Community Bancorp 10-Q for FY2024 Q2

Community Bancorp (CMTV)

10-Q 2024-08-14 For: 2024-06-30

Added on April 11, 2026

About this 10-Q

Community Bancorp filed this 10-Q on August 14, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $2.73M; down 14.6% from net income of $3.2M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Vermont			03-0284070
(State of Incorporation)			(IRS Employer Identification Number)

4811 US Route 5, Derby, Vermont			05829
(Address of Principal Executive Offices)			(zip code)

Registrant’s Telephone Number: (802) 334-7915

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
	(Not Applicable)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

FORM 10-Q
Index
		Page
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements	3
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4	Controls and Procedures	51

PART II	OTHER INFORMATION

Item 1	Legal Proceedings	52
Item 1A	Risk Factors	52
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 6	Exhibits	52
	Signatures	53
	Exhibit Index	54

Community Bancorp. and Subsidiary	June 30,			December 31,
Consolidated Balance Sheets	2024			2023
	(Unaudited)

Assets
Cash and due from banks	$	15,017,341		$	15,001,122
Federal funds sold and overnight deposits		3,411,606			5,433,391
Total cash and cash equivalents		18,428,947			20,434,513
Securities available-for-sale		174,354,789			190,706,019
Restricted equity securities, at cost		3,286,850			1,642,350
Loans held-for-sale		201,000			0
Loans		862,172,136			845,429,854
Allowance for credit losses		(10,335,715	)		(9,842,725	)
Deferred net loan costs		603,723			573,169
Net loans		852,440,144			836,160,298
Bank premises and equipment, net		12,489,733			12,371,371
Accrued interest receivable		4,314,122			4,246,798
Bank owned life insurance		5,274,835			5,232,703
Goodwill		11,574,269			11,574,269
Other real estate owned		275,000			0
Other assets		17,797,538			16,976,613
Total assets	$	1,100,437,227		$	1,099,344,934

Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Demand, non-interest bearing	$	159,944,015		$	202,969,957
Interest-bearing transaction accounts		271,317,426			297,030,893
Money market funds		114,194,530			121,375,419
Savings		145,754,922			151,570,686
Time deposits, $250,000 and over		31,156,229			24,676,853
Other time deposits		126,365,024			99,343,974
Total deposits		848,732,146			896,967,782
Repurchase agreements		31,176,339			36,255,920
Borrowed funds		106,700,000			54,600,000
Junior subordinated debentures		12,887,000			12,887,000
Accrued interest and other liabilities		9,613,008			9,605,418
Total liabilities		1,009,108,493			1,010,316,120

Shareholders’ Equity
Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at 06/30/24 and 12/31/23 ($100,000 liquidation value, per share)		1,500,000			1,500,000
Common stock - $2.50 par value; 15,000,000 shares authorized, 5,765,307 shares issued at 06/30/24 and 5,724,151 shares issued at 12/31/23		14,413,268			14,310,378
Additional paid-in capital		38,173,557			37,574,578
Retained earnings		57,144,239			54,198,230
Accumulated other comprehensive loss		(17,279,553	)		(15,931,595	)
Less: treasury stock, at cost; 210,101 shares at 06/30/24 and 12/31/23		(2,622,777	)		(2,622,777	)
Total shareholders’ equity		91,328,734			89,028,814
Total liabilities and shareholders’ equity	$	1,100,437,227		$	1,099,344,934

Book value per common share outstanding	$	16.17		$	15.87

Community Bancorp. and Subsidiary	Three Months Ended June 30,
Consolidated Statements of Income	2024		2023
(Unaudited)

Interest income
Interest and fees on loans	$	12,067,111	$	10,014,968
Interest on taxable debt securities		932,209		929,963
Interest on tax-exempt debt securities		80,411		90,659
Dividends		63,270		33,999
Interest on federal funds sold and overnight deposits		54,452		144,877
Total interest income		13,197,453		11,214,466

Interest expense
Interest on deposits		3,359,835		2,224,384
Interest on borrowed funds		1,274,424		252,441
Interest on repurchase agreements		177,871		214,654
Interest on junior subordinated debentures		284,030		254,124
Total interest expense		5,096,160		2,945,603

Net interest income		8,101,293		8,268,863
Credit loss expense		331,582		281,142
Net interest income after credit loss expense		7,769,711		7,987,721

Non-interest income
Service fees		964,181		939,451
Income from sold loans		98,469		106,660
Other income from loans		278,223		341,876
Other income		431,544		450,444
Total non-interest income		1,772,417		1,838,431

Non-interest expense
Salaries and wages		2,288,000		2,264,760
Employee benefits		954,154		811,870
Occupancy expenses, net		694,230		700,228
Other expenses		2,335,187		2,087,065
Total non-interest expense		6,271,571		5,863,923

Income before income taxes		3,270,557		3,962,229
Income tax expense		542,371		765,890
Net income	$	2,728,186	$	3,196,339

Earnings per common share	$	0.49	$	0.58
Weighted average number of common shares used in computing earnings per share		5,541,540		5,461,597
Dividends declared per common share	$	0.23	$	0.23

Community Bancorp. and Subsidiary	Six Months Ended June 30,
Consolidated Statements of Income	2024		2023
(Unaudited)

Interest income
Interest and fees on loans	$	23,745,328	$	19,390,993
Interest on taxable debt securities		1,904,557		1,873,441
Interest on tax-exempt debt securities		160,823		181,317
Dividends		105,655		64,653
Interest on federal funds sold and overnight deposits		140,385		474,288
Total interest income		26,056,748		21,984,692

Interest expense
Interest on deposits		6,440,007		4,069,131
Interest on borrowed funds		2,220,241		276,961
Interest on repurchase agreements		376,762		346,782
Interest on junior subordinated debentures		560,799		499,589
Total interest expense		9,597,809		5,192,463

Net interest income		16,458,939		16,792,229
Credit loss expense		645,161		567,668
Net interest income after credit loss expense		15,813,778		16,224,561

Non-interest income
Service fees		1,862,101		1,819,739
Income from sold loans		177,573		214,195
Other income from loans		532,824		770,448
Other income		833,826		792,827
Total non-interest income		3,406,324		3,597,209

Non-interest expense
Salaries and wages		4,746,000		4,553,520
Employee benefits		1,853,390		1,566,140
Occupancy expenses, net		1,416,733		1,471,214
Other expenses		4,555,593		4,152,752
Total non-interest expense		12,571,716		11,743,626

Income before income taxes		6,648,386		8,078,144
Income tax expense		1,097,299		1,543,043
Net income	$	5,551,087	$	6,535,101

Earnings per common share	$	0.99	$	1.19
Weighted average number of common shares used in computing earnings per share		5,531,524		5,452,867
Dividends declared per common share	$	0.46	$	0.46

Community Bancorp. and Subsidiary
Consolidated Statements of Comprehensive Income
(Unaudited)	Three Months Ended June 30,
	2024			2023

Net income	$	2,728,186		$	3,196,339

Other comprehensive income (loss)
Unrealized holding income (loss) on securities AFS arising during the period		202,597			(1,843,589	)
Tax effect		(42,547	)		387,153
Other comprehensive income (loss), net of tax		160,050			(1,456,436	)
Total comprehensive income	$	2,888,236		$	1,739,903

	Six Months Ended June 30, 2024
					Additional											Total
	Common		Preferred		paid-in		Retained						Treasury			shareholders’
	Stock		Stock		capital		earnings			AOCI*			stock			equity

January 1, 2024	$	14,310,378	$	1,500,000	$	37,574,578	$	54,198,230		$	(15,931,595	)	$	(2,622,777	)	$	89,028,814

Issuance of common stock		52,890				307,561											360,451
Cash dividends declared
Common stock								(1,268,320	)								(1,268,320	)
Preferred stock								(31,875	)								(31,875	)
Comprehensive income
Net income								2,822,901									2,822,901
Other comprehensive loss											(1,508,008	)					(1,508,008	)
March 31, 2024	$	14,363,268	$	1,500,000	$	37,882,139	$	55,720,936		$	(17,439,603	)	$	(2,622,777	)	$	89,403,963

Issuance of common stock		50,000				291,418											341,418
Cash dividends declared
Common stock								(1,273,008	)								(1,273,008	)
Preferred stock								(31,875	)								(31,875	)
Comprehensive income
Net income								2,728,186									2,728,186
Other comprehensive income											160,050						160,050
June 30, 2024	$	14,413,268	$	1,500,000	$	38,173,557	$	57,144,239		$	(17,279,553	)	$	(2,622,777	)	$	91,328,734

Community Bancorp. and Subsidiary
Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
	Six Months Ended June 30, 2023
					Additional											Total
	Common		Preferred		paid-in		Retained						Treasury			shareholders’
	Stock		Stock		capital		earnings			AOCI*			stock			equity

January 1, 2023	$	14,119,275	$	1,500,000	$	36,383,235	$	46,464,447		$	(20,667,817	)	$	(2,622,777	)	$	75,176,363
Cumulative change in accounting principle								(549,113	)								(549,113	)
Balance at January 1, 2023 (as adjusted								45,915,334									74,627,250
for change in accounting principle)
Issuance of common stock		43,693				276,184											319,877
Cash dividends declared
Common stock								(1,250,794	)								(1,250,794	)
Preferred stock								(28,125	)								(28,125	)
Comprehensive income
Net income								3,338,761									3,338,761
Other comprehensive income											2,672,818						2,672,818
March 31, 2023	$	14,162,968	$	1,500,000	$	36,659,419	$	47,975,176		$	(17,994,999	)	$	(2,622,777	)	$	79,679,787

Issuance of common stock		45,720				336,527											382,247
Cash dividends declared
Common stock								(1,254,835	)								(1,254,836	)
Preferred stock								(30,000	)								(30,000	)
Comprehensive income
Net income								3,196,339									3,196,339
Other comprehensive loss											(1,456,436	)					(1,456,436	)
June 30, 2023	$	14,208,688	$	1,500,000	$	36,995,946	$	49,886,680		$	(19,451,435	)	$	(2,622,777	)	$	80,517,102

Community Bancorp. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)	Six Months Ended June 30,
	2024			2023

Cash Flows from Operating Activities:
Net income	$	5,551,087		$	6,535,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, bank premises and equipment		524,565			543,590
Credit loss expense		645,161			567,668
Deferred income tax		185,004			(24,713	)
Gain on sale of loans		(39,355	)		(56,608	)
(Gain) loss on sale of bank premises and equipment		(13,981	)		449
Income from CFS Partners		(622,925	)		(555,203	)
Amortization of bond premium, net		104,385			128,123
Proceeds from sales of loans held for sale		2,043,855			2,911,663
Originations of loans held for sale		(2,205,500	)		(3,759,305	)
Decrease in taxes payable		(307,109	)		(722,500	)
(Increase) decrease in interest receivable		(67,324	)		2,067
Decrease in mortgage servicing rights		42,829			41,224
Decrease in right-of-use assets		94,482			100,646
Increase (decrease) in operating lease liabilities		35,675			(107,511	)
Increase in other assets		(58,811	)		(130,411	)
Increase in cash surrender value of BOLI		(42,132	)		(39,489	)
Amortization of limited partnerships		298,404			134,256
Change in net deferred loan fees and costs		(30,554	)		(28,025	)
Increase in interest payable		633,217			204,150
Decrease in accrued expenses		(572,385	)		(502,279	)
Increase in other liabilities		33,647			432,388
Net cash provided by operating activities		6,232,235			5,675,281

Cash Flows from Investing Activities:
Investments - AFS
Maturities, calls, pay downs and sales		14,540,572			7,793,170
Proceeds from redemption of restricted equity securities		3,463,300			1,171,200
Purchases of restricted equity securities		(5,107,800	)		(1,547,300	)
Investments in limited liability entities		0			(81,250	)
Increase in loans, net		(17,247,703	)		(32,867,687	)
Capital expenditures net of proceeds from sales of bank premises and equipment		(723,430	)		(254,123	)
Recoveries of loans charged off		53,690			148,379
Net cash used in investing activities		(5,021,371	)		(25,637,611	)

	2024			2023

Cash Flows from Financing Activities:
Net decrease in demand and interest-bearing transaction accounts		(68,739,409	)		(41,275,644	)
Net decrease in money market and savings accounts		(12,996,653	)		(36,097,148	)
Net increase in time deposits		33,500,426			5,582,229
Net (decrease) increase in repurchase agreements		(5,079,581	)		2,056,502
Net increase in short-term borrowings		22,100,000			13,400,000
Proceeds from long-term borrowings		30,000,000			26,500,000
Decrease in finance lease obligations		(112,782	)		(109,299	)
Dividends paid on preferred stock		(63,750	)		(58,125	)
Dividends paid on common stock		(1,824,681	)		(1,835,286	)
Net cash used in financing activities		(3,216,430	)		(31,836,771	)

Net decrease in cash and cash equivalents		(2,005,566	)		(51,799,101	)
Cash and cash equivalents:
Beginning		20,434,513			71,140,328
Ending	$	18,428,947		$	19,341,227

Supplemental Schedule of Cash Paid During the Period:
Interest	$	8,964,592		$	4,988,313

Income taxes, net of refunds	$	921,000		$	2,156,000

Supplemental Schedule of Noncash Investing and Financing Activities:
Change in unrealized (loss) gain on securities AFS	$	(1,706,273	)	$	1,539,725

Loans transferred to OREO	$	275,000		$	0

Additions to operating lease liabilities	$	138,058		$	0

Common Shares Dividends Paid:
Dividends declared	$	2,541,328		$	2,505,629
(Increase) decrease in dividends payable attributable to dividends declared		(14,778	)		31,781
Dividends reinvested		(701,869	)		(702,124	)
Total dividends paid	$	1,824,681		$	1,835,286

ABS:	Asset backed security	FASB:	Financial Accounting Standards Board
ACL:	Allowance for Credit Losses	FDIC:	Federal Deposit Insurance Corporation
AFS:	Available-for-sale	FDICIA:	Federal Deposit Insurance Corporation
Agency MBS:	MBS issued by a US government agency		Improvement Act of 1991
	or GSE	FHLBB:	Federal Home Loan Bank of Boston
ALCO:	Asset Liability Committee	FHLMC:	Federal Home Loan Mortgage Corporation
ALL:	Allowance for Loan Losses	FOMC:	Federal Open Market Committee
AOCI:	Accumulated other comprehensive income	FRB:	Federal Reserve Board
ASC:	Accounting Standards Codification	FRBB:	Federal Reserve Bank of Boston
ASU:	Accounting Standards Update	GAAP:	Generally Accepted Accounting Principles
Bancorp:	Community Bancorp.		in the United States
Bank:	Community National Bank	GSE:	Government sponsored enterprise
BHG:	Bankers Healthcare Group	HTM:	Held-to-maturity
BIC:	Borrower-in-Custody	ICS:	Insured Cash Sweeps of the IntraFi Network
Board:	Board of Directors	IRS:	Internal Revenue Service
BOLI:	Bank owned life insurance	JNE:	Jobs for New England
bp or bps:	Basis point(s)	Jr:	Junior
BTFP:	Bank Term Funding Program	MBS:	Mortgage-backed security
CDARS:	Certificate of Deposit Accounts Registry	MSRs:	Mortgage servicing rights
	Service of the IntraFi Network	NII:	Net interest income
CDs:	Certificates of deposit	OAS:	Other amortizing security
CECL:	Current Expected Credit Loss	OBS:	Off-balance sheet
CFSG:	Community Financial Services Group, LLC	OCI:	Other comprehensive income (loss)
CFS Partners:	Community Financial Services Partners,	OREO:	Other real estate owned
	LLC	OTTI:	Other-than-temporary impairment
CME:	CME Group Benchmark Administration Ltd.	PMI:	Private mortgage insurance
CMO:	Collateralized Mortgage Obligations	PPP:	Paycheck Protection Program
Company:	Community Bancorp. and Subsidiary	RD:	USDA Rural Development
CRE:	Commercial Real Estate	SBA:	U.S. Small Business Administration
DCF:	Discounted cash flow	SEC:	U.S. Securities and Exchange Commission
DDA or DDAs:	Demand Deposit Account(s)	SOFR:	Secured Overnight Financing Rate
DTC:	Depository Trust Company	USDA:	U.S. Department of Agriculture
DRIP:	Dividend Reinvestment Plan	VA:	U.S. Veterans Administration
Exchange Act:	Securities Exchange Act of 1934

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
June 30, 2024
U.S. GSE debt securities	$	12,000,000	$	0	$	1,219,251	$	10,780,749
U.S. Government securities		34,634,287		0		1,560,609		33,073,678
Taxable Municipal securities		300,000		0		51,869		248,131
Tax-exempt Municipal securities		10,802,563		105,223		637,477		10,270,309
Agency MBS		126,025,299		164,235		18,266,747		107,922,787
ABS and OAS		2,353,172		0		171,598		2,181,574
CMO		9,369,321		0		195,229		9,174,092
Other investments		743,000		0		39,531		703,469
Total	$	196,227,642	$	269,458	$	22,142,311	$	174,354,789

	Less than 12 months				12 months or more				Totals
	Fair		Unrealized		Fair		Unrealized		Number of		Fair		Unrealized
	Value		Loss		Value		Loss		Securities		Value		Loss
June 30, 2024
U.S. GSE debt securities	$	0	$	0	$	10,780,749	$	1,219,251		11	$	10,780,749	$	1,219,251
U.S. Government securities		0		0		33,073,678		1,560,609		48		33,073,678		1,560,609
Taxable Municipal securities		0		0		248,131		51,869		1		248,131		51,869
Tax-exempt Municipal securities		3,050,220		39,380		3,946,038		598,097		15		6,996,258		637,477
Agency MBS		4,270,098		23,678		97,017,100		18,243,069		120		101,287,198		18,266,747
ABS and OAS		0		0		2,181,574		171,598		4		2,181,574		171,598
CMO		0		0		9,174,092		195,229		8		9,174,092		195,229
Other investments		0		0		703,469		39,531		3		703,469		39,531
Total	$	7,320,318	$	63,058	$	157,124,831	$	22,079,253		210	$	164,445,149	$	22,142,311

December 31, 2023
U.S. GSE debt securities	$	0	$	0	$	10,827,574	$	1,172,426		11	$	10,827,574	$	1,172,426
U.S. Government securities		0		0		39,263,249		1,943,800		54		39,263,249		1,943,800
Taxable Municipal securities		0		0		246,965		53,035		1		246,965		53,035
Tax-exempt Municipal securities		529,571		9,468		4,058,155		508,223		10		4,587,726		517,691
Agency MBS		1,328,433		9,218		103,000,706		16,493,101		119		104,329,139		16,502,319
ABS and OAS		0		0		2,347,621		186,251		4		2,347,621		186,251
CMO		3,309,165		18,554		7,428,431		207,792		10		10,737,596		226,346
Other investments		0		0		946,430		45,570		4		946,430		45,570
Total	$	5,167,169	$	37,240	$	168,119,131	$	20,610,198		213	$	173,286,300	$	20,647,438

	Amortized		Fair
	Cost		Value
June 30, 2024
Due in one year or less	$	22,256,998	$	21,815,891
Due from one to five years		33,675,972		31,285,708
Due from five to ten years		1,386,548		1,250,122
Due after ten years		12,882,825		12,080,281
Agency MBS		126,025,299		107,922,787
Total	$	196,227,642	$	174,354,789

	Amortized		Fair
	Cost		Value
December 31, 2023
Due in one year or less	$	17,366,548	$	17,061,882
Due from one to five years		43,976,469		41,245,991
Due from five to ten years		4,485,724		4,141,301
Due after ten years		13,000,616		12,394,046
Agency MBS		132,043,238		115,862,799
Total	$	210,872,595	$	190,706,019

	June 30, 2024					December 31, 2023

Commercial & industrial	$	129,781,623		15.05	%	$	121,705,707		14.40	%
Purchased		9,208,804		1.07	%		10,568,922		1.25	%
Commercial real estate		441,804,609		51.24	%		414,880,621		49.07	%
Municipal		34,101,293		3.96	%		54,466,988		6.44	%
Residential real estate - 1st lien		212,028,611		24.59	%		208,824,888		24.70	%
Residential real estate - Jr lien		31,952,075		3.71	%		31,668,811		3.75	%
Consumer		3,295,121		0.38	%		3,313,917		0.39	%
Total loans		862,172,136		100.00	%		845,429,854		100.00	%

ACL		(10,335,715	)				(9,842,725	)
Deferred net loan costs		603,723					573,169
Net loans	$	852,440,144				$	836,160,298

													Residential		Residential
	Commercial						Commercial						Real Estate		Real Estate
	& Industrial			Purchased			Real Estate			Municipal			1st Lien		Jr Lien			Consumer			Total

ACL beginning balance	$	1,078,956		$	35,623		$	5,730,532		$	142,321		$	2,574,341	$	442,394		$	23,601		$	10,027,768
Charge-offs		(13,834	)		0			(45,393	)		0			0		0			(20,691	)		(79,918	)
Recoveries		31,755			0			0			0			0		1,207			2,982			35,944
Credit loss (reversal) expense		(9,798	)		(3,562	)		300,900			(57,068	)		120,314		(17,978	)		19,113			351,921
ACL ending balance	$	1,087,079		$	32,061		$	5,986,039		$	85,253		$	2,694,655	$	425,623		$	25,005		$	10,335,715

			90 Days		Total
June 30, 2024	30-89 Days		or More		Past Due		Current		Total Loans

Commercial & industrial	$	217,019	$	2,927,101	$	3,144,120	$	126,637,503	$	129,781,623
Purchased		0		0		0		9,208,804		9,208,804
Commercial real estate		0		242,635		242,635		441,561,974		441,804,609
Municipal		500,000		0		500,000		33,601,293		34,101,293
Residential real estate - 1st lien		505,147		1,072,466		1,577,613		210,450,998		212,028,611
Residential real estate - Jr lien		117,402		100,210		217,612		31,734,463		31,952,075
Consumer		33,277		20,591		53,868		3,241,253		3,295,121
Totals	$	1,372,845	$	4,363,003	$	5,735,848	$	856,436,288	$	862,172,136

December 31, 2023

Commercial & industrial	$	253,974	$	3,068,578	$	3,322,552	$	118,383,155	$	121,705,707
Purchased		0		0		0		10,568,922		10,568,922
Commercial real estate		178,083		944,669		1,122,752		413,757,869		414,880,621
Municipal		0		0		0		54,466,988		54,466,988
Residential real estate - 1st lien		1,856,944		646,980		2,503,924		206,320,964		208,824,888
Residential real estate - Jr lien		245,856		25,007		270,863		31,397,948		31,668,811
Consumer		14,728		0		14,728		3,299,189		3,313,917
Totals	$	2,549,585	$	4,685,234	$	7,234,819	$	838,195,035	$	845,429,854

					90 Days or
	Nonaccrual		Total		More and
June 30, 2024	with No ACL		Nonaccrual		Accruing

Commercial & industrial	$	3,441,299	$	3,441,299	$	7,390
Commercial real estate		1,517,471		1,517,471		0
Residential real estate - 1st lien		807,261		807,261		567,440
Residential real estate - Jr lien		51,074		51,074		75,203
Consumer		0		0		20,591
Totals	$	5,817,105	$	5,817,105	$	670,624

December 31, 2023
Commercial & industrial	$	3,632,659	$	3,632,659	$	0
Commercial real estate		2,818,283		2,818,283		38,779
Residential real estate - 1st lien		415,074		415,074		446,395
Residential real estate - Jr lien		89,030		89,030		0
Totals	$	6,955,046	$	6,955,046	$	485,174

	Number of loans		Balance

June 30, 2024		1	$	88,780
December 31, 2023		0	$	0

	Business
	Assets (1)		Real Estate
June 30, 2024
Commercial & industrial	$	1,180,782	$	0
Commercial real estate		0		217,585
Residential real estate - 1st lien		0		619,963
Totals	$	1,180,782	$	837,548

December 31, 2023
Commercial & industrial	$	1,298,717	$	0
Commercial real estate		0		1,263,495
Residential real estate - 1st lien		0		167,363
Totals	$	1,298,717	$	1,430,858

As of or for the six months ended,													Revolving		Revolving
June 30, 2024													Loans		Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
(In thousands)	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total

Commercial & Industrial:
Pass	$	6,240	$	14,675	$	16,718	$	10,973	$	2,092	$	6,096	$	61,176	$	0	$	117,970
Special mention		0		0		0		201		0		0		869		0		1,070
Substandard/Doubtful		0		317		1,294		592		396		2,220		5,923		0		10,742
Total	$	6,240	$	14,992	$	18,012	$	11,766	$	2,488	$	8,316	$	67,968	$	0	$	129,782

Purchased:
Pass	$	0	$	4,637	$	88	$	1,159	$	1,348	$	1,977	$	0	$	0	$	9,209
Total	$	0	$	4,637	$	88	$	1,159	$	1,348	$	1,977	$	0	$	0	$	9,209

Commercial real estate:
Pass	$	23,966	$	69,974	$	87,696	$	36,762	$	41,641	$	111,846	$	62,354	$	0	$	434,239
Special mention		0		0		365		2,053		0		0		0		0		2,418
Substandard/Doubtful		0		0		0		0		2,948		2,199		0		0		5,147
Total	$	23,966	$	69,974	$	88,061	$	38,815	$	44,589	$	114,045	$	62,354	$	0	$	441,804

Municipal:
Pass	$	7,270	$	202	$	680	$	3,057	$	4,440	$	10,199	$	8,253	$	0	$	34,101
Total	$	7,270	$	202	$	680	$	3,057	$	4,440	$	10,199	$	8,253	$	0	$	34,101

Residential real estate - 1st lien:
Pass	$	13,778	$	29,336	$	37,536	$	39,460	$	31,533	$	55,937	$	1,825	$	0	$	209,405
Special mention		0		162		0		0		0		0		0		0		162
Substandard/Doubtful		0		0		298		128		1,802		234		0		0		2,462
Total	$	13,778	$	29,498	$	37,834	$	39,588	$	33,335	$	56,171	$	1,825	$	0	$	212,029

Residential real estate - Jr lien:
Pass	$	1,068	$	2,127	$	1,736	$	326	$	571	$	1,419	$	23,253	$	1,426	$	31,926
Substandard/Doubtful		0		0		0		0		0		26		0		0		26
Total	$	1,068	$	2,127	$	1,736	$	326	$	571	$	1,445	$	23,253	$	1,426	$	31,952

Consumer
Pass	$	1,138	$	1,022	$	611	$	258	$	127	$	139	$	0	$	0	$	3,295
Total	$	1,138	$	1,022	$	611	$	258	$	127	$	139	$	0	$	0	$	3,295

Total Loans	$	53,460	$	122,452	$	147,022	$	94,969	$	86,898	$	192,292	$	163,653	$	1,426	$	862,172

Current period gross charge-offs
Commercial & Industrial	$	0	$	14	$	0	$	5	$	0	$	133	$	0	$	0	$	152
Commercial real estate		0		0		0		0		45		0		0		0		45
Consumer		0		7		0		0		0		26		0		0		33
Total current period gross charge-offs	$	0	$	21	$	0	$	5	$	45	$	159	$	0	$	0	$	230

	·	Reduced accrued interest;
	·	Reduced the original contractual interest rate to a rate that is below the current market rate for the borrower;
	·	Converted a variable-rate loan to a fixed-rate loan;
	·	Extended the term of the loan beyond an insignificant delay;
	·	Deferred or forgiven principal in an amount greater than three months of payments;
	·	Performed a refinancing and deferred or forgiven principal on the original loan;
	·	Capitalized protective advance to pay delinquent real estate taxes; or
	·	Capitalized delinquent accrued interest.

					Total Class
	Payment		Term		of Financing
	Delay		Extension		Receivable

Commercial & Industrial	$	1,634,720	$	102,956		1.34	%

		Weighted-
		Average
		Term Extension
		(months/years)

Commercial & Industrial		3 months

Six Months Ended June 30,	2024

Balance at beginning of year	$	787,013
MSRs capitalized		20,004
MSRs amortized		(62,833	)
Balance at end of period	$	744,184

Year Ended December 31,	2023

Balance at beginning of year	$	862,593
MSRs capitalized		68,297
MSRs amortized		(143,877	)
Balance at end of period	$	787,013

Level 1	Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasury and other U.S. Government debt securities that are highly liquid and are actively traded in over-the-counter markets.

Level 2	Observable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes MSRs, individually analyzed loans, loans held-for-sale, and OREO.

Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

	Debt Securities AFS: Fair value measurement is based upon quoted prices for similar assets, if available. If quoted prices are not available, fair values are measured using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curves, prepayment speeds and default rates, net of any related credit allowance. Level 1 securities would include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Level 2 securities include federal agency securities, municipal securities and other asset-backed securities.

	Individually analyzed loans: Individually analyzed loans are reported based on one of three measures: the present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the collateral if the loan is collateral dependent. If the fair value is less than an impaired loan’s recorded investment, an impairment loss is recognized as part of the ACL. Accordingly, certain individually analyzed loans may be subject to measurement at fair value on a non-recurring basis. Management has estimated the fair value of collateral-dependent loans using Level 2 inputs, such as the fair value of collateral based on independent third-party appraisals.

	Loans held-for-sale: The fair value of loans held-for-sale is based upon an actual purchase and sale agreement between the Company and an independent market participant. The sale is executed within a reasonable period following quarter-end at the stated fair value.

	MSRs: MSRs represent the value associated with servicing residential mortgage loans. Servicing assets and servicing liabilities are reported using the amortization method and compared to fair value for impairment. In evaluating the carrying values of MSRs, the Company obtains third party valuations based on loan level data including note rate, and the type and term of the underlying loans. The Company classifies MSRs as non-recurring Level 2.

	OREO: Real estate acquired through or in lieu of foreclosure and bank properties no longer used as bank premises are initially recorded at fair value. The fair value of OREO is based on property appraisals and an analysis of similar properties currently available. The Company records OREO as non-recurring Level 2.

	June 30,		December 31,
Assets: (market approach)	2024		2023

Level 1
U.S. Government securities	$	33,073,678	$	39,263,249

Level 2
U.S. GSE debt securities	$	10,780,749	$	10,827,574
Taxable Municipal securities		248,131		246,965
Tax-exempt Municipal securities		10,270,309		10,473,785
Agency MBS		107,922,787		115,862,799
ABS and OAS		2,181,574		2,347,621
CMO		9,174,092		10,737,596
Other investments		703,469		946,430
Level 2 Total	$	141,281,111	$	151,442,770

Grand Total	$	174,354,789	$	190,706,019

	·	interest rates change in such a way as to negatively affect loan demand, the local economy or the Company’s net income, asset valuations or margins;
	·	general economic or business conditions, either nationally, regionally or locally, deteriorate, resulting in a decline in credit quality or a diminished demand for the Company’s products and services;
	·	the impact of inflation and slowing economic growth on the Company’s customers and on its financial results and performance;
	·	the effect of United States monetary and fiscal policies, including deficit spending and the interest rate policies of the FRB and its regulation of the money supply;
	·	changes in applicable accounting policies, practices and standards;
	·	the geographic concentration of the Company’s loan portfolio and deposit base;
	·	reductions in deposit levels, which necessitate increased borrowings to fund loans and sale of investment securities;
	·	increases in the level of nonperforming assets and charge-offs;
	·	changes in federal or state tax laws or policy;
	·	changes in laws or government rules, including the rules of the federal Consumer Financial Protection Bureau, or the way in which courts or government agencies interpret or implement those laws or rules, increase our costs of doing business, causing us to limit or change our product offerings or pricing, or otherwise adversely affect the Company’s business;
	·	regulatory responses to high profile bank failures increase our costs of operation, including through regulatory compliance changes and higher FDIC deposit insurance assessments to replenish the Bank Insurance Fund (BIF);

	·	competitive pressures increase among financial service providers in the Company’s northern New England market area or in the financial services industry generally, including competitive pressures from non-bank lenders, payment systems and other financial service providers, from increasing consolidation and integration of financial service providers, and from changes in technology and delivery systems;
	·	cybersecurity risks, including risks to our vendors, could adversely affect the Company’s business, financial performance or reputation and could result in financial liability for losses incurred by customers or others due to data breaches or other compromise of the Company’s information security systems;
	·	higher-than-expected costs are incurred relating to information technology or difficulties arise in implementing technological enhancements;
	·	management’s risk management measures may not be completely effective;
	·	changes in consumer and business spending, borrowing and savings habits;
	·	operational and internal system failures due to changes in normal business practices, including remote working for Company staff;
	·	increased cybercrime and payment system risk due to increased usage by customers of online, mobile and other remote banking channels;
	·	the ongoing challenges to find qualified workers to maintain a stable workforce;
	·	losses due to the fraudulent or negligent conduct of third parties, including the Company’s service providers, customers and employees; and
	·	adverse changes in the credit rating of U.S. government debt.

·	the ACL;
·	OREO;
·	credit losses on debt securities;
·	valuation of residential MSRs; and
·	the carrying value of goodwill.

	(1)	Included in net loans are non-accrual loans with average balances of $6,377,110 and $8,055,008 for the three months ended June 30, 2024 and 2023, respectively. Loans are stated net of unearned discount and ACL, plus loans held-for-sale and include tax-exempt loans to local municipalities with average balances of $58,625,102 and $35,117,182 for the three months ended June 30, 2024 and 2023, respectively.

	(2)	Included in other investments is the Company’s FHLBB Stock with average balances of $2,114,103 and $815,824 for the three months ended June 30, 2024 and 2023, respectively, with a dividend rate of approximately 8.4% and 7.55%, respectively, per quarter.

	(3)	Net interest spread is the difference between the average yield on average interest-earning assets and the average rate paid on average interest-bearing liabilities.

	(4)	Net interest margin is net interest income divided by average earning assets.