AVAILABLE-FOR-SALE DEBT SECURITIES

12 Months Ended

Dec. 31, 2025

AVAILABLE-FOR-SALE DEBT SECURITIES

AVAILABLE-FOR-SALE DEBT SECURITIES

NOTE 3.           AVAILABLE-FOR-SALE DEBT SECURITIES

The following is a summary of available-for-sale debt securities:

			Gross		Gross
			Unrealized		Unrealized
(in thousands)	Amortized Cost		Gains		Losses		Fair Value		Allowance
December 31, 2025
Debt securities:
Obligations of US Government-sponsored enterprises	$	1,113	$	1	$	(12)	$	1,102	$	—
Mortgage-backed securities and collateralized mortgage obligations:
US Government-sponsored enterprises		268,976		2,734		(22,168)		249,542		—
US Government agency		163,369		347		(9,816)		153,900		—
Private label		11,793		—		(794)		10,999		—
Obligations of states and political subdivisions thereof		120,447		4		(15,912)		104,539		—
Corporate bonds		79,255		233		(2,146)		77,342		—
Total available-for-sale debt securities	$	644,953	$	3,319	$	(50,848)	$	597,424	$	—

			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)

Included in mortgage-backed securities and collateralized mortgage obligations are securities backed by residential and commercial loans.

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. We review credit quality on a quarterly basis and securities are triggered for further review in the quarter if the security has significant fluctuations in ratings, drops below investment-grade, or significant pricing changes. 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. For the year ended 2025 there were no significant changes to the credit quality of the portfolio.

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 December 31, 2025 we have one nonaccrual corporate bond of $8.0 million written down by $5.8 million, of which $4.6 million is included in impairment 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. The losses were included in net gain (loss) on available-for-sale debt securities in the consolidated statements of income. The Company had determined that it no longer intended to hold the security until recovery of the amortized cost basis.

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. During the year, there were $571 thousand in write-offs recorded for the nonaccrual security.

The table below presents a rollforward by major security type for the years ended December 31, 2025 and 2024 of the allowance for credit losses on available-for-sale debt securities held at period end:

		Year Ended December 31,				Year Ended December 31,
		2025				2024
(in thousands)		Corporate Bonds		Total		Corporate Bonds		Total
Beginning Balance	$	568	$	568	$	—	$	—
Provision for credit losses on available-for-sale debt securities		636		636		1,171		1,171
Charge-offs		(1,204)		(1,204)		(603)		(603)
Ending Balance	$	—	$	—	$	568	$	568

We carried no allowance and there were no charge-offs on available-for-sale debt securities as of December 31, 2023.

The amortized cost and estimated fair value of available-for-sale debt securities segregated by contractual maturity at December 31, 2025 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Securities not due at a single maturity date are shown separately.

	Available for sale
(in thousands)	Amortized Cost		Fair Value
Within 1 year	$	14,745	$	14,488
Over 1 year to 5 years		35,600		35,254
Over 5 years to 10 years		37,189		35,487
Over 10 years		113,281		97,754
Total bonds and obligations		200,815		182,983
Mortgage-backed securities and collateralized mortgage obligations		444,138		414,441
Total available-for-sale debt securities	$	644,953	$	597,424

The proceeds from sales, calls and maturities of available-for-sale debt securities, gross realized gains and losses for the years ended December 31, 2025, 2024 and 2023 are as follows:

	Year Ended
	December 31,
(in thousands)	2025		2024		2023
Proceeds from sales	$	43,559	$	—	$	—
Proceeds from calls/paydowns		99,804		59,380		41,954
Proceeds from maturities		—		3,011		195
Gross realized gains		247		50		34
Gross realized losses		(434)		—		—
Gross impairment losses		(4,571)		—		—

Accrued interest receivable on available-for-sale debt securities totaled $3.2 million at December 31, 2025 and $3.3 million at December 31, 2024, which is reported in other assets on the Consolidated Balance Sheets.

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 December 31, 2025 and 2024, aggregated by major security type and length of time in a 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
December 31, 2025
Debt securities:
Obligations of US Government-sponsored enterprises	$	—	$	—	$	12	$	413	$	12	$	413
Mortgage-backed securities and collateralized mortgage obligations:
US Government-sponsored enterprises		7		1,241		22,161		150,629		22,168		151,870
US Government agency		970		39,343		8,846		72,849		9,816		112,192
Private label		1		2,000		793		8,984		794		10,984
Obligations of states and political subdivisions thereof		—		—		15,912		97,856		15,912		97,856
Corporate bonds		82		6,911		2,064		53,936		2,146		60,847
Total available-for-sale debt securities	$	1,060	$	49,495	$	49,788	$	384,667	$	50,848	$	434,162

	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 securities in an unrealized loss position at December 31, 2025:

Obligations of US Government-sponsored enterprises

6 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 2.93% 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 US Government-sponsored enterprises. The securities are investment-grade rated and there were no material underlying credit downgrades during the quarter. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2025. All securities are performing.

US Government-sponsored enterprises

353 out of the total 508 securities in our portfolio of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 12.74% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association and the 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 year. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2025. All securities are performing.

US Government agency

127 out of the total 170 securities in our portfolio of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 8.05% 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 rated investment grade and there were no material underlying credit downgrades during the year. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2025. All securities are performing.

Private label

14 of the total 15 securities in our portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 6.74% 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. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2025. All securities are performing.

Obligations of states and political subdivisions thereof

50 of the total 65 securities in our portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 13.99% 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 that risk. There were no material underlying credit downgrades during the year. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2025. All securities are performing.

Corporate bonds

20 of the total 30 securities in our portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 3.41% of the amortized cost of securities in unrealized loss positions. We review the financial strength of all of these bonds, and 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. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2025. All but the one corporate bond discussed above are performing.

We expect to recover the amortized cost basis on all securities in our AFS portfolio. Furthermore, we do not intend to sell nor do we anticipate that we will be required to sell any securities in an unrealized loss position as of December 31, 2025, prior to this recovery.

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

	December 31, 2025				December 31, 2024
	Carrying		Estimated		Carrying		Estimated
(in thousands)	Value		Fair Value		Value		Fair Value
Securities pledged for deposits	$	16,204	$	14,475	$	18,483	$	15,821
Securities pledged for repurchase agreements		15,110		13,207		16,764		14,020
Securities pledged for borrowings (1)		14,831		14,515		35,819		30,634
Total securities pledged	$	46,145	$	42,197	$	71,066	$	60,475

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

The following table summarizes the balance of available-for-sale debt securities at December 31, 2025 and 2024 that represent greater than 10% of shareholders’ equity:

	Years Ended December 31,
	2025				2024
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Federal National Mortgage Association	$	174,322	$	161,700	$	138,375	$	118,106
Federal Home Loan Mortgage Corporation		94,654		87,842		70,443		59,210
Government National Mortgage Association		163,369		153,900		115,177		103,916
Obligations of states and political subdivisions thereof		120,447		104,539		116,421		105,452
Corporate Bonds		79,255		77,342		100,923		93,452