ENBP 10-K & 10-Q changes, risk factors and insider trading

Risks Related Toto TheInterest Corporation’sRates Businessand Investments

The Corporation’s Allowance For Possiblefor Credit Losses May Be Insufficient to Cover Actual Losses

The Corporation maintains an allowance for credit losses, which is a reserve established through a provision for credit losses, charged to expense. The allowance for credit losses represents the Corporation’s best estimate of expected losses in our financial assets, which includes loans, leases, and debt securities. The allowance for possible credit losses includes two primary components: (1) an allowance established on financial assets which share similar risk characteristics collectively evaluated for credit losses, and (2) an allowance established on financial assets which do not share similar risk characteristics with any loan segment and is individually evaluated for credit losses. The level of the allowance for possible credit losses includes quantitative and qualitative factors that comprise the Corporation’s estimate of expected credit losses, including portfolio mix and segmentation, modeling methodology, historical loss experience, relevant available information from internal and external sources relating to qualitative adjustment factors, and reasonable and supportable forecasts about future economic conditions. Determining the appropriate level of the allowance for possible credit losses understandably involves a high degree of subjectivity and requires the Corporation to make significant estimates of current credit risks and future trends, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans, and other factors, both within and outside of the Corporation’s control, may require an increase in the allowance for possible credit losses. In addition, regulatory agencies periodically review the Corporation’s allowance for credit losses and may require an increase in the provision for possible losses or the recognition of further loan charge-offs, based on judgments different than those of management. In addition, if charge-offs in future periods exceed the allowance for possible credit losses, the Corporation will need additional provisions to to increase the allowance for possible credit losses. Any increases in the allowance for possible credit losses will result in a decrease in net income, and may have a material adverse effect on the Corporation’s financial condition and results of operations.

The Corporation is exposed to the risk of cyber-attacks in the normal course course of business. In general, cyber incidents can result from deliberate attacks or unintentional events. The Corporation has observed an increased level of attention in the industry focused on cyber-attacks that include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. To combat against these attacks, policies and procedures are in place to prevent or limit the effect on the possible security breach of its information and technology systems. Further, the Corporation may face unknown or contingent liabilities arising from cybersecurity incidents or data breaches that previously occurred at companies it acquires. Such incidents may not have been discovered, disclosed, or if previously discovered fully-remediated before closing, and the acquired company’s representations, warranties, and indemnities may be limited in scope, duration, or recoverability. As a result, the Corporation could incur costs or liabilities after an acquisition relating to regulatory investigations, litigation, remediation efforts, reputational harm, or customer and partner claims, which could adversely affect its business, financial condition, and results of operations. While the Corporation maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover or ameliorate certain financial aspects of cyber risks, such insurance coverage may be insufficient to cover all or a material amount of losses. While the Corporation has not incurred any material losses related to cyber-attacks, nor is it aware of any specific or threatened cyber-incidents as of the date of this report, it may incur substantial costs and suffer other negative consequences if it falls victim to successful cyber-attacks. Such negative consequences could include remediation costs that may include liability for stolen assets or information and repairing system damage that may have been caused; deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants; lost revenues resulting from unauthorized use of proprietary information or the failure to retain or attract customers following an attack; disruption or failures of physical infrastructure, operating systems or networks that support our business and customers resulting in the loss of customers and business opportunities; additional regulatory scrutiny and possible regulatory penalties; litigation; and reputational damage adversely affecting customer or investor confidence.

Data practices by us or others that result in controversy could impair the acceptance of AI, which could undermine the decisions, predictions, or analysis that AI applications produce. Our customers and potential customers may express adverse opinions concerning our use of AI and machine learning that could result in brand or reputational harm, competitive harm, or legal liability. If the Corporation adopts the use of Generative AI, its content creation may require additional investment as testing for bias, accuracy and unintended, harmful impact is often complex and may be costly. As a result, the Corporation may need to increase the cost of our products and servicesservices, which may make us less competitive, particularly if our competitors incorporate AI more quickly or successfully.

The Increasing Use Ofof Social Media Platforms Presents New Risks Andand Challenges Andand Our Inability Oror Failure Toto Recognize, Respond Toto Andand Effectively Manage Thethe Accelerated Impact Ofof Social Media Could Materially Adversely Impact Our Business

There has been a marked increase in theThe use of social media platforms, including weblogs (blogs), social media websites, and other forms of Internet-based communications which allowallows individuals access to a broad audience of consumers and other interested persons. Social media practices in the banking industry are continually evolving, which creates uncertainty and risk of noncompliance with regulations applicable to our business. Consumers value readily available information concerning businesses and their goods and services and often act on such information without further investigation and without regard to its accuracy. Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content posted. Information posted on such platforms at any time may be adverse to our interests and/or may be inaccurate. The dissemination of information online could harm our business, prospects, financial condition, and results of operations, regardless of the information’s accuracy. The harm may be immediate without affording us an opportunity for redress or correction.

Negative Developments Affecting Thethe Banking Industry, Including Bank Bank Failures Oror Concerns Regarding Liquidity, Have Eroded Customer Confidence Inin Thethe Banking System Andand May Have Aa Material Adverse Effect Onon Thethe Corporation.Corporation

Stock price volatility may make it more difficult for shareholders to resell their shares of common stock when they desire and at pricesprices, they find attractive. The Corporation’s stock price can fluctuate significantly significantly in response to a variety of factors including, among other things:

ENB Financial Corp (the “Corporation”) and its wholly owned subsidiary, Ephrata National Bank, Bank (the “Bank”), are committed to remaining an independent community bank serving its market area. The Corporation’s roots date back to the April 11, 1881 charter granted to Ephrata National Bank by the Office of the Comptroller of the Currency. The Bank’s growth has been entirely organic over 143144 years of existence.existence until February 1, 2026 when it effected the Acquisition. The Board and Management are committed to the principles and values that have served the Corporation well over its history and the desire is to produce strong financial results that will engender trust from the Bank’s customers and favorable returns to the shareholders.

The Corporation recordedCorporation’s net income of $15,317,000$21,559,000 for the year year ended December 31, 2024,2025, a $2,942,000,$6,242,000, or 23.8%40.8% increase over the year ended December 31, 2023.2024. The earningsEarnings per share, basic and diluted, were $2.71$3.80 in 2024,2025, compared to $2.19$2.71 in 2023.2024. A number of items positively impacted net income and led to record earnings.

The Corporation recorded aan $1,015,000$887,000 provision for credit losses losses in 2024,2025, compared to $520,000$1,015,000 in 2023.2024. The higherlower provision in 20242025 was primarily caused by loanfavorable growthcredit as well as higher levels of non-accrual and classified loans. During 2024, the Corporation grew its loan portfolio by $67.2 million.conditions.

The financial services industry uses two primary performance measurements to gauge performance: return on average assets (ROA) and return on average equity (ROE). ROA measures how efficiently a bank generates income based on the amount of assets or size of a company. ROE measures the efficiency of a company in generating income based on the amount of equity or capital utilized. These ratios for the years ended December 31, 2025 and 2024 are as follows:

NII represents the largest portion of the Corporation’s operating income. In 2024,2025, NII generated 75.8%79.2% of the Corporation’s revenue stream, which consists of NII and non-interest income, compared to 81.0%75.8% in 2023.2024. This decreaseincrease is a result of higher levels of non-interestinterest income in 20242025 compared to the prior year. The overall performance of the Corporation is highly dependent on the changes in NII since it comprises such a significant portion of operating income.

The following table shows a summary analysis of NII on a fully taxable equivalent (FTE) basis.basis (in thousands). For analytical purposes and throughout this discussion, yields, rates, and measurements such as NII, net interest spread, and net yield on interest earning assets are presented on an FTE basis.basis assuming a 21% tax rate, less impact of interest expense disallowance. The FTE NII shown in both tables below will exceed the NII reported on the consolidated statements of income, which is not shown on an FTE basis.

NII is the difference between interest income earned on interest-earnings assets and interest expense incurred on interest-bearing liabilities. Accordingly, twoTwo factors affectimpact NII:

NII is impacted by yields earned on assets and rates paid on liabilities. As the Federal Reserve began lowering overnight rates in 2024,2024 and 2025, asset yields did not decline as quickly and the Corporation managed managed liability rates well, moderating the negative impact on net interest margin.

The following table provides an analysis of year-to-year changes in net net interest income by distinguishing what changes were a result of average balance increases or decreases and what changes were a result of interest rate increases or decreases.decreases (in thousands).

The provision for credit losses includes a provision for losses on loans, loans, available-for-sale debt securities, and unfunded loan commitments. The provision provides for losses inherent in the financial assets assets as determined by a quarterly analysis and calculation of various factors related to the financial assets. The amount of the provision reflects the adjustment management determines necessary to ensure the Allowance for Credit Losses (ACL) is adequate to cover any losses inherent in the financial assets. The Corporation recorded a provision expense of $1,017,000$856,000 for credit losses related to loans, a creditprovision provision of $2,000$31,000 related to unfunded commitments, and $0 related to available-for-sale debt securities for the year ended December 31, 2024, 2025, compared to $315,000$1,017,000 expense related to loans, $205,000$2,000 release for unfunded commitments, and $0 related to available-for-sale debt securities for the year ended December 31, 2023.2024. The provision expense was higherlower in 20242025 due to thefavorable Corporation’scredit growth in the loan portfolio as well as slightly higher levels of delinquent, non-accrual, and classified loans.conditions. As of December 31, 2024, 2025, the allowance as a percentage of total loans was 1.13%,1.11%, compared to 1.12%1.13% at December 31, 2023.2024.

Management continues to evaluate the allowance for credit losses in relation relation to the growth or decline of the loan portfolio and its associated credit risk,risk and believes the provision and the allowance for credit credit losses are adequate to provide for future losses. For further discussion of the calculation,discussion, see the “Allowance for Credit Losses” section section.in Management’s Discussion and Analysis.

Other income for 20242025 was $18,130,000,$18,037,000, ana increasedecrease of $5,431,000,$93,000, or 0.5%, 42.8%, compared to the $12,699,000$18,130,000 earned in 2023.2024. The following table details the categories that comprise other income.income (dollars in thousands).

Operating expenses for 2024the year ended December 31, 2025 were $55,231,000, $59,119,000, an increase of $3,824,000, $3,888,000, or 7.4%,7.0%, compared to $51,407,000$55,231,000 in 2023.2024. The following table provides details of the Corporation’s operating expenses for the last two years along with the percentage increase or decrease compared to the previous year.year (dollars in thousands).

Nearly all of the Corporation’s income is taxed at athe federal statutory corporate rate of 21% for Federal income tax purposes.21%. The Corporationholding company is also subject to Pennsylvania Corporate Net Income Tax; however, very limited taxable taxable activity is conducted at the corporateholding company level. The Corporation’s wholly owned subsidiary, Ephrata National Bank, is notcurrently subject subject to the minimal state income tax,tax butin doesan payadjacent state with nexus and also is subject to Pennsylvania Bank Shares Tax. The Bank Shares Tax expense appears on the Corporation’s Consolidated Statements of Income under operating expenses.

The Corporation maintains liquid assets at adequate levels in order to meet the needs of our balance sheet. Our primary source of liquidity is core deposits and our available-for-sale investment portfolioportfolio, both of which provide more than enough liquidity to fund loans to customers and any other funding needs.

A portion of our liquidity consists of cash cash and cash equivalents and borrowings. At December 31, 2024,2025, cash and cash equivalents amounted to $68.9$60,573,000, million, a decrease of $20.1 million,$8,336,000, or 22.6%,12.1%, from balances at December 31, 2023.2024. Our primary sources of cash are principal repayments on loans, proceeds from the sales, calls, and maturities of investment securities, principal repayments of mortgage-backed securities and asset-backed securities, securities, and increases in deposit accounts. As of December 31, 2024,2025, we had outstanding borrowings outstanding from the FHLB of $127,838,000 $143.8 million and subordinated debt of $39.7 million.$81,413,000.

At December 31, 2024,2025, the Corporation had $591.8 million$603,034,000 in outstanding loan commitments outstanding,commitments, which included $64.9 million$68,145,000 in firm loan commitments, $510.5 million$507,785,000 in unused lines of credit, and open letters of credit of $15.8 million.$27,104,000. Certificates of deposit due within one year totaled $330.2 million,$332,212,000, or 76.5%82.6% of certificates certificates of deposit. The Corporation believes, based on past experienceexperience, that a significant portion of certificates of deposit will remain at the Corporation upon maturity and ample liquidity exists outside of these funds. We have the ability to attract and retain deposits by adjusting the interest rates offered.

As reported in the Consolidated Statements Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investinginvesting, or financing cash flows. Net cash provided by operating activities was $15.8 million$25,116,000 and $30.1 million$15,815,000 for the years ended December 31, 20242025 and 2023, 2024, respectively. Net cash used for investing activities was $237.9 million$38,367,000 and $90.3 million$237,881,000 in fiscal years 20242025 and 2023,2024, respectively, reflecting our loan and investment security activities in the respective periods. Cash provided by financing activities amounted to $202.0 million $4,915,000 and $111.6 million$201,979,000 for years ended December 31, 20242025 and 2023,2024. respectivelyFinancing primarily representing increasesactivities in our2024 corewere influenced by brokered deposits throughoutand the year.short term borrowings that were used to fund investment growth and increase net interest income.

The Corporation classifies all of its debt securities as available for for sale and reports the portfolio at fair market value. As of December 31, 2024,2025, the Corporation had $626.1 million$588,949,000 of debt and equity securities, compared to $469.0 million$626,140,000 at December 31, 2023.2024.

In the third quarter of 2024, the Corporation adopted an investment strategy strategy to add $200 million of investments, both agency and non-agency collateralized mortgage obligations consistent with investment policy credit quality parameters, in order to protect interest income in a rising rate environment. The goal of this strategy was to reduce the interest rate risk that management believes was necessary to address the Corporation’s long-term fixed rate assets. The The Corporation paired the investments with off-balance sheet pay-fixed interest rate swaps to mitigate the identified rates-up risk. The The leverage strategy was funded primarily by callable brokered certificates of deposit and a small portion of short-term FHLB borrowings. The funding was chosen to allow for maximum flexibility to protect against rates-down risk. With this strategy, the Corporation has the ability to call the brokered CDs and replace them at lower market rates,rates or unwind the swaps and offset with gains on the investments.

The Corporation’s U.S. Treasury sector and U.S. government agency sectors stayed relatively flat since December 31, 2023.2024. U.S. Treasuries represent a safe credit at a market appropriate yield which added some diversity to the portfolio. These bonds pay monthly principal and interestinterest, and the Corporation has invested into this sector in conjunction conjunction with the strategy discussed above. The Corporation began investing in non-agency MBS and CMO instruments in 2022 as a way to achieve a higher yield with bonds that are well protected from a credit standpoint. As of December 31, 2024,2025, this sector stood at $145.2$143.5 million, million, ana increasedecrease of $89.0$1.7 million year over year. The increase in this sector was also primarily related to the strategy discussed previously. There were no concentrations of issuers greater than 10% of the securities portfolio.

As of December 31, 2024,2025, the Corporation’s corporate bonds decreased by $1.9$7.9 million, or 3.5%,15.0%, from balances at December 31, 2023.2024, as certain corporate bonds were called and redeemed as they converted from fixed to floating rates of interest. Corporate bonds add diversity to the portfolio and provide strong yields for short maturities; however, by their very nature, corporate bonds carry a higher level of credit risk should the entity experience financial difficulties. The fair value of corporate bonds decreased primarily as a result of maturing bonds during 2024.2025.

The following table presents investment securities at December 31, 2025 2024 by expected maturity, including scheduled repayments, and the weighted average yield for each maturity presented. Actual maturities may differ from contractualexpected maturities because because of differences in assumptions on prepayment or call options embedded in the securities. The yields presented are calculated using tax-equivalent interest and the amortized cost. cost (dollars in thousands).

Net loans outstanding increasedtotaled $66.2$1,515,745,000 million, or 4.9%, from $1.34 billion at December 31, 2025, 2023,an toincrease $1.41of billion$88,476,000, or 6.2%, from $1,427,269,000 at December 31, 2024. AllStrong loansales categoriesefforts showedled to an increase in balance balancesacross overmost thecategories priorof period. loans. The Corporation’s strategic plan specifically focused on managed loan growth while maintaining quality of credit standards. This focus resulted in loan growth across all loan segments in 2024.

Agriculture loans increased to $289.3 million$317,957,000 at December 31, 2024,2025, from from $257.3 million$289,284,000 at December 31, 2023.2024. Business loans increased by $6.6$33,753,000 millionduring atthe year end December 31, 20242025 from $354.3 million$360,805,000 at December 31, 31, 2023.2024.

Consumer loans not secured by real estate represent a very small portion of the Corporation’s loan portfolio, at $6.6 million$5,703,000 as of December 31, 2024,2025, and $6.4 million$6,603,000 as of December 31, 2023.2024. These loans consist of personal loans, automobile loans, and other consumer-related loans. Home Equityequity loans increased by $11.2 million$23,040,000 during 20242025 from $107.2$118,329,000 million at December 31, 2023.2024.

Non-OwnerNon-owner Occupiedoccupied CRE loans increased by $1.2 million$33,286,000 during 2024, 2025, from $135.1 million$136,298,000 at at December 31, 2023.2024 to $169,584,000 at December 31, 2025. The Non-Ownernon-owner Occupiedoccupied CRE loans are further segmented by property type with the largest concentration in Other Commercialmulti-family representing 19.3%20.1% of total Non-Ownernon-owner Occupiedoccupied CRE loans outstanding outstanding.at December 31, 2025. Office Spacespace loans represent only 5.6%4.2% of total Non-Owner Occupiednon-owner occupied CRE loans outstanding and retail Retail Centercenter loans represent 7.8%6.1% of total Non-Ownernon-owner Occupiedoccupied CRE loans outstanding. There is no significant single concentration in this category of loans. Total non-owner occupied CRE represents 71.0% of total risk-based capital at December 31, 2025.

The Residentialresidential Realreal Estateestate category represents the largest group of loans loans for the Corporation. The Residentialresidential Realreal Estateestate category of total loans increaseddecreased from $497.6 million$514,120,000 on December 31, 2023,2024, to $514.1$484,337,000 million on December 31, 2024.2025. This category includes closed-end fixed rate or adjustable rateadjustable-rate residential real estate loans secured by 1-4 family residential properties, including first and junior liens.liens, and construction loans. The majoritydecline in the residential real estate category is the result of held for investment mortgage growth in 2024 was related to an increase inless construction loanloans balancesat December 31, 2025 than the prior year, and adjustableas rateindividual mortgages.residential loans moved to permanent financing they were sold on the secondary market. Additionally, some other residential projects were completed and moved to other loan categories. The Corporation also strategically generated more fixed-rate mortgages during 20242025 that were sold on the secondary market resulting in higher levels of gains on mortgages sold.

The following discussion and analysis represents management’s view of the financial condition and results of operations of the Corporation. This discussion and analysis should be read in conjunction with the consolidated financial statements and other financial schedules included in this quarterly report, and in conjunction with the 2025Corporation’s Annual Report toon ShareholdersForm of the Corporation.10-K. The financial condition and results of operations presented are not indicative of future performance.

The Corporation recorded net income of $4,024,000$5,704,000 for the three-month period ended MarchJune 31,30, 2026, a $292,000,$106,000, or 6.8%,1.8% decrease fromover the three months ended MarchJune 31,30, 2025. Net income for the six-month period was $9,728,000, a $398,000, or 3.9% decrease over earnings in the six-month period ended June 30, 2025. Basic and diluted earnings per share of common stock were $1.00 for the firstthree quartermonths ofended 2026June were30, $0.712026, compared to $0.76$1.02 for the same period in 2025.2025, and for the year-to-date period, basic and diluted earnings per share of common stock were $1.71, compared to $1.79 in 2025, or a 4.5% decrease over the comparable six-month period in the previous year.

On February 1, 2026, the Corporation completed its Acquisition of Cecil Bancorp, Inc. (“Cecil”), and its wholly-owned subsidiary, Cecil Bank, which impacted the Corporation’s balance sheet and results of operations for the three and six months ended MarchJune 31, 30, 2026 in comparison to the prior year, as it included twofive months of their activities, as well as merger and conversion related charges of $1,866,000, net of taxes.activities. The fair value of net assets acquired totaled $24,617,000, including net loans of $147,400,000 and deposits of $186,384,000. NetIncluded income,in adjustednet income was $1,240,000 and $3,027,000 of merger and conversion-related expenses, net of taxes, for the three and six months ended June 30, 2026. Adjusted net income (a non-GAAP measure, see separate “Supplemental Reporting of Non-GAAP Measures”) excluding merger and conversion-related charges, was $5,890,000,$6,944,000 and basic$12,755,000, for the three and six months ended June 30, 2026. Adjusted diluted earnings per share, asshare adjusted,(a totalednon-GAAP $1.03.measure), excluding merger and conversion-related charges, were $1.22 and $2.24 for the three and six months ended June 30, 2026. See supplemental discussion of non-GAAP financial measures.

The Corporation’s net interest income (NII) increased by $2,152,000,$3,124,000, or 12.8%,17.7%, and $5,276,000, or 15.3%, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. Interest incomeand fees on loans increased by $3,089,000,$4,381,000, or 16.0%,21.9%, whichand $7,470,000, or 19.0%, for the three and six months ended June 30, 2026, compared to the same periods in 2025, and was favorably impacted by the addition of Cecil’s loans. Interest income on securities available for sale decreased by $884,000,$894,000, or 15.4%,15.7%, and $1,778,000, or 15.6%, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025, due to both lower rates earned on securities as well as lower average balances. Interest expense on deposits declined,declined $316,000, or 4.6%, and $820,000, or 5.9%, for the three and six months ended June 30, 2026 despite the addition of Cecil’s deposits, due to lower market interest rates and management’s strategy to lower the cost of funds, including pricing decisions and calling certain brokered deposits. Interest expense on borrowings increased by $512,000, or 27.3%, and $1,108,000, or 29.5%, for the three and six months ended June 30, 2026, compared to the same periods in 2025, principally due to higher levels of subordinated debt, with newly issued subordinated debt to support the Cecil acquisition at a higher rate than previous issuances.

The Corporation recorded a release of provision release for credit losses of $22,000$462,000 in the firstsecond quarter of 2026, compared to aprovision expense of $126,000 for the second quarter of 2025. For the year-to-date period, provision release was $484,000, compared to provision expense of $486,000$612,000 infor the firstsix quarter ofmonths ended June 30, 2025. The provision release recorded in 2026 was primarily related to favorabledeclines charge-offin history,classified declinesassets in the legacy Ephrata National Bank and acquired Cecil loan portfolios, offsetand bylowering increasedexpected economicusage uncertaintyof considerations.off-balance sheet commitments. The allowance for credit losses (ACL) as a percentage of total loans was 1.15%1.10% as of MarchJune 31,30, 2026, 1.11% as ofat December 31, 2025, and 1.15%1.13% as of MarchJune 31, 30, 2025. The allowance for credit losses on the loans acquired in the Cecil Acquisition contributed to the increase in the ACL to loans coverage ratio.

Other income increased by $1,053,000, $481,000, or 31.7%,13.4%, and $1,534,000, or 22.2%, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year. ThisThe wasprimary duereasons for the increases were related to a variety of increases in a few of the categories including an increase inincreased trust and investment services income,income and increased service fees,fees due to additional customers and noaccounts from the Cecil acquisition. In addition, 2025’s year-to-date income was negatively impacted by losses recorded on thesecurity saletransactions due to strategic sales of debtinvestment securities.securities to fund higher yielding loan growth.

Total operating expenses increased by $3,965,000, $4,344,000, or 27.7%,31.2%, and $8,309,000, or 29.4%, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. The largestprimary increasedriver inof higher operating costs wasexpenses due towere merger and conversion-relatedconversion costs from$1,561,000 and $3,718,000 for the Cecil Acquisition, totaling $2,157,000,three and six months ended June 30, 2026, including severance payments, conversion of Cecil’s operating systems to a unified system, and professional fees to complete the acquisition. Operating expenses also increased due to salary and benefit costs from additional staff including those for ourthe Bank’s four new branches, annual merit increases,increases and higher health insurance costs. Several other categories of expenses increased from the prior yearyear, including occupancy and equipment, computer software and data processing costs, and costs related to professional services, with the Cecil Acquisitionacquisition contributing to the increases.

The lower performance ratios for return on average assets and return on average equity were impacted by the $1,866,000$1,240,000 inand $3,027,000 of merger and conversion-related charges,expenses, net of tax.taxes, for the three and six months ended June 30, 2026.

NII represents the largest portion of the Corporation’s operating income. In the first three months of 2026, NII generated 81.2% of the Corporation’s revenue stream,income, which consists of NII and non-interest income. Thisincome, comparedand torepresents 83.5%83% - 84% of the total for theall firstperiods three months of 2025. The increasepresented in other2026 non-interestand income is the primary reason for the changes, as growth was noted in all other income categories.2025. The overall performance of the Corporation is highly dependent on interest rates and the changes in NII since it comprises such a significant portion of operating income, however, the Corporation continues to grow other operating income for diversification.income.

The following table shows a summary analysis of NII on a fully taxable equivalent (FTE) basis. For analytical purposes and throughout this discussion, yields, rates, and measurements such as NII, net interest spread, and net yield on interest earning assets are presented on an FTE basis, assuming a 21% tax rate. The FTE NII shown in both tables below will exceed the NII reported on the consolidated statements of income,income which is not shownpresented on an FTE basis. The amount of FTE adjustment totaled $145,000$141,000 and $284,000 for the three and six months ended MarchJune 31,30, 2026, compared to $107,000$106,000 and $213,000 for the same periodperiods in 2025 (in thousands):2025.

The following table provides an analysis of year-to-date changes in NII on an FTE basis by distinguishing whatthe changes that were a result of average balance increases or decreasesfluctuations and whatthose changesthat were a result of interest rate increases or decreasesfluctuations (dollars in thousands):

The following tabletables showsfor the three and six months ended June 30, 2026 and 2025 show a more detailed analysis of NII on aan FTE basis with major elements of the Corporation’s balance sheet, which consists of interest earning and non-interest earning assets and interest bearing and non-interest bearingnon-interest-bearing liabilities (dollars in thousands):

(a) Includes balances of nonaccrual non-accrual loans and net deferred loan fees and the recognition of any related interest income.

The Corporation’s average balances on securities decreased by $45,356,000, $46,360,000, or 6.9%,7.2%, for the three months ended MarchJune 31,30, 2026, and $45,861,000, or 7.0%, for the six months ended June 30, 2026 compared to the same periods in 2025. The tax equivalent yield on investments decreased by 31 basis points for the quarter-to-date and 31 basis points for the year-to-date period when comparing both years. Interest income on securities decreased by $883,000, or 15.1%, and $1,762,000, or 15.0%, for the three and six months ended June 30, 2026, compared to the same period in 2025. Interest income on securities decreased by $876,000, or 14.8%, for the three months ended March 31, 2026, compared to the same periodperiods in the prior year. The majority of the securities acquired from Cecil were sold shortly after Acquisition date and provided little in average balances.balances for the periods presented. The decrease31-basis point decline in therate portfolioearned wason primarily securities is the result of maturinga variable rate securities andrepricing regular scheduled monthly principal payments being used to fund loan growth. The tax equivalent yield on investments decreased by 31 basis points for the quarter-to-date period when comparing both years.downward.

The average balance of interest-bearing deposit accounts increased by $72,903,000$68,502,000, or 5.9%,5.4%, and $70,690,000, or 5.6%, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year. Growth was experienced in all deposit types, partiallyprincipally due to $186,384,000 in deposits acquired in the Cecil Acquisition on February 1, 2026. HigherDespite yielding brokeredthe depositsgrowth decreasedin average deposit balances, interest expense declined by $28,889,000$316,000 duringand $820,000 for the firstthree quarterand ofsix months ended June 30, 2026 compared to 2025,the assame certainperiods brokeredin depositsthe wereprior called asyear. partThe lower expense was the result of the discipline in managing cost of funds. As a result of lower market rates during the period and managing our cost of deposits, funds, including less reliance on higher costing brokered time deposits which averaged $66,310,000 and $47,772,000 less in the three and six months ended June 30, 2026 compared to 2025. These brokered deposits which were used to fund the Corporation’s leverage strategy with derivatives were called, as cheaper funds became available. The rate paid on interest bearing deposits declined 28by 21 and 25 basis points fromfor the three and six months ended MarchJune 31,30, 2026 to the same period in 2025. The decrease in rates paid allowed the Corporation to lower its total interest expense on deposits by $503,000 in the first quarter of 2026 compared to 2025.2026.

The Corporation’s average balance on borrowed funds increased by $15,497,000,$15,279,000, or 8.6%,8.7%, for the three months ended MarchJune 31,30, 2026, and $15,398,000, or 8.6%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. In December 2025, the Corporation issued $42,500,000 in subordinated debt that was used to partially fund the Acquisition of Cecil, as well as allow allowing for the repayment in February 2026 of the Corporation’s first2020 subordinated debt issuance in 2020,issuance, which had converted to a floating rate of interest. The interest rate associated withon the 2025newly issued subordinated debt was highergreater than thatthe interest rate of the amount paid off, resulting in a higher cost for subordinated debt in the2026 currentcompared period.to 2025. Scheduled repayments of long-term debt in 2025 and the first quarter half of 2026 were replaced with either deposit growth or short-term borrowings and resulted in the average balancebalances dropping $18,421,000declining inby $23,275,000 and $20,861,000 for the firstthree quarterand ofsix months ended June 30, 2026 compared to the firstsame quarterperiods ofin 2025.the prior year. Total interest expense on borrowings totaled $2,482,000,increased a$512,000 $596,000and increase$1,108,000 overfor the firstthree quarterand ofsix 2025,months primarilyended June 30, 2026 compared to the corresponding periods in the prior year as a result of the higher costing additional balances in subordinated debt with higher rates paid.debt.

For the three months ended MarchJune 31,30, 2026, the net interest spread increased by 2733 basis points to 2.55%,2.80%, compared to 2.28%2.47% for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, the net interest spread increased by 31 basis points to 2.68%, compared to 2.37% for the six months ended June 30, 2025. The effect of noninterest-bearing non-interest bearing funds decreased to 80 basis points for the three months ended MarchJune 31,30, 2026, from 8582 basis points for the three months ended MarchJune 31, 30, 2025, and decreased to 81 basis points from 87 basis points for the six months ended June 30, 2026, compared to the same periods in 2025. The effect of noninterest-bearingnon-interest bearing funds refers to the benefit gained from deposits on which the Corporation does not pay interest andinterest. As rates go higher, the benefit of non-interest-bearing deposits increases because there is agreater componentdifference ofbetween netnon-interest-bearing interestfunds margin.and interest-bearing liabilities. The Corporation’s NIM for the firstsecond quarter of 2026 was 3.35%,3.60%, compared to 3.13%3.29% for the firstsecond quarter of 2025. For the year-to-date period, the Corporation’s NIM was 3.49%, compared to 3.24% for the same period in 2025.

The provision for credit losses includes a provision for losses on loans, available-for-sale debt securities, and unfunded loan commitments. The provision provides for losses inherent in the financial assets as determined by a quarterly analysis and calculation of various factors related to the financial assets. The amount of the provision reflects the adjustment management determines necessary to ensure the Allowance for Credit Losses (ACL) is adequate to cover any losses inherent in the financial assets. The Corporation recorded a provision release of $22,000 for the first quarter of 2026, consisting of a provision for credit losses related to loans of $108,000, a provision release of $130,000 for unfunded commitments, and $0 related to available-for-sale securities. For the first quarter of 2025, the provision for credit losses was $486,000, consisting of $426,000 provision related to loans, $60,000 for unfunded commitments, and $0 related to available-for-sale securities. The lower provision levels in 2026 was primarily related to favorable charge-off history, declines in the legacy Ephrata National Bank and Cecil loan portfolios, offset by increased economic uncertainty considerations.

As of MarchJune 31,30, 2026 and 2025,2026, the allowance as a percentage of total loans was 1.15%.1.10%, compared to 1.11% and 1.13% at December 31, 2025 and June 30, 2025. More details are provided under Allowance for Credit Losses in the Financial Condition section that follows.

Other income for the firstsecond quarter of 2026 was $4,379,000,$4,062,000, an increase of $1,053,000,$481,000, or 31.7%,13.4%, compared to the $3,326,000$3,581,000 earned during the firstsecond quarter of 2025. Other income for the year-to-date period was $8,441,000, an increase of $1,534,000, or 22.2% from the year-to-date period in 2025. The following tabletables detailsdetail the categories that comprise other income (dollars in thousands):

Trust and investment services income increased by $141,000, or 17.9%, for the quarter asand a resultincreased of$334,000, or 20.2% year-to-date due to increased estate fees, additional wealth management accounts, and favorable market conditions. Service fees and commissions increased by $250,000,$257,000, or 14.1%36.9%, for the quarter and increased $461,000, or 31.5% year-to-date due primarily to bothadditional organic growth,customers and new customers that resultedaccounts from the Cecil Acquisition.acquisition. Commissions increased by $103,000, or 10.2%, for the quarter and increased $149,000, or 7.4% year-to-date due to increased interchange fees. The Corporation recorded a$15,000 gainof net gains on securitysecurities transactions of $32,000sold in the firstsecond quarter of 2026,2026 compared to net$48,000 in the second quarter of 2025. For the year-to-date period, the Corporation recorded $47,000 of gains on securities sold compared to losses of $333,000$285,000 for the year-to-date period in the same quarter of the prior year.2025. Losses on security transactions in 2025 were due to strategic sales of debtinvestment securities to fund higher yielding loan growth. Mortgage gains increased by $73,000,$45,000, or 16.6%,11.5%, inand $118,000, or 14.2%, for the firstthree quarterand ofsix 2026months ended June 30, 2026, compared to the firstsame quarterperiods in the prior year. This was primarily a result of 2025,higher due to higher premiums earned on loans sold with servicing released and continued sales of permanent financing for construction loans originated in the prior year. Earnings on bank owned life insurance increasedwere $133,000,higher by $22,000, or 49.1%,7.8%, and $155,000, or 28.0%, for the three and six months ended MarchJune 31,30, 2026, compared to the same period in the prior yearyear. asThis increase in the year-to-date amount was due to death benefits were received related to two former directors.directors in 2026. Other miscellaneous income decreased by $54,000, or 14.9%, and $15,000, or 2.2%, for the three and six months ended June 30, 2026, compared to the prior year as a result of sales tax refunds received in the second quarter of 2025.

Operating expenses for the firstsecond quarter of 2026 were $18,284,000, $18,266,000, an increase of $3,965,000,$4,344,000, or 27.7%,31.2%, compared to $14,319,000the $13,922,000 for the firstsecond quarter of 2025. The following table provides details ofFor the Corporation’s year-to-date period ended June 30, 2026, operating expenses fortotaled the$36,550,000, three-monthan periodincrease endedof March$8,309,000, 31,or 2026,29.4%, compared to the same period in 20252025. (dollarsThe in thousands):following tables detail the categories that comprise operating expenses.

The Acquisition of Cecil led to increased operating expenses as four additional branches in Cecil County, Maryland, were added to the Corporation’s retail network and incremental costs of maintaining two operating systems were required following the Acquisition. The Acquisition also resulted in merger and conversion related expenses of $2,157,000$1,561,000 and $3,718,000 for the three and six months ended MarchJune 31,30, 2026, as wethe Corporation incurred professional services to complete the merger and employee severance payments were processed. The In late June 2026, the Corporation anticipatescompleted convertingthe conversion of the former Cecil operating system to a unified platform which should eliminate redundant expenses in Junefuture 2026.periods.

Salaries and employee benefits are the largest category of operating expenses. For the firstsecond quarter of 2026, salaries and benefits increased $1,257,000,$825,000, or 15.2%,9.9%, and for the six months ended June 30, 2026, salaries and benefits increased $2,082,000, or 12.5%, compared to the same periodperiods in 2025. In addition to increased expense associated with staffingStaffing four additional branches duein toCecil the Acquisition,County, merit increasesincreases, and higher medical insurance costs contributed to the increase. Occupancy and equipment costs were higher by a combined total of $342,000,$611,000, or 26.4%,51.0%, and $953,000, or 38.2%, for the three and six months ended June 30, 2026, compared to the prior year as result of costs associated with new lease expense and higher equipment costs related to costs associatedthe withacquisition. Advertising and marketing expenses were higher by $66,000, or 17.6%, and $47,000, or 6.3%, for the three newand leasedsix properties,months ended June 30, 2026, compared to the prior year. This increase was primarily related to advertising and media production costs as the purchaseCorporation of new equipmentcontinues to convertpursue marketing opportunities in the communities it serves including the recently entered Cecil toCounty a unified platform.market. Computer software and data processing expenses increased by $270,000,$800,000, or 14.8%,44.9%, and $1,070,000, or 29.7%, for the three and six months ended MarchJune 31,30, 2026, ascompared ato resultthe ofsame periods in the previous year due to maintaining two operating systems aswith wellthe asCecil enhancementsacquisition, evolution of enhanced products and services to furthermeet automatecustomers’ processes.needs, and increased transaction volumes. Shares tax expense is based on the Bank’sCorporation’s level of shareholders’ equity, equity and has increased $88,000,$82,000, or 24.4%21.5%, and $171,000, or 23.0%, for the three and six months ended June 30, 2026 due to the growth in shareholders’the Bank’s shareholder’s equity. Professional services costs increased by $113,000, $269,000, or 13.4%,33.2%, and increased by $382,000, or 23.1%, for the quarter and year-to-date periods. The increase is primarily related to higher accounting and legal fees as well as increased costs for other outside services. Other operating expenses increased by $5,000, or 0.5%, and decreased by $326,000,$322,000, or 24.1%,13.6%, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year due primarily to depositdecreased andlevel of fraud-related charges decreasing.charge-offs.

Federal and state income tax expense was $1,022,000 for the first quarter of 2026 compared to $982,000 for the same period in 2025. The effective tax rate for the Corporation was 20.3% for the three months ended March 31, 2026,$1,335,000 and 18.5%$1,380,000 for the three months ended MarchJune 31,30, 2025.2026 and 2025, resulting in an effective tax rate of 19.0% for both periods. For the six months ended June 30, 2026 and 2025, income tax expense was $2,357,000 and $2,362,000 for an effective tax rate of 19.5% and 18.9%. Generally, the Corporation’s effective tax rate is less than the 21% federal statutory rate due to tax-exempt income, including interest earned on tax-exempt investment securities and loans, and income from life insurance policies, partially offset by disallowed interest expense, state income taxes, and non-deductible acquisition related expenses. The increase in the year-to-date statutory rate is higher due to a state tax expense with the Acquisition of Cecil, and non-deductible Acquisition-relatedacquisition-related expenses.

A portion of our liquidity consists of cash and cash equivalents and borrowings. At MarchJune 31,30, 2026, cash and equivalents amounted to $89,520,000,$37,145,000, compared to $60,573,000 at December 31, 2025, and $78,728,000$65,269,000 at MarchJune 31,30, 2025. Our primary sources of cash are principal repayments on loans, proceeds from the sales, calls, and maturities of investment securities, principal repayments of mortgage-backed securities and asset-backed securities, and increases in deposit accounts. As of MarchJune 31,30, 2026, wethe Corporation had outstanding borrowings from the FRB Discount Window of $16,000,000, the FHLB of $120,038,000$113,007,000 and the subordinated debt of $61,474,000.$61,535,000.

At MarchJune 31,30, 2026, the Corporation had $629,599,000 $660,334,000 in outstanding loan commitments, which included $77,578,000$89,038,000 in firm loan commitments, $523,497,000$543,081,000 in unused lines of credit, and open letters of credit of $28,524,000.$28,215,000. Certificates of deposit due within one year totaled $421,654,000,$414,538,000, or 85.9%97.6% of certificates of deposit. The Corporation believes, based on past experience, that a significant portion of certificates of deposit will remain at the Corporation upon maturity and ample liquidity exists outside of these funds. We have the ability to attract and retain deposits by adjusting the interest rates offered.

As reported in the Consolidated Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing, or financing cash flows. Net cash provided by operating activities was $3,610,000$10,062,000 for the quartersix months ended MarchJune 31,30, 2026 and $4,128,000$10,372,000 for the quartersix months ended MarchJune 31,30, 2025. Net cash provided by investing activities was $47,371,000 and $7,944,000$29,790,000 for the quartersix months ended MarchJune 31,30, 20262026, and 2025, respectively, reflecting the liquidation of the Cecil securities in 2026 combined with net loan payoffs.payoffs and net cash used for investing activities was $10,508,000 for the six months ended June 30, 2025. Cash used for financing activities amounted to $22,034,000$63,280,000 and $2,253,000$3,504,000 for quarter6 months ended MarchJune 31,30, 2026 and 2025. Financing activities in 2026 were influenced by the repayment of subordinated debt.debt and brokered deposits, partially offset by increases in demand and savings accounts.

The Corporation classifies all of its debt securities as available for sale and reports the portfolio at fair market value. As of MarchJune 31,30, 2026, the Corporation had $573,634,000$568,205,000 of debt and equity securities, compared to $588,949,000 at December 31, 2025, and $605,259,000$601,920,000 at MarchJune 31,30, 2025.

In the third quarter of 2024, the Corporation adopted an investment strategy to add $200approximately million$200,000,000 of investments, both agency and non-agency collateralized mortgage obligations consistent with investment policy credit quality parameters, in order to protect interest income in a rising rate environment. The goal of this strategy was to reduce the interest rate risk that management believes was necessary to address the Corporation’s long-term fixed rate assets. The Corporation paired the investments with off-balance sheet pay-fixed interest rate swaps to mitigate the identified rates-up risk. The leverage strategy was funded primarilyinitially by callable brokered certificates of deposit and a small portion of short-term FHLB borrowings. The funding was chosen to allow for maximum flexibility to protect against rates-down risk. With this strategy, the Corporation has the ability to call the brokered CDs and replace them at lower market rates or unwind the swaps and offset with gains on the investments. At June 30, 2026, the brokered CDs initially used to fund the strategy have been called and paid off. Pay downs on the securities have resulted in the remaining balance of $175,109,000 at June 30, 2026.

Cecil had securities with a fair value of $19,030,000 as of February 1, 2026, the date of Acquisition. The Corporation evaluated these securities in connection with its overall balance sheet and investment strategy of all net assets acquired and elected to sell $17,843,000 of these securities shortly after closing of the transaction. No additional debt securities were purchased during the three months ended March 31, 2026.

The Corporation’s U.S. Treasury sector and U.S. government agency sectors stayed relatively flat since December 31, 2025. U.S. Treasuries represent a safe credit at a market appropriate yield which added some diversity to the portfolio. These bonds pay monthly principal and interest, and the Corporation has invested into this sector in conjunction with the investment strategy discussed above. The Corporation began investing in non-agency MBS and CMO instruments in 2022 as a way to achieve a higher yield with bonds that are well protected from a credit standpoint. As of MarchJune 31,30, 2026, this sectorsector’s fair value balances stood at $135.3 million,$133,965,000, a decrease of $8.2 million$9,546,000 since December 31, 2025 due to monthly paydowns. There were no concentrations of issuers greater than 10% of the securities portfolio.

The Corporation’s asset-backed securities (ABS) decreased since December 31, 2025, by $1.6 million,$3,324,000, or 3.1%.6.5%. ABS are floating rate student loan pools which are instruments that perform well in a rates-up environment and offset the interest rate risk of the longer fixed-rate municipal bonds. These securities provide a variable rate return above the overnight Federal funds rate in a safe investment with a risk rating very similar to that of U.S. Agency bonds. The asset-backed securities generally provide monthly principal and interest payments to complement the Corporation’s ongoing cash flows. Management views the ABS sector as a safe, higher yielding option than cash, with the qualities of cash in a rates-up environment.

Obligations of statesstate and political subdivisions, or municipal bonds, consist of both tax-free and taxable securities. They carry the longest duration on average of any instrument in the securities portfolio. These instruments also experience significant fair market value gains and losses when interest rates fluctuate, and currently the yield on the portfolio has resulted in unrealized losses. The balanceamortized cost of municipal bonds decreased slightly in the first threesix months of 2026. Municipal bonds represented 29.7%30.4% of the debt securities portfolio as of MarchJune 31,30, 2026, compared to 29.2%31.5% as of December 31, 2025. The largest geographical concentrations as of MarchJune 31,30, 2026 were obligations of states and political subdivisions located in the states of Pennsylvania and California.

As of MarchJune 31,30, 2026, the Corporation’s corporate bonds increased slightlydecreased by $556,000,$1,895,000 or 1.20%,4.20%, from balances at December 31, 2025. Corporate bonds add diversity to the portfolio and provide strong yields for short maturities; however, by their very nature, corporate bonds carry a higher level of credit risk should the entity experience financial difficulties.

The following table presents investment securities at MarchJune 31,30, 2026 by expected maturity, including scheduled repayments, and the weighted average yield for each maturity presented. Actual maturities may differ from expected maturities because of differences in assumptions on prepayment or call options embedded in the securities. The yields presented are calculated using tax-equivalent interest and the amortized cost (dollars in thousands).

Net loans outstanding increased by 14.2%,14.2% to $1,628,874,000$1,653,016,000 at March 31,June 30, 2026 from $1,426,925,000$1,446,716,000 at MarchJune 31,30, 2025. Net loans increased by 8.7%,10.1%, from $1,498,859,000 at December 31, 2025. The following table shows the composition of the loan portfolio as of MarchJune 31,30, 2026, December 31, 2025, and MarchJune 31,30, 2025 (in thousands):

The growth in the loan portfolio since December 31, 20252025, was primarily the result of loans acquired from Cecil of $147,400,000, primarily in the business and consumer loan segments. The MarchJune 31,30, 20262026, loan portfolio increased $203,903,000$206,300,000 from MarchJune 31,30, 2025. In addition to the loans acquired from Cecil, strong sales and marketing efforts led to increased balances across most categories of loans. The Corporation’s strategic plan specifically focusedfocuses on managed loan growth while maintaining quality of credit standards. The residential real estate segment has declined as management has chosen to reduce the number of mortgage loans itin its portfolios due to their long maturity dates and elevated interest rate risk.

In the first threesix months of 2026, mortgage production decreased 10.5%14.6% compared to the first threesix months of 2025. Purchase money origination constituted 88.7%86.9% of the Corporation’s mortgage originations for the threesix months ended MarchJune 31,30, 2026. The held-for-investment production is 44.8%49.5% of total originations with construction-only and construction-permanent loans making up 66.2%66.6% of the total held-for-investment production. As of MarchJune 31,30, 2026, adjustable-rate mortgage balances were $313.9$316.8 million, representing 68.2% of the 1-4 family residential loan portfolio of the Corporation.

The following table presents the Corporation’s non-performing assets at MarchJune 31,30, 2026, December 31, 2025, and MarchJune 31,30, 2025 (in thousands):

The total balance of non-performing assets increaseddecreased by $3,649,000,$894,000, or 34.0%,7.9%, over balances at MarchJune 31, 30, 2025, and increased $5,040,000,$1,036,000, or 54.0%,11.1%, from balances at December 31, 2025. The increasesincrease over the MarchDecember 31, 2025 and December 31, 2025 balance was andue increaseprimarily into customersforeclosure experiencingon financiala difficulties,commercial including the additionproperty of $412,000 of nonaccrual loans$748,000 and $533,000$579,000 of foreclosed assets acquiredassociated inwith the legacy Cecil Acquisition. These loans are generally well secured, or have reserves established on them to mitigate future losses. One loan totaling $2,505,000 that moved into nonaccrual status during the first quarter of 2026 was paid off, in full, in April 2026.portfolio.

Strong credit and collateral policies have been instrumental in producing a favorable history of credit losses for the Corporation. The Net Charge-Off table below shows the net charge-offs for each segment of the Corporation’s loan portfolio for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

The Corporation’s total ending deposits at MarchJune 31,30, 2026 increased by $192,987,000,$143,607,000, or 10.3%,7.7%, from December 31, 2025 and by $172,861,000,$120,442,000, or 9.1%,6.4%, from MarchJune 31,30, 2025. Customer deposits are the Corporation’s primary source of funding for loans and securities. The growth in each category of deposits was primarily the result of the $186,384,000 of deposits that were acquired in the Acquisition of Cecil. Brokered CDs decreasedtotaled $28,889,000,$3,749,000 at June 30, 2026, a decrease of $64,293,000 from $96,955,000 at MarchDecember 31, 2025,2025 to $68,066,000and as$93,240,000 offrom MarchJune 31,30, 2026.2025. The Corporation used excess funds to call certain brokered deposits, to assist in managing the Corporation’s cost of funds.