淨收入：437 萬美元（+23.9%），每股盈利 $0.78（去年同期 $0.62）

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 10-Q
 
☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended March 31, 2026
OR
 
☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                to                 
 
Commission File Number 000-16435
 
 

 
Community Bancorp./VT

(Exact name of Registrant as Specified in its Charter)

  
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
 
Securities registered pursuant to Section 12(b) of the Act: 
 
Title of Each Class
Trading Symbol(s)
Name of each exchange on which registered

Common Stock, $2.50 per value per share 
CMTV
The Nasdaq Stock Market LLC 

 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file for such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒  No ☐ 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  NO ☐
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
☐
Accelerated filer
☐

Non-accelerated filer
☒
Smaller reporting company
☒

 
 
Emerging growth company
☐

 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
 
At May 5, 2026, there were 5,591,253 shares outstanding of the Corporation's common stock.
 

 

 
  
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
 
48

Item 4
Controls and Procedures
 
48

 
 
 
 

PART II
OTHER INFORMATION
 
 

 
 
 
 

Item 1
Legal Proceedings
 
49

Item 1A
Risk Factors
 
49

Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
 
49

Item 6
Exhibits
 
50

 
Signatures
 
51

 
Exhibit Index
 
52

 
 
2

Table of Contents
 
PART I. FINANCIAL INFORMATION
 
ITEM 1. Financial Statements (Unaudited)
 
The following are the unaudited consolidated financial statements for the Company.
 
Community Bancorp. and Subsidiary
 
March 31
 
 
December 31,
 

Consolidated Balance Sheets
 
2026 
 
 
2025 
 

 
 
(Unaudited)
 
 
 
 

 
 
 
 
 
 
 

Assets
 
 
 
 
 
 

Cash and due from banks
 
$9,512,920 
 
$11,802,391 

Federal funds sold and overnight deposits
 
 
55,086,179 
 
 
116,259,370 

Total cash and cash equivalents
 
 
64,599,099 
 
 
128,061,761 

Securities available-for-sale (amortized cost $150,158,141 and $156,694,754 at 03/31/26 and 12/31/25, respectively)
 
 
137,784,382 
 
 
144,528,758 

Restricted equity securities, at cost
 
 
2,902,450 
 
 
2,933,050 

Loans held-for-sale
 
 
300,000 
 
 
138,000 

Loans
 
 
983,876,487 
 
 
965,285,662 

Allowance for credit losses
 
 
(11,280,241) 
 
(10,864,983)
Deferred net loan costs
 
 
852,511 
 
 
786,604 

Net loans
 
 
973,448,757 
 
 
955,207,283 

Bank premises and equipment, net
 
 
12,035,404 
 
 
12,090,886 

Accrued interest receivable
 
 
5,298,063 
 
 
4,607,975 

Bank owned life insurance
 
 
5,416,653 
 
 
5,398,085 

Goodwill
 
 
11,574,269 
 
 
11,574,269 

Other real estate owned
 
 
0 
 
 
319,019 

Other assets
 
 
21,925,695 
 
 
22,699,860 

Total assets
 
$1,235,284,772 
 
$1,287,558,946 

 
 
 
 
 
 
 
 
 

Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 

Liabilities
 
 
 
 
 
 
 
 

Deposits:
 
 
 
 
 
 
 
 

Demand, non-interest bearing
 
$199,316,812 
 
$218,842,543 

Interest-bearing transaction accounts
 
 
291,067,383 
 
 
299,636,739 

Money market funds
 
 
148,980,329 
 
 
187,132,921 

Savings
 
 
147,941,226 
 
 
142,543,291 

Time deposits, $250,000 and over
 
 
166,165,700 
 
 
46,913,997 

Other time deposits
 
 
64,295,307 
 
 
175,598,510 

Total deposits
 
$1,017,766,757 
 
$1,070,668,001 

Repurchase agreements
 
 
40,086,527 
 
 
41,498,171 

Borrowed funds
 
 
35,975,022 
 
 
35,975,022 

Junior subordinated debentures
 
 
12,887,000 
 
 
12,887,000 

Accrued interest and other liabilities
 
 
11,726,716 
 
 
12,843,774 

Total liabilities
 
$1,118,442,022 
 
$1,173,871,968 

 
 
 
 
 
 
 
 
 

Shareholders' Equity
 
 
 
 
 
 
 
 

Common stock - $2.50 par value; 15,000,000 shares authorized, 5,896,981
 
 
 
 
 
 
 
 

shares issued at 03/31/26 and 5,882,266 shares issued at 12/31/25
 
 
14,742,453 
 
 
14,705,665 

Additional paid-in capital
 
 
40,410,499 
 
 
40,076,561 

Retained earnings
 
 
75,997,719 
 
 
73,021,908 

Accumulated other comprehensive loss
 
 
(9,775,269) 
 
(9,611,137)
Less: treasury stock, at cost; 300,409 shares at 03/31/26 and 299,339 shares
 
 
 
 
 
 
 
 

at 12/31/25
 
 
(4,532,652) 
 
(4,506,019)
Total shareholders' equity
 
 
116,842,750 
 
 
113,686,978 

Total liabilities and shareholders' equity
 
$1,235,284,772 
 
$1,287,558,946 

 
 
 
 
 
 
 
 
 

Book value per common share outstanding
 
$20.88 
 
$20.36 

 
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
 
 
3

Table of Contents
 
Community Bancorp. and Subsidiary
 
Three Months Ended March 31
 

Consolidated Statements of Income
 
2026 
 
 
2025
 

(Unaudited)
 
 
 
 
 
 

 
 
 
 
 
 
 

Interest income
 
 
 
 
 
 

Interest and fees on loans
 
$14,432,621 
 
$13,215,032 

Interest on taxable debt securities
 
 
804,751 
 
 
859,231 

Interest on tax-exempt debt securities
 
 
80,411 
 
 
80,411 

Dividends
 
 
51,958 
 
 
47,890 

Interest on federal funds sold and overnight deposits
 
 
657,098 
 
 
321,948 

Total interest income
 
 
16,026,839 
 
 
14,524,512 

 
 
 
 
 
 
 
 
 

Interest expense
 
 
 
 
 
 
 
 

Interest on deposits
 
 
4,176,632 
 
 
4,185,907 

Interest on borrowed funds
 
 
385,950 
 
 
370,977 

Interest on repurchase agreements
 
 
293,730 
 
 
285,959 

Interest on junior subordinated debentures
 
 
222,647 
 
 
243,345 

Total interest expense
 
 
5,078,959 
 
 
5,086,188 

 
 
 
 
 
 
 
 
 

Net interest income
 
 
10,947,880 
 
 
9,438,324 

Credit loss expense
 
 
391,505 
 
 
325,054 

Net interest income after credit loss expense
 
 
10,556,375 
 
 
9,113,270 

 
 
 
 
 
 
 
 
 

Non-interest income
 
 
 
 
 
 
 
 

Service fees
 
 
936,477 
 
 
886,782 

Income from sold loans
 
 
69,546 
 
 
69,377 

Other income from loans
 
 
350,194 
 
 
270,167 

Income from investment in CFS Partners
 
 
242,438 
 
 
249,350 

Other income
 
 
146,685 
 
 
102,933 

Total non-interest income
 
 
1,745,340 
 
 
1,578,609 

 
 
 
 
 
 
 
 
 

Non-interest expense
 
 
 
 
 
 
 
 

Salaries and wages
 
 
2,578,836 
 
 
2,320,066 

Employee benefits
 
 
1,111,276 
 
 
1,017,974 

Occupancy expenses, net
 
 
774,981 
 
 
781,856 

Other expenses
 
 
2,592,267 
 
 
2,383,716 

Total non-interest expense
 
 
7,057,360 
 
 
6,503,612 

 
 
 
 
 
 
 
 
 

Income before income taxes
 
 
5,244,355 
 
 
4,188,267 

Income tax expense
 
 
875,253 
 
 
662,812 

Net income
 
$4,369,102 
 
$3,525,455 

 
 
 
 
 
 
 
 
 

Earnings per common share
 
$0.78 
 
$0.62 

Weighted average number of common shares
 
 
 
 
 
 
 
 

used in computing earnings per share
 
 
5,586,133 
 
 
5,605,278 

Dividends declared per common share
 
$0.25 
 
$0.24 

 
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
 
 
4

Table of Contents
 
Community Bancorp. and Subsidiary
 
 
 
 

Consolidated Statements of Comprehensive Income
 
 
 
 

(Unaudited)
 
Three Months Ended March 31
 

 
 
2026 
 
 
2025
 

 
 
 
 
 
 
 

Net income
 
$4,369,102 
 
$3,525,455 

 
 
 
 
 
 
 
 
 

Other comprehensive income
 
 
 
 
 
 
 
 

Unrealized (loss) gain on securities AFS arising during the period
 
 
(207,764) 
 
3,006,141 

Tax effect
 
 
43,632 
 
 
(631,290)
Other comprehensive (loss) income, net of tax
 
 
(164,132) 
 
2,374,851 

Total comprehensive income
 
$4,204,970 
 
$5,900,306 

 
The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 
 
 
5

Table of Contents
 
Community Bancorp. and Subsidiary

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

 
 
Three Months Ended March 31, 2026
 

 
 
 
 
 
 
 
 
Additional
 
 
 
 
 
 
 
 
 
 
 
Total
 

 
 
Common
 
 
Preferred
 
 
paid-in 
 
 
Retained
 
 
 
 
 
Treasury
 
 
shareholders'
 

 
 
Stock
 
 
Stock
 
 
capital
 
 
earnings
 
 
AOCI*
 
 
stock
 
 
equity
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

January 1, 2026
 
$14,705,665 
 
$0 
 
$40,076,561 
 
$73,021,908 
 
($9,611,137)
 
 
($4,506,019)
 
 
$113,686,978 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Issuance of common stock
 
 
36,788 
 
 
 
 
 
 
333,938 
 
 
 
 
 
 
 
 
 
 
 
 
370,726 

Cash dividends declared
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,393,291) 
 
 
 
 
 
 
 
(1,393,291)
Shares purchased through stock buyback plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(26,633) 
 
(26,633)
Comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,369,102 
 
 
 
 
 
 
 
 
 
4,369,102 

Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(164,132) 
 
 
 
 
 
(164,132)
March 31, 2026
 
$14,742,453 
 
$0 
 
$40,410,499 
 
$75,997,719 
 
($9,775,269)
 
 
($4,532,652)
 
 
$116,842,750 

 
Community Bancorp. and Subsidiary

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

 
 
Three Months Ended March 31, 2025
 

 
 
 
 
 
 
 
 
Additional
 
 
 
 
 
 
 
 
 
 
 
Total
 

 
 
Common
 
 
Preferred
 
 
paid-in 
 
 
Retained
 
 
 
 
 
Treasury
 
 
shareholders'
 

 
 
Stock
 
 
Stock
 
 
capital
 
 
earnings
 
 
AOCI*
 
 
stock
 
 
equity
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

January 1, 2025
 
$14,522,588 
 
$1,500,000 
 
$38,801,755 
 
$61,623,460 
 
($15,776,821)
 
 
($2,622,777)
 
 
$98,048,205 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Issuance of common stock
 
 
53,085 
 
 
 
 
 
 
310,454 
 
 
 
 
 
 
 
 
 
 
 
 
363,539 

Cash dividends declared
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,343,515) 
 
 
 
 
 
 
 
(1,343,515)
Preferred stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(28,125) 
 
 
 
 
 
 
 
(28,125)
Shares purchased through stock buyback plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(35,380) 
 
(35,380)
Comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,525,455 
 
 
 
 
 
 
 
 
 
3,525,455 

Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,374,851 
 
 
 
 
 
 
2,374,851 

March 31, 2025
 
$14,575,673 
 
$1,500,000 
 
$39,112,209 
 
$63,777,275 
 
($13,401,970)
 
 
($2,658,157)
 
 
$102,905,030 

 
*Accumulated other comprehensive loss
 
The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 
 
 
6

Table of Contents
 
Community Bancorp. and Subsidiary
 
 
 
 
 
 

Consolidated Statements of Cash Flows
 
 
 
 
 
 

(Unaudited)
 
Three Months Ended March 31
 

 
 
2026
 
 
2025
 

 
 
 
 
 
 
 

Cash Flows from Operating Activities:
 
 
 
 
 
 

Net income
 
$4,369,102 
 
$3,525,455 

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
 

Depreciation and amortization, bank premises and equipment
 
 
249,913 
 
 
256,686 

Credit loss expense
 
 
391,505 
 
 
325,054 

Deferred income tax benefit
 
 
(109,277) 
 
(102,112)
Gain on sale of loans
 
 
(15,214) 
 
(13,258)
(Gain) loss on sale of bank premises and equipment
 
 
(18,486) 
 
7,839 

Gain on sale of OREO
 
 
(37,318) 
 
0 

Income from CFS Partners
 
 
(242,438) 
 
(249,350)
Amortization of bond premium, net
 
 
4,479 
 
 
29,528 

Proceeds from sales of loans held for sale
 
 
767,231 
 
 
417,133 

Originations of loans held for sale
 
 
(914,017) 
 
(896,375)
Increase in taxes payable
 
 
727,097 
 
 
552,056 

Increase in interest receivable
 
 
(690,088) 
 
(1,003,374)
Decrease in mortgage servicing rights
 
 
22,296 
 
 
28,432 

Decrease in right-of-use assets
 
 
55,486 
 
 
51,245 

Decrease in operating lease liabilities
 
 
(52,654) 
 
(45,563)
Decrease in other assets
 
 
162,683 
 
 
189,101 

Increase in cash surrender value of BOLI
 
 
(18,568) 
 
(20,275)
Amortization of limited partnerships
 
 
513,349 
 
 
212,868 

Change in net deferred loan fees and costs
 
 
(65,907) 
 
(28,950)
Increase (decrease) in interest payable
 
 
9,845 
 
 
(1,915,911)
Decrease in accrued expenses
 
 
(854,034) 
 
(969,079)
(Decrease) increase in other liabilities
 
 
(199,178) 
 
31,374 

Net cash provided by operating activities
 
 
4,055,807 
 
 
382,524 

 
 
 
 
 
 
 
 
 

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 

Investments - AFS
 
 
 
 
 
 
 
 

Maturities, calls, pay downs and sales
 
 
6,532,133 
 
 
9,359,512 

Purchases
 
 
0 
 
 
(14,971,773)
Proceeds from redemption of restricted equity securities
 
 
117,700 
 
 
301,200 

Purchases of restricted equity securities
 
 
(87,100) 
 
(441,700)
Investments in limited liability entities
 
 
(255,916) 
 
0 

Increase in loans, net
 
 
(18,644,242) 
 
(12,400,654)
Capital expenditures net of proceeds from sales of bank
 
 
 
 
 
 
 
 

premises and equipment
 
 
(160,112) 
 
(274,509)
Proceeds from sales of OREO
 
 
356,337 
 
 
0 

Recoveries of loans charged off
 
 
41,690 
 
 
12,098 

Net cash used in investing activities
 
 
(12,099,510) 
 
(18,415,826)
 
 
7

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2026
 
 
2025
 

 
 
 
 
 
 
 

Cash Flows from Financing Activities:
 
 
 
 
 
 

Net decrease in demand and interest-bearing transaction accounts
 
 
(28,095,087) 
 
(18,117,210)
Net decrease in money market and savings accounts
 
 
(32,754,657) 
 
(6,390,829)
Net increase in time deposits
 
 
7,948,500 
 
 
2,519,243 

Net decrease in repurchase agreements
 
 
(1,411,644) 
 
(4,511,453)
Net decrease in short-term borrowings
 
 
0 
 
 
(41,500,000)
Proceeds from long-term borrowings
 
 
0 
 
 
5,000,000 

Decrease in finance lease obligations
 
 
(59,861) 
 
(58,018)
Shares purchased through stock buyback program
 
 
(26,633) 
 
(35,380)
Dividends paid on preferred stock
 
 
0 
 
 
(28,125)
Dividends paid on common stock
 
 
(1,019,578) 
 
(973,406)
Net cash used in financing activities
 
 
(55,418,960) 
 
(64,095,178)
 
 
 
 
 
 
 
 
 

Net decrease in cash and cash equivalents
 
 
(63,462,662) 
 
(82,128,480)
Cash and cash equivalents:
 
 
 
 
 
 
 
 

Beginning
 
 
128,061,761 
 
 
110,940,202 

Ending
 
$64,599,099 
 
$28,811,722 

 
 
 
 
 
 
 
 
 

Supplemental Schedule of Cash Paid During the Period:
 
 
 
 
 
 
 
 

Interest
 
$5,069,114 
 
$7,002,099 

 
 
 
 
 
 
 
 
 

Supplemental Schedule of Noncash Investing and Financing Activities:
 
 
 
 
 
 
 
 

Change in unrealized (loss) gain on securities AFS
 
($207,764)
 
 
$3,006,141 

 
 
 
 
 
 
 
 
 

Additions to operating lease liabilities
 
$71,318 
 
$115,204 

 
 
 
 
 
 
 
 
 

Investment in limited partnerships, not yet paid
 
$4,356,000 
 
$4,356,000 

 
 
 
 
 
 
 
 
 

Common Shares Dividends Paid:
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Dividends declared
 
$1,393,291 
 
$1,343,515 

Increase in dividends payable attributable to dividends declared
 
 
(2,987) 
 
(6,570)
Dividends reinvested
 
 
(370,726) 
 
(363,539)
Total dividends paid
 
$1,019,578 
 
$973,406 

 
The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 
 
 
8

Table of Contents
 
Notes to Consolidated Financial Statements
 
Note 1. Basis of Presentation and Consolidation and Certain Definitions
 
Basis of Presentation and Consolidation. The interim consolidated financial statements of Community Bancorp. and Subsidiary are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for the fair presentation of the consolidated financial condition and results of operations of the Company and its subsidiary, Community National Bank (the Bank), contained herein have been made. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025, contained in the Company's Annual Report on Form 10-K. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for any other interim period or for the full annual period ending December 31, 2026.
 
The Company is considered a “smaller reporting company” and a “non-accelerated filer” under the disclosure rules of the SEC. Accordingly, the Company has elected to provide smaller reporting company scaled disclosures where management deems it appropriate, and to provide its audited consolidated statements of income, comprehensive income, cash flows and changes in shareholders’ equity for a two year, rather than a three year, period is considered a “smaller reporting company” under the disclosure rules of the SEC, as amended in 2018.
 
In addition to the definitions provided elsewhere in this quarterly report, the definitions, acronyms and abbreviations identified below are used throughout this report, including in Part I. “Financial Information” and Part II. “Other Information” and are intended to aid the reader and provide a reference page when reviewing this report.
 
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

AOCI:
Accumulated other comprehensive income
FOMC:
Federal Open Market Committee

ASC:
Accounting Standards Codification
FRB:
Federal Reserve Board

ASU:
Accounting Standards Update
FRBB:
Federal Reserve Bank of Boston

Bancorp:
Community Bancorp.
GAAP:
Generally Accepted Accounting Principles

Bank:
Community National Bank
in the United States

BHG:
Bankers Healthcare Group
GSE:
Government sponsored enterprise

BIC:
Borrower-in-Custody
HTM:
Held-to-maturity

Board:
Board of Directors
ICS:
Insured Cash Sweeps of the IntraFi Network

BOLI:
Bank owned life insurance
IRS:
Internal Revenue Service

bp or bps:
Basis point(s)
JNE:
Jobs for New England

BTFP:
Bank Term Funding Program
Jr:
Junior

CDARS:
Certificate of Deposit Accounts Registry 
MBS:
Mortgage-backed security

Service of the IntraFi Network 
MSRs:
Mortgage servicing rights

CDs:
Certificates of deposit
NII:
Net interest income

CECL:
Current Expected Credit Loss
OAS:
Other amortizing security

CFSG:
Community Financial Services Group, LLC
OBS:
Off-balance sheet

CFS Partners:
Community Financial Services Partners,
OCI:
Other comprehensive income (loss)

LLC
OREO:
Other real estate owned

CME:
CME Group Benchmark Administration Ltd.
OTTI:
Other-than-temporary impairment

CMO:
Collateralized Mortgage Obligations
PMI:
Private mortgage insurance

Company:
Community Bancorp. and Subsidiary
PPP:
Paycheck Protection Program

CRE:
Commercial Real Estate
RD:
USDA Rural Development

DCF:
Discounted cash flow
SBA:
U.S. Small Business Administration

DDA or DDAs:
Demand Deposit Account(s)
SEC:
U.S. Securities and Exchange Commission

DTC:
Depository Trust Company
SOFR:
Secured Overnight Financing Rate

DRIP:
Dividend Reinvestment Plan
USDA:
U.S. Department of Agriculture

Exchange Act:
Securities Exchange Act of 1934
VA:
U.S. Veterans Administration

 
 
9

Table of Contents
 
Note 2. Recent Accounting Developments
 
In December 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Public business entities must disclose the amount of employee compensation, depreciation, and intangible asset amortization. A qualitative description of the amounts remaining in relevant expense captions must be disclosed if not disaggregated quantitatively. The ASU is effective for annual periods beginning after December 15, 2026. Management is reviewing the ASU but does not expect that it will have a material effect on the Company’s consolidated financial statements.
 
Note 3. Earnings per Common Share
 
Earnings per common share amounts are computed based on the weighted average number of shares of common stock issued during the period (retroactively adjusted for stock splits and stock dividends, if any), including Dividend Reinvestment Plan shares issuable upon reinvestment of dividends declared, and reduced for shares held in treasury.
 
The following tables illustrate the calculation of earnings per common share for the periods presented, as adjusted for the cash dividends declared on the preferred stock that was outstanding during the first quarter of 2025:
 
Three Months Ended March 31
 
2026
 
 
2025
 

 
 
 
 
 
 
 

Net income, as reported
 
$4,369,102 
 
$3,525,455 

Less: dividends to preferred shareholders
 
 
0 
 
 
28,125 

Net income available to common shareholders
 
$4,369,102 
 
$3,497,330 

Weighted average number of common shares
 
 
 
 
 
 
 
 

used in calculating earnings per share
 
 
5,586,133 
 
 
5,605,278 

Earnings per common share
 
$0.78 
 
$0.62 

 
 
10

Table of Contents
 
Note 4. Investment Securities
 
Debt securities AFS as of the balance sheet dates consisted of the following:
 
Gross
Gross

Amortized
Unrealized
Unrealized
Fair

Cost
Gains
Losses
Value

March 31, 2026

U.S. GSE debt securities
$12,000,000$0$551,864$11,448,136
U.S. Government securities
9,513,4570129,0909,384,367
Taxable Municipal securities
300,000036,986263,014
Tax-exempt Municipal securities
10,697,80752,743566,93910,183,611
Agency MBS
114,966,030233,51811,291,824103,907,724
ABS and OAS
1,496,844071,3641,425,480
CMO
688,00306,983681,020
Other investments
496,00004,970491,030
Total
$150,158,141$286,261$12,660,020$137,784,382
 
December 31, 2025
 
 
 
 
 
 
 
 
 
 
 
 

U.S. GSE debt securities
 
$12,000,000 
 
$0 
 
$556,223 
 
$11,443,777 

U.S. Government securities
 
 
11,521,640 
 
 
0 
 
 
185,660 
 
 
11,335,980 

Taxable Municipal securities
 
 
300,000 
 
 
0 
 
 
34,437 
 
 
265,563 

Tax-exempt Municipal securities
 
 
10,712,772 
 
 
105,694 
 
 
494,815 
 
 
10,323,651 

Agency MBS
 
 
118,162,360 
 
 
443,634 
 
 
11,344,758 
 
 
107,261,236 

ABS and OAS
 
 
1,745,851 
 
 
0 
 
 
78,970 
 
 
1,666,881 

CMO
 
 
1,756,131 
 
 
0 
 
 
12,327 
 
 
1,743,804 

Other investments
 
 
496,000 
 
 
0 
 
 
8,134 
 
 
487,866 

Total
 
$156,694,754 
 
$549,328 
 
$12,715,324 
 
$144,528,758 

 
The Company had investments in Agency MBS exceeding 10% of shareholders’ equity with a book value of $114.9 million and $118.1 million, respectively, and a fair value of $103.9 million and $107.3 million, respectively, as of March 31, 2026 and December 31, 2025.
 
Investment securities pledged as collateral for repurchase agreements consisted of certain U.S. GSE debt securities, Agency MBS, ABS and OAS, and CMO. These repurchase agreements mature daily. The aggregate amortized cost and fair value of these pledged investments as of the balance sheet dates were as follows:
 
 
 
Amortized
 
 
Fair
 

 
 
Cost
 
 
Value
 

 
 
 
 
 
 
 

March 31, 2026
 
$57,771,094 
 
$51,785,688 

December 31, 2025
 
 
59,380,136 
 
 
53,294,329 

 
There were no sales of debt securities during the first three months of 2026 or 2025.
 
 
11

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The scheduled maturities of debt securities as of the balance sheet dates were as follows:
 
 
 
Amortized
 
 
Fair
 

 
 
Cost
 
 
Value
 

March 31, 2026
 
 
 
 
 
 

Due in one year or less
 
$13,570,463 
 
$13,383,373 

Due from one to five years
 
$8,779,817 
 
 
8,382,987 

Due from five to ten years
 
 
3,400,302 
 
 
3,080,039 

Due after ten years
 
 
9,441,529 
 
 
9,030,259 

Agency MBS
 
 
114,966,030 
 
 
103,907,724 

Total
 
$150,158,141 
 
$137,784,382 

 
December 31, 2025
 
 
 
 
 
 

Due in one year or less
 
$14,556,482 
 
$14,347,722 

Due from one to five years
 
 
11,054,063 
 
 
10,602,542 

Due from five to ten years
 
 
2,853,838 
 
 
2,638,068 

Due after ten years
 
 
10,068,011 
 
 
9,679,190 

Agency MBS
 
 
118,162,360 
 
 
107,261,236 

Total
 
$156,694,754 
 
$144,528,758 

 
Agency MBS are not due at a single maturity date and have not been allocated to maturity groupings for purposes of the maturity table.
 
 
12

Table of Contents
 
 
Debt securities with unrealized losses as of the balance sheet dates are presented in the table below.
 
 
 
Less than 12 months
 
 
12 months or more
 
 
Totals
 

 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Number of
 
 
Fair
 
 
Unrealized
 

 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Securities
 
 
Value
 
 
Loss
 

March 31, 2026
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

U.S. GSE debt securities
 
$0 
 
$0 
 
$11,448,136 
 
$551,864 
 
 
11 
 
$11,448,136 
 
$551,864 

U.S. Government securities
 
 
0 
 
 
0 
 
 
9,384,367 
 
 
129,090 
 
 
17 
 
 
9,384,367 
 
 
129,090 

Taxable Municipal securities
 
 
0 
 
 
0 
 
 
263,014 
 
 
36,986 
 
 
1 
 
 
263,014 
 
 
36,986 

Tax-exempt Municipal securities
 
 
2,982,471 
 
 
41,502 
 
 
4,482,014 
 
 
525,437 
 
 
16 
 
 
7,464,485 
 
 
566,939 

Agency MBS
 
 
2,938,188 
 
 
10,438 
 
 
81,355,199 
 
 
11,281,386 
 
 
116 
 
 
84,293,387 
 
 
11,291,824 

ABS and OAS
 
 
0 
 
 
0 
 
 
1,425,480 
 
 
71,364 
 
 
4 
 
 
1,425,480 
 
 
71,364 

CMO
 
 
0 
 
 
0 
 
 
681,020 
 
 
6,983 
 
 
3 
 
 
681,020 
 
 
6,983 

Other investments
 
 
0 
 
 
0 
 
 
491,030 
 
 
4,970 
 
 
2 
 
 
491,030 
 
 
4,970 

Total
 
$5,920,659 
 
$51,940 
 
$109,530,260 
 
$12,608,080 
 
 
170 
 
$115,450,919 
 
$12,660,020 

 
 
 
Less than 12 months
 
 
12 months or more
 
 
Totals
 

 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Number of
 
 
Fair
 
 
Unrealized
 

 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Securities
 
 
Value
 
 
Loss
 

December 31, 2025
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

U.S. GSE debt securities
 
$0 
 
$0 
 
$11,443,777 
 
$556,223 
 
 
11 
 
$11,443,777 
 
$556,223 

U.S. Government securities
 
 
0 
 
 
0 
 
 
11,335,980 
 
 
185,660 
 
 
21 
 
 
11,335,980 
 
 
185,660 

Taxable Municipal securities
 
 
0 
 
 
0 
 
 
265,563 
 
 
34,437 
 
 
1 
 
 
265,563 
 
 
34,437 

Tax-exempt Municipal securities
 
 
980,268 
 
 
3,766 
 
 
5,553,783 
 
 
491,049 
 
 
14 
 
 
6,534,051 
 
 
494,815 

Agency MBS
 
 
0 
 
 
0 
 
 
83,695,677 
 
 
11,344,758 
 
 
112 
 
 
83,695,677 
 
 
11,344,758 

ABS and OAS
 
 
0 
 
 
0 
 
 
1,666,881 
 
 
78,970 
 
 
4 
 
 
1,666,881 
 
 
78,970 

CMO
 
 
0 
 
 
0 
 
 
1,743,804 
 
 
12,327 
 
 
4 
 
 
1,743,804 
 
 
12,327 

Other investments
 
 
0 
 
 
0 
 
 
487,866 
 
 
8,134 
 
 
2 
 
 
487,866 
 
 
8,134 

Total
 
$980,268 
 
$3,766 
 
$116,193,331 
 
$12,711,558 
 
 
169 
 
$117,173,599 
 
$12,715,324 

  
As of March 31, 2026 and December 31, 2025, the Company did not have the intent to sell, nor was it more likely than not that we would be required to sell, any of the debt securities AFS in an unrealized loss position as of such dates prior to recovery. Management determined that no individual debt securities in an unrealized loss position represented credit losses that would require an allowance for credit losses, and that the unrealized losses as of the balance sheet dates were primarily attributed to increases in market interest rates since these securities were purchased under other market conditions. Accordingly, there was no ACL on AFS debt securities as of March 31, 2026, or December 31, 2025.
 
Accrued interest receivable on AFS debt securities which totaled $402,670 and $449,020 on March 31, 2026, and December 31, 2025, respectively, was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.
 
 
13

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Note 5. Loans, Allowance for Credit Losses, Credit Quality and Off-Balance Sheet Credit Exposures
 
The composition of net loans as of the balance sheet dates was as follows:
 
The composition of net loans follows:
 
 
 
 
 
 
 
 
 

 
 
March 31, 2026
 
 
December 31, 2025
 

 
 
 
 
 
 
 
 
 
 
 
 
 

Commercial & industrial
 
$114,432,291 
 
 
11.64% 
$107,458,746 
 
 
11.13%
Purchased (1)
 
 
9,172,762 
 
 
0.93% 
 
10,010,347 
 
 
1.04%
Commercial real estate
 
 
505,658,932 
 
 
51.39% 
 
499,647,904 
 
 
51.76%
Municipal
 
 
64,105,885 
 
 
6.52% 
 
62,078,419 
 
 
6.43%
Residential real estate - 1st lien
 
 
241,750,077 
 
 
24.57% 
 
236,556,346 
 
 
24.51%
Residential real estate - Jr lien
 
 
45,601,568 
 
 
4.63% 
 
46,472,047 
 
 
4.81%
Consumer
 
 
3,154,972 
 
 
0.32% 
 
3,061,853 
 
 
0.32%
Total loans
 
 
983,876,487 
 
 
100.00% 
 
965,285,662 
 
 
100.00%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ACL
 
 
(11,280,241) 
 
 
 
 
 
(10,864,983) 
 
 
 

Deferred net loan costs
 
 
852,511 
 
 
 
 
 
 
786,604 
 
 
 
 

Net loans
 
$973,448,757 
 
 
 
 
 
$955,207,283 
 
 
 
 

 
 
(1)
As of March 31, 2026, purchased loans consisted of $2.8 million in commercial loans and $6.4 million in consumer loans, compared to $3.0 million and $7.0 million, respectively, as of December 31, 2025.

  
Accrued interest receivable on loans totaled $4.7 million and $3.9 million as of March 31, 2026, and December 31, 2025, respectively, and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.
 
Credit loss expense
 
Three Months Ended March 31
 
2026
 
 
2025
 

 
 
 
 
 
 
 

Credit loss expense - loans
 
$426,984 
 
$418,874 

Credit loss reversal - OBS credit exposure
 
 
(35,479) 
 
(93,820)
Credit loss expense
 
$391,505 
 
$325,054 

 
 
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Table of Contents
 
 
The following tables present the activity in the ACL on loans for the periods presented.
 
For the three months ended March 31, 2026
 
 
 
Balance
 
 
 
 
 
 
Credit Loss
 
 
Balance
 

 
 
December 31,
 
 
 
 
 
 
Expense
 
 
March 31,
 

 
 
2025
 
 
Charge-offs
 
 
Recoveries
 
 
(Reversal)
 
 
2026
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Commercial & Industrial
 
$627,062 
 
$(29,396) 
$29,554 
 
$32,672 
 
$659,892 

Purchased
 
 
30,221 
 
 
0 
 
 
0 
 
 
(2,374) 
 
27,847 

Commercial Real Estate
 
 
6,303,378 
 
 
0 
 
 
0 
 
 
338,437 
 
 
6,641,815 

Municipal
 
 
155,196 
 
 
0 
 
 
0 
 
 
5,069 
 
 
160,265 

Residential Real Estate - 1st Lien
 
 
3,120,462 
 
 
0 
 
 
3,822 
 
 
46,331 
 
 
3,170,615 

Residential Real Estate - Jr Lien
 
 
600,940 
 
 
0 
 
 
0 
 
 
(9,430) 
 
591,510 

Consumer
 
 
27,724 
 
 
(24,020) 
 
8,314 
 
 
16,279 
 
 
28,297 

Totals
 
$10,864,983 
 
$(53,416) 
$41,690 
 
$426,984 
 
$11,280,241 

 
For the year ended December 31, 2025
 
 
 
Balance
 
 
 
 
 
 
Credit Loss
 
 
Balance
 

 
 
December 31,
 
 
 
 
 
 
Expense
 
 
December 31,
 

 
 
2024
 
 
Charge-offs
 
 
Recoveries
 
 
(Reversal)
 
 
2025
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Commercial & Industrial
 
$727,488 
 
$(393,439) 
$56,006 
 
$237,007 
 
$627,062 

Purchased
 
 
22,415 
 
 
0 
 
 
0 
 
 
7,806 
 
 
30,221 

Commercial Real Estate
 
 
6,487,700 
 
 
0 
 
 
0 
 
 
(184,322) 
 
6,303,378 

Municipal
 
 
167,719 
 
 
0 
 
 
0 
 
 
(12,523) 
 
155,196 

Residential Real Estate - 1st Lien
 
 
2,087,034 
 
 
(13,757) 
 
14,367 
 
 
1,032,818 
 
 
3,120,462 

Residential Real Estate - Jr Lien
 
 
291,239 
 
 
0 
 
 
0 
 
 
309,701 
 
 
600,940 

Consumer
 
 
26,617 
 
 
(93,021) 
 
35,633 
 
 
58,495 
 
 
27,724 

Totals
 
$9,810,212 
 
$(500,217) 
$106,006 
 
$1,448,982 
 
$10,864,983 

 
For the three months ended March 31, 2025
 
 
 
Balance
 
 
 
 
 
 
 
 
Credit Loss
 
 
Balance
 

 
 
December 31,
 
 
 
 
 
 
 
 
Expense
 
 
March 31,
 

 
 
2024
 
 
Charge-offs
 
 
Recoveries
 
 
(Reversal)
 
 
2025
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Commercial & Industrial
 
$727,488 
 
$(38,872) 
$8,291 
 
$6,329 
 
$703,236 

Purchased
 
 
22,415 
 
 
0 
 
 
0 
 
 
(1,880) 
 
20,535 

Commercial Real Estate
 
 
6,487,700 
 
 
0 
 
 
0 
 
 
(78,197) 
 
6,409,503 

Municipal
 
 
167,719 
 
 
0 
 
 
0 
 
 
8,390 
 
 
176,109 

Residential Real Estate - 1st Lien
 
 
2,087,034 
 
 
(266) 
 
0 
 
 
438,102 
 
 
2,524,870 

Residential Real Estate - Jr Lien
 
 
291,239 
 
 
0 
 
 
0 
 
 
22,337 
 
 
313,576 

Consumer
 
 
26,617 
 
 
(28,120) 
 
3,807 
 
 
23,793 
 
 
26,097 

Totals
 
$9,810,212 
 
$(67,258) 
$12,098 
 
$418,874 
 
$10,173,926 

 
 
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Table of Contents
 
 
Credit Quality Grouping
 
In developing the ACL, management uses credit quality groupings to help evaluate trends in credit quality. The Company groups credit risk into Groups A, B and C. The manner the Company utilizes to assign risk grouping is driven by loan purpose. Commercial purpose loans are individually risk graded while the retail portion of the portfolio is generally grouped by delinquency pool.
 
Group A loans - Pass – are loans that are expected to perform as agreed under their respective terms. Such loans carry a normal level of risk that does not require management attention beyond that warranted by the loan or loan relationship characteristics, such as loan size or relationship size. Group A loans include commercial purpose loans that are individually risk rated and retail loans that are rated by pool. Group A retail loans include performing consumer and residential real estate loans. Residential real estate loans are loans to individuals secured by 1-4 family homes, including first mortgages, home equity and home improvement loans. Loan balances fully secured by deposit accounts or that are fully guaranteed by the federal government are considered acceptable risk.
 
Group B loans – Special Mention - are loans that require greater attention than the acceptable risk loans in Group A. Characteristics of such loans may include, but are not limited to, borrowers that are experiencing negative operating trends such as reduced sales or margins, borrowers that have exposure to adverse market conditions such as increased competition or regulatory burden, or borrowers that have had unexpected or adverse changes in management. These loans have a greater likelihood of migrating to an unacceptable risk level if these characteristics are left unchecked. Group B is limited to commercial purpose loans that are individually risk rated. 
 
Group C loans – Substandard/Doubtful – are loans that have distinct shortcomings that require a greater degree of management attention. Examples of these shortcomings include a borrower's inadequate capacity to service debt, poor operating performance, or insolvency. These loans are more likely to result in repayment through collateral liquidation. Group C loans range from th