The Company's lending activities are primarily conducted in and around Dover, New Hampshire, and in the areas surrounding its branches. The Company grants commercial real estate loans, multifamily 5+ dwelling unit loans, commercial and industrial loans, acquisition, development and land loans, 1–4 family residential loans, home equity line of credit loans and consumer loans. Most loans are collateralized by real estate. The ability and willingness of real estate, commercial and construction loan borrowers to honor their repayment commitments is generally dependent on the health of the real estate sector in the borrowers’ geographic area and the general economy.

The Company elected to include deferred loan origination costs, net and to exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. As of June 30, 2025 and December 31, 2024, accrued interest receivable for loans totaled $1.4 million and $1.3 million, respectively, and is included in the “accrued interest receivable” line item on the Company’s consolidated balance sheets.

The Company estimates its allowance for credit losses on loans and off-balance sheet credit exposures ("ACL") as outlined in ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended ("ASU 2016-13" or “ASC 326”)." Under ASC 326, the ACL at each reporting period serves as a best estimate of projected credit losses over the contractual life of certain assets and off-balance sheet exposures, adjusted for expected prepayments, given an expectation of economic conditions and forecasts as of the valuation date. The ACL is the sum of various components including the following: (a) historical loss experience, (b) a reasonable and supportable forecasts, (c) loans evaluated individually, and (d) changes in relevant environmental factors. The historical loss component is segmented by loan type and serves as the core of the ACL adequacy methodology. The Company has selected the Weighted Average Remaining Maturity Model (“WARM”), for the loss calculation of each of its loan pools utilizing a third-party software application. The WARM uses a quarterly loss rate and future expectations of loan balances to calculate an ACL. A loss rate is applied to pool balances over time.

The application of ASC 326 may create volatility in the ACL, increasing or decreasing from period to period based on many factors, including, but not limited to: (i) macroeconomic forecasts and conditions; (ii) forecast period and reversion speed; (iii) prepayment speed assumption; (iv) loan portfolio volumes and changes in mix; (v) credit quality; and (vi) various qualitative factors outlined in ASU 2016-13.

The significant key assumptions used with the ACL calculation at June 30, 2025 and December 31, 2024 using the ASC 326 methodology, included:

•Macroeconomic factors (loss drivers): Monitoring and assessing local and national unemployment, changes in national GDP and other macroeconomic factors which may be the most predictive indicator of losses within the loan portfolio. The macroeconomic factors considered in determining the ACL may change from time to time.

•Forecast Period and Reversion speed: ASU 2016-13 requires a company to use a reasonable and supportable forecast period in developing the ACL, which represents the time period that management believes it can reasonably forecast the identified loss drivers. Generally, the forecast period management believes to be reasonable and supportable will be set annually and validated through an assessment of economic leading indicators. In periods of greater volatility and uncertainty, such as the current interest rate environment, management will likely use a shorter forecast period, whereas

when markets, economies, interest rate environment, political matters, and other factors are considered to be more stable and certain, a longer forecast period may be used. Also, in times of greater uncertainty, management may consider a range of possible forecasts and evaluate the probability of each scenario. Generally, the forecasted period is expected to range from one to three years. Once the reasonable and supportable forecast period is determined, ASU 2016-13 requires a company to revert its loss expectations to the long-run historical mean for the remainder of the contract life of the asset, adjusted for prepayments. In determining the length of time over which the reversion will take place (i.e. "reversion speed"), factors such as, historical credit loss experience over previous economic cycles, as well as where the Company believes it is within the current economic cycle, will be considered. The Company has chosen a forecast period of six quarters which will be similar to the historical loss period between January 2014 and December 2016 and then reverting to the long-term average over the following two quarters using the straight-line reversion method. The Company believes this historical forecast period to be representative of potential economic conditions over the next eighteen months.

•Prepayment speeds: Prepayment speeds are determined for each loan segment utilizing the Company's historical loan data, as well as consideration of current environmental factors. The prepayment speed assumption is utilized with the WARM method to forecast expected cash flows over the contractual life of the loan, adjusted for expected prepayments. A higher prepayment speed assumption will drive a lower ACL, and vice versa.

•Qualitative factors: ASU 2016-13 requires companies to consider various qualitative factors that may impact expected credit losses. The Company considers qualitative factors in determining and arriving at an ACL at each reporting period such as: (i) actual or expected changes in economic trends and conditions, (ii) changes in the value of underlying collateral for loans, (iii) changes to lending policies, underwriting standards and/or management personnel performing such functions, (iv) delinquency and other credit quality trends, (v) credit risk concentrations, if any, (vi) changes to the nature of the Company's business impacting the loan portfolio, (vii) and other external factors, that may include, but are not limited to, results of internal loan reviews and examinations by bank regulatory agencies.

Certain loans which may not share similar risk characteristics with other loans in the portfolio may be tested individually for estimated credit losses, including (i) loans classified as special mention, substandard or doubtful and are on non-accrual, (ii) a loan modified for a borrower experiencing financial difficulty or (iii) loans that have other unique characteristics. Factors considered in measuring the extent of the expected credit loss for these loans may include payment status, collateral value, borrower's financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due.

Changes in the ACL for the three and six months ended June 30, 2025 and 2024, by portfolio segment, are summarized as follows:


(Dollars in thousands)	CRE			MF			C+I			ADL			RES			HELOC		CON			Unallocated			Total
Balance, March 31, 2025	$	733		$	58		$	200		$	119		$	1,646		$	232	$	554		$	(25	)	$	3,517
(Release) provision for credit losses on loans		(79	)		(1	)		2			(27	)		(86	)		5		(12	)		198			—
Charge-offs		—			—			—			—			—			—		—			—			—
Recoveries		—			—			—			—			—			—		—			—			—
Balance, June 30, 2025	$	654		$	57		$	202		$	92		$	1,560		$	237	$	542		$	173		$	3,517

Balance, December 31, 2024	$	710		$	59		$	233		$	87		$	1,612		$	214	$	439		$	132		$	3,486
(Release) provision for credit losses on loans		(56	)		(2	)		(31	)		5			(52	)		23		102			41			30
Charge-offs		—			—			—			—			—			—		—			—			—
Recoveries		—			—			—			—			—			—		1			—			1
Balance, June 30, 2025	$	654		$	57		$	202		$	92		$	1,560		$	237	$	542		$	173		$	3,517

Balance, March 31, 2024	$	745		$	75		$	251		$	80		$	1,600		$	169	$	372		$	128		$	3,420
(Release) provision for credit losses on loans		—			32			(17	)		(10	)		8			2		69			(54	)		30
Charge-offs		—			—			—			—			—			—		—			—			—
Recoveries		—			—			—			—			—			—		1			—			1
Balance, June 30, 2024	$	745		$	107		$	234		$	70		$	1,608		$	171	$	442		$	74		$	3,451

Balance, December 31, 2023	$	830		$	76		$	236		$	105		$	1,601		$	156	$	357		$	29		$	3,390
(Release) provision for credit losses on loans		(85	)		31			(2	)		(35	)		7			15		84			45			60
Charge-offs		—			—			—			—			—			—		—			—			—
Recoveries		—			—			—			—			—			—		1			—			1
Balance, June 30, 2024	$	745		$	107		$	234		$	70		$	1,608		$	171	$	442		$	74		$	3,451

The change in the allowance for credit losses during the three and six months ended June 30, 2025 and 2024 was primarily a result of the increase in loans. The following represents the composition of the Company's provision (release) for credit losses for the three and six months ended June 30:

The following is an aging analysis of past due loans by portfolio segment as of June 30, 2025 and December 31, 2024, including non-accrual loans without an ACL:


June 30, 2025:
(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	85,955	$	85,955	$	—
MF		—		—		—		—		5,573		5,573		—
C+I		—		—		—		—		24,902		24,902		—
ADL		—		—		—		—		13,075		13,075		—
RES		181		—		—		181		275,700		275,881		—
HELOC		19		—		—		19		21,335		21,354		—
CON		—		—		—		—		12,757		12,757		—
	$	200	$	—	$	—	$	200	$	439,297	$	439,497	$	—

December 31, 2024:
(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	86,020	$	86,020	$	—
MF		—		—		—		—		5,752		5,752		—
C+I		—		—		—		—		23,711		23,711		—
ADL		—		—		—		—		14,946		14,946		—
RES		—		—		—		—		275,235		275,235		—
HELOC		—		—		—		—		20,908		20,908		—
CON		—		—		—		—		12,395		12,395		—
	$	—	$	—	$	—	$	—	$	438,967	$	438,967	$	—

There were no loans past due over 90 days still accruing interest at June 30, 2025 and December 31, 2024. There were no loans collateralized by residential real estate property in the process of foreclosure at June 30, 2025 and December 31, 2024.

There were no loans modified for borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 and 2024. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification, if applicable. The ACL incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. Because the effect of most modifications made to borrowers experiencing financial difficulty would already be included in the ACL as a result of the measurement methodologies used to estimate the allowance, a change in the ACL is generally not recorded upon modification.

The Company utilizes a ten-grade internal loan rating system for its commercial real estate, multifamily, commercial and industrial and acquisition, development, and land loans. Residential real estate, home equity line of credit and consumer loans are considered “pass” rated loans until they become delinquent. Once delinquent, loans can be rated an 8, 9 or 10 as applicable.

Loans rated 1 through 6: Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 7: Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated 8: Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.

Loans rated 9: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 10: Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted and should be charged off.

On an annual basis, or more often if needed, the Company formally reviews the ratings on its commercial and industrial, commercial real estate, multifamily and acquisition, development and land loans. On a periodic basis, the Company engages an independent third party to review a significant portion of loans within these segments and to assess the credit risk management practices of its commercial lending department. Management uses the results of these reviews as part of its annual review process, adequacy of the ACL on loans and overall credit risk administration. Also, to reduce the level of credit administration on small commercial loan relationships, the Company has established a reduced credit administration process for commercial relationships less than $500,000 with a risk rating of 5 or better. These relationships are monitored based upon performance standards by the assigned lending officer.

On a quarterly basis, the Company formally reviews the ratings on its applicable residential real estate and home equity loans if they have become classified as non-accrual. Criteria used to determine ratings consist of loan-to-value ratios and days delinquent.

Based upon the most recent analysis performed, the risk category of loans by portfolio segment by vintage, reported under the CECL methodology, was as follows as of June 30, 2025 and December 31, 2024:

June 30, 2025:


(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
CRE:
Risk rating:
Pass	$	6,404	$	6,269	$	6,413	$	12,786	$	9,220	$	18,295	$	26,568	$	—	$	85,955
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total CRE		6,404		6,269		6,413		12,786		9,220		18,295		26,568		—		85,955
MF:
Risk rating:
Pass		—		—		1,898		118		605		2,694		258		—		5,573
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total MF		—		—		1,898		118		605		2,694		258		—		5,573
C+I:
Risk rating:
Pass		357		1,965		2,013		3,998		900		4,641		11,028		—		24,902
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total C+I		357		1,965		2,013		3,998		900		4,641		11,028		—		24,902
ADL:
Risk rating:
Pass		1,529		4,507		6,579		157		303		—		—		—		13,075
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total ADL		1,529		4,507		6,579		157		303		—		—		—		13,075
RES:
Risk rating:
Pass		10,717		15,748		24,685		41,192		63,326		120,213		—		—		275,881
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total RES		10,717		15,748		24,685		41,192		63,326		120,213		—		—		275,881
HELOC:
Risk rating:
Pass		—		—		—		—		—		—		21,290		64		21,354
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total HELOC		—		—		—		—		—		—		21,290		64		21,354
CON:
Risk rating:
Pass		1,459		3,942		1,979		2,401		1,504		1,458		—		—		12,743
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		14		—		—		14
Total CON		1,459		3,942		1,979		2,401		1,504		1,472		—		—		12,757
Total	$	20,466	$	32,431	$	43,567	$	60,652	$	75,858	$	147,315	$	59,144	$	64	$	439,497

December 31, 2024:


(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
CRE:
Risk rating:
Pass	$	7,613	$	6,602	$	13,078	$	10,161	$	1,822	$	17,732	$	29,012	$	—	$	86,020
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total CRE		7,613		6,602		13,078		10,161		1,822		17,732		29,012		—		86,020
MF:
Risk rating:
Pass		—		1,925		128		623		1,032		1,755		289		—		5,752
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total MF		—		1,925		128		623		1,032		1,755		289		—		5,752
C+I:
Risk rating:
Pass		4,226		5,011		4,736		1,635		2,341		2,471		2,315		802		23,537
Special mention		—		—		—		—		—		174		—		—		174
Substandard		—		—		—		—		—		—		—		—		—
Total C+I		4,226		5,011		4,736		1,635		2,341		2,645		2,315		802		23,711
ADL:
Risk rating:
Pass		5,213		9,202		219		312		—		—		—		—		14,946
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total ADL		5,213		9,202		219		312		—		—		—		—		14,946
RES:
Risk rating:
Pass		15,675		25,144		42,750		64,686		44,838		82,142		—		—		275,235
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total RES		15,675		25,144		42,750		64,686		44,838		82,142		—		—		275,235
HELOC:
Risk rating:
Pass		—		—		—		—		—		—		20,908		—		20,908
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total HELOC		—		—		—		—		—		—		20,908		—		20,908
CON:
Risk rating:
Pass		4,385		2,363		2,557		1,565		1,334		191		—		—		12,395
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total CON		4,385		2,363		2,557		1,565		1,334		191		—		—		12,395
Total	$	37,112	$	50,247	$	63,468	$	78,982	$	51,367	$	104,465	$	52,524	$	802	$	438,967

Certain directors and executive officers of the Company and entities in which they have significant ownership interests are customers of the Bank. Loans outstanding to these persons and entities at June 30, 2025 and December 31, 2024 were $3.9 million and $4.3 million, respectively.