Summary and Analysis of Key Points

Overview of Financial Performance

• The company, a bank holding company headquartered in Maine, reported solid financial results for the first quarter of 2025. GAAP net income was $10.2 million or $0.66 per diluted share, compared to $10.1 million or $0.66 per diluted share in the same period of 2024. Core (non-GAAP) net income was $10.5 million or $0.68 per diluted share.
• Return on assets was 1.02%, compared to 1.03% in the prior year quarter, while return on equity decreased to 8.88% from 9.32% due to higher average asset and equity balances.
• Net interest income grew to $29.0 million from $28.1 million, and the net interest margin increased to 3.17% from 3.14%, driven by higher yields on earning assets.
• Asset quality remained strong, with non-performing assets to total assets at 0.32% and net charge-offs at 0.01% of average loans.
• Non-interest income increased to $8.9 million from $8.4 million, primarily due to growth in wealth management and customer derivative fee income.
• Non-interest expenses rose to $24.7 million from $23.5 million, mainly due to higher salaries and benefits, losses on sales of premises and equipment, and acquisition-related costs.

Financial Position

• Total assets remained stable at $4.1 billion, with a shift in the asset mix from loans and investments to cash.
• Total loans decreased slightly by 3% on an annualized basis, driven by seasonality and the interest rate environment.
• Securities available for sale declined 1% to $514.0 million, with the portfolio maintaining an average life of 8 years and an effective duration of 5 years.
• Total deposits were flat at $3.3 billion, with a shift in the deposit mix towards time deposits as customers sought higher-yielding options.
• Borrowings decreased 20% to $200.0 million due to pay downs in investments and loans.
• Shareholders’ equity increased, with tangible book value per share rising to $22.47 from $20.48 in the prior year quarter.

Liquidity and Capital

• Liquidity remained strong, with cash and available-for-sale securities representing 14.8% of total assets. The company has access to additional sources of contingent liquidity, including the Federal Home Loan Bank and the Federal Reserve Bank of Boston.
• Capital ratios remained well above regulatory guidelines, with the company and the bank both well capitalized.
• The company expects to continue its current practice of paying quarterly cash dividends, subject to the Board of Directors’ discretion.

Outlook and Risks

• The company’s financial performance has been stable, with solid asset quality, liquidity, and capital positions. However, the company faces risks from changes in economic conditions, consumer savings habits, and access to the brokered deposit market, which could impact its liquidity position.
• The company recently entered into a merger agreement with Woodsville, which may result in additional acquisition and conversion expenses in the future.
• Overall, the company appears to be in a strong financial position, with the ability to navigate the current economic environment and pursue strategic growth opportunities.