Financial Analysis

Acquisitions and Intangible Assets On December 11, 2020, the Company acquired a branch at 1B Belmont Avenue, Belfast, Maine from Bangor Savings Bank. The acquisition added to its existing book of business in Belfast and Waldo County. The Company has leveraged having a physical presence in Belfast and the base of new customers to grow its loan and deposit share in the market. There were no acquisitions in 2024 or 2025. The core deposit intangible related to the FNB Bankshares acquisition was fully amortized in 2015. The core deposit intangible related to the Rockland branch acquisition was fully amortized in 2022. The core deposit intangible related to the Belfast branch acquisition is being amortized on a straight-line basis over ten years. Annual amortization expense for 2025 and 2024 was $26,000, and the amortization expense for each year until fully amortized (presently expected to be 2031) will be $26,000. The Belfast core deposit intangible is being amortized on a straight-line basis as the Company does not expect significant run off in the core deposits.

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Off-Balance-Sheet Financial Credit Exposures and Contractual Obligations Contractual Obligations The Bank is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to originate loans, commitments for unused lines of credit, and standby letters of credit. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The contract amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. Commitments for unused lines of credit are agreements to lend to a customer provided there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on Management's credit evaluation of the borrower. The Bank did not incur any losses on its commitments in 2025, 2024 or 2023. Standby letters of credit are conditional commitments issued by the Bank to guarantee a customer's per …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Borrowed Funds Borrowed funds may consist of Discount Window borrowings from the FRB, advances from the FHLB and securities sold under agreements to repurchase with customers. Pursuant to collateral agreements, FHLB advances are collateralized by all stock in FHLB, qualifying first mortgage loans, U.S. Government and Agency securities not pledged to others, and funds on deposit with FHLB. All FHLB advances as of December 31, 2025 had fixed rates of interest until their respective maturity dates. Securities sold under agreements to repurchase include U.S. agencies securities and other securities. Repurchase agreements have maturity dates ranging from one day to one year. The Bank also has in place $101,000,000 in credit lines with correspondent banks and a credit facility of $313,000,000 with the FRBB using securities, commercial loans and home equity loans as collateral. Of the correspondent bank and FRB credit lines, none were in use as of December 31, 2025. Borrowed funds at December 31, 2025 and 2024 have the following range of interest rates and maturity dates: As of December 31, 2025 Federal Home Loan Bank Advances 2026 3.20% - 3.87% $ 42,000,000 2027 4.12% 35,000,000 2028 3.86% 35,000,000 2029 0.00% 2030 and thereafter 0.00% - 3.20% 25,500,000 137,500,000 Repurchase agreements Municipal and commercial customers 0.05% - 4.03% 50,321,000 $ 187,821,000 As of December 31, 2024 Federal Home Loan Bank Advances 2025 0.00% $ 2026 0.00% 2027 3.97% - 4.12% 70,000,000 2028 0.00% 2 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"Stock Options and Stock-Based Compensation At the 2020 Annual Meeting, shareholders approved the 2020 Equity Incentive Plan (the ""2020 Plan""). There are 400,000 shares of common stock reserved for issuance pursuant to the 2020 Plan in connection with stock options, restricted stock awards, and other equity based awards to attract and retain the best available personnel, provide additional incentive to officers, employees, and non-employee Directors, and promote the success of the Company. Such grants and awards will be structured in a manner that does not encourage the recipients to expose the Company to undue or inappropriate risk. Options issued under the 2020 Plan qualify for treatment as incentive stock options for purposes of Section 422 of the Internal Revenue Code. Other compensation under the 2020 Plan qualifies as performance-based for purposes of Section 162(m) of the Internal Revenue Code, and satisfies NASDAQ guidelines relating to equity compensation. As of December 31, 2025, 172,916 shares of restricted stock had been granted under the 2020 Plan, of which 93,874 shares remain restricted as of December 31, 2025 as detailed in the following table: Year Granted Vesting Term (In Years) Shares Remaining Term (In Years) 2023 3.0 25,659 0.1 2024 3.0 26,937 1.1 2024 2.0 1,869 0.1 2025 3.0 36,732 2.1 2025 1.0 2,677 0.1 93,874 1.2 The compensation cost related to these restricted stock grants was $2,533,000 and will be recognized over the vesting terms of each grant. I …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"Fair Value Disclosures Certain assets and liabilities are recorded at fair value to provide additional insight into the Company's quality of earnings. Some of these assets and liabilities are measured on a recurring basis while others are measured on a nonrecurring basis, with the determination based upon applicable existing accounting pronouncements. For example, securities AFS are recorded at fair value on a recurring basis. Other assets, such as other real estate owned and IAL, are recorded at fair value on a nonrecurring basis using the lower of cost or market methodology to determine impairment of individual assets. The Company groups assets and liabilities, which are recorded at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with level 1 considered highest and level 3 considered lowest). A brief description of each level follows: Level 1 - Valuation is based upon quoted prices for identical instruments in active markets. Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 V …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Income Taxes The current and deferred components of income tax expense (benefit) were as follows: For the years ended December 31, 2025 2024 2023 Federal income tax Current $ 6,859,000 $ 4,986,000 $ 7,011,000 Deferred 81,000 20,000 (1,360,000) 6,940,000 5,006,000 5,651,000 State franchise tax 605,000 533,000 533,000 $ 7,545,000 $ 5,539,000 $ 6,184,000 The actual tax expense differs from the expected tax expense (computed by applying the applicable U.S. Federal corporate income tax rate to income before income taxes) as follows: For the years ended December 31, 2025 2024 2023 Rate Expense Rate Expense Rate Expense Pretax income from continuing operations $ 41,939,000 $ 32,584,000 $ 35,702,000 U.S. Federal statutory income tax rate 21.00% 21.00% 21.00% Expected tax expense at statutory rate 21.00 % $ 8,807,000 21.00 % $ 6,843,000 21.00 % $ 7,498,000 Nontaxable or nondeductible Items Tax exempt income (5.76) % $ (2,417,000) (7.18) % $ (2,340,000) (6.23) % $ (2,224,000) Nondeductible interest expense 2.09 % 877,000 2.88 % 940,000 2.08 % 743,000 Other nontaxable income and nondeductible expenses 0.08 % 32,000 0.09 % 29,000 0.07 % 24,000 State and local taxes, net of federal tax benefit 1.14 % 478,000 1.29 % 421,000 1.18 % 421,000 Tax credits, net of amortization Historical tax credits (2.99) % (1,252,000) (2.81) % (915,000) (0.26) % (92,000) Low Income Housing tax credits (0.66) % (275,000) (0.96) % (313,000) (0.98) % (350,000) Other tax credits (0.06) % (27,000) (0.08) % (27,000 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

New Accounting Pronouncements In December 2023 the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires public business entities, such as the Company, to provide enhanced disclosures on the amount of income taxes paid disaggregated by type and jurisdiction. Adoption is required for annual periods beginning after December 15, 2024 and has not had a material impact on the Company's consolidated financial statements. In November 2024 the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). Under ASU 2024-03, public business entities, such as the Company, are required to disclose in the notes to their financial statements disaggregated information about certain costs and expenses in both annual and interim filings. ASU 2024-03 is effective for calendar year-end public business entities beginning in calendar year 2027, and is not expected to have a material impact on the Company's consolidated financial statements. In November 2025 the FASB issued ASU 2025-08, Financials Instruments - Credit Losses (Topic 326): Purchased Loans. The ASU expands the use of the gross-up approach to include purchased seasoned loans, defined as loans (excluding credit cards) acquired without significant credit deterioration and deemed to be seasoned; seasoned loans are those obtained either through a business combina …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Employee Benefit Plans 401(k) Plan The Bank has a defined contribution plan available to substantially all employees who have completed three months of service. Employees may contribute up to Internal Revenue Service determined limits and the Bank may provide a match to employee contributions not to exceed 3.0% of compensation depending on contribution level. The Plan is a safe harbor plan whereby the Bank also contributes a minimum 3.0% of annual compensation to the plan for all eligible employees. The expense related to the 401(k) plan was $1,083,000, $1,108,000, and $1,067,000 in 2025, 2024, and 2023, respectively. Deferred Compensation and Supplemental Retirement Plan The Bank also provides unfunded supplemental retirement benefits for certain officers, payable in installments over 20 years commencing upon retirement or death. The agreements consist of individual contracts with differing characteristics that, when taken together, do not constitute a post-retirement plan. There are no active officers eligible for these benefits. The costs for these benefits are recognized over the service periods of the participating officers in accordance with FASB ASC Topic 712, ""Compensation Nonretirement Postemployment Benefits"". The expense of these supplemental plans was $169,000 in 2025, $201,000 in 2024, and $57,000 in 2023. As of December 31, 2025 and 2024, the accrued liability of these plans was $2,460,000 and $2,578,000, respectively, and is recorded in other liabilities. Po …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Nature of Operations The Company, through its wholly-owned subsidiary, the Bank, provides a full range of banking services to individual and corporate customers from 18 offices in coastal and eastern Maine. First National Wealth Management, a division of the Bank, provides investment management, private banking and financial planning services. On January 28, 2016, the Board of Directors voted to change the Bank's name to First National Bank from The First, N.A. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and the Bank. All intercompany accounts and transactions have been eliminated in consolidation. Subsequent Events Events occurring subsequent to December 31, 2025 have been evaluated as to their potential impact on the financial statements. Use of Estimates in Preparation of Financial Statements In preparing the financial statements in accordance with GAAP, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet and revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for credit losses, the valuations of mortgage servicing rights, derivat …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Common Stock In 2016, the Company reserved 250,000 shares of its common stock to be made available to directors and employees who elect to participate in the stock purchase or savings and investment plans. As of December 31, 2025, 150,228 shares had been issued pursuant to these plans, leaving 99,772 shares available for future use. The issuance price is based on the market price of the stock at issuance date. Sales of stock to directors and employees amounted to 20,028 shares in 2025, 18,535 shares in 2024, and 17,472 shares in 2023. In 2001, the Company established a dividend reinvestment plan to allow shareholders to use their cash dividends for the automatic purchase of shares in the Company. The plan was amended in 2018 to reflect changes in its administration. When the plan was established, 600,000 shares were registered with the Securities and Exchange Commission, and as of December 31, 2025, 363,633 shares have been issued, leaving 236,367 shares available for future issuance. Participation in this plan is optional and at the individual discretion of each shareholder. Shares are purchased for the plan from the Company at a price per share equal to the average of the daily bid and asked prices reported on the NASDAQ System for the five trading days immediately preceding, but not including, the dividend payment date. Sales of stock under the dividend reinvestment plan amounted to 16,619 shares in 2025, 15,908 shares in 2024, and 14,418 shares in 2023. Proceeds from issu …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Stock-Based Compensation At the 2020 Annual Meeting, shareholders approved the 2020 Equity Incentive Plan. The 2020 Plan reserves 400,000 shares of common stock for issuance in connection with stock options, restricted stock awards, and other equity based awards to attract and retain the best available personnel, provide additional incentive to officers, employees, and non-employee Directors, and promote the success of the Company. Such grants and awards will be structured in a manner that does not encourage the recipients to expose the Company to undue or inappropriate risk. Options issued under the 2020 Plan qualify for treatment as incentive stock options for purposes of Section 422 of the Internal Revenue Code. Other compensation under the 2020 Plan qualifies as performance-based for purposes of Section 162(m) of the Internal Revenue Code, and satisfies NASDAQ guidelines relating to equity compensation. As of September 30, 2025, 172,916 shares of restricted stock had been granted under the 2020 Plan, of which 95,324 shares remain restricted as of September 30, 2025 as detailed in the following table: Year Granted Vesting Term (In Years) Shares Remaining Term (In Years) 2023 3.0 26,109 0.3 2024 3.0 27,337 1.3 2024 2.0 1,869 0.3 2025 3.0 37,332 2.3 2025 1.0 2,677 0.3 95,324 1.4 The compensation cost related to these non-vested restricted stock grants is $2,573,000 and is recognized over the vesting terms of each grant. In the nine months ended September 30, 2025, $764,000 o …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"Fair Value Certain assets and liabilities are recorded at fair value to provide additional insight into the Company's quality of earnings. Some of these assets and liabilities are measured on a recurring basis while others are measured on a nonrecurring basis, with the determination based upon applicable existing accounting pronouncements. For example, securities available for sale are recorded at fair value on a recurring basis. Other assets, such as other real estate owned and IAL, are recorded at fair value on a nonrecurring basis using the lower of cost or market methodology to determine impairment of individual assets. The Company groups assets and liabilities, which are recorded at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with level 1 considered highest and level 3 considered lowest). A brief description of each level follows: Level 1 - Valuation is based upon quoted prices for identical instruments in active markets. Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Income Taxes FASB ASC Topic 740 ""Income Taxes"" defines the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company's financial statements. Topic 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company is currently open to audit under the statute of limitations by the IRS for the years ended December 31, 2021 through 2024."

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Impact of Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires public business entities, such as the Company, to provide enhanced disclosures on the amount of income taxes paid disaggregated by type and jurisdiction. Adoption is required for annual periods beginning after December 15, 2024 and is not expected to have a material impact on the Company's consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). Under ASU 2024-03, public business entities, such as the Company, are required to disclose in the notes to their financial statements disaggregated information about certain costs and expenses in both annual and interim filings. ASU 2024-03 is effective for calendar year-end public business entities beginning in calendar year 2027, and is not expected to have a material impact on the Company's consolidated financial statements. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Employee Benefit Plans 401(k) Plan The Bank has a defined contribution plan available to substantially all employees who have completed three months of service. Employees may contribute up to IRS determined limits and the Bank may match employee contributions not to exceed 3.0% of compensation depending on contribution level. The Plan is a safe harbor plan whereby the Bank also contributes a minimum 3.0% of annual compensation to the plan for all eligible employees. The expense related to the 401(k) plan was $827,000 and $829,000 for the nine months ended September 30, 2025 and 2024, respectively. Deferred Compensation and Supplemental Retirement Benefits The Bank also provides unfunded supplemental retirement benefits for certain officers, payable in installments over 20 years upon retirement or death. The agreements consist of individual contracts with differing characteristics that, when taken together, do not constitute a postretirement plan. There are no active officers eligible for these benefits. The costs for these benefits are recognized over the service periods of the participating officers in accordance with FASB ASC Topic 712 ""Compensation Nonretirement Postemployment Benefits"". The expense of these supplemental retirement benefits was $120,000 and $137,000 for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the associated accrued liability included in other liabilities in the balance sheet was $2,483,000 compared to $ …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Common Stock Proceeds from sale of common stock totaled $680,000 and $638,000 for the nine months ended September 30, 2025 and 2024, respectively.

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