ENBF 20250331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________________ to ________________________

ENB Financial Corp

(Exact name of registrant as specified in its charter)

Pennsylvania	000-53297	51-0661129
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No)

31 E. Main St., Ephrata, PA	17522-0457
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (717) 733-4181

Former name, former address, and former fiscal year, if changed since last report Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None.		N/A		N/A

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 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 ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 1, 2025, the registrant had 5,669,069 shares of $0.10 (par) Common Stock outstanding.

ENB FINANCIAL CORP

INDEX TO FORM 10-Q

March 31, 2025

Part I – FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Consolidated Balance Sheets at March 31, 2025 and 2024, and December 31, 2024 (Unaudited)	3

		Consolidated Statements of Income for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	4

		Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	5

		Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	6

		Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	7

		Notes to the Unaudited Consolidated Interim Financial Statements	8-28

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29-45

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	46-48

	Item 4.	Controls and Procedures	49


Part II – OTHER INFORMATION			50

	Item 1.	Legal Proceedings	50

	Item 1A.	Risk Factors	50

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50

	Item 3.	Defaults upon Senior Securities	51

	Item 4.	Mine Safety Disclosures	51

	Item 5.	Other Information	51

	Item 6.	Exhibits	52


SIGNATURE PAGE			53

ENB FINANCIAL CORP

Part I - Financial Information

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	March 31,			December 31,			March 31,
	2025			2024			2024
	$			$			$
ASSETS
Cash and due from banks		6,853			7,794			13,547
Interest-bearing deposits in other banks		71,875			61,115			54,306
Total cash and cash equivalents		78,728			68,909			67,853
Securities available for sale (at fair value, net of allowance for credit losses of $0)		595,588			616,430			446,774
Equity securities (at fair value)		9,671			9,710			9,401
Loans held for sale		3,284			3,996			1,789
Loans (net of unearned income)		1,443,462			1,427,269			1,380,459
Less: Allowance for credit losses		16,537			16,122			14,616
Net loans		1,426,925			1,411,147			1,365,843
Premises and equipment		28,486			27,897			26,610
Regulatory stock		10,805			10,789			8,549
Bank owned life insurance		36,249			36,014			35,892
Other assets		31,241			34,939			29,328
Total assets		2,220,977			2,219,831			1,992,039

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing		634,110			631,711			602,975
Interest-bearing		1,259,377			1,258,732			1,118,036
Total deposits		1,893,487			1,890,443			1,721,011
Short-term borrowings		60,000			60,000			—
Long-term debt		79,322			83,822			96,982
Subordinated debt		39,756			39,716			39,596
Other liabilities		13,036			14,866			12,517
Total liabilities		2,085,601			2,088,847			1,870,106
Stockholders' equity:
Common stock, par value $0.10
Shares: Authorized 24,000,000
Issued 5,739,114 and Outstanding 5,669,069 as of 3/31/25, 5,655,270 as of 12/31/24, and 5,673,017 as of 3/31/24		574			574			574
Capital surplus		3,961			3,957			4,036
Retained earnings		165,304			162,006			153,573
Accumulated other comprehensive loss, net of tax		(33,285	)		(34,143	)		(35,111	)
Less: Treasury stock cost on 70,045 shares as of 3/31/25, 83,844 shares as of 12/31/24 and 66,097 as of 3/31/24		(1,178	)		(1,410	)		(1,139	)
Total stockholders' equity		135,376			130,984			121,933
Total liabilities and stockholders' equity		2,220,977			2,219,831			1,992,039

See Notes to the Unaudited Consolidated Interim Financial Statements

ENB FINANCIAL CORP

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	Three Months ended March 31,
	2025			2024
	$			$
Interest and dividend income:
Interest and fees on loans		19,290			17,315
Interest on securities available for sale
Taxable		5,077			2,885
Tax-exempt		671			721
Interest on deposits at other banks		215			344
Dividend income		312			306
Total interest and dividend income		25,565			21,571
Interest expense:
Interest on deposits		7,491			6,831
Interest on borrowings		1,886			1,368
Total interest expense		9,377			8,199
Net interest income		16,188			13,372
Provision (release) for credit losses		486			(644	)
Net interest income after provision (release) for credit losses		15,702			14,016
Other income:
Trust and investment services income		864			1,083
Service fees		1,355			1,361
Commissions		1,012			1,017
Losses on the sale of debt securities, net		(305	)		(91	)
Losses on equity securities, net		(28	)		(167	)
Gains on sale of mortgages		439			544
Earnings on bank-owned life insurance		271			293
Other income		356			306
Total other income		3,964			4,346
Operating expenses:
Salaries and employee benefits		8,280			8,335
Occupancy		909			857
Equipment		386			303
Advertising & marketing		367			241
Computer software & data processing		1,819			1,702
Shares tax		361			357
Professional services		843			711
Other expense		1,403			1,088
Total operating expenses		14,368			13,594
Income before income taxes		5,298			4,768
Provision for federal income taxes		982			827
Net income		4,316			3,941
Earnings per share of common stock		0.76			0.70
Cash dividends paid per share		0.18			0.17
Weighted average shares outstanding		5,656,022			5,665,074

See Notes to the Unaudited Consolidated Interim Financial Statements

ENB FINANCIAL CORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(DOLLARS IN THOUSANDS)

	Three Months ended March 31,
	2025			2024
	$			$
Net income		4,316			3,941
Other comprehensive income (loss), net of tax:
Securities available for sale not other-than-temporarily impaired:
Unrealized losses arising during the period		(2,148	)		(1,048	)
Income tax effect		451			220
		(1,697	)		(828	)
Reclassification adjustment for losses included in net income		305			91
Income tax effect		(64	)		(19	)
		241			72
Derivative and hedging activities adjustment:
Changes in unrealized holding gain on derivatives		2,929			—
Income tax effect		(615	)		—
		2,314			—
Other comprehensive income (loss), net of tax		858			(756	)
Comprehensive Income		5,174			3,185

See Notes to the Unaudited Consolidated Interim Financial Statements

ENB FINANCIAL CORP

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

									Accumulated
									Other						Total
	Common		Capital			Retained			Comprehensive			Treasury			Stockholders'
	Stock		Surplus			Earnings			Loss			Stock			Equity
	$		$			$			$			$			$
Balances, December 31, 2023		574		4,072			150,596			(34,355	)		(1,233	)		119,654
Net income		—		—			3,941			—			—			3,941
Other comprehensive loss net of tax		—		—			—			(756	)		—			(756	)
Stock-based compensation expense		—		17			—			—			—			17
Treasury stock purchased - 15,699 shares		—		—			—			—			(228	)		(228	)
Treasury stock issued - 18,622 shares		—		(53	)		—			—			322			269
Cash dividends paid, $0.17 per share		—		—			(964	)		—			—			(964	)
Balances, March 31, 2024		574		4,036			153,573			(35,111	)		(1,139	)		121,933

Balances, December 31, 2024		574		3,957			162,006			(34,143	)		(1,410	)		130,984
Net income		—		—			4,316			—			—			4,316
Other comprehensive income net of tax		—		—			—			858			—			858
Stock-based compensation expense		—		15			—			—			—			15
Treasury stock issued - 13,799 shares		—		(11	)		—			—			232			221
Cash dividends paid, $0.18 per share		—		—			(1,018	)		—			—			(1,018	)
Balances, March 31, 2025		574		3,961			165,304			(33,285	)		(1,178	)		135,376

See Notes to the Unaudited Consolidated Interim Financial Statements

ENB FINANCIAL CORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(DOLLARS IN THOUSANDS)

	Three Months Ended March 31,
	2025			2024
	$			$
Cash flows from operating activities:
Net income		4,316			3,941
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of securities premiums and discounts and loan fees		83			1,123
Decrease (increase) in interest receivable		226			(1,201	)
(Decrease) increase in interest payable		(36	)		480
Provision (release) for credit losses		486			(644	)
Losses on the sale of debt securities, net		305			91
Losses on equity securities, net		28			167
Gains on sale of mortgages		(439	)		(544	)
Loans originated for sale		(11,984	)		(16,643	)
Proceeds from sales of loans		13,135			15,750
Earnings on bank-owned life insurance		(271	)		(293	)
Depreciation of premises and equipment and amortization of software		520			513
Deferred income tax		61			79
Amortization of deferred fees on subordinated debt		40			40
Stock-based compensation expense		15			17
Other assets and other liabilities, net		(2,357	)		(1,466	)
Net cash provided by operating activities		4,128			1,410

Cash flows from investing activities:
Securities available for sale:
Proceeds from maturities, calls, and repayments		17,297			8,663
Proceeds from sales		10,985			5,019
Purchases		(3,047	)		(3,000	)
Equity securities
Proceeds from sales		128			—
Purchases		(117	)		(117	)
Purchase of regulatory bank stock		(182	)		(173	)
Redemptions of regulatory bank stock		166			164
Net increase in loans		(16,250	)		(20,354	)
Purchases of premises and equipment, net		(1,006	)		(1,746	)
Purchase of computer software		(30	)		(53	)
Net cash provided by (used for) investing activities		7,944			(11,597	)
Cash flows from financing activities:
Net increase (decrease) in demand, and savings accounts		12,300			(19,550	)
Net (decrease) increase in time deposits		(9,256	)		13,763
Repayments of long-term debt		(4,500	)		(4,246	)
Dividends paid		(1,018	)		(964	)
Proceeds from sale of treasury stock		221			269
Treasury stock purchased		—			(228	)
Net cash used for financing activities		(2,253	)		(10,956	)
Increase (decrease) in cash and cash equivalents		9,819			(21,143	)
Cash and cash equivalents at beginning of period		68,909			88,996
Cash and cash equivalents at end of period		78,728			67,853
Supplemental disclosures of cash flow information:
Interest paid		9,414			7,719
Income taxes paid		—
Supplemental disclosure of non-cash investing and financing activities:
Fair value adjustments for securities available for sale		4,795			(957	)

See Notes to the Unaudited Consolidated Interim Financial Statements

ENB FINANCIAL CORP
Notes to the Unaudited Consolidated Interim Financial Statements

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and to general practices within the banking industry. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all significant adjustments considered necessary for fair presentation have been included. Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity.

ENB Financial Corp (“the Corporation”) is the bank holding company for its wholly-owned subsidiary Ephrata National Bank (the “Bank”). Ephrata National Bank has one wholly-owned subsidiary, ENB Insurance, LLC which is consolidated into its financial statements. This Form 10-Q, for the first quarter of 2025, is reporting on the results of operations and financial condition of ENB Financial Corp on a consolidated basis.

Operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in ENB Financial Corp’s Annual Report on Form 10-K for the year ended December 31, 2024.

2. Revenue from Contracts with Customers

The Corporation records revenue from contracts with customers in accordance with Accounting Standards Topic 606, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Corporation must identify contracts with customers, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when the Corporation satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods.

The Corporation’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. The Corporation has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Corporation generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

3. Securities Available for Sale

The amortized cost, gross unrealized gains and losses, approximate fair value, and allowance for credit losses of investment securities held at March 31, 2025 and December 31, 2024, are as follows:

			Gross		Gross			Allowance
(DOLLARS IN THOUSANDS)	Amortized		Unrealized		Unrealized			for Credit		Fair
	Cost		Gains		Losses			Losses		Value
	$		$		$			$		$
March 31, 2025
U.S. treasuries		14,907		—		(1,159	)		—		13,748
U.S. government agencies		19,400		—		(1,059	)		—		18,341
U.S. agency mortgage-backed securities		36,777		—		(2,556	)		—		34,221
U.S. agency collateralized mortgage obligations		115,038		23		(3,138	)		—		111,923
Non-agency MBS/CMO		148,446		2		(4,444	)		—		144,004
Asset-backed securities		57,175		47		(521	)		—		56,701
Corporate bonds		51,234		—		(3,724	)		—		47,510
Obligations of states and political subdivisions		195,065		—		(25,925	)		—		169,140
Total securities available for sale		638,042		72		(42,526	)		—		595,588

			Gross		Gross			Allowance
(DOLLARS IN THOUSANDS)	Amortized		Unrealized		Unrealized			for Credit		Fair
	Cost		Gains		Losses			Losses		Value
	$		$		$			$		$
December 31, 2024
U.S. Treasuries		19,900		—		(1,438	)		—		18,462
U.S. government agencies		19,400		—		(1,333	)		—		18,067
U.S. agency mortgage-backed securities		38,000		—		(3,120	)		—		34,880
U.S. agency collateralized mortgage obligations		116,272		—		(5,277	)		—		110,995
Non-agency MBS/CMO		152,096		16		(6,901	)		—		145,211
Asset-backed securities		57,543		123		(398	)		—		57,268
Corporate bonds		57,423		—		(4,351	)		—		53,072
Obligations of states and political subdivisions		203,044		—		(24,569	)		—		178,475
Total securities available for sale		663,678		139		(47,387	)		—		616,430

The amortized cost and fair value of securities available for sale at March 31, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to certain call or prepayment provisions.

CONTRACTUAL MATURITY OF DEBT SECURITIES

(DOLLARS IN THOUSANDS)

	Amortized
	Cost		Fair Value
	$		$
Due in one year or less		8,725		8,682
Due after one year through five years		89,735		84,289
Due after five years through ten years		71,634		62,790
Due after ten years		467,948		439,827
Total debt securities		638,042		595,588

Securities available for sale with a par value of $101,534,000 and $110,232,000 at March 31, 2025, and December 31, 2024, respectively, were pledged or restricted for public funds, borrowings, or other purposes as required by law. The fair value of these pledged securities was $95,586,000 at March 31, 2025, and $102,957,000 at December 31, 2024.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Proceeds from active sales of debt securities available for sale, along with the associated gross realized gains and gross realized losses, are shown below. Realized gains and losses are computed on the basis of specific identification.

PROCEEDS FROM SALES OF SECURITIES AVAILABLE FOR SALE

(DOLLARS IN THOUSANDS)

	Three Months Ended March 31,
	2025			2024
	$			$
Proceeds from sales		10,985			5,019
Gross realized gains		—			—
Gross realized losses		(305	)		(91	)

Information pertaining to securities with gross unrealized losses at March 31, 2025 and December 31, 2024, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:

UNREALIZED LOSSES ON DEBT SECURITIES

(DOLLARS IN THOUSANDS)

	Less than 12 months					More than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	$		$			$		$			$		$
As of March 31, 2025
U.S. Treasuries		—		—			13,748		(1,159	)		13,748		(1,159	)
U.S. government agencies		—		—			18,341		(1,059	)		18,341		(1,059	)
U.S. agency mortgage-backed securities		—		—			33,141		(2,556	)		33,141		(2,556	)
U.S. agency collateralized mortgage obligations		83,957		(1,760	)		17,427		(1,378	)		101,384		(3,138	)
Non-Agency MBS/CMO		109,629		(2,932	)		29,101		(1,512	)		138,730		(4,444	)
Asset-backed securities		17,938		(116	)		26,497		(405	)		44,435		(521	)
Corporate bonds		—		—			47,510		(3,724	)		47,510		(3,724	)
Obligations of states & political subdivisions		1,694		(344	)		167,414		(25,581	)		169,108		(25,925	)
Total unrealized losses on debt securities		213,218		(5,152	)		353,179		(37,374	)		566,397		(42,526	)

			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	$		$			$		$			$		$
As of December 31, 2024
U.S. Treasuries		—		—			18,462		(1,438	)		18,462		(1,438	)
U.S. government agencies		—		—			18,067		(1,333	)		18,067		(1,333	)
U.S. agency mortgage-backed securities		—		—			34,880		(3,120	)		34,880		(3,120	)
U.S. agency collateralized mortgage obligations		93,239		(3,584	)		17,756		(1,693	)		110,995		(5,277	)
Non-Agency MBS/CMO		107,316		(4,930	)		33,606		(1,971	)		140,922		(6,901	)
Asset-backed securities		4,938		(39	)		26,376		(359	)		31,314		(398	)
Corporate bonds		—		—			53,072		(4,351	)		53,072		(4,351	)
Obligations of states & political subdivisions		1,639		(400	)		176,806		(24,169	)		178,445		(24,569	)
Total unrealized losses on debt securities		207,132		(8,953	)		379,025		(38,434	)		586,157		(47,387	)

In the debt security portfolio there were 313 positions carrying unrealized losses as of March 31, 2025.

Management evaluates all of the Corporation’s securities for expected credit losses. No securities in the portfolio required an allowance for credit losses to be recorded in the first three months of 2025 or 2024.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Unrealized losses on the Corporation’s available-for-sale debt securities have not been recognized into income because the bonds are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is solely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

4. Equity Securities

The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of equity securities held at March 31, 2025 and December 31, 2024.

			Gross		Gross
(DOLLARS IN THOUSANDS)	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	$		$		$			$
March 31, 2025
CRA-qualified mutual funds		8,635		—		—			8,635
Bank stocks		1,126		51		(141	)		1,036
Total equity securities		9,761		51		(141	)		9,671

			Gross		Gross
(DOLLARS IN THOUSANDS)	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	$		$		$			$
December 31, 2024
CRA-qualified mutual funds		8,517		—		—			8,517
Bank stocks		1,233		101		(141	)		1,193
Total equity securities		9,750		101		(141	)		9,710

The following table presents the net gains and losses on the Corporation’s equity investments recognized in earnings during the three months ended March 31, 2025 and 2024, and the portion of unrealized gains and losses for the period that relates to equity investments held as of March 31, 2025 and 2024.

NET GAINS AND LOSSES ON EQUITY INVESTMENTS RECOGNIZED IN EARNINGS

(DOLLARS IN THOUSANDS)

	Three Months Ended
	March 31,
	2025			2024
	$			$

Net losses recognized in equity securities during the period		(28	)		(167	)

Less: Net gains realized on the sale of equity securities during the period		22			—

Unrealized losses recognized in equity securities held at reporting date		(50	)		(167	)

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

5. Loans and Allowance for Credit Losses

The following table presents the Corporation’s loan portfolio by category of loans as of March 31, 2025 and December 31, 2024 (in thousands):

	March 31,			December 31,
	2025			2024
	$			$

Agriculture		293,070			289,284
Business Loans		360,975			360,805
Consumer		6,346			6,603
Home Equity		125,173			118,329
Non-Owner Occupied Commercial Real Estate		149,585			136,298
Residential Real Estate (a)		506,525			514,120

Gross loans prior to deferred costs		1,441,674			1,425,439

Deferred loan costs, net		1,788			1,830
Allowance for credit losses		(16,537	)		(16,122	)
Total net loans		1,426,925			1,411,147

(a)	Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $354,440 and $342,640 as of March 31, 2025 and December 31, 2024.

Age Analysis of Past-Due Loans Receivable

The performance and credit quality of the loan portfolio is monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past-due status as of March 31, 2025 and December 31, 2024 (in thousands):

	March 31, 2025
			31-60		61-90		Greater Than
			Days		Days		90 Days		Total		Total
	Current		Past Due		Past Due		Past Due		Past Due		Loans

Agriculture	$	290,449	$	2,307	$	314	$	—	$	2,621	$	293,070
Business Loans		360,811		106		—		58		164		360,975
Consumer		6,342		—		4		—		4		6,346
Home Equity		124,740		122		16		295		433		125,173
Non-Owner Occupied CRE		148,836		—		—		749		749		149,585
Residential Real Estate		497,570		7,146		246		1,563		8,955		506,525
Total	$	1,428,748	$	9,681	$	580	$	2,665	$	12,926	$	1,441,674

	December 31, 2024
			31-60		61-90		Greater Than
			Days		Days		90 Days		Total		Total
	Current		Past Due		Past Due		Past Due		Past Due		Loans

Agriculture	$	288,970	$	—	$	314	$	—	$	314	$	289,284
Business Loans		358,207		2,531		—		67		2,598		360,805
Consumer		6,571		23		—		9		32		6,603
Home Equity		117,451		102		578		198		878		118,329
Non-Owner Occupied CRE		135,541		—		—		757		757		136,298
Residential Real Estate		510,882		808		23		2,407		3,238		514,120
Total	$	1,417,622	$	3,464	$	915	$	3,438	$	7,817	$	1,425,439

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Nonperforming Loans

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2025 and December 31, 2024, (in thousands):

March 31, 2025
	Nonaccrual		Nonaccrual				Loans Past
	with no		with		Total		Due Over 90 Days		Total
	ACL		ACL		Nonaccrual		Still Accruing		Nonperforming

Agriculture	$	2,263	$	—	$	2,263	$	—	$	2,263
Business Loans		3,027		869		3,896		—		3,896
Consumer Loans		—		1		1		—		1
Home Equity		354		—		354		—		354
Non-Owner Occupied CRE		1,037		—		1,037		—		1,037
Residential Real Estate		1,199		1,977		3,176		—		3,176
Total	$	7,880	$	2,847	$	10,727	$	—	$	10,727

December 31, 2024
	Nonaccrual		Nonaccrual				Loans Past
	with no		with		Total		Due Over 90 Days		Total
	ACL		ACL		Nonaccrual		Still Accruing		Nonperforming

Agriculture	$	1,481	$	—	$	1,481	$	—	$	1,481
Business Loans		5,084		969		6,053		—		6,053
Consumer Loans		—		10		10		—		10
Home Equity		393		—		393		—		393
Non-Owner Occupied CRE		—		—		—		—		—
Residential Real Estate		1,806		2,144		3,950		—		3,950
Total	$	8,764	$	3,123	$	11,887	$	—	$	11,887

The following table presents, by class of loans, the collateral-dependent nonaccrual loans and type of collateral as of March 31, 2025 and December 31, 2024 (in thousands).

March 31, 2025
	Real Estate		Other		None		Total
Agriculture	$	2,263	$	—	$	—	$	2,263
Business Loans		3,027		869		—		3,896
Consumer Loans		—		—		1		1
Home Equity		354		—		—		354
Non-Owner Occupied CRE		1,037		—		—		1,037
Residential Real Estate		3,176		—		—		3,176
Total	$	9,857	$	869	$	1	$	10,727

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

December 31, 2024
	Real Estate		Other		None		Total
Agriculture	$	1,481	$	—	$	—	$	1,481
Business Loans		5,085		968		—		6,053
Consumer Loans		—		—		10		10
Home Equity		393		—		—		393
Non-Owner Occupied CRE		—		—		—		—
Residential Real Estate		3,950		—		—		3,950
Total	$	10,909	$	968	$	10	$	11,887

Credit Quality Indicators

The Corporation grades commercial credits differently than consumer credits. The following tables represent all of the Corporation’s commercial credit exposures by internally assigned grades as of March 31, 2025 and December 31, 2024. The grading analysis estimates the capability of the borrower to repay the contractual obligations under the loan agreements as scheduled. The Corporation's internal commercial credit risk grading system is based on experiences with similarly graded loans.

The Corporation's internally assigned grades for commercial credits are as follows:

●

Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

●

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem, if not corrected.

●

Substandard – loans that have a well-defined weakness based on objective evidence and characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

●

Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

●

Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Based on the most recent analysis performed, the following table presents the recorded investment by internal risk rating system for Commercial Credit exposures as of March 31, 2025 (in thousands):

													Revolving		Revolving
	Term Loans Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Converted
March 31, 2025	2025		2024		2023		2022		2021		Prior		Cost Basis		to Term		Total
Agriculture
Risk Rating
Pass	$	6,473	$	29,427	$	49,561	$	38,218	$	43,836	$	78,043	$	24,570	$	—	$	270,128
Special Mention		—		622		207		16		6,345		2,872		2,250		—		12,312
Substandard		3,104		147		1,708		1,428		981		3,017		245		—		10,630
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	9,577	$	30,196	$	51,476	$	39,662	$	51,162	$	83,932	$	27,065	$	—	$	293,070

Agriculture
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Business Loans
Risk Rating
Pass	$	19,773	$	52,983	$	45,830	$	74,035	$	48,126	$	65,207	$	40,382	$	—	$	346,336
Special Mention		—		—		—		—		7		—		—		—		7
Substandard		—		—		2,751		7,389		406		548		3,538		—		14,632
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	19,773	$	52,983	$	48,581	$	81,424	$	48,539	$	65,755	$	43,920	$	—	$	360,975

Business Loans
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Non-Owner Occupied CRE
Risk Rating
Pass	$	5,526	$	9,261	$	29,895	$	37,515	$	26,953	$	33,334	$	3,459	$	—	$	145,943
Special Mention		—		—		—		—		—				—		—		—
Substandard		—		—		378		—		—		3,264		—		—		3,642
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	5,526	$	9,261	$	30,273	$	37,515	$	26,953	$	36,598	$	3,459	$	—	$	149,585

Non-Owner Occupied CRE
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total
Risk Rating
Pass	$	31,773	$	91,671	$	125,286	$	149,768	$	118,915	$	176,584	$	68,411	$	—	$	762,408
Special Mention		—		622		207		16		6,352		2,872		2,250		—		12,319
Substandard		3,104		147		4,837		8,817		1,387		6,829		3,783		—		28,904
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	34,877	$	92,440	$	130,330	$	158,601	$	126,654	$	186,285	$	74,444	$	—	$	803,631

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Based on the most recent analysis performed, the following table presents the recorded investment by internal risk rating system for Commercial Credit exposures as of December 31, 2024 (in thousands):

													Revolving		Revolving
	Term Loans Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Converted
December 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Agriculture
Risk Rating
Pass	$	30,261	$	49,814	$	38,824	$	44,513	$	17,156	$	63,007	$	24,359	$	—	$	267,934
Special Mention		1,033		174		17		6,411		—		1,555		1,714		—		10,904
Substandard		413		1,904		1,522		1,679		1,287		3,275		366		—		10,446
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	31,707	$	51,892	$	40,363	$	52,603	$	18,443	$	67,837	$	26,439	$	—	$	289,284

Agriculture
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	25	$	—	$	—	$	25

Business Loans
Risk Rating
Pass	$	61,110	$	38,875	$	86,326	$	53,149	$	29,095	$	44,956	$	37,440	$	—	$	350,951
Special Mention		—		—		—		409		—		258		—		—		667
Substandard		—		2,816		2,030		—		—		875		3,466		—		9,187
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	61,110	$	41,691	$	88,356	$	53,558	$	29,095	$	46,089	$	40,906	$	—	$	360,805

Business Loans
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Non-Owner Occupied CRE
Risk Rating
Pass	$	3,971	$	36,562	$	33,912	$	26,695	$	14,729	$	16,986	$	—	$	—	$	132,855
Special Mention		—		—		—		—		—				—		—		—
Substandard		—		382		—		—		—		3,061		—		—		3,443
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	3,971	$	36,944	$	33,912	$	26,695	$	14,729	$	20,047	$	—	$	—	$	136,298

Non-Owner Occupied CRE
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total
Risk Rating
Pass	$	95,342	$	125,251	$	159,062	$	124,357	$	60,980	$	124,949	$	61,799	$	—	$	751,740
Special Mention		1,033		174		17		6,820		—		1,813		1,714		—		11,571
Substandard		413		5,102		3,552		1,679		1,287		7,211		3,832		—		23,076
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	96,788	$	130,527	$	162,631	$	132,856	$	62,267	$	133,973	$	67,345	$	—	$	786,387

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

For consumer loans, the Corporation evaluates credit quality based on whether the loan is considered performing or non-performing. Non-performing loans consist of those loans greater than 90 days delinquent and nonaccrual loans.

The following table presents the balances of consumer loans by classes of the loan portfolio based on payment performance as of March 31, 2025 (in thousands):

													Revolving		Revolving
	Term Loans Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Converted
March 31, 2025	2025		2024		2023		2022		2021		Prior		Cost Basis		to Term		Total
Consumer
Payment Performance
Performing	$	1,981	$	1,573	$	793	$	306	$	61	$	19	$	1,612	$	—	$	6,345
Nonperforming		—		—		—		1		—		—		—		—		1
Total	$	1,981	$	1,573	$	793	$	307	$	61	$	19	$	1,612	$	—	$	6,346

Consumer
Current period gross charge-offs	$	—	$	7	$	11	$	5	$	—	$	4	$	—	$	—	$	27

Home equity
Payment Performance
Performing	$	—	$	2,066	$	6,385	$	13,969	$	869	$	1,844	$	99,287	$	399	$	124,819
Nonperforming		—		—		—		—		—		59		295		—		354
Total	$	—	$	2,066	$	6,385	$	13,969	$	869	$	1,903	$	99,582	$	399	$	125,173

Home equity
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	3	$	—	$	—	$	3

Residential Real Estate
Payment Performance
Performing	$	7,520	$	62,958	$	100,258	$	136,893	$	96,393	$	99,327	$	—	$	—	$	503,349
Nonperforming		—		—		1,073		1,060		790		253		—		—		3,176
Total	$	7,520	$	62,958	$	101,331	$	137,953	$	97,183	$	99,580	$	—	$	—	$	506,525

Residential Real Estate
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total
Payment Performance
Performing	$	9,501	$	66,597	$	107,436	$	151,168	$	97,323	$	101,190	$	100,899	$	399	$	634,513
Nonperforming		—		—		1,073		1,061		790		312		295		—		3,531
Total	$	9,501	$	66,597	$	108,509	$	152,229	$	98,113	$	101,502	$	101,194	$	399	$	638,044

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

The following table presents the balances of consumer loans by classes of the loan portfolio based on payment performance as of December 31, 2024 (in thousands):

													Revolving		Revolving
	Term Loans Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Converted
	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Consumer
Payment Performance
Performing	$	3,564	$	967	$	391	$	105	$	46	$	5	$	1,515	$	—	$	6,593
Nonperforming		—		10		—		—		—		—		—		—		10
Total	$	3,564	$	977	$	391	$	105	$	46	$	5	$	1,515	$	—	$	6,603

Consumer
Current period gross charge-offs	$	—	$	16	$	43	$	6	$	—	$	8	$	—	$	—	$	73

Home equity										—
Payment Performance
Performing	$	1,899	$	6,778	$	14,700	$	903	$	497	$	1,560	$	91,167		432	$	117,936
Nonperforming		—		—		—		—		—		3		390		—		393
Total	$	1,899	$	6,778	$	14,700	$	903	$	497	$	1,563	$	91,557	$	432	$	118,329

Home equity
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Residential Real Estate										—
Payment Performance
Performing	$	67,526	$	102,522	$	138,668	$	98,116	$	39,926	$	63,412	$	—	$	—	$	510,170
Nonperforming		—		1,073		1,879		712		—		286		—		—		3,950
Total	$	67,526	$	103,595	$	140,547	$	98,828	$	39,926	$	63,698	$	—	$	—	$	514,120

Residential Real Estate
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total
Payment Performance
Performing	$	72,989	$	110,267	$	153,759	$	99,124	$	40,469	$	64,977	$	92,682	$	432	$	634,699
Nonperforming		—		1,083		1,879		712		—		289		390		—		4,353
Total	$	72,989	$	111,350	$	155,638	$	99,836	$	40,469	$	65,266	$	93,072	$	432	$	639,052

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses (ACL) by portfolio segment for the three months ended March 31, 2025 and March 31, 2024 (in thousands):

March 31, 2025	Beginning							Provisions			Ending
	Balance		Charge-offs			Recoveries		(Reductions)			Balance
Allowance for credit losses:
Agriculture		3,303		—			1		166			3,470
Business Loans		3,234		—			2		(29	)		3,207
Consumer Loans		327		(27	)		16		(8	)		308
Home Equity		2,644		(3	)		—		80			2,721
Non-Owner Occupied CRE		933		—			—		98			1,031
Residential Real Estate		5,681		—			—		119			5,800

Total	$	16,122	$	(30	)	$	19	$	426		$	16,537

March 31, 2024	Beginning							Provisions			Ending
	Balance		Charge-offs			Recoveries		(Reductions)			Balance
Allowance for credit losses:
Agriculture		3,106		—			—		(282	)		2,824
Business Loans		2,684		—			—		(139	)		2,545
Consumer Loans		355		(25	)		5		16			351
Home Equity		2,341		—			—		12			2,353
Non-Owner Occupied CRE		818		—			—		(105	)		713
Residential Real Estate		5,872		—			—		(42	)		5,830

Total	$	15,176	$	(25	)	$	5	$	(540	)	$	14,616

During the three months ended March 31, 2025, management charged off $30,000 in loans while recovering $19,000 and added $426,000 to the provision for credit losses related to loans and $60,000 in provision expense for off-balance sheet credit exposure for a net provision expense of $486,000.

The ACL is maintained at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers historical loss experience, current conditions, and forecasts of future economic conditions as of the balance sheet date. The Corporation develops and documents a systematic ACL methodology based on the following portfolio segments: Agriculture, Business Loans, Consumer Loans, Home Equity, Non-Owner Occupied Commercial Real Estate (CRE), and Residential Real Estate. The following are key risks within each portfolio segment:

Agriculture – Loans made to individuals or operating companies within the Agricultural industry. These loans are generally secured by a first lien mortgage on agricultural land. The primary source of repayment is the income and assets of the borrower. The condition of the agriculture industry as well as the condition of the national economy is an important indicator of risk for this segment.

Business Loans —Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The primary source of repayment for these loans is cash flow from the operations of the company. The condition of the national economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. This segment also includes loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While the risk of these loans is generally confined to the construction period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the national economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Consumer - Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes personal loans and lines of credit that may be secured or unsecured. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the national economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

Home Equity– This segment generally includes lines of credit and term loans secured by the equity in the borrower’s residence. The primary source of repayment for these facilities is the income and assets of the borrower. The condition of the national economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the national housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

Non-Owner Occupied CRE - Loans secured by commercial purpose real estate for various purposes such as hotels, retail, multifamily and health care. The primary sources of repayment for these loans are the operations of the individual projects and global cash flows of the debtors. The condition of the national economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee.

Residential Real Estate—Loans secured by first liens on 1-4 family residential mortgages. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the national economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the national housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

The following table presents the balance in the allowance for credit losses and the recorded investment in loans receivable by portfolio segment based on the estimation method as of March 31, 2025:

ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE

(DOLLARS IN THOUSANDS)

As of March 31, 2025:	Agriculture		Business Loans		Consumer Loans		Home Equity		Non-Owner Occupied CRE		Residential Real Estate		Total
	$		$		$		$		$		$		$
Allowance for credit losses:
Ending balance: individually evaluated		—		64		1		—		—		317		382
Ending balance: collectively evaluated		3,470		3,143		307		2,721		1,031		5,483		16,155

Loans receivable:
Ending balance		293,070		360,975		6,346		125,173		149,585		506,525		1,441,674
Ending balance: individually evaluated		2,263		3,896		1		354		1,037		3,176		10,727
Ending balance: collectively evaluated		290,807		357,079		6,345		124,819		148,548		503,349		1,430,947

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

The following table presents the balance in the allowance for credit losses and the recorded investment in loans receivable by portfolio segment based on estimation method as of December 31, 2024:

ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE

(DOLLARS IN THOUSANDS)

As of December 31, 2024:	Agriculture		Business Loans		Consumer		Home Equity		Non-Owner Occupied CRE		Residential Real Estate		Total
	$		$		$		$		$		$		$
Allowance for credit losses:
Ending balance: individually evaluated		—		250		10		—		186		337		783
Ending balance: collectively evaluated		3,303		2,984		317		2,644		747		5,344		15,339

Loans receivable:
Ending balance		289,284		360,805		6,603		118,329		136,298		514,120		1,425,439
Ending balance: individually evaluated		1,481		6,053		10		393		2,099		3,950		13,986
Ending balance: collectively evaluated		287,803		354,752		6,593		117,936		134,199		510,170		1,411,453

Modifications to Borrowers Experiencing Financial Difficulty

The Corporation may grant a modification to borrowers in financial distress by providing a temporary reduction in interest rate, or an extension of a loan’s stated maturity date. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral.

The Corporation identifies loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower's financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future. There were no modifications of loans to borrowers experiencing financial difficulty for the quarter ended March 31, 2025 or for the quarter ended March 31, 2024.

6. Fair Value Presentation

U.S. generally accepted accounting principles establish a hierarchal disclosure framework associated with the level of observable pricing utilized in measuring assets and liabilities at fair value. The three broad levels defined by the hierarchy are as follows:

	Level I:	Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

	Level II:	Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.

	Level III:	Assets and liabilities that have little to no observable pricing as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

The following tables provide the fair market value for assets required to be measured and reported at fair value on a recurring basis on the Consolidated Balance Sheets as of March 31, 2025, and December 31, 2024, by level within the fair value hierarchy. As required by U.S. generally accepted accounting principles, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

ASSETS MEASURED ON A RECURRING BASIS

(DOLLARS IN THOUSANDS)

	March 31, 2025
	Level I		Level II		Level III		Total
	$		$		$		$

Assets
U.S. treasuries		13,748		—		—		13,748
U.S. government agencies		—		18,341		—		18,341
U.S. agency mortgage-backed securities		—		34,221		—		34,221
U.S. agency collateralized mortgage obligations		—		111,923		—		111,923
Non-agency MBS/CMO		—		144,004		—		144,004
Asset-backed securities		—		56,701		—		56,701
Corporate bonds		—		47,510		—		47,510
Obligations of states & political subdivisions		—		169,140		—		169,140
Equity securities		9,671		—		—		9,671
Total securities		23,419		581,840		—		605,259
Derivatives and hedging activities		—		1,122		—		1,122

Liabilities
Derivatives and hedging activities		—		833		—		833

On March 31, 2025, the Corporation held no securities valued using level III inputs. Most of the Corporation’s debt instruments were valued using level II inputs, where quoted prices are available and observable, but not necessarily quotes on identical securities traded in active markets on a daily basis. The Corporation’s U.S. Treasury bonds, CRA fund investments, and bank stocks are fair valued utilizing level I inputs because the funds have their own quoted prices in an active market. The Corporation’s hedging assets and liabilities are valued using level II inputs as there are quoted prices available and observable, but not necessarily quotes on identical instruments traded in active markets on a daily basis.

Financial instruments are considered level III when their values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. In addition to these unobservable inputs, the valuation models for level III financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. Level III financial instruments also include those for which the determination of fair value requires significant management judgment or estimation.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

ASSETS MEASURED ON A RECURRING BASIS

(DOLLARS IN THOUSANDS)

	December 31, 2024
	Level I		Level II		Level III		Total
	$		$		$		$
U.S. Treasuries		18,462		—		—		18,462
U.S. government agencies		—		18,067		—		18,067
U.S. agency mortgage-backed securities		—		34,880		—		34,880
U. S. agency collateralized mortgage obligations		—		110,995		—		110,995
Non-agency MBS/CMO		—		145,211		—		145,211
Asset-backed securities		—		57,268		—		57,268
Corporate bonds		—		53,072		—		53,072
Obligations of states and political subdivisions		—		178,475		—		178,475
Marketable equity securities		9,710		—		—		9,710
Total securities		28,172		597,968		—		626,140
Derivatives and hedging activities		—		3,929		—		3,929

On December 31, 2024, the Corporation held no securities valued using level III inputs. Most of the Corporation’s debt instruments were valued using level II inputs, where quoted prices are available and observable, but not necessarily quotes on identical securities traded in active markets on a daily basis. The Corporation’s U.S. Treasury bonds, CRA fund investments, and bank stocks are fair valued utilizing level I inputs because the funds have their own quoted prices in an active market.

The following tables provide the fair value for each class of assets required to be measured and reported at fair value on a nonrecurring basis on the Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, by level within the fair value hierarchy:

ASSETS MEASURED ON A NONRECURRING BASIS

(Dollars in Thousands)

	March 31, 2025
	Level I		Level II		Level III		Total
	$		$		$		$
Assets:
Individually analyzed loans	$	—	$	—	$	10,345	$	10,345
Total	$	—	$	—	$	10,345	$	10,345

	December 31, 2024
	Level I		Level II		Level III		Total
	$		$		$		$
Assets:
Individually analyzed loans	$	—	$	—	$	13,203	$	13,203
Total	$	—	$	—	$	13,203	$	13,203

The Corporation had a total of $10,727,000 of individually analyzed loans as of March 31, 2025, with $382,000 of specific allocation against these loans and $13,986,000 of individually analyzed loans as of December 31, 2024, with $783,000 of specific allocation against these loans. The value of individually analyzed loans is generally determined through independent appraisals of the underlying collateral.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized level III inputs to determine fair value:

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

QUANTITATIVE INFORMATION ABOUT LEVEL III FAIR VALUE MEASUREMENTS

(DOLLARS IN THOUSANDS)

	March 31, 2025
	Fair Value	Valuation	Unobservable	Range
	Estimate	Techniques	Input	(Weighted Avg)

Individually analyzed loans	10,345	Appraisal of collateral (1)	Appraisal adjustments (2)	0% to -20% (-20%)
			Liquidation expenses (2)	0% to -10% (-10%)

	December 31, 2024
	Fair Value	Valuation	Unobservable	Range
	Estimate	Techniques	Input	(Weighted Avg)

Individually analyzed loans	13,203	Appraisal of collateral (1)	Appraisal adjustments (2)	0% to -20% (-20%)
			Liquidation expenses (2)	0% to -10% (-10%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level III inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

The following tables provide the carrying amount for each class of assets and liabilities and the fair value for certain financial instruments that are not required to be measured or reported at fair value on the Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024:

FINANCIAL INSTRUMENTS NOT REQUIRED TO BE MEASURED OR REPORTED AT FAIR VALUE

(DOLLARS IN THOUSANDS)

	March 31, 2025
					Quoted Prices in
					Active Markets		Significant Other		Significant
					for Identical		Observable		Unobservable
	Carrying				Assets		Inputs		Inputs
	Amount		Fair Value		(Level 1)		(Level II)		(Level III)
	$		$		$		$		$
Financial Assets:
Cash and cash equivalents		78,728		78,728		78,728		—		—
Regulatory stock		10,805		10,805		10,805		—		—
Loans held for sale		3,284		3,284		3,284		—		—
Loans, net of allowance		1,426,925		1,408,566		—		—		1,408,566
Mortgage servicing assets		2,470		3,204		—		—		3,204
Accrued interest receivable		8,397		8,397		8,397		—		—
Bank owned life insurance		36,249		36,249		36,249		—		—

Financial Liabilities:
Demand deposits		634,110		634,110		634,110		—		—
Interest-bearing demand deposits		362,120		362,120		362,120		—		—
Money market deposit accounts		186,587		186,587		186,587		—		—
Savings accounts		288,470		288,470		288,470		—		—
Time deposits		422,200		420,650		—		—		420,650
Total deposits		1,893,487		1,891,937		1,471,287		—		420,650

Short-term debt		60,000		60,000		60,000
Long-term debt		79,322		79,835		—		—		79,835
Subordinated debt		39,756		35,629		—		—		35,629
Accrued interest payable		3,133		3,133		3,133		—		—

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

FINANCIAL INSTRUMENTS NOT REQUIRED TO BE MEASURED OR REPORTED AT FAIR VALUE

(DOLLARS IN THOUSANDS)

	December 31, 2024
					Quoted Prices in
					Active Markets		Significant Other		Significant
					for Identical		Observable		Unobservable
	Carrying				Assets		Inputs		Inputs
	Amount		Fair Value		(Level 1)		(Level II)		(Level III)
	$		$		$		$		$
Financial Assets:
Cash and cash equivalents		68,909		68,909		68,909		—		—
Regulatory stock		10,789		10,789		10,789		—		—
Loans held for sale		3,996		3,996		3,996		—		—
Loans, net of allowance		1,411,147		1,374,663		—		—		1,374,663
Mortgage servicing assets		2,364		3,179		—		—		3,179
Accrued interest receivable		8,624		8,624		8,624		—		—
Bank owned life insurance		36,014		36,014		36,014		—		—

Financial Liabilities:
Demand deposits		631,711		631,711		631,711		—		—
Interest-bearing demand deposits		384,236		384,236		384,236		—		—
Money market deposit accounts		162,514		162,514		162,514		—		—
Savings accounts		280,526		280,526		280,526		—		—
Time deposits		431,456		432,958		—		—		432,958
Total deposits		1,890,443		1,891,945		1,458,987		—		432,958

Short-term debt		60,000		60,000		60,000		—		—
Long-term debt		83,822		83,841		—		—		83,841
Subordinated debt		39,716		35,593		—		—		35,593
Accrued interest payable		3,169		3,169		3,169		—		—

7. Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the three months ended March 31, 2025 and 2024 is as follows:

ACCUMULATED OTHER COMPREHENSIVE LOSS (1) (2)

(DOLLARS IN THOUSANDS)

	Accumulated Other Comprehensive Loss
	Unrealized
	Gains/(Losses)
	on Securities
	Available-for-Sale			Derivatives		Total
	$			$		$
	$
Balance at December 31, 2024		(34,304	)		161		(34,143	)
Other comprehensive (loss) gain before reclassifications		(1,697	)		2,314		617
Amount reclassified from accumulated other comprehensive income (loss)		241			—		241
Period change		(1,456	)		2,314		858

Balance at March 31, 2025		(35,760	)		2,475		(33,285	)

Balance at December 31, 2023		(34,355	)		—		(34,355	)
Other comprehensive loss before reclassifications		(828	)		—		(828	)
Amount reclassified from accumulated other comprehensive income (loss)		72			—		72
Period change		(756	)		—		(756	)

Balance at March 31, 2024		(35,111	)		—		(35,111	)

(1) All amounts are net of tax. Related income tax expense or benefit is calculated using a Federal income tax rate of 21%.

(2) Amounts in parentheses indicate debits.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

DETAILS ABOUT ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) COMPONENTS (1)

(DOLLARS IN THOUSANDS)

		Amount Reclassified from
	Accumulated Other Comprehensive Income (Loss)
		For the Three Months
		Ended March 31,
		2025			2024			Affected Line Item in the
		$			$			Consolidated Statements of Income
Securities available-for-sale:
Net securities losses, reclassified into earnings			(305	)		(91	)	Losses on the sale of debt securities, net
Related income tax benefit			64			19		Provision for federal income taxes
Net effect on accumulated other comprehensive loss for the period			(241	)		(72	)

Total reclassifications for the period			(241	)		(72	)

8. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Corporation is exposed to certain risks arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity risk, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage exposure that arises from business activities that result in changes in the value of certain assets as a result of interest rate changes. The Corporation’s derivative financial instruments are used to manage these fair value fluctuations principally related to certain fixed rate debt securities.

Fair Values of Derivative Instruments on the Consolidated Balance Sheet

In 2024, the Corporation entered into certain interest rate swap contracts that are matched to closed portfolios of available-for-sale investment securities. These contracts have been designated as hedging instruments to hedge the risk of changes in the fair value of the underlying investment securities due to changes in interest rates. The related contracts are structured so that the notional amounts reduce over time to generally match the expected amortization of the underlying investment security. The following amounts were recorded on the unaudited consolidated balance sheets related to the cumulative basis adjustment for the fair value hedges as of March 31, 2025 and December 31, 2024:

	Carrying Amount				Cumulative Amount of Fair Value
	of the Hedged Assets				Hedging Adjustment
	3/31/2025		12/31/2024		3/31/2025			12/31/2024
Investment Securities, Available-for-Sale¹	$	192,764	$	195,904	$	(418	)	$	(3,758	)

¹ Carrying value represents amortized cost

These amounts were included in the fair value of closed portfolios of available-for-sale investment securities used to designate hedging relationships in which the hedged item is in the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. As of March 31, 2025, the fair value of the closed portfolios used in these hedging relationships was $188.1 million. As of March 31, 2025, the notional amount of hedged assets was $189.4 million.

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

The Corporation is exposed to changes in the fair value of fixed-rate assets due to changes in benchmark interest rates. The Corporation entered into pay-fixed and receive-floating interest rate swaps to manage its exposure to changes in the fair value of its available-for-sale investment securities. These interest rate swaps are designated as fair value hedges using the portfolio layer method. The Corporation receives variable-rate interest payments in exchange for making fixed-rate payments over the lives of the contracts without exchanging the notional amounts. The fair value hedges are recorded as components of other assets and other liabilities in the Corporation’s consolidated balance sheets. The gain or loss on these derivatives, as well as the offsetting gain or loss on the hedged items attributable to the hedged risk are recognized in interest income in the Corporation’s consolidated statements of income.

The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of March 31, 2025 and 2024, (in thousands).

Fair Values of Derivative Instruments on the Consolidated Balance Sheet

			Fair Values of Derivative Instruments
			Asset Derivatives

	Carrying		As of March 31, 2025			Notional		As of December 31, 2024			Notional
Hedged Item	Amount		Balance Sheet Location	Fair Value		Amount		Balance Sheet Location	Fair Value		Amount
MBS Bonds	$	192,764	Other Assets	$	1,122	$	189,423	Other Assets		3,929		193,800
FHLB Advances		60,000	Other Liabilities		833		60,000	Other Liabilities		—		60,000
Total derivatives designated as hedging instruments	$	252,764		$	1,955	$	249,423	—	$	3,929	$	253,800

Cash Flow Hedges of Interest Rate Risk

The Corporation’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Corporation has entered into certain interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Corporation making fixed payments. As of March 31, 2025, the Corporation had two interest rate swaps with a notional of $60 million associated with the Corporation’s cash outflows associated with two short term FHLB advances.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. The Corporation assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. The Corporation did not recognize any hedge ineffectiveness in earnings during the period ended March 31, 2025.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Corporation’s variable-rate liabilities. During the period ended March 31, 2025, the Corporation had $78,000 in gains, classified as a reduction in interest expense.

The table below presents the effect of the Corporation’s cash flow hedge accounting on Accumulated Other Comprehensive Income for the periods ended March 31, 2025 and March 31, 2024 (in thousands).

The Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)

	Amount of (Loss) Gain Recognized in OCI on Derivative						Amount of Gain Reclassified from Accumulated OCI into Income
	Period Ended			Period Ended		Location of Gain Reclassified	Period Ended			Period Ended
	March 31,			March 31,		from Accumulated OCI into	March 31,			March 31,
	2025			2024		Income	2025			2024
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	(98	)	$	—	Interest Expense	$	(78	)	$	—
Total	$	(98	)	$	—		$	(78	)	$	—

ENB FINANCIAL CORP

Notes to the Unaudited Consolidated Interim Financial Statements

Credit-risk-related Contingent Features

The Corporation has agreements with its derivative counterparties that contain a provision where if the Corporation defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Corporation could also be declared in default on its derivative obligations.

The Corporation also has agreements with certain of its derivative counterparties that contain a provision where if the Corporation fails to maintain its status as a well / adequately capitalized institution, then the counterparty could terminate the derivative positions and the Corporation would be required to settle its obligations under the agreements.

As of March 31, 2025, the Corporation had derivatives in a net asset position and was not required to post collateral against its obligations under these agreements. If the Corporation had breached any of these provisions at March 31, 2025, it could have been required to settle its obligations under the agreements at the termination value.

9. Segment Reporting

ASC Topic 280 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to develop strategy, allocate resources and assess performance.

While the Corporation monitors the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on an entity-wide basis. The Corporation provides a variety of financial services to individuals and small businesses in Lancaster County, southeastern Lebanon County, and southwestern Berks County through its branch network. Its primary deposit products are checking, savings and term certificate accounts, and its primary lending products are commercial, agricultural, residential and construction mortgages, small business, and consumer loans.

Operating segments are aggregated into one segment, as operating results for all segments are similar. Accordingly, all the financial service operations are considered by management to be aggregated in one reportable operating segment, Community Banking.

The Chief Operating Decision Maker assesses performance and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. Net income is used to monitor budget versus actual results.

The Chief Operating Decision Maker uses revenue streams and significant expenses to assess performance and evaluate return on assets and return on equity. The Chief Operating Decision Maker uses consolidated net income to benchmark the Corporation against its competitors. The benchmarking analysis and budget to actual results are used in assessing performance and in establishing compensation.

The accounting policies for the Community Banking segment are the same as those of our consolidated entity. Information utilized in the performance assessment by the Chief Operating Decision Maker is consistent with the level of aggregation disclosed in the Consolidated Statement of Income. The measure of segment assets is reported on the balance sheet as total consolidated assets.

10. Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 became effective for our annual financial statements in 2024 and is effective for interim periods within fiscal 2025.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for public business entities for annual periods beginning after December 15, 2024. The Corporation does not expect the adoption of this ASU to have a material impact on the Corporation's financial statements.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 2024 Annual Report to Shareholders of the Corporation. The financial condition and results of operations presented are not indicative of future performance.

Forward-Looking Statements

The U.S. Private Securities Litigation Reform Act of 1995 provides safe harbor in regards to the inclusion of forward-looking statements in this document and documents incorporated by reference. Forward-looking statements pertain to possible or assumed future results that are made using current information. These forward-looking statements are generally identified when terms such as: “believe,” “estimate,” “anticipate,” “expect,” “project,” “forecast,” and other similar wordings are used. The readers of this report should take into consideration that these forward-looking statements represent management’s expectations as to future forecasts of financial performance, or the likelihood that certain events will or will not occur. Due to the very nature of estimates or predications, these forward-looking statements should not be construed to be indicative of actual future results. Additionally, management may change estimates of future performance, or the likelihood of future events, as additional information is obtained. This document may also address targets, guidelines, or strategic goals that management is striving to reach but may not be indicative of actual results.

Readers should note that many factors affect this forward-looking information, some of which are discussed elsewhere in this document and in the documents that are incorporated by reference into this document. These factors include, but are not limited to, the following:

●

National, regional and local economic conditions

●

Interest rate and monetary policies of the Federal Reserve Board

●

Inflation and monetary fluctuations and volatility

●

Instability in the banking system caused by bank failures and continuous financial uncertainty of various banks which may adversely impact the corporation and its securities values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations

●

Health of the housing market

●

Volatility of the securities markets including the valuation of securities

●

Real estate valuations and its impact on the loan portfolio

●

Future actions or inactions of the United States government, including a failure to increase the government debt limit, a prolonged shutdown of the federal government, increase in taxes or regulations, or increasing debt balances

●

Political changes and the impact of new laws and regulations

●

Competitive forces

●

Impact of mergers and acquisition activity in the local market and the effects thereof

●

Potential impact from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses

●

Changes in customer behavior impacting deposit levels and loan demand

●

Changes in accounting principles, policies, or guidelines as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standards setters

●

Ineffective business strategy due to current or future market and competitive conditions

●

Management’s ability to manage credit risk, liquidity risk, interest rate risk, and fair value risk

●

Operational, legal, and reputational risk

●

Results of the regulatory examination and supervision process

●

Possible changes to the capital and liquidity requirements and other regulatory pronouncements, regulations and rules

●

Large scale global disruptions such as pandemics, terrorism, trade wars, and armed conflict.

●

Local market area disruptions due to flooding, severe weather, or other natural disasters

●

The risk that our analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful

ENB FINANCIAL CORP

Management’s Discussion and Analysis

●

Business and competitive disruptions caused by new market and industry entrants

Readers should be aware if any of the above factors change significantly, the statements regarding future performance could also change materially. The safe harbor provision provides that the Corporation is not required to publicly update or revise forward-looking statements to reflect events or circumstances that arise after the date of this report. Readers should review any changes in risk factors in documents filed by the Corporation periodically with the Securities and Exchange Commission, including Item 1A of Part II of this Quarterly Report on Form 10-Q, Annual Reports on Form 10-K, and Current Reports on Form 8-K.

Results of Operations

Overview

The Corporation recorded net income of $4,316,000 for the three-month period ended March 31, 2025, a $375,000, or 9.5% increase over the three months ended March 31, 2024. The earnings per share, basic and diluted, were $0.76 for the three months ended March 31, 2025, compared to $0.70 for the same period in 2024.

The Corporation’s net interest income (NII) increased by $2,816,000, or 21.1% for the three months ended March 31, 2025, compared to the same period in 2024. Interest and fees on loans increased by $1,975,000, or 11.4%, and interest income on securities increased by $2,142,000, or 59.4%, for the three months ended March 31, 2025, compared to the same period in 2024. Conversely, interest expense on deposits and borrowings increased by $1,178,000, or 14.4%, for the three months ended March 31, 2025, compared to the same period in the prior year.

The Corporation recorded a provision for credit losses of $486,000 in the first quarter of 2025, compared to a release of provision expense of $644,000 in the first quarter of 2024. The allowance as a percentage of total loans was 1.15% as of March 31, 2025, 1.13% as of December 31, 2024, and 1.06% as of March 31, 2024.

Other income decreased by $382,000, or 8.8% for the three months ended March 31, 2025, compared to the same period in the prior year. This was primarily due to a decrease in trust and investment services income as a gain on sale of trust assets was recorded in the prior year.

Total operating expenses increased by $774,000, or 5.7%, for the three months ended March 31, 2025, compared to the same period in 2024. The largest increase in operating costs was due to higher charge-off expenses recorded on deposit accounts and fraud-related charge-offs which, combined, increased by $236,000, or 311.7%. Several other categories of expenses increased from the prior year including advertising and marketing costs, computer software and data processing costs, and costs related to professional services. Salaries and benefits, the largest component of operating expenses, did not increase in the first quarter of 2025 when comparing it to the first quarter of 2024.

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. ROA remained the same and ROE decreased slightly for the quarter-to-date period due to higher levels of capital in 2025.

Key Ratios	Three Months Ended
	March 31,
	2025		2024

Return on Average Assets		0.80%		0.80%
Return on Average Equity		13.03%		13.40%

The results of the Corporation’s operations are best explained by addressing, in further detail, the five major sections of the income statement, which are as follows:

●

Net interest income

●

Provision for credit losses

ENB FINANCIAL CORP

Management’s Discussion and Analysis

●

Other income

●

Operating expenses

●

Provision for income taxes

The following discussion analyzes each of these five components.

Net Interest Income (NII)

NII represents the largest portion of the Corporation’s operating income. In the first three months of 2025, NII generated 80.3% of the Corporation’s revenue stream, which consists of NII and non-interest income. This compared to 75.5% for the first three months of 2024. This increase is a result of higher levels of NII and slightly lower levels of non-interest income in the first three months of 2025 resulting in NII contributing to a larger portion of total revenue. 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. 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. 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. The amount of FTE adjustment totaled $107,000 for the three months ended March 31, 2025, compared to $141,000 for the same period in 2024.

NET INTEREST INCOME

(DOLLARS IN THOUSANDS)

	Three Months Ended
	March 31,
	2025		2024
	$		$
Total interest income	25,565		21,571
Total interest expense		9,377		8,199

Net interest income		16,188		13,372
Tax equivalent adjustment		107		141

Net interest income (fully taxable equivalent)		16,295		13,513

NII is the difference between interest income earned on assets and interest expense incurred on liabilities. Accordingly, two factors affect NII:

●

The rates earned on interest earning assets and paid on interest bearing liabilities

●

The average balance of interest earning assets and interest bearing liabilities

NII is impacted by yields earned on assets and rates paid on liabilities. During 2024, asset yields increased due to a higher interest rate environment despite some variable rate assets repricing to lower rates with the several decreases in the Federal Reserve overnight rates. Liability costs increased minimally as rates had increased dramatically in 2023 but then the Corporation was able to reduce deposit costs during 2024 when the Fed first started decreasing rates. Market interest rates stabilized and moderated in 2024 but the Corporation still felt the lingering effects of the prior rate movements as customers continued to move funds to higher yielding deposit products. Higher market rates have helped the Corporation’s asset yields, and the discipline around lowering the cost of funds has enabled the Corporation to increase NIM. Management believes continued improvement will be dependent on the rate at which overnight interest rates change throughout the remainder of 2025.

The Corporation’s net interest margin increased to 3.02% for the quarter ended March 31, 2025, compared to 2.81% for the same quarter in 2024. The Corporation’s NII on a fully taxable equivalent basis increased by $2,782,000, or 20.6%, for the three months ended March 31, 2025, compared to the same period in 2024.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

The Corporation’s overall cost of funds rose significantly throughout 2024 but moderated in the first quarter of 2025. Core deposit interest rates and time deposit rates have decreased over the past year. The change in deposit rates from historical lows in prior years has resulted in some movement from low interest bearing core deposits to higher cost time deposits or other higher yielding money market deposits. This resulted in the total cost of deposits increasing by $660,000 for the quarter, compared to the same period in the prior year. The average balance of borrowings was higher for the first quarter compared to 2024, and interest rates were higher, resulting in the total cost of borrowings increasing by $518,000, for the three months ended March 31, 2025, compared to the same period in 2024.

The following table provides an analysis of year-to-date changes in NII on a FTE basis 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.

RATE/VOLUME ANALYSIS OF CHANGES IN NET INTEREST INCOME

(TAXABLE EQUIVALENT BASIS, DOLLARS IN THOUSANDS)

	Three Months Ended March 31,
	2025 vs. 2024
	Increase (Decrease)
	Due To Change In
							Net
	Average			Interest			Increase
	Balances			Rates			(Decrease)
	$			$			$
INTEREST INCOME

Interest on deposits at other banks		60			(188	)		(128	)

Securities available for sale:
Taxable		1,508			666			2,174
Tax-exempt		(37	)		(22	)		(59	)
Total securities		1,471			644			2,115

Loans		576			1,375			1,951
Regulatory stock		31			(9	)		22

Total interest income		2,138			1,822			3,960

INTEREST EXPENSE

Deposits:
Demand deposits		392			(423	)		(31	)
Savings deposits		(3	)		(1	)		(4	)
Time deposits		403			292			695
Total deposits		792			(132	)		660

Borrowings:
Total borrowings		378			140			518

Total interest expense		1,170			8			1,178

NET INTEREST INCOME		968			1,814			2,782

The following table shows a more detailed analysis of NII on a FTE basis with all the major elements of the Corporation’s balance sheet, which consists of interest earning and non-interest earning assets and interest bearing and non-interest bearing liabilities.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

COMPARATIVE AVERAGE BALANCE SHEETS AND NET INTEREST INCOME

(DOLLARS IN THOUSANDS)

	For the Three Months Ended March 31,
	2025						2024
					(c)						(c)
	Average				Annualized		Average				Annualized
	Balance		Interest		Yield/Rate		Balance		Interest		Yield/Rate
	$		$		%		$		$		%
ASSETS
Interest earning assets:
Federal funds sold and interest on deposits at other banks		41,065		215		2.13		33,932		344		4.08

Securities available for sale:
Taxable		513,710		5,195		4.05		352,775		3,021		3.43
Tax-exempt		143,853		705		1.96		153,417		764		1.99
Total securities (d)		657,563		5,900		3.59		506,192		3,785		2.99

Loans (a)		1,436,318		19,363		5.40		1,371,478		17,412		5.09

Regulatory stock		10,811		194		7.14		8,596		171		7.97

Total interest earning assets		2,145,757		25,672		4.79		1,920,198		21,712		4.53

Non-interest earning assets (d)		42,215						49,629

Total assets		2,187,972						1,969,827

LIABILITIES & STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Demand deposits		533,450		3,250		2.47		472,598		3,281		2.79
Savings deposits		285,061		70		0.10		302,013		75		0.10
Time deposits		423,197		4,171		4.00		340,159		3,475		4.11
Borrowed funds		180,925		1,886		4.23		139,592		1,368		3.94
Total interest bearing liabilities		1,422,633		9,377		2.67		1,254,362		8,199		2.63

Non-interest bearing liabilities:

Demand deposits		617,706						584,242
Other		13,282						12,906

Total liabilities		2,053,621						1,851,510

Stockholders' equity		134,351						118,317

Total liabilities & stockholders' equity		2,187,972						1,969,827

Net interest income (FTE)				16,295						13,513

Net interest spread (b)						2.12						1.90
Effect of non-interest bearing deposits						0.90						0.91
Net yield on interest earning assets (c)						3.02						2.81

(a) Includes balances of nonaccrual loans and the recognition of any related interest income. The quarter-to-date average balances include net deferred loan costs of $1,772,000 as of March 31, 2025, and $2,185,000 as of March 31, 2024. Such fees and costs recognized through income and included in the interest amounts totaled $14,000 in 2025, and ($57,000) in 2024.

(b) Net interest spread is the arithmetic difference between the yield on interest earning assets and the rate paid on interest bearing liabilities.

(c) Net yield, also referred to as net interest margin, is computed by dividing NII (FTE) by total interest earning assets.

(d) Securities recorded at amortized cost. Unrealized holding gains and losses are included in non-interest earning assets.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

The Corporation’s average balances on securities increased by $151.4 million, or 29.9%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase was related to a strategic decision to add investments during the last six months of 2024 in order to generate higher earnings with no overhead costs while offsetting interest rate risk with off-balance sheet derivative products. The tax equivalent yield on investments increased by 60 basis points for the quarter-to-date period when comparing both years. Interest income on securities increased by $2,115,000, or 55.9%, for the three months ended March 31, 2025, compared to the same period in the prior year.

Average balances on loans increased by $64.8 million, or 4.7%, for the three months ended March 31, 2025, compared to the same period in the prior year. Loan yields increased by 31 basis points for the quarter and loan interest income increased by $1,951,000, or 11.2%, due to the increase in loan balances and higher yields.

The average balance of interest-bearing deposit accounts increased by $126.9 million, or 11.4%, for the three months ended March 31, 2025, compared to the same period in the prior year. The average balance of demand deposits increased by $60.9 million, or 12.9% and the average balance of savings accounts decreased by $17.0 million, or 5.6%. The average balance of savings accounts decreased as funds moved into higher-yielding time deposit accounts. Time deposit balances increased by $83.0 million, or 24.4%, driven by the movement of funds into higher-yielding accounts discussed above. In addition, the Corporation had more brokered time deposits at March 31, 2025, compared to March 31, 2024, as this was the primary source of funding to grow investments. Brokered time deposits increased by $57.9 million, or 148.6%, during this timeframe. The interest rate paid on all interest-bearing deposits decreased minimally from the prior year with the combined rate decreasing by one basis point for the quarter ended March 31, 2025, compared to the same period in the prior year. The combination of these changes resulted in an increase in interest expense on deposits of $660,000, for the three months ended March 31, 2025, compared to the same period in 2024.

The Corporation’s average balance on borrowed funds increased by $41.3 million, or 29.6%, for the three months ended March 31, 2025, compared to the same period in 2024. The Corporation’s borrowed funds consist of FHLB advances as well as subordinated debt issued in December of 2020 and July of 2022 which was used to support capital growth for the Corporation. The rate paid on borrowed funds increased by 29 basis points for the three months ended March 31, 2025, compared to the same period in the prior year.

For the three months ended March 31, 2025, the net interest spread increased by 22 basis points to 2.12%, compared to 1.90% for the three months ended March 31, 2024. The effect of non-interest bearing funds decreased to 90 basis points for the three months ended March 31, 2025, from 91 basis points for the three months ended March 31, 2024. The effect of non-interest bearing funds refers to the benefit gained from deposits on which the Corporation does not pay interest. As rates go higher, the benefit of non-interest bearing deposits increases because there is more difference between non-interest bearing funds and interest bearing liabilities. The Corporation’s NIM for the first quarter of 2025 was 3.02%, compared to 2.81% for the first quarter of 2024.

The Asset Liability Committee (ALCO) carefully monitors the NIM because it indicates trends in NII, the Corporation’s largest source of revenue. For more information on the plans and strategies in place to protect the NIM and moderate the impact of changes in rates, refer to Item 7A: Quantitative and Qualitative Disclosures about Market Risk.

Provision for Credit Losses

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 expense of $426,000 for credit losses related to loans, a provision expense of $60,000 for unfunded commitments, and $0 related to available-for-sale securities for the first three months of 2025, compared to a release of provision expense of $540,000 related to loans, $104,000 for unfunded commitments, and $0 related to available-for-sale securities for the three months ended March 31, 2024. As of March 31, 2025, the allowance as a percentage of total loans was 1.15%, compared to 1.06% at March 31, 2024. More detail is provided under Allowance for Credit Losses in the Financial Condition section that follows.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Other Income

Other income for the first quarter of 2025 was $3,964,000, a decrease of $382,000, or 8.8%, compared to the $4,346,000 earned during the first quarter of 2024. The following table details the categories that comprise other income.

OTHER INCOME

(DOLLARS IN THOUSANDS)

	Three Months Ended March 31,
	2025			2024			Increase (Decrease)
	$			$			$			%

Trust and investment services		864			1,083			(219	)		(20.2	)
Service fees		1,355			1,361			(6	)		(0.4	)
Commissions		1,012			1,017			(5	)		(0.5	)
Net losses on debt and equity securities		(333	)		(258	)		(75	)		29.1
Gains on sale of mortgages		439			544			(105	)		(19.3	)
Earnings on bank owned life insurance		271			293			(22	)		(7.5	)
Other miscellaneous income		356			306			50			16.3

Total other income		3,964			4,346			(382	)		(8.8	)

Trust and investment services income decreased for the quarter as a result of the gain on sale of a limited number of trust assets sold in the first quarter of 2024. Service fees and commissions remained relatively flat from last year’s first quarter. The Corporation incurred $333,000 of net losses on debt and equity securities in the first quarter of 2025, compared to net losses of $258,000 in the same quarter of the prior year as a result of strategic sales of debt securities to fund higher yielding loan growth. Mortgage gains decreased by $105,000, or 19.3%, in the first quarter of 2025, compared to the first quarter of 2024. This was primarily a result of compressed margins and the Corporation selling the permanent financing for construction loans with points that were recorded as income in the prior year. Earnings on bank owned life insurance were lower by $22,000, or 7.5%, for the three months ended March 31, 2025, compared to the same period in the prior year and other miscellaneous income increased by $50,000, or 16.3%.

Operating Expenses

Operating expenses for the first quarter of 2025 were $14,368,000, an increase of $774,000, or 5.7%, compared to the $13,594,000 for the first quarter of 2024. The following table provides details of the Corporation’s operating expenses for the three month period ended March 31, 2025, compared to the same period in 2024.

OPERATING EXPENSES

(DOLLARS IN THOUSANDS)

	Three Months Ended March 31,
	2025		2024		Increase (Decrease)
	$		$		$			%
Salaries and employee benefits		8,280		8,335		(55	)		(0.7	)
Occupancy expenses		909		857		52			6.1
Equipment expenses		386		303		83			27.4
Advertising & marketing expenses		367		241		126			52.3
Computer software & data processing expenses		1,819		1,702		117			6.9
Bank shares tax		361		357		4			1.1
Professional services		843		711		132			18.6
Other operating expenses		1,403		1,088		315			29.0
Total Operating Expenses		14,368		13,594		774			5.7

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Salaries and employee benefits are the largest category of operating expenses. For the first quarter of 2025, salaries and benefits decreased $55,000, or 0.7%, compared to the same period in 2024. This was primarily due to lower health insurance costs reflective of fewer claims during the first quarter of 2025. Occupancy and equipment costs were higher by a combined total of $135,000, or 11.6%, related to costs associated with new lease expense and higher equipment costs. Advertising and marketing expenses were higher by $126,000, or 52.3%, for the three months ended March 31, 2025, compared to the prior year. This increase was primarily related to media production costs and sponsorships as the Corporation continues to pursue marketing and sponsorship opportunities in the communities it serves. Computer software and data processing expenses increased by $117,000, or 6.9%, for the three months ended March 31, 2025, as a result of higher costs associated with the core conversion in the prior year as well as other technology initiatives. Shares tax expense is based on the Corporation’s level of shareholders’ equity and has remained relatively flat from 2024 to 2025. Professional services costs increased by $132,000, or 18.6%, related to higher accounting and legal fees as well as increased costs for other outside services. Other operating expenses increased by $315,000, or 29.0%, for the three months ended March 31, 2025, compared to the same period in the prior year due largely to checking account charge-off costs and an increased level of fraud-related charge-offs.

Income Taxes

Federal income tax expense was $982,000 for the first quarter of 2025 compared to $827,000 for the same period in 2024. The effective tax rate for the Corporation was 18.5% for the three months ended March 31, 2025, and 17.3% for the three months ended March 31, 2024. Certain items of income are not subject to Federal income tax, such as tax-exempt interest income on loans and securities, and Bank Owned Life Insurance (BOLI) income; therefore, the effective income tax rate for the Corporation is lower than the stated tax rate.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Financial Condition

Investment Securities

The Corporation classifies all of its debt securities as available for sale and reports the portfolio at fair value. As of March 31, 2025, the Corporation had $595.6 million of debt securities available for sale, which accounted for 26.8% of assets, compared to 27.8% as of December 31, 2024, and 22.4% as of March 31, 2024. Based on ending balances, the debt securities portfolio increased 33.3% from March 31, 2024, and decreased 3.4% from December 31, 2024.

The debt securities portfolio was showing a net unrealized loss of $42,454,000 as of March 31, 2025, compared to $47,248,000 as of December 31, 2024, and $44,444,000 as of March 31, 2024. The valuation of the Corporation’s debt securities portfolio is impacted by both the U.S. Treasury rates and the perceived forward direction of interest rates.

Each quarter, management sets portfolio allocation guidelines and adjusts the security portfolio strategy generally based on the following factors:

●

ALCO positions as to liquidity, credit risk, interest rate risk, and fair value risk

●

Growth of the loan portfolio

●

Slope of the U.S. Treasury curve

●

Relative performance of the various instruments, including spread to U.S. Treasuries

●

Duration and average length of the portfolio

●

Volatility of the portfolio

●

Direction of interest rates

●

Economic factors impacting debt securities

The investment policy of the Corporation establishes guidelines to promote diversification within the portfolio. The diversity specifications provide opportunities to shorten or lengthen duration, maximize yield, and mitigate credit risk.

The Corporation’s U.S. Treasury and U.S. government agency sectors decreased $4.4 million during the first three months of 2025 due to the maturity of a bond in the first quarter. These sectors represent safe credits, but generally carry a lower yield due to the investments made in 2020 and 2021 when rates were lower.

The Corporation’s U.S. agency mortgage-backed securities (MBS) and collateralized mortgage obligations (CMO) have remained stable since December 31, 2024. MBS and CMOs both consist of mortgage instruments that pay monthly interest and principal, however the behavior of the two types vary according to the structure of the mortgage pool or CMO instrument. Management desires to maintain some amount of MBS and CMOs in order to assist in adding to and maintaining a stable five-year ladder of cash flows, which is important in providing stable liquidity and interest rate risk positions. U.S. agency MBS and CMO securities pay contractual monthly principal and interest, but are also subject to additional prepayment of principal. The combined effect of all of these instruments paying monthly principal and interest provides the Corporation with a reasonably stable base cash flow. Cash flows coming off of MBS and CMOs do slow down and speed up as interest rates increase or decrease, which has an impact on the portfolio’s length and yield.

The portfolio of non-agency MBS and CMO securities stood at $144.0 million as of March 31, 2025, or 24.2% of the total portfolio. This sector better structures the portfolio to achieve higher yields and shortens the duration while also protecting in a rates-up environment. The non-agency portfolio stood at $145.2 million at December 31, 2024.

The Corporation’s asset-backed securities declined slightly by $567,000, or 1.0%, from December 31, 2024, to March 31, 2025. Many of the bonds in this sector generate regular monthly principal payments which caused the value to decline. These bonds are primarily floating rate instruments, so in the current higher rate environment, they have added to the overall yield increase for the portfolio.

As of March 31, 2025, the fair value of the Corporation’s corporate bonds decreased by $5.6 million, or 10.5%, from balances at December 31, 2024. This decrease was due to one bond maturing and several bonds being sold during the first quarter. Like any security, corporate bonds have both positive and negative qualities and management must evaluate these securities on a risk versus reward basis. Corporate bonds add diversity to the portfolio and provide strong yields for short maturities; however, by their very nature, corporate bonds carry a high level of credit risk should the entity experience financial difficulties. As a result of the higher level of credit risk taken by purchasing a corporate bond, management has in place procedures to closely analyze the financial health of the company. Financial analysis is conducted prior to every corporate bond purchase with ongoing monitoring performed on all securities held.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Obligations of states 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. Municipal tax-equivalent yields generally start above other taxable bonds. These instruments also experience significant fair market value gains and losses when interest rates decrease and increase. Municipal securities were purchased throughout 2020 and 2021 due to the levels of excess liquidity experienced due to deposit inflows. The balance of municipal bonds decreased by $9.3 million, or 5.2%, in the first three months of 2025, primarily due to the sale of a number of these bonds during the first quarter. Municipal bonds represented 28.4% of the securities portfolio as of March 31, 2025 and 29.0% as of December 31, 2024.

Loans

Net loans outstanding increased by 4.5%, to $1,426.9 million at March 31, 2025, from $1,365.8 million at March 31, 2024. Net loans increased by 1.1%, an annualized rate of 4.4%, from $1,411.1 million at December 31, 2024. The following table shows the composition of the loan portfolio as of March 31, 2025 and December 31, 2024.

LOANS BY MAJOR CATEGORY

(DOLLARS IN THOUSANDS)

	March 31,					December 31,
	2025					2024
	$			%		$			%

Agriculture		293,070			20.4		289,284			20.3
Business Loans		360,975			25.0		360,805			25.3
Consumer		6,346			0.4		6,603			0.5
Home Equity		125,173			8.7		118,329			8.3
Non-Owner Occupied CRE		149,585			10.4		136,298			9.6
Residential Real Estate (a)		506,525			35.1		514,120			36.0

Total loans		1,441,674			100		1,425,439			100
Less:
Deferred loan costs, net		1,788					1,830
Allowance for credit losses		(16,537	)				(16,122	)
Total net loans		1,426,925					1,411,147

(a)	Residential real estate loans do not include mortgage loans serviced for others which totaled $354,440 as of March 31, 2025 and $342,640 as of December 31, 2024.

There was marginal growth in the loan portfolio since December 31, 2024. Agriculture loans, home equity loans, and non-owner occupied CRE loans grew since December 31, 2024, while the other categories of loans remained stagnant or decreased minimally.

The agriculture loan segment increased $3,786,000, or 1.3%, the business loan segment increased nominally, the consumer loan segment decreased $257,000, or 3.9%, the home equity segment increased $6,844,000, or 5.8%, the non-owner occupied CRE segment increased $13,287,000, or 9.7%, and the residential real estate segment decreased $7,595,000, or 1.5% from balances at December 31, 2024. The agriculture segment is concentrated primarily in loans to dairy operators, poultry operators, and crop farmers. Business loans are fairly diverse with small concentrations in lessors of residential buildings and dwellings and lessors of non-residential buildings. These concentrations are less than 10% of the total business loan portfolio.

In the first three months of 2025, mortgage production decreased 30.4% compared to the first three months of 2024. Purchase money origination constituted 95.8% of the Corporation’s mortgage originations for the three months ended March 31, 2025. The held-for-investment production is 55.1% of total originations with construction-only and construction-permanent loans making up 61.3% of the total held-for-investment production. As of March 31, 2025, adjustable-rate mortgage balances were $326.4 million, representing 64.4% of the 1-4 family residential loan portfolio of the Corporation.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Non-Performing Assets

Non-performing assets include:

●

Nonaccrual loans

●

Loans past due 90 days or more and still accruing

●

Other real estate owned

NON-PERFORMING ASSETS

(DOLLARS IN THOUSANDS)

	March 31,		December 31,		March 31,
	2025		2024		2024
	$		$		$

Nonaccrual loans		10,727		11,887		3,671
Loans past due 90 days or more and still accruing		—		—		660
Total non-performing loans		10,727		11,887		4,331

Other real estate owned		—		—		—

Total non-performing assets		10,727		11,887		4,331

Non-performing assets to net loans		0.75%		0.83%		0.32%

The total balance of non-performing assets increased by $6,396,000, or 147.7%, over balances at March 31, 2024, and decreased $1,160,000, or 9.8%, from balances at December 31, 2024. The increase from March 31, 2024 was due to the addition of a number of unrelated relationships experiencing payment defaults. The decrease from December 31, 2024 was mostly due to the payoff of a residential loan. Non-accrual loans increased by $7,056,000, or 192.2%, since March 31, 2024, and decreased $1,160,000, or 9.8%, since December 31, 2024. No loans were past due 90 days or more and still accruing interest at March 31, 2025 or December 31, 2024, compared to $660,000 at March 31, 2024. The primary reason for the increase in non-accrual loans from March 31, 2024 was the addition of a commercial loan relationship with balances of $3.6 million, another commercial loan in the amount of $748,000, a residential mortgage loan in the amount of $589,000, an agriculture mortgage in the amount of $619,000, and a number of other smaller loan relationships. The Corporation has taken a more disciplined approach to classifying loans as non-accrual when they hit 90 days past due which is why there are no loans at March 31, 2025 or December 31, 2024, that are 90 days or more past due. While non-performing asset balances have increased as of March 31, 2025 when compared to the prior year, the non-performing asset balances have decreased since December 31, 2024 and the Corporation’s total level of non-performing assets is in line with its peer group.

There was no other real estate owned (OREO) as of March 31, 2025, December 31, 2024, or March 31, 2024.

Allowance for Credit Losses

The allowance for credit losses (ACL) is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on total loans. Management reviews the adequacy of the ACL on a quarterly basis. The ACL represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The ACL is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Corporation measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Additionally, the ACL calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending policies and procedures, loan portfolio trends, lending management experience, asset quality, loan review, underlying collateral, and credit concentrations. Loans that do not share risk characteristics are evaluated on an individual basis. When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of collateral at the reporting date adjusted for selling costs as appropriate. Based on the quarterly calculation, management will adjust the ACL through the provision for credit losses as necessary.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

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 as of March 31, 2025 and March 31, 2024.

Net Charge-Offs

(DOLLARS IN THOUSANDS)

	March 31,			March 31,
	2025			2024
	$			$

Loans charged-off:
Agriculture		—			—
Business Loans		—			—
Consumer Loans		27			25
Home Equity		3			—
Non-Owner Occupied CRE		—			—
Residential Real Estate		—			—
Total loans charged-off		30			25

Recoveries of loans previously charged-off
Agriculture		1			—
Business Loans		2			—
Consumer Loans		16			5
Home Equity		—			—
Non-Owner Occupied CRE		—			—
Residential Real Estate		—			—
Total recoveries		19			5

Net charge-offs (recoveries)
Agriculture		(1	)		—
Business Loans		(2	)		—
Consumer Loans		11			20
Home Equity		3			—
Non-Owner Occupied CRE		—			—
Residential Real Estate		—			—
Total net charge-offs		11			20

The Corporation has historically experienced very low net charge-off percentages due to disciplined credit practices. As of March 31, 2025, there were $30,000 in charge-offs and $19,000 of recoveries, representing a net charge-off position of $11,000 as shown above. As of March 31, 2024, there were $25,000 in charge-offs and $5,000 in recoveries, representing a net charge-off position of $20,000.

Management regularly reviews the overall risk profile of the loan portfolio and the impact that current economic trends have on the Corporation’s loans. The financial industry typically evaluates the quality of loans on a scale with “unclassified” representing healthy loans, “special mention” being the first indication of credit concern, and several successive classified ratings indicating further credit declines of “substandard,” “doubtful,” and, ultimately, “loss.”

The Corporation’s level of classified loans was $28.9 million on March 31, 2025, compared to $14.8 million on March 31, 2024. Total classified loans have increased from the prior year due to the downgrading of a number of unrelated agriculture and business relationships. Having more loans in a classified status could result in a larger allowance as higher amounts of projected historical losses and qualitative factors are attached to these loans.

Deposits

The Corporation’s total ending deposits at March 31, 2025, increased by $3.0 million, or 0.2%, from December 31, 2024, and $172.5 million, or 10.0%, from March 31, 2024. Customer deposits are the Corporation’s primary source of funding for loans and securities. The mix of the Corporation’s deposit categories has changed since March 31, 2024, as customers have moved from low-interest bearing accounts into higher yielding checking accounts and time deposits. Since March 31, 2024, there has been a $31.1 million, or 5.2% increase in non-interest bearing demand deposit accounts, a $46.0 million, or 14.6% increase in interest bearing demand balances, a $29.6 million, or 18.8% increase in money market account balances, a $9.0 million, or 3.0% decrease in savings account balances, and a $74.7 million, or 21.5% increase in time deposit balances.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

The increase in time deposit balances was partially the result of issuing brokered certificates of deposit in order to fund a leverage strategy coupled with available-for-sale investment securities purchases and interest rate swaps. Brokered CDs grew $58.0 million, from $39.0 million at March 31, 2024, to $97.0 million as of March 31, 2025. The remaining increase in time deposit balances was a result of the increased rate environment and offering promotional rates on specific time deposit terms. Time deposits are typically a more rate-sensitive product, making them a source of funding that is prone to balance variations depending on the interest rate environment and how the Corporation’s time deposit rates compare with the local market rates. Time deposits fluctuate as consumers search for the best rates in the market, with less allegiance to any particular financial institution.

As of March 31, 2025 and 2024, the total uninsured deposits of the Corporation were approximately $224,995,000 and $205,707,000, respectively or 11.9% and 12.0%, of total deposits. Total uninsured deposits is calculated based on regulatory reporting requirements and reflects the portion of any deposit of a customer at an insured depository institution that exceeds the applicable FDIC insurance coverage for that depositor at that institution and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regime.

The Deposits by Major Classification table, shown below, provides the balances of each category for March 31, 2025, December 31, 2024, and March 31, 2024.

DEPOSITS BY MAJOR CLASSIFICATION

(DOLLARS IN THOUSANDS)

	March 31,		December 31,		March 31,
	2025		2024		2024
	$		$		$

Non-interest bearing demand		634,110		631,711		602,975
Interest bearing demand		362,120		384,236		316,081
Money market deposit accounts		186,587		162,514		157,023
Savings accounts		288,470		280,526		297,469
Time deposits		422,200		431,456		347,463
Total deposits		1,893,487		1,890,443		1,721,011

The growth and mix of deposits is often driven by several factors including:

●

Convenience and service provided

●

Current rates paid on deposits relative to competitor rates

●

Level of and perceived direction of interest rates

●

Financial condition and perceived safety of the institution

●

Possible risks associated with other investment opportunities

●

Level of fees on deposit products

Borrowings

Total borrowings were $179.1 million, $183.5 million, and $136.6 million as of March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Short-term borrowings with the Federal Home Loan Bank (FHLB) were $60.0 million as of March 31, 2025 and December 31, 2024. There were no short-term borrowings as of March 31, 2024. Short-term funds are used for immediate liquidity needs and are not typically part of an ongoing liquidity or interest rate risk strategy; therefore, they fluctuate more rapidly. When short-term funds are used, they are purchased through correspondent and member bank relationships as overnight borrowings or through the FHLB for terms less than one year.

Total long-term borrowings, borrowings initiated for terms longer than one year, were $79.3 million as of March 31, 2025, $83.8 million as of December 31, 2024, and $97.0 million as of March 31, 2024, respectively. The long-term borrowings for the Corporation were made up entirely of FHLB long-term advances. FHLB advances are used as a secondary source of funding and to mitigate interest rate risk. These long-term funding instruments are typically a more effective funding instrument in terms of selecting the exact amount, rate, and term of funding rather than trying to source the same through deposits. In this manner, management can efficiently meet known liquidity and interest rate risk needs. The Corporation continues to be well under the FHLB maximum borrowing capacity (MBC), which is currently $722.7 million. The Corporation’s internal policy limits are far more restrictive than the FHLB MBC, which is calculated and set quarterly by FHLB.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

In addition to the long-term advances funded through the FHLB, on December 30, 2020, the Corporation completed the sale of a subordinated debt note offering. The Corporation sold $20.0 million of subordinated debt notes with a maturity date of December 30, 2030. These notes are non-callable for 5 years and carry a fixed interest rate of 4% per year for 5 years and then convert to a floating rate for the remainder of the term. The notes can be redeemed at par beginning 5 years prior to maturity. The notes are structured to qualify as Tier 2 capital for the Corporation and any funds it invests in the Bank qualify as Tier 1 capital at the Bank. As of March 31, 2025, $16.0 million of funds were invested in the Bank. The Corporation paid an issuance fee of 2% of the total issue that will be amortized to the call date on a pro-rata basis.

On July 22, 2022, the Corporation completed the sale of an additional subordinated debt note offering. The Corporation sold $20.0 million of subordinated debt notes with a maturity date of September 30, 2032. These notes are all non-callable for 5 years and carry a fixed interest rate of 5.75% per year for the 5 years and then convert to a floating rate for the remainder of the term. The notes can be redeemed at par beginning 5 years prior to maturity. The notes are structured to qualify as Tier 2 capital for the Corporation and any funds it invests in the Bank qualify as Tier 1 capital at the Bank. As of March 31, 2025, $17.0 million of funds were invested in the Bank. The Corporation paid an issuance fee of 2% of the total issue that will be amortized to the call date on a pro-rata basis.

Stockholders’ Equity

Federal regulatory authorities require banks to meet minimum capital levels. The Corporation, as well as the Bank, as the solely owned subsidiary of the Corporation, maintains capital ratios well above those minimum levels. The risk-weighted capital ratios are calculated by dividing capital by total risk-weighted assets. Regulatory guidelines determine the risk-weighted assets by assigning assets to specific risk-weighted categories. The calculation of tier I capital to risk-weighted average assets does not include an add-back to capital for the amount of the allowance for credit losses, thereby making this ratio lower than the total capital to risk-weighted assets ratio.

The consolidated asset limit on small bank holding companies is $3 billion and a company with assets under that limit is not subject to the consolidated capital rules but may disclose capital amounts and ratios. The Corporation has elected to disclose those amounts and ratios.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

The following tables reflect the capital ratios for the Corporation and Bank compared to the regulatory capital requirements.

REGULATORY CAPITAL RATIOS:

			Regulatory Requirements
			Adequately		Well
As of March 31, 2025	Capital Ratios		Capitalized		Capitalized
Total Capital to Risk-Weighted Assets
Consolidated		14.8%		N/A		N/A
Bank		14.6%		8.0%		10.0%

Tier 1 Capital to Risk-Weighted Assets
Consolidated		11.1%		N/A		N/A
Bank		13.4%		6.0%		8.0%

Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		11.1%		N/A		N/A
Bank		13.4%		4.5%		6.5%

Tier 1 Capital to Average Assets
Consolidated		7.6%		N/A		N/A
Bank		9.2%		4.0%		5.0%

As of December 31, 2024
Total Capital to Risk-Weighted Assets
Consolidated		14.6%		N/A		N/A
Bank		14.4%		8.0%		10.0%

Tier I Capital to Risk-Weighted Assets
Consolidated		10.9%		N/A		N/A
Bank		13.2%		6.0%		8.0%

Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		10.9%		N/A		N/A
Bank		13.2%		4.5%		6.5%

Tier I Capital to Average Assets
Consolidated		7.5%		N/A		N/A
Bank		9.1%		4.0%		5.0%


As of March 31, 2024
Total Capital to Risk-Weighted Assets
Consolidated		14.8%		N/A		N/A
Bank		14.4%		8.0%		10.0%

Tier 1 Capital to Risk-Weighted Assets
Consolidated		10.9%		N/A		N/A
Bank		13.3%		6.0%		8.0%

Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		10.9%		N/A		N/A
Bank		13.3%		4.5%		6.5%

Tier 1 Capital to Average Assets
Consolidated		7.8%		N/A		N/A
Bank		9.5%		4.0%		5.0%

As of March 31, 2025, the Bank’s Tier 1 Leverage Ratio stood at 9.2% while the Corporation’s Tier 1 Leverage Ratio was 7.6%. Tier 1 Capital at the Corporation level was not impacted by the subordinated debt issue since subordinated debt only qualifies as Tier 2 Capital at the corporate level. As such, in terms of the Corporation’s regulatory capital ratios, only the Total Capital to Risk-Weighted Assets ratio was enhanced as a result of the $40 million subordinated debt issue. Most of the marked improvement in capital ratios occurred at the Bank level.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Off-Balance Sheet Arrangements

In the normal course of business, the Corporation typically has off-balance sheet arrangements related to loan funding commitments. These arrangements may impact the Corporation’s financial condition and liquidity if they were to be exercised within a short period of time. As discussed in the following liquidity section, the Corporation has in place sufficient liquidity alternatives to meet these obligations. The following table presents information on the commitments by the Corporation as of March 31, 2025.

OFF-BALANCE SHEET ARRANGEMENTS

(DOLLARS IN THOUSANDS)

	March 31,
	2025
	$
Commitments to extend credit:
Revolving home equity		268,118
1-4 family residential contruction loans		24,481
Commercial real estate, other construction and land development loans		38,796
Commercial and industrial loans		106,538
Other		148,289
Standby letters of credit		15,323

Total		601,545

Significant Legislation

Dodd-Frank Wall Street Reform and Consumer Protection Act

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was signed into law. Dodd-Frank is intended to affect a fundamental restructuring of federal banking regulation. Among other things, Dodd-Frank creates a new Financial Stability Oversight Council to identify systemic risks in the financial system and gives federal regulators new authority to take control of and liquidate financial firms. Dodd-Frank additionally creates a new independent federal regulator to administer federal consumer protection laws. Among the provisions that have already or are likely to affect the Corporation are the following:

Holding Company Capital Requirements

Dodd-Frank requires the Federal Reserve to apply consolidated capital requirements to bank holding companies that are no less stringent than those currently applied to depository institutions. Under these standards, trust preferred securities will be excluded from tier I capital unless such securities were issued prior to May 19, 2010, by a bank holding company with less than $15 billion in assets. Dodd-Frank additionally requires that bank regulators issue countercyclical capital requirements so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, are consistent with safety and soundness.

Deposit Insurance

Dodd-Frank permanently increased the maximum deposit insurance amount for banks, savings institutions, and credit unions to $250,000 per depositor. Additionally, on February 7, 2011, the Board of Directors of the FDIC approved a final rule based on the Dodd-Frank Act that revises the assessment base from one based on domestic deposits to one based on assets. This change, which was effective in April 2011, saved the Corporation a significant amount of FDIC insurance premiums from the significantly higher FDIC insurance premiums placed into effect after the financial crisis.

Corporate Governance

Dodd-Frank requires publicly traded companies to give stockholders a non-binding vote on executive compensation at least every three years, a non-binding vote regarding the frequency of the vote on executive compensation at least every six years, and a non-binding vote on “golden parachute” payments in connection with approvals of mergers and acquisitions unless previously voted on by shareholders. The SEC has finalized the rules implementing these requirements which took effect on January 21, 2011. The Corporation was exempt from these requirements until January 21, 2013, due to its status as a smaller reporting company.

ENB FINANCIAL CORP

Management’s Discussion and Analysis

Consumer Financial Protection Bureau

Dodd-Frank created the Consumer Financial Protection Bureau (CFPB), which is granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy Provisions of the Gramm-Leach-Bliley Act, and certain other statutes. The CFPB has examination and primary enforcement authority with respect to depository institutions with $10 billion or more in assets. Smaller institutions will be subject to rules promulgated by the CFPB but will continue to be examined and supervised by federal banking regulators for consumer compliance purposes. The CFPB will have authority to prevent unfair, deceptive, or abusive practices in connection with the offering of consumer financial products. Dodd-Frank authorizes the CFPB to establish certain minimum standards for the origination of residential mortgages including a determination of the borrower’s ability to repay. In addition, Dodd-Frank will allow borrowers to raise certain defenses to foreclosure if they receive any loan other than a “qualified mortgage” as defined by the CFPB. Dodd-Frank permits states to adopt consumer protection laws and standards that are more stringent than those adopted at the federal level and, in certain circumstances, permits state attorneys general to enforce compliance with both the state and federal laws and regulations.

Interstate Branching

Dodd-Frank authorizes national and state banks to establish branches in other states to the same extent as a bank chartered by that state would be permitted. Previously, banks could only establish branches in other states if the host state expressly permitted out-of-state banks to establish branches in that state. Accordingly, banks will be able to enter new markets more freely.

Limits on Interstate Acquisitions and Mergers

Dodd-Frank precludes a bank holding company from engaging in an interstate acquisition – the acquisition of a bank outside its home state – unless the bank holding company is both well capitalized and well managed. Furthermore, a bank may not engage in an interstate merger with another bank headquartered in another state unless the surviving institution will be well capitalized and well managed. The previous standard in both cases was adequately capitalized and adequately managed.

ENB FINANCIAL CORP

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a financial institution, the Corporation is subject to three primary risks:

●

Credit risk

●

Liquidity risk

●

Interest rate risk

The Board of Directors has established an Asset Liability Management Committee (ALCO) to measure, monitor, and manage these primary market risks. The Asset Liability Policy has instituted guidelines for all of these primary risks, as well as other financial performance measurements with target ranges. The Asset Liability goals and guidelines are consistent with the Strategic Plan goals related to financial performance.

Credit Risk

For discussion on credit risk refer to the sections in Item 2. Management’s Discussion and Analysis, on securities, non-performing assets, and allowance for credit losses.

Liquidity Risk

Liquidity refers to having an adequate supply of cash available to meet business needs. Financial institutions must ensure that there is adequate liquidity to meet a variety of funding needs, at a minimal cost. Funding new loans and covering deposit withdrawals are the primary liquidity needs of the Corporation. The Corporation uses a variety of funding sources to meet liquidity needs, such as deposits, loan repayments, cash flows from securities, borrowings, and current earnings.

As noted in the discussion on deposits, customers have historically provided the Corporation with a reliable and steadily increasing source of funds liquidity. The Corporation also has in place relationships with other banking institutions for the purpose of buying and selling Federal funds. The lines of credit with these institutions provide immediate sources of additional liquidity. The Corporation currently has unsecured lines of credit totaling $30 million. This does not include amounts available from member banks such as the Federal Reserve Discount Window or the FHLB of Pittsburgh.

The Corporation regularly reviews its liquidity position by measuring its projected net cash flows at a 30 and 90-day interval. The Corporation stresses the measurements by assuming a level of deposit out-flows that have not historically been realized. In addition to this forecast, other funding sources are reviewed as a method to provide emergency funding if necessary. The objective of this measurement is to identify the amount of cash that could be raised quickly without the need to liquidate assets. The Corporation also stresses its liquidity position utilizing different longer-term scenarios. The varying degrees of stress create pressure on deposit flows in its local market, reduce access to wholesale funding and limit access of funds available through brokered deposit channels. In addition to stressing cash flow, specific liquidity risk indicators are monitored to help identify risk areas. This analysis helps identify and quantify the potential cash surplus/deficit over a variety of time horizons to ensure the Corporation has adequate funding resources. Assumptions used for liquidity stress testing are subjective. Should an evolving liquidity situation or business cycle present new data, potential assumption changes will be considered. The Corporation believes it can meet all anticipated liquidity demands.

Historically, the Corporation has satisfied its liquidity needs from earnings, repayment of loans and amortizing investment securities, maturing investment securities, loan sales, deposit growth and its ability to access existing lines of credit. All investment securities are classified as available for sale; therefore, securities that are unencumbered can be used as collateral for borrowings and are an additional source of readily available liquidity.

ENB FINANCIAL CORP

The Corporation analyzes the following additional liquidity measurements in an effort to monitor and mitigate liquidity risk:

●

On-hand Liquidity/Total Liabilities – Net liquid assets as a percentage of total liabilities

●

Non-Core Funding Dependence – Non-core liabilities minus short-term investments as a percentage of long-term assets

●

Reliance on Wholesale Funding – Wholesale funding as a percentage of total funding

●

Net Short-term Liabilities/Total Assets – Short-term liabilities minus short-term assets as a percentage of total assets

●

Loan to Deposit Ratio – Total loans as a percentage of total deposits

●

Investment Securities to Assets Threshold – Total investment securities as a percentage of total assets

These measurements are designed to prevent undue reliance on outside sources of funding and to ensure a steady stream of liquidity is available should events occur that would cause a sudden decrease in deposits or large increase in loans or both, which would in turn draw significantly from the Corporation’s available liquidity sources. As of March 31, 2025, the Corporation was in the low-risk range for all of the above measurements except for two ratios that fell in the moderate-risk range: reliance on wholesale funding and the investment securities to assets ratio. Both of these ratios were impacted by the derivative strategy undertaken in 2024 to leverage the balance sheet through wholesale borrowings and investment securities with off-balance sheet interest rate swaps. While this placed the Corporation in the moderate-risk range for the ratios mentioned above, the strategy was analyzed extensively and the risk measured.

The Corporation’s liquidity measurements are tracked and reported quarterly by management to both observe trends and ensure the measurements stay within desired ranges. Management is confident that a sufficient amount of internal and external liquidity exists to provide for significant unanticipated liquidity needs.

Interest Rate Risk

Interest rate risk is measured using two analytical tools:

●

Changes in net interest income

●

Changes in net portfolio value

Financial modeling is used to forecast net interest income and earnings, as well as net portfolio value, also referred to as fair value. The modeling is generally conducted under nine different interest rate scenarios that can vary according to the present level of interest rates. The scenarios consist of a projection of net interest income if rates remain flat, increase 100, 200, 300, or 400 basis points, or decrease 100, 200, 300, or 400 basis points.

The results obtained through the use of forecasting models are based on a variety of factors. Both the net interest income and fair value forecasts make use of the maturity and repricing schedules to determine the changes to the balance sheet over the course of time. Additionally, there are many assumptions that factor into the results. These assumptions include, but are not limited to, the following:

●

Projected forward interest rates

●

Slope of the U.S. Treasury curve

●

Spreads available on securities over the U.S. Treasury curve

●

Prepayment speeds on loans held and mortgage-backed securities

●

Anticipated calls on securities with call options

●

Deposit and loan balance fluctuations

●

Competitive pressures affecting loan and deposit rates

●

Economic conditions

●

Consumer reaction to interest rate changes

As a result of the many assumptions, this information should not be relied upon to predict future results. Additionally, both of the analyses discussed below do not consider any action that management could take to minimize or offset the negative effect of changes in interest rates. These tools are used to assist management in identifying possible areas of risk in order to address them before a greater risk is posed. Back testing of the model is completed to compare actual results to projections to ensure the validity of the assumptions in the model. The back testing analyses indicate that the model assumptions are reliable.

ENB FINANCIAL CORP

Changes in Net Interest Income

The change in net interest income measures the amount of net interest income fluctuation that would be experienced over one year, assuming interest rates change immediately and remain the same for one year. This is considered to be a short-term view of interest rate risk. The analysis of changes in net interest income due to changes in interest rates is commonly referred to as interest rate sensitivity. The Corporation’s interest rate sensitivity analysis indicates that if interest rates were to change immediately, the Corporation would realize less net interest income in all up and down rate scenarios. In past years, the Corporation was generally showing asset sensitivity meaning in a rates-up environment, assets would reprice faster than liabilities resulting in higher net interest income. In the past year, this increase in net interest income shifted to a decline primarily due to the increased impact from a higher cost of funds if rates continue to rise. While the Corporation would recognize higher interest income on its variable-rate assets, it would also now be repricing liabilities at a much faster pace resulting in increased interest expense that would offset the rise in interest income. Likewise, in the down-rate scenarios, asset yields would decline in conjunction with market rate moves, while deposit repricing would be slower to retain existing deposit balances.

The first quarter 2025 analysis projects net interest income expected in the nine rate scenarios over a one-year time horizon. As of March 31, 2025, the Corporation was within guidelines for the maximum amount of net interest income change in all rate scenarios.

The assumptions and analysis of interest rate risk are based on historical experience during varied economic cycles. Management believes these assumptions to be appropriate; however, actual results could vary significantly. Management uses this analysis to identify trends in interest rate sensitivity and determine if action is necessary to mitigate asset liability risk.

Changes in Net Portfolio Value

The change in net portfolio value is considered a tool to measure long-term interest rate risk. The analysis measures the exposure of the balance sheet to valuation changes due to changes in interest rates. The calculation of net portfolio value discounts future cash flows to the present value based on current market rates. The change in net portfolio value estimates the gain or loss in value that would occur on market sensitive instruments given an interest rate increase or decrease in the same nine scenarios mentioned above. As of March 31, 2025, the Corporation was within guidelines for all rate scenarios except the down 300 and 400 basis point scenarios. The Corporation shows a favorable benefit to net portfolio value in the rising rate scenarios, due primarily to the large amount of core deposits on the Corporation’s balance sheet. The non-interest bearing demand deposit accounts and low-interest bearing checking, and money market accounts provide more benefit to the Corporation when interest rates are higher and the difference between the overnight funding costs compared to the average interest bearing core deposit rates are greater. As interest rates increase, the discount rate used to value the Corporation’s interest bearing accounts increases, causing a lower net present value for these interest-bearing deposits. This improves the modeling of the Corporation’s fair value risk to higher interest rates as the liability amounts decrease causing a higher net portfolio value of the Corporation’s balance sheet. However, as interest rates decrease, the discount rate used to value the Corporation’s interest bearing accounts decreases, causing a higher net present value for these interest-bearing deposits.

The analysis shows a valuation loss in the down rate scenarios. Policy allows for a valuation decline of 30% for the down 300 and 35% for the down 400 basis point scenarios and actual projected results show a valuation decline of 44.4% and 65.9%, respectively. While this loss is outside of policy guidelines, it is unlikely that rates would move down immediately by 300 or 400 basis points. The Corporation will continue to monitor these measurements in the down-rate scenarios and adjust balance sheet structure as necessary to prepare for future potential lower rates.

The weakness with the net portfolio value analysis is that it assumes liquidation of the Corporation rather than as a going concern. For that reason, it is considered a secondary measurement of interest rate risk to “Changes in Net Interest Income” discussed above. However, the net portfolio value analysis is a more important tool to measure the impact of interest rate changes to capital. In the current regulatory climate, the focus is on ensuring adequate asset liability modeling is being done to project the impact of very large interest rate increases on capital. The asset liability modeling currently in place measures the impact of such a rate change on the valuation of the Corporation’s loans, securities, deposits, and borrowings, and the resulting impact to capital. Management continues to analyze additional scenario testing to model “worst case” scenarios to adequately plan for the possible severe impact of such events.

ENB FINANCIAL CORP

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

Management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer (Principal Executive Officer) and Treasurer (Principal Financial Officer), of the effectiveness of the design and the operation of the Corporation’s disclosure controls and procedures (as such term as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer (Principal Executive Officer) along with the Treasurer (Principal Financial Officer) concluded that the Corporation’s disclosure controls and procedures as of March 31, 2025, are effective to ensure that information required to be disclosed in the reports that the company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

(b) Changes in Internal Controls.

There have been no changes in the Corporation’s internal controls over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

ENB FINANCIAL CORP

PART II – OTHER INFORMATION

March 31, 2025

Item 1. Legal Proceedings

Management is not aware of any litigation that would have a material adverse effect on the consolidated financial position or results of operations of the Corporation or its subsidiaries taken as a whole. There are no proceedings pending other than ordinary routine litigation incident to the business of the Corporation. In addition, no material proceedings are pending, are known to be threatened, or contemplated against the Corporation by governmental authorities.

Item 1A. Risk Factors

The Corporation continually monitors the risks related to the Corporation’s business, other events, the Corporation’s Common Stock, and the Corporation’s industry. Other than as noted below, there have been no material changes in risk factors applicable to the Corporation from those disclosed in "Risk Factors" in Item 1A of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.

Changes to trade policies and tariffs can have an adverse impact on our business and our customers.

Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets we serve. Our customers-particularly local businesses engaged in agriculture, manufacturing, and retail-may face higher costs for imported goods and materials, reduced export demand, and supply chain disruptions due to increased tariffs. These challenges could lead to lower revenues, reduced profitability, and potential layoffs, all of which may impair our customers' ability to meet their financial obligations. Furthermore, prolonged trade tensions and economic uncertainty could lead to market volatility, declining asset values, and weakened consumer confidence. If our customers experience financial stress, we could see an increase in loan delinquencies and credit losses, negatively affecting our asset quality and overall financial performance. Additionally, any decline in local economic activity could reduce loan demand, deposit growth, and fee income, which are critical to our long-term success. While we actively monitor economic and policy developments, we cannot predict the outcome of trade negotiations or the full impact of tariffs and trade restrictions on our business, customers, and the broader economy. Any adverse effects from tariffs or a trade war could materially and negatively impact our financial condition, results of operations, and future growth prospects.

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

Purchases

The following table details the Corporation’s purchase of its own common stock during the three months ended March 31, 2025.

Issuer Purchase of Equity Securities

Total Number of

Maximum Number

Total Number

Average

Shares Purchased

of Shares that May

of Shares

Price Paid

as Part of Publicly

Yet be Purchased

Period

Purchased

Per Share

Announced Plans *

Under the Plan *

January 2025

—

200,000

February 2025

—

200,000

March 2025

—

200,000

Total

—

* On October 16, 2024, the Board of Directors of the Corporation approved a plan to repurchase, in the open market and privately renegotiated transactions, up to 200,000 shares of its outstanding common stock. This plan replaces the 2020 plan. As of March 31, 2025, no shares had been purchased under this plan.

ENB FINANCIAL CORP

Item 3. Defaults Upon Senior Securities – Nothing to Report

Item 4. Mine Safety Disclosures – Not Applicable

Item 5. Other Information

During the three months ended March 31, 2025, no director or officer of the Corporation adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

ENB FINANCIAL CORP

Item 6. Exhibits:

Exhibit No.	Description
3(i)	Articles of Incorporation of the Registrant, as amended (Incorporated by reference to Exhibit 3.1 of the Corporation’s Form 8-K filed with the SEC on June 7, 2019)
3 (ii)	By-Laws of the Registrant, as amended. (Incorporated herein by reference to Exhibit 3.2 of the Corporation’s Form 8-K filed with the SEC on July 21, 2021.)
10.1	Form of Deferred Income Agreement. (Incorporated herein by reference to Exhibit 10.1 of the Corporation’s Quarterly Report on Form 10-Q filed with the SEC on August 13, 2008.)
10.2	2022 Employee Stock Purchase Plan (Incorporated herein by reference to Appendix A to the Corporation’s Definitive Proxy Statement filed with the SEC on April 4, 2022.)
10.3	2020 Non-Employee Directors’ Stock Plan. (Incorporated herein by reference to Exhibit 99.1 of the Corporation’s Form S-8 filed with the SEC on June 3, 2020.)
10.4	Employment Agreement by and among ENB Financial Corp, The Ephrata National Bank and Jeffrey S. Stauffer dated as of October 28, 2022. (Incorporated herein by reference to Exhibit 10.2 of the Corporation's Form 8-K filed with the SEC on November 1, 2022.)
10.5	Employment Agreement by and among ENB Financial Corp, The Ephrata National Bank and Rachel G. Bitner dated as of October 28, 2022. (Incorporated herein by reference to Exhibit 10.4 of the Corporation's Form 8-K filed with the SEC on November 1, 2022.)
10.6	Employment Agreement by and among ENB Financial Corp, The Ephrata National Bank and Joselyn D. Strohm dated as of June 5, 2023. (Incorporated herein by reference to Exhibit 10.1 of the Corporation's Form 8-K filed with the SEC on June 7, 2023.)
10.7	Employment Agreement by and among ENB Financial Corp, The Ephrata National Bank and William Kitsch dated as of October 28, 2022. (Incorporated herein by reference to Exhibit 10.1 of the Corporation's Form 8-K filed with the SEC on April 28, 2025.)
10.8	Amendment to the Employment Agreement by and among ENB Financial Corp, The Ephrata National Bank and William Kitsch dated as of October 28, 2022. (Incorporated herein by reference to Exhibit 10.1 of the Corporation's Form 8-K filed with the SEC on April 28, 2025.)
31.1	Section 302 Chief Executive Officer Certification (Required by Rule 13a-14(a)).
31.2	Section 302 Principal Financial Officer Certification (Required by Rule 13a-14(a)).
32.1	Section 1350 Chief Executive Officer Certification (Required by Rule 13a-14(b)).
32.2	Section 1350 Principal Financial Officer Certification (Required by Rule 13a-14(b)).
101	Interactive Data Files
104	Cover Page Interactive Data File

ENB FINANCIAL CORP

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ENB Financial Corp
	(Registrant)


Dated: May 13, 2025	By:	/s/ Jeffrey S. Stauffer
		Jeffrey S. Stauffer
		Chairman of the Board
		Chief Executive Officer and President
		Principal Executive Officer


Dated: May 13, 2025	By:	/s/ Rachel G. Bitner
		Rachel G. Bitner
		Treasurer
		Principal Financial Officer