COMMUNITY BANCORP /VT

Community Bancorp./VT operates as a bank holding company under the laws of the State of Vermont, with its sole subsidiary, Community National Bank, conducting substantially all business operations. The Bank was originally organized in 1851 as the Peoples Bank and subsequently reorganized as the National Bank of Derby Line in 1865, changing its name to Community National Bank in 1975 after acquiring the Island Pond National Bank. On December 31, 2007, the Company completed its acquisition of LyndonBank, a Vermont bank headquartered in Lyndonville, Vermont, in a cash merger transaction, expanding its branch network into Caledonia, Orleans, Lamoille, and Franklin Counties. The Company maintains its main office in Derby, Vermont, and currently operates eleven branch offices in northeastern and central Vermont, along with loan production offices in Chittenden County, Vermont, and Grafton County, New Hampshire. The opportunities for growth continue to be primarily in the Central Vermont and Chittenden County markets where economic activity is more robust than in the Orleans and Caledonia County markets, and where the Company is increasing its presence and market share. The Company is also focusing on expanding its presence in the neighboring state of New Hampshire, as reflected in the opening of its loan production office in Lebanon, New Hampshire in 2019.

The Company competes in all aspects of its business with other banks and credit unions in northern and central Vermont, including three of the largest banks operating in the state, which maintain branch offices throughout its service area. It also competes with bank and non-bank lenders in Chittenden County, Vermont and Grafton County, New Hampshire where it maintains loan production offices. Competition from the tax-exempt credit union industry has intensified in recent years, as a number of credit union competitors, including the largest state-chartered Vermont credit union, have converted from an employment based common bond to a community common bond, significantly increasing their fields of membership. Because federal law subsidizes credit unions by giving them a general exemption from federal income taxes, they have a significant pricing advantage over commercial banks for their deposit and loan products. To compete, the Company stresses the community orientation of its banking operations and relies on personal relationships established by its officers, directors and employees with customers and on strong ties to the local community. Management believes the Company can continue to compete effectively in view of its local market knowledge and community ties and its understanding and responsiveness to evolving customer needs.

The Company generates revenue through a broad range of loan and deposit services provided to individuals, businesses, nonprofit organizations and municipalities in its northern and central Vermont markets. The significant services offered include business banking, commercial real estate lending, residential real estate lending, retail credit, municipal and institutional banking, and retail banking. The Company focuses on establishing and maintaining long-term relationships with customers, placing particular emphasis on relationships with individual customers and small-to-medium-sized businesses. The Company also offers trust and wealth management services through CFSG, its affiliated non-depository trust company based in Newport, Vermont, in which the Company's ownership interest increased to 50% effective July 31, 2025, following the redemption of all of Guaranty Bancorp Inc.'s membership interest in CFS Partners.

In business banking, the Company offers a range of credit products for general business purposes, including financing for commercial business properties, equipment, inventories and accounts receivable, as well as standby letters of credit, business checking and other deposit accounts, cash management services, repurchase agreements, ACH and wire transfer services, card processing and remote deposit capture. In commercial real estate lending, the Company provides products to meet the financing needs of commercial developers and investors, residential builders and developers and community development entities, facilitating the purchase of land and/or build structures for business use and for investors developing residential or commercial property, as well as real estate secured financing of existing businesses. The Bank has previously been recognized by the SBA as Vermont's top Section 7(a) program lender, providing financing to startups and other small businesses not eligible for more traditional financing, and as one of Vermont's top third party small business lenders under the SBA's Section 504 loan program. In residential real estate lending, the Company provides conventional permanent and construction/permanent financing arrangements, FHA/VA loan products, both fixed-rate and adjustable rate residential mortgage loans and home equity loans, with a portion of first lien residential mortgage loans sold into the secondary market. The Company does not originate subprime residential real estate loans. In retail credit, the Company provides personal loans, automobile loans and boat/recreational vehicle loans, and through a marketing alliance with a third party, offers credit cards. In municipal and institutional banking, the Company provides deposit account services, tax-exempt loans, lines of credit and term loans to state and local governments, schools, charities, membership and not-for-profit associations, and through an arrangement with the FHLBB, offers a secured deposit product to municipal customers collateralized by FHLBB letters of credit. In retail banking, the Company provides checking accounts, savings programs, ATMs, debit/credit cards, night deposit facilities and online, mobile and telephone banking.

On December 31, 2007, the Company completed its acquisition of LyndonBank in a cash merger transaction. In 2007, the Company formed CMTV Statutory Trust I, a Delaware statutory business trust, for the purpose of issuing $12.5 million ¹ of trust preferred securities, which provided a portion of the cash consideration paid in the 2007 acquisition of LyndonBank and provided additional regulatory capital. In 2024, the Company established a LLC to facilitate its purchase of federal NMTCs under an investment structure designed by a local community development entity. Effective July 31, 2025, with the redemption of all of Guaranty Bancorp Inc.'s membership interest in CFS Partners, the Company's ownership interest in CFS Partners increased to 50% ². Effective on February 2, 2026, the Company's common stock trades on the Capital Market tier of The Nasdaq Stock Market LLC under the trading symbol 'CMTV', whereas previously it traded on the OTC QX platform. As of December 31, 2025, the Company had $0 ³ in purchased deposits through CDARS and $30.5 million ⁴ in purchased certificates of deposit through a deposit broker. Also as of such date, the Company had reciprocal deposits representing exchanged funds outstanding in the amount of $4.8 million ⁵ of CDARS, $48.8 million ⁶ of ICS money market deposits and $122.0 million ⁷ of ICS demand deposits.

For the fiscal year ended December 31, 2025, the Company reported net income of $6,178,000 ⁸, compared to $6,178,000 ⁹ in the prior year. Net interest income was $22,559,000 ¹⁰ for 2025, compared to $22,557,000 ¹¹ for 2024. The provision for credit losses was $1,050,000 ¹² in 2025, compared to $1,050,000 ¹³ in 2024. Noninterest income was $5,291,000 ¹⁴ in 2025, compared to $5,291,000 ¹⁵ in 2024. Noninterest expense was $18,622,000 ¹⁶ in 2025, compared to $18,622,000 ¹⁷ in 2024. Net income available to common shareholders was $5,828,000 ¹⁸ for 2025, compared to $5,828,000 ¹⁹ for 2024. Basic earnings per common share were $1.04 ²⁰ in 2025, compared to $1.04 ²¹ in 2024. Diluted earnings per common share were $1.04 ²² in 2025, compared to $1.04 ²³ in 2024.

The Company's growth vectors continue to be primarily in the Central Vermont and Chittenden County markets where economic activity is more robust than in its Orleans and Caledonia County markets, and where the Company is increasing its presence and market share. The Company is also focusing on expanding its presence in the neighboring state of New Hampshire, as reflected in the opening of its loan production office in Lebanon, New Hampshire in 2019. The Company actively evaluates the banking needs of its markets, including low- and moderate-income areas, and offers products that are responsive to the needs of its customer base. The Company's markets provide a mix of real estate, commercial and industrial, municipal and consumer lending opportunities, as well as a stable core deposit base.

The filing does not contain a dedicated discussion of margin and cost outlook with specific targets or figures.

The filing does not contain a dedicated discussion of operational outlook regarding supply chain, manufacturing capacity, technology infrastructure investments, or headcount strategy with specific figures.

The filing does not contain specific figures for R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy beyond what is disclosed in the financial statements and regulatory context. The Company and the Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. Under the Basel III capital requirements, failure to maintain the required capital conservation buffer would result in additional limitations on permissible shareholder distributions. The Company and the Bank met the capital conservation buffer requirement at December 31, 2025, with a capital conservation buffer of 7.49% ²⁴ for the Company and 7.38% ²⁵ for the Bank as of that date.

The filing does not contain a dedicated discussion of headwinds and constraints as a separate section, but the Risk Factors section discusses various risks including credit risk, interest rate risk, and competition from tax-exempt credit unions.

The Company faces intense competition from tax-exempt credit unions, which have a significant pricing advantage over commercial banks due to their general exemption from federal income taxes, and this competition has intensified as credit unions have converted to community common bonds, significantly increasing their fields of membership. The Company is subject to extensive regulation, and changes in federal and state laws and regulations, including those related to capital requirements, could materially impact operations. Under the Basel III capital rules, failure to maintain the required capital conservation buffer of 2.5% ²⁶ of risk-weighted assets would result in limitations on permissible shareholder distributions and discretionary bonus payments. The Company is also subject to interest rate risk, as changes in interest rates can affect net interest income and the value of the loan and securities portfolios. Additionally, the Company's growth strategy depends on expanding in Central Vermont and Chittenden County markets where economic activity is more robust, but competition from three of the largest banks operating in the state, as well as non-bank lenders, is strong in these areas.

Management's message emphasizes the Company's community orientation, strong ties to the local community, and focus on establishing and maintaining long-term relationships with customers, particularly individual customers and small-to-medium-sized businesses. Management believes the Company can continue to compete effectively in view of its local market knowledge and community ties and its understanding and responsiveness to evolving customer needs. The strategic priorities emphasized include increasing presence and market share in the Central Vermont and Chittenden County markets where economic activity is more robust, and expanding presence in the neighboring state of New Hampshire. Management also highlights the Company's commitment to providing for the financial services needs of the communities it serves, including low- and moderate-income areas, and actively evaluating the banking needs of its markets.