UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C.
20549

 FORM 10-K

 (Mark One)

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

 For the
fiscal year ended December 31, 2023

 OR

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

 For the
transition period from _______________ to _______________

 Commission
File Number 000-53297

 ENB
Financial Corp

 (Exact
name of registrant as specified in its charter)

 Pennsylvania

 51-0661129

 State or other jurisdiction of incorporation or organization

 (IRS Employer Identification No.)

 31 E. Main St. Ephrata, PA

 17522

 (Address of principal executive offices)

 (Zip Code)

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

 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

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

 Title of each
class

 Common Stock,
Par Value $0.10 Per Share

 Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 Yes No

 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 Regulations S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements.

 Indicate by check mark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers
during the relevant recovery period pursuant to § 240.10D-1(b).

 Indicate by check mark if the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market
value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2023, was approximately $ 43,227,028.

 The number of shares
of the registrant's Common Stock outstanding as of March 11, 2024, was 5,654,355.

 DOCUMENTS
INCORPORATED BY REFERENCE

 The Registrant's
Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders to be held on May 7, 2024, is incorporated into Parts III and IV
hereof.

 ENB FINANCIAL
CORP

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures about Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers, and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Signatures

 ENB FINANCIAL
CORP

 Forward-Looking Statements

 The U.S. Private Securities Litigation Reform Act of 1995 provides
safe harbor in regard 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 predictions, 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:

 Economic conditions

 Monetary and interest rate policies of the Federal Reserve Board

 Inflation and monetary fluctuations and volatility

 Possible impacts of the capital and liquidity requirements of Basel III standards and other regulatory pronouncements

 Effects of short- and long-term federal budget and tax negotiations and their effects on economic and business conditions

 Effects of the failure of the Federal government to reach agreement to raise the debt ceiling and the negative effects on economic
or business conditions as a result

 Effects of weak market conditions, specifically the effect on loan customers to repay loans

 Political changes and their impact on new laws and regulations

 Effects of war, acts of terrorism, and international and domestic instabilities

 Competitive forces

 Changes in deposit flows, loan demand, or real estate and investment securities values

 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

 Operation, legal, and reputation risk

 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

 The impact of new laws and regulations concerning taxes, banking, securities and insurance and their application with which the Corporation
and its subsidiaries must comply

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

 Effects of economic conditions particularly with regard to the effects of any pandemic, epidemic, or health-related crisis and government
and business responses thereto, specifically the effect on loan customers to repay loans

 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 ENB Financial Corp 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 ENB Financial Corp periodically with the Securities and
Exchange Commission, including Item 1A. of this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form
8-K.

 Item 1. Business

 General

 ENB Financial Corp ("the Corporation") is a bank holding
company that was formed on July 1, 2008. The Corporation's wholly owned subsidiary, Ephrata National Bank ("the Bank"),
also referred to as ENB, is a full service commercial bank organized under the laws of the United States. Presently, no other subsidiaries
exist under the bank holding company. The Bank has one subsidiary, ENB Insurance, which is a full-service insurance agency that offers
a broad range of insurance products to commercial and personal clients. The Corporation and the Bank are both headquartered in Ephrata,
Lancaster County, Pennsylvania. The Bank was incorporated on April 11, 1881, pursuant to The National Bank Act under a charter granted
by the Office of the Comptroller of the Currency (OCC). The Federal Deposit Insurance Corporation (FDIC) insures deposit accounts up to
the maximum extent provided by law. The Corporation's retail, operational, and administrative offices are predominantly located
in Lancaster County, southeastern Lebanon County, and southwestern Berks County, Pennsylvania, the "Market Area". Eleven full
service community banking offices are located in Lancaster County with one full service community banking office in Lebanon County and
one full service community banking office in Berks County, Pennsylvania.

 The basic business of the Corporation is to provide a broad range of
financial services to individuals and small-to-medium-sized businesses in the Market Area. The Corporation utilizes funds gathered through
deposits from the general public to originate loans. The Corporation offers a range of demand accounts, in addition to savings and time
deposits. The Corporation also offers secured and unsecured commercial, real estate, and consumer loans. Ancillary services that provide
added convenience to customers include direct deposit and direct payments of funds through Electronic Funds Transfer, ATMs linked to the
NYCE network, telephone banking, MasterCard debit cards, Visa or MasterCard credit cards, and safe deposit box facilities.
In addition, the Corporation offers internet banking including bill pay and wire transfer capabilities, remote deposit capture, and an
ENB Bank on the Go! app for iPhones or Android phones. The Corporation also offers a full complement of trust and investment advisory
services through ENB's Wealth Solutions.

 As of December 31, 2023, the Corporation employed 296 persons, consisting
of 281 full-time, 12 part-time, and 3 seasonal employees. The number of full-time employees decreased by 2 employees, and the number
of part-time employees remained the same from the previous year-end while 3 seasonal roles were added to provide support during time periods,
throughout the year, of higher volume. The decrease in the number of full-time employees is temporary and is reflective of
open positions that are expected to be filled. The Corporation expects to add additional personnel to support the initiatives within
technology, operations, and customer experience in 2024. A collective bargaining agent does not represent the employees and management
believes it maintains good relationships with its employees.

 Operating Segments

 The Corporation's business is providing financial products and
services. These products and services are provided through the Corporation's wholly owned subsidiary, the Bank. The Bank is presently
the only subsidiary of the Corporation, and the Bank only has one reportable operating segment, community banking, as described in Note
A of the Notes to the Consolidated Financial Statements included in this Report. The segment reporting information in Note A is incorporated
by reference into this Part I, Item 1. The Bank has one subsidiary, ENB Insurance, which is a full-service insurance agency that offers
a broad range of insurance products to commercial and personal clients. ENB Insurance is managed separately from the banking and related
financial services that the Bank offers.

 Business Operations

 Products and Services with Reputation Risk

 The Corporation offers a diverse range of financial and banking products
and services. In the event one or more customers and/or governmental agencies becomes dissatisfied with or objects to any product or service
offered by the Corporation, negative publicity with respect to any such product or service, whether legally justified or not, could have
a negative impact on the Corporation's reputation. The discontinuance of any product or service, whether or not any customer or
governmental agency has challenged any such product or service, could have a negative impact on the Corporation's reputation.

 Market Area and Competition

 The Corporation's primary
market area is Lancaster County, Pennsylvania, where eleven full service offices are located and areas of contiguous Lebanon and
Berks Counties. The Corporation has one full service office in southeastern Lebanon County (Myerstown) and a full service office in
southwestern Berks County (Morgantown). The Corporation's greater service area is considered to be Lancaster, Lebanon, and
southwestern Berks Counties of Pennsylvania. The area served by the Corporation is a mix of rural communities and small to mid-sized
towns.

 The Corporation's headquarters
and main campus are located in downtown Ephrata, Pennsylvania. The Corporation's main office and drive-up are located in downtown
Ephrata, while the Cloister office is also located within Ephrata Borough. The Corporation ranks a commanding first in deposit market
share in the Ephrata area with 45.9% of deposits as of June 30, 2023, based on data compiled annually by the Federal Deposit Insurance
Corporation (FDIC). The Corporation's deposit market share in the Ephrata area was 43.9% as of June 30, 2022. The Corporation's
very high market share in the Ephrata area has led to the expansion of the Corporation's branch network outside of the Ephrata area
but within the Corporation's Market Area.

 In the course of attracting and retaining
deposits and originating loans, the Corporation faces considerable competition. The Corporation competes with other commercial banks,
savings and loan institutions, and credit unions for traditional banking products, such as deposits and loans. The Corporation competes
with consumer finance companies for loans, mutual funds, and other investment alternatives for deposits. The Corporation competes for
deposits based on the ability to provide a range of products, low fees, quality service, competitive rates, and convenient locations and
hours. The competition for loan origination generally relates to interest rates offered, products available, quality of service, and loan
origination fees charged. Several competitors within the Corporation's primary market have substantially higher legal lending limits
that enable them to service larger loans and larger commercial customers.

 The Corporation continues to assess the competition and market area
to determine the best way to meet the financial needs of the communities it serves. Management also continues to pursue new market opportunities
based on the strategic plan to efficiently grow the Corporation, improve earnings performance, and bring the Corporation's products
and services to customers currently not being reached. Management strategically addresses growth opportunities versus competitive issues
by determining the new products and services to be offered, expansion of existing footprint with new locations, as well as investing in
the expertise of staffing for expansion of these services.

 Concentrations and Seasonality

 The Corporation does not have any portion of its businesses dependent
on a single or limited number of customers, the loss of which would have a material adverse effect on its businesses' financial
condition and results of operations. No substantial portion of loans or investments is concentrated within a single industry or group
of related industries, although a significant amount of loans are secured by real estate located in northern Lancaster County, Pennsylvania.
The business activities of the Corporation are generally not seasonal in nature. However, the sizable agricultural portfolio has certain
specific, limited elements that are predominately seasonal in nature due to typical farming operations. Financial instruments with concentrations
of credit risk are described in Note P of the Notes to Consolidated Financial Statements included in this Report. The concentration of
credit risk information in Note P is incorporated by reference into this Part I, Item 1.

 Supervision and Regulation

 Bank holding companies operate in a highly regulated environment and
are routinely examined by federal and state regulatory authorities. The following discussion concerns various federal and state laws and
regulations and the potential impact of such laws and regulations on the Corporation and the Bank.

 To the extent that the following information describes statutory or
regulatory provisions, it is qualified in its entirety by reference to the particular statutory or regulatory provisions themselves. Proposals
to change laws and regulations are frequently introduced in Congress, the state legislatures, and before the various bank regulatory agencies.
The Corporation cannot determine the likelihood or timing of any such proposals or legislation, or the impact they may have on the Corporation
and the Bank. A change in law, regulations, or regulatory policy may have a material effect on the Corporation and the Bank's business.

 The operations of the Bank are subject to federal and state statutes
applicable to banks chartered under the banking laws of the United States, to members of the Federal Reserve System, and to banks whose
deposits are insured by the FDIC. Bank operations are subject to regulations of the OCC, the Consumer Financial Protection Bureau (CFPB),
the Board of Governors of the Federal Reserve System, and the FDIC.

 Bank Holding Company Supervision and Regulation

 The Bank Holding Company Act of 1956

 The Corporation is subject to the provisions of the Bank Holding Company
Act of 1956, as amended, and to supervision by the Federal Reserve Board. The following restrictions apply:

 General Supervision by the Federal Reserve Board

 As a bank holding company, the Corporation's activities are limited
to the business of banking and activities closely related or incidental to banking. Bank holding companies are required to file periodic
reports with and are subject to examination by the Federal Reserve Board. The Federal Reserve Board has adopted a risk-focused supervision
program for small shell bank holding companies that is tied to the examination results of the subsidiary bank. The Federal Reserve Board
has issued regulations under the Bank Holding Company Act that require a bank holding company to serve as a source of financial and managerial
strength to its subsidiary banks. As a result, the Federal Reserve Board may require that the Corporation stand ready to provide adequate
capital funds to the Bank during periods of financial stress or adversity.

 Restrictions on Acquiring Control of Other Banks and Companies

 A bank holding company may not:

 acquire direct or indirect control of more than 5% of the outstanding shares of any class of voting stock, or substantially all of
the assets of any bank, or

 merge or consolidate with another bank holding company, without prior approval of the Federal Reserve Board.

 In addition, a bank holding company may not:

 engage in a non-banking business, or

 acquire ownership or control of more than 5% of the outstanding shares of any class of voting stock of any company engaged in a non-banking
business,

 unless the Federal Reserve Board determines the business to be so closely
related to banking as to be a proper incident to banking. In making this determination, the Federal Reserve Board considers whether these
activities offer benefits to the public that outweigh any possible adverse effects.

 Anti-Tie-In Provisions

 A bank holding company and its subsidiaries may not engage in tie-in
arrangements in connection with any extension of credit or provision of any property or services. These anti-tie-in provisions state generally
that a bank may not:

 extend credit,

 lease or sell property, or

 furnish any service to a customer,

 on the condition that the customer provides additional credit or service
to a bank or its affiliates, or on the condition that the customer not obtain other credit or service from a competitor of the bank.

 Restrictions on Extensions of Credit by Banks to their Holding
Companies

 Subsidiary banks of a holding company are also subject to restrictions
imposed by the Federal Reserve Act on:

 any extensions of credit to the bank holding company or any of its subsidiaries,

 investments in the stock or other securities of the Corporation, and

 taking these stock or securities as collateral for loans to any borrower.

 Risk-Based Capital Guidelines

 Bank holding companies must comply with the Federal Reserve Board's
current risk-based capital guidelines, which are amended provisions of the Bank Holding Company Act of 1956. The required minimum ratio
of total capital to risk-weighted assets, including some off-balance sheet activities, such as standby letters of credit, is 8%. At least
half of the total capital is required to be Tier I Capital, consisting principally of common shareholders' equity, less certain
intangible assets. The remainder, Tier II Capital, may consist of:

 some types of preferred stock,

 a limited amount of subordinated debt,

 some hybrid capital instruments,

 other debt securities, and

 a limited amount of the general credit loss allowance.

 The risk-based capital guidelines are required to take adequate account
of interest rate risk, concentrations of credit risk, and risks of nontraditional activities.

 Capital Leverage Ratio Requirements

 The Federal Reserve Board requires a bank holding company to maintain
a leverage ratio of a minimum level of Tier I capital, as determined under the risk-based capital guidelines, equal to 3% of average total
consolidated assets for those bank holding companies that have the highest regulatory examination rating and are not contemplating or
experiencing significant growth or expansion. All other bank holding companies are required to maintain a ratio of at least 1% to 2% above
the stated minimum. The Bank is subject to similar capital requirements pursuant to the Federal Deposit Insurance Act.

 Restrictions on Control Changes

 The Change in Bank Control Act of 1978 requires persons seeking control
of a bank or bank holding company to obtain approval from the appropriate federal banking agency before completing the transaction. The
law contains a presumption that the power to vote 10% or more of voting stock confers control of a bank or bank holding company. The Federal
Reserve Board is responsible for reviewing changes in control of bank holding companies. In doing so, the Federal Reserve Board reviews
the financial position, experience and integrity of the acquiring person, and the effect the change of control will have on the financial
condition of the Corporation, relevant markets, and federal deposit insurance funds.

 Sarbanes-Oxley Act of 2002

 The Sarbanes-Oxley Act (SOX), also known as the "Public Company
Accounting Reform and Investor Protection Act," was established in 2002 and introduced major changes to the regulation of financial
practice. SOX was established as a reaction to the outbreak of corporate and accounting scandals, including Enron and WorldCom. SOX represents
a comprehensive revision of laws affecting corporate governance, accounting obligations, and corporate reporting. SOX is applicable to
all companies with equity or debt securities that are either registered, or file reports under the Securities Exchange Act of 1934 such
as the Corporation. SOX includes significant additional disclosure requirements and expanded corporate governance rules and the SEC has
adopted extensive additional disclosures, corporate governance provisions, and other related rules pursuant to it. The Corporation has
expended and will continue to expend, considerable time and money in complying with SOX.

 Bank Supervision and Regulation

 Safety and Soundness

 The primary regulator for the Bank is the OCC. The OCC has the authority
under the Financial Institutions Supervisory Act and the Federal Deposit Insurance Act to prevent a national bank from engaging in any
unsafe or unsound practice in conducting business or from otherwise conducting activities in violation of the law.

 Federal and state banking laws and regulations govern, but are not
limited to, the following:

 Scope of a bank's business

 Investments a bank may make

 Reserves that must be maintained against certain deposits

 Loans a bank makes and collateral it takes

 Merger and consolidation activities

 Establishment of branches

 The Corporation is a member of the Federal Reserve System. Therefore,
the policies and regulations of the Federal Reserve Board have a significant impact on many elements of the Corporation's operations,
including:

 Loan and deposit growth

 Rate of interest earned and paid

 Types of securities

 Breadth of financial services provided

 Levels of liquidity

 Levels of required capital

 Management cannot predict the effect of changes to such policies and
regulations upon the Corporation's business model and the corresponding impact they may have on future earnings.

 FDIC Insurance Assessments

 The FDIC imposes a risk-related premium schedule for all insured depository
institutions that results in the assessment of premiums based on the Bank's capital and supervisory measures. Under the risk-related
premium schedule, the FDIC assigns, on a semi-annual basis, each depository institution to one of three capital groups, the best of these
being "Well Capitalized." For purposes of calculating the insurance assessment, the Bank was considered "Well Capitalized"
as of December 31, 2023, and December 31, 2022. This designation has benefited the Bank in the past and continues to benefit it in terms
of a lower quarterly FDIC rate. The FDIC adjusts the insurance rates when necessary. The total FDIC assessments paid by the Bank in 2023
were $892,000, compared to $528,000 in 2022.

 Community Reinvestment Act

 Under the Community Reinvestment Act (CRA), as amended, the OCC is
required to assess all financial institutions that it regulates to determine whether these institutions are meeting the credit needs of
the community that they serve. The Act focuses specifically on low and moderate income neighborhoods. The OCC takes an institution's
CRA record into account in its evaluation of any application made by any of such institutions for, among other things:

 Approval of a new branch or other deposit facility

 Closing of a branch or other deposit facility

 An office relocation or a merger

 Any acquisition of bank shares

 The CRA, as amended, also requires that the OCC make publicly available
the evaluation of a bank's record of meeting the credit needs of its entire community, including low and moderate income neighborhoods.
This evaluation includes a descriptive rating of either outstanding, satisfactory, needs to improve, or substantial noncompliance, along
with a statement describing the basis for the rating. These ratings are publicly disclosed. The Bank received a satisfactory rating on
the most recent CRA Performance Evaluation completed on July 12, 2021.

 The Federal Deposit Insurance Corporation Improvement Act of
1991

 Capital Adequacy

 Under the Federal Deposit Insurance Corporation Improvement Act of
1991 (FDICIA), institutions are classified in one of five defined categories as illustrated below:

 Tier I Capital

 Common Equity Tier I

 Capital Category

 Total Capital Ratio

 Ratio

 Capital Ratio

 Leverage Ratio

 Well Capitalized

 > 10.0

 > 8.0

 > 6.5

 > 5.0

 Adequately Capitalized

 > 8.0

 > 6.0

 > 4.5

 > 4.0*

 Undercapitalized

 < 8.0

 < 6.0

 < 4.5

 < 4.0*

 Significantly Undercapitalized

 < 6.0

 < 4.0

 < 3.5

 < 3.0

 Critically Undercapitalized

 < 2.0

 *3.0 for those banks having the highest
 available regulatory rating.

 The Bank's and Corporation's capital ratios exceed the
regulatory requirements to be considered well capitalized for Total Risk-Based Capital, Tier I Risk-Based Capital, Common Equity Tier
I Capital, and Tier I Leverage Capital. The capital ratio table and Consolidated Financial Statement Note M – Regulatory Matters
and Restrictions, are incorporated by reference herein, from Item 8, and made a part hereof. Note M discloses capital ratios for both
the Bank and the Corporation, shown as Consolidated.

 Regulatory Capital Changes

 In July 2013, the federal banking agencies issued final rules to implement
the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act. The final rules call for the following capital requirements:

 A minimum ratio of common equity tier I capital to risk-weighted assets of 4.5%

 A minimum ratio of tier I capital to risk-weighted assets of 6%

 A minimum ratio of total capital to risk-weighted assets of 8%

 A minimum leverage ratio of 4%

 In addition, the final rules established a common equity tier I capital
conservation buffer of 2.5% of risk-weighted assets applicable to all banking organizations. If a banking organization fails to hold capital
above the minimum capital ratios and the capital conservation buffer, it will be subject to certain restrictions on capital distributions
and discretionary bonus payments.

 Consistent with the Dodd-Frank Act, the rules replace the ratings-based
approach to securitization exposures, which is based on external credit ratings, with the simplified supervisory formula approach in order
to determine the appropriate risk weights for these exposures. Alternatively, banking organizations may use the existing gross-up approach
to assign securitization exposures to a risk weight category or choose to assign such exposures a 1,250 percent risk weight. The Corporation
does not securitize assets and has no plans to do so.

 Under the rules, mortgage servicing assets (MSAs) and certain deferred
tax assets (DTAs) are subject to stricter limitations than those applicable under the current general risk-based capital rule. The rules
also increase the risk weights for past-due loans, certain commercial real estate loans, and some equity exposures, and makes selected
other changes in risk weights and credit conversion factors.

 Management has evaluated the impact of the above rules on levels of
the Corporation's capital. The final rulings were highly favorable in terms of the items that would have a more significant impact
to the Corporation and community banks in general. Specifically, the AOCI final ruling, which would have had the greatest impact, now
provides the Corporation with an opt-out provision. The final ruling on the risk weightings of mortgages was favorable and did not have
a material negative impact. The rulings as to trust preferred securities, preferred stock, and securitization of assets are not applicable
to the Corporation, and presently the revised treatment of MSAs is not material to capital. The remaining changes to risk weightings on
several items mentioned above such as past-due loans and certain

 commercial real estate loans do not have a material impact to capital
presently, but could change as these levels change.

 Real Estate Lending Standards

 Pursuant to the FDICIA, federal banking agencies adopted real estate
lending guidelines which would set loan-to-value ("LTV") ratios for different types of real estate loans. The LTV ratio is
generally defined as the total loan amount divided by the appraised value of the property at the time the loan is originated. If the institution
does not hold a first lien position, the total loan amount would be combined with the amount of all junior liens when calculating the
ratio. In addition to establishing the LTV ratios, the guidelines require all real estate loans to be based upon proper loan documentation
and a recent appraisal or certificate of inspection of the property.

 Prompt Corrective Action

 In the event that an institution's capital deteriorates to the
Undercapitalized category or below, FDICIA prescribes an increasing amount of regulatory intervention, including:

 Implementation of a capital restoration plan and a guarantee of the plan by a parent institution

 Placement of a hold on increases in assets, number of branches, or lines of business

 If capital reaches the significantly or critically undercapitalized
level, further material restrictions can be imposed, including restrictions on interest payable on accounts, dismissal of management,
and (in critically undercapitalized situations) appointment of a receiver. For well-capitalized institutions, FDICIA provides authority
for regulatory intervention where they deem the institution to be engaging in unsafe or unsound practices, or if the institution receives
a less than satisfactory examination report rating for asset quality, management, earnings, liquidity, or sensitivity to market risk.

 Other FDICIA Provisions

 Each depository institution must submit audited financial statements
to its primary regulator and the FDIC, whose reports are made publicly available. In addition, the audit committee of each depository
institution must consist of outside directors and the audit committee at "large institutions" (as defined by FDIC regulation)
must include members with banking or financial management expertise. The audit committee at "large institutions" must also
have access to independent outside counsel. In addition, an institution must notify the FDIC and the institution's primary regulator
of any change in the institution's independent auditor, and annual management letters must be provided to the FDIC and the depository
institution's primary regulator. The regulations define a "large institution" as one with over $500 million in assets,
which does include the Bank. Also, under the rule, an institution's independent public accountant must examine the institution's internal
controls over financial reporting and perform agreed-upon procedures to test compliance with laws and regulations concerning safety and
soundness.

 Under the FDICIA, each federal banking agency must prescribe certain
safety and soundness standards for depository institutions and their holding companies. Three types of standards must be prescribed:

 asset quality and earnings

 operational and managerial, and

 compensation

 Such standards would include a ratio of classified assets to capital,
minimum earnings, and, to the extent feasible, a minimum ratio of market value to book value for publicly traded securities of such institutions
and holding companies. Operational and managerial standards must relate to:

 internal controls, information systems and internal audit systems

 loan documentation

 credit underwriting

 interest rate exposure

 asset growth, and

 compensation, fees and benefits

 The FDICIA also sets forth Truth in Savings disclosure and advertising
requirements applicable to all depository institutions.

 USA PATRIOT Act of 2001/Bank Secrecy Act

 In October 2001, the USA Patriot Act of 2001 (Patriot Act) was enacted
in response to the terrorist attacks in New York, Pennsylvania and Washington, D.C., which occurred on September 11, 2001. The Patriot
Act is intended to strengthen U.S. law enforcement's and the intelligence communities' abilities to work cohesively to combat
terrorism on a variety of fronts. The impact of the Patriot Act on financial institutions of all kinds is significant and wide ranging.
The Patriot Act contains sweeping anti-money laundering and financial transparency laws and imposes various regulations, including standards
for verifying client identification at account opening, and rules to promote cooperation among financial institutions, regulators and
law enforcement entities in identifying parties that may be involved in terrorism or money laundering.

 Under the Bank Secrecy Act (BSA), banks and other financial institutions
are required to report to the Internal Revenue Service currency transactions of more than $10,000 or multiple transactions of which a
bank is aware in any one day that aggregate in excess of $10,000 and to report suspicious transactions under specified criteria. Civil
and criminal penalties are provided under the BSA for failure to file a required report, for failure to supply information required by
the BSA, or for filing a false or fraudulent report.

 Loans to Insiders/Regulation O

 Regulation O, also known as Loans to Insiders, governs the permissible
lending relationships between a bank and its executive officers, directors, and principal shareholders and their related interests. The
primary restriction of Regulation O is that loan terms and conditions, including interest rates and collateral coverage, can be no more
favorable to the insider than loans made in comparable transactions to non-covered parties. Additionally, the loan may not involve more
than normal risk. The regulation requires quarterly reporting to regulators of the total amount of credit extended to insiders.

 Under Regulation O, a bank is not required to obtain approval from
the bank's Board of Directors prior to making a loan to an executive officer or Board of Director member as long as a first lien
on the executive officer's residence secures the loan. The Corporation's policy requires prior Board of Director approval
of any Executive Officer or Director loan that when aggregated with other outstanding extensions of credit to the Insider and their related
interests exceeds $500,000. Loans to any Executive Officer or Director with aggregate exposure of under $500,000 must be reported at the
next scheduled Board of Director meeting. Further amendments allow bank insiders to take advantage of preferential loan terms that are
available to substantially all employees. Regulation O does permit an insider to participate in a plan that provides more favorable credit
terms than the bank provides to non-employee customers provided that the plan:

 Is widely available to employees

 Does not give preference to any insider over other employees

 The Bank has a policy in place that offers general employees more favorable
loan terms than those offered to non-employee customers. The Bank's policy on loans to insiders allows insiders to participate in
the same favorable rate and terms offered to all other employees; however, any loan to an insider that does not fall within permissible
regulatory exceptions must receive the prior approval of the Bank's Board of Directors.

 Dodd-Frank Wall Street Reform and Consumer Protection Act

 Dodd-Frank Act, was enacted in response to the financial crisis of
2007 - 2008. The act reshaped Wall Street and the American banking industry by bringing the most significant changes to financial regulation
in the United States since the regulatory reform that followed the Great Depression. The Act's numerous provisions were to be implemented
over a period of several years and were intended to decrease various risks in the U.S. financial system. Dodd-Frank created a new Financial
Stability Oversight Council to identify systemic risks in the financial system and gave federal regulators new authority to take control
of and liquidate financial firms. Dodd-Frank was expected to and did have an impact on the Corporation's business operations as
its provisions began to take effect. To date the provisions that did go into effect, or began to phase in, did at a minimum increase
the Corporation's operating and compliance costs.

 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.

 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. Additionally, Dodd-Frank directs the federal banking regulators
to promulgate rules prohibiting excessive compensation paid to executives of depository institutions and their holding companies with
assets in excess of $1 billion, regardless of whether the company is publicly traded. Dodd-Frank also gives the SEC authority to prohibit
broker discretionary voting on elections of directors and executive compensation matters.

 Consumer Financial Protection Bureau (CFPB)

 Dodd-Frank created a new, independent federal agency called 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 are subject to rules promulgated by the CFPB but continue to be examined and supervised by federal banking
regulators for consumer compliance purposes. The CFPB has authority to prevent unfair, deceptive, or abusive practices in connection with
the offering of consumer financial products. Dodd-Frank authorized 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 allows 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.

 Ability-to-Repay and Qualified Mortgage Rule

 Pursuant to the Dodd-Frank Act, the CFPB amended Regulation Z as implemented
by the Truth in Lending Act, requiring mortgage lenders to make a reasonable and good faith determination based on verified and documented
information that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms. Mortgage lenders
are required to determine consumers' ability to repay in one of two ways. The first alternative requires the mortgage lender to
consider the following eight underwriting factors when making the credit decision: (1) current or reasonably expected income or assets;
(2) current employment status; (3) the monthly payment on the covered transaction; (4) the monthly payment on any simultaneous
loan; (5) the monthly payment for mortgage-related obligations; (6) current debt obligations, alimony, and child support; (7) the
monthly debt-to-income ratio or residual income; and (8) credit history. Alternatively, the mortgage lender can originate "qualified
mortgages," which are entitled to a presumption that the creditor making the loan satisfied the ability-to-repay requirements. In
general, a "qualified mortgage" is a mortgage loan without negative amortization, interest-only payments, balloon payments,
or terms exceeding 30 years. In addition, to be a qualified mortgage the points and fees paid by a consumer cannot exceed 3% of the total
loan amount. Loans which meet these criteria will be considered qualified mortgages, and as a result generally protect lenders from fines
or litigation in the event of foreclosure. Qualified mortgages that are "higher-priced" (e.g. subprime loans) garner a rebuttable
presumption of compliance with the ability-to-repay rules, while qualified mortgages that are not "higher-priced" (e.g. Prime
loans) are given a safe harbor of compliance. The final rule, as issued, is not expected to have a material impact on the Corporation's
lending activities and on the Corporation's Consolidated Financial Statements.

 Interchange Fees

 Under the Durbin Amendment to the Dodd-Frank Act, the Federal Reserve
adopted rules establishing standards for assessing whether the interchange fees that may be charged with respect to certain electronic
debit transactions are "reasonable and proportional" to the costs incurred by issuers for processing such transactions.

 Interchange fees or "swipe" fees, are charges that merchants
pay to the Corporation and other card-issuing banks for processing electronic payment transactions. The Federal Reserve Board has ruled
that for financial institutions with

 assets of $10 billion or more the maximum permissible interchange fee for an electronic debit transaction
is the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. The Federal Reserve Board also has
rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit
or prepaid product. While the Corporation's asset size is presently under $10 billion, there is concern that these requirements
impacting financial institutions over $10 billion in assets will eventually be pushed down to either financial institutions over $1 billion
or to all financial institutions. This would negatively impact the Corporation's non-interest income.

 TILA/RESPA Integrated Disclosure (TRID) Rules

 The TRID rules were mandated by Dodd-Frank to address the problem of
the sometimes duplicative and overlapping disclosures required by the Truth in Lending Act (TILA) and Real Estate Settlement Procedures
Act (RESPA) involving consumer purpose, closed end loans secured by real property. The CFPB was tasked with developing the new disclosures,
defining the regulatory compliance parameters, and implementation. The timing elements built around these new disclosures were established
to provide the consumer with ample time to consider the credit transaction and its associated costs. The final rules were implemented
by amending the Truth in Lending Act; however implementation proved to be difficult as this marked the first time in thirty years that
these standard disclosures were changed. Much reliance was placed on third party providers to the financial institutions to make all the
necessary changes to the disclosures. After one delay, the rules became effective October 3, 2015. The Corporation partnered with its
loan document software providers to ensure timely, compliant implementation.

 Department of Defense Military Lending Rule

 In 2015, the U.S. Department of Defense issued a final rule which restricts
pricing and terms of certain credit extended to active duty military personnel and their families. This rule, which was implemented
effective October 3, 2016, caps the interest rate on certain credit extensions to an annual percentage rate of 36% and restricts other
fees. The rule requires financial institutions to verify whether customers are military personnel subject to the rule. The
impact of this final rule, and any subsequent amendments thereto, on the Corporation's lending activities and the Corporation's
statements of income or condition has had little or no impact; however, management will continue to monitor the implementation of the
rule for any potential side effects on the Corporation's business.

 Cybersecurity

 In March 2015, federal regulators issued two related statements regarding
cybersecurity. One statement instructed financial institutions to design multiple layers of security controls to establish lines of defense
and to ensure that their risk management practices cover the risk of compromised customer credentials, including security measures to
reliably authenticate customers accessing internet-based services of the financial institution. The other statement indicates that a financial
institution's management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery,
resumption and maintenance of the institution's operations after a cyber-attack involving malware. Financial institutions are expected
to develop appropriate processes to enable recovery of data and business operations and address the rebuilding of network capabilities
and restoring data if the institution or its critical service providers are victim to a cyber-attack. The Corporation could be subject
to fines or penalties if it fails to observe this regulatory guidance. See Item 1A. Risk Factors for further discussion of risks related
to cybersecurity.

 Ongoing Legislation

 As a consequence of the extensive regulation of the financial services
industry and specifically commercial banking activities in the United States, the Corporation's business is particularly susceptible
to changes in federal and state legislation and regulations. Over the course of time, various federal and state proposals for legislation
could result in additional regulatory and legal requirements for the Corporation. Management cannot predict if any such legislation will
be adopted, or if adopted, how it would affect the business of the Corporation. Past history has demonstrated that new legislation or
changes to existing legislation usually results in a heavier compliance burden and generally increases the cost of doing business.

 It is possible that there will be regulatory proposals which, if implemented,
could have a material effect upon our liquidity, capital resources and results of operations. In addition, the general cost of compliance
with numerous federal and state laws does have, and in the future may have, a negative impact on our results of operations. As with other
banks, the status of the financial services industry can affect the Bank. Consolidations of institutions are expected to continue as the
financial services industry seeks greater efficiencies and market share. Bank

 management believes that such consolidations may enhance
the Bank's competitive position as a community bank. See Item 1A. Risk Factors for more information.

 Statistical Data

 The statistical disclosures required by this item are incorporated
by reference herein from the Consolidated Statements of Income on page 57 as found in this Form 10-K filing.

 Available Information

 The Corporation maintains a website on the Internet at www.enbfc.com.
The Corporation makes available free of charge, on or through its website, its proxy statements, annual reports on From 10-K, quarterly
reports on From 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after such material
is electronically filed with the Securities and Exchange Commission (SEC). This reference to the Corporation's Internet address
shall not, under any circumstances, be deemed to incorporate the information available at such Internet address into this Form 10-K or
other SEC filings. The information available at the Corporation's Internet address is not part of this Form 10-K or any other report
filed by the Corporation with the SEC. The Corporation's SEC filings can also be obtained on the SEC's website on the Internet
at www.sec.gov.

 Item 1A. Risk Factors

 An investment in the Corporation's common stock is subject to
risks inherent to the banking industry and the equity markets. The material risks and uncertainties that management believes affect the
Corporation are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described
below together with all of the other information included or incorporated by reference in this report. The risks and uncertainties described
below are not the only ones facing the Corporation. Additional risks and uncertainties that management is not aware of or is not focused
on, or currently deems immaterial, may also impair the Corporation's business operations. This report is qualified in its entirety
by these risk factors.

 If any of the following risks actually occur, the Corporation's
financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of the Corporation's
common stock could decline significantly, and you could lose all or part of your investment.

 Risks Related To The Corporation's Business

 The Corporation Is Subject To Interest Rate Risk

 The Corporation's earnings and cash flows are largely dependent
upon its net interest income. Net interest income is the difference between interest income earned on interest earning assets, such as
loans and securities, and interest expense paid on interest bearing liabilities, such as deposits and borrowed funds. Interest rates are
highly sensitive to many factors that are beyond the Corporation's control, including general economic conditions and policies of
various governmental and regulatory agencies, particularly, the Board of Governors of the Federal Reserve System. Changes in monetary
policy, including changes in interest rates, could influence not only the interest the Corporation receives on loans and securities, but
also the amount of interest it pays on deposits and borrowings. Changes in interest rates could also affect:

 The Corporation's ability to originate loans and obtain deposits

 The fair value of the Corporation's financial assets and liabilities

 The average duration of the Corporation's assets and liabilities

 The future liquidity of the Corporation

 If the interest rates paid on deposits and other borrowings increase
at a faster rate than the interest rates received on loans and other securities, the Corporation's net interest income, and therefore
earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other securities
fall more quickly than, or do not keep pace with, the interest rates paid on deposits and other borrowings or increases thereon.

 Although management believes it has implemented effective asset and
liability management strategies to reduce the potential effects of changes in interest rates on the Corporation's results of operations,
any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on the Corporation's
financial condition and results of operations.

 The Corporation Is Subject To Lending Risk

 There are inherent risks associated with the Corporation's lending
activities. These risks include, among other things, the impact of changes in interest rates and changes in the economic conditions in
the markets where the Corporation operates, as well as those across the Commonwealth of Pennsylvania and the United States. Increases
in interest rates and/or weakening economic conditions could adversely impact the ability of borrowers to repay outstanding loans or the
value of the collateral securing these loans. The Corporation is also subject to various laws and regulations that affect its lending
activities. Failure to comply with applicable laws and regulations could subject the Corporation to regulatory enforcement action that
could result in the assessment of significant civil money penalties against the Corporation.

 As of December 31, 2023, 26.1% of the Corporation's loan
portfolio consisted of Business Loans. These types of loans are generally viewed as having more risk of default than consumer real estate
loans or other consumer loans. These types of loans are also typically larger than consumer real estate loans and other consumer loans.
Because the Corporation's loan portfolio contains a significant number of commercial and industrial, construction, and commercial
real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase
in non-performing loans. An increase in non-performing loans could result in a net loss of earnings from these loans, an increase in the
provision for possible credit losses, and an increase in loan charge-offs, all of which could have a material adverse effect on the Corporation's
financial condition and results of operations.

 The Corporation is subject to commercial real estate volatility
that may result in increases in non-performing loans that could have an adverse impact on our financial condition and results of operations.

 The commercial real estate market nationally, regionally, and locally
has recently been subject to increased levels of volatility. Many believe that commercial real estate in the commercial office sector
is undergoing a fundamental transformation and change that started during the recent pandemic but also continues due to evolving workplace
environments. These changes in the marketplace affect the demand for commercial office space which in turn may affect the credit status,
profitability, and collectability, of existing and future commercial real estate office sector loans. As explained above in greater detail
in the risk factor for Lending Risk, volatility and increases in non-performing loans could have an adverse impact on our financial condition
and results of operations.

 The Corporation's Allowance For Possible Credit Losses
May Be Insufficient

 The Corporation maintains an allowance for possible credit losses,
which is a reserve established through a provision for credit losses, charged to expense. The allowance for possible credit losses
represents the Corporation's best estimate of expected losses in our financial assets, which includes loans, leases, and debt securities.
The allowance for possible credit losses includes two primary components: (1) an allowance established on financial assets which share
similar risk characteristics collectively evaluated for credit losses, and (2) an allowance established on financial assets which do not
share similar risk characteristics with any loan segment and is individually evaluated for credit losses. The level of the allowance for
possible credit losses includes quantitative and qualitative factors that comprise the Corporation's estimate of expected credit
losses, including portfolio mix and segmentation, modeling methodology, historical loss experience, relevant available information from
internal and external sources relating to qualitative adjustment factors, and reasonable and supportable forecasts about future economic
conditions. Determining the appropriate level of the allowance for possible credit losses understandably involves a high degree
of subjectivity and requires the Corporation to make significant estimates of current credit risks and future trends, all of which may
undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification
of additional problem loans, and other factors, both within and outside of the Corporation's control, may require an increase in
the allowance for possible credit losses. In addition, regulatory agencies periodically review the Corporation's allowance
for credit losses and may require an increase in the provision for possible losses or the recognition of further loan charge-offs, based
on judgments different than those of management. In addition, if charge-offs in future periods exceed the allowance for possible
credit losses, the Corporation will need additional provisions to increase the allowance for possible credit losses. Any increases
in the allowance for possible credit losses will result in a decrease in net income, and may have a material adverse effect on the Corporation's
financial condition and results of operations.

 If The Corporation Concludes That The Decline In Value Of Any
Of Its Debt Securities Is Credit Related, The Corporation is Required To Write Down The Value Of That Security Through A Charge
To Earnings

 The Corporation reviews the debt securities portfolio at each
quarter-end reporting period to determine whether the fair value is below the current carrying value. When the fair value of any
of the debt securities has declined below its carrying value, the Corporation is required to assess whether the decline is related
to credit deterioration. If it concludes that the decline is credit related, it is required to write down the value of that security
through a charge to earnings. In determining whether a credit loss exists, management shall consider the factors in paragraphs 326-30-55-1
through 55-4 of ASU 2016-13 and use its best estimate of the present value of cash flows expected to be collected from the debt security.
Management must use its best estimate to determine if a credit loss exists. It may develop its best estimate using either a singular
best estimate approach or a probability-weighted approach, but must apply the chosen approach consistently. Management has
elected to use the single best estimate method. If the present value of the best estimate is equal to amortized cost, no credit
loss calculation needs to be made. If the present value is below amortized cost, the entity must measure the credit loss using the
best estimate of cash flows. Due to the complexity of the calculations and assumptions used in determining whether a credit loss
exists, the credit loss, if any, may not accurately reflect the actual credit loss in the future.

 The Basel III Capital Requirements Or Other Regulatory Standards
May Require Us To Maintain Higher Levels Of Capital, Which Could Reduce Our Profitability

 Basel III targets higher levels of base capital, certain capital
buffers, and a migration toward common equity as the key source of regulatory capital. Although the new capital requirements are phased
in over the next decade, Basel III signals a growing effort by domestic and international bank regulatory agencies to require financial
institutions, including depository institutions, to maintain higher levels of capital. As Basel III is implemented, regulatory viewpoints
could change and require additional capital to support our business risk profile. If the Corporation and the Bank are required to maintain
higher levels of capital, the Corporation and the Bank may have fewer opportunities to invest capital into interest-earning assets, which
could limit the profitable business operations available to the Corporation and the Bank and adversely impact our financial condition
and results of operations.

 Future Credit Downgrades Of The United States Government Due
To Issues Relating To Debt And The Deficit May Adversely Affect The Corporation

 As a result of past difficulties of the federal government to reach
agreement over federal debt and issues connected with the debt ceiling, certain rating agencies placed the United States Government's
long-term sovereign debt rating on their equivalent of negative watch and announced the possibility of a rating downgrade. The rating
agencies, due to constraints related to the rating of the United States, also placed government-sponsored enterprises in which the Corporation
invests and receives lines of credit on negative watch and a downgrade of the United States credit rating would trigger a similar downgrade
in the credit rating of these government-sponsored enterprises. Furthermore, the credit rating of other entities, such as state
and local governments, may also be downgraded should the United States credit rating be downgraded. Credit downgrades often cause a lower
valuation of the Corporation's securities.

 The Corporation Is Subject To Environmental Liability Risk Associated
With Lending Activities

 A significant portion of the Corporation's loan portfolio is
secured by real property. During the ordinary course of business, the Corporation may foreclose on and take title to properties securing
certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic
substances are found, the Corporation may be liable for remediation costs, as well as for personal injury and property damage. Environmental
laws may require the Corporation to incur substantial expenses and may materially reduce the affected property's value or limit
the Corporation's ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement
policies with respect to existing laws, may increase the Corporation's exposure to environmental liability. Although the Corporation
has policies and procedures to perform an environmental review before initiating any foreclosure action on real property, these reviews
may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated
with an environmental hazard could have a material adverse effect on the Corporation's financial condition and results of operations.

 The Corporation's Profitability Depends Significantly On
Economic Conditions In The Commonwealth Of Pennsylvania And Its Market Area

 The Corporation's success depends primarily on the general economic
conditions of the Commonwealth of Pennsylvania, and more specifically, the local markets in which the Corporation operates. Unlike larger
national or other regional banks that are more geographically diversified, the Corporation provides banking and financial services to
customers primarily located in Lancaster County, as well as Berks, Chester, and Lebanon Counties.

 The local economic conditions in these areas have a significant
impact on the demand for the Corporation's products and services as well as the ability of the Corporation's customers to
repay loans, the value of the collateral securing loans, and the stability of the Corporation's deposit funding sources. A significant
decline in general economic conditions, caused by inflation, recession, acts of terrorism, outbreak of hostilities or other international
or domestic occurrences, unemployment, changes in securities markets, or other factors could impact these local economic conditions and,
in turn, have a material adverse effect on the Corporation's financial condition and results of operations.

 The Earnings Of Financial Services Companies Are Significantly
Affected By General Business And Economic Conditions

 The Corporation's operations and profitability are impacted by
general business and economic conditions in the United States and abroad. These conditions include short-term and long-term interest rates,
inflation, money supply, political issues, legislative and regulatory changes, fluctuations in both debt and equity capital markets, broad
trends in industry and finance, and the strength of the U.S. economy and the local economies in which the Corporation operates, all of
which are beyond the Corporation's control. Deterioration in economic conditions could result in an increase in loan delinquencies
and non-performing assets, decreases in loan collateral values and a decrease in demand for the Corporation's products and services,
among other things, any of which could have a material adverse impact on the Corporation's financial condition and results of operations.

 The Corporation Operates In A Highly Competitive Industry And
Market Area

 The Corporation faces substantial competition in all areas of its operations
from a variety of different competitors, many of which are larger and may have more financial resources. Such competitors primarily include
national, regional, and community banks within the various markets in which the Corporation operates. Additionally, various out-of-state
banks have begun to enter or have announced plans to enter the market areas in which the Corporation currently operates. The Corporation
also faces competition from many other types of financial institutions, including, without limitation, online banks, savings and loans,
credit unions, finance companies, brokerage firms, insurance companies, and other financial intermediaries. The financial services industry
could become even more competitive as a result of legislative, regulatory and technological changes, and continued consolidation. Banks,
securities firms, and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type
of financial service, including banking, securities underwriting, insurance (both agency and underwriting), and merchant banking. Also,
technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks,
such as automatic transfer and automatic payment systems. Many of the Corporation's competitors have fewer regulatory constraints
and may have lower cost structures. Additionally, due to their size, many competitors may be able to achieve economies of scale and, as
a result, may offer a broader range of products and services as well as better pricing for those products and services than the Corporation
can offer.

 The Corporation's ability to compete successfully depends on
a number of factors, including, among other things:

 The ability to develop, maintain, and build upon long-term customer relationships based on quality service, high ethical standards,
and safe, sound management practices

 The ability to expand the Corporation's market position

 The scope, relevance, and pricing of products and services offered to meet customer needs and demands

 The rate at which the Corporation introduces new products and services relative to its competitors

 Customer satisfaction with the Corporation's level of service

 Industry and general economic trends

 Failure to perform in any of these areas could significantly weaken
the Corporation's competitive position, which could adversely affect the Corporation's growth and profitability and have a
material adverse effect on the Corporation's financial condition and results of operations.

 The Corporation Is Subject To Extensive Government Regulation
And Supervision

 The Corporation is subject to extensive federal and state regulation
and supervision. Banking regulations are primarily intended to protect depositors' funds, federal deposit insurance funds, and the
banking system as a whole, not shareholders. These regulations affect the Corporation's lending practices, capital structure, investment
practices, dividend policy, and growth, among other things. Congress and federal regulatory agencies continually review banking laws,
regulations, and policies for possible changes. Changes to statutes, regulations, or regulatory policies, including changes in interpretation
or implementation of statutes, regulations, or policies, could affect the Corporation in substantial and unpredictable ways.

 Such changes could subject the Corporation to additional costs, limit
the types of financial services and products the Corporation may offer, and/or increase the ability of non-banks to offer competing financial
services and products, among other things. Failure to comply with laws, regulations, or policies could result in sanctions by regulatory
agencies, civil money penalties, and/or reputation damage, which could have a material adverse effect on the Corporation's business,
financial condition, and results of operations. While the Corporation has policies and procedures designed to prevent any such violations,
there can be no assurance that such violations will not occur.

 Future Governmental Regulation And Legislation Could Limit The
Corporation's Future Growth

 The Corporation is a registered bank holding company, and
its subsidiary bank is a depository institution whose deposits are insured by the FDIC. As a result, the Corporation is subject to various
regulations and examinations by various regulatory authorities. In general, statutes establish the corporate governance and eligible business
activities for the Corporation, certain acquisition and merger restrictions, limitations on inter-company transactions such as loans and
dividends, capital adequacy requirements, requirements for anti-money laundering programs and other compliance matters, among other regulations.
The Corporation is extensively regulated under federal and state banking laws and regulations that are intended primarily for the protection
of depositors, federal deposit insurance funds and the banking system as a whole. Compliance with these statutes and regulations is important
to the Corporation's ability to engage in new activities and consummate additional acquisitions. In addition, the Corporation is
subject to changes in federal and state tax laws as well as changes in banking and credit regulations, accounting principles and governmental
economic and monetary policies. The Corporation cannot predict whether any of these changes may adversely and materially affect it. Federal
and state banking regulators also possess broad powers to take supervisory actions as they deem appropriate. These supervisory actions
may result in higher capital requirements, higher insurance premiums and limitations on the Corporation's activities that could
have a material adverse effect on its business and profitability. While these statutes are generally designed to minimize potential loss
to depositors and the FDIC insurance funds, they do not eliminate risk, and compliance with such statutes increases the Corporation's
expense, requires management's attention and can be a disadvantage from a competitive standpoint with respect to non-regulated competitors.

 The Corporation's Banking Subsidiary May Be Required To
Pay Higher FDIC Insurance Premiums Or Special Assessments Which May Adversely Affect Its Earnings

 Future bank failures may prompt
the FDIC to increase its premiums above the current levels or to issue special assessments. The Corporation generally is unable to control
the amount of premiums or special assessments that its subsidiary is required to pay for FDIC insurance. Any future changes in the calculation
or assessment of FDIC insurance premiums may have a material adverse effect on the Corporation's results of operations, financial
condition, and the ability to continue to pay dividends on common stock at the current rate or at all.

 The Corporation's Controls And Procedures May Fail Or Be
Circumvented

 Management regularly reviews and updates the Corporation's internal
controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed
and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of
the system are met. Any failure or circumvention of the Corporation's controls and procedures or failure to comply with regulations
related to controls and procedures could have a material adverse effect on the Corporation's business, results of operations, and
financial condition.

 New Lines Of Business Or New Products And Services May Subject
The Corporation To Additional Risks

 From time to time, the Corporation may implement new lines of business
or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these
efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or
new products and services, the Corporation may invest significant time and resources. Initial timetables for the introduction and development
of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible.
External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the
successful implementation of a new line of business or a new product or service. Furthermore, any new line of business and/or new product
or service could have a significant impact on the effectiveness of the Corporation's system of internal controls. Failure to successfully
manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse
effect on the Corporation's business, results of operations, and financial condition.

 The Corporation's Ability To Pay Dividends Depends On Earnings
And Is Subject To Regulatory Limits

 The Corporation's ability to pay dividends is also subject to
its profitability, financial condition, capital expenditures, and other cash flow requirements. Dividend payments are subject to legal
and regulatory limitations, generally based on net profits and retained earnings, imposed by the various banking regulatory agencies.
There is no assurance that the Corporation will have sufficient earnings to be able to pay dividends or generate adequate cash flow to
pay dividends in the future. The Corporation's failure to pay dividends on its common stock could have a material adverse effect
on the market price of its common stock.

 Future Acquisitions May Disrupt The Corporation's Business
And Dilute Stockholder Value

 The Corporation may use its common stock to acquire other companies
or make investments in corporations and other complementary businesses. The Corporation may issue additional shares of common stock to
pay for future acquisitions, which would dilute the ownership interest of current shareholders of the Corporation. Future business acquisitions
could be material to the Corporation, and the degree of success achieved in acquiring and integrating these businesses into the Corporation
could have a material effect on the value of the Corporation's common stock. In addition, any acquisition could require the Corporation
to use substantial cash or other liquid assets or to incur debt. In those events, the Corporation could become more susceptible to economic
downturns and competitive pressures.

 The Corporation May Need To Or Be Required To Raise Additional
Capital In The Future, And Capital May Not Be Available When Needed And On Terms Favorable To Current Shareholders

 Federal banking regulators require
the Corporation and its subsidiary bank to maintain adequate levels of capital to support their operations. These capital levels are determined
and dictated by law, regulation, and banking regulatory agencies. In addition, capital levels are also determined by the Corporation's
management and board of directors based on capital levels that they believe are necessary to support the Corporation's business
operations.

 If the Corporation raises capital
through the issuance of additional shares of its common stock or other securities, it would likely dilute the ownership interests of current
investors and could dilute the per share book value and earnings per share of its common stock. Furthermore, a capital raise through issuance
of additional shares may have an adverse impact on the Corporation's stock price. New investors also may have rights, preferences
and privileges senior to the Corporation's current shareholders, which may adversely impact its current shareholders. The Corporation's
ability to raise additional capital will depend on conditions in the capital markets at that time, which are outside of its control, and
on its financial performance. Accordingly, the Corporation cannot be certain of its ability to raise additional capital on acceptable
terms and acceptable time frames or to raise additional capital at all. If the Corporation cannot raise additional capital in sufficient
amounts when needed, its ability to comply with regulatory capital requirements could be materially impaired. Additionally, the inability
to raise capital in sufficient amounts may adversely affect the Corporation's financial condition and results of operations.

 The Corporation May Not Be Able To Attract And Retain Skilled
People

 The Corporation's success highly depends on its ability to attract
and retain key people. Competition for the best people in most activities engaged in by the Corporation can be intense and the Corporation
may not be able to hire people or to retain them. The unexpected loss of services of one or more of the Corporation's key personnel
could have a material adverse impact on the Corporation's business because of their skills, knowledge of the Corporation's
market, years of industry experience, and the difficulty of promptly finding qualified replacement personnel.

 The Corporation's Communications, Information and Technology
Systems May Experience An Interruption Or Breach In Security

 The Corporation relies heavily on communications, information and technology
systems to conduct its business. Any failure, interruption, or breach in security of these systems could result in failures or disruptions
in the Corporation's customer relationship management, general ledger, deposit, loan, and other systems. While the Corporation has
policies and procedures designed to prevent or limit the effect of the failure, interruption, or security breach of its communications,
information and technology systems, there can be no assurance that any such failures, interruptions, or security breaches will not occur
or, if they do occur, that they will be adequately addressed. Further, while the Corporation maintains insurance coverage that may, subject
to policy terms and conditions including significant self-insured deductibles, cover or ameliorate certain financial aspects of cyber
risks, such insurance coverage may be insufficient to cover all losses.

 The occurrence of any failures, interruptions, or security breaches
of the Corporation's communications, information and technology systems could damage the Corporation's reputation, adversely
affecting customer or consumer confidence, result in a loss of customer business, subject the Corporation to additional regulatory scrutiny
and possible regulatory penalties, or expose the Corporation to civil litigation and possible financial liability, any of which could
have a material adverse effect on the Corporation's financial condition and results of operations.

 The Corporation Continually Encounters Technological Change

 The financial services industry is continually undergoing rapid technological
change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency
and enables financial institutions to better serve customers and to reduce costs. The Corporation's future success depends, in part,
upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer
demands, as well as to create additional efficiencies in the Corporation's operations. Many of the Corporation's competitors
have substantially greater resources to invest in technological improvements. The Corporation may not be able to effectively implement
new technology-driven products and services or be successful in marketing these products and services to its customers. Failure to successfully
keep pace with technological change affecting the financial services industry could have a material adverse impact on the Corporation's
business, financial condition, and results of operations.

 The Corporation's Operations Of Its Business, Including
Its Interaction With Customers, Are Increasingly Done Via Electronic Means, And This Has Increased Its Risks Related To Cyber Security

 The Corporation is exposed to the risk of cyber-attacks in the normal
course of business. In general, cyber incidents can result from deliberate attacks or unintentional events. The Corporation has observed
an increased level of attention in the industry focused on cyber-attacks that include, but are not limited to, gaining unauthorized access
to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption.
To combat against these attacks, policies and procedures are in place to prevent or limit the effect on the possible security breach of
its information and technology systems. While the Corporation maintains insurance coverage that may, subject to policy terms and conditions
including significant self-insured deductibles, cover or ameliorate certain financial aspects of cyber risks, such insurance coverage
may be insufficient to cover all or a material amount of losses. While the Corporation has not incurred any material losses related to
cyber-attacks, nor is it aware of any specific or threatened cyber-incidents as of the date of this report, it may incur substantial costs
and suffer other negative consequences if it falls victim to successful cyber-attacks. Such negative consequences could include remediation
costs that may include liability for stolen assets or information and repairing system damage that may have been caused; deploying additional
personnel and protection technologies, training employees, and engaging third party experts and consultants; lost revenues resulting from
unauthorized use of proprietary information or the failure to retain or attract customers following an attack; disruption or failures
of physical infrastructure, operating systems or networks that support our business and customers resulting in the loss of customers and
business opportunities; additional regulatory scrutiny and possible regulatory penalties; litigation; and reputational damage adversely
affecting customer or investor confidence.

 The Corporation Uses Artificial Intelligence (AI) In Its Business,
And Challenges With Properly Managing Its Use Could Result In Disruption Of The Corporation's Internal Operations, Reputational
Harm, Competitive Harm, Legal Liability And Adversely Affect Our Results Of Operations And Stock Price.

 The Corporation incorporates AI solutions into platforms
that deliver products and services to our customers, including solutions developed by third parties whose AI is integrated into our products
and services. Our business could be harmed and we may be exposed to legal liability and reputational risk if the AI we use is or is alleged
to be deficient, inaccurate, or biased because the AI algorithms are flawed, insufficient, of poor quality, or reflect unwanted forms of
bias, particularly if third party AI integrated with our platforms produces false or "hallucinatory" inferences.

 Data practices by us or others that result in controversy could impair
the acceptance of AI, which could undermine the decisions, predictions, or analysis that AI applications produce. Our customers and
potential customers may express adverse opinions concerning our use of AI and machine learning that could result in brand or reputational
harm, competitive harm, or legal liability. If the Corporation adopts the use of Generative AI, its content creation may require additional
investment as testing for bias, accuracy and unintended, harmful impact is often complex and may be costly. As a result, the Corporation
may need to increase the cost of our products and services which may make us less competitive, particularly if our competitors incorporate AI more
quickly or successfully.

 Governmental bodies have implemented laws and are considering further
regulation of AI (including machine learning), which could negatively impact our ability to use and develop AI. The Corporation is
unable to predict how application of existing laws, including federal and state privacy and data protection laws, and adoption of new
laws and regulations applicable to AI will affect us but it is likely that compliance with such laws and regulations will increase our
compliance costs and such increase may be substantial and adversely affect our results of operations. Furthermore, our use of Generative
AI and other forms of AI may expose us to risks relating to intellectual property ownership and licensing rights, including copyright
of Generative AI and other AI output as these issues have not been fully interpreted by federal courts or been fully addressed by federal
or state legislation or regulations.

 The Increasing Use Of Social Media Platforms Presents New Risks
And Challenges And Our Inability Or Failure To Recognize, Respond To And Effectively Manage The Accelerated Impact Of Social Media Could
Materially Adversely Impact Our Business

 There has been a marked increase in the use of social media platforms,
including weblogs (blogs), social media websites, and other forms of Internet-based communications which allow individuals access to a
broad audience of consumers and other interested persons. Social media practices in the banking industry are evolving, which creates uncertainty
and risk of noncompliance with regulations applicable to our business. Consumers value readily available information concerning businesses
and their goods and services and often act on such information without further investigation and without regard to its accuracy. Many
social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy
of the content posted. Information posted on such platforms at any time may be adverse to our interests and/or may be inaccurate. The
dissemination of information online could harm our business, prospects, financial condition, and results of operations, regardless of
the information's accuracy. The harm may be immediate without affording us an opportunity for redress or correction.

 Other risks associated with the use of social media include improper
disclosure of proprietary information, negative comments about our business, exposure of personally identifiable information, fraud, out-of-date
information, and improper use by employees and customers. The inappropriate use of social media by our customers or employees could result
in negative consequences including remediation costs including training for employees, additional regulatory scrutiny and possible regulatory
penalties, litigation or negative publicity that could damage our reputation adversely affecting customer or investor confidence.

 The Corporation Is Subject To Claims And Litigation Pertaining
To Fiduciary Responsibility

 From time to time, customers make claims and take legal action pertaining
to the Corporation's performance of its fiduciary responsibilities. Whether customer claims and legal action related to the Corporation's
performance of its fiduciary responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner
favorable to the Corporation, they may result in significant financial liability and/or adversely affect the market perception of the
Corporation and its products and services as well as impact customer demand for those products and services. Any financial liability or
reputation damage could have a material adverse effect on the Corporation's business, financial condition, and results of operations.

 Financial Services Companies Depend On The Accuracy And Completeness
Of Information About Customers And Counterparties

 In deciding whether to extend credit or enter into other transactions,
the Corporation may rely on information furnished by, or on behalf of, customers and counterparties, including financial statements, credit
reports, and other financial information. The Corporation may also rely on representations of those customers, counterparties, or other
third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading
financial statements, credit reports, or other financial information could have a material adverse impact on the Corporation's business
and, in turn, the Corporation's financial condition and results of operations.

 Consumers May Decide Not To Use Banks To Complete Their Financial
Transactions

 Technology and other changes are allowing parties to complete financial
transactions that historically have involved banks through alternative methods. For example, consumers can now maintain funds that would
have historically been held as bank deposits in brokerage accounts or mutual funds. Consumers can also complete transactions such as paying
bills and/or transferring funds directly without the assistance of banks. The process of eliminating banks as intermediaries, known as
"disintermediation," could result in the loss of fee income, as well as the loss of customer deposits and the related income
generated from those deposits.

 The loss of these revenue streams and the lower cost deposits as a
source of funds could have a material adverse effect on the Corporation's financial condition and results of operations.

 A Change In Control Of The United States Government And Issues
Relating To Debt And The Deficit May Adversely Affect The Corporation

 The outcome of future elections could result in changes in control
of the federal government and bring significant changes (or uncertainty) in governmental policies, regulatory environments, spending sentiment
and many other factors and conditions, some of which could adversely impact the Corporation's business, financial condition and
results of operations.

 Negative Developments Affecting The Banking Industry, Including
Recent Bank Failures Or Concerns Regarding Liquidity, Have Eroded Customer Confidence In The Banking System And May Have A Material Adverse
Effect On The Corporation.

 Events impacting the banking industry, including the high-profile failure
or instability of certain banking institutions, have resulted and may continue to result in general uncertainty and eroded confidence
in the safety, soundness, and financial strength of the financial services sector. In particular, the bank failures highlighted the potential
serious impact of a financial institution unable to meet withdrawal requests by depositors. This has resulted in a growing concern about
liquidity in the banking industry, access to and volatile capital markets and reduced stock valuations for certain financial institutions.
Similar future events, including additional bank failures or bank instability, could directly or indirectly adversely impact our own liquidity,
access to capital markets, stock price, financial condition and results of operations. Further, these recent events may also result in:
greater regulatory scrutiny and enforcement; additional and more stringent laws and regulations for the financial services industry; increased
FDIC deposit insurance premiums or special FDIC assessments; and higher capital ratio requirements, which as a result could have a material
negative impact and adverse effect on our business, financial condition and results of operations.

 Other Events

 Natural Disasters, Acts Of War Or Terrorism, Domestic and International
Instability, Pandemics, and Other External Events Could Significantly Impact The Corporation's Business

 Severe weather, natural disasters, acts of war or terrorism, domestic
and international instability, pandemics, and other adverse external events could have a significant impact on the Corporation's
ability to conduct business. Such events could affect the stability of the Corporation's deposit base; impair the ability of borrowers
to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue,
and/or cause the Corporation to incur additional expenses. Severe weather or natural disasters, acts of war or terrorism, pandemics, or
other adverse external events, may occur in the future. Although management has established disaster recovery policies and procedures,
the occurrence of any such event could have a material adverse effect on the Corporation's business, financial condition, and results
of operations.

 Risks Associated With The Corporation's Common Stock

 The Corporation's Stock Price Can Be Volatile

 Stock price volatility may make it more difficult for shareholders
to resell their shares of common stock when they desire and at prices they find attractive. The Corporation's stock price can fluctuate
significantly in response to a variety of factors including, among other things:

 •

 Actual or anticipated variations in quarterly results of operations

 •

 Recommendations by securities analysts

 •

 Operating and stock price performance of other companies that investors deem comparable to the Corporation

 •

 News reports relating to trends, concerns, and other issues in the financial services industry

 •

 Perceptions in the marketplace regarding the Corporation and/or its competitors

 •

 New technology used, or services offered, by competitors

 •

 Significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by, or involving, the Corporation or its competitors

 •

 Changes in government regulations

 •

 Geopolitical conditions such as acts
 or threats of terrorism or military conflicts

 General market fluctuations, industry factors, and general economic
and political conditions and events, such as economic slowdowns or recessions, interest rate changes, or credit loss trends, could also
cause the Corporation's stock price to decrease regardless of operating results.

 The Trading Volume In The Corporation's Common Stock Is
Less Than That Of Other Larger Financial Services Companies

 The Corporation's common stock is listed for trading on the OTCQX
Best Market (OTCQX) under the symbol ENBP. The trading volume in its common stock is a fraction of that of other larger financial services
companies. A public trading market having the desired characteristics of depth, liquidity, and orderliness depends on the presence in
the marketplace of willing buyers and sellers of the Corporation's common stock at any given time. This presence depends on the
individual decisions of investors and general economic and market conditions over which the Corporation has no control. Given the lower
trading volume of the Corporation's common stock, significant sales of the Corporation's common stock, or the expectation
of these sales, could cause the Corporation's stock price to fall.

 An Investment In The Corporation's Common Stock Is Not
An Insured Deposit

 The Corporation's common stock is not a bank deposit and, therefore,
is not insured against loss by the FDIC, any other deposit insurance fund, or by any other public or private entity. Investment in the
Corporation's common stock is inherently risky for the reasons described in this "Risk Factors" section and elsewhere
in this report and is subject to the same market forces that affect the price of common stock in any company. As a result, an investor
in the Corporation's common stock may lose some or all of their investment.

 The Corporation's Articles Of Incorporation And Bylaws,
As Well As Certain Banking Laws, May Have An Anti-Takeover Effect

 Provisions of the Corporation's articles of incorporation and
bylaws, federal banking laws, including regulatory approval requirements, and the Corporation's stock purchase rights plan, could
make it more difficult for a third party to acquire the Corporation, even if doing so would be perceived to be beneficial to the Corporation's
shareholders. The combination of these provisions effectively inhibits a non-negotiated merger or other business combination that could
adversely affect the market price of the Corporation's common stock.

 Item 1B. Unresolved Staff Comments

 None

 Item 1C. Cybersecurity

 Cybersecurity, data privacy, and data protection are
critical to our business. In the ordinary course of our business, we collect and store certain confidential information such as the personal
information of depositors and borrowers and information about our employees, contractors, vendors, and suppliers. We rely heavily on the
secure processing, storage, and transmission of sensitive and confidential financial, personal, and other information in our computer
systems and networks.

 The Corporation has developed and implemented an Information
Security Program based on the Cybersecurity Framework (CSF) best practices and recommendations from the National Institute of Standards
and Technology (NIST), applicable regulatory guidance, and other industry standards. Components of the program include a risk assessment
program to identify, assess, and mitigate cybersecurity risk; a vendor management program to address third-party cybersecurity risk; a
business continuity program (BCP) to ensure continuity of operations; and an incident response program documenting cybersecurity incident
response and notification procedures. The Corporation's Information Security Officer (ISO) oversees the programs and reports on their statuses
to management committees including the Senior Leadership Committee, ERM Governance Committee, and Operational Risk Committees. The ISO
is part of the risk management function, reporting directly to the Chief Risk Officer, who in turn, reports directly to the Board of Directors.
The ISO has over twenty years of professional experience in cybersecurity, vendor management, business continuity, and incident response,
and holds multiple relevant professional certifications. The ISO provides periodic updates to the Board of Directors, including a comprehensive
annual report. The Information Security, Vendor Management, BCP, and Incident Response Programs are approved by the Board annually.

 The ISO maintains risk assessments for critical IT systems,
vendors, and processes. A third party cybersecurity risk assessment tool, as well as the FFIEC's Cybersecurity Assessment Tool (CAT) are
used annually to assess these

 risks. Third parties are assessed to address their risks according to service type, compliance risk, financial
risk, operational risk, and security risk. The level of due diligence and ongoing monitoring that is performed is based on that assessment.

 The ISO conducts training on cybersecurity risks for
all new employees, and at least annually for existing employees and the Board of Directors. In addition to this training program,
simulated phishing attempts are sent to employees on a regular basis to evaluate their understanding of these risks and to provide
supplemental training as needed. The Corporation uses data loss prevention and web filtering software to ensure malicious data does
not enter the Corporation's network, and sensitive information does not leave the network unless properly secured. Penetration tests and
vulnerability scanning are performed on a regular basis. We employ an in-depth, layered, defensive strategy with respect to our
products, services, and technology. We leverage people, processes, and technology to manage and maintain cybersecurity controls. We
employ various preventative and detective tools designed to monitor, block, and provide alerts regarding suspicious activity, as
well as to report on any suspected advanced persistent threats.

 Access to data on the Corporation's networks is granted only
if needed for job functions. The Information Security Department approves all changes to access and critical systems are subject to annual
review.

 An Incident Response Team that includes representatives from
key areas of the Corporation meets in the event of cybersecurity incidents. This Team receives special training, including an annual tabletop
exercise. The Team ensures the proper notifications are made to comply with all relevant laws, rules, regulations, and policies.

 During the year ended December 31, 2023, there were no cybersecurity
incidents that materially affected or are reasonably likely to materially affect the Corporation.

 Item 2. Properties

 As of December 31, 2023, ENB Financial Corp and Ephrata National Bank
owned and leased buildings in the normal course of business. The headquarters of ENB Financial Corp and main office of Ephrata National
Bank is at 31 East Main Street, Ephrata, Pennsylvania. As of December 31, 2023, the Bank owned 18 properties and leased five properties.
These properties are adequate for their intended and present utilization.

 For more information concerning the amounts recorded for premises and
equipment and commitments under current leasing agreements, see Notes D and Q of the Notes to Consolidated Financial Statements included
in Item 8. "Financial Statements and Supplementary Data" of this report on Form 10-K.

 Item 3. Legal Proceedings

 The nature of the Corporation's business generates a certain
amount of litigation involving matters arising in the ordinary course of business; however, in the opinion of management, there are no
material proceedings pending to which the Corporation is a party to, or which would be material in relation to the Corporation's
financial condition. There are no proceedings pending other than ordinary routine litigation incident to the business of the Corporation.
In addition, no material proceedings are pending, known to be threatened, or contemplated against the Corporation by governmental authorities.

 Item 4. Mine Safety Disclosures – Not Applicable

 Item 5.
 Market for Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities

 The Corporation has only one class of stock authorized, issued, and
outstanding, which consists of common stock with a par value of $0.10 per share. As of December 31, 2023, there were 24,000,000 shares
of common stock authorized with 5,739,114 shares issued, and 5,670,054 shares outstanding to approximately 822 shareholders.

 The Corporation's common stock is traded on a limited basis on
the OTCQX Best Market under the symbol "ENBP." Prices presented in the table below reflect high and low prices of actual transactions
known to management. Prices and dividends per share are adjusted for stock splits. Market quotations reflect inter-dealer prices, without
retail mark up, mark down, or commission and may not reflect actual transactions.

 2023

 2022

 High

 Low

 Dividend

 High

 Low

 Dividend

 First quarter

 $
 16.99

 $
 13.45

 $
 0.17

 $
 22.40

 $
 21.15

 $
 0.17

 Second quarter

 15.00

 12.45

 0.17

 22.40

 17.67

 0.17

 Third quarter

 14.90

 12.65

 0.17

 18.55

 16.10

 0.17

 Fourth quarter

 15.00

 12.64

 0.17

 18.03

 16.00

 0.17

 Dividends

 The Corporation, and before it the Bank, since 1973 has generally paid
quarterly cash dividends on or around March 15, June 15, September 15, and December 15 of each year. The Corporation currently expects
to continue the practice of paying regular quarterly cash dividends to its shareholders for the foreseeable future. However, future dividends
are dependent upon future earnings and legal restrictions. The dividend payments reflected above amount to a dividend payout ratio between
26.0% and 31.0% for 2022 and 2023, respectively. The dividend payout ratio is only one element of management's plan for managing
capital. Certain laws restrict the amount of dividends that may be paid to shareholders in any given year. In addition, under Pennsylvania
corporate law, the Corporation may not pay a dividend if, after issuing the dividend (1) the Corporation would be unable to pay its debts
as they become due, or (2) the Corporation's total assets would be less than its total liabilities plus the amount needed to satisfy
any preferential rights of shareholders. In addition, as declared by the Board of Directors, Ephrata National Bank's dividend restrictions
apply indirectly to ENB Financial Corp because cash available for dividend distributions will initially come from dividends Ephrata National
Bank pays to ENB Financial Corp. See Note M to the consolidated financial statements in this Form 10-K filing, for information that discusses
and quantifies this regulatory restriction.

 ENB Financial Corp offers its shareholders the convenience of a Dividend
Reinvestment Plan (DRP) and the direct deposit of cash dividends. The DRP gives shareholders registered with the Corporation the opportunity
to have their quarterly dividends invested automatically in additional shares of the Corporation's common stock. Shareholders who
prefer a cash dividend may have their quarterly dividends deposited directly into a checking or savings account at their financial institution.
For additional information on either program, contact the Corporation's stock registrar and dividend paying agent, Computershare
Shareholder Services, P.O. Box 505000, Louisville, KY 40233-5000.

 Purchases

 The following table details the Corporation's purchase of its
own common stock during the three months ended December 31, 2023.

 Issuer
Purchase of Equity Securites

 Total Number of

 Maximum Number

 Total Number

 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 *

 October 2023

 10,000

 13.12

 10,000

 120,510

 November 2023

 —

 —

 —

 120,510

 December 2023

 —

 —

 —

 120,510

 Total

 10,000

 * On October 21, 2020, 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 2019 plan. The first purchase of common stock under this plan occurred on October 28, 2020. By December 31, 2023,
a total of 79,490 shares were repurchased at a total cost of $1,357,412, for an average cost per share of $17.07.

 Recent Sales of Unregistered Securities and Equity Compensation
Plan

 The Corporation does not have an equity compensation plan and has not
sold any unregistered securities.

 Item 6. [Reserved]

 Item 7. 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 annual report. The financial condition and results
of operations presented are not indicative of future performance.

 Strategic Overview

 ENB Financial Corp and its wholly owned subsidiary, Ephrata
National Bank, are committed to remaining an independent community bank serving its market area. The Corporation's roots date back
to the April 11, 1881 charter granted to Ephrata National Bank by the Office of the Comptroller of the Currency. The Bank's growth
has been entirely organic over 142 years of existence. The Board and Management are committed to the principles and values that have served
the company well over its history and the desire is to produce strong financial results that will ensure trust from the Bank's customers
and favorable returns to the shareholders.

 Results of Operations

 Overview

 The year ended December 31, 2023, was positively impacted
by a number of items resulting in solid financial results. The Corporation grew interest income rapidly during 2023 as a result of interest-earning
asset growth in 2022 and 2023. The growth in interest income was also supported by the rapid increase in the Federal Funds rate and concurrently
the Prime rate as the Federal Reserve moved to combat inflation by increasing overnight rates dramatically. In conjunction with the rising
rate environment, the Corporation also experienced a rapid increase in interest expense during 2023 as the cost of funds on deposits and
borrowings increased dramatically. Even with the increased interest expense, net interest income still increased as interest income rose
faster than interest expense. The year was also marked by lower operating income and higher operating expenses with increases primarily
in salaries and benefits as well as software and technology costs.

 The Corporation recorded net income of $12,375,000 for the
year ended December 31, 2023, a $2,256,000, or 15.4% decrease from the year ended December 31, 2022. The earnings per share, basic and
diluted, were $2.19 in 2023, compared to $2.62 in 2022, a 16.4% decrease. The decrease in the Corporation's 2023 earnings was caused
primarily by a decline in non-interest income in addition to an increase in operating expenses that was partially offset by the increase
in net interest income and a decrease in the provision for credit losses.

 The Corporation's net interest income (NII) increased
by $3,456,000, or 6.8%, in 2023, compared to 2022. The increase in NII primarily resulted from an increase in interest and fees on loans
of $19,291,000, or 46.0%, and interest on securities available for sale of $1,387,000, or 10.5%. Interest expense on deposits and borrowings
increased by $18,462,000, or 343.4%, in 2023 compared to the prior year. The increasing interest rate environment has caused an increase
in asset yield, but also an increase in the cost of funds, which has resulted in these much higher levels of interest expense.

 The Corporation recorded a $520,000 provision for credit
losses in 2023, compared to $1,300,000 in 2022. The lower provision in 2023 was primarily caused by the adoption of ASU 2016-13 Financial
Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments as of January 1, 2023. This required standard
implements a methodology that reflects credit losses that are expected to occur over the remaining life of the financial asset. This
new current expected credit loss model (CECL) is based on possible economic scenarios as well as qualitative factors specific to the
Corporation. During 2023, the Corporation grew its loan portfolio by $169 million. However, during the third and fourth quarters, improved
economic factors resulted in a decrease in the allowance requirement resulting in a lower provision expense compared to 2022.

 Non-interest income excluding security and mortgage gains increased
by $1,176,000, or 9.6%, for the year ended December 31, 2023, compared to the prior year, due primarily to higher fees earned on an off-balance
sheet sweep account which had increased participation and higher balances in 2023 compared to the prior year. Mortgage gains decreased
in 2023 to $767,000, compared to $1,302,000 in 2022. The majority of mortgage production during 2023 were adjustable rate mortgages that
were generated and retained on the Corporation's balance sheet resulting in lower levels of mortgages originated for sale and lower
levels of gains on mortgages sold.

 Additionally, the Corporation recorded pre-tax losses on debt and equity
securities of $1,496,000 during 2023, compared to gains of $10,000 recorded in 2022. During 2023, the Corporation made the strategic decision
to update a partial portfolio restructuring and sell some low-yielding securities to reinvest in higher yielding loans. During the first
quarter of 2023, the Corporation sold approximately $28.1 million of municipal bonds that had a duration of 2.85 years with a book yield
of 2.96%. The loss on these sales was $435,000 with an earn-back period of approximately six months. During the second quarter
of 2023, the Corporation sold $33.0 million of bonds: $9.0 million of Corporate bonds, $15.3 million of U.S. Treasury bonds, and $8.7
million of U.S. Agency bonds. The Corporate bonds had a book yield of 5.66% with a duration of 3 months. The loss on sale
from this transaction was $24,000. The U.S. Treasury and Agency bonds resulted in a loss of $929,000. These bonds had a book
yield of 1.52% with a duration of 1.5 years. This strategic sale had an earn-back period of approximately 11 months. Proceeds from
all sales were used to fund higher yielding loan growth. New loans originated in the first half of 2023, had an average rate of
6.11% with an average life of 6 years.

 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.

 Key Performance Ratios

 Year ended December 31,

 2023

 2022

 Return on Average Assets

 0.65
 %

 0.83
 %

 Return on Average Equity

 12.03
 %

 13.63
 %

 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

 Other income

 Operating expenses

 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 2023, NII generated 81.0% of the Corporation's revenue stream, which consists of NII and non-interest income, compared
to 78.9% in 2022. This increase is a result of higher levels of interest-earning assets in 2023 compared to 2022 and lower non-interest
income as a result of losses on securities, lower levels of mortgage gains, and lower levels of bank owned life insurance income. 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.

 Net Interest Income

 Year ended December 31,

 2023

 2022

 $

 $

 Total interest income

 77,877

 55,959

 Total interest expense

 23,838

 5,376

 Net interest income

 54,039

 50,583

 Tax equivalent adjustment

 1,210

 Net interest income

 (fully taxable equivalent)

 54,672

 51,793

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

 The rates charged 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.
With the rapid increase in the short-term Federal Reserve rates in 2022 and 2023, asset yields have increased and the U.S. Treasury curve
increased dramatically on the short end but has been relatively flat on the long end resulting in an inverted yield curve.

 As a result of a larger balance sheet in 2023, with higher asset yields,
the Corporation's NII on a tax equivalent basis increased significantly but the Corporation's margin decreased to 2.94% for
year ended December 31, 2023, compared to 3.03% in 2022. Loan and investment yields were higher in 2023 due to the Fed rate increases
during the year positively impacting yields on variable rate instruments and increasing the yields on new volume. However, the rate on
interest-bearing liabilities increased at a faster pace resulting in the margin compression. The Corporation's NII on a tax equivalent
basis in 2023 increased over 2022, by $2,879,000, or 5.6%.

 The Corporation's overall cost of funds increased dramatically
during 2023 with higher core deposit interest rates as well as time deposit rates. Customer behavior changed during 2023 as well with
balances moving out of non-interest bearing accounts into higher costs accounts like time deposits. The average balance and interest rates
of borrowings was higher in 2023 compared to 2022, resulting in higher interest expense. The Corporation now carries a total of $40 million
of subordinated debt that was issued at the holding company; $20 million beginning on December 30, 2020, at a rate of 4.00%, and $20 million
beginning on July 22, 2022, at a rate of 5.75%.

 The following table provides an analysis of year-to-year changes in
net interest income 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)

 2023 vs. 2022

 Increase (Decrease)

 Due To Change In

 Net

 Interest

 Increase

 Balances

 Rates

 (Decrease)

 $

 $

 $

 INTEREST INCOME

 Interest on deposits at other banks

 (77
)

 Securities available for sale:

 Taxable

 (1,108
)

 3,982

 2,874

 Tax-exempt

 (998
)

 (881
)

 (1,879
)

 Total securities

 (2,106
)

 3,101

 Loans

 11,161

 8,219

 19,380

 Total interest income

 9,119

 12,222

 21,341

 INTEREST EXPENSE

 Deposits:

 9,804

 10,166

 Savings deposits

 (7
)

 1,120

 4,498

 5,618

 1,475

 14,541

 16,016

 Borrowings:

 Total borrowings

 1,687

 2,446

 Total interest expense

 3,162

 15,300

 18,462

 NET INTEREST INCOME

 5,957

 (3,078
)

 2,879

 In 2023, the Corporation's NII on an FTE basis increased by $2,879,000,
a 5.6% increase over 2022. Total interest income increased $21,341,000, or 37.3%, while interest expense increased $18,462,000, or 343.3%,
from 2022 to 2023. The FTE interest income from the securities portfolio increased by $995,000, or 6.9%, while loan interest income increased
$19,380,000, or 46.0%. During 2023, additional loan volume added $11,161,000 to net interest income, and higher yields primarily due to
the higher interest rate environment in 2023, caused an $8,219,000 increase. Lower balances in the securities portfolio caused a decrease
of $2,106,000 in net interest income, while higher yields on securities caused a $3,101,000 increase, resulting in a net increase of $995,000.

 The average balance of interest bearing liabilities increased by 18.7%
during 2023, driven by the growth in deposit and borrowings balances. Deposit rates increased in 2023 causing a significant increase in
interest expense. Higher interest rates contributed to $14,541,000 of increased interest expense while higher deposit balances caused
$1,475,000 of increased expense, resulting in a total increase in interest expense of $16,016,000.

 Interest-bearing demand deposits repriced causing a large increase
in interest expense due to the large quantity of accounts that were adjusted as customers chose higher yielding products. Demand deposit
interest expense increased a total of $10,166,000 in 2023, with $9,804,000 due to higher rates, while higher balances caused an increase
of $362,000. Lower balances in savings accounts caused a decrease of $7,000, while higher rates caused an increase of $239,000, resulting
in the net increase in interest expense of $232,000 on savings deposits. Time deposit balances increased rapidly throughout 2023, resulting
in higher interest expense of $1,120,000, while higher rates caused an increase of $4,498,000, resulting in a net increase of $5,618,000.

 The average balance of total borrowings increased by $48,475,000, or
55.2%, from December 31, 2022, to December 31, 2023. The increase in total borrowings increased interest expense by $1,687,000. Higher
rates on borrowings, affected by the Fed rate increases, resulted in higher interest expense of $759,000. The aggregate of these amounts
was an increase in interest expense of $2,446,000 related to total borrowings.

 The following table shows a more detailed analysis of net interest
income on an FTE basis shown 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. Additionally, the analysis provides the net
interest spread and the net yield on interest earning assets. The net interest spread is the difference between the yield on interest
earning assets and the interest rate paid on interest bearing liabilities. The net interest spread has the deficiency of not giving credit
for the non-interest bearing funds and capital used to fund a portion of the total interest earning assets. For this reason, management
emphasizes the net yield on interest earning assets, also referred to as the net interest margin (NIM). The NIM is calculated by dividing
net interest income on an FTE basis into total average interest earning assets. The NIM is generally the benchmark used by analysts to
measure how efficiently a bank generates NII.

 COMPARATIVE AVERAGE BALANCE SHEETS AND NET INTEREST INCOME

 (TAXABLE EQUIVALENT BASIS, DOLLARS IN THOUSANDS)

 2023

 2022

 Yield/

 Yield/

 Interest

 Rate

 Interest

 Rate

 $

 $

 %

 $

 $

 %

 ASSETS

 Interest earning assets:

 Federal funds sold and deposits at other banks

 23,620

 3.77

 35,710

 0.48

 Securities available for sale:

 Taxable

 373,311

 12,149

 3.25

 419,323

 9,275

 2.21

 Tax-exempt

 159,842

 3,347

 2.09

 202,868

 5,226

 2.58

 Total securities (d)

 533,153

 15,496

 2.91

 622,191

 14,501

 2.33

 Loans (a)

 1,293,734

 61,522

 4.76

 1,043,065

 42,142

 4.04

 7,950

 7.57

 5,894

 6.01

 Total interest earning assets

 1,858,457

 78,510

 4.23

 1,706,860

 57,169

 3.35

 Non-interest earning assets (d)

 41,184

 57,510

 Total assets

 1,899,641

 1,764,370

 LIABILITIES &

STOCKHOLDERS' EQUITY

 Interest bearing liabilities:

 488,008

 11,950

 2.45

 415,749

 1,784

 0.43

 337,659

 0.10

 365,460

 0.03

 208,320

 6,492

 3.12

 116,615

 0.75

 Borrowed funds

 136,243

 5,072

 3.72

 87,768

 2,626

 2.99

 Total interest bearing liabilities

 1,170,230

 23,838

 2.04

 985,592

 5,376

 0.55

 Non-interest bearing liabilities:

 615,169

 664,116

 Other

 11,413

 7,305

 Total liabilities

 1,796,812

 1,657,013

 Stockholders' equity

 102,829

 107,357

 Total liabilities & stockholders' equity

 1,899,641

 1,764,370

 Net interest income (FTE)

 54,672

 51,793

 Net interest spread (b)

 2.19

 2.80

 Effect of non-interest bearing funds

 0.75

 0.23

 Net yield on interest earning assets (c)

 2.94

 3.03

 (a)

 Includes balances of non-accrual loans and the recognition of any related interest income. Average balances also include net
deferred loan costs of $2,478,000 in 2023 and $2,239,000 in 2022. Such fees recognized through income and included in the interest amounts
totaled ($366,000) in 2023 and ($175,000) in 2022.

 (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 net interest income (FTE) by total interest earning assets.

 (d)

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

 The Corporation's average balance of securities decreased by
$89.0 million, or 14.3%, in 2023 compared to 2022 and the tax equivalent yield on investments increased by 58 basis points. Despite lower
balances, interest income on securities increased due to the increasing yield due to higher market rates.

 Average balances on loans increased by $250.7 million, or 24.0%, for
the year ended December 31, 2023, compared to the prior year. Loan yields increased by 72 basis points for the year and loan interest
income increased $19,380,000, or 46.0% as a result of the significantly higher balances and higher yields.

 The average balance of interest-bearing deposit accounts increased
by $136.2 million, or 15.2%, in 2023 compared to 2022. Interest-bearing demand deposits and time deposits increased rapidly during 2023
while the average balance of savings accounts declined as customers moved funds into higher yielding accounts. Coupled with higher average
balances, the interest rate paid on deposits increased as well resulting in an increase in interest expense on deposits of $16,016,000,
or 582.4%, for the year ended December 31, 2023.

 The Corporation's average balance on borrowed funds increased
by $48.5 million, or 55.2%, in 2023. The Corporation's borrowed funds consist of overnight borrowings, short and long-term 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 Bank.
The additional FHLB advances were used to fund loan growth and caused average borrowings to increase year-over-year. The rate paid on
borrowed funds increased by 73 basis points for 2023, compared to 2022 as a result of the second issuance of subordinated debt in July
of 2022 which carries a 5.75% rate, and additional FHLB advances which carried higher rates due to the Fed Funds rate increases throughout
2023.

 For the year ended December 31, 2023, the net interest spread decreased
by 61 basis points to 2.19%, compared to 2.80% for 2022. The effect of non-interest bearing funds increased to 75 basis points from 23
basis points when comparing both years. 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 2023 was 2.94%, compared to 3.03%
for 2022.

 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 $315,000 for credit losses related to loans, $205,000
for unfunded commitments, and $0 related to available-for-sale debt securities for the year ended December 31, 2023, compared to $1,300,000
related to loans for the year ended December 31, 2022. The provision expense was lower in 2023 due to the Corporation's adoption
of ASU 2016-13 which requires a reliance on forward economic indicators to project expected credit losses. Improved economic conditions
in the third and fourth quarters of 2023 resulted in a reduction in provision expense. As of December 31, 2023, the allowance as a percentage
of total loans was 1.12%, compared to 1.19% at December 31, 2022.

 Management continues to evaluate the allowance for credit losses in
relation to the growth or decline of the loan portfolio and its associated credit risk, and believes the provision and the allowance for
credit losses are adequate to provide for future losses. For further discussion of the calculation, see the "Allowance for Credit
Losses" section.

 Other Income

 Other income for 2023 was $12,699,000, a decrease of $865,000, or 6.4%,
compared to the $13,564,000 earned in 2022. The following table details the categories that comprise other income.

 OTHER INCOME

 2023 vs. 2022

 2023

 2022

 Increase (Decrease)

 $

 $

 $

 %

 Trust and investment services

 2,883

 2,643

 9.1

 Service charges on deposit accounts

 1,378

 1,348

 2.2

 Other fees

 3,368

 1,590

 1,778

 111.8

 Commissions

 3,618

 3,663

 (45
)

 (1.2
)

 Net (losses) gains on debt and equity securities

 (1,496
)

 (1,506
)

 (15,060.0
)

 Gains on sale of mortgages

 1,302

 (535
)

 (41.1
)

 Earnings on bank-owned life insurance

 1,583

 (625
)

 (39.5
)

 Other miscellaneous income

 1,223

 1,425

 (202
)

 (14.2
)

 Total other income

 12,699

 13,564

 (865
)

 (6.4
)

 Trust and investment services income increased by 9.1% from 2022 to
2023 primarily as a result of higher income on the trust services side which increased by $366,000, or 21.7%. Service charges on deposit
accounts increased by $30,000, or 2.2% compared to the prior year and other fees increased by $1,778,000, or 111.8% as a result of
higher fees on a third party sweep product in 2023. The Corporation sets rates on this sweep product and retains a certain percentage
of this rate which is recorded as other income. Commissions remained stable for the year ended December 31, 2023, compared to 2022. Gains
on debt and equity securities were lower in 2023 driven by the strategic sale of some investments in order to fund much higher yielding
loan growth. The losses on these securities will be recovered in fewer than twelve months due to the disparity in rate between the investments
and newly issued loans at much higher rates. Mortgage gains were lower in 2023, by $535,000, or 41.1%, due to rapid increases in interest
rates which negatively impacted the margins on mortgages sold. Additionally, more mortgage originations in 2023 were in the form of adjustable-rate
mortgages held on the Corporation's balance sheet as opposed to 2022 when most mortgage originations were fixed-rate and sold on
the secondary market. Holding mortgages on balance sheet results in interest income as opposed to an immediate gain on sale when mortgages
are sold in the secondary market. Earnings on bank-owned life insurance (BOLI) decreased by $625,000, or 39.5%, year-over-year primarily
attributed to two BOLI payouts in the fourth quarter of 2022 that were not replicated in 2023. The Corporation purchased and is the beneficiary
of all BOLI policies taken out on a group of its former directors and current and former officers. Due to the death of two participants
during 2022, the Corporation recorded BOLI income of $678,000. Other miscellaneous income decreased $202,000, or 14.2% in 2023 compared
to 2022 due to non-recurring income items in 2022.

 Operating Expenses

 Operating expenses for 2023 were $51,407,000, an increase of $5,478,000,
or 11.9%, compared to $45,929,000 in 2022. The following table provides details of the Corporation's operating expenses for the
last two years along with the percentage increase or decrease compared to the previous year.

 OPERATING EXPENSES

 2023 vs. 2022

 2023

 2022

 Increase (Decrease)

 $

 $

 $

 %

 Salaries and employee benefits

 30,152

 27,324

 2,828

 10.3

 Occupancy expenses

 3,259

 2,846

 14.5

 Equipment expenses

 1,302

 1,240

 5.0

 Advertising & marketing expenses

 1,404

 1,083

 29.6

 Computer software & data processing expenses

 6,891

 5,591

 1,300

 23.3

 Shares tax

 1,167

 1,380

 (213
)

 (15.4
)

 Professional services

 3,198

 2,743

 16.6

 Other operating expenses

 4,034

 3,722

 8.4

 Total operating expenses

 51,407

 45,929

 5,478

 11.9

 Salaries and employee benefits are the largest category of operating
expenses. For the year 2023, salaries and benefits increased $2,828,000, or 10.3%, compared to 2022. The increase in salary costs was
primarily due to additions to staff as well as increasing costs to fill empty positions due to the competitive job market. Occupancy and
equipment expenses combined increased 11.6%, from the prior year mostly due to higher depreciation costs related to new facilities and
equipment and increased lease expenses. Advertising and marketing expenses increased by $321,000, or 29.6%, as a result of higher levels
of advertising costs as the Corporation markets to new prospects in newer markets as well as promotes various products and services. Computer
software and data processing expenses are growing at a rapid pace, 23.3% year-over year, as a result of higher technology costs and new
bank-wide initiatives that rely heavily on software platforms and additional costs related to system conversions the Corporation implemented
in 2023. Shares tax expense is based on the Corporation's level of shareholders' equity from the prior year and has decreased by 15.4%,
year-over-year commensurate with the decline in shareholders' equity from 2021 to 2022. Professional services expenses increased by 16.6% in 2023, compared to the
prior year driven higher by an increase in outside services costs primarily related to project management costs related to system conversions.
Other operating expenses increased by 8.4% year-over-year primarily as a result of higher FDIC insurance costs and higher expenses due
to fraud-related charge-offs.

 Income Taxes

 Nearly all of the Corporation's income is taxed at a corporate
rate of 21% for Federal income tax purposes. The Corporation is also subject to Pennsylvania Corporate Net Income Tax; however, very limited
taxable activity is conducted at the corporate level. The Corporation's wholly owned subsidiary, Ephrata National Bank, is not subject
to state income tax, but does pay Pennsylvania Bank Shares Tax. The Bank Shares Tax expense appears on the Corporation's Consolidated
Statements of Income under operating expenses.

 Certain items of income are not subject to Federal income tax, such
as tax-exempt interest income on loans and securities, and increases in the cash surrender value of bank-owned life insurance; therefore,
the effective income tax rate for the Corporation is lower than the stated tax rate. The effective tax rate is calculated by dividing
the Corporation's provision for income tax by the pre-tax income for the applicable period.

 For the year ended December 31, 2023,
the Corporation recorded a tax provision of $2,436,000, compared to $2,287,000 for 2022.
This increase in tax expense can be attributed to lower levels of tax-free income. The effective tax rate for the Corporation was
16.4% for 2023 and 13.5% for 2022. The Corporation's effective tax rate is lower than the 21% corporate rate as a result of tax-free
assets that the Corporation holds on its balance sheet. The majority of the Corporation's tax-free assets are in the form of obligations
of states and political subdivisions, referred to as municipal bonds. The Corporation also has a relatively small component of tax-free
municipal loans.

 Financial Condition

 Balance Sheet Overview and Liquidity

 The Corporation maintains liquid assets at
adequate levels in order to meet the needs of our balance sheet. Our primary source of liquidity is core deposits and our available-for-sale
investment portfolio both of which provide more than enough liquidity to fund loans to customers and any other funding needs.

 A portion of our liquidity consists of cash
and cash equivalents and borrowings. At December 31, 2023, cash and equivalents amounted to $89.0 million, an increase
of $51.4 million, or 136.9%, from balances at December 31, 2022. Our primary sources of cash are principal repayments on loans, proceeds
from the sales, calls, and maturities of investment securities, principal repayments of mortgage-backed securities and asset-backed securities,
and increases in deposit accounts. As of December 31, 2023, we had borrowings outstanding from the FHLB of $101.2 million
and subordinated debt of $39.6 million.

 At December 31, 2023, the Corporation had
$614.5 million in loan commitments outstanding, which included $91.5 million in firm loan commitments, $504.7 million in unused lines
of credit, and open letters of credit of $18.3 million. Certificates of deposit due within one year totaled $247.2 million, or 82.3% of
certificates of deposit. We believe, based on past experience that a significant portion of our certificates of deposit will remain with
us upon maturity and we have ample liquidity outside of these funds. We have the ability to attract and retain deposits by adjusting the
interest rates offered.

 As reported in the Consolidated Statements
of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing or financing cash flows. Net cash
provided by operating activities was $30.1 million and $21.6 million for the years ended December 31, 2023 and 2022, respectively. Net
cash used for investing activities was $90.3 million and $315.8 million in fiscal years 2023 and 2022, respectively, reflecting our loan
and investment security activities in the respective periods. Cash provided by financing activities amounted to $111.6 million and $173.3
million for years ended December 31, 2023 and 2022, respectively primarily representing increases in our core deposits through the year.

 Investment Securities

 The Corporation classifies all of its debt securities as available
for sale and reports the portfolio at fair market value. As of December 31, 2023, the Corporation had $469.0 million of debt and equity
securities, compared to $538.3 million at December 31, 2022, a decrease of $69.2 million, or 12.9%.

 The largest movements within the securities portfolio were shaped by
market factors, such as:

 slope of the U.S. Treasury curve and projected forward rates

 interest spread versus U.S. Treasury rates on the various securities

 pricing of the instruments, including supply and demand for the product

 structure of the instruments, including duration and average life

 portfolio weightings versus policy guidelines

 prepayment speeds on mortgage-backed securities and collateralized mortgage obligations

 credit risk of each instrument and risk-based capital considerations

 Federal income tax considerations with regard to obligations of tax-free states and political subdivisions.

 The Corporation's U.S. Treasury sector decreased by $14.5 million,
or 44.4%, since December 31, 2022. U.S. Treasuries represent a safe credit at a market appropriate yield which added some diversity to
the portfolio. The Corporation's U.S. government agency sector decreased by $7.2 million, or 29.2%, since December 31, 2022. The
decreases have been due to bond sales throughout the year as part of the portfolio restructuring. Agency MBS and CMO investments in total
have declined by $12.8 million, or 17.6%. These bonds pay monthly principal and interest and the Corporation has not reinvested into this
sector, so the fair value has been declining. The Corporation began investing in non-agency MBS and CMO instruments in 2022 as a way to
achieve a higher yield with bonds that are well protected from a credit standpoint. As of December 31, 2023, this sector stood at $56.2
million, an increase of $5.9 million year over year. There were not concentrations of issuers greater than 10% of the securities portfolio.

 The Corporation's asset-backed securities (ABS) decreased since
December 31, 2022, by $7.9 million, or 10.8%. ABS securities are floating rate student loan pools which are instruments that perform well
in a rates-up environment and offset the interest rate risk of the longer fixed-rate municipal bonds. These securities provide a variable
rate return above the overnight Federal funds rate in a safe investment with a risk rating very similar to that of U.S. Agency
bonds. The asset-backed securities generally provide monthly principal and interest payments to complement the Corporation's ongoing
cash flows. Management views the ABS sector as a safe, higher yielding option than cash, with the qualities of cash in a rates-up environment.

 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
but have a higher yield because of the longer interest rate risk. These instruments also experience significant fair market value gains
and losses when interest rates decrease and increase. The Corporation sold some municipal bonds during 2023 and the decrease in market interest rates in the fourth quarter of 2023 caused the
unrealized losses on these bonds to decrease. As a result, the fair value of this sector
declined by $18.4 million, or 8.9% from December 31, 2022, to December 31, 2023. Municipal bonds represented 40.8% of the debt securities
portfolio as of December 31, 2023, compared to 38.9% as of December 31, 2022. The largest geographical concentrations as of December 31,
2023, were obligations of states and political subdivisions located in the states of Pennsylvania and California.

 As of December 31, 2023, the fair value of the
Corporation's corporate bonds decreased by $14.6 million, or 21.0%, from balances at December 31, 2022. Corporate bonds add
diversity to the portfolio and provide strong yields for short maturities; however, by their very nature, corporate bonds carry a
higher level of credit risk should the entity experience financial difficulties. The fair value of corporate bonds decreased
primarily as a result of maturing bonds during 2023.

 The following table presents investment securities at December 31,
2023 by maturity, and the weighted average yield for each maturity presented. Actual maturities may differ from contractual maturities
because of prepayment or call options embedded in the securities. The yields presented are calculated using tax-equivalent interest and
the amortized cost.

 SECURITIES PORTFOLIO MATURITY ANALYSIS

 Within

 1 - 5

 5 - 10

 Over 10

 1 Year

 Years

 Years

 Years

 Total

 %

 %

 %

 %

 %

 $

 Yield

 $

 Yield

 $

 Yield

 $

 Yield

 $

 Yield

 —

 —

 19,869

 1.35

 —

 —

 —

 —

 19,869

 1.35

 —

 —

 19,400

 0.78

 —

 0.00

 —

 —

 19,400

 0.78

 1.32

 24,703

 2.00

 18,457

 3.41

 2.96

 43,753

 2.60

 1,797

 2.44

 19,299

 1.84

 2.03

 —

 —

 21,841

 1.90

 Non Agency MBS/CMO

 13,640

 5.67

 18,037

 6.27

 26,064

 3.61

 1,540

 4.90

 59,281

 4.93

 4,007

 5.97

 25,678

 6.43

 36,706

 6.09

 —

 —

 66,391

 6.21

 3,162

 2.47

 42,311

 1.77

 15,649

 3.89

 —

 —

 61,122

 2.35

 1,161

 1.27

 31,607

 2.38

 134,608

 1.97

 44,024

 2.24

 211,400

 2.08

 Total securities available for sale

 23,959

 4.81

 200,904

 2.76

 232,229

 3.05

 45,965

 2.34

 503,057

 2.95

 Loans

 Net loans outstanding increased $167.9 million, or 14.3%, from $1.18
billion at December 31, 2022, to $1.34 billion at December 31, 2023. All loan categories showed an increase in balances over the prior
period. The Corporation's strategic plan specifically focused on loan growth while maintaining quality of credit standards. This
focus resulted in loan growth across all loan segments in 2023.

 Agriculture loans increased to $257.3 million at December 31, 2023,
from $238.7 million at January 1, 2023, a 7.8% increase. Business loans increased by $17.9 million at December 31, 2023 from $336.3 million
at January 1, 2023, or 5.3%.

 Consumer loans not secured by real estate represent a very small portion
of the Corporation's loan portfolio, at $6.4 million as of December 31, 2023 and $5.9 million as of January 1, 2023. These loans
consist of personal loans, automobile loans, and other consumer-related loans. Home Equity loans increased by $8.3 million at December
31, 2023 from $98.9 million at January 1, 2023, or 8.4%. Non-Owner Occupied CRE loans increased by $23.8 million at December 31, 2023
from $111.3 million at January 1, 2023, or 21.4%.

 The Residential Real Estate category represents the largest group of
loans for the Corporation. The Residential Real Estate category of total loans increased from $397.3 million on January 1, 2023, to $497.6
million on December 31, 2023, a 25.2% increase. This category includes closed-end fixed rate or adjustable rate residential real estate
loans secured by 1-4 family residential properties, including first and junior liens. The majority of mortgage production during 2023
were adjustable rate mortgages that were generated and retained on the Corporation's balance sheet resulting in lower levels of
mortgages originated for sale and lower levels of gains on mortgages sold.

 The following tables show the maturities for the loan portfolio as
of December 31, 2023, by time frame for the major categories, and also the loans, which are floating or fixed, maturing after one year.

 LOAN MATURITIES

 Due After

 Due After

 One Year

 Five Years

 Due in One

 Through

 Through

 Due After

 Year or Less

 Five Years

 15 Years

 15 Years

 Total

 $

 $

 $

 $

 $

 1,573

 34,823

 77,711

 143,266

 7,804

 98,148

 107,785

 140,515

 354,252

 1,545

 4,695

 —

 6,392

 5,434

 27,624

 73,763

 107,176

 5,112

 10,903

 47,778

 71,324

 13,971

 7,856

 51,018

 424,708

 497,553

 Total amount due

 30,360

 161,859

 312,068

 853,576

 1,357,862

 FIXED AND FLOATING RATE LOANS DUE AFTER ONE YEAR

 Floating or

 Fixed Rates

 Adjustable Rates

 Total

 $

 $

 $

 19,058

 236,741

 255,799

 98,150

 248,298

 346,448

 3,363

 1,484

 4,847

 30,808

 76,013

 106,821

 20,442

 109,563

 130,005

 149,977

 333,605

 483,582

 Total amount due

 321,798

 1,005,704

 1,327,502

 The majority of the Corporation's fixed-rate loans have a maturity
date longer than five years. The primary reason for the longevity of the portfolio is the high percentage of real estate loans, which
typically have maturities of 15 or 20 years. Out of all the loans due after one year, $321.8 million, or 24.2%, are fixed-rate loans as
of December 31, 2023. These loans will not reprice to a higher or lower interest rate unless they mature or are refinanced by the borrower.
The remaining $1,005.7 million, or 75.8% of loans due after one year, are made up of loans that are true floating loans and loans that
will reprice at a predetermined time in the amortization of the loan. True floating rate loans that would immediately reprice according
to changes in the Prime rate are favorable in reducing the Corporation's total exposure to interest rate risk and fair value risk
should interest rates increase.

 For more details regarding how the length of the loan portfolio and
its repricing affects interest rate risk, please see Item 7A Quantitative and Qualitative Disclosures about Market Risk.

 Non-Performing Assets

 Non-performing assets include:

 Non-accrual loans

 Loans past due 90 days or more and still accruing

 Other real estate owned

 NON-PERFORMING ASSETS

 2023

 2022

 $

 $

 Non-accrual loans

 2,758

 4,178

 Loans past due 90 days or more and still accruing

 Total non-performing loans

 3,277

 4,347

 Other real estate owned

 —

 —

 Total non-performing assets

 3,277

 4,347

 Non-accrual loans to total loans

 0.20%

 0.35%

 Non-performing loans to total loans

 0.24%

 0.36%

 Allowance for credit losses to total loans

 1.12%

 1.19%

 Allowance for credit losses to non-accrual loans

 550.25%

 338.70%

 Allowance for credit losses to non-performing loans

 463.11%

 325.53%

 Non-performing assets decreased by $1,070,000, or 24.6%, from December 31, 2022, to December 31, 2023, primarily
due to three unrelated non-accrual loans that paid off during the year. As of December 31, 2023, there were twelve loans to ten unrelated
borrowers totaling $2,758,000 on non-accrual compared to twelve loans to ten unrelated borrowers totaling $4,178,000 as of December 31,
2022. The largest non-accrual relationship at December 31, 2023, was a commercial mortgage to a single borrower with a balance of $801,000.

 Loans past due 90 days or more and still accruing increased by $350,000,
or 207.1%, during 2023 partially offsetting the decrease in non-accrual loans. This increase was primarily the result of a residential
mortgage loan for $356,000 that was past due by more than 90 days as of the end of 2023. There were only a total of four loans that reached
the 90 days past due level which is a very small number of loans.

 Management continues to monitor delinquency trends and the level of
non-performing loans as a leading indicator of future credit risk. At this time, management believes that the potential for material losses
related to non-performing loans remains low but is likely to trend higher in recessionary periods. It is far more likely the level of
non-performing assets would increase than decline to lower levels. The level of the Corporation's non-performing loans remains very
low relative to the size of the portfolio and relative to peers.

 As of December 31, 2023 and 2022, the Corporation had no properties
classified as other real estate owned (OREO). Expenses related to OREO are included in other operating expenses and gains or losses on
the sale of OREO are included in other income on the Consolidated Statements of Income.

 Allowance for Credit Losses

 The allowance for credit losses is established to cover any losses
inherent in the loan portfolio. Management reviews the adequacy of the allowance each quarter based upon a detailed analysis and calculation
of the allowance for credit losses. This calculation is based upon a systematic methodology for determining the allowance for credit losses
in accordance with U.S. generally accepted accounting principles. The calculation includes estimates and is based upon losses inherent
in the loan portfolio.

 The calculation, and detailed analysis supporting it, emphasizes the level of delinquent, non-performing and classified
loans. The allowance calculation includes specific provisions for non-performing loans and general allocations to cover anticipated losses
on all loan types based on historical losses. Based on the quarterly credit loss calculation, management will adjust the allowance for
credit losses through the provision as necessary. Changes to the allowance for credit losses during the year are primarily affected by
three events:

 Charge off of loans considered not recoverable

 Recovery of loans previously charged off

 Provision for credit losses

 The Corporation's strong credit and collateral policies have
been instrumental in producing a favorable history of loan losses. In recent years, the Corporation has primarily recorded provision expenses
in order to account for the growth in the loan portfolio as well as make adjustments for increasing levels of delinquencies and classified
loans.

 The Net Charge-Off table below shows the net charge-offs for each segment
of the Corporation's loan portfolio as of December 31, 2023.

 Net Charge-Offs

 2023

 $

 Loans charged-off:

 —

 —

 —

 —

 —

 Total loans charged-off

 Recoveries of loans previously charged-off

 —

 —

 Total recoveries

 Net charge-offs (recoveries)

 —

 (71
)

 (11
)

 —

 —

 (8
)

 Total net charge-offs (recoveries)

 (30
)

 Average loans outstanding

 246,124

 347,473

 5,011

 102,895

 125,042

 455,199

 Total average loans outstanding

 1,281,744

 Net charge-offs (recoveries) as a % of average loans outstanding

 (0.03%
)

 0.00%

 1.20%

 0.00%

 0.00%

 0.00%

 Total net charge-offs (recoveries) as a % of average loans outstanding

 0.00%

 The Net Charge-Off table below shows the net charge-offs for each segment of the Corporation's loan portfolio
as of December 31, 2022.

 Net Charge-Offs

 2022

 $

 Loans charged-off:

 —

 Total loans charged-off

 Recoveries of loans previously charged-off

 Total recoveries

 Net charge-offs (recoveries)

 (10
)

 Total net charge-offs (recoveries)

 Average loans outstanding

 435,738

 416,824

 184,483

 6,020

 Total average loans outstanding

 1,043,065

 Net charge-offs (recoveries) as a % of average loans outstanding

 0.02%

 0.00%

 0.00%

 0.23%

 Total net charge-offs (recoveries) as a % of average loans outstanding

 0.01%

 The following table provides the allocation of the Corporation's
allowance for credit losses by major loan classifications. In connection with the adoption of ASU 2016-13, the Corporation made changes
to the loan portfolio segments to align with the methodology applied in determining the allowance under CECL. Refer to Note C Loans and
Allowance for Credit Losses for further discussion of these portfolio segments. The new segmentation consists of: Agriculture, Business
Loans, Consumer Loans, Home Equity, Non-Owner Occupied Commercial Real Estate, and Residential Real Estate.

 The percentage of loans indicates the percentage of the loan portfolio
represented by the indicated loan type as of December 31, 2023.

 ALLOCATION OF RESERVE

 2023

 % of

 $

 Loans

 3,106

 19.0

 2,684

 26.1

 0.5

 2,341

 7.9

 10.0

 5,872

 36.5

 Total allowance for credit losses

 15,176

 100.0

 As of December 31, 2023, Residential Real
Estate loans represent 36.6% of total loans with 38.7% of the allowance covering these loans. Business Loans represent 26.1% of
total loans with 17.7% of the allowance covering these loans. Agriculture Loans represent 19.0% of total loans with 20.5% of the
allowance covering these loans. Non-Owner Occupied CRE represents 10.0% of total loans with 5.4% of the allowance covering these
loans. Home Equity Loans represent 7.9% of total loans with 15.4% of the allowance covering these loans. The amount of allowance
allocated to consumer loans has always been very small as generally consumer loans more than 90 days delinquent are charged off.

 The percentage of loans indicates the percentage of the loan portfolio
represented by the indicated loan type as of December 31, 2022.

 ALLOCATION OF RESERVE

 2022

 % of

 $

 Loans

 6,074

 43.7

 5,442

 43.8

 2,151

 12.0

 0.5

 Unallocated

 —

 Total allowance for loan losses

 100.0

 Deposits

 The Corporation's total ending deposits at December 31, 2023,
increased by $87.8 million, or 5.4%, from December 31, 2022. Customer deposits are the Corporation's primary source of funding for
loans and securities. Deposit balances grew rapidly in 2022 and prior years due to the very low interest rate environment and the few
options available for customers to earn a return on their investment. During 2023, the Corporation grew deposits at a slower pace due
to the rapidly rising rate environment and the financial/product options available to customers.

 The Deposits by Major Classification table, shown below, provides the
average balances of each category for December 31, 2023 and December 31, 2022.

 DEPOSITS BY MAJOR CLASSIFICATION

 Average balances and average rates paid on deposits by major category are summarized as follows:

 2023

 2022

 $

 %

 $

 %

 Non-interest bearing demand

 615,169

 —

 664,116

 —

 Interest-bearing demand

 214,100

 4.12

 117,123

 1.24

 NOW accounts

 110,652

 0.34

 131,613

 0.05

 Money market deposit accounts

 163,256

 1.69

 167,013

 0.16

 337,659

 0.10

 365,460

 0.03

 208,320

 3.12

 116,615

 0.75

 1,649,156

 1,561,940

 The average balance of the Corporation's core
deposits decreased by $4.5 million, or 0.3%, from December 31, 2022, to December 31, 2023. Non-interest bearing demand accounts decreased
by $48.9 million, or 7.4%, and are the Corporation's cheapest source of funding for balance sheet growth. Interest-bearing demand
accounts grew by $97.0 million, or 82.8%, as a result of participating in the reciprocal program for an off-balance sheet sweep product.
Money market account average balances decreased by $3.8 million, or 2.2%, and savings accounts decreased by $27.8 million, or 7.6%, from
December 31, 2022, to December 31, 2023. Time deposits are typically a more rate-sensitive product making them a less reliable source
of funding. Time deposits fluctuate as consumers search for the best rates in the market, with less allegiance to any particular financial
institution. In 2023, time deposits grew significantly, by $91.7 million, or 78.6%, compared to average balances at December 31, 2022.

 As of December 31, 2023, time deposits of $250,000 or more made up
17.7% of the total time deposits. This compares to 7.2% on December 31, 2022. The total dollar amount of time deposits of $250,000 or
more increased $49,446,000, or 510.5%, from December 31, 2022 to December 31, 2023. Since time deposits of $250,000 or more are made up
of relatively few customers with large dollar accounts, management monitors these accounts closely due to the potential for these deposits
to rapidly increase or decrease. The following table provides the total amount of time deposits of $250,000 or more for the past two years
by maturity distribution.

 MATURITY OF TIME DEPOSITS OF $250,000 OR MORE

 2023

 2022

 $

 $

 Three months or less

 6,359

 1,940

 Over three months through six months

 23,297

 Over six months through twelve months

 14,013

 Over twelve months

 15,462

 6,351

 Total

 59,131

 9,685

 As of December 31, 2023 and 2022, the total uninsured deposits of the
Corporation were approximately $226,771,000 and $380,064,000, or 13.1% and 23.2% of total deposits, respectively. 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.

 Borrowings

 Total borrowings were $140.8 million as of December 31, 2023, and $113.4
million as of December 31, 2022. The Corporation had no short-term borrowings at December 31, 2023, and had $16.0 million in short-term
borrowings at December 31, 2022. Long-term borrowings with the Federal Home Loan Bank (FHLB) increased to $101.2 million as of December
31, 2023, from $58.0 million as of December 31, 2022. These borrowings are used as a secondary source of funding and to mitigate interest
rate risk. The increase in long-term FHLB borrowing balances during the year related to strong loan growth and a desire to hedge against
potential deposit runoff as a result of the challenging economic environment. As of December 31, 2023, all the borrowings of FHLB were
fixed-rate loans. The Corporation continues to be well under the FHLB maximum borrowing capacity which is $687.7 million as of December
31, 2023.

 In addition to the long-term advances funded through the FHLB, the
Corporation previously completed two sales of a subordinated debt note offering. The Corporation sold $20.0 million of subordinated debt
notes in December 2020 with a maturity date of December 30, 2030 and another $20.0 million in July 2022 with a maturity date of September
30, 2032. These notes are non-callable for 5 years and carry a fixed interest rate of 4.00% and 5.75%, respectively, 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 December 31, 2023, $33.0 million of funds were invested in the Bank. The Corporation paid an issuance fee of 2% 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.

 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 December 31, 2023

 Capital Ratios

 Capitalized

 Capitalized

 Total Capital to Risk-Weighted Assets

 14.8%

 N/A

 N/A

 Bank

 14.4%

 8.0%

 10.0%

 Tier 1 Capital to Risk-Weighted Assets

 10.9%

 N/A

 N/A

 Bank

 13.3%

 6.0%

 8.0%

 Common Equity Tier 1 Capital to Risk-Weighted Assets

 10.9%

 N/A

 N/A

 Bank

 13.3%

 4.5%

 6.5%

 Tier 1 Capital to Average Assets

 7.7%

 N/A

 N/A

 Bank

 9.4%

 4.0%

 5.0%

 As of December 31, 2022

 Total Capital to Risk-Weighted Assets

 15.0%

 N/A

 N/A

 Bank

 14.5%

 8.0%

 10.0%

 Tier I Capital to Risk-Weighted Assets

 10.9%

 N/A

 N/A

 Bank

 13.4%

 6.0%

 8.0%

 Common Equity Tier I Capital to Risk-Weighted Assets

 10.9%

 N/A

 N/A

 Bank

 13.4%

 4.5%

 6.5%

 Tier I Capital to Average Assets

 7.6%

 N/A

 N/A

 Bank

 9.3%

 4.0%

 5.0%

 As of December 31, 2023 the Bank's Tier 1 Leverage Ratio stood
at 9.4% while the Corporation's Tier 1 Leverage Ratio was 7.7%. Tier 1 Capital levels at the Corporation level were 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.

 Since the Corporation elected to opt-out of the requirement to include
most components of accumulated other comprehensive income in calculating regulatory capital, the significant devaluation of the investment
portfolio that resulted in a higher level of unrealized losses, has not affected the regulatory capital. However, the changes in investment
unrealized gains and losses do impact tangible capital on the balance sheet on an ongoing basis and was adversely impacted by the dramatic
increase in market interest rates during 2022 and 2023.

 Contractual Cash Obligations

 The Corporation has a number of contractual obligations that arise
from the normal course of business. The following table summarizes the contractual cash obligations of the Corporation as of December
31, 2023, and shows the future periods in which settlement of the obligations is expected. The contractual obligation numbers below do
not include accrued interest. Refer to Note O to the Consolidated Financial Statements referenced in the table for additional details
regarding these obligations.

 CONTRACTUAL OBLIGATIONS

 Less than

 1-3

 4-5

 1 year

 years

 years

 5 years

 Total

 $

 $

 $

 $

 $

 Time deposits (Note F)

 249,641

 59,959

 24,100

 —

 333,700

 Borrowings (Notes G and H)

 17,406

 63,982

 59,396

 —

 140,784

 Operating Leases (Note Q)

 1,278

 2,781

 Total contractual obligations

 267,504

 124,526

 83,957

 1,278

 477,265

 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 liquidity section to follow, 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 December 31, 2023. For further details regarding off-balance sheet arrangements, refer to Note O to the Consolidated
Financial Statements.

 OFF-BALANCE SHEET ARRANGEMENTS

 2023

 $

 Commitments to extend credit:

 Revolving home equity loans

 218,462

 Construction loans

 33,789

 Real estate loans

 107,563

 Business loans

 229,137

 Consumer loans

 1,451

 Other

 5,767

 Standby letters of credit

 18,339

 Total

 614,508

 Critical Accounting Policies

 The presentation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make estimates and assumptions that affect many
of the reported amounts and disclosures. Actual results could differ from these estimates.

 Allowance for Credit Losses

 A material estimate that is particularly susceptible to significant
change is the determination of the allowance for credit losses. Management believes that the allowance for credit losses is adequate and
reasonable. The Corporation's methodology for determining the allowance for credit losses is described in an earlier section of
Management's Discussion and Analysis. Given the very subjective nature of identifying and valuing credit losses, it is likely that
well-informed individuals could make materially different assumptions and, therefore, calculate a materially different allowance amount.
Management uses available information to recognize losses on loans; however, changes in economic conditions may necessitate revisions.
In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Corporation's
allowance for credit losses. Such agencies may require the Corporation to recognize adjustments to the allowance based on their judgments
of information available to them at the time of their examination.

 Sensitivity Analysis

 The below table indicates the impact to the allowance for credit losses
on loans if the factors described below were adjusted in the Corporation's CECL model as of December 31, 2023.

 Increase/(Decrease) ($)

 Adjustment Factor

 Economic Forecast

 (2,381)

 If S1 forecasts were used instead of weighted upside/downside/baseline scenarios

 Economic Forecast

 (476)

 If Baseline forecasts were used instead of weighted upside/downside/baseline scenarios

 Economic Forecast

 If 40/30/30 weighted scenarios were used for baseline/S1/S3

 Economic Forecast

 6,163

 If S3 forecasts were used instead of weighted upside/downside/baseline scenarios

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 As a financial institution, the Corporation is subject to four primary
market risks: Credit risk, liquidity risk, interest rate risk, and fair value risk. The Board of Directors has established an Asset Liability
Management Committee (ALCO) to measure, monitor, and manage these four 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 Corporation's Strategic Plan goals.

 For discussion on credit risk, refer to the sections on non-performing
assets, allowance for credit losses, Note C, and Note P to the Consolidated Financial Statements.

 Liquidity

 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 an advantageous
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, paydowns, maturities, and sales of investment securities,
borrowings, and current earnings.

 One of the measurements used in liquidity planning is the Maturity
Gap Analysis. The Maturity Gap Analysis below measures the amount of assets maturing within various time frames versus liabilities maturing
in those same periods. These time frames are referred to as gaps and are reported on a cumulative basis. For instance, the one-year gap
shows all assets maturing one year or less from a specific date versus the total liabilities maturing in the same time period. The gap
is then expressed as a percentage of assets over liabilities. Mismatches between assets and liabilities maturing are identified and assist
management in determining potential liquidity issues.

 The maturity gap analysis does not include non-interest earning assets
and non-interest bearing liabilities, with the exception of non-interest bearing demand deposit accounts. The non-interest bearing demand
deposits are considered additional deposit liabilities with no associated interest expense, which acts to lower the overall interest rate
paid on total deposits.

 Gap ratios have been relatively stable for the Corporation throughout
2023. The Corporation's assets are fairly long, with relatively low levels of cash and cash equivalents. Meanwhile the Corporation's
core deposit liabilities continue to model as long liabilities, with the complement of shorter term time deposits increasing significantly
during 2023.

 The size and length of the Corporation's core deposit liabilities
provide the most extension in terms of lengthening the liabilities on the balance sheet. The length of the core deposits is significantly
longer than the Corporation's longest term deposits and wholesale borrowings. As of December 31, 2023, the Corporation had higher
cash levels than at December 31, 2022. In a rising rate environment, having more assets maturing than liabilities is beneficial because
those assets can be reinvested at higher yields.

 The table below shows the six-month, one-year, three-year, and five-year
cumulative gaps as of December 31, 2023, for the Bank, along with the cumulative maturity gap guidelines monitored by management. For
the purposes of this analysis, core deposits without a specific maturity date are spread across all time periods based on historical behavior.

 MATURITY GAP ANALYSIS

 Less than

 6 months

 1 year

 3 years

 Maturity Gap

 6 months

 to 1 year

 to 3 years

 to 5 years

 5 years

 $

 $

 $

 $

 $

 Assets maturing

 202,480

 128,935

 419,308

 372,718

 847,570

 Liabilities maturing

 432,901

 111,375

 141,676

 213,848

 843,793

 Maturity gap

 (230,421
)

 17,560

 277,632

 158,870

 3,777

 Cumulative maturity gap

 (230,421
)

 (212,861
)

 64,771

 223,641

 227,418

 Maturity gap %

 46.8%

 115.8%

 296.0%

 174.3%

 100.4%

 Cumulative maturity gap %

 46.8%

 60.9%

 109.4%

 124.9%

 113.0%

 As of December 31, 2023, cumulative maturity gap ratios were on the
low side for up to a year indicating that there are more liabilities maturing in the short time frames than assets. For the six-month
time frame, the gap ratio was 46.8% and for the one-year cumulative gap, the ratio was 60.9%. For one year to three years, the cumulative
gap was 109.4%, representing a higher level of asset maturities versus liabilities. For the three to five-year time frame, the cumulative
gap was 124.9%, and for the over five-year time frame, the cumulative gap was 113.0%. In a rising rate environment, higher gap ratios
are beneficial as assets can reprice to the higher rates; however, lower gap ratios are harmful in a rising rate environment as liabilities
would potentially be repricing to higher rates faster than assets. Management anticipates higher deposit and borrowings costs with limited
savings on the liability side later in 2024 should the Fed start to move rates down. Higher liability costs will result primarily from
deposits continuing to reprice to higher rates and shifting from lower cost accounts to higher cost accounts. Management will continue
to monitor all gap ratios to ensure proper positioning for future interest rate cycles.

 It is likely that with some competition pricing and talk of a recession
in 2024, customer behavior patterns would change and deposits would become more rate sensitive with a greater portion potentially leaving
the Corporation. These maturity gaps are closely monitored along with additional liquidity measurements discussed below. Management believes
the probability of future Federal Reserve rate decreases is high in the latter part of 2024, driven by economic factors.

 In addition to the cumulative maturity gap analysis discussed above,
management utilizes a number of other important liquidity measurements that management believes have advantages over, and give better
clarity to, the Corporation's present and projected liquidity. These measurements are evaluated quarterly through the ALCO process.
There are a number of key ratios measured that involve liquidity, non-core funding sources, and contingency funding with each ratio assigned
a risk level of low, moderate, or high.

 As of December 31, 2023, the Corporation was within guidelines for
all of the above measurements except for two that fell in the moderate range: long term assets to total assets and tangible equity to
total assets. The long term assets to total assets is slightly elevated due to holding more mortgages on the balance sheet as well as
a large amount of longer municipal securities in the investment portfolio. The tangible equity to total assets ratio is lower due to the
unrealized losses experienced on the investment portfolio due to the rapid increase in interest rates in 2022 and 2023.

 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 and Fair Value Risk

 Identifying the interest rate risk of the Corporation's interest
earning assets and interest bearing liabilities is essential to managing net interest margin and net interest income. In addition to the
impact on earnings, management is also concerned about how much the value of the Corporation's assets might fall or rise given an
increasing or decreasing interest rate environment. Interest rate sensitivity analysis (IRSA) measures the impact of a change in interest
rates on the net interest income and net interest margin of the Corporation, while net portfolio value (NPV) analysis measures the change
in the Corporation's capital fair value, given interest rate fluctuations. Therefore, the two primary approaches to measuring the
impact of interest rate changes on the Corporation's earnings and fair value are referred to as:

 Changes in net interest income

 Changes in net portfolio value

 The Corporation's asset liability model is able to perform dynamic
forecasting based on a wide range of assumptions provided. The model is flexible and can be used for many types of financial projections.
The Corporation uses financial modeling to forecast balance sheet growth and earnings. The results obtained through the use of forecasting
models are based on a variety of factors. Both earnings and balance sheet forecasts make use of maturity and repricing schedules to determine
the changes to the Corporation's 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:

 Projected interest rates

 Timing of interest rate changes

 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

 For the interest rate sensitivity analysis and net portfolio value
analysis shown below, results are based on a static balance sheet reflecting no projected growth from balances as of December 31, 2023,
and December 31, 2022. While it is unlikely that the balance sheet will not grow at all, management considers a static analysis of this
sort to be the most conservative and most accurate means to evaluate fair value and future interest rate risk. The static balance sheet
approach is used to reduce the number of variables in calculating the model's accuracy in predicting future net interest income.
It is appropriate to pull out various balance sheet growth scenarios, which could be utilized to compensate for a declining margin. By
testing the model using a base model assuming no growth, this variable is eliminated and management can focus on predicted net interest
income based on the current existing balance sheet.

 As a result of the many assumptions, this information should not be
relied upon to predict future results. Additionally, both of the analyses shown 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.

 Changes in Net Interest Income

 The changes in net interest income reflect how much the Corporation's
net interest income would be expected to increase or decrease given a change in market interest rates. The changes in net interest income
shown are measured over a one-year time horizon and assume an immediate rate change on the rate sensitive assets and liabilities. This
is considered the more important measure of interest rate sensitivity due to the immediate effect that rate changes may have on the overall
performance of the Corporation. The following table takes into consideration when financial instruments would most likely reprice and
the duration of the pricing change. It is important to emphasize that the information shown in the table is an estimate based on hypothetical
changes in market interest rates.

 CHANGES IN NET INTEREST INCOME

 2023

 2022

 Policy

 Percentage

 Percentage

 Guidelines

 Change

 Change

 %

 300 basis point rise

 (7.0
)

 (6.8
)

 (20.00
)

 200 basis point rise

 (3.8
)

 (4.1
)

 (16.00
)

 100 basis point rise

 (1.6
)

 (1.6
)

 (12.00
)

 Base rate scenario

 —

 —

 —

 100 basis point decline

 (3.2
)

 0.4

 (12.00
)

 200 basis point decline

 (3.0
)

 (2.6
)

 (16.00
)

 300 basis point decline

 (3.3
)

 —

 (20.00
)

 This table shows the effect of an immediate interest rate shock over a one-year period on the Corporation's net interest income.

 Base rate is the Prime rate.

 As of December 31, 2023, the above analysis shows a negative impact to the Corporation's net interest income
in all rate scenarios. In the past two years, the Federal funds rate has increased rapidly. The Corporation is now experiencing a rising
cost of funds on the liability side in pricing its deposits. Once deposit pricing has stabilized, net interest income would increase with
the repricing of variable rate loans and securities moving immediately as Prime moves. The pressure on the cost of funds side is currently
resulting in the Corporation being liability sensitive in the short-term, but asset sensitive in the long-term. The analysis above focuses
on immediate rate movements, referred to as rate shocks, and measured over the course of one year.

 In all rates-up scenarios, modeled net interest income compared very
similar to the results as of December 31, 2022. When rates do go up, most assets with the ability to reprice off a key benchmark rate
will generally reprice by the full amount of the Federal Reserve's rate movement. In the current environment, deposit rate changes
have been more significant and happening faster than in years prior to 2022 when market rates were not moving. This has resulted in the
pressure on net interest income shown above. In past years, financial institutions have benefited from a larger level of deposit balances
as a result of the historically long and very low interest rate cycle. The analysis above assumes no growth of the Corporation's
balance sheet and no change in the mix of earning assets.

 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 (NPV)

 The change in NPV gives a long-term view of the exposure to changes
in interest rates. The NPV is calculated by discounting the future cash flows to the present value based on current market rates. The
NPV is the mathematical equivalent of the present value of assets minus the present value of liabilities.

 The table below indicates the changes in the Corporation's NPV
as of December 31, 2023 and December 31, 2022. As part of the Asset Liability Policy, the Board of Directors has established risk measurement
guidelines to protect the Corporation against decreases in the NPV and net interest income in the event of the interest rate changes described
below.

 As of December 31, 2023, the Corporation was within guidelines for
all up-rate scenarios but was outside of guidelines for the down-300 basis point rate scenario. The positive impact of higher rates on
both loans and securities was down from December 31, 2022. On the liability side of the Corporation's balance sheet, the value of
non-interest bearing deposit accounts only becomes more and more valuable as interest rates rise, which is reflected in NPV as a decrease
in liabilities. These deposits have always been highly favorable in a rising rate environment as these balances are more valuable to the
Corporation, representing a decrease in liabilities as interest rates rise. However, with higher rates on interest bearing checking, NOW,
and money market accounts, the benefit of these deposits in a rising rate environment has declined. As interest rates increase, the discount
rate used to value the Corporation's interest bearing accounts increases, causing a lower net present value. This improves the modeling
of the Corporation's fair value risk as the liability amounts decrease, causing the net present value or fair value of the Corporation's
balance sheet to increase. This was especially apparent throughout 2022 when rates were extremely low and the Corporatin's deposits
grew at a very fast pace. In 2023, deposit growth was slower and deposit pricing increased resulting in a decline in the benefit in the
rising rate scenarios. The much higher complement of long modeling deposits caused the changes in net portfolio value to be more exaggerated
in both the up and down-rate scnenarios as of December 31, 2023 and 2022.

 CHANGES IN NET PORTFOLIO VALUE

 2023

 2022

 Policy

 Percentage

 Percentage

 Guidelines

 Change

 Change

 %

 300 basis point rise

 5.0

 11.0

 (30.00
)

 200 basis point rise

 6.0

 10.0

 (25.00
)

 100 basis point rise

 5.0

 7.0

 (20.00
)

 Base rate scenario

 —

 —

 —

 100 basis point decline

 (9.0
)

 (11.0
)

 (20.00
)

 200 basis point decline

 (24.0
)

 (29.0
)

 (25.00
)

 300 basis point decline

 (46.0
)

 (30.00
)

 This table shows the
effect of an immediate interest rate shock on the net portfolio value of the Corporation's assets and liabilities. Base rate is the
Prime rate.

 The results as of December 31, 2023, indicate that the Corporation's
net portfolio value would experience valuation

 gains in all up-rate scenarios with a gain of 5.0% in the rates-up
300 basis point scenario, and gains of 6.0% and 5.0%, in the rates-up 200 and 100 basis point scenarios, respectively. A valuation gain
indicates that the value of the Corporation's assets is declining at a slower pace than the decrease in the value of the Corporation's
liabilities. Even though the Corporation has some longer-term assets such as residential mortgages and municipal securities which show
declines in value as interest rates increase further, the large balances of core deposits more than offsets this fair value exposure of
the longer-term assets.

 The changes in net portfolio value do show exposure in the down-rate
scenarios with the 300 rate scenario that is outside of policy guidelines. A valuation loss indicates that the value of the Corporation's
assets is declining at a faster pace than the decrease in the value of the Corporation's liabilities. Even outside of the interest
rate environment, the Corporation's exposure to valuation changes could change going forward if the mix of the Corporation's
deposits change, which would impact the average life of those deposits.

 Item 8. Financial Statements and Supplementary Data

 The following audited consolidated financial statements are set forth
in this Annual Report of Form 10-K on the following pages:

 Index to Consolidated Financial Statements
 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID 74)

 Consolidated Balance Sheets

 Consolidated Statements of Income

 Consolidated Statements of Comprehensive Income

 Consolidated Statements of Changes in Stockholders' Equity

 Consolidated Statements of Cash Flows

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Stockholders and the Board of Directors
of ENB Financial Corp

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of ENB Financial Corp and subsidiaries (the "Company") as of December 31, 2023 and 2022; the related consolidated
statements of income, comprehensive income (loss), changes in stockholders' equity, and cash flows for the years then ended; and
the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its
operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States
of America.

 Change in Accounting Principle

 As discussed in Note A to the financial statements,
the Company changed its method of accounting for credit losses effective January 1, 2023, due to the adoption of Accounting Standards
Codification (ASC) Topic 326, Financial Instruments – Credit Losses.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Basis for Opinion (Continued)

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matters

 The critical audit matters communicated below
are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to
the Audit Committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involve our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter, in any way, our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 Allowance for Credit Losses (ACL)

 Description of the Matter

 The Company's loan portfolio totaled $1.4
billion as of December 31, 2023, and the associated ACL was $15.2 million. As discussed in Note A and C to the consolidated financial
statements, estimating an appropriate allowance for credit losses requires management to make certain assumptions about expected losses
on loans in the loan portfolio over their remaining contractual life as of the balance sheet date. The allowance for credit losses is
measured on a collective pool basis when similar risk characteristics exist. Loans that do not share similar risk characteristics are
evaluated on an individual basis, at the balance sheet date. The measurement of expected credit losses on collectively evaluated loans
is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable
forecasts that affect the collectability of the amortized cost basis. Management applies qualitative adjustments to reflect the inherent
losses that exist in the loan portfolio at the balance sheet date that are not reflected in the historical loss experience. Qualitative
adjustments are made based upon changes in lending policies and procedures, terms and volume of the loan portfolio, experience, ability,
and depth of management, volume and severity of problem credits, quality and oversight of the credit review system, changes in the underlying
value of collateral, concentrations of credit, and external factors.

 We identified these qualitative adjustments within
the ACL as critical audit matters because they involve a high degree of subjectivity. While the determination of these qualitative adjustments
includes analysis of observable data over the historical loss period, the judgments required to assess the directionality and magnitude
of adjustments is highly subjective. Auditing these complex judgments and assumptions involved especially challenging auditor judgment
due to the nature of audit evidence and the nature and extent of effort required to address these matters.

 How We Addressed the Matter in Our Audit

 The primary procedures we performed to address
this critical audit matter included:

 Testing the design, implementation, and operating
effectiveness of internal controls over the calculation of the allowance for credit losses, including the qualitative factor adjustments.

 Allowance for Credit Losses (ACL) – Qualitative
Factors (Continued)

 How We Addressed the Matter in Our Audit
(Continued)

 Testing the completeness and accuracy of the
data inputs used by management as a basis for the qualitative factors by agreeing them to internal and external data sources.

 Testing management's process and evaluating
the reasonableness of their inputs and assumptions by evaluating the reasonableness of the qualitative factor adjustments, including the
magnitude and directional consistency of the adjustments.

 We have served as the Company's auditor
since 2005.

 S.R. Snodgrass, P.C.

 King of Prussia, Pennsylvania

 CONSOLIDATED BALANCE SHEETS

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

 2023

 2022

 $

 $

 ASSETS

 Cash and due from banks

 29,519

 28,935

 Interest-bearing deposits in other banks

 59,477

 8,637

 Total cash and cash equivalents

 Securities available for sale (at fair value, net of allowance for credit losses of $ 0)

 459,569

 529,142

 Equity securities (at fair value)

 9,451

 9,118

 Loans held for sale

 5,927

 Loans (net of unearned income)

 1,360,078

 1,191,117

 Less: Allowance for credit losses

 15,176

 Net loans

 1,344,902

 1,176,966

 Premises and equipment

 25,284

 25,333

 8,540

 6,670

 Bank owned life insurance

 35,632

 34,805

 Other assets

 28,098

 33,183

 Total assets

 2,000,824

 1,858,716

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Liabilities:

 Deposits:

 Noninterest-bearing

 Interest-bearing

 1,114,830

 966,616

 1,726,798

 1,638,958

 Short-term debt

 —

 16,000

 Long-term debt

 101,228

 58,039

 Subordinated debt

 39,556

 39,396

 Other liabilities

 13,588

 8,988

 Total liabilities

 1,881,170

 1,761,381

 Stockholders' equity:

 Common stock, par value $ 0.10

 Shares: Authorized 24,000,000

 Issued 5,739,114 and Outstanding 5,670,054 as of 12/31/23 and 5,635,533 as of 12/31/22

 Capital surplus

 4,072

 4,437

 Retained earnings

 150,596

 142,677

 Accumulated other comprehensive loss, net of tax

 ( 34,355
)

)

 Less: Treasury stock cost on 69,060 shares as of 12/31/23 and 103,581 shares as of 12/31/22

 ( 1,233
)

 ( 2,061
)

 Total stockholders' equity

 119,654

 97,335

 Total liabilities and stockholders' equity

 2,000,824

 1,858,716

 CONSOLIDATED STATEMENTS OF INCOME

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

 2023

 2022

 $

 $

 Interest and dividend income:

 Interest and fees on loans

 61,235

 41,944

 Interest on securities available for sale

 Taxable

 11,648

 9,048

 Tax-exempt

 3,001

 4,214

 Interest on deposits at other banks

 Dividend income

 1,103

 Total interest and dividend income

 77,877

 55,959

 Interest expense:

 Interest on deposits

 18,766

 2,750

 Interest on borrowings

 5,072

 2,626

 Total interest expense

 23,838

 5,376

 Net interest income

 54,039

 50,583

 Provision for credit losses

 1,300

 Net interest income after provision for credit losses

 53,519

 49,283

 Other income:

 Trust and investment services income

 2,883

 2,643

 Service fees

 4,746

 2,938

 Commissions

 3,618

 3,663

 (Losses) gains on sale of debt securities, net

 ( 1,371
)

 Losses on equity securities, net

 ( 125
)

 ( 32
)

 Gains on sale of mortgages

 1,302

 Earnings on bank-owned life insurance

 1,583

 Other income

 1,223

 1,425

 Total other income

 12,699

 13,564

 Operating expenses:

 Salaries and employee benefits

 30,152

 27,324

 Occupancy

 3,259

 2,846

 Equipment

 1,302

 1,240

 Advertising & marketing

 1,404

 1,083

 Computer software & data processing

 6,891

 5,591

 Shares tax

 1,167

 1,380

 Professional services

 3,198

 2,743

 Other expense

 4,034

 3,722

 Total operating expenses

 51,407

 45,929

 Income before income taxes

 14,811

 16,918

 Provision for federal income taxes

 2,436

 2,287

 Earnings per share of common stock (basic and diluted)

 2.19

 2.62

 Cash dividends paid per share

 0.68

 0.68

 Weighted average shares outstanding

 5,644,486

 5,588,656

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 2023

 2022

 $

 $

 Other comprehensive income (loss), net of tax:

 Net change in unrealized gains (losses):

 Securities available for sale not other-than-temporarily impaired:

 Unrealized gains (losses) arising during the period

 16,271

 ( 65,443
)

 Income tax effect

 ( 3,417
)

 13,743

 12,854

 ( 51,700
)

 Losses (gains) recognized in earnings

 1,371

 ( 42
)

 Income tax effect

 ( 288
)

 1,083

 ( 33
)

 Other comprehensive income (loss), net of tax

 13,937

 ( 51,733
)

 Comprehensive Income (Loss)

 26,312

 ( 37,102
)

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

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

 Accumulated

 Other

 Total

 Common

 Capital

 Retained

 Comprehensive

 Treasury

 Stockholders'

 Stock

 Surplus

 Earnings

 Income (Loss)

 Stock

 Equity

 $

 $

 $

 $

 $

 $

 Balances, December 31, 2021

 4,520

 131,856

 3,441

 ( 3,103
)

 137,288

 —

 —

 —

 —

 Other comprehensive loss, net of tax

 —

 —

 —

 ( 51,733
)

 —

 ( 51,733
)

 —

 Stock-based compensation expense

 Treasury stock purchased - 6,456 shares

 —

 —

 —

 —

 ( 116
)

 ( 116
)

 Treasury stock issued - 58,032 shares

 —

 ( 94
)

 —

 —

 1,158

 1,064

 Cash dividends paid, $ 0.68 per share

 —

 —

 ( 3,810
)

 —

 —

 ( 3,810
)

 Balances, December 31, 2022

 4,437

 142,677

)

 ( 2,061
)

 97,335

 Cumulative effect of adoption of ASU 2016-13

 —

 —

 ( 619
)

 —

 —

 ( 619
)

 —

 —

 —

 —

 Other comprehensive income, net of tax

 —

 —

 —

 13,937

 —

 13,937

 —

 Stock-based compensation expense

 —

 —

 —

 —

 Treasury stock purchased - 40,134 shares

 —

 —

 —

 —

 ( 572
)

 ( 572
)

 Treasury stock issued - 74,655 shares

 —

 ( 427
)

 —

 —

 1,400

 Cash dividends paid, $ 0.68 per share

 —

 —

 ( 3,837
)

 —

 —

 ( 3,837
)

 Balances, December 31, 2023

 4,072

 150,596

 ( 34,355
)

 ( 1,233
)

 119,654

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2023

 2022

 $

 $

 Cash flows from operating activities:

 Adjustments to reconcile net income to net cash provided by operating
 activities:

 Net amortization of securities premiums and discounts and loan fees

 4,689

 5,233

 Increase in interest receivable

 ( 459
)

 ( 1,403
)

 Increase in interest payable

 1,606

 Provision for credit losses

 1,300

 Loss (gain) on sale of debt securities, net

 1,371

 ( 42
)

 Loss on equity securities, net

 Gain on sale of mortgages

 ( 767
)

 ( 1,302
)

 Loans originated for sale

 ( 31,532
)

 ( 30,160
)

 Proceeds from sales of loans

 37,874

 28,729

 Earnings on bank-owned life insurance

 ( 958
)

 ( 1,583
)

 Depreciation of premises and equipment and amortization of software

 2,004

 1,629

 Deferred income tax

 ( 65
)

 Amortization of deferred fees on subordinated debt

 Stock-based compensation expense

 Other assets and other liabilities, net

 2,909

 4,144

 Net cash provided by operating activities

 30,147

 21,616

 Cash flows from investing activities:

 Securities avaiable for sale:

 Proceeds from maturities, calls, and repayments

 31,865

 53,714

 Proceeds from sales

 61,089

 28,590

 Purchases

 ( 11,433
)

 ( 123,854
)

 Equity securities:

 Proceeds from sales

 —

 Purchases

 ( 458
)

 ( 319
)

 Purchase of regulatory bank stock

 ( 3,001
)

 ( 1,982
)

 Redemptions of regulatory bank stock

 1,131

 Proceeds from bank-owned life insurance

 2,078

 —

 Net increase in loans

 ( 169,502
)

 ( 270,468
)

 Purchases of premises and equipment, net

 ( 1,552
)

 ( 2,192
)

 Purchase of computer software

 ( 533
)

 ( 141
)

 Net cash used for investing activities

 ( 90,316
)

 ( 315,809
)

 Cash flows from financing activities:

 Net (decrease) increase in demand, NOW, and savings accounts

 ( 112,033
)

 106,852

 Net increase in time deposits

 199,873

 19,893

 Proceeds from short-term debt

 —

 16,000

 Repayments of short-term debt

 ( 16,000
)

 —

 Proceeds from long-term debt

 57,005

 13,833

 Repayments of long-term debt

 ( 13,816
)

 —

 Proceeds from issuance of subordinated debt

 —

 19,600

 Dividends paid

 ( 3,837
)

 ( 3,810
)

 Proceeds from sale of treasury stock

 1,064

 Treasury stock purchased

 ( 572
)

 ( 116
)

 Net cash provided by financing activities

 111,593

 173,316

 Increase (decrease) in cash and cash equivalents

 51,424

 ( 120,877
)

 Cash and cash equivalents at beginning of period

 158,449

 Cash and cash equivalents at end of period

 Supplemental disclosures of cash flow information:

 Interest paid

 22,232

 5,030

 Income taxes paid

 2,000

 1,900

 Supplemental disclosure of non-cash investing and financing activities:

 —

 —

 Fair value adjustments for securities available for sale

 ( 17,642
)

 65,485

 Recognition of lease operating right-of-use assets

 —

 2,811

 Recognition of operating lease liabilities

 —

 2,811

 Death benefits receivable on BOLI

 2,083

 2,075

 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Nature of Operations
 ENB Financial Corp, ("the Corporation") through its wholly
owned subsidiary, Ephrata National Bank, provides financial services to Northern Lancaster County and surrounding communities. ENB Financial
Corp, a bank holding company, was formed on July 1, 2008, to become the parent company of Ephrata National Bank, which existed as a stand-alone
national bank since its formation on April 11, 1881. The Corporation's wholly owned subsidiary, Ephrata National Bank, offers a
full array of banking services including loan and deposit products for both personal and commercial customers, as well as trust and investment
services, through thirteen full-service office locations. The Bank has one subsidiary, ENB Insurance, which is a full-service insurance
agency that offers a broad range of insurance products to commercial and personal clients. ENB Insurance is managed separately from the
banking and related financial services that the Corporation offers.

 Basis of Presentation
 The consolidated financial statements of ENB Financial Corp and its
subsidiary, Ephrata National Bank, (collectively "the Corporation") conform to U.S. generally accepted accounting principles
(GAAP). The preparation of these statements requires that management make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Material estimates of the Corporation, including the allowance
for credit losses, are evaluated regularly by management. Actual results could differ from the reported estimates given different conditions
or assumptions. 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.

 The accounting and reporting policies followed by the Corporation conform
with U.S. GAAP and to general practices within the banking industry. All significant intercompany transactions have been eliminated in
consolidation. The following is a summary of the more significant policies.

 Accounting Pronouncements Adopted in 2023

 In June 2016, the FASB issued ASU No. 2016-13,
" Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and
subsequent related updates. This ASU replaces the incurred loss methodology for recognizing credit losses and requires businesses and
other organizations to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans
and held-to-maturity securities, net investments in leases, off-balance sheet credit exposures such as unfunded commitments, and other
financial instruments. In addition, ASC 326 requires credit losses on available-for-sale debt securities to be presented as an allowance
rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required
to sell. This guidance became effective on January 1, 2023 for the Corporation. The results reported for periods beginning after January
1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable accounting
standards.

 The Corporation adopted this guidance, and subsequent
related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans, available-for-sale
debt securities and unfunded commitments. On January 1, 2023, the Corporation recorded a cumulative effect decrease to retained earnings
of $ 619,000, net of tax, of which $ 537,000 related to loans, $ 82,000 related to unfunded commitments, and $ 0 related to available-for-sale
securities.

 The Corporation has elected to exclude accrued
interest receivable from the measurement of its allowance for credit losses (ACL). When a loan is placed on nonaccrual status, any outstanding
accrued interest is reversed against interest income.

 The Corporation adopted the provisions of ASC
326 related to presenting other-than-temporary impairment on available-for-sale debt securities prior to January 1, 2023, using the prospective
transition approach, though no such charges had been recorded on the securities held by the Corporation as of the date of adoption.

 In connection with the adoption of ASU 2016-13,
the Corporation made changes to the loan portfolio segments to align with the methodology applied in determining the allowance under CECL.
Refer to Note C Loans and Allowance for Credit Losses for further discussion of these portfolio segments.

 The new segmentation consists of: Agriculture,
Business Loans, Consumer Loans, Home Equity, Non-Owner Occupied Commercial Real Estate, and Residential Real Estate.

 The impact of the change from the incurred loss
model to the current expected credit loss model and the reclassification of loans for the identification of new portfolio loan segments
under CECL is detailed below (in thousands).

 January 1, 2023

 Pre-adoption

 Adoption Impact

 As Reported

 $

 $

 $

 Assets

 ACL on debt securities available for sale

 —

 —

 —

 ACL on loans

 Commercial Real Estate

 6,074

 ( 6,074
)

 —

 Consumer Real Estate

 5,442

 ( 5,442
)

 —

 Commercial and Industrial

 2,151

 ( 2,151
)

 —

 —

 3,537

 3,537

 —

 3,382

 3,382

 —

 2,129

 2,129

 —

 —

 4,658

 4,658

 Unallocated

 ( 417
)

 —

 14,831

 Liabilities

 ACL for unfunded commitments

 1,017

 1,120

 $
 15,168

 $

 $
 15,951

 Concurrently, on January 1, 2023, the Corporation
adopted ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures",
the effective date of the guidance, on a prospective basis. ASU 2022-02 eliminated the accounting
guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors
when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors
will determine whether a modification results in a new loan or continuation of existing loan. Additionally, ASU 2022-02 requires
an entity to disclose current-period gross write-offs by year of origination for financing receivables within the scope of Subtopic 326-20,
Financial Instruments—Credit Losses—Measured at Amortized Cost.

 Cash and Cash Equivalents
 For purposes of reporting cash flows, cash and cash equivalents are
identified as cash and due from banks and include cash on hand, collection items, amounts due from banks, and interest bearing deposits
in other banks with maturities of less than 90 days.

 Investment Securities
 Management classifies its debt securities at the time of purchase as
available for sale (AFS) or held to maturity (HTM). At December 31, 2023 and 2022, all debt securities were classified as AFS, meaning
that the Corporation intends to hold them for an indefinite period of time, but not necessarily to maturity. AFS debt securities are stated
at estimated fair value, adjusted for amortization of premiums and accretion of discounts which are recognized as adjustments of interest
income through call date or maturity. The related unrealized gains and losses are reported as other comprehensive income or loss, net
of tax, until realized.

 Allowance for Credit Losses- Available for Sale securities
 The Corporation is required to conduct a credit
loss evaluation on AFS securities to determine whether the Corporation has the intent to sell the security or it is more likely than not
that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Corporation to reduce
the security's amortized cost basis down to its fair value through earnings. The Corporation also evaluates the unrealized losses on AFS
securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation
is based upon factors such as the creditworthiness of the underlying borrowers, performance of the

 underlying collateral, if applicable,
and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative
of a decline in the fair value of the security due to a credit factor. This includes, but is not limited to, an evaluation of the type
of security, and extent to which the fair value has been less than amortized cost, and near-term prospects of the issuer. If this assessment
indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis
of the security. Under ASU 2016-13, if the present value of the cash flows expected to be collected is less than the amortized cost, an
allowance for credit losses (ACL) is recorded, which is limited by the amount that the fair value is less than the amortized cost. Any
additional amount of loss would be due to non-credit factors and is recorded in accumulated other comprehensive income (AOCI), net of
tax. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through
the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of tax,
on the consolidated statements of financial condition.

 Equity Securities
 Equity securities include common stocks of public companies and a Community
Reinvestment Act-qualified mutual fund that the Corporation has the intent and ability to hold for an indeterminate amount of time. Such
securities are reported at fair value with changes in unrealized holding gains and losses recognized through earnings on a monthly basis.

 Other Than Temporary Impairment ("OTTI")
 The Bank adopted ASU No. 2016-13 effective January 1, 2023. Financial
statement amounts related to Investment Securities recorded as
of December 31, 2022 and for the periods ending December 31, 2022 are presented in accordance with the accounting policies described in
the following sections. The following sections were carried forward from the Annual Report on Form 10-K for the year ended December 31,
2022.

 Management monitors all of the Corporation's securities for OTTI
on a monthly basis and determines whether any impairment should be recorded. A number of factors are considered in determining whether
a security is impaired, including, but not limited to, the following:

 Percentage of unrealized losses,

 Period of time the security has had unrealized losses,

 Type of security,

 Maturity date of the instrument if a debt instrument,

 The intent to sell the security or whether it is more likely than not that the Corporation would be required to sell the security
before its anticipated recovery in market value,

 Amount of projected credit losses based on current cash flow analysis, default and severity rates, and

 Market dynamics impacting the market for and liquidity of the security.

 Management will more closely evaluate those securities that have unrealized
losses of 10 % or more and have had unrealized losses for more than twelve months. If management determines that the declines in value
of the security are not temporary, or if management does not have the ability to hold the security until maturity, which is the case with
equity securities, then management will record impairment on the security. For debt securities evaluated for impairment, management will
determine what portion of the unrealized valuation loss is attributed to projected or known loss of principal, and what portion is attributed
to market pricing not reflective of the true value of the security, based on current cash flow analysis. Management will generally record
impairment equivalent to the projected or known loss of principal, known as the credit loss. The other portion of the fair market value
loss is attributed to market factors and it is management's opinion that these fair value losses are temporary and not permanent.
All impairment is recorded as a loss on securities and is included in the Corporation's Consolidated Statements of Income.

 Loans Held for Investment
 Loans receivable, that management has the intent and ability to hold
for the foreseeable future, or until maturity or payoff, generally are reported at the outstanding principal balances, reduced by any
charge-offs and net of any deferred loan origination fees or costs. Net loan origination fees and costs are deferred and recognized as
an adjustment of yield over the contractual life of the loan.

 Interest accrues daily on outstanding loan balances. Generally, the
accrual of interest discontinues when the ability to collect the loan becomes doubtful or when a loan becomes more than 90 days past due
as to principal and interest.

 These loans are referred to as non-accrual loans. Management may elect to continue the accrual of interest
based on the expectation of future payments and/or the sufficiency of the underlying collateral.

 Loans Held for Sale
 Loans originated and intended for sale on the secondary market are
carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance
by charges to income. In general, fixed-rate residential mortgage loans originated by the Corporation and held for sale are carried in
the aggregate at the lower of cost or market. The Corporation originates loans for immediate sale with servicing retained and servicing
released to several investors. However, the vast majority of the sold mortgages are sold to the Federal Home Loan Bank of Pittsburgh (FHLB)
and Fannie Mae, with servicing retained. As a result, the Corporation has a growing portfolio of mortgages that are serviced on
behalf of FHLB and Fannie Mae. In addition, the Corporation originates FHA, VA, and USDA mortgages which are originated for immediate
sale to various investors on a service-released basis.

 Allowance for Credit Losses-Loans
 The allowance for credit losses (ACL) is a valuation
reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the net
amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected
recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

 The ACL is an estimate of expected credit losses,
measured over the contractual life of a loan, that considers historical loss experience, current conditions, and forecasts of future economic
conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

 The methodology for determining the ACL has two
main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics
and evaluation of loans that do not share risk characteristics with other loans.

 The ACL is measured on a collective (pool) basis
when similar risk characteristics exist. The Corporation measures the ACL using the following methods. Historical credit loss experience
is the basis for the estimation of expected credit losses. The Corporation applies historical loss rates to pools of loans with similar
risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the
current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet
date. Reasonable and supportable forecast adjustment is based on the unemployment forecast, BBB Rated Corporate Bond Spread, GDP
Growth, Retail Sales, Asset Prices, and Management Judgement. The reasonable and supportable period is the life of the loan as credit
loss models used produce reasonable estimates of losses over the life of the loan. The qualitative adjustments for current
conditions are based upon changes in lending policies and procedures, loan portfolio trends, lending management experience, asset quality,
loan review, underlying collateral, credit concentrations, and external factors. These modified historical loss rates are multiplied
by the outstanding principal balance of each loan to calculate a required reserve.

 The Corporation has elected
to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued
interest is reversed against interest income.

 The ACL for individual loans begins with the use
of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and
therefore, should be individually assessed. We evaluate all commercial loans that meet the following criteria: 1) when it is determined
that foreclosure is probable, 2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially
through the operation or sale of the collateral, 3) when it is determined by management that a loan does not share similar risk characteristics
with other loans. Specific reserves are established based on the following three acceptable methods for measuring the ACL: 1) the
present value of expected future cash flows discounted at the loan's original effective interest rate; 2) the loan's observable
market price; or 3) the fair value of the collateral when the loan is collateral dependent. Our individual loan evaluations consist primarily
of the fair value of collateral method because most of our loans are collateral dependent. Collateral values are discounted to consider
disposition costs when appropriate. A specific reserve is established or a charge-off is taken if the fair value of the loan is less than
the loan balance.

 In terms of the Corporation's loan portfolio, Consumer loans
are deemed to have the most risk and therefore carry a higher qualitative adjustment than other portfolio segments. These loans
are highly dependent on their financial condition and therefore are more dependent on economic conditions. Business loans are considered
to have more risk than the Agriculture, Home Equity, and Residential Real Estate loans as these loans have accounted for higher levels
of charge-offs. The Corporation's Non-Owner Occupied CRE portfolio has performed well historically with no losses in the look-back
period. Overall, the Corporation has historically experienced very low levels of delinquencies, non-accrual loans, and charge-offs.
Qualitative factors are set and adjusted accordingly.

 Allowance for Credit Losses-Loans —Prior to the Adoption
of ASU 2016-13

 Prior to the adoption of ASU 2016-13 Financial Instruments - Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Bank calculated our ALL using an incurred loan loss
methodology. The following policy related to the ALL in prior periods.

 The allowance for credit losses is maintained at a level considered
by management to be adequate to provide for known and inherent risks in the loan portfolio at the Consolidated Balance Sheets dates. The
monthly provision or credit for loan losses is an expense or a reduction of expense which increases or decreases the allowance, and charge-offs,
net of recoveries, decrease the allowance. The Corporation performs ongoing credit reviews of the loan portfolio and considers current
economic conditions, historical loan loss experience, and other factors in determining the adequacy of the reserve balance. Loans determined
to be uncollectible are charged to the allowance during the period in which such determination is made.

 In calculating the allowance, management will begin by compiling the
balance of loans by credit quality for each loan segment in order that allocations can be made in aggregate based on historic losses and
qualitative factors. Prior to calculating these aggregate allocations, management will individually evaluate commercial and commercial
real estate loans for impairment. A loan is impaired when it is probable that a creditor will be unable to collect all principal and interest
due according to the contractual terms of the loan agreement. All other loan types such as residential mortgages, home equity loans and
lines of credit, and all other consumer loans, are not individually evaluated for impairment and are therefore allocated for in aggregate.
These loans are considered to be large groups of smaller-balance homogenous loans and are measured for impairment collectively. Loans
that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management
determines the significance of payment delays on a case-by-case basis, taking into consideration all circumstances concerning the loan,
the creditworthiness and payment history of the borrower, the length of the payment delay, and the amount of shortfall in relation to
the principal and interest owed. For loans deemed to be impaired, management will provide a specific allocation. This loan balance is
then subtracted from the total loan balances being allocated for in the aggregate. The remaining balances, along with the full loan balances
for the other loan types are then multiplied by an adjusted loss ratio, which is the sum of both the historical loss ratio and a qualitative
factor adjustment. Generally both the historical loss ratio and the qualitative factor adjustment will increase as the credit rating of
the loan deteriorates. The credit ratings begin with unclassified loans, which represent the best internal credit rating, also referred
to as a "pass" credit and then continue with declining grades of special mention, substandard, doubtful, and loss. Special
mention loans are no longer deemed to be a "pass" credit and require additional management attention. They are essentially
placed on "watched" status and attempts are made to improve the credit to an unclassified status. If the credit would deteriorate
further it would then be a substandard credit, which for regulatory purposes, is deemed to be a classified loan. Doubtful and loss credit
grades represent further credit deterioration and are also considered classified loans.

 For each loan type, all of these credit rating categories are broken
out with adjusted loss ratios. The loan balance is then multiplied by the adjusted loss ratio to produce the required allowance. The allowances
are totaled and added to any specific allocations on impaired loans to arrive at the total allowance for credit losses for the Corporation.

 Management tracks and assigns a historical loss percentage for each
loan rating category within each loan type. A rolling three-year historical loss ratio, calculated on a quarterly basis, with a 60 %,
 30 %, and 10 % weighting for the past three years is used. In this manner the historical loss percentage is heavily weighted to the current
loss environment, but has sufficient weighting assigned to prior periods to avoid unnecessary volatile fluctuations based on just one
period's data.

 Management currently utilizes nine qualitative factors that are adjusted
based on changes in the lending environment and economic conditions. The qualitative factors include the following:

 levels of and trends in delinquencies, non-accruals, and charge-offs,

 trends in the nature and volume of the loan portfolio,

 changes in lending policies and procedures,

 experience, ability, and depth of lending personnel and management oversight,

 national and local economic trends,

 concentrations of credit,

 external factors such as competition, legal, and regulatory requirements,

 changes in the quality of loan review and Board oversight,

 changes in the value of underlying collateral.

 The number of qualitative factors can change. Factors can be added
for new risks or taken away if the risk no longer applies. Each loan type will have its own risk profile and management will evaluate
and adjust each qualitative factor for each loan type quarterly, if necessary. For example, if one area of the loan portfolio is experiencing
sharp increases in growth, it is likely the qualitative factor for trends in the loan portfolio would be increased for that loan type.
As levels of delinquencies and non-accrual loans decline for any segment of the loan portfolio it is likely that factor would be reduced.

 In terms of the Corporation's loan portfolio, the commercial
and industrial loans and commercial real estate loans are deemed to have more risk than the consumer real estate loans and other consumer
loans in the portfolio. The commercial loans not secured by real estate are highly dependent on their financial condition and therefore
are more dependent on economic conditions. The commercial loans secured by real estate are also dependent on economic conditions but generally
have stronger forms of collateral. Commercial real estate lending is highly impacted by the value of collateral so these commercial loans
carry a higher qualitative factor for changes in collateral value. While the Corporation's CRE loans have performed well historically,
other commercial loans and commercial mortgage loans have historically been responsible for the majority of the Corporation's delinquencies,
non-accrual loans, and charge-offs, so both of these categories carry higher qualitative factors than consumer real estate loans and other
consumer loans. The Corporation has historically experienced very low levels of consumer real estate and consumer loan charge-offs so
these qualitative factors are set lower than the commercial real estate and commercial and industrial loans.

 The definition of "impaired loans" is not the same as the
definition of "non-accrual loans," although the two categories overlap. Generally, a non-accrual loan will always be considered
impaired due to payment delinquency or uncertain collection, but there are cases where an impaired loan is not considered non-accrual.
The primary factors considered by management in determining impairment include payment status and collateral value, but could also include
debt service coverage, financial health of the business, and other external factors that could impact the ability of the borrower to fully
repay the loan. The amount of impairment for these types of loans is determined by the difference between the present value of the expected
cash flows related to the loan using the original interest rate and its recorded value or, as a practical expedient in the case of collateral-dependent
loans, the difference between the fair value of the collateral and the recorded amount of the loan. When foreclosure is probable, impairment
is measured based on the fair value of the collateral on a discounted basis, relative to the loan amount.

 Non-Accrual Loans
 Management will place a business or commercial loan on non-accrual
status when it is determined that the loan is impaired, or when the loan is 90 days past due. These customers will generally be placed
on non-accrual status at the end of each quarter. Consumer loans over 90 days delinquent are generally charged off, or in the case of
residential real estate loans the Corporation will seek to bring the customer current or pursue foreclosure options. When the borrower
is on non-accrual, the Corporation will reverse any accrued interest on the books and will discontinue recognizing any interest income
until the borrower is placed back on accrual status or fully pays off the loan balance plus any accrued interest. Payments received by
the customer while the loan is on non-accrual are fully applied against principal. The Corporation maintains records of the full amount
of interest that is owed by the borrower. A non-accrual loan will generally only be placed back on accrual status after the borrower has
become current and has demonstrated six consecutive months of non-delinquency.

 Allowance for Off-Balance Sheet Extensions of Credit
 The Corporation maintains an allowance for off-balance sheet extensions
of credit, which would include any unadvanced amount on lines of credit and any letters of credit provided to borrowers. The allowance
is carried as a liability and is included in other liabilities on the Corporation's Consolidated Balance Sheets. The liability
was $ 1,325,000 as of December 31, 2023, and $ 1,017,000 as of December 31, 2022. As the unadvanced portion of lines of credit increases,
this provision will increase.

 Management follows the same methodology as the allowance for credit
losses when calculating the allowance for off-balance sheet extensions of credit. The unadvanced amounts for each loan segment are broken
down by credit classification. A historical loss ratio and qualitative factor are calculated for each credit classification by
loan type. The historical loss ratio and qualitative factor are combined to produce an adjusted loss ratio, which is multiplied
by the amount at risk for each credit classification within each loan segment to arrive at an allocation. The allocations are summed
to arrive at the total allowance for off-balance sheet extensions of credit.

 Other Real Estate Owned (OREO)
 OREO represents properties acquired through customer loan defaults.
These properties are recorded at the lower of cost or fair value less projected disposal costs at acquisition date. Fair value is determined
by current appraisals. Costs associated with holding OREO are charged to operational expense. OREO is a component of other assets on the
Corporation's Consolidated Balance Sheets. The Corporation had no OREO as of December 31, 2023, or December 31, 2022.

 Mortgage Servicing Rights (MSRs)
 The Corporation has agreements for the express purpose of selling
residential mortgage loans on the secondary market, referred to as mortgage servicing rights. The Corporation maintains all
servicing rights for loans currently sold through FHLB and Fannie Mae. The Corporation had $ 2,151,000 of MSRs as of December 31,
2023, compared to $ 2,030,000 as of December 31, 2022. The value of MSRs increased during 2023 as valuation of new assets outpaced
amortization on existing assets. The value of newly originated MSRs is determined by estimating the life of the mortgage and how
long the Corporation will have access to the servicing income stream to determine the relative fair value. The Corporation utilizes
a third party that calculates the MSR valuation on a quarterly basis. A longer estimated life would increase the MSR valuation,
while a shorter estimated life would decrease the value of the MSR. Management records the MSR value based on the third-party
reporting. Ultimately the value of the MSRs would be at what level a willing buyer and seller would exchange the MSRs. MSRs are
amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio. Impairment is
evaluated based on the fair value of the rights, portfolio interest rates, and prepayment characteristics. MSRs are a component of
other assets on the Consolidated Balance Sheets.

 The following chart provides the activity of the Corporation's
mortgage servicing rights for the years ended December 31, 2023 and 2022.

 MORTGAGE SERVICING RIGHTS

 2023

 2022

 $

 $

 Beginning Balance

 2,030

 1,768

 Additions

 Amortization

 ( 64
)

 ( 22
)

 Disposals

 ( 62
)

 ( 60
)

 Ending Balance

 2,151

 2,030

 Premises and Equipment
 Land is carried at cost. Premises and equipment are carried at cost,
less accumulated depreciation. Book depreciation is computed using straight-line methods over the estimated useful lives of generally
 fifteen to thirty-nine years for buildings and improvements and four to ten years for furniture and equipment. Maintenance and repairs
of property and equipment are charged to operational expense as incurred, while major improvements are capitalized. Net gains or losses
upon disposition are included in other income or operational expense, as applicable.

 Transfer of Assets
 Transfers of financial assets are accounted for as sales when control
over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been
isolated from the Corporation, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right)
to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets through
an agreement to repurchase them before their maturity.

 Bank-Owned Life Insurance (BOLI)
 BOLI is carried by the Corporation at the cash surrender value of the
underlying policies. Income earned on the policies is based on any increase in cash surrender value less the cost of the insurance, which
varies according to age and health of the insured. The life insurance policies owned by the Corporation had a cash surrender value of
$ 35,632,000 and $ 34,805,000 as of December 31, 2023, and 2022, respectively.

 Leases
 The Corporation has operating leases for several branch
locations and office space. Generally, the underlying lease agreements do not contain any material residual value guarantees or material
restrictive covenants. The Corporation may also lease certain office equipment under operating leases. Many of the Corporation's leases
include both lease (e.g., minimum rent payments) and non-lease components (e.g., common-area or other maintenance costs). The Corporation
accounts for each component separately based on the standalone price of each component. In addition, there are several operating leases
with lease terms of less than one year and therefore, we have elected the practical expedient to exclude these short-term leases from
our right of use assets and lease liabilities.

 Most leases include one or more options to renew.
The exercise of lease renewal options is typically at the sole discretion of management and is based on whether the extension options
are reasonably certain to be exercised after giving proper consideration to all facts and circumstances of the lease. If management determines
that the Corporation is reasonably certain to exercise the extension option(s), the additional term is included in the calculation of the
lease liability.

 As most of the leases do not provide an implicit
rate, the Corporation uses the fully collateralized FHLB borrowing rate, commensurate with the lease terms based on the information available
at the lease commencement date in determining the present value of the lease payments.

 Advertising Costs
 The Corporation expenses advertising costs as incurred.

 Income Taxes
 An asset and liability approach is followed for financial accounting
and reporting for income taxes. Accordingly, a net deferred tax asset or liability is recorded in the consolidated financial statements
for the tax effects of temporary differences, which are items of income and expense reported in different periods for income tax and financial
reporting purposes. Deferred tax expense is determined by the change in the assets or liabilities related to deferred income taxes. As
changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

 Earnings per Share
 Basic earnings per share represents income available to common stockholders
divided by the weighted average number of common shares outstanding during the period less any unvested restricted shares. Diluted earnings
per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well
as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Corporation relate
solely to outstanding stock options and are determined using the treasury stock method. Treasury shares are not deemed outstanding for
earnings per share calculations.

 Comprehensive Income (Loss)
 The Corporation is required to present comprehensive
income (loss) in a full set of general-purpose consolidated financial statements for all periods presented. Other comprehensive income
(loss) consists of unrealized holding gains and losses on the available for sale securities portfolio.

 Segment Disclosure
 U.S. generally accepted accounting principles establish standards for
the manner in which public business enterprises report information about segments in the annual financial statements and requires that
those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes
standards for related disclosures regarding financial products and services, geographic areas, and major customers. The Corporation has
only one operating segment consisting of its banking and fiduciary operations.

 Retirement Plans
 The Corporation provides an optional 401(k) plan, in which employees
may elect to defer pre-tax salary dollars, subject to the maximum annual Internal Revenue Service contribution amounts. The Corporation
will match 50 % of employee contributions up to 5 %, limiting the match to 2.5 %.

 As part of the 401(k) Plan, the Corporation also has a noncontributory
Profit Sharing Plan which covers substantially all employees. The Corporation provides a 3 % non-elective contribution to all employees
and contributes a 2 % elective contribution to all employees aged 21 or older who work 1,000 or greater
hours in a calendar year and have completed at least one full year of employment.

 Trust Assets and Income
 Assets held by ENB's Wealth Solutions Group in a fiduciary or
agency capacity for customers are not included in the Corporation's Consolidated Balance Sheets since these items are not assets
of the Corporation. Trust income is reported in the Corporation's Consolidated Statements of Income under other income.

 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.

 Reclassification of Comparative Amounts
 Certain comparative amounts for the prior year
have been reclassified to conform to current-year classifications. Such reclassifications had no material effect on net income or stockholders'
equity.

 Recently Issued Accounting Standards
 In
March 2023, the FASB issued ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments
in Tax Credit Structures Using the Proportional Amortization Method. ASU 2023-02 permits reporting entities to elect to account for
their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional
amortization method if certain conditions are met. ASU 2023-02 is effective for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2023. This Update is not expected to have a significant impact on the Corporation's financial
statements.

 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. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning
after December 15, 2024. Early adoption is permitted.

 Public
entities are required to adopt the changes retrospectively, recasting each prior-period disclosure for which a comparative income statement
is presented in the period of adoption. This Update is not expected to have a significant impact on the Corporation's
financial statements.

 In
December 2023, the FASB issued ASU 2023-09, Income Taxes 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 period beginning after December 15, 2024. This Update is not expected to have
a significant impact on the Corporation's financial statements.

 NOTE B - SECURITIES

 DEBT SECURITIES

 The amortized cost, gross unrealized gains and
losses, estimated fair value, and allowance for credit losses of investment securities held at December 31, 2023 are as follows:

 Gross

 Gross

 Allowance

 for Credit

 Fair

 Cost

 Gains

 Value

 $

 $

 $

 $

 $

 U. S. Treasuries

 19,869

 —

 ( 1,710
)

 —

 19,400

 —

 ( 1,862
)

 —

 43,753

 —

 ( 3,597
)

 —

 40,156

 21,841

 —

 ( 2,004
)

 —

 Non-agency MBS/CMO

 59,281

 ( 3,116
)

 —

 56,187

 66,391

 ( 1,106
)

 —

 65,305

 61,122

 —

 ( 6,118
)

 —

 211,400

 ( 24,018
)

 —

 187,383

 Total securities available for sale

 503,057

 ( 43,531
)

 —

 459,569

 The amortized cost, gross unrealized gains and losses, and estimated fair value of investment securities held at December 31, 2022, are as follows:

 Gross

 Gross

 Fair

 Cost

 Gains

 Value

 $

 $

 $

 $

 Decmber 31, 2022

 U. S. Treasuries

 35,737

 —

 ( 3,080
)

 32,657

 27,605

 —

 ( 2,818
)

 24,787

 49,939

 —

 ( 4,632
)

 45,307

 30,193

 —

 ( 2,703
)

 27,490

 Non-agency MBS/CMO

 53,900

 —

 ( 3,650
)

 76,110

 ( 2,892
)

 73,234

 76,685

 ( 7,064
)

 69,631

 240,102

 ( 34,326
)

 205,786

 Total securities available for sale

 590,271

 ( 61,165
)

 529,142

 The amortized cost and fair value of debt securities available for sale at December 31, 2023,
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

 Cost

 $

 $

 Due in one year or less

 4,351

 4,280

 Due after one year through five years

 103,985

 95,621

 Due after five years through ten years

 67,391

 57,942

 Due after ten years

 327,330

 301,726

 Total debt securities

 503,057

 459,569

 Securities available for sale with a par value of $ 117,525,000 and $ 116,179,000 at December
31, 2023 and 2022, respectively, were pledged or restricted for public funds, borrowings, or other purposes as required by law. The fair
market value of these pledged securities was $ 109,651,000 at December 31, 2023, and $ 107,071,000 at December 31, 2022.

 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

 Securities Available for Sale

 2023

 2022

 $

 $

 Proceeds from sales

 61,089

 28,590

 Gross realized gains

 Gross realized losses

 1,375

 Information pertaining to securities with gross unrealized losses for
which an allowance for credit losses has not been recorded at December 31, 2023, and December 31, 2022, aggregated by investment category
and length of time that individual securities have been in a continuous loss position follows:

 UNREALIZED LOSSES OF SECURITIES

 Less than 12 months

 More than 12 months

 Total

 Gross

 Gross

 Gross

 Fair

 Fair

 Fair

 Value

 Value

 Value

 $

 $

 $

 $

 $

 $

 As of December 31, 2023

 —

 —

 ( 1,710
)

 ( 1,710
)

 —

 —

 ( 1,862
)

 ( 1,862
)

 —

 —

 40,147

 ( 3,597
)

 40,147

 ( 3,597
)

 —

 —

 ( 2,004
)

 ( 2,004
)

 Non-Agency MBS/CMO

 11,189

 ( 119
)

 41,966

 ( 2,997
)

 53,155

 ( 3,116
)

 2,661

 ( 47
)

 57,049

 ( 1,059
)

 59,710

 ( 1,106
)

 —

 —

 ( 6,118
)

 ( 6,118
)

 Obligations of states & political subdivisions

 —

 —

 186,819

 ( 24,018
)

 186,819

 ( 24,018
)

 Total unrealized losses

 13,850

 ( 166
)

 436,519

 ( 43,365
)

 450,369

 ( 43,531
)

 As of December 31, 2022

 19,721

 ( 1,169
)

 12,936

 ( 1,911
)

 32,657

 ( 3,080
)

 1,953

 ( 52
)

 21,634

 ( 2,766
)

 23,587

 ( 2,818
)

 24,667

 ( 1,653
)

 20,640

 ( 2,979
)

 45,307

 ( 4,632
)

 9,984

 ( 500
)

 17,453

 ( 2,203
)

 27,437

 ( 2,703
)

 Non-Agency MBS/CMO

 ( 3,650
)

 —

 —

 ( 3,650
)

 29,283

 ( 1,028
)

 42,032

 ( 1,864
)

 71,315

 ( 2,892
)

 15,197

 ( 1,230
)

 43,417

 ( 5,834
)

 58,614

 ( 7,064
)

 Obligations of states & political subdivisions

 103,200

 ( 10,949
)

 100,575

 ( 23,377
)

 203,775

 ( 34,326
)

 Total unrealized losses

 254,255

 ( 20,231
)

 258,687

 ( 40,934
)

 512,942

 ( 61,165
)

 In the debt security portfolio, there are 319 positions carrying unrealized
losses as of December 31, 2023. There were no instruments with current expected credit losses at December 31, 2023.

 The Corporation evaluates fixed income positions for current expected
credit loss at least on a quarterly basis, and more frequently when economic and market concerns warrant such evaluation. The Corporation
does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a
recovery of fair value, which may be maturity. The Corporation concluded that the decline in fair value of these securities was not indicative
of a credit loss. No securities in the portfolio required an allowance for credit losses to be recorded during the year ended December
31, 2023, and no impairment was recorded during the year ended December 31, 2022.

 EQUITY SECURITIES

 The following tables summarize the amortized cost,
gross unrealized gains and losses, and fair value of equity securities held at December 31, 2023 and December 31, 2022.

 Gross

 Gross

 Fair

 Cost

 Gains

 Value

 $

 $

 $

 $

 CRA-qualified mutual funds

 7,734

 —

 —

 7,734

 Bank stocks

 1,754

 ( 181
)

 1,717

 Total equity securities

 9,488

 ( 181
)

 9,451

 Gross

 Gross

 Fair

 Cost

 Gains

 Value

 $

 $

 $

 $

 CRA-qualified mutual funds

 7,345

 —

 —

 7,345

 Bank stocks

 1,685

 ( 74
)

 1,773

 Total equity securities

 9,030

 ( 74
)

 9,118

 The following table presents the net gains and losses on the Corporation's
equity investments recognized in earnings during the year ended December 31, 2023 and 2022, and the portion of unrealized gains and losses
for the periods that relates to equity investments held as of December 31, 2023 and 2022.

 NET GAINS AND LOSSES ON EQUITY INVESTMENTS RECOGNIZED IN EARNINGS

 Year Ended

 Year Ended

 2023

2022

 $

 $

 Net gains (losses) recognized in equity securities during the period

 ( 125
)

 ( 32
)

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

 —

 ( 52
)

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

 ( 125
)

 ( 84
)

 There were no proceeds from the sale of equity securities during 2023
and $ 151,000 during 2022.

 NOTE C - LOANS AND ALLOWANCE FOR CREDIT LOSSES

 The following table presents the Corporation's loan portfolio
by category of loans as of December

 31, 2023 (in thousands):

 2023

 $

 354,252

 6,392

 107,176

 Non-Owner Occupied Commercial Real Estate

 Residential Real Estate (a)

 497,553

 Gross loans prior to deferred costs

 1,357,862

 Deferred loan costs, net

 2,216

 Allowance for credit losses

 ( 15,176
)

 Total net loans (b)

 1,344,902

 (a)
 Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $ 301,822,000 as of December
31, 2023.

 (b)
 Refer to Note A, Accounting Pronouncements Adopted in 2023 for details of reclassification of the portfolio segments related to the adoption
of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

 The following
table presents the Corporation's loan portfolio, prior to the adoption of ASC 326, by category of loans and the impact of the change
from the adoption of the standard (in thousands):

 Post Adoption

 Adoption

 January, 1

 2022

 Impact

 2023

 $

 $

 $

 —

 238,734

 238,734

 —

 336,340

 336,340

 —

 98,854

 98,854

 —

 111,333

 111,333

 Residential Real Estate (a)

 —

 397,260

 397,260

 210,823

 ( 210,823
)

 —

 221,167

 ( 221,167
)

 —

 86,793

 ( 86,793
)

 —

 Total commercial real estate

 518,783

 ( 518,783
)

 —

 Consumer real estate (a)

 1-4 family residential mortgages

 410,301

 ( 410,301
)

 —

 Home equity loans

 11,937

 ( 11,937
)

 —

 Home equity lines of credit

 98,349

 ( 98,349
)

 —

 Total consumer real estate

 520,587

 ( 520,587
)

 —

 87,528

 ( 87,528
)

 —

 ( 28,664
)

 —

 27,122

 ( 27,122
)

 —

 Total commercial and industrial

 143,314

 ( 143,314
)

 —

 5,769

 5,932

 Gross loans prior to deferred fees

 1,188,453

 —

 1,188,453

 Deferred loan costs, net

 2,664

 Allowance for credit losses

 ( 14,151
)

 Total net loans

 1,176,966

 (a)
 Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $ 298,375,000 as of December
31, 2022.

 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
December 31, 2023 and 2022. The grading analysis estimates the capability of the borrower to repay the contractual obligations under the
loan agreements as scheduled or at all. 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.

 Based on the most recent analysis performed,
the following table presents the recorded investment by internal risk rating system for Commercial Credit exposure as of December 31,
2023 in accordance with ASC 326 (in thousands):

 Revolving

 Revolving

 Term Loans Amortized Costs Basis by Origination Year

 Loans

 Loans

 Converted

 2023

 2022

 2021

 2020

 2019

 Prior

 Cost Basis

 to Term

 Total

 Risk Rating

 Pass

 $
 47,599

 $
 41,741

 $
 49,276

 $
 18,699

 $
 14,793

 $
 58,459

 $
 21,157

 $
 —

 $
 251,724

 1,136

 —

 2,372

 —

 —

 1,772

 —

 3,276

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 47,659

 $
 41,750

 $
 49,796

 $
 20,115

 $
 15,324

 $
 61,367

 $
 21,361

 $
 —

 $

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Risk Rating

 Pass

 $
 43,670

 $
 102,419

 $
 64,030

 $
 36,675

 $
 17,785

 $
 45,583

 $
 37,269

 $
 —

 $
 347,431

 —

 —

 —

 —

 3,152

 1,369

 —

 —

 —

 5,982

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 46,822

 $
 103,831

 $
 64,456

 $
 36,938

 $
 17,785

 $
 46,691

 $
 37,729

 $
 —

 $
 354,252

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Risk Rating

 Pass

 $
 26,757

 $
 43,976

 $
 27,377

 $
 12,849

 $
 7,705

 $
 12,397

 $

 $
 —

 $
 131,436

 —

 —

 —

 —

 —

 1,068

 —

 —

 —

 —

 2,312

 —

 —

 2,613

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 27,149

 $
 44,615

 $
 27,377

 $
 12,849

 $
 10,017

 $
 12,735

 $

 $
 —

 $

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Total

 Risk Rating

 Pass

 $
 118,026

 $
 188,136

 $
 140,683

 $
 68,223

 $
 40,283

 $
 116,439

 $
 58,801

 $
 —

 $
 730,591

 1,443

 —

 4,279

 3,152

 1,369

 2,673

 2,911

 —

 11,871

 —

 —

 —

 —

 —

 —

 —

 —

 —

 $
 121,630

 $
 190,196

 $
 141,629

 $
 69,902

 $
 43,126

 $
 120,793

 $
 59,465

 $
 —

 $
 746,741

 (a)

 Refer to Note A, Accounting Pronouncements Adopted in 2023 for details of reclassification of the portfolio segments related to adoption
of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

 The following table presents the recorded investment in loans by internal
risk rating system for Commercial Credit Exposure as of December 31, 2022 in accordance with ASC 310 (in thousands):

 Commercial

 Commercial

 and

 Tax-free

 Mortgages

 Mortgages

 Industrial

 Loans

 Loans

 Total

 $

 $

 $

 $

 $

 $

 $

 Grade:

 Pass

 209,534

 214,905

 83,240

 85,977

 26,749

 649,069

 —

 1,966

 3,553

 —

 6,544

 1,289

 4,296

 —

 —

 6,484

 —

 —

 —

 —

 —

 —

 —

 Loss

 —

 —

 —

 —

 —

 —

 —

 Total

 210,823

 221,167

 86,793

 87,528

 27,122

 662,097

 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. Management will generally charge off consumer loans more than 120 days past due for closed end loans and over 180
days for open-end consumer loans.

 The following table presents the balances of consumer
loans by classes of the loan portfolio based on payment performance as of December 31, 2023 in accordance with ASC 326 (in thousands):

 Revolving

 Revolving

 Term Loans Amortized Costs Basis by Origination Year

 Loans

 Loans

 Converted

 2023

 2022

 2021

 2020

 2019

 Prior

 Cost Basis

 to Term

 Total

 Payment Performance

 $
 3,251

 $
 1,085

 $

 $

 $

 $

 $
 1,482

 $
 —

 $
 6,379

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 3,251

 $
 1,098

 $

 $

 $

 $

 $
 1,482

 $
 —

 $
 6,392

 $
 —

 $

 $

 $

 $

 $

 $
 —

 $
 —

 $

 Home equity

 Payment Performance

 $
 7,086

 $
 18,476

 $
 1,049

 $

 $

 $
 1,847

 $
 76,076

 1,399

 $
 107,026

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 7,086

 $
 18,476

 $
 1,049

 $

 $

 $
 1,847

 $
 76,226

 $
 1,399

 $
 107,176

 Home equity

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Payment Performance

 $
 123,368

 $
 148,835

 $
 105,283

 $
 43,961

 $
 31,514

 $
 44,236

 $
 —

 $
 —

 $
 497,197

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 123,368

 $
 148,835

 $
 105,639

 $
 43,961

 $
 31,514

 $
 44,236

 $
 —

 $
 —

 $
 497,553

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Total

 Payment Performance

 $
 133,705

 $
 168,396

 $
 106,683

 $
 44,701

 $
 32,074

 $
 46,086

 $
 77,558

 $
 1,399

 $
 610,602

 —

 —

 —

 —

 —

 $
 133,705

 $
 168,409

 $
 107,039

 $
 44,701

 $
 32,074

 $
 46,086

 $
 77,708

 $
 1,399

 $
 611,121

 (a)

 Refer to Note A, Accounting Pronouncements Adopted in 2023 for details of reclassification of the portfolio segments related to adoption
of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

 The following table presents the balances of consumer
loans by classes of the loan portfolio based on payment performance as of December 31, 2022 in accordance with ASC 310 (in thousands):

 CONSUMER CREDIT EXPOSURE

 CREDIT RISK PROFILE BY PAYMENT PERFORMANCE

 1-4 Family

 Residential

 Lines of

 Mortgages

 Loans

 Credit

 Total

 Payment performance:

 $

 $

 $

 $

 $

 409,854

 11,598

 98,349

 5,739

 525,540

 Non-performing

 —

 Total

 410,301

 11,937

 98,349

 5,769

 526,356

 Age Analysis of Past Due Loans Receivable

 The following tables present an age analysis of the Corporation's
past due loans, segregated by loan portfolio class, as of December 31, 2023:

 31-60

 61-90

 Greater Than

 Days

 Days

 90 Days

 Total

 Total

 Current

 Loans

 $

 $
 —

 $
 —

 $
 —

 $
 —

 $

 354,008

 —

 354,252

 6,361

 6,392

 106,787

 107,176

 —

 —

 —

 —

 495,952

 1,245

 —

 1,601

 497,553

 $
 1,355,597

 $
 1,560

 $

 $

 $
 2,265

 $
 1,357,862

 (a)

 Refer to Note A, Accounting Pronouncements Adopted in 2023 for details of reclassification of the portfolio segments related to adoption
of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

 The following table presents the classes of the
loan portfolio summarized by the past-due status as of December 31, 2022 (in thousands):

 Loans

 Greater

 Receivable >

 30-59 Days

 60-89 Days

 than 90

 Total Past

 Total Loans

 90 Days and

 Days

 Due

 Current

 Receivable

 Accruing

 $

 $

 $

 $

 $

 $

 $

 —

 —

 210,269

 210,823

 —

 —

 —

 2,787

 2,787

 218,380

 221,167

 —

 —

 —

 —

 —

 86,793

 86,793

 —

 1-4 family residential mortgages

 —

 1,352

 408,949

 410,301

 Home equity loans

 —

 11,581

 11,937

 —

 Home equity lines of credit

 —

 98,168

 98,349

 —

 —

 —

 87,338

 87,528

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 27,122

 27,122

 —

 5,725

 5,769

 Total

 1,096

 4,347

 5,464

 1,182,989

 1,188,453

 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 December
31, 2023, (in thousands):

 Nonaccrual

 Nonaccrual

 Loans Past

 with no

 with

 Total

 Due Over 90 Days

 Total

 ACL

 ACL

 Nonaccrual

 Still Accruing

 $

 $
 —

 $

 $
 —

 $

 1,817

 —

 1,817

 —

 1,817

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 $
 2,758

 $
 —

 $
 2,758

 $

 $
 3,277

 (a)
 Refer to Note A, Accounting Pronouncements Adopted in 2023 for details of reclassification of the portfolio segments related to adoption
of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

 The following table presents nonaccrual loans by classes of the loan
portfolio as of December 31, 2022 (in thousands):

 NON-ACCRUAL LOANS BY LOAN CLASS

 2022

 $

 2,787

 —

 1-4 family residential mortgages

 Home equity loans

 Home equity lines of credit

 —

 —

 —

 —

 Total

 4,178

 As of December 31, 2022, all of the Corporation's commercial loans on nonaccrual status were also considered
impaired.

 The following table presents, by class of loans, the collateral-dependent
nonaccrual loans and type of collateral as of December 31, 2023 (in thousands).

 Real Estate

 Other

 None

 Total

 $

 $
 —

 $
 —

 $

 1,817

 —

 —

 1,817

 —

 —

 —

 —

 —

 —

 —

 —

 Non-Owner Occupied

 —

 —

 —

 —

 —

 —

 —

 —

 Total

 $
 2,758

 $
 —

 $
 —

 $
 2,758

 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 during the year ended
December 31, 2023.

 There were no payment defaults for loans granted
modifications due to a borrower experiencing financial difficulty within twelve months of the modification date, during the year ended
December 31, 2023.

 As described in Note 1, the Corporation adopted
ASU 2022-02 on January 1, 2023, which eliminated the recognition and measurement of troubled debt restructurings (TDRs). There was one
TDR as of December 31, 2022 with a balance of $ 442,000.00.

 The following table summarizes information in
regards to impaired loans by loan portfolio class as of December 31, 2022:

 IMPAIRED LOAN ANALYSIS

 Recorded
 Investment

 Unpaid
 Principal

 Related
 Allowance

 Recorded
 Investment

 Interest
 Income
 Recognized

 $

 $

 $

 $

 $

 With no related allowance recorded:

 1,201

 1,271

 —

 —

 3,229

 3,348

 —

 3,350

 —

 —

 —

 —

 —

 Total commercial real estate

 4,430

 4,619

 —

 4,129

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total commercial and industrial

 —

 —

 Total with no related allowance

 4,620

 4,818

 —

 4,289

 With an allowance recorded:

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total commercial real estate

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total commercial and industrial

 —

 —

 —

 —

 —

 Total with a related allowance

 —

 —

 —

 —

 —

 Total by loan class:

 1,201

 1,271

 —

 —

 3,229

 3,348

 —

 3,350

 —

 —

 —

 —

 —

 Total commercial real estate

 4,430

 4,619

 —

 4,129

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Total commercial and industrial

 —

 —

 Total

 4,620

 4,818

 —

 4,289

 The following table details activity in the allowance for credit losses
by portfolio segment for the year ended December 31, 2023:

 Impact of

 Beginning

 adopting

 Provisions

 Ending

 ASC 326

 Charge-offs

 Recoveries

 (Reductions)

 Allowance for credit losses:

 Commercial Real Estate

 $
 6,074

 $
 ( 6,074
)

 $
 —

 $
 —

 $
 —

 $
 —

 Consumer Real Estate

 5,442

 ( 5,442
)

 —

 —

 —

 —

 Commercial & Industrial

 2,151

 ( 2,151
)

 —

 —

 —

 —

 —

 3,537

 —

 ( 502
)

 3,106

 —

 3,382

 —

 ( 709
)

 2,684

 ( 64
)

 —

 2,129

 —

 —

 2,341

 —

 —

 —

 ( 57
)

 —

 4,658

 —

 1,206

 5,872

 Unallocated

 ( 417
)

 —

 —

 —

 —

 $

 $

 $
 ( 64
)

 $

 $

 $
 15,176

 (a)
 Refer to Note A, Accounting Pronouncements Adopted in 2023 for details of reclassification of the portfolio segments related to
adoption of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

 During the year ended December 31, 2023, management charged off $ 64,000
in loans while recovering $ 94,000 and added $ 315,000 to the provision for credit losses related to loans and added $ 205,000 to the provision
for off-balance sheet credit exposure for a combined provision of $ 520,000.

 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 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.

 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.

- 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 December 31, 2023 ending balance of the allowance for credit losses
related to loans was up $ 1,025,000, or 7.2 %, from December 31, 2022, and the allowance as a percentage of total loans was 1.12 % as of
December 31, 2023, and 1.19 % as of December 31, 2022.

 The following table details activity in the allowance for credit losses
by portfolio segment for the year ended December 31, 2022:

 ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE

 Commercial

 Commercial

 and

 Real Estate

 Real Estate

 Industrial

 Unallocated

 Total

 $

 $

 $

 $

 $

 $

 Allowance for credit losses:

 Beginning balance

 6,263

 3,834

 2,112

 12,931

 Charge-offs

 ( 84
)

 —

 ( 44
)

 ( 19
)

 —

 ( 147
)

 Recoveries

 —

 Provision (credit)

 ( 115
)

 1,598

 ( 6
)

 ( 218
)

 1,300

 Ending balance

 6,074

 5,442

 2,151

 Ending balance: individually evaluated for impairment

 —

 —

 —

 —

 —

 —

 Ending balance: collectively evaluated for impairment

 6,074

 5,442

 2,151

 Loans receivable:

 Ending balance

 518,783

 520,587

 143,314

 5,769

 1,188,453

 Ending balance: individually evaluated for impairment

 4,430

 —

 —

 4,620

 Ending balance: collectively evaluated for impairment

 514,353

 520,587

 143,124

 5,769

 1,183,833

 During the year ended December 31, 2022, management charged off $ 147,000
in loans while recovering $ 67,000 and added $ 1,300,000 to the provision. The unallocated portion of the allowance was 2.9 % of total reserves
as of December 31, 2022.

 During the year ended December 31, 2022, net provision expense was
recorded for Consumer Real Estate and Commercial and Industrial but a credit provision was recorded for Commercial Real Estate and Consumer.
The provision expense was primarily related to growth in those sectors of the loan portfolio through December 31, 2022, while the credit
provision was primarily related to declining qualitative factors in several areas.

 NOTE D – PREMISES AND EQUIPMENT

 The major classes of the Corporation's premises and equipment
and accumulated depreciation are as follows:

 2023

 2022

 $

 $

 Land

 5,043

 5,043

 Buildings and improvements

 32,364

 30,780

 Furniture and equipment

 11,246

 10,330

 Construction in process

 1,298

 Total

 48,928

 47,451

 Less accumulated depreciation

 ( 23,644
)

 ( 22,118
)

 Premises and equipment

 25,284

 25,333

 Depreciation expense, which is included in operating expenses, amounted
to $ 1,601,000 for 2023, and $ 1,335,000 for 2022. The construction in process category represents expenditures for ongoing projects. When
construction is completed, these amounts will be reclassified into buildings and improvements, and/or furniture and equipment. Depreciation
only begins when the project or asset is placed into service. As of December 31, 2023 and 2022, the construction in process consists primarily
of costs associated with the construction of a drive-thru facility as well as renovations to leased office space.

 NOTE E – REGULATORY STOCK

 The Bank is a member of the Federal Home Loan Bank (FHLB) of Pittsburgh,
which is one of 11 regional Federal Home Loan Banks. Each FHLB serves as a reserve or central bank for its members within its assigned
region. As a member, the Bank is required to purchase and maintain stock in the FHLB in an amount equal to 0.10 % of its asset value
plus an additional 4 % of its outstanding advances from the FHLB and mortgage partnership finance loans sold to the FHLB. At December 31,
2023, the Bank held $ 7,360,000 in stock of the FHLB compared to $ 5,552,000 as of December 31, 2022.

 The FHLB repurchases excess capital stock on a quarterly basis and
pays a quarterly dividend on stock held by the Corporation. The FHLB's quarterly dividend yield was 8.25 % annualized on activity
stock and 5.35 % annualized on membership stock as of December 31, 2023. Most of the Corporation's dividend is based on the activity
stock, which is based on the amount of borrowings and mortgage activity with FHLB. The Corporation will continue to monitor the financial
condition of the FHLB quarterly to assess its ability to continue to regularly repurchase excess capital stock and pay a quarterly dividend.

 The Corporation also owned $ 1,143,000 of Federal Reserve Bank stock
and $ 37,000 of Atlantic Community Bancshares, Inc. stock, the Bank Holding Company of ACBB, as of December 31, 2023, compared to $ 1,081,000
and $ 37,000, respectively, as of December 31, 2022.

 NOTE F – DEPOSITS

 Deposits by major classifications are summarized as follows:

 2023

 2022

 $

 $

 Non-interest bearing demand

 Interest-bearing demand

 214,033

 164,208

 NOW accounts

 99,738

 139,846

 Money market deposit accounts

 158,446

 163,836

 308,913

 364,897

 Time deposits under $250,000

 274,569

 124,144

 Time deposits of $250,000 or more

 59,131

 9,685

 1,726,798

 1,638,958

 At December 31, 2023, the scheduled maturities of time deposits are as follows:

 2024

 249,641

 2025

 44,621

 2026

 15,338

 2027

 2,366

 2028

 21,734

 Total

 333,700

 At December 31, 2023, the Bank held $ 39,092,000 in brokered deposits
compared to $ 19,518,000 as of December 31, 2022.

 NOTE G – SHORT TERM BORROWINGS

 Short-term borrowings consist of Federal funds purchased that mature
one business day from the transaction date, overnight borrowings from the Federal Reserve Discount Window, and FHLB advances with a term
of less than one year.

 A summary of short-term borrowings is as follows for the years ended
December 31, 2023 and 2022:

 2023

 2022

 $

 $

 Total short-term borrowings outstanding at year end

 —

 16,000

 Average interest rate at year end

 —

 3.00 %

 Maximum outstanding at any month end

 13,500

 24,000

 Average amount outstanding for the year

 5,587

 13,336

 Weighted-average interest rate for the year

 3.53 %

 2.29 %

 As of December 31, 2023, the Corporation had approved unsecured
Federal funds lines of $ 30 million. The Corporation also has the ability to borrow from the Federal Reserve through either the Discount
Window or the Bank Term Funding Program (BTFP). The amount of borrowing available through the Discount Window was $ 48.9 million, while
the BTFP availability was $ 20.0 million as of December 31, 2023. As of December 31, 2022, the Corporation had $ 52.6 million in available
borrowings at the Discount Window. For further information on borrowings from the FHLB see Note H.

 NOTE H – OTHER BORROWED FUNDS

 Federal Home Loan Bank (FHLB) Borrowings

 Maturities of FHLB borrowings at December 31, 2023, and 2022, are summarized as follows:

 2023

 2022

 Weighted-

 Weighted-

 Rate

 Rate

 $

 %

 $

 %

 FHLB fixed rate loans

 2023

 —

 —

 13,816

 2.77

 2024

 17,406

 2.02

 17,406

 2.02

 2025

 15,984

 2.16

 12,984

 1.47

 2026

 28,158

 4.47

 —

 —

 2027

 16,833

 4.11

 13,833

 4.01

 2028

 22,847

 3.81

 —

 —

 Total other borrowings

 101,228

 3.47

 58,039

 1.89

 As a member of the FHLB of Pittsburgh, the Corporation
has access to significant credit facilities. Borrowings from FHLB are secured with a blanket security agreement and the required investment
in FHLB member bank stock. As part of the security agreement, the Corporation maintains unencumbered qualifying assets (principally 1-4
family residential mortgage loans) in an amount at least as much as the advances from the FHLB. Additionally, all of the Corporation's
FHLB stock is pledged to secure these advances.

 The Corporation had an FHLB maximum borrowing capacity of $ 687.7 million
as of December 31, 2023 with remaining borrowing capacity of $ 583.3 million. The borrowing arrangement with the FHLB is subject to annual
renewal. The maximum borrowing capacity is recalculated quarterly.

 Subordinated Debt

 Subordinated debt at December 31, 2023 and 2022 was as follows:

 (Dollars in thousands)

 2023

 2022

 Carrying

 Carrying

 Issued

 Rate

 Issued by

 Ranking

 $

 $

 %

 $

 Date Issued

 Maturity

 ENB Financial Corp

 Subordinated (1)(2)

 19,840

 19,760

 4.00 %

 20,000

 12/30/20

 12/30/30

 ENB Financial Corp

 Subordinated (1)(3)

 19,716

 19,636

 5.75 %

 20,000

 07/22/22

 09/30/32

 Total

 39,556

 39,396

 (1)
 The subordinated notes qualify as Tier 2 capital for regulatory capital purposes.

 (2)
 ENB Financial Corp has the ability to call the subordinated notes, in whole, or in part, at a redemption price equal to 100% of the principal
balance at certain times on or after December 30, 2025.

 (3)
 ENB Financial Corp has the ability to call the subordinated notes, in whole, or in part, at a redemption price equal to 100% of the principal
balance at certain times on or after July 22, 2027.

 NOTE I – CAPITAL TRANSACTIONS

 On October 21, 2020, the Board of Directors of the Corporation approved
a plan to repurchase, in open market and privately negotiated transactions, up to 200,000 shares of its outstanding common stock. This
plan replaced the 2019 plan. As of December 31, 2023, a total of 79,490 shares were repurchased at a total cost of $ 1,357,000, for an
average cost per share of $ 17.07. Shares repurchased under these plans were held as treasury shares to be utilized in connection with
the Corporation's three stock purchase plans.

 Currently, the following three stock purchase plans are in place:

 a nondiscriminatory employee stock purchase plan (ESPP), which allows employees to purchase shares at a 15 % discount from the stock's
fair market value at the end of each quarter,

 a dividend reinvestment plan (DRP), and;

 a directors' stock purchase plan (DSPP).

 The ESPP was started in 2001 and is the largest of the three plans.
There were 46,033 shares issued through the ESPP in 2023 with 349,886 shares issued since existence. The DRP was started in 2005 with
 19,421 shares issued in 2022 and 263,044 total shares issued since existence. Lastly, the DSPP was started in 2010 as an additional option
for board compensation. This plan is limited to outside directors. A total of 5,731 shares were issued in connection with this plan in
2023 and 49,925 since existence. In 2022, there were 39,617 shares issued through the ESPP, 14,170 shares issued through the DRP, and
 4,245 shares issued through the DSPP. The plans are beneficial to the Corporation as all reissued shares increase capital and since dividends
are paid out in the form of additional shares, the plans act as a source of funds. The total amount of shares issued from Treasury for
these plans collectively in 2023 and 2022 was 71,185 and 58,032, respectively.

 The Corporation entered into employment agreements with a number of
its key personnel. The initial term of each employment agreement is three (3) years. Each employment agreement shall automatically renew
for additional three (3) year terms at the end of the initial three (3) year term and at the end of each three (3) year renewal of the
employment agreement unless notice to terminate is given by either party at least one hundred eighty (180) days prior to the expiration
of the initial term or any renewal term of the employment agreement. If proper notice to terminate is not given, each employment agreement
shall renew for an additional three (3) years. Further, in consideration of entering into the employment agreements, the employees each
received restricted stock units. Each restricted stock unit represents a contingent right to receive one share of Corporation common stock.
The restricted stock units vest at a rate of 33 1/3% on each anniversary of the date of grant. The product of the number of shares granted
and the grant date market price of the Corporation's common stock determines the fair value of the restricted shares which is expensed
over the vesting period. During the year ended December 31, 2023, the Corporation recorded $ 62,000 of stock-based compensation expense,
compared to $ 11,000 for the year ended December 31, 2022. Expected future compensation expense relating to the restricted stock units
is $ 125,000 over the remaining vesting period.

 The following is a summary of the status of the Corporation's nonvested
restricted stock as of December 31, 2023, and changes therein during the year then ended:

 Number of

 Weighted-Average

 Restricted

 Grant Date

 Stock Units

 Nonvested at December 31, 2022

 11,960

 16.80

 Granted

 1,439

 $
 13.90

 Vested

 3,539

 16.80

 Forfeited

 1,340

 16.80

 Nonvested at December 31, 2023

 8,520

 $
 16.31

 NOTE J – RETIREMENT PLANS

 The Corporation has a 401(k) Savings Plan under which the Corporation
makes an employer matching contribution, a non-elective safe harbor contribution and a discretionary non-elective profit sharing contribution.
Employee contributions to the plan are subject to the maximum annual Internal Revenue Service contribution
amounts which were $ 22,500 for 2023 and $ 20,500 for 2022, for persons under age 50, and for persons over age 50 were $ 30,000 in 2023 and
$ 27,000 in 2022. The employer matching contribution is made on the compensation of all eligible employees, up to a maximum
of 2.5 % of an eligible employee's compensation, at $0.50 for every $1.00 of employee contribution up to 5 % of an eligible employee's
salary. The Corporation's cost for this 401(k) match was $ 447,000 for 2023 and 2022.

 The employer non-elective safe harbor contribution is 3 % of all employee
compensation for the year. Based on the performance of the Corporation the Compensation Committee determined the discretionary non-elective
profit sharing contribution would be 2 % of all eligible employee compensation. For the Corporation, the expense of the 401(k) matching
contribution will be smaller than the non-elective safe harbor and the discretionary non-elective profit sharing expenses as the Corporation
is matching a maximum of up to 2.5 % of salary, depending on employee contributions, compared to contributing up to 5.0 % of eligible employee's
salaries in the safe harbor and discretionary profit sharing contributions.

 For purposes of the 401(k) Savings Plan, covered compensation was
limited to $ 330,000 in 2023 and $ 305,000 in 2022. Total expenses of the plan were $ 986,000 and $ 941,000, for 2023 and 2022, respectively.
The Corporation's 401(k) Savings Plan is fully funded as all obligations are funded monthly.

 NOTE K - DEFERRED COMPENSATION

 Prior to 1999, directors of the Corporation had the ability to defer
their directors' fees into a directors' deferred compensation plan. Directors electing to defer their compensation signed
a contract that allowed the Corporation to take out a life insurance policy on the director designed to fund the future deferred compensation
obligation, which is paid out over a ten-year period at retirement age. A contract and life insurance policy was taken out for each period
of pay deferred. The amount of deferred compensation to be paid to each director was actuarially determined based on the amount of life
insurance the annual directors' fees were able to purchase. This amount varies for each director depending on age, general health,
and the number of years until the director is entitled to begin receiving payments. The Corporation is the owner and beneficiary of all
life insurance policies on the directors.

 At the time the directors' pay was deferred, the Corporation
used the amount of the annual directors' fees to pay the premiums on the life insurance policies. The Corporation could continue
to pay premiums after the deferment period, or could allow the policies to fund annual premiums through loans against the policy's
cash surrender value. The Corporation has continued to pay the premiums on the life insurance policies and no loans exist on the policies.

 The life insurance policies had an aggregate death benefit value of
$ 6,069,000 at December 31, 2023, and $ 6,787,000 at December 31, 2022. The cash surrender value of the above policies totaled $ 4,786,000
and $ 5,275,000 as of December 31, 2023, and 2022, respectively.

 NOTE L - INCOME TAXES

 Federal income tax expense as reported differs from the amount computed
by applying the statutory Federal income tax rate to income before taxes. A reconciliation of the differences by amount and percent is
as follows:

 FEDERAL INCOME TAX SUMMARY

 2023

 2022

 $

 %

 $

 %

 Income tax at statutory rate

 3,110

 21.0

 3,553

 21.0

 Tax-exempt interest income

 ( 885
)

 ( 6.0
)

 ( 1,052
)

 ( 6.2
)

 Non-deductible interest expense

 2.5

 0.5

 Bank-owned life insurance

 ( 174
)

 ( 1.2
)

 ( 307
)

 ( 1.8
)

 Other

 0.1

 0.0

 Income tax expense

 2,436

 16.4

 2,287

 13.5

 The ability to realize the benefit of deferred tax assets is dependent
upon a number of factors, including the generation of future taxable income, the ability to carry back losses to recover taxes paid in
previous years, the ability to offset capital losses with capital gains, the reversal of deferred tax liabilities, and certain tax planning
strategies.

 U.S. generally accepted accounting principles prescribe a recognition
threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not
that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant
information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that
is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not
recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously
recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent
financial reporting period in which that threshold is no longer met.

 There is currently no liability for uncertain tax positions and no
known unrecognized tax benefits. The Corporation recognizes, when applicable, interest and penalties related to unrecognized tax benefits
in the provision for income taxes in the Consolidated Statements of Income. With few exceptions, the Corporation is no longer subject
to U.S. federal, state, or local income tax examinations by tax authorities for years before 2020.

 Significant components of income tax expense are as follows:

 2023

 2022

 $

 $

 Current tax expense

 2,268

 2,352

 Deferred tax expense (benefit)

 ( 65
)

 Income tax expense

 2,436

 2,287

 Components of the Corporation's net deferred tax position are as follows:

 2023

 2022

 $

 $

 Deferred tax assets

 Allowance for credit losses

 3,187

 2,972

 Allowance for off-balance sheet extensions of credit

 Net unrealized holding losses on securities available for sale

 9,132

 12,837

 Interest on non-accrual loans

 Other

 Total deferred tax assets

 13,198

 16,697

 Deferred tax liabilities

 Premises and equipment

 ( 1,184
)

 ( 936
)

 Mortgage servicing rights

 ( 464
)

 ( 334
)

 Discount on investment securities

 ( 288
)

 ( 210
)

 Other

 ( 574
)

 ( 655
)

 Total deferred tax liabilities

 ( 2,510
)

 ( 2,135
)

 Net deferred tax assets

 10,688

 14,562

 NOTE M – REGULATORY MATTERS AND RESTRICTIONS

 The Corporation and the Bank are subject to various regulatory capital
requirements administered by the Federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory
and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation's
consolidated financial statements.

 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.

 Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities,
and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also
subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The quantitative measures established
by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth below) of tier I capital to
average assets, and common equity tier I capital, tier I capital, and total capital to risk-weighted assets.

 As of December 31, 2023 and 2022, the Bank was categorized as "well
capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events since that notification
that management believes have changed the institution's category. The following chart details the Corporation's and the Bank's
capital levels as of December 31, 2023 and December 31, 2022, compared to regulatory levels.

 CAPITAL LEVELS

 To Be Well

 Capitalized Under

 For Capital

 Prompt Corrective

 Actual

 Adequacy Purposes

 Action Provision

 $

 %

 $

 %

 $

 %

 As of December 31, 2023

 Total Capital to Risk-Weighted Assets

 210,066

 14.8

 N/A

 N/A

 N/A

 N/A

 Bank

 204,290

 14.4

 113,182

 8.0

 141,477

 10.0

 Tier I Capital to Risk-Weighted Assets

 154,009

 10.9

 N/A

 N/A

 N/A

 N/A

 Bank

 187,790

 13.3

 84,886

 6.0

 113,182

 8.0

 Common Equity Tier I Capital to Risk-Weighted Assets

 154,009

 10.9

 N/A

 N/A

 N/A

 N/A

 Bank

 187,790

 13.3

 63,665

 4.5

 91,960

 6.5

 Tier I Capital to Average Assets

 154,009

 7.7

 N/A

 N/A

 N/A

 N/A

 Bank

 187,790

 9.4

 80,295

 4.0

 100,369

 5.0

 As of December 31, 2022

 Total Capital to Risk-Weighted Assets

 200,191

 15.0

 N/A

 N/A

 N/A

 N/A

 Bank

 193,076

 14.5

 106,407

 8.0

 133,008

 10.0

 Tier I Capital to Risk-Weighted Assets

 145,627

 10.9

 N/A

 N/A

 N/A

 N/A

 Bank

 177,907

 13.4

 79,805

 6.0

 106,407

 8.0

 Common Equity Tier I Capital to Risk-Weighted Assets

 145,627

 10.9

 N/A

 N/A

 N/A

 N/A

 Bank

 177,907

 13.4

 59,854

 4.5

 86,455

 6.5

 Tier I Capital to Average Assets

 145,627

 7.6

 N/A

 N/A

 N/A

 N/A

 Bank

 177,907

 9.3

 76,190

 4.0

 95,238

 5.0

 In addition to the capital guidelines, certain laws restrict the amount
of dividends paid to stockholders in any given year. The approval of the OCC shall be required if the total of all dividends declared
by the Corporation in any year shall exceed the total of its net profits for that year combined with retained net profits of the preceding
two years. Under this restriction, the Corporation could declare dividends in 2024, without the approval of the OCC, of approximately
$ 22.6 million, plus an additional amount equal to the Corporation's net profits for 2024, up to the date of any such dividend declaration.

 NOTE N – TRANSACTIONS WITH DIRECTORS AND OFFICERS

 The following table presents activity in the amounts due from directors,
executive officers, immediate family, and affiliated companies. An analysis of the activity with respect to such aggregate loans to related
parties is shown below.

 LOANS TO INSIDERS

 Year Ended

 Year Ended

 2023

 2022

 $

 $

 Balance, beginning of year

 2,624

 Advances

 1,369

 1,398

 Repayments

 ( 2,025
)

 ( 1,614
)

 Other changes

 —

 2,646

 Balance, end of year

 1,968

 2,624

 In the Corporation's case, other changes in the table above for
the year ended December 31, 2022, represented the addition of a director.

 Deposits from the insiders totaled $ 1,792,000 as of December 31, 2023,
and $ 1,417,000 as of December 31, 2022.

 NOTE O - COMMITMENTS AND CONTINGENCIES

 In the normal course of business, the Corporation makes various commitments
that are not reflected in the accompanying consolidated financial statements. These are commonly referred to as off-balance sheet commitments
and include firm commitments to extend credit, unused lines of credit, and open letters of credit. On December 31, 2023, firm loan commitments
totaled approximately $ 91.5 million; unused lines of credit totaled $ 504.7 million; and open letters of credit totaled $ 18.3 million.
The sum of these commitments, $ 614.5 million, represents total exposure to credit loss in the event of nonperformance by customers with
respect to these financial instruments; however the vast majority of these commitments are typically not drawn upon. The same credit policies
for on-balance sheet instruments apply for making commitments and conditional obligations and the actual credit losses that could arise
from the exercise of these commitments is expected to compare favorably with the credit loss experience on the loan portfolio taken as
a whole. Commitments to extend credit on December 31, 2022, totaled $ 596.4 million, representing firm loan commitments of $ 117.5 million,
unused lines of credit of $ 467.8 million, and open letters of credit totaling $ 11.1 million.

 Firm commitments to extend credit and unused lines of credit are agreements
to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on an individual
basis. The amount of collateral obtained, if deemed necessary by the extension of credit, is based on management's credit evaluation
of the customer. These commitments are supported by various types of collateral, where it is determined that collateral is required.

 Open letters of credit are conditional commitments issued to guarantee
the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements.
Most guarantees expire within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers. While various assets of the customer act as collateral for these letters of credit, real estate is the
primary collateral held for these potential obligations.

 NOTE P - FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK

 The Corporation determines concentrations of credit risk by reviewing
loans by borrower, geographical area, and loan purpose. The amount of credit extended to a single borrower or group of borrowers is capped
by the legal lending limit, which is defined as 15 % of the Bank's risk-based capital, less the allowance for credit losses. The
Corporation's lending policy further restricts the amount to 75 % of the legal lending limit. As of December 31, 2023, the Corporation's
legal lending limit was $ 30,644,000, and the Corporation's lending policy internal limit was $ 22,983,000. This compared to a legal
lending limit of $ 28,961,000, and lending policy limit of $ 21,721,000 as of December 31, 2022. As of December 31, 2023 and 2022, no lending
relationships exceeded the Corporation's internal lending policy limit.

 Geographically, the primary lending area for the Corporation is defined
as its market area, with the vast majority of the loans made in Lancaster County. The ability of debtors to honor their loan agreements
is impacted by the health of the local economy. The Corporation's immediate market area benefits from a diverse economy, which has
resulted in a diverse loan portfolio. As a community bank, the largest amount of loans outstanding consists of personal mortgages, residential
rental loans, and personal loans secured by real estate. Beyond personal lending, the Corporation's business and commercial lending
includes loans for agricultural, construction, specialized manufacturing, service industries, many types of small businesses, and loans
to governmental units and non-profit entities.

 Management evaluates concentrations of credit based on loan purpose
on a quarterly basis. The Corporation's greatest concentration of loans by purpose is residential real estate, which comprises $ 604.7
million, or 44.5 %, of the $ 1,357.9 million gross loans outstanding as of December 31, 2023. This compares to $ 520.6 million, or 43.8 %,
of the $ 1,188.5 million of gross loans outstanding as of December 31, 2022. Residential real estate consists of first mortgages and home
equity loans.

 The Corporation remains focused on agricultural purpose loans, of which
the vast majority are real estate secured. Agricultural mortgages made up 19.0 % of gross loans as of December 31, 2023, compared to 18.6 %
as of December 31, 2022; however these agricultural mortgages are spread over several broader types of agricultural purpose loans. More
specifically within these larger purpose categories, management monitors on a quarterly basis the largest concentrations of non-consumer
credit based on the North American Industrial Classification System (NAICS). As of December 31, 2023, the largest specific industry type
categories were non-residential real estate investment loans of $ 102.4 million, or 7.5 % of gross loans, dairy cattle and milk production
loans of $ 90.9 million, or 6.7 % of gross loans, and residential real estate investment loans with a balance of $ 62.1 million, or 4.6 %
of gross loans.

 To evaluate risk for the securities portfolio, the Corporation reviews
both geographical concentration and credit ratings. The largest geographical concentrations as of December 31, 2023, were obligations
of states and political subdivisions located in the states of Pennsylvania and California. Based on fair market value, the Corporation
had 19 % of its portfolio invested in Pennsylvania municipals and 19 % in California. As of December 31, 2023, no municipal bonds were below
an A credit rating.

 The Corporation held $ 61.1 million of corporate bonds based on amortized
cost as of December 31, 2023. Out of the $ 61.1 million of total corporate securities, $ 57.1 million is domestic and $ 4.0 million is foreign-issued
debt. Most of the Corporation's foreign-issued debt is from the United Kingdom, Australia, and Switzerland. In addition, $ 37.2 million,
or 60.9 %, of the corporate bonds held are invested in national or foreign banks, bank holding companies, brokerage firms, or finance companies.

 By internal policy, at time of purchase, all corporate bonds must carry
a credit rating of at least A3 by Moody's or A- by S&P, and at all times corporate bonds are to be investment grade, which is
defined as Baa3 for Moody's and BBB- for S&P, or above. As of December 31, 2023, all of the Corporation's corporate bonds
carried at least one single A credit rating of A3 by Moody's or A- by S&P. All were considered investment grade.

 NOTE Q – LEASES

 A lease is defined as a contract, or part of a contract, that conveys
the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. For the Corporation,
Topic 842 primarily affects the accounting treatment for operating lease agreements in which the Corporation is the lessee.

 All of these leases in which the Corporation is the lessee are comprised
of real estate property for branches and office space with terms extending through 2042. All of the Corporation's leases are classified
as operating leases.

 The following table represents the Consolidated Balance Sheet classification
of the Corporation's Right-of-Use (ROU) assets and lease liabilities.

 Lease Consolidated Balance Sheets Classification

 (Dollars in Thousands)

 Classification

 Lease Right-of-Use Assets

 Operating lease right-of use assets

 Other Assets

 $
 2,736

 $
 3,117

 Lease Liabilities

 Operating lease liabilties

 Other Liabilities

 $
 2,781

 $
 3,145

 The calculated amount of the ROU assets and lease liabilities in the
table above are impacted by the length of the lease term and the discount rate used to determine the present value of the minimum lease
payments. The Corporation's lease agreements often include one or more options to renew at the Corporation's discretion. If
at lease inception, the Corporation considers the exercising of a renewal option to be reasonably certain, the Corporation will include
the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of
the rate implicit in the lease whenever this rate is readily determinable. As the rate is rarely determinable, the Corporation utilizes
its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.

 Weighted-average remaining lease term

 Operating leases

 12.2 years

 12.5 years

 Weighted-average discount rate

 Operating leases

 2.85 %

 2.88 %

 The total rent expense for all operating leases was $ 468,000 and $ 326,000
for the years ended December 31, 2023 and 2022, respectively. As the Corporation elected, for all classes of underlying assets, not to
separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily
represents variable payments such as common area maintenance and utilities.

 Future minimum payments for operating leases with initial or remaining
terms of one year or more as of December 31, 2023 were as follows:

 (Dollars in Thousands)

 Operating Leases

 Twelve Months Ended:

 December 31, 2024

 $

 December 31, 2025

 December 31, 2026

 December 31, 2027

 December 31, 2028

 Thereafter

 1,818

 Total Future Minimum Lease Payments

 3,321

 Amounts Representing Interests

 ( 540
)

 Present Value of Net Future Minimum Lease Payments

 $
 2,781

 NOTE R - FAIR VALUE MEASUREMENTS

 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 judgement or estimation.

 This hierarchy requires the use of observable market data when available.

 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 December 31, 2023 and December
31, 2022, 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.

 ASSETS REPORTED AT FAIR VALUE ON A RECURRING BASIS

 Level I

 Level II

 Level III

 Total

 $

 $

 $

 $

 —

 —

 —

 —

 —

 40,156

 —

 40,156

 U. S. agency collateralized mortgage obligations

 —

 —

 Non-agency MBS/CMO

 —

 56,187

 56,187

 —

 65,305

 —

 65,305

 —

 —

 —

 187,383

 —

 187,383

 Marketable equity securities

 9,451

 —

 —

 9,451

 Total securities

 27,610

 441,410

 —

 469,020

 On December 31, 2023, the Corporation held no securities valued using
level III inputs. All of the Corporation's debt instruments were valued using levels I and II inputs. Level I means each investment
has their own quoted prices in an active market and Level II means quoted prices are available and observable but not necessarily quotes
on identical securities traded in active markets on a daily basis. The Corporation's CRA fund investments and bank stocks are fair
valued utilizing level I inputs.

 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.

 ASSETS REPORTED AT FAIR VALUE ON A RECURRING BASIS

 Level I

 Level II

 Level III

 Total

 $

 $

 $

 $

 32,657

 —

 —

 32,657

 —

 24,787

 —

 24,787

 —

 45,307

 —

 45,307

 U. S. agency collateralized mortgage obligations

 —

 27,490

 —

 27,490

 Non-agency MBS/CMO

 —

 —

 73,234

 —

 73,234

 —

 69,631

 —

 69,631

 —

 205,786

 —

 205,786

 Marketable equity securities

 9,118

 —

 —

 9,118

 Total securities

 41,775

 496,485

 —

 538,260

 On December 31, 2022, the Corporation held no securities valued using
level III inputs. All of the Corporation's debt instruments were valued using levels I and II inputs. Level I means each investment
has their own quoted prices in an active market and Level II means quoted prices are available and observable but not necessarily quotes
on identical securities traded in active markets on a daily basis. The Corporation's 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 table provides 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 December 31, 2023 and December 31, 2022, by level within the fair value hierarchy:

 ASSETS MEASURED ON A NONRECURRING BASIS

 Level I

 Level II

 Level III

 Total

 $

 $

 $

 $

 Assets:

 Individually analyzed Loans

 —

 —

 3,144

 3,144

 —

 —

 3,144

 3,144

 Level I

 Level II

 Level III

 Total

 $

 $

 $

 $

 Assets:

 Impaired Loans

 —

 —

 4,620

 4,620

 Total

 —

 —

 4,620

 4,620

 The Corporation had a total of $ 3,144,000 of individually
analyzed loans as of December 31, 2023. As of December 31, 2022, the Corporation had a total of $ 4,620,000 of impaired loans with no specific
allocation against these loans. The value of impaired 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:

 QUANTITATIVE INFORMATION ABOUT LEVEL III FAIR VALUE MEASUREMENTS

 Valuation

 Unobservable

 Range

 Estimate

 Techniques

 Input

 (Weighted Avg)

 Individually analyzed loans

 3,144

 Appraisal of collateral (1)

 Appraisal adjustments (2)

 0 % to - 20 % (-20%)

 Liquidation expenses (2)

 0 % to - 10 % (-10%)

 Valuation

 Unobservable

 Range

 Estimate

 Techniques

 Input

 (Weighted Avg)

 Impaired loans

 4,620

 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 includes 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.

 NOTE S - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

 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 Corporation's Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022:

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

 Quoted Prices in

 Active Markets

 Significant Other

 Significant

 for Identical

 Observable

 Unobservable

 Carrying

 Assets

 Inputs

 Inputs

 (Level 1)

 (Level II)

 (Level III)

 $

 $

 $

 $

 $

 Financial Assets:

 Cash and cash equivalents

 —

 —

 8,540

 8,540

 8,540

 —

 —

 Loans held for sale

 —

 —

 Loans, net of allowance

 1,344,902

 1,300,300

 —

 —

 1,300,300

 Mortgage servicing assets

 2,151

 2,904

 —

 —

 2,904

 Accrued interest receivable

 7,015

 7,015

 7,015

 —

 —

 Bank owned life insurance

 35,632

 35,632

 35,632

 —

 —

 Financial Liabilities:

 —

 —

 Interest-bearing demand deposits

 214,033

 214,033

 214,033

 —

 —

 NOW accounts

 99,738

 99,738

 99,738

 —

 —

 Money market deposit accounts

 158,446

 158,446

 158,446

 —

 —

 308,913

 308,913

 308,913

 —

 —

 333,700

 331,680

 —

 —

 331,680

 1,726,798

 1,724,778

 1,393,098

 —

 331,680

 Short-term debt

 —

 —

 —

 —

 —

 Long-term debt

 101,228

 101,509

 —

 —

 101,509

 Subordinated debt

 39,556

 33,976

 —

 —

 33,976

 Accrued interest payable

 2,203

 2,203

 2,203

 —

 —

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

 Quoted Prices in

 Active Markets

 Significant Other

 Significant

 for Identical

 Observable

 Unobservable

 Carrying

 Assets

 Inputs

 Inputs

 (Level 1)

 (Level II)

 (Level III)

 $

 $

 $

 $

 $

 Financial Assets:

 Cash and cash equivalents

 —

 —

 6,670

 6,670

 6,670

 —

 —

 Loans held for sale

 5,927

 5,927

 5,927

 —

 —

 Loans, net of allowance

 1,176,966

 1,112,400

 —

 —

 1,112,400

 Mortgage servicing assets

 2,030

 2,894

 —

 —

 2,894

 Accrued interest receivable

 6,555

 6,555

 6,555

 —

 —

 Bank owned life insurance

 34,805

 34,805

 34,805

 —

 —

 Financial Liabilities:

 —

 —

 Interest-bearing demand deposits

 164,208

 164,208

 164,208

 —

 —

 NOW accounts

 139,846

 139,846

 139,846

 —

 —

 Money market deposit accounts

 163,836

 163,836

 163,836

 —

 —

 364,897

 364,897

 364,897

 —

 —

 133,829

 129,422

 —

 —

 129,422

 1,638,958

 1,634,551

 1,505,129

 —

 129,422

 Short-term debt

 16,000

 15,721

 —

 —

 15,721

 Long-term debt

 58,039

 56,431

 —

 —

 56,431

 Subordinated debt

 39,396

 35,975

 —

 —

 35,975

 Accrued interest payable

 —

 —

 NOTE T – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 The activity in accumulated other comprehensive income (loss) for the
years ended December 31, 2023 and 2022 is as follows:

 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (1) (2)

 Gains/(Losses)

 on Securities

 Available-for-Sale

 $

 Balance at January 1, 2023

)

 Other comprehensive income before reclassifications

 12,854

 Amount reclassified from accumulated other comprehensive income

 1,083

 Period change

 13,937

 Balance at December 31, 2023

 ( 34,355
)

 Balance at January 1, 2022

 3,441

 Other comprehensive loss before reclassifications

 ( 51,700
)

 Amount reclassified from accumulated other comprehensive loss

 ( 33
)

 Period change

 ( 51,733
)

 Balance at December 31, 2022

)

 (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.

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

 Amount Reclassified from

 Accumulated Other Comprehensive

 Income (Loss)

 For the Year Ended

 Affected Line Item

 2023

 2022

 in the Consolidated

 $

 $

 Statements of Income

 Securities available for sale:

 Net securities (losses) gains reclassified into earnings

 ( 1,371
)

 (Losses) gains on sale of debt securities, net

 Related income tax benefit (expense)

 ( 9
)

 Provision for federal income taxes

 Net effect on accumulated other comprehensive income
 (loss) for the period

 ( 1,083
)

 Total reclassifications for the period

 ( 1,083
)

 (1) Amounts in parentheses indicate debits.

 NOTE U – CONDENSED PARENT ONLY DATA

 Condensed Balance Sheets (Parent Company Only)

 2023

 2022

 $

 $

 Assets

 Cash

 2,969

 4,601

 Equity securities

 1,717

 1,773

 Equity in bank subsidiary

 153,434

 129,615

 Other assets

 1,100

 Total assets

 159,220

 136,757

 Liabilities

 Subordinated debt

 39,556

 39,396

 Other Liabilities

 Total Liabilities

 39,566

 39,422

 Stockholders' Equity

 Common stock

 Capital surplus

 4,072

 4,437

 Retained earnings

 150,596

 142,677

 Accumulated other loss, net of tax

 ( 34,355
)

)

 Treasury stock

 ( 1,233
)

 ( 2,061
)

 Total stockholders' equity

 119,654

 97,335

 Total liabilities and stockholders' equity

 159,220

 136,757

 Condensed Statements of Comprehensive Income (Loss)

 2023

 2022

 $

 $

 Income

 Dividend income - investment securities

 Losses on equity securities, net

 ( 126
)

 ( 32
)

 Dividend income

 3,837

 3,810

 Undistributed earnings of bank subsidiary

 10,438

 12,161

 Total income

 14,220

 16,006

 Expense

 Subordinated debt interest expense

 1,950

 1,311

 Shareholder expenses

 Other expenses

 Total expense

 2,360

 1,740

 Benefit for income taxes

 ( 515
)

 ( 365
)

 Net Income

 Comprehensive Income (Loss)

 26,312

 ( 37,102
)

 Condensed Statements of Cash Flows

 2023

 2022

 Cash Flows from Operating Activities:

 $

 $

 Net Income

 Equity in undistributed earnings of subsidiaries

 ( 10,438
)

 ( 12,161
)

 Losses on equity securities, net

 Net amortization of subordinated debt fees

 Net increase in other assets

 ( 332
)

 ( 316
)

 Net decrease in other liabilities

 ( 16
)

 ( 15
)

 Net cash provided by operating activities

 1,874

 2,287

 Cash Flows from Investing Activities:

 Proceeds from sales of equity securities

 —

 Purchases of equity securities

 ( 70
)

 ( 213
)

 Net cash used for investing activities

 ( 70
)

 ( 62
)

 Cash Flows from Financing Activities:

 Proceeds from sale of treasury stock

 1,064

 Proceeds from issuance of subordinated debt

 —

 19,600

 Dividend to bank subsidiary

 —

 ( 17,000
)

 Treasury stock purchased

 ( 572
)

 ( 116
)

 Dividends paid

 ( 3,837
)

 ( 3,810
)

 Net cash used for financing activities

 ( 3,436
)

 ( 262
)

 Cash and Cash Equivalents:

 Net change in cash and cash equivalents

 ( 1,632
)

 1,963

 Cash and cash equivalents at beginning of period

 4,601

 2,638

 Cash and cash equivalents at end of period

 2,969

 4,601

 Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

 None

 Item 9A. 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 December 31, 2023, 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 December 31, 2023, are effective in timely alerting them to material
information relating to the Corporation required to be in the Corporation's periodic filings under the Exchange Act.

 (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 has materially affected, or is reasonably likely
to materially affect, the Corporation's internal control over financial reporting.

 (c) Report on Management's Assessment of Internal
Control over Financial Reporting

 The Corporation is responsible for the preparation, integrity,
and fair presentation of the financial statements included in this annual report. The financial statements and notes included in this
annual report have been prepared in conformity with United States generally accepted accounting principles and necessarily include some
amounts that are based on management's best estimates and judgments.

 Management of the Corporation is responsible for establishing
and maintaining effective internal control over financial reporting that is designed to produce reliable financial statements in conformity
with United States generally accepted accounting principles. The system of internal control over financial reporting as it relates to
the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits.
Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed,
has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or
fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly,
even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.

 Management assessed the Corporation's system of internal
control over financial reporting as of December 31, 2023, in relation to criteria for effective internal control over financial reporting
as described in "Internal Control - Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management concludes that, as of December 31, 2023, its system of internal control over financial
reporting is effective and meets the criteria of the "Internal Control – Integrated Framework."

 This annual report does not include an attestation report
of the Corporation's registered public accounting firm regarding internal control over financial reporting. Management's report
was not subject to attestation by the Corporation's registered public accounting firm pursuant to the Dodd-Frank Act exemption rules
of the SEC that permit the Corporation to provide only Management's report in this annual report.

 /s/ Jeffrey S. Stauffer

 /s/ Rachel G. Bitner

 Jeffrey S. Stauffer

 Rachel G. Bitner

 Chairman of the Board

 Treasurer

 Chief Executive Officer and President

 (Principal Financial Officer)

 (Principal Executive Officer)

 Ephrata, PA

 Item 9B. Other Information

 During the three months ended December 31, 2023, no director
or officer of the Corporation adopted or terminated a Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation
S-K.

 Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent
Inspections

 Not Applicable

 Item 10. Directors, Executive Officers, and Corporate Governance

 The information required by this Item, relating to directors, executive
officers, and control persons is set forth under the captions, "Election of Directors," "Information and Qualifications
of Nominees for Director and Continuing Directors," "Meetings and Committees of the Board of Directors – Audit Committee,"
"Executive Officers," "Audit Committee Report," and "Delinquent Section 16(a) Reports," of the Corporation's
definitive Proxy Statement to be used in connection with the Annual Meeting of Shareholders, to be held on May 7, 2024, which is incorporated
herein by reference.

 The Corporation has adopted a Code of Ethics that applies to directors,
officers, and employees of the Corporation and the Bank. The Code of Ethics is attached as Exhibit 14 to this Form 10-K.

 There were no material changes to the procedures by which security
holders may recommend nominees to the Corporation's Board of Directors during the fourth quarter of 2023.

 Item 11. Executive Compensation

 The information required by this Item, relating to executive compensation,
is set forth under the captions, "Board Compensation and Plan Information," "Executive Compensation," "Retirement
Plans," and "Potential Payments Upon Termination or Change in Control," in the Summary Compensation Table, Defined Contribution
Profit Sharing Plan Table, and the 401(k) Savings Plan – Match Data Table of the Corporation's definitive Proxy Statement
to be used in connection with the Annual Meeting of Shareholders, to be held on May 7, 2024, which is incorporated herein by reference.

 Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters

 The information required by this Item, related to beneficial ownership
of the Corporation's common stock, is set forth under the caption, "Share Ownership" of the Corporation's definitive
Proxy Statement to be used in connection with the Annual Meeting of Shareholders to be held on May 7, 2024, which is incorporated herein
by reference.

 Item 13. Certain Relationships and Related Transactions, and Director
Independence

 The information required by this Item related to transactions with
management and others, certain business relationships, and indebtedness of management, is set forth under the caption, "Transactions
with Related Persons," and "Governance of the Company" of the Corporation's definitive Proxy Statement to be used
in connection with the Annual Meeting of Shareholders to be held on May 7, 2024, which is incorporated herein by reference.

 Item 14. Principal Accountant Fees and Services

 The information required by this Item related to fees and the audit
committees' pre-approved policies are set forth under the captions, "Audit Committee Report" and "Proposal No.
2: To Ratify the Selection of Independent Registered Public Accounting Firm" of the Corporation's definitive Proxy Statement
to be used in connection with the Annual Meeting of Shareholders to be held on May 7, 2024, which is incorporated herein by reference.

 Item 15.
 Exhibits and Financial Statement Schedules

 (a)
 1.

 Financial Statements.

 The following financial statements are
included by reference in Part II, Item 8 hereof:

 Report of Independent Registered Accounting Firm

 Consolidated Balance Sheets

 Consolidated Statements of Income

 Consolidated Statements of Comprehensive Income

 Consolidated Statements of Changes in Stockholders' Equity

 Consolidated Statements of Cash Flows

 2.
 The financial statement schedules required by this Item are omitted because the information is either inapplicable, not required,
or is shown in the respective consolidated financial statements or the notes thereto.

 3.
 The Exhibits filed herewith or incorporated by reference as a part of this Annual Report, are set forth in (b), below.

 (b)
 EXHIBITS

 3 (i)

 Articles of Incorporation of the Registrant, as amended. (Incorporated herein by reference to Exhibit 3.1 of the Corporation's Form 8-K filed with the SEC on June 7, 2019.)

 3 (ii)

 Bylaws 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 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 Chad E. Neiss 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 November 1, 2022.)

 10.5

 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.)

 10.6

 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.)

 10.7

 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.)

 Code of Ethics Policy of Registrant as amended March 11, 2009. (Incorporated herein by reference to Exhibit 14 of the Corporation's Form 10-K filed with the SEC on March 12, 2009.)

 Subsidiaries of the Registrant

 Consent of Independent Registered Public Accounting Firm

 31.1

 Section 302 Chief Executive Officer Certification (Required by Rule 13a-14(a)/15a-14(a)).

 31.2

 Section 302 Principal Financial Officer Certification (Required by Rule 13a-14(a)/15a-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)).

 Interactive Data File

 (c)
 NOT APPLICABLE.

 Item 16.
 Form 10-K Summary

 None

 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.

 By:

 /s/ Jeffrey S. Stauffer

 Jeffrey S. Stauffer, Chairman of the Board, Chief Executive Officer and President

 Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 /s/ Jeffrey S. Stauffer

 Chairman of the Board,

 (Jeffrey S. Stauffer)

 Chief Executive Officer and President

 (Principal Executive Officer)

 /s/ Rachel G. Bitner

 Treasurer

 (Rachel G. Bitner)

 (Principal Financial Officer)

 /s/ Joshua E. Hoffman

 (Joshua E. Hoffman)

 /s/ Willis R. Lefever

 (Willis R. Lefever)

 /s/ Jay S. Martin

 (Jay S. Martin)

 /s/ Susan Young Nicholas, Esq.

 (Susan Young Nicholas)

 /s/ Dr. Brian K. Reed

 (Dr. Brian K. Reed)

 /s/ J. Daniel Stoltzfus

 (J. Daniel Stoltzfus)

 /s/ Mark C. Wagner

 (Mark C. Wagner)

 /s/ Judith A. Weaver

 (Judith A. Weaver)

 /s/ Roger L. Zimmerman

 (Roger L. Zimmerman)

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