NorthEast Community Bancorp, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended March 31, 2025

☐

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

For the transition period from to

Commission File Number: 001-40589

NorthEast Community Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland

86-3173858

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

325 Hamilton Avenue

White Plains, New York 10601

(Address of Principal Executive Offices)

(914) 684-2500

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	NECB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒	Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of May 9, 2025, there were 14,023,376 shares of the registrant’s common stock outstanding.

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TABLE OF CONTENTS


`
		Page

Part I	Financial Information	3

Item 1.	Financial Statements	3

	Consolidated Statements of Financial Condition as of March 31, 2025 and December 31, 2024 (Unaudited)	3

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

	Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2025 and 2024 (Unaudited)	6

	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended March 31, 2025 and 2024 (Unaudited)	7

	Consolidated Statements of Cash Flows for the Three Months ended March 31, 2025 and 2024 (Unaudited)	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	45

Item 4.	Controls and Procedures	47

Part II	Other Information	47

Item 1.	Legal Proceedings	47

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	48

Item 4.	Mine Safety Disclosures	48

Item 5.	Other Information	48

Item 6.	Exhibits	48

Exhibit Index		49

Signatures		50

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PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


	March 31,		December 31,
	2025		2024

	(In thousands, except share
	and per share amounts)
ASSETS
Cash and amounts due from depository institutions	$	11,524	$	13,700
Interest-bearing deposits		77,934		64,559
Total cash and cash equivalents		89,458		78,259
Certificates of deposit		100		100
Equity securities		23,294		21,994
Securities held-to-maturity ( net of allowance for credit losses of $126 and $126, respectively )		14,487		14,616
Loans receivable		1,725,664		1,812,647
Deferred loan fees, net		(63)		(49)
Allowance for credit losses		(5,127)		(4,830)
Net loans		1,720,474		1,807,768
Premises and equipment, net		24,889		24,805
Investments in restricted stock, at cost		397		397
Bank owned life insurance		25,905		25,738
Accrued interest receivable		12,432		13,481
Real estate owned		5,120		5,120
Property held for investment		1,361		1,370
Right of Use Assets – Operating		3,856		4,001
Right of Use Assets – Financing		346		347
Other assets		11,257		11,585
Total assets	$	1,933,376	$	2,009,581
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	278,694	$	287,135
Interest bearing		1,307,321		1,383,240
Total deposits		1,586,015		1,670,375
Advance payments by borrowers for taxes and insurance		2,298		1,618
Lease Liability – Operating		3,972		4,108
Lease Liability – Financing		619		609
Accounts payable and accrued expenses		13,262		14,530
Total liabilities		1,606,166		1,691,240

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (continued)

(Unaudited)


	March 31,		December 31,
	2025		2024

	(In thousands, except share
	and per share amounts)
Stockholders’ equity:
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding	$	—	$	—
Common stock, $0.01 par value; 75,000,000 shares authorized; 14,023,376 shares and 14,016,254 shares issued and outstanding, respectively		140		140
Additional paid-in capital		110,871		110,091
Unearned Employee Stock Ownership Plan (“ESOP”) shares		(5,870)		(6,088)
Retained earnings		221,858		213,974
Accumulated other comprehensive income		211		224
Total stockholders’ equity		327,210		318,341
Total liabilities and stockholders’ equity	$	1,933,376	$	2,009,581

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2025		2024

	(In thousands, except
	per share amounts)
INTEREST INCOME:
Loans	$	36,882	$	36,703
Interest-earning deposits		1,081		1,200
Securities		244		218
Total Interest Income		38,207		38,121
INTEREST EXPENSE:
Deposits		13,933		12,394
Borrowings		-		731
Financing lease		10		10
Total Interest Expense		13,943		13,135
Net Interest Income		24,264		24,986
Provision for (reversal of) credit loss		237		(165)
Net Interest Income after Provision for (Reversal of) Credit Loss		24,027		25,151
NON-INTEREST INCOME:
Other loan fees and service charges		740		462
Earnings on bank owned life insurance		167		157
Unrealized gain (loss) on equity securities		300		(82)
Other		28		17
Total Non-Interest Income		1,235		554
NON-INTEREST EXPENSES:
Salaries and employee benefits		5,933		5,351
Occupancy expense		747		707
Equipment		217		253
Outside data processing		735		637
Advertising		102		88
Real estate owned expense		30		11
Other		2,855		2,634
Total Non-Interest Expenses		10,619		9,681
INCOME BEFORE PROVISION FOR INCOME TAXES		14,643		16,024
PROVISION FOR INCOME TAXES		4,076		4,650
NET INCOME	$	10,567	$	11,374

EARNINGS PER COMMON SHARE – BASIC	$	0.80	$	0.87
EARNINGS PER COMMON SHARE – DILUTED		0.78		0.86
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC		13,192		13,118
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED		13,560		13,191

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2025		2024

	(In thousands)
Net Income	$	10,567	$	11,374
Other comprehensive income (loss):
Defined benefit pension:
Reclassification adjustments out of accumulated other comprehensive income (loss):
Amortization of actuarial gain		(10)		(13)
Actuarial (gain) loss arising during period		(10)		18
Total		(20)		5
Income tax effect¹		7		(2)
Total other comprehensive income (loss)		(13)		3
Total Comprehensive Income	$	10,554	$	11,377

¹Amounts are included in provision for income taxes in the consolidated statements of income.

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three months Ended March 31, 2025 and 2024

(Unaudited)


											Accumulated
					Additional						Other
	Number of		Common		Paid- in		Unearned		Retained		Comprehensive
	Shares, net		Stock		Capital		ESOP Shares		Earnings		Income		Total

	(In thousands, except share and per share amounts)

Balance – December 31, 2024		14,016,254	$	140	$	110,091	$	(6,088)	$	213,974	$	224	$	318,341
Net income		—		—		—		—		10,567		—		10,567
Other comprehensive loss		—		—		—		—		—		(13)		(13)
Cash dividend declared ($0.20 per share)		—		—		—		—		(2,683)		—		(2,683)
Compensation expense related to restricted stock awards		—		—		293		—		—		—		293
Compensation expense related to stock options		—		—		185		—		—		—		185
Stock option exercise		7,122		—		—		—		—		—		—
ESOP shares earned		—		—		302		218		—		—		520
Balance – March 31, 2025		14,023,376	$	140	$	110,871	$	(5,870)	$	221,858	$	211	$	327,210

											Accumulated
					Additional						Other
	Number of		Common		Paid- in		Unearned		Retained		Comprehensive
	Shares, net		Stock		Capital		ESOP Shares		Earnings		Income		Total

	(In thousands, except share and per share amounts)

Balance – December 31, 2023		14,144,856	$	142	$	109,924	$	(6,563)	$	175,505	$	317	$	279,325
Net income		—		—		—		—		11,374		—		11,374
Other comprehensive income		—		—		—		—		—		3		3
Cash dividend declared ($0.10 per share)		—		—		—		—		(1,337)		—		(1,337)
Stock repurchases		(80,060)		(1)		(1,250)		—		—		—		(1,251)
Compensation expense related to restricted stock awards		—		—		252		—		—		—		252
Compensation expense related to stock options		—		—		192		—		—		—		192
Stock option exercise		1,000		—		14		—		—		—		14
ESOP shares earned		—		—		135		217		—		—		352
Balance - March 31, 2024		14,065,796	$	141	$	109,267	$	(6,346)	$	185,542	$	320	$	288,924

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2025		2024

	(In thousands)
Cash Flows from Operating Activities:
Net income	$	10,567	$	11,374
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of securities premiums and discounts, net		1		1
Provision for (reversal of) credit losses		237		(165)
Depreciation		298		297
Net (accretion) amortization of deferred loan fees and costs		(60)		14
Deferred income tax benefit		(136)		(97)
Unrealized (gain) loss recognized on equity securities		(300)		82
Earnings on bank owned life insurance		(167)		(157)
ESOP compensation expense		520		352
Compensation expense related to stock options		185		192
Compensation expense related to restricted stock		293		252
Decrease (increase) in accrued interest receivable		1,049		(641)
Decrease in other assets		619		3,991
Increase (decrease) in accounts payable - loan closing		42		(59)
Decrease in accounts payable and accrued expenses		(2,205)		(2,528)
Net Cash Provided by Operating Activities		10,943		12,908
Cash Flows from Investing Activities:
Net decrease (increase) in loans		86,912		(71,136)
Proceeds from sale of loans		380		3,424
Principal repayments on securities held-to-maturity		128		128
Purchase of marketable equity securities		(1,000)		—
Redemptions of restricted stock		—		315
Purchases of premises and equipment		(382)		(68)
Net Cash Provided by (Used in) Investing Activities		86,038		(67,337)
Cash Flows from Financing Activities:
Net (decrease) increase in deposits		(84,360)		111,966
Repayment of FRB borrowings		—		(10,000)
Repayment of FHLB of NY advances		—		(7,000)
Stock repurchases		—		(1,251)
Stock option exercised		—		14
Increase in advance payments by borrowers for taxes and insurance		680		326
Cash dividends paid		(2,102)		(849)
Net Cash (Used in) Provided by Financing Activities		(85,782)		93,206
Net Increase in Cash and Cash Equivalents		11,199		38,777
Cash and Cash Equivalents – Beginning		78,259		68,671
Cash and Cash Equivalents – Ending	$	89,458	$	107,448

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)


	Three Months Ended March 31,
	2025		2024

	(In thousands)
Supplementary Cash Flows Information:
Income taxes paid	$	4,667	$	4,019
Interest paid	$	13,789	$	12,866
Supplementary Disclosure of Non-Cash Investing and Financing Activities:
Dividends declared and not paid	$	2,805	$	1,407

See notes to interim unaudited consolidated financial statements.

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NORTHEAST COMMUNITY BANCORP, INC.

Notes to Condensed Consolidated Financial Statements

(Dollars in thousands, unless otherwise stated)

(Unaudited)

NORTHEAST COMMUNITY BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Summary of Significant Accounting Policies

The following is a description of the Company’s business and significant accounting and reporting policies:

Nature of Business:

Northeast Community Bancorp, Inc. (the “Company”) is a Maryland corporation that was incorporated in May 2021 to be the successor to NorthEast Community Bancorp, Inc., a federally chartered corporation (the “Mid-Tier Holding Company”), upon completion of the second-step conversion of NorthEast Community Bank (the “Bank”) from the two-tier mutual holding company structure to the stock holding company structure. NorthEast Community Bancorp, MHC was the former mutual holding company for the Mid-Tier Holding Company prior to the completion of the second-step conversion. In conjunction with the second-step conversion, each of NorthEast Community Bancorp, MHC and the Mid-Tier Holding Company merged out of existence and now cease to exist.

The Bank is a New York State-chartered savings bank and the Company’s primary activity is the ownership and operation of the Bank.

The Bank is headquartered in White Plains, New York. The Bank was founded in 1934 and is a community oriented financial institution dedicated to serving the financial services needs of individuals and businesses within its market area. The Bank currently conducts business through its eleven branch offices located in the Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex and Norfolk Counties in Massachusetts and three loan production offices located in White Plains, New York, New City, New York, and Danvers, Massachusetts.

The Bank’s principal business consists of originating primarily construction loans and, to a lesser extent, commercial and industrial loans and multifamily and mixed-use residential real estate loans and non-residential real estate loans. The Bank offers a variety of retail deposit products to the general public in the areas surrounding its main office and its branch offices, with interest rates that are competitive with those of similar products offered by other financial institutions operating in its market area. The Bank also utilizes borrowings, brokered deposits, military deposits, and listing deposit services as sources of funds. The Bank’s revenues are derived primarily from interest on loans and, to a lesser extent, interest on investment securities and mortgage-backed securities. The Bank also generates revenues from other income including deposit fees and service charges.

New England Commercial Properties LLC (“NECP”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in October 2007 to facilitate the purchase or lease of real property by the Bank. New England Commercial Properties, LLC currently owns one foreclosed property located in Pennsylvania.

NECB Financial Services Group, LLC (“NECB Financial”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in the third quarter of 2012 as a complement to Harbor West Wealth Management Group to sell life insurance and fixed rate annuities. NECB Financial is licensed in New York State. NECB Financial terminated its license in Connecticut on February 22, 2024 due to the sale of all the Bank’s assets relating to Harbor West Wealth Management Group to a third party in January 2024. This subsidiary is currently inactive.

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72 West Eckerson LLC (“72 West Eckerson”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in April 2015 to facilitate the purchase or lease of real property by the Bank and currently owns the Bank branch locations in Spring Valley, New York and Monroe, New York.

166 Route 59 Realty LLC (“166 Route 59 Realty”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in April 2021 to facilitate the purchase or lease of real property by the Bank and currently owns the property for the Bank branch located in Airmont, New York.

3 Winterton Realty LLC, a New York limited liability company and wholly owned subsidiary of the Bank, was formed in October 2021 to facilitate the purchase or lease of real property by the Bank and currently owns the property for the Bank branch located in Bloomingburg, New York.

NECB Real Estate LLC (“NECB Real Estate”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in October 2024 to facilitate the purchase or lease of real property by the Bank. NECB Real Estate currently owns one foreclosed property located in the Bronx, New York.

Principal of Consolidations:

The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank, NECP, NECB Financial, 72 West Eckerson, 166 Route 59 Realty, 3 Winterton Realty LLC, and NECB Real Estate (collectively the “Company”) and have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant inter-company accounts and transactions have been eliminated in consolidation. The accounting and reporting policies of the Company and its subsidiaries conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and to the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations. The unaudited consolidated interim financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

In the opinion of the Company, all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the operating results for the interim periods have been included. The results of operations for periods of less than a year are not necessarily indicative of results for the full year or any other period.

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Estimates that are particularly susceptible to change in the near term are used in connection with the determination of the allowance for credit losses.

Loan Concentration Risk:

The Company’s lending activity is concentrated in construction loans secured by the construction primarily of multi-family, residential condominium properties, and occasionally non-residential properties located in New York State and occasionally by the renovation of multi-family properties in Massachusetts. As of March 31, 2025 and December 31, 2024, the Company had a majority of construction loans located in New York State, including $626.2 million and $708.5 million in the Bronx, $222.4 million and $246.4 million in the Town of Monroe, $87.6 million and $112.4 million in the Hamlet of Monsey, and $140.4 million and $141.6 million in the Village of Spring Valley. At March 31, 2025, the Company had $99.5 million, or 7.7%, of construction loans located in Rockland County, New York, related to office space or commercial use.

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Note 2 — Regulatory Capital

The Company and the Bank are subject to regulatory capital requirements promulgated by the federal banking agencies. The Federal Reserve establishes capital requirements, including well capitalized standards, for the consolidated bank holding company, and the FDIC has similar requirements for the Company’s subsidiary bank. However, the Federal Reserve has provided a “small bank holding company” exception to its consolidated capital requirements for holding companies, and legislation and the related issuance of regulations by the Federal Reserve Board have established the current threshold for the exception at $3.0 billion. As a result, the Company will not be subject to the consolidated holding company capital requirement until such time as its consolidated assets exceed $3.0 billion. The Bank met all capital adequacy requirements to which it was subject as of March 31, 2025 and December 31, 2024.

The following table presents information about the Bank’s capital levels at the dates presented:


					Regulatory Capital Requirements
					Minimum Capital						For Classification as
	Actual				Adequacy(1)						Well-Capitalized
	Amount		Ratio		Amount			Ratio			Amount			Ratio

	(Dollars in Thousands)
As of March 31, 2025:
Total capital (to risk-weighted assets)	$	303,266	15.10	%	$	≥	160,697	≥	8.00	%	$	≥	200,871	≥	10.00	%
Tier 1 capital (to risk-weighted assets)		297,163	14.79			≥	120,523	≥	6.00			≥	160,697	≥	8.00
Common equity tier 1 capital (to risk-weighted assets)		297,163	14.79			≥	90,392	≥	4.50			≥	130,566	≥	6.50
Core (Tier 1) capital (to adjusted total assets)		297,163	15.09			≥	78,762	≥	4.00			≥	98,452	≥	5.00
As of December 31, 2024:
Total capital (to risk-weighted assets)	$	290,903	13.92	%	$	≥	167,154	≥	8.00	%	$	≥	208,942	≥	10.00	%
Tier 1 capital (to risk-weighted assets)		285,272	13.65			≥	125,365	≥	6.00			≥	167,154	≥	8.00
Common equity tier 1 capital (to risk-weighted assets)		285,272	13.65			≥	94,024	≥	4.50			≥	135,813	≥	6.50
Core (Tier 1) capital (to adjusted total assets)		285,272	14.44			≥	79,030	≥	4.00			≥	98,788	≥	5.00

(1)	Ratios do not include the capital conservation buffer.

Based on the most recent notification by the FDIC, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action. There have been no conditions or events that have occurred since notification that management believes have changed the Bank’s category.

Note 3 — Earnings Per Share

Basic earnings per share is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding during the period less any unvested restricted shares. Unallocated common shares held by the Employee Stock Ownership Plan (“ESOP”) are not included in the weighted-average number of common shares outstanding for purposes of calculating basic net income per common share until they are committed to be released. 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 Company relate to outstanding stock options and are determined using the treasury stock method. The following table sets forth the weighted average shares outstanding used in the computations of basic and diluted earnings per share.

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The following table sets forth the computations of basic and diluted earnings per share:


	Three Months Ended March 31,
	2025		2024

	(In Thousands, except per share data)
Net income (basic and diluted)	$	10,567	$	11,374

Weighted average shares issued		14,021		14,118
Less: Weighted average unearned ESOP shares		(594)		(681)
Less: Weighted average unvested restricted shares		(235)		(319)
Basic weighted average shares outstanding		13,192		13,118
Add: Dilutive effect of restricted stock		102		59
Add: Dilutive effect of stock options		266		14
Diluted weighted average shares outstanding		13,560		13,191

Net income per share
Basic	$	0.80	$	0.87
Diluted	$	0.78	$	0.86

Note 4 — Equity Securities

The following table is the schedule of equity securities at March 31, 2025 and December 31, 2024. Our equity securities portfolio consists of our investment in a market-rate bond mutual fund that invests in high quality fixed income bonds, mainly government agency securities whose proceeds are designed to positively impact community development throughout the United States. The mutual fund focuses exclusively on providing affordable housing for low- and moderate-income borrowers and renters within our delineated lending areas, including those in majority minority census tracts. The high-quality fixed income bonds consist of 90% agency mortgage-backed securities and 10% state and municipal bonds. All agency mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.


	March 31,		December 31,
	2025		2024

	(In Thousands)
Equity Securities, at Fair Value	$	23,294	$	21,994

The following is a summary of unrealized gain or loss recognized in net income on equity securities during the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024

	(In Thousands)

Net unrealized gain (loss) recognized on equity securities during the period	$	300	$	(82)
Less: Net losses realized on the sale of equity securities during the period		—		—
Unrealized net (loss) gain recognized on equity securities held at the reporting date	$	300	$	(82)

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Note 5 — Securities Held-to-Maturity

The following table summarizes the Company’s portfolio of securities held-to-maturity at March 31, 2025 and December 31, 2024.


	March 31, 2025
			Gross		Gross				Allowance
	Amortized		Unrealized		Unrealized		Fair		for
	Cost		Gains		Losses		Value		Credit Loss

	(In Thousands)
Mortgage-backed securities – residential:
Government National Mortgage Association	$	403	$	—	$	—	$	403	$	—
Federal Home Loan Mortgage Corporation		752		1		93		660		—
Federal National Mortgage Association		1,607		—		145		1,462		—
Collateralized mortgage obligations – GSE		2,761		—		582		2,179		—
Total mortgage-backed securities		5,523		1		820		4,704		—
Municipal Bonds		9,090		—		2,151		6,939		126
	$	14,613	$	1	$	2,971	$	11,643	$	126


	December 31, 2024
			Gross		Gross				Allowance
	Amortized		Unrealized		Unrealized		Fair		for
	Cost		Gains		Losses		Value		Credit Loss

	(In Thousands)
Mortgage-backed securities – residential:
Government National Mortgage Association	$	414	$	—	$	—	$	414	$	—
Federal Home Loan Mortgage Corporation		775		1		110		666		—
Federal National Mortgage Association		1,677		—		177		1,500		—
Collateralized mortgage obligations – GSE		2,782		—		624		2,158		—
Total mortgage-backed securities		5,648		1		911		4,738		—
Municipal Bonds		9,094		—		1,974		7,120		126
	$	14,742	$	1	$	2,885	$	11,858	$	126

Contractual final maturities of mortgage-backed securities and municipal bonds were as follows at March 31, 2025:


	March 31, 2025
	Amortized		Fair
	Cost		Value

	(In Thousands)
Due within one year	$	527	$	445
Due after one but within five years		1,815		1,479
Due after five but within ten years		2,675		2,170
Due after ten years		9,596		7,549
	$	14,613	$	11,643

The maturities shown above are based upon contractual final maturity. Actual maturities will differ from contractual maturities due to scheduled monthly repayments and due to the underlying borrowers having the right to prepay their obligations.

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The activity in the allowance for credit losses for debt securities held-to-maturity for the three months ended March 31, 2025 and 2024 was as follows:


		Municipal Bonds
Balance – December 31, 2024	$	126
Provision for (reversal of) credit loss		-
Balance – March 31, 2025	$	126

		Municipal Bonds
Balance – December 31, 2023	$	136
Provision for (reversal of) credit loss		(3)
Balance – March 31, 2024	$	133

The age of unrealized losses and the fair value of related securities held-to-maturity, for which an allowance for credit losses was not deemed necessary, were as follows:


	Less than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses

	(In Thousands)
March 31, 2025:
Mortgage-backed securities - residential:
Federal Home Loan Mortgage Corporation	$	—	$	—	$	629	$	93	$	629	$	93
Federal National Mortgage Association		—		—		1,455		145		1,455		145
Collateralized mortgage obligations – GSE		—		—		2,179		582		2,179		582
Total mortgage-backed securities	$	—	$	—	$	4,263	$	820	$	4,263	$	820


	Less than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses

	(In Thousands)
December 31, 2024:
Mortgage-backed securities - residential:
Federal Home Loan Mortgage Corporation	$	—	$	—	$	634	$	110	$	634	$	110
Federal National Mortgage Association		—		—		1,500		177		1,500		177
Collateralized mortgage obligations – GSE		—		—		2,158		624		2,158		624
Total mortgage-backed securities	$	—	$	—	$	4,292	$	911	$	4,292	$	911

At March 31, 2025, thirteen mortgage-backed securities had unrealized losses due to interest rate volatility. Management concluded that the unrealized loss reflected above was temporary in nature since the unrealized loss was related primarily to market interest rate volatility, and was not related to the underlying credit quality of the issuers of the securities. Additionally, the Company has the ability and intent to hold the securities for the time necessary to recover the amortized cost. At December 31, 2024, there were sixteen mortgage-backed securities that had unrealized losses due to interest rate volatility.

Credit Quality Indicators

The held to maturity securities portfolio consists of agency mortgage-backed securities and municipal bonds. All agency mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The seven municipal bonds in the portfolio carry no lower than A ratings from the rating agencies at March 31, 2025 and have no realized losses since they were issued. The Company regularly monitors the

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municipal bonds sector of the market and reviews collectability including such factors as the financial condition of the issuers as well as credit ratings in effect as of the reporting period.

Note 6 — Loans Receivable and the Allowance for Credit Losses

The composition of loans was as follows at March 31, 2025 and December 31, 2024:


	March 31,		December 31,
	2025		2024

	(In Thousands)
Residential real estate:
One-to-four family	$	3,436	$	3,472
Multi-family		253,018		206,606
Mixed-use		26,572		26,571
Total residential real estate		283,026		236,649
Non-residential real estate		29,198		29,446
Construction		1,287,225		1,426,167
Commercial and industrial		123,113		118,736
Consumer		3,102		1,649
Total Loans		1,725,664		1,812,647
Deferred loan fees, net		(63)		(49)
Allowance for credit losses		(5,127)		(4,830)
	$	1,720,474	$	1,807,768

Loans serviced for the benefit of others totaled approximately $52.9 million and $52.5 million at March 31, 2025 and December 31, 2024, respectively. The value of mortgage servicing rights was not material at March 31, 2025 and December 31, 2024.

The allowance for credit losses on loans represents management’s estimate of losses inherent in the loan portfolio as of the statement of financial condition date and is recorded as a reduction to loans. The allowance for credit losses is increased by the provision for credit losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for credit losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely.

The allowance for credit losses on loans is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the relevant available information from internal and external sources related to past events and current conditions, as well as the incorporation of reasonable and supportable forecasts. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

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The following tables summarize the allocation of the allowance for credit losses and loans receivable by loan class and credit loss method at March 31, 2025 and December 31, 2024:

At March 31, 2025:


			Non-				Commercial
	Residential		residential				and
	Real Estate		Real Estate		Construction		Industrial		Consumer		Total

	(In Thousands)
Allowance for credit losses:
Ending balance	$	2,224	$	271	$	1,716	$	606	$	310	$	5,127
Ending balance: individually evaluated for credit loss	$	—	$	—	$	—	$	—	$	—	$	—
Ending balance: collectively evaluated for credit loss	$	2,224	$	271	$	1,716	$	606	$	310	$	5,127
Loans receivable:
Ending balance	$	283,026	$	29,198	$	1,287,225	$	123,113	$	3,102	$	1,725,664
Ending balance: individually evaluated for credit loss	$	—	$	—	$	—	$	241	$	—	$	241
Ending balance: collectively evaluated for credit loss	$	283,026	$	29,198	$	1,287,225	$	122,872	$	3,102	$	1,725,423

At December 31, 2024:


			Non-				Commercial
	Residential		residential				and
	Real Estate		Real Estate		Construction		Industrial		Consumer		Total

	(In Thousands)
Allowance for credit losses:
Ending balance	$	1,900	$	308	$	1,937	$	520	$	165	$	4,830
Ending balance: individually evaluated for credit loss	$	—	$	—	$	—	$	—	$	—	$	—
Ending balance: collectively evaluated for credit loss	$	1,900	$	308	$	1,937	$	520	$	165	$	4,830
Loans receivable:
Ending balance	$	236,649	$	29,446	$	1,426,167	$	118,736	$	1,649	$	1,812,647
Ending balance: individually evaluated for credit loss	$	—	$	—	$	—	$	241	$	—	$	241
Ending balance: collectively evaluated for credit loss	$	236,649	$	29,446	$	1,426,167	$	118,495	$	1,649	$	1,812,406

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The activity in the allowance for credit loss by loan class for the three months ended March 31, 2025 and 2024 was as follows:


			Non-				Commercial
	Residential		residential				and
	Real Estate		Real Estate		Construction		Industrial		Consumer		Total

	(In Thousands)
Allowance for credit losses:
Balance - December 31, 2024	$	1,900	$	308	$	1,937	$	520	$	165	$	4,830
Charge-offs		—		—		—		—		(117)		(117)
Recoveries		—		350		—		—		2		352
Provision (reversal of)		324		(387)		(221)		86		260		62
Balance -March 31, 2025	$	2,224	$	271	$	1,716	$	606	$	310	$	5,127


			Non-				Commercial
	Residential		residential				and
	Real Estate		Real Estate		Construction		Industrial		Consumer		Total

	(In Thousands)
Allowance for credit losses:
Balance - December 31, 2023	$	2,433	$	126	$	1,914	$	472	$	148	$	5,093
Charge-offs		—		—		—		—		(21)		(21)
Recoveries		—		—		—		—		—		—
Provision (reversal of)		(204)		(16)		55		(50)		70		(145)
Balance - March 31, 2024	$	2,229	$	110	$	1,969	$	422	$	197	$	4,927

During the three months ended March 31, 2025, the provision expense recorded for residential real estate loans was primarily attributed to increased loan balances. The provision expense recorded for commercial and industrial loans was attributed to increased loan balances and increased credit risk. The reversal of provision recorded for non-residential real estate loans was primarily attributed to a $350,000 recovery from a loan charged off in 2021, and slightly decreased loan balance. The reversal of provision recorded for constructions loans was primarily attributed to decreased loan balances. The provision expense recorded for consumer loans was primarily attributed to the increased balance on deposit account overdrafts.

During the three months ended March 31, 2024, the reversal of provision recorded for residential real estate loans was primarily attributed to the decreased loan balances and reduced credit risk. The reversal of provision recorded for non-residential real estate loans and commercial and industrial loans was primarily attributed to the decreased loan balances. The provision expenses recorded for consumer loans were primarily attributed to the increased deposit account overdraft balances. The provision expenses recorded for constructions loans were primarily attributed to the increased construction loan balances, offset by improving economic conditions during the first quarter of 2024.

The Company has one individually evaluated loan, totaling $241,000 at March 31, 2025 and December 31, 2024. The underlying business experienced a significant decline in sales revenue since 2024, but the borrower continues to make monthly payments through personal guarantees. Therefore, this loan was downgraded to substandard in 2024 but still accruing. There were no non-accrual loans at March 31, 2025 and December 31, 2024.

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The following tables provide information about delinquencies in our loan portfolio at the dates indicated.

Age Analysis of Past Due Loans as of March 31, 2025:


													Recorded
													Investment >
	30 – 59 Days		60 – 89 Days		Greater Than		Total Past				Total Loans		90 Days and
	Past Due		Past Due		90 Days		Due		Current		Receivable		Accruing

	(In Thousands)
Residential real estate:
One- to four-family	$	—	$	—	$	—	$	—	$	3,436	$	3,436	$	—
Multi-family		—		—		—		—		253,018		253,018		—
Mixed-use		—		—		—		—		26,572		26,572		—
Non-residential real estate		—		—		—		—		29,198		29,198		—
Construction loans		—		—		—		—		1,287,225		1,287,225		—
Commercial and industrial loans		—		—		—		—		123,113		123,113		—
Consumer		—		—		—		—		3,102		3,102		—
	$	—	$	—	$	—	$	—	$	1,725,664	$	1,725,664	$	—

Age Analysis of Past Due Loans as of December 31, 2024:


													Recorded
													Investment
	30 – 59 Days		60 – 89 Days		Greater Than		Total Past				Total Loans		> 90 Days and
	Past Due		Past Due		90 Days		Due		Current		Receivable		Accruing

	(In Thousands)
Residential real estate:
One- to four-family	$	—	$	—	$	—	$	—	$	3,472	$	3,472	$	—
Multi-family		931		—		—		931		205,675		206,606		—
Mixed-use		—		—		—		—		26,571		26,571		—
Non-residential real estate		—		—		—		—		29,446		29,446		—
Construction loans		—		—		—		—		1,426,167		1,426,167		—
Commercial and industrial loans		—		—		—		—		118,736		118,736		—
Consumer		—		—		—		—		1,649		1,649		—
	$	931	$	—	$	—	$	931	$	1,811,716	$	1,812,647	$	—

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Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings:

Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses.

Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.

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The following table presents the risk category of loans at March 31, 2025 by loan segment and vintage year:


														Revolving		Revolving
	Term Loans Amortized Costs Basis by Origination Year													Loans		Loans
														Amortized		Converted
March 31, 2025		2025		2024		2023		2022		2021		Prior		Cost Basis		to Term		Total
Residential real estate
Risk Rating
Pass	$	49,886	$	18,213	$	78,269	$	69,979	$	22,161	$	44,518	$	-	$	-	$	283,026
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	49,886	$	18,213	$	78,269	$	69,979	$	22,161	$	44,518	$	-	$	-	$	283,026

Residential real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Non-residential real estate
Risk Rating
Pass	$	-	$	13,821	$	1,559	$	241	$	1,653	$	11,924	$	-	$	-	$	29,198
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	-	$	13,821	$	1,559	$	241	$	1,653	$	11,924	$	-	$	-	$	29,198

Non-residential real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Construction										-
Risk Rating
Pass	$	49,897	$	472,022	$	364,431	$	226,396	$	112,320	$	62,159	$	-	$	-	$	1,287,225
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	49,897	$	472,022	$	364,431	$	226,396	$	112,320	$	62,159	$	-	$	-	$	1,287,225

Construction
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial and industrial										-
Risk Rating
Pass	$	160	$	6,814	$	4,184	$	5,765	$	180	$	1,709	$	103,710	$	350	$	122,872
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		241		-		-		-		-		-		-		241
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	160	$	7,055	$	4,184	$	5,765	$	180	$	1,709	$	103,710	$	350	$	123,113

Commercial and industrial
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer										-
Risk Rating
Pass	$	3,102	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	3,102
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	3,102	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	3,102

Consumer
Current period gross charge-offs	$	117	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	117

Total										-
Risk Rating
Pass	$	103,045	$	510,870	$	448,443	$	302,381	$	136,314	$	120,310	$	103,710	$	350	$	1,725,423
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		241		-		-		-		-		-		-		241
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	103,045	$	511,111	$	448,443	$	302,381	$	136,314	$	120,310	$	103,710	$	350	$	1,725,664
Total
Current period gross charge-offs	$	117	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	117

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The following table presents the risk category of loans at December 31, 2024 by loan segment and vintage year:


														Revolving		Revolving
	Term Loans Amortized Costs Basis by Origination Year													Loans		Loans
														Amortized		Converted
December 31, 2024		2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Residential real estate
Risk Rating
Pass	$	18,326	$	78,603	$	70,892	$	22,292	$	11,361	$	35,175	$	-	$	-	$	236,649
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	18,326	$	78,603	$	70,892	$	22,292	$	11,361	$	35,175	$	-	$	-	$	236,649
Residential real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Non-residential real estate
Risk Rating
Pass	$	13,881	$	1,569	$	243	$	1,669	$	974	$	11,110	$	-	$	-	$	29,446
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	13,881	$	1,569	$	243	$	1,669	$	974	$	11,110	$	-	$	-	$	29,446
Non-residential real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Construction
Risk Rating
Pass	$	408,072	$	460,460	$	303,417	$	166,997	$	43,405	$	43,816	$	-	$	-	$	1,426,167
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	408,072	$	460,460	$	303,417	$	166,997	$	43,405	$	43,816	$	-	$	-	$	1,426,167
Construction
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial and industrial
Risk Rating
Pass	$	1,250	$	4,365	$	5,988	$	232	$	82	$	795	$	100,049	$	5,734	$	118,495
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		241		241
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	1,250	$	4,365	$	5,988	$	232	$	82	$	795	$	100,049	$	5,975	$	118,736
Commercial and industrial
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	1,000	$	-	$	-	$	1,000

Consumer
Risk Rating
Pass	$	1,648	$	-	$	-	$	-	$	-	$		$	1	$	-	$	1,649
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	1,648	$	-	$	-	$	-	$	-	$	-	$	1	$	-	$	1,649
Consumer
Current period gross charge-offs	$	347	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	347

Total
Risk Rating
Pass	$	443,177	$	544,997	$	380,540	$	191,190	$	55,822	$	90,896	$	100,050	$	5,734	$	1,812,406
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		241		241
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	443,177	$	544,997	$	380,540	$	191,190	$	55,822	$	90,896	$	100,050	$	5,975	$	1,812,647
Total
Current period gross charge-offs	$	347	$	-	$	-	$	-	$	-	$	1,000	$	-	$	-	$	1,347

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Modifications to Borrowers Experiencing Financial Difficulty:

Occasionally, the Company modifies loans to borrowers in financial distress by providing term extension; an other-than-insignificant payment delay; or interest rate reduction.

In some cases, the Company provides multiple types of concessions on a loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as interest rate reduction, may be granted.

There were no loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2025 or the year ended December 31, 2024.

Allowance for Credit Losses on Off-Balance Sheet Commitments:

The following table presents the activity in the allowance for credit losses related to off-balance sheet commitments, that is included in accounts payable and accrued expenses on the consolidated statement of financial condition, for the three months ended March 31, 2025 and 2024:


	Allowance for Credit Loss
Balance – December 31, 2024	$	704
Provision for credit loss		175
Balance – March 31, 2025	$	879

	Allowance for Credit Loss
Balance – December 31, 2023	$	1,038
Reversal of credit loss		(17)
Balance – March 31, 2024	$	1,021

Note 7 — Real Estate Owned (“REO”)

The Company owned two foreclosed properties valued at approximately $5,120,000 at March 31, 2025 and December 31, 2024, consisting of an office building located in Pennsylvania which was acquired through foreclosure in December 2014, and a land and land improvement located in Bronx which was acquired through foreclosure in October 2024.

Further declines in real estate values may result in impairment charges in the future. Routine holding costs are charged to expense as incurred and improvements to real estate owned that enhance the value of the real estate are capitalized. REO expense recorded in the Consolidated Statements of Income, including loss on sales and write-downs, amounted to $30,000 and $11,000 for the three months ended March 31, 2025 and 2024, respectively.

Note 8 — Borrowings

Our borrowings include Federal Home Loan Bank of New York (“FHLB”) advances and short-term borrowings from the Discount Window at the Federal Reserve Bank of New York (“FRBNY”).

On August 30, 2023, the FRBNY approved the Company’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Company to borrow from the Discount Window at the FRBNY. At March 31, 2025 and December 31, 2024, there were no outstanding borrowings from the FHLB and FRBNY. At March 31, 2025, the Company had the ability to borrow $941.3 million from the FRBNY, $15.5 million from the FHLB, and $8.0 million from ACBB.

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Note 9 — Benefits Plans

Outside Director Retirement Plan (“DRP”)

The DRP is an unfunded non-contributory defined benefit pension plan covering all non-employee directors meeting eligibility requirements as specified in the plan document. The following table sets forth information regarding the components of net pension periodic expense measured as of March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024

	(Dollars In Thousands)
Net periodic pension expense:
Service cost	$	21	$	23
Interest cost		19		21
Actuarial gain recognized		(10)		(13)
Total net periodic pension expense included in other non-interest expenses	$	30	$	31

Unrecognized net gain of $10,000 for the three months ended March 31, 2025, and unrecognized net loss of $18,000 for the three months ended March 31, 2024, were included in accumulated other comprehensive income.

Supplemental Executive Retirement Plan (“SERP”)

The SERP is a non-contributory defined benefit plan that covers certain officers of the Company. Under the SERP, each of these individuals will be entitled to receive upon retirement an annual benefit paid in monthly installments equal to 50% of his average base salary in the three-year period preceding retirement. Each individual may also retire early and receive a reduced benefit upon the attainment of certain age and years of service combination. Additional terms related to death while employed, death after retirement, disability before retirement and termination of employment are fully described within the plan document. The benefit payment term is the greater of 15 years or the executive’s remaining life.

Expenses of $139,000 and $130,000 for the three months ended March 31, 2025 and 2024, respectively, were recorded for this plan and are reflected in the Consolidated Statements of Income under Salaries and Employee Benefits.

Stock-Based Deferral Plan

In June 2021, the Company established a stock-based deferral plan for eligible key executives and members of the Board of Directors of the Company to elect to defer compensation received from the Company for their services and make deemed investments of that deferred compensation in shares of the Company’s common stock. At March 31, 2025, the Company did not have any obligations under the plan.

401(k) Plan

The Company maintains a 401(k) plan for all eligible employees. Participants are permitted to contribute from 1% to 15% or 60% of their annual compensation up to the maximum permitted under the Internal Revenue Code. The Company provided no matching contribution during the three months ended March 31, 2025 and 2024.

Employee Stock Ownership Plan (“ESOP”)

In conjunction with the Mid-Tier Holding Company’s public stock offering in 2006, the Bank established an ESOP for all eligible employees (substantially all full-time employees). The ESOP borrowed $5,184,200 from the Mid-Tier Holding Company and used those funds to acquire 518,420 shares of Mid-Tier Holding Company common stock at $10.00 per share. The loan from the Mid-Tier Holding Company, which has been assumed by the Company, carries an interest rate of 8.25% and is repayable in twenty annual installments. This loan will be paid off by the end of 2025.

In conjunction with the Company’s second-step conversion offering, on July 12, 2021, the ESOP borrowed $7,827,260 from the Company and used those funds to acquire 782,726 shares of Company common stock at $10.00 per

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share. The loan from the Company carries an interest rate equal to 3.25% and is repayable in fifteen annual installments through 2035.

Each year, the Bank makes discretionary contributions to the ESOP equal to the principal and interest payment required on the loans from the Company. The ESOP may further pay down the principal balance of the loans by using dividends paid, if any, on the shares of Company common stock it owns. The balance remaining on the first ESOP loan was $478,000 and $919,000 at March 31, 2025 and December 31, 2024, respectively. The balance remaining on the second ESOP loan was $5,991,000 and $6,417,000 at March 31, 2025 and December 31, 2024, respectively.

Shares purchased for the ESOP with the loan proceeds serve as collateral for the loan and are held in a suspense account for future allocation among ESOP participants. As the loan principal is repaid, shares will be released from the suspense account and become eligible for allocation. The allocation among plan participants will be as described in the ESOP governing document.

ESOP shares initially pledged as collateral were recorded as unearned ESOP shares in the stockholders’ equity section of the Consolidated Statement of Financial Condition. Thereafter, on a monthly basis over the terms of the ESOP loans, approximately 2,894 shares for the ESOP loan made in 2006 and approximately 4,348 shares for the ESOP loan made in 2021 are committed to be released, respectively. Compensation expense is recorded in an amount equal to the shares committed to be released multiplied by the average closing price of the Company’s stock during that month. ESOP expense totaled approximately $520,000 and $352,000 for the three months ended March 31, 2025 and 2024, respectively. Dividends on unallocated shares, which totaled approximately $122,000 and $70,000 for the three months ended March 31, 2025 and 2024, respectively, are recorded as a reduction of the ESOP loan. Dividends on allocated shares, which totaled approximately $174,000 and $78,000 for the three months ended March 31, 2025 and 2024, respectively, are charged to retained earnings.

ESOP shares are summarized as follows:


	March 31,		December 31,
	2025		2024
Allocated shares		868,678		781,762
Shares committed to be released		21,728		86,916
Unearned shares		587,003		608,731
Total ESOP Shares		1,477,409		1,477,409
Less allocated shares distributed to former or retired employees		(181,942)		(165,644)
Total ESOP Shares Held by Trustee		1,295,467		1,311,765
Fair value of unearned shares	$	13,759,350	$	14,889,560

Note 10 — Fair Value Disclosures

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s marketable equity securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company has to record at fair value other assets and liabilities on a non-recurring basis, such as securities held to maturity, individually evaluated loans and other real estate owned. U.S. GAAP has established a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

Level 1:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

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Level 3:

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

The level of the asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s assets that are carried at fair value on a recurring basis and the level that was used to determine their fair value at March 31, 2025 and December 31, 2024:


	Quoted Prices in				Significant Other				Significant				Total Carried
	Active Markets for				Observable				Unobservable				at Fair
	Identical Assets				Inputs				Inputs				Value on a
	(Level 1)				(Level 2)				(Level 3)				Recurring Basis
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
Description	2025		2024		2025		2024		2025		2024		2025		2024
Assets:
Marketable equity securities:
Mutual funds	$	23,294	$	21,994	$	—	$	—	$	—	$	—	$	23,294	$	21,994
Total assets	$	23,294	$	21,994	$	—	$	—	$	—	$	—	$	23,294	$	21,994

There were no transfers between Level 1 and 2 during the three months ended March 31, 2025 or the year ended December 31, 2024. The Company did not have any liabilities that were carried at fair value on a recurring basis at March 31, 2025 and December 31, 2024.

The following table sets forth the Company’s assets that are carried at fair value on a non-recurring basis and the level that was used to determine their fair value, at March 31, 2025 and December 31, 2024:


	Quoted Prices in				Significant Other				Significant				Total Carried
	Active Markets for				Observable				Unobservable				at Fair
	Identical Assets				Inputs				Inputs				Value on a
	(Level 1)				(Level 2)				(Level 3)				Non-Recurring Basis
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
Description	2025		2024		2025		2024		2025		2024		2025		2024

	(In Thousands)
Assets:
Real estate owned	$	—		—	$	—	$	—	$	5,120	$	5,120	$	5,120	$	5,120
Total assets	$	—	$	—	$	—	$	—	$	5,120	$	5,120	$	5,120	$	5,120

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The following tables present the qualitative information about non-recurring Level 3 fair value measurements of financial instruments at March 31, 2025 and December 31, 2024:

At March 31, 2025

Fair

Valuation

Unobservable

Weighted

Value

Technique

Input

Range

Average

(In Thousands)

Assets:

Real estate owned

767

Sales approach

Adjustment to sales comparison value

- 40% to - 10%

Real estate owned

4,353

Income approach

Capitalization rate

6.00%

At December 31, 2024

Fair

Valuation

Unobservable

Weighted

Value

Technique

Input

Range

Average

(In Thousands)

Assets:

Real estate owned

767

Sales approach

Adjustment to sales comparison value

- 40% to - 10%

Real estate owned

4,353

Income approach

Capitalization rate

6.00%

The Company did not have any liabilities that were carried at fair value on a non-recurring basis at March 31, 2025 and December 31, 2024.

The methods and assumptions used to estimate fair value at March 31, 2025 and December 31, 2024 are as follows:

For real estate owned, fair value is generally determined through independent appraisals or fair value estimations of the underlying properties which generally include various Level 3 inputs which are not identifiable. The appraisals or fair value estimation may be adjusted by management for qualitative reasons and estimated liquidation expenses. Management’s assumptions may include consideration of location and occupancy of the property and current economic conditions. Subsequently, as these properties are actively marketed, the estimated fair values may be periodically adjusted through incremental subsequent write-downs to reflect decreases in estimated values resulting from sales price observations and the impact of changing economic and market conditions.

A loan is considered individually evaluated for credit loss when, based upon current information and events, it is probable that the Company will be unable to collect all scheduled payments in accordance with the contractual terms of the loan. Individually evaluated loans that are collateral dependent are written down to fair value through the establishment of specific reserves, a component of the allowance for credit losses or through partial charge-offs, and as such are carried at the lower of cost or the fair value. Estimates of fair value of the collateral are determined based on a variety of information, including available valuations from certified appraisers for similar assets, present value of discounted cash flows and inputs that are estimated based on commonly used and generally accepted industry liquidation advance rates and estimates and assumptions developed by management. The appraisals may be adjusted by management for estimated liquidation expenses and qualitative factors such as economic conditions. If real estate is not the primary source of repayment, present value of discounted cash flows and estimates using generally accepted industry liquidation advance rates are utilized. Due to the multitude of assumptions, many of which are subjective in nature, and the varying inputs and techniques used by appraisers, the Company recognizes that valuations could differ across a wide spectrum of valuation techniques employed and accordingly, fair value estimates for impaired loans are classified as Level 3.

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends

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and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

Fair values for marketable equity securities are determined by quoted market prices on nationally recognized and foreign securities exchanges (Level 1). Fair values for equity securities and securities held to maturity are determined utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the security’s terms and conditions, among other things

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

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The carrying amounts and estimated fair value of our financial instruments are as follows:


					Fair Value at March 31, 2025
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying				Assets		Inputs		Inputs
(In thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash and cash equivalents	$	89,458	$	89,458	$	89,458	$	—	$	—
Certificates of deposit		100		100		—		100		—
Marketable equity securities		23,294		23,294		23,294		—		—
Securities held to maturity		14,487		11,643		—		11,643		—
Loans receivable, net		1,720,474		1,715,111		—		—		1,715,111
Investments in restricted stock		397		397		—		397		—
Accrued interest receivable		12,432		12,432		—		12,432		—
Financial Liabilities
Deposits		1,586,015		1,587,879		—		1,587,879		—


					Fair Value at December 31, 2024
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying				Assets		Inputs		Inputs
(In thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash and cash equivalents	$	78,259	$	78,259	$	78,259	$	—	$	—
Certificates of deposit		100		100		—		100		—
Marketable equity securities		21,994		21,994		21,994		—		—
Securities held to maturity		14,616		11,858		—		11,858		—
Loans receivable		1,807,768		1,801,607		—		—		1,801,607
Investments in restricted stock		397		397		—		397		—
Accrued interest receivable		13,481		13,481		—		13,481		—
Financial Liabilities
Deposits		1,670,375		1,674,376		—		1,674,376		—

Note 11 — Revenue Recognition

The majority of the Company’s revenues come from interest income and other sources, including loans and securities that are outside the scope of ASC 606, Revenue from Contracts with Customers. The Company’s services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include deposit service charges on deposits, electronic banking fees and charges income, and investment advisory fees.

A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as referral fees based on month end reports. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and

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therefore, does not experience significant contract balances. As of March 31, 2025, the Company did not have any significant contract balances.

All of the Company’s revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income. The following table presents the Company’s sources of noninterest income for the three months ended March 31, 2025 and 2024. Sources of revenue outside the scope of ASC 606 are noted as such:


	Three Months Ended March 31,
	2025		2024

	(In Thousands)
Non-interest income:
Deposit-related fees and charges	$	17	$	15
Loan-related fees and charges⁽¹⁾		456		211
Electronic banking fees and charges		267		236
Income from bank owned life insurance⁽¹⁾		167		157
Unrealized gain (loss) on equity securities⁽¹⁾		300		(82)
Miscellaneous⁽¹⁾		28		17
Total non-interest income	$	1,235	$	554

(1)	Not within the scope of ASC 606.

A description of the Company’s revenue streams accounted for under ASC 606 is as follows:

Service Charges on Deposit Accounts

The Company earns fees from deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed at the point in the time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.

Electronic Banking Fee Income

The Company earns interchange fees from debit and credit card holder transactions conducted through various payment networks. Interchange fees from cardholder transactions are recognized daily, concurrently with the transaction processing services provided by an outsourced technology solution.

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Note 12 — Other Non-Interest Expenses

The following is an analysis of other non-interest expenses:


	Three Months Ended March 31,
	2025		2024

	(In Thousands)
Other	$	1,367	$	1,103
Service contracts		423		424
Consulting expense		191		231
Telephone		143		170
Directors' compensation		237		246
Audit and accounting		143		135
Insurance		106		102
Director, officer, and employee expense		59		79
Legal fees		98		66
Office supplies and stationary		56		51
Recruiting expense		32		27
	$	2,855	$	2,634

Note 13 — Stock Compensation Plans

At a special shareholders meeting held on September 29, 2022, the Company’s shareholders approved the Company’s 2022 Equity Incentive Plan whereby 1,369,771 shares of the Company’s common stock were reserved from authorized but unissued shares for purposes of grants of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, performance shares and performance units to selected employees and non-employee directors of the Company.

The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted stock under the Company’s 2022 Equity Incentive Plan. Management recognizes compensation expense for the fair value of restricted stock on a straight-line basis over the requisite service period for the entire award. As of March 31, 2025 and December 31, 2024, there were 102,759 shares available for future awards under this plan, which includes 98,311 shares available for stock options and 4,448 shares available for restricted stock awards.

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A summary of the Company’s restricted stock activity and related information for the three months ended March 31, 2025 and 2024 follows:


	2025
			Weighted
			Average
	Shares		Market Price
Outstanding at December 31, 2024		234,635	$	14.58
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at March 31, 2025		234,635	$	14.58

	2024
			Weighted
			Average
	Shares		Market Price
Outstanding at December 31, 2023		352,037	$	13.67
Granted		—		—
Forfeited		—		—
Vested		—		—
Outstanding at March 31, 2024		352,037	$	13.67

Compensation expense related to restricted stock was $293,000 and $252,000 for the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, the total compensation cost related to non-vested awards that has not yet been recognized was $3.0 million and $3.3 million, respectively, which is expected to be recognized over the next three years.

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A summary of the Company’s stock option activity and related information for the three months ended March 31, 2025 and 2024 follows:


	2025
			Weighted
			Average
	Options		Exercise Price
Outstanding at December 31, 2024		842,896	$	13.72
Granted		—		—
Forfeited		—		—
Exercised		14,480		12.40
Outstanding at March 31, 2025		828,416	$	13.74
Exercisable at March 31, 2025		322,078		13.78

	2024
			Weighted
			Average
		Options	Exercise Price
Outstanding at December 31, 2023		880,097	$	13.67
Granted		—		—
Forfeited		—		—
Exercised		1,000		14.08
Outstanding at March 31, 2024		879,097	$	13.67
Exercisable at March 31, 2024		175,019		13.67

Compensation cost related to stock options is recognized based on the fair value of the stock options at the grant date on a straight line basis over the vesting period. Compensation expense related to stock options was $185,000 and $192,000 for the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, unrecognized compensation cost related to stock option awards was $1.9 million and $2.1 million, respectively, which is expected to be recognized over the next three years.

Note 14 — Business Segments

While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. Substantially most of the Company’s operations occur through the Bank and involve the delivery of loan and deposit products to customers.

The Company’s chief operating decision maker is the Executive Committee that includes the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. The Executive Committee assesses performance of the Company on a consolidated basis and decides how to allocate resources based on net income that is also reported as net income on the Consolidated Statement of Income.

The Executive Committee uses net income, which is the measure of segment profit and loss, to evaluate income generated from segment assets (return on assets) and other measures, such as net interest margin, return on average assets, and return on common equity, in deciding how to reinvest profits, such as originating loans, investing in investment securities, or to repurchase shares in the Company’s common stock. Net income is used to monitor budget versus actual results. The Executive Committee also uses net income and other measures in comparing the Company to its peer banks. The comparison of the Company’s net income and other measures to its peer banks, along with the comparison of budgeted versus actual results are used in assessing the Company’s performance and in establishing management compensation. Loans, investments, and deposits provide the revenues in the banking operations. Interest expense and payroll provide the significant expenses in the banking operations. All operations are domestic.

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The following table presents the Company’s reported segment revenues, profit or loss and significant segment expenses for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024

	(In Thousand)
Total interest income	$	38,207	$	38,121
Total interest expense		13,943		13,135
Net interest income		24,264		24,986
Provision for (reversal of) credit loss		237		(165)
Net interest income after provision for credit losses		24,027		25,151
Total non-interest income		1,235		554
Non-interest expense:
Salaries and employee benefits		5,933		5,351
Occupancy expense		747		707
Equipment		217		253
Outside data processing		735		637
Advertising		102		88
Real estate owned expense		30		11
Other		2,855		2,634
Total Non-Interest Expenses		10,619		9,681
Income before income tax expense		14,643		16,024
Income tax expense		4,076		4,650
Segment net income	$	10,567	$	11,374

Reconciliation of profit or loss
Adjustments and reconciling items		—		—
Consolidated net income	$	10,567	$	11,374

Earnings per common share - Basis	$	0.80	$	0.87
Earnings per common share - Diluted		0.78		0.86

The measure of segment assets is reported as total assets on the Consolidated Statement of Condition.

The following table presents the Company’s reported segment assets as of March 31, 2025 and December 31, 2024:


	March 31,		December 31,
	2025		2024

	(In Thousand)
Segment assets
Adjustments and reconciling items	$	—	$	—
Consolidated total assets		1,933,376		2,009,581

Note 15 — Recent Accounting Pronouncements

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvement: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which incorporates several SEC disclosure requirements into US GAAP and adds interim and annual disclosure requirements to a variety of topics in the Accounting Standards Codification, including those focusing on accounting changes, earnings per share, debt and repurchase agreements. For entities subject to the SEC disclosure requirements and those “required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer,” the US GAAP requirements will be effective when the removal of the related SEC rule is effective. Early adoption is not permitted for these entities. For all other entities, the effective date will be two years later, and early adoption is permitted. That is, financial statements issued after the effective date of each amendment are required to include on a prospective basis the related disclosure incorporated into US GAAP by this ASU. However, if the SEC does

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not act to remove its related requirements by June 30, 2027, any related FASB amendments will be removed from the Codification and will not be effective for any entities.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. This ASU requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Specific disclosures are required for (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities. The amendments in this Update do not change or remove current expense disclosure requirements. However, the amendments affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments. The amendments in ASU 2024-03 apply only to public business entities and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. This Update is not expected to have a significant impact on the Company’s financial statements.

In December 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This new guidance clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. The ASU requires entities to apply a preexisting contract approach. To qualify for induced conversion accounting under this approach, the inducement offer is required to preserve the form of consideration and result in an amount of consideration that is no less than that issuable pursuant to the preexisting conversion privileges. The guidance is effective for fiscal years beginning after December 15, 2025, with early adoption permitted, and it can be adopted either on a prospective or retrospective basis. This Update is not expected to have a significant impact on the Company’s financial statements.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. This Update is not expected to have a significant impact on the Company’s financial statements.

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

Forward-Looking Statements

Statements contained in this report that are not historical facts may constitute forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended), which involve significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “plan,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted. The Company undertakes no obligation to update these forward-looking statements in the future.

The Company cautions readers of this report that a number of important factors could cause the Company’s actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to: (i) general economic conditions, including higher inflation or recessionary conditions, either nationally or in our market area, that are worse than expected; (ii) changes in the interest rate environment that reduce our interest margins, reduce the fair value of financial instruments or reduce the demand for our loan products; (iii) increased competitive pressures among financial services companies; (iv) changes in consumer spending, borrowing and savings habits; (v) changes in the quality and composition of our loan or investment portfolios and the adequacy of credit loss reserves; (vi) changes in

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real estate market values in our market area; (vii) decreased demand for loan products, deposit flows, competition, or decreased demand for financial services in our market area; (viii) major catastrophes such as earthquakes, floods or other natural or human disasters and pandemics or infectious disease outbreaks, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on us and our customers and other constituencies; (ix) legislative or regulatory changes that adversely affect our business or changes in the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; (x) the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts; (xi) technological changes that may be more difficult or expensive than expected; (xii) success or consummation of new business initiatives may be more difficult or expensive than expected; (xiii) the inability to successfully integrate acquired businesses and financial institutions into our business operations; (xiv) adverse changes in the securities markets; (xv) the impact of failures or disruptions in or breaches of the Company’s operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; (xvi) the inability of third party service providers to perform; and (xvii) changes in accounting policies and practices, as may be adopted by bank regulatory agencies or the Financial Accounting Standards Board.

Critical Accounting Policies

We consider accounting policies involving significant judgements and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider these accounting policies to be our crucial accounting policies. The judgements and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgements and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

Balance Sheet Analysis

General

Total assets decreased $76.2 million, or 3.8%, to $1.9 billion at March 31, 2025, from $2.0 billion at December 31, 2024. The decrease in assets was primarily due to decreases in net loans of $87.3 million and decreases of $1.0 million in accrued interest receivable, partially offset by increases in cash and cash equivalents of $11.2 million and increases of $1.3 million in equity securities.

Cash and cash equivalents increased $11.2 million, or 14.3%, to $89.5 million at March 31, 2025 from $78.3 million at December 31, 2024. The increase in cash and cash equivalents was a result of a decrease of $87.3 million in net loans and an increase of $8.9 million in stockholders’ equity, partially offset by a decrease in deposits of $84.4 million.

Equity securities increased $1.3 million, or 5.9%, to $23.3 million at March 31, 2025 from $22.0 million at December 31, 2024. The increase in equity securities was attributable to the purchase of $1.0 million in equity securities during the three months ended March 31, 2025 and market appreciation of $300,000 due to market interest rate volatility during the quarter ended March 31, 2025.

Securities held-to-maturity decreased $129,000, or 0.9%, to $14.5 million at March 31, 2025 from $14.6 million at December 31, 2024 due to $129,000 in maturities and pay-downs of various investment securities.

Loans, net of the allowance for credit losses, decreased $87.3 million, or 4.8%, to $1.7 billion at March 31, 2025 from $1.8 billion at December 31, 2024. The decrease in loans consisted of decreases of $138.9 million in construction loans, $248,000 in non-residential loans, and $36,000 in one-to-four family loans. The decrease in our construction loan portfolio was due to normal pay-downs and principal reductions as construction projects were completed and either condominium units were sold to end buyers or multi-family rental buildings were refinanced by other financial institutions. The decrease in construction loans was offset by increases of $46.4 million in multi-family loans, $4.4 million in commercial and industrial loans, and $1.5 million in consumer loans.

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During the quarter ended March 31, 2025, we originated loans totaling $170.1 million consisting primarily of $110.2 million in construction loans, $49.1 million in multi-family loans, $10.1 million in commercial and industrial loans, and $730,000 in mixed-use loans. The $110.2 million in construction loans had 38.4% disbursed at loan closing, with the remaining funds to be disbursed over the terms of the construction loans.

The allowance for credit losses related to loans increased to $5.1 million as of March 31, 2025, from $4.8 million as of December 31, 2024. The increase in the allowance for credit losses related to loans was due to recoveries totaling $352,000 and provision for credit losses totaling $62,000, offset by charge-offs totaling $117,000.

Premises and equipment increased $84,000, or 0.3%, to $24.9 million at March 31, 2025 from $24.8 million at December 31, 2024 primarily due to the purchases of additional fixed assets.

Federal Home Loan Bank stock was $397,000, foreclosed real estate was $5.1 million, and property held for investment was $1.4 million at both March 31, 2025 and December 31, 2024.

Bank owned life insurance (“BOLI”) increased $167,000, or 0.6%, to $25.9 million at March 31, 2025 from $25.7 million at December 31, 2024 due to increases in the BOLI cash value.

Accrued interest receivable decreased $1.0 million, or 7.9%, to $12.4 million at March 31, 2025 from $13.5 million at December 31, 2024 due to a decrease in the loan portfolio.

Right of use assets — operating decreased $145,000, or 3.6%, to $3.9 million at March 31, 2025 from $4.0 million at December 31, 2024, primarily due to amortization.

Other assets decreased $328,000, or 2.8%, to $11.3 million at March 31, 2025 from $11.6 million at December 31, 2024 due to decreases of $1.7 million in tax assets and $10,000 in miscellaneous assets, partially offset by increases of $1.1 million in suspense accounts and $263,000 in prepaid expenses.

Total deposits decreased $84.4 million, or 5.1%, to $1.6 billion at March 31, 2025 from $1.7 billion at December 31, 2024. The decrease in deposits was primarily due to decreases in certificates of deposit of $125.1 million, or 12.5%, and non-interest bearing deposits of $9.9 million, or 3.5%, partially offset by increases in NOW/money market accounts of $45.9 million, or 18.8%, and savings account balances of $3.3 million, or 2.4%. The decrease of $125.1 million in certificates of deposit consisted of a decrease in retail certificates of deposit of $76.0 million, or 14.8%, and a decrease in brokered certificates of deposit of $54.8 million, or 12.6%, partially offset by an increase in non-brokered listing services certificates of deposit of $5.7 million, or 17.0%.

The decrease in retail certificates of deposit was due to a shift in deposits to our retail high yield money market accounts. The decrease in brokered certificates of deposit was due to management’s strategy to reduce the cost of funds by calling higher rate brokered deposits on their call date.

Advance payments by borrowers for taxes and insurance increased $680,000, or 42.0%, to $2.3 million at March 31, 2025 from $1.6 million at December 31, 2024 due primarily to accumulation of real estate tax payments from borrowers.

Lease liability – operating decreased $136,000, or 3.3%, to $4.0 million at March 31, 2025 from $4.1 million at December 31, 2024, primarily due to amortization.

Accounts payable and accrued expenses decreased $1.3 million, or 8.7%, to $13.3 million at March 31, 2025 from $14.5 million at December 31, 2024 due primarily to a decrease in accrued expense of $2.8 million, partially offset by increases in dividends payable and other payables of $806,000, suspense accounts for loan closings of $346,000, and deferred compensation of $167,000. The allowance for credit losses for off-balance sheet commitments increased $175,000, or 24.8%, to $879,000 at March 31, 2025 from $704,000 at December 31, 2024 due primarily to an increase of $101.4 million, or 18.0%, in off-balance sheet commitments.

Stockholders’ equity increased $8.9 million, or 2.8% to $327.2 million at March 31, 2025, from $318.3 million at December 31, 2024. The increase in stockholders’ equity was due to net income of $10.6 million for the quarter ended

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March 31, 2025, an increase of $302,000 in earned employee stock ownership plan shares coupled with a reduction of $218,000 in unearned employee stock ownership plan shares, and the amortization expense of $478,000 relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, partially offset by dividends declared of $2.7 million and $13,000 in other comprehensive loss.

Results of Operations for the Three Months Ended March 31, 2025 and 2024

Financial Highlights

Net income for the three months ended March 31, 2025 was $10.6 million compared to net income of $11.4 million for the three months ended March 31, 2024. The decrease in net income of $807,000, or 7.1%, between periods was primarily due to a decrease in net interest income, an increase in the provision for credit losses, and an increase in non-interest expense, partially offset by an increase in non-interest income and a decrease in income tax expense.

Net Interest Income

Net interest income was $24.3 million for the three months ended March 31, 2025, as compared to $25.0 million for the three months ended March 31, 2024. The decrease in net interest income of $722,000, or 2.9%, was primarily due to an increase in interest expense that exceeded an increase in interest income and a decrease in the yield on interest earning assets that exceeded a decrease in the cost of funds for interest bearing liabilities.

Total interest and dividend income increased $86,000, or 0.2%, to $38.2 million for the three months ended March 31, 2025 from $38.1 million for the three months ended March 31, 2024. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $159.9 million, or 9.2%, to $1.9 billion for the three months ended March 31, 2025 from $1.7 billion for the three months ended March 31, 2024, partially offset by a decrease in the yield on interest earning assets by 72 basis points from 8.77% for the three months ended March 31, 2024 to 8.05% for the three months ended March 31, 2025.

Interest expense increased $808,000, or 6.2%, to $13.9 million for the three months ended March 31, 2025 from $13.1 million for the three months ended March 31, 2024. The increase in interest expense was due to an increase in average interest bearing liabilities of $149.7 million, or 12.2%, to $1.4 billion for the three months ended March 31, 2025 from $1.2 billion for the three months ended March 31, 2024, partially offset by a decrease in the cost of interest bearing liabilities by 24 basis points from 4.29% for the three months ended March 31, 2024 to 4.05% for the three months ended March 31, 2025.

Our net interest margin decreased 64 basis points, or 11.1%, to 5.11% for the three months ended March 31, 2025 compared to 5.75% for the three months ended March 31, 2024. The decrease in the net interest margin was due to a decrease in the yield on interest-earning assets that exceeded a decrease in the cost of funds on interest-bearing liabilities.

Credit Loss Expense

The Company recorded a credit loss expense of $237,000 for the three months ended March 31, 2025 compared to a credit loss expense reduction of $165,000 for the three months ended March 31, 2024. The credit loss expense of $237,000 for the three months ended March 31, 2025 was comprised of credit loss expense for loans of $62,000 and credit loss expense for off-balance sheet commitments of $175,000.

The credit loss expense for loans of $62,000 for the three months ended March 31, 2025 was primarily due to an increase in the multi-family loan portfolio. The credit loss expense for off-balance sheet commitments of $175,000 for the three months ended March 31, 2025 was primarily due to an increase in unfunded off-balance sheet commitments.

The credit loss expense reduction of $165,000 for the three months ended March 31, 2024 was comprised of a credit loss expense reduction for loans of $145,000, a credit loss expense reduction for held-to-maturity investment securities of $3,000, and a credit loss expense reduction for off-balance sheet commitments of $17,000. The credit loss expense reduction for loans of $145,000 for the three months ended March 31, 2024 was primarily attributed to favorable trend in the economy.

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With respect to the allowance for credit losses for loans, we charged-off $117,000 during the three months ended March 31, 2025 as compared to charge-offs of $21,000 during the three months ended March 31, 2024. The charge-offs during both periods were against various unpaid overdrafts in our demand deposit accounts.

We recorded recoveries of $352,000 during the three months ended March 31, 2025 compared to no recoveries during the three months ended March 31, 2024. The recoveries of $352,000 during the three months ended March 31, 2025 comprised of recoveries of $350,000 regarding a previously charged-off non-residential mortgage loan and $2,000 from a previously charged-off unpaid overdraft on a demand deposit account.

Based on a review at March 31, 2025 of the loans that were in the loan portfolio, our off-balance sheet credit exposures, and our HTM investment securities, management believes that the allowances for these three components are maintained at a level that represents our best estimate of inherent losses in the loan portfolio, off-balance sheet credit exposures, and HTM investment securities that were both probable and reasonably estimable.

Management uses available information to establish the appropriate level of the three ACLs. Future additions or reductions to the three ACLs might be necessary based on estimates that are susceptible to change as a result of changes in economic conditions and other factors. As a result, our three ACLs might not be sufficient to cover actual credit losses, and future provisions for credit losses could materially adversely affect our operating results. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our three ACLs. Such agencies may require us to recognize adjustments to the three ACLs based on their judgments about information available to them at the time of their examination.

Non-Interest Income

Non-interest income for the three months ended March 31, 2025 was $1.2 million compared to non-interest income of $554,000 for the three months ended March 31, 2024. The increase of $681,000, or 122.9%, in total non-interest income was primarily due to increases of $382,000 in unrealized gain/(loss) on equity securities, $278,000 in other loan fees and service charges, $11,000 in miscellaneous other non-interest income, and $10,000 in BOLI income.

The increase in unrealized gain/(loss) on equity securities was due to an unrealized gain of $300,000 on equity securities during the three months ended March 31, 2025 compared to an unrealized loss of $82,000 on equity securities during the three months ended March 31, 2024. The unrealized gain of $300,000 on equity securities during the three months ended March 31, 2025 was due to market interest rate volatility during the three months ended March 31, 2025.

The increase of $278,000 in other loan fees and service charges was due to an increase of $245,000 in other loan fees and loan servicing fees, an increase of $31,000 in ATM/debit card/ACH fees, and an increase of $2,000 in deposit account fees. The increase in BOLI income of $10,000 was due to an increase in the yield on BOLI assets.

Non-Interest Expense

Non-interest expense increased $938,000, or 9.7%, to $10.6 million for the three months ended March 31, 2025 from $9.7 million for the three months ended March 31, 2024. The increase resulted primarily from increases of $582,000 in salaries and employee benefits, $221,000 in other operating expense, $98,000 in outside data processing expense, $40,000 in occupancy expense, $19,000 in real estate owned expense, and $14,000 in advertising expense, partially offset by a decrease of $36,000 in equipment expense.

Salaries and employee benefits increased $582,000, or 10.9%, to $5.9 million for the three months ended March 31, 2025 from $5.4 million for the three months ended March 31, 2024 primarily due to an increase in the number of full time equivalent employees to support the growth of the Company and an increase in employee compensation and benefits expense in order to retain key personnel.

Other non-interest expense increased $221,000, or 8.4%, to $2.9 million for the three months ended March 31, 2025 from $2.6 million for the three months ended March 31, 2024 due mainly to increases of $157,000 in miscellaneous other non-interest expense, $106,000 in regulatory fees, $32,000 in legal expense, $8,000 in audit and accounting fees, $5,000 in expenses related to the hiring of personnel, $5,000 in office supplies, and $4,000 in insurance expense. These

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increases were offset by decreases of $40,000 in consulting fees, $27,000 in telephone expense, $20,000 in directors, officers and employees’ expense, $9,000 in directors’ compensation, and $1,000 in service contracts expense.

Miscellaneous other non-interest expense increased $157,000, or 43.9%, to $516,000 for the three months ended March 31, 2025 from $359,000 for the three months ended March 31, 2024 due to increases of $53,000 in miscellaneous expenses, $48,000 in miscellaneous charge-offs, $41,000 in public company expenses, $6,000 in postage expenses, $5,000 in check and correspondence bank charges, and $5,000 in dues and subscription expense.

Regulatory fees increased $106,000, or 14.2%, to $850,000 for the three months ended March 31, 2025 from $744,000 for the three months ended March 31, 2024 due to an increase in our total assets. Legal fees increased $32,000, or 48.5%, to $98,000 for the three months ended March 31, 2025 from $66,000 for the three months ended March 31, 2024 due to an increase in transactions requiring legal services. Audit and accounting expense increased $8,000, or 5.9%, to $143,000 for the three months ended March 31, 2025 from $135,000 for the three months ended March 31, 2024 due to normal increases by the Company’s accounting firms. Recruitment expense increased by $5,000, or 18.5%, to $32,000 for the three months ended March 31, 2025 from $27,000 for the three months ended March 31, 2024 due to the need to increase personnel. Office supplies increased by $5,000, or 9.8%, to $56,000 for the three months ended March 31, 2025 from $51,000 for the three months ended March 31, 2024 due to the growth of the Company. Insurance expense increased $4,000, or 3.9%, to $106,000 for the three months ended March 31, 2025 from $102,000 for the three months ended March 31, 2024 due to a general increase in insurance premiums.

Consulting fees decreased by $40,000, or 17.3%, to $191,000 for the three months ended March 31, 2025 from $231,000 for the three months ended March 31, 2024 due to less reliance on consultants. Telephone expense decreased by $27,000, or 15.9%, to $143,000 for the three months ended March 31, 2025 from $170,000 for the three months ended March 31, 2024 due to a reduction in telephone usage. Directors, officers, and employees’ expenses decreased $20,000, or 25.3%, to $59,000 for the three months ended March 31, 2025 from $79,000 for the three months ended March 31, 2024 due to reduction in traveling expense. Directors’ compensation decreased $9,000, or 3.7%, to $237,000 for the three months ended March 31, 2025 from $246,000 for the three months ended March 31, 2024 due to a reduction in the amortization of expenses related to the 2022 Equity Incentive Plan awards of restricted stocks and options, partially offset by an increase in the quarterly retainer fees.

Outside data processing expense increased $98,000, or 15.4%, to $735,000 for the three months ended March 31, 2025 from $637,000 for the three months ended March 31, 2024 due to additional data processing services to support the growth of the Company. Occupancy expense increased $40,000, or 5.7%, to $747,000 for the three months ended March 31, 2025 from $707,000 for the three months ended March 31, 2024 primarily as a result of the impact of inflation in operating cost.

Real estate owned expense increased $19,000, or 172.7%, to $30,000 for the three months ended March 31, 2025 from $11,000 for the three months ended March 31, 2024 due to higher operating expenses to maintain two foreclosed properties in 2025 compared to one foreclosed property in 2024.

Advertising expense increased $14,000, or 15.9%, to $102,000 for the three months ended March 31, 2025 from $88,000 for the three months ended March 31, 2024 due mainly to an increase in advertising and promotional products.

Equipment expense decreased $36,000, or 14.2%, to $217,000 for the three months ended March 31, 2025 from $253,000 for the three months ended March 31, 2024 due to a reduced need to purchase additional equipment.

Income Taxes. We recorded income tax expense of $4.1 million and $4.7 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, we had approximately $204,000 in tax exempt income, compared to approximately $195,000 in tax exempt income for the three months ended March 31, 2024. Our effective income tax rates were 27.8% and 29.0% for the three months ended March 31, 2025 and 2024, respectively.

Average Balances and Yields

The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest

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expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average daily balances of assets or liabilities, respectively, for the periods presented. Loan fees, including prepayment fees, are included in interest income on loans and are not material. Non-accrual loans are included in the average balances only. In addition, yields are not presented on a tax-equivalent basis. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant.


	Three Months Ended March 31,
	2025							2024
	Average			Interest and		Yield/		Average			Interest and		Yield/
	Balance			Dividends		Cost		Balance			Dividends		Cost

Loans receivable	$	1,767,849		$	36,882	8.35	%	$	1,612,343		$	36,703	9.11	%
Securities		36,751			235	2.56			33,848			197	2.33
Federal Home Loan Bank stock		397			9	9.07			842			21	9.98
Other interest-earning assets		93,476			1,081	4.63			91,552			1,200	5.24
Total interest-earning assets		1,898,473			38,207	8.05			1,738,585			38,121	8.77
Allowance for credit losses		(4,827)							(5,091)
Non-interest-earning assets		96,493							88,859
Total assets	$	1,990,139						$	1,822,353

Interest bearing demand	$	274,630		$	2,445	3.56	%	$	171,483		$	1,817	4.24	%
Savings and club accounts		138,903			730	2.10			182,771			1,202	2.63
Certificates of deposit		962,084			10,758	4.47			810,586			9,375	4.63
Interest-bearing deposits		1,375,617			13,933	4.05			1,164,840			12,394	4.26
Borrowed money	$	-			10	—			61,092			741	4.85
Interest-bearing liabilities		1,375,617			13,943	4.05			1,225,932			13,135	4.29
Non-interest-bearing demand		270,874							291,909
Other non-interest-bearing liabilities		18,086							18,090
Total liabilities		1,664,577							1,535,931
Equity		325,562							286,422
Total liabilities and equity	$	1,990,139						$	1,822,353
Net interest income/interest spread				$	24,264	4.00	%				$	24,986	4.48	%
Net interest margin						5.11	%						5.75	%
Net interest-earning assets	$	522,856						$	512,653
Average interest-earning assets to interest-bearing liabilities		138.01	%						141.82	%

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Rate/Volume Analysis

The following tables set forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns.


	Three Months Ended 3/31/2025
	Compared to
	Three Months Ended 3/31/2024
	Increase (Decrease)
	Due to
	Volume		Rate		Total

	(Dollars in thousands)
Interest income:
Loans receivable	$	13,238	$	(13,059)	$	179
Securities		18		20		38
Federal Home Loan Bank stock		(10)		(2)		(12)
Other interest-earning assets		153		(272)		(119)
Total	$	13,399	$	(13,313)	$	86
Interest expense:
Interest bearing demand deposit	$	2,331	$	(1,703)	$	628
Savings accounts		(257)		(215)		(472)
Certificates of deposits		3,288		(1,905)		1,383
Borrowed money		(366)		(365)		(731)
Total		4,996		(4,188)		808
Net change in net interest income	$	8,403	$	(9,125)	$	(722)

Asset Quality

The following table sets forth information with respect to our non-performing assets at the dates indicated.


	March 31,			December 31,
	2025			2024

	(Dollars in thousands)
Total non-accrual loans	$	—		$	—
Total accruing loans past due 90 days or more		—			—
Total non-performing loans		—			—
Real estate owned		5,120			5,120
Total non-performing assets	$	5,120		$	5,120
Total non-performing loans to total loans		—	%		—	%
Total non-performing assets to total assets		0.26	%		0.25	%

Non-performing assets totaled $5.1 million at March 31, 2025 and at December 31, 2024, respectively. These non-performing assets consisted of two foreclosed properties, with one foreclosed property totaling $4.4 million located in the Bronx, New York and one foreclosed property totaling $767,000 located in Pittsburgh, Pennsylvania.

During the three months ended March 31, 2025 and 2024, we did not collect any interest income from loans that were in non-accrual status.

From time to time, as part of our loss mitigation strategy, we may modify loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no new loan modifications to borrowers experiencing financial difficulties during the three months ended March 31, 2025 or 2024.

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At March 31, 2025 and December 31, 2024, we had no loans modified to borrowers experiencing financial difficulty.

The following table sets forth an analysis of the activity in the allowance for credit losses related to loans for the periods indicated:


	March 31,			December 31,
	2025			2024

	(Dollars In Thousands)
Allowance at beginning of period	$	4,830		$	5,093
Provision for credit losses		62			1,084
Net Charge-offs:
Residential real estate loans:
One- to four-family		—			—
Multifamily		—			—
Mixed-use		—			—
Total residential real estate loans		—			—
Non-residential real estate loans		(350)			—
Construction loans		—			—
Commercial and industrial loans		—			1,000
Consumer loans		115			347
Total net charge-offs		(235)			1,347
Allowance at end of period	$	5,127		$	4,830
Total loans outstanding	$	1,725,664		$	1,812,598
Average loans outstanding		1,767,849			1,701,079
Ratio of allowance to non-performing loans		—	%		—	%
Ratio of allowance to total loans		0.30	%		0.27	%
Ratio of net charge-offs to average loans		(0.01)	%		0.08	%
Non-performing loans	$	—		$	—

The Company’s allowance for credit losses related to loans totaled $5.1 million, or 0.30% of total loans as of March 31, 2025 compared to $4.8 million, or 0.27% of total loans as of December 31, 2024. In addition, the Company’s allowance for credit losses related to off-balance sheet commitments totaled $879,000 as of March 31, 2025 compared to $704,000 at December 31, 2024. The allowance for credit losses related to held-to-maturity debt securities totaled $126,000 as of March 31, 2025 and December 31, 2024, respectively.

The allowance for credit losses related to loans increased $297,000 to $5.1 million at March 31, 2025 from $4.8 million at December 31, 2024. The increase in the allowance for credit losses was due primarily to recoveries of $352,000 and a credit loss expense of $62,000, offset by charge-offs totaling $117,000.

The allowance for credit losses related to off-balance sheet commitments increased $175,000 to $879,000 at March 31, 2025 from $704,000 due to a credit loss expense of $175,000 at March 31, 2025.

Liquidity and Capital Resources

We maintain liquid assets at levels we believe are adequate to meet our liquidity needs. We established a liquidity ratio policy that identifies three liquidity ratios consisting of (1) Cash/Deposits & Short Term Borrowings (“Cash Liquidity”), (2) Cash & Investments/Deposits & Short Term Borrowings (“On Balance Sheet Liquidity”), and (3) Cash & Investments & Borrowing Capacity/Deposits & Short Term Borrowings (“On Balance Sheet Liquidity & Borrowing Capacity”) to assist in the management of our liquidity. We also establish targets of 2.0% for the Cash Liquidity ratio, 8.0% for the On Balance Sheet Liquidity ratio, and 20.0% for the On Balance Sheet Liquidity & Borrowing Capacity ratio.

Our Cash Liquidity ratio, On Balance Sheet Liquidity ratio, and On Balance Sheet Liquidity & Borrowing Capacity ratio averaged 6.1%, 8.4%, and 74.2%, respectively, for the three months ended March 31, 2025 compared to 6.7%,

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8.8%, and 65.6%, respectively, for the year ended December 31, 2024. We adjust our liquidity levels to fund deposit outflows, pay real estate taxes on real estate loans, repay our borrowings, and fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.

Our liquidity ratios cannot be calculated using amounts disclosed in our consolidated financial statements, as many of the calculations involve monthly, quarterly or annual averages. To calculate our liquidity ratios, the average liquidity base from the prior month is used as the denominator to calculate a daily liquidity ratio. The liquidity base consists of savings account balances, certificates of deposit balances, checking and money market balances, deposit loans and borrowings. The daily balances of these components are averaged to arrive at the liquidity base for the month, and the daily cash balances in selected general ledger accounts are used to derive our liquidity position. A daily liquidity ratio is calculated using the liquidity for the day divided by the prior month’s average liquidity base. At the end of each month, a monthly liquidity position is calculated using the average liquidity position for the month divided by the prior month’s average liquidity base. To calculate quarterly and annual liquidity ratios, we take the average liquidity for the three- or twelve-month period, respectively, and average it.

Our primary sources of liquidity are deposits, prepayment of loans and mortgage-backed securities, maturities of investment securities, other short-term investments, earnings, and funds provided from operations. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by our competition. We set the interest rates on our deposits to maintain a desired level of total deposits. In addition, we invest excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements.

Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Consolidated Statements of Cash Flows included with our Consolidated Financial Statements.

Our primary investing activities are the origination of construction loans, commercial and industrial loans, multifamily loans, and to a lesser extent, mixed-use real estate loans and other loans. For the three months ended March 31, 2025 and 2024, our loan originations totaled $170.1 million and $180.5 million, respectively. Cash received from the maturities and pay-downs on securities totaled $128,000 for both the three months ended March 31, 2025 and 2024, respectively. We purchased $1.0 million in equity securities during the three months ended March 31, 2025 compared to no purchases during the three months ended March 31, 2024.

Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of New York to provide advances. As a member of the Federal Home Loan Bank of New York, we are required to own capital stock in the Federal Home Loan Bank of New York and are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to credit-worthiness have been met. We had an available borrowing limit of $15.5 million and $18.2 million from the Federal Home Loan Bank of New York as of March 31, 2025 and December 31, 2024, respectively. We had no Federal Home Loan Bank advances at March 31, 2025 and December 31, 2024.

The Federal Reserve Bank of New York (“FRBNY”) approved on August 30, 2023 the Bank’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Bank to borrow from the Discount Window at the FRBNY. We had an available borrowing limit of $941.3 million and $834.7 million from the FRBNY as of March 31, 2025 and December 31, 2024, respectively. We had no FRBNY borrowings at March 31, 2025 and December 31, 2024.

In addition, we are party to a loan agreement with ACBB under which we can borrow up to $8.0 million in short-term borrowings. There were no outstanding borrowings with ACBB at March 31, 2025 and December 31, 2024.

At March 31, 2025, we had unfunded commitments on construction and multi-family mortgage loans of $360.7 million, outstanding commitments to originate loans of $205.9 million, unfunded commitments under lines of credit of $81.9 million, and unfunded standby letters of credit of $14.9 million. At March 31, 2025, certificates of deposit scheduled to mature in less than one year totaled $809.0 million. Based on prior experience, management believes that a

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significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as various types of sourced deposits, Federal Home Loan Bank advances, or Federal Reserve Bank borrowings, in order to maintain our level of assets. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents. In addition, the cost of such deposits may be significantly higher or lower depending on market interest rates at the time of renewal.

The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its stockholders and for the repurchase, if any, of its shares of common stock. At March 31, 2025, the Company had liquid assets of $14.9 million and $4.1 million in loan participations originated by the Bank which are held by the Company.

Off-Balance Sheet Arrangements

For the three months ended March 31, 2025, we did not engage in any off-balance sheet transactions reasonably likely to have a material adverse effect on our financial condition, results of operations or cash-flows.

Impact of Inflation and Changing Prices

The consolidated financial statements and related notes of NorthEast Community Bancorp have been prepared in accordance with GAAP, which generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest rate risk is defined as the exposure to current and future earnings and capital that arises from adverse movements in interest rates. Depending on a bank’s asset/liability structure, adverse movements in interest rates could be either rising or falling interest rates. For example, a bank with predominantly long-term fixed-rate assets and short-term liabilities could have an adverse earnings exposure to a rising rate environment. Conversely, a short-term or variable-rate asset base funded by longer-term liabilities could be negatively affected by falling rates. This is referred to as re-pricing or maturity mismatch risk.

Interest rate risk also arises from changes in the slope of the yield curve (yield curve risk), from imperfect correlations in the adjustment of rates earned and paid on different instruments with otherwise similar re-pricing characteristics (basis risk), and from interest rate related options embedded in our assets and liabilities (option risk).

Our objective is to manage our interest rate risk by determining whether a given movement in interest rates affects our net interest income and the market value of our portfolio equity in a positive or negative way and to execute strategies to maintain interest rate risk within established limits. The results at March 31, 2025 indicate the level of risk within the parameters of our model. Our management believes that the March 31, 2025 results indicate a profile that reflects interest rate risk exposures in both rising and declining rate environments for both net interest income and economic value.

Model Simulation Analysis. We view interest rate risk from two different perspectives. The traditional accounting perspective, which defines and measures interest rate risk as the change in net interest income and earnings caused by a change in interest rates, provides the best view of short-term interest rate risk exposure. We also view interest rate risk from an economic perspective, which defines and measures interest rate risk as the change in the market value of portfolio equity caused by changes in the values of assets and liabilities, which fluctuate due to changes in interest rates. The market value of portfolio equity, also referred to as the economic value of equity, is defined as the present value of future cash flows from existing assets, minus the present value of future cash flows from existing liabilities.

These two perspectives give rise to income simulation and economic value simulation, each of which presents a unique picture of our risk of any movement in interest rates. Income simulation identifies the timing and magnitude of

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changes in income resulting from changes in prevailing interest rates over a short-term time horizon (usually one or two years). Economic value simulation reflects the interest rate sensitivity of assets and liabilities in a more comprehensive fashion, reflecting all future time periods. It can identify the quantity of interest rate risk as a function of the changes in the economic values of assets and liabilities, and the corresponding change in the economic value of equity of NorthEast Community Bank. Both types of simulation assist in identifying, measuring, monitoring and controlling interest rate risk and are employed by management to ensure that variations in interest rate risk exposure will be maintained within policy guidelines.

We produce these simulation reports and discuss them at our Asset and Liability Committee meetings on at least a quarterly basis. The simulation reports compare baseline (no interest rate change) to the results of an interest rate shock, to illustrate the specific impact of the interest rate scenario tested on income and equity. The model, which incorporates asset and liability rate information, simulates the effect of various interest rate movements on income and equity value. The reports identify and measure our interest rate risk exposure present in our current asset/liability structure. Management considers both a static (current position) and dynamic (forecast changes in volume) analysis as well as non-parallel and gradual changes in interest rates and the yield curve in assessing interest rate exposures.

If the results produce quantifiable interest rate risk exposure beyond our limits, then the testing will have served as a monitoring mechanism to allow us to initiate asset/liability strategies designed to reduce and therefore mitigate interest rate risk. The table below sets forth an approximation of our interest rate risk exposure. The simulation uses projected repricing of assets and liabilities at March 31, 2025. The income simulation analysis presented represents a one-year impact of the interest scenario assuming a static balance sheet. Various assumptions are made regarding the prepayment speed and optionality of loans, investment securities and deposits, which are based on analysis and market information. The assumptions regarding optionality, such as prepayments of loans and the effective lives and repricing of non-maturity deposit products, are documented periodically through evaluation of current market conditions and historical correlations to our specific asset and liability products under varying interest rate scenarios.

Because the prospective effects of hypothetical interest rate changes are based on a number of assumptions, these computations should not be relied upon as indicative of actual results. While we believe such assumptions to be reasonable, assumed prepayment rates may not approximate actual future prepayment activity on mortgage-backed securities or agency issued collateralized obligations (secured by one- to four-family loans and multifamily loans). Further, the computation does not reflect any actions that management may undertake in response to changes in interest rates and assumes a constant asset base. Management periodically reviews the rate assumptions based on existing and projected economic conditions and consults with industry experts to validate our model and simulation results.

The table below sets forth, as of March 31, 2025, NorthEast Community Bank’s net portfolio value, the estimated changes in our net portfolio value and net interest income that would result from the designated instantaneous parallel changes in market interest rates.


	Twelve Month
	Net Interest Income		Net Portfolio Value
	Percent				Percent
Change in Interest Rates (Basis Points)	of Change		Estimated NPV		of Change
+200	14.95	%	$	361,136	2.00	%
+100	7.61			358,171	1.16
0	—			354,068	—
-100	(8.42)			346,860	(2.04)
-200	(16.95)	%		336,865	(4.86)	%

As of March 31, 2025, based on the scenarios above, net interest income would increase by approximately 7.61% to 14.95%, over a one-year time horizon in a rising interest rate environment. One-year net interest income would decrease by approximately 8.42% to 16.95% in a declining interest rate environment over the same period.

Economic value at risk would be positively impacted by a rise in interest rates and negatively impacted by a decline in interest rates. We have established an interest rate floor of zero percent for measuring interest rate risk. The difference between the two results reflects the relatively long terms of a portion of our assets which is captured by the economic value at risk but has less impact on the one year net interest income sensitivity.

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Overall, our March 31, 2025 results indicate that we are adequately positioned with an acceptable net interest income and economic value at risk and that all interest rate risk results continue to be within our policy guidelines.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure (1) that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms; and (2) that they are alerted in a timely manner about material information relating to the Company required to be filed in its periodic Securities and Exchange Commission filings.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various legal actions and claims arising in the normal course of business. In the opinion of management, these legal actions and claims are not expected to have a material adverse impact on the Company’s financial condition.

Item 1A. Risk Factors

For information regarding the Company’s risk factors, refer to “Item 1A: Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 14, 2025. As of March 31, 2025, the risk factors of the Company have not changed materially from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

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

On May 30, 2023, the Company announced that its Board of Directors had authorized a stock repurchase program to acquire up to 1,509,218 shares, or 10%, of the Company's currently issued and outstanding common stock commencing on May 30, 2023. The stock repurchase program is the Company’s second repurchase program since completing its second-step conversion and related stock offering in July 2021.

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The following table provides information on repurchases by the Company of its common stock under the Company’s stock repurchase program during the three months ended March 31, 2025:


				Total Number of Shares	Maximum Number of
				Purchased as Part of	Shares that May Yet Be
	Total Number of		Average Price Paid	Publicly Announced	Purchased Under the
Period	Shares Purchased		Per Share	Plans or Programs	Plans or Programs
January 1 - 31, 2025	-	$	-	-	418,044
February 1 - 28, 2025	-		-	-	418,044
March 1 - 31, 2025	-		-	-	418,044
Total	-			-

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the quarter ended March 31, 2025, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.

Item 6. Exhibits

See Exhibit Index.

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EXHIBIT INDEX


Exhibit No.	Description
31.1†	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of NorthEast Community Bancorp, Inc.
31.2† 32.0†	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of NorthEast Community Bancorp, Inc. Certification of Chief Executive Officer and Chief Financial Officer of NorthEast Community Bancorp, Inc. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.0†	The following materials from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended March 31, 2025, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.

101.INS†	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH†	XBRL Taxonomy Extension Schema Document

101.CAL†	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†	XBRL Taxonomy Extension Label Linkbase Document

101.PRE†	XBRL Taxonomy Extension Presentation Linkbase Document
104†	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

† Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, duly authorized.

Date: May 9, 2025


	NORTHEAST COMMUNITY BANCORP, INC.

	By:	/s/ Kenneth A. Martinek
	Name:	Kenneth A. Martinek
	Title:	Chairman and Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Donald S. Hom
	Name:	Donald S. Hom
	Title:	Executive Vice President and Chief Financial Officer
		(Principal Financial and Chief Accounting Officer)