What changed in this filing

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Item 1. Business

2025-03-21 compared with 2024-03-29 · 84 added, 137 removed, 839 unchanged (21% of the section changed)

33 unchanged sentences

The Company is amortizing the customer list intangible on a straight-line basis over a ten-year period.

During the year ended December 31, 2023 and 2022, $30,000 and $34,000 of amortization expense was recorded, respectively.

During the years ended December 31, 2024 and 2023, $32,000 and $30,000 of amortization expense was recorded, respectively.

First Seacoast Bank is active in the communities we serve.

95 unchanged sentences

At December 31, 2024, 7.5% of our one- to four-family residential real estate loans were adjustable-rate loans.

Our adjustable-rate mortgage loans have initial repricing terms of one, three or five years.

The majority of our adjustable-rate mortgage loans have initial repricing terms of one, three, five or seven years.

Following the initial repricing term, such loans adjust annually for the balance of the loan term.

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This loan was performing in accordance with its original repayment terms at December 31, 2024.

At December 31, 2023, the average loan balance outstanding in the multi-family real estate loans portfolio was $758,000, and the largest individual multi-family real estate loan outstanding was a $4.5 million participation loan secured by a 204-unit property.

At December 31, 2024, the average loan balance outstanding in the multi-family real estate loans portfolio was $523,000, and the largest individual multi-family real estate loan outstanding was a $1.9 million participation loan secured by a multi-unit property.

This loan was performing in accordance with its original repayment terms at December 31, 2024.

14 unchanged sentences

Upon completion of construction, such loans generally convert to permanent commercial mortgage loans.

At December 31, 2023, commercial construction loan balances totaled $11.4 million, or 2.7% of our total loan portfolio, with an additional $7.6 million available for advance to borrowers.

At December 31, 2024, fully advanced commercial construction loan balances totaled $11.2 million, or 2.5% of our total loan portfolio.

Commercial real estate construction loans are generally structured as interest-only for up to 18 months, with a loan-to-value of 80% of the appraised value on a completed basis or a loan-to-cost of completion ratio of up to 85%.

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Typically, a 7(a) loan includes a 75% guarantee and an Express loan includes a 50% guarantee from the U.S.

At December 31, 2023, we had five loans outstanding with an aggregate principal balance of $2.2 million with Small Business Administration 7(a) guarantees totaling $1.7 million and three Small Business Administration Express loans with an aggregate principal balance of $75,000 with guarantees totaling $38,000.

During 2023, we purchased $2.0 million of participation interests in two commercial and industrial loans through our membership in a national community bank loan program.

At December 31, 2024, we had six loans outstanding with an aggregate principal balance of $2.8 million with Small Business Administration 7(a) guarantees totaling $2.1 million and three Small Business Administration Express loans with an aggregate principal balance of $69,000 with guarantees totaling $34,000.

During 2024 and 2023, we purchased $2.7 million and $2.0 million, respectively, of participation interests in three and two commercial and industrial loans, respectively, through our membership in a national community bank loan program.

Loans are typically provided to middle market businesses with approximately $10-$75 million in EBITDA.

Senior credit facilities typically range in size from $25-$250 million, primarily

secured by substantially all of the assets of the business.

Senior credit

facilities typically range in size from $25-$250 million, primarily secured by substantially all of the assets of the business.

These loans generally have five to seven-year terms and variable interest rates.

At December 31, 2023 and 2022, we had outstanding participation interests in these commercial and industrial loans totaling $2.0 million and $-0-, respectively.

At December 31, 2024 and 2023, we had outstanding participation interests in these commercial and industrial loans totaling $4.0 million and $2.0 million, respectively.

At December 31, 2024 and 2023, we had $472,000 and $-0- of unfunded commitments related to these participation interests, respectively.

We continue to expand our commercial and industrial lending activities in order to diversify our loan portfolio, increase our yield and offer a full range of products to our commercial customers.

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Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our real estate loan originations can vary from period to period.

We consider our balance sheet, as well as market conditions, on an ongoing basis in making decisions as to whether to hold one- to four-family residential real estate loans we originate in our portfolio for investment or to sell such loans to investors, based on profitability and risk management considerations.

We sell selected conforming, 15-year and 30-year fixed-rate one- to four-family residential real estate loans that we originate, on a servicing-retained basis, when we are able

to, and strategically retain non-eligible fixed-rate and adjustable-rate one- to four-family residential real estate loans in order to manage the duration and time to repricing of our one- to four-family residential loan portfolio.

investors, based on profitability and risk management considerations.

We sell selected conforming, 15-year and 30-year fixed-rate one- to four-family residential real estate loans that we originate, on a servicing-retained basis, when we are able to, and strategically retain non-eligible fixed-rate and adjustable-rate one- to four-family residential real estate loans in order to manage the duration and time to repricing of our one- to four-family residential loan portfolio.

For the years ended December 31, 2024 and 2023, we sold $893,000 and $417,000, respectively, of our one- to four-family residential real estate loans.

In addition to purchasing consumer loans secured by manufactured housing properties, as discussed above under “Consumer Loans,” we purchase one- to four-family jumbo residential real estate loans to supplement our own origination efforts.

During 2023 and 2022, we purchased $780,000 and $1.3 million, respectively, of one- to four-family jumbo residential real estate loans secured by properties located in the greater Boston market.

During 2024 and 2023, we purchased $-0- and $780,000, respectively, of one- to four-family jumbo residential real estate loans secured by properties located in the greater Boston market.

As of December 31, 2024, the portfolio of purchased residential real estate loans had outstanding principal balances of $22.8 million and were performing in accordance with their original repayment terms.

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The properties are independently appraised and subject to field inspections by our loan officers.

As noted above, during 2023, we also purchased $2.0 million of participation interests in two commercial and industrial loans through our membership in a national community bank loan program.

As noted above, during 2024 and 2023, we also purchased $2.7 million and $2.0 million, respectively, of participation interests in commercial and industrial loans through our membership in a national community bank loan program.

Loans are typically provided to middle market businesses with approximately $10-$75 million in EBITDA.

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Our board of directors has established a Loan Officers Review Committee to oversee loan approvals.

The voting members of the Loan Officers Review Committee consist of our President and Chief Executive Officer, Executive Vice President – Chief Financial Officer, Senior Vice President – Senior Commercial Loan Officer, Senior Vice President – Senior Retail Loan Officer, Senior Vice President – Bank Administration and Risk Management Officer and Vice President – Retail Loan Production Officer.

The voting members of the Loan Officers Review Committee consist of our President and Chief Executive Officer, Executive Vice President – Chief Financial Officer, Senior Vice President – Senior Commercial Loan Officer, Senior Vice President – Senior Retail Loan Officer, Senior Vice President – Chief Operating Officer and Vice President – Retail Loan Production Officer.

The board of directors has granted loan approval authority to certain officers up to prescribed limits, depending on the seniority of the officer, the type of loan and underlying security.

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Once the letter is sent, we begin contacting the customer either by telephone or additional letters as appropriate.

Alternating telephone attempts and additional letters continue until a loan becomes 90 days past due, at which point we would place the loan on non-accrual status and generally refer the loan for foreclosure proceedings, unless management determines that it is in the best interest of First Seacoast Bank to work further with the borrower to arrange a workout plan.

The foreclosure process generally would begin

when a loan becomes 120 days delinquent.

Alternating telephone attempts and additional

letters continue until a loan becomes 90 days past due, at which point we would place the loan on non-accrual status and generally refer the loan for foreclosure proceedings, unless management determines that it is in the best interest of First Seacoast Bank to work further with the borrower to arrange a workout plan.

The foreclosure process generally would begin when a loan becomes 120 days delinquent.

We do not pursue multiple collections processes, such as considering modifications or workouts, while proceeding with foreclosure.

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Total non-performing assets

Total accruing troubled debt restructurings

Total non-performing assets and accruing troubled debt restructurings

Total non-performing loans as a percent of total loans

Total non-performing assets as a percent of total assets

Total non-performing assets and accruing troubled debt restructurings as a percent of total assets

Non-performing Loans.

Loans are reviewed on a regular basis.

Management determines that a loan is non-performing when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral-dependent.

Management determines that a loan is non-performing when it is probable that at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral-dependent.

When a loan is determined to be non-performing, the measurement of the loan in the allowance for credit losses ("ACL") is based on present value of expected future cash flows, except that all collateral-dependent loans are measured for non-performance based on the fair value of the collateral.

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Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Non-performing loans were $141,000, or 0.03% of total loans, at December 31, 2023, compared to $89,000, or 0.02% of total loans, at December 31, 2022.

At December 31, 2023, non-performing loans consist of a residential mortgage loan and an associated home equity loan with outstanding balances totaling $141,000 and an estimated market value of $216,000.

At December 31, 2022, non-performing loans consisted primarily of a residential mortgage loan to a deceased borrower which had an outstanding balance of $84,000 and was secured by real estate with an appraised value of $420,000.

The property was sold in April 2023 and the loan repaid.

Non-performing loans were $-0- at December 31, 2024, compared to $141,000, or 0.03% of total loans, at December 31, 2023.

At December 31, 2023, non-performing loans consisted of a residential mortgage loan and an associated home equity loan with outstanding balances totaling $141,000 and an estimated market value of $216,000.

The property was sold in July 2024 and all outstanding balances were repaid.

Modifications Made to Borrowers Experiencing Financial Difficulty.

In March 2022, the FASB issued ASU 2022-2 ,“Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures,” (“ASU 2022-2”) which eliminates the troubled debt restructuring (“TDR”) accounting model for creditors that have adopted Topic 326, “Financial Instruments – Credit Losses.” Due to the removal of the TDR accounting model, all loan modifications are accounted for under the general loan modification guidance in Subtopic 310-20.

In March 2022, the FASB issued ASU 2022-2 ,“Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures,” (“ASU 2022-2” or "Topic 326") which eliminated the troubled debt restructuring (“TDR”) accounting model for creditors that have adopted Topic 326.

Due to the removal of the TDR accounting model, all loan modifications are accounted for under the general loan modification guidance in Accounting Standards Codification Subtopic 310-20.

In addition, on a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty.

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ASU 2022-2 became effective on January 1, 2023.

There were no loans modified for borrowers experiencing financial difficulty during the year ended December 31, 2023.

Under previous accounting guidance and prior to the adoption ASU 2022-2, loans were considered TDRs when a borrower was experiencing financial difficulties that led to a restructuring of the loan, and First Seacoast Bank grants a concession to the borrower that it would not otherwise consider.

These concessions included a modification of terms, such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than current market rate for a new loan with similar risk or some combination thereof to facilitate payment.

TDRs were considered impaired loans.

Loans on non-accrual status at the date of modification were initially classified as a non-accrual TDR.

Our policy provided that TDR loans were returned to accrual status after a period of satisfactory and reasonable future payment performance under the terms of the restructuring.

Satisfactory payment performance was generally no less than six consecutive months of timely payments.

At December 31, 2022, we had one accruing TDR.

This residential mortgage loan was originated during 2010 with Federal Housing Administration (“FHA”) insurance and sold to Freddie Mac with servicing retained by the Bank.

The FHA insurance lapsed and the loan was repurchased from Freddie Mac and a modification agreement was executed directly with the borrowers.

The modification agreement defers delinquent interest and escrow payments to the end of the loan.

The loan was determined to be a TDR as it did not meet the qualifications of Section 4013 of the CARES Act.

At December 31, 2023 and 2022, this loan had an outstanding balance of $182,000 and $189,000, respectively.

At December 31, 2023 and 2022, this loan had a fair value of $184,000 and $191,000, respectively, which was determined through a calculation of the present value of estimated future cash flows.

The allowance for credit losses on loans and allowance for loan losses included a specific reserve for this loan of $-0- as of December 31, 2023 and 2022.

This loan was returned to performing status during June 2022.

There are no commitments to lend additional funds to these borrowers.

There were no loans modified for borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023.

Foreclosed Assets.

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Allowance for Credit Losses ("ACL")

Effective January 1, 2023, the Company adopted the new accounting standard for credit losses, ASU No.

2016-13 , Financial Instruments - Credit Losses (Topic 326):

The Company estimates its allowance for credit losses as outlined in ASU 2016-13 , Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, as amended ("ASU 2016-13" or “ASC 326”).

This new accounting standard, commonly referred to as "CECL," significantly changed the methodology for accounting for reserves on loans and unfunded off-balance sheet credit exposures, including certain unfunded loan commitments and standby guarantees.

ASU 2016-13 replaced the "incurred loss" methodology used to establish an allowance on loans and off-balance sheet credit exposures, with an "expected loss" approach.

Under CECL, the ACL at each reporting period serves as a best estimate of projected credit losses over the contractual life of certain assets, adjusted for expected prepayments, given an expectation of economic conditions and forecasts as of the valuation date.

Upon adoption of CECL, the Company made the following elections regarding accrued interest receivable:

This accounting standard, commonly referred to as "CECL," significantly changed the methodology for accounting for reserves on loans and unfunded off-balance sheet credit exposures, including certain unfunded loan commitments and standby guarantees.

Under CECL, the ACL at each reporting period serves as a best estimate of projected credit losses over the contractual life of certain assets and off balance sheet exposures, adjusted for expected prepayments, given an expectation of economic conditions and forecasts as of the valuation date.

Upon adoption of ASC 326, the Company made the following elections regarding accrued interest receivable:

(i) present accrued interest receivable balances separately on the balance sheet on the consolidated statements of condition;

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For loans, write-off typically occurs when a loan has been in default for 90 days or more.

An immaterial amount of accrued interest on non-accrual loans was written off during the year ended December 31, 2023, by reversing interest income.

An immaterial amount of accrued interest on non-accrual loans was written off during the years ended December 31, 2024 and 2023, by reversing interest income.

Historically, the Company has not experienced uncollectible accrued interest receivable on its securities available-for-sale.

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A loss rate is applied to pool balances over time.

CECL may create more volatility in the ACL, specifically the ACL on loans and ACL on off-balance sheet credit exposures.

Under CECL, the ACL may increase or decrease period to period based on many factors, including, but not limited to:

ASC 326 may create more volatility in the ACL, specifically the ACL on loans and ACL on off-balance sheet credit exposures.

Under ASC 326, the ACL may increase or decrease period to period based on many factors, including, but not limited to:

(i) macroeconomic forecasts and conditions;

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and (vi) various qualitative factors outlined in ASU 2016-13.

The significant key assumptions used with the ACL calculation at December 31, 2023 using the CECL methodology, included:

The significant key assumptions used with the ACL calculation at December 31, 2024 and 2023 using the ASC 326 methodology, included:

Macroeconomic factors (loss drivers) :

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Generally, the forecast period management believes to be reasonable and supportable will be set annually and validated through an assessment of economic leading indicators.

In periods of greater volatility and uncertainty,

such as the current interest rate environment, management will likely use a shorter forecast period, whereas when markets, economies, interest rate environment, political matters, and other factors are considered to be more stable and certain, a longer forecast period may be used.

In periods of greater volatility and uncertainty, such as the current interest rate environment, management will likely use a shorter forecast period, whereas when markets, economies, interest rate environment, political matters, and other factors are considered to be more stable and certain, a longer forecast period may be used.

Also, in times of greater uncertainty, management may consider a range of possible forecasts and evaluate the probability of each scenario.

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The Company continues to consider qualitative factors in determining and arriving at an ACL at each reporting period such as:

(i) actual or expected changes in economic trends and conditions, (ii) changes in the value of underlying collateral for loans, (iii) changes to lending policies, underwriting standards and/or management personnel performing such functions, (iv) delinquency and other credit quality trends, (v) credit risk concentrations, if any, (vi) changes to the nature of the Company's business impacting the loan portfolio, (vii) and other external factors, that may include, but are not limited to, results of internal loan reviews and examinations by bank regulatory agencies.

(i) actual or expected

changes in economic trends and conditions, (ii) changes in the value of underlying collateral for loans, (iii) changes to lending policies, underwriting standards and/or management personnel performing such functions, (iv) delinquency and other credit quality trends, (v) credit risk concentrations, if any, (vi) changes to the nature of the Company's business impacting the loan portfolio, (vii) and other external factors, that may include, but are not limited to, results of internal loan reviews and examinations by bank regulatory agencies.

Certain loans which may not share similar risk characteristics with other loans in the portfolio may be tested individually for estimated credit losses, including (i) loans classified as special mention, substandard or doubtful and are on non-accrual, (ii) a loan modified for a borrower experiencing financial difficulty or (iii) loans that have other unique characteristics.

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As an integral part of their examination process, the Office of the Comptroller of the Currency will periodically review our ACL, and as a result of such reviews, we may have to adjust our ACL.

However, regulatory agencies are not directly involved in the process for establishing the ACL as the process is our responsibility and any increase or decrease in the ACL is the responsibility of management.

Allowance for Loan Losses (“ALL”)

Prior to the adoption of ASU 2016-13, the ALL was maintained at a level which, in management’s judgment, was adequate to absorb probable credit losses inherent in the loan portfolio.

The amount of the ALL was based on management’s evaluation of the collectability of the loan portfolio, including the nature of the portfolio, credit concentrations, trends in historical loss experience, specific impaired loans, potential problem loans and economic conditions.

Allowances for impaired loans are generally determined based on collateral values or the present value of estimated cash flows.

Because of uncertainties associated with regional economic conditions, collateral values and future cash flows on impaired loans, it was reasonably possible that management’s estimate of probable credit losses inherent in the loan portfolio and the related ALL would change materially in the near-term.

The ALL was increased by a provision for loan losses, which was charged to expense and reduced by full and partial charge-offs, net of recoveries.

Changes in the ALL relating to impaired loans were charged or credited to the provision for loan losses.

Management’s periodic evaluation of the adequacy of the ALL was based on various factors, including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, the fair value of underlying collateral, current economic conditions and other qualitative and quantitative factors which would affect potential credit losses.

However, regulatory agencies are not directly involved in the process of establishing the ACL as the process is our responsibility and any increase or decrease in the ACL is the responsibility of management.

Allowance for Credit Losses on Loans .

The following table sets forth activity in our ACL and ALL for the years 2023 and 2022, respectively.

The following table sets forth activity in our ACL for the years 2024 and 2023, respectively.

At or for the Years Ended December 31,

(Dollars in thousands)

Allowance at beginning of the year

Allowance at beginning of year

Provision for credit losses on loans

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Allowance at end of year

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

outstanding during the year:

One- to four-family residential real estate

Commercial real estate

Acquisition, development and land

Commercial and industrial

Home equity loans and lines of credit

Allowance as a percent of total loans outstanding at year end

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Allowance as a percent of total non-accrual loans at year end

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

outstanding during the year

Net charge-offs as a percent of average consumer loans outstanding during the year

Allocation of Allowance for Credit Losses on Loans.

The following table sets forth the ACL and ALL allocated by loan category, the total loan balances by category and the percent of loans in each category to total loans at the dates indicated.

The ACL and ALL allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

The following table sets forth the ACL allocated by loan category, the total loan balances by category and the percent of loans in each category to total loans at the dates indicated.

The ACL allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

At December 31,

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As noted above and within previous accounting guidance used for the "incurred loss" model, ASU 2016-13 requires companies to consider various qualitative factors that may impact expected credit losses.

The Company made relevant adjustments to its qualitative factors in the measurement of its ACL at December 31, 2023.

The Company made relevant adjustments to its qualitative factors in the measurement of its ACL at December 31, 2024 and 2023.

Although we believe that we use the best information available to establish the ACL, future adjustments to the ACL may be necessary and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.

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Our Asset/Liability Management Committee (“ALCO”) is responsible for implementing our investment policy.

Authority to make investments under the approved investment policy guidelines is delegated to our President and Chief Executive Officer, Chief Financial Officer and Finance Officer.

Authority to make investments under the approved investment policy guidelines is delegated to our President and Chief Executive Officer and Chief Financial Officer.

All investment transactions are reviewed at the next regularly scheduled meeting of the board of directors.

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Our available-for-sale securities consist of debt securities that we intend to hold for an indefinite period of time, but not necessarily to maturity, and are carried at fair value.

Generally, when market interest rates rise, the fair value of available-for-sale securities decreases,

resulting in unrealized losses, net of tax, and when market interest rates decrease, the fair value of those securities increases, resulting in unrealized gains, net of tax.

On November 28, 2023, we executed a balance sheet repositioning strategy related to our available-for-sale investment securities portfolio.

Generally, when market interest rates rise, the fair value of available-for-sale securities decreases, resulting in unrealized losses, net of tax, and when market interest rates decrease, the fair value of those securities increases, resulting in unrealized gains, net of tax.

On December 11, 2024, we executed a balance sheet repositioning strategy related to our available-for-sale investment securities portfolio.

We sold $23.5 million in book value of lower-yielding investment securities for an after-tax realized gain of $5,000 and purchased $16.6 million of higher-yielding investment securities which were classified as available-for-sale upon purchase.

On November 28, 2023, we executed a balance sheet repositioning strategy related to our available-for-sale

investment securities portfolio.

We sold $40.6 million in book value of lower-yielding investment securities for an after-tax realized loss of $3.1 million and purchased $40.6 million of higher-yielding investment securities which were classified as available-for-sale upon purchase.

During the year ended December 31, 2022, market interest rates increased significantly, which resulted in unrealized losses, net of tax, resulting from the decrease in the fair value of our available-for-sale securities.

At December 31, 2022, our consolidated stockholders’ equity of $49.3 million had been reduced by $10.4 million related to these unrealized losses.

Since 2022, market interest rates have increased significantly, resulting in unrealized losses, net of tax, from the decrease in the fair value of our available-for-sale securities.

Future increases in market interest rates are likely to result in additional unrealized losses on available-for-sale securities, which would reduce our stockholders’ equity.

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At December 31, 2024, our core deposits, which are deposits other than time deposits, were $318.5 million, representing 70.1% of total deposits.

As part of our business strategy, we intend to continue efforts to increase our core deposits while allowing higher-cost time deposits to run off upon maturity.

As part of our business strategy, we intend to continue efforts to increase our core deposits while allowing higher-cost customer time deposits to run off upon maturity.

We generally require commercial business borrowers to maintain their primary deposit accounts with us.

At December 31, 2023, there were $23.6 million of brokered deposits included in time deposits.

At December 31, 2024 and 2023, there were $63.1

million and $23.6 million of brokered deposits included in time deposits, respectively.

The purchase of brokered deposits offered a lower cost alternative to advances from the Federal Home Loan Bank of a similar duration.

Additionally, there were $22.1 million and $20.9 of brokered deposits included in savings deposits at December 31, 2024 and 2023, respectively.

At December 31, 2023, our deposits totaled $404.8 million.

For customers requiring full FDIC insurance on certificates of deposit in excess of $250,000, we began offering in late 2023 the CDARS® program, which allows the Bank to place the certificates of deposit with other participating banks to maximize the customers’ FDIC insurance.

At December 31, 2024 and 2023, our deposits totaled $454.2 million and $404.8 million, respectively.

For customers requiring full FDIC insurance on certificates of deposit in excess of $250,000, we offer the CDARS® program, which allows the Bank to place the certificates of deposit with other participating banks to maximize the customers’ FDIC insurance.

We receive a like amount of deposits from other participating financial institutions.

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We believe that deposits are a stable source of funds, but our ability to attract and maintain deposits at favorable rates will be affected by market conditions, including competition and prevailing interest rates.

The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated.

The following tables set forth the distribution of total average deposit accounts, by account type, at the dates indicated.

At December 31,

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Time deposits

As of December 31, 2023 and 2022, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was estimated to be $102.5 million, or 25.3% of total deposits, and $82.0 million, or 21.4% of total deposits, respectively.

As of December 31, 2024 and 2023, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, had an estimated value not exceeding $112.2 million, or 24.7% of total deposits, and $102.5 million, or 25.3% of total deposits, respectively.

At December 31, 2024 and 2023, uninsured time deposits totaled $7.6 million and $7.4 million, respectively.

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At December 31, 2024, we had $52.3 million in advances from the FHLB and $94.0 million of additional borrowing capacity.

The Bank has established two secured credit facilities with the Federal Reserve Bank of Boston (“FRB”) – Bank Term Funding Program (“BTFP”) and Borrower-In-Custody of Collateral Program (“BIC”).

As of December 31, 2023, a $20.0 million BTFP advance is outstanding and collateralized by eligible collateral consisting primarily of government-sponsored enterprise obligations, mortgage-backed securities and collateralized mortgage obligations issued by various U.S.

Government agencies, owned as of March 12, 2023 and December 31, 2023.

At December 31, 2023, the Bank’s remaining borrowing capacity is $3.5 million under the BTFP.

At December 31, 2023, the Bank’s borrowing capacity is $50.6 million under the BIC and is based upon eligible collateral - principally general obligation municipal bonds.

The entire balance of this credit facility was available at December 31, 2023.

The Bank has an overnight line of credit with the FHLB that may be drawn up to $3.0 million.

We may access additional advances if we purchase additional FHLB capital stock.

Additionally, at December 31, 2023, we had $5.0 million of unsecured Fed funds borrowing lines of credit with two correspondent banks.

The entire balance of these credit facilities was available as of December 31, 2023.

At December 31, 2024, the Bank had an overnight line of credit with the FHLB that may be drawn up to $3.0 million.

Additionally, at December 31, 2024, the Bank had $2.0 million of an unsecured Fed Funds borrowing line of credit with a correspondent bank.

The entire balance of these credit facilities was available at December 31, 2024.

We may obtain advances from a secured credit facility with the Federal Reserve Bank of Boston (“FRB”) – Borrower-In-Custody of Collateral Program (“BIC”).

Advances under the BIC would be collateralized by eligible collateral.

During December 2024, the Bank unpledged the collateral previously pledged to the BIC - principally general obligation municipal bonds – with the intention of pledging commercial real estate loans.

On January 7, 2025, the Bank completed the eligibility process whereby the FHLB subordinated their interest in commercial real estate loans up to a maximum of $65 million allowing these loans to be pledged to the BIC.

The Bank pledged $65.0 million of commercial real estate loans to the BIC resulting in $38.5 million of borrowing capacity under this credit facility as of January 16, 2025.

Personnel and Human Capital

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Management believes that we have a good working relationship with our employees.

The safety, health and wellness of our employees is a top priority.

The COVID-19 pandemic presented a unique challenge with regard to maintaining employee safety while continuing successful operations.

Through teamwork and the adaptability of our management and staff, we were able to transition many of our employees to effectively work from remote locations and ensured a safe working environment for employees performing customer facing activities at our branch locations.

All employees are encouraged to stay at home when they experience signs or symptoms of a possible COVID-19 illness and are provided paid time off during such absences.

Employee retention helps us operate efficiently and achieve our business objectives.

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In addition, First Seacoast Bank is a member of and owns stock in the Federal Home Loan Bank, which is one of the 11 regional banks in the Federal Home Loan Bank System.

First Seacoast Bank’s relationship with its depositors and borrowers is also regulated to a great extent by federal law and, to a lesser extent, state law, including in matters concerning the ownership of deposit accounts and the form and content of First Seacoast Bank’s loan documents.

First Seacoast Bank’s relationship with its depositors and borrowers is also regulated to a

great extent by federal law and, to a lesser extent, state law, including in matters concerning the ownership of deposit accounts and the form and content of First Seacoast Bank’s loan documents.

As a savings and loan holding company, First Seacoast Bancorp, Inc.

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First Seacoast Bancorp, Inc.

is also be subject to the rules and regulations of the SEC under the federal securities laws.

is also subject to the rules and regulations of the SEC under the federal securities laws.

Set forth below are certain material regulatory requirements that are applicable to First Seacoast Bank and First Seacoast Bancorp, Inc.

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Pursuant to 2020 federal legislation, the CBLR was temporarily lowered to 8%, transitioning back to 9% by year-ended 2021.

Throughout 2023, the Bank did not make an election to use the CBLR.

Throughout 2024, the Bank did not make an

election to use the CBLR.

At December 31, 2024, First Seacoast Bank’s capital exceeded all applicable requirements including the applicable capital conservation buffer.

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An institution that has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a common equity Tier 1 ratio of less than 4.5% or a leverage ratio of less than 4% is considered to be “undercapitalized.” A savings institution that has total risk-based capital of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a common equity Tier 1 ratio of less than 3.0% or a leverage ratio that is less than 3.0% is considered to be “significantly undercapitalized.” A savings institution that has a tangible capital to assets ratio equal to or less than 2.0% is deemed to be “critically undercapitalized.”

In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

As fully implemented on January 1, 2019, the capital conservation buffer requirement is 2.5% of risk-weighted assets.

Generally, the Office of the Comptroller of the Currency is required to appoint a receiver or conservator for a federal savings association that becomes “critically undercapitalized” within specific time frames.

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The Office of the Comptroller of the Currency may also take any one of a number of discretionary supervisory actions against undercapitalized federal savings associations, including the issuance of a capital directive and the replacement of senior executive officers and directors.

At December 31, 2023, First Seacoast Bank met the criteria for being considered “well capitalized,” which means that its total risk-based capital ratio exceeded 10%, its Tier 1 risk-based ratio exceeded 8.0%, its common equity Tier 1 ratio exceeded 6.5% and its leverage ratio exceeded 5.0%.

At December 31, 2024, First Seacoast Bank met the criteria for being considered “well capitalized,” which means that its total risk-based capital ratio exceeded 10%, its Tier 1 risk-based ratio exceeded 8.0%, its common equity Tier 1 ratio exceeded 6.5%, its leverage ratio exceeded 5.0% and its capital conservation buffer exceeded 2.5%.

Qualified Thrift Lender Test.

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A financial holding company may engage in activities that are financial in nature, including underwriting equity securities and insurance as well as activities that are incidental to financial activities or complementary to a financial activity.

A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to regulatory approval, and certain additional activities authorized by federal regulations.

additional activities authorized by federal regulations.

First Seacoast Bancorp, Inc.

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In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board considers factors such as the financial and managerial resources, future prospects of the company and institution involved, the effect of the acquisition on the risk to the federal deposit insurance fund, the convenience and needs of the community and competitive factors.

The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions:

The Federal Reserve Board is prohibited from approving any acquisition that would result in a savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions:

• the approval of interstate supervisory acquisitions by savings and loan holding companies;

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These regulatory policies may affect the ability of the Company to pay dividends, repurchase shares of common stock or otherwise engage in capital distributions.

For the repurchase plan authorized by the board of directors on September 23, 2020, as described in Item 5 below, a notice was filed with the Federal Reserve Bank of Boston.

The Federal Reserve Bank of Boston did not object to our repurchase plan.

For the stock repurchase program authorized by the board of directors on April 11, 2024 and the authorization of additional stock repurchases by the board of directors on December 12, 2024, as described in Item 5 below, notices were filed with the Federal Reserve Bank of Boston.

The Federal Reserve Bank of Boston did not object to our stock repurchase plans.

Under the Federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire direct or indirect “control” of a savings and loan holding company.

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Our Senior Technology/Cybersecurity Officer is primarily responsible for this cybersecurity component and is a key member of the Company's Information Technology Governance, along with our Chief Finance/Information Security Officer, including the Enterprise Risk Management Committee ("ERM"), the Information Technology Steering Committee ("ITSC") and the Information Technology Advisory Committee ("ITAC"), reporting directly to the Chief Information Officer.

Our Senior Technology/Cybersecurity Officer has substantial relevant expertise and formal training in the areas of information security and cybersecurity risk management, including 30 years of cybersecurity experience, 5 of which was spent at the Company.

Our Senior Technology/Cybersecurity Officer has substantial relevant expertise and formal training in the areas of information security and cybersecurity risk management,

including 31 years of cybersecurity experience, 6 of which was spent at the Company.

The ITAC and ERM are board level committees with the ITSC consisting of members of management.

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We also maintain a third-party risk management program designed to identify, assess, and manage risks, including cybersecurity risks, associated with external service providers and our supply chain.

We also actively monitor our email gateways for malicious phishing email campaigns and monitor remote connections as a portion of our workforce

has the option to work remotely.

We also actively monitor our email gateways for malicious phishing email campaigns and monitor remote connections as a portion of our workforce has the option to work remotely.

We leverage internal auditors to periodically review our processes, systems, and controls, including with respect to our information security program, to assess their design and operating effectiveness and make recommendations to strengthen our risk management program.

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More frequent meetings occur from time to time in accordance with the IRP in order to facilitate timely informing and monitoring efforts.

The Senior Technology/Cybersecurity Officer reports summaries of key issues, including significant cybersecurity and/or privacy incidents, discussed at committee meetings and the actions taken to the ITAC on a quarterly basis (or more frequently as may be required by the IRP).

The Senior Technology/Cybersecurity Officer reports summaries of key issues, including significant cybersecurity and/or

privacy incidents, discussed at committee meetings and the actions taken to the ITAC on a quarterly basis (or more frequently as may be required by the IRP).

The ITAC is responsible for overseeing our information security and technology programs, including management’s actions to identify, assess, mitigate, and remediate or prevent material cybersecurity issues and risks.

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The ITAC and ERM provide a report of their activities to the board of directors regularly.

As of December 31, 2023, the net book value of our land, building and equipment was $4.1 million.

The following table sets forth information regarding our offices as of December 31, 2023:

Leased or Owned

Year Acquired or

Net Book Value of

Real Property

(In thousands)

Main Office and Annex:

633/629 Central Avenue

Dover, NH 03820

Branch Offices:

6 Eastern Avenue

Barrington, NH 03825

Durham, NH 03824

1650 Woodbury Avenue

Portsmouth, NH 03801

17 Wakefield Street

Rochester, NH 03867

We believe that current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business