What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 204 added, 148 removed, 806 unchanged (30% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, 2025 (Unaudited) and December 31, 2024

September 30, 2025 (Unaudited) and December 31, 2024

(in thousands except share and per share data)

June 30, 2025

September 30, 2025

December 31, 2024

25 unchanged sentences

39,826,446 and 42,705,729

shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

INTEREST AND DIVIDEND INCOME

10 unchanged sentences

Provision for credit losses - loans

Release of credit losses - unfunded commitments

Provision for (release of) credit losses - unfunded commitments

Total provision for credit losses

5 unchanged sentences

Swap contract income

Loss on sale of available-for-sale securities, net

Total noninterest income

20 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

OTHER COMPREHENSIVE INCOME, NET OF TAX:

Net change in fair value of available-for-sale securities

Net change in fair value of cash flow hedges

TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX:

8 unchanged sentences

Income (Loss)

Balance, March 31, 2024

Balance, June 30, 2024

Other comprehensive income, net of tax

ESOP shares committed to be released ( 43,057 shares)

Balance, September 30, 2024

Balance, June 30, 2025

Balance, March 31, 2025

Other comprehensive income, net of tax

Repurchase of common shares under share repurchase plan

( 1,106,588 )

Restricted stock award issued

Stock-based compensation

ESOP shares committed to be released ( 43,057 shares)

Balance, June 30, 2025

For the Six Months Ended

Dividends paid

Balance, September 30, 2025

For the Nine Months Ended

Stock Held by

2 unchanged sentences

Balance, December 31, 2023

Adoption of ASU 2023-02

Other comprehensive income, net of tax

2 unchanged sentences

ESOP shares committed to be released ( 127,766 shares)

Balance, June 30, 2024

Balance, September 30, 2024

Balance, December 31, 2024

5 unchanged sentences

ESOP shares committed to be released ( 127,766 shares)

Balance, June 30, 2025

Dividends paid

Balance, September 30, 2025

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(Unaudited - Dollars in thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

Net accretion of available-for-sale securities

Loss on sale of available-for-sale securities, net

Amortization of core deposit intangible

8 unchanged sentences

Increase in cash surrender values of BOLI

Establishment of solar income tax credit investment basis reduction deferred tax liability

Deferred income tax benefit

9 unchanged sentences

Purchases of available-for-sale securities

Proceeds from sales of available-for-sale securities

Proceeds from maturities, calls and paydowns of available-for-sale securities

2 unchanged sentences

Proceeds from BOLI death benefit

Proceeds from surrender of BOLI policies

Proceeds from surrender (purchases) of BOLI policies

Purchases of banking premises and equipment

5 unchanged sentences

Repurchase of common shares under share repurchase plan

Dividends paid

Net change in mortgagors' escrow accounts

Increase (decrease) in FHLB borrowings, net

Decrease in FHLB borrowings, net

NET CASH PROVIDED BY FINANCING ACTIVITIES

4 unchanged sentences

Supplemental disclosure of non-cash transactions:

Unrealized gains on available-for-sale securities

Cumulative effect adjustment of adoption of ASU 2023-02, net of income taxes

Unrealized gains (losses) on available-for-sale securities

Unrealized gains on cash flow hedges

Mortgage loans transferred to loans held for sale

Restricted stock awards granted

Initial recognition of operating lease right of use assets and lease liabilities

Increase in operating lease right of use assets and lease liabilities resulting from lease modifications

The accompanying notes are an integral part of these unaudited consolidated financial statements.

8 unchanged sentences

The Company and the activities of the Bank and its subsidiaries are also subject to various Massachusetts business and banking-related regulations.

On June 5, 2025, the Company announced the signing of a definitive merger agreement under which the Company will acquire Provident Bancorp, Inc., with the Company as the surviving entity, and the Bank will acquire BankProv, with the Bank as the surviving entity (the “Merger”).

On June 5, 2025, the Company announced the signing of a definitive merger agreement under which the Company will acquire Provident Bancorp, Inc., with the Company as the surviving entity, and the Bank will acquire BankProv, the wholly owned subsidiary of Provident Bancorp, Inc., with the Bank as the surviving entity (the “Merger”).

The transaction is valued at approximately $ 211.8 million.

The closing of the Merger, which is expected to occur during the fourth quarter of 2025, is subject to the satisfaction of various conditions, including the affirmative vote by the holders of a majority of Provident Bancorp, Inc.

The closing of the Merger, which is expected to occur during the fourth quarter of 2025, was approved by the affirmative vote of the holders of a majority of Provident Bancorp, Inc.

common stock and the receipt of required regulatory approvals from applicable state and federal regulators.

6 unchanged sentences

Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on shareholders’ equity or net income.

The accompanying Consolidated Balance Sheet as of June 30, 2025, the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Shareholders’ Equity and Consolidated Statements of Cash Flows for the three and six months ended June 30, 2025 and 2024 are unaudited.

The accompanying Consolidated Balance Sheet as of September 30, 2025, the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Shareholders’ Equity and Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2025 and 2024 are unaudited.

The Consolidated Balance Sheet as of December 31, 2024 was derived from the Audited Consolidated Financial Statements as of that date.

1 unchanged sentence

In the opinion of management, the Company’s Consolidated Financial Statements reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The results for the three and six months ended June 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim period, or any future year or period.

The results for the three and nine months ended September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim period, or any future year or period.

The Company qualifies as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012 and has elected to defer the adoption of new or revised accounting standards until the nonpublic company effective dates.

As such, the Company will adopt standards on the nonpublic company effective dates until such time that we no longer qualify as an EGC.

Subsequent events are events or transactions that occur after the balance sheet date but before consolidated financial statements are issued.

Subsequent events are events or transactions that occur after the consolidated balance sheet date but before consolidated financial statements are issued.

Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the consolidated balance sheet, including the estimates inherent in the process of preparing consolidated financial statements.

10 unchanged sentences

In preparing the Consolidated Financial Statements in conformity with U.S.

GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheets and income and expenses for the periods reported.

GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and income and expenses for the periods reported.

Actual results could differ from those estimates based on changing conditions, including economic conditions and future events.

1 unchanged sentence

Recent Accounting Pronouncements

Relevant standards that were recently issued but not yet adopted as of June 30, 2025:

Relevant standards that were recently issued but not yet adopted as of September 30, 2025:

In November 2024, the FASB issued ASU 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Sub Topic 220-40):

9 unchanged sentences

The Company does not expect the adoption of ASU 2023-09 to have a material effect on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Note 3 – Securities

13 unchanged sentences

Credit Losses

June 30, 2025

September 30, 2025

(in thousands)

19 unchanged sentences

SBA securities

The Company did not record a provision for estimated credit losses on any available-for-sale securities for the three and six months ended June 30, 2025 and 2024.

Excluded from the table above is accrued interest on available-for-sale securities of $ 1.7 million and $ 1.6 million at June 30, 2025 and December 31, 2024, respectively, which is included within accrued interest receivable on the consolidated balance sheets.

Additionally, the Company did no t record any write-offs of accrued interest income on available-for-sale securities for the three and six months ended June 30, 2025 and 2024.

No securities held by the Company were delinquent on contractual payments at June 30, 2025 or December 31, 2024, no r were any securities placed on non-accrual status for the three and six months ended June 30, 2025 and 2024.

The following is a summary of actual maturities of certain available-for-sale securities as of June 30, 2025.

The Company did not record a provision for estimated credit losses on any available-for-sale securities for the three and nine months ended September 30, 2025 and 2024.

Excluded from the table above is accrued interest on available-for-sale securities of $ 1.7 million and $ 1.6 million at September 30, 2025 and December 31, 2024, respectively, which is included within accrued interest receivable on the consolidated balance sheets.

Additionally, the Company did no t record any write-offs of accrued interest income on available-for-sale securities for the three and nine months ended September 30, 2025 and 2024.

No securities held by the Company were delinquent on contractual payments at September 30, 2025 or December 31, 2024, no r were any securities placed on non-accrual status for the three and nine months ended September 30, 2025 and 2024.

The following is a summary of actual maturities of certain available-for-sale securities as of September 30, 2025.

The amortized cost and fair values are based on the contractual maturity dates.

7 unchanged sentences

Over five years to ten years

Over ten years

Agency mortgage-backed securities

1 unchanged sentence

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

There were no sales of available-for-sale securities during the three and six months ended June 30, 2025 and 2024.

There were no available-for-sale securities pledged to secure borrowings as of June 30, 2025 and December 31, 2024.

There were no sales of available-for-sale securities during the three and nine months ended September 30, 2025.

During the three and nine months ended September 30, 2024, the Company sold $ 29.3 million of AFS securities and recognized gross realized losses of $ 1.9 million and gross realized gains of $ 30,000 .

There were no available-for-sale securities pledged to secure borrowings as of September 30, 2025 and December 31, 2024.

The following tables present fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates stated.

2 unchanged sentences

(Dollars in thousands)

June 30, 2025

September 30, 2025

Number of Securities

19 unchanged sentences

Included in corporate bonds are investments in senior and subordinated debt of banks and bank holding companies, some of which do not have investment ratings.

At June 30, 2025, available-for-sale debt securities had unrealized losses with aggregate depreciation of 4.8 % from the Company’s amortized cost basis.

At September 30, 2025, available-for-sale debt securities had unrealized losses with aggregate depreciation of 3.9 % from the Company’s amortized cost basis.

These unrealized losses relate to changes in market interest rates since acquiring the securities.

As management has the intent and ability to hold available-for-sale debt securities until maturity or cost recovery, no allowance for credit losses on securities is deemed necessary as of June 30, 2025 and December 31, 2024.

Note 4 – Loans Receivable, Allowance for Credit Losses and Credit Quality

11 unchanged sentences

Loans are charged-off against the ACL when management believes the loan balance is no longer collectible.

This determination is made based on management's review of specific facts and circumstances of the individual loan, including the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform.

This determination made is based on management's review of specific facts and circumstances of the individual loan, including the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform.

Subsequent recoveries of previously charged-off amounts are recorded as increases to the ACL.

The provision for credit losses on loans is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held-for-investment

loan portfolio.

The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

10 unchanged sentences

Qualitative adjustments to quantitative loss factors, either negative or positive, may include considerations of economic conditions, volume and severity of past due loans, value of underlying collateral, experience, depth, and ability of management, and concentrations of credit.

The Company made no significant changes to loss factors, assumptions nor qualitative factors within the CECL model during the three and six months ended June 30, 2025 and 2024.

During the three and nine months ended September 30, 2025, as part of management’s annual analysis of prepayment speeds, the historical prepayment speed analysis of the purchased consumer loans portfolio used in the ACL calculation was enhanced, transitioning from a lifetime analysis to a month-over-month analysis.

The resulting Other Consumer loans prepayment speed forecast dropped from 16.8 % to 10.1 % and resulted in a $ 1.3 million increase in the quantitative value of the Other Consumer Loans ACL.

For those loans that do not share similar risk characteristics, the Company estimates the ACL on an individual (or loan by loan) basis.

9 unchanged sentences

Loans consist of the following as of the dates stated:

June 30, 2025

September 30, 2025

December 31, 2024

11 unchanged sentences

Allowance for credit losses

Included in the above are approximately $ 441.9 million and $ 459.6 million in loans to borrowers in the cannabis industry at June 30, 2025 and December 31, 2024, respectively.

Of that total, $ 268.3 million and $ 321.9 million were direct loans to cannabis companies and were collateralized by real estate at June 30, 2025 and December 31, 2024, respectively.

During the three months ended June 30, 2025, the Company did no t purchase any consumer loan pools.

During the three months ended June 30, 2024, the Company purchased approximately $ 14.1 million of consumer loan pools.

During the six months ended June 30, 2025 and 2024, the Company purchased approximately $ 14.4 million and $ 19.6 million of consumer loan pools, respectively.

The loans purchased during the six months ended June 30, 2025 included loan pools collateralized by automobiles.

The loans purchased during the three and six months ended June 30, 2024 included loan pools collateralized by boats, recreational vehicles, automobiles and solar panels.

Included in the above are approximately $ 418.6 million and $ 459.6 million in loans to borrowers in the cannabis industry at September 30, 2025 and December 31, 2024, respectively.

Of that total, $ 258.5 million and $ 321.9 million were direct loans to cannabis companies and were collateralized by real estate at September 30, 2025 and December 31, 2024, respectively.

During the three months ended September 30, 2025 and 2024, the Company purchased approximately $ 20.3 million and $ 13.3 million of consumer loan pools, respectively.

During the nine months ended September 30, 2025 and 2024, the Company purchased approximately $ 34.7 million and $ 32.9 million of consumer loan pools, respectively.

The loans purchased during the three and nine months ended September 30, 2025 included loan pools collateralized by automobiles.

The loans purchased during the three and nine months ended September 30, 2024 included loan pools collateralized by boats, recreational vehicles and automobiles.

The outstanding balances of these purchased consumer loan pools, shown net of premium (discount) are as follows as of the dates stated:

June 30, 2025

September 30, 2025

Premium (Discount)

13 unchanged sentences

Home improvement loans

The carrying value of loans pledged to secure advances from the FHLB were $ 1.25 billion and $ 1.24 billion as of June 30, 2025 and December 31, 2024, respectively.

The carrying value of loans pledged to secure advances from the FHLB were $ 1.23 billion and $ 1.24 billion as of September 30, 2025 and December 31, 2024, respectively.

The following table presents the aging of the amortized cost of loans receivable by loan category as of the date stated:

June 30, 2025

September 30, 2025

More Past Due

18 unchanged sentences

The following table presents the amortized cost of nonaccrual loans receivable by loan category as of the dates stated:

June 30, 2025

September 30, 2025

December 31, 2024

5 unchanged sentences

Commercial and industrial

During the three and six months ended June 30, 2025, the Company reversed $ 457,000 and $ 494,000 of interest income for loans that were placed on non-accrual respectively.

During the three and six months ended June 30, 2024, the Company reversed $ 149,000 of interest income for loans that were placed on non-accrual.

During the three and nine months ended September 30, 2025, the Company reversed $ 82,000 and $ 288,000 of interest income for loans that were placed on non-accrual respectively.

During the three and nine months ended September 30, 2024, the Company reversed $ 232,000 of interest income for loans that were placed on non-accrual.

Credit Quality Information

17 unchanged sentences

Management uses the results of these reviews as part of its annual review process.

The following table presents the amortized cost of loans receivable by internal risk grade by year of origination as of June 30, 2025.

Also presented are current period gross charge-offs by loan type and vintage year for the three months ended June 30, 2025:

The following table presents the amortized cost of loans receivable by internal risk grade by year of origination as of September 30, 2025.

Also presented are current period gross charge-offs by loan type and vintage year for the three months ended September 30, 2025:

Term Loans Amortized Cost Basis by Origination Year (in thousands)

28 unchanged sentences

Current period gross charge-offs

(1) Consumer loans are not formally risk rated and included $ 1.5 million of loans on non-accrual as of June 30, 2025.

(1) Consumer loans are not formally risk rated and included $ 2.1 million of loans on non-accrual as of September 30, 2025.

The following table presents the amortized cost of loans receivable by internal risk grade by year of origination as of December 31, 2024.

32 unchanged sentences

The following table presents an analysis of the change in the ACL by major loan segment for the periods stated:

For the Three Months Ended June 30, 2025

For the Three Months Ended September 30, 2025

Commercial and

(in thousands)

Balance at March 31, 2025

Balance at June 30, 2025

Provision for (release of) credit losses

Recoveries of loans previously charged-off

Balance at June 30, 2025

For the Three Months Ended June 30, 2024

Balance at September 30, 2025

For the Three Months Ended September 30, 2024

Construction and

2 unchanged sentences

(in thousands)

Balance at March 31, 2024

Balance at June 30, 2024

Provision for (release of) credit losses

Recoveries of loans previously charged off

Balance at June 30, 2024

For the Six Months Ended June 30, 2025

Balance at September 30, 2024

For the Nine Months Ended September 30, 2025

Construction and

5 unchanged sentences

Recoveries of loans previously charged off

Balance at June 30, 2025

For the Six Months Ended June 30, 2024

Balance at September 30, 2025

For the Nine Months Ended September 30, 2024

Construction and

5 unchanged sentences

Recoveries of loans previously charged off

Balance at June 30, 2024

The following table presents the amortized cost of collateral-dependent loans as of June 30, 2025 and December 31, 2024:

June 30, 2025

Balance at September 30, 2024

The following table presents the amortized cost of collateral-dependent loans as of September 30, 2025 and December 31, 2024:

September 30, 2025

December 31, 2024

5 unchanged sentences

The Company closely monitors the performance of borrowers experiencing financial difficulty to understand the effectiveness of its loan modification efforts.

During the three and six months ended June 30, 2025, the Company did no t modify any loans to borrowers experiencing financial difficulty.

During the three and six months ended June 30, 2024, the Company modified one commercial real estate participation loan with an amortized cost basis of $ 6.2 million, or 0.01 % of total commercial real estate loans, through an interest rate reduction and maturity extension.

The modified commercial real estate participation loan subsequently experienced a $ 4.0 million charge-off resulting from a shortfall in the projected sale price of the underlying real estate collateral.

During the three months ended June 30, 2025, the Company recorded a $ 923,000 recovery from the previously modified commercial real estate participation loan, as part of the settlement of the loan.

The following tables present the period end amortized cost basis of loans modified to borrowers experiencing financial difficulty during the periods indicated, disaggregated by class of financing receivable, type of modification granted and the financial effect of the modifications:

Three Months Ended September 30, 2025

% of Total Class of

Financing Receivable

Financial Effect

(In thousands)

Interest rate reduction

Commercial real estate

Terminated swap, changed interest rate index, reduced spread and added rate floors

Nine Months Ended September 30, 2025

% of Total Class of

Financing Receivable

Financial Effect

(In thousands)

Interest rate reduction

Commercial real estate

Terminated swap, changed interest rate index, reduced spread and added rate floors

Three Months Ended September 30, 2024

% of Total Class of

Financing Receivable

Financial Effect

(In thousands)

Term extension and interest rate increase

Commercial real estate

Resulted in a net charge off of $ 3.1 million

Nine Months Ended September 30, 2024

% of Total Class of

Financing Receivable

Financial Effect

(In thousands)

Term extension and interest rate increase

Commercial real estate

Resulted in a net charge off of $ 3.1 million

Note 5 – Employee Benefits

2 unchanged sentences

The amount contributed by the Company to the 401(k) Plan is included in salaries and employee benefits in the consolidated statements of income .

The amounts contributed to the 401(k) plan for the three months ended June 30, 2025 and 2024 were $ 728,000 and $ 726,000 , respectively, and $ 1.4 million and $ 1.3 million for the six months ended June 30, 2025 and 2024, re spectively.

The amounts contributed to the 401(k) plan for the three months ended September 30, 2025 and 2024 were $ 735,000 and $ 626,000 , respectively, and $ 2.2 million and $ 2.0 million for the nine months ended September 30, 2025 and 2024, re spectively.

Employee Pension Plan – The Company provided pension benefits through a defined benefit plan maintained with the Co-operative Banks Employees Retirement Association (“CBERA”) (the “Plan”).

1 unchanged sentence

therefore, the Company is not required to recognize the funded status of the plan on its consolidated balance sheet and need only accrue for any quarterly contributions due and payable on demand, or any withdrawal liabilities assessed by CBERA if the Company intended to withdraw from the Plan.

The Company determined to freeze benefit accruals and withdraw from the CBERA Plan as of December 31, 2023.

The Company froze its benefit accruals from the CBERA Plan as of December 31, 2023.

The Company withdrew from the Plan in the second quarter of 2024.

During the three and six months ended June 30, 2025, as part of the final CBERA Plan liquidation, the Company contributed an additional $ 2,000 and $ 1.2 million to the CBERA Plan respectively.

During the three and six months ended June 30, 2024, an expense of $ 390,000 was recorded to reflect the estimated final withdrawal liability from the Plan.

During the three and nine months ended September 30, 2025, as part of the final liquidation of the employee pension plan, the Company received $ 739,000 as a result of an overfunding and contributed $ 480,000 , respectively.

During the three and nine months ended September 30, 2024, an expense of $ 390,000 was recorded to reflect the estimated final withdrawal liability from the Plan.

The expense was primarily driven by final computations for estimated payouts to participants .

3 unchanged sentences

however, all key officers will be fully vested upon the attainment of age 65.

The obligations under these plans are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $ 2.8 million and $ 2.6 million as of June 30, 2025 and December 31, 2024, respectively.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 88,000 and $ 100,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 177,000 and $ 200,000 for the six months ended June 30, 2025 and 2024, r espectively.

The obligations under these plans are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $ 2.3 million and $ 2.6 million as of September 30, 2025 and December 31, 2024, respectively.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 89,000 and $ 100,000 for the three months ended September 30, 2025 and 2024, respectively, and $ 266,000 and $ 299,000 for the nine months ended September 30, 2025 and 2024, r espectively.

Deferred Compensation Plans – In January 2022, the Company put into place an unfunded Non-qualified Deferred Compensation Plan (“Deferred Comp Plan”) for select employees of the Company.

1 unchanged sentence

Amounts deferred under the Deferred Comp Plan increase in value based upon the growth of the Bank’s tangible capital, with the Compensation Committee holding discretionary authority.

The obligations under the Deferred Comp Plan are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $ 6.2 million and $ 878,000 at June 30, 2025 and December 31, 2024, respectively.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 84,000 and $ 8,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 172,000 and $ 16,000 for the six months ended June 30, 2025 and 2024, respectively.

The obligations under the Deferred Comp Plan are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $ 4.9 million and $ 878,000 at September 30, 2025 and December 31, 2024, respectively.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 86,000 and $ 8,000 for the three months ended September 30, 2025 and 2024, respectively, and $ 258,000 and $ 24,000 for the nine months ended September 30, 2025 and 2024, respectively.

LTIP – In January 2020, the Company put into place a long-term incentive plan for certain members of its management team where benefits are awarded annually on a discretionary basis and cliff vest after three years .

Under this plan, individuals are granted “phantom shares” and benefits are accrued based upon the projected growth of the Bank’s capital.

The obligations under this plan are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $ 6.3 million and $ 14.6 million as of June 30, 2025 and December 31, 2024, respectively.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 832,000 and $ 1.8 million for the three months ended June 30, 2025 and 2024, respectively, and $ 1.7 million and $ 3.2 million for the six months ended June 30, 2025 and 2024, respectively.

The obligations under this plan are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $ 7.2 million and $ 14.6 million as of September 30, 2025 and December 31, 2024, respectively.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 946,000 and $ 1.8 million for the three months ended September 30, 2025 and 2024, respectively, and $ 2.6 million and $ 5.0 million for the nine months ended September 30, 2025 and 2024, respectively.

Director Pension Plan – The Company has a director defined benefit pension plan (“Director Pension Plan”), c overing directors who were in service prior to 2023 and have met the plan’s vesting requirements .

The Company’s liabilities for the Director Pension Plan are calculated by an independent actuary who uses the “projected unit credit” actuarial method to determine the normal cost and actuarial liability.

The liability for the Director Pension Plan amounted to $ 6.0 million and $ 5.7 million as of June 30, 2025 and December 31, 2024, respectively, and is recorded on the consolidated balance sheets.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 162,000 and $ 181,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 324,000 and $ 361,000 for the six months ended June 30, 2025 and 2024, respectively.

The liability for the Director Pension Plan amounted to $ 6.2 million and $ 5.7 million as of September 30, 2025 and December 31, 2024, respectively, and is recorded on the consolidated balance sheets.

The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 162,000 and $ 181,000 for the three months ended September 30, 2025 and 2024, respectively, and $ 486,000 and $ 542,000 for the nine months ended September 30, 2025 and 2024, respectively.

The Company records an estimate of net periodic pension cost for the director pension plan to accrued retirement liabilities on the consolidated balance sheet on a quarterly basis.

1 unchanged sentence

Employment and Change in Control Agreements – The Company has entered into an employment agreement with the Chief Executive Officer and has entered into Change in Control Agreements with its Chief Financial Officer and its Chief Operating Officer that renew for one additional year each June 5th, which provide severance payments in the event of the executive’s involuntary or constructive termination of employment, including upon a termination following a change in control as defined in the agreements.

During 2024, the Company entered into Change in Control agreements with certain executive officers, which provide severance payments in the event of the executive’s involuntary or

constructive termination of employment, including upon a termination following a change in control as defined in the agreements.

Employee Stock Ownership Plan – As part of the Initial Public Offering ("IPO") completed on December 27, 2023, the Bank established a tax-qualified Employee Stock Ownership Plan ("ESOP") to provide eligible employees the opportunity to own Company shares.

The ESOP borrowed $ 47.2 million from the Company to purchase 3,416,458 common shares on the open market.

The loan is payable in annual installments over 20 years at an interest rate of 8.50 %, which was refinanced to 7.50 % during the six months ended June 30, 2025.

The loan is payable in annual installments over 20 years at an interest rate of 8.50 %, which was refinanced to 7.50 % during the nine months ended September 30, 2025.

As the loan is repaid to the Company, shares are released and allocated proportionally to eligible participants on the basis of each participant’s proportional share of compensation relative to the compensation of all participants.

5 unchanged sentences

As the loan is internally leveraged, the loan receivable from the ESOP to the Company is not reported as an asset nor is the debt of the ESOP shown as a liability on the Company’s consolidated balance sheets.

Total compensation expense recognized in connection with the ESOP was $ 842,000 and $ 628,000 for the three months ended June 30, 2025 and 2024, respectively.

Total compensation expense recognized in connection with the ESOP was $ 1.6 million and $ 1.2 million for the six months ended June 30, 2025 and 2024, respectively.

Total compensation expense recognized in connection with the ESOP was $ 790,000 and $ 762,000 for the three months ended September 30, 2025 and 2024, respectively.

Total compensation expense recognized in connection with the ESOP was $ 2.4 million and $ 2.0 million for the nine months ended September 30, 2025 and 2024, respectively.

The following table presents share information held by the ESOP:

June 30, 2025

September 30, 2025

December 31, 2024

12 unchanged sentences

All of the restricted stock awards which have been granted to date vest over five years in equal portions beginning on the first anniversary date of the restricted stock award.

The following table summarizes the Company’s restricted tock award activities for the periods indicated:

Three Months Ended June 30, 2025

Six Months Ended June 30, 2025

Number of Shares

Weighted-Average Grant Date Fair Value Per Share

Number of Shares

Weighted-Average Grant Date Fair Value Per Share

Non-vested balance at beginning of period

Non-vested balance at end of period

The following table represents the compensation expense and income tax benefits recognized for restricted stock awards for the periods indicated:

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

(in thousands)

Stock-based compensation expense:

Restricted stock awards

Total stock-based compensation expense

Related tax benefits recognized in earnings

During the three months ended September 30, 2025, the Company did no t have any restricted stock activity.

During the nine months ended September 30, 2025, the Company granted 1,284,525 shares of restricted stock with a weighted-average grant date fair value per share of $ 16.41 .

During the three and nine months ended September 30, 2025, the Company recognized $ 1.1 million and $ 1.8 million of stock compensation expense, respectively.

The Company did no t have any restricted stock activity or recognize any stock compensation expense during the three and nine months ended September 30, 2024.

Note 6 – Fair Value Measurements

10 unchanged sentences

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value for June 30, 2025 and December 31, 2024.

These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value for September 30, 2025 and December 31, 2024.

Available-for-sale securities – Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.

7 unchanged sentences

Assets measured and reported at estimated fair value on a recurring basis are summarized below:

June 30, 2025

September 30, 2025

(in thousands)

23 unchanged sentences

Derivative liabilities

The Company had no purchases, sales or transfers of level 3 assets during the three and six months ended June 30, 2025 and 2024.

The change in the value of Level 3 assets during the three and six months ended June 30, 2025 was a direct result of the change in market value of the underlying securities.

The Company had no purchases, sales or transfers of level 3 assets during the three and nine months ended September 30, 2025 and 2024.

The change in the value of Level 3 assets during the three and nine months ended September 30, 2025 was a direct result of the change in market value of the underlying securities.

The Company may also be required from time to time to measure certain other assets at fair value on a non-recurring basis in accordance with U.S.

14 unchanged sentences

The following table summarizes assets measured at fair value on a non-recurring basis:

June 30, 2025

September 30, 2025

(in thousands)

3 unchanged sentences

Collateral-dependent loans, net of reserve

For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

Collateral-dependent loans

7 unchanged sentences

The exit price notion is a market-based measurement of fair value that is represented by the price to sell an asset or transfer a liability in the principal market (or most advantageous market in the absence of a principal market) on the measurement date.

As of June 30, 2025 and December 31, 2024, fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

As of September 30, 2025 and December 31, 2024, fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated:

June 30, 2025

September 30, 2025

(In thousands)

34 unchanged sentences

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

As of June 30, 2025 and December 31, 2024, the maximum potential amount of the Company’s obligation was $ 5.7 million and $ 6.0 million, respectively, for standby letters of credit.

As of September 30, 2025 and December 31, 2024, the maximum potential amount of the Company’s obligation was $ 5.6 million and $ 6.0 million, respectively, for standby letters of credit.

The Company’s outstanding letters of credit generally have a term of less than one year.

1 unchanged sentence

If the customer’s line of credit is also in default, the Company may take possession of the collateral, if any, securing the line of credit.

Financial instruments whose contract amounts represents off-balance sheet credit risk and are not reflected on the Company’s consolidated balance sheets consist of the following at the dates stated:

June 30, 2025

Financial instruments whose contract amounts represent off-balance sheet credit risk and are not reflected on the Company’s consolidated balance sheets consist of the following at the dates stated:

September 30, 2025

December 31, 2024

6 unchanged sentences

Potential losses on off-balance sheet loan commitments are estimated using the same risk factors used to determine the ACL on loans, adjusted for the likelihood that funding will occur.

The allowance for off-balance sheet commitments is recorded within other liabilities on the consolidated balance sheets and amounted to $ 2.3 million and $ 3.2 million as of June 30, 2025 and December 31, 2024, respectively.

For the three months ended June 30, 2025 and 2024, the Company recorded a release of the allowance for unfunded commitments of $ 1.1 million and $ 762,000 respectively.

For the six months ended June 30, 2025 and 2024, the Company recorded a release of the allowance for unfunded commitments of $ 872,000 and $ 223,000 , respectively.

The allowance for off-balance sheet commitments is recorded within other liabilities on the consolidated balance sheets and amounted to $ 2.7 million and $ 3.2 million as of September 30, 2025 and December 31, 2024, respectively.

For the three months ended September 30, 2025 the Company recorded a provision for credit losses in the allowance for unfunded commitments of $ 355,000 , compared to a release of the allowance for unfunded commitments of $ 2.4 million for the three months ended September 30, 2024.

For the nine months ended September 30, 2025 and 2024, the Company recorded a release of the allowance for unfunded commitments of $ 517,000 and $ 2.6 million, respectively.

Note 8 – Derivatives and Hedging Activities

4 unchanged sentences

The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s assets and liabilities.

Interest rate positions – The Company may utilize various interest rate derivatives as hedging instruments against interest rate risk associated with the Company’s borrowings and loan portfolios.

An interest rate derivative is an agreement whereby one party agrees to pay a floating rate of interest on a notional principal amount in exchange for receiving a fixed rate of interest on the same notional amount, for a predetermined period of time, from a second party.

The amounts relating to the notional principal amount are not actually exchanged.

The following table reflects information about the Company’s derivative positions at the dates indicated below for interest rate swaps which qualify as cash flow hedges for accounting purposes:

September 30, 2025

Weighted Average Rate

Weighted Average

(in thousands)

Interest rate swaps

The maximum length of time over which the Company is currently hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable interest on existing financial instruments is 3 years .

Included in the table above is a forward-starting interest rate swap with a notional amount of $ 150 million, which does not begin exchanging cash flows until Q3 2026 and carries a 3-year term during the swap period.

For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

The Company expects approximately $ 54,000 (pre-tax) to be reclassified as an increase to net interest income from other comprehensive income related to the Company’s cash flow hedges in the twelve months following September 30, 2025.

This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve at September 30, 2025.

The Company had no hedges in place for the three and nine months ended September 30, 2024.

Non-designated Hedges – Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements and/or the Company has not elected to apply hedge accounting.

2 unchanged sentences

Those interest rate swap and cap agreements are simultaneously hedged by offsetting interest rate swaps and caps that are executed with a third party, such that the Company minimizes its net risk exposure resulting from such transactions.

As of June 30, 2025, the Company had 72 interest rate swap agreements with an aggregate notional amount of $ 460.3 million compared to 67 interest rate swap agreements with an aggregate notional amount of $ 429.9 million related to this program as of December 31, 2024.

As of September 30, 2025, the Company had 71 interest rate swap agreements with an aggregate notional amount of $ 458.7 million compared to 67 interest rate swap agreements with an aggregate notional amount of $ 429.9 million related to this program as of December 31, 2024.

Risk Participation Agreements – Risk Participation Agreements (“RPAs”) are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party.

7 unchanged sentences

Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivable from the customer.

As of June 30, 2025, the Company had 17 RPAs with an aggregate notional amount of $ 44.8 million related to this program compared to 17 RPAs with an aggregate notional amount of $ 44.9 million as of December 31, 2024.

As of September 30, 2025, the Company had 17 RPAs with an aggregate notional amount of $ 44.7 million related to this program compared to 17 RPAs with an aggregate notional amount of $ 44.9 million as of December 31, 2024.

These RPAs all represent “participations-in” and generally have terms ranging from five to ten years .

1 unchanged sentence

Liabilities (2)

June 30, 2025

September 30, 2025

(in thousands)

10 unchanged sentences

(2) Recorded in accrued expenses and other liabilities on the consolidated balance sheets.

Swap contract fees, net of brokerage costs, recognized in earnings on the above noted interest rate products and RPA contracts approximated $ 524,000 and $ 265,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 612,000 and $ 752,000 for the six months ended June 30, 2025 and 2024, respectively.

Swap contract fees, net of brokerage costs, recognized in earnings on the above noted interest rate products and RPA contracts approximated $ 208,000 and $ 375,000 for the three months ended September 30, 2025 and 2024, respectively, and $ 820,000 and $ 1.1 million for the nine months ended September 30, 2025 and 2024, respectively.

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults (or is capable of being declared in default) on any of its indebtedness, then the Company could also be declared in default on its derivative obligations, and it could be required to terminate its derivative positions with the counterparty.

The Company also has agreements with certain of its derivative counterparties that contain a provision whereby if the counterparty fails to maintain its status as a well-capitalized institution, then the Company could be required to terminate its derivative positions with the counterparty.

In order to mitigate counterparty default risk in conjunction with these interest rate products and RPA credit contracts, the Company was required to maintain $ 9.1 million of collateral deposit accounts with the counterparties to these agreements as of June 30, 2025 and December 31, 2024.

Note 9 – Other Comprehensive Income (Loss)

3 unchanged sentences

For the Three Months Ended

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

(In thousands)

(Expense) Benefit

Change in fair value of available-for-sale securities

Reclassification adjustment for net realized (losses) gains in net income

Net change in fair value of available-for-sale securities

Change in fair value of cash flow hedges

Total other comprehensive income (loss)

For the Six Months Ended

June 30, 2025

June 30, 2024

For the Nine Months Ended

September 30, 2025

September 30, 2024

(In thousands)

(Expense) Benefit

Change in fair value of available-for-sale securities

Reclassification adjustment for net realized (losses) gains in net income

Net change in fair value of available-for-sale securities

Change in fair value of cash flow hedge

Total other comprehensive income (loss)

The following table presents the components of accumulated other comprehensive loss as of June 30, 2025 and December 31, 2024:

June 30, 2025

The following table presents the components of accumulated other comprehensive loss as of September 30, 2025 and December 31, 2024:

September 30, 2025

December 31, 2024

1 unchanged sentence

Net unrealized holding losses on available-for-sale securities, net of tax

Net change in fair value of cash flow hedge, net of tax

Unrecognized director pension plan benefits, net of tax

5 unchanged sentences

The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The Company operated under the risk-based framework as of June 30, 2025 and December 31, 2024.

The Company operated under the risk-based framework as of September 30, 2025 and December 31, 2024.

Under this framework, quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of Total Capital, Tier 1 Capital and Common Equity Tier 1 Capital to Risk-Weighted Assets, and Tier 1 Capital to Total Average Assets (as defined in the regulations).

Management believes, as of June 30, 2025 and December 31, 2024, that the Company and the Bank meet all capital adequacy requirements to which each is subject.

As of June 30, 2025 and December 31, 2024, the Company and the Bank were categorized as well capitalized under the regulatory framework for prompt corrective action.

Management believes, as of September 30, 2025 and December 31, 2024, that the Company and the Bank meet all capital adequacy requirements to which each is subject.

As of September 30, 2025 and December 31, 2024, the Company and the Bank were categorized as well capitalized under the regulatory framework for prompt corrective action.

To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below.

6 unchanged sentences

action provisions

June 30, 2025

September 30, 2025

(in thousands)

28 unchanged sentences

action provisions

June 30, 2025

September 30, 2025

(in thousands)

25 unchanged sentences

Diluted EPS have been calculated in a manner similar to that of basic EPS except that the weighted-average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares (such as those resulting from the vesting of restricted stock awards) were issued during the period, computed using the treasury stock method.

There were 959,865 and 482,584 securities that had a dilutive effect during the three and six months ended June 30, 2025.

There were no securities that had a dilutive effect during the three and six months ended June 30, 2024.

There were 207,251 and 188,733 securities that had a dilutive effect during the three and nine months ended September 30, 2025, respectively.

There were no securities that had a dilutive effect during the three and nine months ended September 30, 2024.

Unallocated ESOP shares and unallocated restricted stock awards are not deemed outstanding for EPS calculations.

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

(Dollars in thousands, except per share data)

7 unchanged sentences

average unallocated restricted stock awards

( 1,284,525 )

Average number of common shares outstanding used to calculate basic EPS

3 unchanged sentences

Earnings per common share - diluted

For the three and six months ended June 30, 2025 and 2024, there were no anti-dilutive shares.

For the three and nine months ended September 30, 2025 and 2024, there were no anti-dilutive shares.

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-Q

Item 1. Financial Statements