What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 217 added, 127 removed, 737 unchanged (32% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2025 (Unaudited) and December 31, 2024

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

(in thousands except share and per share data)

March 31, 2025

June 30, 2025

December 31, 2024

10 unchanged sentences

Prepaid expenses and other assets

Deferred income tax asset, net

Deferred income tax asset

Liabilities and shareholders' equity

12 unchanged sentences

40,748,380 and 42,705,729

shares issued and outstanding at March 31, 2025 and December 31, 2024 respectively

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

Additional paid-in capital

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

INTEREST AND DIVIDEND INCOME

10 unchanged sentences

Provision for credit losses - loans

Provision for credit losses - unfunded commitments

Release of credit losses - unfunded commitments

Total provision for credit losses

13 unchanged sentences

FDIC and state insurance assessments

Merger and acquisition expenses

General and administrative expenses

11 unchanged sentences

For the Three Months Ended

For the Six Months Ended

OTHER COMPREHENSIVE INCOME, NET OF TAX:

10 unchanged sentences

Income (Loss)

Balance, March 31, 2024

Other comprehensive income, net of tax

ESOP shares committed to be released ( 42,589 shares)

Balance, June 30, 2024

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 ( 42,589 shares)

Balance, June 30, 2025

For the Six Months Ended

Stock Held by

Comprehensive

Income (Loss)

Balance, December 31, 2023

3 unchanged sentences

ESOP shares committed to be released ( 84,709 shares)

Balance, March 31, 2024

Balance, June 30, 2024

Balance, December 31, 2024

Other comprehensive income, net of tax

Repurchase of common shares under share repurchase plan ( 2,135,286 shares)

Repurchase of common shares under share repurchase plan

( 3,241,874 )

Restricted stock award issued

Stock-based compensation

ESOP shares committed to be released ( 84,709 shares)

Balance, March 31, 2025

Balance, June 30, 2025

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

2 unchanged sentences

(Unaudited - Dollars in thousands)

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash from operating activities:

Net amortization (accretion) of available-for-sale securities

Net accretion of available-for-sale securities

Amortization of core deposit intangible

9 unchanged sentences

Deferred income tax benefit

Stock-based compensation

Changes in operating assets and liabilities:

3 unchanged sentences

Accrued retirement liabilities

NET CASH (PROVIDED BY) USED IN OPERATING ACTIVITIES

NET CASH PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

5 unchanged sentences

Proceeds from BOLI death benefit

Proceeds from surrender of BOLI policies

Purchases of banking premises and equipment

6 unchanged sentences

Net change in mortgagors' escrow accounts

Decrease in FHLB borrowings, net

Increase (decrease) in FHLB borrowings, net

NET CASH PROVIDED BY FINANCING ACTIVITIES

11 unchanged sentences

Basis of Presentation

Corporate Structure and Nature of Operations

NB Bancorp, Inc., a Maryland corporation (the “Company”) (referred to herein as the “Company," “we,” “us,” or “our”), is a bank holding company.

3 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”).

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.

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

Basis of Presentation

5 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 March 31, 2025, the Consolidated Statements of Income, of Comprehensive Income, of Changes in Shareholders’ Equity and of Cash Flows for the three months ended March 31, 2025 and 2024 are unaudited.

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 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 months ended March 31, 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 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 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.

3 unchanged sentences

Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the consolidated balance sheet but arose after that date.

Operating Segments

The Company adopted FASB ASU 2023-07 “Segment Reporting (Topic 280) - Improvement to Reportable Segment Disclosures” on January 1, 2024, which requires that information be reported about a company’s operating segments using a “management approach.” Reportable segments are identified in these standards as those revenue producing components for which separate financial information is produced internally and which are subject to evaluation by the chief operating decision maker (“CODM”).

The Company has determined that its CODM is its Chief Executive Officer.

The Company has one reportable segment:

its banking business, which consists of a full range of banking lending, savings, and small business offerings.

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income and other comprehensive income.

The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income and other comprehensive income.

Note 2 – Summary of Significant Accounting Policies

5 unchanged sentences

Recent Accounting Pronouncements

Relevant standards that were recently issued but not yet adopted as of March 31, 2025:

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

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

17 unchanged sentences

Federal Government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors.

If this assessment indicates the existence of credit losses, the security will be written down to fair value, as determined by a discounted cash flow analysis.

If this assessment indicates the existence of credit losses, the security will be written down to fair value, as determined by a discounted cash flow analysis, through an allowance for credit losses.

To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

5 unchanged sentences

Credit Losses

March 31, 2025

June 30, 2025

(in thousands)

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SBA securities

The Company did not record a provision for estimated credit losses on any available-for-sale securities for the three months ended March 31, 2025 and 2024.

Excluded from the table above is accrued interest on available-for-sale securities of $ 1.8 million and $ 1.6 million at March 31, 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 months ended March 31, 2025 and 2024.

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

The following is a summary of actual maturities of certain available-for-sale securities as of March 31, 2025.

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

10 unchanged sentences

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 months ended March 31, 2025 and 2024.

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

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.

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)

March 31, 2025

June 30, 2025

Number of Securities

Government Agencies

Agency mortgage-backed securities

17 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 March 31, 2025, available-for-sale debt securities had unrealized losses with aggregate depreciation of 4.9 % from the Company’s amortized cost basis.

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.

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 March 31, 2025 and December 31, 2024.

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

Loans Receivable

Loans that management has the intent and ability to hold for the foreseeable future or until loan maturity or pay-off are reported as held-for-investment at their outstanding principal balance adjusted for any charge-offs and net of any deferred fees (including purchase accounting adjustments) and origination costs (collectively referred to as “amortized cost”).

For originated loans, loan fees and certain direct origination costs are deferred and amortized into interest income over the contractual life of the loan using the level-yield method.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported as held-for-investment at their outstanding principal balance adjusted for any charge-offs and net of any deferred fees (including purchase accounting adjustments) and origination costs (collectively referred to as “amortized cost”).

For originated loans, loan fees and certain direct origination costs are deferred and amortized or accreted into interest income over the contractual life of the loan using the level-yield method.

When a loan is paid off, the unamortized portion is recognized in interest income.

2 unchanged sentences

When cash payments are received, they are applied to principal first, then to accrued interest.

It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current.

It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current and the borrower demonstrated the ability to pay and remain current.

In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not go on nonaccrual status if the Company determines that the loans are well-secured and are in the process of collection.

4 unchanged sentences

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.

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.

8 unchanged sentences

Historical loss rates used in the quantitative model are primarily derived using both the Bank’s data, supplemented with peer bank data obtained from publicly available sources.

Management also considers qualitative adjustments when estimating credit losses to take into account the model’s quantitative limitations.

Management also considers qualitative adjustments when estimating credit losses in consideration of the model’s quantitative limitations.

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 months ended March 31, 2025.

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

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.

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

This population of individually evaluated loans (or loan relationships with the same primary source of repayment) is determined on a quarterly basis and consists of:

8 unchanged sentences

Loans consist of the following as of the dates stated:

March 31, 2025

June 30, 2025

December 31, 2024

11 unchanged sentences

Allowance for credit losses

Included in the above are approximately $ 454.3 million and $ 459.6 million in loans to borrowers in the cannabis industry at March 31, 2025 and December 31, 2024, respectively.

Of that total, $ 320.3 million and $ 321.9 million were direct loans to cannabis companies and were collateralized by real estate at March 31, 2025 and December 31, 2024, respectively.

During the three months ended March 31, 2025 and 2024, the Company purchased approximately $ 14.4 million and $ 5.5 million of consumer loan pools, respectively.

The loans purchased during the three months ended March 31, 2025 included loan pools collateralized by automobiles.

The loans purchased during the three months ended March 31, 2024 included loan pools collateralized by boats, recreational vehicles and automobiles.

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

March 31, 2025

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.

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

Premium (Discount)

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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 March 31, 2025 and December 31, 2024, respectively.

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

March 31, 2025

June 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:

March 31, 2025

June 30, 2025

December 31, 2024

5 unchanged sentences

Commercial and industrial

During the three months ended March 31, 2025 and 2024, the Company reversed $ 378,000 and $ 159,000 of interest income for loans that were placed on non-accrual respectively.

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.

Credit Quality Information

9 unchanged sentences

There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.

Non-accrual residential real estate and commercial loans are downgraded to a substandard risk rating.

Loans rated 8:

3 unchanged sentences

Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted.

On an annual basis, or more often if needed, the Company reviews the accuracy of risk ratings for all commercial real estate, construction and land development loans, and commercial and industrial loans based on various ongoing performance characteristics and supporting information that is provided from time to time by commercial borrowers.

On an annual basis, or more often if needed, the Company reviews the accuracy of risk ratings for commercial real estate, construction and land development loans, and commercial and industrial loans based on various ongoing performance characteristics and supporting information that is provided from time to time by commercial borrowers.

Annually, the Company engages an independent third-party to review a significant portion of loans within these segments.

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 March 31, 2025.

Also presented are current period gross charge-offs by loan type and vintage year for the three months ended March 31, 2025:

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:

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

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Current period gross charge-offs

(1) Consumer loans are not formally risk rated and included $ 1.8 million of loans on non-accrual as of March 31, 2025.

(1) Consumer loans are not formally risk rated and included $ 1.5 million of loans on non-accrual as of June 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 March 31, 2025

For the Three Months Ended June 30, 2025

Commercial and

(in thousands)

Balance at December 31, 2024

Balance at March 31, 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

Construction and

Commercial and

Land Development

(in thousands)

Balance at March 31, 2024

For the Three Months Ended March 31, 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

Construction and

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Recoveries of loans previously charged off

Balance at March 31, 2024

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

March 31, 2025

Balance at June 30, 2025

For the Six Months Ended June 30, 2024

Construction and

Commercial and

Land Development

(in thousands)

Balance at December 31, 2023

Provision for (release of) credit losses

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

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 months ended March 31, 2025 and 2024, the Company did no t modify any loans to borrowers experiencing financial difficulty.

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.

Note 5 – Employee Benefits

401(k) Plan – The Company has an employee tax deferred incentive plan (the “401(k) plan”) under which the Company makes voluntary contributions within certain limitations.

All employees who meet specified age and length of service requirements are eligible to participate in the 401(k) plan.

All employees who meet specified age and length of service requirements are el igible to participate in the 401(k) plan.

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 March 31, 2025 and 2024 were $ 688,000 and $ 619,000 , respectively.

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.

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”).

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

During the three months ended March 31, 2025, as part of the final CBERA Plan liquidation, the Company contributed an additional $1.1 million to the CBERA Plan.

During the three months ended March 31, 2024, an expense of $ 390,000 was recorded to reflect an increase in the liability related to the withdrawal from the CBERA Plan.

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

Officers’ Deferred Compensation Plan – During 2014, the Company put into place an unfunded, defined contribution, Non-qualified Deferred Compensation Plan (“Officers’ Deferred Comp Plan”) for select employees of the Company.

The Officers’ Deferred Comp Plan was provided to key management of the Company and results in 5 % - 20 % of the employee’s then current base salary being credited to the participant’s account annually, subject to increases based upon increases in annual base compensation and the possibility of additional discretionary contributions.

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.

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

Officers’ Deferred Compensation Plans – During 2014, the Company put into place an unfunded, defined contribution, Non-qualified Deferred Compensation Pl an (“Deferred Comp Plan”) for select employees of the Company.

The Officers’ Deferred Comp Plan was provided to key management of the Company and results in 5 % - 20 % of the employee’s then current base salary being credited to the participant’s account annually, subject to increases in annual base compensation and the possibility of additional discretionary contributions.

The employees vest at varying dates in accordance with each individual’s deferred compensation participation agreement;

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 in the Company’s consolidated balance sheets and approximated $ 2.7 million and $ 2.6 million at March 31, 2025 and December 31, 2024, respectively.

The expense under the Officers’ Deferred Comp Plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $ 89,000 and $ 100,000 for the the three months ended March 31, 2025 and 2024, respectively.

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.

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.

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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 $ 5.8 million and $ 878,000 at March 31, 2025 and December 31, 2024, respectively.

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.

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 $ 5.9 million and $ 14.6 million as of March 31, 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 $ 1.4 million for the three months ended March 31, 2025 and 2024, respectively.

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.

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 $ 5.9 million and $ 5.7 million as of March 31, 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 March 31, 2025 and 2024, respectively.

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 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.

Equity adjustments, to accumulated other comprehensive loss, in conjunction with the pension plan are recorded by the Company annually upon receipt of the independent actuarial report.

Employment and Change in Control Agreements – The Company entered into an employment agreement with the Chief Executive Officer that renew for one additional year each January 1 st .

During 2025, 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.

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 %.

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.

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 $ 783,000 and $ 588,000 for the three months ended March 31, 2025 and 2024, respectively.

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.

The following table presents share information held by the ESOP:

March 31, 2025

June 30, 2025

December 31, 2024

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These shares may be awarded from the Company’s authorized but unissued shares.

However, the 2025 Plan permits the grant of additional awards of restricted stock or RSUs above the aforementioned limit, provided that, for each additional share of RSA or RSU awarded in excess of such limit, the pool of shares available to be issued upon the exercise of stock options will be reduced by three shares.

Pursuant to the terms of the 2025 Plan, each of the Company’s non-employee directors were automatically granted awards of restricted stock on April 23, 2025.

Such RSAs vest pro-rata on an annual basis over a five-year period.

During the three months ended March 31, 2025, the Company did not grant any RSAs, RSUs, non-qualified stock options or incentive stock options.

However, the 2025 Plan permits the grant of additional RSAs or RSUs above the aforementioned limit, provided that, for each additional share of RSA or RSU awarded in excess of such limit, the pool of shares available to be issued upon the exercise of stock options will be reduced by three shares.

The restricted stock awards are measured based on grant-date fair value, which reflects the 10-day volume-weighted average price of our stock, on the date of the grant.

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

Note 6 – Fair Value Measurements

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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 March 31, 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 June 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.

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In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.

Derivative arrangements – The fair values of derivative arrangements are estimated by the Company using a third-party derivative valuation expert who relies on Level 2 inputs, namely discounted cash flow models to determine fair value by calculating a settlement termination value with the counterparty.

Derivative arrangements – The fair values of derivative arrangements are estimated by the Company using a third-party derivative valuation expert who relies on Level 2 inputs, namely discounted cash flow models to determine a fair value by calculating a settlement termination value with the counterparty.

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

March 31, 2025

June 30, 2025

(in thousands)

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Derivative liabilities

The Company had no purchases, sales or transfers of level 3 assets during the three months ended March 31, 2025 and 2024.

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

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 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.

Any adjustments to fair value usually result in write-downs of individual assets.

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Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3).

In limited circumstances, the collateral value for a collater-dependent loan may be based on the enterprise value of a company.

In limited circumstances, the collateral value for a collateral-dependent loan may be based on the enterprise value of a company.

The enterprise value method involves assessing the borrower’s ability to repay the loan by estimating the total value of its business, including both debt and equity.

This approach is typically used where the recoverable value is based on the fair value of the company as a going concern, adjusted for the prioriry of the Company’s claim.

This approach is typically used where the recoverable value is based on the fair value of the company as a going concern, adjusted for the priority of the Company’s claim.

Fair value adjustments are recorded in the period incurred as provision for credit losses in the consolidated statements of income.

1 unchanged sentence

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

March 31, 2025

June 30, 2025

(in thousands)

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Collateral-dependent loans, net of reserve

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

Collateral-dependent loans

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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 March 31, 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 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.

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

March 31, 2025

June 30, 2025

(In thousands)

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

As of March 31, 2025 and December 31, 2024, the maximum potential amount of the Company’s obligation was $ 6.3 million and $ 6.0 million, respectively, for standby letters of credit.

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.

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

2 unchanged sentences

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:

March 31, 2025

June 30, 2025

December 31, 2024

5 unchanged sentences

The Bank accrues for credit losses related to off-balance sheet financial instruments.

Potential losses on off-balance sheet loan commitments are estimated using the same risk factors used to determine the allowance for credit losses 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 $ 3.4 million and $ 3.2 million as of March 31, 2025 and December 31, 2024, respectively.

For the three months ended March 31, 2025 and 2024, the Company recorded a provision for unfunded commitments of $ 211,000 and $ 539,000 respectively.

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.

Note 8 – Derivatives and Hedging Activities

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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.

Fair Value Hedges of Interest Rate Risk – The Company is exposed to changes in the fair value of certain pools of its pre-payable fixed-rate assets due to changes in benchmark interest rates.

The Company uses interest rate swap agreements to manage its exposure to changes in the fair value of these instruments attributable to changes in the designated benchmark interest rate.

Interest rate swap agreements designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in interest income.

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.

Changes in the fair value of derivatives not designated in hedging relationships, exclusive of credit valuation adjustments, are recorded directly in earnings.

The Company executes interest rate swaps and cap agreements with commercial banking customers to facilitate their respective risk management strategies.

The Company executes interest rate swaps and cap agreements with commercial banking customers to facilitate its respective risk management strategies.

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 March 31, 2025, the Company had 69 interest rate swap agreements with an aggregate notional amount of $ 415.5 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 (“RPAs”) – 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.

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.

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.

Under the terms of these agreements, the “participating bank” receives a fee from the “lead bank” in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap.

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

As of March 31, 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 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.

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

1 unchanged sentence

Liabilities (2)

March 31, 2025

June 30, 2025

(in thousands)

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(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 $ 88,000 and $ 487,000 for the three months ended March 31, 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 $ 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.

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 March 31, 2025 and December 31, 2024.

Note 9 – Other Comprehensive Income

Note 9 – Other Comprehensive Income (Loss)

GAAP generally requires that recognized revenue, expenses, gains and losses be included in net income.

2 unchanged sentences

For the Three Months Ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

(In thousands)

1 unchanged sentence

Total other comprehensive income (loss)

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

March 31, 2025

For the Six Months Ended

June 30, 2025

June 30, 2024

(In thousands)

Change in fair value of available-for-sale securities

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

December 31, 2024

4 unchanged sentences

Note 10 – Regulatory Capital Requirements

The Company is subject to various regulatory capital requirements administered by the federal banking agencies.

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies.

Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

1 unchanged sentence

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 March 31, 2025 and December 31, 2024.

The Company operated under the risk-based framework as of June 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 March 31, 2025 and December 31, 2024, that the Company and the Bank meet all capital adequacy requirements to which each is subject.

As of March 31, 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 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.

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.

There are no conditions or events since that notification that management believes have changed the Bank’s category.

There are no conditions or events since that notification that management believes have changed the Bank’s or Company’s category.

The Bank’s actual capital amounts and ratios are presented in the table as of the date indicated:

4 unchanged sentences

action provisions

March 31, 2025

June 30, 2025

(in thousands)

28 unchanged sentences

action provisions

March 31, 2025

June 30, 2025

(in thousands)

24 unchanged sentences

Basic EPS represents net income available to common shareholders divided by the weighted-average number of common shares outstanding during the period.

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 exercise of stock options) were issued during the period, computed using the treasury stock method.

There were no securities that had a dilutive effect during the three months ended March 31, 2025 and 2024.

Unallocated ESOP shares are not deemed outstanding for EPS calculations.

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.

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

(Dollars in thousands, except per share data)

4 unchanged sentences

( 3,416,458 )

( 3,245,635 )

( 3,215,177 )

average unallocated restricted stock awards

Average number of common shares outstanding used to calculate basic EPS

1 unchanged sentence

Average number of common shares outstanding used to calculate diluted EPS

Earnings per common share:

Basic and diluted

For the three months ended March 31, 2025 and 2024, there were no anti-dilutive shares.

Earnings per common share - basic

Earnings per common share - diluted

For the three and six months ended June 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