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Item 7. Management’s Discussion and Analysis

2026-03-13 compared with 2025-03-14 · 149 added, 130 removed, 502 unchanged (36% of the section changed)

12 unchanged sentences

At December 31, 2025, $1.3 billion, or 71.8%, of our total loan portfolio, net of loans in process, consisted of construction loans primarily located in high demand and high absorption areas in the New York Metropolitan Area.

There continues to be a significant need for construction financing within the high absorption, homogeneous communities served by the Bank and we intend to continue to support the growth of these communities through the financing of condominium and apartment construction loans within the communities.

There continues to be a significant need for construction financing within the high absorption, homogeneous

communities served by the Bank and we intend to continue to support the growth of these communities through the financing of condominium and apartment construction loans within the communities.

Maintaining strong asset quality and managing credit risk.

2 unchanged sentences

Our ratio of non-performing assets to total assets was 0.00%, 0.25%, and 0.33%, at December 31, 2025, 2024 and 2023, respectively.

We attribute this credit quality to a

conservative credit culture and an effective credit risk management environment.

We attribute this credit quality to a conservative credit culture and an effective credit risk management environment.

We have an experienced team of credit professionals, well-defined and implemented credit policies and procedures, what we believe to be conservative loan underwriting criteria, and active credit monitoring policies and procedures.

48 unchanged sentences

On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on the loan’s disparate risk characteristics.

When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, the loan’s observable market price or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable.

value of the collateral as of the reporting date, less estimated selling costs, as applicable.

If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.

1 unchanged sentence

Total assets increased $53.9 million, or 2.7%, to $2.1 billion at December 31, 2025, from $2.0 billion at December 31, 2024.

The increase in assets was primarily due to increases in net loans of $226.0 million, cash and cash equivalents of $9.6 million, equity securities of $3.9 million, real estate owned of $3.7 million, and other assets of $3.5 million.

The increase in assets was primarily due to increases in net loans of $47.8 million, equity securities of $4.6 million, securities held-to-maturity of $3.7 million, and cash and cash equivalents of $2.9 million, partially offset by decreases in real estate owned of $5.1 million and accrued interest receivable of $1.3 million.

Cash and cash equivalents increased $2.9 million, or 3.7%, to $81.2 million at December 31, 2025 from $78.3 million at December 31, 2024.

The increase in cash and cash equivalents was a result of an increase in deposits of $270.3 million, partially offset by a decrease in borrowings of $64.0 million, an increase of $227.0 million in net loans, dividends to shareholders of $8.7 million, and stock repurchases of $2.4 million.

The increase in cash and cash equivalents was a result of an increase of $70.0 million in borrowings that funded increases of $47.8 million in loans, $4.6 million in equity securities, and $3.7 million in securities held-to-maturity, and a decrease of $53.5 million in deposits.

Equity securities increased $4.6 million, or 20.8%, to $26.6 million at December 31, 2025 from $22.0 million at December 31, 2024.

The increase in equity securities was attributable to the purchase of $4.0 million in equity securities during the second half of 2024, offset by market depreciation of $109,000 due to market interest rate volatility during the year ended December 31, 2024.

Securities held-to-maturity decreased $1.3 million, or 7.8%, to $14.6 million at December 31, 2024 from $15.9 million at December 31, 2023 due to $1.3 million in maturities and pay-downs of various investment securities, partially offset by a decrease of $10,000 in the allowance for credit losses for held-to-maturity securities.

The increase in equity securities was attributable to the purchase of $4.0 million in equity securities during the year ended December 31, 2025 and market appreciation of $521,000 due to market interest rate volatility during the year ended December 31, 2025.

Securities held-to-maturity increased $3.7 million, or 25.3%, to $18.3 million at December 31, 2025 from $14.6 million at December 31, 2024 due to purchases of $4.8 million in municipal bonds, partially offset by $1.1 million in maturities and pay-downs of various investment securities.

Loans, net of the allowance for credit losses, increased $47.8 million, or 2.6%, to $1.9 billion at December 31, 2025 from $1.8 billion at December 31, 2024.

The increase in loans, net of the allowance for credit losses, was primarily due to loan originations of $656.0 million during the year ended December 31, 2024, consisting primarily of $573.8 million in construction loans with respect to which approximately 36.3% of the funds were disbursed at loan closings, with the remaining funds to be disbursed over the terms of the construction loans.

In addition, during the year ended December 31, 2024, we originated $54.9 million in commercial and industrial loans, $14.0 million in non-residential loans, $12.6 million in multi-family loans, and $600,000 in mixed-use loans.

We also originated $9.2 million in letters of credit.

Loan originations during the year ended December 31, 2024 resulted in a net increase of $206.8 million in construction loans, $7.6 million in commercial and industrial loans, $8.3 million in non-residential loans, $7.7 million in multi-family loans, and $409,000 in consumer loans.

The increase in our loan portfolio was partially offset by decreases of $3.1 million in mixed-use loans and $1.8 million in residential loans, coupled with normal pay-downs and principal reductions.

The increase in loans consisted of increases of $99.9 million in multi-family loans of which $59.6 million is attributed to residential cooperative building loans, $31.7 million in commercial and industrial loans, and $9.0 million in non-residential loans.

The increases in these loan categories were partially offset by decreases of $89.8 million in construction loans, $1.6 million in consumer loans, $1.4 million in mixed-use loans, and $358,000 in one-to-four family loans.

The decrease in our construction loan portfolio was due to normal pay-downs and principal reductions as construction projects were completed and either condominium units were sold to end buyers or multi-family rental buildings were refinanced by other financial institutions.

During the year ended December 31, 2025, we originated loans totaling $860.7 million consisting primarily of $665.1 million in construction loans, $119.9 million in multi-family loans of which $49.6 million is attributed to residential cooperative building loans, $64.0 million in commercial and industrial loans, $11.1 million in non-residential loans, and $730,000 in mixed-use loans.

The $665.1 million in construction loans had 41.2% disbursed at loan closing, with the remaining funds to be disbursed over the terms of the construction loans.

The allowance for credit losses related to loans decreased to $4.7 million as of December 31, 2025, from $4.8 million as of December 31, 2024.

The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $1.3 million, offset by provision for credit losses totaling $1.1 million.

Premises and equipment decreased $647,000, or 2.5%, to $24.8 million at December 31, 2024 from $25.5 million at December 31, 2023 primarily due to the depreciation of fixed assets.

Investments in Federal Home Loan Bank stock decreased $532,000, or 57.3%, to $397,000 at December 31, 2024 from $929,000 at December 31, 2023.

The decrease was due primarily to the mandatory redemption of Federal Home Loan Bank stock totaling $630,000 in connection with the maturity of $14.0 million in advances in 2024, offset by purchases of Federal Home Loan Bank stock totaling $98,000 due to the growth of our mortgage loan portfolio.

The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $701,000 and negative provision for credit losses totaling $272,000, offset by recoveries totaling $875,000.

Premises and equipment increased $572,000, or 2.3%, to $25.4 million at December 31, 2025 from $24.8 million at December 31, 2024 primarily due to the purchases of additional fixed assets and the expansion of our Kiryas Joel branch office.

Federal Home Loan Bank stock increased $13,000, or 3.3%, to $410,000 at December 31, 2025 from $397,000 at December 31, 2024 primarily due to an increase in mortgage-related assets.

Bank owned life insurance (“BOLI”) increased $695,000, or 2.7%, to $26.4 million at December 31, 2025 from $25.7 million at December 31, 2024 due to increases in the BOLI cash value.

Accrued interest receivable increased $1.2 million, or 9.5%, to $13.5 million at December 31, 2024 from $12.3 million at December 31, 2023 due to an increase in the loan portfolio.

Real estate owned increased $3.7 million, or 251.6%, to $5.1 million at December 31, 2024 from $1.5 million at December 31, 2023 due to foreclosure of a property, with a book value of $4.4 million, located in the Bronx, New York, offset by charge-offs totaling $689,000 resulting from a decrease in the estimated fair value of a foreclosed property located in Pittsburgh, Pennsylvania.

Right of use assets — operating decreased $565,000, or 12.4%, to $4.0 million at December 31, 2024 from $4.6 million at December 31, 2023, primarily due to amortization.

Other assets increased $3.5 million, or 44.0%, to $11.6 million at December 31, 2024 from $8.0 million at December 31, 2023 due to increases of $3.1 million in tax assets, $476,000 in suspense accounts, and $6,000 in miscellaneous assets, partially offset by decreases of $40,000 in prepaid expenses and $2,000 in securities receivables.

Total deposits increased $270.3 million, or 19.3%, to $1.7 billion at December 31, 2024 from $1.4 billion at December 31, 2023.

The increase in deposits was primarily due to the Bank offering competitive interest rates to attract deposits.

This resulted in a shift in deposits whereby certificates of deposit increased $239.7 million, or 31.5%, and NOW/money market accounts increased $98.0 million, or 67.4%, partially offset by decreases in savings account balances of $54.3 million, or 28.2%, and non-interest bearing demand deposits of $14.7 million, or 4.9%.

Federal Reserve Bank borrowings of $50.0 million at December 31, 2023 and Federal Home Loan Bank advances of $14.0 million at December 31, 2023 were paid-off during the year ended December 31, 2024.

Advance payments by borrowers for taxes and insurance decreased $402,000, or 19.9%, to $1.6 million at December 31, 2024 from $2.0 million at December 31, 2023 due primarily to real estate tax payments for borrowers.

Lease liability – operating decreased $517,000, or 11.2%, to $4.1 million at December 31, 2024 from $4.6 million at December 31, 2023, primarily due to amortization.

Accounts payable and accrued expenses increased $972,000, or 7.2%, to $14.5 million at December 31, 2024 from $13.6 million at December 31, 2023 due primarily to increases in dividends payable and other payables of $856,000 and deferred compensation of $729,000, partially offset by decreases in accrued interest expense of $102,000, suspense account for loan closings of $99,000, and accrued expense of $79,000.

The allowance for credit losses for off-balance sheet commitments decreased $334,000, or 32.1%, to $704,000 at December 31, 2024 from $1.0 million at December 31, 2023.

Accrued interest receivable decreased $1.3 million, or 9.3%, to $12.2 million at December 31, 2025 from $13.5 million at December 31, 2024 due to a 75 basis point decrease in the Prime Rate that occurred in 2025, partially offset by an increase of $47.4 million in the loan portfolio.

Real estate owned decreased $5.1 million, or 100.0%, to none at December 31, 2025 from $5.1 million at December 31, 2024 due to the sale of two foreclosed properties to two independent third parties.

Property held for investment decreased $36,000, or 2.6%, to $1.3 million at December 31, 2025 from $1.4 million at December 31, 2024 due to the amortization of property.

Right of use assets — operating increased $655,000, or 16.4%, to $4.7 million at December 31, 2025 from $4.0 million at December 31, 2024, primarily due to the physical expansion of a branch office and the resulting amendment of the operating lease and the renewal of another branch operating lease, partially offset by the amortization of the right of use assets.

Other assets decreased $621,000, or 5.4%, to $11.0 million at December 31, 2025 from $11.6 million at December 31, 2024 due to decreases of $2.5 million in tax assets and $9,000 in miscellaneous assets, partially offset by increases of $1.1 million in prepaid expenses and $819,000 in suspense accounts.

Total deposits decreased $53.5 million, or 3.2%, to $1.6 billion at December 31, 2025 from $1.7 billion at December 31, 2024.

The decrease in deposits was primarily due to decreases in certificates of deposit of $101.3 million, or 10.1% and non-interest bearing deposits of $15.2 million, or 5.3%, partially offset by increases in NOW/money market accounts of $59.1 million, or 24.3%, and savings account balances of $3.9 million, or 2.9%.

The decrease of $101.3 million in certificates of deposit consisted of decreases in retail certificates of deposit of $69.8 million, or 13.6% and brokered certificates of deposit of $65.5 million, or 15.0%, partially offset by an increase in non-brokered listing services certificates of deposit of $34.0 million, or 101.3%.

The decrease in brokered certificates of deposit was due to management’s strategy to reduce the cost of funds by “calling” higher rate brokered deposits on their call dates and to rely less on brokered deposits.

The decrease in retail certificates of deposit was due to a shift in deposits to our retail high yield money market accounts.

The increase in non-brokered listing services certificates of deposits was due to management’s strategy to diversify funding sources.

Advance payments by borrowers for taxes and insurance increased $734,000, or 45.4%, to $2.4 million at December 31, 2025 from $1.6 million at December 31, 2024 due primarily to accumulation of real estate tax payments from borrowers.

Borrowings increased to $70.0 million at December 31, 2025 from none at December 31, 2024 due primarily to management’s strategy to diversify funding sources.

Lease liability – operating increased $688,000, or 16.7%, to $4.8 million at December 31, 2025 from $4.1 million at December 31, 2024, primarily due to the physical expansion of a branch office and the resulting amendment of the operating lease and the renewal of another branch operating lease, partially offset by the amortization of the lease liability.

Accounts payable and accrued expenses increased $2.8 million, or 19.2%, to $17.3 million at December 31, 2025 from $14.5 million at December 31, 2024 due primarily to increases in accrued expense of $812,000, accrued dividends payable of $673,000, deferred compensation of $615,000, accrued borrowing interest expense of $512,000, and the allowance for credit losses for off-balance sheet commitments of $175,000, partially offset by a decrease in suspense account-loan closings of $12,000.

The allowance for credit losses for off-balance sheet commitments increased $175,000, or 24.9%, to $879,000 at December 31, 2025 from $704,000 at December 31, 2024 due primarily to an increase of $117.7 million, or 20.9%, in off-balance sheet commitments from December 31, 2024 to December 31, 2025.

Stockholders’ equity increased $33.4 million, or 10.5% to $351.7 million at December 31, 2025, from $318.3 million at December 31, 2024.

The increase in stockholders’ equity was due to net income of $47.1 million for the year ended December 31, 2024, the amortization expense of $2.0 million relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, an increase of $1.3 million in earned employee stock ownership plan shares coupled with a reduction of $475,000 in unearned employee stock ownership plan shares, and an exercise of stock options totaling $14,000, partially offset by dividends paid and declared of $8.7 million, stock repurchases and stock repurchase excise taxes totaling $2.5 million, awarding restricted stock totaling $725,000.

and $93,000 in other comprehensive income.

The increase in stockholders’ equity was due to net income of $44.4 million for

the year ended December 31, 2025, an increase of $1.1 million in earned employee stock ownership plan shares coupled with a reduction of $869,000 in unearned employee stock ownership plan shares, the amortization expense of $2.0 million relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, and $9,000 in other comprehensive income, partially offset by dividends declared of $13.4 million, stock repurchases of $1.6 million, and $18,000 in stock options exercised.

Our loan portfolio consists primarily of construction loans, commercial and industrial loans, multifamily and mixed-use residential real estate loans and non-residential real estate loans.

13 unchanged sentences

The following table sets forth certain information at December 31, 2025 regarding the dollar amount of loan principal repayments becoming due during the periods indicated.

The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below.

The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience

to differ from that shown below.

Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.

11 unchanged sentences

Residential real estate loans

One- to four-family

Non-residential real estate loans

1 unchanged sentence

Commercial and industrial loans

Consumer loans

Our investment portfolio consists primarily of mutual funds, residential mortgage-backed securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae primarily with stated final maturities of 10 years or more, and municipal securities with maturities of one year or more.

18 unchanged sentences

In addition, we rely on brokered, listing and military deposits, which represent a viable and cost effective addition to our deposit gathering and maintenance strategy, often at a lower “all-in” cost when compared to our retail branch network.

Use of these types of deposits allows us to match the maturity of these deposits to the term of our construction loans.

Use of these types of deposits allows us to match the maturity

of these deposits to the term of our construction loans.

The following table sets forth the deposits as a percentage of total deposits for the dates indicated:

6 unchanged sentences

Certificates of deposit

As of December 31, 2024 and 2023, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000, which is the maximum amount for federal deposit insurance) was $346.9 million and $344.8 million, respectively.

In addition, as of December 31, 2024, the aggregate amount of all our uninsured certificates of

deposit was $187.2 million.

As of December 31, 2025 and 2024, the aggregate amount of uninsured deposits (deposits in amounts greater than $250,000, which is the maximum amount for federal deposit insurance) was $361.0 million and $346.9 million, respectively.

In addition, as of December 31, 2025, the aggregate amount of all our uninsured certificates of deposit was $172.0 million.

We have no deposits that are uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.

13 unchanged sentences

The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.

Deferred loan fees totaled $49,000 and deferred loan costs totaled $176,000 for the years ended December 31, 2024 and 2023, respectively.

Deferred loan cost totaled $268,000 and deferred loan fees totaled $49,000 for the years ended December 31, 2025 and 2024, respectively.

Loan balances exclude loans held for sale.

13 unchanged sentences

Interest-bearing deposits

Federal Home Loan Bank advances and other

Total interest-bearing liabilities

36 unchanged sentences

Net income for the year ended December 31, 2025 was $44.4 million compared to net income of $47.1 million for the year ended December 31, 2024.

Net income for the year ended December 31, 2024 was greater than the year ended December 31, 2023 primarily due to an increase in net interest income and provision for credit losses reduction, partially offset by a decrease in non-interest income, an increase in non-interest expenses, and an increase in income tax expense.

Net income for the year ended December 31, 2025 was lower than net income for the year ended December 31, 2024 primarily due to a decrease in net interest income and an increase in non-interest expense, partially offset by a decrease in the provision for credit losses, an increase in non-interest income, and a decrease in income tax expense.

Summary Income Statements

4 unchanged sentences

Net interest income

Provision for credit losses

Provision for (reversal of) credit losses

Non-interest income

5 unchanged sentences

Net interest income totaled $100.7 million for the year ended December 31, 2025, as compared to $102.8 million for the year ended December 31, 2024.

The increase in net interest income of $5.6 million, or 5.8%, was primarily due to an increase in interest income that exceeded an increase in interest expense.

The increase in interest income is attributable to increases in loans and interest-bearing deposits, partially offset by decreases in investment securities and FHLB stock.

The increase in interest income is also attributable to the Federal Reserve’s interest rate increases during 2023 that continued until September 2024.

However, the Federal Reserve’s decrease of interest rates starting in September 2024 impacted the yield on our interest earning assets.

The increase in market interest rates in 2023 that continued until September 2024 also caused an increase in our interest expense.

As a result, the increase in interest expense for the year ended December 31, 2024 was due to an increase in the cost of funds on our deposits and borrowed money.

The increase in interest expense was also due to increases in the average balances on our certificates of deposits, our interest-bearing demand deposits, and our borrowed money, offset by a decrease in the average balance of our savings and club deposits.

Total interest and dividend income increased $27.5 million, or 20.8%, to $160.0 million for the year ended December 31, 2024 from $132.5 million for the year ended December 31, 2023.

The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $312.3 million, or 20.6%, to $1.8 billion for the year ended December 31, 2024 from $1.5 billion for the year ended December 31, 2023 and an increase in the yield on interest earning assets by two basis points from 8.73% for the year ended December 31, 2023 to 8.75% for the year ended December 31, 2024.

Interest expense increased $21.9 million, or 62.1%, to $57.2 million for the year ended December 31, 2024 from $35.3 million for the year ended December 31, 2023.

The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 77 basis points from 3.58% for the year ended December 31, 2023 to 4.35% for the year ended December 31, 2024, and an increase in average interest bearing liabilities of $328.9 million, or 33.3%, to $1.3 billion for the year ended December 31, 2024 from $986.3 million for the year ended December 31, 2023.

The increase in the cost of interest bearing liabilities was also partially due to a shift to interest bearing certificates of deposits and interest bearing demand deposits from savings accounts as the average balances of interest bearing certificates of deposits increased by $302.5 million, or 49.2%, from $615.1 million for the year ended December 31, 2023 to $917.7 million for the year ended December 31, 2024 and the average balances of interest bearing demand deposits increased by $116.6 million, or 124.8%, from $93.4 million for the year ended December 31, 2023 to $210.0 million for the year ended December 31, 2024.

During the same time period, the average balances of savings accounts decreased by $94.3 million, or 37.9%, from $248.8 million for the year ended December 31, 2023 to $154.4 million for the year ended December 31, 2024.

The increase in the average balances of interest bearing certificates of deposits and interest bearing demand deposits were used primarily to fund the loan portfolio growth and decreases in savings and club deposits and non-interest bearing demand deposits.

The average balances of our non-interest bearing demand deposits decreased by $44.2 million, or 13.7%, from $322.2 million for the year ended December 31, 2023 to $278.0 million for the year ended December 31, 2024.

Net interest margin decreased by 79 basis points, or 12.3%, for the year ended December 31, 2024 to 5.62% compared to 6.41% for the year ended December 31, 2023.

The decrease in the net interest margin was due to an increase in the average balance of interest earning assets of $312.3 million or 20.6% that outpaced an increase in the net interest income of $5.6 million, or 5.8%.

The decrease in net interest income of $2.1 million, or 2.0%, was primarily due to a decrease in interest income that exceeded a decrease in interest expense caused by a decrease in the yield on interest-earning assets that exceeded the decrease in the cost of funds for interest-bearing liabilities.

decrease in the yield on interest-earning assets and the cost of funds for interest-bearing liabilities was due primarily to a 175 basis points decrease in the Federal Funds rate from September 2024 to December 2025.

The decrease in yields and cost of funds was partially offset by an increase in the average balance of interest-earning assets that exceeded an increase in the average balance of interest-bearing liabilities.

In this regard, the increase in the average balances of loans receivable and investment securities exceeded the decrease in the average balances of FHLB stock and other interest-earning assets.

In addition, the increase in the average balances of interest-bearing demand deposits and borrowed money exceeded the decrease in the average balances of certificates of deposits and savings and club deposits.

Total interest and dividend income decreased $5.9 million, or 3.7%, to $154.1 million for the year ended December 31, 2025 from $160.0 million for the year ended December 31, 2024.

The decrease in interest and dividend income was due to a decrease in the yield on interest-earning assets by 71 basis points from 8.75% for the year ended December 31, 2024 to 8.04% for the year ended December 31, 2025, partially offset by an increase in the average balance of interest-earning assets of $88.2 million, or 4.8%, to $1.9 billion for the year ended December 31, 2025 from $1.8 billion for the year ended December 31, 2024.

The increase in the average balance of interest-earning assets was due to an increase in the average balances of loans receivable of $104.6 million, or 6.1%, to $1.8 billion for the year ended December 31, 2025 from $1.7 billion for the year ended December 31, 2024 and an increase in the average balances of investment securities of $4.5 million, or 13.1%, to $39.3 million for the year ended December 31, 2025 from $34.8 million for the year ended December 31, 2024.

These increases were partially offset by a decrease in the average balances of other interest-earning assets of $20.8 million, or 22.5%, to $71.8 million for the year ended December 31, 2025 from $92.6 million for the year ended December 31, 2024 and a decrease in the average balances of FHLB stock of $97,000, or 14.3%, to $580,000 for the year ended December 31, 2025 from $677,000 for the year ended December 31, 2024.

Interest expense decreased $3.9 million, or 6.7%, to $53.4 million for the year ended December 31, 2025 from $57.2 million for the year ended December 31, 2024.

The decrease in interest expense was due to a decrease in the cost of interest-bearing liabilities by 46 basis points from 4.35% for the year ended December 31, 2024 to 3.89% for the year ended December 31, 2025, partially offset by an increase in average interest-bearing liabilities of $56.7 million, or 4.3%, to $1.4 billion for the year ended December 31, 2025 from $1.3 billion for the year ended December 31, 2024.

The cost of interest-bearing liabilities was partially impacted by a shift to interest-bearing demand deposits and borrowed money from savings and club deposits and interest-bearing certificates of deposits.

In this regard, the average balances of interest-bearing demand deposits increased by $83.0 million, or 39.5%, to $293.0 million for the year ended December 31, 2025 from $210.0 million for the year ended December 31, 2024 and the average balances of borrowed money increased by $50.8 million, or 153.4%, to $83.9 million for the year ended December 31, 2025 from $33.1 million for the year ended December 31, 2024.

The average balances of interest-bearing certificates of deposits decreased by $59.6 million, or 6.5%, to $858.1 million for the year ended December 31, 2025 from $917.7 million for the year ended December 31, 2024 and the average balances of savings and club deposits decreased by $17.5 million, or 11.4%, to $136.9 million for the year ended December 31, 2025 from $154.4 million for the year ended December 31, 2024.

In addition, the average balances of our non-interest bearing demand deposits decreased by $3.9 million, or 1.4%, from $277.9 million for the year ended December 31, 2024 to $274.0 million for the year ended December 31, 2025.

The increase in the average balances of interest-bearing demand deposits and borrowed money was used primarily to fund the loan portfolio growth and the decreases in other interest-earning assets, interest-bearing certificates of deposits, savings and club deposits, and non-interest bearing demand deposits.

Net interest margin decreased 37 basis points, or 6.6%, to 5.25% for the year ended December 31, 2025 compared to 5.62% for the year ended December 31, 2024.

The decrease in the net interest margin was due to a 175 basis points decrease in the Federal Funds rate from September 2024 to December 2025 that resulted in a decrease in the yield on interest-earning assets, partially offset by a larger decrease in the cost of funds on interest-bearing liabilities.

Credit Loss Expense.

A credit loss expense of $740,000 was recorded for the year ended December 31, 2024 as compared to a credit loss expense of $972,000 for the year ended December 31, 2023.

A credit loss expense reduction of $97,000 was recorded for the year ended December 31, 2025 compared to a credit loss expense of $740,000 for the year ended December 31, 2024.

The credit loss expense

reduction of $97,000 for the year ended December 31, 2025 was comprised of a credit loss expense reduction for loans of $272,000, offset by a credit loss expense for off-balance sheet commitments of $175,000.

The credit loss expense reduction for loans of $272,000 for the year ended December 31, 2025 was primarily due to a credit loss expense reduction of $334,000 during the fourth quarter of 2025 due to a recovery of unused interest reserve deposits totaling $334,000 from a foreclosed construction loan, offset by a credit loss expense of $62,000 during the first quarter of 2025 due to an increase in the multi-family loan portfolio.

The credit loss expense of $740,000 for the year ended December 31, 2024 was comprised of a credit loss expense for loans of $1.0 million, partially offset by a credit loss expense reduction for off-balance sheet commitments of $334,000 and a credit loss expense reduction for held-to-maturity investment securities of $10,000.

1 unchanged sentence

The credit loss expense reduction for off-balance sheet commitments of $334,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $157.6 million in the level of off-balance sheet commitments.

The credit loss expense reduction for held-to-maturity investment securities of $10,000 for the year ended December 31,

2024 was primarily attributed to a reduction of $708,000 in the level of applicable held-to-maturity investment securities.

The credit loss expense of $972,000 for the year ended December 31, 2023 was comprised of credit loss expense for loans of $1.5 million and credit loss expense for held-to-maturity investment securities of $5,000, partially offset by a credit loss expense reduction for off-balance sheet commitments of $548,000.

We charged-off $1.3 million during the year ended December 31, 2024 as compared to charge-offs of $313,000 during the year ended December 31, 2023.

The charge-offs of $1.3 million during the year ended December 31, 2024 were comprised of a complete charge-off of $1.0 million against a potential non-performing commercial and industrial loan whereby the borrower pleaded guilty and faces incarceration due to loan fraud not related to our commercial and industrial loan and charge-offs totaling $347,000 against various unpaid overdrafts in our demand deposit accounts.

The charge-offs of $313,000 during the year ended December 31, 2023 were comprised of a charge-off of $159,000 related to three performing construction loans on the same project whereby we sold the loans to a third-party at a loss of $159,000.

The remaining charge-offs of $154,000 for the 2023 period were against various unpaid overdrafts in our demand deposit accounts.

We recorded no recoveries from previously charged-off loans during the year ended December 31, 2024 and 2023.

The credit loss expense reduction for held-to-maturity investment securities of $10,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $708,000 in the level of applicable held-to-maturity investment securities.

We charged-off $702,000 during the year ended December 31, 2025 as compared to charge-offs of $347,000 during the year ended December 31, 2024.

The charge-offs in both years were against various unpaid overdrafts in our demand deposit accounts.

We recorded recoveries of $875,000 during the year ended December 31, 2025 compared to no recoveries during the year ended December 31, 2024.

The recoveries of $875,000 during the year ended December 31, 2025 were comprised of recoveries of $350,000 from a previously charged-off non-residential mortgage loan, $334,000 from unused interest reserve deposits from a construction loan, and $191,000 from previously charged-off unpaid overdrafts on demand deposit accounts.

Based on a review of our loan portfolio, held-to-maturity investment securities, and off-balance sheet commitments at December 31, 2025, management believes that the allowance is maintained at a level that represents its best estimate of expected future losses in the loan portfolio, held-to-maturity investment securities, and off-balance sheet commitments that were both probable and reasonably estimable.

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Other loan fees and service charges

Gain (loss) on disposition of equipment

(Loss) gain on disposition of equipment

Earnings on bank-owned life insurance

Investment advisory fees

Realized and unrealized (loss) gain on equity securities

The decrease in total non-interest income of $960,000, or 25.6%, was primarily due to decreases of $458,000 in investment advisory fees, $403,000 in unrealized gains (losses) on equity securities, and $357,000 in BOLI income, partially offset by increases of $207,000 in other loan fees and service charges, $40,000 from sale/disposition of fixed assets, and $11,000 in miscellaneous other non-interest income.

The decrease in investment advisory fees was due to the disposition in January 2024 of the Bank’s assets relating to the Harbor West Wealth Management Group.

As a result of the transaction, the Bank no longer generates investment advisory fees.

The decrease in unrealized gain (loss) on equity securities was due to an unrealized loss of $109,000 on equity securities during the year ended December 31, 2024 compared to an unrealized gain of $294,000 on equity securities during the year ended December 31, 2023.

The unrealized loss of $109,000 on equity securities during the 2024 period was due to market interest rate volatility during the year ended December 31, 2024.

The decrease in BOLI income was primarily due to two death claims totaling $1.8 million on BOLI policies that resulted in additional BOLI income of $404,000 in the year ended December 31, 2023.

The increase of $207,000 in other loan fees and service charges was due to increases of $148,000 in other loan fees and loan servicing fees, $51,000 in ATM/debit card/ACH fees, and $7,000 in deposit account fees.

Regarding the sale/disposition of fixed assets, we recorded gains of $22,000 during the year ended December 31, 2024 compared to losses of $18,000 during the year ended December 31, 2023.

Unrealized gain (loss) on equity securities

Non-interest income for the year ended December 31, 2025 was $4.1 million compared to non-interest income of $2.8 million for the year ended December 31, 2024.

The increase in total non-interest income of $1.3 million, or 47.1%, was primarily due to increases of $686,000 in unrealized gain on equity securities, $616,000 in other loan fees and service charges, and $39,000 in BOLI income, partially offset by decreases of $28,000 in net gain on disposition of fixed assets and $2,000 in miscellaneous other non-interest income.

The increase in unrealized gain on equity securities was due to an unrealized gain of $577,000 on equity securities during the year ended December 31, 2025 compared to an unrealized loss of $109,000 on equity securities during the year ended December 31, 2024.

Both the unrealized gain/loss on equity securities during the 2025 and 2024 periods were due to market interest rate volatility during the respective periods.

The increase of $616,000 in other loan fees and service charges was due to increases of $425,000 in miscellaneous loan fees, $188,000 in ATM/debit card/ACH fees, and $2,000 in deposit account fees.

The increase in BOLI income of $39,000 was due to an increase in the yield on BOLI assets.

Regarding the sale/disposition of fixed assets, we recorded losses of $6,000 during the year ended December 31, 2025 compared to gains of $22,000 during the year ended December 31, 2024.

Non-Interest Expense

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Outside data processing

Loss on disposition of business

Real estate owned expense

Non-interest expense increased $3.6 million, or 9.2%, to $42.7 million for the year ended December 31, 2025 from $39.1 million for the year ended December 31, 2024.

The increase resulted primarily from increases of $2.1 million in salaries and employee benefits, $879,000 in other operating expense, $638,000 in real estate owned expense, $394,000 in outside data processing expense, and $233,000 in occupancy expense, partially offset by decreases of $165,000 in equipment expense, $138,000 in loss on the disposition of the Bank’s assets relating to the Harbor West Wealth Management Group, and $103,000 in advertising expense.

Salaries and employee benefits increased by $2.1 million, or 11.2%, to $20.9 million in 2024 from $18.8 million in 2023 primarily due to the hiring of additional personnel to support the growth of the Company, an increase in personnel compensation in order to remain competitive in recruiting and retaining personnel, an increase in the ESOP compensation cost due to an increase in the value of the Company’s stock, an increase in the amortization of expenses related to the 2022 Equity Incentive Plan awards of restricted stocks and options, and a decrease in loan origination expenses related to loan origination fees due to a decrease in loan originations.

Other non-interest expense increased by $879,000 or 9.0%, to $10.6 million in 2024 from $9.8 million in 2023 due mainly to increases of $448,000 in miscellaneous other non-interest expense, $310,000 in service contracts expense, $252,000 in directors compensation, $59,000 in directors, officers, and employee expenses, $40,000 in audit and accounting fees, $29,000 in office supplies, $26,000 in expenses related to the hiring of personnel, and $17,000 in insurance expense.

These increases were partially offset by decreases of $222,000 in legal fees, $44,000 in consulting fees, and $36,000 in telephone expense.

The increase of $448,000 in miscellaneous other non-interest expense was mainly due to an increase of $384,000 in regulatory insurance premiums and assessments due to an increase in our total assets, an increase of $43,000 in dues and subscriptions and $21,000 in other non-interest expense.

Real estate owned expense increased by $638,000, or 686.0%, to $731,000 in 2024 from $93,000 in 2023 due to the write down of $689,000 in the value of a Pittsburgh, Pennsylvania foreclosed property in 2024, partially offset by a decrease of $50,000 in operating expenses to maintain that real estate owned property in 2024.

The write down of $689,000 on the fair market value of the Pittsburgh, Pennsylvania foreclosed property in 2024 was due to the decrease in demand for office space in that area.

Outside data processing expense increased by $394,000, or 17.8%, to $2.6 million in 2024 from $2.2 million in 2023 due to an increase in transactions and additional services required in 2024 to support the Company’s expansion.

The increase resulted primarily from increases of $2.2 million in salaries and employee benefits, $626,000 in other operating expense, $474,000 in outside data processing expense, $164,000 in occupancy expense, $114,000 in real estate owned expense, and $8,000 in advertising expense, partially offset by a decrease of $22,000 in equipment expense.

Salaries and employee benefits increased by $2.2 million, or 10.7%, to $23.2 million in 2025 from $20.9 million in 2024 primarily due to the hiring of additional personnel to support the growth of the Company, an increase in personnel compensation and benefits cost in order to remain competitive in recruiting and retaining personnel, an increase in the ESOP compensation cost due to an increase in the value of the Company’s stock, and an increase in the amortization of expenses related to the 2022 Equity Incentive Plan awards of restricted stocks and options, partially offset by an increase in loan origination offset expenses related to loan origination fees due to an increase in loan originations.

Other non-interest expense increased by $626,000 or 5.9%, to $11.3 million in 2025 from $10.6 million in 2024 due mainly to increases of $426,000 in miscellaneous other non-interest expense, $371,000 in legal fees, $84,000 in service contracts expense, $55,000 in dues and subscriptions, $14,000 in audit and accounting fees, $14,000 in insurance expense, and $9,000 in recruitment expense.

These increases were partially offset by decreases of $234,000 in directors compensation, $42,000 in consulting fees, $30,000 in telephone expense, $23,000 in directors, officers, and employee expenses, and $9,000 in office supplies.

The increase of $426,000 in miscellaneous other non-interest expense was mainly due to increases of $280,000 in regulatory insurance premiums and assessments due to an increase in our total assets, $137,000 in other non-interest expense, $71,000 in public company expense, $21,000 in check charges and correspondent bank service charges, and $10,000 in postage expense, partially offset by a decrease of $93,000 in miscellaneous charge-offs.

Real estate owned expense increased by $114,000, or 15.6%, to $845,000 in 2025 from $731,000 in 2024 due to the write down and losses totaling $495,000 on the sale of a foreclosed property located in Pittsburgh, Pennsylvania, $232,000 in closing costs related to the sale of a foreclosed property located in the Bronx in 2025, and operating expenses totaling $118,000.

In 2024, we wrote down $689,000 in the value of the Pittsburgh foreclosed property and experienced operating expenses totaling $42,000.

The write downs on the fair market value of the Pittsburgh foreclosed property in 2025 and 2024 was due to the decrease in demand for office space in that area.

Outside data processing expense increased by $474,000, or 18.2%, to $3.1 million in 2025 from $2.6 million in 2024 to an increase in transactions and additional services required in 2025 to support the Company’s growth.

Occupancy expense increased by $164,000, or 5.8%, to $3.0 million in 2025 from $2.8 million in 2024 primarily as a result of the increased cost of operating office space.

Equipment expense decreased by $165,000, or 15.6%, to $890,000 in 2024 from $1.1 million in 2023 due to a reduced need to purchase additional equipment in 2024.

Advertising expense decreased by $103,000, or 19.8%, to $418,000 in 2024 from $521,000 in 2023 due mainly to a decrease in promotional products.

There was no disposition of a business segment in 2024 compared to a loss of $138,000 in the disposition of Harbor West in 2023.

Advertising expenses increased by $8,000, or 1.9%, to $426,000 in 2025 from $418,000 in 2024 due mainly to a nominal increase in promotional products and advertisements.

Equipment expense decreased by $22,000, or 2.5%, to $868,000 in 2025 from $890,000 in 2024 due to a reduced need to purchase additional equipment in 2025.

Income Taxes.

The Company recorded income tax expense of $17.8 million and $18.7 million for the years ended December 31, 2025 and 2024, respectively.

For the year ended December 31, 2024, the Company had approximately $802,000 in tax exempt income, compared to $1.1 million in tax exempt income for the year ended December 31, 2023.

The decrease in tax exempt income was due to two death claims totaling $1.8 million on BOLI policies during the year ended December 31, 2023.

Our effective income tax rates were 28.4% and 28.5% for the year ended December 31, 2024 and 2023, respectively.

For the year ended December 31, 2025, the Company had approximately $867,000 in tax exempt income, compared to $$802,000 in tax exempt income for the year ended December 31, 2024.

The increase in tax exempt income was due to an increase in tax exempt municipal bonds to $13.4 million as of December 31, 2025 from $9.1 million as of December 31, 2024 and an increase of $40,000 in BOLI income from 2024 to 2025.

Risk Management

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Our credit risk management strategy also emphasizes diversification at the borrower level as well as regular credit examinations, continuous site visits by executive management and management reviews of large credit exposures and credits that might experience deterioration of credit quality.

loan review program for all real estate loans (including construction loans) with terms more than 12 months.

As part of its risk management process, the Bank conducts stress testing on its commercial real estate portfolio, performs a global cash flow analysis for loans associated with multiple properties and/or guarantors and also operates a loan review program for all real estate loans (including construction loans) with terms more than 12 months.

In addition, we track our board approved limits for each commercial real estate category on a monthly basis.

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Total non-performing assets to total assets

During the year ended December 31, 2024, non-performing assets decreased by $721,000, or 12.3%, to $5.1 million as of December 31, 2024 from $5.8 million as of December 31, 2023.

At December 31, 2023, we had two non-performing construction loans totaling $4.4 million secured by the same project located in the Bronx, New York.

We successfully foreclosed on these two loans on October 21, 2024 and the balances were transferred to foreclosed real estate.

As a result, at December 31, 2024, we had two non-performing assets consisting of two foreclosed properties, with one foreclosed property totaling $4.4 million located in the Bronx, New York and one foreclosed property totaling $767,000 located in Pittsburgh, Pennsylvania.

We had no non-performing assets at December 31, 2025 compared to $5.1 million in non-performing assets at December 31, 2024.

Non-performing assets as of December 31, 2024 consisted of a foreclosed property totaling $4.3 million located in the Bronx, New York and a foreclosed property totaling $767,000 located in Pittsburgh, Pennsylvania.

The Bronx property was sold on June 30, 2025 to a third-party buyer at no loss to the Company which, in connection therewith, we provided the financing to complete the multi-family project.

We charged off $222,000 in September 2025 on the Pittsburgh property and we sold the property on December 30, 2025 at a loss of $273,000.

In 2025, we collected no interest income from loans that were in non-accrual status in 2025.

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When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

There were no new loan modifications to borrowers experiencing financial difficulties during the years

ended December 31, 2024 and December 31, 2023.

There were no new loan modifications to borrowers experiencing financial difficulties during the years ended December 31, 2025 and 2024.

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

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Total criticized loans

On the basis of management’s review of our assets, we had one loan with a balance of $241,000 classified as substandard at December 31, 2024 compared to two loans totaling $4.4 million classified as substandard at December 31, 2023.

In addition, we had no loans classified as special mention at December 31, 2024 compared to one loan with a balance of $915,000 classified as special mention at December 31, 2023.

On the basis of management’s review of our assets, we had no loans classified as substandard at December 31, 2025 compared to one loan with a balance of $241,000 classified as substandard at December 31, 2024.

This one loan with a current balance of $226,000 was subsequently upgraded to special mention at December 31, 2025, representing all of our special mention loans as of that date, compared to no loans classified as special mention at December 31, 2024.

This loan was current and performing according to its loan terms at December 31, 2025.

There were no assets classified as doubtful or loss at December 31, 2025 or 2024.

1 unchanged sentence

Not all classified assets constitute non-performing assets.

The decrease in substandard assets was due to the addition of a performing commercial and industrial loan with a balance of $241,000 at December 31, 2024 that experienced a significant decline in sales revenue in 2024, offset by the successful foreclosure and transfer to real estate owned in 2024 of two non-performing, non-accrual construction loans totaling $4.4 million secured by the same project located in the Bronx, New York.

The decrease in special mention assets was due to the removal from special mention of one multi-family loan with a balance of $915,000 at December 31, 2023 that has been performing during 2024.

Delinquent Loans

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When additional allowances are necessary, a provision for credit losses is charged to earnings.

The ACL is maintained at a level that management considers adequate to provide for estimated losses and impairment based upon an

evaluation of known and inherent risk in the loan portfolio.

The ACL is maintained at a level that management considers adequate to provide for estimated losses and impairment based upon an evaluation of known and inherent risk in the loan portfolio.

The ACL consists of two elements:

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Our loan officers, loan servicing staff, and internal loan review personnel identify and manage potential problem loans within our mortgage, construction, and commercial and industrial loan portfolio.

Non-performing assets within these loan portfolios are transferred to the Special Assets Department for workout or litigation.

Non-performing assets within

these loan portfolios are transferred to the Special Assets Department for workout or litigation.

The Special Assets Department reports directly to the Executive Committee.

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Additionally, we reserve for certain inherent, but undetected, losses that are probable within the loan portfolio.

This is due to several factors, such as, but not limited to, inherent delays in obtaining

information regarding a customer’s financial condition or changes in their unique business conditions and the interpretation of economic trends.

This is due to several factors, such as, but not limited to, inherent delays in obtaining information regarding a customer’s financial condition or changes in their unique business conditions and the interpretation of economic trends.

While this analysis is conducted at least quarterly, we have the ability to revise the allowance factors whenever necessary to address improving or deteriorating credit quality trends or specific risks associated with a given loan pool classification.

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Our principal focus, therefore, is on the adequacy of the total allowance for credit losses.

Although we believe we have established and maintained the ACL on loans at appropriate levels, changes in reserves may be necessary if actual economic and other conditions differ substantially from the forecast used in estimating the ACL.

See note 1 to our consolidated financial statements for a detailed discussion of our accounting policies and methodologies for establishing the ACL.

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Allowance at beginning of period

Impact of adopting ASC 326

Net charge-offs:

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Consumer loans

Total net charge-offs

Total net (recovery) charge-offs

Provision for credit losses

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Consumer loans

Net charge-offs as a percentage of average loans outstanding

Net (recovery) charge-offs as a percentage of average loans outstanding

Residential real estate loans:

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Consumer loans

Total net charge-offs

Total net (recovery) charge-offs

Credit Quality Ratios:

6 unchanged sentences

The allowance for credit losses related to loans decreased by $99,000 to $4.7 million at December 31, 2025 from $4.8 million at December 31, 2024.

The decrease in the allowances for credit losses was due primarily to the charge-offs of $1.3 million during the year ended December 31, 2024 that were comprised of a complete charge-off of $1.0 million against a potential non-performing commercial and industrial loan whereby the borrower pleaded guilty and faces incarceration due to loan fraud not related to our commercial and industrial loan and charge-offs totaling $347,000 against various unpaid overdrafts in our demand deposit accounts, partially offset by provision for credit losses related to loans totaling $1.0 million during 2024.

The increase in the provision for credit losses related to loans was due to increases in the construction, multi-family mortgage, non-residential mortgage, and commercial and industrial loan portfolio, partially offset by a decrease in the mixed-use mortgage loan portfolio.

We had no recoveries in 2024 and 2023.

The decrease in the allowances for credit losses was due primarily to the charge-offs of $702,000 during the year ended December 31, 2025 that were comprised of charge-offs against various unpaid overdrafts in our demand deposit accounts, partially offset by a provision for credit losses reduction of $272,000 and recoveries totaling $875,000.

The credit loss expense reduction for loans of $272,000 for the year ended December 31, 2025 was primarily due to a credit loss expense reduction of $334,000 during the fourth quarter of 2025 resulting from a recovery of unused interest reserve deposits totaling $334,000 from a foreclosed construction loan, offset by a credit loss expense of $62,000 during the first quarter of 2025 due to an increase in the multi-family loan portfolio.

We recorded recoveries of $875,000 during the year ended December 31, 2025 compared to no recoveries during the year ended December 31, 2024.

Loans evaluated collectively totaled $1.9 billion at December 31, 2025 compared to $1.8 billion at December 31, 2024.

Loans evaluated individually totaled $241,000 at December 31, 2024 compared to $4.4 million at December 31, 2023.

The allowance for credit losses related to off-balance sheet commitments decreased by $334,000 to $704,000 at December 31, 2024 from $1.0 million at December 31, 2023 due primarily to a decrease in the amount of off-balance sheet commitments.

The allowance for credit losses related to held-to-maturity of debt securities decreased by $10,000 to $126,000 at December 31, 2024 from $136,000 at December 31, 2023 due primarily to a decrease in the amount of applicable held-to-maturity debt securities.

We had no loans evaluated individually at December 31, 2025 compared to $241,000 at December 31, 2024.

The allowance for credit losses related to off-balance sheet commitments increased by $175,000 to $879,000 at December 31, 2025 from $704,000 at December 31, 2024 due primarily to an increase in the amount of off-balance sheet commitments.

The allowance for credit losses related to held-to-maturity of debt securities remained the same at $126,000 at December 31, 2025 and 2024.

Interest Rate Risk Management

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

Income simulation identifies the timing and magnitude of changes in income resulting from changes in prevailing interest rates over a short-term time horizon (usually one or

Income simulation identifies the timing and magnitude of

changes in income resulting from changes in prevailing interest rates over a short-term time horizon (usually one or two years).

Economic value simulation reflects the interest rate sensitivity of assets and liabilities in a more comprehensive fashion, reflecting all future time periods.

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To calculate quarterly and annual liquidity ratios, we take the average liquidity for the three- or twelve-month period, respectively, and average it.

Given the rapid movement of deposits in today’s banking environment, the Company also manages its liquidity position through a time-series approach to liquidity availability.

Traditional liquidity management focuses on on-balance sheet capacity;

however, converting those assets into cash may involve delays or market-driven losses.

To address this, the Company emphasizes the actual accessibility of liquidity as measured by when cash becomes available in the Company’s Cash Accounts rather than simply its balance sheet presence.

This time-series liquidity framework is analyzed across the following intervals:

Minute 1, Day 1, Week 1, Month 1, and Year 1.

This structure ensures a proactive and disciplined approach to managing liquidity risk.

Represents the amount of cash the Company can immediately access and disperse within one minute while remaining solvent.

It is defined as the cash and cash equivalents currently on the balance sheet and typically covers daily cash needs.

In the event of a liquidity run, this is the amount of cash that the Company can access and disperse within one day.

It includes Minute 1 liquidity plus total borrowing capacity from the Federal Home Loan Bank, Federal Reserve Bank, and other secured and unsecured sources.

In a prolonged liquidity event, this is the amount of cash available over one week.

Week 1 liquidity includes Day 1 liquidity plus the estimated collateral value of unpledged investments that can be pledged or sold, as well

as a portion (typically 10% each) of the Company’s brokered and listing service deposit capacity expected to be accessible within the week.

Represents the total cash the Company can access and disperse over a one-month period while remaining solvent.

It includes Week 1 liquidity plus the remaining brokered and listing service deposit capacity not already included in Week 1.

Reflects the amount of liquidity the Company can access and deploy over a one-year time period.

It includes Month 1 liquidity plus the value of unpledged but pledgeable loans available on the balance sheet.

To assess the adequacy of its liquidity, the Company compares time-series liquidity against Total Non-Contractual Deposits defined as total deposits less (1) brokered deposits outstanding, (2) other contractual funding outstanding, and (3) collateralized municipal deposits outstanding.

At December 31, 2025, the Company’s ratios of Cash and Borrowing Capacity/Total Non-Contractual Deposits and Cash, Borrowing Capacity and Sourced Deposits Capacity/Total Non-Contractual Deposits were 71.7% and 119.4%, respectively.

These figures demonstrate that the Company has sufficient liquidity resources to meet sudden and unexpected deposit outflow.

Our primary sources of liquidity are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities, other short-term investments, earnings, and funds provided from operations.

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Cash received from the sales, calls, maturities and pay-downs on securities totaled $1.1 million and $1.2 million for the years ended December 31, 2025 and 2024, respectively.

We purchased $4.0 million and $806,000 in securities for the years ended December 31, 2024 and 2023, respectively.

We purchased $8.8 million and $4.0 million in securities for the years ended December 31, 2025 and 2024, respectively.

Deposit flows are generally affected by the level of interest rates we offer, the interest rates and products offered by local competitors, and other factors.

Total deposits increased by $270.3 million at December 31, 2024 due to increases in certificates of deposits and NOW/money market deposits, offset by decreases in savings account deposits, and non-interest bearing demand deposits.

Total deposits decreased by $53.5 million at December 31, 2025 due to decreases in certificates of deposits and non-interest bearing demand deposits, offset by increases in NOW/money market deposits and savings account deposits.

Liquidity management is both a daily and long-term function of business management.

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We had an available borrowing limit of $35.8 million and $18.2 million from the Federal Home Loan Bank of New York as of December 31, 2025 and 2024, respectively.

We had no Federal Home Loan Bank advances at December 31, 2024 compared to $14.0 million in Federal Home Loan Bank advances at December 31, 2023.

We had no Federal Home Loan Bank advances at December 31, 2025 and 2024.

The Federal Reserve Bank of New York (“FRBNY”) approved on August 30, 2023 the Bank’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Bank to borrow from the Discount Window at the FRBNY.

We had an available borrowing limit of $834.7 million and $865.1 million from the FRBNY as of December 31, 2024 and 2023, respectively.

We had no FRBNY borrowings at December 31, 2024 compared to $50.0 million in FRBNY borrowings at December 31, 2023

We had an available borrowing limit of $768.8 million and $834.7 million from the

FRBNY as of December 31, 2025 and 2024, respectively.

We had $70.0 million in FRBNY borrowings at December 31, 2025 compared to no FRBNY borrowings at December 31, 2024.

In addition, we have a borrowing agreement with Atlantic Community Bankers Bank (“ACBB”) to provide short-term borrowings of $8.0 million at December 31, 2025 and 2024.

There were no outstanding borrowings with ACBB at December 31, 2025 and 2024.

We have elected to withdraw the loans we have pledged to secure Federal Home Loan Bank of New York advances and some of our correspondent banking services to become effective in or around March 2026, but we will remain a member of the Federal Home Loan Bank of New York after such withdrawals become effective.

We intend to utilize the FRBNY for some of our future correspondent banking services.

At December 31, 2025, we had unfunded commitments on construction loans of $404.8 million, unfunded commitments under lines of credit of $71.0 million, outstanding commitments to originate loans of $189.7 million, and unfunded standby letters of credit of $14.2 million.

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Impact of Inflation and Changing Prices

dollars without consideration for changes in the relative purchasing power of money over time due to inflation.

The consolidated financial statements and related notes of the Company have been prepared in accordance with GAAP, which generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation.

The primary impact of inflation is reflected in the increased cost of our operations.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis