What changed in this filing

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Item 1. Business

2023-03-30 compared with 2022-03-30 · 62 added, 94 removed, 456 unchanged (25% of the section changed)

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As a result of the second-step conversion, all share information has been subsequently revised to reflect the 1.3400 exchange ratio, unless otherwise noted.

The Bank is a New York State-chartered savings bank and completed its conversion from a federally-chartered savings bank effective as of the close of business on June 29, 2012.

The Company’s primary activity is the ownership and operation of the Bank.

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

The Bank is headquartered in White Plains, New York.

The Bank was founded in 1934 and is a community oriented financial institution dedicated to serving the financial services needs of individuals and businesses within its market area.

The Bank currently conducts business through its ten branch offices located in Bronx, New York, Orange, Rockland and Westchester Counties in New York and Essex, Middlesex and Norfolk Counties in Massachusetts and three loan production offices located in White Plains, New York, New City, New York and Danvers, Massachusetts.

The Bank currently conducts business through its eleven branch offices located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex and Norfolk Counties in Massachusetts and three loan production offices located in White Plains, New York, New City, New York and Danvers, Massachusetts.

The Bank’s principal business consists of originating primarily construction loans and, to a lesser extent, commercial and industrial loans and multifamily and mixed-use residential real estate loans and non-residential real estate loans.

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Throughout this report, references to “we,” “us” or “our” refer to the Company or the Bank, or both, as the context indicates.

We are headquartered in White Plains, New York, which is located in Westchester County, and we operate through our main and annex offices in White Plains, two full-service branch offices in the New York City borough of Manhattan (New York County), one full-service branch office in the New York City borough of the Bronx (Bronx County), two full-service branch offices in Rockland County, New York, two full-service branch offices in Orange County, New York, and three full-service branches in Danvers (Essex County), Framingham (Middlesex County) and

Quincy (Norfolk County), Massachusetts, and loan production offices in White Plains, New York, New City, New York and Danvers, Massachusetts.

We generate deposits through our main office and ten branch offices.

We are headquartered in White Plains, New York, which is located in Westchester County, and we operate through our main and annex offices in White Plains, two full-service branch offices in the New York City borough of Manhattan (New York County), one full-service branch office in the New York City borough of the Bronx (Bronx County), two full-service branch offices in Rockland County, New York, two full-service branch offices in Orange County, New York, one full-service branch office in Sullivan County, New York, and three full-service branches in Danvers (Essex County), Framingham (Middlesex County) and Quincy (Norfolk County), Massachusetts, and loan

production offices in White Plains, New York, New City, New York and Danvers, Massachusetts.

We generate deposits through our main office and eleven branch offices.

We conduct lending activities primarily in the State of New York, the Commonwealth of Massachusetts, and, to a lesser extent, in New Jersey.

We also have a limited number of loans in Connecticut, New Hampshire, and Pennsylvania, states in which we no longer originate loans.

We also have a limited number of loans in Connecticut and Pennsylvania, states in which we no longer originate loans.

Our construction loans originated in Orange, Rockland and Sullivan Counties in New York and Brooklyn (Kings County) are almost exclusively located within homogeneous communities that demonstrate significant population growth concentrated in well-defined existing, and newer expanding, communities.

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We originate loans primarily for investment purposes.

The largest segment of our loan portfolio is construction loans followed by commercial and industrial loans.

We also originate multifamily, mixed-use and non-residential real

estate loans.

We consider our lending territory to be the New York State/New York City Metropolitan area and the Massachusetts/Boston Metropolitan area.

The largest segment of our loan portfolio is construction loans followed by multi-family real estate loans.

We also originate mixed-use and non-residential real estate loans and commercial and industrial loans.

We consider our lending territory to be the New York State/New York City

Metropolitan area and the Massachusetts/Boston Metropolitan area.

We also originate a limited number of loans in New Jersey.

Although we no longer originate loans in Connecticut, New Hampshire and Pennsylvania, we also have a limited number of loans in these three states.

At December 31, 2021, $872.6 million, or 89.7% of our portfolio was secured by loans in the New York State/New York Metropolitan Area, $49.9 million, or 5.1% of our portfolio was secured by loans in the Massachusetts/Boston Metropolitan Area and $50.3 million, or 5.2% of our portfolio was secured by loans in Connecticut, New Hampshire, New Jersey, and Pennsylvania.

Although we no longer originate loans in Connecticut and Pennsylvania, we also have a limited number of loans in these two states.

At December 31, 2022, $1.1 billion, or 89.4%, of our portfolio was secured by loans in the New York State/New York Metropolitan Area, $105.3 million, or 8.7%, of our portfolio was secured by loans in the Massachusetts/Boston Metropolitan Area and $22.7 million, or 1.9%, of our portfolio was secured by loans in Connecticut, New Jersey, and Pennsylvania.

Construction Loans.

In 2012, we entered the Massachusetts construction market by originating construction loans secured by the construction of multifamily and single family properties as an accommodation to maintain and/or develop relationships with our deposit and loan customers.

In the same manner, during the latter part of 2013 we entered the New York construction market by originating construction loans secured by the construction of multifamily and residential condominium properties located in New York State, primarily in Bronx, Orange, Rockland and Sullivan Counties in New York.

We primarily make construction loans to borrowers and developers that we know or that are referred to us by existing customers for construction in high absorption, homogeneous communities.

In the same manner, during the latter part of 2013 we expanded the New York construction market by originating construction loans secured by the construction of multifamily and residential condominium properties located in New York State, primarily in Bronx, Orange, Rockland and Sullivan Counties in New York.

We primarily make construction loans to borrowers and developers who we know or who are referred to us by existing customers for construction in high absorption, homogeneous communities.

The demand for housing (whether for rent or for purchase) is far greater in these high absorption communities than the available supply.

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For such loans, we do not offer permanent financing.

We do not originate land acquisition and development loans unless the land is ready to build with all permits in place or construction is “as of right.”

We originate land acquisition and development loans whereby the land is ready to build with all permits in place or construction is “as of right.” We also originate occasional land loans to existing well established borrowers with the understanding the borrower will obtain all required permits prior to the borrower requesting a construction loan to develop the property.

Construction loans are typically for 18 to 36 month terms, pay interest only during that period, and are indexed to the prime rate plus a margin.

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We require our borrowers to fund an interest reserve in advance.

As a project progresses and the borrower requests funds to continue the project, we require an engineer consultant to inspect the project to verify that the work has been completed prior to disbursing the funds sought.

As a project progresses and the borrower requests funds to continue the project, we require an independent consultant to inspect the project to verify that the work has been completed prior to disbursing the funds sought.

We also obtain a title continuation update to confirm that no liens have been placed on the project.

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Construction loans in Bronx County consist primarily of loans to construct affordable rental apartment buildings containing between ten and 50 or more apartments.

Most buildings are granted real estate tax abatements under New York City’s 421-A program due to the affordable nature of the apartments in the buildings.

Our average construction loan ranges from $3.0 million to $7.0 million on buildings and complexes ranging from 20 to 40 units.

Most buildings are granted real estate tax abatements under New York City’s 421-A or equivalent program due to the affordable nature of the apartments in the buildings.

Our average construction loans range from $5.0 million to $10.0 million on buildings and complexes ranging from 20 to 40 units.

We also lend on projects, completed in stages, of up to $45 million.

For projects above $33 million, we generally partner with a participating bank from outside our market area.

We typically grant separate land and construction loans and occasionally site development loans secured by the project.

At December 31, 2021, if we were to count land, construction and development loans as separate loans, our construction loan portfolio consisted of 538 loans totaling $1.2 billion in committed amount, comprising of outstanding

disbursed balance of $683.8 million and undisbursed loans in process of $436.9 million.

At December 31, 2021, the construction loan portfolio was comprised primarily of 525 New York construction loans with $1.1 billion in committed amount, comprising of outstanding disbursed balance of $665.0 million and undisbursed loans in process of $422.7 million.

At December 31, 2021, if we were to combine land, construction and development loans as one loan on a project, our construction loan portfolio consisted of 302 loans totaling $1.2 billion in committed amount, comprising of outstanding disbursed balance of $683.8 million and undisbursed loans in process of $436.9 million.

At December 31, 2022, if we were to count land, construction and development loans as separate loans, our construction loan portfolio consisted of 612 loans totaling $1.6 billion in committed amount, comprised of outstanding disbursed balances of $930.6 million and undisbursed loans in process of $637.4 million.

At December 31, 2022, if we were to combine land, construction and development loans as one loan on a project, our construction loan portfolio consisted of 350 loans totaling $1.6 billion in committed amount, comprised of outstanding disbursed balance of $930.6 million and undisbursed loans in process of $637.4 million.

At December 31, 2022, the construction loan portfolio was comprised primarily of 342 New York construction loans with $1.6 billion in committed amount, comprising of outstanding disbursed balances of $903.8 million and undisbursed loans in process of $625.9 million.

All construction loans were performing according to their terms at December 31, 2022.

If we were to combine land, construction and development loans as one loan on a project, the average size in our construction loan portfolio was $3.9 million in committed amount, comprising of outstanding disbursed balances of $2.3 million and undisbursed loans in process of $1.4 million at December 31, 2021

If we were to combine land, construction and development loans as one loan on a project, the average size in our construction loan portfolio was $4.6 million in committed amount, comprised of outstanding disbursed balances of $2.7 million and undisbursed loans in process of $1.8 million at December 31, 2022.

Our largest outstanding construction loan had a balance of $20.3 million and was performing in accordance with its terms at December 31, 2022.

This loan is secured by a mixed-use building located in the Bronx, New York.

This loan is secured by the development of a 111 apartment unit and ground floor commercial space mixed-use building located in the Bronx, New York.

Our largest committed construction loan had a total commitment of $43.6 million of which 50.0% of the commitment has been sold to another financial institution thereby reducing our committed portion to $21.8 million.

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This loan is secured by the development of a 160,000 square foot class A office building located in Monsey, New York.

At December 31, 2021, our largest outstanding construction loan relationship with one borrower was comprised of three construction loans with outstanding balances totaling $10.7 million with no available loans in process.

This relationship also had four commercial and industrial lines of credit totaling $16.5 million with an outstanding balance of $10.5 million at December 31, 2021, one multi-family mortgage loan with an outstanding balance of $921,000 at December 31, 2021, and five stand-by letters of credit totaling $855,000 with no outstanding balance at December 31, 2021.

At December 31, 2022, our largest outstanding construction loan relationship with one borrower was comprised of thirteen construction loans with $40.3 million in committed amount of which $10.0 million of the commitment has been sold to another financial institution thereby reducing our committed portion to $30.3 million.

Our portion of these construction loans had an outstanding balance of $17.3 million and undisbursed loans in process of $13.0 million.

This relationship also had three commercial and industrial lines of credit totaling $3.7 million with an outstanding balance of $3.7 million at December 31, 2022.

All of these loans were performing in accordance with their terms at December 31, 2022.

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At December 31, 2022, the largest outstanding commercial and industrial loan had a balance of $5.5 million with no remaining available line of credit.

The loan is secured by an office and warehouse complex located in Totowa, New Jersey.

The largest outstanding commercial and industrial line of credit relationship with one borrower was comprised of three lines of credit totaling $30.0 million, with outstanding balances totaling $2.6 million and remaining available lines of credit totaling $27.4 million.

The loan is being used to support the development of up to sixteen units at any one time of a sixty-unit development located in New Hempstead, New York.

In addition, we granted to the borrower on the same development a land mortgage loan with an outstanding balance of $4.5 million at December 31, 2022.

The commercial and industrial loan is secured by a UCC-1 on all business assets and an assignment of contracts.

The largest outstanding commercial and industrial line of credit relationship with one borrower was comprised of three lines of credit totaling $30.0 million, with no outstanding balances and remaining available lines of credit totaling $30.0 million.

However, pursuant to the terms of the governing loan documents, the borrower cannot at any one time have more than $10.0 million outstanding in the aggregate with respect to all three lines of credit.

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Mixed-use real estate loans are secured by properties that are intended for both residential and business use.

We also originate multifamily and mixed-use real estate loans in Massachusetts and, on a limited basis, in New Jersey.

We also have a limited number of multifamily and mixed-use real estate loans in Connecticut, New Hampshire, and Pennsylvania.

We also offer construction/renovation loans on multifamily and mixed-use rental properties in high absorption areas, dependent on vacancy rates in relation to borough or town averages.

In recent years, we have de-emphasized multifamily and mixed-use real estate lending as we have focused more on construction lending.

We originate multifamily and mixed-use real estate loans in Massachusetts and, on a limited basis, in New Jersey.

We also have a limited number of multifamily and mixed-use real estate loans in Connecticut and Pennsylvania.

We offer construction/renovation loans on multifamily and mixed-use rental properties in high absorption areas, dependent on vacancy rates in relation to borough or town averages.

In recent years, except for Massachusetts, we have de-emphasized multifamily and mixed-use real estate lending as we have focused more on construction lending.

We have been originating multifamily and mixed-use real estate loans in the New York State/New York Metropolitan Area for 89 years.

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At December 31, 2022, multifamily and mixed-use real estate loans to borrowers in the New York State/New York Metropolitan Area totaled $63.3 million.

In the Massachusetts/Boston Metropolitan Area, where we have also originated such loans, the primary source of mortgage loan originations are from personal contacts by our loan officers, referrals from existing customers and advertising.

We generally retain for our portfolio all of the loans that we originate in Massachusetts.

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On December 31, 2022, the largest outstanding multifamily real estate loan had a balance of $13.3 million and was performing according to its terms at December 31, 2022.

This loan is secured by a 218 unit apartment complex located in Philadelphia, Pennsylvania.

This loan is secured by a 62 unit two building apartment complex located in Boston, Massachusetts.

The largest mixed-use real estate loan had a balance of $2.5 million and was performing according to its terms at December 31, 2022.

This loan is secured by four mixed-use buildings with 11 apartment units and five commercial units located in Brooklyn, New York.

As of December 31, 2021, the average loan size in our multifamily and mixed-use portfolio was approximately $698,000.

As of December 31, 2022, the average loan size in our multifamily and mixed-use portfolio was approximately $1.1 million.

Non-Residential Real Estate Loans .

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At December 31, 2022, our non-residential real estate loan portfolio was comprised mainly of $18.4 million of loans secured by properties in the New York State/New York Metropolitan Area, $4.4 million of loans secured by properties in the Massachusetts/Boston Metropolitan Area, and $2.6 million of loans secured by properties in Connecticut, New Jersey, and Pennsylvania.

We have de-emphasized the origination of non-residential real estate loans in recent years as we began increasing our origination of construction loans.

We have de-emphasized the origination of non-residential real estate loans in recent years as we began increasing our origination of construction loans and multifamily loans.

Our non-residential real estate loans are structured in a manner similar to our multifamily and mixed-use real estate loans, typically at a fixed rate of interest for three to five years and then a rate that adjusts every three to five years over the term of the loan, which is typically 15 years.

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At December 31, 2022, we had $25.3 million in non-residential real estate loans outstanding, or 2.1% of total loans.

At December 31, 2021, the largest outstanding non-residential real estate loan had an outstanding balance of $10.0 million.

This loan is secured by a 16-acre site, which is listed on the national and state registries for historic places.

The property consists of 12 buildings totaling approximately 160,000 square feet, including a large central convent, chapel, elementary school, high school, administrative building and other ancillary structures located in White Plains, New York.

This loan was performing according to its terms at December 31, 2021.

At December 31, 2021, this loan was also the largest outstanding non-residential real estate loan relationship with one borrower and was performing in accordance with its terms.

At December 31, 2022, the largest outstanding non-residential real estate loan had an outstanding balance of $2.3 million and was performing in accordance with its terms.

This loan is secured by three properties located in Brooklyn, New York consisting of a 17,850 square foot single story warehouse building, a 7,650 square foot single story bus maintenance garage, and a 0.39 acre paved parking lot.

As of December 31, 2022, the average balance of loans in our non-residential loan portfolio was $633,000.

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We offer personal loans, loans secured by savings accounts or certificates of deposit (share loans), and overdraft protection for checking accounts which is linked to statement savings accounts and has the ability to transfer funds from the statement savings account to the checking account when needed to cover overdrafts.

At December 31, 2021, our portfolio of consumer loans was $269,000, or 0.03% of total loans.

We also consider any checking accounts with overdrawn balances as a consumer loan even though the customer typically deposits sufficient funds the next business day to cover the overdrawn balance.

At December 31, 2022, our portfolio of consumer loans was $546,000, or 0.04% of total loans, comprised primarily of checking accounts with overdrawn balances of $517,000.

Consumer loans may entail greater risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly.

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Loan originations come from a number of sources.

The primary source of loan originations are our in-house loan officers and referrals from customers and, to a lesser extent, mortgage loan brokers and local realtors.

The primary source of loan originations are our in-house loan officers and referrals from customers and, to a much lesser extent, mortgage loan brokers and local realtors.

Historically, we have primarily originated our own loans and retained them in our portfolio.

While in the past we purchased a limited number of participations from one financial institution that also serves high absorption areas in Brooklyn, New York, we currently have only one such participation loan in our portfolio.

At December 31, 2021, the participation loan totaled $1.5 million and was performing according to its terms.

We also purchased whole loans from one financial institution during 2021.

While in the past we purchased a limited number of participations from one financial institution that also serves high absorption areas in Brooklyn, New York, we currently do not have any purchased participation loan in our portfolio.

We also purchased whole residential and non-residential mortgage loans from a Massachusetts financial institution during 2021.

At December 31, 2022, these whole purchased loans totaled $2.8 million and were performing according to their terms.

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Generally, these deferrals included the deferral of principal and interest payments for a period of three months, although interest income continued to accrue.

As of December 31, 2021, one loan with an aggregate balance of $79,000 remains on deferral under the CARES Act.

As of February 1, 2022, the loan was returned to normal payment status.

As of December 31, 2022, we had no loan on deferral under the CARES Act.

Investment Activities

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The vast majority of our depositors are residents of the States of New York and Massachusetts.

Deposits are obtained primarily from customers residing in or working in the communities in which our branches are located, and we rely on our long-standing relationships with our customers to retain these deposits.

Deposits are obtained primarily from customers residing in or working in the communities in which our

branches are located, and we rely on our long-standing relationships with our customers to retain these deposits.

We also obtain deposits from our commercial and industrial and construction loan customers.

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The Bank is a member of the Federal Home Loan Bank of New York.

The regulation and supervision of the Bank establish a comprehensive framework of activities in which an institution can engage and is intended primarily for the protection of depositors and borrowers and, for purposes of the FDIC, the protection of the insurance fund.

FDIC, the protection of the insurance fund.

The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.

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The description is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on the Bank and the Company.

Interagency Statement on Loan Modifications.

On March 22, 2020, the federal banking agencies issued an interagency statement to provide additional guidance to financial institutions who are working with borrowers affected by the coronavirus (“COVID-19”).

The statement provided that agencies will not criticize institutions for working with borrowers and will not direct supervised institutions to automatically categorize all COVID-19 related loan modifications as troubled debt restructurings (“TDRs”).

The agencies have confirmed with staff of the Financial Accounting Standards Board that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not TDRs.

This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.

Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented.

The statement further provided that working with borrowers that are current on existing loans, either individually or as part of a program for creditworthy borrowers who are experiencing short-term financial or operational problems as a result of COVID-19, generally would not be considered TDRs.

For modification programs designed to provide temporary relief for current borrowers affected by COVID-19, financial institutions may presume that borrowers that are current on payments are not experiencing financial difficulties at the time of the modification for purposes of determining TDR status, and thus no further TDR analysis is required for each loan modification in the program.

The statement indicated that the agencies’ examiners will exercise judgment in reviewing loan modifications, including TDRs, and will not automatically adversely risk rate credits that are affected by COVID-19, including those considered TDRs.

In addition, the statement noted that efforts to work with borrowers of one- to-four family residential mortgages, where the loans are prudently underwritten, and not past due or carried on non-accrual status, will not result in the loans being considered restructured or modified for the purposes of their risk-based capital rules.

With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral.

The Coronavirus Aid, Relief and Economic Security Act.

The CARES Act, which became law on March 27, 2020, provided over $2 trillion to combat COVID-19 and stimulate the economy.

The law had several provisions relevant to financial institutions, including:

● Allowing institutions not to characterize loan modifications relating to the COVID-19 pandemic as a troubled debt restructuring and also allowing them to suspend the corresponding impairment determination for accounting purposes.

● An option to delay the implementation of the accounting standard for current expected credit losses (CECL) until the earlier of December 31, 2020 or when the President declares that the coronavirus emergency is terminated.

● The ability of a borrower of a federally backed mortgage loan (VA, FHA, USDA, Freddie and Fannie) experiencing financial hardship due, directly or indirectly, to the COVID-19 pandemic to request forbearance from paying their mortgage by submitting a request to the borrower’s servicer affirming their financial hardship during the COVID-19 emergency.

Such a forbearance will be granted for up to 180 days, which can be extended for an additional 180-day period upon the request of the borrower.

During that time, no fees, penalties or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the mortgage contract will accrue on the borrower’s account.

Except for vacant or abandoned property, the servicer of a federally backed mortgage is prohibited from taking any foreclosure action, including any eviction or sale action, for not less than the 60-day period beginning March 18, 2020.

● The ability of a borrower of a multi-family federally backed mortgage loan that was current as of February 1, 2020, to submit a request for forbearance to the borrower’s servicer affirming that the borrower is experiencing financial hardship during the COVID-19 emergency.

A forbearance will be granted for up to 30 days, which can be extended for up to two additional 30-day periods upon the request of the borrower.

During the time of the forbearance, the multi-family borrower cannot evict or initiate the eviction of a tenant or charge any late fees, penalties or other charges to a tenant for late payment of rent.

Additionally, a multi-family borrower that receives a forbearance may not require a tenant to vacate a dwelling unit before a date that is 30 days after the date on which the borrower provides the tenant notice to vacate and may not issue a notice to vacate until after the expiration of the forbearance.

Coronavirus Response and Relief Supplemental Appropriations Act of 2021.

On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed into law, which also contains provisions that could directly impact financial institutions, including extending the time that insured depository institutions and depository institution holding companies have to comply with the current expected credit losses (“CECL”) accounting standard and extending the authority granted to banks under the CARES Act to elect to temporarily suspend the requirements under U.S.

GAAP applicable to troubled debt restructurings for loan modifications related to the COVID-19 pandemic for any loan that was not more than 30 days past due as of December 31, 2019.

The act directs financial regulators to support community development financial institutions and minority depository institutions and directs Congress to re-appropriate $429 billion in unobligated CARES Act funds.

The PPP, which was originally established under the CARES Act, was also extended under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021.

Bank Regulation

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Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.

Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital.

Total capital includes Tier 1 capital

(common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital.

Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.

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The Economic Growth, Regulatory Relief, and Consumer Protection Act enacted in May 2018 required the federal banking agencies, including the FDIC, to establish for banks with assets of less than $10 billion of assets a community bank leverage ratio (the ratio of a bank’s tangible equity capital to average total consolidated assets) of 8 to 10%.

A qualifying community bank with capital meeting the specified requirements (including off balance sheet

exposures of 25% or less of total assets and trading assets and liabilities of 5% or less of total assets) and electing to follow the alternative framework is considered to meet all applicable regulatory capital requirements including the risk-based requirements.

A qualifying community bank with capital meeting the specified requirements (including off balance sheet exposures of 25% or less of total assets and trading assets and liabilities of 5% or less of total assets) and electing to follow the alternative framework is considered to meet all applicable regulatory capital requirements including the risk-based requirements.

The community bank leverage ratio was established at 9%, effective January 1, 2021.

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A bank that ceases to meet any qualifying criteria is provided with a two-quarter grace period to comply with the community bank leverage ratio requirements or the general capital regulations by the federal regulators.

In addition, Section 4012 of the CARES Act required that the community bank leverage ratio be temporarily lowered to 8%.

The federal regulators issued a rule making the lower ratio effective April 23, 2020.

The rules also established a two-quarter grace period for a qualifying community bank whose leverage ratio falls below the 8% community bank leverage ratio requirement so long as the bank maintains a leverage ratio of 7% or greater.

Another rule was issued providing for the transition back to the 9% community bank leverage ratio, increasing the ratio to 8.5% for calendar year 2021 and to 9% thereafter.

As of December 31, 2022, the Bank had not elected the community bank leverage ratio alternative reporting framework.

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The guidelines address internal controls and information systems, the internal audit system, credit underwriting, loan documentation, interest rate exposure, asset growth, asset quality, earnings and compensation, fees and benefits.

The agencies have also established standards for safeguarding customer information.

The agencies have also

established standards for safeguarding customer information.

If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.

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Federal law requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with respect to banks that do not meet minimum capital requirements.

these purposes, the law establishes five capital categories:

For these purposes, the law establishes five capital categories:

well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

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An undercapitalized bank’s compliance with a capital restoration plan is required to be guaranteed by any company that controls the undercapitalized institution in an amount equal to the lesser of 5.0% of the institution’s total assets when deemed undercapitalized or the amount necessary to achieve the status of adequately capitalized.

If an “undercapitalized” bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” “Significantly undercapitalized” banks must comply with one or more of a number of additional restrictions, including but not limited to an order by the FDIC to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, cease receipt of deposits from correspondent banks or dismiss directors or officers, and restrictions on interest rates paid on deposits, compensation of executive officers and capital distributions by the parent holding company.

but not limited to an order by the FDIC to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, cease receipt of deposits from correspondent banks or dismiss directors or officers, and restrictions on interest rates paid on deposits, compensation of executive officers and capital distributions by the parent holding company.

“Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after it obtains such status.

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

(i) the approval of interstate

supervisory acquisitions by savings and loan holding companies;

(i) the approval of interstate supervisory acquisitions by savings and loan holding companies;

and (ii) the acquisition of a savings association in another state if the laws of the state of the target savings association specifically permit such acquisitions.

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The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.

policies, procedures and systems designed to comply with these regulations, and we review and document such policies, procedures and systems to ensure continued compliance with these regulations.

We have policies, procedures and systems designed to comply with these regulations, and we review and document such policies, procedures and systems to ensure continued compliance with these regulations.

Change in Control Regulations.

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Our executive officers are elected annually by the board of directors and serve at the board’s discretion.

The following individuals currently serve as our executive officers and will serve in the same positions following the conversion and offering:

The following individuals currently serve as our executive officers:

Chairman and Chief Executive Officer

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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 1. Business