NorthEast Community Bancorp, Inc./MD/ 10-Q

Item 1. Financial Statements NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2023 2022 ​ ​ (In thousands, except share ​ ​ and per share amounts) ASSETS ​ ​ ​ ​ ​ ​ Cash and amounts due from depository institutions ​ $ 15,727 ​ $ 13,210 Interest-bearing deposits ​ 90,996 ​ 82,098 Total cash and cash equivalents ​ 106,723 ​ 95,308 Certificates of deposit ​ 100 ​ 100 Equity securities ​ 17,714 ​ 18,041 Securities available-for-sale, at fair value ​ - ​ 1 Securities held-to-maturity (net of allowance for credit losses of $ 131 , fair value of  $ 11,909 and $ 22,865 , respectively) ​ 15,524 ​ 26,395 Loans receivable ​ 1,507,938 ​ 1,217,321 Deferred loan costs, net ​ ​ 232 ​ ​ 372 Allowance for credit losses ​ ​ ( 4,767 ) ​ ​ ( 5,474 ) Net loans ​ ​ 1,503,403 ​ 1,212,219 Premises and equipment, net ​ 25,523 ​ 26,063 Investments in restricted stock, at cost ​ 929 ​ 1,238 Bank owned life insurance ​ 24,926 ​ 25,896 Accrued interest receivable ​ 11,323 ​ 8,597 Goodwill ​ 200 ​ 200 Real estate owned ​ 1,456 ​ 1,456 Property held for investment ​ 1,417 ​ 1,444 Right of Use Assets – Operating ​ 1,935 ​ 2,312 Right of Use Assets – Financing ​ 352 ​ 355 Other assets ​ 8,420 ​ 5,338 Total assets ​ $ 1,719,945 ​ $ 1,424,963 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Liabilities: ​ ​ Deposits: ​ ​ Non-interest bearing ​ $ 309,190 ​ $ 376,302 Interest bearing ​ 1,056,444 ​ 745,653 Total deposits ​ 1,365,634 ​ 1,121,955 Advance payments by borrowers for taxes and insurance ​ 2,510 ​ 2,369 Borrowings ​ 64,000 ​ 21,000 Lease Liability – Operating ​ 1,991 ​ 2,363 Lease Liability – Financing ​ 561 ​ 533 Accounts payable and accrued expenses ​ 12,836 ​ 14,754 Total liabilities ​ 1,447,532 ​ 1,162,974 ​ See notes to interim unaudited consolidated financial statements. ​ 3 Table of Contents NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (continued) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2023 2022 ​ ​ (In thousands, except share ​ ​ and per share amounts) Stockholders’ equity: ​ ​ Preferred stock, $ 0.01 par value; 25,000,000 shares authorized; none issued or outstanding $ — $ — Common stock, $ 0.01 par value; 75,000,000 shares authorized; 14,481,614 shares and 16,049,454 shares issued and outstanding , respectively ​ ​ 145 ​ ​ 161 Additional paid-in capital ​ 114,669 ​ ​ 136,434 Unearned Employee Stock Ownership Plan (“ESOP”) shares ​ ( 6,780 ) ​ ​ ( 7,432 ) Retained earnings ​ 164,201 ​ ​ 132,670 Accumulated other comprehensive income ​ 178 ​ ​ 156 Total stockholders’ equity ​ 272,413 ​ 261,989 Total liabilities and stockholders’ equity ​ $ 1,719,945 ​ $ 1,424,963 ​ ​ ​ ​ ​ ​ ​ ​ ​ See notes to interim unaudited consolidated financial statements. ​ 4 Table of Contents NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2023 2022 2023 2022 ​ ​ ​ (In thousands, except per share amounts) ​ INTEREST INCOME: ​ ​ ​ ​ ​ ​ Loans ​ $ 33,757 ​ $ 18,771 ​ $ 91,826 ​ $ 46,244 ​ Interest-earning deposits ​ 1,181 ​ ​ 414 ​ 2,886 ​ ​ 718 ​ Securities ​ 199 ​ ​ 199 ​ 650 ​ ​ 534 ​ Total Interest Income ​ 35,137 ​ 19,384 ​ 95,362 ​ 47,496 ​ INTEREST EXPENSE: ​ ​ ​ ​ ​ Deposits ​ 9,889 ​ ​ 1,786 ​ 23,050 ​ ​ 4,123 ​ Borrowings ​ 109 ​ ​ 129 ​ 299 ​ ​ 417 ​ Financing lease ​ 10 ​ ​ 9 ​ 28 ​ ​ 28 ​ Total Interest Expense ​ 10,008 ​ 1,924 ​ 23,377 ​ 4,568 ​ Net Interest Income ​ 25,129 ​ 17,460 ​ 71,985 ​ 42,928 ​ Provision for credit loss ​ 156 ​ ​ - ​ ​ 767 ​ ​ - ​ Net Interest Income after Provision for Credit Loss ​ 24,973 ​ 17,460 ​ 71,218 ​ 42,928 ​ NON-INTEREST INCOME: ​ ​ ​ ​ ​ Other loan fees and service charges ​ 364 ​ ​ 544 ​ 1,417 ​ ​ 1,562 ​ Gain on disposition of equipment ​ - ​ ​ 52 ​ - ​ ​ 98 ​ Earnings on bank owned life insurance ​ 153 ​ ​ 153 ​ 857 ​ ​ 450 ​ Investment advisory fees ​ 114 ​ ​ 107 ​ 343 ​ ​ 364 ​ Unrealized loss on equity securities ​ ( 430 ) ​ ​ ( 573 ) ​ ( 327 ) ​ ​ ( 1,636 ) ​ Other ​ 20 ​ ​ 26 ​ 67 ​ ​ 66 ​ Total Non-Interest Income ​ 221 ​ 309 ​ 2,357 ​ 904 ​ NON-INTEREST EXPENSES: ​ ​ ​ ​ ​ Salaries and employee benefits ​ 4,700 ​ ​ 3,979 ​ 14,079 ​ ​ 11,420 ​ Occupancy expense ​ 616 ​ ​ 598 ​ 1,890 ​ ​ 1,763 ​ Equipment ​ 240 ​ ​ 259 ​ 844 ​ ​ 825 ​ Outside data processing ​ 569 ​ ​ 473 ​ 1,638 ​ ​ 1,388 ​ Advertising ​ 133 ​ ​ 78 ​ 420 ​ ​ 183 ​ Real estate owned expense ​ 11 ​ ​ 199 ​ 52 ​ ​ 252 ​ Other ​ 2,646 ​ ​ 2,237 ​ 7,064 ​ ​ 6,220 ​ Total Non-Interest Expenses ​ 8,915 ​ 7,823 ​ 25,987 ​ 22,051 ​ INCOME BEFORE PROVISION FOR INCOME TAXES ​ 16,279 ​ 9,946 ​ 47,588 ​ 21,781 ​ PROVISION FOR INCOME TAXES ​ 4,436 ​ ​ 2,404 ​ 13,413 ​ ​ 5,201 ​ NET INCOME ​ $ 11,843 ​ $ 7,542 ​ $ 34,175 ​ $ 16,580 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EARNINGS PER COMMON SHARE – BASIC ​ $ 0.80 ​ $ 0.49 ​ $ 2.42 ​ $ 1.07 ​ EARNINGS PER COMMON SHARE – DILUTED ​ 0.80 ​ ​ 0.49 ​ ​ 2.41 ​ ​ 1.07 ​ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC ​ ​ 14,743 ​ ​ 15,536 ​ ​ 14,143 ​ ​ 15,515 ​ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED ​ ​ 14,822 ​ ​ 15,536 ​ 14,192 ​ 15,515 ​ ​ See notes to interim unaudited consolidated financial statements. ​ 5 Table of Contents NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2023 2022 2023 2022 ​ ​ ​ (In thousands) ​ (In thousands) ​ Net Income ​ $ 11,843 ​ $ 7,542 ​ $ 34,175 ​ $ 16,580 ​ Other comprehensive income: ​ ​ ​ ​ ​ Defined benefit pension: ​ ​ ​ ​ ​ ​ ​ Reclassification adjustments out of accumulated other comprehensive income: ​ ​ ​ ​ ​ Amortization of actuarial (gain) loss ​ ( 8 ) ​ ​ 7 ​ ( 24 ) ​ 20 ​ Actuarial loss arising during period ​ 18 ​ ​ 23 ​ 54 ​ 63 ​ Total ​ 10 ​ 30 ​ 30 ​ 83 ​ Income tax effect ¹ ​ ( 3 ) ​ ( 7 ) ​ ( 8 ) ​ ( 19 ) ​ Total other comprehensive income ​ 7 ​ 23 ​ 22 ​ 64 ​ Total Comprehensive Income ​ $ 11,850 ​ $ 7,565 ​ $ 34,197 ​ $ 16,644 ​ ¹ Amounts are included in provision for income taxes in the consolidated statements of income. ​ See notes to interim unaudited consolidated financial statements. ​ 6 Table of Contents NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ Number of ​ Common ​ Paid- in ​ Unearned ​ Retained ​ Comprehensive ​ ​ ​ ​ Shares, net Stock Capital ESOP Shares Earnings Income Total ​ ​ (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance – December 31, 2022 ​ ​ 16,049,454 ​ $ 161 ​ $ 136,434 ​ $ ( 7,432 ) ​ $ 132,670 ​ $ 156 ​ $ 261,989 Net income ​ — ​ — ​ — ​ — ​ 11,244 ​ — ​ 11,244 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 7 ​ 7 Cash dividend declared ($ 0.06 per share) ​ — ​ — ​ — ​ — ​ ( 875 ) ​ — ​ ( 875 ) Stock repurchases ​ ​ ( 723,626 ) ​ ​ ( 8 ) ​ ​ ( 10,514 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 10,522 ) Compensation expense related to restricted stock awards ​ ​ — ​ ​ — ​ ​ 241 ​ ​ — ​ ​ — ​ ​ — ​ ​ 241 Compensation expense related to stock options ​ ​ — ​ ​ — ​ ​ 192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 192 Cumulative effect of adoption of ASU 2016-13 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 99 ) ​ ​ — ​ ​ ( 99 ) ESOP shares earned ​ — ​ — ​ 109 ​ 217 ​ — ​ — ​ 326 Balance - March 31, 2023 ​ ​ 15,325,828 ​ $ 153 ​ $ 126,462 ​ $ ( 7,215 ) ​ $ 142,940 ​ $ 163 ​ $ 262,503 Net income ​ — ​ — ​ — ​ — ​ 11,087 ​ — ​ 11,087 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 8 ​ 8 Cash dividend declared ($ 0.06 per share) ​ — ​ — ​ — ​ — ​ ( 845 ) ​ — ​ ( 845 ) Stock repurchases ​ ​ ( 288,890 ) ​ ​ ( 3 ) ​ ​ ( 3,917 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,920 ) Compensation expense related to restricted stock awards ​ ​ — ​ ​ — ​ ​ 241 ​ ​ — ​ ​ — ​ ​ — ​ ​ 241 Compensation expense related to stock options ​ ​ — ​ ​ — ​ ​ 192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 192 ESOP shares earned ​ — ​ — ​ 76 ​ 218 ​ — ​ — ​ 294 Balance - June 30, 2023 ​ ​ 15,036,938 ​ $ 150 ​ $ 123,054 ​ $ ( 6,997 ) ​ $ 153,182 ​ $ 171 ​ $ 269,560 Net income ​ — ​ — ​ — ​ — ​ 11,843 ​ — ​ 11,843 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 7 ​ 7 Cash dividend declared ($ 0.06 per share) ​ — ​ — ​ — ​ — ​ ( 824 ) ​ — ​ ( 824 ) Stock repurchases ​ ​ ( 555,324 ) ​ ​ ( 5 ) ​ ​ ( 8,941 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,946 ) Compensation expense related to restricted stock awards ​ ​ — ​ ​ — ​ ​ 241 ​ ​ — ​ ​ — ​ ​ — ​ ​ 241 Compensation expense related to stock options ​ ​ — ​ ​ — ​ ​ 192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 192 ESOP shares earned ​ — ​ — ​ 123 ​ 217 ​ — ​ — ​ 340 Balance – September 30, 2023 ​ ​ 14,481,614 ​ $ 145 ​ $ 114,669 ​ $ ( 6,780 ) ​ $ 164,201 ​ $ 178 ​ $ 272,413 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ Number of ​ Common ​ Paid- in ​ Unearned ​ Retained ​ Comprehensive ​ ​ ​ ​ Shares, net Stock Capital ESOP Shares Earnings Loss Total ​ ​ (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance – December 31, 2021 ​ ​ 16,377,936 ​ $ 164 ​ $ 145,335 ​ $ ( 8,301 ) ​ $ 114,323 ​ $ ( 139 ) ​ $ 251,382 Net income ​ — ​ — ​ — ​ — ​ 3,645 ​ — ​ 3,645 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 19 ​ 19 Cash dividend declared ($ 0.06 per share) ​ — ​ — ​ — ​ — ​ ( 931 ) ​ — ​ ( 931 ) ESOP shares earned ​ — ​ — ​ 41 ​ 217 ​ — ​ — ​ 258 Balance - March 31, 2022 ​ ​ 16,377,936 ​ $ 164 ​ $ 145,376 ​ $ ( 8,084 ) ​ $ 117,037 ​ $ ( 120 ) ​ $ 254,373 Net income ​ — ​ — ​ — ​ — ​ 5,393 ​ — ​ 5,393 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 22 ​ 22 Cash dividend declared ($ 0.06 per share) ​ — ​ — ​ — ​ — ​ ( 3,722 ) ​ — ​ ( 3,722 ) ESOP shares earned ​ — ​ — ​ 28 ​ 218 ​ — ​ — ​ 246 Balance - June 30, 2022 ​ ​ 16,377,936 ​ $ 164 ​ $ 145,404 ​ $ ( 7,866 ) ​ $ 118,708 ​ $ ( 98 ) ​ $ 256,312 Net income ​ — ​ — ​ — ​ — ​ 7,542 ​ — ​ 7,542 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 23 ​ 23 Cash dividend declared ($ 0.06 per share) ​ — ​ — ​ — ​ — ​ ( 916 ) ​ — ​ ( 916 ) Stock Repurchases ​ ​ ( 250,288 ) ​ ​ ( 3 ) ​ ​ ( 3,192 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,195 ) Restricted Stock Award ​ 86,880 ​ 1 ​ ( 1 ) ​ — ​ — ​ — ​ — ESOP shares earned ​ — ​ — ​ 54 ​ 217 ​ — ​ — ​ 271 Balance - September 30, 2022 ​ ​ 16,214,528 ​ $ 162 ​ $ 142,265 ​ $ ( 7,649 ) ​ $ 125,334 ​ $ ( 75 ) ​ $ 260,037 See notes to interim unaudited consolidated financial statements. ​ 7 Table of Contents NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2023 2022 ​ ​ ​ (In thousands) ​ Cash Flows from Operating Activities: ​ ​ ​ Net income ​ $ 34,175 ​ $ 16,580 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Net amortization of securities premiums and discounts, net ​ 19 ​ ​ 18 ​ Provision for credit losses ​ 767 ​ ​ - ​ Depreciation ​ 920 ​ ​ 892 ​ Net amortization of deferred loan fees and costs ​ 230 ​ ​ 377 ​ Deferred income tax benefit ​ ( 830 ) ​ ​ ( 1,235 ) ​ Unrealized loss recognized on equity securities ​ 327 ​ ​ 1,636 ​ Impairment of real estate owned ​ - ​ ​ 189 ​ Earnings on bank owned life insurance ​ ( 857 ) ​ ​ ( 450 ) ​ Gain on dispositions of premises and equipment ​ - ​ ​ ( 98 ) ​ ESOP compensation expense ​ 960 ​ ​ 775 ​ Compensation expense related to stock options ​ ​ 576 ​ ​ - ​ Compensation expense related to restricted stock ​ ​ 723 ​ ​ - ​ Increase in accrued interest receivable ​ ( 2,727 ) ​ ​ ( 2,352 ) ​ (Increase) decrease in other assets ​ ( 1,813 ) ​ ​ 417 ​ Decrease in accounts payable - loan closing ​ ​ ( 2,535 ) ​ ​ ( 2,520 ) ​ Increase in accounts payable and accrued expenses ​ 931 ​ ​ 218 ​ Net Cash Provided by Operating Activities ​ 30,866 ​ 14,447 ​ Cash Flows from Investing Activities: ​ ​ ​ Net increase in loans ​ ( 318,991 ) ​ ( 149,344 ) ​ Proceeds from sale of loans ​ 26,414 ​ 4,553 ​ Proceeds from bank owned life insurance ​ ​ 1,827 ​ ​ - ​ Principal repayments on securities available-for-sale ​ ​ 1 ​ ​ - ​ Principal repayments on securities held-to-maturity ​ 10,791 ​ 1,168 ​ Purchase of securities held-to-maturity ​ ( 70 ) ​ ( 10,038 ) ​ Purchase of restricted stock ​ ​ ( 6 ) ​ ​ — ​ Redemptions of restricted stock ​ 315 ​ 331 ​ Purchases of premises and equipment ​ ( 380 ) ​ ( 3,236 ) ​ Net Cash Used in Investing Activities ​ ( 280,099 ) ​ ( 156,566 ) ​ Cash Flows from Financing Activities: ​ ​ ​ Net increase in deposits ​ 243,679 ​ 60,460 ​ Proceeds from FRB borrowing ​ ​ 50,000 ​ ​ — ​ Repayment of FHLB of NY advances ​ ( 7,000 ) ​ ( 7,000 ) ​ Stock repurchases ​ ​ ( 23,388 ) ​ ​ ( 3,195 ) ​ Increase in advance payments by borrowers for taxes and insurance ​ 142 ​ 413 ​ Cash dividends paid ​ ( 2,785 ) ​ ( 5,896 ) ​ Net Cash Provided by Financing Activities ​ 260,648 ​ 44,782 ​ Net Increase (Decrease) in Cash and Cash Equivalents ​ 11,415 ​ ( 97,337 ) ​ Cash and Cash Equivalents – Beginning ​ 95,308 ​ 152,269 ​ Cash and Cash Equivalents – Ending ​ $ 106,723 ​ $ 54,932 ​ See notes to interim unaudited consolidated financial statements. ​ 8 Table of Contents NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2023 2022 ​ ​ ​ (In thousands) ​ Supplementary Cash Flows Information: ​ ​ ​ Income taxes paid ​ $ 16,396 ​ $ 5,485 ​ Interest paid ​ $ 23,106 ​ $ 4,491 ​ Supplementary Disclosure of Non-Cash Investing and Financing Activities: ​ ​ ​ Dividends declared and not paid ​ $ 872 ​ $ 968 ​ ​ See notes to interim unaudited consolidated financial statements. ​ ​ 9 Table of Contents ​ NORTHEAST COMMUNITY BANCORP, INC. Notes to Condensed Consolidated Financial Statements (Dollars in thousands, unless otherwise stated) (Unaudited) NORTHEAST COMMUNITY BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Summary of Significant Accounting Policies The following is a description of the Company’s business and significant accounting and reporting policies: Nature of Business: Northeast Community Bancorp, Inc. (the “Company”) is a Maryland corporation that was incorporated in May 2021 to be the successor to NorthEast Community Bancorp, Inc., a federally chartered corporation (the “Mid-Tier Holding Company”), upon completion of the second-step conversion of NorthEast Community Bank (the “Bank”) from the two-tier mutual holding company structure to the stock holding company structure. NorthEast Community Bancorp, MHC was the former mutual holding company for the Mid-Tier Holding Company prior to the completion of the second-step conversion. In conjunction with the second-step conversion, each of NorthEast Community Bancorp, MHC and the Mid-Tier Holding Company merged out of existence and now cease to exist. The second-step conversion was completed on July 12, 2021, at which time the Company sold, for gross proceeds of $ 97.8 million, a total of 9,784,077 shares of common stock at $ 10.00 per share. As part of the second-step conversion, each of the existing outstanding shares of Mid-Tier Holding Company common stock owned by persons other than NorthEast Community Bancorp, MHC was converted into 1.3400 shares of Company common stock. 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 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 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. The Bank offers a variety of retail deposit products to the general public in the areas surrounding its main office and its branch offices, with interest rates that are competitive with those of similar products offered by other financial institutions operating in its market area. The Bank also utilizes borrowings as a source of funds. The Bank’s revenues are derived primarily from interest on loans and, to a lesser extent, interest on investment securities and mortgage-backed securities. The Bank also generates revenues from other income including deposit fees, service charges and investment advisory fees. The Bank also offers investment advisory and financial planning services under the name Harbor West Wealth Management Group, a division of the Bank, through a networking arrangement with a registered broker-dealer and investment advisor. New England Commercial Properties LLC (“NECP”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in October 2007 to facilitate the purchase or lease of real property by the Bank. New England Commercial Properties, LLC currently owns one foreclosed property located in Pennsylvania. 10 Table of Contents NECB Financial Services Group, LLC (“NECB Financial”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in the third quarter of 2012 as a complement to Harbor West Wealth Management Group to sell life insurance and fixed rate annuities. NECB Financial is licensed in the States of New York and Connecticut. 72 West Eckerson LLC (“72 West Eckerson”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in April 2015 to facilitate the purchase or lease of real property by the Bank and currently owns the Bank branch locations in Spring Valley, New York and Monroe, New York. 166 Route 59 Realty LLC (“166 Route 59 Realty”), a New York limited liability company and wholly owned subsidiary of the Bank, was formed in April 2021 to facilitate the purchase or lease of real property by the Bank and currently owns the property for the Bank branch located in Airmont, New York. 3 Winterton Realty LLC, a New York limited liability company and wholly owned subsidiary of the Bank, was formed in October 2021 to facilitate the purchase or lease of real property by the Bank and currently owns the property for the Bank branch located in Bloomingburg, New York. Principal of Consolidations: The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank, NECP, NECB Financial, 72 West Eckerson, 166 Route 59 Realty, and 3 Winterton Realty LLC (collectively the “Company”) and have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant inter-company accounts and transactions have been eliminated in consolidation. The accounting and reporting policies of the Company and its subsidiaries conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and to the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations. The unaudited consolidated interim financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2022. In the opinion of the Company, all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the operating results for the interim periods have been included. The results of operations for periods of less than a year are not necessarily indicative of results for the full year or any other period. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Estimates that are particularly susceptible to change in the near term are used in connection with the determination of the allowance for credit losses, the review of the need for a valuation allowance of the Company’s deferred tax assets and the fair value of financial instruments. Accounting Pronouncements Adopted in 2023: Effective January 1, 2023, the Company adopted Accounting Standards Topic 326, “Financial Instruments – Credit Losses” which replaced the previously existing U.S. GAAP “incurred loss” approach to “expected credit losses” approach, which is referred as Current Expected Credit Losses (“CECL”). CECL measures the credit loss associated with financial assets carried at amortized cost, including loan receivables, held-to-maturity debt securities, off balance sheet credit exposures. The company adopted Topic 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balances sheet exposures. Results for reporting periods beginning after January 1, 2023 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. Upon adoption, we recorded a cumulative-effect adjustment totaling $ 134,000 , or $ 99,000 , net of tax, to reduce 11 Table of Contents retained earnings. The transition adjustment includes the adoption and changes to the three applicable components of the allowance for credit losses (“ACL”): a decrease of $ 1.6 million in the allowance for credit losses related to loans, an increase of $ 132,000 in the allowance for credit losses related to held-to-maturity debt securities, and an increase of $ 1.6 million in the allowance for credit losses related to off-balance sheet items. The following table illustrates the impact of adopting ASC 326: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2023 ​ ​ Pre-adoption ​ Adoption Impact ​ As Reported ​ ​ (In Thousands) Assets ​ ​ ​ ​ ​ ​ ACL on debt securities held-to-maturity ​ ​ ​ ​ ​ ​ Municipal Bonds $ - $ 132 $ 132 ACL on loan receivables ​ ​ ​ ​ ​ ​ Residential real estate ​ 528 ​ 895 ​ 1,423 Non-residential real estate ​ 131 ​ 7 ​ 138 Construction ​ 3,835 ​ ( 2,086 ) ​ 1,749 Commercial and industrial ​ 955 ​ ( 437 ) ​ 518 Consumer ​ 18 ​ 44 ​ 62 Unallocated ​ 7 ​ ( 7 ) ​ - ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ACL for off-balance sheet exposure ​ - ​ 1,586 ​ 1,586 ​ $ 5,474 $ 134 $ 5,608 ​ Allowance for Credit Losses - Loans The allowance for credit losses related to loans is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period. The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans. The allowance for credit losses related to loans is measured on a collective (pool) basis when similar risk characteristics exist. If the risk characteristics of a loan change, such that they are no longer similar to other loans in the pool, the Company will evaluate the loan with a different pool of loans that share similar risk characteristics. If the loan does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. The Company evaluates the pooling methodology at least annually. Loans are charged off against the allowance for credit losses related to loans when the Company believes the balances to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off. The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. Such segments include residential real estate, non-residential real estate, construction, commercial and industrial business, and consumer. For most segments the Company calculates estimated credit losses using a probability of default and loss given default methodology, the results of which are applied to each individual loan within the segment. The point in time probability of default and loss given default are then conditioned by macroeconomic scenarios to incorporate reasonable and supportable forecasts that affect the collectability of the reported amount. 12 Table of Contents The Company estimates the allowance for credit losses related to loans via a quantitative analysis which considers relevant available information from internal and external sources related to past events and current conditions, as well as the incorporation of reasonable and supportable forecasts. The Company evaluates a variety of factors including third party economic forecasts, industry trends and other available published economic information in arriving at its forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the renewal option is included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company. Also included in the allowance for credit losses related to loans are qualitative reserves to cover losses that are expected but, in the Company’s assessment, might not be adequately represented in the quantitative analysis or the forecasts described above. Factors that the Company considers include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and non-accrual loans, the effect of external factors such as competition, legal and regulatory requirements, among others. Qualitative loss factors are applied to each portfolio segment with the amounts judgmentally determined by the relative risk to the most severe loss periods identified in the historical loan charge-offs of the Company. The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income. 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. 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. Allowance for Credit Losses – Held-to-Maturity Debt Securities The allowance for credit losses related to held-to-maturity debt securities is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of held-to-maturity debt securities to present the net amount expected to be collected on the held-to-maturity debt securities. Losses, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When an investment is placed on non-accrual status, any outstanding accrued interest is reversed against interest income. Allowance for Credit Losses Related to Off-Balance Sheet Credit Exposures The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses related to off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. ​ Note 2 — Regulatory Capital The Company and the Bank are subject to regulatory capital requirements promulgated by the federal banking agencies. The Federal Reserve establishes capital requirements, including well capitalized standards, for the consolidated bank holding company, and the FDIC has similar requirements for the Company’s subsidiary bank. The Bank met all capital adequacy requirements to which it was subject as of September 30, 2023 and December 31, 2022. 13 Table of Contents The following table presents information about the Bank’s capital levels at the dates presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Regulatory Capital Requirements ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ For Classification as ​ ​ Actual ​ Adequacy(1) ​ Well-Capitalized ​ Amount Ratio Amount Ratio Amount Ratio ​ ​ (Dollars in Thousands) As of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 245,572 13.50 % $ ≥ 145,565 ≥ 8.00 % $ ≥ 181,957 ≥ 10.00 % Tier 1 capital (to risk-weighted assets) ​ 239,511 13.16 ​ ≥ 109,174 ≥ 6.00 ​ ≥ 145,565 ≥ 8.00 ​ Common equity tier 1 capital (to risk-weighted assets) ​ 239,511 13.16 ​ ≥ 81,880 ≥ 4.50 ​ ≥ 118,272 ≥ 6.50 ​ Core (Tier 1) capital (to adjusted total assets) ​ 239,511 14.70 ​ ≥ 65,185 ≥ 4.00 ​ ≥ 81,481 ≥ 5.00 ​ As of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 222,728 13.66 % $ ≥ 130,429 ≥ 8.00 % $ ≥ 163,036 ≥ 10.00 % Tier 1 capital (to risk-weighted assets) ​ 217,283 13.33 ​ ≥ 97,822 ≥ 6.00 ​ ≥ 130,429 ≥ 8.00 ​ Common equity tier 1 capital (to risk-weighted assets) ​ 217,283 13.33 ​ ≥ 73,366 ≥ 4.50 ​ ≥ 105,973 ≥ 6.50 ​ Core (Tier 1) capital (to adjusted total assets) ​ 217,283 16.50 ​ ≥ 52,687 ≥ 4.00 ​ ≥ 65,858 ≥ 5.00 ​ (1) Ratios do not include the capital conservation buffer. Based on the most recent notification by the FDIC, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action. There have been no conditions or events that have occurred since notification that management believes have changed the Bank’s category. ​ Note 3 — Equity Securities The following table is the schedule of equity securities at September 30, 2023 and December 31, 2022. The equity securities consists of our investment in a market-rate bond mutual fund that invests in high quality fixed income bonds, mainly government agency securities whose proceeds are designed to positively impact community development throughout the United States. The mutual fund focuses exclusively on providing affordable housing for low- and moderate-income borrowers and renters within our delineated lending areas, including those in majority minority census tracts. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2023 2022 ​ ​ ​ (In Thousands) ​ Equity Securities, at Fair Value ​ $ 17,714 ​ $ 18,041 ​ ​ The following is a summary of unrealized gain or loss recognized in net income on equity securities during the three and nine months ended September 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2023 2022 ​ 2023 2022 ​ ​ ​ (In Thousands) ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss recognized on equity securities during the period ​ $ 430 ​ $ 573 ​ $ 327 ​ $ 1,636 ​ Less: Net losses realized on the sale of equity securities during the period ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Unrealized net loss recognized on equity securities held at the reporting date ​ $ 430 ​ $ 573 ​ $ 327 ​ $ 1,636 ​ ​ ​ ​ 14 Table of Contents Note 4 — Securities Available-for-Sale The Company’s portfolio of securities available-for-sale totaled zero and $ 1,000 at September 30, 2023 and December 31, 2022, respectively. ​ The following table is the schedule of securities available-for-sale at December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Cost Gains Losses Value ​ (In Thousands) Mortgage-backed securities – residential: ​ ​ ​ ​ Federal Home Loan Mortgage Corporation ​ $ 1 ​ $ — ​ $ — ​ $ 1 ​ ​ $ 1 ​ $ — ​ $ — ​ $ 1 ​ There were no sales of securities available-for-sale as of September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, the Company had no unrealized loss. ​ ​ ​ Note 5 — Securities Held-to-Maturity The following table summarizes the Company’s portfolio of securities held-to-maturity at September 30, 2023 and December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ Allowance ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ for ​ Cost Gains Losses ​ Value ​ Credit Loss ​ ​ (In Thousands) Mortgage-backed securities – residential: ​ ​ ​ ​ ​ ​ ​ ​ Government National Mortgage Association ​ $ 474 ​ $ ​ ​ $ 17 ​ $ 457 ​ $ — Federal Home Loan Mortgage Corporation ​ 890 ​ — ​ 147 ​ ​ 743 ​ — Federal National Mortgage Association ​ 2,060 ​ — ​ 274 ​ ​ 1,786 ​ — Collateralized mortgage obligations – GSE ​ 2,930 ​ — ​ 723 ​ ​ 2,207 ​ — Total mortgage-backed securities ​ ​ 6,354 ​ ​ — ​ ​ 1,161 ​ ​ 5,193 ​ ​ — Municipal Bonds ​ ​ 9,301 ​ ​ — ​ ​ 2,585 ​ ​ 6,716 ​ ​ 131 ​ ​ $ 15,655 ​ $ — ​ $ 3,746 ​ $ 11,909 ​ $ 131 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Cost Gains Losses Value ​ ​ (In Thousands) Mortgage-backed securities – residential: ​ ​ ​ ​ Government National Mortgage Association ​ $ 523 ​ $ — ​ $ 18 ​ $ 505 Federal Home Loan Mortgage Corporation ​ 961 ​ — ​ 129 ​ 832 Federal National Mortgage Association ​ 2,308 ​ — ​ 250 ​ 2,058 Collateralized mortgage obligations – GSE ​ 3,043 ​ — ​ 506 ​ 2,537 Total mortgage-backed securities ​ ​ 6,835 ​ ​ — ​ ​ 903 ​ ​ 5,932 Municipal Bonds ​ ​ 9,546 ​ ​ — ​ ​ 2,524 ​ ​ 7,022 U.S. Treasury securities ​ ​ 10,014 ​ ​ — ​ ​ 103 ​ ​ 9,911 ​ ​ $ 26,395 ​ $ — ​ $ 3,530 ​ $ 22,865 ​ 15 Table of Contents Contractual final maturities of mortgage-backed securities and municipal bonds were as follows at September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ Amortized ​ Fair ​ Cost Value ​ (In Thousands) Due within one year ​ $ 562 ​ $ 467 Due after one but within five years ​ 1,667 ​ 1,281 Due after five but within ten years ​ 2,931 ​ 2,292 Due after ten years ​ 10,495 ​ 7,869 ​ ​ $ 15,655 ​ $ 11,909 ​ The maturities shown above are based upon contractual final maturity. Actual maturities will differ from contractual maturities due to scheduled monthly repayments and due to the underlying borrowers having the right to prepay their obligations. The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity: ​ ​ ​ ​ ​ ​ ​ Municipal ​ ​ Bonds Balance – December 31, 2022 ​ $ - Impact of adopting ASC 326 ​ ​ 132 Provision for credit loss ​ ​ 4 Balance – March 31, 2023 ​ $ 136 Provision for credit loss ​ ​ ( 1 ) Balance – June 30, 2023 ​ $ 135 Provision for credit loss ​ ​ ( 4 ) Balance – September 30, 2023 ​ $ 131 ​ ​ 16 Table of Contents The age of unrealized losses and the fair value of related securities held-to-maturity, for which an allowance for credit losses was not deemed necessary, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Value Losses Value Losses Value Losses ​ ​ (In Thousands) September 30, 2023: ​ ​ ​ ​ ​ ​ Mortgage-backed securities - residential: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government National Mortgage Association ​ $ — ​ $ — ​ $ 457 ​ $ 17 ​ $ 457 ​ $ 17 Federal Home Loan Mortgage Corporation ​ ​ — ​ ​ — ​ ​ 743 ​ ​ 147 ​ ​ 743 ​ ​ 147 Federal National Mortgage Association ​ ​ — ​ ​ — ​ ​ 1,786 ​ ​ 274 ​ ​ 1,786 ​ ​ 274 Collateralized mortgage obligations – GSE ​ ​ — ​ ​ — ​ ​ 2,207 ​ ​ 723 ​ ​ 2,207 ​ ​ 723 Total mortgage-backed securities ​ ​ — ​ ​ — ​ ​ 5,193 ​ ​ 1,161 ​ ​ 5,193 ​ ​ 1,161 Municipal Bonds ​ ​ — ​ ​ — ​ ​ 6,716 ​ ​ 2,585 ​ ​ 6,716 ​ ​ 2,585 ​ ​ $ — ​ $ — ​ $ 11,909 ​ $ 3,746 ​ $ 11,909 ​ $ 3,746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Value Losses Value Losses Value Losses ​ ​ (In Thousands) December 31, 2022: ​ ​ ​ ​ ​ ​ Mortgage-backed securities - residential: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government National Mortgage Association ​ $ 505 ​ $ 18 ​ $ — ​ $ — ​ $ 505 ​ $ 18 Federal Home Loan Mortgage Corporation ​ ​ — ​ ​ — ​ ​ 824 ​ ​ 129 ​ ​ 824 ​ ​ 129 Federal National Mortgage Association ​ ​ 478 ​ ​ 33 ​ ​ 1,580 ​ ​ 217 ​ ​ 2,058 ​ ​ 250 Collateralized mortgage obligations – GSE ​ ​ 1,777 ​ ​ 344 ​ ​ 759 ​ ​ 162 ​ ​ 2,536 ​ ​ 506 Total mortgage-backed securities ​ ​ 2,760 ​ ​ 395 ​ ​ 3,163 ​ ​ 508 ​ ​ 5,923 ​ ​ 903 Municipal Bonds ​ ​ 444 ​ ​ 39 ​ ​ 6,579 ​ ​ 2,485 ​ ​ 7,023 ​ ​ 2,524 U.S. Treasury securities ​ ​ 9,911 ​ ​ 103 ​ ​ — ​ ​ — ​ ​ 9,911 ​ ​ 103 ​ ​ $ 13,115 ​ $ 537 ​ $ 9,742 ​ $ 2,993 ​ $ 22,857 ​ $ 3,530 ​ At September 30, 2023, thirty-two mortgage-backed securities and seven municipal bonds had unrealized loss due to interest rate volatility. Management concluded that the unrealized loss reflected above was temporary in nature since the unrealized loss was related primarily to market interest rate volatility, and not related to the underlying credit quality of the issuers of the securities. Additionally, the Company has the ability and intent to hold the securities for the time necessary to recover the amortized cost. At December 31, 2022, there were thirty-five mortgage-backed securities, six municipal bonds and two U.S. Treasury notes had unrealized loss due to interest rate volatility. Credit Quality Indicators ​ The held to maturity securities portfolio consists of agency mortgage-backed securities and municipal bonds. All agency mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The seven municipal bonds in the portfolio carry no lower than A ratings from the rating agencies at September 30, 2023 and have a long history of no credit losses. The Company regularly monitors the municipal bonds sector of the market and reviews collectability including such factors as the financial condition of the issuers as well as credit ratings in effect as of the reporting period. ​ Note 6 — Loans Receivable and the Allowance for Credit Losses Loans are stated at unpaid principal balances plus net deferred loan origination fees and costs less an allowance for credit losses. Interest on loans receivable is recorded on the accrual basis. An allowance for uncollected interest is 17 Table of Contents established on loans where management has determined that the borrowers may be unable to meet contractual principal and/or interest obligations or where interest or principal is 90 days or more past due, unless the loans are well secured with a reasonable expectation of collection. When a loan is placed on nonaccrual, an allowance for uncollected interest is established and charged against current income. Thereafter, interest income is not recognized unless the financial condition and payment record of the borrower warrant the recognition of interest income. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Interest on loans that have been restructured is accrued according to the renegotiated terms. Net loan origination fees and costs are deferred and amortized into interest income over the contractual lives of the related loans by use of the level yield method. Past due status of loans is based upon the contractual due date. Prepayment penalties received on loans which pay in full prior to the scheduled maturity are included in interest income in the period the prepayment penalties are collected. The composition of loans were as follows at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2023 2022 ​ ​ ​ (In Thousands) ​ Residential real estate: ​ ​ ​ One-to-four family ​ $ 5,303 ​ $ 5,467 ​ Multi-family ​ 175,699 ​ 123,385 ​ Mixed-use ​ 28,533 ​ 21,902 ​ Total residential real estate ​ 209,535 ​ 150,754 ​ Non-residential real estate ​ 20,289 ​ 25,324 ​ Construction ​ 1,168,909 ​ 930,628 ​ Commercial and industrial ​ 107,963 ​ 110,069 ​ Consumer ​ 1,242 ​ 546 ​ Total Loans ​ 1,507,938 ​ 1,217,321 ​ Deferred loan costs, net ​ 232 ​ 372 ​ Allowance for credit losses ​ ( 4,767 ) ​ ( 5,474 ) ​ ​ ​ $ 1,503,403 ​ $ 1,212,219 ​ ​ Loans serviced for the benefit of others totaled approximately $ 37.5 million and $ 22.4 million at September 30, 2023 and December 31, 2022, respectively. The value of mortgage servicing rights was not material at September 30, 2023 and December 31, 2022. The allowance for credit losses on loans represents management’s estimate of losses inherent in the loan portfolio as of the statement of financial condition date and is recorded as a reduction to loans. The allowance for credit losses is increased by the provision for credit losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for credit losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. The allowance for credit losses on loans is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the relevant available information from internal and external sources related to past events and current conditions, as well as the incorporation of reasonable and supportable forecasts. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. 18 Table of Contents The following tables summarize the allocation of the allowance for credit losses based upon the calculation methodology described in Note 1, and loans receivable by loan class and credit loss method at September 30, 2023 and December 31, 2022: At September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction Industrial Consumer Unallocated Total ​ ​ (In Thousands) Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ 2,108 ​ $ 110 ​ $ 1,917 ​ $ 485 ​ $ 147 ​ $ — ​ $ 4,767 Ending balance: individually evaluated for credit loss ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Ending balance: collectively evaluated for credit loss ​ $ 2,108 ​ $ 110 ​ $ 1,917 ​ $ 485 ​ $ 147 ​ $ — ​ $ 4,767 Loans receivable: ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ 209,535 ​ $ 20,289 ​ $ 1,168,909 ​ $ 107,963 ​ $ 1,242 ​ $ — ​ $ 1,507,938 Ending balance: individually evaluated for credit loss ​ $ — ​ $ — ​ $ 4,381 ​ $ — ​ $ — ​ $ — ​ $ 4,381 Ending balance: collectively evaluated for credit loss ​ $ 209,535 ​ $ 20,289 ​ $ 1,164,528 ​ $ 107,963 ​ $ 1,242 ​ $ — ​ $ 1,503,557 ​ ​ At December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ Construction ​ Industrial ​ Consumer ​ Unallocated ​ Total ​ ​ (In Thousands) Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ 528 ​ $ 131 ​ $ 3,835 ​ $ 955 ​ $ 18 ​ $ 7 ​ $ 5,474 Ending balance: individually evaluated for impairment ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Ending balance: collectively evaluated for impairment ​ $ 528 ​ $ 131 ​ $ 3,835 ​ $ 955 ​ $ 18 ​ $ 7 ​ $ 5,474 Loans receivable: ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ 150,754 ​ $ 25,324 ​ $ 930,628 ​ $ 110,069 ​ $ 546 ​ $ — ​ $ 1,217,321 Ending balance: individually evaluated for impairment ​ $ 855 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 855 Ending balance: collectively evaluated for impairment ​ $ 149,899 ​ $ 25,324 ​ $ 930,628 ​ $ 110,069 ​ $ 546 ​ $ — ​ $ 1,216,466 ​ ​ 19 Table of Contents The activity in the allowance for credit loss by loan class for the three and nine months ended September 30, 2023 and 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction Industrial Consumer Unallocated Total ​ ​ (In Thousands) Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance -June 30, 2023 ​ $ 1,559 ​ $ 118 ​ $ 2,123 ​ $ 515 ​ $ 85 ​ $ — ​ $ 4,400 Charge-offs ​ — ​ — ​ — ​ — ​ ( 71 ) ​ — ​ ( 71 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — Provision (Benefit) ​ 549 ​ ( 8 ) ​ ( 206 ) ​ ( 30 ) ​ 133 ​ — ​ 438 Balance -September 30, 2023 ​ $ 2,108 ​ $ 110 ​ $ 1,917 ​ $ 485 ​ $ 147 ​ $ — ​ $ 4,767 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction Industrial Consumer Unallocated Total ​ ​ (In Thousands) Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance - June 30, 2022 ​ $ 546 ​ $ 198 ​ $ 3,581 ​ $ 865 ​ $ 16 ​ $ 261 ​ $ 5,467 Charge-offs ​ — ​ — ​ — ​ — ​ ( 6 ) ​ — ​ ( 6 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — Provision (Benefit) ​ ( 151 ) ​ ( 55 ) ​ 312 ​ 66 ​ 25 ​ ( 197 ) ​ — Balance - September 30, 2022 ​ $ 395 ​ $ 143 ​ $ 3,893 ​ $ 931 ​ $ 35 ​ $ 64 ​ $ 5,461 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ Construction ​ Industrial ​ Consumer ​ Unallocated ​ Total ​ ​ (In Thousands) Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ Balance - December 31, 2022 ​ $ 528 ​ $ 131 ​ $ 3,835 ​ $ 955 ​ $ 18 ​ $ 7 ​ $ 5,474 Impact of adopting ASC 326 ​ ​ 895 ​ ​ 7 ​ ​ ( 2,086 ) ​ ​ ( 437 ) ​ ​ 44 ​ ​ ( 7 ) ​ ​ ( 1,584 ) Charge-offs ​ — ​ — ​ ( 159 ) ​ — ​ ( 127 ) ​ — ​ ( 286 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — Provision (Benefit) ​ 685 ​ ( 28 ) ​ 327 ​ ( 33 ) ​ 212 ​ — ​ 1,163 Balance - September 30, 2023 ​ $ 2,108 ​ $ 110 ​ $ 1,917 ​ $ 485 ​ $ 147 ​ $ — ​ $ 4,767 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ Construction ​ Industrial ​ Consumer ​ Unallocated ​ Total ​ ​ (In Thousands) Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ Balance - December 31, 2021 ​ $ 571 ​ $ 381 ​ $ 3,143 ​ $ 973 ​ $ 10 ​ $ 164 ​ $ 5,242 Charge-offs ​ — ​ — ​ — ​ — ​ ( 23 ) ​ — ​ ( 23 ) Recoveries ​ 189 ​ 53 ​ — ​ — ​ — ​ — ​ 242 Provision (Benefit) ​ ( 365 ) ​ ( 291 ) ​ 750 ​ ( 42 ) ​ 48 ​ ( 100 ) ​ — Balance - September 30, 2022 ​ $ 395 ​ $ 143 ​ $ 3,893 ​ $ 931 ​ $ 35 ​ $ 64 ​ $ 5,461 ​ During the three and nine months ended September 30, 2023, the provision expenses recorded for residential real estate loans were primarily attributed to the increased loan balances. During the three months ended September 30, 2023, the credit provision recorded for construction loans was due to decreased loan balances. During the nine months ended September 30, 2023, the provision expenses recorded for construction loans were primarily attributed to the increased loan balances. The Company has two individually evaluated loans, totaling $ 4.4 million, which were collateral-dependent construction loans, secured by multi-family real estate, at September 30, 2023. The two loans are secured by the same project located in the Bronx, New York, and are currently placed on non-accrual status. There was no interest income recognized from non-accrual loans as of September 30, 2023. There were no non-accrual loans at December 31, 2022. ​ 20 Table of Contents The following table shows our recorded investment, unpaid principal balance and allocated allowance for credit losses for loans that were considered nonperforming and impaired as of and for the periods presented: As of and for the Three and Nine Months Ended September 30, 2023 and September 30, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2023 ​ Nine Months Ended September 30, 2023 ​ Recorded Unpaid Principal Related Average Recorded Interest Income Average Recorded Interest Income 2023 - Nonperforming ​ Investment ​ Balance ​ Allowance ​ Investment ​ Recognized Investment ​ Recognized ​ ​ (In Thousands) With no related allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate-Multi-family ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Non-residential real estate ​ — ​ — ​ — ​ — ​ — ​ — ​ — Construction ​ 4,381 ​ 4,353 ​ — ​ 4,381 ​ — ​ 4,834 ​ — Commercial and industrial ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ 4,381 ​ 4,353 ​ — ​ 4,381 ​ — ​ 4,834 ​ — With an allowance recorded ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total: ​ ​ ​ ​ ​ ​ ​ Residential real estate-Multi-family ​ — ​ — ​ — ​ — ​ — ​ — ​ — Non-residential real estate ​ — ​ — ​ — ​ — ​ — ​ — ​ — Construction ​ 4,381 ​ 4,353 ​ — ​ 4,381 ​ — ​ 4,834 ​ — Commercial and industrial ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ $ 4,381 ​ $ 4,353 ​ $ — ​ $ 4,381 ​ $ — ​ $ 4,834 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2022 ​ Nine Months Ended September 30, 2022 ​ Recorded Unpaid Principal Related Average Recorded Interest Income Average Recorded Interest Income 2022 - Impaired ​ Investment ​ Balance ​ Allowance ​ Investment ​ Recognized Investment ​ Recognized ​ ​ (In Thousands) With no related allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate-Multi-family ​ $ 861 ​ $ 861 ​ $ — ​ $ 863 ​ $ 11 ​ $ 867 ​ $ 33 Non-residential real estate ​ — ​ — ​ — ​ 385 ​ — ​ 570 ​ 14 Construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial and industrial ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ 861 ​ 861 ​ — ​ 1,248 ​ 11 ​ 1,437 ​ 47 With an allowance recorded ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total: ​ ​ ​ ​ ​ ​ ​ Residential real estate-Multi-family ​ 861 ​ 861 ​ — ​ 863 ​ 11 ​ 867 ​ 33 Non-residential real estate ​ — ​ — ​ — ​ 385 ​ — ​ 570 ​ 14 Construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial and industrial ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ $ 861 ​ $ 861 ​ $ — ​ $ 1,248 ​ $ 11 ​ $ 1,437 ​ $ 47 ​ ​ 21 Table of Contents As of and for the Year Ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recorded Unpaid Principal Related Average Recorded Interest Income 2022 ​ Investment ​ Balance ​ Allowance ​ Investment ​ Recognized ​ ​ (In Thousands) With no related allowance recorded: ​ ​ ​ ​ ​ Residential real estate-Multi-family ​ $ 855 ​ $ 769 ​ $ — ​ $ 863 ​ $ 43 Non-residential real estate ​ — ​ — ​ — ​ 385 ​ ​ 14 Construction ​ — ​ — ​ — ​ — ​ ​ — Commercial and industrial ​ — ​ — ​ — ​ — ​ — ​ ​ 855 ​ 769 ​ — ​ 1,248 ​ 57 With an allowance recorded ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total: ​ ​ ​ ​ ​ Residential real estate-Multi-family ​ 855 ​ 769 ​ — ​ 863 ​ 43 Non-residential real estate ​ — ​ — ​ — ​ 385 ​ 14 Construction ​ — ​ — ​ — ​ — ​ — Commercial and industrial ​ — ​ — ​ — ​ — ​ — ​ ​ $ 855 ​ $ 769 ​ $ — ​ $ 1,248 ​ $ 57 ​ The following tables provide information about delinquencies in our loan portfolio at the dates indicated. Age Analysis of Past Due Loans as of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recorded ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment > ​ ​ 30 – 59 Days ​ 60 – 89 Days ​ Greater Than ​ Total Past ​ ​ ​ ​ Total Loans ​ 90 Days and ​ Past Due Past Due 90 Days Due Current Receivable Accruing ​ ​ (In Thousands) Residential real estate: ​ ​ ​ ​ ​ ​ ​ One- to four-family ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5,303 ​ $ 5,303 ​ $ — Multi-family ​ — ​ — ​ — ​ — ​ 175,699 ​ 175,699 ​ — Mixed-use ​ — ​ — ​ — ​ — ​ 28,533 ​ 28,533 ​ — Non-residential real estate ​ — ​ — ​ — ​ — ​ 20,289 ​ 20,289 ​ — Construction loans ​ — ​ — ​ 4,381 ​ 4,381 ​ 1,164,528 ​ 1,168,909 ​ — Commercial and industrial loans ​ — ​ — ​ — ​ — ​ 107,963 ​ 107,963 ​ — Consumer ​ — ​ — ​ — ​ — ​ 1,242 ​ 1,242 ​ — ​ ​ $ — ​ $ — ​ $ 4,381 ​ $ 4,381 ​ $ 1,503,557 ​ $ 1,507,938 ​ $ — ​ 22 Table of Contents Age Analysis of Past Due Loans as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recorded ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment ​ ​ 30 – 59 Days ​ 60 – 89 Days ​ Greater Than ​ Total Past ​ ​ ​ ​ Total Loans ​ > 90 Days and ​ Past Due Past Due 90 Days Due Current Receivable Accruing ​ ​ (In Thousands) Residential real estate: ​ ​ ​ ​ ​ ​ ​ One- to four-family ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5,467 ​ $ 5,467 ​ $ — Multi-family ​ — ​ 946 ​ — ​ 946 ​ 122,439 ​ 123,385 ​ — Mixed-use ​ — ​ — ​ — ​ — ​ 21,902 ​ 21,902 ​ — Non-residential real estate ​ — ​ — ​ — ​ — ​ 25,324 ​ 25,324 ​ — Construction loans ​ — ​ — ​ — ​ — ​ 930,628 ​ 930,628 ​ — Commercial and industrial loans ​ — ​ — ​ — ​ — ​ 110,069 ​ 110,069 ​ — Consumer ​ — ​ — ​ — ​ — ​ 546 ​ 546 ​ — ​ ​ $ — ​ $ 946 ​ $ — ​ $ 946 ​ $ 1,216,375 ​ $ 1,217,321 ​ $ — ​ Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings: Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses. Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values. ​ 23 Table of Contents The following table presents the risk category of loans at September 30, 2023 by loan segment and vintage year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Revolving ​ ​ ​ ​ Term Loans Amortized Costs Basis by Origination Year ​ Loans ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Converted ​ ​ September 30, 2023 ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ Prior ​ Cost Basis ​ to Term ​ Total Residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 53,643 $ 72,141 $ 24,440 $ 10,756 $ 1,345 $ 46,294 $ - $ - $ 208,619 Special Mention ​ ​ - ​ - ​ - ​ 916 ​ - ​ - ​ - ​ - ​ 916 Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 53,643 $ 72,141 $ 24,440 $ 11,672 $ 1,345 $ 46,294 $ - $ - $ 209,535 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ - $ 252 $ 2,131 $ 999 $ 382 $ 16,525 $ - $ - $ 20,289 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ - $ 252 $ 2,131 $ 999 $ 382 $ 16,525 $ - $ - $ 20,289 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 253,267 $ 543,534 $ 236,380 $ 56,220 $ 35,198 $ 39,929 $ - $ - $ 1,164,528 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ 4,381 ​ - ​ - ​ - ​ - ​ 4,381 Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 253,267 $ 543,534 $ 236,380 $ 60,601 $ 35,198 $ 39,929 $ - $ - $ 1,168,909 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ 159 $ - $ - $ 159 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 2,037 $ 8,701 $ 485 $ 520 $ 478 $ 2,313 $ 91,840 $ 1,589 $ 107,963 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 2,037 $ 8,701 $ 485 $ 520 $ 478 $ 2,313 $ 91,840 $ 1,589 $ 107,963 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,219 $ - $ - $ - $ - $ ​ $ 23 $ - $ 1,242 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 1,219 $ - $ - $ - $ - $ - $ 23 $ - $ 1,242 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ 127 $ - $ - $ - $ - $ - $ - $ - $ 127 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 310,166 $ 624,628 $ 263,436 $ 68,495 $ 37,403 $ 105,061 $ 91,863 $ 1,589 $ 1,502,641 Special Mention ​ ​ - ​ - ​ - ​ 916 ​ - ​ - ​ - ​ - ​ 916 Substandard ​ ​ - ​ - ​ - ​ 4,381 ​ - ​ - ​ - ​ - ​ 4,381 Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 310,166 $ 624,628 $ 263,436 $ 73,792 $ 37,403 $ 105,061 $ 91,863 $ 1,589 $ 1,507,938 ​ ​ ​ 24 Table of Contents The following table provides certain information related to the credit quality of our loan portfolio at December 31, 2022. Credit Risk Profile by Internally Assigned Grade as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ Non-residential ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction and Industrial Consumer Total ​ ​ (In Thousands) Grade: ​ ​ ​ ​ ​ ​ Pass ​ $ 148,953 ​ $ 25,324 ​ $ 930,628 ​ $ 110,069 ​ $ 546 ​ $ 1,215,520 Special Mention ​ 946 ​ — ​ — ​ — ​ — ​ 946 Substandard ​ 855 ​ — ​ — ​ — ​ — ​ 855 Doubtful ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ $ 150,754 ​ $ 25,324 ​ $ 930,628 ​ $ 110,069 ​ $ 546 ​ $ 1,217,321 ​ Modifications to Borrowers Experiencing Financial Difficulty: Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. There were no loans modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023 or the year ended December 31, 2022. Allowance for Credit Losses on Off-Balance Sheet Commitments: The following table presents the activity in the allowance for credit losses related to off-balance sheet commitments, that is included in Accounts Payable and Accrued Expenses on the consolidated statement of financial condition, for the three and nine months ended September 30, 2023: ​ ​ ​ ​ ​ ​ ​ Allowance for ​ ​ Credit Loss Balance – December 31, 2022 ​ $ - Impact of adopting ASC 326 ​ ​ 1,586 Provision for credit loss ​ ​ ( 200 ) Balance – March 31, 2023 ​ $ 1,386 Provision for credit loss ​ ​ 83 Balance – June 30, 2023 ​ $ 1,469 Provision for credit loss ​ ​ ( 278 ) Balance – September 30, 2023 ​ $ 1,191 ​ ​ ​ Note 7 — Real Estate Owned (“REO”) The Company owned one foreclosed property valued at approximately $ 1,456,000 at September 30, 2023 and $ 1,456,000 at December 31, 2022, consisting of an office building located in Pennsylvania. The property was acquired through foreclosure in December 2014. Further declines in real estate values may result in impairment charges in the future. Routine holding costs are charged to expense as incurred and improvements to real estate owned that enhance the value of the real estate are capitalized. REO expense recorded in the consolidated statements of income amounted to $ 11,000 and $ 200,000 for the three months, and $ 52,000 and $ 252,000 for the nine months ended September 30, 2023 and 2022, respectively. 25 Table of Contents ​ Note 8 — Federal Home Loan Bank of New York (“FHLB”) Advances Our borrowings include Federal Home Loan Bank of New York (“FHLB”) advances and short-term borrowings from the Discount Window at the Federal Reserve Bank of New York (“FRBNY”). FHLB advances are summarized as follows at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2023 ​ 2022 ​ ​ ​ Weighted Average ​ Weighted Average ​ ​ ​ Amount ​ Interest Rate ​ Amount ​ Interest Rate ​ ​ ​ (Dollars in Thousands) ​ Advances maturing in: ​ ​ ​ ​ One year or less ​ $ 7,000 ​ 2.86 % $ 7,000 ​ 2.83 % ​ After one to three years ​ ​ — — % ​ 7,000 2.86 % ​ After five years (due 2030) ​ 7,000 1.61 % 7,000 1.61 % ​ ​ ​ $ 14,000 2.24 % $ 21,000 2.43 % ​ ​ At September 30, 2023, none of the above advances were subject to early call or redemption features. All advances had fixed interest rates, with the remaining term of nine months for one advance and seven years for the other advance. At September 30, 2023, the advances were secured by a pledge of the Company’s investment in the capital stock of the FHLB and a blanket assignment of the Company’s otherwise unpledged qualifying mortgage loans. At September 30, 2023, these unpledged qualifying mortgage loans were not pledged to any company other than the FHLB. At September 30, 2023, the Company had the ability to borrow $ 31.3 million, net of $ 14.0 million in outstanding advances, from the FHLB and $ 8.0 million from Atlantic Community Bankers Bank (“ACBB”). ​ On August 30, 2023, the FRBNY approved the Company’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Company to borrow from the Discount Window at the FRBNY. As of September 30, 2023, the borrowing from FRBNY was $ 50.0 million, bearing an interest rate of 5.5 % and matures on December 22, 2023. The Company had an available borrowing limit of $ 739.4 million from the FRBNY as of September 30, 2023. ​ Note 9 — Benefits Plans ​ Outside Director Retirement Plan (“DRP”) The DRP is an unfunded non-contributory defined benefit pension plan covering all non-employee directors meeting eligibility requirements as specified in the plan document. The following table sets forth information regarding the components of net pension periodic expense measured as of September 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2023 2022 ​ 2023 2022 ​ ​ (Dollars In Thousands) ​ (Dollars In Thousands) Net periodic pension expense: ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 31 ​ $ 30 ​ ​ $ 93 ​ $ 90 Interest cost ​ 10 ​ ​ 14 ​ ​ 30 ​ 42 Actuarial (gain) loss recognized ​ ( 8 ) ​ ​ 7 ​ ​ ( 24 ) ​ 20 Total net periodic pension expense included in other non-interest expenses ​ $ 33 ​ $ 51 ​ ​ $ 99 ​ $ 152 ​ Unrecognized net loss of $ 18,000 and $ 23,000 for the three months, and $ 54,000 and $ 64,000 for the nine months ended September 30, 2023 and 2022, respectively, were included in accumulated other comprehensive income. 26 Table of Contents Supplemental Executive Retirement Plan (“SERP”) The SERP is a non-contributory defined benefit plan that covers certain officers of the Company. Under the SERP, each of these individuals will be entitled to receive upon retirement an annual benefit paid in monthly installments equal to 50 % of his average base salary in the three-year period preceding retirement. Each individual may also retire early and receive a reduced benefit upon the attainment of certain age and years of service combination. Additional terms related to death while employed, death after retirement, disability before retirement and termination of employment are fully described within the plan document. The benefit payment term is the greater of 15 years or the executives remaining life. No benefits are expected to be paid during the next five years . Expenses of $ 51,000 and $ 121,000 for the three months, and $ 162,000 and $ 361,000 for the nine months ended September 30, 2023 and 2022, respectively, were recorded for this plan and are reflected in the Consolidated Statements of Income under Salaries and Employee Benefits. Stock-Based Deferral Plan In June 2021, the Company established a stock-based deferral plan for eligible key executives and members of the Board of Directors of the Company to elect to defer compensation received from the Company for their services and make deemed investments of that deferred compensation in shares of the Company’s common stock. At September 30, 2023, the Company did not have any obligations under the plan. 401(k) Plan The Company maintains a 401(k) plan for all eligible employees. Participants are permitted to contribute from 1 % to 15 % or 60 % of their annual compensation up to the maximum permitted under the Internal Revenue Code. The Company provided no matching contribution during the three and nine months ended September 30, 2023 and 2022. Employee Stock Ownership Plan (“ESOP”) In conjunction with the Mid-Tier Holding Company’s public stock offering in 2006, the Bank established an ESOP for all eligible employees (substantially all full-time employees). The ESOP borrowed $ 5,184,200 from the Mid-Tier Holding Company and used those funds to acquire 518,420 shares of the Mid-Tier Holding Company common stock at $ 10.00 per share. The loan from the Mid-Tier Holding Company, which has been assumed by the Company, carries an interest rate of 8.25 % and is repayable in twenty annual installments through 2025. In conjunction with the Company’s second-step conversion offering, on July 12, 2021, the ESOP borrowed $ 7,827,260 from the Company and used those funds to acquire 782,726 shares of Company common stock at $ 10.00 per share. The loan from the Company carries an interest rate equal to 3.25 % and is repayable in fifteen annual installments through 2035. Each year, the Bank makes discretionary contributions to the ESOP equal to the principal and interest payment required on the loan from the Company. The ESOP may further pay down the principal balance of the loans by using dividends paid, if any, on the shares of Company common stock it owns. The balance remaining on the first ESOP loan was $ 1,327,000 at September 30, 2023 and December 31, 2022. The balance remaining on the second ESOP loan was $ 6,850,000 at September 30, 2023 and December 31, 2022. Shares purchased with the loan proceeds serve as collateral for the loan and are held in a suspense account for future allocation among ESOP participants. As the loan principal is repaid, shares will be released from the suspense account and become eligible for allocation. The allocation among plan participants will be as described in the ESOP governing document. ESOP shares initially pledged as collateral were recorded as unearned ESOP shares in the stockholders’ equity section of the consolidated statement of financial condition. Thereafter, on a monthly basis over the terms of the ESOP loans, approximately 2,894 shares for the ESOP loan made in 2006 and approximately 4,348 shares for the ESOP loan made in 2021 are committed to be released respectively. Compensation expense is recorded equal to the shares committed to be released multiplied by the average closing price of the Company’s stock during that month. ESOP 27 Table of Contents expense totaled approximately $ 340,000 and $ 271,000 for the three months, and $ 960,000 and $ 775,000 for the nine months ended September 30, 2023 and 2022, respectively. Dividends on unallocated shares, which totaled approximately $ 47,000 and $ 52,000 for the three months, and $ 141,000 and $ 313,000 for the nine months ended September 30, 2023 and 2022, are recorded as a reduction of the ESOP loan. Dividends on allocated shares, which totaled approximately $ 42,000 and $ 36,000 for the three months, and $ 125,000 and $ 219,000 for the nine months ended September 30, 2023 and 2022, respectively, are charged to retained earnings. ESOP shares are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2023 ​ 2022 ​ Allocated shares ​ ​ 694,848 ​ 607,922 ​ Shares committed to be released ​ ​ 65,187 ​ 86,920 ​ Unearned shares ​ ​ 717,374 ​ 782,567 ​ Total ESOP Shares ​ ​ 1,477,409 ​ 1,477,409 ​ Less allocated shares distributed to former or retired employees ​ ​ ( 143,612 ) ​ ( 122,280 ) ​ Total ESOP Shares Held by Trustee ​ ​ 1,333,797 ​ 1,355,129 ​ Fair value of unearned shares ​ $ 10,588,440 ​ $ 11,675,897 ​ ​ ​ ​ Note 10 — Leases The Company has operating leases and finance leases all comprised of real estate property. The operating leases comprise substantially all of the Company’s obligations in which the Company is the lessee, with remaining lease terms ranging between 2 and 9 years . Most operating lease agreements consist of initial lease terms ranging between 5 and 10 years , with options to renew the leases or extend the term. The finance lease has a remaining lease term of 95 years . The payment structure of all leases is fixed rental payments with lease payments increasing on pre-determined dates at either a predetermined amount or change in the consumer price index. In accordance with ASC 842, the Company recognized operating and financing lease assets and corresponding lease liabilities related to office facilities and retail branches. The operating and financing lease assets represent the Company’s right to use an underlying asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments over the lease term. The Company has elected that any short term leases would be expensed as incurred. The operating and financing lease asset and lease liability are determined at the commencement date of the lease based on the present value of the lease payments. Our leases do not provide an implicit interest rate. The company used its incremental borrowing rate, the rate of interest to borrow in a collateralized basis for a similar term, at the lease commencement date. All of the leases are net leases and, therefore, do not contain non-lease components. The Company either pays directly or reimburses the lessor for property and casualty insurance cost and the property taxes assessed on the property, as well as a portion of the common area maintenance associated with the property which are categorized as non-components as outlined in the applicable guidance. ​ 28 Table of Contents At September 30, 2023 and December 31, 2022, the quantitative data relating to the Company’s leases are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 Finance Lease Amounts: ​ ​ ​ ROU asset ​ $ 352 ​ $ 355 ​ Lease liability ​ $ 561 ​ $ 533 ​ Operating Lease Amounts: ​ ​ ​ ​ ​ ROU assets ​ $ 1,935 ​ $ 2,312 ​ Lease liabilities ​ $ 1,991 ​ $ 2,363 ​ Weighted-average remaining lease term ​ ​ ​ Finance lease ​ 93 years ​ 94 years ​ Operating leases ​ 5.80 years ​ 6.19 years ​ Weighted-average discount rate ​ ​ ​ Finance lease ​ 9.50 % 9.50 % Operating leases ​ 1.40 % 1.50 % ​ The components of lease expense and cash flow information related to leases as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Nine Months Ended September 30, ​ ​ 2023 2022 2023 2022 ​ ​ (Dollars In Thousands) ​ (Dollars In Thousands) ​ Finance Lease Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of ROU asset ​ $ 1 ​ ​ 1 ​ $ 3 ​ $ 3 ​ Interest on lease liability ​ $ 10 ​ ​ 9 ​ $ 28 ​ $ 28 ​ Operating Lease Costs ​ $ 127 ​ ​ 140 ​ $ 380 ​ $ 423 ​ Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease ​ $ — ​ ​ — ​ $ — ​ $ — ​ Operating leases ​ $ 125 ​ ​ 279 ​ $ 373 ​ $ 417 ​ ​ Maturities of lease liabilities at September 30, 2023 are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Finance ​ ​ Leases ​ Lease Years ended December 31: ​ ​ ​ ​ ​ ​ 2023 ​ $ 92 ​ $ 7 2024 ​ 436 ​ 30 2025 ​ 398 ​ 30 2026 ​ 235 ​ 31 2027 ​ 239 ​ 33 Thereafter ​ 636 ​ 4,016 Total lease payments ​ $ 2,036 ​ $ 4,147 Interest ​ ( 45 ) ​ ( 3,586 ) Lease liability ​ $ 1,991 ​ $ 561 ​ ​ ​ Note 11 — Fair Value Disclosures The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company has to record at fair value other assets and liabilities on a non-recurring basis, such as securities held to maturity, impaired loans and other real estate owned. U.S. GAAP has 29 Table of Contents established a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 : Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). The level of the asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s assets that are carried at fair value on a recurring basis and the level that was used to determine their fair value at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ Total Carried ​ ​ Active Markets for ​ Observable ​ Unobservable ​ at Fair ​ ​ Identical Assets ​ Inputs ​ Inputs ​ Value on a ​ ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Recurring Basis ​ ​ September 30, ​ December 31, ​ September 30, ​ December 31, ​ September 30, ​ December 31, ​ September 30, ​ December 31, Description 2023 2022 2023 2022 2023 2022 2023 2022 Assets: ​ ​ ​ ​ ​ ​ ​ ​ Marketable equity securities: ​ ​ ​ ​ ​ ​ ​ ​ Mutual funds ​ $ 17,714 ​ $ 18,041 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 17,714 ​ $ 18,041 Mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ FHLMC ​ — ​ — ​ — ​ 1 ​ — ​ — ​ — ​ 1 Total assets ​ $ 17,714 ​ $ 18,041 ​ $ — ​ $ 1 ​ $ — ​ $ — ​ $ 17,714 ​ $ 18,042 ​ There were no transfers between Level 1 and 2 during the three and nine months ended September 30, 2023 or the year ended December 31, 2022. The Company did no t have any liabilities that were carried at fair value on a recurring basis at September 30, 2023 and December 31, 2022. The following table sets forth the Company’s assets that are carried at fair value on a non-recurring basis and the level that was used to determine their fair value, at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ Total Carried ​ ​ Active Markets for ​ Observable ​ Unobservable ​ at Fair ​ ​ Identical Assets ​ Inputs ​ Inputs ​ Value on a ​ ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Non-Recurring Basis ​ ​ September 30, ​ December 31, ​ September 30, ​ December 31, ​ September 30, ​ December 31, ​ September 30, ​ December 31, Description 2023 2022 2023 2022 2023 2022 2023 2022 ​ (In Thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 4,381 ​ $ 855 ​ $ 4,381 ​ $ 855 Real estate owned ​ — ​ — ​ — ​ — ​ 1,456 ​ 1,456 ​ 1,456 ​ 1,456 Total assets ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5,837 ​ $ 2,311 ​ $ 5,837 ​ $ 2,311 ​ 30 Table of Contents The following tables present the qualitative information about non-recurring Level 3 fair value measurements of financial instruments at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At September 30, 2023 ​ Fair Valuation Unobservable ​ Weighted ​ ​ Value ​ Technique ​ Input ​ Range ​ Average ​ ​ (In Thousands) Assets: ​ ​ ​ Loans individually evaluated ​ $ 4,381 ​ Income approach ​ Capitalization rate ​ 6.00 % 6.00 % Real estate owned ​ 1,456 Income approach Capitalization rate 12.00 % 12.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2022 ​ Fair Valuation Unobservable ​ Weighted ​ ​ Value ​ Technique ​ Input ​ Range ​ Average ​ ​ (In Thousands) Assets: ​ ​ ​ Impaired loans ​ $ 855 Income approach Capitalization rate 5.60 % 5.60 % Real estate owned ​ 1,456 Income approach Capitalization rate 12.00 % 12.00 % ​ The Company did no t have any liabilities that were carried at fair value on a non-recurring basis at September 30, 2023 and December 31, 2022. The methods and assumptions used to estimate fair value at September 30, 2023 and December 31, 2022 are as follows: For real estate owned, fair value is generally determined through independent appraisals or fair value estimations of the underlying properties which generally include various Level 3 inputs which are not identifiable. The appraisals or fair value estimation may be adjusted by management for qualitative reasons and estimated liquidation expenses. Management’s assumptions may include consideration of location and occupancy of the property and current economic conditions. Subsequently, as these properties are actively marketed, the estimated fair values may be periodically adjusted through incremental subsequent write-downs to reflect decreases in estimated values resulting from sales price observations and the impact of changing economic and market conditions. A loan is considered individually evaluated for credit loss when, based upon current information and events, it is probable that the Company will be unable to collect all scheduled payments in accordance with the contractual terms of the loan. Individually evaluated loans that are collateral dependent are written down to fair value through the establishment of specific reserves, a component of the allowance for credit losses or through partial charge-offs, and as such are carried at the lower of cost or the fair value. Estimates of fair value of the collateral are determined based on a variety of information, including available valuations from certified appraisers for similar assets, present value of discounted cash flows and inputs that are estimated based on commonly used and generally accepted industry liquidation advance rates and estimates and assumptions developed by management. The appraisals may be adjusted by management for estimated liquidation expenses and qualitative factors such as economic conditions. If real estate is not the primary source of repayment, present value of discounted cash flows and estimates using generally accepted industry liquidation advance rates are utilized. Due to the multitude of assumptions, many of which are subjective in nature, and the varying inputs and techniques used by appraisers, the Company recognizes that valuations could differ across a wide spectrum of valuation techniques employed and accordingly, fair value estimates for impaired loans are classified as Level 3. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective 31 Table of Contents dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end. The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at September 30, 2023 and December 31, 2022: Securities Fair values for marketable equity securities are determined by quoted market prices on nationally recognized and foreign securities exchanges (Level 1). Fair values for securities available for sale and held to maturity are determined utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the security’s terms and conditions, among other things. The carrying amounts and estimated fair value of our financial instruments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at September 30, 2023 ​ ​ ​ ​ ​ Quoted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Prices in ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ ​ ​ ​ Assets ​ Inputs ​ Inputs (In thousands) Amount Fair Value (Level 1) (Level 2) (Level 3) Financial Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 106,723 ​ $ 106,723 ​ $ 106,723 ​ $ — ​ $ — Certificates of deposit ​ ​ 100 ​ ​ 100 ​ ​ — ​ ​ 100 ​ ​ — Marketable equity securities ​ ​ 17,714 ​ ​ 17,714 ​ ​ 17,714 ​ ​ — ​ ​ — Securities available for sale ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Securities held to maturity ​ ​ 15,524 ​ ​ 11,909 ​ ​ — ​ ​ 11,909 ​ ​ — Loans receivable, net ​ ​ 1,503,403 ​ ​ 1,473,766 ​ ​ — ​ ​ — ​ ​ 1,473,998 Investments in restricted stock ​ ​ 929 ​ ​ 929 ​ ​ — ​ ​ 929 ​ ​ — Accrued interest receivable ​ ​ 11,323 ​ ​ 11,323 ​ ​ — ​ ​ 11,323 ​ ​ — Financial Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ 1,365,634 ​ ​ 1,360,276 ​ ​ — ​ ​ 1,360,276 ​ ​ — Borrowings ​ ​ 64,000 ​ ​ 62,707 ​ ​ — ​ ​ 62,707 ​ ​ — ​ 32 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at December 31, 2022 ​ ​ ​ ​ ​ ​ Quoted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Prices in ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ Carrying ​ ​ ​ ​ Assets ​ Inputs ​ Inputs (In thousands) Amount Fair Value (Level 1) (Level 2) (Level 3) Financial Assets ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 95,308 ​ $ 95,308 ​ $ 95,308 ​ $ — ​ $ — Certificates of deposit ​ ​ 100 ​ ​ 100 ​ ​ — ​ ​ 100 ​ ​ — Marketable equity securities ​ ​ 18,041 ​ ​ 18,041 ​ ​ 18,041 ​ ​ — ​ ​ — Securities available for sale ​ ​ 1 ​ ​ 1 ​ ​ — ​ ​ 1 ​ ​ — Securities held to maturity ​ ​ 26,395 ​ ​ 22,865 ​ ​ — ​ ​ 22,865 ​ ​ — Loans receivable, net ​ ​ 1,212,219 ​ ​ 1,191,483 ​ ​ — ​ ​ — ​ ​ 1,191,483 Investments in restricted stock ​ ​ 1,238 ​ ​ 1,238 ​ ​ — ​ ​ 1,238 ​ ​ — Accrued interest receivable ​ ​ 8,597 ​ ​ 8,597 ​ ​ — ​ ​ 8,597 ​ ​ — Financial Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ 1,121,955 ​ ​ 1,121,107 ​ ​ — ​ ​ 1,121,107 ​ ​ — FHLB of New York advances ​ ​ 21,000 ​ ​ 19,437 ​ ​ — ​ ​ 19,437 ​ ​ — ​ ​ ​ Note 12 — Revenue Recognition The majority of the Company’s revenues come from interest income and other sources, including loans and securities that are outside the scope of ASC 606, Revenue from Contracts with Customers. The Company’s services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include deposit service charges on deposits, electronic banking fees and charges income, and investment advisory fees. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as referral fees based month end reports. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of September 30, 2023, the Company did not have any significant contract balances. 33 Table of Contents All of the Company’s revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income. The following table presents the Company’s sources of noninterest income for the three and nine months ended September 30, 2023 and 2022. Sources of revenue outside the scope of ASC 606 are noted as such: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2023 2022 ​ 2023 2022 ​ ​ ​ (In Thousands) ​ (In Thousands) ​ Non-interest income: ​ ​ ​ ​ ​ ​ ​ Deposit-related fees and charges ​ $ 15 ​ $ 17 ​ $ 42 ​ $ 53 ​ Loan-related fees and charges (1) ​ 106 ​ ​ 308 ​ 652 ​ 861 ​ Electronic banking fees and charges ​ 243 ​ ​ 219 ​ 723 ​ 648 ​ Gain on disposition of equipment (1) ​ — ​ ​ 52 ​ — ​ 98 ​ Income from bank owned life insurance (1) ​ 153 ​ ​ 153 ​ 857 ​ 450 ​ Investment advisory fees ​ 114 ​ ​ 107 ​ 343 ​ 364 ​ Unrealized loss on equity securities (1) ​ ( 430 ) ​ ​ ( 573 ) ​ ( 327 ) ​ ( 1,636 ) ​ Miscellaneous (1) ​ 20 ​ ​ 26 ​ 67 ​ 66 ​ Total non-interest income ​ $ 221 ​ $ 309 ​ $ 2,357 ​ $ 904 ​ (1) Not within the scope of ASC 606. A description of the Company’s revenue streams accounted for under ASC 606 is as follows: Service Charges on Deposit Accounts The Company earns fees from deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed at the point in the time the Company fulfills the customer’s request. The Company discontinued the imposition of overdraft fees on all consumer and business accounts in August 2022. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Electronic Banking Fee Income The Company earns interchange fees from debit and credit card holder transactions conducted through various payment networks. Interchange fees from cardholder transactions are recognized daily, concurrently with the transaction processing services provided by an outsourced technology solution. Investment Advisory Fees The Company earns fees from investment advisory and financial planning services under the name of Harbor West Financial Planning Wealth Management, a division of the Company through a networking arrangement with a registered broker-dealer and investment advisor. The registered broker-dealer deducts investment advisory fees and financial planning services fees from the client’s assets under management and remits the fees, net of administrative fees, to the Company on a monthly basis. The Company recognizes the fees into non-interest income upon receipt of the monthly remittances. ​ ​ ​ ​ ​ 34 Table of Contents ​ Note 13 — Other Non-Interest Expenses The following is an analysis of other non-interest expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2023 2022 ​ 2023 2022 ​ ​ ​ (In Thousands) ​ (In Thousands) ​ Other ​ $ 1,105 ​ $ 751 ​ $ 2,771 ​ $ 2,088 ​ Service contracts ​ 364 ​ ​ 275 ​ 1,040 ​ 804 ​ Consulting expense ​ 191 ​ ​ 251 ​ 612 ​ 710 ​ Telephone ​ 167 ​ ​ 145 ​ 486 ​ 437 ​ Directors compensation ​ 217 ​ ​ 155 ​ 666 ​ 436 ​ Audit and accounting ​ 159 ​ ​ 163 ​ 376 ​ 463 ​ Insurance ​ 97 ​ ​ 95 ​ 290 ​ 273 ​ Director, officer, and employee expense ​ 62 ​ ​ 73 ​ 190 ​ 201 ​ Legal fees ​ 238 ​ ​ 283 ​ 474 ​ 640 ​ Office supplies and stationary ​ 44 ​ ​ 23 ​ 132 ​ 100 ​ Recruiting expense ​ 2 ​ ​ 23 ​ 27 ​ 68 ​ ​ ​ $ 2,646 ​ $ 2,237 ​ $ 7,064 ​ $ 6,220 ​ ​ ​ Note 14 — Earnings Per Share Basic earnings per share is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding during the period less any unvested restricted shares. Unallocated common shares held by the Employee Stock Ownership Plan (“ESOP”) are not included in the weighted-average number of common shares outstanding for purposes of calculating basic net income per common share until they are committed to be released. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock options and are determined using the treasury stock method. The following table sets forth the weighted average shares outstanding used in the computations of basic and diluted earnings per share. The following table sets forth the computations of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2023 2022 ​ 2023 2022 ​ ​ (In Thousands, except per share data) ​ (In Thousands, except per share data) Net income (basic and diluted) ​ $ 11,843 ​ $ 7,542 ​ $ 34,175 $ 16,580 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares issued ​ 15,855 ​ ​ 16,348 ​ ​ 15,233 ​ ​ 16,348 Less: Weighted average unearned ESOP shares ​ ( 769 ) ​ ​ ( 812 ) ​ ​ ( 747 ) ​ ​ ( 833 ) Less: Weighted average unvested restricted shares ​ ( 343 ) ​ ​ — ​ ( 343 ) ​ — Basic weighted average shares outstanding ​ 14,743 ​ ​ 15,536 ​ 14,143 ​ 15,515 Add: Dilutive effect of restricted stock ​ 76 ​ ​ — ​ 49 ​ — Add: Dilutive effect of stock option ​ 3 ​ ​ — ​ — ​ — Diluted weighted average shares outstanding ​ 14,822 ​ ​ 15,536 ​ ​ 14,192 ​ ​ 15,515 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.80 ​ $ 0.49 ​ $ 2.42 ​ $ 1.07 Diluted ​ $ 0.80 ​ $ 0.49 ​ $ 2.41 ​ $ 1.07 ​ ​ ​ ​ 35 Table of Contents Note 15 — Stock Compensation Plans At a special shareholders meeting held on September 29, 2022, the Company’s shareholders approved the Company’s 2022 Equity Incentive Plan whereby 1,369,771 shares of the Company’s common stock were reserved from authorized but unissued shares for purposes of grants of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, performance shares and performance units to selected employees and non-employee directors of the Company. Under this plan, 86,880 shares of restricted stock and 217,206 nonqualified stock options in the aggregate were awarded to six non-employee directors of the Company on September 30, 2022, and 265,157 shares of restricted stock and 662,891 nonqualified stock options were in the aggregate awarded to employees of the Company on November 17, 2022. The restricted shares and nonqualified stock options vest at a rate of 20 % per year from the date of the grants. The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted stock under the Company’s 2022 Equity Incentive plan. Management recognizes compensation expense for the fair value of restricted stock on a straight-line basis over the requisite service period for the entire award. As of September 30, 2023 and December 31, 2022, there were 137,637 shares available for future awards under this plan, which includes 98,311 shares available for stock options and 39,326 shares available for restricted stock awards. A summary of the Company’s restricted stock activity and related information for the three and nine months ended September 30, 2023 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant-Date ​ Shares Market Price Outstanding at December 31, 2022 ​ ​ 352,037 $ 13.67 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Vested ​ ​ — ​ — Outstanding at March 31, 2023 ​ ​ 352,037 ​ $ 13.67 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Vested ​ ​ — ​ — Outstanding at June 30, 2023 ​ ​ 352,037 ​ $ 13.67 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Vested ​ ​ 17,376 ​ — Outstanding at September 30, 2023 ​ ​ 334,661 ​ $ 13.67 ​ Compensation expense related to restricted stock was $ 241,000 and $ 723,000 for the three and nine months ended September 30, 2023. At September 30, 2023 and December 31, 2022, the total compensation cost related to non-vested awards that has not yet been recognized was $ 4.0 million and $ 4.7 million, respectively, which is expected to be recognized over the next 5 years. ​ 36 Table of Contents A summary of the Company’s stock option activity and related information for the three and nine months ended September 30, 2023 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant-Date ​ Options Market Price Outstanding at December 31, 2022 ​ ​ 880,097 $ 13.67 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Exercised ​ ​ — ​ — Outstanding at March 31, 2023 ​ ​ 880,097 ​ $ 13.67 Exercisable at March 31, 2023 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Exercised ​ ​ — ​ — Outstanding at June 30, 2023 ​ ​ 880,097 ​ $ 13.67 Exercisable at June 30, 2023 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Exercised ​ ​ — ​ — Outstanding at September 30, 2023 ​ ​ 880,097 ​ $ 13.67 Exercisable at September 30, 2023 ​ ​ 43,441 ​ ​ 13.67 ​ Compensation cost related to stock options is recognized based on the fair value of the stock options at the grant date on a straight line basis over the vesting period. Compensation expense related to stock options was $ 192,000 and $ 576,000 for the three and nine months ended September 30, 2023. At September 30, 2023 and December 31, 2022, unrecognized compensation cost related to stock option awards was $ 3.2 million and $ 3.7 million, respectively, which is expected to be recognized over the next 5 years. Note 16 — Recent Accounting Pronouncements In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718), which amends or supersedes various SEC paragraphs within the Codification to conform to past SEC announcements and guidance issued by the SEC. The ASU does not provide any new guidance so there is no transition or effective date associated with it. This ASU did not have a significant impact on the Company’s financial statements. ​ 37 Table of Contents