What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-09 · 176 added, 127 removed, 733 unchanged (29% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

September 30,

(In thousands, except share

29 unchanged sentences

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (continued)

September 30,

(In thousands, except share

16 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except share

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except

and per share amounts)

(In thousands, except

per share amounts)

INTEREST INCOME:

11 unchanged sentences

Investment advisory fees

Unrealized (loss) gain on equity securities

Unrealized gain (loss) on equity securities

Total Non-Interest Income

14 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

12 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three and Six Months Ended June 30, 2024 and 2023

Three and Nine Months Ended September 30, 2024 and 2023

Comprehensive

17 unchanged sentences

Balance - June 30, 2024

Other comprehensive income

Cash dividend declared ($ 0.15 per share)

Compensation expense related to restricted stock awards

Compensation expense related to stock options

Restricted Stock Award

ESOP shares earned

Balance – September 30, 2024

Comprehensive

16 unchanged sentences

Balance - June 30, 2023

Other comprehensive income

Cash dividend declared ($ 0.06 per share)

Stock repurchases

Compensation expense related to restricted stock awards

Compensation expense related to stock options

ESOP shares earned

Balance - September 30, 2023

See notes to interim unaudited consolidated financial statements .

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

2 unchanged sentences

Net amortization of securities premiums and discounts, net

Provision for (reversal of) credit losses

(Reversal of) provision for credit losses

Net (accretion) amortization of deferred loan fees and costs

Deferred income tax benefit

Unrealized loss (gain) recognized on equity securities

Unrealized (gain) loss recognized on equity securities

Impairment of real estate owned

Earnings on bank owned life insurance

5 unchanged sentences

Decrease in accounts payable - loan closing

Decrease in accounts payable and accrued expenses

(Decrease) increase in accounts payable and accrued expenses

Net Cash Provided by Operating Activities

5 unchanged sentences

Principal repayments on securities held-to-maturity

Purchase of marketable equity securities

Purchase of securities held-to-maturity

Purchase of restricted stock

4 unchanged sentences

Net increase in deposits

Proceeds from FRB borrowings

Repayment of FRB borrowings

2 unchanged sentences

Stock option exercised

Decrease in advance payments by borrowers for taxes and insurance

Increase in advance payments by borrowers for taxes and insurance

Cash dividends paid

6 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

2 unchanged sentences

Interest paid

Recognition of lease liability – finance

Dividends declared and not paid

46 unchanged sentences

Loan Concentration Risk:

The Company’s lending activity is concentrated in construction loans secured by the construction primarily of multi-family, residential condominium properties, and occasionally non-residential properties located in New York State and by occasionally the renovation of multi-family properties in Massachusetts.

As of June 30, 2024 and December 31, 2023, the Company had a majority of construction loans located in New York State, including $ 680.0 million and $ 626.0 million in the Bronx, $ 230.4 million and $ 198.5 million in the Town of Monroe, $ 124.6 million and $ 133.7 million in the Hamlet of Monsey, and $ 121.2 million and $ 105.9 million in the Village of Spring Valley.

At June 30, 2024, the Company had $ 75.9 million, or 5.7 %, of construction loans located in Rockland County, New York, related to office space or commercial use.

The Company’s lending activity is concentrated in construction loans secured by the construction primarily of multi-family, residential condominium properties, and occasionally non-residential properties located in New York State and occasionally by the renovation of multi-family properties in Massachusetts.

As of September 30, 2024 and December 31, 2023, the Company had a majority of construction loans located in New York State, including $ 679.3 million and $ 626.0 million in the Bronx, $ 240.9 million and $ 198.5 million in the Town of Monroe, $ 117.5 million and $ 133.7 million in the Hamlet of Monsey, and $ 135.1 million and $ 105.9 million in the Village of Spring Valley.

At September 30, 2024, the Company had $ 75.9 million, or 5.7 %, of construction loans located in Rockland County, New York, related to office space or commercial use.

Note 2 — Regulatory Capital

3 unchanged sentences

As a result, the Company will not be subject to the consolidated holding company capital requirement until such time as its consolidated assets exceed $3.0 billion.

The Bank met all capital adequacy requirements to which it was subject as of June 30, 2024 and December 31, 2023.

The Bank met all capital adequacy requirements to which it was subject as of September 30, 2024 and December 31, 2023.

The following table presents information about the Bank’s capital levels at the dates presented:

4 unchanged sentences

(Dollars in Thousands)

As of June 30, 2024:

As of September 30, 2024:

Total capital (to risk-weighted assets)

17 unchanged sentences

The following table sets forth the computations of basic and diluted earnings per share:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In Thousands, except per share data)

10 unchanged sentences

Note 4 — Equity Securities

The following table is the schedule of equity securities at June 30, 2024 and December 31, 2023.

The following table is the schedule of equity securities at September 30, 2024 and December 31, 2023.

Our equity securities portfolio 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.

5 unchanged sentences

government, are highly rated by major rating agencies and have a long history of no credit losses.

September 30,

(In Thousands)

Equity Securities, at Fair Value

The following is a summary of unrealized loss or gain recognized in net income on equity securities during the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30,

Six Months Ended June 30,

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, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

(In Thousands)

Net (loss) gain recognized on equity securities during the period

Net gain (loss) recognized on equity securities during the period

Net losses realized on the sale of equity securities during the period

Unrealized net (loss) gain recognized on equity securities held at the reporting date

Unrealized net gain (loss) recognized on equity securities held at the reporting date

Note 5 — Securities Held-to-Maturity

The following table summarizes the Company’s portfolio of securities held-to-maturity at June 30, 2024 and December 31, 2023.

June 30, 2024

The following table summarizes the Company’s portfolio of securities held-to-maturity at September 30, 2024 and December 31, 2023.

September 30, 2024

(In Thousands)

15 unchanged sentences

Municipal Bonds

Contractual final maturities of mortgage-backed securities and municipal bonds were as follows at June 30, 2024:

June 30, 2024

Contractual final maturities of mortgage-backed securities and municipal bonds were as follows at September 30, 2024:

September 30, 2024

(In Thousands)

5 unchanged sentences

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 activity in the allowance for credit losses for debt securities held-to-maturity for the three and six months ended June 30, 2024 and 2023 was as follows:

The activity in the allowance for credit losses for debt securities held-to-maturity for the three and nine months ended September 30, 2024 and 2023 was as follows:

Municipal Bonds

4 unchanged sentences

Balance – June 30, 2024

Provision for (reversal of) credit loss

Balance – September 30, 2024

Municipal Bonds

5 unchanged sentences

Balance – June 30, 2023

Provision for (reversal of) credit loss

Balance – September 30, 2023

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:

2 unchanged sentences

(In Thousands)

June 30, 2024:

September 30, 2024:

Mortgage-backed securities - residential:

14 unchanged sentences

Total mortgage-backed securities

At June 30, 2024, twenty-six mortgage-backed securities had unrealized losses due to interest rate volatility.

At September 30, 2024, nineteen mortgage-backed securities had unrealized losses 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 was 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.

Additionally, the Company has the ability and intent to hold the securities for the time necessary to recover

the amortized cost.

At December 31, 2023, there were thirty-two mortgage-backed securities that had unrealized losses due to interest rate volatility.

5 unchanged sentences

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 June 30, 2024 and have no realized losses since they were issued.

The seven municipal bonds in the portfolio carry no lower than A ratings from the rating agencies at September 30, 2024 and have no realized losses since they were issued.

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

The composition of loans was as follows at June 30, 2024 and December 31, 2023:

The composition of loans was as follows at September 30, 2024 and December 31, 2023:

September 30,

(In Thousands)

6 unchanged sentences

Allowance for credit losses

Loans serviced for the benefit of others totaled approximately $ 45.6 million and $ 40.7 million at June 30, 2024 and December 31, 2023, respectively.

The value of mortgage servicing rights was not material at June 30, 2024 and December 31, 2023.

Loans serviced for the benefit of others totaled approximately $ 50.7 million and $ 40.7 million at September 30, 2024 and December 31, 2023, respectively.

The value of mortgage servicing rights was not material at September 30, 2024 and December 31, 2023.

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.

6 unchanged sentences

This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The following tables summarize the allocation of the allowance for credit losses and loans receivable by loan class and credit loss method at June 30, 2024 and December 31, 2023:

At June 30, 2024:

The following tables summarize the allocation of the allowance for credit losses and loans receivable by loan class and credit loss method at September 30, 2024 and December 31, 2023:

At September 30, 2024:

(In Thousands)

25 unchanged sentences

collectively evaluated for credit loss

The activity in the allowance for credit loss by loan class for the three and six months ended June 30, 2024 and 2023 was as follows:

The activity in the allowance for credit loss by loan class for the three and nine months ended September 30, 2024 and 2023 was as follows:

(In Thousands)

Allowance for credit losses:

Balance -March 31, 2024

Provision (reversal of)

Balance - June 30, 2024

Provision (reversal of)

Balance - September 30, 2024

(In Thousands)

Allowance for loan losses:

Balance - March 31, 2023

Provision (Benefit)

Balance - June 30, 2023

Provision (Benefit)

Balance - September 30, 2023

(In Thousands)

2 unchanged sentences

Provision (reversal of)

Balance - June 30, 2024

Balance - September 30, 2024

(In Thousands)

3 unchanged sentences

Provision (Benefit)

Balance - June 30, 2023

During the three months ended June 30, 2024, the reversal of provision recorded for residential real estate loans was primarily attributed to reduced credit risk.

The provision expenses recorded for non-residential real estate loans and commercial and industrial loans were primarily attributed to the increased loan balances.

The reversal of provision recorded for consumer loans was primarily attributed to the reduced credit risk on deposit account overdrafts.

The reversal of provision recorded for constructions loans was primarily attributed to improving sub-market housing conditions during the second quarter of 2024, offset by slightly increased loan balances.

During the three months ended June 30, 2023, the provision expenses recorded for construction loans and residential real estate loans were primarily attributed to the increased loan balances.

The reversal of provision recorded for non-residential real estate loans and consumer loans were primarily attributed to the decreased loan and deposit account overdraft balances, respectively.

During the six months ended June 30, 2024, the reversal of provision recorded for residential real estate loans was primarily attributed to reduced credit risk and a slight decrease of loan balances.

The provision expenses recorded for non-residential real estate loans and commercial and industrial loans were primarily attributed to the increased loan

The provision expenses recorded for consumer loans was primarily attributed to increased deposit account overdraft balances.

The reversal of provision recorded for constructions loans was primarily attributed to improving economic and sub-market housing conditions during the six months ended June 30, 2024, offset by increased loan balances.

During the six months ended June 30, 2023, the provision expenses recorded for construction loans and residential real estate loans were primarily attributed to the increased loan balances.

The provision expenses recorded for consumer loans were primarily attributed to the increased deposit account overdraft balances.

The reversal of provision recorded on non-residential real estate loans and commercial and industrial loans were primarily attributed to decreased loan balances.

The Company had two individually evaluated loans, totaling $ 4.4 million, which are collateral-dependent construction loans, secured by multi-family real estate, at June 30, 2024 and December 31, 2023, respectively.

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 June 30, 2024 and 2023.

Balance - September 30, 2023

During the three months ended September 30, 2024, the reversal of provision recorded for residential real estate loans and commercial and industrial loans was primarily attributed to reduced credit risk.

The reversal of provision recorded for non-residential real estate loans was primarily attributed to decreased loan balances.

The provision expense recorded for consumer loans was primarily attributed to the increased balance on deposit account overdrafts.

The provision expense recorded for constructions loans was primarily attributed to increased loan balances, offset by improving sub-market housing conditions during the third quarter of 2024.

During the three months ended September 30, 2023, the provision expense recorded for residential real estate loans was primarily attributed to the increased loan balances.

The credit provision recorded for construction loans and commercial and industrial loans was primarily due to decreased loan balances.

The provision expense recorded for consumer loans was due to increased deposit account overdrafts.

During the nine months ended September 30, 2024, the reversal of provision recorded for residential real estate loans and commercial and industrial loans were primarily attributed to reduced credit risk.

The provision expenses recorded for non-residential real estate loans was primarily attributed to increased loan balances.

The provision expenses

recorded for consumer loans was primarily attributed to increased deposit account overdraft balances.

The reversal of provision recorded for constructions loans was primarily attributed to improving economic and sub-market housing conditions during the nine months ended September 30, 2024, offset by increased loan balances.

During the nine months ended September 30, 2023, the provision expenses recorded for construction loans and residential real estate loans were primarily attributed to increased loan balances.

The provision expenses recorded for consumer loans were primarily attributed to increased deposit account overdraft balances.

The Company had two individually evaluated loans, totaling $ 4.4 million, which are collateral-dependent construction loans, secured by multi-family real estate, at September 30, 2024 and December 31, 2023, respectively.

The two loans are secured by the same project located in the Bronx, New York, and were previously placed on non-accrual status.

There was no interest income recognized from non-accrual loans as of September 30, 2024 and 2023.

In October 2024, the Company successfully foreclosed on these two loans.

Following the foreclosure, the total loan balances were reclassed to foreclosed real estate owned on the statement of condition.

There was a $ 60,000 charge-off on the transaction to non-interest expenses on the statement of income for escrows of taxes and legal fees paid by the Company.

The following tables provide information about delinquencies in our loan portfolio at the dates indicated.

Age Analysis of Past Due Loans as of June 30, 2024:

Age Analysis of Past Due Loans as of September 30, 2024:

(In Thousands)

4 unchanged sentences

Commercial and industrial loans

In July 2024, the $ 924,000 multi-family loan past due over 60 days and two construction loans totaling $ 1.6 million past due over 30 days were brought current.

Age Analysis of Past Due Loans as of December 31, 2023:

16 unchanged sentences

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.

The following table presents the risk category of loans at June 30, 2024 by loan segment and vintage year:

The following table presents the risk category of loans at September 30, 2024 by loan segment and vintage year:

Term Loans Amortized Costs Basis by Origination Year

June 30, 2024

September 30, 2024

Residential real estate

38 unchanged sentences

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.

Occasionally, the Company modifies loans to borrowers in financial distress by providing term extension;

an other-than-insignificant payment delay;

or interest rate reduction.

In some cases, the Company provides multiple types of concessions on a 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 six months ended June 30, 2024 or the year ended December 31, 2023.

If the borrower continues to experience financial difficulty, another concession, such as interest rate reduction, may be granted.

There were no loans modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 or the year ended December 31, 2023.

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 six months ended June 30, 2024 and 2023:

Allowance for Credit Loss

4 unchanged sentences

Balance – June 30, 2024

Provision for (reversal of) credit loss

Balance – September 30, 2024

Allowance for Credit Loss

5 unchanged sentences

Balance – June 30, 2023

Provision for (reversal of) credit loss

Balance – September 30, 2023

Note 7 — Real Estate Owned (“REO”)

The Company owned one foreclosed property valued at approximately $ 1,456,000 at June 30, 2024 and December 31, 2023, respectively, consisting of an office building located in Pennsylvania.

The Company owned one foreclosed property valued at approximately $ 978,000 at September 30, 2024 and $ 1,456,000 at December 31, 2023, consisting of an office building located in Pennsylvania.

The property was acquired through foreclosure in December 2014.

1 unchanged sentence

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 $ 27,000 and $ 21,000 for the three months, and $ 39,000 and $ 41,000 for the six months ended June 30, 2024 and 2023, respectively.

During the third quarter ended September 30, 2024, the Company recorded a $ 478,000 impairment on the value of the property due to the deterioration of the office occupancy rate in the Pittsburgh business district office market due to workers continuing to work remotely post pandemic, the high operating expenses due to inflation, and the increased capitalization rate.

Therefore, REO expense recorded in the consolidated statements of income amounted to $ 488,000 and $ 11,000 for the three months, and $ 527,000 and $ 52,000 for the nine months ended September 30, 2024 and 2023, respectively.

Note 8 — Borrowings

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 June 30, 2024 and December 31, 2023:

FHLB advances are summarized as follows at September 30, 2024 and December 31, 2023:

September 30,

Weighted Average

8 unchanged sentences

After five years (due 2030)

At June 30, 2024, none of the above advances were subject to early call or redemption features.

All advances had fixed interest rates, with the remaining term of six years for the advance.

At June 30, 2024, 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 June 30, 2024, these unpledged qualifying mortgage loans were not pledged to any company other than the FHLB.

At June 30, 2024, the Company had the ability to borrow $ 29.6 million, net of $ 7.0 million in outstanding advances, from the FHLB and $ 8.0 million from Atlantic Community Bankers Bank (“ACBB”).

At September 30, 2024, none of the above advances were subject to early call or redemption features.

All advances had fixed interest rates, with a remaining term of six years .

At September 30, 2024, 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, 2024, these unpledged qualifying mortgage loans were not pledged to any company other than the FHLB.

At September 30, 2024, the Company had the ability to borrow $ 14.8 million, net of $ 7.0 million in outstanding advances, from the FHLB and $ 8.0 million from Atlantic Community Bankers Bank (“ACBB”).

In October 2024, the Company paid off the $ 7.0 million advance at the FHLB.

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 June 30, 2024 and December 31, 2023, the borrowing from FRBNY was $ 40.0 million and $ 50.0 million, and bears an interest rate of 5.5 % and 5.5 % , respectively.

This borrowing matures in September 2024.

The Company paid-off the $ 40.0 million borrowings in August 2024.

The Company had an available borrowing limit of $ 845.9 million from the FRBNY as of June 30, 2024.

As of September 30, 2024, there were no outstanding borrowings from the FRBNY.

At December 31, 2023, the borrowing from the FRBNY was $ 50.0 million, bearing an interest rate of 5.5 % .

The Company had an available borrowing limit of $ 832.1 million from the FRBNY as of September 30, 2024.

Note 9 — Benefits Plans

1 unchanged sentence

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 June 30, 2024 and 2023:

Three Months Ended June 30,

Six Months Ended June 30,

The following table sets forth information regarding the components of net pension periodic expense measured as of September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars In Thousands)

4 unchanged sentences

Total net periodic pension expense included in other non-interest expenses

Unrecognized net loss of $ 18,000 and $ 18,000 for the three months, and $ 36,000 and $ 36,000 for the six months ended June 30, 2024 and 2023, respectively, were included in accumulated other comprehensive income.

Unrecognized net loss of $ 18,000 for the three months, and $ 54,000 for the nine months ended September 30, 2024 and 2023, were included in accumulated other comprehensive income.

Supplemental Executive Retirement Plan (“SERP”)

5 unchanged sentences

No benefits are expected to be paid during the next five years .

Expenses of $ 131,000 and $ 51,000 for the three months, and $ 261,000 and $ 111,000 for the six months ended June 30, 2024 and 2023, respectively, were recorded for this plan and are reflected in the Consolidated Statements of Income under Salaries and Employee Benefits.

Expenses of $ 130,000 and $ 51,000 for the three months, and $ 391,000 and $ 162,000 for the nine months ended September 30, 2024 and 2023, 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 June 30, 2024, the Company did not have any obligations under the plan.

At September 30, 2024, the Company did not have any obligations under the 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 six months ended June 30, 2024 and 2023.

The Company provided no matching contribution during the three and nine months ended September 30, 2024 and 2023.

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 ESOP borrowed $ 5,184,200 from the Mid-Tier Holding Company and used those funds to acquire 518,420 shares of 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.

3 unchanged sentences

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 $ 919,000 at June 30, 2024 and December 31, 2023.

The balance remaining on the second ESOP loan was $ 6,417,000 at June 30, 2024 and December 31, 2023.

The balance remaining on the first ESOP loan was $ 919,000 at September 30, 2024 and December 31, 2023.

The balance remaining on the second ESOP loan was $ 6,417,000 at September 30, 2024 and December 31, 2023.

Shares purchased for the ESOP with the loan proceeds serve as collateral for the loan and are held in a suspense account for future allocation among ESOP participants.

4 unchanged sentences

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.

expense totaled approximately $ 352,000 and $ 294,000 for the three months, and $ 711,000 and $ 620,000 for the six months ended June 30, 2024 and 2023, respectively.

Dividends on unallocated shares, which totaled approximately $ 70,000 and $ 47,000 for the three months, and $ 139,000 and $ 94,000 for the six months ended June 30, 2024 and 2023, are recorded as a reduction of the ESOP loan.

Dividends on allocated shares, which totaled approximately $ 78,000 and $ 42,000 for the three months, and $ 156,000 and $ 83,000 for the six months ended June 30, 2024 and 2023, respectively, are charged to retained earnings.

expense totaled approximately $ 473,000 and $ 340,000 for the three months, and $ 1,184,000 and $ 960,000 for the nine months ended September 30, 2024 and 2023, respectively.

Dividends on unallocated shares, which totaled approximately $ 209,000 and $ 47,000 for the three months, and $ 348,000 and $ 141,000 for the nine months ended September 30, 2024 and 2023, are recorded as a reduction of the ESOP loan.

Dividends on allocated shares, which totaled approximately $ 235,000 and $ 42,000 for the three months, and $ 391,000 and $ 125,000 for the nine months ended September 30, 2024 and 2023, respectively, are charged to retained earnings.

ESOP shares are summarized as follows:

September 30,

Allocated shares

16 unchanged sentences

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 June 30, 2024 and December 31, 2023:

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, 2024 and December 31, 2023:

Quoted Prices in

4 unchanged sentences

Recurring Basis

September 30,

Marketable equity securities:

There were no transfers between Level 1 and 2 during the three and six months ended June 30, 2024 or the year ended December 31, 2023.

The Company did no t have any liabilities that were carried at fair value on a recurring basis at June 30, 2024 and December 31, 2023.

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 June 30, 2024 and December 31, 2023:

There were no transfers between Level 1 and 2 during the three and nine months ended September 30, 2024 or the year ended December 31, 2023.

The Company did no t have any liabilities that were carried at fair value on a recurring basis at September 30, 2024 and December 31, 2023.

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, 2024 and December 31, 2023:

Quoted Prices in

4 unchanged sentences

Non-Recurring Basis

September 30,

(In Thousands)

1 unchanged sentence

Real estate owned

The following tables present the qualitative information about non-recurring Level 3 fair value measurements of financial instruments at June 30, 2024 and December 31, 2023:

At June 30, 2024

The following tables present the qualitative information about non-recurring Level 3 fair value measurements of financial instruments at September 30, 2024 and December 31, 2023:

At September 30, 2024

(In Thousands)

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Capitalization rate

The Company did no t have any liabilities that were carried at fair value on a non-recurring basis at June 30, 2024 and December 31, 2023.

The methods and assumptions used to estimate fair value at June 30, 2024 and December 31, 2023 are as follows:

The Company did no t have any liabilities that were carried at fair value on a non-recurring basis at September 30, 2024 and December 31, 2023.

The methods and assumptions used to estimate fair value at September 30, 2024 and December 31, 2023 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.

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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.

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Fair Value at

June 30, 2024

September 30, 2024

(In thousands)

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The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances.

As of June 30, 2024, the Company did not have any significant contract balances.

As of September 30, 2024, the Company did not have any significant contract balances.

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 six months ended June 30, 2024 and 2023.

The following table presents the Company’s sources of noninterest income for the three and nine months ended September 30, 2024 and 2023.

Sources of revenue outside the scope of ASC 606 are noted as such:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In Thousands)

6 unchanged sentences

Investment advisory fees

Unrealized (loss) gain on equity securities (1)

Unrealized gain (loss) on equity securities (1)

Miscellaneous (1)

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The following is an analysis of other non-interest expenses:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In Thousands)

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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.

The product of the number of shares granted and the grant date market price of the Company’s common stock deter mine the fair value of restricted stock under the Company’s 2022 Equity Incentive plan.

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 June 30, 2024 and December 31, 2023, there were 132,759 shares available for future awards under this plan, which includes 98,311 shares available for stock options and 34,448 shares available for restricted stock awards.

A summary of the Company’s restricted stock activity and related information for the three and six months ended June 30 follows:

As of September 30, 2024 and December 31, 2023, there were 132,759 shares available for future awards under this plan, which includes 98,311 shares available for stock options and 34,448 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, 2024 and 2023 follows:

Outstanding at December 31, 2023

1 unchanged sentence

Outstanding at June 30, 2024

Outstanding at September 30, 2024

Outstanding at December 31, 2022

1 unchanged sentence

Outstanding at June 30, 2023

Compensation expense related to restricted stock was $ 252,000 and $ 241,000 for the three months, and $ 504,000 and $ 482,000 for the six months ended June 30, 2024 and 2023.

At June 30, 2024 and December 31, 2023, the total compensation cost related to non-vested awards that has not yet been recognized was $ 3.3 million and $ 3.8 million, respectively, which is expected to be recognized over the next 3 years.

A summary of the Company’s stock option activity and related information for the three and six months ended June 30 follows:

Outstanding at September 30, 2023

Compensation expense related to restricted stock was $ 290,000 and $ 241,000 for the three months, and $ 794,000 and $ 723,000 for the nine months ended September 30, 2024 and 2023.

At September 30, 2024 and December 31, 2023, the total compensation cost related to non-vested awards that has not yet been recognized was $ 3.7 million and $ 3.8 million, respectively, which is expected to be recognized over the next three years .

A summary of the Company’s stock option activity and related information for the three and nine months ended September 30, 2024 and 2023 follows:

Exercise Price

4 unchanged sentences

Exercisable at June 30, 2024

Outstanding at September 30, 2024

Exercisable at September 30, 2024

Exercise Price

4 unchanged sentences

Exercisable at June 30, 2023

Outstanding at September 30, 2023

Exercisable at September 30, 2023

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 $ 192,000 for the three months, and $ 384,000 and $ 384,000 for the six months ended June 30, 2024 and 2023.

At June 30, 2024 and December 31, 2023, unrecognized compensation cost related to stock option awards was $ 2.6 million and $ 3.0 million, respectively, which is expected to be recognized over the next 3 years.

Compensation expense related to stock options was $ 192,000 and $ 192,000 for the three months, and $ 576,000 and $ 576,000 for the nine months ended September 30, 2024 and 2023.

At September 30, 2024 and December 31, 2023, unrecognized compensation cost related to stock option awards was $ 2.4 million and $ 3.0 million, respectively, which is expected to be recognized over the next three years .

Note 14 — Recent Accounting Pronouncements

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For all other entities, the effective date will be two years later, and early adoption is permitted.

That is, financial statements issued after the effective date of each amendment are required to

include on a prospective basis the related disclosure incorporated into US GAAP by this ASU.

That is, financial statements issued after the effective date of each amendment are required to include on a prospective basis the related disclosure incorporated into US GAAP by this ASU.

However, if the SEC does not act to remove its related requirements by June 30, 2027, any related FASB amendments will be removed from the Codification and will not be effective for any entities.

19 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements