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, ​ 2024 2023 ​ ​ (In thousands, except share ​ ​ and per share amounts) ASSETS ​ ​ ​ ​ ​ ​ Cash and amounts due from depository institutions ​ $ 16,023 ​ $ 13,394 Interest-bearing deposits ​ 81,766 ​ 55,277 Total cash and cash equivalents ​ 97,789 ​ 68,671 Certificates of deposit ​ 100 ​ 100 Equity securities ​ 20,547 ​ 18,102 Securities held-to-maturity ( net of allowance for credit losses of $ 126 and $ 136 , fair value of $ 12,623 and $ 13,126 , respectively ) ​ 15,061 ​ 15,860 Loans receivable ​ 1,760,504 ​ 1,586,721 Deferred loan (fees) costs, net ​ ​ ( 245 ) ​ ​ 176 Allowance for credit losses ​ ​ ( 4,833 ) ​ ​ ( 5,093 ) Net loans ​ ​ 1,755,426 ​ 1,581,804 Premises and equipment, net ​ 24,945 ​ 25,452 Investments in restricted stock, at cost ​ 712 ​ 929 Bank owned life insurance ​ 25,568 ​ 25,082 Accrued interest receivable ​ 13,463 ​ 12,311 Real estate owned ​ 978 ​ 1,456 Property held for investment ​ 1,380 ​ 1,407 Right of Use Assets – Operating ​ 4,144 ​ 4,566 Right of Use Assets – Financing ​ 348 ​ 351 Other assets ​ 7,496 ​ 8,044 Total assets ​ $ 1,967,957 ​ $ 1,764,135 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Liabilities: ​ ​ Deposits: ​ ​ Non-interest bearing ​ $ 267,592 ​ $ 300,184 Interest bearing ​ 1,360,475 ​ 1,099,852 Total deposits ​ 1,628,067 ​ 1,400,036 Advance payments by borrowers for taxes and insurance ​ 2,462 ​ 2,020 Borrowings ​ 7,000 ​ 64,000 Lease Liability – Operating ​ 4,241 ​ 4,625 Lease Liability – Financing ​ 599 ​ 571 Accounts payable and accrued expenses ​ 15,965 ​ 13,558 Total liabilities ​ 1,658,334 ​ 1,484,810 ​ 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, ​ 2024 2023 ​ ​ (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; 14,020,602 shares and 14,144,856 shares issued and outstanding , respectively ​ ​ 140 ​ ​ 142 Additional paid-in capital ​ 109,368 ​ ​ 109,924 Unearned Employee Stock Ownership Plan (“ESOP”) shares ​ ( 5,911 ) ​ ​ ( 6,563 ) Retained earnings ​ 205,699 ​ ​ 175,505 Accumulated other comprehensive income ​ 327 ​ ​ 317 Total stockholders’ equity ​ 309,623 ​ 279,325 Total liabilities and stockholders’ equity ​ $ 1,967,957 ​ $ 1,764,135 ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, ​ ​ 2024 2023 2024 2023 ​ ​ ​ (In thousands, except (In thousands, except ​ ​ ​ per share amounts) per share amounts) ​ INTEREST INCOME: ​ ​ ​ ​ ​ ​ Loans ​ $ 39,484 ​ $ 33,757 ​ $ 114,821 ​ $ 91,826 ​ Interest-earning deposits ​ 1,472 ​ ​ 1,181 ​ 4,058 ​ ​ 2,886 ​ Securities ​ 227 ​ ​ 199 ​ 662 ​ ​ 650 ​ Total Interest Income ​ 41,183 ​ 35,137 ​ 119,541 ​ 95,362 ​ INTEREST EXPENSE: ​ ​ ​ ​ ​ Deposits ​ 14,630 ​ ​ 9,889 ​ 40,459 ​ ​ 23,050 ​ Borrowings ​ 257 ​ ​ 109 ​ 1,559 ​ ​ 299 ​ Financing lease ​ 10 ​ ​ 10 ​ 29 ​ ​ 28 ​ Total Interest Expense ​ 14,897 ​ 10,008 ​ 42,047 ​ 23,377 ​ Net Interest Income ​ 26,286 ​ 25,129 ​ 77,494 ​ 71,985 ​ Provision for (reversal of) credit loss ​ 105 ​ ​ 156 ​ ​ ( 286 ) ​ ​ 767 ​ Net Interest Income after Provision for (Reversal of) Credit Loss ​ 26,181 ​ 24,973 ​ 77,780 ​ 71,218 ​ NON-INTEREST INCOME: ​ ​ ​ ​ ​ Other loan fees and service charges ​ 589 ​ ​ 364 ​ 1,613 ​ ​ 1,417 ​ Earnings on bank owned life insurance ​ 167 ​ ​ 153 ​ 486 ​ ​ 857 ​ Investment advisory fees ​ - ​ ​ 114 ​ - ​ ​ 343 ​ Unrealized gain (loss) on equity securities ​ 547 ​ ​ ( 430 ) ​ 445 ​ ​ ( 327 ) ​ Other ​ 46 ​ ​ 20 ​ 90 ​ ​ 67 ​ Total Non-Interest Income ​ 1,349 ​ 221 ​ 2,634 ​ 2,357 ​ NON-INTEREST EXPENSES: ​ ​ ​ ​ ​ Salaries and employee benefits ​ 5,135 ​ ​ 4,700 ​ 15,738 ​ ​ 14,079 ​ Occupancy expense ​ 735 ​ ​ 616 ​ 2,116 ​ ​ 1,890 ​ Equipment ​ 187 ​ ​ 240 ​ 661 ​ ​ 844 ​ Outside data processing ​ 681 ​ ​ 569 ​ 1,924 ​ ​ 1,638 ​ Advertising ​ 128 ​ ​ 133 ​ 310 ​ ​ 420 ​ Real estate owned expense ​ 488 ​ ​ 11 ​ 527 ​ ​ 52 ​ Other ​ 2,607 ​ ​ 2,646 ​ 7,864 ​ ​ 7,064 ​ Total Non-Interest Expenses ​ 9,961 ​ 8,915 ​ 29,140 ​ 25,987 ​ INCOME BEFORE PROVISION FOR INCOME TAXES ​ 17,569 ​ 16,279 ​ 51,274 ​ 47,588 ​ PROVISION FOR INCOME TAXES ​ 4,883 ​ ​ 4,436 ​ 14,416 ​ ​ 13,413 ​ NET INCOME ​ $ 12,686 ​ $ 11,843 ​ $ 36,858 ​ $ 34,175 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EARNINGS PER COMMON SHARE – BASIC ​ $ 0.97 ​ $ 0.80 ​ $ 2.81 ​ $ 2.42 ​ EARNINGS PER COMMON SHARE – DILUTED ​ 0.95 ​ ​ 0.80 ​ ​ 2.78 ​ ​ 2.41 ​ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC ​ ​ 13,075 ​ ​ 14,743 ​ ​ 13,108 ​ ​ 14,143 ​ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED ​ ​ 13,417 ​ ​ 14,822 ​ 13,279 ​ 14,192 ​ ​ 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, ​ ​ 2024 2023 2024 2023 ​ ​ ​ (In thousands) ​ (In thousands) ​ Net Income ​ $ 12,686 ​ $ 11,843 ​ $ 36,858 ​ $ 34,175 ​ Other comprehensive income: ​ ​ ​ ​ ​ Defined benefit pension: ​ ​ ​ ​ ​ ​ ​ Reclassification adjustments out of accumulated other comprehensive income: ​ ​ ​ ​ ​ Amortization of actuarial gain ​ ( 13 ) ​ ​ ( 8 ) ​ ( 39 ) ​ ( 24 ) ​ Actuarial loss arising during period ​ 18 ​ ​ 18 ​ 54 ​ 54 ​ Total ​ 5 ​ 10 ​ 15 ​ 30 ​ Income tax effect¹ ​ ( 1 ) ​ ( 3 ) ​ ( 5 ) ​ ( 8 ) ​ Total other comprehensive income ​ 4 ​ 7 ​ 10 ​ 22 ​ Total Comprehensive Income ​ $ 12,690 ​ $ 11,850 ​ $ 36,868 ​ $ 34,197 ​ 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, 2024 and 2023 (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, 2023 ​ ​ 14,144,856 ​ $ 142 ​ $ 109,924 ​ $ ( 6,563 ) ​ $ 175,505 ​ $ 317 ​ $ 279,325 Net income ​ — ​ — ​ — ​ — ​ 11,374 ​ — ​ 11,374 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 3 ​ 3 Cash dividend declared ($ 0.10 per share) ​ — ​ — ​ — ​ — ​ ( 1,337 ) ​ — ​ ( 1,337 ) Stock repurchases ​ ​ ( 80,060 ) ​ ​ ( 1 ) ​ ​ ( 1,250 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,251 ) Compensation expense related to restricted stock awards ​ ​ — ​ ​ — ​ ​ 252 ​ ​ — ​ ​ — ​ ​ — ​ ​ 252 Compensation expense related to stock options ​ ​ — ​ ​ — ​ ​ 192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 192 Stock option exercise ​ ​ 1,000 ​ ​ — ​ ​ 14 ​ ​ — ​ ​ — ​ ​ — ​ ​ 14 ESOP shares earned ​ — ​ — ​ 135 ​ 217 ​ — ​ — ​ 352 Balance - March 31, 2024 ​ ​ 14,065,796 ​ $ 141 ​ $ 109,267 ​ $ ( 6,346 ) ​ $ 185,542 ​ $ 320 ​ $ 288,924 Net income ​ — ​ — ​ — ​ — ​ 12,798 ​ — ​ 12,798 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 3 ​ 3 Cash dividend declared ($ 0.10 per share) ​ — ​ — ​ — ​ — ​ ( 1,330 ) ​ — ​ ( 1,330 ) Stock repurchases ​ ​ ( 75,194 ) ​ ​ ( 1 ) ​ ​ ( 1,222 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,223 ) Compensation expense related to restricted stock awards ​ ​ — ​ ​ — ​ ​ 252 ​ ​ — ​ ​ — ​ ​ — ​ ​ 252 Compensation expense related to stock options ​ ​ — ​ ​ — ​ ​ 192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 192 Stock option exercise ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ESOP shares earned ​ — ​ — ​ 141 ​ 218 ​ — ​ — ​ 359 Balance - June 30, 2024 ​ ​ 13,990,602 ​ $ 140 ​ $ 108,630 ​ $ ( 6,128 ) ​ $ 197,010 ​ $ 323 ​ $ 299,975 Net income ​ — ​ — ​ — ​ — ​ 12,686 ​ — ​ 12,686 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 4 ​ 4 Cash dividend declared ($ 0.15 per share) ​ — ​ — ​ — ​ — ​ ( 3,997 ) ​ — ​ ( 3,997 ) Compensation expense related to restricted stock awards ​ ​ — ​ ​ — ​ ​ 290 ​ ​ — ​ ​ — ​ ​ — ​ ​ 290 Compensation expense related to stock options ​ ​ — ​ ​ — ​ ​ 192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 192 Restricted Stock Award ​ ​ 30,000 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ESOP shares earned ​ — ​ — ​ 256 ​ 217 ​ — ​ — ​ 473 Balance – September 30, 2024 ​ ​ 14,020,602 ​ $ 140 ​ $ 109,368 ​ $ ( 5,911 ) ​ $ 205,699 ​ $ 327 ​ $ 309,623 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 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, ​ ​ 2024 2023 ​ ​ ​ (In thousands) ​ Cash Flows from Operating Activities: ​ ​ ​ Net income ​ $ 36,858 ​ $ 34,175 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Net amortization of securities premiums and discounts, net ​ 5 ​ ​ 19 ​ (Reversal of) provision for credit losses ​ ( 286 ) ​ ​ 767 ​ Depreciation ​ 884 ​ ​ 920 ​ Net (accretion) amortization of deferred loan fees and costs ​ ( 142 ) ​ ​ 230 ​ Deferred income tax benefit ​ ( 553 ) ​ ​ ( 830 ) ​ Unrealized (gain) loss recognized on equity securities ​ ( 445 ) ​ ​ 327 ​ Impairment of real estate owned ​ 478 ​ ​ - ​ Earnings on bank owned life insurance ​ ( 486 ) ​ ​ ( 857 ) ​ ESOP compensation expense ​ 1,184 ​ ​ 960 ​ Compensation expense related to stock options ​ ​ 576 ​ ​ 576 ​ Compensation expense related to restricted stock ​ ​ 794 ​ ​ 723 ​ Increase in accrued interest receivable ​ ( 1,152 ) ​ ​ ( 2,727 ) ​ Decrease (increase) in other assets ​ 1,553 ​ ​ ( 1,813 ) ​ Decrease in accounts payable - loan closing ​ ​ ( 92 ) ​ ​ ( 2,535 ) ​ (Decrease) increase in accounts payable and accrued expenses ​ ( 726 ) ​ ​ 931 ​ Net Cash Provided by Operating Activities ​ 38,450 ​ 30,866 ​ Cash Flows from Investing Activities: ​ ​ ​ Net increase in loans ​ ( 186,680 ) ​ ( 318,991 ) ​ Proceeds from sale of loans ​ 13,345 ​ 26,414 ​ Proceeds from bank owned life insurance ​ ​ — ​ ​ 1,827 ​ Principal repayments on securities available-for-sale ​ ​ — ​ ​ 1 ​ Principal repayments on securities held-to-maturity ​ 805 ​ 10,791 ​ Purchase of marketable equity securities ​ ​ ( 2,000 ) ​ ​ — ​ Purchase of securities held-to-maturity ​ ​ — ​ ​ ( 70 ) ​ Purchase of restricted stock ​ ( 98 ) ​ ( 6 ) ​ Redemptions of restricted stock ​ 315 ​ 315 ​ Purchases of premises and equipment ​ ( 377 ) ​ ( 380 ) ​ Net Cash Used in Investing Activities ​ ( 174,690 ) ​ ( 280,099 ) ​ Cash Flows from Financing Activities: ​ ​ ​ Net increase in deposits ​ 228,031 ​ 243,679 ​ Proceeds from FRB borrowings ​ ​ — ​ ​ 50,000 ​ Repayment of FRB borrowings ​ ​ ( 50,000 ) ​ ​ — ​ Repayment of FHLB of NY advances ​ ( 7,000 ) ​ ( 7,000 ) ​ Stock repurchases ​ ​ ( 2,474 ) ​ ​ ( 23,388 ) ​ Stock option exercised ​ ​ 14 ​ ​ — ​ Increase in advance payments by borrowers for taxes and insurance ​ 442 ​ 142 ​ Cash dividends paid ​ ( 3,655 ) ​ ( 2,785 ) ​ Net Cash Provided by Financing Activities ​ 165,358 ​ 260,648 ​ Net Increase in Cash and Cash Equivalents ​ 29,118 ​ 11,415 ​ Cash and Cash Equivalents – Beginning ​ 68,671 ​ 95,308 ​ Cash and Cash Equivalents – Ending ​ $ 97,789 ​ $ 106,723 ​ 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, ​ ​ 2024 2023 ​ ​ ​ (In thousands) ​ Supplementary Cash Flows Information: ​ ​ ​ Income taxes paid ​ $ 14,094 ​ $ 16,396 ​ Interest paid ​ $ 41,558 ​ $ 23,106 ​ Dividends declared and not paid ​ $ 5,606 ​ $ 872 ​ ​ 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 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 the 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, brokered deposits, military deposits, and listing deposit services as sources 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 and service charges. The Bank previously offered 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. The Bank entered into an agreement to sell all of the Bank’s assets relating to Harbor West Wealth Management Group to a third party in December 2023, and the sale closed in January 2024. As a result of the transaction, the Bank no longer offers these services and no longer generates investment advisory fees. 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. 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 New York State. 10 Table of Contents NECB Financial terminated its license in Connecticut on February 22, 2024 due to the sale of all the Bank’s assets relating to Harbor West Wealth Management Group to a third party in January 2024. This subsidiary is currently inactive. 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, 2023. 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. 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 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. ​ 11 Table of Contents ​ 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. However, the Federal Reserve has provided a “small bank holding company” exception to its consolidated capital requirements for holding companies, and legislation and the related issuance of regulations by the Federal Reserve Board have established the current threshold for the exception at $3.0 billion. 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 September 30, 2024 and December 31, 2023. 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, 2024: ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 288,849 14.04 % $ ≥ 164,542 ≥ 8.00 % $ ≥ 205,678 ≥ 10.00 % Tier 1 capital (to risk-weighted assets) ​ 283,012 13.76 ​ ≥ 123,407 ≥ 6.00 ​ ≥ 164,542 ≥ 8.00 ​ Common equity tier 1 capital (to risk-weighted assets) ​ 283,012 13.76 ​ ≥ 92,555 ≥ 4.50 ​ ≥ 133,691 ≥ 6.50 ​ Core (Tier 1) capital (to adjusted total assets) ​ 283,012 14.76 ​ ≥ 76,706 ≥ 4.00 ​ ≥ 95,883 ≥ 5.00 ​ As of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 255,252 13.43 % $ ≥ 152,097 ≥ 8.00 % $ ≥ 190,121 ≥ 10.00 % Tier 1 capital (to risk-weighted assets) ​ 249,013 13.10 ​ ≥ 114,072 ≥ 6.00 ​ ≥ 152,097 ≥ 8.00 ​ Common equity tier 1 capital (to risk-weighted assets) ​ 249,013 13.10 ​ ≥ 85,554 ≥ 4.50 ​ ≥ 123,579 ≥ 6.50 ​ Core (Tier 1) capital (to adjusted total assets) ​ 249,013 14.43 ​ ≥ 69,007 ≥ 4.00 ​ ≥ 86,259 ≥ 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 — 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. ​ 12 Table of Contents The following table sets forth the computations of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Nine Months Ended September 30, ​ 2024 2023 2024 2023 ​ ​ (In Thousands, except per share data) (In Thousands, except per share data) Net income (basic and diluted) ​ $ 12,686 ​ $ 11,843 $ 36,858 $ 34,175 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares issued ​ 14,013 ​ ​ 15,855 ​ 14,053 ​ ​ 15,233 Less: Weighted average unearned ESOP shares ​ ( 638 ) ​ ​ ( 769 ) ​ ( 660 ) ​ ​ ( 747 ) Less: Weighted average unvested restricted shares ​ ( 300 ) ​ ​ ( 343 ) ( 285 ) ​ ( 343 ) Basic weighted average shares outstanding ​ 13,075 ​ ​ 14,743 13,108 ​ 14,143 Add: Dilutive effect of restricted stock ​ 130 ​ ​ 76 ​ 101 ​ ​ 49 Add: Dilutive effect of stock options ​ 212 ​ ​ 3 ​ 70 ​ ​ — Diluted weighted average shares outstanding ​ 13,417 ​ ​ 14,822 13,279 ​ ​ 14,192 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.97 ​ $ 0.80 $ 2.81 ​ $ 2.42 Diluted ​ $ 0.95 ​ $ 0.80 $ 2.78 ​ $ 2.41 ​ ​ Note 4 — Equity Securities 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. 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. The high-quality fixed income bonds consist of 90 % agency mortgage-backed securities and 10 % state 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2024 2023 ​ ​ ​ (In Thousands) ​ Equity Securities, at Fair Value ​ $ 20,547 ​ $ 18,102 ​ ​ 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, ​ ​ 2024 2023 2024 2023 ​ ​ ​ (In Thousands) ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net gain (loss) recognized on equity securities during the period ​ $ 547 ​ $ ( 430 ) ​ $ 445 ​ $ ( 327 ) ​ Less: Net losses realized on the sale of equity securities during the period ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Unrealized net gain (loss) recognized on equity securities held at the reporting date ​ $ 547 ​ $ ( 430 ) ​ $ 445 ​ $ ( 327 ) ​ ​ ​ ​ ​ ​ ​ 13 Table of Contents Note 5 — Securities Held-to-Maturity The following table summarizes the Company’s portfolio of securities held-to-maturity at September 30, 2024 and December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ Allowance ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ for ​ Cost Gains Losses ​ Value ​ Credit Loss ​ ​ (In Thousands) Mortgage-backed securities – residential: ​ ​ ​ ​ ​ ​ ​ ​ Government National Mortgage Association ​ $ 425 ​ $ — ​ $ 3 ​ $ 422 ​ $ — Federal Home Loan Mortgage Corporation ​ 798 ​ 1 ​ 87 ​ ​ 712 ​ — Federal National Mortgage Association ​ 1,752 ​ — ​ 145 ​ ​ 1,607 ​ — Collateralized mortgage obligations – GSE ​ 2,806 ​ — ​ 541 ​ ​ 2,265 ​ — Total mortgage-backed securities ​ ​ 5,781 ​ ​ 1 ​ ​ 776 ​ ​ 5,006 ​ ​ — Municipal Bonds ​ ​ 9,406 ​ ​ — ​ ​ 1,789 ​ ​ 7,617 ​ ​ 126 ​ ​ $ 15,187 ​ $ 1 ​ $ 2,565 ​ $ 12,623 ​ $ 126 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 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 ​ $ 452 ​ $ — ​ $ 7 ​ $ 445 ​ $ — Federal Home Loan Mortgage Corporation ​ 868 ​ — ​ 114 ​ 754 ​ — Federal National Mortgage Association ​ 1,985 ​ — ​ 198 ​ 1,787 ​ — Collateralized mortgage obligations – GSE ​ 2,889 ​ — ​ 580 ​ 2,309 ​ — Total mortgage-backed securities ​ ​ 6,194 ​ ​ — ​ ​ 899 ​ ​ 5,295 ​ ​ — Municipal Bonds ​ ​ 9,802 ​ ​ — ​ ​ 1,971 ​ ​ 7,831 ​ ​ 136 ​ ​ $ 15,996 ​ $ — ​ $ 2,870 ​ $ 13,126 ​ $ 136 ​ Contractual final maturities of mortgage-backed securities and municipal bonds were as follows at September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ ​ Amortized ​ Fair ​ Cost Value ​ (In Thousands) Due within one year ​ $ 716 ​ $ 648 Due after one but within five years ​ 1,944 ​ 1,666 Due after five but within ten years ​ 2,776 ​ 2,343 Due after ten years ​ 9,751 ​ 7,966 ​ ​ $ 15,187 ​ $ 12,623 ​ 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. ​ 14 Table of Contents 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 Balance – December 31, 2023 ​ $ 136 Provision for (reversal of) credit loss ​ ​ ( 3 ) Balance – March 31, 2024 ​ $ 133 Provision for (reversal of) credit loss ​ ​ ( 7 ) Balance – June 30, 2024 ​ $ 126 Provision for (reversal of) credit loss ​ ​ - Balance – September 30, 2024 ​ $ 126 ​ ​ ​ ​ ​ ​ ​ Municipal Bonds Balance – December 31, 2022 ​ $ - Impact of adopting ASC 326 ​ ​ 132 Provision for credit loss ​ ​ 4 Balance – March 31, 2023 ​ $ 136 Provision for (reversal of) credit loss ​ ​ ( 1 ) Balance – June 30, 2023 ​ $ 135 Provision for (reversal of) credit loss ​ ​ ( 4 ) Balance – September 30, 2023 ​ $ 131 ​ 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, 2024: ​ ​ ​ ​ ​ ​ Mortgage-backed securities - residential: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government National Mortgage Association ​ $ — ​ $ — ​ $ 422 ​ $ 3 ​ $ 422 ​ $ 3 Federal Home Loan Mortgage Corporation ​ ​ — ​ ​ — ​ ​ 679 ​ ​ 87 ​ ​ 679 ​ ​ 87 Federal National Mortgage Association ​ ​ — ​ ​ — ​ ​ 1,607 ​ ​ 145 ​ ​ 1,607 ​ ​ 145 Collateralized mortgage obligations – GSE ​ ​ — ​ ​ — ​ ​ 2,265 ​ ​ 541 ​ ​ 2,265 ​ ​ 541 Total mortgage-backed securities ​ $ — ​ $ — ​ $ 4,973 ​ $ 776 ​ $ 4,973 ​ $ 776 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2023: ​ ​ ​ ​ ​ ​ Mortgage-backed securities - residential: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government National Mortgage Association ​ $ — ​ $ — ​ $ 445 ​ $ 7 ​ $ 445 ​ $ 7 Federal Home Loan Mortgage Corporation ​ ​ — ​ ​ — ​ ​ 754 ​ ​ 114 ​ ​ 754 ​ ​ 114 Federal National Mortgage Association ​ ​ — ​ ​ — ​ ​ 1,787 ​ ​ 198 ​ ​ 1,787 ​ ​ 198 Collateralized mortgage obligations – GSE ​ ​ — ​ ​ — ​ ​ 2,309 ​ ​ 580 ​ ​ 2,309 ​ ​ 580 Total mortgage-backed securities ​ $ — ​ $ — ​ $ 5,295 ​ $ 899 ​ $ 5,295 ​ $ 899 ​ 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 15 Table of Contents the amortized cost. At December 31, 2023, there were thirty-two mortgage-backed securities that had unrealized losses 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, 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 September 30, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2024 2023 ​ ​ ​ (In Thousands) ​ Residential real estate: ​ ​ ​ One-to-four family ​ $ 3,507 ​ $ 5,252 ​ Multi-family ​ 202,516 ​ 198,927 ​ Mixed-use ​ 28,399 ​ 29,643 ​ Total residential real estate ​ 234,422 ​ 233,822 ​ Non-residential real estate ​ 30,312 ​ 21,130 ​ Construction ​ 1,368,222 ​ 1,219,413 ​ Commercial and industrial ​ 125,520 ​ 111,116 ​ Consumer ​ 2,028 ​ 1,240 ​ Total Loans ​ 1,760,504 ​ 1,586,721 ​ Deferred loan (fees) costs, net ​ ( 245 ) ​ 176 ​ Allowance for credit losses ​ ( 4,833 ) ​ ( 5,093 ) ​ ​ ​ $ 1,755,426 ​ $ 1,581,804 ​ ​ 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. 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. 16 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction Industrial Consumer Total ​ ​ (In Thousands) Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ 1,936 ​ $ 318 ​ $ 1,959 ​ $ 418 ​ $ 202 ​ $ 4,833 Ending balance: individually evaluated for credit loss ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Ending balance: collectively evaluated for credit loss ​ $ 1,936 ​ $ 318 ​ $ 1,959 ​ $ 418 ​ $ 202 ​ $ 4,833 Loans receivable: ​ ​ ​ ​ ​ ​ Ending balance ​ $ 234,422 ​ $ 30,312 ​ $ 1,368,222 ​ $ 125,520 ​ $ 2,028 ​ $ 1,760,504 Ending balance: individually evaluated for credit loss ​ $ — ​ $ — ​ $ 4,413 ​ $ — ​ $ — ​ $ 4,413 Ending balance: collectively evaluated for credit loss ​ $ 234,422 ​ $ 30,312 ​ $ 1,363,809 ​ $ 125,520 ​ $ 2,028 ​ $ 1,756,091 ​ ​ At December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ Construction ​ Industrial ​ Consumer ​ Total ​ ​ (In Thousands) Allowance for credit losses: ​ ​ ​ ​ ​ ​ Ending balance ​ $ 2,433 ​ $ 126 ​ $ 1,914 ​ $ 472 ​ $ 148 ​ $ 5,093 Ending balance: individually evaluated for credit loss ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Ending balance: collectively evaluated for credit loss ​ $ 2,433 ​ $ 126 ​ $ 1,914 ​ $ 472 ​ $ 148 ​ $ 5,093 Loans receivable: ​ ​ ​ ​ ​ ​ Ending balance ​ $ 233,822 ​ $ 21,130 ​ $ 1,219,413 ​ $ 111,116 ​ $ 1,240 ​ $ 1,586,721 Ending balance: individually evaluated for credit loss ​ $ — ​ $ — ​ $ 4,385 ​ $ — ​ $ — ​ $ 4,385 Ending balance: collectively evaluated for credit loss ​ $ 233,822 ​ $ 21,130 ​ $ 1,215,028 ​ $ 111,116 ​ $ 1,240 ​ $ 1,582,336 ​ ​ 17 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction Industrial Consumer Unallocated Total ​ ​ (In Thousands) Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance - June 30, 2024 ​ $ 2,024 ​ $ 379 ​ $ 1,868 ​ $ 477 ​ $ 167 ​ $ — ​ $ 4,915 Charge-offs ​ — ​ — ​ — ​ — ​ ( 82 ) ​ — ​ ( 82 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — Provision (reversal of) ​ ( 88 ) ​ ( 61 ) ​ 91 ​ ( 59 ) ​ 117 ​ — ​ — Balance - September 30, 2024 ​ $ 1,936 ​ $ 318 ​ $ 1,959 ​ $ 418 ​ $ 202 ​ $ — ​ $ 4,833 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate Construction Industrial Consumer Unallocated Total ​ ​ (In Thousands) Allowance for loan 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 credit losses: ​ ​ ​ ​ ​ ​ ​ Balance - December 31, 2023 ​ $ 2,433 ​ $ 126 ​ $ 1,914 ​ $ 472 ​ $ 148 ​ $ — ​ $ 5,093 Charge-offs ​ — ​ — ​ — ​ — ​ ( 115 ) ​ — ​ ( 115 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — Provision (reversal of) ​ ( 497 ) ​ 192 ​ 45 ​ ( 54 ) ​ 169 ​ — ​ ( 145 ) Balance - September 30, 2024 ​ $ 1,936 ​ $ 318 ​ $ 1,959 ​ $ 418 ​ $ 202 ​ $ — ​ $ 4,833 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ residential ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ Construction ​ Industrial ​ Consumer ​ Unallocated ​ Total ​ ​ (In Thousands) Allowance for loan 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 ​ 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 18 Table of Contents 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 September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 3,507 ​ $ 3,507 ​ $ — Multi-family ​ — ​ — ​ — ​ — ​ 202,516 ​ 202,516 ​ — Mixed-use ​ — ​ — ​ — ​ — ​ 28,399 ​ 28,399 ​ — Non-residential real estate ​ — ​ — ​ — ​ — ​ 30,312 ​ 30,312 ​ — Construction loans ​ 9,291 ​ — ​ 4,413 ​ 13,704 ​ 1,354,518 ​ 1,368,222 ​ — Commercial and industrial loans ​ 1,125 ​ — ​ — ​ 1,125 ​ 124,395 ​ 125,520 ​ — Consumer ​ — ​ — ​ — ​ — ​ 2,028 ​ 2,028 ​ — ​ ​ $ 10,416 ​ $ — ​ $ 4,413 ​ $ 14,829 ​ $ 1,745,675 ​ $ 1,760,504 ​ $ — ​ Age Analysis of Past Due Loans as of December 31, 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 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5,252 ​ $ 5,252 ​ $ — Multi-family ​ — ​ — ​ — ​ — ​ 198,927 ​ 198,927 ​ — Mixed-use ​ — ​ — ​ — ​ — ​ 29,643 ​ 29,643 ​ — Non-residential real estate ​ — ​ — ​ — ​ — ​ 21,130 ​ 21,130 ​ — Construction loans ​ 2,319 ​ — ​ 4,385 ​ 6,704 ​ 1,212,709 ​ 1,219,413 ​ — Commercial and industrial loans ​ — ​ — ​ — ​ — ​ 111,116 ​ 111,116 ​ — Consumer ​ 1 ​ — ​ — ​ 1 ​ 1,239 ​ 1,240 ​ — ​ ​ $ 2,320 ​ $ — ​ $ 4,385 ​ $ 6,705 ​ $ 1,580,016 ​ $ 1,586,721 ​ $ — ​ ​ 19 Table of Contents 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. ​ 20 Table of Contents The following table presents the risk category of loans at September 30, 2024 by loan segment and vintage year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Revolving ​ ​ ​ ​ Term Loans Amortized Costs Basis by Origination Year ​ Loans ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Converted ​ ​ September 30, 2024 ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Cost Basis ​ to Term ​ Total Residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 9,913 $ 79,216 $ 71,111 $ 24,488 $ 11,421 $ 38,273 $ - $ - $ 234,422 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 9,913 $ 79,216 $ 71,111 $ 24,488 $ 11,421 $ 38,273 $ - $ - $ 234,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 13,941 $ 1,577 $ 245 $ 1,793 $ 980 $ 11,776 $ - $ - $ 30,312 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 13,941 $ 1,577 $ 245 $ 1,793 $ 980 $ 11,776 $ - $ - $ 30,312 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 269,931 $ 458,822 $ 363,671 $ 174,781 $ 44,749 $ 51,855 $ - $ - $ 1,363,809 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ 4,413 ​ - ​ - ​ - ​ 4,413 Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 269,931 $ 458,822 $ 363,671 $ 174,781 $ 49,162 $ 51,855 $ - $ - $ 1,368,222 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,311 $ 4,543 $ 7,191 $ 284 $ 172 $ 1,525 $ 110,097 $ 397 $ 125,520 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 1,311 $ 4,543 $ 7,191 $ 284 $ 172 $ 1,525 $ 110,097 $ 397 $ 125,520 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 2,019 $ - $ - $ - $ - $ 9 $ - $ - $ 2,028 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 2,019 $ - $ - $ - $ - $ 9 $ - $ - $ 2,028 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ 115 $ - $ - $ - $ - $ - $ - $ - $ 115 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 297,115 $ 544,158 $ 442,218 $ 201,346 $ 57,322 $ 103,438 $ 110,097 $ 397 $ 1,756,091 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ 4,413 ​ - ​ - ​ - ​ 4,413 Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 297,115 $ 544,158 $ 442,218 $ 201,346 $ 61,735 $ 103,438 $ 110,097 $ 397 $ 1,760,504 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ 115 $ - $ - $ - $ - $ - $ - $ - $ 115 ​ ​ 21 Table of Contents The following table presents the risk category of loans at December 31, 2023 by loan segment and vintage year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Revolving ​ ​ ​ ​ Term Loans Amortized Costs Basis by Origination Year ​ Loans ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Converted ​ ​ December 31, 2023 ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ Prior ​ Cost Basis ​ to Term ​ Total Residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 81,379 $ 71,932 $ 24,504 $ 10,696 $ 1,326 $ 43,070 $ - $ - $ 232,907 Special Mention ​ ​ - ​ - ​ - ​ 915 ​ - ​ - ​ - ​ - ​ 915 Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 81,379 $ 71,932 $ 24,504 $ 11,611 $ 1,326 $ 43,070 $ - $ - $ 233,822 Residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,602 $ 251 $ 1,841 $ 995 $ 379 $ 16,062 $ - $ - $ 21,130 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 1,602 $ 251 $ 1,841 $ 995 $ 379 $ 16,062 $ - $ - $ 21,130 Non-residential real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 376,763 $ 501,012 $ 216,901 $ 55,865 $ 25,150 $ 39,337 $ - $ - $ 1,215,028 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ 4,385 ​ - ​ - ​ - ​ - ​ 4,385 Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 376,763 $ 501,012 $ 216,901 $ 60,250 $ 25,150 $ 39,337 $ - $ - $ 1,219,413 Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ 159 $ - $ - $ 159 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 5,057 $ 8,329 $ 436 $ 435 $ 308 $ 2,195 $ 91,301 $ 3,055 $ 111,116 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 5,057 $ 8,329 $ 436 $ 435 $ 308 $ 2,195 $ 91,301 $ 3,055 $ 111,116 Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ - $ - $ - $ - $ - $ - $ - $ - $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,229 $ - $ - $ - $ - $ ​ $ 11 $ - $ 1,240 Special Mention ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Substandard ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 1,229 $ - $ - $ - $ - $ - $ 11 $ - $ 1,240 Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ 154 $ - $ - $ - $ - $ - $ - $ - $ 154 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 466,030 $ 581,524 $ 243,682 $ 67,991 $ 27,163 $ 100,664 $ 91,312 $ 3,055 $ 1,581,421 Special Mention ​ ​ - ​ - ​ - ​ 915 ​ - ​ - ​ - ​ - ​ 915 Substandard ​ ​ - ​ - ​ - ​ 4,385 ​ - ​ - ​ - ​ - ​ 4,385 Doubtful ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total ​ $ 466,030 $ 581,524 $ 243,682 $ 73,291 $ 27,163 $ 100,664 $ 91,312 $ 3,055 $ 1,586,721 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period gross charge-offs ​ $ 154 $ - $ - $ - $ - $ 159 $ - $ - $ 313 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22 Table of Contents Modifications to Borrowers Experiencing Financial Difficulty: 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 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 nine months ended September 30, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ Allowance for Credit Loss Balance – December 31, 2023 ​ $ 1,038 Provision for (reversal of) credit loss ​ ​ ( 17 ) Balance – March 31, 2024 ​ $ 1,021 Provision for (reversal of) credit loss ​ ​ ( 219 ) Balance – June 30, 2024 ​ $ 802 Provision for (reversal of) credit loss ​ ​ 105 Balance – September 30, 2024 ​ $ 907 ​ ​ ​ ​ ​ ​ Allowance for Credit Loss Balance – December 31, 2022 ​ $ - Impact of adopting ASC 326 ​ ​ 1,586 Provision for (reversal of) credit loss ​ ​ ( 200 ) Balance – March 31, 2023 ​ $ 1,386 Provision for (reversal of) credit loss ​ ​ 83 Balance – June 30, 2023 ​ $ 1,469 Provision for (reversal of) credit loss ​ ​ ( 278 ) Balance – September 30, 2023 ​ $ 1,191 ​ ​ ​ ​ ​ ​ ​ Note 7 — Real Estate Owned (“REO”) 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. 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. 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. ​ 23 Table of Contents 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 September 30, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ Weighted Average ​ Weighted Average ​ ​ ​ Amount ​ Interest Rate ​ Amount ​ Interest Rate ​ ​ ​ (Dollars in Thousands) ​ Advances maturing in: ​ ​ ​ ​ One year or less ​ $ — ​ — % $ 7,000 ​ 2.86 % ​ After one to three years ​ ​ — — ​ ​ — — ​ ​ After three to four years ​ ​ — ​ — ​ ​ — ​ — ​ ​ After five years (due 2030) ​ 7,000 1.61 % 7,000 1.61 % ​ ​ ​ $ 7,000 1.61 % $ 14,000 2.24 % ​ ​ 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 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 ​ 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, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Nine Months Ended September 30, ​ 2024 2023 2024 2023 ​ ​ (Dollars In Thousands) ​ (Dollars In Thousands) Net periodic pension expense: ​ ​ ​ ​ ​ ​ Service cost ​ $ 23 ​ $ 31 ​ $ 80 ​ $ 93 Interest cost ​ 21 ​ ​ 10 ​ 64 ​ 30 Actuarial gain recognized ​ ( 13 ) ​ ​ ( 8 ) ​ ( 39 ) ​ ( 24 ) Total net periodic pension expense included in other non-interest expenses ​ $ 31 ​ $ 33 ​ $ 105 ​ $ 99 ​ 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. 24 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 executive’s remaining life. No benefits are expected to be paid during the next five years . 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 September 30, 2024, 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, 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 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 $ 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. 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 25 Table of Contents 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, ​ December 31, ​ ​ 2024 2023 ​ Allocated shares ​ ​ 781,762 ​ 694,842 ​ Shares committed to be released ​ ​ 65,187 ​ 86,920 ​ Unearned shares ​ ​ 630,460 ​ 695,647 ​ Total ESOP Shares ​ ​ 1,477,409 ​ 1,477,409 ​ Less allocated shares distributed to former or retired employees ​ ​ ( 165,644 ) ​ ( 143,612 ) ​ Total ESOP Shares Held by Trustee ​ ​ 1,311,765 ​ 1,333,797 ​ Fair value of unearned shares ​ $ 16,675,667 ​ $ 12,340,778 ​ ​ ​ ​ ​ ​ Note 10 — 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 marketable equity securities 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, individually evaluated loans and other real estate owned. U.S. GAAP has 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, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 2024 2023 2024 2023 2024 2023 2024 2023 Assets: ​ ​ ​ ​ ​ ​ ​ ​ Marketable equity securities: ​ ​ ​ ​ ​ ​ ​ ​ Mutual funds ​ $ 20,547 ​ $ 18,102 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 20,547 ​ $ 18,102 Total assets ​ $ 20,547 ​ $ 18,102 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 20,547 ​ $ 18,102 ​ 26 Table of Contents 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 ​ 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 2024 2023 2024 2023 2024 2023 2024 2023 ​ (In Thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 4,413 ​ $ 4,385 ​ $ 4,413 ​ $ 4,385 Real estate owned ​ — ​ — ​ — ​ — ​ 978 ​ 1,456 ​ 978 ​ 1,456 Total assets ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5,391 ​ $ 5,841 ​ $ 5,391 ​ $ 5,841 ​ 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 ​ Fair Valuation Unobservable ​ Weighted ​ ​ Value ​ Technique ​ Input ​ Range ​ Average ​ ​ (In Thousands) Assets: ​ ​ ​ Loans individually evaluated ​ $ 4,413 Income approach Capitalization rate 6.00 % 6.00 % Real estate owned ​ 978 Income approach Capitalization rate 13.50 % 13.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2023 ​ Fair Valuation Unobservable ​ Weighted ​ ​ Value ​ Technique ​ Input ​ Range ​ Average ​ ​ (In Thousands) Assets: ​ ​ ​ Loans individually evaluated ​ $ 4,385 Income approach Capitalization rate 6.00 % 6.00 % 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, 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. 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. 27 Table of Contents 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 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. Fair values for marketable equity securities are determined by quoted market prices on nationally recognized and foreign securities exchanges (Level 1). Fair values for equity securities and securities 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 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. ​ 28 Table of Contents The carrying amounts and estimated fair value of our financial instruments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at September 30, 2024 ​ ​ ​ ​ ​ 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 ​ $ 97,789 ​ $ 97,789 ​ $ 97,789 ​ $ — ​ $ — Certificates of deposit ​ ​ 100 ​ ​ 100 ​ ​ — ​ ​ 100 ​ ​ — Marketable equity securities ​ ​ 20,547 ​ ​ 20,547 ​ ​ 20,547 ​ ​ — ​ ​ — Securities held to maturity ​ ​ 15,061 ​ ​ 12,623 ​ ​ — ​ ​ 12,623 ​ ​ — Loans receivable, net ​ ​ 1,755,426 ​ ​ 1,749,916 ​ ​ — ​ ​ — ​ ​ 1,749,916 Investments in restricted stock ​ ​ 712 ​ ​ 712 ​ ​ — ​ ​ 712 ​ ​ — Accrued interest receivable ​ ​ 13,463 ​ ​ 13,463 ​ ​ — ​ ​ 13,463 ​ ​ — Financial Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ 1,628,067 ​ ​ 1,634,216 ​ ​ — ​ ​ 1,634,216 ​ ​ — Borrowings ​ ​ 7,000 ​ ​ 6,232 ​ ​ — ​ ​ 6,232 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at December 31, 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 ​ $ 68,671 ​ $ 68,671 ​ $ 68,671 ​ $ — ​ $ — Certificates of deposit ​ ​ 100 ​ ​ 100 ​ ​ — ​ ​ 100 ​ ​ — Marketable equity securities ​ ​ 18,102 ​ ​ 18,102 ​ ​ 18,102 ​ ​ — ​ ​ — Securities held to maturity ​ ​ 15,860 ​ ​ 13,126 ​ ​ — ​ ​ 13,126 ​ ​ — Loans receivable ​ ​ 1,581,804 ​ ​ 1,552,219 ​ ​ — ​ ​ — ​ ​ 1,552,219 Investments in restricted stock ​ ​ 929 ​ ​ 929 ​ ​ — ​ ​ 929 ​ ​ — Accrued interest receivable ​ ​ 12,311 ​ ​ 12,311 ​ ​ — ​ ​ 12,311 ​ ​ — Financial Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ 1,400,036 ​ ​ 1,401,083 ​ ​ — ​ ​ 1,401,083 ​ ​ — Borrowings ​ ​ 64,000 ​ ​ 63,053 ​ ​ — ​ ​ 63,053 ​ ​ — ​ ​ Note 11 — 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. 29 Table of Contents 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, 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 nine months ended September 30, 2024 and 2023. Sources of revenue outside the scope of ASC 606 are noted as such: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 2023 2024 2023 ​ ​ ​ (In Thousands) ​ (In Thousands) ​ Non-interest income: ​ ​ ​ ​ ​ ​ ​ Deposit-related fees and charges ​ $ 17 ​ $ 15 ​ $ 46 ​ $ 42 ​ Loan-related fees and charges (1) ​ 315 ​ ​ 106 ​ 816 ​ 652 ​ Electronic banking fees and charges ​ 257 ​ ​ 243 ​ 751 ​ 723 ​ Income from bank owned life insurance (1) ​ 167 ​ ​ 153 ​ 486 ​ 857 ​ Investment advisory fees ​ — ​ ​ 114 ​ — ​ 343 ​ Unrealized gain (loss) on equity securities (1) ​ 547 ​ ​ ( 430 ) ​ 445 ​ ( 327 ) ​ Miscellaneous (1) ​ 46 ​ ​ 20 ​ 90 ​ 67 ​ Total non-interest income ​ $ 1,349 ​ $ 221 ​ $ 2,634 ​ $ 2,357 ​ (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. 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 previously earned fees from investment advisory and financial planning services under the name of Harbor West Wealth Management Group, a former division of the Bank, through a networking arrangement with a registered broker-dealer and investment advisor. Under this prior arrangement, the registered broker-dealer deducted investment advisory fees and financial planning services fees from the client’s assets under management and remitted the fees, net of administrative fees, to the Bank on a monthly basis. The Company recognized the fees into non-interest income upon the Bank’s receipt of the monthly remittances. ​ 30 Table of Contents As previously noted, in January 2024, the Bank sold all of the Bank’s assets relating to Harbor West Wealth Management Group to a third party. As a result, the Bank no longer generates investment advisory fees following the completion of the sale transaction. ​ Note 12 — Other Non-Interest Expenses The following is an analysis of other non-interest expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 2023 2024 2023 ​ ​ ​ (In Thousands) ​ (In Thousands) ​ Other ​ $ 155 ​ $ 185 ​ $ 530 ​ $ 558 ​ Regulatory insurance premium and assessments ​ ​ 823 ​ ​ 747 ​ ​ 2,280 ​ ​ 1,696 ​ Dues and subscriptions ​ ​ 182 ​ ​ 173 ​ ​ 574 ​ ​ 517 ​ Service contracts ​ 438 ​ ​ 364 ​ 1,284 ​ 1,040 ​ Consulting expense ​ 190 ​ ​ 191 ​ 590 ​ 612 ​ Telephone ​ 145 ​ ​ 167 ​ 478 ​ 486 ​ Directors' compensation ​ 233 ​ ​ 217 ​ 719 ​ 666 ​ Audit and accounting ​ 130 ​ ​ 159 ​ 406 ​ 376 ​ Insurance ​ 106 ​ ​ 97 ​ 318 ​ 290 ​ Director, officer, and employee expense ​ 78 ​ ​ 62 ​ 238 ​ 190 ​ Legal fees ​ 84 ​ ​ 238 ​ 269 ​ 474 ​ Office supplies and stationary ​ 40 ​ ​ 44 ​ 148 ​ 132 ​ Recruiting expense ​ 3 ​ ​ 2 ​ 30 ​ 27 ​ ​ ​ $ 2,607 ​ $ 2,646 ​ $ 7,864 ​ $ 7,064 ​ ​ ​ ​ Note 13 — 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. 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, 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. ​ 31 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ Shares Market Price Outstanding at December 31, 2023 ​ ​ 286,508 $ 13.72 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Vested ​ ​ — ​ — Outstanding at March 31, 2024 ​ ​ 286,508 ​ $ 13.72 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Vested ​ ​ — ​ — Outstanding at June 30, 2024 ​ ​ 286,508 ​ $ 13.72 Granted ​ ​ 30,000 ​ 22.82 Forfeited ​ ​ — ​ — Vested ​ ​ 17,376 ​ — Outstanding at September 30, 2024 ​ ​ 299,132 ​ $ 14.63 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average ​ 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 ​ $ 13.72 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Vested ​ ​ 17,376 ​ — Outstanding at September 30, 2023 ​ ​ 334,661 ​ $ 13.67 ​ 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 . ​ 32 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ Options Exercise Price Outstanding at December 31, 2023 ​ ​ 880,097 $ 13.67 Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Exercised ​ ​ 1,000 ​ 14.08 Outstanding at March 31, 2024 ​ ​ 879,097 ​ $ 13.67 Exercisable at March 31, 2024 ​ ​ 175,019 ​ ​ 13.67 ​ ​ ​ ​ ​ ​ ​ Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Exercised ​ ​ — ​ — Outstanding at June 30, 2024 ​ ​ 879,097 ​ $ 13.67 Exercisable at June 30, 2024 ​ ​ 175,019 ​ ​ 13.67 ​ ​ ​ ​ ​ ​ ​ Granted ​ ​ — ​ — Forfeited ​ ​ — ​ — Exercised ​ ​ — ​ — Outstanding at September 30, 2024 ​ ​ 879,097 ​ $ 13.67 Exercisable at September 30, 2024 ​ ​ 218,460 ​ ​ 13.67 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average ​ ​ Options Exercise 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 ​ ​ — ​ — Vested ​ ​ — ​ — 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 $ 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 . 33 Table of Contents Note 14 — Recent Accounting Pronouncements In October 2023, the FASB issued ASU 2023-06, Disclosure Improvement: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which incorporates several SEC disclosure requirements into US GAAP and adds interim and annual disclosure requirements to a variety of topics in the Accounting Standards Codification, including those focusing on accounting changes, earnings per share, debt and repurchase agreements. For entities subject to the SEC disclosure requirements and those “required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer,” the US GAAP requirements will be effective when the removal of the related SEC rule is effective. Early adoption is not permitted for these entities. 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. 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. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of the amount of net income taxes paid for federal, state, and foreign taxes, as well as the amount paid to any jurisdiction in which income taxes paid is equal to or greater than a 5% quantitative threshold. The amendments will require the disclosure of pre-tax income disaggregated between domestic and foreign, as well as income tax expense disaggregated by federal, state, and foreign. The amendment also eliminates certain disclosures related to unrecognized tax benefits and certain temporary differences. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted in any annual period where financial statements have not yet been issued. The amendments should be applied on a prospective basis but retrospective application is permitted. The Company does not expect adoption of the standard to have a material impact on its Consolidated Financial Statements. In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718), which amended the guidance in ASC 718 to add an example showing how to apply the scope guidance to determine whether profits interest and similar awards should be accounted for as share-based payment arrangements. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements. This ASU removes various references to the FASB’s Concepts Statements from the FASB’s Accounting Standards Codification. The FASB does not expect these updates to have a significant effect on current accounting practice since, in most cases, the amendments to the Codification remove references to Concept Statements that are extraneous and not required to understand or apply the guidance. However, the FASB has provided transition guidance if applying the updated guidance results in accounting changes for some entities. The amendments in ASU 2024-02 are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. This Update is not expected to have a significant impact on the Company’s financial statements. ​