What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-14 compared with 2024-03-28 · 314 added, 262 removed, 1265 unchanged (31% of the section changed)

16 unchanged sentences

During the quarter and year ended December 31, 2024, there were no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

This Annual Report on Form 10-K does not include an attestation report of the independent registered public accounting firm because the Company is an emerging growth company.

OTHER INFORMATION

5 unchanged sentences

Business—Executive Officers” in this Annual Report on Form 10-K and to the sections captioned “ Proposal 1—Election of Directors ,” and “ Corporate Governance ” in our definitive proxy statement for our 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission no later than 120 days after the close of the fiscal year covered by this Annual Report on Form 10-K (the “Proxy Statement”).

The Company has adopted the NorthEast Community Bancorp, Inc.

Policy Regarding Insider Trading (the “Insider Trading Policy”) and related procedures governing the purchase, sale, and/or other disposition of its securities by its directors, officers, and employees that the Company believes are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and applicable Nasdaq Stock Market listing standards.

A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal securities laws and the applicable Nasdaq Stock Market listing requirements.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

The information required by this item with respect to any delinquent reports filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by referenced to the Proxy Statement.

Code of Ethics and Business Conduct

3 unchanged sentences

A copy of the Code of Ethics and Business Conduct is available in the Investor Relations section of our website (www.necb.com ).

We intend to disclose any amendments to our Code of Ethics and Business Conduct required to be disclosed by the rules of the SEC and the Nasdaq Stock Market on the Investor Relations section of our website.

EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by reference to the section captioned “Executive Compensation ” in the Proxy Statement.

The information required by this item is incorporated herein by reference to the section captioned “Executive Compensation ” and “Director Compensation” in the Proxy Statement.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated herein by reference to the section captioned “Security Ownership ” in the Proxy Statement.

The information required by this item is incorporated herein by reference to the section captioned “Stock Ownership ” in the Proxy Statement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

21 unchanged sentences

Employment Agreement by and between NorthEast Community Bancorp, Inc., NorthEast Community Bank and Kenneth A.

Filed herewith

Incorporated herein by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2023 (File No.

001-40589), filed on March 28, 2024

Employment Agreement by and between NorthEast Community Bancorp, Inc., NorthEast Community Bank and Jose M.

Filed herewith

Incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2023 (File No.

001-40589), filed on March 28, 2024

Employment Agreement by and between NorthEast Community Bancorp, Inc., NorthEast Community Bank and Donald S.

28 unchanged sentences

333-253982), initially filed on March 8, 2021

NorthEast Community Bancorp, Inc.

Policy Regarding Insider Trading

Filed herewith

Consent of S.R.

9 unchanged sentences

Incentive-Compensation Recoupment Policy

Filed herewith

Incorporated herein by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2023 (File No.

001-40589), filed on March 28, 2024

The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in inline XBRL (Extensible Business Reporting Language):

11 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company changed its method of accounting for credit losses effective January 1, 2023, due to the adoption of Accounting Standards Codification (ASC) Topic 326, Financial Instruments – Credit Losses.

Basis for Opinion

26 unchanged sentences

Equity securities

Securities available-for-sale, at fair value

Securities held-to-maturity (net of allowance for credit losses of $ 136 , fair value of $ 13,126 and $ 22,865 , respectively)

Securities held-to-maturity ( net of allowance for credit losses of $ 126 and $ 136 , respectively )

Loans receivable

Deferred loan costs, net

Deferred loan (fees) costs, net

Allowance for credit losses

26 unchanged sentences

75,000,000 shares authorized ;

14,144,856 shares and 16,049,454 shares issued and outstanding , respectively

14,016,254 shares and 14,144,856 shares outstanding , respectively

Additional paid-in capital

17 unchanged sentences

Provision for credit loss

Net Interest Income after Provision for Credit Losses

Net Interest Income after Provision for Credit Loss

NON-INTEREST INCOME:

Other loan fees and service charges

(Loss) gain on disposition of equipment

Gain (loss) on disposition of equipment

Earnings on bank owned life insurance

Investment advisory fees

Realized and unrealized gain (loss) on equity securities

Realized and unrealized (loss) gain on equity securities

Total Non-Interest Income

3 unchanged sentences

Outside data processing

Impairment loss on goodwill

Loss on disposition of business

12 unchanged sentences

(In thousands)

Other comprehensive income:

Other comprehensive (loss) income:

Defined benefit pension:

Reclassification adjustments out of accumulated other comprehensive income:

Amortization of actuarial (gain) loss ¹

Actuarial gain arising during period

Income tax effect ²

Amortization of actuarial gain ¹

Actuarial (loss) gain arising during period

Income tax benefit (effect) ²

Tax adjustment - pension liability

Total other comprehensive income

Total other comprehensive (loss) income

Total Comprehensive Income

9 unchanged sentences

Balance – December 31, 2023

Other comprehensive income

Other comprehensive loss

Cash dividend declared ($ 0.65 per share)

Stock Repurchases

( 1,909,476 )

Restricted stock award

Stock option exercise

Compensation expense related to restricted stock awards

Compensation expense related to stock options

Cumulative effect of adoption of ASU 2016-13

ESOP shares earned

7 unchanged sentences

Stock Repurchases

( 1,909,476 )

Restricted stock award

1 unchanged sentence

Compensation expense related to stock options

Cumulative effect of adoption of ASU 2016-13

ESOP shares earned

9 unchanged sentences

Provision for credit losses

Net amortization of deferred loan fees and costs

Net (accretion) amortization of deferred loan fees and costs

Deferred income tax benefit

Realized and unrealized (gain) loss recognized on equity securities

Impairment of goodwill

Realized and unrealized loss (gain) on equity securities

Impairment of real estate owned

1 unchanged sentence

Loss on disposition of business

Loss (gain) on dispositions of premises and equipment

(Gain) loss on dispositions of premises and equipment

ESOP compensation expense

2 unchanged sentences

Increase in accrued interest receivable

Decrease in other assets

(Increase) decrease in other assets

Decrease in accounts payable - loan closing

(Decrease) increase in accounts payable and accrued expenses

Increase (decrease) in accounts payable and accrued expenses

Net Cash Provided by Operating Activities

4 unchanged sentences

Principal repayments on securities held-to-maturity

Purchase of securities held-to-maturity

Purchase of marketable equity securities

Proceeds from bank owned life insurance

6 unchanged sentences

Proceeds from FRB borrowing

Repayment of FRB borrowing

Repayment of FHLB of NY advances

Stock repurchases

Increase (decrease) in advance payments by borrowers for taxes and insurance

Stock option exercised

Decrease in advance payments by borrowers for taxes and insurance

Cash dividends paid

Net Cash Provided by Financing Activities

Net Decrease in Cash and Cash Equivalents

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents – Beginning

Cash and Cash Equivalents – Ending

See notes to consolidated financial statements.

Northeast Community Bancorp, Inc.

8 unchanged sentences

Recognition of lease liability – operating

Recognition of real estate owned

Dividends declared and not paid

18 unchanged sentences

The Bank’s revenues are derived primarily from interest on loans and, to a lesser extent, interest on investment securities and mortgage-backed securities.

The Bank also generates revenues from other income including deposit fees, service charges and investment advisory fees.

The Bank also offers investment advisory and financial planning services under the name Harbor West Wealth Management Group, a division of the Bank, through a networking arrangement with a registered broker-dealer and investment advisor.

The agreement to sell all the Bank’s assets relating to Harbor West Wealth Management Group to a third party was executed in December 2023, with the transaction closing in January 2024.

The Bank also generates revenues from other income including deposit fee 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.

3 unchanged sentences

We terminated our 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.

Northeast Community Bancorp, Inc.

22 unchanged sentences

Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits in other banks, all with original maturities of 90 days or less.

Certificates of Deposit:

Certificates of deposit are carried at cost which approximates fair value and have maturities of less than one year.

Northeast Community Bancorp, Inc.

35 unchanged sentences

Prepayment penalties received on loans which pay in full prior to the scheduled maturity are included in interest income in the period the prepayment penalties are collected.

Accounting Pronouncements Adopted in 2023:

Effective January 1, 2023, the Company adopted Accounting Standards Topic 326, “Financial Instruments – Credit Losses” which replaced the previously existing U.S.

GAAP “incurred loss” approach to “expected credit losses” approach, which is referred as Current Expected Credit Losses (“CECL”).

CECL measures the credit loss associated with financial assets carried at amortized cost, including loan receivables, held-to-maturity debt securities, off balance sheet credit exposures.

The Company adopted Topic 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balances sheet exposures.

Results for reporting periods beginning after January 1, 2023 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

Upon adoption, we recorded a cumulative-effect adjustment totaling $ 134,000 , or $ 99,000 , net of tax, to reduce retained earnings.

The transition adjustment includes the adoption and changes to the three applicable components of the allowance for credit losses (“ACL”):

a decrease of $ 1.6 million in the allowance for credit losses related to loans, an increase of $ 132,000 in the allowance for credit losses related to held-to-maturity debt securities, and an increase of $ 1.6 million in the allowance for credit losses related to off-balance sheet items.

The following table illustrates the impact of adopting ASC 326:

January 1, 2023

Adoption Impact

(In Thousands)

ACL on debt securities held-to-maturity

Municipal Bonds

ACL on loan receivables

Residential real estate

Non-residential real estate

Commercial and industrial

ACL for off-balance sheet exposure

Allowance for Credit Losses - Loans

4 unchanged sentences

Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies (continued)

The methodology for determining the ACL has two main components:

19 unchanged sentences

When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income.

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

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

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

Northeast Community Bancorp, Inc.

1 unchanged sentence

Note 1 - Summary of Significant Accounting Policies (continued)

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

Allowance for Credit Losses – Held-to-Maturity Debt Securities

10 unchanged sentences

Concentration of Risk:

The Company’s lending activity is concentrated in construction and permanent loans secured by multi-family and non-residential real estate located primarily in the Northeast and Mid-Atlantic regions of the United States.

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 December 31, 2024 and 2023, the Company had majority of construction loans located in New York state, including $ 708.5 million and $ 626.0 million in the Bronx, $ 246.4 million and $ 198.5 million in the Town of Monroe, $ 112.4 million and $ 133.7 million in the Hamlet of Monsey, $ 141.6 million and $ 105.9 million in the Village of Spring Valley, and $ 9.7 million and $ 18.8 million in Brooklyn.

The Company also had deposits in excess of the FDIC insurance limit at other financial institutions.

At December 31, 2023 and 2022, such deposits totaled $ 43.2 million and $ 59.0 million held by the Federal Reserve Bank of New York, $ 13.7 million and $ 26.4 million held by the Federal Home Loan Bank of New York, and $ 430,000 and $ 1.0 million held by Atlantic Community Bankers Bank (“ACBB”).

At December 31, 2024 and 2023, such deposits totaled $ 51.0 million and $ 43.2 million held by the Federal Reserve Bank of New York, $ 12.1 million and $ 13.7 million held by the Federal Home Loan Bank of New York, and $ 707,000 and $ 430,000 held by Atlantic Community Bankers Bank (“ACBB”).

Generally, deposits in excess of $250,000 are not insured by the FDIC.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies (continued)

Premises and Equipment:

5 unchanged sentences

Maintenance and repairs are charged to operations in the years incurred.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies (continued)

Property and equipment are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable.

12 unchanged sentences

These stocks are carried at cost.

At December 31, 2023 and 2022, the Company had $ 859,000 and $ 1.2 million in FHLB stock, and $ 70,000 and $ 70,000 in ACBB stocks.

Goodwill at December 31, 2023 and 2022 totaled zero and $ 200,000 , respectively, and consists of goodwill acquired in the business combination completed by the Company in November 2007.

The Company tests goodwill during the fourth quarter of each year for impairment, or more frequently if certain indicators are present or changes in circumstances suggest that impairment may exist.

The Company utilizes a two-step approach.

The first step requires a comparison of the carrying value of the reporting unit to the fair value of the unit.

The Company estimates the fair value of the reporting unit through internal analyses and external valuation, which utilizes an income approach based on the present value of future cash flows.

If the carrying value of the reporting unit exceeds its fair value, impairment exists and the Company will perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any.

The second step of the goodwill impairment test, if necessary, compares the implied fair value of a reporting unit’s goodwill with its carrying value.

The implied fair value of goodwill is determined in the same manner that the amount of goodwill recognized in a business combination is determined.

The Company allocates the fair value of the reporting unit to all of the assets and liabilities of that unit, including identifiable intangible assets, as if the reporting unit had been acquired in a business combination.

Any excess of the value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.

Impairment charges of $ 451,000 were recorded in 2022 due to increased capitalization rate when evaluating the investment value of the goodwill.

As of December 31, 2023, the goodwill was eliminated along with the sale of Harbor West Wealth Management Group to a third party in December 2023.

The sale resulted in a total of $ 138,000 loss recognized on the consolidated statement of income.

At December 31, 2024 and 2023, the Company had $ 327,000 and $ 859,000 in FHLB stock, and $ 70,000 and $ 70,000 in ACBB stocks.

Real Estate Owned:

3 unchanged sentences

Costs of holding such properties are charged to non-interest expense in the current period.

Gains, to the extent allowable, and losses

Gains, to the extent allowable, and losses on the disposition of these properties are reflected in the real estate owned expense in the consolidated statement of income.

The Company wrote down $ 689,000 in 2024 due to a decrease in the estimated fair value of a foreclosed property located in Pittsburgh, Pennsylvania.

No write-downs were recorded in 2023.

Northeast Community Bancorp, Inc.

1 unchanged sentence

Note 1 - Summary of Significant Accounting Policies (continued)

on the disposition of these properties are reflected in the real estate owned expense in the consolidated statement of income.

The Company wrote down $ 540,000 in 2022 due to increased capitalization rate in evaluating the fair value of the properties.

No write-downs were recorded in 2023.

Property Held for Investment:

34 unchanged sentences

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 computations of basic and diluted earnings per share:

(In Thousands, except per share data)

Net income (basic and diluted)

Weighted average shares issued

Weighted average unearned ESOP shares

Weighted average unvested restricted shares

Basic weighted average shares outstanding

Dilutive effect of restricted stock

Dilutive effect of stock option

Diluted weighted average shares outstanding

Net income per share

There were 880,097 stock options outstanding at December 31, 2023 and 2022 respectively that were not included in the computation of diluted earnings per share as their effect would have been anti-dilutive.

Stockholders’ Equity:

3 unchanged sentences

The Company has not issued any preferred stock.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies (continued)

Employee Stock Ownership Plan (ESOP):

10 unchanged sentences

The Company accounts for forfeitures as they occur.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies (continued)

Stock Repurchases:

1 unchanged sentence

Segment Information:

The Company reports certain financial information about significant revenue-producing segments of the business for which such information is available and utilized by the chief operating decision makers.

Substantially most of the Company’s operations occur through the bank and involve the delivery of loan and deposit products to customers.

Small portion of the Company’s operations occurs through wealth management advisory service to customers.

Management makes operating decisions and assesses performance based on an ongoing review of its banking and advisory service.

The wealth management operation does not meet the quantitative threshold requirement to be disclosed separately.

While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis.

Operating segments are aggregated into one as operating results for all segments are similar.

Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

Adoption of New Accounting Standard

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis.

The Company has retrospectively provided the enhanced disclosures in Note 26 as of December 31, 2024 and 2023.

Off-Balance-Sheet Financial Instruments:

In the ordinary course of business, the Company enters into off-balance-sheet financial instruments consisting of commitments to extend credit.

Such financial instruments are recorded in the consolidated statement of financial condition when funded.

Such financial instruments are recorded in the Consolidated Statements of Financial Condition when funded.

Note 2 – Mutual Holding Company Reorganization and Regulatory Matters

2 unchanged sentences

As disclosed in note 1, in conjunction with the completion of the second-step conversion on July 12, 2021, each of NorthEast Community Bancorp, MHC and the Mid-Tier Holding Company merged out of existence and now cease to exist.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 2 – Mutual Holding Company Reorganization and Regulatory Matters (continued)

The Federal Deposit Insurance Corporation (“FDIC”) and the New York State Department of Financial Services (“NYS”) are the Bank’s primary regulator.

1 unchanged sentence

The FDIC also has authority to use its enforcement powers to prohibit a savings bank from paying dividends if, in its opinion, the payment of dividends would constitute an unsafe and unsound practice.

The Bank is subject to risk-based capital standards by which banks are evaluated in terms of capital adequacy.

These regulatory capital requirements are administered by the federal banking agencies.

Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.

The Bank’s capital and classification are also subject to qualitative judgments by the regulators.

Management believes that, as of December 31, 2023, the Bank meets all capital adequacy requirements to which it is subject.

Prompt corrective action regulations provide five classifications:

well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition.

If adequately capitalized, regulatory approval is required to accept brokered deposits.

If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

At year-end 2023 and 2022, the most recent regulatory notifications categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action.

There are no conditions or events since that notification that management believes have changed the institution’s category.

In addition, a capital conservation buffer of 2.50 % is applicable to all capital ratios except for the Tier 1 Leverage ratio.

The capital conservation buffer is equal to the lowest value of the three applicable capital ratios less the regulatory minimum (“adequately capitalized”) for each respective capital measurement.

Compliance with the capital conservation buffer is required to avoid limitations on certain capital distributions, especially dividends.

The Bank is required to maintain a capital conservation buffer of 2.50 % at December 31, 2023 and 2022.

The Bank met all capital adequacy requirements to which it was subject as of December 31, 2023 and 2022.

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 December 31, 2024 and December 31, 2023.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Actual and required capital amounts and ratios as of December 31, 2023 and 2022, are presented below:

Note 2 – Mutual Holding Company Reorganization and Regulatory Matters (continued)

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

Regulatory Capital Requirements

14 unchanged sentences

(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 - Financial Instruments with Off-Balance Sheet Risk

12 unchanged sentences

Consumer lines

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 3 - Financial Instruments with Off-Balance Sheet Risk (continued)

Commitments to extend credit are legally binding agreements to lend to a customer as long as there is no violation of any condition established in the contract.

1 unchanged sentence

The amount of collateral obtained, if deemed necessary by the Company, is based on management’s credit evaluation of the borrower.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 4 – Equity Securities

4 unchanged sentences

(In Thousands)

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

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

Capital gain realized on equity securities during the period

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

Realized and unrealized net gain (loss) recognized on equity securities held at the reporting date

Note 5 – Securities Available-for-Sale

The Company’s portfolio of securities available-for-sale was zero at December 31, 2023.

The following table summarized the portfolio at December 31, 2022:

December 31, 2022

(In Thousands)

Mortgage-backed securities – residential:

Federal Home Loan Mortgage Corporation

There were no sales of securities available-for-sale during the years ended December 31, 2023 and 2022.

The Company had no unrealized loss on securities available-for-sale at December 31, 2023 and 2022.

Realized and unrealized net (loss) gain recognized on equity securities held at the reporting date

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 5 – Earnings Per Share

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

(In Thousands, except per share data)

Net income (basic and diluted)

Weighted average shares issued

Weighted average unearned ESOP shares

Weighted average unvested restricted shares

Basic weighted average shares outstanding

Dilutive effect of restricted stock

Dilutive effect of stock option

Diluted weighted average shares outstanding

Net income per share

There were 880,097 stock options outstanding at December 31, 2023 that were not included in the computation of diluted earnings per share as their effect would have been anti-dilutive.

There was no anti-dilutive shares outstanding at December 31, 2024.

Note 6 – Securities Held-to-Maturity

10 unchanged sentences

Municipal Bonds

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 6 – Securities Held-to-Maturity (continued)

December 31, 2023

7 unchanged sentences

Municipal Bonds

Treasury securities

Contractual final maturities of mortgage-backed securities and municipal bonds were as follows at December 31, 2024:

7 unchanged sentences

Actual maturities will differ from contractual maturities due to scheduled monthly repayments and due to the underlying borrowers having the right to prepay their obligations.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 6 – Securities Held-to-Maturity (continued)

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity:

Municipal Bonds

Balance – December 31, 2023

Provision for credit loss

Balance - December 31, 2024

Municipal Bonds

Balance – December 31, 2022

Impact of adopting ASC 326

1 unchanged sentence

Balance - December 31, 2023

The age of unrealized losses and the fair value of related securities held-to-maturity were as follows:

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 6 – Securities Held-to-Maturity (continued)

The age of unrealized losses and the fair value of related securities held-to-maturity were as follows, for which an allowance for credit losses has not been recorded:

Less than 12 Months

3 unchanged sentences

Mortgage-backed securities - residential:

Government National Mortgage Association

Federal Home Loan Mortgage Corporation

12 unchanged sentences

Total mortgage-backed securities

Municipal Bonds

Treasury securities

Northeast Community Bancorp, Inc.

1 unchanged sentence

Note 6 – Securities Held-to-Maturity (continued)

At December 31, 2023, twenty-seven mortgage-backed securities and eight municipal bonds had unrealized loss due to interest rate volatility.

At December 31, 2024, sixteen mortgage-backed securities had unrealized loss due to interest rate volatility.

Management concluded that the unrealized loss reflected above was related primarily to market interest rates volatility, and not related to the underlying credit quality of the issuers of the securities.

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

At December 31, 2022, there were thirty-five mortgage-backed securities, six municipal bonds and two U.S.

Treasury notes with unrealized loss.

At December 31, 2023, there were twenty-seven mortgage-backed securities and eight municipal bonds with unrealized loss.

Note 7 - Loans Receivable and the Allowance for Credit Losses

6 unchanged sentences

Commercial and industrial

Deferred loan costs, net

Deferred loan (fees) costs, net

Allowance for credit losses

2 unchanged sentences

The Company sold loan participations totaling $ 11.8 million and $ 19.2 million in 2024 and 2023.

There was no other loan sold in 2024.

During the year ended December 31, 2023, the Company sold three loans with the same borrower totaling $ 10.4 million with a charge-off of $ 159,000 recognized on the sale.

During the year ended December 31, 2022, the Company sold one loan totaling $ 1,578,000 , net of interest reserve of $ 63,000 , with a charge-off of $ 391,000 recognized on the sale.

Northeast Community Bancorp, Inc.

18 unchanged sentences

(In Thousands)

Allowance for loan losses:

Allowance for credit losses:

Ending balance

16 unchanged sentences

Balance - December 31, 2023

Impact of adopting ASC 326

Provision (Benefit)

Provision (reversal of)

Balance - December 31, 2024

2 unchanged sentences

Balance - December 31, 2022

Provision (Benefit)

Impact of adopting ASC 326

Provision (reversal of)

Balance - December 31, 2023

During the year ended December 31, 2024, the reversal of provision recorded for residential real estate loans was primarily attributed to reduced credit risk.

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

The provision expense recorded for commercial and industrial loans were attributed to increased credit risk.

During the last quarter of 2024, the Company had a complete charge-off of $ 1.0 million against a potential non-performing commercial and industrial loan whereby the borrower pleaded guilty and faces incarceration due to loan fraud not related to our commercial and industrial loan.

The provision expense recorded for consumer loans was primarily attributed to increased deposit account overdraft balances and increased credit risk.

The provision expense recorded for constructions loans was primarily attributed to increased loan balances, offset by improving economic and sub-market housing conditions during the year ended December 31, 2024.

During the year ended December 31, 2023, the provision expenses recorded for construction loans were primarily attributed to the increased loan balances.

1 unchanged sentence

The provision expenses recorded for consumer loans was primarily due to increased deposit account overdraft balance and increased credit risk.

During the year ended December 31, 2022, the provision expenses recorded for construction loans were attributed to the increased loan balances.

The credit provision recorded for residential loans was primarily due to loan recoveries and reduced credit risk.

The credit provision recorded for non-residential loans was attributed to loan recoveries and decreased loan balances.

Northeast Community Bancorp, Inc.

20 unchanged sentences

Interest Income

2022 - Impaired

2023 - Individually evaluated

(In Thousands)

7 unchanged sentences

Commercial and industrial

The Company has one individually evaluated loan, totaling $ 241,000 at December 31, 2024.

The underlying business experienced a significant decline in sales revenue during 2024, but the borrower continues to make monthly payments through personal guarantees.

Therefore, this loan was downgraded to substandard but still accruing.

At December 31, 2024, there were no non-accrual loans.

At December 31, 2023, the Company had two individually evaluated loans, totaling $ 4.4 million, which were collateral-dependent construction loans, secured by multi-family real estate.

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

In October 2024, the Company acquired the foreclosed property that secured the two loans at a book value of $ 4.4 million

Northeast Community Bancorp, Inc.

1 unchanged sentence

Note 7 - Loans Receivable and the Allowance for Credit Losses (continued)

The Company has two individually evaluated loans, totaling $ 4.4 million, which were collateral-dependent construction loans, secured by multi-family real estate, at December 31, 2023.

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

and recorded it as real estate owned on the Consolidated Statement of Financial Condition as of December 31, 2024.

There was no interest income recognized from non-accrual loans as of December 31, 2024 and 2023.

There were no non-accrual loans at December 31, 2022.

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

30 unchanged sentences

Note 7 - Loans Receivable and the Allowance for Credit Losses (continued)

The following table presents the risk category of loans at December 31, 2023 by loan segment and vintage year:

The following tables presents the risk category of loans at December 31, 2024 and 2023 by loan segment and vintage year:

Term Loans Amortized Costs Basis by Origination Year

21 unchanged sentences

Note 7 - Loans Receivable and the Allowance for Credit Losses (continued)

The following table provides certain information related to the credit quality of our loan portfolio at December 31, 2022.

Credit Risk Profile by Internally Assigned Grade as of December 31, 2022:

Non-residential

and Industrial

(In Thousands)

Term Loans Amortized Costs Basis by Origination Year

December 31, 2023

Residential real estate

Special Mention

Residential real estate

Current period gross charge-offs

Non-residential real estate

Special Mention

Non-residential real estate

Current period gross charge-offs

Special Mention

Current period gross charge-offs

Commercial and industrial

Special Mention

Commercial and industrial

Current period gross charge-offs

Special Mention

Current period gross charge-offs

Special Mention

Current period gross charge-offs

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 7 - Loans Receivable and the Allowance for Credit Losses (continued)

Modifications to Borrowers Experiencing Financial Difficulty:

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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 year ended December 31, 2023:

Allowance for

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 year ended December 31, 2024 and 2023:

Allowance for Credit Loss

Balance – December 31, 2023

Reversal of credit loss

Balance – December 31, 2024

Allowance for Credit Loss

Balance – December 31, 2022

Impact of adopting ASC 326

Provision for credit loss

Reversal of credit loss

Balance – December 31, 2023

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 8 - Premises and Equipment, Net

5 unchanged sentences

Depreciation expense on premises and equipment for the fiscal years ended December 31, 2024 and 2023 totaled $ 1.2 million and $ 1.2 million, respectively.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 9 - Accrued Interest Receivable, Net

1 unchanged sentence

Loans receivable

Note 10 - Goodwill and Intangible Assets

Goodwill and intangible assets at December 31 are summarized as follows:

(In Thousands)

Accumulative goodwill impairment

Goodwill, net of charge-off

As of December 31, 2023, the goodwill was eliminated along with the sale of Harbor West Wealth Management Group to a third party in December 2023.

The sale resulted in a total of $ 138,000 loss recognized on the consolidated statement of income.

The Company identified $ 451,000 in goodwill impairment during the year ended December 31, 2022.

Note 10 - Real Estate Owned (“REO”)

The Company owned one foreclosed property valued at approximately $ 1,456,000 at December 31, 2023 and 2022, respectively, consisting of an office building located in Pennsylvania.

The property was acquired through foreclosure in December 2014.

The Company owned two foreclosed properties valued at approximately $ 5,120,000 at December 31, 2024, consisting of an office building located in Pennsylvania which was acquired through foreclosure in December 2014, and a land and land improvement located in Bronx which was acquired through foreclosure in October 2024.

The Company owned one foreclosed property valued at $ 1,456,000 at December 31, 2023, consisting of an office building located in Pennsylvania which was acquired through foreclosure in December 2014.

Further declines in real estate values may result in impairment charges in the future.

1 unchanged sentence

REO expense recorded in the Consolidated Statements of Income, including loss on sales and write-downs, amounted to $ 731,000 and 93,000 during the years ended December 31, 2024 and 2023.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 11– Property Held For Investment

5 unchanged sentences

The property is currently leased to a car rental company to generate current income for the Company.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 12 – Deposits

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At December 31, 2024 and 2023, the Company also had $ 12.8 million and $ 13.0 million, respectively, in Insured Cash Sweep (“ICS”) reciprocal money market deposits, which are no longer considered fully-insured brokered deposits as defined in the FDIC call report instructions.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 13 – Deposits (continued)

The ICS money market deposits were obtained from seven retail depositors and then transferred into the ICS Network in order to obtain full FDIC insurance coverage for our customers.

6 unchanged sentences

Certificates of deposit

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 13 – Borrowings

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After five years (due 2030)

At December 31, 2023, none of the above advances were subject to early call or redemption features.

All advances had fixed interest rates and the term of the advance ranges between 2 and 10 years .

At December 31, 2023, the advances were secured by a pledge of the Company’s investment in the capital stock of the FHLB and a blanket assignment of the Company’s otherwise unpledged qualifying mortgage loans.

At December 31, 2023, these unpledged qualifying mortgage loans were not pledged to any company other than the FHLB.

At December 31, 2023, the Company had the ability to borrow $ 29.7 million, net of $ 14.0 million in outstanding advances, from the FHLB and $ 8.0 million from ACBB.

On August 30, 2023, the FRBNY approved the Company’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Company to borrow from the Discount Window at the FRBNY.

As of December 31, 2023, the borrowing from FRBNY was $ 50.0 million, bearing an interest rate of 5.5 % and matures on March 20, 2024.

The Company had an available borrowing limit of $ 865.1 million from the FRBNY as of December 31, 2023.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

As of December 31, 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 %.

At December 31, 2024, the Company had the ability to borrow $ 834.7 million from the FRBNY, $ 18.2 million from the FHLB, and $ 8.0 million from ACBB.

Note 14 - Income Taxes

8 unchanged sentences

Deferred tax expense

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 14 - Income Taxes (continued)

The following table presents a reconciliation between the reported income taxes and the income taxes, which would be computed by applying the existing federal income tax rate of 21 % for 2024 and 2023 to income before taxes:

5 unchanged sentences

Effective Income Tax Rate

The tax effects of significant items comprising the net deferred tax asset are as follows:

The tax effects of significant items comprising the net deferred tax assets are as follows:

(In Thousands)

6 unchanged sentences

Deferred tax liability:

Accumulated other comprehensive gain – DRP

Total Deferred Tax Liabilities

Net Deferred Tax Assets Included in Other Assets

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 15 - Income Taxes (continued)

The Company has state net operating loss (NOL) carryforwards totaling approximately $ 263,000 at December 31, 2024 that are available to be carried forward to future years.

1 unchanged sentence

At December 31, 2024, the Company had no valuation allowance because the Company determined there will be enough future New York State taxable income to utilize the New York State deferred tax assets.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 15 - Other Non-Interest Expenses

2 unchanged sentences

(In Thousands)

Regulatory insurance premium and assessments

Dues and subscriptions

Service contracts

5 unchanged sentences

Recruiting expense

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 16 - Benefits Plans

6 unchanged sentences

Interest cost

Actuarial gain

Actuarial loss (gain)

Benefits Paid

4 unchanged sentences

Rate of increase in future compensation levels

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 16 - Benefits Plans (continued)

Outside Director Retirement Plan (“DRP”) (continued)

Years Ended December 31,

2 unchanged sentences

Interest cost

Actuarial (gain) loss amortized

Actuarial gain amortized

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

2 unchanged sentences

Benefit payments, which reflect expected future service as appropriate, are expected to be paid for the years ending December 31 as follows (in thousands):

At December 31, 2023 and 2022, unrecognized net gain of $ 116,000 and $ 353,000 , respectively, were included in accumulated other comprehensive income.

At December 31, 2024 and 2023, unrecognized net loss of $ 88,000 and net gain of $ 116,000 , respectively, were included in accumulated other comprehensive income.

Supplemental Executive Retirement Plan (“SERP”)

1 unchanged sentence

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

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 17 - Benefits Plans (continued)

Supplemental Executive Retirement Plan (“SERP”)(continued)

early and receive a reduced benefit upon the attainment of certain age and years of service combination.

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.

7 unchanged sentences

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.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 16 - Benefits Plans (continued)

Stock-Based Deferral Plan (continued)

make deemed investments of that deferred compensation in shares of the Company’s common stock.

At December 31, 2024 and 2023, the Company did not have any obligations under the plan.

14 unchanged sentences

Thereafter, on a monthly basis over the terms of the ESOP loans, approximately 2,894 shares for the ESOP established in 2006 and approximately 4,348 shares for the ESOP

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 17 - Benefits Plans (continued)

Employee Stock Ownership Plan (“ESOP”)(continued)

established in 2021 are committed to be released, respectively.

11 unchanged sentences

Fair value of unearned shares

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 17 – Stock Based Compensation

3 unchanged sentences

As of December 31, 2024, there were 102,759 shares available for future awards under this plan, which includes 98,311 shares available for stock options and 4,448 shares available for restricted stock awards.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 18 – Stock Based Compensation (continued)

A summary of the Company’s restricted stock activity and related information for the year ended December 31 follows:

17 unchanged sentences

Exercisable at end of year

Weighted average fair value

of options granted in current year

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

7 unchanged sentences

Compensation expense related to stock options was $ 845,000 and $ 768,000 for the years ended December 31, 2024 and 2023.

At December 31, 2023, unrecognized compensation cost related to stock option awards was $ 3.0 million, which is expected to be recognized over the next 5 years .

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

At December 31, 2024 and 2023, unrecognized compensation cost related to stock option awards was $ 2.1 million and $ 3.0 million, which is expected to be recognized over the next 3 years .

Note 18 - Leases

4 unchanged sentences

The payment structure of all leases is fixed rental payments with lease payments increasing on pre-determined dates at either a predetermined amount or change in the consumer price index.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 18 – Leases (continued)

In accordance with ASC 842, the Company recognized operating and financing lease assets and corresponding lease liabilities related to office facilities and retail branches.

6 unchanged sentences

The Company either pays directly or reimburses the lessor for property and casualty insurance cost and the property taxes assessed on the property, as well as a portion of the common area maintenance associated with the property which are categorized as non-components as outlined in the applicable guidance.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 19 – Leases (continued)

The quantitative data relates to the Company’s leases are as follows (in thousands):

16 unchanged sentences

Operating leases

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 18 – Leases (continued)

Maturities of lease liabilities at December 31, 2024 are as follows (in thousands):

5 unchanged sentences

Based on information presently available and advice received from legal counsel representing the Company and Bank in connection with such claims and litigation, it is the opinion of management that the disposition or ultimate determination of such claims and litigation will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 20 - Fair Value Disclosures

8 unchanged sentences

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).

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 20 - Fair Value Disclosures (continued)

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

26 unchanged sentences

(In Thousands)

Collateral dependent loans

Income approach

Capitalization rate

Real estate owned

Sales approach

Adjustment to sales comparison value

- 40 % to - 10 %

Real estate owned

Income approach

2 unchanged sentences

(In Thousands)

Impaired loans

Collateral dependent loans

Income approach

9 unchanged sentences

Subsequently, as these properties are actively marketed, the estimated fair values may be periodically adjusted through incremental subsequent write-downs to reflect decreases in estimated values resulting from sales price observations and the impact of changing economic and market conditions.

A loan is considered individually evaluated for credit loss when, based upon current information and events, it is probable that the Company will be unable to collect all scheduled payments in accordance with the contractual terms of the loan.

Individually evaluated loans that are collateral dependent are written down to fair value through the establishment of specific reserves, a component of the allowance for credit losses or through partial charge-offs, and

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 20 – Fair Value Disclosures (continued)

41 unchanged sentences

Marketable equity securities

Securities available for sale

Securities held to maturity

3 unchanged sentences

Financial Liabilities

FHLB of New York advances

Northeast Community Bancorp, Inc.

4 unchanged sentences

Deposits of related parties at the Company totaled $ 2.1 million and $ 2.2 million at December 31, 2024 and 2023, respectively.

O’Malley is an attorney with Kevin P.

O’Malley served as a director of the Company during the years ended December 31, 2024 and 2023 and during that time, also served as an attorney with Kevin P.

O’Malley, P.C., a law firm that provides construction loan closing services to borrowers of the Company.

1 unchanged sentence

O’Malley’s law firm in connection with closing of construction loans.

In addition, in fiscal year 2023 and 2022, the Company paid Mr.

O’Malley’s law firm zero and $ 3,000 for legal services provided on a corporate related matter.

Morgenthau was appointed and served as a director of the Company in 2024, and he also served as an attorney with Moritt Hock & Hamroff LLP, a law firm that provides legal services to the Company.

During the fiscal year ended December 31, 2024, the Company paid $ 94,000 to the firm.

Note 22 – Revenue Recognition

7 unchanged sentences

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

As of December 31, 2023, the Company did not have any significant contract balances.

As of December 31, 2024 and 2023, 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.

6 unchanged sentences

Electronic banking fees and charges

(Loss) gain on disposition of equipment (1)

Gain (loss) on disposition of equipment (1)

Income from bank owned life insurance (1)

Investment advisory fees

Realized and unrealized gain (loss) on equity securities (1)

Realized and unrealized (loss) gain on equity securities (1)

Miscellaneous (1)

20 unchanged sentences

Note 23 – Recent Accounting Pronouncements

Accounting Standards Pending Adoption:

In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718), which amends or supersedes various SEC paragraphs within the Codification to conform to past SEC announcements and guidance issued by the SEC.

The ASU does not provide any new guidance so there is no transition or effective date associated with it.

This ASU did not have a significant impact on the Company’s financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvement:

5 unchanged sentences

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.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 24 – Recent Accounting Pronouncements (continued)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, requires the amount of net income taxes paid for federal, state, and foreign taxes, as well as the amount paid to any jurisdiction that net taxes exceed a 5% quantitative threshold.

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.

2 unchanged sentences

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 amendments should be applied on a prospective basis but retrospective application is

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 23 – Recent Accounting Pronouncements (continued)

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.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures .

This ASU requires disclosure in the notes to financial statements of specified information about certain costs and expenses.

Specific disclosures are required for (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities.

The amendments in this Update do not change or remove current expense disclosure requirements.

However, the amendments affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments.

The amendments in ASU 2024-03 apply only to public business entities and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

This Update is not expected to have a significant impact on the Company’s financial statements.

In December 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments .

This new guidance clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument.

The ASU requires entities to apply a preexisting contract approach.

To qualify for induced conversion accounting under this approach, the inducement offer is required to preserve the form of consideration and result in an amount of consideration that is no less than that issuable pursuant to the preexisting conversion privileges.

The guidance is effective for fiscal years beginning after December 15, 2025, with early adoption permitted, and it can be adopted either on a prospective or retrospective basis.

This Update is not expected to have a significant impact on the Company’s financial statements.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU.

This Update is not expected to have a significant impact on the Company’s financial statements.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 24 - Subsequent Events

27 unchanged sentences

Income before Income Tax Expense and Equity in Undistributed Earnings of Subsidiary

Income tax (benefit) expense

Income tax benefit

Income before Equity in Undistributed Earnings of Subsidiary

11 unchanged sentences

Net increase in loans

Net Cash Provided (Used in) by Investing Activities

Net Cash (Used in) Provided by Investing Activities

Cash Flows from Financing Activities

Cash dividends paid

Stock option exercised

Stock repurchase

Net Cash Used in Financing Activities

Net Decrease in Cash and Cash Equivalents

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents – Beginning

Cash and Cash Equivalents – Ending

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 26 – Business Segments

Accounting policies for segments are the same as those described in Note 1.

The Company has one reportable segment.

Substantially most of the Company’s operations occur through the bank and involve the delivery of loan and deposit products to customers.

Small portion of the Company’s operations occurs through wealth management advisory service to customers in 2023 before the sale of all the Bank’s assets relating to Harbor West Wealth Management Group to a third party.

In 2023, the wealth management operation does not meet the quantitative threshold requirement to be disclosed separately.

In 2024, the Company does not have revenue-producing segment through wealth management advisory services.

The Company’s chief operating decision maker is the Executive Committee that includes the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer.

The Executive Committee assesses performance of the Company on a consolidated basis and decides how to allocate resources based on net income that is also reported as net income on the Consolidated Statement of Income.

The Executive Committee uses net income, which is the measure of segment profit and loss, to evaluate income generated from segment assets (return on assets) and other measures, such as net interest margin, return on average assets, and return on common equity, in deciding how to reinvest profits, such as originating loans, investing in investment securities, or to repurchase shares in the Company’s common stock.

Net income is used to monitor budget versus actual results.

The Executive Committee also uses net income and other measures in comparing to the Company’s peer banks.

The comparison of the Company’s net income and other measures to its peer banks, along with the comparison of budgeted versus actual results are used in assessing the Company’s performance and in establishing management compensation.

Loans, investments, and deposits provide the revenues in the banking operation.

Interest expense and payroll provide the significant expenses in the banking operation.

All operations are domestic.

Northeast Community Bancorp, Inc.

Notes to Consolidated Financial Statements

Note 26 – Business Segments (continued)

The following table presents the Company’s reported segment revenues, profit or loss and significant segment expenses for the years ended December 31, 2024 and 2023:

Years Ended December 31,

(In Thousand)

Total interest income

Total interest expense

Net interest income

Provision for credit losses

Net interest income after provision for credit losses

Total non-interest income

Non-interest expense:

Salaries and employee benefits

Occupancy expense

Outside data processing

Loss on disposition of business

Real estate owned expense

Total Non-Interest Expenses

Income before income tax expense

Income tax expense

Segment net income

Reconciliation of profit or loss

Adjustments and reconciling items

Consolidated net income

Earnings per common share - Basis

Earnings per common share - Diluted

The measure of segment assets is reported as total assets on the Consolidated Statement of Condition.

The following table presents the Company’s reported segment assets as of December 31, 2024 and 2023:

(In Thousand)

Segment assets

Adjustments and reconciling items

Consolidated total assets

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

28 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures