What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-06 · 106 added, 200 removed, 601 unchanged (34% of the section changed)

4 unchanged sentences

(Dollars in thousands except per share data)

September 30,

2025 December 31,

4 unchanged sentences

Investment securities available for sale, at fair value 5,236 5,551

Investment securities held to maturity, net of allowance for credit losses of $ 0 at September 30, 2024 and December 31, 2023 (fair value of $ 7,872 at September 30, 2024 and $ 7,892 at December 31, 2023)

Investment securities held to maturity, net of allowance for credit losses of $ 0 at March 31, 2025 and December 31, 2024 (fair value of $ 7,447 at March 31, 2025 and $ 7,492 at December 31, 2024)

Total investment securities 14,340 14,760

27 unchanged sentences

Preferred stock, 1,000,000 shares authorized, $ 1,000 liquidation value Series B non-cumulative convertible;

325 shares and 375 shares outstanding at September 30, 2024 and December 31, 2023, respectively

325 shares outstanding at March 31, 2025 and December 31, 2024

Common stock, $ 0.10 par value;

authorized 15,000,000 shares;

12,264,116 shares and 12,240,821 shares at September 30, 2024 and December 31, 2023, respectively

12,327,850 shares and 12,313,489 shares at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 137,951 137,784

1 unchanged sentence

Accumulated other comprehensive loss ( 285 ) ( 337 )

Treasury stock, 381,723 shares and 284,522 shares at September 30, 2024 and December 31, 2023, at cost

Treasury stock, 484,522 shares at March 31, 2025 and December 31, 2024, at cost

( 7,277 ) ( 7,277 )

7 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

Interest income:

8 unchanged sentences

Net interest income 16,607 14,054

Provision for (recovery of) credit losses ( 141 ) 300 546 ( 1,600 )

Net interest income after provision for (recovery of) credit losses 14,864 15,383 42,543 50,299

Provision for credit losses 590 204

Net interest income after provision for credit losses 16,017 13,850

Non-interest income

Service fees on deposit accounts 308 379

Gain (loss) on sale of SBA loans ( 3 ) — 23 —

Other loan fees 178 238

Bank owned life insurance income 165 160

Net gain on sale and valuation adjustment of OREO — 38 — 38

Other 170 285

26 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

Net income attributable to the Company $ 7,778 $ 6,151

8 unchanged sentences

(Dollars in thousands except share data)

Periods ended September 30, 2024

Three-months ended March 31, 2025 and 2024

Shares of Preferred Stock Outstanding Preferred

5 unchanged sentences

Three Months Ended

Balance, June 30, 2024 325 $ 325 12,254,220 $ 1,225 $ 136,946 $ 157,725 $ ( 406 ) $ ( 3,015 ) $ 292,800

Net income — — — — — 7,508 — — 7,508

Common stock options exercised — — 9,896 1 111 — — — 112

Treasury stock purchase ( 100,000 of shares)

— — — — — — — ( 2,024 ) ( 2,024 )

Other comprehensive income — — — — — — 139 — 139

Stock compensation expense — — — — 73 — — — 73

Dividend on preferred stock ($ 15.00 per share)

— — — — — ( 5 ) — — ( 5 )

Dividend on common stock ($ 0.18 per share)

— — — — — ( 2,143 ) — — ( 2,143 )

Balance, September 30, 2024

325 $ 325 12,264,116 $ 1,226 $ 137,130 $ 163,085 $ ( 267 ) $ ( 5,039 ) $ 296,460

Nine Months Ended

Balance, December 31, 2023 375 $ 375 12,240,821 $ 1,224 $ 136,700 $ 149,437 $ ( 404 ) $ ( 3,015 ) $ 284,317

Net income — — — — — 20,114 — — 20,114

Net income attributable to the company — — — — — 6,151 — — 6,151

Common stock options exercised — — 6,522 1 55 — — — 56

Preferred stock shares conversion ( 50 ) ( 50 ) 6,877 — 49 — — — ( 1 )

Treasury stock purchase ( 100,000 of shares)

— — — — — — — ( 2,024 ) ( 2,024 )

Other comprehensive income — — — — — — 137 — 137

Other comprehensive loss — — — — — — ( 26 ) — ( 26 )

Stock compensation expense — — — — 46 — — — 46

3 unchanged sentences

— — — — — ( 2,152 ) — — ( 2,152 )

Balance, September 30, 2024

Balance, March 31, 2024

375 $ 375 12,247,343 $ 1,225 $ 136,801 $ 153,430 $ ( 430 ) $ ( 3,015 ) $ 288,386

See accompanying notes to the unaudited consolidated financial statements

Parke Bancorp, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands except share data)

Periods ended September 30, 2023

Shares of Preferred Stock Outstanding Preferred

Stock Shares of Common Stock issued Common

Stock Additional

Earnings Accumulated

Other Comprehensive (Loss) Income Treasury

Stock Total Shareholders' Equity

Three Months Ended

Balance, June 30, 2023 445 $ 445 12,231,193 $ 1,223 $ 136,447 $ 144,550 $ ( 510 ) $ ( 3,015 ) $ 279,140

Net income — — — — — 1,029 — — 1,029

Other comprehensive loss — — — — — — ( 133 ) — ( 133 )

Stock compensation expense — — — — 100 — — — 100

Dividend on preferred stock ($ 15.00 per share)

— — — — — ( 7 ) — — ( 7 )

Dividend on common stock ($ 0.18 per share)

— — — — — ( 2,150 ) — — ( 2,150 )

Balance, September 30, 2023 445 $ 445 12,231,193 $ 1,223 $ 136,547 $ 143,422 $ ( 643 ) $ ( 3,015 ) $ 277,979

Nine Months Ended

Balance, December 31, 2024 325 $ 325 12,313,489 $ 1,231 $ 137,784 $ 168,347 $ ( 337 ) $ ( 7,277 ) $ 300,073

Cumulative effect of adoption of ASU 2016-3 — — — — — ( 2,102 ) — — ( 2,102 )

Net income — — — — — 20,289 — — 20,289

Net income attributable to the company — — — — — 7,778 — — 7,778

Common stock options exercised — — 14,361 2 97 — — — 99

Other comprehensive loss — — — — — — ( 117 ) — ( 117 )

Other comprehensive income — — — — — — 52 — 52

Stock compensation expense — — — — 70 — — — 70

3 unchanged sentences

— — — — — ( 2,125 ) — — ( 2,125 )

Balance, September 30, 2023 445 $ 445 12,231,193 $ 1,223 $ 136,547 $ 143,422 $ ( 643 ) $ ( 3,015 ) $ 277,979

Balance, March 31, 2025

325 $ 325 12,327,850 $ 1,233 $ 137,951 $ 173,995 $ ( 285 ) $ ( 7,277 ) $ 305,942

See accompanying notes to the unaudited consolidated financial statements

3 unchanged sentences

(Dollars in thousands)

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation and amortization 148 143

Provision for (recovery of) credit losses 546 ( 1,600 )

Provision for credit losses 590 204

Increase in value of bank owned life insurance ( 165 ) ( 160 )

Gain on sale of SBA loans ( 23 ) —

SBA loans originated for sale ( 300 ) —

Proceeds from sale of SBA loans originated for sale 323 —

Net gain on sale of OREO and valuation adjustments — ( 38 )

Net accretion of purchase premiums and discounts on securities ( 10 ) ( 11 )

1 unchanged sentence

Net changes in:

Decrease (increase) in accrued interest receivable and other assets 2,659 ( 5,738 )

Increase in accrued interest payable and other accrued liabilities 3,203 910

Decrease in accrued interest receivable and other assets 590 1,836

(Decrease) increase in accrued interest payable and other accrued liabilities ( 2,002 ) 141

Net cash provided by operating activities 6,999 8,350

2 unchanged sentences

Repayments and maturities of investment securities held to maturity 120 37

Net increase in loans ( 52,583 ) ( 48,671 )

(Purchases) sales of bank premises and equipment ( 72 ) 116

Proceeds from sale of OREO, net — 161

Net (increase) decrease in loans ( 15,021 ) 1,820

Purchases of bank premises and equipment ( 381 ) ( 18 )

Redemptions of restricted stock 3,387 3,600

Purchases of restricted stock ( 1,575 ) ( 2,262 )

Net cash used in investing activities ( 52,303 ) ( 47,956 )

Net cash (used in) provided by investing activities ( 13,090 ) 3,592

Cash Flows from Financing Activities:

Cash dividends ( 2,130 ) ( 2,158 )

Treasury stock purchase ( 2,024 ) —

Proceeds from exercise of stock options 99 56

Conversion of Series B preferred stock ( 1 ) —

(Decrease) increase in FHLBNY long-term borrowings ( 75,000 ) 20,000

Net increase in FHLBNY short-term borrowings 95,000 8,000

Net decrease in noninterest-bearing deposits ( 33,690 ) ( 121,430 )

Decrease in FHLBNY long-term borrowings — ( 75,000 )

Net (decrease) increase in FHLBNY short-term borrowings ( 40,000 ) 45,000

Net increase (decrease) in noninterest-bearing deposits 1,311 ( 35,801 )

Net increase in interest-bearing deposits 34,320 46,678

Net cash provided by (used in) financing activities 17,733 ( 21,438 )

Net cash used in financing activities ( 6,400 ) ( 21,225 )

Net decrease in cash and cash equivalents ( 12,491 ) ( 9,283 )

Cash and Cash Equivalents, January 1, 221,527 180,376

Cash and Cash Equivalents, September 30, $ 172,449 $ 126,740

Cash and Cash Equivalents, March 31, $ 209,036 $ 171,093

Supplemental Disclosure of Cash Flow Information:

2 unchanged sentences

Non-cash Investing and Financing Items

Loans transferred to OREO $ — $ 123

Accrued dividends payable $ 2,137 $ 2,158

18 unchanged sentences

The accompanying interim financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The accompanying interim financial statements for the three and nine months ended September 30, 2024 and 2023 are unaudited.

The accompanying interim financial statements for the three months ended March 31, 2025 and 2024 are unaudited.

The balance sheet as of December 31, 2024, was derived from the audited financial statements.

In the opinion of management, these financial statements include all normal and recurring adjustments necessary for a fair statement of the results for such interim periods.

Results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results for the full year or any other period.

Results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results for the full year or any other period.

Use of Estimates:

2 unchanged sentences

Material estimates that are particularly susceptible to significant change in the near term include the allowance for credit losses, the valuation of deferred income taxes, and the carrying value of other real estate owned ("OREO").

Allowance For Credit Losses (ACL)

We maintain the ACL at a level that we believe to be appropriate to absorb estimated credit losses in the loan portfolios as of the balance sheet date.

We established our allowance in accordance with guidance provided in Accounting Standard Codification ("ASC") - Financial Instruments - Credit Losses ("ASC 326").

The allowance for credit losses represents management’s estimate of expected losses inherent in the Company’s lending activities excluding loans accounted for under fair value.

The allowance for credit losses is maintained through charges to the provision for credit losses in the Consolidated Statements of Income as expected losses are estimated.

Loans or portions thereof that are determined to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance.

The Company performs periodic reviews of its loan and lease portfolios to identify credit risks and to assess the overall collectability of those portfolios.

The Company's allowance for credit losses includes a general component and an asset-specific component for collateral-dependent loans.

To determine the asset-specific component of the allowance, the loans are evaluated individually based on the fair value of the underlying collateral.

The Company generally measures the asset-specific allowance as the difference between the net realizable value of loan collateral and the recorded investment of a loan.

The general component of the allowance evaluates the impairments of pools of the loan portfolio collectively.

It incorporates a historical valuation allowance and qualitative allowance.

The historical valuation utilizes a vintage loss rate approach utilizing a third party software model.

The vintage loss rate approach creates pools of loans based on the segments defined by management, and consists of commercial and industrial, construction, commercial - owner occupied, commercial - non-owner occupied, residential - 1 to 4 family, residential - 1 to 4 family investment, residential - multifamily, and consumer.

The loan pools are aggregated by origination year.

Charge-offs, net of recoveries, are allocated by the year of charge-off to each loan pool.

An average life is prescribed to a pool of loans that were originated in a particular year.

The actual charge-offs as a percent of total loans are calculated for each historical year, and projected for future years for each year within the average life time horizon.

The sum of the actual charge-offs and projected charge-offs are divided by the average amortized origination amount for each respective year.

Those charge-off percentages are added together to obtain an aggregated vintage loss percentage which is then multiplied by the outstanding loan balances to obtain a reserve requirement.

The qualitative allowance component is based on general economic conditions and other qualitative risk factors both internal and external to the Company.

It is generally determined by evaluating, among other things:

(i) the experience, ability and effectiveness of the Bank's lending management and staff;

(ii) the effectiveness of the Bank's lending policies, procedures and internal controls;(iii) volume and severity of loan credit quality;

(iv) nature and volume of portfolio and term of loans (v) the composition and concentrations of credit;

(vi) the effectiveness of the internal loan review system;

and (vii) national and local economic trends and conditions, and industry conditions.

Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis.

Each component is determined to have either a high, high-moderate, moderate, low-moderate or low degree of risk.

The results are then input into a "general allocation matrix" to determine an appropriate general valuation allowance.

The Company has elected to exclude accrued interest receivable from the measurement of the ACL.

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

The process of determining the level of the allowance for credit losses requires a high degree of estimate and judgment.

It is reasonably possible that actual outcomes may differ from our estimates.

Segment Reporting:

The Company operates one reportable segment of business, "community banking".

Through its community banking segment, the Company provides a broad range of retail and community banking services.

The accounting policies of the community banking segment are the same as those described in the summary of significant accounting policies.

The Company's chief operating decision maker ("CODM") is the President, Chief Executive Officer and Director, who decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The following table presents segment profit and significant expenses.

Community Banking Segment

(Dollars in thousands)

For the Three Months Ended March 31,

Total interest income $ 33,846 $ 29,477

Total interest expense 17,239 15,423

Provision for credit losses 590 204

Net interest income after provision for credit losses 16,017 13,850

Total non-interest income 821 1,062

Total non-interest expense 6,538 6,535

Income before income tax expense 10,300 8,377

Income tax expense 2,522 2,226

Net income attributable to the Company $ 7,778 $ 6,151

Reconciliation of profit or loss

Adjustments and reconciling items — —

Consolidated net income $ 7,778 $ 6,151

INVESTMENT SECURITIES

The following is a summary of the Company's investments in available for sale and held to maturity securities as of September 30, 2024 and December 31, 2023.

The following is a summary of the Company's investments in available for sale and held to maturity securities as of March 31, 2025 and December 31, 2024.

None of the securities shown below required an allowance for credit losses.

As of September 30, 2024 Amortized

As of March 31, 2025 Amortized

losses Fair value

17 unchanged sentences

Total held to maturity $ 9,209 $ 3 $ 1,720 $ 7,492

The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of September 30, 2024 are as follows:

The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of March 31, 2025 are as follows:

(Dollars in thousands)

12 unchanged sentences

Expected maturities may differ from contractual maturities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalty.

The Company did not sell any securities during the three and nine months ended September 30, 2024 or 2023.

The following tables show the gross unrealized losses and fair value of the Company's available for sale investments for which an allowance for credit losses has not been recorded, which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2024 and December 31, 2023:

As of September 30, 2024 Less Than 12 Months 12 Months or Greater Total

The Company did not sell any securities during the three months ended March 31, 2025 or 2024.

As of March 31, 2025 Less Than 12 Months 12 Months or Greater Total

Description of Securities Fair

21 unchanged sentences

Impairment that has not been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes.

The Company’s unrealized loss for the debt securities classified as available for sale is comprised of 0 securities in the less than 12 months loss position and 14 securities in the 12 months or greater loss position at September 30, 2024.

The Company’s unrealized loss for the debt securities classified as available for sale is comprised of 5 securities in the less than 12 months loss position and 14 securities in the 12 months or greater loss position at March 31, 2025.

These securities are mortgage-backed securities that had unrealized losses issued or guaranteed by the US government or US government sponsored entities.

The unrealized losses associated with those mortgage-backed securities are generally driven by changes in interest rates and are not due to credit losses given the explicit or implicit guarantees provided by the U.S.

Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not consider the unrealized loss in these securities to be credit losses at September 30, 2024.

The Company classifies the held-to-maturity debt securities into the following major security types:

3 unchanged sentences

Based on the credit ratings of our held-to-maturity securities and our historical experience including no losses, we have determined that an allowance for credit loss on the held-to-maturity portfolio is not required.

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

At September 30, 2024 and December 31, 2023, the Company had $ 1.84 billion and $ 1.79 billion, respectively, in loans receivable outstanding.

Outstanding balances include $ 2.0 million and $ 2.7 million at September 30, 2024 and December 31, 2023, respectively, for net deferred loan costs, and unamortized discounts.

The portfolio segments of loans receivable at September 30, 2024 and December 31, 2023, consist of the following:

September 30, 2024 December 31, 2023

At March 31, 2025 and December 31, 2024, the Company had $ 1.88 billion and $ 1.87 billion, respectively, in loans receivable outstanding.

Outstanding balances include $ 1.3 million and $ 1.8 million at March 31, 2025 and December 31, 2024, respectively, for net deferred loan costs, and unamortized discounts.

The portfolio segments of loans receivable at March 31, 2025 and December 31, 2024, consist of the following:

March 31, 2025 December 31, 2024

(Dollars in thousands)

11 unchanged sentences

Total loan receivable, net of allowance for credit losses on loans $ 1,850,084 $ 1,835,580

An age analysis of past due loans by class at September 30, 2024 and December 31, 2023 is as follows:

September 30, 2024 30-59

An age analysis of past due loans by class at March 31, 2025 and December 31, 2024 is as follows:

March 31, 2025 30-59

Days Total Past

30 unchanged sentences

The following table provides the amortized cost of loans on nonaccrual status:

September 30, 2024

March 31, 2025

(amounts in thousands) Nonaccrual with no ACL Nonaccrual with ACL Total Nonaccrual Loans Past Due Over 90 Days Still Accruing Total Nonperforming

23 unchanged sentences

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

At September 30, 2024 and December 31, 2023, the allowance for credit losses on off-balance sheet credit exposures was $ 864.0 thousand and $ 499.0 thousand, respectively, on exposures totaling $ 159.9 million and $ 133.7 million, respectively.

The provision (recovery) for credit losses on off balance sheet exposures during the three and nine month periods ending September 30, 2024 and 2023 were $( 32.2 ) thousand and $ 365.2 thousand, and zero and $( 200.0 ) thousand, respectively.

At March 31, 2025 and December 31, 2024, the allowance for credit losses on off-balance sheet credit exposures was $ 940.0 thousand and $ 867.0 thousand, respectively, on exposures totaling $ 186.7 million and $ 172.2 million, respectively.

The provision for credit losses on off balance sheet exposures during the three month period ending March 31, 2025 and 2024 were $ 73.0 thousand and $ 439.0 thousand, respectively.

Allowance for Credit Losses (ACL)

The following tables present the information regarding the allowance for credit losses for the three and nine months ended September 30, 2024 and 2023:

The following tables present the information regarding the allowance for credit losses for the three months ended March 31, 2025 and 2024:

Real Estate Mortgage

1 unchanged sentence

(Dollars in thousands)

Three months ended September 30, 2024

June 30, 2024 $ 1,068 $ 3,992 $ 1,536 $ 5,414 $ 9,070 $ 9,683 $ 1,603 $ 59 $ 32,425

Charge-offs — — — — — — — — —

Recoveries 1 — — — — — — — 1

Provisions (benefits) 15 114 668 ( 395 ) 124 ( 760 ) 121 5 ( 108 )

Ending Balance at September 30, 2024

$ 1,084 $ 4,106 $ 2,204 $ 5,019 $ 9,194 $ 8,923 $ 1,724 $ 64 $ 32,318

Allowance for credit losses

Nine months ended September 30, 2024

Three months ended March 31, 2025

December 31, 2024 $ 1,097 $ 3,037 $ 1,871 $ 6,300 $ 9,166 $ 8,832 $ 2,203 $ 67 $ 32,573

2 unchanged sentences

Provisions (benefits) ( 50 ) ( 762 ) 599 1,061 ( 352 ) 23 ( 1 ) ( 1 ) 517

Ending Balance at September 30, 2024

Ending Balance at March 31, 2025

$ 1,048 $ 2,275 $ 2,470 $ 7,361 $ 8,814 $ 8,855 $ 2,202 $ 66 $ 33,091

During the quarter, the increase to the Commercial Owner Occupied portfolio was due to an increase in the portfolio balance that increased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

The decrease to the Commercial Non-Owner Occupied is due to a decrease in problem loan qualitative factor, partially offset by an increase in the economic condition factor.

The decrease in the Residential 1 to 4 Family Investment portfolio is due to a downward adjustment of the derived historical loss rate which better reflects the problem loan risk of loss of the portfolio.

For the year to date, the increase in the Construction, Commercial Owner Occupied, and Residential Multifamily portfolios was due to increases in the portfolio balances that increased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

The decrease to the Commercial Non-Owner Occupied portfolios was due to a decrease in the portfolios internally classified problem loan balance that decreased the problem loan qualitative factor.

During the quarter, the increase to the Commercial Owner Occupied, and the Commercial Non-owner Occupied portfolio's was due to an increase in the portfolio balances that increased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

The provision benefit during the quarter to the Construction segment is due to a decrease in the portfolio balance that decreased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

Real Estate Mortgage

1 unchanged sentence

(Dollars in thousands)

Three months ended September 30, 2023

June 30, 2023 $ 590 $ 3,978 $ 1,869 $ 8,798 $ 7,710 $ 7,740 $ 1,232 $ 98 $ 32,015

Charge-offs — — — — — — — — —

Recoveries 4 — — — — — — — 4

Provisions (benefits) ( 79 ) ( 833 ) ( 153 ) ( 276 ) 1,164 489 25 ( 37 ) 300

Ending Balance at September 30, 2023 $ 515 $ 3,145 $ 1,716 $ 8,522 $ 8,874 $ 8,229 $ 1,257 $ 61 $ 32,319

Nine months ended September 30, 2023

Three months ended March 31, 2024

December 31, 2023 $ 926 $ 3,347 $ 1,795 $ 7,108 $ 9,061 $ 8,783 $ 1,049 $ 62 $ 32,131

Impact of adoption ASC 326 168 1,899 ( 171 ) ( 951 ) 1,782 ( 794 ) ( 128 ) 53 1,858

Charge-offs — — — — — — — — —

1 unchanged sentence

Provisions (benefits) 112 ( 314 ) ( 104 ) ( 1,722 ) 274 813 698 8 ( 235 )

Ending Balance at September 30, 2023 $ 515 $ 3,145 $ 1,716 $ 8,522 $ 8,874 $ 8,229 $ 1,257 $ 61 $ 32,319

During the quarter, the increase to the Residential 1 to 4 Family and Residential 1 to 4 Family Investment portfolio's was due to

an increase in the portfolio balances as well as an increase in the qualitative factor for the Residential 1 to 4 Family Residential

portfolio driven by an increase in delinquent loan balances.

The credit provision during the quarter to the Construction segment

was mainly due to a decrease in the portfolio balance.

For the nine months ended September 30, 2023, the increase to the provision for the Residential 1 to 4 Family portfolio was

mainly driven by an increase in the qualitative factor due to an increase in delinquent loan balances.

The credit provision to the

Construction and Residential 1 to 4 Family Investment segments was largely driven by declines or slowdowns to growth within

the portfolio that lowered loan exposure and also caused changes to the qualitative factors related to loan volume within the

portfolio segments, partially offset by an increase in the balance of the Residential 1 - 4 Family Investment segment.

provision for the Commercial Owner Occupied portfolio is attributed to a decrease in the historical vintage reserve rate.

Ending Balance at March 31, 2024 $ 1,060 $ 3,033 $ 1,691 $ 5,386 $ 9,335 $ 9,596 $ 1,747 $ 70 $ 31,918

During the quarter, the increase to the Residential Multifamily portfolio was due to an increase in the portfolio balance that increased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

The increase to the Residential 1 to 4 Family Investment portfolio is driven by changes to the qualitative factors related to concentration levels within the portfolio segments.

The provision benefit during the quarter to the Commercial Non-owner Occupied segment was mainly due to a decrease in the problem loan balance as well as a decrease in the portfolio balance.

Collateral-Dependent Loans

The following table presents the collateral-dependent loans by portfolio segment and collateral type at September 30, 2024:

The following table presents the collateral-dependent loans by portfolio segment and collateral type at March 31, 2025:

(amounts in thousands) Real Estate Business Assets Other

46 unchanged sentences

Borrowers in this category require constant monitoring, are considered work-out loans and present the potential for future loss to the Bank.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, as of September 30, 2024.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, as of March 31, 2025.

(Dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans at Amortized Cost Basis

As of September 30, 2024

As of March 31, 2025

2025 2024 2023 2022 2021 Prior Total

47 unchanged sentences

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

As of September 30, 2024, the Company was in the process of foreclosing on 21 residential 1 to 4 family loans with a principal balance of $ 4.6 million.

Total Loan Receivable $ 67,717 $ 171,255 $ 188,197 $ 453,064 $ 221,017 $ 617,438 $ 164,487 $ 1,883,175

As of March 31, 2025, the Company was in the process of foreclosing on 22 residential 1 to 4 family loans with a principal balance of $ 4.7 million.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, as of December 31, 2024.

50 unchanged sentences

Current period gross charge-offs $ — $ — $ — $ — $ — $ 21 $ — $ 21

Total Loan Receivable $ 176,434 $ 192,338 $ 443,151 $ 228,189 $ 115,219 $ 522,571 $ 190,251 $ 1,868,153

Modifications to Borrowers Experiencing Financial Difficulty

At September 30, 2024, the Company did not make any modifications to borrowers experiencing financial difficulty.

During the periods ended March 31, 2025 and 2024, the Company did not make any modifications to borrowers experiencing financial difficulty.

EARNINGS PER SHARE (“EPS”)

The following tables set forth the calculation of basic and diluted EPS for the three and nine-month periods ended September 30, 2024 and 2023.

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

The following tables set forth the calculation of basic and diluted EPS for the three-month periods ended March 31, 2025 and 2024.

Three months ended March 31,

(Dollars in thousands except share and per share data)

13 unchanged sentences

Diluted earnings per common share $ 0.65 $ 0.51

As of September 30, 2024 and December 31, 2023, there were 317,130 and 330,536 weighted average option shares outstanding, respectively, that were not included in the computation of diluted EPS because these shares were anti-dilutive.

As of March 31, 2025 and December 31, 2024, there were 323,005 and 191,375 weighted average option shares outstanding, respectively, that were not included in the computation of diluted EPS because these shares were anti-dilutive.

Fair Value Measurements

26 unchanged sentences

Available for Sale Securities

As of September 30, 2024

As of March 31, 2025

Residential mortgage-backed securities $ — $ 5,236 $ — $ 5,236

3 unchanged sentences

Total $ — $ 5,551 $ — $ 5,551

For the nine months ended September 30, 2024, there were no transfers between the levels within the fair value hierarchy.

There were no level 3 assets or liabilities held during the three and nine months ended September 30, 2024 and 2023.

For the three months ended March 31, 2025, there were no transfers between the levels within the fair value hierarchy.

There were no level 3 assets or liabilities held during the three months ended March 31, 2025 and 2024.

Fair Value on a Non-recurring Basis:

2 unchanged sentences

(Dollars in thousands)

As of September 30, 2024

As of March 31, 2025

Collateral-dependent loans $ — $ — $ 5,266 $ 5,266

13 unchanged sentences

These instruments include cash and cash equivalents, accrued interest receivable, bank owned life insurance, Federal Home Loan Bank of New York ("FHLBNY") restricted stock, demand and other non-maturity deposits and accrued interest payable, and they are considered to be level 1 measurements.

The following table summarizes the carrying amounts and fair values for financial instruments that are not carried at fair value at September 30, 2024 and December 31, 2023:

September 30, 2024 Carrying Amount Fair Value

The following table summarizes the carrying amounts and fair values for financial instruments that are not carried at fair value at March 31, 2025 and December 31, 2024:

March 31, 2025 Carrying Amount Fair Value

Total Level 1 Level 2 Level 3

18 unchanged sentences

These financial instruments include commitments to extend credit and standby letters of credit.

These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance

These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheet.

The contract or notional amounts of these instruments reflect the extent of the Company’s involvement in these particular classes of financial instruments.

8 unchanged sentences

Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Commitments to fund fixed-rate loans were immaterial at September 30, 2024.

Commitments to fund fixed-rate loans were immaterial at March 31, 2025.

Variable-rate commitments are generally issued for less than one year and carry market rates of interest.

Such instruments are not likely to be affected by annual rate caps triggered by rising interest rates.

As of September 30, 2024 and December 31, 2023, unused commitments to extend credit amounted to approximately $ 121.5 million and $ 93.8 million, respectively.

At September 30, 2024 and December 31, 2023, the allowance for credit losses on off-balance sheet credit exposures was $ 864.0 thousand and $ 499 thousand, respectively, an increase of $ 365.0 thousand, mainly due to the increase in the unused commitment balance.

As of March 31, 2025 and December 31, 2024, unused commitments to extend credit amounted to approximately $ 137.5 million and $ 122.5 million, respectively.

At March 31, 2025 and December 31, 2024, the allowance for credit losses on off-balance sheet credit exposures was $ 940.0 thousand and $ 867.0 thousand, respectively, an increase of $ 73.0 thousand, mainly due to the increase in the unused commitment balance.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

As of September 30, 2024 and December 31, 2023, standby letters of credit with customers were $ 0.6 million and $ 1.5 million, respectively.

On September 26, 2024, the Bank entered into an agreement with the FHLBNY for a Municipal Letter of Credit ("MLOC") of $ 50.0 million.

The MLOC is used to pledge against public deposits and the MLOC expires on December 26, 2024.

There were no outstanding borrowings on the letters of credit as of September 30, 2024.

As of March 31, 2025 and December 31, 2024, standby letters of credit with customers were $ 0.6 million and $ 0.6 million, respectively.

On March 31, 2025, the Bank entered into an agreement with the FHLBNY for a Municipal Letter of Credit ("MLOC") of $ 40.0 million.

The MLOC is used to pledge against public deposits and the MLOC expires on June 30, 2025.

There were no outstanding borrowings on the letters of credit as of March 31, 2025.

The Company also has entered into an employment contract with the President of the Company, which provides for continued payment of certain employment salary and benefits prior to the expiration date of the agreement and in the event of a change in control, as defined.

4 unchanged sentences

A financial institution that provides services to cannabis-related businesses can comply with Bank Secrecy Act (“BSA”) disclosure standards by following the FinCEN guidelines.

We maintain stringent written policies and procedures related to the acceptance of such businesses and to the monitoring and maintenance of such business accounts.

We maintain stringent written policies and procedures related to the acceptance of such businesses and to the monitoring and maintenance of such

business accounts.

We conduct a significant due diligence review of the cannabis business before the business is accepted, including confirmation that the business is properly licensed by the applicable state.

3 unchanged sentences

Any change in the Federal government’s enforcement position, could cause us to immediately cease providing banking services to the cannabis industry.

At September 30, 2024 and December 31, 2023, deposit balances from cannabis customers were approximately $ 116.5 million and $ 96.7 million, or 7.5 % and 6.2 % of total deposits, respectively, with three customers accounting for 53.6 % and 60.6 % of the total at September 30, 2024 and December 31, 2023.

At September 30, 2024 and December 31, 2023, there were cannabis-related loans in the amounts of $ 38.7 million and $ 27.1 million, respectively.

At March 31, 2025 and December 31, 2024, deposit balances from cannabis customers were approximately $ 196.0 million and $ 151.9 million, or 11.8 % and 9.3 % of total deposits, respectively, with two customers accounting for 66.4 % and 59.3 % of the total at March 31, 2025 and December 31, 2024.

At March 31, 2025 and December 31, 2024, there were cannabis-related loans in the amounts of $ 44.9 million and $ 43.4 million, respectively.

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

What changed 10-Q

Item 1. Financial Statements