What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-07 · 109 added, 87 removed, 194 unchanged (50% of the section changed)

21 unchanged sentences

Volatility in the housing markets, real estate values and unemployment levels results in significant write-downs of asset values by financial institutions.

Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing in and around s outhern New Jersey and Philadelphia, Pennsylvania.

Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing in and around southern New Jersey and Philadelphia, Pennsylvania.

We focus our lending efforts primarily in three lending areas:

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Our deposit products include checking, savings, money market accounts, and certificates of deposit.

T he majority of our deposit accounts are obtained through our retail banking business, which provides us with low cost funding to grow our lending efforts.

The majority of our deposit accounts are obtained through our retail banking business, which provides us with low cost funding to grow our lending efforts.

The Company also generates income from loan and deposit fees and other non-interest related activities.

The Company's non-interest expense primarily consists of employee compensation, administration, and other operating expenses.

At March 31, 2025, we had total assets of $2.14 billion, and total equity of $305.9 million.

Net income available to common shareholders for the three months ended March 31, 2025 was $7.8 million.

At June 30, 2025, we had total assets of $2.17 billion, and total equity of $312.2 million.

Net income available to common shareholders for the three and six months ended June 30, 2025 was $8.3 million and $16.1 million, respectively.

Results of Operations

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Our net income available to common shareholders for the first quarter of 2025 increased $1.6 million, or 26.5%, to $7.8 million, compared to $6.1 million for the same period last year.

Earnings per share were $0.66 per basic common share and $0.65 per diluted common share for the first quarter of 2025, compared to $0.51 per basic common share and $0.51 per diluted common share for the same period last year.

The increase was primarily due to an increase in net interest income, partially offset by an increase in provision for credit losses, and a decrease in non-interest income.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Our net income available to common shareholders for the three months ended June, 30, 2025 increased $1.8 million, or 28.3%, to $8.3 million, compared to $6.5 million for the three months ended June 30, 2024.

Earnings per share were $0.70 per basic common share and $0.69 per diluted common share for the three months ended June 30, 2025, compared to $0.54 per basic common share and $0.53 per diluted common share for the same period last year.

The increase was primarily due to an increase in net interest income, partially offset by an increase in provision for credit losses, a decrease in non-interest income, and an increase in non-interest expense.

Net Interest Income :

Our net interest income was $16.6 million for the first quarter of 2025 compared to $14.1 million for the first quarter of 2024, an increase of $2.5 million, or 18.2%.

Net interest income increased during the three months ended March 31, 2025, primarily due to an increase in interest and fees on loans and an increase in interest on deposits with banks, partially offset by an increase in interest expense on deposits and borrowings.

Interest income increased $4.4 million, or 14.8%, during the three months ended March 31, 2025 as compared to the same period in the prior year.

Our net interest income was $17.9 million for the second quarter of 2025 compared to $14.3 million for the second quarter of 2024, an increase of $3.6 million, or 24.9%.

Net interest income increased during the three months ended June 30, 2025, primarily due to an increase in interest and fees on loans and an increase in interest on deposits with banks, partially offset by an increase in interest expense on deposits and borrowings.

Interest income increased $4.8 million, or 16.0%, during the three months ended June 30, 2025 as compared to the same period in the prior year.

The increase in interest income was primarily due to an increase of $4.0 million in interest and fees on loans, due to higher loan balances and market interest rates.

Interest from deposits with banks increased $0.9 million during the three months ended March 31, 2025 as compared to the same period in the prior year, primarily due to higher cash balances held at the Federal Reserve Bank ("FRB").

The increase in interest income was partially offset by an increase in interest expense during the three months ended March 31, 2025 of $1.8 million, or 11.8%, primarily due to an increase in market interest rates on deposits and the overall mix of deposits of $1.7 million.

Interest from deposits with banks increased $0.8 million during the three months ended June 30, 2025 as compared to the same period in the prior year, primarily due to higher cash balances held at the Federal Reserve Bank ("FRB").

The increase in interest income was partially offset by an increase in interest expense during the three months ended June 30, 2025 of $1.3 million, or 8.0%, primarily due to an increase in market interest rates on deposits and the overall mix of deposits of $1.5 million.

Provision for credit losses :

For the three months ended March 31, 2025, the provision for credit losses was $0.6 million, compared to $0.2 million for the three months ended March 31, 2024, an increase of $0.4 million.

The increase in the provision for credit losses for the three months ended March 31, 2025, was primarily due to an increase in the commercial non-owner occupied and commercial owner occupied loan portfolio's balances from December 31, 2024.

For the three months ended June 30, 2025, the provision for credit losses was $1.0 million, compared to $0.5 million for the three months ended June 30, 2024, an increase of $0.5 million.

The increase in the provision for credit losses for the three months ended June 30, 2025, was primarily due to an increase in the construction loan and the commercial non-owner occupied loan portfolios, partially offset by a decrease in the commercial owner occupied loan portfolio and a decrease in the residential - 1 to 4 family investment loan portfolio balances from March 31, 2025.

Non-interest Income :

Our non-interest income was $0.8 million for the three months ended March 31, 2025, a decrease of $0.2 million, compared to $1.1 million for the three months ended March 31, 2024.

The decrease is primarily attributable to a decrease in service fees on deposit accounts of $0.1 million due to a decrease in cannabis deposit fee income, and a decrease in other non-interest income of $0.1 million.

Our non-interest income was $0.8 million for the three months ended June 30, 2025, a decrease of $0.4 million, compared to $1.2 million for the three months ended June 30, 2024.

The decrease is primarily attributable to a decrease in other income attributed to legal settlements and insurance proceeds received during the same period in 2024.

Non-interest Expense :

Our non-interest expense was unchanged at $6.5 million for the three months ended March 31, 2025, from the three months ended March 31, 2024.

Income tax expense was $2.5 million on income before taxes of $10.3 million for the three months ended March 31, 2025, resulting in an effective tax rate of 24.5%, compared to income tax expense of $2.2 million on income before taxes of $8.4 million for the same period of 2024, resulting in an effective tax rate of 26.6%.

Our non-interest expense increased $0.4 million, or 7.1%, for the three months ended June 30, 2025, from the three months ended June 30, 2024 , to $6.7 million.

The increase was primarily driven by an increase in compensation and benefits of $0.2 million, an increase in data processing expense of $0.2 million, and an increase in professional services of $0.1 million, for the three months ended June 30, 2025 compared to the same period in 2024, partially offset by a decrease in other real estate owned ("OREO") expense of $0.1 million.

Income tax expense was $2.7 million on income before taxes of $11.0 million for the three months ended June 30, 2025, resulting in an effective tax rate of 24.9%, compared to income tax expense of $2.3 million on income before taxes of $8.8 million for the same period of 2024, resulting in an effective tax rate of 26.6%.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Our net income available to common shareholders for the six months ended June 30, 2025 increased $3.5 million, or 27.4%, to $16.1 million, compared to $12.6 million for the six months ended June 30, 2024.

Earnings per share were $1.36 per basic common share and $1.34 per diluted common share for the six months ended June 30, 2025, compared to $1.05 per basic common share and $1.04 per diluted common share for the six months ended June 30, 2024.

Net Interest Income :

Our net interest income was $34.5 million for the six months ended June 30, 2025 compared to $28.4 million for the six months ended June 30, 2024, an increase of $6.1 million, or 21.6%.

Net interest income increased during the six months ended June 30, 2025, primarily due to an increase in interest and fees on loans and an increase in interest on deposits with banks, partially offset by an increase in interest expense on deposits and borrowings.

Interest income increased $9.2 million, or 15.4%, during the six months ended June 30, 2025 as compared to the same period in the prior year.

The increase in interest income was primarily due to an increase of $7.4 million in interest and fees on loans, due to higher loan balances and market interest rates.

Interest from deposits with banks increased $1.8 million during the six months ended June 30, 2025 as compared to the same period in the prior year, primarily due to higher cash balances held at the Federal Reserve Bank ("FRB").

The increase in interest income was partially offset by an increase in interest expense during the six months ended June 30, 2025 of $3.1 million, or 9.9%, primarily due to an increase in market interest rates on deposits and the overall mix of deposits of $3.2 million.

Provision for credit losses :

For the six months ended June 30, 2025, the provision for credit losses was $1.6 million, compared to $0.7 million for the six months ended June 30, 2024, an increase of $0.9 million.

The increase was primarily due to an increase in the commercial non-owner occupied and construction loan portfolios outstanding loan balances of $66.6 million, from the balance at December 31, 2024, partially offset by a decrease in the residential - 1 to 4 family investment loan portfolio.

Non-interest Income :

Our non-interest income was $1.6 million for the six months ended June 30, 2025, a decrease of $0.6 million, compared to $2.3 million for the six months ended June 30, 2024.

The decrease was primarily driven by a decrease in other income of $0.4 million, and a decrease in service fees on deposit accounts of $0.1 million.

Non-interest Expense :

For the six months ended June 30, 2025, non-interest expense increased $0.4 million, or 3.5%, to $13.2 million, compared to the same period in 2024.

The increase in non-interest expense was primarily due to an increase in professional services of $0.4 million, an increase in compensation and benefits of $0.3 million, and an increase in data processing expense of $0.2 million, partially offset by a decrease in OREO expense of $0.4 million, and a decrease in other operating expense of $0.2 million, compared to the six months ended June 30, 2024.

Income tax expense was $5.3 million on income before taxes of $21.3 million for the six months ended June 30, 2025, resulting in an effective tax rate of 24.7%, compared to income tax expense of $4.6 million on income before taxes of $17.2 million for the same period of 2024, resulting in an effective tax rate of 26.6%.

Net Interest Income

Net interest income is the interest earned on investment securities, loans and other interest-earning assets minus the interest paid on deposits, short-term borrowings and long-term debt.

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The following tables presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the periods indicated.

For the Three Months Ended March 31,

Balance Interest

Expense Yield/

Balance Interest

Expense Yield/

For the Three Months Ended June 30,

(Dollars in thousands)

Loans* $ 1,878,594 $ 31,476 6.80 % $ 1,792,735 $ 28,083 6.30 %

Investment securities**

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Total interest-earning assets

Other assets 63,834 70,416

Allowance for credit losses

Total assets $ 2,126,259 $ 1,941,869

Liabilities and Shareholders’ Equity

Interest bearing deposits:

Checking $ 66,001 $ 170 1.04 % $ 72,272 $ 267 1.49 %

Money markets

Savings 54,700 147 1.09 % 78,199 220 1.13 %

Time deposits

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Total interest-bearing deposits

Borrowings 159,873 2,070 5.25 % 140,106 1,966 5.64 %

Total interest-bearing liabilities

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Total non-interest bearing liabilities

Equity 304,660 287,821

Total liabilities and shareholders’ equity

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Includes balances of FHLBNY and ACBB stock.

For the Six Months Ended June 30,

(Dollars in thousands)

Investment securities**

Interest bearing deposits

Total interest-earning assets

Allowance for credit losses

Liabilities and Shareholders’ Equity

Interest bearing deposits:

Money markets

Time deposits

Brokered certificates of deposit

Total interest-bearing deposits

Total interest-bearing liabilities

Non-interest bearing deposits

Other liabilities

Total non-interest bearing liabilities

Total liabilities and shareholders’ equity

Net interest income

Interest rate spread

Net interest margin

The average balance of loans includes loans on nonaccrual.

Includes balances of FHLBNY and ACBB stock.

Financial Condition

At March 31, 2025, the Company’s total assets were $2.14 billion, a decrease of $0.4 million, or 0.02%, from December 31, 2024.

The decrease in total assets was primarily attributable to a decrease in cash and cash equivalents of $12.5 million, a decrease in FHLBNY restricted stock of $1.8 million, and a decrease in other assets of $1.0 million, partially offset by an increase in loans receivable of $15.0 million.

At June 30, 2025, the Company’s total assets were $2.17 billion, an increase of $28.1 million, or 1.30%, from December 31, 2024.

The increase in total assets was primarily attributable to an increase in net loans of $66.6 million, partially offset by a decrease in cash and cash equivalents of $37.3 million.

Cash and cash equivalents decreased $37.3 million, or 16.8%, primarily due to the increase in loans and a decrease in FHLBNY borrowings of $45.0 million, partially offset by an increase in deposits of $62.4 million.

Loans increased $66.6 million, or 3.6%, primarily due to increases in the commercial non-owner occupied and construction loan portfolio's balances, partially offset by a decrease in the residential - 1 to 4 family investment loan portfolio balance.

FHLBNY restricted stock decreased $1.9 million, or 22.4%, due to the repayment of $45.0 million of FHLBNY advances.

Other assets decreased $1.0 million due to a decrease in prepaid expenses.

Loans increased $15.0 million, primarily due to increases in the commercial owner occupied and commercial non-owner occupied portfolio's balances, partially offset by a decrease in the construction portfolio balance.

Total liabilities were $1.84 billion at March 31, 2025.

This represented a $6.3 million, or 0.3%, decrease, from $1.84 billion at December 31, 2024.

The decrease in total liabilities was primarily due to a decrease in FHLBNY borrowings of $40.0 million, or 27.6%, to $105.0 million, partially offset by an increase in deposits of $35.6 million, or 2.2%, to $1.67 billion at March 31, 2025.

The decrease in borrowings was attributed to the repayment of $40.0 million in FHLBNY advances, while the increase in deposits was primarily due to an increase in money market deposits of $128.4 million, partially offset by a decrease in brokered time deposits of $88.9 million.

Total equity was $305.9 million and $300.1 million at March 31, 2025 and December 31, 2024, respectively, an increase of $5.9 million from December 31, 2024.

Other assets increased $1.5 million due to an increase in prepaid expenses.

Total liabilities were $1.86 billion at June 30, 2025.

This represented a $16.0 million, or 0.9%, increase, from $1.84 billion at December 31, 2024.

The increase in total liabilities was primarily due to an increase in total deposits of $62.4 million, or 3.8%, to $1.69 billion at June 30, 2025, partially offset by a decrease in FHLBNY borrowings of $45.0 million, or 31.0%, to $100.0 million.

The increase in deposits was due to an increase in money market balances of $199.6 million, partially offset by a decrease in brokered CD balances of $124.1 million.

The decrease in borrowings was attributed to the repayment of $45.0 million in FHLBNY advances.

Total equity was $312.2 million and $300.1 million at June 30, 2025 and December 31, 2024, respectively, an increase of $12.1 million from December 31, 2024.

The increase was primarily due to the retention of earnings, partially offset by the payment of $4.2 million of cash dividends.

The following table presents certain key condensed balance sheet data as of March 31, 2025 and December 31, 2024 :

2025 December 31,

2024 Change % Change

The following table presents certain key condensed balance sheet data as of June 30, 2025 and December 31, 2024:

(Dollars in thousands)

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Allowance for credit losses

Total assets 2,141,855 2,142,236 (381) — %

Total deposits

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Total liabilities

Total equity 305,942 300,073 5,869 2.0 %

Total liabilities and equity

Cash and cash equivalents

Cash and cash equivalents decreased $12.5 million to $209.0 million at March 31, 2025 from $221.5 million at December 31, 2024, a decrease of 5.6%.

Cash and cash equivalents decreased $37.3 million to $184.3 million at June 30, 2025 from $221.5 million at December 31, 2024, a decrease of 16.8%.

The decrease was primarily due to an increase in loans, and a decrease in FHLBNY borrowings, partially offset by an increase in deposits.

Investment securities

Total investment securities decreased to $14.3 million at March 31, 2025, from $14.8 million at December 31, 2024, a decrease of $0.4 million or 2.8%.

Total investment securities decreased to $14.0 million at June 30, 2025, from $14.8 million at December 31, 2024, a decrease of $0.8 million or 5.1%.

The decrease was attributed to normal pay downs of securities.

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Loans receivable :

Loans receivable increased to $1.88 billion at March 31, 2025, from $1.87 billion at December 31, 2024, an increase of $15.0 million, or 0.8%.

T he increase was primarily due to increases in the commercial-owner occupied, and commercial non-owner occupied, loan portfolios, partially offset by a decrease in the construction loan portfolio.

Loans receivable as of March 31, 2025 and December 31, 2024, consisted of the following:

March 31, 2025 December 31, 2024

Amount Percentage of Loans to total

Loans Amount Percentage of Loans to total

Loans $ Change % Change

Loans receivable increased to $1.93 billion at June 30, 2025, from $1.87 billion at December 31, 2024, an increase of $66.6 million, or 3.6%.

The increase was primarily due to increases in the commercial non-owner occupied, and construction loan portfolios, partially offset by a decrease in the residential - 1 to 4 family investment loan portfolio.

Loans receivable as of June 30, 2025 and December 31, 2024, consisted of the following:

June 30, 2025

December 31, 2024

Percentage of

Loans to total

(Dollars in thousands)

Commercial and Industrial

Construction 126,462 6.7 % 149,346 8.0 % (22,884) (15.3) %

Real Estate Mortgage:

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Residential – Multifamily

Consumer 4,704 0.2 % 4,884 0.3 % (180) (3.7) %

Total Loans $ 1,883,175 100.0 % $ 1,868,153 100.0 % $ 15,022 0.8 %

At March 31, 2025, total deposits increased to $1.67 billion from $1.63 billion at December 31, 2024, an increase of $35.6 million, or 2.2%.

At June 30, 2025, total deposits increased to $1.69 billion from $1.63 billion at December 31, 2024, an increase of $62.4 million, or 3.8%.

The increase in deposits was primarily due to an increase in money market deposits of $199.6 million, partially offset by a decrease in brokered time deposits of $121.7 million The increase in our money market deposits was primarily due to the increase of $172.8 million in our premier money market account balance, and an increase of $33.4 million in our municipal money market account balance.

The decrease in the brokered time deposit balance is primarily attributed to $75.0 million in Wells Fargo brokered CD maturities, and $13.2 million in CDARs brokered CD maturities, respectively.

The decrease in the brokered time deposit balance is primarily attributable to $110.1 million in brokered CD maturities, and $13.2 million in CDARs brokered CD maturities, respectively.

The increase in the estimated uninsured deposits balance is mainly due to an increase in our cannabis and municipal deposit balances.

March 31, December 31,

2025 2024 $ Change % Change

(Dollars in thousands)

1 unchanged sentence

Interest-bearing

Checking 56,241 60,499 (4,258) (7.0) %

Savings 54,482 55,912 (1,430) (2.6) %

Money market 743,814 615,444 128,370 20.9 %

Time deposits

2 unchanged sentences

Total brokered deposits

Total borrowings were $148.3 million at March 31, 2025 and $188.3 million at December 31, 2024.

Total borrowings were $143.4 million at June 30, 2025 and $188.3 million at December 31, 2024.

The decrease in borrowings is due to a decrease of $45.0 million in FHLBNY advances.

At March 31, 2025, $85.0 million of the outstanding FHLBNY advances have short-term maturities.

Total equity increased to $305.9 million at March 31, 2025 from $300.1 million at December 31, 2024, an increase of $5.9 million, or 2.0%, primarily due to the retention of earnings from the period, partially offset by the payment of $2.1 million of cash dividends.

At June 30, 2025, $80.0 million of the outstanding FHLBNY advances have short-term maturities.

Total equity increased to $312.2 million at June 30, 2025 from $300.1 million at December 31, 2024, an increase of $12.1 million, or 4.0%, primarily due to the retention of earnings from the period, partially offset by the payment of $4.2 million of cash dividends.

Liquidity and Capital Resources

Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis.

At March 31, 2025, our cash position was $209.0 million.

At June 30, 2025, our cash position was $184.3 million.

We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve.

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The Bank primarily utilizes brokered relationships with Wells Fargo, Piper Sandler, and Stonecastle.

As of March 31, 2025, the Company had $121.6 million sourced from these relationships.

As of June 30, 2025, the Company had $86.8 million sourced from these relationships.

For an additional source of brokered liquidity, the Bank joined the IntraFi Financial Network.

IntraFi provides the Bank an additional source of external funds through their weekly CDARS ® settlement process, as well as their ICS ® money market product.

As of March 31, 2025, the Company did not have any deposits sourced from IntraFi.

As of June 30, 2025, the Company did not have any deposits sourced from IntraFi.

While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB").

As of March 31, 2025, the Company had lines of credit with the FHLBNY of $685.0 million, of which $105.0 million was outstanding, and an additional $40.0 million from a letter of credit for securing public funds.

The remaining borrowing capacity was $540.0 million at March 31, 2025.

As of March 31, 2025, the Company had a borrowing capacity through the FRB discount window of $283.0 million.

There were no balances outstanding with the FRB as of March 31, 2025.

We had outstanding loan commitments of $137.5 million at March 31, 2025.

As of June 30, 2025, the Company had lines of credit with the FHLBNY of $645.1 million, of which $100.0 million was outstanding, and an additional $60.0 million from a letter of credit for securing public funds.

The remaining borrowing capacity was $485.1 million at June 30, 2025.

As of June 30, 2025, the Company had a borrowing capacity through the FRB discount window of $337.1 million.

There were no balances outstanding with the FRB as of June 30, 2025.

We had outstanding loan commitments of $161.9 million at June 30, 2025.

Our loan commitments are normally originated with the full amount of collateral.

1 unchanged sentence

The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth.

The following is a discussion of our cash flows for the three months ended March 31, 2025 and 2024.

Cash provided by operating activities was $7.0 million in the three months ended March 31, 2025, compared to $8.4 million for the same period in the prior year.

The decrease in operating cash flow was primarily due to the decrease in accrued interest payable and other accrued liabilities, partially offset by a decrease in accrued interest receivable and other assets.

Cash used in investing activities was $13.1 million in the three months ended March 31, 2025, compared to cash provided from investing activities of $3.6 million in the same period last year.

The increase in cash used in the investing activities during the three months ended March 31, 2025, was primarily due to the increase in cash outflow from the origination of loans.

Cash used in financing activities was $6.4 million in the three months ended March 31, 2025, compared to cash used in financing activities of $21.2 million in the same period last year.

The decrease in cash provided by financing activities during the three months ended March 31, 2025, was primarily due to an increase in noninterest-bearing deposits, partially offset by lower increase in interest-bearing deposits, and the net decrease in FHLBNY borrowings.

The following is a discussion of our cash flows for the six months ended June 30, 2025 and 2024.

Cash provided by operating activities was $13.8 million during the six months ended June 30, 2025, compared to $17.2 million for the same period in the prior year.

The decrease in operating cash flow was primarily due to the increase in accrued interest receivable and other assets, and the decrease in accrued interest payable and other accrued liabilities.

Cash used in investing activities was $64.2 million during the six months ended June 30, 2025, compared to cash used in investing activities of $19.3 million in the same period last year.

The increase in cash used in the investing activities during the six months ended June 30, 2025, was primarily due to the increase in cash outflow from the origination of loans.

Cash provided by financing activities was $13.2 million during the six months ended June 30, 2025, compared to cash used in financing activities of $10.6 million in the same period last year.

The increase in cash provided by financing activities during the six months ended June 30, 2025, was primarily due to an increase in interest bearing and noninterest-bearing deposits, partially offset by a net decrease in FHLBNY borrowings.

Capital Adequacy

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We also use other means to manage our capital.

Total equity increased $5.9 million at March 31, 2025, from December 31, 2024, primarily from the Company’s net income of $7.8 million for the period, net of common and preferred stock dividends of $2.1 million.

Total equity increased $12.1 million at June 30, 2025, from December 31, 2024, primarily from the Company’s net income of $16.1 million for the period, net of common and preferred stock dividends of $4.2 million.

Banks and bank holding companies are subject to various regulatory capital requirements administered by federal banking agencies.

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Under the capital rules issued by the Federal banking agencies, the Company and the Bank elected to exclude the effects of certain Accumulated Other Comprehensive Income (“AOCI”) items from its regulatory capital calculation.

At March 31, 2025, the Bank and the Company were both considered “well capitalized”.

The following table presents the tier 1 regulatory capital leverage ratios of the Company and the Bank at March 31, 2025:

Amount Ratio Amount Ratio

At June 30, 2025, the Bank and the Company were both considered “well capitalized”.

The following table presents the tier 1 regulatory capital leverage ratios of the Company and the Bank at June 30, 2025:

(Dollars in thousands except ratios)

Company Parke Bank

Tier 1 leverage

22 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis