What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-08-06 · 83 added, 79 removed, 224 unchanged (42% of the section changed)

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Financial institutions can be affected by changing conditions in the real estate and financial markets.

The effects of geopolitical instability, including the conflict between Russia and Ukraine and the war in Israel, foreign currency exchange volatility, volatility in global capital markets, inflationary pressures, higher tariffs, and higher interest rates may meaningfully impact loan production, income levels, and the measurement of certain significant estimates such as the allowance for credit losses.

The effects of geopolitical instability, including the conflicts between Russia and Ukraine and Israel and Hamas, foreign currency exchange volatility, volatility in global capital markets, inflationary pressures, higher tariffs, and higher interest rates may meaningfully impact loan production, income levels, and the measurement of certain significant estimates such as the allowance for credit losses.

Moreover, in a period of economic contraction, we may experience elevated levels of credit losses, reduced interest income, impairment of financial assets, diminished access to capital markets and other funding sources, and reduced demand for our products and services.

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

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.

At September 30, 2025, we had total assets of $2.17 billion, and total equity of $314.8 million.

Net income available to common shareholders for the three and nine months ended September 30, 2025 was $10.6 million and $26.7 million, respectively.

Results of Operations

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.

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

Our net income available to common shareholders for the three months ended September, 30, 2025 increased $3.1 million, or 41.6%, to $10.6 million, compared to $7.5 million for the three months ended September 30, 2024.

Earnings per share were $0.90 per basic common share and $0.89 per diluted common share for the three months ended September 30, 2025, compared to $0.63 per basic common share and $0.62 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 $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.

Our net interest income was $20.2 million for the third quarter of 2025 compared to $14.7 million for the third quarter of 2024, an increase of $5.4 million, or 37.0%.

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

Interest income increased $4.4 million, or 13.7%, during the three months ended September 30, 2025 as compared to the same period in the prior year.

The increase in interest income was primarily due to an increase of $4.7 million in interest and fees on loans, due to higher loan balances and market interest rates.

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.

Interest from deposits with banks decreased $0.3 million during the three months ended September 30, 2025 as compared to the same period in the prior year, primarily due to lower average cash balances held at the Federal Reserve Bank ("FRB").

The increase in interest income was also due to a decrease in interest expense on borrowings during the three months ended September 30, 2025 of $1.5 million, or 60.3%, primarily due to the redemption of the Company's $30.0 million, 6.5% fixed to floating rate subordinated notes, as well as the repayment of $30.0 million of FHLBNY advances, during the three months ended September 30, 2025.

This was partially offset by an increase in interest expense on deposits of $0.4 million during the three months ended September 30, 2025, as compared to the same period in the prior year, primarily due to an increase interest-bearing deposit balances during the three months ended September 30, 2025.

Provision for credit losses :

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.

For the three months ended September 30, 2025, the provision for credit losses was $0.4 million, compared to a recovery of provision for credit losses of $0.1 million for the three months ended September 30, 2024, an increase of $0.5 million.

The increase in the provision for credit losses for the three months ended September 30, 2025, was primarily due to an increase of $48.4 million in the construction loan portfolio balance and an increase of $15.6 million in the commercial non-owner occupied loan portfolio balance from June 30, 2025, partially offset by a decrease in the multi-family loan portfolio of $12.8 million, and a decrease in the loss rate for the residential - 1 to 4 family investment loan portfolio from June 30, 2025.

Non-interest Income :

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.

Our non-interest income was $0.9 million for the three months ended September 30, 2025, a decrease of $0.05 million, compared to $0.9 million for the three months ended September 30, 2024.

The decrease is primarily attributable to a decrease in loan fees, service fees on deposit accounts, and other income, compared to the same period in 2024.

Non-interest Expense :

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.

Our non-interest expense increased $0.8 million, or 12.6%, for the three months ended September 30, 2025, from the three months ended September 30, 2024 , to $7.2 million.

The increase was primarily driven by an increase in compensation and benefits of $0.1 million, an increase in professional services expense of $0.2 million, and an increase in other operating expense of $0.3 million, partially offset by a decrease in other real estate owned ("OREO") expense of $0.1 million, for the three months ended September 30, 2025 compared to the same period in 2024.

Income tax expense was $2.9 million on income before taxes of $13.5 million for the three months ended September 30, 2025, resulting in an effective tax rate of 21.2%, compared to income tax expense of $1.9 million on income before taxes of $9.4 million for the same period of 2024, resulting in an effective tax rate of 20.1%.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Our net income available to common shareholders for the nine months ended September 30, 2025 increased $6.6 million, or 32.7%, to $26.7 million, compared to $20.1 million for the nine months ended September 30, 2024.

Earnings per share were $2.26 per basic common share and $2.23 per diluted common share for the nine months ended September 30, 2025, compared to $1.68 per basic common share and $1.66 per diluted common share for the nine months ended September 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.

Our net interest income was $54.6 million for the nine months ended September 30, 2025 compared to $43.1 million for the nine months ended September 30, 2024, an increase of $11.6 million, or 26.8%.

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

Interest income increased $13.6 million, or 14.8%, during the nine months ended September 30, 2025 as compared to the same period in the prior year.

The increase in interest income was primarily due to an increase of $12.2 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.

Interest from deposits with banks increased $1.4 million during the nine months ended September 30, 2025 as compared to the same period in the prior year, primarily due to higher average cash balances held at the FRB.

The increase in interest income was partially offset by an increase in interest expense during the nine months ended September 30, 2025 of $2.0 million, or 4.2%, primarily due to an increase in interest-bearing deposit balances.

The increase was partially offset by a decrease in interest expense on borrowings of $1.5 million during the nine months ended September 30, 2025, primarily due to the payoff of the Company's $30.0 million, 6.5% subordinated notes, and a $75.0 million decrease in advances from the FHLBNY.

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.

For the nine months ended September 30, 2025, the provision for credit losses was $1.9 million, compared to $0.5 million for the nine months ended September 30, 2024, an increase of $1.4 million.

The increase was primarily driven by an increase in the construction loan portfolio balance of $63.8 million, and an increase in the commercial non-owner occupied loan balance of $80.2 million, from the balance at December 31, 2024, partially offset by a decrease in the residential - 1 to 4 family investment loan portfolio balance of $28.0 million, and a decrease in the multi-family portfolio loan balance of $9.6 million.

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.

Our non-interest income was $2.5 million for the nine months ended September 30, 2025, a decrease of $0.7 million, compared to $3.2 million for the nine months ended September 30, 2024.

The decrease was primarily due to a decrease in other income of $0.4 million, a decrease in service fees on deposit accounts of $0.1 million, and a decrease in loan fees 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%.

For the nine months ended September 30, 2025, non-interest expense increased $1.2 million, or 6.5%, to $20.4 million, compared to the same period in 2024.

The increase in non-interest expense was primarily due to an increase in professional services of $0.6 million, an increase in compensation and benefits of $0.4 million, and an increase in data processing expense of $0.3 million, partially offset by a decrease in OREO expense of $0.5 million, compared to the nine months ended September 30, 2024.

Income tax expense was $8.1 million on income before taxes of $34.8 million for the nine months ended September 30, 2025, resulting in an effective tax rate of 23.3%, compared to income tax expense of $6.5 million on income before taxes of $26.6 million for the same period of 2024, resulting in an effective tax rate of 24.3%.

Net Interest Income

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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 June 30,

For the Three Months Ended September 30,

(Dollars in thousands)

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Includes balances of FHLBNY and ACBB stock.

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

(Dollars in thousands)

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Financial Condition

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.

At September 30, 2025, the Company’s total assets were $2.17 billion, an increase of $29.9 million, or 1.40%, from December 31, 2024.

The increase in total assets was primarily attributable to an increase in net loans of $90.7 million, and an increase in the bank owned life insurance ("BOLI") balance of $3.9 million, partially offset by a decrease in cash and cash equivalents of $62.2 million, and a decrease in restricted stock balance of $3.3 million.

Cash and cash equivalents decreased $62.2 million, or 28.1%, primarily due to the increase in loans, a decrease in FHLBNY borrowings of $75.0 million, and a decrease in subordinated debentures of $29.9 million, partially offset by an increase in deposits of $121.5 million.

Loans increased $90.7 million, or 4.9%, primarily due to increases in the construction and commercial non-owner occupied loan portfolios' balances, partially offset by a decrease in the residential - 1 to 4 family investment loan portfolio balance.

FHLBNY restricted stock decreased $3.3 million, or 37.7%, due to the repayment of $75.0 million of FHLBNY advances.

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

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

BOLI increased $3.9 million, or 13.3%, primarily due to the funding of $3.37 million of additional policies.

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

This represented a $15.1 million, or 0.8%, 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 June 30, 2025 and December 31, 2024:

The increase in total liabilities was primarily due to an increase in total deposits of $121.5 million, or 7.5%, to $1.75 billion at September 30, 2025, partially offset by a decrease in FHLBNY borrowings of $75.0 million, or 51.7%, to $70.0 million, and a decrease in subordinated debt of $29.9 million.

The increase in deposits was due to an increase in money market balances of $273.3 million, partially offset by a decrease in brokered time deposits of $121.0 million, and non-brokered time deposit balances of $14.2 million, a decrease in non-interest checking deposits of $8.8 million, and a decrease in savings deposits of $8.5 million.

Total equity was $314.8 million and $300.1 million at September 30, 2025 and December 31, 2024, respectively, an increase of $14.8 million from December 31, 2024.

The increase was primarily due to the retention of earnings, partially offset by the payment of $6.4 million of cash dividends, and the repurchase of Company common stock of $6.5 million.

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

September 30,

(Dollars in thousands)

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Cash and cash equivalents

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.

Cash and cash equivalents decreased $62.2 million to $159.3 million at September 30, 2025 from $221.5 million at December 31, 2024, a decrease of 28.1%.

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

Investment securities

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.

Total investment securities decreased to $13.9 million at September 30, 2025, from $14.8 million at December 31, 2024, a decrease of $0.9 million or 6.1%.

The decrease was attributed to normal pay downs of securities, partially offset by the purchase of a corporate security for $0.5 million.

For detailed information on the composition and maturity distribution of our investment portfolio, see NOTE 3 - Investment Securities in the notes to the unaudited consolidated financial statements.

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Loans receivable :

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

Loans receivable increased to $1.96 billion at September 30, 2025, from $1.87 billion at December 31, 2024, an increase of $92.0 million, or 4.9%.

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

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

September 30, 2025

December 31, 2024

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Residential – Multifamily

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.

At September 30, 2025, total deposits increased to $1.75 billion from $1.63 billion at December 31, 2024, an increase of $121.5 million, or 7.5%.

The increase in deposits was primarily due to an increase in money market deposits of $273.3 million, partially offset by a decrease in brokered time deposits of $126.0 million.

The increase in our money market deposits was primarily due to the increase of $218.3 million in our premier money market account balance, and an increase of $66.6 million in our municipal money market account balance.

The decrease in the brokered time deposit balance is primarily attributable to $108.0 million in brokered CD maturities, and $13.0 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.

September 30,

(Dollars in thousands)

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Total brokered deposits

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 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.

Total borrowings were $83.4 million at September 30, 2025 and $188.3 million at December 31, 2024.

The decrease in borrowings is due to a decrease of $75.0 million in FHLBNY advances, and a decrease of $29.9 million of subordinated debt.

At September 30, 2025, $70.0 million of the outstanding FHLBNY advances have short-term maturities.

Total equity increased to $314.8 million at September 30, 2025 from $300.1 million at December 31, 2024, an increase of $14.8 million, or 4.0%, primarily due to the retention of earnings from the period, partially offset by the payment of $6.4 million of cash dividends, and the repurchase of Company common stock of $6.5 million.

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

At September 30, 2025, our cash position was $159.3 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 June 30, 2025, the Company had $86.8 million sourced from these relationships.

As of September 30, 2025, the Company had $89.7 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 June 30, 2025, the Company did not have any deposits sourced from IntraFi.

As of September 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 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.

As of September 30, 2025, the Company had lines of credit with the FHLBNY of $618.6 million, of which $70.0 million was outstanding, and an additional $75.0 million from a letter of credit for securing public funds, of which zero was outstanding as of September 30, 2025.

The remaining borrowing capacity was $473.6 million at September 30, 2025.

As of September 30, 2025, the Company had a borrowing capacity through the FRB discount window of $357.6 million.

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

We had outstanding loan commitments of $173.4 million at September 30, 2025.

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

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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 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 following is a discussion of our cash flows for the nine months ended September 30, 2025 and 2024.

Cash provided by operating activities was $25.1 million during the nine months ended September 30, 2025, compared to $26.6 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.

Cash used in investing activities was $91.6 million during the nine months ended September 30, 2025, compared to cash used in investing activities of $52.3 million in the same period last year.

The increase in cash used in the investing activities during the nine months ended September 30, 2025, was primarily due to the increase in cash outflow from the origination of loans, and the purchase of bank owned life insurance of $3.4 million.

Cash provided by financing activities was $4.3 million during the nine months ended September 30, 2025, compared to cash used in financing activities of $17.7 million in the same period last year.

The decrease in cash provided by financing activities during the nine months ended September 30, 2025, was primarily due to a decrease in FHLB borrowings, and a decrease in subordinated debt, partially offset by an increase in non-interest bearing deposits and an increase in interest bearing and noninterest-bearing deposits.

Capital Adequacy

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We also use other means to manage our capital.

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.

Total equity increased $14.8 million at September 30, 2025, from December 31, 2024, primarily from the Company’s net income of $26.7 million for the period, net of common and preferred stock dividends of $6.4 million, and the repurchase of Company common stock of $6.5 million.

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

4 unchanged sentences

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 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:

At September 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 September 30, 2025:

(Dollars in thousands except ratios)

7 unchanged sentences

Our allowances for credit losses represents management's best estimate of probable losses inherent in our investment and loan portfolios, excluding those loans accounted for under fair value.

Our process for determining the allowance for credit losses is discussed in Note 1 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K .

Our process for determining the allowance for credit losses is discussed in Note 1 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Our determination of the allowance for credit losses is based on periodic evaluations of the loan and lease portfolios and other relevant factors, broken down into vintage based on year of origination.

13 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