UNITY BANCORP INC /NJ/ 10-K

Item 8. Financial Statements and Supplementary Data: Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ASSETS ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 19,841 ​ $ 20,206 Interest-bearing deposits ​ 196,678 ​ 160,232 Cash and cash equivalents ​ 216,519 ​ 180,438 Securities: ​ ​ ​ ​ ​ ​ Debt securities available for sale (net of valuation allowance of $ 0 and $ 2,824 as of December 31, 2025 and December 31, 2024, respectively) (amortized cost of $ 72,474 and $ 100,212 at December 31, 2025 and December 31, 2024, respectively) ​ 70,870 ​ 93,884 Debt securities held to maturity ​ 36,576 ​ 41,294 Equity securities with readily determinable fair values ​ 16,569 ​ 9,850 Total securities ​ 124,015 ​ 145,028 Loans: ​ ​ ​ ​ Loans held for sale ​ 9,490 ​ 12,163 SBA loans held for investment ​ ​ 34,259 ​ ​ 38,309 Commercial loans ​ 1,518,032 ​ 1,281,436 Commercial construction loans ​ ​ 147,215 ​ ​ 130,193 Residential mortgage loans ​ 677,221 ​ 630,927 Consumer loans ​ 85,219 ​ 76,711 Residential construction loans ​ ​ 73,277 ​ ​ 90,918 Total loans ​ 2,544,713 ​ 2,260,657 Allowance for credit losses ​ ( 32,342 ) ​ ( 26,788 ) Net loans ​ 2,512,371 ​ 2,233,869 Premises and equipment, net ​ 18,022 ​ 18,778 Bank owned life insurance ("BOLI") ​ 26,547 ​ 25,773 Deferred tax assets ​ 14,640 ​ 14,106 Federal Home Loan Bank ("FHLB") stock ​ 14,314 ​ 12,507 Accrued interest receivable ​ 12,896 ​ 12,691 Goodwill ​ 1,516 ​ 1,516 Other real estate owned ("OREO") ​ ​ 1,472 ​ ​ — Prepaid expenses and other assets ​ 24,340 ​ 9,311 Total assets ​ $ 2,966,652 ​ $ 2,654,017 LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Deposits: ​ ​ ​ ​ Noninterest-bearing demand ​ $ 465,596 ​ $ 440,803 Interest-bearing demand ​ 369,131 ​ 321,780 Savings ​ 535,044 ​ 491,175 Brokered deposits ​ ​ 274,203 ​ ​ 217,931 Time deposits ​ 680,087 ​ 628,624 Total deposits ​ 2,324,061 ​ 2,100,313 Borrowed funds ​ 255,774 ​ 220,504 Subordinated debentures ​ 10,310 ​ 10,310 Accrued interest payable ​ 2,138 ​ 1,702 Accrued expenses and other liabilities ​ 28,738 ​ 25,605 Total liabilities ​ 2,621,021 ​ 2,358,434 Shareholders’ equity: ​ ​ ​ ​ Preferred stock, no par value, 500 shares authorized, no shares issued and no shares outstanding as of December 31, 2025 and December 31, 2024 ​ ​ — ​ ​ — Common stock, no par value, 12,000 shares authorized, 10,048 shares issued and 9,982 shares outstanding as of December 31, 2025 ; 12,000 shares authorized, 11,616 shares issued and 10,026 shares outstanding as of December 31 , 2024 ​ 105,892 ​ 103,936 Retained earnings ​ 243,935 ​ 227,331 Treasury stock, at cost ( 66 shares as of December 31, 2025 and 1,590 shares as of December 31, 2024) ​ ​ ( 3,101 ) ​ ​ ( 33,577 ) Accumulated other comprehensive loss ​ ( 1,095 ) ​ ( 2,107 ) Total shareholders’ equity ​ 345,631 ​ 295,583 Total liabilities and shareholders’ equity ​ $ 2,966,652 ​ $ 2,654,017 ​ The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. 53 Table of Contents Consolidated Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands, except per share amounts) ​ 2025 ​ ​ ​ 2024 INTEREST INCOME ​ ​ ​ ​ ​ Interest-bearing deposits ​ $ 1,964 ​ $ 2,033 FHLB stock ​ 565 ​ 789 Securities: ​ ​ ​ ​ Taxable ​ 6,818 ​ 7,312 Tax-exempt ​ 71 ​ 70 Total securities ​ 6,889 ​ 7,382 Loans: ​ ​ ​ ​ SBA loans ​ 3,790 ​ 4,887 Commercial loans ​ 95,144 ​ 75,699 Commercial construction loans ​ ​ 10,340 ​ ​ 12,074 Residential mortgage loans ​ 41,925 ​ 37,770 Consumer loans ​ 5,830 ​ 5,607 Residential construction loans ​ ​ 7,181 ​ ​ 9,497 Total loans ​ 164,210 ​ 145,534 Total interest income ​ 173,628 ​ 155,738 INTEREST EXPENSE ​ ​ ​ ​ Interest-bearing demand deposits ​ 7,528 ​ 7,176 Savings deposits ​ 11,652 ​ 13,006 Brokered deposits ​ 7,608 ​ 8,412 Time deposits ​ 25,571 ​ 22,918 Borrowed funds and subordinated debentures ​ 4,236 ​ 5,615 Total interest expense ​ 56,595 ​ 57,127 Net interest income ​ 117,033 ​ 98,611 Provision for credit losses, loans ​ ​ 6,699 ​ ​ 2,407 Provision for credit losses, off-balance sheet ​ ​ 66 ​ ​ 1 (Release) provision for credit losses, securities ​ ( 2,824 ) ​ 1,541 Net interest income after provision for credit losses ​ 113,092 ​ 94,662 NONINTEREST INCOME ​ ​ ​ ​ Branch fee income ​ 1,836 ​ 1,391 Service and loan fee income ​ 2,712 ​ 2,165 Gain on sale of SBA loans held for sale, net ​ 705 ​ 660 Gain on sale of mortgage loans, net ​ 1,527 ​ 1,488 BOLI income ​ 774 ​ 544 Net securities gains ​ 5,596 ​ 586 Other income ​ 1,629 ​ 1,635 Total noninterest income ​ 14,779 ​ 8,469 NONINTEREST EXPENSE ​ ​ ​ ​ Compensation and benefits ​ 32,186 ​ 29,749 Processing and communications ​ ​ 4,193 ​ ​ 3,473 Occupancy ​ ​ 3,407 ​ ​ 3,184 Furniture and equipment ​ 3,224 ​ 3,140 Professional services ​ 1,758 ​ 1,683 Advertising ​ 1,682 ​ 1,611 Loan related expenses ​ ​ 888 ​ ​ 1,138 Deposit insurance ​ ​ 1,174 ​ ​ 1,100 Director fees ​ ​ 1,293 ​ ​ 956 Other expenses ​ 2,554 ​ 2,707 Total noninterest expense ​ 52,359 ​ 48,741 Income before provision for income taxes ​ 75,512 ​ 54,390 Provision for income taxes ​ 17,561 ​ 12,940 Net income ​ $ 57,951 ​ $ 41,450 Net income per common share - Basic ​ $ 5.78 ​ $ 4.13 Net income per common share - Diluted ​ $ 5.67 ​ $ 4.06 Weighted average common shares outstanding – Basic ​ 10,033 ​ 10,031 Weighted average common shares outstanding – Diluted ​ 10,223 ​ 10,202 ​ The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. ​ 54 Table of Contents Consolidated Statements of Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax ​ ​ ​ ​ ​ ​ ​ Before tax ​ expense ​ Net of tax (In thousands) ​ amount ​ (benefit) ​ amount Net income ​ $ 75,512 ​ $ 17,561 ​ $ 57,951 Other comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on securities arising during the period ​ 1,840 ​ ​ 447 ​ ​ 1,393 Less: reclassification for losses on securities included in net income ​ ( 60 ) ​ ​ ( 15 ) ​ ​ ( 45 ) Total unrealized gains on securities available for sale ​ 1,900 ​ ​ 462 ​ ​ 1,438 Net unrealized losses from cash flow hedges: ​ ​ ​ ​ ​ ​ Unrealized holding losses on cash flow hedges arising during the period ​ ( 945 ) ​ ​ ( 258 ) ​ ​ ( 687 ) Less: reclassification adjustment for losses on cash flow hedges included in net income ​ ​ ( 359 ) ​ ​ ( 98 ) ​ ​ ( 261 ) Total unrealized losses on cash flow hedges ​ ( 586 ) ​ ( 160 ) ​ ( 426 ) Total other comprehensive income ​ 1,314 ​ 302 ​ 1,012 Total comprehensive income ​ $ 76,826 ​ $ 17,863 ​ $ 58,963 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ Income tax ​ ​ ​ ​ ​ ​ ​ Before tax ​ expense ​ Net of tax (In thousands) ​ amount ​ (benefit) ​ amount Net income ​ $ 54,390 ​ $ 12,940 ​ $ 41,450 Other comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on securities arising during the period ​ 1,002 ​ ​ 247 ​ ​ 755 Less: reclassification adjustment for losses on securities included in net income ​ — ​ ​ — ​ ​ — Total unrealized gains on securities available for sale ​ 1,002 ​ ​ 247 ​ ​ 755 Net unrealized losses from cash flow hedges: ​ ​ ​ ​ ​ ​ ​ Unrealized holding losses on cash flow hedges arising during the period ​ ( 1,097 ) ​ ​ ( 301 ) ​ ​ ( 796 ) Less: reclassification adjustment for losses on cash flow hedges included in net income ​ ​ ( 925 ) ​ ​ ( 254 ) ​ ​ ( 671 ) Total unrealized losses on cash flow hedges ​ ( 172 ) ​ ( 47 ) ​ ( 125 ) Total other comprehensive income ​ 830 ​ 200 ​ 630 Total comprehensive income ​ $ 55,220 ​ $ 13,140 ​ $ 42,080 ​ ​ The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. ​ 55 Table of Contents Consolidated Statements of Changes in Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ other ​ ​ ​ ​ Total ​ ​ Common stock ​ Retained ​ comprehensive ​ Treasury ​ Shareholders’ (In thousands, except per share amounts) ​ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ earnings ​ ​ ​ (loss) income ​ stock ​ ​ ​ equity Balance, December 31, 2023 10,063 ​ $ 100,426 ​ $ 191,108 ​ $ ( 2,737 ) ​ $ ( 27,367 ) ​ $ 261,430 Net income — ​ ​ — ​ ​ 41,450 ​ ​ — ​ ​ — ​ 41,450 Other comprehensive income, net of tax — ​ ​ — ​ ​ — ​ ​ 630 ​ ​ — ​ 630 Dividends on common stock ($ 0.52 per share) 7 ​ ​ 206 ​ ​ ( 5,227 ) ​ ​ — ​ ​ — ​ ( 5,021 ) Share-based compensation (1) ​ 185 ​ ​ 3,304 ​ ​ — ​ ​ — ​ ​ — ​ 3,304 Treasury stock purchased, at cost ( 229 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 6,210 ) ​ ​ ( 6,210 ) Balance, December 31, 2024 10,026 ​ $ 103,936 ​ $ 227,331 ​ $ ( 2,107 ) ​ $ ( 33,577 ) ​ $ 295,583 Net income — ​ ​ — ​ ​ 57,951 ​ ​ — ​ ​ — ​ 57,951 Other comprehensive income, net of tax — ​ ​ — ​ ​ — ​ ​ 1,012 ​ ​ — ​ 1,012 Dividends on common stock ($ 0.58 per share) 4 ​ ​ 223 ​ ​ ( 5,832 ) ​ ​ — ​ ​ — ​ ( 5,609 ) Share-based compensation (1) 68 ​ ​ 1,733 ​ ​ — ​ ​ — ​ ​ — ​ 1,733 Treasury stock purchased, at cost ​ ( 116 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,039 ) ​ ​ ( 5,039 ) Treasury stock retirement ​ — ​ ​ — ​ ​ ( 35,515 ) ​ ​ — ​ ​ 35,515 ​ ​ — Balance, December 31, 2025 9,982 ​ $ 105,892 ​ $ 243,935 ​ $ ( 1,095 ) ​ $ ( 3,101 ) ​ $ 345,631 ​ (1) Includes the issuance of common stock under employee benefit plans, which includes nonqualified stock options and restricted stock expense related entries, employee option exercises and the tax benefit of options exercised. ​ The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. ​ 56 Table of Contents Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the twelve months ended December 31, (In thousands) ​ 2025 ​ ​ ​ 2024 ​ ​ ​ OPERATING ACTIVITIES: ​ ​ ​ ​ ​ Net income ​ $ 57,951 ​ $ 41,450 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ Provision for credit losses, loans ​ 6,699 ​ 2,407 ​ (Release) Provision for credit losses, AFS securities ​ ​ ( 2,824 ) ​ ​ 1,541 ​ Net accretion of purchase premiums and discounts on securities ​ ( 85 ) ​ ( 256 ) ​ Depreciation and amortization, net ​ 2,807 ​ 2,568 ​ Deferred income tax benefit ​ ( 840 ) ​ ( 1,747 ) ​ Net securities gains ​ ( 5,596 ) ​ ( 586 ) ​ Stock compensation expense ​ 2,092 ​ 1,823 ​ Gain on sale of mortgage loans, net ​ ( 1,527 ) ​ ( 1,488 ) ​ Gain on sale of SBA loans held for sale, net ​ ( 705 ) ​ ( 660 ) ​ BOLI income ​ ( 774 ) ​ ( 544 ) ​ Net change in other assets and liabilities ​ ( 12,292 ) ​ 3,479 ​ Net cash provided by operating activities ​ 44,906 ​ 47,987 ​ INVESTING ACTIVITIES: ​ ​ ​ ​ ​ Purchases of securities held to maturity ​ — ​ ( 5,000 ) ​ Purchase of equity securities ​ ( 2,666 ) ​ ( 2,247 ) ​ Purchases of securities available for sale ​ ( 15,448 ) ​ ( 10,500 ) ​ (Purchases) redemption from sale of FHLB stock, at cost ​ ( 1,807 ) ​ 5,928 ​ Maturities and principal payments on debt securities held to maturity ​ 4,784 ​ 100 ​ Maturities and principal payments on debt securities available for sale ​ 37,199 ​ 7,824 ​ Proceeds from sales of securities available for sale ​ 1,000 ​ — ​ Proceeds from sales of equity securities ​ 6,558 ​ 785 ​ Net increase in loans ​ ( 285,892 ) ​ ( 89,010 ) ​ Purchases of premises and equipment, net ​ ( 564 ) ​ ( 693 ) ​ Net cash used in investing activities ​ ( 256,836 ) ​ ( 92,813 ) ​ FINANCING ACTIVITIES: ​ ​ ​ ​ ​ Net increase in deposits ​ 223,748 ​ 176,173 ​ Proceeds (repayments) of short-term borrowings, net ​ 30,000 ​ ( 137,000 ) ​ Proceeds from long-term borrowings, net ​ ​ 5,270 ​ ​ 1,066 ​ Proceeds from exercise of stock options, net of withheld taxes ​ ( 359 ) ​ 1,480 ​ Cash dividends on common stock ​ ( 5,609 ) ​ ( 5,021 ) ​ Purchase of treasury stock ​ ​ ( 5,039 ) ​ ​ ( 6,210 ) ​ Net cash provided by financing activities ​ 248,011 ​ 30,488 ​ Increase (decrease) in cash and cash equivalents ​ 36,081 ​ ( 14,338 ) ​ Cash and cash equivalents, beginning of period ​ 180,438 ​ 194,776 ​ Cash and cash equivalents, end of period ​ $ 216,519 ​ $ 180,438 ​ SUPPLEMENTAL DISCLOSURES ​ ​ ​ ​ ​ Cash: ​ ​ ​ ​ ​ Interest paid ​ $ 56,159 ​ $ 57,349 ​ Income taxes paid ​ 14,033 ​ 14,074 ​ Noncash investing activities: ​ ​ ​ ​ ​ Establishment of lease liability and right-of-use asset, net of terminations ​ 725 ​ — ​ Capitalization of servicing rights ​ 228 ​ 186 ​ Transfer of loans to OREO ​ 1,472 ​ — ​ ​ The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. ​ ​ ​ 57 Table of Contents Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Overview The accompanying Consolidated Financial Statements include the accounts of Unity Bancorp, Inc. (the “Parent Company”) and its wholly-owned subsidiary, Unity Bank (the “Bank” or when consolidated with the Parent Company, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. Unity Bancorp, Inc. is a financial holding company incorporated in New Jersey and registered under the Bank Holding Company Act of 1956, as amended. Its wholly-owned subsidiary, the Bank, is chartered by the New Jersey Department of Banking and Insurance. The Bank provides a full range of commercial and retail banking services through twenty-two branch offices located in Bergen, Hunterdon, Middlesex, Morris, Ocean, Somerset, Union and Warren counties in New Jersey and Northampton County in Pennsylvania. These services include the acceptance of demand, savings and time deposits and the extension of consumer, real estate, SBA and other commercial credits. Unity Investment Services, Inc. is a wholly-owned subsidiary of Unity Bank and is used to hold and administer part of the Bank’s investment portfolio. Unity Investment Services, Inc. has one subsidiary, Unity Delaware Investment 2, Inc., which has three subsidiaries. Unity Strategic Investment I, Inc. and Unity Strategic Investment II, Inc. and Unity NJ REIT, Inc., which was formed in 2013 to hold real estate related loans. The Company has a wholly-owned subsidiary: Unity (NJ) Statutory Trust II. For additional information on Unity (NJ) Statutory Trust II, see Note 7 to the Consolidated Financial Statements. Use of Estimates in the Preparation of Financial Statements In preparing the consolidated financial statements in conformity with U.S. GAAP, Management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheet and Statement of Income for the periods indicated. Amounts requiring the use of significant estimates include the allowance for credit losses. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks and interest-bearing deposits. Restrictions on Cash In addition, the Company’s contract with its current electronic funds transfer provider requires a predetermined balance be maintained in a settlement account controlled by the provider equal to the Company’s average daily net settlement position multiplied by four days. The required balance was $ 262 thousand as of December 31, 2025 and 2024, respectively. This balance can be adjusted periodically to reflect actual transaction volume and seasonal factors. Securities The Company classifies its securities into three categories, debt securities available for sale (“AFS”), debt securities held to maturity (“HTM”) and equity securities held at fair value ("equity securities"). ​ 58 Table of Contents Debt securities that are classified as available for sale are stated at fair value. Unrealized gains and losses on debt securities available for sale are excluded from results of operations and are reported in other comprehensive income, a separate component of shareholders’ equity, net of taxes. Debt securities classified as available for sale include debt securities that may be sold in response to changes in interest rates, changes in prepayment risks, for asset/liability management purposes or liquidity needs. The cost of debt securities sold is determined on a specific identification basis. Gains and losses on sales of debt securities are recognized in the Consolidated Statements of Income on a trade date basis. Debt securities are classified as held to maturity based on Management’s intent and ability to hold them to maturity. Such debt securities are stated at cost, adjusted for unamortized purchase premiums and discounts. For debt securities, purchase discounts are accreted using the interest method over the stated terms of the securities; whereas purchase premiums are amortized through the earliest call date. Equity securities are investments carried at fair value that may be sold in response to changing market and interest rate conditions or for other business purposes. Activity in this portfolio is undertaken primarily to manage liquidity and interest rate risk, to take advantage of market conditions that create economically attractive returns and as an additional source of earnings. Periodic net gains and losses on equity investments are recognized in the Consolidated Statements of Income as realized gains and losses carried at fair value with changes recognized in net income. For additional information on securities, see Note 2 to the Consolidated Financial Statements. Valuation Allowance – Debt Securities The Company has a process in place to identify debt securities that could potentially incur credit impairment. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Management evaluates debt securities for impairment at least on a quarterly basis and more frequently when economic or market concern warrants such evaluation. This evaluation considers relevant facts and circumstances in evaluating whether there is credit or interest rate-related impairment of a security. The CECL standard requires credit losses on both HTM and AFS debt securities to be recognized through a valuation allowance instead of as a direct write-down to the amortized cost basis of the security. Management assesses its intent to sell and whether it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered impaired where Management has no intent to sell and the Company has no requirement to sell prior to recovery of its amortized cost basis, the amount of the impairment is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings as provision expense and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of future expected cash flows due to factors that are not credit related is recognized in other comprehensive income. For debt securities where Management has the intent to sell, the amount of the impairment is reflected in earnings as realized losses. The present value of expected future cash flows is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The asset-backed securities cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate bond cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances including timing, security interests and loss severity. The Company elected the practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies for available for sale and held to maturity securities. These securities are either explicitly or implicitly guaranteed by the U.S. Government, are highly rated by major agencies and have a long history of no credit losses. 59 Table of Contents The Company considers a debt security to be past due in terms of payment based on its contractual terms. A debt security may be placed on nonaccrual, with interest no longer recognized, when collectability of principal or interest is doubtful. A security may be partially or fully charged-off against the allowance if it is determined to be uncollectible. Recoveries of previously charged-off available for sale securities are recognized when received, while recoveries on held to maturity securities are recognized when expected. For additional information on the allowance for credit losses, see Note 4 to the Consolidated Financial Statements. Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company; (ii) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (iii) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. During the normal course of business, the Company may transfer a portion of a financial asset, for example, a participation in a loan or the government guaranteed portion of a loan. In order to be eligible for sales treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. Loans Loans Held for Sale Loans held for sale represent the guaranteed portion of certain SBA loans and Mortgage loans, that the Company has elected to hold for sale and are reflected at the lower of aggregate cost or market value. The Company originates loans to customers under an SBA program that historically has provided for SBA guarantees of up to 90 percent of each loan. The Company may sell the guaranteed portion of its SBA loans to a third party and retains the servicing, holding the nonguaranteed portion in its portfolio. The net amount of loan origination fees on loans sold is included in the carrying value and in the gain or loss on the sale. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur; see details under the “Transfers of Financial Assets” heading above. Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment, if temporary, would generally be reported as a valuation allowance. Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. For additional information on servicing assets, see Note 3 to the Consolidated Financial Statements. 60 Table of Contents Loans Held for Investment Loans held for investment are stated at the unpaid principal balance, net of unearned discounts, deferred loan origination fees and costs and net charge-offs. In accordance with the level yield method, loan origination fees, net of direct loan origination costs, are deferred and recognized over the estimated life of the related loans as an adjustment to the loan yield. Interest is credited to operations primarily based upon the principal balance outstanding. Loans are reported as past due when either interest or principal is unpaid in the following circumstances: fixed payment loans when (i) the borrower is in arrears for two or more monthly payments; (ii) open end credit for two or more billing cycles or (iii) single payment notes if interest or principal remains unpaid for 30 days or more. Nonaccrual loans consist of loans that are not accruing interest as a result of principal or interest being delinquent for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt (nonaccrual loans). When a loan is classified as nonaccrual, interest accruals are discontinued and all past due interest previously recognized as income is reversed and charged against current period earnings. Generally, until the loan becomes current, any payments received from the borrower are applied to outstanding principal until such time as Management determines that the financial condition of the borrower and other factors merit recognition of a portion of such payments as interest income. Loans may be returned to an accrual status when the ability to collect is reasonably assured or when the loan is brought current as to principal and interest. Loans are charged-off when collection is in doubt and when the Company can no longer justify maintaining the loan as an asset on the Consolidated Balance Sheet. Loans qualify for charge-off when, after thorough analysis, all possible sources of repayment are insufficient. These include: (i) potential future cash flows; (ii) value of collateral and/or (iii) strength of co-makers and guarantors. Additionally, all loans classified as a loss or that portion of the loan classified as a loss is charged-off, subject to government guarantee. All loan charge-offs are approved by Executive Management. For additional information on loans, see Note 3 to the Consolidated Financial Statements. Allowance for Credit Losses for Loans and Reserve for Unfunded Loan Commitments The allowance for credit losses represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the Balance Sheet date. The measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit. The allowance is established through a provision for credit losses that is charged against income. The methodology for determining the allowance for credit losses is considered a critical accounting policy by Management because of the high degree of judgment involved, the subjectivity of the assumptions used and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded allowance for credit losses. The allowance for credit losses is reported separately as a contra-asset on the Consolidated Balance Sheet. The expected credit losses for unfunded lending commitments and unfunded loan commitments is reported on the Consolidated Balance Sheet in Accrued expenses and other liabilities. The allowance for credit losses on loans is deducted from the amortized cost basis of the loan to present the net amount expected to be collected. Expected losses are evaluated and calculated on a collective, or pooled, basis for those loans which share similar risk characteristics. At each reporting period, the Company evaluates whether loans within a pool continue to exhibit similar risk characteristics. If the risk characteristics of a loan change, such that they are no longer similar to other loans in the pool, the Company will evaluate the loan with a different pool of loans that share similar risk characteristics. If the loan does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. The Company generally considers those loans for individual evaluation to be those on nonaccrual. Loans are charged off against the allowance for credit losses when the Company believes the balances to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off or expected to be charged-off. 61 Table of Contents The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. Such segments include SBA, Commercial, Residential mortgage, Consumer and Residential construction. The Commercial segment is further sub-segmented into SBA 504, Commercial & industrial, Commercial real estate and Commercial construction. The Consumer segment is further bifurcated into Home equity and Consumer other. For most segments the Company calculates estimated credit losses using a weighted average remaining maturity methodology. The Company estimates the allowance for credit losses on loans via a quantitative analysis which considers relevant available information from internal and external sources related to past events and current conditions, as well as the incorporation of reasonable and supportable forecasts. The Company evaluates a variety of factors including third party economic forecasts, industry trends and other available published economic information in arriving at its forecasts. After the reasonable and supportable forecast period, the Company reverts, after four quarters, on a straight-line basis over the following four quarters, to the historical average economic variables. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the allowance for credit losses on loans are qualitative reserves to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. Factors that the Company considers include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations and the volume and severity of past due loans and nonaccrual loans. On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will record a provision for the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan. The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancelable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. To determine the expected funding rate, the Company uses a historical utilization rate for each segment. There were no changes to the Company’s methodology for credit loss estimates during the year ended December 31, 2025. For additional information on the allowance for credit losses and reserve for unfunded loan commitments, see Note 4 to the Consolidated Financial Statements. Premises and Equipment, net Land is carried at cost. All other fixed assets are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful life of buildings is not to exceed 30 years , furniture and fixtures is generally 10 years or less and equipment is 3 to 5 years . Leasehold improvements are depreciated over the lesser of the useful life of the asset or the life of the underlying lease. For additional information on premises and equipment, see Note 5 to the Consolidated Financial Statements. Bank Owned Life Insurance The Company purchased life insurance policies on certain members of Management. Bank owned life insurance is recorded at its cash surrender value or the amount that can be realized and the appreciation and death benefits from Bank owned life insurance are not subject to income tax. 62 Table of Contents Federal Home Loan Bank (“FHLB”) Stock Federal law requires a member institution of the Federal Home Loan Bank system to hold stock of its district FHLB according to a predetermined formula. The stock is carried at cost. Management reviews the stock for impairment based on the ultimate recoverability of the cost basis in the stock. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. Management considers such criteria as the significance of the decline in net assets, if any, of the FHLB, the length of time this situation has persisted, commitments by the FHLB to make payments required by law or regulation, the impact of legislative and regulatory changes on the customer base of the FHLB and the liquidity position of the FHLB. Accrued Interest Receivable Accrued interest receivable consists of amounts earned on investments and loans. The Company recognizes accrued interest receivable as it is earned. The Company is using the practical expedient to exclude accrued interest receivable from credit loss measurement. Other Real Estate Owned Other real estate owned (“OREO”) is recorded at the fair value, less estimated costs to sell at the date of acquisition, with a charge to the allowance for credit losses for any excess of the loan carrying value over such amount. Subsequently, OREO is carried at the lower of cost or fair value, as determined by current appraisals. Certain costs that increase the value or extend the useful life in preparing properties for sale are capitalized to the extent that the appraisal amount exceeds the carrying value and expenses of holding foreclosed properties are charged to operations as incurred. Goodwill The Company accounts for goodwill and other intangible assets in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 350, “Intangibles – Goodwill and Other,” which allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. Based on a qualitative assessment, Management determined that the Company’s recorded goodwill totaling $ 1.5 million, which resulted from the 2005 acquisition of its Phillipsburg, New Jersey branch, is not impaired as of December 31, 2025. Reclassification Certain reclassifications have been made in the Consolidated Financial Statements to conform to the current year presentation. Such reclassifications had no impact on net income or stockholders’ equity as previously reported. Appraisals All appraisals must be performed in accordance with the Uniform Standards of Professional Appraisal Practice (“USPAP”). Appraisals are certified to the Company and performed by appraisers on the Company’s approved list of appraisers. Evaluations are completed by a person independent of Company Management. The content of the appraisal depends on the complexity and location of the property. Derivative Instruments and Hedging Activities The Company utilizes derivative instruments in the form of interest rate swaps to hedge its exposure to interest rate risk in conjunction with its overall asset and liability risk management process. In accordance with accounting requirements, the Company formally designates all of its hedging relationships as either fair value hedges or cash flow hedges. The Company’s derivative instruments currently consist of cash flow hedges. 63 Table of Contents The Company recognizes all derivative instruments at fair value in either Prepaid expense and other assets or Accrued expenses and other liabilities on the Consolidated Balance Sheet and the related cash flows in the Operating Activities section of the Consolidated Statement of Cash Flows. For derivatives designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows), the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. Those derivative financial instruments that do not meet the hedging criteria would be classified as undesignated derivatives and would be recorded at fair value with changes in fair value recorded in income. The Company discontinues hedge accounting when (a) it determines that a derivative is no longer effective in offsetting changes in cash flows of a hedged item; (b) the derivative expires or is sold, terminated or exercised; (c) probability exists that the forecasted transaction will no longer occur or (d) Management determines that designating the derivative as a hedging instrument is no longer appropriate. In all cases in which hedge accounting is discontinued and a derivative remains outstanding, the Company will carry the derivative at fair value in the Consolidated Financial Statements, recognizing changes in fair value in current period income in the Consolidated Statement of Income. For additional information on derivative instruments and hedging activities, see Note 7 to the Consolidated Financial Statements. Income Taxes The Company follows FASB ASC Topic 740, “Income Taxes,” which prescribes a threshold for the financial statement recognition of income taxes and provides criteria for the measurement of tax positions taken or expected to be taken in a tax return. ASC 740 also includes guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, Management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company participates in federal and state income tax credit programs. Tax credits are accounted for within the scope of ASC 740 and are reflected as a reduction of income tax expense when the related tax benefit is realized or realizable. Tax credits are recognized in the period when the Company concludes that it has met the more-likely-than-not recognition threshold under ASC 740. Interest and penalties associated with unrecognized tax benefits are recognized in income tax expense on the Consolidated Statements of Income. 64 Table of Contents For additional information on income taxes, see Note 11 to the Consolidated Financial Statements. Net Income Per Share Basic net income per common share is calculated as net income available to common shareholders divided by the weighted average common shares outstanding during the reporting period. Diluted net income per common share is computed similarly to that of basic net income per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally stock options, were issued during the reporting period utilizing the treasury stock method; however, when a net loss rather than net income is recognized, diluted earnings per share equals basic earnings per share. For additional information on net income per share, see Note 12 to the Consolidated Financial Statements. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation,” which requires recognition of compensation expense related to stock-based compensation awards over the period during which an employee is required to provide service for the award. Compensation expense is equal to the fair value of the award, net of estimated forfeitures, and is recognized over the vesting period of such awards. For additional information on the Company’s stock-based compensation, see Note 14 to the Consolidated Financial Statements. Fair Value The Company follows FASB ASC Topic 820, “Fair Value Measurement and Disclosures,” which provides a framework for measuring fair value under generally accepted accounting principles. For additional information on the fair value of the Company’s financial instruments, see Note 15 to the Consolidated Financial Statements. Other Comprehensive Income (Loss) Other comprehensive income (loss) consists of the change in unrealized gains (losses) on securities available for sale and derivative related items that were reported as a component of shareholders’ equity, net of tax. For additional information on other comprehensive income (loss), see Note 9 to the Consolidated Financial Statements. Dividend Restrictions Banking regulations require maintaining certain capital levels that may limit the dividends paid by the Bank to the holding company or by the holding company to the shareholders. Operating Segments While Management, whom includes the Chief Executive Officer and acts as the Chief Operating Decision Maker (“CODM”), monitors the revenue streams of its various products and services, operating results and financial performance are evaluated on a company-wide basis. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM uses net income reporting in the Company’s Consolidated Statements of Income to make operating and strategic decisions. Accordingly, there is only one reportable segment. The Company adopted ASU 2023-07 during the year ended December 31, 2024 noting no material impact. 65 Table of Contents Revenue Recognition FASB ASC 606, Revenue from Contracts with Customers ("ASC 606") , establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans, letters of credit, derivatives and investment securities, as well as revenue related to mortgage servicing activities, as these activities are subject to other U.S. GAAP discussed elsewhere within the Company’s disclosures. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC 606, which are presented in its income statements as components of non-interest income are as follows: ● Branch fee income - these represent general service fees for monthly account maintenance and activity or transaction based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when the Company’s performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payments for such performance obligations are generally received at the time the performance obligations are satisfied. ● Other non-interest income primarily includes items such as loan-related fees, investment gains/losses, bank owned life insurance income, dividends on FHLB and FRB stock and other general operating income, none of which are subject to the requirements of ASC 606. Recent Accounting Pronouncements ​ ​ ​ ​ Accounting Standard Update (“ASU”) Required Adoption Date Brief Description Effect on the Company’s Financial Statements ASU 2024-03, Income Statement – Reporting comprehensive income – Expense Disaggregation Disclosures (Subtopic 220-40) Fiscal years beginning after December 15, 2026 Improve transparency of specific expense categories, which is generally not presented in the financial statements today. No significant impact ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans Fiscal years beginning after December 15, 2026 Expands the “gross-up” method to more types of purchased loans and reduce day-1 credit loss expense volatility on purchased credit-deteriorated (“PCD”) assets. No significant impact ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements Fiscal years beginning after December 15, 2026 To more closely align hedge accounting with the economics of an entity’s risk management activities. No significant impact 66 Table of Contents 2. Securities This table provides the major components of debt securities AFS, HTM and equity securities at amortized cost and estimated fair value at December 31, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ Estimated (In thousands) ​ cost ​ gains ​ losses ​ fair value Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 5,000 ​ $ — ​ $ ( 31 ) ​ $ 4,969 State and political subdivisions ​ 185 ​ — ​ ( 26 ) ​ 159 Residential mortgage-backed securities ​ 12,702 ​ 27 ​ ( 977 ) ​ 11,752 Asset backed securities ​ ​ 22,001 ​ ​ 11 ​ ​ ( 12 ) ​ ​ 22,000 Corporate and other securities ​ 32,586 ​ 314 ​ ( 910 ) ​ 31,990 Total debt securities available for sale ​ $ 72,474 ​ $ 352 ​ $ ( 1,956 ) ​ $ 70,870 Held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 28,000 ​ $ — ​ $ ( 3,812 ) ​ $ 24,188 State and political subdivisions ​ 1,299 ​ 42 ​ — ​ 1,341 Residential mortgage-backed securities ​ 7,277 ​ — ​ ( 2,401 ) ​ 4,876 Total debt securities held to maturity ​ $ 36,576 ​ $ 42 ​ $ ( 6,213 ) ​ $ 30,405 Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ Total equity securities ​ $ 15,009 ​ $ 1,965 ​ $ ( 405 ) ​ $ 16,569 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ ​ Valuation ​ Estimated (In thousands) ​ cost ​ gains ​ losses ​ ​ allowance ​ fair value Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 15,000 ​ $ — ​ $ ( 241 ) ​ $ — ​ $ 14,759 State and political subdivisions ​ 357 ​ — ​ ( 24 ) ​ — ​ 333 Residential mortgage-backed securities ​ 13,814 ​ 27 ​ ( 1,555 ) ​ — ​ 12,286 Asset backed securities ​ ​ 39,300 ​ ​ 94 ​ ​ ( 2 ) ​ ​ — ​ ​ 39,392 Corporate and other securities ​ 31,741 ​ 165 ​ ( 1,968 ) ​ ( 2,824 ) ​ 27,114 Total debt securities available for sale ​ $ 100,212 ​ $ 286 ​ $ ( 3,790 ) ​ $ ( 2,824 ) ​ $ 93,884 Held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 28,000 ​ $ — ​ $ ( 4,932 ) ​ $ — ​ $ 23,068 State and political subdivisions ​ 1,234 ​ 59 ​ — ​ — ​ 1,293 Residential mortgage-backed securities ​ 12,060 ​ — ​ ( 2,607 ) ​ — ​ 9,453 Total debt securities held to maturity ​ $ 41,294 ​ $ 59 ​ $ ( 7,539 ) ​ $ — ​ $ 33,814 Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total equity securities ​ $ 10,606 ​ $ 64 ​ $ ( 820 ) ​ $ — ​ $ 9,850 For the year ended December 31, 2025, there was a release in credit losses on AFS debt securities of $ 2.8 million, compared to a provision of $ 1.5 million for the year ended December 31, 2024. 67 Table of Contents The following table summarizes the amortized cost of HTM debt securities by external credit rating at December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-investment ​ ​ ​ ​ ​ ​ (In thousands) ​ AAA/AA/A rated ​ BBB rated ​ grade rated ​ Non-rated ​ Total December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 28,000 ​ $ — ​ $ — ​ $ — ​ $ 28,000 State and political subdivisions ​ 1,299 ​ — ​ — ​ — ​ 1,299 Residential mortgage-backed securities ​ 7,277 ​ — ​ — ​ — ​ 7,277 Total ​ $ 36,576 ​ $ — ​ $ — ​ $ — ​ $ 36,576 December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 28,000 ​ $ — ​ $ — ​ $ — ​ $ 28,000 State and political subdivisions ​ 1,234 ​ — ​ — ​ — ​ 1,234 Residential mortgage-backed securities ​ 12,060 ​ — ​ — ​ — ​ 12,060 Total ​ $ 41,294 ​ $ — ​ $ — ​ $ — ​ $ 41,294 This table provides the remaining contractual maturities within the investment portfolios. The carrying value of securities at December 31, 2025 is distributed by contractual maturity. Securities, which may have principal prepayment provisions, are distributed based on contractual maturity. Expected maturities will differ materially from contractual maturities as a result of early prepayments and calls. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ ​ Fair (In thousands) ​ cost ​ ​ value Available for sale, at fair value: ​ ​ ​ ​ ​ Due in one year $ 2,000 $ 1,951 Due after one year through five years ​ 16,240 ​ ​ 15,946 Due after five years through ten years ​ 31,346 ​ ​ 31,061 Due after ten years ​ 10,186 ​ ​ 10,160 Residential mortgage-backed securities ​ 12,702 ​ ​ 11,752 Total $ 72,474 ​ $ 70,870 Held to maturity, at amortized cost: ​ ​ ​ ​ ​ Due in one year $ — ​ $ — Due after one year through five years ​ 3,000 ​ ​ 2,996 Due after five years through ten years ​ — ​ ​ — Due after ten years ​ 26,299 ​ ​ 22,533 Residential mortgage-backed securities ​ 7,277 ​ ​ 4,876 Total $ 36,576 ​ $ 30,405 The number of securities in an unrealized loss position as of December 31, 2025 totaled 67 , compared to 75 at December 31, 2024. This decrease is primarily due to payoffs and market interest rate fluctuations. As of December 31, 2025, the company had accrued interest receivable of $ 0.8 million relating to debt securities, compared to $ 1.2 million at December 31, 2024. During the year ended December 31, 2025, there was no interest income reversed relating to nonaccrual debt securities compared to $ 125 thousand during the year ended December 31, 2024. During the 68 Table of Contents year ended December 31, 2025, there were no interest payments recorded as a reduction of principal relating to nonaccrual debt securities compared to $ 213 thousand during the year ended December 31, 2024. At the year-end 2025 and 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10 % of shareholders’ equity. The fair value of securities with unrealized losses by length of time where the individual securities have been in a continuous unrealized loss position at December 31, 2025 and December 31, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ Less than 12 months ​ 12 months and greater ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated ​ Unrealized ​ Estimated ​ Unrealized ​ Estimated ​ Unrealized (In thousands) ​ ​ fair value ​ (loss) ​ fair value ​ (loss) ​ fair value ​ (loss) Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ — ​ $ — ​ $ 4,969 ​ $ ( 31 ) ​ $ 4,969 ​ $ ( 31 ) State and political subdivisions ​ ​ — ​ ​ — ​ ​ 159 ​ ​ ( 26 ) ​ ​ 159 ​ ​ ( 26 ) Residential mortgage-backed securities ​ ​ — ​ ​ — ​ ​ 11,625 ​ ​ ( 977 ) ​ ​ 11,625 ​ ​ ( 977 ) Asset backed securities ​ ​ ​ 9,988 ​ ​ ( 12 ) ​ ​ — ​ ​ — ​ ​ 9,988 ​ ​ ( 12 ) Corporate and other securities ​ 2,483 ​ ( 18 ) ​ 9,681 ​ ( 892 ) ​ 12,164 ​ ( 910 ) Total temporarily impaired AFS securities ​ $ 12,471 ​ $ ( 30 ) ​ $ 26,434 ​ $ ( 1,926 ) ​ $ 38,905 ​ $ ( 1,956 ) Held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ — ​ $ — ​ $ 24,188 ​ $ ( 3,812 ) ​ $ 24,188 ​ $ ( 3,812 ) Residential mortgage-backed securities ​ — ​ — ​ 4,876 ​ ( 2,401 ) ​ 4,876 ​ ( 2,401 ) Total temporarily impaired HTM securities ​ $ — ​ $ — ​ $ 29,064 ​ $ ( 6,213 ) ​ $ 29,064 ​ $ ( 6,213 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ Less than 12 months ​ 12 months and greater ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated ​ Unrealized ​ Estimated ​ Unrealized ​ Estimated ​ Unrealized (In thousands) ​ ​ fair value ​ (loss) ​ fair value ​ (loss) ​ fair value ​ (loss) Available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ — ​ $ — ​ $ 14,759 ​ $ ( 241 ) ​ $ 14,759 ​ $ ( 241 ) State and political subdivisions ​ ​ — ​ ​ — ​ ​ 333 ​ ​ ( 24 ) ​ ​ 333 ​ ​ ( 24 ) Residential mortgage-backed securities ​ ​ 8 ​ ​ ( 1 ) ​ ​ 12,145 ​ ​ ( 1,554 ) ​ ​ 12,153 ​ ​ ( 1,555 ) Asset backed securities ​ ​ ​ 3,998 ​ ​ ( 1 ) ​ ​ 3,000 ​ ​ ( 1 ) ​ ​ 6,998 ​ ​ ( 2 ) Corporate and other securities ​ — ​ — ​ 14,609 ​ ( 1,968 ) ​ 14,609 ​ ( 1,968 ) Total temporarily impaired AFS securities ​ $ 4,006 ​ $ ( 2 ) ​ $ 44,846 ​ $ ( 3,788 ) ​ $ 48,852 ​ $ ( 3,790 ) Held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ — ​ $ — ​ $ 23,068 ​ $ ( 4,932 ) ​ $ 23,068 ​ $ ( 4,932 ) Residential mortgage-backed securities ​ — ​ — ​ 4,453 ​ ( 2,607 ) ​ 4,453 ​ ( 2,607 ) Total temporarily impaired HTM securities ​ $ — ​ $ — ​ $ 27,521 ​ $ ( 7,539 ) ​ $ 27,521 ​ $ ( 7,539 ) Unrealized losses in each of the categories presented in the tables above were primarily driven by market interest rate fluctuations. Realized Gains and Losses There was an $ 11 thousand gross realized loss on available for sale securities due to sales in 2025 compared to no gross realized gains or losses relating to sales in 2024. Pledged Securities Securities with a carrying value of $ 69.2 million and $ 11.5 million at December 31, 2025 and December 31, 2024, respectively, were pledged to secure other borrowings and for other purposes required or permitted by law. 69 Table of Contents Equity Securities Included in this category are Community Reinvestment Act ("CRA") investments and the Company’s current other equity holdings of financial institutions. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interests in entities at fixed or determinable prices. The following is a summary of the gains and losses recognized in net income on equity securities for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Net unrealized gains (losses) recognized during the period on equity securities ​ $ 2,084 ​ $ 492 Net gains recognized during the period on equity securities sold during the period ​ 3,523 ​ 94 Gains recognized during the reporting period on equity securities ​ $ 5,607 ​ $ 586 3. Loans The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for credit losses for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 SBA loans held for investment ​ $ 34,259 ​ $ 38,309 Commercial loans ​ ​ ​ ​ SBA 504 loans ​ 43,802 ​ 48,479 Commercial & industrial ​ 183,163 ​ 147,186 Commercial real estate (1) ​ 1,291,067 ​ 1,085,771 Commercial construction loans ​ 147,215 ​ 130,193 Residential mortgage loans ​ 677,221 ​ 630,927 Consumer loans ​ ​ ​ ​ Home equity ​ 82,488 ​ 73,223 Consumer other ​ 2,731 ​ 3,488 Residential construction loans ​ ​ 73,277 ​ ​ 90,918 Total loans held for investment ​ $ 2,535,223 ​ $ 2,248,494 Loans held for sale ​ 9,490 ​ 12,163 Total loans ​ $ 2,544,713 ​ $ 2,260,657 (1) Commercial real estate includes Commercial Mortgage – Owner Occupied, Commercial Mortgage – Nonowner Occupied and Commercial Mortgage – Other. Commercial Mortgage – Other primarily includes multifamily and land loans. Loans are made to individuals and commercial entities. Specific loan terms vary as to interest rate, repayment and collateral requirements based on the type of loan requested and the credit worthiness of the prospective borrower. Credit risk tends to be geographically concentrated in that a majority of the loan customers are located in the markets serviced by the Bank. Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and/or property type. A description of the Company’s different loan segments follows: Loans Held for Sale: Loans held for sale represent the guaranteed portion of SBA loans and qualified residential mortgage loans. These loans are reflected at the lower of aggregate cost or market value. When sales of loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur. 70 Table of Contents Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets, in the accompanying Consolidated Statements of Income. SBA Loans: SBA 7(a) loans, on which the SBA has historically provided guarantees of up to 90 percent of the principal balance, are considered a higher risk loan product for the Company than its other loan products. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the nonguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, business acquisitions, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. Loans are guaranteed by the businesses’ major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. Commercial Loans: Commercial credit is extended primarily to middle market and small business customers. Commercial loans are generally made in the Company’s market place for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. The SBA 504 program consists of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property. Loans are generally guaranteed in full or for a meaningful amount by the businesses’ major owners. Commercial loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. Residential Mortgage, Consumer and Residential Construction Loans: The Company originates mortgage and consumer loans including principally residential real estate, home equity lines and loans and residential construction lines. Each loan type is evaluated on debt to income, type of collateral, loan to collateral value, credit history and Company relationship with the borrower. Risks in these loan categories are dependent on overall economic conditions and the housing market. Inherent in the lending function is credit risk, which is the possibility a borrower may not perform in accordance with the contractual terms of their loan. A borrower’s inability to pay their obligations according to the contractual terms can create the risk of past due loans and, ultimately, credit losses, especially on collateral deficient loans. The Company minimizes its credit risk by loan diversification and adhering to credit administration policies and procedures. Due diligence on loans begins when the Company initiates contact regarding a loan with a borrower. Documentation, including a borrower’s credit history, materials establishing the value and liquidity of potential collateral, the purpose of the loan, the source of funds for repayment of the loan and other factors, are analyzed before a loan is submitted for approval. The loan portfolio is then subject to on-going internal reviews for credit quality, as well as independent credit reviews by an outside firm. The Company’s extension of credit is governed by the Credit Risk Policy which was established to control the quality of the Company’s loans. These policies and procedures are reviewed and approved by the Board of Directors on a regular basis. Credit Ratings The Company places all SBA, commercial, commercial construction and residential construction loans into various credit risk rating categories based on an assessment of the expected ability of the borrowers to properly service their debt. The assessment considers numerous factors including, but not limited to, current financial information on the borrower, historical payment experience, strength of any guarantor, nature of and value of any collateral, acceptability of the loan structure and documentation, relevant public information and current economic trends. This credit risk rating analysis is performed when the loan is initially underwritten and then annually based on set criteria in the loan policy. 71 Table of Contents The Company uses the following regulatory definitions for criticized and classified risk ratings: Pass: Risk ratings of 1 through 6 are used for loans that are performing, as they meet, and are expected to continue to meet, all of the terms and conditions set forth in the original loan documentation, and are generally current on principal and interest payments. These performing loans are termed “Pass”. Special Mention: These loans have a potential weakness that deserves Management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loans or of the institution’s credit position at some future date. Substandard: These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as Substandard have a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution may sustain some loss if the deficiencies are not corrected. Doubtful: These loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions and values. Once a borrower is deemed incapable of repayment of unsecured debt, the loan is termed a “Loss” and charged off immediately, subject to government guarantee. Loss: These loans are considered uncollectible and hold minute value that their continuance as bankable loans is no longer warranted. This classification does not imply zero possible recovery or salvage value; rather, it is neither practical nor desirable to postpone writing off the asset despite some partial recovery occurring later. For residential mortgage and consumer loans, Management uses performing versus nonperforming as the best indicator of credit quality. Nonperforming loans consist of loans that are not accruing interest (nonaccrual loans) as a result of principal or interest being delinquent for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. These credit quality indicators are updated on an ongoing basis, as a loan is placed on nonaccrual status as soon as Management believes there is sufficient doubt as to the ultimate ability to collect interest on a loan. 72 Table of Contents The following table shows the internal loan classification risk by loan portfolio classification by origination year and gross writeoffs as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans ​ ​ ​ ​ ​ ​ Amortized Cost Basis by Origination Year ​ ​ ​ ​ ​ (In thousands) ​ 2025 ​ ​ 2024 ​ ​ 2023 ​ ​ 2022 ​ ​ 2021 ​ ​ 2020 and Earlier ​ ​ Revolving Loans Amortized Cost Basis ​ ​ Total SBA loans held for investment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass $ 2,719 ​ $ 3,311 ​ $ 1,155 ​ $ 5,663 ​ $ 6,339 ​ $ 11,751 ​ $ - ​ $ 30,938 Special Mention ​ - ​ ​ - ​ ​ 711 ​ ​ 283 ​ ​ 351 ​ ​ 311 ​ ​ - ​ ​ 1,656 Substandard ​ - ​ ​ - ​ ​ 172 ​ ​ 1,493 ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,665 Total SBA loans held for investment $ 2,719 ​ $ 3,311 ​ $ 2,038 ​ $ 7,439 ​ $ 6,690 ​ $ 12,062 ​ $ - ​ $ 34,259 SBA loans held for investment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs $ - ​ $ - ​ $ 61 ​ $ 535 ​ $ 323 ​ $ 11 ​ $ - ​ $ 930 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass $ 291,258 ​ $ 148,983 ​ $ 127,049 ​ $ 309,072 ​ $ 137,214 ​ $ 375,281 ​ $ 100,978 ​ $ 1,489,835 Special Mention ​ - ​ ​ - ​ ​ 762 ​ ​ 536 ​ ​ 914 ​ ​ 6,460 ​ ​ - ​ ​ 8,672 Substandard ​ - ​ ​ 9,893 ​ ​ 137 ​ ​ - ​ ​ 6,714 ​ ​ 2,781 ​ ​ - ​ ​ 19,525 Total commercial loans $ 291,258 ​ $ 158,876 ​ $ 127,948 ​ $ 309,608 ​ $ 144,842 ​ $ 384,522 ​ $ 100,978 ​ $ 1,518,032 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs $ - ​ $ - ​ $ - ​ $ - ​ $ 1 ​ $ 101 ​ $ - ​ $ 102 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Construction loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass $ 58,495 ​ $ 55,511 ​ $ 10,118 ​ $ 10,003 ​ $ - ​ $ 5,692 ​ $ 7,396 ​ $ 147,215 Total commercial construction loans $ 58,495 ​ $ 55,511 ​ $ 10,118 ​ $ 10,003 ​ $ - ​ $ 5,692 ​ $ 7,396 ​ $ 147,215 Commercial Construction loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performing $ 147,623 ​ $ 69,751 ​ $ 53,816 ​ $ 197,958 ​ $ 57,512 ​ $ 142,388 ​ $ - ​ $ 669,048 Nonperforming ​ - ​ ​ 865 ​ ​ - ​ ​ 3,294 ​ ​ 944 ​ ​ 3,070 ​ ​ - ​ ​ 8,173 Total residential mortgage loans $ 147,623 ​ $ 70,616 ​ $ 53,816 ​ $ 201,252 ​ $ 58,456 ​ $ 145,458 ​ $ - ​ $ 677,221 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs $ - ​ $ - ​ $ - ​ $ - ​ $ 312 ​ $ 231 ​ $ - ​ $ 543 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performing $ 9,647 ​ $ 4,093 ​ $ 1,624 ​ $ 2,404 ​ $ 390 ​ $ 7,928 ​ $ 57,865 ​ $ 83,951 Nonperforming ​ - ​ ​ 926 ​ ​ - ​ ​ - ​ ​ - ​ ​ 342 ​ ​ - ​ ​ 1,268 Total consumer loans $ 9,647 ​ $ 5,019 ​ $ 1,624 ​ $ 2,404 ​ $ 390 ​ $ 8,270 ​ $ 57,865 ​ $ 85,219 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs $ - ​ $ - ​ $ - ​ $ 11 ​ $ 71 ​ $ 30 ​ $ - ​ $ 112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass $ 46,077 ​ $ 22,263 ​ $ 1,773 ​ $ - ​ $ 595 ​ $ 2,398 ​ $ - ​ $ 73,106 Substandard ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 171 ​ ​ - ​ ​ 171 Total residential construction loans $ 46,077 ​ $ 22,263 ​ $ 1,773 ​ $ - ​ $ 595 ​ $ 2,569 ​ $ - ​ $ 73,277 Residential construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans held for investment $ 555,819 ​ $ 315,596 ​ $ 197,317 ​ $ 530,706 ​ $ 210,973 ​ $ 558,573 ​ $ 166,239 ​ $ 2,535,223 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 73 Table of Contents The following table shows the internal loan classification risk by loan portfolio classification by origination year and gross writeoffs as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans ​ ​ ​ ​ ​ ​ ​ Amortized Cost Basis by Origination Year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ 2024 ​ ​ 2023 ​ ​ 2022 ​ ​ 2021 ​ ​ 2020 ​ ​ 2019 and Earlier ​ ​ Revolving Loans Amortized Cost Basis ​ ​ Total SBA loans held for investment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 2,167 ​ $ 1,580 ​ $ 5,205 ​ $ 6,411 ​ $ 5,570 ​ $ 10,085 ​ $ - ​ $ 31,018 Special Mention ​ ​ - ​ ​ 769 ​ ​ 1,740 ​ ​ 356 ​ ​ 508 ​ ​ 729 ​ ​ - ​ ​ 4,102 Substandard ​ ​ - ​ ​ - ​ ​ 956 ​ ​ 2,116 ​ ​ 116 ​ ​ 1 ​ ​ - ​ ​ 3,189 Total SBA loans held for investment ​ $ 2,167 ​ $ 2,349 ​ $ 7,901 ​ $ 8,883 ​ $ 6,194 ​ $ 10,815 ​ $ - ​ $ 38,309 SBA loans held for investment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs ​ $ - ​ $ - ​ $ 300 ​ $ 70 ​ $ - ​ $ - ​ $ - ​ $ 370 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 189,371 ​ $ 167,190 ​ $ 331,349 ​ $ 161,508 ​ $ 123,225 ​ $ 330,131 ​ $ 94,369 ​ $ 1,397,143 Special Mention ​ ​ - ​ ​ - ​ ​ 6,269 ​ ​ 1,737 ​ ​ - ​ ​ 3,108 ​ ​ 17 ​ ​ 11,131 Substandard ​ ​ - ​ ​ - ​ ​ - ​ ​ 2 ​ ​ 1,187 ​ ​ 2,157 ​ ​ 9 ​ ​ 3,355 Total commercial loans ​ $ 189,371 ​ $ 167,190 ​ $ 337,618 ​ $ 163,247 ​ $ 124,412 ​ $ 335,396 ​ $ 94,395 ​ $ 1,411,629 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs ​ $ - ​ $ - ​ $ 38 ​ $ 138 ​ $ 200 ​ $ 107 ​ $ 150 ​ $ 633 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performing ​ $ 93,825 ​ $ 73,862 ​ $ 224,295 ​ $ 65,192 ​ $ 44,366 ​ $ 122,916 ​ $ - ​ $ 624,456 Nonperforming ​ ​ - ​ ​ 227 ​ ​ 1,488 ​ ​ 2,238 ​ ​ - ​ ​ 2,518 ​ ​ - ​ ​ 6,471 Total residential mortgage loans ​ $ 93,825 ​ $ 74,089 ​ $ 225,783 ​ $ 67,430 ​ $ 44,366 ​ $ 125,434 ​ $ - ​ $ 630,927 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs ​ $ - ​ $ - ​ $ - ​ $ 150 ​ $ - ​ $ - ​ $ - ​ $ 150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performing ​ $ 5,898 ​ $ 2,602 ​ $ 3,275 ​ $ 1,515 ​ $ 667 ​ $ 10,409 ​ $ 52,345 ​ $ 76,711 Total consumer loans ​ $ 5,898 ​ $ 2,602 ​ $ 3,275 ​ $ 1,515 ​ $ 667 ​ $ 10,409 ​ $ 52,345 ​ $ 76,711 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs ​ $ - ​ $ - ​ $ 63 ​ $ 100 ​ $ - ​ $ 198 ​ $ - ​ $ 361 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential construction loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk Rating: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performing ​ $ 36,522 ​ $ 16,889 ​ $ 26,683 ​ $ 7,766 ​ $ 1,154 ​ $ 1,357 ​ $ - ​ $ 90,371 Nonperforming ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 547 ​ ​ - ​ ​ - ​ ​ 547 Total residential construction loans ​ $ 36,522 ​ $ 16,889 ​ $ 26,683 ​ $ 7,766 ​ $ 1,701 ​ $ 1,357 ​ $ - ​ $ 90,918 Residential construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current-period gross writeoffs ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ 277 ​ $ - ​ $ 277 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans held for investment ​ $ 327,783 ​ $ 263,119 ​ $ 601,260 ​ $ 248,841 ​ $ 177,340 ​ $ 483,411 ​ $ 146,740 ​ $ 2,248,494 74 Table of Contents Nonaccrual and Past Due Loans Nonaccrual loans consist of loans that are not accruing interest as a result of principal or interest being delinquent for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. When a loan is classified as nonaccrual, interest accruals are discontinued and all past due interest previously recognized as income is reversed and charged against current period earnings. Generally, until the loan becomes current, any payments received from the borrower are applied to outstanding principal until such time as Management determines that the financial condition of the borrower and other factors merit recognition of a portion of such payments as interest income. Loans may be returned to an accrual status when the ability to collect is reasonably assured or when the loan is brought current as to principal and interest. The risk of loss is difficult to quantify and is subject to fluctuations in collateral values, general economic conditions and other factors. The Company values its collateral through the use of appraisals, broker price opinions and knowledge of its local market. The Bank’s nonaccrual policy requires stopping interest accrual and amortization of fees and costs on any loan that shows serious doubt about collectability, such as loans in default for 90 days or more, loans not expected to be repaid in full, or loans maintained on a cash basis due to borrower deterioration. A loan may return to accrual status only when repayment is reasonably assured, or it becomes well secured and in process of collection, supported by documented borrower performance and a current credit evaluation. The following tables set forth an aging analysis of past due and nonaccrual loans as of December 31, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90+ days ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30 ‑ 59 days ​ 60 ‑ 89 days ​ and still ​ ​ ​ Total past ​ ​ ​ ​ ​ ​ (In thousands) ​ past due ​ past due ​ accruing ​ Nonaccrual ​ due ​ Current ​ Total loans SBA loans held for investment ​ $ 730 ​ $ 68 ​ $ — ​ $ 1,751 ​ $ 2,549 ​ $ 31,710 ​ $ 34,259 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SBA 504 loans ​ — ​ — ​ — ​ — ​ — ​ 43,802 ​ 43,802 Commercial & industrial ​ 401 ​ — ​ — ​ 1,240 ​ 1,641 ​ 181,522 ​ 183,163 Commercial real estate ​ 6,463 ​ 150 ​ — ​ 17,233 ​ 23,846 ​ 1,168,535 ​ 1,192,381 Commercial other ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 98,686 ​ ​ 98,686 Commercial construction loans ​ — ​ — ​ — ​ — ​ — ​ 147,215 ​ 147,215 Residential mortgage loans ​ 8,538 ​ 7,568 ​ — ​ 8,173 ​ 24,279 ​ 652,942 ​ 677,221 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home equity ​ 2,507 ​ 240 ​ — ​ 1,268 ​ 4,015 ​ 78,473 ​ 82,488 Consumer other ​ 4 ​ — ​ — ​ — ​ 4 ​ 2,727 ​ 2,731 Residential construction loans ​ ​ — ​ ​ — ​ ​ — ​ ​ 171 ​ ​ 171 ​ ​ 73,106 ​ ​ 73,277 Total loans held for investment ​ ​ 18,643 ​ ​ 8,026 ​ ​ — ​ ​ 29,836 ​ ​ 56,505 ​ ​ 2,478,718 ​ ​ 2,535,223 Loans held for sale ​ — ​ — ​ — ​ — ​ — ​ 9,490 ​ 9,490 Total loans ​ $ 18,643 ​ $ 8,026 ​ $ — ​ $ 29,836 ​ $ 56,505 ​ $ 2,488,208 ​ $ 2,544,713 75 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90+ days ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30 ‑ 59 days ​ 60 ‑ 89 days ​ and still ​ ​ ​ Total past ​ ​ ​ ​ ​ ​ (In thousands) ​ past due ​ past due ​ accruing ​ Nonaccrual ​ due ​ Current ​ Total loans SBA loans held for investment ​ $ 1,006 ​ $ 451 ​ $ — ​ $ 3,850 ​ $ 5,307 ​ $ 33,002 ​ $ 38,309 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SBA 504 loans ​ — ​ — ​ — ​ — ​ — ​ 48,479 ​ 48,479 Commercial & industrial ​ 941 ​ — ​ — ​ 1,228 ​ 2,169 ​ 145,017 ​ 147,186 Commercial real estate ​ 22,378 ​ 2,339 ​ — ​ 1,746 ​ 26,463 ​ 1,059,308 ​ 1,085,771 Commercial construction loans ​ — ​ — ​ — ​ — ​ — ​ 130,193 ​ 130,193 Residential mortgage loans ​ 15,654 ​ 4,094 ​ 760 ​ 5,711 ​ 26,219 ​ 604,708 ​ 630,927 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home equity ​ 479 ​ 2,162 ​ — ​ — ​ 2,641 ​ 70,582 ​ 73,223 Consumer other ​ 36 ​ 5 ​ — ​ — ​ 41 ​ 3,447 ​ 3,488 Residential construction loans ​ ​ — ​ ​ — ​ ​ — ​ ​ 547 ​ ​ 547 ​ ​ 90,371 ​ ​ 90,918 Total loans held for investment ​ ​ 40,494 ​ ​ 9,051 ​ ​ 760 ​ ​ 13,082 ​ ​ 63,387 ​ ​ 2,185,107 ​ ​ 2,248,494 Loans held for sale ​ — ​ — ​ — ​ — ​ — ​ 12,163 ​ 12,163 Total loans ​ $ 40,494 ​ $ 9,051 ​ $ 760 ​ $ 13,082 ​ $ 63,387 ​ $ 2,197,270 ​ $ 2,260,657 As of December 31, 2025 and 2024, the Company had accrued interest receivable of $ 12.0 million and $ 11.3 million relating to loans receivable, respectively. During the years ended December 31, 2025 and 2024 the company reversed $ 1.6 million and $ 0.6 million in interest income from nonaccrual loans, respectively. Individually Evaluated Loans The Company has defined individually evaluated loans to be all nonperforming loans. Management individually evaluates a loan when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 76 Table of Contents The following tables provide detail on the Company’s loans individually evaluated in the Company’s CECL evaluation with the associated allowance amount, if applicable, as of December 31, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Unpaid ​ ​ ​ ​ ​ ​ ​ ​ Allowance for ​ ​ principal ​ Recorded ​ Credit Losses (In thousands) ​ balance ​ investment ​ Allocated With no related allowance: ​ ​ ​ ​ ​ ​ ​ SBA loans held for investment ​ $ 1,355 ​ $ 1,163 ​ $ — Commercial loans ​ ​ ​ ​ ​ ​ Commercial & industrial ​ ​ 1,468 ​ ​ 1,156 ​ ​ — Commercial real estate ​ 17,235 ​ 17,233 ​ — Total commercial loans ​ 18,703 ​ 18,389 ​ — Residential mortgage loans ​ ​ 5,704 ​ ​ 5,494 ​ ​ — Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ Home equity ​ ​ 1,292 ​ ​ 1,268 ​ ​ — Total consumer loans ​ ​ 1,292 ​ ​ 1,268 ​ ​ — Total individually evaluated loans with no related allowance ​ 27,054 ​ 26,314 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With an allowance: ​ ​ ​ ​ ​ ​ SBA loans held for investment ​ 1,504 ​ 588 ​ 3 Commercial loans ​ ​ ​ ​ ​ ​ Commercial & industrial ​ 91 ​ 84 ​ 84 Total commercial loans ​ 91 ​ 84 ​ 84 Residential mortgage loans ​ ​ 2,725 ​ ​ 2,679 ​ ​ 15 Residential construction loans ​ ​ 171 ​ ​ 171 ​ ​ 44 Total individually evaluated loans with a related allowance ​ 4,491 ​ 3,522 ​ 146 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total individually evaluated loans: ​ ​ ​ ​ ​ ​ SBA loans held for investment ​ 2,859 ​ 1,751 ​ 3 Commercial loans ​ ​ ​ ​ ​ ​ Commercial & industrial ​ 1,559 ​ 1,240 ​ 84 Commercial real estate ​ 17,235 ​ 17,233 ​ — Total commercial loans ​ 18,794 ​ 18,473 ​ 84 Residential mortgage loans ​ ​ 8,429 ​ ​ 8,173 ​ ​ 15 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ Home equity ​ ​ 1,292 ​ ​ 1,268 ​ ​ — Total consumer loans ​ ​ 1,292 ​ ​ 1,268 ​ ​ — Residential construction loans ​ ​ 171 ​ ​ 171 ​ ​ 44 Total individually evaluated loans ​ $ 31,545 ​ $ 29,836 ​ $ 146 77 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Unpaid ​ ​ ​ ​ ​ ​ ​ ​ Allowance for ​ ​ principal ​ Recorded ​ Credit Losses (In thousands) ​ balance ​ investment ​ Allocated With no related allowance: ​ ​ ​ ​ ​ ​ ​ SBA loans held for investment ​ $ 432 ​ $ 334 ​ $ — Commercial loans ​ ​ ​ ​ ​ ​ Commercial & industrial ​ ​ 638 ​ ​ 33 ​ ​ — Commercial real estate ​ 2,055 ​ ​ 1,746 ​ ​ — Total commercial loans ​ 2,693 ​ 1,779 ​ — Residential mortgage loans ​ ​ 4,238 ​ ​ 4,238 ​ ​ — Total individually evaluated loans with no related allowance ​ 7,363 ​ 6,351 ​ — ​ ​ ​ ​ ​ ​ ​ With an allowance: ​ ​ ​ ​ ​ ​ ​ ​ SBA loans held for investment ​ 4,011 ​ 3,516 ​ 755 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ 1,672 ​ 1,195 ​ 62 Total commercial loans ​ ​ 1,672 ​ ​ 1,195 ​ ​ 62 Residential mortgage loans ​ ​ 2,413 ​ ​ 2,233 ​ ​ 52 Residential construction loans ​ 547 ​ ​ 547 ​ ​ 102 Total individually evaluated loans with a related allowance ​ ​ 8,643 ​ 7,491 ​ 971 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total individually evaluated loans: ​ ​ ​ ​ ​ ​ SBA loans held for investment ​ 4,443 ​ 3,850 ​ 755 Commercial loans ​ ​ ​ ​ ​ ​ Commercial & industrial ​ 2,310 ​ 1,228 ​ 62 Commercial real estate ​ 2,055 ​ 1,746 ​ — Total commercial loans ​ ​ 4,365 ​ 2,974 ​ 62 Residential mortgage loans ​ ​ 6,651 ​ ​ 6,471 ​ ​ 52 Residential construction loans ​ ​ 547 ​ ​ 547 ​ ​ 102 Total individually evaluated loans ​ $ 16,006 ​ $ 13,842 ​ $ 971 The Company did no t recognize interest income on nonaccrual loans for the years ended December 31, 2025 and December 31, 2024. Other Loan Information Servicing Assets: Loans sold to others and serviced by the Company are not included in the accompanying Consolidated Balance Sheets. The total amount of such loans serviced, but owned by third party investors, amounted to approximately $ 63.5 million and $ 91.2 million at December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, the carrying value of servicing assets was $ 0.5 million and $ 0.7 million, respectively, and is included in Prepaid expenses and other assets. A summary of the changes in the related servicing assets for the past two years follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Balance, beginning of year ​ $ 663 ​ $ 881 Servicing assets capitalized ​ 228 ​ 186 Amortization of expense, net ​ ( 361 ) ​ ( 404 ) Balance, end of year ​ $ 530 ​ $ 663 78 Table of Contents In addition, the Company had $ 0.4 million and $ 0.5 million in discounts related to the retained portion of unsold SBA loans at December 31, 2025 and 2024, respectively. These discounts are amortized to income over the same period of the balance of the loans sold. As of December 31, 2025 and 2024, the Company held $ 1.5 million and $ 3.4 million, respectively, in Residential mortgage loans in the process of being sold. Officer and Director Loans: In the ordinary course of business, the Company may extend credit to officers, directors or their associates. These loans are subject to the Company’s normal lending policy, and are done on an arms-length basis. An analysis of such loans, all of which are current as to principal and interest payments, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Balance, beginning of year ​ $ 8,316 ​ $ 7,894 New loans and advances ​ 750 ​ 1,500 Loan repayments ​ ( 1,293 ) ​ ( 1,078 ) Balance, end of year ​ $ 7,773 ​ $ 8,316 Loan Portfolio Collateral: The majority of the Company’s loans are secured by real estate. Declines in the market values of real estate in the Company’s trade area impact the value of the collateral securing its loans. This could lead to greater losses in the event of defaults on loans secured by real estate. At December 31, 2025 and December 31, 2024, approximately 96 % of the Company’s loan portfolio was secured by real estate. Modifications The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a weighted-average remaining maturity model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. ​ ​ ​ 79 Table of Contents The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of gross loans and type of concession granted during the twelve months ended December 31, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Delay ​ ​ Term Extension ​ ​ Interest Rate Reduction ​ ​ ​ Principal ​ Percentage ​ ​ ​ Principal ​ Percentage ​ ​ ​ Principal ​ Percentage ​ (In thousands) ​ ​ Balance ​ of Loan Class ​ ​ ​ Balance ​ of Loan Class ​ ​ ​ Balance ​ of Loan Class ​ Commercial loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ 628 ​ 0.1 ​ ​ ​ 5,158 ​ 0.4 ​ ​ ​ 1,846 ​ 0.2 ​ Commercial & industrial ​ ​ — ​ — ​ ​ ​ 210 ​ 0.1 ​ ​ ​ — ​ — ​ Residential mortgage loans ​ ​ 2,419 ​ 0.4 ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Balance, December 31, 2025 ​ $ 3,047 ​ 0.1 % ​ $ 5,368 ​ 0.2 % ​ $ 1,846 ​ 0.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Delay ​ ​ ​ Term Extension ​ ​ ​ ​ Principal ​ Percentage ​ ​ ​ Principal ​ Percentage ​ (In thousands) ​ ​ Balance ​ of Loan Class ​ ​ ​ Balance ​ of Loan Class ​ SBA loans held for investment ​ $ 93 ​ 0.3 % ​ $ — ​ — % Commercial loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ 632 ​ 0.1 ​ ​ ​ — ​ — ​ Commercial & industrial ​ ​ — ​ — ​ ​ ​ 1,882 ​ 2.4 ​ Residential mortgage loans ​ ​ — ​ — ​ ​ ​ 1,033 ​ 0.2 ​ Consumer loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home equity ​ ​ — ​ — ​ ​ ​ 2,162 ​ 3.0 ​ Balance, December 31, 2024 ​ $ 725 ​ 0.1 % ​ $ 5,077 ​ 0.2 % Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged-off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. Two loans, a $ 0.6 million residential mortgage loan and a $ 83.8 thousand commercial and industrial loan, that were modified during the year ended December 31, 2025 were not in compliance with the modified terms as of December 31, 2025, compared to one home equity loan for $ 2.2 million as of December 31, 2024. 4. Allowance for Credit Losses and Reserve for Unfunded Loan Commitments Allowance for Credit Losses The Company has an established methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses inherent in the loan portfolio. At a minimum, the adequacy of the allowance for credit losses is reviewed by Management on a quarterly basis. The allowance is increased by provisions charged to expense and is reduced by net charge-offs. The standardized methodology used to assess the adequacy of the allowance includes the allocation of specific and general reserves. The same standard methodology is used, regardless of loan type. Specific reserves are evaluated for individually evaluated loans. The general reserve is set based upon a representative average historical net charge-off rate adjusted for the following environmental factors: delinquency and impairment trends, charge-off and recovery trends, volume and loan term trends, changes in risk and underwriting policy trends, staffing and experience changes, national and local economic trends, industry conditions and credit concentration changes. These environmental factors include reasonable and supportable forecasts. Within the historical net charge-off rate, the Company weights the data dating back 10 years on a straight line basis and projects the losses on a weighted average remaining maturity basis for each segment. All of the environmental factors are ranked and assigned a basis points value based on the following scale: low, low moderate, 80 Table of Contents moderate, high moderate and high risk. Each environmental factor is evaluated separately for each class of loans and risk weighted based on its individual characteristics. According to the Company’s policy, a loss (“charge-off”) is to be recognized and charged to the allowance for credit losses as soon as a loan is recognized as uncollectable. All credits which are 90 days past due must be analyzed for the Company’s ability to collect on the credit. Once a loss is known to exist, the charge-off approval process is immediately expedited. This charge-off policy is followed for all loan types. The allocated allowance is the total of identified specific and general reserves by loan category. The allocation is not necessarily indicative of the categories in which future losses may occur. The total allowance is available to absorb losses from any segment of the portfolio. The following tables detail the activity in the allowance for credit losses by portfolio segment held for investment for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ ​ ​ (In thousands) ​ SBA ​ Commercial ​ Residential ​ Consumer ​ Construction ​ Total Balance, beginning of period ​ $ 1,535 ​ $ 17,361 ​ $ 6,254 ​ $ 775 ​ $ 863 ​ $ 26,788 Charge-offs ​ ( 930 ) ​ ( 102 ) ​ ( 543 ) ​ ( 112 ) ​ — ​ ( 1,687 ) Recoveries ​ 61 ​ 395 ​ — ​ 86 ​ — ​ 542 Net charge-offs ​ ( 869 ) ​ 293 ​ ( 543 ) ​ ( 26 ) ​ — ​ ( 1,145 ) Provision for (credit to) credit losses charged to expense ​ 119 ​ 4,494 ​ 1,984 ​ 246 ​ ( 144 ) ​ 6,699 Balance, end of period ​ $ 785 ​ $ 22,148 ​ $ 7,695 ​ $ 995 ​ $ 719 ​ $ 32,342 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ ​ ​ (In thousands) ​ SBA ​ Commercial ​ Residential ​ Consumer ​ Construction ​ Total Balance, beginning of period ​ $ 1,221 ​ $ 15,876 ​ $ 6,529 ​ $ 1,022 ​ $ 1,206 ​ $ 25,854 Charge-offs ​ ( 370 ) ​ ( 633 ) ​ ( 150 ) ​ ( 361 ) ​ ( 277 ) ​ ( 1,791 ) Recoveries ​ 47 ​ 204 ​ — ​ 67 ​ — ​ 318 Net charge-offs ​ ( 323 ) ​ ( 429 ) ​ ( 150 ) ​ ( 294 ) ​ ( 277 ) ​ ( 1,473 ) Provision for (credit to) credit losses charged to expense ​ 637 ​ 1,914 ​ ( 125 ) ​ 47 ​ ( 66 ) ​ 2,407 Balance, end of period ​ $ 1,535 ​ $ 17,361 ​ $ 6,254 ​ $ 775 ​ $ 863 ​ $ 26,788 The change in the allowance for credit losses for the year-ended December 31, 2025 was mainly due to loan growth and an increase in nonperforming assets, partially offset by charge-offs. Reserve for Unfunded Loan Commitments The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancelable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. To determine the expected funding rate, the Company uses a historical utilization rate for each segment. As noted above, the allowance for credit losses on unfunded loan commitments is included in Other liabilities on the Consolidated Balance Sheet. At December 31, 2025, a $ 0.7 million commitment reserve was reported, compared to $ 0.6 million at 2024. 81 Table of Contents Valuation Allowance: Debt Security Available for Sale The Company maintains a valuation allowance on AFS debt securities. Adjustments to the reserve are made through provision for credit losses and applied to the reserve which is classified in “Debt securities available for sale” on the Consolidated Balance Sheet. At December 31, 2025, there was no reserve, compared to $ 2.8 million at December 31, 2024. The decrease was due to a security that went into nonaccrual status in 2024. The debt security was converted into common stock and Unity realized a $ 3.5 million gain resulting in a release in reserve. The Company maintains a valuation allowance on HTM debt securities at a level that Management believes is adequate to absorb estimated probable losses. At December 31, 2025 and December 31, 2024, no reserve was reported on the Consolidated Balance Sheet as these securities are either explicitly or implicitly guaranteed by the U.S. Government, are highly rated by major agencies and have a long history of no credit losses. 5. Premises and Equipment The detail of premises and equipment as of December 31 st for the past two years is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ December 31, 2025 ​ December 31, 2024 Land and buildings ​ ​ ​ $ 23,340 ​ ​ ​ $ 23,319 Furniture, fixtures and equipment ​ 3,541 ​ 3,429 Leasehold improvements ​ 1,699 ​ 1,534 Gross premises and equipment ​ 28,580 ​ 28,282 Less: Accumulated depreciation ​ ( 10,558 ) ​ ( 9,504 ) Net premises and equipment ​ $ 18,022 ​ $ 18,778 Amounts charged to noninterest expense for depreciation of premises and equipment amounted to $ 1.4 and $ 1.5 million in 2025 and 2024, respectively. 6. Deposits The following table details the maturity distribution of time deposits as of December 31 st for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ More than ​ ​ ​ More than ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ three six months ​ ​ ​ ​ ​ ​ Three months through More than ​ ​ ​ ​ ​ months or ​ through six twelve ​ twelve ​ ​ ​ (In thousands) ​ less months months ​ months ​ Total At December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than $250,000 ​ $ 189,659 ​ $ 160,457 ​ $ 243,879 ​ $ 37,593 ​ $ 631,588 $250,000 or more ​ 88,319 ​ ​ 63,174 ​ ​ 96,871 ​ ​ 2,929 ​ ​ 251,293 Total by maturity ​ $ 277,978 ​ $ 223,631 ​ $ 340,750 ​ $ 40,522 ​ $ 882,881 At December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than $250,000 ​ $ 197,392 ​ $ 186,828 ​ $ 150,942 ​ $ 41,260 ​ $ 576,422 $250,000 or more ​ 85,296 ​ ​ 100,173 ​ ​ 47,951 ​ ​ 5,261 ​ ​ 238,681 Total by maturity ​ $ 282,688 ​ $ 287,001 ​ $ 198,893 ​ $ 46,521 ​ $ 815,103 The following table presents the expected maturities of time deposits over the next five years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ Thereafter ​ ​ ​ Total Balance maturing ​ $ 842,358 ​ $ 36,948 ​ $ 2,496 ​ $ 421 ​ $ 550 ​ $ 108 ​ $ 882,881 Time deposits with balances of $250 thousand or more totaled $ 251.3 million and $ 238.7 million at December 31, 2025 and 2024, respectively. 82 Table of Contents Deposits from principal officers, directors, and their affiliates at year-end 2025 and 2024 were $ 40.7 million and $ 30.6 million, respectively. 7. Borrowed Funds, Subordinated Debentures and Derivatives The following table presents the period-end and weighted average rate for borrowed funds and subordinated debentures as of the two most recent fiscal year end-dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ (In thousands) Amount Rate Amount Rate FHLB borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-overnight, fixed rate advances ​ $ 15,774 2.55 % $ 20,504 4.36 % Overnight advances ​ 170,000 3.94 ​ 140,000 4.67 ​ Puttable advances ​ 70,000 3.60 ​ 60,000 3.70 ​ Subordinated debentures: ​ $ 10,310 5.54 % $ 10,310 6.19 % The following table presents borrowed funds and subordinated debentures by maturity over the next five years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ Thereafter ​ ​ ​ Total FHLB borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-overnight, fixed rate advances ​ $ 5,774 ​ $ ​ ​ $ 10,000 ​ $ — ​ $ — ​ $ — ​ $ 15,774 Overnight advances ​ ​ 170,000 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 170,000 Puttable advances ​ ​ — ​ ​ — ​ ​ 20,000 ​ ​ 30,000 ​ ​ 20,000 ​ ​ — ​ ​ 70,000 Subordinated debentures: ​ — ​ — ​ — ​ — ​ — ​ 10,310 ​ 10,310 Total borrowings ​ $ 175,774 ​ $ — ​ $ 30,000 ​ $ 30,000 ​ $ 20,000 ​ $ 10,310 ​ $ 266,084 Subordinated Debentures At December 31, 2025 and 2024, the Company was a party in the following subordinated debenture transactions: ● On July 24, 2006 , Unity (NJ) Statutory Trust II, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued $ 10.0 million of floating rate capital trust pass through securities to investors due on July 24, 2036 . The subordinated debentures are redeemable in whole or part, prior to maturity but after July 24, 2011. The floating interest rate on the subordinated debentures is the three-month CME term SOFR plus 262 basis points and reprices quarterly. The floating interest rate was 5.537 % at December 31, 2025 and 6.189 % at December 31, 2024. ● In connection with the formation of the statutory business trust, the trust also issued $ 465 thousand of common equity securities to the Company, which together with the proceeds stated above were used to purchase the subordinated debentures, under the same terms and conditions. At December 31, 2025 and 2024, $ 310 thousand of the common equity securities remained. The capital securities in the above transaction have preference over the common securities with respect to liquidation and other distributions and qualify as Tier 1 capital. Under the terms of the Dodd-Frank Wall Street Reform and Consumer Protection Act, these securities will continue to qualify as Tier 1 capital as the Company has less than $15 billion in assets. In accordance with FASB ASC Topic 810, “Consolidation,” the Company does not consolidate the accounts and related activity of Unity (NJ) Statutory Trust II because it is not the primary beneficiary. The additional capital from this transaction was used to bolster the Company’s capital ratios and for general corporate purposes, including among other things, capital contributions to the Bank. The Company has the ability to defer interest payments on the subordinated debentures for up to 5 years without being in default. Due to the redemption provisions of these securities, the expected maturity could differ from the contractual maturity. 83 Table of Contents Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments The Company has derivative financial instruments in the form of interest rate swap agreements, which derive their value from underlying interest rates. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments and the value of the derivatives are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the derivative instrument, is reflected on the Company’s Consolidated Balance Sheet as Prepaid expenses and other assets or Accrued expenses and other liabilities. The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to any derivative agreement. The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations. The Company deals only with primary dealers. Derivative instruments are generally either negotiated over the counter (“OTC”) contracts or standardized contracts executed on a recognized exchange. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amount, exercise prices and maturity. Risk Management Policies – Hedging Instruments The primary focus of the Company’s asset/liability management program is to monitor the sensitivity of the Company’s net portfolio value and net income under varying interest rate scenarios to take steps to control its risks. On a quarterly basis, the Company evaluates the effectiveness of entering into any derivative agreement by measuring the cost of such an agreement in relation to the reduction in net portfolio value and net income volatility within an assumed range of interest rates. Interest Rate Risk Management – Cash Flow Hedging Instruments The Company has variable rate debt as a source of funds for use in the Company’s lending and investment activities and for other general business purposes. These debt obligations expose the Company to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense decreases. Management believes it is prudent to limit the variability of a portion of its interest payments and, therefore hedges its variable interest rate payments. To meet this objective, Management enters into interest rate swap agreements whereby the Company receives variable interest rate payments and makes fixed interest rate payments during the contract period. At December 31, 2025, and 2024 the Company had no cash collateral pledged for these derivatives. A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at December 31, 2025 and 2024, respectively is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Notional amount ​ $ 20,000 ​ $ 20,000 ​ Fair value ​ $ 157 ​ $ 139 ​ Weighted average pay rate ​ 2.89 % 0.83 % Weighted average receive rate ​ 4.10 % 5.12 % Weighted average maturity in years ​ 2.20 ​ 0.19 ​ Number of contracts ​ 1 ​ 1 ​ In the third quarter of 2024, to hedge floating rate liability exposure, the Company entered into a forward starting pay-fix, receive-float interest rate swap which commenced in the first quarter of 2025 and matures in the first quarter of 2028. The interest rate swap, which qualifies for hedge accounting, is tied to the Secured Overnight Financing Rate (SOFR) for a 84 Table of Contents notional amount of $ 20.0 million. The effective fixed rate interest rate obligation to the Company is 2.89 % . As of December 31, 2024, the fair value of the swap was $ 0.6 million. During the twelve months ended December 31, 2025 the Company received variable rate SOFR payments from and paid fixed rates in accordance with its interest rate swap agreements. The unrealized gains relating to interest rate swaps are recorded as a derivative asset and are included in Prepaid expenses and other assets in the Company’s Consolidated Balance Sheet. The unrealized losses are recorded as a derivative liability and are included in Accrued expenses and other liabilities. Changes in the fair value of interest rate swaps designated as hedging instruments of the variability of cash flows associated with long-term debt are reported in other comprehensive income. The amount included in accumulated other comprehensive income would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining terms of the swaps. The following table presents the net losses recorded in other comprehensive income and the Consolidated Financial Statements relating to the cash flow derivative instruments at December 31, 2025 and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) 2025 2024 Loss recognized in OCI ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross of tax ​ $ ( 586 ) ​ $ ( 172 ) Net of tax ​ ​ ( 426 ) ​ ​ ( 125 ) Loss reclassified from AOCI into net income ​ ​ ​ ​ ​ ​ Gross of tax ​ ​ ( 359 ) ​ ​ ( 925 ) Net of tax ​ ​ ​ ​ ( 261 ) ​ ​ ​ ​ ( 671 ) 8. Leases and Commitments Leases Operating leases in which the Company is the lessee and the term is greater than 12 months, are recorded as right of use ("ROU") assets and lease liabilities, and are included in Prepaid expenses and other assets and Accrued expenses and other liabilities, respectively, on the Company’s Consolidated Balance Sheets. The Company does not currently have any finance leases in which it is the lessee. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate. The borrowing rate for each lease is unique based on the lease term. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in Occupancy expense in the Consolidated Statements of Income. The Company’s leases relate primarily to the Company’s bank branches and office space with remaining lease terms of generally 1 to 10 years . Certain lease arrangements contain extension options which typically range from 1 to 5 years at the then fair market rental rates. Extension options which are reasonably certain to be exercised are included in the calculation of the ROU asset and lease liability. Certain real estate leases have lease payments that adjust based on annual changes in the Consumer Price Index ("CPI"). The leases that are dependent upon CPI are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Operating lease ROU assets totaled $ 4.7 million at December 31, 2025, compared to $ 4.6 million at December 31, 2024. As of December 31, 2025, operating lease liabilities totaled $ 5.0 million, compared to $ 4.8 million at December 31, 2024. 85 Table of Contents The table below summarizes the Company’s net lease cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ 2025 ​ 2024 Operating lease cost ​ $ 760 ​ $ 732 Net lease cost ​ $ 760 ​ $ 732 The table below summarizes the cash and non-cash activities associated with the Company’s leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ 2025 ​ 2024 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ Operating cash flows for operating leases ​ $ 725 ​ $ 711 As of December 31, 2025 and December 31, 2024, the Company had no lease terminations. The table below summarizes other information related to the Company’s operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Weighted average remaining lease term in years ​ 8.91 ​ ​ 9.47 ​ Weighted average discount rate ​ 3.07 % ​ 2.94 % The table below summarizes the maturity of remaining lease liabilities: ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ December 31, 2025 2026 ​ $ 807 2027 ​ 764 2028 ​ 528 2029 ​ 520 2030 ​ 531 2031 and thereafter ​ 2,481 Total lease payments ​ $ 5,631 Less: Interest ​ ( 630 ) Present value of lease liabilities ​ $ 5,001 As of December 31, 2025, the Company had not entered into any material leases that have not yet commenced. Commitments to Borrowers Commitments to extend credit are legally binding loan commitments with set expiration dates. They are intended to be disbursed, subject to certain conditions, upon the request of the borrower. The Company was committed to advance approximately $ 508.5 million to its borrowers as of December 31, 2025, compared to $ 322.3 million at December 31, 2024. At December 31, 2025, $ 270.3 million of these commitments expire within one year, compared to $ 167.1 million a year earlier. At December 31, 2025, the Company had $ 5.9 million in standby letters of credit, compared to $ 5.5 million at December 31, 2024, respectively, which are included in the commitments amount noted above. The estimated fair value of these guarantees is not significant. The Company believes it has the necessary liquidity to honor all commitments. Many of these commitments will expire and never be funded. 86 Table of Contents Litigation The Company may, in the ordinary course of business, become a party to litigation involving collection matters, contract claims and other legal proceedings relating to the conduct of its business. In the best judgment of Management, based upon consultation with counsel, the consolidated financial position and results of operations of the Company will not be affected materially by the final outcome of any pending legal proceedings or other contingent liabilities and commitments. 9. Accumulated Other Comprehensive (Loss) Income The following tables shows the changes in other comprehensive (loss), net of tax income for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2025 ​ Net unrealized Net unrealized Accumulated ​ (losses) gains on gains (losses) from other ​ securities cash flow hedges comprehensive (In thousands) ​ net of tax net of tax (loss) income Balance, beginning of period ​ ​ ​ $ ( 2,653 ) ​ $ 546 ​ ​ ​ $ ( 2,107 ) Other comprehensive income (loss) before reclassifications ​ 1,438 ​ ​ ( 687 ) ​ 751 Less amounts reclassified from accumulated other comprehensive loss ​ — ​ ​ ( 261 ) ​ ( 261 ) Period change ​ 1,438 ​ ( 426 ) ​ 1,012 Balance, end of period ​ $ ( 1,215 ) ​ $ 120 ​ $ ( 1,095 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2024 ​ Net unrealized Net unrealized Accumulated ​ (losses) gains on gains (losses) from other ​ securities cash flow hedges comprehensive (In thousands) ​ net of tax net of tax (loss) income Balance, beginning of period ​ ​ ​ $ ( 3,408 ) ​ $ 671 ​ ​ ​ $ ( 2,737 ) Other comprehensive income (loss) before reclassifications ​ 755 ​ ​ ( 796 ) ​ ( 41 ) Less amounts reclassified from accumulated other comprehensive loss ​ — ​ ​ ( 671 ) ​ ( 671 ) Period change ​ 755 ​ ( 125 ) ​ 630 Balance, end of period ​ $ ( 2,653 ) ​ $ 546 ​ $ ( 2,107 ) 10. Shareholders’ Equity Repurchase Plan On August 1, 2024 the Board authorized a repurchase plan permitting the repurchase of up to 500 thousand shares, or approximately 5.0 % of the Company’s outstanding common stock, in addition to the previously approved repurchase plan authorizing the repurchase of up to 500 thousand shares of common stock. A total of 116 thousand shares were repurchased at an average price of $ 43.21 during 2025, all of which were repurchased under the prior repurchase plan, leaving 568 thousand shares available for repurchase as of December 31, 2025. A total of 229 thousand shares were repurchased at an average price of $ 27.05 during 2024, leaving 685 thousand shares available for repurchase as of December 31, 2024. The timing and amount of additional purchases, if any, will depend upon several factors including the Company’s capital needs, the Company’s liquidity position, the performance of its loan portfolio, the need for additional provisions for credit losses and the market price of the Company’s stock. 87 Table of Contents 11. Income Taxes Income taxes paid for the past two years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ ​ 2025 ​ ​ 2024 Federal ​ $ 9,800 ​ $ 11,850 State ​ ​ ​ ​ ​ ​ New Jersey ​ ​ 3,552 ​ ​ 1,982 Other ​ ​ 681 ​ ​ 242 Total ​ $ 14,033 ​ $ 14,074 The components of the provision for income taxes for the past two years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Federal - current provision ​ $ 14,496 ​ $ 12,236 Federal - deferred benefit ​ ( 458 ) ​ ( 1,401 ) Total federal provision ​ 14,038 ​ 10,835 State - current provision ​ 3,905 ​ 2,451 State - deferred benefit ​ ( 382 ) ​ ( 346 ) Total state provision ​ 3,523 ​ 2,105 Total provision for income taxes ​ $ 17,561 ​ $ 12,940 Reconciliation between the reported income tax provision and the amount computed by multiplying income before taxes by the statutory Federal income tax rate for the past two years is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands, except percentages) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ % of Pretax ​ ​ ​ ​ ​ % of Pretax ​ ​ ​ ​ Amount ​ Income ​ ​ ​ Amount ​ Income ​ Federal income tax provision at statutory rate of 21% ​ $ 15,857 ​ 21.0 % ​ $ 11,422 ​ 21.0 % State and Local Income Taxes, Net of Federal Income Tax Effect* ​ ​ 2,783 ​ 3.7 ​ ​ ​ 1,663 ​ 3.1 ​ Nontaxable or Nondeductible Items** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt income ​ ( 15 ) ​ ( 0.0 ) ​ ​ ( 15 ) ​ ( 0.0 ) ​ Bank owned life insurance ​ ( 154 ) ​ ( 0.2 ) ​ ​ ( 114 ) ​ ( 0.2 ) ​ Stock option and restricted stock ​ ( 486 ) ​ ( 0.6 ) ​ ​ ( 536 ) ​ ( 1.0 ) ​ Meals and entertainment ​ 40 ​ 0.1 ​ ​ 48 ​ 0.1 ​ Non-deductible compensation ​ ​ 61 ​ 0.1 ​ ​ ​ 250 ​ 0.5 ​ Other adjustments ​ ( 525 ) ​ ( 0.7 ) ​ ​ 222 ​ 0.4 ​ Provision for income taxes ​ $ 17,561 ​ 23.3 % ​ $ 12,940 ​ 23.8 % *State taxes in New Jersey made up the majority (greater than 50%) of the tax effect in this category. ** The nontaxable or nondeductible items category includes items such as other non-deductible expenses. None of those items individually or in the aggregate exceeded the 5% quantitative threshold for separate disaggregation in the current year. 88 Table of Contents Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The components of the net deferred tax asset at December 31, 2025 and 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Deferred tax assets: ​ ​ ​ ​ Allowance for credit losses ​ $ 8,668 ​ $ 7,168 SERP ​ 1,958 ​ 1,788 Stock-based compensation ​ 1,062 ​ 1,010 Deferred compensation ​ 2,218 ​ 1,750 Depreciation ​ 742 ​ 701 Deferred loan fees and costs, net ​ ​ 587 ​ ​ 227 Net unrealized securities losses ​ 29 ​ 1,755 Net other deferred tax assets ​ 1,214 ​ 991 Gross deferred tax assets ​ 16,478 ​ 15,390 Deferred tax liabilities: ​ ​ ​ ​ Goodwill ​ 414 ​ 413 REIT deferral ​ ​ 1,326 ​ ​ 596 Interest rate swaps ​ ​ 43 ​ ​ 203 Net other deferred tax liabilities ​ 55 ​ 72 Gross deferred tax liabilities ​ 1,838 ​ 1,284 Net deferred tax asset ​ $ 14,640 ​ $ 14,106 The Company computes deferred income taxes under the asset and liability method. Deferred income taxes are recognized for tax consequences of “temporary differences” by applying enacted statutory tax rates to differences between the financial reporting and the tax basis of existing assets and liabilities. A deferred tax liability is recognized for all temporary differences that will result in future taxable income. A deferred tax asset is recognized for all temporary differences that will result in future tax deductions subject to reduction of the asset by a valuation allowance. Included as a component of deferred tax assets is an income tax expense (benefit) related to unrealized gains (losses) on AFS debt securities and interest rate swaps. The after-tax component of each of these is included in other comprehensive income (loss) in shareholders’ equity. The after-tax component related to AFS debt securities was an unrealized loss of $ 1.2 million in 2025, compared to unrealized loss of $ 2.7 million in 2024. The after tax component related to the interest rate swaps was an unrealized gain of $ 0.1 million for 2025, compared to an unrealized gain of $ 0.5 million for 2024. The Company follows FASB ASC Topic 740, “Income Taxes,” which prescribes a threshold for the financial statement recognition of income taxes and provides criteria for the measurement of tax positions taken or expected to be taken in a tax return. ASC 740 also includes guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition of income taxes. The Company did no t recognize or accrue any interest or penalties related to income taxes during the years ended December 31, 2025, 2024 or 2023. The Company does no t have an accrual for uncertain tax positions as of December 31, 2025, 2024 or 2023, as deductions taken or benefits accrued are based on widely understood administrative practices and procedures and are based on clear and unambiguous tax law. Tax returns for all years 2022 and thereafter are subject to future examination by tax authorities. 89 Table of Contents 12. Net Income per Share The following is a reconciliation of the calculation of basic and diluted net income per share for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands, except per share amounts) ​ ​ ​ 2025 ​ ​ ​ 2024 Net income ​ $ 57,951 ​ $ 41,450 Weighted average common shares outstanding - Basic ​ 10,033 ​ 10,031 Plus: Potential dilutive common stock equivalents ​ 190 ​ 171 Weighted average common shares outstanding - Diluted ​ 10,223 ​ 10,202 Net income per common share - Basic ​ $ 5.78 ​ $ 4.13 Net income per common share - Diluted ​ 5.67 ​ 4.06 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive ​ — ​ — 13. Regulatory Capital The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. The minimum capital level requirements include: (i) a Tier 1 leverage ratio of 4% (ii) common equity Tier 1 capital ratio of 4.5%; (iii) a Tier 1 capital ratio of 6%; and (iv) a total capital ratio of 8% for all institutions. The Bank is also required to maintain a “capital conservation buffer” of 2.5 % above the regulatory minimum capital ratios which results in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0 %; (ii) a Tier 1 capital ratio of 8.5 %; and (iii) a total capital ratio of 10.5 %. An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that could be utilized for such actions. The following table shows information regarding the Company’s and the Bank’s regulatory capital levels at December 31, 2025 and at December 31, 2024, as if the Company were subject to consolidated capital requirements. As of December 31, 2024, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, common equity Tier 1 risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that Management believes have changed the Bank’s category. Management believes that the Company and the Bank meet all capital adequacy requirements to which they are subject. Due to a Federal Reserve policy applicable to bank holding companies with less than $3 billion in consolidated assets, the Company is not subject to consolidated capital requirements: ​ 90 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual ​ Required for Capital Adequacy Purposes ​ To be Well Capitalized Under Prompt Corrective Action Regulations * ​ ​ Amount ​ Ratio ​ Amount ​ Ratio ​ Amount ​ Ratio ​ ​ (Dollars in thousands) As of December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total risk-based capital (to risk-weighted assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated $ 385,054 ​ ​ 16.12 % ​ $ 191,088 ​ 8.00 % ​ $ 238,860 ​ 10.00 % Bank ​ 374,667 ​ ​ 15.70 ​ ​ ​ 190,922 ​ 8.00 ​ ​ ​ 238,652 ​ 10.00 ​ Common equity tier 1 (to risk-weighted assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated ​ 345,158 ​ ​ 14.45 ​ ​ ​ 107,487 ​ 4.50 ​ ​ ​ 155,259 ​ 6.50 ​ Bank ​ 344,796 ​ ​ 14.45 ​ ​ ​ 107,393 ​ 4.50 ​ ​ ​ 155,124 ​ 6.50 ​ Tier 1 capital (to risk-weighted assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated ​ 355,158 ​ ​ 14.87 ​ ​ ​ 143,316 ​ 6.00 ​ ​ ​ 191,088 ​ 8.00 ​ Bank ​ 344,796 ​ ​ 14.45 ​ ​ ​ 143,191 ​ 6.00 ​ ​ ​ 190,922 ​ 8.00 ​ Tier 1 capital (to average total assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated ​ 355,158 ​ ​ 12.72 ​ ​ ​ 111,698 ​ 4.00 ​ ​ ​ 139,622 ​ 5.00 ​ Bank ​ 344,796 ​ ​ 12.39 ​ ​ ​ 111,305 ​ 4.00 ​ ​ ​ 139,131 ​ 5.00 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total risk-based capital (to risk-weighted assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated $ 332,700 ​ ​ 15.62 % ​ $ 170,364 ​ 8.00 % ​ $ 212,955 ​ 10.00 % Bank ​ 324,763 ​ ​ 15.37 ​ ​ ​ 169,013 ​ 8.00 ​ ​ ​ 211,266 ​ 10.00 ​ Common equity tier 1 (to risk-weighted assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated ​ 296,071 ​ ​ 13.90 ​ ​ ​ 95,830 ​ 4.50 ​ ​ ​ 138,421 ​ 6.50 ​ Bank ​ 298,342 ​ ​ 14.12 ​ ​ ​ 95,070 ​ 4.50 ​ ​ ​ 137,323 ​ 6.50 ​ Tier 1 capital (to risk-weighted assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated ​ 306,071 ​ ​ 14.37 ​ ​ ​ 127,773 ​ 6.00 ​ ​ ​ 170,364 ​ 8.00 ​ Bank ​ 298,342 ​ ​ 14.12 ​ ​ ​ 126,760 ​ 6.00 ​ ​ ​ 169,013 ​ 8.00 ​ Tier 1 capital (to average total assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company Consolidated ​ 306,071 ​ ​ 12.22 ​ ​ ​ 100,150 ​ 4.00 ​ ​ ​ 125,187 ​ 5.00 ​ Bank ​ 298,342 ​ ​ 11.95 ​ ​ ​ 99,844 ​ 4.00 ​ ​ ​ 124,806 ​ 5.00 ​ ​ * Prompt Corrective Action requirements only apply to the Bank 91 Table of Contents 14. Employee Benefit Plans Stock Option Plans The Company has maintained option plans and maintains an equity incentive plan, which allow for the grant of options to officers, employees and members of the Board of Directors. Grants of options under the Company’s plans generally vest over 3 years and must be exercised within 10 years of the date of grant. Transactions under the Company’s stock option plans for 2025 and 2024 are summarized in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ average ​ ​ ​ ​ ​ ​ ​ average ​ remaining ​ Aggregate ​ ​ ​ ​ exercise ​ contractual ​ intrinsic ​ ​ Shares ​ price ​ life in years ​ value Outstanding at December 31, 2023 471,132 ​ $ 17.92 4.9 ​ $ 5,500,080 Options granted — ​ — ​ ​ ​ Options exercised ( 130,733 ) ​ 14.81 ​ ​ ​ Options forfeited — ​ — ​ ​ ​ Options expired — ​ — ​ ​ ​ Outstanding at December 31, 2024 340,399 ​ $ 19.11 4.4 ​ $ 8,340,435 Options granted — ​ — ​ ​ ​ Options exercised ( 35,133 ) ​ 14.57 ​ ​ ​ Options forfeited — ​ — ​ ​ ​ Options expired — ​ — ​ ​ ​ Outstanding at December 31, 2025 305,266 ​ $ 19.63 3.6 ​ $ 9,796,051 Exercisable at December 31, 2025 ​ 305,266 ​ $ 19.63 3.6 ​ $ 9,796,051 On May 5, 2023, the Company adopted the 2023 Equity Compensation Plan providing for grants of up to 500,000 shares to be allocated between incentive and non-qualified stock options, restricted stock awards, performance units and deferred stock. The Plan, along with the 2019 Equity Compensation Plan adopted on April 25, 2019, replaced all previously approved and established equity plans then currently in effect. As of December 31, 2025, 281,500 options and 404,550 shares of restricted stock have been awarded from the plans. In addition, 10,812 unvested options and 26,198 unvested shares of restricted stock have been cancelled and returned to the plans, leaving 350,960 shares available for future grants. There were no options granted during 2025 and 2024. Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Number of options exercised ​ 35,133 ​ 130,733 Total intrinsic value of options exercised ​ $ 1,125,256 ​ $ 2,639,413 Cash received from options exercised ​ ​ 512,059 ​ ​ 1,936,351 Tax deduction realized from options ​ ​ 771,558 ​ ​ 741,939 92 Table of Contents The following table summarizes information about stock options outstanding at December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding ​ Options exercisable ​ ​ ​ ​ ​ ​ ​ Weighted average ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Range of ​ Options ​ remaining contractual ​ average ​ Options ​ average ​ exercise prices ​ outstanding ​ life (in years) ​ exercise price ​ exercisable ​ exercise price $ 8.94 - 12.34 3,500 ​ 0.2 ​ $ 8.95 ​ 3,500 $ 8.95 ​ 12.35 - 15.75 7,333 ​ 1.0 ​ 15.70 ​ 7,333 15.70 ​ 15.76 - 19.16 112,133 ​ 3.9 ​ 17.73 ​ 112,133 17.73 ​ 19.17 - 22.57 182,300 ​ 3.6 ​ 21.16 ​ 182,300 21.16 ​ Total 305,266 ​ 3.6 ​ $ 19.63 ​ 305,266 $ 19.63 FASB ASC Topic 718, “Compensation - Stock Compensation,” requires an entity to recognize the fair value of equity awards as compensation expense over the period during which an employee is required to provide service in exchange for such an award (vesting period). Compensation expense related to stock options and the related income tax benefit for the years ended December 31, 2025 and 2024 are detailed in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Compensation expense ​ $ — ​ $ 33 Income tax benefit ​ ​ — ​ ​ 9 As of December 31, 2025, there was no unrecognized compensation costs related to nonvested share-based stock option compensation arrangements granted under the Company’s plans, as all options were fully vested. Restricted Stock Awards Restricted stock is issued under the Company’s active Equity Compensation plans to reward employees and directors and to retain them by distributing stock over a period of time. Restricted stock awards granted to date vest over a period of 4 years and are recognized as compensation to the recipient over the vesting period. The awards are recorded at fair market value at the time of grant and amortized into salary expense on a straight line basis over the vesting period. The following table summarizes nonvested restricted stock activity for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average grant ​ ​ Shares ​ date fair value Nonvested restricted stock at December 31, 2024 175,248 ​ ​ 26.47 Granted 58,700 ​ ​ 45.21 Cancelled ( 7,086 ) ​ ​ 34.11 Vested ( 68,006 ) ​ ​ 25.69 Nonvested restricted stock at December 31, 2025 158,856 ​ ​ 33.38 Restricted stock awards granted during the years ended December 31, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Number of shares granted ​ 58,700 ​ 77,950 Average grant date fair value ​ $ 45.21 ​ $ 28.84 93 Table of Contents Compensation expense related to the restricted stock for the years ended December 31, 2025 and 2024, is detailed in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Compensation expense ​ $ 2,332 ​ $ 1,790 Income tax benefit ​ ​ 531 ​ ​ 501 As of December 31, 2025, there was approximately $ 3.6 million of unrecognized compensation cost related to nonvested restricted stock awards granted under the Company’s stock incentive plans. That cost is expected to be recognized over a weighted average period of 2.5 years. 401(k) Savings Plan The Bank has a 401(k) savings plan covering substantially all employees. The Bank makes a Safe Harbor Matching Contribution to the 401(k) plan. The Bank contributed $ 1.0 million and $ 0.9 million to the Plan in 2025 and 2024, respectively. Deferred Compensation Plan The Company has a deferred compensation plan for Directors and eligible Management. Directors of the Company have the option to elect to defer up to 100 percent of their respective retainer and Board of Director fees, and each eligible member of Management has the option to elect to defer up to 100 percent of their cash based compensation. Director and Management deferred compensation totaled $ 1.2 million in 2025 and $ 1.0 million in 2024, and the interest paid on deferred balances totaled $ 0.6 million in 2025 and $ 0.5 million in 2024. The deferred balances distributed totaled $ 14 thousand in 2025 and $ 14 thousand in 2024. The total deferred balances included in the Company’s Consolidated Balance Sheet were $ 8.0 million and $ 6.4 million as of December 31, 2025 and 2024, respectively. Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, in 2015 the Company established an unfunded supplemental defined benefit plan to provide additional retirement benefits for the President and Chief Executive Officer (“CEO”) and unfunded, non-qualified deferred retirement plans for certain other key executives. On June 4, 2015, the Company approved the Supplemental Executive Retirement Plan (“SERP”) pursuant to which the President and CEO is entitled to receive certain supplemental nonqualified retirement benefits. The retirement benefit under the SERP is an amount equal to sixty percent ( 60 %) of the average of the President and CEO’s base salary for the thirty-six ( 36 ) months immediately preceding the executive’s separation from service after age 66, adjusted annually thereafter by a percentage equal to the Consumer Price Index as reported by the U.S. Bureau of Labor Statistics for All Urban Consumers (CPI-U). The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $ 9.0 million. A discount rate of four percent ( 4 %) was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting in this retirement benefit on January 1, 2014, and fully vested on January 1, 2024. 94 Table of Contents No contributions or payments have been made for the year 2025 or 2024. The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Service cost ​ $ ( 58 ) ​ $ 797 Interest cost ​ 250 ​ 241 Net periodic benefit cost ​ $ 192 ​ $ 1,038 For the years ended December 31, 2025 and 2024, service cost and interest cost were included in Compensation and benefits expense on the Consolidated Statements of Income. The following table summarizes the changes in benefit obligations of the defined benefit plan recognized during the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Benefit obligation, beginning of year ​ $ 6,322 ​ $ 5,284 Service cost ​ ( 58 ) ​ 797 Interest cost ​ 250 ​ 241 Benefit obligation, end of period ​ $ 6,514 ​ $ 6,322 On October 22, 2015, the Company entered into an Executive Incentive Retirement Plan (the “EIRP”) with key executive officers other than the President and CEO. The EIRP has an effective date of January 1, 2015. The EIRP is an unfunded , nonqualified deferred compensation plan. For any EIRP Year, a guaranteed annual Deferral Award, equal to seven and one half percent ( 7.5 %) of the participant’s annual base salary, may be credited to each Participant’s Deferred Benefit Account. A discretionary annual Deferral Award, equal to seven and one half percent ( 7.5 %) of the participant’s annual base salary, may be credited to the Participant’s account in addition to the guaranteed Deferral Award, if the Bank exceeds the benchmarks set forth in the Annual Executive Bonus Matrix. The total Deferral Award shall never exceed fifteen percent ( 15 %) of the participant’s base salary for any given Plan Year. Each Participant shall be one hundred percent ( 100 %) vested in all Deferral Awards as of the date they are awarded. As of December 31, 2025, the Company had total expenses related to the EIRP of $ 136 thousand, compared to $ 124 thousand in 2024. The EIRP is reflected on the Company’s Consolidated Balance Sheet as Accrued expenses and other assets, with a total of $ 0.9 million as of December 31, 2025, compared to $ 0.8 million in 2024. Certain members of Management are also enrolled in a split-dollar life insurance plan with a post-retirement death benefit of $ 250 thousand. 15. Fair Value Fair Value Measurement The Company follows FASB ASC Topic 820, “Fair Value Measurement and Disclosures,” which requires additional disclosures about the Company’s assets and liabilities that are measured at fair value. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable inputs. The Company utilizes techniques that maximize the 95 Table of Contents use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed as follows: Level 1 Inputs ● Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Generally, this includes debt and equity securities and derivative contracts that are traded in an active exchange market (i.e. New York Stock Exchange). Level 2 Inputs ● Quoted prices for similar assets or liabilities in active markets. ● Quoted prices for identical or similar assets or liabilities in inactive markets. ● Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (i.e., interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.” ● Generally, this includes U.S. Government sponsored mortgage-backed securities, asset backed securities, corporate debt securities and derivative contracts. Level 3 Inputs ● Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities. ● These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Fair Value on a Recurring Basis The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis: Debt Securities Available for Sale The fair value of available for sale ("AFS") debt securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). Most of the Company’s AFS debt securities were classified as Level 2 assets at December 31, 2025. The valuation of AFS debt securities using Level 2 inputs was primarily determined using the market approach, which uses quoted prices for similar assets or liabilities in active markets and all other relevant information. It includes model pricing, defined as valuing securities based upon their relationship with other benchmark securities. Included in the Company’s AFS debt securities are select corporate bonds which are classified as Level 3 assets at December 31, 2025. The valuation of these corporate bonds is determined using broker quotes, third-party vendor prices, or other valuation techniques, such as discounted cash flow techniques. Market inputs used in the other valuation techniques or underlying third-party vendor prices or broker quotes include benchmark and government bond yield curves, credit spreads and trade execution data. 96 Table of Contents Equity Securities with Readily Determinable Fair Values The fair value of equity securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). Included in the Company’s equity securities is restricted stock which is classified as a Level 3 asset at December 31, 2025. The valuation of this restricted stock is determined using observable prices for the restricted and unrestricted stock and models, including Discount for Lack of Marketability. As of December 31, 2025, the fair value of the Company’s equity securities portfolio was $ 16.6 million. Most of the Company’s equity securities were classified as Level 1 assets at December 31, 2025 and 2024. The valuation of securities using Level 1 inputs was primarily determined by active markets with readily determinable fair value using quoted market prices. Included in the Company’s equity securities is restricted stock which are classified as Level 3 assets at December 31, 2025. The valuation of this restricted stock was determined using broker quotes, third-party vendor prices, or other valuation techniques, such as discounted cash flow techniques. Market inputs used in the other valuation techniques or underlying third-party vendor prices or broker quotes include benchmark and government bond yield curves, credit spreads and trade execution data. The following table presents a reconciliation of the Level 3 securities measured at fair value on a recurring basis for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt and Equity Securities ​ ​ 2025 ​ 2024 (In thousands) ​ ​ ​ Corporate Debt ​ ​ Restricted Stock ​ ​ ​ Corporate Debt ​ ​ Restricted Stock Balance of Recurring Level 3 assets at January 1 $ 6,488 ​ $ — $ 7,979 ​ $ — Activity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transfers from Corporate debt to Restricted stock, net ​ ​ ( 3,163 ) ​ ​ 3,163 ​ ​ — ​ ​ — Reversal of valuation allowance ​ ​ 1,199 ​ ​ 1,625 ​ ​ — ​ ​ — Transfers from Restricted Stock to Unrestricted Stock ​ ​ — ​ ​ ( 3,000 ) ​ ​ — ​ ​ — Unrealized holding gains included in other comprehensive income ​ ​ 399 ​ ​ — ​ ​ 263 ​ ​ — Transfers into Level 3 ​ ​ 1,785 ​ ​ — ​ ​ — ​ ​ — Principal Payments ​ ​ — ​ ​ — ​ ​ ( 213 ) ​ ​ — Unrealized holding gains (losses) included in net income ​ — ​ ​ 1,692 ​ ( 1,541 ) ​ ​ — Balance of recurring Level 3 assets at December 31 ​ $ 6,708 ​ $ 3,480 ​ $ 6,488 ​ $ — Interest Rate Swap Agreements The fair value of interest rate swap agreements is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). The Company’s derivative instruments are classified as Level 2 assets, as the readily observable market inputs to these models are validated to external sources, such as industry pricing services, or are corroborated through recent trades, dealer quotes, yield curves, implied volatility or other market-related data. 97 Table of Contents The tables below present the balances of assets measured at fair value on a recurring basis as of December 31 st for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2025 Using ​ ​ ​ ​ ​ Quoted Prices in ​ ​ ​ ​ ​ ​ ​ ​ Assets/Liabilities ​ Active Markets ​ Significant Other ​ Significant ​ ​ Measured at Fair ​ for Identical ​ Observable ​ Unobservable (In thousands) ​ ​ ​ Value ​ ​ ​ Assets (Level 1) ​ ​ ​ Inputs (Level 2) ​ ​ ​ Inputs (Level 3) Measured on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ Assets: ​ ​ ​ ​ ​ ​ ​ ​ Debt securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 4,969 ​ $ — ​ $ 4,969 ​ $ — State and political subdivisions ​ 159 ​ — ​ 159 ​ — Residential mortgage-backed securities ​ 11,752 ​ — ​ 11,752 ​ — Asset backed securities ​ ​ 22,000 ​ ​ — ​ ​ 22,000 ​ ​ — Corporate and other securities ​ 31,990 ​ — ​ 25,282 ​ 6,708 Total debt securities available for sale ​ $ 70,870 ​ $ — ​ $ 64,162 ​ $ 6,708 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities, at fair value ​ $ 16,569 ​ $ 13,089 ​ $ — ​ $ 3,480 Total equity securities ​ $ 16,569 ​ $ 13,089 ​ $ — ​ $ 3,480 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swap agreements ​ $ 157 ​ $ — ​ $ 157 ​ $ — Total swap agreements ​ $ 157 ​ $ — ​ $ 157 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value Measurements at December 31, 2024 Using ​ ​ ​ ​ ​ Quoted Prices in ​ ​ ​ ​ ​ ​ ​ ​ Assets/Liabilities ​ Active Markets ​ Significant Other ​ Significant ​ ​ Measured at Fair ​ for Identical ​ Observable ​ Unobservable (In thousands) ​ ​ ​ Value ​ ​ ​ Assets (Level 1) ​ ​ ​ Inputs (Level 2) ​ ​ ​ Inputs (Level 3) Measured on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ Assets: ​ ​ ​ ​ ​ ​ ​ ​ Debt securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government sponsored entities ​ $ 14,759 ​ $ — ​ $ 14,759 ​ $ — State and political subdivisions ​ 333 ​ — ​ 333 ​ — Residential mortgage-backed securities ​ 12,286 ​ — ​ 12,286 ​ — Asset backed securities ​ ​ 39,392 ​ ​ — ​ ​ 39,392 ​ ​ — Corporate and other securities ​ 27,114 ​ — ​ 20,626 ​ 6,488 Total debt securities available for sale ​ $ 93,884 ​ $ — ​ $ 87,396 ​ $ 6,488 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities, at fair value ​ $ 9,850 ​ $ 9,850 ​ $ — ​ $ — Total equity securities ​ $ 9,850 ​ $ 9,850 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swap agreements ​ $ 742 ​ $ — ​ $ 742 ​ $ — Total swap agreements ​ $ 742 ​ $ — ​ $ 742 ​ $ — There were no liabilities measured on a recurring basis as of December 31, 2025 and 2024. 98 Table of Contents Fair Value on a Nonrecurring Basis Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following is a description of the valuation methodologies used for instruments measured at fair value on a nonrecurring basis: Collateral-Dependent Loans Fair value is determined based on the fair value of the collateral. Partially charged-off loans are measured for impairment based upon a third-party appraisal for collateral-dependent loans. When an updated appraisal is received for a nonperforming loan, the value on the appraisal may be discounted. If there is a deficiency in the value after the Company applies these discounts, Management applies a specific reserve and the loan remains in nonaccrual status. The receipt of an updated appraisal would not qualify as a reason to put a loan back into accruing status. The Company removes loans from nonaccrual status generally when the ability to collect is reasonably assured and when the loan is brought current as to principal and interest. Charge-offs are determined based upon the loss that Management believes the Company will incur after evaluating collateral for impairment based upon the valuation methods described above and the ability of the borrower to pay any deficiency. The valuation allowance for individually evaluated loans is included in the allowance for credit losses in the Consolidated Balance Sheets. The valuation allowance for individually evaluated loans was $ 0.1 million and $ 1.0 million at December 31, 2025 and December 31, 2024, respectively. The following tables present the assets and liabilities subject to fair value adjustments on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2025 Using ​ ​ ​ ​ ​ Quoted Prices ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Other ​ Significant ​ ​ Assets/Liabilities ​ Markets for ​ Observable ​ Unobservable ​ ​ Measured at Fair ​ Identical Assets ​ Inputs ​ Inputs (In thousands) ​ ​ ​ Value ​ ​ ​ (Level 1) ​ ​ ​ (Level 2) ​ ​ ​ (Level 3) Measured on a non-recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ 3,376 ​ $ — ​ $ — ​ $ 3,376 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2024 Using ​ ​ ​ ​ ​ Quoted Prices ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Other ​ Significant ​ ​ Assets/Liabilities ​ Markets for ​ Observable ​ Unobservable ​ ​ Measured at Fair ​ Identical Assets ​ Inputs ​ Inputs (In thousands) ​ ​ ​ Value ​ ​ ​ (Level 1) ​ ​ ​ (Level 2) ​ ​ ​ (Level 3) Measured on a non-recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ 6,520 ​ $ — ​ $ — ​ $ 6,520 Fair Value of Financial Instruments FASB ASC Topic 825, “Financial Instruments,” requires the disclosure of the estimated fair value of certain financial instruments, including those financial instruments for which the Company did not elect the fair value option. These estimated fair values as of December 31, 2025 and December 31, 2024 have been determined using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop estimates of fair value. The estimates presented are not necessarily indicative of amounts the Company could realize in a current market exchange. The use of alternative market assumptions and estimation methodologies could have had a material effect on these estimates of fair value. The methodology for estimating the fair value of financial assets and liabilities that are measured on a recurring or nonrecurring basis are discussed above. 99 Table of Contents The following methods and assumptions were used to estimate the fair value of other financial instruments for which it is practicable to estimate that value: Securities The fair value of securities is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). Loans Held for Sale The fair value of loans held for sale is estimated by using a market approach that includes significant other observable inputs. Loans The fair value of loans is estimated by discounting the future cash flows using current market rates that reflect the interest rate risk inherent in the loan, except for previously discussed individually evaluated loans. Deposit Liabilities The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date (i.e. carrying value). The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using current market rates. Borrowed Funds and Subordinated Debentures The fair value of borrowings is estimated by discounting the projected future cash flows using current market rates. The table below presents the carrying amount and estimated fair values of the Company’s financial instruments (not presented previously) presented as of December 31 st for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Carrying ​ ​ ​ ​ ​ ​ (In thousands) amount ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ Debt securities held to maturity $ 36,576 ​ $ — ​ $ 30,405 ​ $ — Loans held for sale 9,490 ​ — ​ 10,041 ​ — Loans, net of allowance for credit losses 2,502,881 ​ — ​ 2,466,691 ​ 3,376 Financial liabilities: ​ ​ ​ ​ ​ ​ ​ Deposits 2,324,061 ​ — ​ 2,322,637 ​ — Borrowed funds and subordinated debentures 266,084 ​ — ​ 266,769 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Carrying ​ ​ ​ ​ ​ ​ (In thousands) amount ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ Debt securities held to maturity $ 41,294 ​ $ — ​ $ 33,814 ​ $ — Loans held for sale 12,163 ​ — ​ 12,896 ​ — Loans, net of allowance for credit losses 2,221,707 ​ — ​ 2,152,080 ​ 6,520 Financial liabilities: ​ ​ ​ ​ ​ ​ ​ Deposits 2,100,313 ​ — ​ 2,095,365 ​ — Borrowed funds and subordinated debentures 230,814 ​ — ​ 230,576 ​ — 100 Table of Contents Limitations Fair value estimates are made at a point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-statement of condition financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the effect of fair value estimates have not been considered in the above estimates. 16. Condensed Financial Statements of Unity Bancorp, Inc. (Parent Company Only) Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ASSETS ​ ​ ​ ​ Cash and cash equivalents ​ $ 449 ​ $ 350 Equity securities ​ 8,253 ​ 3,732 Investment in subsidiaries ​ 345,269 ​ 297,853 Premises and equipment, net ​ 3,469 ​ 3,506 Other assets ​ 331 ​ 482 Total assets ​ $ 357,771 ​ $ 305,923 LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ Other liabilities ​ 1,830 ​ 30 Subordinated debentures ​ 10,310 ​ 10,310 Shareholders’ equity ​ 345,631 ​ 295,583 Total liabilities and shareholders’ equity ​ $ 357,771 ​ $ 305,923 101 Table of Contents Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Dividend from Bank ​ $ 8,759 ​ $ 6,196 Gain on sales of securities ​ 3,524 ​ 54 Market value appreciation on equity securities ​ ​ 2,102 ​ ​ 575 Release of credit losses securities ​ ​ 1,265 ​ ​ — Other income ​ 742 ​ 793 Total income ​ 16,392 ​ 7,618 Interest expenses ​ 616 ​ 718 Other expenses ​ 237 ​ 170 Total expenses ​ 853 ​ 888 Income before provision for income taxes and equity in undistributed net income of subsidiary ​ 15,539 ​ 6,730 Income tax expense ​ 1,900 ​ 121 Income before equity in undistributed net income of subsidiary ​ 13,639 ​ 6,609 Equity in undistributed net income of subsidiaries ​ 44,312 ​ 34,841 Net income ​ $ 57,951 ​ $ 41,450 Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 OPERATING ACTIVITIES ​ ​ ​ ​ Net income ​ $ 57,951 ​ $ 41,450 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Equity in undistributed net income of subsidiaries ​ ( 44,312 ) ​ ( 34,841 ) Release of credit losses securities ​ ​ ( 1,265 ) ​ ​ — Gain on sales of securities ​ ( 3,524 ) ​ ( 54 ) Net accretion of purchase premiums and discounts on securities ​ — ​ ( 17 ) Net change in other assets and other liabilities ​ ( 1,511 ) ​ 280 Net cash provided by operating activities ​ 7,339 ​ 6,818 INVESTING ACTIVITIES ​ ​ ​ ​ Purchases of equity securities ​ ( 2,666 ) ​ ( 247 ) Maturities and principal payments on securities available for sale ​ ​ — ​ ​ 1,495 Purchases of premises and equipment ​ ​ ( 126 ) ​ ​ ( 160 ) Proceeds from sales of securities ​ 6,558 ​ 785 Net cash provided by investing activities ​ 3,766 ​ 1,873 FINANCING ACTIVITIES ​ ​ ​ ​ (Payments) proceeds from exercise of stock based compensation, net of taxes ​ ( 359 ) ​ 1,480 Purchase of treasury stock ​ ​ ( 5,039 ) ​ ​ ( 6,210 ) Cash dividends paid on common stock ​ ( 5,608 ) ​ ( 5,021 ) Net cash used in financing activities ​ ( 11,006 ) ​ ( 9,751 ) Increase (decrease) in cash and cash equivalents ​ 99 ​ ( 1,060 ) Cash and cash equivalents, beginning of period ​ 350 ​ 1,410 Cash and cash equivalents, end of period ​ $ 449 ​ $ 350 SUPPLEMENTAL DISCLOSURES ​ ​ ​ ​ Interest paid ​ $ 615 ​ $ 722 102 Table of Contents 17. Subsequent Events In February 2026, subsequent to the Company’s fiscal year end of December 31, 2025, the contractual restriction on Patriot Bancorp, Inc.’s equity position, previously converted from a debt instrument, expired. Prior to the lifting of this restriction, the shares were classified as restricted securities and presented at fair value in the accompanying consolidated financial statements. Upon expiration of the restriction, the shares became freely tradable. To the extent that shares remain held by the Company, Management will continue to mark this position to market. 103 Table of Contents ​ Report of Independent Registered Public Accounting Firm ​ ​ To the Shareholders and the Board of Directors Unity Bancorp, Inc. ​ Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Unity Bancorp, Inc. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 4, 2026 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting. ​ Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 104 Table of Contents Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Allowance for Credit Losses – Collectively Evaluated Loans ​ As described in Notes 1, 3 and 4 to the financial statements, the Company has recorded an allowance for credit losses (ACL) in the amount of $32.3 million as of December 31, 2025, representing management’s estimate of credit losses over the remaining expected life of the Company’s loan portfolio as of that date. Management determined these amounts, and corresponding provision for credit loss expense, pursuant to the application of Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses . ​ The Company’s methodology to determine its allowance for credit losses incorporates quantitative and qualitative assessments of its historical losses, current loan portfolio and economic conditions, the application of forecasted economic conditions, and related modeling. We determined that performing procedures relating to the qualitative and forecasted components of the Company’s methodology are a critical audit matter. ​ The principal considerations for our determination are (i) the application of significant judgment and estimation on the part of management, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures and evaluating audit evidence obtained, and (ii) significant audit effort was necessary in evaluating management’s methodology, significant assumptions and calculations. ​ How the Critical Audit Matter was addressed in the Audit ​ Following are some of the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the collectively evaluated ACL, including controls over the following: ​ ● Validation of the model validation for appropriateness of model usage along with recalculation of model results. ● Completeness and accuracy of loan data. ● Mathematical accuracy of the calculation. 105 Table of Contents ● Development of qualitative adjustments to model results. ● Evaluation of the reasonableness and relevance of management’s assumptions including general qualitative factors and economic forecasts. ​ In addition to the test of controls, addressing the matters above involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures also included, among others, reviewing the Company’s model oversight ensuring appropriate recalculation of the model used along with management’s review of model validation results, testing significant assumptions used in the calculation, testing management’s process for determining the qualitative reserve component, evaluating the appropriateness of management’s methodology relating to the qualitative reserve component and testing the completeness and accuracy of data utilized by management. ​ /s/ Wolf & Company, P.C. ​ Boston, Massachusetts March 4, 2026 ​ We have served as the Company's auditor since 2023. ​ 106 Table of Contents ​ ​ Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors Unity Bancorp, Inc. ​ Opinion on Internal Control Over Financial Reporting We have audited Unity Bancorp, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the COSO in 2013. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company and our report dated March 4, 2026 expressed an unqualified opinion. ​ Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ 107 Table of Contents Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ /s/ Wolf & Company, P.C. ​ Boston, Massachusetts March 4, 2026 ​ ​ 108 Table of Contents ​ Supplementary Data (Unaudited) Quarterly Financial Information The following quarterly financial information for the years ended December 31, 2025 and 2024 is unaudited. However, in the opinion of Management, all adjustments, which include normal recurring adjustments necessary to present fairly the results of operations for the periods, are reflected. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 (In thousands, except per share data) ​ ​ ​ December 31 ​ ​ ​ September 30 ​ ​ ​ June 30 ​ ​ ​ March 31 Total interest income ​ $ 45,868 ​ $ 44,361 ​ $ 42,600 ​ $ 40,799 Total interest expense ​ 14,499 ​ 14,505 ​ 14,043 ​ 13,548 Net interest income ​ 31,369 ​ 29,856 ​ 28,557 ​ 27,251 Provision (release) for credit losses ​ 2,258 ​ 542 ​ ( 175 ) ​ 1,316 Net interest income after provision for credit losses ​ 29,111 ​ 29,314 ​ 28,732 ​ 25,935 Total noninterest income ​ 3,898 ​ 2,967 ​ 5,815 ​ 2,099 Total noninterest expense ​ 13,315 ​ 13,415 ​ 13,019 ​ 12,610 Income before provision for income taxes ​ 19,694 ​ 18,866 ​ 21,528 ​ 15,424 Provision for income taxes ​ 4,222 ​ 4,476 ​ 5,037 ​ 3,826 Net income ​ $ 15,472 ​ $ 14,390 ​ $ 16,491 ​ $ 11,598 Net income per common share - Basic ​ $ 1.55 ​ $ 1.43 ​ $ 1.64 ​ $ 1.16 Net income per common share - Diluted ​ 1.52 ​ 1.41 ​ 1.61 ​ 1.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 (In thousands, except per share data) ​ ​ ​ December 31 ​ ​ ​ September 30 ​ ​ ​ June 30 ​ ​ ​ March 31 Total interest income ​ $ 40,264 ​ $ 39,550 ​ $ 37,987 ​ $ 37,937 Total interest expense ​ 13,774 ​ 14,694 ​ 14,563 ​ 14,096 Net interest income ​ 26,490 ​ 24,856 ​ 23,424 ​ 23,841 Provision for credit losses ​ 1,300 ​ 1,080 ​ 926 ​ 643 Net interest income after provision for credit losses ​ 25,190 ​ 23,776 ​ 22,498 ​ 23,198 Total noninterest income ​ 1,916 ​ 2,803 ​ 2,032 ​ 1,718 Total noninterest expense ​ 12,617 ​ 12,012 ​ 11,980 ​ 12,132 Income before provision for income taxes ​ 14,489 ​ 14,567 ​ 12,550 ​ 12,784 Provision for income taxes ​ 2,984 ​ 3,662 ​ 3,096 ​ 3,198 Net income ​ $ 11,505 ​ $ 10,905 ​ $ 9,454 ​ $ 9,586 Net income per common share - Basic ​ $ 1.15 ​ $ 1.09 ​ $ 0.94 ​ $ 0.95 Net income per common share - Diluted ​ 1.13 ​ 1.07 ​ 0.92 ​ 0.94 109 Table of Contents Supplementary Data (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the years ended December 31, (In thousands, except percentages and per share data) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Selected Results of Operations ​ ​ ​ ​ Interest income ​ $ 173,628 ​ $ 155,738 ​ Interest expense ​ 56,595 ​ 57,127 ​ Net interest income ​ 117,033 ​ 98,611 ​ Provision for credit losses ​ 3,941 ​ 3,949 ​ Noninterest income ​ 14,779 ​ 8,469 ​ Noninterest expense ​ 52,359 ​ 48,741 ​ Provision for income taxes ​ 17,561 ​ 12,940 ​ Net income ​ 57,951 ​ 41,450 ​ Per Share Data ​ ​ ​ ​ ​ Net income per common share - Basic ​ $ 5.78 ​ $ 4.13 ​ Net income per common share - Diluted ​ 5.67 ​ 4.06 ​ Book value per common share ​ 34.63 ​ 29.48 ​ Market value per common share ​ 51.72 ​ 43.61 ​ Cash dividends declared on common shares ​ 0.58 ​ 0.52 ​ Selected Balance Sheet Data ​ ​ ​ ​ ​ Assets ​ $ 2,966,652 ​ $ 2,654,017 ​ Loans ​ 2,544,713 ​ 2,260,657 ​ Allowance for credit losses ​ (32,342) ​ (26,788) ​ Securities ​ 124,015 ​ 145,028 ​ Deposits ​ 2,324,061 ​ 2,100,313 ​ Borrowed funds and subordinated debentures ​ 266,084 ​ 230,814 ​ Shareholders’ equity ​ 345,631 ​ 295,583 ​ Common shares outstanding ​ 9,982 ​ 10,026 ​ Performance Ratios ​ ​ ​ ​ ​ Return on average assets ​ 2.17 % 1.68 % Return on average equity ​ 18.07 ​ 14.99 ​ Net interest spread ​ 3.69 ​ 3.29 ​ Net interest margin ​ 4.52 ​ 4.16 ​ Asset Quality Ratios ​ ​ ​ ​ ​ Allowance for credit losses to loans ​ 1.27 % 1.18 ​ Allowance for credit losses to nonaccrual loans ​ 108.40 ​ 204.77 % Nonaccrual loans to total loans ​ 1.17 ​ 0.58 ​ Nonaccrual assets to total assets ​ 1.06 ​ 0.57 ​ Net charge-offs to average loans ​ 0.06 ​ 0.07 ​ Capital Ratios - Company ​ ​ ​ ​ ​ Leverage Ratio ​ 12.72 ​ 12.22 ​ Common Equity Tier 1 risk-based capital ratio ​ 14.45 ​ 13.90 ​ Tier 1 risk-based capital ratio ​ 14.87 ​ 14.37 ​ Total risk-based capital ratio ​ 16.12 ​ 15.62 ​ Capital Ratios - Bank ​ ​ ​ ​ ​ Leverage Ratio ​ 12.39 ​ 11.95 ​ Common Equity Tier 1 risk-based capital ratio ​ 14.45 ​ 14.12 ​ Tier 1 risk-based capital ratio ​ 14.45 ​ 14.12 ​ Total risk-based capital ratio ​ 15.70 ​ 15.37 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure: None. ​ 110 Table of Contents