NorthEast Community Bancorp, Inc./MD/

Previous wording

At December 31, 2024, $1.4 billion, or 78.6%, of our total loan portfolio, net of loans in process, consisted of construction loans primarily located in high demand and high absorption areas in the New York Metropolitan Area. There continues to be a significant need for construction financing within the high absorption, homogeneous communities served by the Bank and we intend to continue to support the growth of these communities through the financing of condominium and apartment construction loans within the communities.

Current wording

At December 31, 2025, $1.3 billion, or 71.8%, of our total loan portfolio, net of loans in process, consisted of construction loans primarily located in high demand and high absorption areas in the New York Metropolitan Area. There continues to be a significant need for construction financing within the high absorption, homogeneous

Previous wording

conservative credit culture and an effective credit risk management environment. We have an experienced team of credit professionals, well-defined and implemented credit policies and procedures, what we believe to be conservative loan underwriting criteria, and active credit monitoring policies and procedures. Our senior management team also spends substantial time conducting construction site visits and visiting regularly with community leaders and borrowers in our high absorption communities, which enables us to understand the needs of our communities and to stay informed as to matters affecting those communities.

Current wording

Strong asset quality is a key to the long-term financial success of any financial institution. We have been successful in maintaining strong asset quality in recent years. Our ratio of non-performing assets to total assets was 0.00%, 0.25%, and 0.33%, at December 31, 2025, 2024 and 2023, respectively. We attribute this credit quality to a conservative credit culture and an effective credit risk management environment. We have an experienced team of credit professionals, well-defined and implemented credit policies and procedures, what we believe to be conservative loan underwriting criteria, and active credit monitoring policies and procedures. Our senior management team also spends substantial time conducting construction site visits and visiting regularly with community leaders and borrowers in our high absorption communities, which enables us to understand the needs of our communities and to stay informed as to matters affecting those communities.

Previous wording

On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on the loan’s disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, the loan’s observable market price or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.

Current wording

On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on the loan’s disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, the loan’s observable market price or, for collateral-dependent loans, the fair

Previous wording

Total assets increased $245.4 million, or 13.9%, to $2.0 billion at December 31, 2024, from $1.8 billion at December 31, 2023. The increase in assets was primarily due to increases in net loans of $226.0 million, cash and cash equivalents of $9.6 million, equity securities of $3.9 million, real estate owned of $3.7 million, and other assets of $3.5 million.

Current wording

Total assets increased $53.9 million, or 2.7%, to $2.1 billion at December 31, 2025, from $2.0 billion at December 31, 2024. The increase in assets was primarily due to increases in net loans of $47.8 million, equity securities of $4.6 million, securities held-to-maturity of $3.7 million, and cash and cash equivalents of $2.9 million, partially offset by decreases in real estate owned of $5.1 million and accrued interest receivable of $1.3 million.

Previous wording

Cash and cash equivalents increased $9.6 million, or 14.0%, to $78.3 million at December 31, 2024 from $68.7 million at December 31, 2023. The increase in cash and cash equivalents was a result of an increase in deposits of $270.3 million, partially offset by a decrease in borrowings of $64.0 million, an increase of $227.0 million in net loans, dividends to shareholders of $8.7 million, and stock repurchases of $2.4 million.

Current wording

Cash and cash equivalents increased $2.9 million, or 3.7%, to $81.2 million at December 31, 2025 from $78.3 million at December 31, 2024. The increase in cash and cash equivalents was a result of an increase of $70.0 million in borrowings that funded increases of $47.8 million in loans, $4.6 million in equity securities, and $3.7 million in securities held-to-maturity, and a decrease of $53.5 million in deposits.

Previous wording

Equity securities increased $3.9 million, or 21.5%, to $22.0 million at December 31, 2024 from $18.1 million at December 31, 2023. The increase in equity securities was attributable to the purchase of $4.0 million in equity securities during the second half of 2024, offset by market depreciation of $109,000 due to market interest rate volatility during the year ended December 31, 2024.

Current wording

Equity securities increased $4.6 million, or 20.8%, to $26.6 million at December 31, 2025 from $22.0 million at December 31, 2024. The increase in equity securities was attributable to the purchase of $4.0 million in equity securities during the year ended December 31, 2025 and market appreciation of $521,000 due to market interest rate volatility during the year ended December 31, 2025.

Previous wording

Securities held-to-maturity decreased $1.3 million, or 7.8%, to $14.6 million at December 31, 2024 from $15.9 million at December 31, 2023 due to $1.3 million in maturities and pay-downs of various investment securities, partially offset by a decrease of $10,000 in the allowance for credit losses for held-to-maturity securities.

Current wording

Securities held-to-maturity increased $3.7 million, or 25.3%, to $18.3 million at December 31, 2025 from $14.6 million at December 31, 2024 due to purchases of $4.8 million in municipal bonds, partially offset by $1.1 million in maturities and pay-downs of various investment securities.

Previous wording

The allowance for credit losses related to loans decreased to $4.8 million as of December 31, 2024, from $5.1 million as of December 31, 2023. The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $1.3 million, offset by provision for credit losses totaling $1.1 million.

Current wording

The allowance for credit losses related to loans decreased to $4.7 million as of December 31, 2025, from $4.8 million as of December 31, 2024. The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $701,000 and negative provision for credit losses totaling $272,000, offset by recoveries totaling $875,000.

Previous wording

Bank owned life insurance (“BOLI”) increased $656,000, or 2.6%, to $25.7 million at December 31, 2024 from $25.1 million at December 31, 2023 due to increases in the BOLI cash value.

Current wording

Bank owned life insurance (“BOLI”) increased $695,000, or 2.7%, to $26.4 million at December 31, 2025 from $25.7 million at December 31, 2024 due to increases in the BOLI cash value.

Previous wording

Other assets increased $3.5 million, or 44.0%, to $11.6 million at December 31, 2024 from $8.0 million at December 31, 2023 due to increases of $3.1 million in tax assets, $476,000 in suspense accounts, and $6,000 in miscellaneous assets, partially offset by decreases of $40,000 in prepaid expenses and $2,000 in securities receivables.

Current wording

Other assets decreased $621,000, or 5.4%, to $11.0 million at December 31, 2025 from $11.6 million at December 31, 2024 due to decreases of $2.5 million in tax assets and $9,000 in miscellaneous assets, partially offset by increases of $1.1 million in prepaid expenses and $819,000 in suspense accounts.

Previous wording

Advance payments by borrowers for taxes and insurance decreased $402,000, or 19.9%, to $1.6 million at December 31, 2024 from $2.0 million at December 31, 2023 due primarily to real estate tax payments for borrowers.

Current wording

Advance payments by borrowers for taxes and insurance increased $734,000, or 45.4%, to $2.4 million at December 31, 2025 from $1.6 million at December 31, 2024 due primarily to accumulation of real estate tax payments from borrowers.

Previous wording

Accounts payable and accrued expenses increased $972,000, or 7.2%, to $14.5 million at December 31, 2024 from $13.6 million at December 31, 2023 due primarily to increases in dividends payable and other payables of $856,000 and deferred compensation of $729,000, partially offset by decreases in accrued interest expense of $102,000, suspense account for loan closings of $99,000, and accrued expense of $79,000. The allowance for credit losses for off-balance sheet commitments decreased $334,000, or 32.1%, to $704,000 at December 31, 2024 from $1.0 million at December 31, 2023.

Current wording

Accounts payable and accrued expenses increased $2.8 million, or 19.2%, to $17.3 million at December 31, 2025 from $14.5 million at December 31, 2024 due primarily to increases in accrued expense of $812,000, accrued dividends payable of $673,000, deferred compensation of $615,000, accrued borrowing interest expense of $512,000, and the allowance for credit losses for off-balance sheet commitments of $175,000, partially offset by a decrease in suspense account-loan closings of $12,000.

Previous wording

Stockholders’ equity increased $39.0 million, or 14.0% to $318.3 million at December 31, 2024, from $279.3 million at December 31, 2023. The increase in stockholders’ equity was due to net income of $47.1 million for the year ended December 31, 2024, the amortization expense of $2.0 million relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, an increase of $1.3 million in earned employee stock ownership plan shares coupled with a reduction of $475,000 in unearned employee stock ownership plan shares, and an exercise of stock options totaling $14,000, partially offset by dividends paid and declared of $8.7 million, stock repurchases and stock repurchase excise taxes totaling $2.5 million, awarding restricted stock totaling $725,000. and $93,000 in other comprehensive income.

Current wording

the year ended December 31, 2025, an increase of $1.1 million in earned employee stock ownership plan shares coupled with a reduction of $869,000 in unearned employee stock ownership plan shares, the amortization expense of $2.0 million relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, and $9,000 in other comprehensive income, partially offset by dividends declared of $13.4 million, stock repurchases of $1.6 million, and $18,000 in stock options exercised.

Previous wording

Loan Maturity. The following table sets forth certain information at December 31, 2024 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.

Current wording

Loan Maturity. The following table sets forth certain information at December 31, 2025 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience

Previous wording

Deposits are a major source of our funds for lending and other investment purposes, and our deposits are provided primarily by individuals within our market area. In addition, we rely on brokered, listing and military deposits, which represent a viable and cost effective addition to our deposit gathering and maintenance strategy, often at a lower “all-in” cost when compared to our retail branch network. Use of these types of deposits allows us to match the maturity of these deposits to the term of our construction loans. The following table sets forth the deposits as a percentage of total deposits for the dates indicated:

Current wording

Deposits are a major source of our funds for lending and other investment purposes, and our deposits are provided primarily by individuals within our market area. In addition, we rely on brokered, listing and military deposits, which represent a viable and cost effective addition to our deposit gathering and maintenance strategy, often at a lower “all-in” cost when compared to our retail branch network. Use of these types of deposits allows us to match the maturity

Previous wording

As of December 31, 2024 and 2023, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000, which is the maximum amount for federal deposit insurance) was $346.9 million and $344.8 million, respectively. In addition, as of December 31, 2024, the aggregate amount of all our uninsured certificates of

Current wording

As of December 31, 2025 and 2024, the aggregate amount of uninsured deposits (deposits in amounts greater than $250,000, which is the maximum amount for federal deposit insurance) was $361.0 million and $346.9 million, respectively. In addition, as of December 31, 2025, the aggregate amount of all our uninsured certificates of deposit was $172.0 million. We have no deposits that are uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.

Previous wording

The following tables set forth average balance sheets, average yields and costs, and certain other information for theyears indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial.** **All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan fees totaled $49,000 and deferred loan costs totaled $176,000 for theyears ended December 31, 2024 and 2023, respectively. Loan balances exclude loans held for sale.

Current wording

The following tables set forth average balance sheets, average yields and costs, and certain other information for theyears indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial.** **All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan cost totaled $268,000 and deferred loan fees totaled $49,000 for theyears ended December 31, 2025 and 2024, respectively. Loan balances exclude loans held for sale.

Previous wording

Net income for the year ended December 31, 2024 was $47.1 million compared to net income of $46.3 million for theyear ended December 31, 2023. Net income for the year ended December 31, 2024 was greater than the year ended December 31, 2023 primarily due to an increase in net interest income and provision for credit losses reduction, partially offset by a decrease in non-interest income, an increase in non-interest expenses, and an increase in income tax expense.

Current wording

Net income for the year ended December 31, 2025 was $44.4 million compared to net income of $47.1 million for theyear ended December 31, 2024. Net income for the year ended December 31, 2025 was lower than net income for the year ended December 31, 2024 primarily due to a decrease in net interest income and an increase in non-interest expense, partially offset by a decrease in the provision for credit losses, an increase in non-interest income, and a decrease in income tax expense.

Previous wording

Net interest income totaled $102.8 million for the year ended December 31, 2024, as compared to $97.2 million for theyear ended December 31, 2023. The increase in net interest income of $5.6 million, or 5.8%, was primarily due to an increase in interest income that exceeded an increase in interest expense.

Current wording

Net interest income totaled $100.7 million for the year ended December 31, 2025, as compared to $102.8 million for theyear ended December 31, 2024. The decrease in net interest income of $2.1 million, or 2.0%, was primarily due to a decrease in interest income that exceeded a decrease in interest expense caused by a decrease in the yield on interest-earning assets that exceeded the decrease in the cost of funds for interest-bearing liabilities. The

Previous wording

Total interest and dividend income increased $27.5 million, or 20.8%, to $160.0 million for the year ended December 31, 2024 from $132.5 million for the year ended December 31, 2023. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $312.3 million, or 20.6%, to $1.8 billion for the year ended December 31, 2024 from $1.5 billion for the year ended December 31, 2023 and an increase in the yield on interest earning assets by two basis points from 8.73% for the year ended December 31, 2023 to 8.75% for the year ended December 31, 2024.

Current wording

Total interest and dividend income decreased $5.9 million, or 3.7%, to $154.1 million for the year ended December 31, 2025 from $160.0 million for the year ended December 31, 2024. The decrease in interest and dividend income was due to a decrease in the yield on interest-earning assets by 71 basis points from 8.75% for the year ended December 31, 2024 to 8.04% for the year ended December 31, 2025, partially offset by an increase in the average balance of interest-earning assets of $88.2 million, or 4.8%, to $1.9 billion for the year ended December 31, 2025 from $1.8 billion for the year ended December 31, 2024.

Previous wording

Interest expense increased $21.9 million, or 62.1%, to $57.2 million for the year ended December 31, 2024 from $35.3 million for the year ended December 31, 2023. The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 77 basis points from 3.58% for the year ended December 31, 2023 to 4.35% for the year ended December 31, 2024, and an increase in average interest bearing liabilities of $328.9 million, or 33.3%, to $1.3 billion for the year ended December 31, 2024 from $986.3 million for the year ended December 31, 2023.

Current wording

Interest expense decreased $3.9 million, or 6.7%, to $53.4 million for the year ended December 31, 2025 from $57.2 million for the year ended December 31, 2024. The decrease in interest expense was due to a decrease in the cost of interest-bearing liabilities by 46 basis points from 4.35% for the year ended December 31, 2024 to 3.89% for the year ended December 31, 2025, partially offset by an increase in average interest-bearing liabilities of $56.7 million, or 4.3%, to $1.4 billion for the year ended December 31, 2025 from $1.3 billion for the year ended December 31, 2024.

Previous wording

The increase in the cost of interest bearing liabilities was also partially due to a shift to interest bearing certificates of deposits and interest bearing demand deposits from savings accounts as the average balances of interest bearing certificates of deposits increased by $302.5 million, or 49.2%, from $615.1 million for the year ended December 31, 2023 to $917.7 million for the year ended December 31, 2024 and the average balances of interest bearing demand deposits increased by $116.6 million, or 124.8%, from $93.4 million for the year ended December 31, 2023 to $210.0 million for the year ended December 31, 2024. During the same time period, the average balances of savings accounts decreased by $94.3 million, or 37.9%, from $248.8 million for the year ended December 31, 2023 to $154.4 million for the year ended December 31, 2024. The increase in the average balances of interest bearing certificates of deposits and interest bearing demand deposits were used primarily to fund the loan portfolio growth and decreases in savings and club deposits and non-interest bearing demand deposits.

Current wording

The cost of interest-bearing liabilities was partially impacted by a shift to interest-bearing demand deposits and borrowed money from savings and club deposits and interest-bearing certificates of deposits. In this regard, the average balances of interest-bearing demand deposits increased by $83.0 million, or 39.5%, to $293.0 million for the year ended December 31, 2025 from $210.0 million for the year ended December 31, 2024 and the average balances of borrowed money increased by $50.8 million, or 153.4%, to $83.9 million for the year ended December 31, 2025 from $33.1 million for the year ended December 31, 2024. The average balances of interest-bearing certificates of deposits decreased by $59.6 million, or 6.5%, to $858.1 million for the year ended December 31, 2025 from $917.7 million for the year ended December 31, 2024 and the average balances of savings and club deposits decreased by $17.5 million, or 11.4%, to $136.9 million for the year ended December 31, 2025 from $154.4 million for the year ended December 31, 2024. In addition, the average balances of our non-interest bearing demand deposits decreased by $3.9 million, or 1.4%, from $277.9 million for the year ended December 31, 2024 to $274.0 million for the year ended December 31, 2025.

Previous wording

Credit Loss Expense. A credit loss expense of $740,000 was recorded for the year ended December 31, 2024 as compared to a credit loss expense of $972,000 for theyear ended December 31, 2023. The credit loss expense of $740,000 for the year ended December 31, 2024 was comprised of a credit loss expense for loans of $1.0 million, partially offset by a credit loss expense reduction for off-balance sheet commitments of $334,000 and a credit loss expense reduction for held-to-maturity investment securities of $10,000.

Current wording

Credit Loss Expense. A credit loss expense reduction of $97,000 was recorded for the year ended December 31, 2025 compared to a credit loss expense of $740,000 for the year ended December 31, 2024. The credit loss expense

Previous wording

The credit loss expense of $972,000 for the year ended December 31, 2023 was comprised of credit loss expense for loans of $1.5 million and credit loss expense for held-to-maturity investment securities of $5,000, partially offset by a credit loss expense reduction for off-balance sheet commitments of $548,000.

Current wording

The credit loss expense of $740,000 for the year ended December 31, 2024 was comprised of a credit loss expense for loans of $1.0 million, partially offset by a credit loss expense reduction for off-balance sheet commitments of $334,000 and a credit loss expense reduction for held-to-maturity investment securities of $10,000.

Previous wording

The credit loss expense reduction for off-balance sheet commitments of $334,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $157.6 million in the level of off-balance sheet commitments. The credit loss expense reduction for held-to-maturity investment securities of $10,000 for the year ended December 31,

Current wording

The credit loss expense for loans of $1.0 million for the year ended December 31, 2024 was primarily attributed to charge-offs totaling $1.3 million, partially offset by favorable trends in the economy. The credit loss expense reduction for off-balance sheet commitments of $334,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $157.6 million in the level of off-balance sheet commitments. The credit loss expense reduction for held-to-maturity investment securities of $10,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $708,000 in the level of applicable held-to-maturity investment securities.

Previous wording

We charged-off $1.3 million during the year ended December 31, 2024 as compared to charge-offs of $313,000 during the year ended December 31, 2023. The charge-offs of $1.3 million during the year ended December 31, 2024 were comprised of a complete charge-off of $1.0 million against a potential non-performing commercial and industrial loan whereby the borrower pleaded guilty and faces incarceration due to loan fraud not related to our commercial and industrial loan and charge-offs totaling $347,000 against various unpaid overdrafts in our demand deposit accounts. The charge-offs of $313,000 during the year ended December 31, 2023 were comprised of a charge-off of $159,000 related to three performing construction loans on the same project whereby we sold the loans to a third-party at a loss of $159,000. The remaining charge-offs of $154,000 for the 2023 period were against various unpaid overdrafts in our demand deposit accounts.

Current wording

We charged-off $702,000 during the year ended December 31, 2025 as compared to charge-offs of $347,000 during the year ended December 31, 2024. The charge-offs in both years were against various unpaid overdrafts in our demand deposit accounts.

Previous wording

The decrease in total non-interest income of $960,000, or 25.6%, was primarily due to decreases of $458,000 in investment advisory fees, $403,000 in unrealized gains (losses) on equity securities, and $357,000 in BOLI income, partially offset by increases of $207,000 in other loan fees and service charges, $40,000 from sale/disposition of fixed assets, and $11,000 in miscellaneous other non-interest income.

Current wording

Non-interest income for the year ended December 31, 2025 was $4.1 million compared to non-interest income of $2.8 million for the year ended December 31, 2024. The increase in total non-interest income of $1.3 million, or 47.1%, was primarily due to increases of $686,000 in unrealized gain on equity securities, $616,000 in other loan fees and service charges, and $39,000 in BOLI income, partially offset by decreases of $28,000 in net gain on disposition of fixed assets and $2,000 in miscellaneous other non-interest income.

Previous wording

The decrease in investment advisory fees was due to the disposition in January 2024 of the Bank’s assets relating to the Harbor West Wealth Management Group. As a result of the transaction, the Bank no longer generates investment advisory fees. The decrease in unrealized gain (loss) on equity securities was due to an unrealized loss of $109,000 on equity securities during the year ended December 31, 2024 compared to an unrealized gain of $294,000 on equity securities during the year ended December 31, 2023. The unrealized loss of $109,000 on equity securities during the 2024 period was due to market interest rate volatility during the year ended December 31, 2024.

Current wording

The increase in unrealized gain on equity securities was due to an unrealized gain of $577,000 on equity securities during the year ended December 31, 2025 compared to an unrealized loss of $109,000 on equity securities during the year ended December 31, 2024. Both the unrealized gain/loss on equity securities during the 2025 and 2024 periods were due to market interest rate volatility during the respective periods. The increase of $616,000 in other loan fees and service charges was due to increases of $425,000 in miscellaneous loan fees, $188,000 in ATM/debit card/ACH fees, and $2,000 in deposit account fees. The increase in BOLI income of $39,000 was due to an increase in the yield on BOLI assets.

Previous wording

Regarding the sale/disposition of fixed assets, we recorded gains of $22,000 during the year ended December 31, 2024 compared to losses of $18,000 during the year ended December 31, 2023.

Current wording

Regarding the sale/disposition of fixed assets, we recorded losses of $6,000 during the year ended December 31, 2025 compared to gains of $22,000 during the year ended December 31, 2024.

Previous wording

Non-interest expense increased $3.8 million, or 10.9%, to $39.1 million for the year ended December 31, 2024 from $35.2 million for theyear ended December 31, 2023. The increase resulted primarily from increases of $2.1 million in salaries and employee benefits, $879,000 in other operating expense, $638,000 in real estate owned expense, $394,000 in outside data processing expense, and $233,000 in occupancy expense, partially offset by decreases of $165,000 in equipment expense, $138,000 in loss on the disposition of the Bank’s assets relating to the Harbor West Wealth Management Group, and $103,000 in advertising expense.

Current wording

Non-interest expense increased $3.6 million, or 9.2%, to $42.7 million for the year ended December 31, 2025 from $39.1 million for theyear ended December 31, 2024. The increase resulted primarily from increases of $2.2 million in salaries and employee benefits, $626,000 in other operating expense, $474,000 in outside data processing expense, $164,000 in occupancy expense, $114,000 in real estate owned expense, and $8,000 in advertising expense, partially offset by a decrease of $22,000 in equipment expense.

Previous wording

Salaries and employee benefits increased by $2.1 million, or 11.2%, to $20.9 million in 2024 from $18.8 million in 2023 primarily due to the hiring of additional personnel to support the growth of the Company, an increase in personnel compensation in order to remain competitive in recruiting and retaining personnel, an increase in the ESOP compensation cost due to an increase in the value of the Company’s stock, an increase in the amortization of expenses related to the 2022 Equity Incentive Plan awards of restricted stocks and options, and a decrease in loan origination expenses related to loan origination fees due to a decrease in loan originations.

Current wording

Salaries and employee benefits increased by $2.2 million, or 10.7%, to $23.2 million in 2025 from $20.9 million in 2024 primarily due to the hiring of additional personnel to support the growth of the Company, an increase in personnel compensation and benefits cost in order to remain competitive in recruiting and retaining personnel, an increase in the ESOP compensation cost due to an increase in the value of the Company’s stock, and an increase in the amortization of expenses related to the 2022 Equity Incentive Plan awards of restricted stocks and options, partially offset by an increase in loan origination offset expenses related to loan origination fees due to an increase in loan originations.

Previous wording

Other non-interest expense increased by $879,000 or 9.0%, to $10.6 million in 2024 from $9.8 million in 2023 due mainly to increases of $448,000 in miscellaneous other non-interest expense, $310,000 in service contracts expense, $252,000 in directors compensation, $59,000 in directors, officers, and employee expenses, $40,000 in audit and accounting fees, $29,000 in office supplies, $26,000 in expenses related to the hiring of personnel, and $17,000 in insurance expense. These increases were partially offset by decreases of $222,000 in legal fees, $44,000 in consulting fees, and $36,000 in telephone expense.

Current wording

Other non-interest expense increased by $626,000 or 5.9%, to $11.3 million in 2025 from $10.6 million in 2024 due mainly to increases of $426,000 in miscellaneous other non-interest expense, $371,000 in legal fees, $84,000 in service contracts expense, $55,000 in dues and subscriptions, $14,000 in audit and accounting fees, $14,000 in insurance expense, and $9,000 in recruitment expense. These increases were partially offset by decreases of $234,000 in directors compensation, $42,000 in consulting fees, $30,000 in telephone expense, $23,000 in directors, officers, and employee expenses, and $9,000 in office supplies.

Previous wording

The increase of $448,000 in miscellaneous other non-interest expense was mainly due to an increase of $384,000 in regulatory insurance premiums and assessments due to an increase in our total assets, an increase of $43,000 in dues and subscriptions and $21,000 in other non-interest expense.

Current wording

The increase of $426,000 in miscellaneous other non-interest expense was mainly due to increases of $280,000 in regulatory insurance premiums and assessments due to an increase in our total assets, $137,000 in other non-interest expense, $71,000 in public company expense, $21,000 in check charges and correspondent bank service charges, and $10,000 in postage expense, partially offset by a decrease of $93,000 in miscellaneous charge-offs.

Previous wording

Real estate owned expense increased by $638,000, or 686.0%, to $731,000 in 2024 from $93,000 in 2023 due to the write down of $689,000 in the value of a Pittsburgh, Pennsylvania foreclosed property in 2024, partially offset by a decrease of $50,000 in operating expenses to maintain that real estate owned property in 2024. The write down of $689,000 on the fair market value of the Pittsburgh, Pennsylvania foreclosed property in 2024 was due to the decrease in demand for office space in that area.

Current wording

Real estate owned expense increased by $114,000, or 15.6%, to $845,000 in 2025 from $731,000 in 2024 due to the write down and losses totaling $495,000 on the sale of a foreclosed property located in Pittsburgh, Pennsylvania, $232,000 in closing costs related to the sale of a foreclosed property located in the Bronx in 2025, and operating expenses totaling $118,000. In 2024, we wrote down $689,000 in the value of the Pittsburgh foreclosed property and experienced operating expenses totaling $42,000. The write downs on the fair market value of the Pittsburgh foreclosed property in 2025 and 2024 was due to the decrease in demand for office space in that area.

Previous wording

Outside data processing expense increased by $394,000, or 17.8%, to $2.6 million in 2024 from $2.2 million in 2023 due to an increase in transactions and additional services required in 2024 to support the Company’s expansion. Occupancy expense increased by $233,000, or 9.0%, to $2.8 million in 2024 from $2.6 million in 2023 primarily as a result of the increased cost of operating office space.

Current wording

Outside data processing expense increased by $474,000, or 18.2%, to $3.1 million in 2025 from $2.6 million in 2024 to an increase in transactions and additional services required in 2025 to support the Company’s growth. Occupancy expense increased by $164,000, or 5.8%, to $3.0 million in 2025 from $2.8 million in 2024 primarily as a result of the increased cost of operating office space. Advertising expenses increased by $8,000, or 1.9%, to $426,000 in 2025 from $418,000 in 2024 due mainly to a nominal increase in promotional products and advertisements. Equipment expense decreased by $22,000, or 2.5%, to $868,000 in 2025 from $890,000 in 2024 due to a reduced need to purchase additional equipment in 2025.

Previous wording

Income Taxes. The Company recorded income tax expense of $18.7 million and $18.5 million for theyears ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, the Company had approximately $802,000 in tax exempt income, compared to $1.1 million in tax exempt income for theyear ended December 31, 2023. The decrease in tax exempt income was due to two death claims totaling $1.8 million on BOLI policies during the year ended December 31, 2023. Our effective income tax rates were 28.4% and 28.5% for the year ended December 31, 2024 and 2023, respectively.

Current wording

Income Taxes. The Company recorded income tax expense of $17.8 million and $18.7 million for theyears ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, the Company had approximately $867,000 in tax exempt income, compared to $$802,000 in tax exempt income for theyear ended December 31, 2024. The increase in tax exempt income was due to an increase in tax exempt municipal bonds to $13.4 million as of December 31, 2025 from $9.1 million as of December 31, 2024 and an increase of $40,000 in BOLI income from 2024 to 2025.

Previous wording

As part of its risk management process, the Bank conducts stress testing on its commercial real estate portfolio, performs a global cash flow analysis for loans associated with multiple properties and/or guarantors and also operates a

Current wording

As part of its risk management process, the Bank conducts stress testing on its commercial real estate portfolio, performs a global cash flow analysis for loans associated with multiple properties and/or guarantors and also operates a loan review program for all real estate loans (including construction loans) with terms more than 12 months. In addition, we track our board approved limits for each commercial real estate category on a monthly basis.

Previous wording

From time to time, as part of our loss mitigation strategy, we may modify loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no new loan modifications to borrowers experiencing financial difficulties during the years

Current wording

From time to time, as part of our loss mitigation strategy, we may modify loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no new loan modifications to borrowers experiencing financial difficulties during theyears ended December 31, 2025 and 2024. At December 31, 2025 and 2024, we had no loans modified to borrowers experiencing financial difficulty.

Previous wording

On the basis of management’s review of our assets, we had one loan with a balance of $241,000 classified as substandard at December 31, 2024 compared to two loans totaling $4.4 million classified as substandard at December 31, 2023. In addition, we had no loans classified as special mention at December 31, 2024 compared to one loan with a balance of $915,000 classified as special mention at December 31, 2023.

Current wording

On the basis of management’s review of our assets, we had no loans classified as substandard at December 31, 2025 compared to one loan with a balance of $241,000 classified as substandard at December 31, 2024. This one loan with a current balance of $226,000 was subsequently upgraded to special mention at December 31, 2025, representing all of our special mention loans as of that date, compared to no loans classified as special mention at December 31, 2024. This loan was current and performing according to its loan terms at December 31, 2025.

Previous wording

The allowance for credit losses (“ACL”) is a valuation account that reflects management's evaluation of expected future losses in the loan portfolio. We evaluate the need to establish allowances against credit losses on loans on a quarterly basis. When additional allowances are necessary, a provision for credit losses is charged to earnings. The ACL is maintained at a level that management considers adequate to provide for estimated losses and impairment based upon an

Current wording

The allowance for credit losses (“ACL”) is a valuation account that reflects management's evaluation of expected future losses in the loan portfolio. We evaluate the need to establish allowances against credit losses on loans on a quarterly basis. When additional allowances are necessary, a provision for credit losses is charged to earnings. The ACL is maintained at a level that management considers adequate to provide for estimated losses and impairment based upon an evaluation of known and inherent risk in the loan portfolio. The ACL consists of two elements: (1) identification of loans that must be individually analyzed for credit loss and (2) establishment of an ACL for loans collectively analyzed.