Orange County Bancorp, Inc. /DE/

Previous wording

The following discussion and analysis of our financial condition and results of operations at March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025 should be read in conjunction with our audited consolidated financial statements and the accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. We assume no obligation to update any of these forward-looking statements.

Current wording

The following discussion and analysis of our financial condition and results of operations at June 30, 2026 and December 31, 2025 and for the three and six months ended June 30, 2026 and 2025 should be read in conjunction with our audited consolidated financial statements and the accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. We assume no obligation to update any of these forward-looking statements.

Previous wording

** ** We are a bank holding company headquartered in Middletown, New York and registered under the Bank Holding Company Act. Through our wholly owned subsidiaries, Orange Bank & Trust Company and Orange Investment Advisors, formally known as Hudson Valley Investment Advisors, Inc., we offer full-service commercial and consumer banking products and services and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments and affluent individuals in the Lower Hudson Valley region, the New York metropolitan area and nearby markets in Connecticut and New Jersey. By combining the high-touch service and relationship-based focus of a community bank with the extensive suite of financial products and services offered by our larger competitors, we believe we can continue to capitalize on the growth opportunities available in our market areas. We also offer a variety of deposit accounts to businesses and consumers, including checking accounts and a full line of municipal banking accounts through our business banking platform. These activities, together with our 16 offices and one loan production office, continue to produce a stable source of low- cost core deposits and a diverse loan portfolio with attractive risk-adjusted yields. We also offer private banking services through Orange Bank & Trust Private Banking, a division of Orange Bank & Trust Company, and provide trust and wealth management services through Orange Bank & Trust Company’s trust services department and OIA, which combined had $1.6 billion in assets under management at March 31, 2026. As of March 31, 2026, our assets, loans, deposits and stockholders’ equity totaled $2.7 billion, $1.9 billion, $2.4 billion and $291.7 million, respectively.

Current wording

** ** We are a bank holding company headquartered in Middletown, New York and registered under the Bank Holding Company Act. Through our wholly owned subsidiaries, Orange Bank & Trust Company and Orange Investment Advisors, formerly known as Hudson Valley Investment Advisors, Inc., we offer full-service commercial and consumer banking products and services and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments and affluent individuals in the Lower Hudson Valley region, the New York metropolitan area and nearby markets in Connecticut and New Jersey. By combining the high-touch service and relationship-based focus of a community bank with the extensive suite of financial products and services offered by our larger competitors, we believe we can continue to capitalize on the growth opportunities available in our market areas. We also offer a variety of deposit accounts to businesses and consumers, including checking accounts and a full line of municipal banking accounts through our business banking platform. These activities, together with our 16 offices and one loan production office, continue to produce a stable source of low-cost core deposits and a diverse loan portfolio with attractive risk-adjusted yields. We also offer private banking services through Orange Bank & Trust Private Banking, a division of Orange Bank & Trust Company, and provide trust and wealth management services through Orange Bank & Trust Company’s trust services department and OIA, which combined had $1.7 billion in assets under management at June 30, 2026. As of June 30, 2026, our assets, loans, deposits and stockholders’ equity totaled $2.8 billion, $1.9 billion, $2.4 billion and $306.6 million, respectively.

Previous wording

At March 31, 2026, we operate from our main office and 15 branch offices. We own our main office in Middletown, New York, and three branch offices which are located in Chester, Newburgh and in Montgomery, New York. We lease twelve branch offices located in Middletown, Goshen, Cortlandt Manor, White Plains, Mamaroneck, New City, Mt. Pleasant, Mount Vernon, Nanuet, Yonkers, and two Bronx locations, all in New York. The branches are leased under agreements that may be renewed for various periods. In addition, OIA operates from leased offices located in Goshen, New York. At March 31, 2026 and December 31, 2025, the total net book value of our leasehold improvements, furniture, fixtures and equipment was approximately $15.6 million and $15.5 million, respectively.

Current wording

At June 30, 2026, we operate from our main office and 15 branch offices. We own our main office in Middletown, New York, and three branch offices which are located in Chester, Newburgh and in Montgomery, New York. We lease twelve branch offices located in Middletown, Goshen, Cortlandt Manor, White Plains, Mamaroneck, New City, Mt. Pleasant, Mount Vernon, Nanuet, Yonkers, and two Bronx locations, all in New York. The branches are leased under agreements that may be renewed for various periods. In addition, OIA operates from leased offices located in Goshen, New York. At June 30, 2026 and December 31, 2025, the total net book value of our leasehold improvements, furniture, fixtures and equipment was approximately $15.5 million.

Previous wording

Noninterest Income. Noninterest income is also a contributor to our net income. Noninterest income consists primarily of our investment advisory income, trust income generated by OIA and our trust department, as well as income generated by our BOLI investment earnings. In addition, noninterest income is also impacted by net gains (losses) on the sale of investment securities, service charges on deposit accounts, and other fee income consisting primarily of debit card fee income, checkbook fees and rebates and safe deposit box rental income.

Current wording

Noninterest Income. Noninterest income is also a contributor to our net income. Noninterest income consists primarily of our investment advisory income, trust income generated by OIA and our trust department, as well as income generated by our BOLI investment earnings. In addition, noninterest income is also impacted by net gains (losses) on the sale of investment securities and loans, service charges on deposit accounts, and other fee income consisting primarily of debit card fee income, checkbook fees and rebates and safe deposit box rental income.

Previous wording

Noninterest Expense. Noninterest expense includes salaries, employee benefits, occupancy, professional fees, directors’ fees and expenses, computer software expense, federal deposit insurance assessment, advertising expenses, advisor expenses related to trust income and other expenses. In evaluating our level of noninterest expense, we closely monitor our efficiency ratio. The efficiency ratio is calculated by dividing noninterest expense to net interest income plus noninterest income. We continue to seek to identify ways to streamline our business and operate more efficiently.

Current wording

Noninterest Expense. Noninterest expense includes salaries, employee benefits, occupancy, professional fees, directors’ fees and expenses, computer software expense, federal deposit insurance assessment, advertising expenses, advisor expenses related to trust income and other expenses. In evaluating our level of noninterest expense, we closely monitor our efficiency ratio. The efficiency ratio is calculated by dividing noninterest expense by net interest income plus noninterest income. We continue to seek to identify ways to streamline our business and operate more efficiently.

Previous wording

Regulatory Trends. We operate in a highly regulated environment and nearly all of our operations are subject to extensive regulation and supervision. Bank or securities regulators, Congress, the State of New York, the FRB and the New York State Department of Financial Services (the “NYSDFS”) may revise the laws and regulations applicable to us, may impose new laws and regulations, increase the level of scrutiny of our business in the supervisory process, and pursue additional enforcement actions against financial institutions. Future legislative and regulatory changes such as these may increase our costs and have an adverse effect on our business, financial condition and results of operations. The legislative and regulatory trends that will affect us in the future are impossible to predict with any certainty.

Current wording

Financial Services (the “NYSDFS”) may revise the laws and regulations applicable to us, may impose new laws and regulations, increase the level of scrutiny of our business in the supervisory process, and pursue additional enforcement actions against financial institutions. Future legislative and regulatory changes such as these may increase our costs and have an adverse effect on our business, financial condition and results of operations. The legislative and regulatory trends that will affect us in the future are impossible to predict with any certainty.

Previous wording

Allowance for Credit Losses. Management believes that the determination of the allowance for credit losses involves a high degree of complexity and requires management to make difficult and subjective judgments, which often require assumptions or estimates about highly uncertain matters. Changes in these judgments, assumptions or estimates could materially impact the results of operations for Orange County Bancorp. The methodology, assumptions, and governance of this CECL model have been codified in a policy document that was most recently reviewed and approved by the Company’s Audit & Risk Committee during the fourth quarter of 2025. While there were no fundamental changes to the CECL model during the quarter, management evaluated certain probability of default assumptions as well as the loss driver analysis. This evaluation resulted in adjustment of certain assumptions but were not considered significant changes to the model. Accordingly, management believes there were no significant changes to the critical accounting estimates during the three months ended March 31, 2026, and as disclosed in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 16, 2026. A summary of our accounting policies, including the Allowance for Credit Losses, is included in the Company’s Annual Report on Form 10-K.

Current wording

Allowance for Credit Losses. Management believes that the determination of the allowance for credit losses involves a high degree of complexity and requires management to make difficult and subjective judgments, which often require assumptions or estimates about highly uncertain matters. Changes in these judgments, assumptions or estimates could materially impact the results of operations for Orange County Bancorp. The methodology, assumptions, and governance of this CECL model have been codified in a policy document that was most recently reviewed and approved by the Company’s Audit & Risk Committee during the fourth quarter of 2025. While there were no fundamental changes to the CECL model during the quarter, management evaluated certain probability of default assumptions as well as the loss driver analysis. This evaluation resulted in adjustment of certain assumptions but were not considered significant changes to the model. Accordingly, management believes there were no significant changes to the critical accounting estimates during the three and six months ended June 30, 2026, and as disclosed in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 16, 2026. A summary of our accounting policies, including the Allowance for Credit Losses, is included in the Company’s Annual Report on Form 10-K.

Previous wording

Assets. Our total assets were $2.7 billion at March 31, 2026, an increase of $46.2 million, or 1.7%, from December 31, 2025. The increase was primarily driven by increases of $53.3 million in cash and due from banks and $2.2 million in loans, while investment securities, available for sale, decreased by $11.9 million during the three months ended March 31, 2026.

Current wording

Assets. Our total assets were $2.8 billion at June 30, 2026, an increase of $141.0 million, or 5.3%, from December 31, 2025. The increase was primarily driven by increases of $130.7 million in cash and due from banks and $63.6 million in loans held-for-sale, while loans decreased by $38.0 million and investment securities, available for sale, decreased by $23.5 million during the six months ended June 30, 2026.

Previous wording

Cash and due from banks. Cash and due from banks increased $53.3 million, or 26.1%, to $257.5 million at March 31, 2026, from $204.2 million at December 31, 2025. The increase was mainly the result of management’s focus on deposit growth during the three months ended March 31, 2026 combined with repayments of loans during the quarter which led to higher levels of liquidity.

Current wording

Cash and due from banks. Cash and due from banks increased $130.7 million, or 64.0%, to $334.9 million at June 30, 2026, from $204.2 million at December 31, 2025. The increase was mainly the result of management’s focus on deposit growth during the six months ended June 30, 2026 combined with repayments of loans and paydowns and maturities of securities during the second quarter which led to higher levels of liquidity.

Previous wording

Net loans increased $2.2 million, or 0.1%, and remained relatively level at approximately $2.0 billion at March 31, 2026 and December 31, 2025. The slight increase included growth within the CRE construction category, home equity segment, and consumer sector offset by a decrease in commercial and industrial loans. Commercial real estate construction loans increased by $7.6 million, or 7.7%, to $106.9 million at March 31, 2026 from $99.3 million at December 31, 2025. Home equity loans increased $4.3 million, or 18.9%, reaching $26.9 million at March 31, 2026 from $22.6 million at December 31, 2025. Consumer loans grew $7.2 million, or 21.4%, to $40.6 million at March 31, 2026 from $33.4 million at December 31, 2025. Commercial and industrial loans decreased $18.7 million, or 7.5%, to $231.0 million at March 31, 2026 from $249.6 million at December 31, 2025. Commercial real estate and residential real estate loans remained level between March 31, 2026 and December 31, 2025. The overall diversification within the commercial real estate portfolio continues to provide stability while we remained focused on loan originations to new and existing customers during the three months ended March 31, 2026 as well as our continued commitment to geographic expansion in our market area.

Current wording

Net loans decreased $38.0 million, or 2.0% to $1.9 billion at June 30, 2026 from December 31, 2025. The decrease in loans was primarily due to$68.4 million of loans transferred to loans held-for-sale and a decrease of $10.2 million in commercial and industrial loans. Commercial and industrial loans decreased $10.2 million, or 4.1%, to $239.5 million at June 30, 2026 from $249.6 million at December 31, 2025. The rest of the portfolio experienced growth within the commercial real estate loans, residential real estate loans, equity lines and in the consumer loans sector. Commercial real estate loans increased $26.5 million, or 1.8% and remained relatively level near $1.5 billion at June 30, 2026 and December 31, 2025. Excluding the effect of the $63.6 million transfer to loans held-for-sale, residential real estate and home equity loans grew organically by a combined $8.9 million. The Company transferred loans with an aggregate principal balance of $68.4 million from the loan portfolio to loans held-for-sale. At the date of transfer, the loans were recorded as held-for-sale at $63.6 million, net of a valuation allowance of $4.8 million. As of June 30, 2026, the loans held-for-sale portfolio consisted of $44.0 million of residential real estate loans and $19.6 million of home equity loans. Consumer loans increased $2.8 million, or 8.4%, to $36.2 million at June 30, 2026 from $33.4 million at December 31, 2025. The overall diversification within the commercial real estate portfolio continues to provide stability while we remained focused on loan originations to new and existing customers during the six months ended June 30, 2026 as well as our continued commitment to geographic expansion in our market area.

Previous wording

When we acquire real estate as a result of foreclosure, the real estate is classified as real estate owned. The real estate owned is recorded at the lower of carrying amount or fair value, less estimated costs to sell. Soon after acquisition, we order a new appraisal to determine the current market value of the property. Any excess of the recorded value of the loan satisfied over the market value of the property is charged against the allowance for credit losses, or, if the existing allowance is inadequate, charged to expense of the current period. After acquisition, all costs incurred in maintaining the property are expensed. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell. Management will consider a modification of loan terms, such as a reduction of the interest rate to below market terms, capitalizing past due interest or extending the maturity date and possibly a partial forgiveness of the principal amount due, when it is deemed appropriate based on individual borrower conditions. Interest income on restructured loans is accrued after the borrower demonstrates the ability to pay under the restructured terms through a sustained period of repayment performance, which is generally six consecutive months.

Current wording

When we acquire real estate as a result of foreclosure, the real estate is classified as real estate owned. The real estate owned is recorded at the lower of carrying amount or fair value, less estimated costs to sell. Soon after acquisition, we order a new appraisal to determine the current market value of the property. Any excess of the recorded value of the loan satisfied over the market value of the property is charged against the allowance for credit losses, or, if the existing allowance is inadequate, charged to expense of the current period. After acquisition, all costs incurred in maintaining the property are expensed. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell. Management will consider a modification of loan terms, such as a reduction of the interest rate to below market terms, capitalizing past due interest or extending the maturity date and possibly a partial forgiveness of the principal amount due, when it is deemed appropriate based on individual borrower conditions. Interest income on restructured loans is accrued after the borrower demonstrates the ability to pay under the restructured

Previous wording

The following table sets forth information regarding our non-performing assets. Non-performing loans aggregated approximately $26.1 million at March 31, 2026 as compared to $11.1 million at December 31, 2025.

Current wording

The following table sets forth information regarding our non-performing assets. Non-performing loans aggregated approximately $22.2 million at June 30, 2026 as compared to $11.1 million at December 31, 2025.

Previous wording

Non-performing loans at March 31, 2026 totaled $26.1 million and consisted of $23.0 million related to commercial real estate loans, $2.3 million associated with commercial and industrial loans, and $833 thousand of home equity loans. Although there was an increase in the commercial and industrial segment of the portfolio, the level of non-performing loans was still mainly related to the commercial real estate portfolio. The commercial real estate non-performing loans were mainly the result of payment disruption and non-accrual classification during the quarter for a $14.3 million participation related to a senior living facility and the continued non-performance of a non-accrual commercial real estate office space loan participation which was classified as non-accrual during the second quarter of 2024. The office space loan remained at $6.0 million as of March 31, 2026. The other loans designated as non-accrual were based upon individual analysis and payment performance. We had no other real estate owned at March 31, 2026 and December 31, 2025.

Current wording

Non-performing loans at June 30, 2026 totaled $22.2 million and consisted of $15.6 million related to commercial real estate loans, $2.4 million associated with commercial and industrial loans, and $833 thousand related to home equity loans. Although there was an increase in the commercial and industrial segment of the portfolio, the level of non-performing loans was still mainly related to the commercial real estate portfolio. The commercial real estate non-performing loans were mainly the result of a $14.2 million commercial real estate participation loan that experienced payment disruption during the six months ended June 30, 2026 due to bankruptcy at the parent company, offset partially by settlement of a previously reported participation loan for an office complex. The settlement reduced non-performing loans by approximately $6.0 million during the second quarter of 2026. Total accruing loans 90 days or more past due represented $3.3 million of loans as of June 30, 2026, compared to $18 thousand at December 31, 2025. The increase in accruing loans 90 days or more past due was related primarily to a commercial real estate participation loan that experienced an administrative delay in the processing of an extension/modification during the six months ended June 30, 2026 due to divorce proceedings, and remains a performing loan and in accrual status at June 30, 2026.

Previous wording

Led by the increase in non-accrual loans, non-performing assets increased $15.0 million, or 134.4%, to $26.1 million, or 0.96% of total assets, at March 31, 2026 from $11.1 million, or 0.42% of total assets, at December 31, 2025. Management continues to focus on credit quality and attention to assets with potential concerns.

Current wording

Led by the increase in non-accrual loans and loans 90 days past due, non-performing assets increased $11.0 million, or 99.1%, to $22.2 million, or 0.79% of total assets, at June 30, 2026 from $11.1 million, or 0.42% of total assets, at December 31, 2025. Management continues to focus on credit quality and attention to assets with potential concerns.

Previous wording

From time to time, as part of our loss mitigation strategy, we may renegotiate loan terms based on the economic and legal reasons related to the borrower’s financial difficulties. There were no loans modified due to financial difficulties during the three months ended March 31, 2026.

Current wording

From time to time, as part of our loss mitigation strategy, we may renegotiate loan terms based on the economic and legal reasons related to the borrower’s financial difficulties. There were no loans modified due to financial difficulties during the six months ended June 30, 2026.

Previous wording

Classified Assets. Federal regulations provide that loans and other assets of lesser quality should be classified as “substandard”, “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that we will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets

Current wording

Classified Assets. Federal regulations provide that loans and other assets of lesser quality should be classified as “substandard”, “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that we will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. We designate an asset as “special mention” if the asset has a potential weakness that warrants management’s close attention.

Previous wording

On the basis of management’s review of our assets, we have classified $80.9 million of our assets at March 31, 2026 as substandard compared to $73.7 million at December 31, 2025, with the increase due to a combination of risk ratings resulting from certain trends, including delinquencies within the loan portfolio, and the sale or chargeoff of certain loans. There were no doubtful assets as of March 31, 2026 and December 31, 2025. We designated $47.2 million of our assets at March 31, 2026 as special mention compared to $58.4 million designated as special mention at December 31, 2025.

Current wording

On the basis of management’s review of our assets, we have classified $66.4 million of our assets at June 30, 2026 as substandard compared to $73.7 million at December 31, 2025, with the decrease due to a combination of risk ratings resulting from certain trends, including delinquencies within the loan portfolio, and the sale or chargeoff of certain loans. There were no doubtful assets as of June 30, 2026 or December 31, 2025. We designated $43.1 million of our assets at June 30, 2026 as special mention compared to $58.4 million designated as special mention at December 31, 2025.

Previous wording

For the three months ended March 31, 2026, the commercial and industrial segment of the loan portfolio had a net charge-off amount of $17 thousand, or a net charge-off ratio of 0.74%. The consumer loan portfolio experienced net recoveries during the quarter of approximately $19 thousand related to collection of certain loans. For the three months ended March 31, 2026 and 2025, respectively, no other category of loans had a net charge-off ratio which exceeded 0.01% either individually, or in the aggregate.

Current wording

For the six months ended June 30, 2026, the Company recognized net charge-offs of $524 thousand, or 0.03%. Commercial real estate loans reflected a net charge-offs of $535 thousand associated with the settlement and payoff of certain loans. For the period, the commercial and industrial segment of the loan portfolio recognized a net charge-off amount of $13 thousand, or a net charge-off ratio of 0.03%. The consumer loan portfolio experienced net recoveries during the six month period of approximately $24 thousand related to collection of certain loans. For the six months ended June 30, 2026 and 2025, respectively, no other category of loans had a net charge-off ratio which exceeded 0.01% either individually, or in the aggregate.

Previous wording

Available for sale securities decreased $11.9 million, or 2.8%, to $407.5 million at March, 31, 2026 due mainly to limited purchases combined with continued declines for all investment categories, except corporate securities, due to normal amortization and cash flow during the three month period ended March 31, 2026.

Current wording

Available for sale securities decreased $23.5 million, or 5.6%, to $395.9 million at June 30, 2026 primarily due to investments repayments and maturities combined with continued decline for all investment categories due to normal amortization and cash flow during the six month period ended June 30, 2026. We did not have held-to-maturity securities at June 30, 2026 or December 31, 2025.

Previous wording

Total deposits increased $39.4 million, or 1.7%, to $2.4 billion at March 31, 2026 from $2.3 billion at December 31, 2025 driven by continued deposit growth focused on commercial transaction accounts during the first quarter of 2026. This growth allows for continued stability and strength of liquidity levels for the Bank. Non-interest-bearing demand deposits increased $1.7 million due to normal business activity and continued focus on transactional accounts during the first three months of 2026. Interest bearing demand deposits experienced a $53.4 million, or 12.7%, increase while money market deposits decreased $369.7 million, and savings deposits increased by $447.0 million during the first three months of 2026 primarily related to our continued strategic focus on business account activity and a shift in certain customer accounts from money market accounts to savings accounts during the quarter. At March 31, 2026, our core deposits (which includes all deposits except for certificates of deposit) totaled $2.3 billion, or 97.2% of our total deposits. Certificates of deposit decreased by $93.1 million, or 58.6%, mainly from non-renewals of brokered deposits during the three months ended March 31, 2026. We held approximately $30.0 million of brokered deposits (excluding reciprocal deposits obtained through the Certificate Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) networks) at March 31, 2026 as compared to $125.0 million at December 31, 2025. This decrease represents a continued strategic initiative to reduce short term brokered deposits as a result of increased core deposits and allow for replacement of maturing brokered deposits with transactional customer deposits with lower interest expense. Our reciprocal deposits obtained through the CDARS and ICS networks totaled $128.8 million at March 31, 2026 and the CDARS and ICS deposits totaled $101.8 million at December 31, 2025. Uninsured deposits, net of fully collateralized municipal relationships, remained stable and represent approximately 49% of total deposits as of March 31, 2026 and 46% of total deposits as of December 31, 2025.

Current wording

Total deposits increased $120.8 million, or 5.2%, to $2.4 billion at June 30, 2026 from $2.3 billion at December 31, 2025 driven by continued deposit growth focused on commercial transaction accounts during the first six months of 2026. This growth allows for continued stability and strength of liquidity levels for the Bank. Non-interest-bearing demand deposits increased $68.3 million due to normal business activity and continued focus on transactional accounts during the first six months of 2026. Interest bearing demand deposits experienced a $71.1 million, or 17.0%, increase while money market deposits decreased $391.6 million, and savings deposits increased by $496.0 million during the first six months of 2026 primarily related to our continued strategic focus on business account activity and a shift in certain customer accounts from money market accounts to savings accounts during the first six month period in 2026. At June 30, 2026, our core deposits (which includes all deposits except for certificates of deposit) totaled $2.4 billion, or 98.5% of our total deposits. Certificates of deposit decreased by $123.0 million, or 77.3%, mainly from non-renewals of brokered deposits during the six months ended June 30, 2026. We did not have any brokered deposits (excluding reciprocal deposits obtained through the Certificate Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) networks) at June 30, 2026. We had approximately $125.0 million of brokered deposits (excluding reciprocal deposits obtained through the Certificate Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) networks) at December 31, 2025. This decrease represents a continued strategic initiative to reduce short term brokered deposits as a result of increased core deposits and allow for replacement of maturing brokered deposits with transactional customer deposits with lower interest expense. Our reciprocal deposits obtained through the CDARS and ICS networks totaled $144.5 million at June 30, 2026 and the CDARS and ICS deposits totaled $101.8 million at December 31, 2025. Uninsured deposits, net of fully collateralized municipal relationships, remained stable and represent approximately 52% of total deposits as of June 30, 2026 and 46% of total deposits as of December 31, 2025.

Previous wording

Total borrowings from the Federal Home Loan Bank of New York were $10.0 million at March 31, 2026 and December 31, 2025 as deposit growth exceeded loan growth during the period. This level balance represents the continued focus by management to reduce borrowings and the related interest expense by using lower-cost deposits for funding. We have the unused capacity to borrow an additional $563.3 million from the Federal Home Loan Bank of New York as of March 31, 2026.

Current wording

Total borrowings from the Federal Home Loan Bank of New York were $10.0 million at June 30, 2026 and December 31, 2025 as deposit growth exceeded loan growth during the period. This level balance represents the continued focus by management to reduce borrowings and the related interest expense by using lower-cost deposits for funding. We have the unused capacity to borrow an additional $597.0 million from the Federal Home Loan Bank of New York as of June 30, 2026.

Previous wording

Stockholders’ equity increased $7.3 million, or 2.6%, to $291.7 million at March 31, 2026 from $284.4 million at December 31, 2025. The increase was due to the combination of $11.3 million in net income offset by an increase in unrealized losses of approximately $2.8 million on the market value of investment securities within the Company’s equity as accumulated other

Current wording

Stockholders’ equity increased $22.3 million, or 7.8%, to $306.6 million at June 30, 2026 from $284.4 million at December 31, 2025. The increase was due to the combination of $24.9 million in net income, a $3.6 million increase in surplus and a decrease in unrealized gains of approximately $1.4 million on the market value of investment securities within the Company’s equity as accumulated other comprehensive income (loss) (“AOCI”), net of taxes during the first six months of 2026, offset by dividends paid of $4.8 million during the six months ended June 30, 2026. The increase of $3.6 million in surplus was primarily due to a liability-to-equity reclassification of equity awards in the amount of $2.3 million during the six months ended June 30, 2026.

Previous wording

The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the three month periods ended March 31, 2026 and 2025. No tax equivalent yield adjustments have been made, as the effects would be immaterial. The average balances are daily averages for loans, as presented. Interest income on loans includes the effects of discount accretion and net deferred loan origination costs accounted for as yield adjustments. Average deferred loan fees totaled $4.7 million and $4.9 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Current wording

The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the three and six month periods ended June 30, 2026 and 2025. No tax equivalent yield adjustments have been made, as the effects would be immaterial. The average balances are daily averages for loans, as presented. Interest income on loans includes the effects of discount accretion and net deferred loan origination costs accounted for as yield adjustments. Average deferred loan fees totaled $4.7 million and $4.9 million for the three months ended June 30, 2026 and June 30, 2025, respectively. Average deferred loan fees totaled $4.7 million and $4.9 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Summary Income Statements**.**The following table sets forth the income summary for the periods indicated:

Current wording

The following table sets forth the income summary for the periods indicated:

Previous wording

Interest Income. Interest income increased $2.5 million, or 7.9%, to $34.4 million for the three months ended March 31, 2026 from $31.9 million for the three months ended March 31, 2025. This increase was driven by a $142.6 million increase in the balance of average interest-earning assets between the two periods. Within the average balance of interest-earning assets, the average balance of loans grew $125.4 million, or 6.9%, between the three months ended March 31, 2026 and March 31, 2025. During the current period, the average yield of interest-earning assets increased by 10 basis points from 5.33% for the three months ended March 31, 2025 to 5.43% for the three months ended March 31, 2026 as a result primarily of increased yields and fees associated with loans originated in 2025 and the early part of 2026.

Current wording

Interest Income. Interest income increased $1.3 million, or 4.0%, to $34.5 million for the three months ended June 30, 2026 from $33.2 million for the three months ended June 30, 2025. This increase was driven by a $84.0 million increase in the balance of average interest-earning assets between the two periods. Within the average balance of interest-earning assets, the average balance of loans grew $89.7 million, or 4.8%, between the three months ended June 30, 2026 and June 30, 2025. During the current period, the average yield of interest-earning assets increased by three basis points from 5.36% for the three months ended June 30, 2025 to 5.39% for the three months ended June 30, 2026 as a result primarily of increased yields and fees associated with loans originated in 2025 and the early part of 2026.

Previous wording

Interest income on loans increased by $2.5 million, or 9.1%, to $29.8 million during the three months ended March 31, 2026 from $27.3 million during the three months ended March 31, 2025. The increase in interest income on loans was primarily due to the increase in the average balance of loans combined with higher yields during the current period. The average balance of these loans increased by $125.4 million, or 6.9%, to $2.0 billion for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in the average balance of loans was due to growth in commercial real estate construction loan balances as well as growth in our home equity loan portfolio. The average yield on loans increased by 13 basis points to 6.18% for the three months ended March 31, 2026 from 6.05% for the three months ended March 31, 2025 as a result of focused loan pricing during 2025 and the first quarter of 2026.

Current wording

Interest income on loans increased by $1.5 million, or 5.4%, to $29.6 million during the three months ended June 30, 2026 from $28.1 million during the three months ended June 30, 2025. The increase in interest income on loans was primarily due to the increase in the average balance of loans combined with higher yields during the current period. The average balance of these loans increased by $89.7 million, or 4.8%, to $2.0 billion for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase in the average balance of loans was due to growth in multi-family, commercial real estate, home equity lines of credit as well as growth in our consumer installment loan portfolio. The average yield on loans increased by three basis points to 6.03% for the three months ended June 30, 2026 from 6.00% for the three months ended June 30, 2025 as a result of disciplined loan pricing during 2025 and the first quarter of 2026.

Previous wording

Interest income on securities decreased by $232 thousand to $2.9 million during the three months ended March 31, 2026 from $3.1 million during the three months ended March 31, 2025. The decrease in interest income on securities was driven primarily by a decrease in the average balance of securities outstanding during the current period due to certain maturities and securities sales. The average balance of securities decreased by $24.6 million, or 5.6%, to $417.2 million for the three months ended March 31, 2026 compared to $441.8 million for the three months ended March 31, 2025. The average yield on investment securities decreased by six basis points overall to 2.81% for the three months ended March 31, 2026 from 2.87% for the three months ended March 31, 2025. The decrease in the average yield reflected the continued maturity of investments coupled with the effect of lower yields.

Current wording

Interest income on securities including restricted stock decreased by $346 thousand to $2.9 million during the three months ended June 30, 2026 from $3.3 million during the three months ended June 30, 2025. The decrease in interest income on securities was driven primarily by a decrease in the average balances of securities outstanding during the current period due to investment repayments and certain maturities. The average balance of securities decreased by $28.7 million, or 6.5%, to $409.7 million for the three months ended June 30, 2026 compared to $438.4 million for the three months ended June 30, 2025. The average yield on investment securities decreased by 13 basis points to 2.88% for the three months ended June 30, 2026 from 3.01% for the three months ended June 30, 2025. The decrease in the average yield on investment securities reflected the continued repayments and maturities of higher yielding securities during the three months ended June 30, 2026.

Previous wording

Interest Expense. Interest expense decreased $1.8 million, or 21.3%, to $6.5 million for the three months ended March 31, 2026 from $8.3 million for the three months ended March 31, 2025. The decreased interest expense was primarily due to the continued reduction of interest costs associated with lower FHLB advances and borrowings as well as reduced higher cost brokered deposits due to increased customer deposit levels during the quarter. The average rate paid on interest-bearing liabilities decreased forty-three basis points to 1.62% during the three months ended March 31, 2026 as compared to 2.05% for the three month period ended March 31, 2025. The average balance of interest-bearing liabilities decreased by $10.2 million, or 0.6%, exceeding $1.6 billion for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Current wording

Interest Expense. Interest expense decreased $2.0 million, or 24.2%, to $6.1 million for the three months ended June 30, 2026 from $8.1 million for the three months ended June 30, 2025. The decreased interest expense was primarily due to the continued reduction of interest costs associated with lower average balances in deposits and FHLB advances, offset by increased interest cost and higher average balances of subordinated notes. The average rate paid on interest-bearing liabilities decreased 41 basis points to 1.52% during the three months ended June 30, 2026 as compared to 1.93% for the three month period ended June 30, 2025. The average balance of interest-bearing liabilities decreased by $54.9 million, or 3.3%, to $1.6 billion for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Previous wording

Interest expense on interest-bearing deposits decreased by $1.1 million to $6.0 million for the three months ended March 31, 2026 from $7.1 million for the three months ended March 31, 2025. The decrease in interest expense on interest-bearing deposits was due mainly to a decrease in the average rate on interest-bearing deposits during the current period. The average balance of interest-bearing deposits increased by $59.8 million, or 3.9%, to $1.6 billion for the three months ended March 31, 2026 as compared to $1.5 billion for the three months ended March 31, 2025 as a result of the increases in the average balances of total core deposits which excludes certificates of deposit, which included lower levels of brokered deposits at higher rates. The average cost of interest-bearing deposits decreased thirty-six basis points to 1.52% during the three months ended March 31, 2026 as compared to 1.88% for the three months ended March 31, 2025 as a result of the lower interest rate environment.

Current wording

Interest expense on interest-bearing deposits decreased by $1.9 million to $5.6 million for the three months ended June 30, 2026 from $7.5 million for the three months ended June 30, 2025. The decrease in interest expense on interest-bearing deposits was due mainly to a decrease in the average rate on interest-bearing deposits during the current period. The average rate of interest-bearing deposits decreased 44 basis points to 1.41% during the three months ended June 30, 2026 as compared to 1.85% for the three months ended June 30, 2025 as a result of the lower interest rate environment. The average balance of interest-bearing deposits decreased by $39.2 million, or 2.4%, to $1.6 billion for the three months ended June 30, 2026 and remained leveled as compared to the three months ended June 30, 2025 as a result of the decreases in the average balances of certificates of deposit, which included lower levels of brokered deposits at higher rates.

Previous wording

We also recorded interest expense of $430 thousand during the three months ended March 31, 2026 related to subordinated debt as compared to $230 thousand in interest expense for the three months ended March 31, 2025. The increase is related to the issuance in September 2025 of $25.0 million in outstanding subordinated notes.

Current wording

We also recorded interest expense of $430 thousand during the three months ended June 30, 2026 related to subordinated debt as compared to $231 thousand in interest expense for the three months ended June 30, 2025. The increase was related to the issuance in September 2025 of $25.0 million in outstanding subordinated notes. In addition, we expensed $860 thousand and $461 thousand in interest expense for the six months ended June 30, 2026 and June 30, 2025, respectively. The increased interest costs represent the debt service required as part of the 2025 subordinated notes.

Previous wording

the current period. Management was able to replace higher cost FHLB borrowings with lower cost deposits and reduce interest expense during the current period. Although borrowings remain a potential source of strategic funding for the Company, the reduction in borrowings during the quarter reflects the ability of the Company to increase deposits and strategically reduce related interest costs.

Current wording

The interest expense related to FHLB advances in the second quarter of 2026 decreased $241 thousand to $134 thousand at an average cost of 3.95% as compared to interest expense of $375 thousand at an average cost of 4.38% for the same period in 2025. The decrease in FHLB expense in the second quarter of 2026 was primarily due to a decrease of $20.7 million in the average balance of such advances and a decrease in the average cost paid on FHLB advances. The decrease in average FHLB balance was the direct result of Management being able to replace higher cost FHLB borrowings with lower cost deposits and reduce interest expense during the current period. Although borrowings remain a potential source of strategic funding for the Company, the reduction in borrowings during the quarter reflects the ability of the Company to increase deposits and strategically reduce related interest costs.

Previous wording

The interest expense related to borrowings in the first quarter of 2026 decreased to $98 thousand at an average cost of 3.97% as compared to interest expense of $931 thousand at an average cost of 4.44% for the same period in 2025. The first quarter 2026 average FHLB and other borrowings decreased to $10.0 million compared to $85.0 million of average FHLB and other borrowings in the same quarter of 2025. The decrease in average borrowings was the direct result of paydowns driven by increased deposits during

Current wording

The interest expense related to FHLB advances for the first six months of 2026 decreased $1.1 million to $232 thousand at an average cost of 3.96% as compared to interest expense of $1.3 million at an average cost of 4.42% for the same period in 2025. The decrease in FHLB expense for the first six months of 2026 was primarily due to a decrease of $47.7 million in the average balance of such advances and a decrease in the average cost paid on FHLB advances. The decrease in average FHLB balance was the direct result of Management being able to replace higher cost FHLB borrowings with lower cost deposits and reduce interest expense during the current period.

Previous wording

Net Interest Income. Net interest income increased $4.3 million, or 18.1%, to $27.9 million for the three months ended March 31, 2026 from $23.6 million for the three months ended March 31, 2025 due to the increase in income from average interest earning assets and the reduction of interest costs associated with interest bearing liabilities. Net interest rate spread increased by 53 basis points to 3.81% for the three months ended March 31, 2026 from 3.28% for the three months ended March 31, 2025, reflecting a 10 basis points increase in the average yield on interest-earning assets combined with a 43 basis points decrease in the average rate paid on interest-bearing liabilities. The net interest margin rose by forty-five basis points to 4.40% for the three months ended March 31, 2026 from 3.95% for the three months ended March 31, 2025 due to the lower interest rate environment for short term funding, the impact of managed funding and deposit cost, and increased yields on the lending portfolio during the current period.

Current wording

Net Interest Income. Net interest income increased $3.3 million, or 13.1%, to $28.4 million for the three months ended June 30, 2026 from $25.1 million for the three months ended June 30, 2025 due to the increase in income from average interest earning assets and the reduction of interest costs associated with interest bearing liabilities. Net interest rate spread increased by 44 basis points to 3.87% for the three months ended June 30, 2026 from 3.43% for the three months ended June 30, 2025, reflecting a three basis points increase in the average yield on interest-earning assets combined with a 41 basis points decrease in the average rate paid on interest-bearing liabilities. The net interest margin rose by 38 basis points to 4.44% for the three months ended June 30, 2026 from 4.06% for the three months ended June 30, 2025 due to the lower interest rate environment for short term funding, the impact of managed funding and deposit cost, and increased yields on the lending portfolio during the current period.

Previous wording

Provision for Credit Losses. The Company recognized a net recovery of $436 thousand in the provision for credit losses during the three months ended March 31, 2026, compared to a provision of $202 thousand for the three months ended March 31, 2025. The decreased provision for the three months ended March 31, 2026 as compared to the same period in 2025 reflected slower loan growth during the first quarter of 2026 combined with the effect of lower levels of reserves associated with certain types of loans closed during 2026. The allowance for credit losses to total loans was 1.43% as of March 31, 2026, a decrease of two basis points, or 1.4%, versus 1.45% as of December 31, 2025.

Current wording

Provision for Credit Losses. The Company recognized a net recovery of $1.0 million in the provision for credit losses during the three months ended June 30, 2026, compared to a provision of $2.1 million for the three months ended June 30, 2025. The decreased provision for the three months ended June 30, 2026 was primarily a result of slower loan growth combined with lower reserves associated with the composition of loans closed during the second quarter of 2026. The allowance for credit losses to total loans was 1.38% as of June 30, 2026, a decrease of seven basis points, or 4.83%, versus 1.45% as of December 31, 2025.

Previous wording

Noninterest income decreased by $179 thousand, or 4.1%, reaching $4.2 million for the three months ended March 31, 2026 as compared to $4.4 million for the three months ended March 31, 2025. Our Wealth Management division revenues, which include our Trust and Asset Management businesses also experienced a decrease and represented a 5.0% decrease quarter-over-quarter, to $3.3 million for the first quarter of 2026 as compared to $3.4 million for the first quarter of 2025 as a result of an overall net decrease in assets-under-management. During the same period, assets-under-management decreased to $1.6 billion at March 31, 2026 from $1.7 billion at March 31, 2025.

Current wording

Noninterest income decreased by $7.9 million, or 108.3%, to a $607 thousand loss for the three months ended June 30, 2026 as compared to $7.3 million for the three months ended June 30, 2025. The decrease of $7.9 million in noninterest income was largely related to a valuation loss of $4.8 million related to loans classified as held-for-sale during the second quarter of 2026 and the recognition of gain associated with the sale of a branch location of $1.2 million coupled with a Bank Owned Life Insurance gain of $2.4 million related to policy proceeds from a death benefit during the prior year period. Our Wealth Management division revenues, which include our Trust and Asset Management businesses also experienced a decrease in income of $178 thousand and represented a 5.2% decrease quarter-over-quarter, to $3.2 million for the second quarter of 2026 as compared to $3.4 million for the second quarter of 2025 as a result of an overall net decrease in assets-under-management. During the same period, assets-under-management decreased to $1.7 billion at June 30, 2026 from $1.8 billion at June 30, 2025.

Previous wording

Non-interest expense was $17.9 million for the first quarter of 2026, reflecting an increase of approximately $1.4 million, or 8.7%, as compared to $16.5 million for the same period in 2025. The increase in non-interest expense for the current three month period was due primarily to continued investment in overall Company growth, including salaries and benefits, professional fees, and advertising expense. Our efficiency ratio improved to 55.9% for the three months ended March 31, 2026, from 58.9% for the same period in 2025.

Current wording

Non-interest expense was $17.3 million for the second quarter of 2026, reflecting an increase of approximately $515 thousand, or 3.1%, as compared to $16.8 million for the same period in 2025. The increase in non-interest expense for the current three month period was due primarily to continued investment in overall Company growth, including salaries and benefits, Director’s fees and expenses, professional fees, and advertising expense. Our efficiency ratio increased to 62.1% for the three months ended June 30, 2026, from 51.6% for the same period in 2025.

Previous wording

Provision for Income Tax. Our provision for income taxes for the three months ended March 31, 2026 was $3.3 million, compared to $2.6 million for the same period in 2025. The increase was directly related to provisions associated with higher levels of pre-tax income as well as the effect of certain tax adjustments for the quarter. Our effective tax rate for the three month period ended March 31, 2026 was 22.7%, as compared to 22.9% for the same period in 2025.

Current wording

Provision for Income Tax. Our provision for income taxes for the three months ended June 30, 2026 reflected a credit of $2.1 million, compared to a provision of $3.1 million for the same period in 2025. The decrease in provision was related to the Company’s reversal of the deferred tax valuation allowance. The reversal was based on the financial strength of the Company and sustained history of profitability which demonstrates the likelihood of realizing the benefits of the deferred tax asset. Our effective tax rate for the three month period ended June 30, 2026 was (18.2%), as compared to 23.0% for the same period in 2025.

Previous wording

The following table presents the statements of income and total assets for our reportable business segments for the periods indicated:

Current wording

The following tables present the statements of income and total assets for our reportable business segments for the periods indicated:

Previous wording

The market value of assets under management and/or administration at March 31, 2026 was $1.6 billion as compared to $1.7 billion at March 31, 2025. This includes assets held at both Orange Bank & Trust Company and OIA at March 31, 2026 and 2025.

Current wording

The market value of assets under management and/or administration was $1.7 billion and $1.8 billion at June 30, 2026 and 2025, respectively. This includes assets held at both Orange Bank & Trust Company and OIA at June 30, 2026 and 2025.