First Seacoast Bancorp, Inc.

Previous wording

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the Company’s consolidated financial condition at September 30, 2025 and consolidated results of operations for the three and nine months ended September 30, 2025 and 2024. It should be read in conjunction with our unaudited consolidated financial statements and accompanying notes presented elsewhere in this report and with the Company’s audited consolidated financial statements and accompanying notes presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on March 21, 2025 with the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation.

Current wording

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the Company’s consolidated financial condition at March 31, 2026 and consolidated results of operations for the three months ended March 31, 2026 and 2025. It should be read in conjunction with our unaudited consolidated financial statements and accompanying notes presented elsewhere in this report and with the Company’s audited consolidated financial statements and accompanying notes presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 20, 2026 with the Securities and Exchange Commission (the "SEC") and as amended by the Form 10-K/A filed with the SEC on April 30, 2026. Certain prior year amounts have been reclassified to conform to the current year presentation.

Previous wording

Total Assets. Total assets were $609.6 million as of September 30, 2025, an increase of $28.8 million, or 5.0%, compared to total assets of $580.8 million at December 31, 2024. The increase was due primarily to a $12.5 million increase in cash and due from banks and a $22.3 million increase in securities available-for-sale, offset by a $5.5 million decrease in net loans.

Current wording

Total Assets. Total assets were $588.8 million as of March 31, 2026, a decrease of $10.5 million, or 1.8%, compared to total assets of $599.3 million at December 31, 2025. The decrease was due primarily to a $1.1 million decrease in net loans and a $9.7 million decrease in securities available-for-sale.

Previous wording

Available-for-Sale Securities. Available-for-sale securities increased by $22.3 million, or 18.6%, to $142.5 million at September 30, 2025 from $120.2 million at December 31, 2024. This increase was primarily due to investment purchases totaling $32.1 million and a $2.7 million decrease in net unrealized losses within the portfolio, offset by $12.1 million of proceeds from maturities and principal payments during the nine months ended September 30, 2025. The unrealized losses within the portfolio are due to noncredit-related factors, including changes in market interest rates and other market conditions, and therefore we recorded no allowance for credit losses on available-for-sale debt securities as of September 30, 2025.

Current wording

Available-for-Sale Securities. Available-for-sale securities decreased by $9.7 million, or 6.4%, to $142.7 million at March 31, 2026 from $152.4 million at December 31, 2025. This decrease was due primarily to a $1.0 million increase in net unrealized losses within the portfolio and proceeds from maturities and principal payments totaling $8.6 million during the three months ended March 31, 2026. Management believes that the unrealized losses within the portfolio are due to noncredit-related factors, including changes in market interest rates and other market conditions, and therefore we recorded no allowance for credit losses on available-for-sale debt securities as of March 31, 2026.

Previous wording

Net Loans. Net loans decreased $5.5 million, or 1.3%, to $430.0 million at September 30, 2025 from $435.5 million at December 31, 2024. During the nine months ended September 30, 2025, we collected $9.2 million of loan principal, net of new loan originations, and purchased $2.3 million of participation interests in commercial and industrial loans through our membership in a national community bank loan program and $1.3 million of consumer loans secured by manufactured housing properties. As of September 30, 2025 and December 31, 2024, the portfolio of purchased loans had an outstanding principal balance of $37.0 million and $34.3 million, respectively, and were performing in accordance with their original repayment terms at each date.

Current wording

Net Loans. Net loans decreased $1.1 million, or 0.3%, to $415.0 million at March 31, 2026 from $416.0 million at December 31, 2025. During the three months ended March 31, 2026, we collected $1.5 million of loan principal payments, net of loan originations, and purchased $297,000 of consumer loans secured by manufactured housing properties. As of March 31, 2026 and December 31, 2025, the portfolio of purchased loans had an outstanding principal balance of $38.3 million and $37.0 million, respectively, and such loans were performing in accordance with their original repayment terms.

Previous wording

One- to four-family residential mortgage loans decreased $4.1 million, or 1.5%, to $271.1 million at September 30, 2025 from $275.2 million at December 31, 2024. Commercial real estate mortgage loans increased $1.2 million, or 1.4%, to $87.2 million at September 30, 2025 from $86.0 million at December 31, 2024. Multi-family loans decreased $1.1 million, or 18.3%, to $4.7 million at September 30, 2025 from $5.8 million at December 31, 2024. Commercial and industrial loans increased $971,000, or 4.1%, to $24.7 million at September 30, 2025 from $23.7 million at December 31, 2024. Acquisition, development, and land loans decreased $2.9 million, or 19.3%, to $12.1 million at September 30, 2025 from $14.9 million at December 31, 2024. Home equity loans and lines of credit increased $540,000, or 2.6%, to $21.4 million at September 30, 2025 from $20.9 million at December 31, 2024. Consumer loans were $12.4 million at September 30, 2025 and December 31, 2024.

Current wording

One- to four-family residential mortgage loans decreased $2.4 million, or 0.9%, to $262.8 million at March 31, 2026 from $265.2 million at December 31, 2025. Commercial real estate mortgage loans increased $211,000, or 0.3%, to $80.8 million at March 31, 2026 from $80.6 million at December 31, 2025. Multi-family loans decreased $67,000, or 1.4%, to $4.8 million at March 31, 2026 and December 31, 2025. Commercial and industrial loans decreased $1.3 million, or 5.6%, to $21.3 million at March 31, 2026 from $22.5 million at December 31, 2025. Acquisition, development, and land loans increased $1.6 million, or 12.2%, to $14.4 million at March 31, 2026 from $12.9 million at December 31, 2025. Home equity loans and lines of credit increased $1.1 million, or 5.4%, to $21.8 million at March 31, 2026 from $20.7 million at December 31, 2025. Consumer loans decreased $222,000, or 1.7%, to $12.5 million at March 31, 2026 from $12.7 million at December 31, 2025.

Previous wording

Our ACL on loans was $3.5 million at September 30, 2025 and December 31, 2024 based upon ASU 2016-13 and its credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost, including loans, to be presented at the net amount expected to be collected, through an ACL that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires the measurement of all expected credit losses for loans held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, the ASU requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied at prior reporting dates are still permitted, though the inputs to those techniques have changed to reflect the full amount of expected credit losses. We have selected the Weighted Average Remaining Maturity Model (“WARM” or

Current wording

Our ACL on loans was $3.4 million at March 31, 2026 and December 31, 2025 based upon ASU 2016-13 and its credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost, including loans, to be presented at the net amount expected to be collected, through an ACL that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires the measurement of all expected credit losses for loans held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, the ASU requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied at prior reporting dates are still permitted, though the inputs to those techniques have changed to reflect the full amount of expected credit losses. We have selected the Weighted Average Remaining Maturity Model (“WARM” or "CECL model"), for the loss calculation of each of our loan pools utilizing a third-party software application. The WARM uses a quarterly loss rate and future expectations of loan balances to calculate an ACL. A loss rate is applied to pool balances over time.

Previous wording

Deposits. Our deposits are generated primarily from residents within our primary market area. We offer a selection of deposit accounts, including non-interest-bearing and interest-bearing checking accounts, savings accounts, money market accounts and time deposits, for both individuals and businesses. As of September 30, 2025 and December 31, 2024, the aggregate amount of uninsured deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was estimated not to exceed $111.9 million, or 23.3% of total deposits, and $112.2 million, or 24.7% of total deposits, respectively.

Current wording

Deposits. Our deposits are generated primarily from residents within our primary market area. We offer a selection of deposit accounts, including non-interest-bearing and interest-bearing checking accounts, savings accounts, money market accounts and time deposits, for both individuals and businesses. As of March 31, 2026 and December 31, 2025, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was estimated not to exceed $110.0 million, or 24.0% of total deposits, and $107.7 million, or 22.9% of total deposits, respectively.

Previous wording

For customers requiring full FDIC insurance on certificates of deposit in excess of $250,000, we began offering in late 2023 the CDARS® program, which allows us to place the certificates of deposit with other participating banks to maximize the customers’ FDIC insurance coverage. We receive a like amount of deposits from other participating financial institutions. In addition, we offer the ICS™ program, an insured deposit “sweep” program for demand deposits which is a product offered by IntraFi Network, LLC, which is also the provider of the CDARS® program. Similarly to the certificates of deposit’s discussed above, we receive a like amount of deposits from other financial institutions and all customer deposits are insured by the FDIC. These “reciprocal” CDARS® and ICS deposits are classified as “brokered” deposits in regulatory reports and "core" deposits in our consolidated balance sheet. At September 30, 2025 our “reciprocal” CDARS® and ICS deposits were $-0- and $9.1 million, respectively. At December 31, 2024, our “reciprocal” CDARS® and ICS deposits were $-0- and $6.0 million, respectively.

Current wording

For customers requiring full FDIC insurance on certificates of deposit in excess of $250,000, we offer the CDARS® program, which allows us to place the certificates of deposit with other participating banks to maximize the customers’ FDIC insurance coverage. We receive a like amount of deposits from other participating financial institutions. In addition, we offer the ICS™ program, an insured deposit “sweep” program for demand deposits which is a product offered by IntraFi Network, LLC, which is also the provider of the CDARS® program. Similarly to the certificates of deposit’s discussed above, we receive a like amount of deposits from other financial institutions and all customer deposits are insured by the FDIC. These “reciprocal” CDARS® and ICS deposits are classified as “brokered” deposits in regulatory reports and "core" deposits in our consolidated balance sheet. At March 31, 2026 our “reciprocal” CDARS® and ICS deposits were $-0- and $11.6 million, respectively. At December 31, 2025, our “reciprocal” CDARS® and ICS deposits were $-0- and $9.1 million, respectively.

Previous wording

Deposits increased $25.8 million, or 5.7%, to $480.0 million at September 30, 2025 from $454.2 million at December 31, 2024 primarily as a result of a $5.2 million increase in commercial deposits and a $20.6 million increase in retail deposits. Core deposits (defined as deposits other than time deposits) increased $4.6 million, or 1.5%, to $323.1 million at September 30, 2025 from $318.5 million at December 31, 2024. As of September 30, 2025, savings deposits decreased $987,000, money market deposits decreased $1.4 million, NOW and demand deposit accounts increased $7.1 million and time deposits increased $21.2 million. The increase in time deposits included an $11.8 million increase in brokered deposits which consisted of $24.3 million of new brokered deposits used to fund the purchase of securities available-for-sale in a leveraged investment transaction completed in May 2025 offset by $12.5 million of brokered deposits called by the Company in September 2025. There were $75.0 million and $63.1 million of brokered deposits included in time deposits at September 30, 2025 and December 31, 2024, respectively.

Current wording

Deposits decreased $11.8 million to $459.0 million at March 31, 2026 from $470.8 million at December 31, 2025 primarily as a result of a $16.3 million decrease in retail deposits offset by a $4.5 million increase in commercial deposits. Core deposits (defined as deposits other than time deposits, including CDARS® and ICS deposits) increased $10.3 million, or 3.2%, to $329.1 million at March 31, 2026 from $318.8 million at December 31, 2025. As of March 31, 2026, savings deposits decreased $180,000, money market deposits increased $3.4 million, NOW and demand deposits increased $7.1 million and time deposits decreased $22.0 million. There were $58.7 million and $69.1 million of brokered deposits included in time deposits at March 31, 2026 and December 31, 2025, respectively, and $21.9 million of brokered deposits included in savings deposits. The purchase of brokered deposits offered a lower cost alternative to advances of similar duration from the Federal Home Loan Bank. Deposits from related parties totaled $11.0 million and $10.9 million at March 31, 2026 and December 31, 2025, respectively.

Previous wording

Borrowings. Total borrowings from the FHLB decreased $520,000, or 1.0%, to $51.7 million at September 30, 2025 from $52.3 million at December 31, 2024.

Current wording

Borrowings. Total borrowings from the FHLB was $52.3 million at March 31, 2026 and December 31, 2025.

Previous wording

Total Stockholders’ Equity. Total stockholders’ equity increased $1.1 million, or 1.8%, to $63.2 million at September 30, 2025 from $62.1 million at December 31, 2024. This increase was due primarily to other comprehensive income of $2.0 million related to net changes in unrealized holding losses in the available-for-sale securities portfolio as a result of decreases in market interest rates during the nine months ended September 30, 2025 and the recognition of $834,000 of previously unearned compensation offset by a net loss of $758,000 for the nine months ended September 30, 2025 and $935,000 of common stock repurchases.

Current wording

Total Stockholders’ Equity. Total stockholders’ equity decreased $937,000, or 1.5%, to $62.6 million at March 31, 2026 from $63.5 million at December 31, 2025. This decrease was due primarily to a net loss of $508,000 for the three months ended March 31, 2026 and $715,000 other comprehensive loss related to net changes in unrealized holding losses in the available-for-sale securities portfolio as a result of decreases in market interest rates during the three months ended March 31, 2026, partially offset by the recognition of $286,000 of previously unearned compensation.

Previous wording

Non-performing loans were $194,000 and $-0- at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025, non-performing loans consisted of a residential mortgage loan with an outstanding balance of $65,000 and an estimated collateral market value of $275,000, a consumer loan secured by a manufactured housing property with an outstanding balance of $117,000 and an estimated collateral market value of $124,000 and an unsecured consumer loan with an outstanding balance of $12,000. At September 30, 2025 and December 31, 2024, we had no foreclosed assets.

Current wording

Non-performing loans were $412,000 and $478,000 at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, non-performing loans consist of a residential mortgage loan and a consumer loan secured by a manufactured housing property. The non-performing residential mortgage loan with an outstanding balance of $295,000 was destroyed by a fire. Our outstanding residential mortgage loan balance is expected to be paid with insurance proceeds. The non-performing consumer loan secured by a manufactured housing property with an outstanding balance of $117,000 and an estimated market value of $140,000 is with a deceased borrower. The property is expected to be sold and outstanding balances paid. At March 31, 2026 and December 31, 2025, we had no foreclosed assets.

Previous wording

Net Income (Loss). Net loss was $758,000 for the nine months ended September 30, 2025, compared to net income of $895,000 for the nine months ended September 30, 2024, a decrease of $1.7 million. The decrease was due primarily to a decrease in non-interest income of $2.2 million and a $969,000 increase in non-interest expenses offset by a $1.1 million increase in net interest and dividend income after provision (release) for credit losses and an increase in income tax benefit of $437,000 during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Current wording

Net Loss. Net loss was $508,000 for the three months ended March 31, 2026, compared to a net loss of $603,000 for the three months ended March 31, 2025, a decrease of $95,000, or 15.8%. The decrease was due primarily to an increase in net interest and dividend income after release of credit losses of $343,000 and an increase in total non-interest income of $61,000 offset by an increase in income tax expense of $302,000 during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

Interest and Dividend Income. Total interest and dividend income increased $1.2 million, or 6.1%, to $20.0 million for the nine months ended September 30, 2025 compared to $18.9 million for the nine months ended September 30, 2024. The increase was due to a $524,000 increase in interest and dividend income on investments and a $627,000 increase in interest and fees on loans.

Current wording

Interest and Dividend Income. Total interest and dividend income increased $35,000, or 0.5%, to $6.5 million for the three months ended March 31, 2026 compared to $6.4 million for the three months ended March 31, 2025. This increase was due to a $199,000 increase in interest and dividend income on investments offset by a $164,000 decrease in interest and fees on loans.

Previous wording

Average interest-earning assets increased $18.7 million, to $593.3 million for the three months ended September 30, 2025 from $574.6 million for the three months ended September 30, 2024. The weighted average annualized yield on interest earning-assets increased to 4.65% for the three months ended September 30, 2025 from 4.56% for the three months ended September 30, 2024 primarily due to an increase in market interest rates. The weighted average annualized yield for the loan portfolio increased to 4.72% for the three months ended September 30, 2025 from 4.67% for the three months ended September 30, 2024 due primarily to an increase in market interest rates. The weighted average annualized yield for all other interest-earning assets increased to 4.46% for the three months ended September 30, 2025 from 4.22% for the three months ended September 30, 2024 due primarily to an increase in market interest rates.

Current wording

Average interest-earning assets increased $3.7 million, to $574.7 million for the three months ended March 31, 2026 from $571.0 million for the three months ended March 31, 2025. The weighted average annualized yield on interest earning-assets decreased to 4.50% for the three months ended March 31, 2026 from 4.51% for the three months ended March 31, 2025. The weighted average annualized yield for the loan portfolio increased to 4.66% for the three months ended March 31, 2026 from 4.57% for the three months ended March 31, 2025 due primarily to an increase in market loan interest rates. The weighted average annualized yield for all other interest-earning assets decreased to 4.09% for the three months ended March 31, 2026 from 4.28% for the three months ended March 31, 2025 due primarily to a decrease in market investment interest rates.

Previous wording

Interest Expense. Total interest expense decreased $121,000, or 3.4%, to $3.4 million for the three months ended September 30, 2025 from $3.6 million for the three months ended September 30, 2024. Interest expense on deposits increased $113,000, or 4.2%, to $2.8 million for the three months ended September 30, 2025 from $2.7 million for the three months ended September 30, 2024. The average balance of interest-bearing deposits increased $39.0 million, or 10.4%, to $414.8 million for the three months ended September 30, 2025 from $375.8 million for the three months ended September 30, 2024 primarily as a result of an increase in the average balance of time deposits. The weighted average annualized rate of interest-bearing deposits decreased to 2.72% for the three months ended September 30, 2025 from 2.88% for the three months ended September 30, 2024 primarily as a result of a decrease in market interest rates.

Current wording

Interest Expense. Total interest expense decreased $300,000, or 9.2%, to $3.0 million for the three months ended March 31, 2026 from $3.3 million for the three months ended March 31, 2025. Interest expense on deposits decreased $255,000, or 9.8%, to $2.3 million for the three months ended March 31, 2026 from $2.6 million for the three months ended March 31, 2025. The average balance of interest-bearing deposits decreased $992,000, or 0.3%, to $391.4 million for the three months ended March 31, 2026 from $392.4 million for the three months ended March 31, 2025 primarily as a result of a decrease in the average balances of money market deposits, savings deposits and time deposits offset by an increase in the average balances of NOW and demand deposits. The weighted average annualized rate of interest-bearing deposits decreased to 2.39% for the three months ended March 31, 2026 from 2.65% for the three months ended March 31, 2025 primarily as a result of a decrease in market interest rates.

Previous wording

Net Interest and Dividend Income. Net interest and dividend income increased $465,000, or 15.6%, to $3.4 million for the three months ended September 30, 2025 from $3.0 million for the three months ended September 30, 2024. This increase was due to an increase of $18.7 million, or 3.3%, in the average balance of interest-earning assets, consisting primarily of an increase in the average balance of taxable debt securities offset by a decrease in the average balance of non-taxable debt securities during the three months ended September 30, 2025, offset by a $19.8 million, or 4.4%, increase in the average balance of interest-bearing liabilities, consisting primarily of an increase in the average balance of time deposits offset by a decrease in the average balance of borrowings. Annualized net interest margin increased to 2.32% for the three months ended September 30, 2025 from 2.08% for the three months ended September 30, 2024 due primarily to an increase in net interest income offset by an increase in the average balance of interest-earning assets.

Current wording

Net Interest and Dividend Income. Net interest and dividend income increased $335,000, or 10.5%, to $3.5 million for the three months ended March 31, 2026 from $3.2 million for the three months ended March 31, 2025. This increase was due to an increase of $3.7 million, or 0.6%, in the average balance of interest-earning assets, consisting primarily of an increase in the average balance of taxable debt securities offset by a decrease in the average balance of interest-earning loans, during the three months ended March 31, 2026 and a $4.1 million, or 0.9%, decrease in the average balance of interest-bearing liabilities, consisting of decreases in the average balances of interest-bearing deposits and borrowings. Annualized net interest margin increased to 2.45% for the three months ended March 31, 2026 from 2.23% for the three months ended March 31, 2025 due primarily to an increase in net interest income.

Previous wording

Provision (Release) for Credit Losses. Based on management’s analysis of the ACL, a $50,000 provision for credit losses was recorded for the nine months ended September 30, 2025, compared to a $(20,000) release of credit losses for the nine months ended September 30, 2024. The provision for credit losses for the nine months ended September 30, 2025 consisted of a $30,000 provision for credit losses on loans and a $20,000 provision for credit losses on off-balance sheet credit exposures. The release of credit losses for the nine months ended September 30, 2024 consisted of a $80,000 provision for credit losses on loans and a $(100,000) release of credit losses on off-balance sheet credit exposures.

Current wording

Release of Credit Losses. Based on management’s analysis of the ACL, an $(8,000) release of credit losses was recorded for the three months ended March 31, 2026, compared to a $-0- release of credit losses for the three months ended March 31, 2025. The release of credit losses for the three months ended March 31, 2026 consisted of $-0- provision for credit losses on loans and an $(8,000) release of credit losses on off-balance sheet credit exposures. The release of credit losses for the three months ended March 31, 2025 consisted of $30,000 provision for credit losses on loans and a $(30,000) release of credit losses on off-balance sheet credit exposures.

Previous wording

Non-Interest Income. Non-interest income increased $180,000, or 49.5%, to $544,000 for the three months ended September 30, 2025 compared to $364,000 for the three months ended September 30, 2024. The increase in non-interest income during the three months ended September 30, 2025 was due primarily to a $95,000 increase in customer service fees and an $88,000 increase in gain on sale of loans. During the three months ended September 30, 2025 a commercial and industrial loan originated under the Small Business Administration7(a) Guarantee program was sold. The 75% guarantee portion of the loan was sold, on a servicing-retained basis, at a gain of $102,000.

Current wording

Non-Interest Income. Non-interest income increased $61,000, or 17.4%, to $412,000 for the three months ended March 31, 2026 compared to $351,000 for the three months ended March 31, 2025. The increase in non-interest income during the three months ended March 31, 2026 was due primarily to an increase in customer service fees.

Previous wording

Non-Interest Expense. Non-interest expense increased $268,000, or 6.8%, to $4.2 million for the three months ended September 30, 2025 from $3.9 million for the three months ended September 30, 2024. The increase was primarily due to an $89,000, or 4.1%, increase in salaries and employee benefits, a $73,000, or 44.5%, increase in equity compensation, a $57,000, or 16.6%, increase in data processing and a $55,000, or 67.1%, increase in deposit insurance fees. The increase in salaries and employee benefits was due to normal salary increases. The increase in equity compensation expense was due to the incentive and non-statutory stock options granted in December 2024.

Current wording

Non-Interest Expense. Non-interest expense increased $7,000, or 0.2%, to $4.2 million for the three months ended March 31, 2026 and March 31, 2025. The increase was primarily due to a $73,000 increase in salaries and employee benefits and a $57,000 increase in occupancy expense offset by a $19,000 decrease in director compensation, a $28,000 decrease in employee travel and education expenses and a $55,000 decrease in professional fees and assessment. The increase in salaries and employee benefits was due to normal salary increases.

Previous wording

Income Taxes. Income tax benefit decreased $44,000, or 6.9%, to $596,000 for the three months ended September 30, 2025 from $640,000 for the three months ended September 30, 2024. The effective tax rate was (289.3)% and (107.4)% for the three months ended September 30, 2025 and 2024, respectively. The income tax benefit and effective tax rate for the three months ended September 30, 2025 was greater than statutory federal and state rates due primarily to a $499,000 reduction of the deferred tax asset valuation allowance as of September 30, 2025 resulting from the change in accumulated other comprehensive income during the three months ended September 30, 2025. The income tax benefit and effective tax rate for the three months ended September 30, 2024 was greater than statutory federal and state rates due primarily to the reduction of $802,000 of the deferred tax asset valuation allowance as of September 30, 2024 resulting from the change in accumulated other comprehensive income during the three months ended September 30, 2024, offset by a $742,000 decrease in loss before income tax benefit.

Current wording

Income Taxes. Income tax expense increased $302,000 to an income tax expense of $273,000 for the three months ended March 31, 2026 from an income tax benefit of $(29,000) for the three months ended March 31, 2025. The effective tax rate was (116.2)% and 4.6% for the three months ended March 31, 2026 and 2025, respectively. Loss before income tax expense (benefit) was $(235,000) for the three months ended March 31, 2026 as compared to $(632,000) for the three months ended March 31, 2025. The income tax expense and effective tax rate for the three months ended March 31, 2026 was greater than statutory federal and state rates due primarily to a $392,000 increase in the deferred tax asset valuation allowance during the three months ended March 31, 2026. The income tax benefit and effective tax rate for the three months ended March 31, 2025 was less than statutory federal and state rates due primarily to a $120,000 increase in the deferred tax asset valuation allowance during the three months ended March 31, 2025. Net deferred tax assets of $7.1 million and $7.0 million as of March 31, 2026 and 2025, respectively, were reduced by a 100% valuation allowance because management believes that it is more likely than not that the benefit of these deferred tax assets will not be realized. The ultimate realization of these deferred tax assets is dependent upon the generation of future taxable income. The valuation allowance for these net deferred tax assets may be adjusted in the future if estimates of taxable income during the carryforward period are increased.

Previous wording

Net deferred fee expense included in loan interest totaled $138,000 and $153,000 for the three months ended September 30, 2025 and 2024, respectively.

Current wording

(4) Net deferred fee expense included in loan interest totaled $(122,000) and $(141,000) for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. As of September 30, 2025 and December 31, 2024, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, had an estimated value not exceeding $111.9 million, or 23.3% of total deposits, and $112.2 million, or 24.7% of total deposits, respectively. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the FHLB and FRB as supplemental sources of funds. At September 30, 2025 and December 31, 2024, we had $51.7 million and $52.3 million outstanding in advances from the FHLB, respectively, and the ability to borrow an additional $98.7 million and $94.0 million, respectively.

Current wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. As of March 31, 2026 and December 31, 2025, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was an estimated value not exceeding $110.0 million, or 24.0% of total deposits, and $107.7 million, or 22.9% of total deposits, respectively. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the FHLB and FRB as supplemental sources of funds. At March 31, 2026 and December 31, 2025, we had $52.3 million outstanding in advances from the FHLB and the ability to borrow an additional $94.4 million and $96.6 million, respectively.

Previous wording

At September 30, 2025 and December 31, 2024, the Bank had an overnight line of credit with the FHLB for up to $3.0 million. The Bank has a secured credit facility with the FRB – BIC Program. The Bank’s unused available borrowing capacity at the FRB was $37.6 million and $-0- at September 30, 2025 and December 31, 2024, respectively. Additionally, at September 30, 2025 and December 31, 2024, the Bank had a $2.0 million unsecured Fed Funds borrowing line of credit with a correspondent bank. At September 30, 2025 and December 31, 2024, there were no outstanding balances under any of these additional credit facilities.

Current wording

At March 31, 2026 and December 31, 2025, the Bank had an overnight line of credit with the FHLB for up to $3.0 million. The Bank has a secured credit facility with the FRB – BIC Program. The Bank’s unused available borrowing capacity at the FRB was $37.3 million and $34.1 million at March 31, 2026 and December 31, 2025, respectively. Additionally, at March 31, 2026 and December 31, 2025, the Bank had a $2.0 million unsecured Fed Funds borrowing line of credit with a correspondent bank. At March 31, 2026 and December 31, 2025, there were no outstanding balances under any of these additional credit facilities.

Previous wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash provided (used) by operating activities was $1.1 million and $(1.2) million for the nine months ended September 30, 2025 and 2024, respectively. Net cash used by investing activities, which consists primarily of disbursements for loan originations and purchases and the purchase of securities available-for-sale, offset by proceeds from the sale of land and building, principal collections on loans and proceeds from the sale, maturity and principal payments on securities available-for-sale, was $14.4 million and $10.1 million for the nine months ended September 30, 2025 and 2024, respectively. Net cash provided by financing activities, consisting primarily of activity in deposit accounts and FHLB advances offset by treasury stock purchases, was $25.8 million and $21.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash provided by operating activities was $547,000 and $573,000 for the three months ended March 31, 2026 and 2025, respectively. Net cash provided (used) by investing activities, which consists primarily of loan principal collections, net of disbursements for loan originations, and proceeds from the sale, maturity and principal payments on securities available-for-sale, net of securities available-for-sale purchases, was $9.4 million and $(13.3) million for the three months ended March 31, 2026 and 2025, respectively. Net cash (used) provided by financing activities, consisting primarily of activity in deposit accounts and FHLB advances offset by treasury stock purchases, was $(10.6) million and $11.8 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

First Seacoast Bancorp, Inc. is a separate legal entity from First Seacoast Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At September 30, 2025, the Company (on an unconsolidated basis) had liquid assets of $16.1 million.

Current wording

First Seacoast Bancorp, Inc. is a separate legal entity from First Seacoast Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At March 31, 2026, the Company (on an unconsolidated basis) had liquid assets of $16.5 million.