ECB Bancorp, Inc. /MD/

NOTE1 – NATURE OF OPERATIONS

ECB Bancorp, Inc., a Maryland corporation (the “Company”), is a bank holding company, the subsidiary of which is Everett Co-operative Bank (the “Bank”), a state chartered bank. The Bank was founded in1890 and is headquartered in Everett, Massachusetts. The Bank operates its business from its main office,two branches and a separate administrative office, all located in eastern Massachusetts. The Bank is engaged principally in the business of attracting deposits from the general public and investing those deposits inone-to-four family residential real estate loans, commercial real estate and multifamily real estate loans, construction and land loans and home equity lines of credit and loans. To a lesser extent we also originate commercial business loans and consumer loans.

CONVERSION

On* March 9, 2022,the Board of Directors of the Bank adopted a Plan of Conversion under which the Bank would convert from a Massachusetts mutual co-operative bank into a Massachusetts stock co-operative bank and become the wholly-owned subsidiary of a newly chartered stock holding company, the Company. The Plan of Conversion received the required approvals of various regulatory agencies and the Plan of Conversion was approved by the required vote of more thantwo*-thirds of the Bank’s depositors present and voting at a special meeting of depositors held on* May 5, 2022.The Bank’s mutual to stock conversion and the Company’s stock offering were consummated on July 27, 2022.*In the offering, the Company sold 8,915,247 shares of common stock at a per share price of $10.00 for gross offering proceeds of $89.2 million. Additionally, the Company contributed 260,000 shares and $600,000 in cash to the Everett Co-operative Bank Charitable Foundation (the “Foundation”).

The Bank has established a Liquidation Account in an amount equal to the net worth of the Bank as of the date of the latest consolidated balance sheet contained in the final prospectus distributed in connection with the Company's stock conversion and stock offering. The function of the Liquidation Account is to establish a priority on liquidation of the Bank. The Liquidation Account will be maintained by the Bank for the benefit of the eligible account holders who continue to maintain deposit accounts with the Bank following the conversion. Each eligible account holder, with respect to each deposit account, holds a related inchoate interest in a portion of the Liquidation Account balance, in relation to each deposit account balance at the eligibility record date, or to such balance as it* maybe subsequently reduced, as hereinafter provided. The initial Liquidation Account balance willnot* be increased, and is subject to downward adjustment to the extent of any downward adjustment of any subaccount balance of any eligible account holder in accordance with the regulations of the Division of Banks of the Commonwealth of Massachusetts.

In the unlikely event of a complete liquidation of the Bank (and only in such event), following all liquidation payments to creditors (including those to depositors to the extent of their deposit accounts) each eligible account holder shall be entitled to receive a liquidating distribution from the Liquidation Account, in the amount of the then-adjusted subaccount balances for his or her deposit accounts then held, before any liquidating distribution* may*be made to any holder of the Bank’s capital stock.

The Bank* may**not* declare or pay a cash dividend on its outstanding capital stock if the effect thereof would cause its regulatory capital to be reduced below the amount required to maintain the Liquidation Account and under FDIC rules and regulations.

NOTE2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING POLICIES

The accounting and reporting policies of the Company and the Bank conform to accounting principles generally accepted in the United States of America (U.S. GAAP) and predominant practices within the banking industry. The consolidated financial statements are prepared using the accrual basis of accounting. The significant accounting policies are summarized below to assist the reader in better understanding the consolidated financial statements and other data contained herein.

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Principles of Consolidation

The consolidated financial statements of the Company include the balances and results of operations of its wholly-owned subsidiary Everett Co-operative Bank (the "Bank") as well as First Everett Securities Corporation, a wholly-owned subsidiary of the Bank, engaged principally in the buying and holding of investment securities. Intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance for credit losses is a significant estimate that is particularly susceptible to significant change in the near term.

Reclassification

Certain previously reported amounts have been reclassified to conform to the current period’s presentation.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash items, due from banks and short-term investments.

The Company has historically been required to maintain certain vault cash and/or deposits with the Federal Reserve Bank of Boston. However, no reserve is required at* December 31, 2025or2024.*

Securities

The Company classifies securities at the time of purchase intoone ofthree categories: held-to-maturity (HTM), available-for-sale (AFS), or trading. These security classifications* maybe modified after acquisition only under certain specified conditions. In general, debt securities may*be classified as held-to-maturity only if the Company has the positive intent and ability to hold them to maturity. Trading securities are defined as those bought and held principally for the purpose of selling them in the near term. All other debt securities must be classified as available-for-sale.

Purchase premiums and discounts are recognized in interest income, using the interest method. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Such gains and losses are recognized within non-interest income within the consolidated statements of income.

For AFS securities in an unrealized loss position, management willfirst evaluate whether there is intent to sell a security, or if it is more likely thannot that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis. If either of these criteria are met, the Company will record a write-down of the security’s amortized cost basis to fair value through income. For those AFS securities which donot meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors. In performing this assessment, management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S. federal government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors. If this assessment indicates the existence of credit losses, an allowance for credit losses will be established, as determined by a discounted cash flow analysis. To the extent the estimated cash flows donot support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

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Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when the security is determined to be uncollectible, or when either of the afore-mentioned criteria surrounding intent or requirement to sell have been met. No allowance for credit losses was recorded for AFS securities as of* December 31, 2025and2024*.

Debt securities are placed on non-accrual status at the time any principal or interest payments become90 days delinquent. Interest accrued butnot received for a security placed on non-accrual is reversed against current interest income.

Refer to Note3, “Investments in Securities” for additional information regarding the measurement of impairment losses on AFS securities.

The Company measures expected credit losses on held to maturity securities on a collective basis by major security type. Management classifies the held-to maturity portfolio into the following major security types: U.S. Government Sponsored Enterprises, U.S. Treasury, Agency Mortgage-Backed Securities, and Corporate Bonds.

Refer to Note3, “Investments in Securities” for additional information regarding the measurement of credit losses on HTM securities.

Federal Home Loan Bank Stock

The Bank, as a member of the Federal Home Loan Bank of Boston (FHLB), is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock hasno quoted market value and is carried at cost. The Company reviews its investment in capital stock of the FHLB for impairment based on the ultimate recoverability of the cost basis in the FHLB stock.

Loans Held-for-Sale

Loans held-for-sale are carried at the lower of amortized cost or estimated fair value in the aggregate. Net unrealized losses are recognized through a valuation allowance and recorded in noninterest income. Fair value is based on committed secondary market prices. No losses have been recorded during2025 or2024. Gains or losses on sales of mortgage loans are recognized in the Consolidated Statements of Income at the time of sale. Interest income is recognized on loans held for sale between the time the loan is funded and the loan is sold. Direct loan origination costs and fees are deferred upon origination and are recognized in the Consolidated Statements of Income on the date of sale.

Loans

Loans that the Company has the intent and ability to hold until maturity or payoff are carried at amortized cost (net of the allowance for credit losses). Amortized cost is the principal amount outstanding, adjusted by partial charge-offs and net of any deferred loan costs or fees. For originated loans, loan fees and certain direct origination costs are deferred and amortized into interest income over the contractual life of the loan using the level-yield method. When a loan is paid off, the unamortized portion is recognized in interest income. Interest income on loans is accrued based upon the daily principal amount outstanding except for loans on nonaccrual status. As a general rule, loans more than90 days past due with respect to principal or interest are classified as nonaccrual loans, or sooner if management considers such action to be prudent. However, loans that are more than90 days past due* maybe kept on an accruing status if the loan is well secured and in the process of collection. Income accruals are suspended on all nonaccrual loans in a timely manner and all previously accrued and uncollected interest is reversed against current income. A loan can be returned to accrual status when collectibility of principal and interest is reasonably assured and the loan has performed for a period of time, generally at leastsix* months. When doubt exists as to the collectibility of a loan, any payments received are applied to reduce the amortized cost of the loan to the extent necessary to eliminate such doubt. For all loan portfolios, a charge-off occurs when the Company determines that a specific loan, or portion thereof, is uncollectible. This determination is made based on management's review of specific facts and circumstances of the individual loan, including the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform.

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Allowance for Credit Losses

The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses on loans measured at amortized cost. Credit losses are charged against the allowance when management's assessments confirm that the Company willnot collect the full amortized cost basis of a loan. Subsequent recoveries, if any, are credited to the allowance. Under the current expected credit loss methodology (CECL) methodology, the Company estimates credit losses for financial assets on a collective basis for loans sharing similar risk characteristics. The Company segments financial assets with similar risk characteristics and has elected to segment its loans based on Federal Call codes used for reporting loans to the Federal Deposit Insurance Corporation as part of the Call Report process. These segments are collectively evaluated for expected credit losses using a quantitative Discounted Cash Flow ("DCF") model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The Company has elected to use this approach because DCF models allow for effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner and peer data is available for certain inputs such as the probability of default and the loss given default. The quantitative model utilizes a loss factor based approach to estimate expected credit losses, which are derived from internal historical and industry peer loss experience. The model estimates expected credit losses using loan level data over the estimated life of the exposure, considering the effect of prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the historical long-run average using the straight-line reversion method. Management periodically evaluates a reasonable and supportable forecast period and a reversion period to be appropriate for purposes of estimating expected credit losses. The qualitative risk factors impacting the expected risk of loss within the portfolio include the following:

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each loan segment are as follows:

One-to-four residential real estate and home equity lines of credit and loans: The Company generally doesnot originate loans with a loan-to-value ratio greater than 80 percent without requiring private mortgage insurance. Loans in these segments are collateralized primarily by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in these segments.

Commercial real estate and multi-family residential: Loans in these segments are primarily income-producing properties throughout Massachusetts. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates which, in turn, will have an effect on the credit quality in these segments. Management periodically obtains rent rolls and continually monitors the cash flows of these loans.

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Construction: The loans in this segment are residential and commercial construction-to-permanent loans collateralized by owner-occupied residential and commercial real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Commercial: Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Consumer: Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower.

Loans that donot share similar risk characteristics with any pools of assets are subject to individual evaluation and are removed from the collectively assessed pools to avoid double counting. This generally includes loans on non-accrual status and loans that are90 days or greater past due. For the loans that will be individually evaluated, the Company will use either a discounted cash flow (“DCF”) approach or a fair value of collateral approach. The latter approach will be used for loans deemed to be collateral dependent or when foreclosure is probable.

Accrued interest receivable amounts are excluded from balances of loans held at amortized cost and are included within accrued interest receivable in the consolidated balance sheets. Management has electednot to measure an allowance for credit losses on these amounts as the Company employs a timely write-off policy. Consistent with the Company's policy for nonaccrual loans, accrued interest receivable is typically written off when loans reach90 days past due and are placed on nonaccrual status.

In the ordinary course of business, the Company enters into commitments to extend credit. Such financial instruments are recorded in the financial statements when they are funded. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for credit losses on loans with an additional assumption of probability of funding. The reserve for unfunded lending commitments is included in other liabilities in the consolidated balance sheets.

Bank Owned Life Insurance

The Company holds bank-owned life insurance on the lives of certain participating employees. The amount reported as an asset on the Consolidated Balance Sheets is the sum of the cash surrender values ("CSV") reported to the Company by the various insurance carriers. Increases in the cash surrender value of life insurance policies, as well as benefits received net of any cash surrender value, are recorded in other noninterest income, and are generallynot subject to income taxes. The Company reviews the financial strength of the insurance carriers prior to the purchase of life insurance policies andno less than annually thereafter. Regulatory requirements limit the total amount of CSV to be held with any individual carrier to15% of Tier1 capital (as defined for regulatory purposes) and the total CSV of all life insurance policies is limited to25% of Tier1 capital.

Premises and Equipment

Land is carried at cost. Buildings, leasehold improvements and furniture and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease terms or the estimated lives of the improvements. Expected lease terms include lease options to the extent that the exercise of such options is reasonably assured.

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Leases

Leases are evaluated at inception to determine if leases should be classified as an operating or finance lease. Leases are recognized as right-of-use lease assets and lease liabilities. The discount rate used in determining the present value of lease payments is based on the Company’s incremental borrowing rate for borrowings with terms similar to each lease at commencement date. The Company recognizes lease expense for operating leases on a straight-line basis.

Other Real Estate Owned

Real estate properties and other assets, which have served as collateral to secure loans, are held for sale and are initially recorded at fair value less estimated costs to sell at the date control is established, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated costs to sell) of the foreclosed asset is charged to the allowance for credit losses. Subsequent declines in the fair value of the foreclosed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the valuation allowance, butnot below zero. Upon a sale of a foreclosed asset, any excess of the carrying value over the sale proceeds is recognized as a loss on sale. Any excess of sale proceeds over the carrying value of the foreclosed asset isfirst applied as a recovery to the valuation allowance, if any, with the remainder being recognized as a gain on sale. Operating expenses and changes in the valuation allowance relating to foreclosed assets are recorded in other noninterest expense. The Company heldno other real estate owned as of* December 31, 2025and2024.*

Advertising

The Company directly expenses costs associated with advertising as they are incurred.

Stock-based Compensation

The Company recognizes stock-based compensation based on the grant-date fair value of the award withno adjustment for expected forfeitures, as forfeitures are recognized when they occur. For restricted stock awards, the Company recognizes compensation expense ratably over the vesting period for the fair value of the award, measured at the grant date. For stock option awards, the Company values awards granted using the Black-Scholes option-pricing model. The Company recognizes compensation expense for these awards on a straight-line basis over the requisite service period for the entire award (straight-line attribution method), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award that is vested at that time. The Company recognizes excess tax benefits on certain stock compensation transactions. The excess tax benefits are recorded through earnings as a discrete item within the Company’s effective tax rate during the period of the transaction.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged tonot meet the “more-likely-than-not” threshold, based upon the technical merits of the position. Estimated interest and penalties, if applicable, related to uncertain tax positions are included as a component of income tax expense.

The Company has evaluated the positions taken on its tax returns filed and the potential impact on its tax status as of* December 31, 2025*. The Company has concludedno uncertain income tax positions exist at* December 31, 2025*. The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the 2022 through2024 tax years.

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Risks and Uncertainties

Most of the Company’s business activity is with customers located within the greater Boston area. The majority of the Company’s loan portfolio is comprised of loans collateralized by real estate located in the greater Boston area.

The Company invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the consolidated balance sheet or statements of income.

Ineffective liquidity management could adversely affect the Company's financial results and condition. Effective liquidity management is essential for the operation of the business. The Company requires sufficient liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on its debt obligations as they come due, and other cash commitments under both normal operating conditions and other unpredictable circumstances causing industry or general financial market stress. The Company's access to funding sources in amounts adequate to finance its activities on terms that are acceptable to the Company could be impaired by factors that affect the Company specifically, or the financial services industry or economy generally. Factors that could detrimentally impact the Company's access to liquidity sources include a downturn in the geographic markets in which our loans and operations are concentrated or difficult credit markets. The Company's access to deposits* mayalso be affected by the liquidity needs of its depositors. In particular, a portion of the Company's liabilities are checking accounts and other liquid deposits, which are payable on demand or upon several days’ notice, while by comparison, a substantial majority of the Company's assets are loans, which cannot be called or sold in the same time frame. Although the Company has historically been able to replace maturing deposits and advances as necessary, it mightnot* be able to replace such funds in the future, especially if a large number of the Company's depositors seek to withdraw their accounts, regardless of the reason. A failure to maintain adequate liquidity could materially and adversely affect the Company's business, results of operations, or financial condition.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC)Topic606**:Revenue from Contracts with Customers. The Company’s principal revenue streams come from interest and dividend income and mortgage banking activities – which are specifically excluded from the scope of Topic606. Revenue streams within the scope of Topic606 such as customer service and account maintenance fees, deposit charges, ATM interchange and other transaction fees represent an immaterial percentage of total revenue and are recognized when the Company’s performance obligations have been satisfied.

Earnings Per Share

Basic earnings per share is calculated by dividing the income available to common shares by the weighted-average number of common shares outstanding during the period. Diluted earnings per share have been calculated in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potential dilutive common shares (such as those resulting from the exercise of stock options) were issued during the period, computed using the treasury stock method. Unallocated ESOP shares arenot deemed outstanding for earnings per share calculations.

Common Share Repurchases

Shares repurchased by the Company under the Company’s share repurchase program have been classified as authorized but unissued shares. The cost of shares repurchased by the Company has been accounted for as a reduction to common stock and additional paid in capital balances. Under Maryland corporation law, repurchased shares arenot classified as Treasury shares; but rather, are classified as authorized but unissued shares. U.S. GAAP states that the accounting for share repurchases shall conform to state law where applicable.

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Employee Stock Ownership Plan ("ESOP")

ESOP shares are shown as a reduction of equity and are presented in the consolidated statements of changes in shareholders’ equity as unallocated common stock held by ESOP. Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the average fair market value of the shares during the period. The Company recognizes compensation expense ratably over the period based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. When the shares are released, unallocated common stock held by ESOP is reduced by the cost of the ESOP shares released and the difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. The loan receivable from the ESOP isnot reported as an asset nor is the Company’s guarantee to fund the ESOP reported as a liability on the Company’s consolidated balance sheet.

Derivatives and Hedging

Derivative instruments are carried at fair value in the Company’s financial statements. The accounting for changes in the fair value of a derivative instrument is determined by whether it has been designated and qualifies as part of a hedging relationship, and further, by the type of hedging relationship. At the inception of a hedge, the Company documents certain items, including butnot limited to the following: the relationship between hedging instruments and hedged items, the Company's risk management objectives, hedging strategies, and the evaluation of hedge transaction effectiveness. Documentation includes linking all derivatives designated as cash flow hedges to specific forecasted transactions.

The Company’s derivative instruments that are designated and qualify for hedge accounting are classified as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows associated with a recognized asset or liability, or a forecasted transaction). As such, changes in the fair value of the designated hedging instrument that is included in the assessment of hedge effectiveness are recorded in other comprehensive income and reclassified into net income in the same period or periods during which the hedged forecasted transaction affects net income. Such reclassifications are presented in the same income statement line item as the net income effect of the hedged item. If the hedging instrument isnot highly effective at achieving offsetting cash flows attributable to the revised contractually specified interest rate(s), hedge accounting will be discontinued. At that time, accumulated other comprehensive income would be frozen and amortized, as long as the forecasted transactions are still probable of occurring. If a cash flow hedge is terminated, hedge accounting treatment would be retained, and accumulated other comprehensive income would be frozen and amortized, as long as the forecasted transactions are still probable of occurring

RECENT ACCOUNTING STANDARDS

The Company qualifies as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of2012 and* may*elect to defer the adoption of new or revised accounting standards until the nonpublic company effective dates.

In* December 2023,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU")2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures.* These amendments require that public business entities on an annual basis disclose specific categories in the rate reconciliation. ASU2023-09 also requires entities to provide additional information for reconciling items that meet a quantitative threshold. The Company adopted ASU2023-09 as of* December 31, 2025withno* significant impact on our income tax disclosures.

In* November 2024,FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220*-40): Disaggregation of Income Statement Expenses*, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after* December 15, 2026,and for interim periods within fiscal years beginning after December 15, 2027.Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the new guidance to determine the impact it may*have on its consolidated financial statements and related disclosures, but expects additional disclosures upon adoption.

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NOTE3 – INVESTMENTS IN SECURITIES

Available-for-Sale Securities

Investments in securities have been classified in the consolidated balance sheets according to management’s intent. The following tables summarize the amortized cost, allowance for credit losses, and fair value of securities and their corresponding amounts of unrealized gains and losses for available-for-sale at the dates indicated:

The Company didnot record a provision for estimated credit losses on any available-for-sale securities for the years ended* December 31, 2025* or* December 31, 2024*. Excluded from the table above is accrued interest on available-for-sale securities of $335,000 and $16,000 at* December 31, 2025and December 31, 2024,respectively, which is included within accrued interest receivable in the Consolidated Balance Sheets. Additionally, the Company didnot record any write-offs of accrued interest income on available for sale securities for the years ended December 31, 2025* and* December 31, 2024*. No securities held by the Company were delinquent on contractual payments at* December 31, 2025* and* December 31, 2024*, nor were any securities placed on non-accrual status for the year then ended.

The aggregate fair value and unrealized losses of available-for-sale securities that have been in a continuous unrealized loss position for less thantwelve months and fortwelve months or more, and haveno allowance for credit losses, are as follows as of* December 31, 2025* and* December 31, 2024*:

Management evaluates securities for expected credit losses at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.

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Held-to-Maturity Securities

The following tables summarize the amortized cost, allowance for credit losses, and fair value of securities and their corresponding amounts of unrealized gains and losses for held-to-maturity at the dates indicated:

The Company measures expected credit losses on held to maturity securities on a collective basis by major security type. Management classifies the held-to-maturity portfolio into the following major security types: U.S. Government Sponsored Enterprises, U.S. Treasury, Agency Mortgage-Backed Securities, and Corporate Bonds.

Debt securities issued by U.S. government-sponsored enterprises, U.S. Treasury securities and mortgage-backed securities are guaranteed by the U.S. federal government or other government sponsored agencies and have a long history ofno credit losses. As a result, management has determined these securities to have azero loss expectation. The Company's investments in corporate bonds are deemed “investment grade” and (a) the Company doesnot intend to sell these securities before recovery and (b) it is more likely thannot that the Company willnot be required to sell these securities before recovery. Therefore the Company didnot record a provision for estimated credit losses on any held to maturity securities during the year ended* December 31, 2025* and* December 31, 2024*. Excluded from the table above is accrued interest on held to maturity securities of $237,000 and $378,000 at* December 31, 2025and2024*. respectively, which is included within accrued interest receivable in the Consolidated Balance Sheets. Additionally, the Company didnot record any write-offs of accrued interest income on held to maturity securities for the year ended* December 31, 2025* and* December 31, 2024*. No securities held by the Company were delinquent on contractual payments at* December 31, 2025* or* December 31, 2024*, nor were any securities placed on non-accrual status for the year then ended.

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Held-to-Maturity and Available-for-Sale Securities

The actual maturities of certain available-for-sale or held-to-maturity securities* maydiffer from the contractual maturities because borrowers mayhave the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of available-for-sale and held-to-maturity securities as of December 31, 2025* is presented below:

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. There wereno sales of securities during the years ended* December 31, 2025or2024.*

The carrying value of securities pledged to secure advances from the FHLB were $48.5 million and $55.5 million as of* December 31, 2025* and* December 31, 2024*, respectively.

The carrying value of securities pledged to secure advances from the Federal Reserve Bank (“FRB”) was $18.7 million and $16.0 million as of* December 31, 2025* and* December 31, 2024*, respectively.

NOTE4 – LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Loans consisted of the following as of the dates indicated:

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. As of* December 31, 2025and2024*, accrued interest receivable for loans totaled $4.6 million and $3.5 million, respectively, and is included in the "Accrued interest receivable" line item on the Company's Consolidated Balance Sheets.

The Company elected to exclude net deferred loan fees from the amortized cost basis of loans disclosed throughout this footnote.

The carrying value of loans pledged to secure advances from the FHLB was $920.9 million and $744.6 million as of* December 31, 2025* and* December 31, 2024*, respectively.

The carrying value of loans pledged to secure advances from the FRB was $114.7 million as of* December 31, 2025.There wereno loans pledged to the FRB at December 31, 2024.*

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The following tables set forth information regarding the allowance for credit losses as of and for the years ended* December 31, 2025* and* December 31, 2024*:

During the year ended* December 31, 2025,the total provision for losses was $1,534,000 of which $1,457,000 relates to the provision for losses on loans while $77,000 relates to the provision for losses on off-balance sheet commitments. During the year ended December 31, 2024,*the total provision for losses was $174,000 of which $296,000 relates to the provision for losses on loans while ($122,000) relates to a benefit for losses on off-balance sheet commitments.

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The following table shows the age analysis of past due loans as of the dates indicated:

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As of* December 31, 2025*, the Company's collateral-dependent residential real estate loans and home equity lines of credit and loans had amortized cost bases of $1.1 million and $43,000, respectively. These loans are secured by real estate withno related allowance for credit losses.

As of* December 31, 2024*, the Company's collateral-dependent residential real estate loans and home equity lines of credit and loans had amortized cost bases of $1.9 million and $85,000, respectively. These loans are secured by real estate withno related allowance for credit losses.

The following table shows information regarding nonaccrual loans as of the dates indicated:

Credit Quality Information

The Company's loan rating system for multi-family and commercial real estate, construction, commercial loans and certain residential and home equity lines of credit is as follows:

Loans rated1 –6: Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated7: Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated8: Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Bank will sustain some loss if the weakness isnot corrected.

Loans rated9: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated10: Loans in this category are considered uncollectible (loss) and of such little value that their continuance as loans isnot warranted.

On an annual basis, or more often if needed, the Company formally reviews the ratings on all commercial loans with aggregate potential outstanding balances of $500,000 or more, and all commercial real estate loans (including multi-family and construction loans as well as residential and home equity line of credit loans to commercial borrowers) with aggregate potential outstanding balances of $2.0 million or more. For loans that arenot formally rated, the Company initially assesses credit quality based upon the borrower’s ability to pay and subsequently monitors these loans based on the borrower’s payment activity.

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The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of* December 31, 2025* and* December 31, 2024*:

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(1) All loansnot formally rated were accruing as of* December 31, 2025*. Non-accrual loans that werenot formally rated amounted to $526,000 as of* December 31, 2024*.

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At* December 31, 2025*, the Company hadno consumer mortgage loans secured by residential real estate property in the process of foreclosure. At* December 31, 2024*, the Company hadone consumer mortgage loan secured by residential real estate property in the process of foreclosure for $335,000.

For the years ended* December 31, 2025* and* December 31, 2024*, the Company didnot provide loan modifications involving borrowers that are experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification, if applicable. The Allowance for Credit Losses ("ACL") incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. Because the effect of most modifications made to borrowers experiencing financial difficulty would already be included in the ACL as a result of the measurement methodologies used to estimate the allowance, a change in the ACL is generallynot recorded upon modification.

NOTE5 – PREMISES AND EQUIPMENT

The following is a summary of premises and equipment as of* December 31:*

Depreciation and amortization expense for the years ended* December 31, 2025and2024* amounted to $297,000 and $302,000, respectively.

NOTE6 – LEASES

The Company has operating leases for office space andtwo branch locations. These leases have remaining lease terms ofone year tofive years and certain of these leases have options to extend the lease for up tofifteen years. The options to extend have been included in the lease term if it was determined that it was reasonably certain that the Company will exercise the option.

All of the Company's leases are classified as operating leases. The right-of-use assets and corresponding lease liabilities are classified within “other assets” and “other liabilities,” respectively, in the accompanying consolidated balance sheets.

As of the dates indicated, the Company had the following related to operating leases:

Lease expense for the years ended* December 31, 2025* and* December 31, 2024* amounted to $203,000 and $200,000, respectively.

The calculated amount of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company's lease agreements include options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use assets and lease liabilities. The weighted average remaining lease term for operating leases at* December 31, 2025and2024* was 10.0 years and 7.6 years, respectively. The weighted average discount rate was 4.58% and 4.28% at* December 31, 2025and2024*, respectively.

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The following table sets forth the remaining minimum rental payments related to operating leases outstanding as of* December 31, 2025*.

NOTE7 – DEPOSITS

The aggregate amount of time deposit accounts in denominations that meet or exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit (currently*$250,000*) at* December 31, 2025and2024* was $334.8 million and $258.7 million, respectively.

The aggregate amount of brokered time deposits at* December 31, 2025and2024* was $134.0 million and $125.6 million, respectively. All brokered time deposits are in denominations less than*$250,000.*

For time deposits as of* December 31, 2025*, the scheduled maturities for each of the following years ended* December 31*are (in thousands):

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NOTE8 – BORROWINGS

Borrowings consist of advances borrowed from the FHLB.

Maturities of advances from the FHLB for the years ending after* December 31, 2025* and* December 31, 2024* are summarized as follows (dollars in thousands):

Certain borrowings from the FHLB are callable by the FHLB prior to maturity.

Borrowings from the FHLB are secured by a blanket lien on qualified collateral, consisting primarily of loans withfirst mortgages secured byone-to-four family, multifamily and commercial real estate properties and other qualified assets.

At* December 31, 2025and2024*, the interest rates on FHLB advances ranged from 0.82% to 4.95% and 0.82% to 4.95%, respectively.

At* December 31, 2025and2024*, the Bank had a $2.2 million line of credit established with the FHLB. There wereno advances on this line. The available borrowing capacity with the FHLB was $395.4 million as of* December 31, 2025* and $328.5 million as of* December 31, 2024*.

At* December 31, 2025and2024*, the Bank had a $15.0 million and $10.0 million line of credit established with the Atlantic Community Bankers Bank, respectively. There wereno advances on this line.

At* December 31, 2025* and2024, the Bank had a line of credit established with the FRB with unused borrowing capacity of $75.7 million and $15.1 million, respectively

NOTE9 – EMPLOYEE BENEFIT PLANS

Pension Plans

401(k) Plan

The Company has adopted a savings plan which qualifies under Section401(k) of the Internal Revenue Code and provides for voluntary contributions by participating employees ranging from1% to75% of their compensation, subject to certain limitations based on federal tax laws. The Bank makes matching contributions equal to 100% of each eligible employee’s voluntary contributions, up to 7% of the employee’s eligible wages.

Total expense related to the401(k) plan for the years ended* December 31, 2025and2024* amounted to $551,000 and $473,000, respectively.

Employee Incentive Plan

The Company provides an employee incentive plan which is approved annually by the Board of Directors, based on various factors. The employee incentive plan expense for the years ended* December 31, 2025and2024* amounted to $1,708,000 and $1,557,000, respectively.

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Supplemental Executive Retirement Plan (SERP)

The Bank has a SERP for certain former executive officers. The SERP provides nonfunded retirement benefits designed to supplement benefits available through the Bank’s other retirement plans for employees. The liability for the SERP amounted to $1,012,000 and $1,029,000 at* December 31, 2025and2024*, respectively.

Director Fee Continuation Plan (DFCP)

The Bank has established a DFCP which provides supplemental retirement benefits for directors. Under the DFCP, individuals who are directors as of the effective date of the DFCP are 100% vested in their benefits. Individuals who become directors after the effective date become fully vested in their accounts after having served on the Board of Directors fortwelve years. Effective* December 2025,*the plan was amended and frozen so that only directors serving on the Board of Directors as of the closing of the initial public offering are eligible to participate in the plan.

The following tables set forth information about the SERP and DFCP as of* December 31*and the years then ended:

Amounts recognized in accumulated other comprehensive income as of* December 31, 2025and2024*, before tax effect, consist of:

The accumulated benefit obligation and unfunded status of the SERP was $1,012,000 and $1,029,000 at* December 31, 2025and2024*, respectively, and is classified within “other liabilities” in the accompanying consolidated balance sheets. The accumulated benefit obligation and unfunded status of the DFCP was $911,000 and $834,000 at* December 31, 2025and2024*, respectively, and is classified within “other liabilities” in the accompanying consolidated balance sheets.

Assumptions used to determine the benefit obligation at* December 31*are as follows:

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Components of net periodic cost (benefit) and other comprehensive loss (income) for the years ended* December 31*are as follows:

The components of net periodic benefit cost attributable to service cost for the SERP and DFCP are included in the line items "salaries and employee benefits" and "director compensation," respectively. The components of net periodic benefit cost other than the service cost component are included in the line item “other expense” in the income statement.

Assumptions used to determine the net periodic cost for years ended* December 31*are as follows:

Estimated future benefit payments, which reflect expected future service, as appropriate, as of* December 31, 2025* are as follows:

Supplemental Executive Retirement Agreement

On* January 1, 2018,the Company entered into a supplemental executive retirement agreement with an executive officer whereby the Company is obligated to provide post-retirement salary continuation benefits equal to 60% of the executive officer’s final average compensation, as defined. Benefits are100%* vested, commence upon retirement, and are payable based on aten-year certain and life annuity. The liability for the Plan amounted to $3,507,000 and $3,385,000 as of* December 31, 2025and2024*, respectively. The expense recognized for the Plan for the years ended* December 31, 2025and2024* amounted to $122,000 and $185,000, respectively.

Executive Deferred Compensation Plans

The Company has entered into deferred compensation plans withthree executive officers that allow the Company to make contributions to an account for the executive officers each year, as of* January 1,based on the prior year’s performance and the Company's intent is that the contribution equal 10% of the executive officers' salaries and bonuses. The Company maymake other contributions to the deferred compensation plans, at its discretion, at other times during the year. The expense recognized under the deferred compensation plans for the years ended December 31, 2025and2024* amounted to $137,000 and $94,000, respectively. The liability for the Executive Deferred Compensation Plans amounted to $410,000 and $273,000 as of* December 31, 2025and2024*, respectively.

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Deferred Compensation Plan for Directors

The Company maintains the Everett Co-operative Bank Deferred Compensation Plan for Directors (the “Director Deferred Compensation Plan”) to allow for certain tax planning opportunities and additional retirement income for directors of the Company. All non-employee directors are eligible to participate in the Director Deferred Compensation Plan. Under the Director Deferred Compensation Plan, directors* mayelect to defer the receipt of up to 100% of their director fees. Participants are always 100% vested in their deferred fees and any interest credited to those deferrals. Earnings are credited to a participant’s deferrals each year and are indexed annually to the highest certificate of deposit rate offered by the Bank on January**1st* of each year. The liability for the Director Deferred Compensation Plan amounted to $760,000 and $748,000 as of* December 31, 2025and2024*, respectively.

Survivor Benefit Plan

The Company entered into Survivor Benefit Plan Participation Agreements with a group of employees whereby the Company is obligated to provide up totwo years of recognized compensation, as defined, to the beneficiary if the participant dies while employed by the Company. There wasno expense recognized during2025 or2024.

Employment and Change in Control Agreements

The Company entered into an employment agreement with the Chief Executive Officer and Change in Control agreements with certain executive officers, which provide severance payments in the event of the executive’s involuntary or constructive termination of employment, including upon a termination following a change in control as defined in the agreements.

Employee Stock Ownership Plan

As part of the Initial Public Offering ("IPO") completed on* July 27, 2022,*the Bank established a tax-qualified Employee Stock Ownership Plan ("ESOP") to provide eligible employees the opportunity to own Company shares. The ESOP borrowed $7.3 million from the Company to purchase 734,020 common shares during the IPO. The loan is payable in annual installments over 20 years at an interest rate of 4.75%. As the loan is repaid to the Company, shares are released and allocated proportionally to eligible participants on the basis of each participant’s proportional share of compensation relative to the compensation of all participants. The unallocated ESOP shares are pledged as collateral on the loan.

The Company accounts for its ESOP in accordance with FASB ASC718-40, Compensation–* Stock Compensation*. Under this guidance, unreleased shares are deducted from shareholders’ equity as unearned ESOP shares in the accompanying consolidated balance sheets. The Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they are committed to be released. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the difference will be credited or debited to additional paid-in capital included within shareholders' equity. As the loan is internally leveraged, the loan receivable from the ESOP to the Company isnot reported as an asset nor is the debt of the ESOP shown as a liability in the Company’s consolidated balance sheets.

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Total compensation expense recognized in connection with the ESOP was $579,000 and $494,000 for the years ended* December 31, 2025and2024*, respectively. The following table presents share information held by the ESOP:

NOTE10 – STOCK-BASED COMPENSATION

On* September 7, 2023,the Company adopted the ECB Bancorp, Inc.2023 Equity Incentive Plan ("2023* Equity Plan”). The2023 Equity Plan authorizes 1,248,133 shares of common stock for equity based compensation awards including restricted stock awards, restricted stock units, stock options, and incentive stock options. As of* December 31, 2025*, there were 208,716 shares available for future grants.

Stock-Based Compensation - Stock Options

On* September 8, 2023,the Company granted 174,960 stock options to non-employee directors with a contractual term of 10 years. On October 31, 2023,the Company granted 589,009 stock options to employees with a contractual term of 10 years. The stock options vest in equal annual installments over afive-year period. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. There wereno stock options granted for the year ended December 31, 2025* or2024. The following table represents stock option activities for the period indicated:

The total intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date.

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Stock-Based Compensation - Restricted Stock Awards

The restricted stock awards are measured based on grant-date fair value, which reflects the closing price of our stock on the date of grant. All of the restricted stock awards which have been granted to date vest over five years in equal portions beginning on thefirst anniversary date of the restricted stock award, except the restricted stock awards granted in2025 which vest inone year.

The following table represents information regarding non-vested restricted stock award activities for the periods indicated:

The following table represents the compensation expense and income tax benefit recognized for stock options and restricted stock awards for the periods indicated:

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The following table sets forth the total compensation cost related to non-vested awardsnot yet recognized and the weighted average period (in years) over which it is expected to be recognized as of* December 31, 2025* and* December 31, 2024* (dollars in thousands):

NOTE11 – INCOME TAXES

The components of income tax expense are as follows for the years ended* December 31:*

The reasons for the differences between the statutory federal income tax rate and the effective tax rates are summarized as follows for the years ended* December 31:*

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The Company had gross deferred tax assets and gross deferred tax liabilities as follows as of* December 31:*

The federal income tax reserve for credit losses at the Company’s base year amounted to $1,876,000 as of* December 31, 2025and2024*. If any portion of the reserve is used for purposes other than to absorb the losses for which it was established, approximately 150% of the amount actually used (limited to the amount of the reserve) would be subject to taxation in the year it is used. As the Company intends to use the reserve only to absorb credit losses, a deferred income tax liability of approximately $527,000 hasnot been provided as of* December 31, 2025and2024*.

At* December 31, 2025* and* December 31, 2024,the Company had a charitable contribution carryover of $160,000 and $1,356,000, respectively, which expires on December 31, 2027.Valuation allowance recorded against the related deferred tax assets was $29,000 for the year ended December 31, 2025.There wasno valuation allowance recorded for the year ended December 31, 2024.*

NOTE12 – RELATED PARTY TRANSACTIONS

During2018, the Company entered into a lease agreement with a related party for office space. The initial lease term expired in* February 2023and contains afive year option to extend, as well as a cancellation clause permitting the Company to cancel the lease anytime during the initial term withsixty* days’ notice. In* Februaryof2022,* the lease was amended to replace thefive year option to extend withthree options to extend the term oftwo years, two years andone year. In2023, the Company executed thetwo year lease extension option. In* Augustof2024,* the Company extended the lease through* February 2027.Annual rent is $48,000, payable monthly,not including an annual tenant improvement credit of $18,000. The Company is responsible for a portion of common area charges, as well as other customary leasehold costs. Net annual rental payments amounted to $32,000 and $30,000 for2025* and2024, respectively.

In addition, during* February 2022,a new lease agreement was entered into with the related party for additional office space. The initial lease term expired in February 2023and containsthree* options to extend the term oftwo years, two years andone year. Thefirst two year option was exercised during2022. In* Augustof2024,* the Company extended the lease through* February 2027.Annual rent is $28,000, payable monthly. The Company is responsible for a portion of common area charges, as well as other customary leasehold costs. Net annual rental payments amounted to $29,000 and $28,000 for2025* and2024, respectively.

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The Company utilizes the services of a law firm that is a related party for loan closings and related matters as well as general corporate legal matters. Fees for the years ended* December 31, 2025* and* December 31, 2024* were $119,000 and $117,000, respectively. Fees paid by the Company amounted to $78,000 and $67,000 for2025 and2024, respectively. The other fees were paid by borrowers, or paid by the Company and then reimbursed by borrowers.

The Company utilizes the services ofone of the members of the Board of Directors of the Company for loan closings and related matters. Fees for the years ended* December 31, 2025* and* December 31, 2024* were $202,000 and $162,000, respectively. Fees paid by the Company for the years ended* December 31, 2025* and* December 31, 2024* were $7,000 and $8,000, respectively. The other fees were paid by borrowers, or paid by the Company and then reimbursed by borrowers.

NOTE13 – FAIR VALUE MEASUREMENTS

ASC820-10, Fair Value Measurement–* Overall*, provides a framework for measuring fair value under U.S. GAAP. This guidance also allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis.

In accordance with ASC820-10, the Company groups its financial assets and financial liabilities measured at fair value inthree levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level1 – Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level2 – Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained fromthird party pricing services for identical or comparable assets or liabilities.

Level3 – Valuations for assets and liabilities that are derived from other methodologies, including option pricing models, discounted cash flow models and similar techniques, and arenot based on market exchange, dealer, or broker traded transactions. Level3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets and liabilities.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value for* December 31, 2025* and* December 31, 2024*.

Cash and Cash Equivalents

Available-for-Sale and Held-to-Maturity Securities

The Company’s investment in debt securities is generally classified within Level2 of the fair value hierarchy. For those securities, the Company obtains fair value measurements from independent pricing services which arenot adjusted by management. The fair value measurements consider observable data that considers standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data.

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FHLB Stock

The fair value of FHLB stock approximates the carrying amount based on the redemption provisions of the FHLB. These assets were classified as Level2.

Loans Held-for-Sale

The fair value of loans held for sale, whose carrying amounts approximate fair value, is based on committed secondary market prices. These assets were classified as Level2 given the use of observable inputs.

Loans

The fair value of loans is measured on an exit price basis incorporating discounts for credit, liquidity and marketability factors. Loans were classified as Level3 since the valuation methodology utilizes significant unobservable inputs.

Bank-Owned Life Insurance

The fair value of bank-owned life insurance was based upon quotations received from bank-owned life insurance dealers. These assets were classified as Level2 given the use of observable inputs.

Accrued Interest Receivable

Deposits

The fair value of deposits withno stated maturity, such as noninterest-bearing demand deposits, interest-bearing demand deposits, savings and money market accounts, was equal to their carrying amount. The fair value of certificates of deposits is valued using a replacement cost of funds approach, and discounted to the market rates and based on weighted remaining maturity. Deposits were classified as Level2 given the use of observable market inputs.

Accrued Interest Payable

Derivative Instruments

The fair value of interest rate swaps was determined using discounted cash flow analysis on the expected cash flows of the interest rate swaps. This analysis reflects the contractual terms of the interest rate swaps, including the period of maturity, and uses observable market-based inputs including interest rate curves. The inputs used to value the Company’s interest rate swaps fall within Level2 of the fair value hierarchy and as a result, the interest rate swaps were categorized as Level2 within the fair value hierarchy.

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As of* December 31, 2025and2024*, the following summarizes assets measured at fair value on a recurring basis:

Under certain circumstances, the Company makes fair value adjustments to its assets and liabilities although they arenot measured at fair value on an ongoing basis.

As of* December 31, 2025and2024*, the Bank hadno assets or liabilities for which a nonrecurring change in fair value had been recorded.

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ASC Topic825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that arenot measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value are discussed above. The estimated fair values and related carrying amounts of assets and liabilities for which fair value is only disclosed are shown below at the dates indicated:

NOTE14 – COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there isno violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and* may*require payment of a fee. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies but usually includes income producing commercial properties or residential real estate.

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Standby letters of credit are conditional commitments issued by the Company to guarantee the performance by a customer to athird party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of* December 31, 2025and2024*, the maximum potential amount of the Company’s obligation was $50,000 for standby letters of credit. The Company’s outstanding letters of credit generally have a term of less thanone year. If a letter of credit is drawn upon, the Company* mayseek recourse through the customer’s underlying line of credit. If the customer’s line of credit is also in default, the Company may*take possession of the collateral, if any, securing the line of credit.

Amounts of financial instruments whose contract amounts represent off-balance sheet credit risk are as follows as of the dates indicated:

The Company accrues for credit losses related to off-balance sheet financial instruments. Expected losses on off-balance sheet loan commitments are estimated using the same risk factors used to determine the allowance for credit losses on loans, adjusted for the likelihood that funding will occur. The allowance for off-balance sheet commitments is recorded within other liabilities on the consolidated balance sheets and amounted to $711,000 and $634,000 as of* December 31, 2025and2024*, respectively. For the year ended* December 31, 2025,the provision recorded for off-balance sheet commitments was $77,000. For the year ended December 31, 2024,*a benefit of $122,000 was recorded to reflect a reduction in allowance for off-balance sheet commitments.

NOTE15 – OTHER COMPREHENSIVE (LOSS) INCOME

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the shareholders' equity section of the consolidated balance sheets, such items, along with net income, are components of comprehensive income.

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The components of other comprehensive income (loss) and related tax effects are as follows for the years ended* December 31, 2025and2024*:

(1) Reclassification adjustments are comprised of amortization of unrecognized SERP costs reclassified into other expense.

(2) Reclassification adjustments are comprised of amortization of unrecognized DFCP costs reclassified into other expense.

(3) Reclassification adjustments are comprised of realized gains on cash flow hedges reclassified into interest expense.

Accumulated other comprehensive income as of* December 31, 2025and2024* consists of unrecognized benefit costs, net of taxes, unrealized holding gains (losses) on securities available for sale, net of tax, and fair value of cash flow hedges, net of tax, as follows:

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NOTE16 – REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements.

Management believes, as of* December 31, 2025*, that the Bank meets all capital adequacy requirements to which it is subject.

As of* December 31, 2025*, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier1 risk-based, Common Equity Tier1 risk-based and Tier1 leverage ratios as set forth in the table below. There areno conditions or events since that notification that management believes have changed the Bank’s category.

The Bank’s actual capital amounts and ratios are presented in the table as of the dates indicated:

In addition to the above minimum requirements, the Bank is subject to a Capital Conservation Buffer requirement of 2.5%. The requirement limits capital distributions and certain discretionary bonus payments to management if the Bank doesnot maintain the minimum Capital Conservation Buffer. At* December 31, 2025*, the Bank exceeded the minimum Capital Conservation Buffer.

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NOTE17 – PARENT COMPANY FINANCIAL STATEMENTS

ECB BANCORP, INC.

BALANCE SHEETS

(Dollars in thousands)

ECB BANCORP, INC.

STATEMENTS OF INCOME

(Dollars in thousands)

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ECB BANCORP, INC.

STATEMENTS OF CASH FLOWS

(Dollars in thousands)

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NOTE18 – EARNINGS PER SHARE ("EPS")

Basic earnings per share is calculated by dividing the income available to common shares by the weighted-average number of common shares outstanding during the period. Diluted earnings per share have been calculated in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potential dilutive common shares (such as those resulting from the exercise of stock options) were issued during the period, computed using the treasury stock method. Unallocated ESOP shares arenot deemed outstanding for earnings per share calculations.

For the year ended* December 31, 2025,there wereno anti-dilutive shares. For the year ended December 31, 2024,*the shares that were anti-dilutive, and therefore excluded from the calculation of diluted earnings per share, included options to purchase 758,137 shares of common stock.

NOTE19 – DERIVATIVE AND HEDGING ACTIVITIES

The Company uses derivative financial instruments to manage its interest rate risk resulting from the differences in the amount, timing, and duration of known or expected cash payments. The Company has entered into interest rate swaps to add stability to interest expense and manage exposure to interest rate movements as part of an overall risk management strategy.

An interest rate swap is an agreement wherebyone party agrees to pay a floating rate of interest on a notional principal amount in exchange for receiving a fixed rate of interest on the same notional amount, for a predetermined period of time, from asecond party. The amounts relating to the notional principal amount arenot actually exchanged. The Company has entered into interest rate swaps in which it pays fixed and receives floating interest in order to manage its interest rate risk exposure to the variability in interest cash flows on certain floating-rate FHLB Advances and brokered certificates of deposit. The interest rate swaps effectively convert the floating rate payments made on the FHLB Advances and brokered certificates of deposit to a fixed rate and consequently reduce the Company’s exposure to variability in short-term interest rates.

Derivative instruments are carried at fair value in the Company’s Consolidated Financial Statements. The accounting for changes in the fair value of a derivative instrument is dependent upon whether ornot the instrument qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship.

The Company’s interest rate swaps have been designated as and are accounted for as cash flow hedges. The changes in fair value are included in other comprehensive income and reclassified into net income in the same period or periods during which the hedged forecasted transaction affects net income.

Cash flow hedges are initially assessed for effectiveness using regression analysis. Changes in the fair value of derivatives that are designated as and that qualify as cash flow hedges are recorded in OCI and are subsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. Quarterly, a quantitative analysis is performed to monitor the ongoing effectiveness of the hedging instrument. All derivative positions were initially, and continue to be, highly effective at* December 31, 2025*.

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The following table reflects the Company's derivative position at the dates indicated below for the interest rate swaps:

The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets as of* December 31, 2025* and* December 31, 2024:*

For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company expects approximately $457,000 to be reclassified as an increase to interest expense from OCI related to the Company’s cash flow hedges in thetwelve months following* December 31, 2025*. This reclassification is due to anticipated payments that will be paid to counterparty on the swaps based upon the forward curve at* December 31, 2025*.

The maximum length of time over which the Company is currently hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable interest on existing financial instruments is 4.4 years.

The pre-tax effects of cash flow hedges on accumulated other comprehensive income and current earnings for the period indicated are as follows:

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts donot perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterpartynot secured by variation margin plus any initial margin collateral posted. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with those counterparties is remote. As of* December 31, 2025*, the Company has pledged cash collateral to a derivative counterparty totaling $3,390,000. As of* December 31, 2024,the Company has pledged cash collateral to a derivative counterparty totaling $1,100,000. As of December 31, 2024,the Company has received cash collateral from a derivative counterparty totaling $570,000. The Company mayneed to post additional collateral or may*receive collateral in the future in proportion to potential changes in the overall unrealized gain or loss position.

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