ECB Bancorp, Inc. /MD/
For the period ended Mar 31, 2026. Filed May 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
ECBK$21.45-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001437749-25-033851
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001437749-26-015758
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 59 current paragraphs.
29 unchanged; 24 reworded; 6 added; 23 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 44 previous and 44 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Significant Accounting Policies
Current report
***Federal Home Loan Bank Advances.***FHLB advances were $260.8 million at March 31, 2026, as compared to $284.8 million at December 31, 2025, or a decrease of $24.0 million, or $8.4%.
Current report
Average interest-earning assets increased $181.4 million to $1.57 billion for the three months ended March 31, 2026 from $1.39 billion for the three months ended March 31, 2025. The yield on interest-earning assets increased 44 basis points to 5.54% for the three months ended March 31, 2026 from 5.10% for the three months ended March 31, 2025.
Current report
Interest Expense. Total interest expense was $11.8 million for the three months ended March 31, 2026, as compared to $11.0 million for the three months ended March 31, 2025, an increase of $807,000, or 7.4%. The increase was driven by a $468,000 increase in interest expense on FHLB advances as well as a $339,000 increase in interest expense on deposit accounts. The increase in interest expense on FHLB advances was primarily due to an increase in the average balance of FHLB advances of $46.5 million, or 21.4%, to $263.6 million for the three months ended March 31, 2026 from $217.1 million for the three months ended March 31, 2025. The increase in interest expense on deposit accounts was due to an increase in the average balance of interest-bearing deposits of $128.6 million, or 13.6%, to $1.07 billion for the three months ended March 31, 2026 from $944.4 million for the three months ended March 31, 2025, partially offset by a decrease in the cost of interest-bearing deposits of 32 basis points to 3.48% for the three months ended March 31, 2026 from 3.80% for the three months ended March 31, 2025.
Current report
Provision for Credit Losses. The provision for credit losses was $153,000 for the quarter ended March 31, 2026, as compared to a benefit of $10,000 for the three months ended March 31, 2025. The three months ended March 31, 2025 benefited from reduced qualitative reserve factors.
Current report
Income Tax Expense. We recorded a provision for income tax expense of $1.1 million for the quarter ended March 31, 2026, as compared to $424,000 for the three months ended March 31, 2025, reflecting effective tax rates of 26.8% and 24.6%, respectively.
Removed paragraphs (23)
Previous report
Critical Accounting Policies
Previous report
Income Taxes
Previous report
We use the liability method of accounting for income taxes. Under this method, 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. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax asset will not be realized. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments may require us to make projections of future taxable income and/or to carryback to taxable income in prior years. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets.
Previous report
Securities Valuation
Previous report
We classify our investments in debt securities as either held-to-maturity or available-for-sale. Securities classified as held-to maturity are recorded at amortized cost. Available-for-sale securities are carried at fair value. We obtain our fair values from one or more third-party services. This service’s fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting our financial position, results of operations and cash flows.
Previous report
For any debt security with a fair value less than its amortized cost basis, we will determine whether we have the intent to sell the debt security or whether it is more likely than not we will be required to sell the debt security before the recovery of its amortized cost basis. If either condition is met, the Company will recognize a full impairment charge to earnings. For all other debt securities that do not meet either condition and that have expected credit losses, the credit loss will be recognized in earnings. Any non-credit related loss impairment related to all other factors will be recorded in other comprehensive income (loss). Management also assesses the nature of the unrealized losses taking into consideration factors such as changes in risk-free interest rates, general credit spread widening, market supply and demand, creditworthiness of the issuer, and quality of the underlying collateral.
Previous report
Core deposits (defined as all deposits other than certificates of deposit) increased $16.2 million, or 4.1%, to $409.2 million at September 30, 2025 from $393.0 million at December 31, 2024.
Previous report
Federal Home Loan Bank Advances. FHLB advances increased $25.8 million, or 11.0%, to $259.8 million at September 30, 2025 from $234.0 million at December 31, 2024. The increase in FHLB advances was used primarily to fund loan growth.
Previous report
Average interest-earning assets increased $188.9 million to $1.50 billion for the three months ended September 30, 2025 from $1.31 billion for the three months ended September 30, 2024. The yield on interest-earning assets increased 21 basis points to 5.35% for the three months ended September 30, 2025 from 5.14% for the three months ended September 30, 2024.
Previous report
Interest Expense. Total interest expense increased $1.1 million, or 10.1%, to $12.0 million for the three months ended September 30, 2025 from $10.9 million for the three months ended September 30, 2024. Interest expense on deposit accounts increased $753,000, or 8.6%, to $9.5 million for the three months ended September 30, 2025 from $8.8 million for the three months ended September 30, 2024, due to an increase in the average balance of interest-bearing deposits of $144.0 million, or 16.4%, to $1.02 billion for the three months ended September 30, 2025 from $879.2 million for the three months ended September 30, 2024, partially offset by a decrease in the cost of interest bearing deposits of 28 basis points to 3.70% for the three months ended September 30, 2025 from 3.98% for the three months ended September 30, 2024. Interest expense on FHLB advances increased $344,000, or 16.6%, to $2.4 million for the three months ended September 30, 2025 from $2.1 million for the three months ended September 30, 2024, due to an increase in the average balance of FHLB advances of $35.4 million, or 17.0%, to $243.7 million for the three months ended September 30, 2025 from $208.2 million for the three months ended September 30, 2024, partially offset by a decrease in the cost of FHLB advances of 2 basis points to 3.93% for the three months ended September 30, 2025 from 3.95% for the three months ended September 30, 2024.
Previous report
Provision for Credit Losses. The provision for credit losses was $183,000 for the quarter ended September 30, 2025 as compared to $46,000 for the quarter ended September 30, 2024. The increase in the provision for credit losses was driven by greater loan growth in the quarter ended September 30, 2025 than in the quarter ended September 30, 2024.
Previous report
Income Tax Expense. Income tax expense increased $412,000, or 101.7%, to $817,000 for the three months ended September 30, 2025 from $405,000 for the three months ended September 30, 2024. The effective tax rate was 25.1% and 26.3% for the three months ended September 30, 2025 and 2024, respectively.
Previous report
Net Income. We recorded net income of $5.2 million for the nine months ended September 30, 2025, compared to net income of $2.5 million for the nine months ended September 30, 2024, an increase of $2.6 million, or 103.4% in net income.
Previous report
Interest and Dividend Income. Interest and dividend income increased $7.9 million, or 16.1%, to $57.1 million for the nine months ended September 30, 2025 from $49.2 million for the nine months ended September 30, 2024. This increase was driven by a $7.7 million increase in interest and fees on loans and a $533,000 increase in interest and dividends on investment securities, partially offset by a $344,000 decrease in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $143.4 million in the average balance of the loan portfolio to $1.24 billion for the nine months ended September 30, 2025 from $1.09 billion for the nine months ended September 30, 2024, as well as an increase in the average yield of 24 basis points to 5.43% during the nine months ended September 30, 2025 from 5.19% during the nine months ended September 30, 2024. The yield for the nine months ended September 30, 2025 benefited primarily from new loans with higher rates. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 78 basis points to 3.66% during the nine months ended September 30, 2025 from 2.88% during the nine months ended September 30, 2024. The decrease in interest income on short term investments was driven by a decrease in the yield on short term investments of 103 basis points to 4.42% during the nine months ended September 30, 2025 from 5.45% during the nine months ended September 30, 2024, partially offset by an increase of $14.9 million in the average balance of short term investments to $123.1 million for the nine months ended September 30, 2025 from $108.2 million for the nine months ended September 30, 2024.
Previous report
Average interest-earning assets increased $164.3 million to $1.44 billion for the nine months ended September 30, 2025 from $1.28 billion for the nine months ended September 30, 2024. The yield on interest-earning assets increased 17 basis points to 5.24% for the nine months ended September 30, 2025 from 5.07% for the nine months ended September 30, 2024.
Previous report
Interest Expense. Total interest expense increased $3.3 million, or 10.8%, to $34.4 million for the nine months ended September 30, 2025 from $31.0 million for the nine months ended September 30, 2024. Interest expense on deposit accounts increased $3.1 million, or 12.5%, to $27.5 million for the nine months ended September 30, 2025 from $24.5 million for the nine months ended September 30, 2024, due to an increase in the average balance of interest-bearing deposits of $143.1 million, or 17.1%, to $982.6 million for the nine months ended September 30, 2025 from $839.4 million for the nine months ended September 30, 2024, partially offset by a decrease in the cost of interest bearing deposits of 15 basis points to 3.75% for the nine months ended September 30, 2025 from 3.90% for the nine months ended September 30, 2024. Interest expense on FHLB advances increased $297,000, or 4.5%, to $6.8 million for the nine months ended September 30, 2025 from $6.6 million for the nine months ended September 30, 2024, due to an increase the average balance of FHLB advances of $12.9 million, or 5.9%, to $232.4 million for the nine months ended September 30, 2025 from $219.5 million for the nine months ended September 30, 2024, partially offset by a decrease in the cost of FHLB advances of 5 basis points to 3.94% for the nine months ended September 30, 2025 from 3.99% for the nine months ended September 30, 2024.
Previous report
Net Interest and Dividend Income. Net interest and dividend income increased $4.6 million, or 25.0%, to $22.8 million for the nine months ended September 30, 2025 from $18.2 million for the nine months ended September 30, 2024. This increase was primarily due to increases in the average balance and yields on loans and investment securities as well as a decrease in the cost of interest bearing liabilities. The resulting net interest margin expanded by 23 basis points to 2.06% for the nine months ended September 30, 2025 as compared to 1.83% for the nine months ended September 30, 2024.
Previous report
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses was $1.3 million for the nine months ended September 30, 2025, as compared to $485,000 for the nine months ended September 30, 2024. The increase in the provision for credit losses was driven by greater loan growth in the nine months ended September 30, 2025 than in the nine months ended September 30, 2024.
Previous report
Noninterest Income. Noninterest income was $966,000 for the nine months ended September 30, 2025, as compared to $898,000 for the nine months ended September 30, 2024, or an increase of $68,000, or 7.6%. The table below sets forth our noninterest income for nine months ended September 30, 2025 and 2024:
Previous report
Noninterest Expense. Noninterest expense was $15.5 million for the nine months ended September 30, 2025 and $15.2 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company recognized $236,000 in Employee Retention Tax Credits (ERTC) in the form of refunds of certain federal employment taxes that are authorized and established under the CARES Act. The amount was recorded as a reduction to salaries and employee benefits expenses. The table below sets forth our noninterest expense for the nine months ended September 30, 2025 and 2024:
Previous report
Income Tax Expense. Income tax expense increased $829,000, or 93.5%, to $1.7 million for the nine months ended September 30, 2025 from $887,000 for the nine months ended September 30, 2024. The effective tax rate was 24.9% and 25.8% for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
(1) Excludes interest and dividends on cost method investments of $551,000 and $624,000 for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
(5) Annualized
Reworded paragraphs (24)
Previous wording
Management’s discussion and analysis of the financial condition at September 30, 2025 compared to December 31, 2024 and results of operations for the three and nine months ended September 30, 2025 and 2024 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.
Current wording
Management’s discussion and analysis of the financial condition at March 31, 2026 compared to December 31, 2025 and results of operations for the three months ended March 31, 2026 and 2025 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.
Previous wording
There are no material changes to the critical accounting policies disclosed in ECB Bancorp, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2025.
Current wording
There are no material changes to the significant accounting policies disclosed in ECB Bancorp, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2026.
Previous wording
***Total Assets.***Total assets were $1.55 billion at September 30, 2025, as compared to $1.42 billion at December 31, 2024, or an increase of $134.5 million, or 9.5%.
Current wording
***Total Assets.***Total assets were $1.65 billion at March 31, 2026, as compared to $1.61 billion at December 31, 2025, or an increase of $44.6 million, or 2.8%.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents were $102.6 million at September 30, 2025, as compared to $157.6 million at December 31, 2024, or a decrease of $55.0 million, or 34.9%. The decrease in cash and cash equivalents was driven by growth in both loans and investments that in aggregate, was greater than our growth in deposits and borrowings.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents were $111.3 million at March 31, 2026, as compared to $86.9 million at December 31, 2025, or an increase of $24.4 million, or 28.0%. The increase in cash and cash equivalents was driven by strong deposit growth that outpaced our loan growth for the quarter.
Previous wording
***Interest Bearing Time Deposits.***Interest bearing time deposits were $8.0 million at September 30, 2025, as compared to $100,000 at December 31, 2024, or an increase of $7.9 million. This increase was due to purchases of new interest bearing time deposits.
Current wording
***Interest-Bearing Time Deposits.***Interest-bearing time deposits were $11.5 million at March 31, 2026, as compared to $8.0 million at December 31, 2025, or an increase of $3.5 million, or 43.7%. This increase was due to purchases of new short-term interest-bearing time deposits.
Previous wording
Investment Securities Available for Sale. Investments in securities available for sale were $31.0 million at September 30, 2025, as compared to $6.6 million at December 31, 2024, or an increase of $24.5 million, or 372.6%. This increase was due to purchases of new securities.
Current wording
Investment Securities Available for Sale. Investments in securities available for sale were $37.1 million at March 31, 2026, as compared to $34.3 million at December 31, 2025, or an increase of $2.7 million, or 8.0%. This increase was due to purchases of new securities.
Previous wording
Investment Securities Held to Maturity. Investments in securities held to maturity were $58.5 million at September 30, 2025, as compared to $73.2 million at December 31, 2024, or a $14.7 million, or 20.1%, decrease. This decrease was due to maturities and principal paydowns of securities.
Current wording
Investment Securities Held to Maturity. Investments in securities held to maturity were $51.6 million at March 31, 2026, as compared to $55.8 million at December 31, 2025, or a decrease of $4.1 million, or 7.4%. This decrease was due to maturities and principal paydowns of securities.
Previous wording
Loans. Total gross loans were $1.32 billion at September 30, 2025, as compared to $1.15 billion at December 31, 2024, or an increase of $170.5 million, or 14.9%.
Current wording
Loans. Total gross loans were $1.40 billion at March 31, 2026, as compared to $1.38 billion at December 31, 2025, or an increase of $19.8 million, or 1.4%.
Previous wording
Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $11.1 million and $10.0 million at September 30, 2025 and December 31, 2024, respectively. Accordingly, the increase in the FHLB stock is due to increased borrowings.
Current wording
Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $11.1 million and $11.9 million at March 31, 2026 and December 31, 2025, respectively. The amount of stock we are required to purchase is in proportion to our FHLB borrowings and level of total assets.
Previous wording
Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance increased $354,000, or 2.4%, to $15.3 million at September 30, 2025 from $14.9 million at December 31, 2024. The increase was due to an increase of $354,000 in the cash surrender value of our bank-owned life insurance portfolio during the nine months ended September 30, 2025.
Current wording
Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance was $15.5 million at March 31, 2026, as compared to $15.4 million at December 31, 2025, or an increase of $117,000, or 0.8%. The increase was due to an increase of the cash surrender value of our bank-owned life insurance portfolio.
Previous wording
Deposits. Total deposits were $1.11 billion at September 30, 2025, as compared to $998.5 million at December 31, 2024, or an increase of $110.1 million, or 11.0%.
Current wording
Deposits. Total deposits were $1.20 billion at March 31, 2026, as compared to $1.13 billion at December 31, 2025, or an increase of $67.1 million, or 5.9%.
Previous wording
Shareholders' Equity. Total shareholders' equity increased $1.0 million, or 0.6%, to $169.3 million as of September 30, 2025 from $168.3 million as of December 31, 2024. This increase is primarily the result of earnings of $5.2 million. Partially offsetting the increase from earnings were decreases in additional paid-in capital ("APIC") and accumulated other comprehensive income ("AOCI") of $3.0 million and $1.4 million, respectively. The decrease in APIC was driven by $4.1 million in shares repurchased under our share repurchase plan, partially offset by an increase in APIC of $1.1 million related to stock-based compensation and ESOP shares committed to be released. The decrease in AOCI was driven by a decrease in the fair value of cash flow hedges. Our book value per share increased by $0.68 to $19.18 at September 30, 2025 from $18.50 at December 31, 2024.
Current wording
Shareholders' Equity. Total shareholders' equity was $175.9 million as of March 31, 2026, as compared to $171.9 million as of December 31, 2025, or an increase of $4.0 million, or 2.3%. This increase is primarily the result of earnings of $3.1 million and a decrease in accumulated other comprehensive loss ("AOCL") of $752,000. The decrease in AOCL was driven by an increase in the fair value of cash flow hedges. Our book value per share increased by $0.50 to $20.05 at March 31, 2026 from $19.55 at December 31, 2025.
Previous wording
Net Income. We recorded net income of $2.4 million for the three months ended September 30, 2025, compared to net income of $1.1 million for the three months ended September 30, 2024, or an increase of $1.3 million, or 115.3% in net income.
Current wording
Net Income. We recorded net income of $3.1 million for the three months ended March 31, 2026, as compared to net income of $1.3 million for the three months ended March 31, 2025, or an increase of $1.8 million, or 140.7%.
Previous wording
Interest and Dividend Income. Interest and dividend income increased $3.3 million, or 19.0%, to $20.4 million for the three months ended September 30, 2025 from $17.2 million for the three months ended September 30, 2024. This increase was driven by a $3.3 million increase in interest and fees on loans and a $229,000 increase in interest and dividends on investment securities, partially offset by a $297,000 decrease in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $181.6 million in the average balance of the loan portfolio to $1.30 billion for the three months ended September 30, 2025 from $1.12 billion for the three months ended September 30, 2024, as well as an increase in the average yield of 26 basis points to 5.53% during the three months ended September 30, 2025 from 5.27% during the three months ended September 30, 2024. The yield for the three months ended September 30, 2025 benefited primarily from new loans with higher rates. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 88 basis points to 3.88% during the three months ended September 30, 2025 from 3.00% during the three months ended September 30, 2024 as well as an increase of $6.7 million in the average balance of the investment portfolio to $86.4 million for the three months ended September 30, 2025 from $79.7 million for the three months ended September 30, 2024. The decrease in interest income on short term investments was driven by a decrease in the yield on short term investments of 101 basis points to 4.40% during the three months ended September 30, 2025 from 5.41% during the three months ended September 30, 2024 as well as a decrease of $1.8 million in the average balance of short term investments to $108.7 million for the three months ended September 30, 2025 from $110.5 million for the three months ended September 30, 2024.
Current wording
Interest and Dividend Income. Interest and dividend income was $21.6 million for the three months ended March 31, 2026, as compared to $17.6 million for the three months ended March 31, 2025, or an increase of $4.0 million, or 22.7%. This increase was driven by a $4.4 million increase in interest and fees on loans, a $277,000 increase in interest and dividends on securities and a $92,000 increase in interest on interest-bearing time deposits, partially offset by an $811,000 decrease in interest on short-term investments. The increase in interest and fees on loans was driven by an increase of $224.3 million in the average balance of the loan portfolio to $1.38 billion for the three months ended March 31, 2026 from $1.16 billion for the three months ended March 31, 2025, as well as an increase in the average yield of 44 basis points to 5.74% during the three months ended March 31, 2026 from 5.30% during the three months ended March 31, 2025. The yield for the three months ended March 31, 2026 benefited primarily from new loans with higher rates. The increase in interest and dividends on securities was driven by an increase in the average yield of 101 basis points to 4.38% during the three months ended March 31, 2026 from 3.37% during the three months ended March 31, 2025 as well as an increase of $6.5 million in the average balance of the investment portfolio to $87.4 million for the three months ended March 31, 2026 from $80.9 million for the three months ended March 31, 2025. The increase in interest income on interest-bearing time deposits was driven by an increase in the average balance of interest-bearing time deposits to $8.9 million for the three months ended March 31, 2026 from $100,000 for the three months ended March 31, 2025. The decrease in interest income on short-term investments was driven by a decrease of $58.3 million in the average balance of the short-term investments to $90.0 million for the three months ended March 31, 2026 from $148.3 million for the three months ended March 31, 2025, as well as a decrease in the average yield of 78 basis points to 3.67% during the three months ended March 31, 2026 from 4.45% during the three months ended March 31, 2025.
Previous wording
Net Interest and Dividend Income. Net interest and dividend income increased $2.2 million, or 34.4%, to $8.5 million for the three months ended September 30, 2025 from $6.3 million for the three months ended September 30, 2024. This increase was driven by increases in the average balance and yields on loans as well as a decrease in the cost of interest bearing liabilities. The resulting net interest margin expanded by 34 basis points to 2.19% for the three months ended September 30, 2025 as compared to 1.85% for the three months ended September 30, 2024.
Current wording
Net Interest and Dividend Income. Net interest and dividend income increased $3.2 million, or 47.9%, to $9.8 million for the three months ended March 31, 2026 from $6.6 million for the three months ended March 31, 2025. This increase was driven by increases in the average balance and yields on loans as well as a decrease in the average cost of interest-bearing deposits. The resulting net interest margin expanded by 60 basis points to 2.49% for the three months ended March 31, 2026, as compared to 1.89% for the three months ended March 31, 2025.
Previous wording
Noninterest Income. Noninterest income was $341,000 for the three months ended September 30, 2025, as compared to $304,000 for the three months ended September 30, 2024, or an increase of $37,000, or 12.2%. The table below sets forth our noninterest income for three months ended September 30, 2025 and 2024:
Current wording
Noninterest Income. Noninterest income was $327,000 for the three months ended March 31, 2026, as compared to $271,000 for the three months ended March 31, 2025, or an increase of $56,000, or 20.7%. The table below sets forth our noninterest income for the three months ended March 31, 2026 and 2025:
Previous wording
Noninterest Expense. Noninterest expense was $5.4 million for the three months ended September 30, 2025 as compared to $5.0 million for the three months ended September 30, 2024, or an increase of $347,000, or 6.9%. The table below sets forth our noninterest expense for three months ended September 30, 2025 and 2024:
Current wording
Noninterest Expense. Noninterest expense was $5.7 million for the three months ended March 31, 2026, as compared to $5.2 million for the three months ended March 31, 2025, or an increase of $537,000, or 10.3%. The table below sets forth our noninterest expense for the three months ended March 31, 2026 and 2025:
Previous wording
(1) Excludes interest and dividends on cost method investments of $188,000 and $202,000 for the three months ended September 30, 2025 and 2024, respectively.
Current wording
(1) Excludes interest and dividends on cost method investments of $186,000 and $181,000 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. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of loans and securities. We are also able to borrow from the Federal Home Loan Bank of Boston, the Federal Reserve Bank and the Atlantic Community Bankers Bank. At September 30, 2025, we had outstanding advances of $259.8 million from the Federal Home Loan Bank. At September 30, 2025, we had unused borrowing capacity of $424.5 million with the Federal Home Loan Bank, $66.6 million with the Federal Reserve Bank and $15.0 million with the Atlantic Community Bankers Bank.
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. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of loans and securities. We are also able to borrow from the Federal Home Loan Bank of Boston ("FHLB"), the Federal Reserve Bank and the Atlantic Community Bankers Bank. At March 31, 2026, we had outstanding advances of $260.8 million from the FHLB. At March 31, 2026, we had unused borrowing capacity of $427.9 million with the FHLB, $71.4 million with the Federal Reserve Bank and $15.0 million with the Atlantic Community Bankers Bank.
Previous wording
At September 30, 2025, we had $42.2 million in loan commitments outstanding. In addition to commitments to originate loans, we had $90.4 million in unused lines of credit to borrowers and $55.1 million in unadvanced construction loans.
Current wording
At March 31, 2026, we had $23.8 million in loan commitments outstanding. In addition to commitments to originate loans, we had $99.5 million in unused lines of credit to borrowers and $49.1 million in unadvanced construction loans.
Previous wording
Non brokered certificates of deposit due within one year of September 30, 2025 totaled $428.9 million, or 38.7%, of total deposits. If these deposits do not remain with us, we may be required to seek other sources of funds, including brokered deposits and FHLB advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before September 30, 2026, or on our savings and money market accounts.
Current wording
Non-brokered certificates of deposit due within one year of March 31, 2026 totaled $430.9 million, or 35.9%, of total deposits. If these deposits do not remain with us, we may be required to seek other sources of funds, including brokered deposits and FHLB advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before March 31, 2027, or on our savings and money market accounts.
Previous wording
Our primary investing activity is originating loans. During the nine months ended September 30, 2025 and the year ended December 31, 2024, we originated$226.7 million and $160.4 million of loans, respectively.
Current wording
Our primary investing activity is originating loans. During the three months ended March 31, 2026 and the year ended December 31, 2025, we originated$79.5 million and $429.6 million of loans, respectively.
Previous wording
Financing activities consist primarily of activity in deposit accounts and FHLB advances. We experienced net increases in deposits of $110.1 million and $130.3 million for the nine months ended September 30, 2025 and the year ended December 31, 2024, respectively. At September 30, 2025 and December 31, 2024, the level of brokered time deposits was $133.9 million and $125.6 million, respectively. Deposit flows are affected primarily by the overall level of interest rates and the interest rates and products offered by us and our competitors. At September 30, 2025 and December 31, 2024, the level of FHLB advances was $259.8 million and $234.0 million, respectively.
Current wording
Financing activities consist primarily of activity in deposit accounts and FHLB advances. We experienced net increases in deposits of $67.1 million and $133.8 million for the three months ended March 31, 2026 and the year ended December 31, 2025, respectively. At March 31, 2026 and December 31, 2025, the level of brokered time deposits was $152.3 million and $134.0 million, respectively. Deposit flows are affected primarily by the overall level of interest rates and the interest rates and products offered by us and our competitors. At March 31, 2026 and December 31, 2025, the level of FHLB advances was $260.8 million and $284.8 million, respectively.
Previous wording
For additional information, see the consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 included as part of the consolidated financial statements appearing elsewhere in this Form 10-Q.
Current wording
For additional information, see the consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 included as part of the consolidated financial statements appearing elsewhere in this Form 10-Q.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Comparison of Operating Results for the Nine Months Ended September 30, 2025 and September 30, 2024
Previous report — wording carried elsewhere
***Average Balances and Yields.***The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Average balances are daily average balances. Non-accrual loans are included in average balances only. Average yields include the effect of deferred costs and fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.
Previous report — wording carried elsewhere
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
Previous report — wording carried elsewhere
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
Previous report — wording carried elsewhere
(4) Net interest margin represents net interest income divided by average total interest-earning assets.
Previous report — wording carried elsewhere
***Rate/Volume Analysis.***The following tables present the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior period volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. There were no out-of-period items or adjustments required to be excluded from the table below.