ECB Bancorp, Inc. /MD/

Previous 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.

Current wording

Management’s discussion and analysis of the financial condition at June 30, 2026 compared to December 31, 2025 and results of operations for the three and six months ended June 30, 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

This Quarterly Report on Form 10-Q contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “intend,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “intend,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

Previous 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%.

Current wording

***Total Assets.***Total assets were $1.67 billion at June 30, 2026, as compared to $1.61 billion at December 31, 2025, or an increase of $65.9 million, or 4.1%.

Previous 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.

Current wording

Cash and Cash Equivalents. Cash and cash equivalents were $124.0 million at June 30, 2026, as compared to $86.9 million at December 31, 2025, or an increase of $37.0 million, or 42.6%. The increase in cash and cash equivalents was driven by strong deposit growth that outpaced our loan growth.

Previous 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.

Current wording

***Interest-Earning Time Deposits.***Interest-earning time deposits were $14.2 million at June 30, 2026, as compared to $8.0 million at December 31, 2025, or an increase of $6.2 million, or 78.1%. This increase was due to purchases of new short-term interest-earning time deposits.

Previous 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.

Current wording

Investment Securities Available for Sale. Investments in securities available for sale were $40.1 million at June 30, 2026, as compared to $34.3 million at December 31, 2025, or an increase of $5.7 million, or 16.7%. This increase was due to purchases of new securities.

Previous 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.

Current wording

Investment Securities Held to Maturity. Investments in securities held to maturity were $50.5 million at June 30, 2026, as compared to $55.8 million at December 31, 2025, or a decrease of $5.3 million, or 9.5%. This decrease was due to maturities and principal paydowns of securities.

Previous 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%.

Current wording

Loans. Total gross loans were $1.40 billion at June 30, 2026, as compared to $1.38 billion at December 31, 2025, or an increase of $21.3 million, or 1.5%.

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 $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.

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 $12.2 million and $11.9 million at June 30, 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 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.

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 $15.7 million at June 30, 2026, as compared to $15.4 million at December 31, 2025, or an increase of $236,000, or 1.5%. 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 $1.20 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%.

Current wording

Deposits. Total deposits were $1.19 billion at June 30, 2026, as compared to $1.13 billion at December 31, 2025, or an increase of $60.4 million, or 5.3%.

Previous wording

***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 wording

***Federal Home Loan Bank Advances.***FHLB advances were $285.0 million at June 30, 2026, as compared to $284.8 million at December 31, 2025, or an increase of $185,000, or 0.1%.

Previous 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.

Current wording

Shareholders' Equity. Total shareholders' equity was $179.9 million as of June 30, 2026, as compared to $171.9 million as of December 31, 2025, or an increase of $7.9 million, or 4.6%. This increase is primarily the result of earnings of $6.4 million and an increase in accumulated other comprehensive income ("AOCI") of $1.6 million. The increase in AOCI was driven by an increase in the fair value of cash flow hedges. Our book value per share increased by $1.01 to $20.56 at June 30, 2026 from $19.55 at December 31, 2025.

Previous 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%.

Current wording

Net Income. We recorded net income of $3.3 million for the three months ended June 30, 2026, as compared to net income of $1.4 million for the three months ended June 30, 2025, or an increase of $1.8 million, or 126.5%.

Previous 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.

Current wording

Interest and Dividend Income. Interest and dividend income was $22.1 million for the three months ended June 30, 2026, as compared to $19.1 million for the three months ended June 30, 2025, or an increase of $3.0 million, or 15.9%. This increase was driven by a $2.9 million increase in interest and fees on loans, a $199,000 increase in interest and dividends on securities and a $138,000 increase in interest on interest-earning time deposits, partially offset by a $186,000 decrease in interest on short-term investments. The increase in interest and fees on loans was driven by an increase of $148.6 million in the average balance of the loan portfolio to $1.39 billion for the three months ended June 30, 2026 from $1.24 billion for the three months ended June 30, 2025, as well as an increase in the average yield of 26 basis points to 5.69% during the three months ended June 30, 2026 from 5.43% during the three months ended June 30, 2025. The yield for the three months ended June 30, 2026 benefited primarily from new loans with higher rates as well as the repricing of existing loans. The increase in interest and dividends on securities was driven by an increase in the average yield of 74 basis points to 4.44% during the three months ended June 30, 2026 from 3.70% during the three months ended June 30, 2025 as well as an increase of $1.5 million in the average balance of the investment portfolio to $89.5 million for the three months ended June 30, 2026 from $88.0 million for the three months ended June 30, 2025. The increase in interest income on interest-earning time deposits was driven by an increase in the average balance of interest-earning time deposits to $13.6 million for the three months ended June 30, 2026 from $38,000 for the three months ended June 30, 2025. The decrease in interest income on short-term investments was driven by a decrease in the average yield of 74 basis points to 3.68% during the three months ended June 30, 2026 from 4.42% during the three months ended June 30, 2025.

Previous wording

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 wording

Interest Expense. Total interest expense was $12.1 million for the three months ended June 30, 2026, as compared to $11.4 million for the three months ended June 30, 2025, an increase of $662,000, or 5.8%. The increase was driven by a $336,000 increase in interest expense on deposits as well as a $326,000 increase in interest expense on FHLB advances. The increase in interest expense on deposit accounts was due to an increase in the average balance of interest-bearing deposits of $125.7 million, or 12.8%, to $1.10 billion for the three months ended June 30, 2026 from $979.2 million for the three months ended June 30, 2025, partially offset by a decrease in the cost of interest-bearing deposits of 31 basis points to 3.43% for the three months ended June 30, 2026 from 3.74% for the three months ended June 30, 2025. The increase in interest expense on FHLB advances was due to an increase in the average balance of FHLB advances of $33.0 million, or 14.0%, to $269.0 million for the three months ended June 30, 2026 from $236.1 million for the three months ended June 30, 2025.

Previous 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.

Current wording

Net Interest and Dividend Income. Net interest and dividend income increased $2.4 million, or 31.0%, to $10.0 million for the three months ended June 30, 2026 from $7.7 million for the three months ended June 30, 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 37 basis points to 2.45% for the three months ended June 30, 2026, as compared to 2.08% for the three months ended June 30, 2025.

Previous 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:

Current wording

Noninterest Income. Noninterest income was $304,000 for the three months ended June 30, 2026, as compared to $355,000 for the three months ended June 30, 2025, or a decrease of $51,000, or 14.4%. The table below sets forth our noninterest income for the three months ended June 30, 2026 and 2025:

Previous 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:

Current wording

Noninterest Expense. Noninterest expense was $5.8 million for the three months ended June 30, 2026, as compared to $5.0 million for the three months ended June 30, 2025, or an increase of $832,000, or 16.7%. The table below sets forth our noninterest expense for the three months ended June 30, 2026 and 2025:

Previous wording

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.

Current wording

Income Tax Expense. We recorded a provision for income tax expense of $1.2 million for the three months ended June 30, 2026, as compared to $475,000 for the three months ended June 30, 2025, reflecting effective tax rates of 27.0% and 24.8%, respectively.

Previous 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.

Current wording

(1) Excludes interest and dividends on cost method investments of $202,000 and $182,000 for the three months ended June 30, 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 ("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.

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 June 30, 2026, we had outstanding advances of $285.0 million from the FHLB. At June 30, 2026, we had unused borrowing capacities of $478.4 million with the FHLB, $69.9 million with the Federal Reserve Bank and $15.0 million with the Atlantic Community Bankers Bank.

Previous 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.

Current wording

At June 30, 2026, we had $53.6 million in loan commitments outstanding. In addition to commitments to originate loans, we had $101.2 million in unused lines of credit to borrowers and $40.2 million in unadvanced construction loans.

Previous 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.

Current wording

Non-brokered certificates of deposit due within one year of June 30, 2026 totaled $416.0 million, or 34.9%, 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 June 30, 2027, or on our savings and money market accounts.

Previous 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.

Current wording

Our primary investing activity is originating loans. During the six months ended June 30, 2026 and the year ended December 31, 2025, we originated$119.3 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 $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.

Current wording

Financing activities consist primarily of activity in deposit accounts and FHLB advances. We experienced net increases in deposits of $60.4 million and $133.8 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, the level of brokered time deposits was $127.3 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 June 30, 2026 and December 31, 2025, the level of FHLB advances was $285.0 million and $284.8 million, respectively.

Previous 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.

Current wording

For additional information, see the consolidated statements of cash flows for the six months ended June 30, 2026 and 2025 included as part of the consolidated financial statements appearing elsewhere in this Form 10-Q.