PARKE BANCORP, INC.

Previous wording

Financial institutions can be affected by changing conditions in the real estate and financial markets. The effects of geopolitical instability, including the conflicts between the U.S./Israel and Iran, Russia and Ukraine, and Israel and Hezbollah/Hamas, foreign currency exchange volatility, volatility in global capital markets, inflationary pressures, higher tariffs, and higher interest rates may meaningfully impact loan production, income levels, and the measurement of certain significant estimates such as the allowance for credit losses. Moreover, in a period of economic contraction, we may experience elevated levels of credit losses, reduced interest income, impairment of financial assets, diminished access to capital markets and other funding sources, and reduced demand for our products and services. Volatility in the housing markets, real estate values and unemployment levels results in significant write-downs of asset values by financial institutions. Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing in and around southern New Jersey and Philadelphia, Pennsylvania. We focus our lending efforts primarily in three lending areas: residential mortgage loans, commercial mortgage loans, and construction loans. As a result of this geographic concentration, a significant broad-based deterioration in economic conditions in these areas could have a material adverse impact on the quality of our loan portfolio, results of operations and future growth potential.

Current wording

Financial institutions can be affected by changing conditions in the real estate and financial markets. The effects of geopolitical instability, including the conflicts between the U.S./Israel and Iran, Russia and Ukraine, and Israel and Hezbollah/Hamas, foreign currency exchange volatility, volatility in global capital markets, inflationary pressures, higher tariffs, and higher interest rates may meaningfully impact loan production, income levels, and the measurement of certain significant estimates such as the allowance for credit losses. Moreover, in a period of economic contraction, we may experience elevated levels of credit losses, reduced interest income, impairment of financial assets, diminished access to capital markets and other funding sources, and reduced demand for our products and services. Volatility in the housing markets, real estate values and unemployment levels results in significant write-downs of asset values by financial institutions. Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing in and around southern New Jersey, Philadelphia, Pennsylvania, New York, New York, and South Carolina. We focus our lending efforts primarily in three lending areas: residential mortgage loans, commercial mortgage loans, and construction loans. As a result of this geographic concentration, a significant broad-based deterioration in economic conditions in these areas could have a material adverse impact on the quality of our loan portfolio, results of operations and future growth potential.

Previous wording

Our operations are subject to risks and uncertainties surrounding our exposure to changes in the interest rate environment. Earnings and liquidity depend to a great extent on our interest rates. Interest rates are highly sensitive to many factors beyond our control, including competition, general economic conditions, geopolitical tensions and monetary, trade, tariff, and fiscal policies of various governmental and regulatory authorities, including the Federal Reserve. Conditions such as inflation, deflation, recession, unemployment and other factors beyond our control may also affect interest rates. The nature and timing of any changes in interest rates or general economic conditions and their effect on us cannot be controlled and are difficult to predict. If the rate of interest we pay on our interest-bearing liabilities increases more than the rate of interest we receive on our interest-earning assets, our net interest income, and therefore our earnings, could contract and be materially adversely affected. Our earnings could also be materially adversely affected if the rates on interest-earning assets fall more quickly than those on our interest-bearing liabilities. Changes in interest rates could also create competitive pressures, which could impact our liquidity position.

Current wording

Our operations are subject to risks and uncertainties surrounding our exposure to changes in the interest rate environment. Earnings and liquidity depends largely on our interest rates. Interest rates are highly sensitive to many factors beyond our control, including competition, general economic conditions, geopolitical tensions and monetary, trade, tariff, and fiscal policies of various governmental and regulatory authorities, including the Federal Reserve. Conditions such as inflation, deflation, recession, unemployment and other factors beyond our control may also affect interest rates. The nature and timing of any changes in interest rates or general economic conditions and their effect on us cannot be controlled and are difficult to predict. If the rate of interest we pay on our interest-bearing liabilities increases more than the rate of interest we receive on our interest-earning assets, our net interest income, and therefore our earnings, could contract and be materially adversely affected. Our earnings could also be materially adversely affected if the rates on interest-earning assets fall more quickly than those on our interest-bearing liabilities. Changes in interest rates could also create competitive pressures, which could impact our liquidity position.

Previous wording

At June 30, 2026, we had total assets of $2.30 billion, and total equity of $346.1 million. Net income available to common shareholders for the three and six months ended June 30, 2026 was $12.2 million, and $24.1 million, respectively.

Current wording

At September 30, 2026, we had total assets of $2.33 billion, and total equity of $356.1 million. Net income available to common shareholders for the three and nine months ended September 30, 2026 was $12.2 million, and $36.2 million, respectively.

Previous wording

Net Income: Our net income available to common shareholders for the three months ended June 30, 2026 increased $4.0 million, or 47.8%, to $12.2 million, compared to $8.3 million for the three months ended June 30, 2025. Earnings per share were $1.04 per basic common share and $1.03 per diluted common share for the three months ended June 30, 2026, compared to $0.70 per basic common share and $0.69 per diluted common share for the same period last year. The increase was primarily due to an increase in net interest income and a decrease in the provision for credit losses, partially offset by an increase in non-interest expense.

Current wording

Net Income: Our net income available to common shareholders for the three months ended September 30, 2026 increased $1.5 million, or 14.5%, to $12.2 million, compared to $10.6 million for the three months ended September 30, 2025. Earnings per share were $1.04 per basic common share and $1.02 per diluted common share for the three months ended September 30, 2026, compared to $0.90 per basic common share and $0.89 per diluted common share for the same period last year. The increase was primarily due to an increase in net interest income and a decrease in non-interest expense, partially offset by an increase in the provision for credit losses.

Previous wording

Net Interest Income: Our net interest income was $23.0 million for the second quarter of 2026 compared to $17.9 million for the second quarter of 2025, an increase of $5.1 million, or 28.8%. Net interest income increased during the three months ended June 30, 2026, primarily due to an increase in interest and fees on loans, and a decrease in interest expense on deposits and borrowings, partially offset by a decrease in interest on deposits with banks. Interest income increased $3.4 million, or 9.8%, during the three months ended June 30, 2026 as compared to the same period in the prior year. The increase in interest income was primarily due to an increase of $4.2 million in interest and fees on loans, due to higher loan balances and market interest rates. Interest from deposits with banks decreased $0.8 million during the three months ended June 30, 2026 as compared to the same period in the prior year, primarily due to lower average cash balances held at the Federal Reserve Bank ("FRB") and lower interest earning rates. The increase in net interest income was also due to a decrease in interest expense on deposits during the three months ended June 30, 2026 of $1.4 million, or 9.3%, primarily due to a decrease in interest rates, partially offset by an increase in balances outstanding. Interest expense on borrowings decreased during the three months ended June 30, 2026, by $0.3 million, or 31.3%, as compared to the same period in the prior year, due to a decrease in interest rates paid on borrowings, partially offset by an increase in balances outstanding.

Current wording

Net Interest Income: Our net interest income was $23.0 million for the third quarter of 2026 compared to $20.2 million for the third quarter of 2025, an increase of $2.9 million, or 14.2%. Net interest income increased during the three months ended September 30, 2026, primarily due to an increase in interest and fees on loans, and a decrease in interest expense on deposits, partially offset by an increase in interest on borrowings. Interest income increased $2.2 million, or 5.9%, during the three months ended September 30, 2026 as compared to the same period in the prior year. The increase in interest income was primarily due to an increase of $2.1 million in interest and fees on loans, due to higher loan balances and market interest rates. The increase in net interest income was also due to a decrease in interest expense on deposits during the three months ended September 30, 2026 of $1.4 million, or 9.3%, primarily due to a decrease in interest rates. Interest expense on borrowings increased during the three months ended September 30, 2026, by $0.7 million, or 76.2%, as compared to the same period in the prior year, due to an increase in Federal Home Loan Bank of New York ("FHLBNY") borrowings outstanding.

Previous wording

Provision for credit losses: For the three months ended June 30, 2026, the provision for credit losses was $0.7 million, compared to a provision for credit losses of $1.0 million for the three months ended June 30, 2025, a decrease of $0.3 million. The decrease in the provision for credit losses for the three months ended June 30, 2026, was due to a decrease in loan balance during the three months ended June 30, 2026, as compared to an increase in loan balances during the same period in 2025, partially offset by an increase in charge-offs during the three months ended June 30, 2026. The increase in charge-offs was primarily due to one Commercial Non-owner Occupied, distressed office building, which was repossessed and transferred to Other Real Estate Owned.

Current wording

Provision for credit losses: For the three months ended September 30, 2026, the provision for credit losses was $1.0 million, compared to a provision for credit losses of $0.4 million for the three months ended September 30, 2025, an increase of $0.6 million. The increase in the provision for credit losses for the three months ended September 30, 2026, was due to an increase in loan balances during the three months ended September 30, 2026, as compared to an increase in loan balances during the same period in 2025.

Previous wording

Non-interest Income: Our non-interest income was $0.9 million for the three months ended June 30, 2026, an increase of $61.0 thousand, compared to $0.8 million for the three months ended June 30, 2025. The increase is primarily attributable to an increase in bank owned life insurance ("BOLI") income, compared to the same period in 2025.

Current wording

Non-interest Income: Our non-interest income was $1.0 million for the three months ended September 30, 2026, an increase of $0.1 million, or 14.2%, compared to $0.9 million for the three months ended September 30, 2025. The increase is primarily attributable to an increase in bank owned life insurance ("BOLI") income, and an increase in loan fees, partially offset by a decrease in service fees on deposit accounts, compared to the same period in 2025.

Previous wording

Non-interest Expense: Our non-interest expense increased $0.2 million, or 3.6%, for the three months ended June 30, 2026, from the three months ended June 30, 2025, to $6.9 million. The increase was primarily driven by an increase in compensation and benefits of $0.3 million, and an increase in other operating expense of $0.1 million, partially offset by a decrease in data processing expense of $0.2 million, for the three months ended June 30, 2026, compared to the same period in 2025.

Current wording

Non-interest Expense: Our non-interest expense decreased $0.4 million, or 5.4%, for the three months ended September 30, 2026, from the three months ended September 30, 2025, to $6.8 million. The decrease was primarily driven by a decrease in professional services expense of $1.0 million, partially offset by an increase in compensation and benefits of $0.2 million, and an increase in OREO expense of $0.3 million. The decrease in professional services expense was primarily due to a $0.3 million transfer of OREO related legal fees to OREO expense, and a $0.6 million decrease in other professional fees attributed to changes in a previous contractual arrangement that resulted in a reduction to the overall contract cost.

Previous wording

Income Tax: Income tax expense was $4.0 million on income before taxes of $16.3 million for the three months ended June 30, 2026, resulting in an effective tax rate of 24.9%, compared to income tax expense of $2.7 million on income before taxes of $11.0 million for the same period of 2025, resulting in an effective tax rate of 24.9%.

Current wording

Income Tax: Income tax expense was $4.1 million on income before taxes of $16.3 million for the three months ended September 30, 2026, resulting in an effective tax rate of 25.1%, compared to income tax expense of $2.9 million on income before taxes of $13.5 million for the same period of 2025, resulting in an effective tax rate of 21.2%.

Previous wording

Net Income: Our net income available to common shareholders for the six months ended June 30, 2026 increased $8.0 million, or 50.0%, to $24.1 million, compared to $16.1 million for the six months ended June 30, 2025. Earnings per share were $2.05 per basic common share and $2.02 per diluted common share for the six months ended June 30, 2026, compared to $1.36 per basic common share and $1.34 per diluted common share for the same period last year. The increase was primarily due to an increase in net interest income and a decrease in provision for credit losses, partially offset by an increase in non-interest expense.

Current wording

Net Income: Our net income available to common shareholders for the nine months ended September 30, 2026 increased $9.6 million, or 35.8%, to $36.2 million, compared to $26.7 million for the nine months ended September 30, 2025. Earnings per share were $3.09 per basic common share and $3.04 per diluted common share for the nine months ended September 30, 2026, compared to $2.26 per basic common share and $2.23 per diluted common share for the same period last year. The increase was primarily due to an increase in net interest income, and an increase in non-interest income, partially offset by an increase in non-interest expense, and an increase in income tax expense.

Previous wording

Net Interest Income: Our net interest income was $45.1 million for the six months ended June 30, 2026 compared to $34.5 million for the six months ended June 30, 2025, an increase of $10.7 million, or 30.9%. Net interest income increased during the six months ended June 30, 2026, primarily due to an increase in interest and fees on loans, and a decrease in interest expense on deposits and borrowings, partially offset by a decrease in interest on deposits with banks. Interest income increased $6.5 million, or 9.5%, during the six months ended June 30, 2026 as compared to the same period in the prior year. The increase in interest income was primarily due to an increase of $8.6 million in interest and fees on loans, due to higher loan balances and market interest rates. Interest from deposits with banks decreased $2.0 million during the six months ended June 30, 2026 as compared to the same period in the prior year, primarily due to lower average cash balances held at the Federal Reserve Bank ("FRB") and lower interest earning rates. The increase in net interest income was also due to a decrease in interest expense on deposits during the six months ended June 30, 2026 of $3.1 million, or 10.4%, primarily due to a decrease in interest rates, partially offset by an increase in balances outstanding. Interest expense on borrowings decreased during the six months ended June 30, 2026, by $1.0 million, or 24.4%, as compared to the same period in the prior year, due to a decrease in interest rates paid on borrowings and, to a lesser extent, a decrease in the average borrowings during the period.

Current wording

Net Interest Income: Our net interest income was $68.2 million for the nine months ended September 30, 2026 compared to $54.6 million for the nine months ended September 30, 2025, an increase of $13.5 million, or 24.8%. Net interest income increased during the nine months ended September 30, 2026, primarily due to an increase in interest and fees on loans, and a decrease in interest expense on deposits and borrowings, partially offset by a decrease in interest on deposits with banks. Interest income increased $8.7 million, or 8.2%, during the nine months ended September 30, 2026 as compared to the same period in the prior year. The increase in interest income was primarily due to an increase of $10.7 million in interest and fees on loans, due to higher loan balances and market interest rates. Interest from deposits with banks decreased $2.0 million during the nine months ended September 30, 2026 as compared to the same period in the prior year, primarily due to lower average cash balances held at the Federal Reserve Bank ("FRB") and lower interest earning rates. The increase in net interest income was also due to a decrease in interest expense on deposits during the nine months ended September 30, 2026 of $4.6 million, or 10.0%, primarily due to a decrease in interest rates, partially offset by an increase in balances outstanding. Interest expense on borrowings decreased during the nine months ended September 30, 2026, by $0.3 million, or 5.2%, as compared to the same period in the prior year, due to a decrease in interest rates paid on borrowings, partially offset by an increase in average borrowings during the period.

Previous wording

Provision for credit losses: For the six months ended June 30, 2026, the provision for credit losses was $0.9 million, compared to a provision for credit losses of $1.6 million for the six months ended June 30, 2025, a decrease of $0.7 million. The decrease in the provision for credit losses for the six months ended June 30, 2026, was primarily due to a decrease in loan balances from December 31, 2025, partially offset by an increase in charge-offs during the six months ended June 30, 2026.

Current wording

Provision for credit losses: For the nine months ended September 30, 2026, the provision for credit losses was $1.8 million, compared to a provision for credit losses of $1.9 million for the nine months ended September 30, 2025, a decrease of $0.1 million. The provision for credit losses for the nine months ended September 30, 2026, is driven by the increase in the gross loan balance of $60.9 million, partially offset by the charge off $1.0 million.

Previous wording

Non-interest Income: Our non-interest income was $1.7 million for the six months ended June 30, 2026, an increase of $0.1 million, compared to $1.6 million for the six months ended June 30, 2025. The increase is primarily attributable to an increase in bank owned life insurance ("BOLI") income, compared to the same period in 2025.

Current wording

Non-interest Income: Our non-interest income was $2.7 million for the nine months ended September 30, 2026, an increase of $0.2 million, compared to $2.5 million for the nine months ended September 30, 2025. The increase is primarily attributable to an increase in bank owned life insurance ("BOLI") income, compared to the same period in 2025.

Previous wording

Non-interest Expense: Our non-interest expense increased $0.9 million, or 6.9%, for the six months ended June 30, 2026, from the six months ended June 30, 2025, to $14.1 million. The increase was primarily driven by an increase in compensation and benefits of $0.7 million, and an increase in other operating expense of $0.5 million, partially offset by a decrease in data processing expense of $0.3 million, for the six months ended June 30, 2026, compared to the same period in 2025.

Current wording

Non-interest Expense: Our non-interest expense increased $0.5 million, or 2.6%, for the nine months ended September 30, 2026, from the nine months ended September 30, 2025, to $20.9 million. The increase in non-interest expense was primarily due to an increase in compensation and benefits of $0.9 million, and an increase in other operating expense of $0.5 million, partially offset by a decrease in professional services expense of $1.1 million, and a decrease in data processing expense of $0.3 million, compared to the nine months ended September 30, 2025. The increase in compensation and benefits is primarily due to the increase in staff levels, and annual wage growth. The increase in other operating expense is primarily due to an increase in travel expense, miscellaneous loan expenses, and miscellaneous operating expenses. The decrease in professional services expense is primarily due to a $0.6 million decrease in legal fees, and a $0.4 million decrease in other professional fees attributed to lower BSA related consulting expense. The decrease in data processing expense is primarily due to lower core banking system expense.

Previous wording

Income Tax: Income tax expense was $7.8 million on income before taxes of $31.9 million for the six months ended June 30, 2026, resulting in an effective tax rate of 24.4%, compared to income tax expense of $5.3 million on income before taxes of $21.3 million for the same period of 2025, resulting in an effective tax rate of 24.7%.

Current wording

Income Tax: Income tax expense was $11.9 million on income before taxes of $48.1 million for the nine months ended September 30, 2026, resulting in an effective tax rate of 24.7%, compared to income tax expense of $8.1 million on income before taxes of $34.8 million for the same period of 2025, resulting in an effective tax rate of 23.3%.

Previous wording

The following tables presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the periods indicated.

Current wording

The following tables present the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the periods indicated.

Previous wording

At June 30, 2026, the Company’s total assets were $2.30 billion, an increase of $53.6 million, or 2.40%, from December 31, 2025. The increase in total assets was primarily attributable to an increase in cash and cash equivalents of $47.9 million, and an increase in other real estate owned of $3.9 million, partially offset by a decrease in net loans of $3.8 million. Cash and cash equivalents increased $47.9 million, or 30.5%, primarily due to an increase in FHLBNY borrowings of $34.0 million, and the decrease in gross loans of $3.9 million.

Current wording

At September 30, 2026, the Company’s total assets were $2.33 billion, an increase of $83.2 million, or 3.70%, from December 31, 2025. The increase in total assets was primarily attributable to an increase in cash and cash equivalents of $11.8 million, and an increase in net loans of $60.1 million. Cash and cash equivalents increased $11.8 million, or 7.5%, primarily due to an increase in brokered deposits of $34.6 million, and an increase in FHLBNY borrowings of $35.0 million, partially offset by the increase in net loans of $60.1 million.

Previous wording

Total liabilities were $1.96 billion at June 30, 2026. This represented a $32.1 million, or 1.7%, increase, from $1.92 billion at December 31, 2025. The increase in total liabilities was primarily due to an increase in FHLBNY borrowings of $34.0 million, or 26.2%, to $164.0 million at June 30, 2026.

Current wording

Total liabilities were $1.98 billion at September 30, 2026. This represented a $51.5 million, or 2.7%, increase, from $1.92 billion at December 31, 2025. The increase in total liabilities was primarily due to an increase in deposits of $18.1 million, or 1.0%, and an increase in FHLBNY borrowings of $35.0 million, or 26.9%, to $165.0 million at September 30, 2026.

Previous wording

Total equity was $346.1 million and $324.5 million at June 30, 2026 and December 31, 2025, respectively, an increase of $21.6 million from December 31, 2025. The increase was primarily due to the retention of earnings, partially offset by the payment of $4.5 million of cash dividends.

Current wording

Total equity was $356.1 million and $324.5 million at September 30, 2026 and December 31, 2025, respectively, an increase of $31.6 million from December 31, 2025. The increase was primarily due to the retention of earnings, partially offset by the payment of $6.9 million of cash dividends.

Previous wording

Cash and cash equivalents increased $47.9 million to $204.7 million at June 30, 2026 from $156.9 million at December 31, 2025, an increase of 30.5%. The increase was primarily due to an increase in FHLBNY borrowings, and a decrease in gross loan balance.

Current wording

Cash and cash equivalents increased $11.8 million to $168.7 million at September 30, 2026 from $156.9 million at December 31, 2025, an increase of 7.5%. The increase was primarily due to an increase in deposits, and an increase in FHLBNY borrowings, partially offset by an increase in gross loans.

Previous wording

Total investment securities increased to $14.3 million at June 30, 2026, from $13.5 million at December 31, 2025, an increase of $0.8 million or 5.7%. The increase was attributed to the purchase of a $1.5 million security for CRA purposes, partially offset by normal pay downs of securities. For detailed information on the composition and maturity distribution of our investment portfolio, see NOTE 3 - Investment Securities in the notes to the unaudited consolidated financial statements.

Current wording

Total investment securities increased to $13.8 million at September 30, 2026, from $13.5 million at December 31, 2025, an increase of $0.3 million or 2.2%. The increase was attributed to the purchase of a $1.5 million security for CRA purposes, partially offset by normal pay downs of securities. For detailed information on the composition and maturity distribution of our investment portfolio, see NOTE 3 - Investment Securities in the notes to the unaudited consolidated financial statements.

Previous wording

Loans receivable: Loans receivable decreased to $2.03 billion at June 30, 2026, from $2.04 billion at December 31, 2025, a decrease of $3.9 million, or 0.2%. The decrease was primarily due to decreases in the residential - 1 to 4 family, and residential 1 to 4 family investment loan portfolios, partially offset by an increase in the residential - multifamily loan portfolio. Loans receivable as of June 30, 2026 and December 31, 2025, consisted of the following:

Current wording

Loans receivable: Loans receivable increased to $2.10 billion at September 30, 2026, from $2.04 billion at December 31, 2025, an increase of $60.9 million, or 3.0%. The increase was primarily due to increases in the residential - multifamily, commercial - non-owner occupied, construction, and commercial - owner occupied loan portfolios, partially offset by decreases in the residential - 1 to 4 family, and the residential - 1 to 4 family investment loan portfolios. Loans receivable as of September 30, 2026 and December 31, 2025, consisted of the following:

Previous wording

At June 30, 2026, total deposits increased to $1.76 billion from $1.76 billion at December 31, 2025, an increase of $0.9 million, or 0.1%. The increase in deposits was primarily due to an increase in money market deposits of $49.3 million, of which $13.1 million were brokered deposits, partially offset by decrease in time deposits of $34.5 million, $9.4 million in checking deposits, and $3.3 million in noninterest-bearing deposits.

Current wording

At September 30, 2026, total deposits increased to $1.78 billion from $1.76 billion at December 31, 2025, an increase of $18.1 million, or 1.0%. The increase in deposits was primarily due to an increase in money market deposits of $87.1 million, of which $13.0 million were brokered deposits, and an increase in checking of $15.6 million, of which $28.6 million was brokered and partially offset by a decrease in non-brokered checking deposits of $13.0 million, partially offset by a decrease in time deposits of $78.8 million.

Previous wording

Total borrowings were $177.4 million at June 30, 2026 and $143.4 million at December 31, 2025. The increase in borrowings during 2026 is due to an increase of $34.0 million in FHLBNY advances. At June 30, 2026, all of the outstanding FHLBNY advances had short-term maturities.

Current wording

Total borrowings were $178.4 million at September 30, 2026 and $143.4 million at December 31, 2025. The increase in borrowings during 2026 is due to an increase of $35.0 million in FHLBNY advances. At September 30, 2026, all of the outstanding FHLBNY advances had short-term maturities.

Previous wording

Total equity increased to $346.1 million at June 30, 2026 from $324.5 million at December 31, 2025, an increase of $21.6 million, or 6.6%, primarily due to the retention of earnings from the period, partially offset by the payment of $4.5 million of cash dividends.

Current wording

Total equity increased to $356.1 million at September 30, 2026 from $324.5 million at December 31, 2025, an increase of $31.6 million, or 9.7%, primarily due to the retention of earnings from the period, partially offset by the payment of $6.9 million of cash dividends.

Previous wording

Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis. At June 30, 2026, our cash position was $204.7 million. We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve.

Current wording

Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis. At September 30, 2026, our cash position was $168.7 million. We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve.

Previous wording

We also use brokered deposits as a funding source. The Bank primarily utilizes brokered relationships with Wells Fargo, Piper Sandler, and Stonecastle. As of June 30, 2026, the Company had $194.5 million of brokered deposits resulting from these relationships. For an additional source of brokered liquidity, the Bank joined the IntraFi Financial Network. IntraFi provides the Bank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. As of June 30, 2026, the Company had $50.1 million sourced from IntraFi. While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB"). As of June 30, 2026, the Company had lines of credit with the FHLBNY of $659.2 million, of which $164.0 million was outstanding, and an additional $110.0 million from a letter of credit for securing public funds, of which zero was outstanding as of June 30, 2026. The remaining borrowing capacity was $385.2 million at June 30, 2026. As of June 30, 2026, the Company had a borrowing capacity through the FRB discount window of $390.6 million. There were no borrowings outstanding from the FRB as of June 30, 2026. Our diversity of funding capacity results in the Bank's ability to cover 132.8% of estimated uninsured deposits at June 30, 2026.

Current wording

We also use brokered deposits as a funding source. The Bank primarily utilizes brokered relationships with Piper Sandler, and Stonecastle. As of September 30, 2026, the Company had $178.6 million of brokered deposits resulting from these relationships. For an additional source of brokered liquidity, the Bank joined the IntraFi Financial Network. IntraFi provides the Bank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. As of September 30, 2026, the Company had $73.7 million sourced from IntraFi. While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB"). As of September 30, 2026, the Company had lines of credit with the FHLBNY of $661.0 million, of which $165.0 million was outstanding, and an additional $105.0 million from a letter of credit for securing public funds, of which zero was outstanding as of September 30, 2026. The remaining borrowing capacity was $391.0 million at September 30, 2026. As of September 30, 2026, the Company had a borrowing capacity through the FRB discount window of $368.3 million. There were no borrowings outstanding from the FRB as of September 30, 2026. Our diversity of funding capacity results in the Bank's ability to cover 125.4% of estimated uninsured deposits at September 30, 2026.

Previous wording

We had outstanding loan commitments of $184.3 million at June 30, 2026. Our loan commitments are normally originated with the full amount of collateral. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth.

Current wording

We had outstanding loan commitments of $246.9 million at September 30, 2026. Our loan commitments are normally originated with the full amount of collateral. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth.

Previous wording

The following is a discussion of our cash flows for the six months ended June 30, 2026 and 2025.

Current wording

The following is a discussion of our cash flows for the nine months ended September 30, 2026 and 2025.

Previous wording

Cash provided by operating activities was $19.3 million during the six months ended June 30, 2026, compared to $13.8 million for the same period in the prior year. The increase in operating cash flow was primarily due to the increase in net income, partially offset by the increase in accrued interest receivable and other assets and the decrease in accrued interest payable and other accrued liabilities.

Current wording

Cash provided by operating activities was $32.1 million during the nine months ended September 30, 2026, compared to $25.1 million for the same period in the prior year. The increase in operating cash flow was primarily due to the increase in net income, partially offset by the increase in accrued interest receivable and other assets and the decrease in accrued interest payable and other accrued liabilities.

Previous wording

Cash used in investing activities was $3.7 million during the six months ended June 30, 2026, compared to cash used in investing activities of $64.2 million in the same period last year. The decrease in cash used in the investing activities during the six months ended June 30, 2026, was primarily due to the decrease in cash outflow from the origination of loans, and the decrease in the net purchase of FHLBNY restricted stock.

Current wording

Cash used in investing activities was $68.6 million during the nine months ended September 30, 2026, compared to cash used in investing activities of $91.6 million in the same period last year. The decrease in cash used in the investing activities during the nine months ended September 30, 2026, was primarily due to the decrease in cash outflow from the origination of loans, the decrease in the purchase of bank owned life insurance policies, and the decrease in the net purchase of FHLBNY restricted stock.

Previous wording

Cash provided by financing activities was $32.2 million during the six months ended June 30, 2026, compared to $13.2 million in the same period last year. The increase in cash provided by financing activities during the six months ended June 30, 2026, was primarily due to an increase in FHLBNY borrowings, partially offset by a decrease in noninterest-bearing deposits, and a decrease in the growth of interest-bearing deposits.

Current wording

Cash provided by financing activities was $48.3 million during the nine months ended September 30, 2026, compared to $4.3 million in the same period last year. The increase in cash provided by financing activities during the nine months ended September 30, 2026, was primarily due to an increase in FHLBNY borrowings, and the repayment of subordinated debt in the prior year, partially offset by a decrease in the growth of interest-bearing deposits.

Previous wording

We utilize a comprehensive process for assessing the Company’s overall capital adequacy. We actively review our capital strategies in light of current and anticipated business risks, future growth opportunities, industry standards, and compliance with regulatory requirements. The assessment of overall capital adequacy depends on a variety of factors, including asset quality, liquidity, earnings stability, competitive forces, economic conditions, and strength of management. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations. We primarily manage our capital through the retention of earnings. We also use other means to manage our capital. Total equity increased $21.6 million at June 30, 2026, from December 31, 2025, primarily from the Company’s net income of $24.1 million for the period, net of common and preferred stock dividends of $4.5 million.

Current wording

We utilize a comprehensive process for assessing the Company’s overall capital adequacy. We actively review our capital strategies in light of current and anticipated business risks, future growth opportunities, industry standards, and compliance with regulatory requirements. The assessment of overall capital adequacy depends on a variety of factors, including asset quality, liquidity, earnings stability, competitive forces, economic conditions, and strength of management. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations. We primarily manage our capital through the retention of earnings. We also use other means to manage our capital. Total equity increased $31.6 million at September 30, 2026, from December 31, 2025, primarily from the Company’s net income of $36.2 million for the period, net of common and preferred stock dividends of $6.9 million.