Princeton Bancorp, Inc. (BPRN)

CIK: 0001913971. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-13.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1913971. Latest filing source: 0001193125-26-106151.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001913971.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001913971.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-214214.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with the unaudited consolidated interim financial statements contained in Part I, Item 1 of this report, and with our audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in our Form 10-K as of and for the year ended December 31, 2025.

Cautionary Statement Regarding Forward-Looking Statements

The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission, in its reports to stockholders and in other communications by the Company (including this press release), which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the potential impact of any future Federal budget stalemates in Congress, higher tariffs imposed by the Trump administration, higher inflation levels, and general economic and recessionary concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the global impact of foreign military conflicts; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; the timing and nature of the regulatory response to any applications filed by the Company and the Bank; developments in technology, such as artificial intelligence, and our ability to incorporate innovative technologies in our business and provide products and services that satisfy our customers' expectations for convenience and security; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025; and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as required by applicable law or regulation.

Throughout this document, references to “we,” “us,” or “our” refer to the Company and the Bank.

Executive Overview

The Company is the holding company for The Bank of Princeton (the “Bank”), a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank is a member of the Federal Deposit Insurance Corporation (“FDIC”).

The Company’s common stock trades on the “Nasdaq Global Select Market” under ticker symbol, “BPRN.”

Critical Accounting Policies and Estimates

The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are

26

summarized in Note 1 to the consolidated financial statements included in the 2025 Annual Report on Form 10-K. There have been no changes to the Critical Accounting Estimates since the Company filed its Annual Report on Form 10-K for the year ended December 31, 2025.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements included in the 2025 Annual Report on Form 10-K and Note 1- Summary of Significant Accounting Policies in this document.

Economy

Economic conditions during the first quarter of 2026 remained mixed, characterized by moderating growth, resilient labor markets, and inflation trending downward but still modestly above the target of the Federal Reserve. Consumer spending continued to support economic activity but showed signs of softening amid elevated interest rates and reduced excess savings, while business investment remained constrained by tighter financial conditions. The Federal Reserve maintained a restrictive monetary policy stance during the quarter, contributing to higher borrowing costs, modest tightening in credit availability, and continued pressure on interest-sensitive sectors, including commercial real estate. Looking ahead, economic conditions remain uncertain, with risks dependent on the trajectory of inflation, labor market conditions, and the timing of potential monetary policy adjustments.

Comparison of Financial Condition at March 31, 2026 and December 31, 2025

General

Total assets were $2.25 billion at March 31, 2026, a decrease of $31.4 million, or 1.37% when compared to $2.29 billion at the end of 2025. The primary reasons for the decrease in total assets were related to decreases in cash and cash equivalents of $15.9 million and investment securities of $18.0 million, partially offset by an increase in net loans of $2.7 million.

Cash and cash equivalents

Cash and cash equivalents decreased $15.9 million, or 11.7%, to $119.8 million at March 31, 2026 compared to December 31, 2025.

Investment securities

Total available-for-sale investment securities decreased $18.0 million, or 9.9%, to $164.6 million at March 31, 2026 compared to December 31, 2025. This decrease was related to the payoffs of mortgage-backed securities of U.S. government sponsored enterprises and U.S government agency securities during the three months ended March 31, 2026.

Loans

Loans, net of deferred loan fees and costs, increased $2.7 million, or 0.15%, to $1.82 billion at March 31, 2026 compared to December 31, 2025. The increase in the Company’s net loans consisted of increases in of $10.8 million in home equity and consumer loans, $6.7 million in residential mortgages, $4.1 million in commercial and industrial loans, and $1.4 million in construction loans, and, partially offset by a decrease of $20.0 million in commercial real estate loans.

The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and non-owner-occupied CRE loans, was $1.32 billion or 72.6% of total loans of $1.82 billion at March 31, 2026. There were 721 loans in the Company’s CRE portfolio with an average and median loan size of $1.8 million and $0.6 million, respectively. Loan to Value (“LTV”) estimates are less than 70% for $1.21 billion or 92.5% of the CRE portfolio and less than 80% for $1.31 billion or 99.6% of the CRE portfolio.

27

The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value for the periods presented (dollars in thousands):

March 31, 2026

December 31, 2025

Balance

% of

portfolio

Weighted

Average

LTV

Balance

% of

portfolio

Weighted

Average

LTV

Commercial Real Estate

Multi Family

502,834

38.0

%

52.5

%

505,267

37.6

%

52.5

%

Owner Occupied

376,380

28.4

%

34.7

%

394,281

29.3

%

34.9

%

Land

27,514

2.1

%

70.7

%

27,514

2.1

%

70.7

%

Non Owner Occupied

Retail

107,350

8.1

%

41.7

%

9,829

0.7

%

50.9

%

Office Building

91,964

7.0

%

42.2

%

80,244

6.0

%

44.5

%

Industrial/Warehousing

75,927

6.2

%

43.9

%

44,198

3.3

%

41.4

%

Mixed Use

49,335

3.3

%

42.4

%

60,520

4.5

%

43.0

%

Restaurants

16,819

1.3

%

36.0

%

20,284

1.5

%

38.0

%

Healthcare

9,715

0.7

%

50.3

%

108,367

8.1

%

41.0

%

Other

65,509

5.0

%

42.5

%

93,027

6.9

%

42.4

%

Total non owner occupied

416,619

31.5

%

416,469

31.0

%

Total Commercial Real Estate

1,323,347

100.0

%

1,343,531

100.0

%

The following table presents the geographic markets of the commercial real estate portfolio for the periods presented (dollars in thousands):

March 31, 2026

December 31, 2025

Balance

% of

portfolio

Balance

% of

portfolio

Geographical Market

New York

631,491

47.8

%

629,314

46.8

%

New Jersey

496,600

37.5

%

504,206

37.5

%

Pennsylvania

177,713

13.4

%

186,268

13.9

%

Other

17,543

1.3

%

23,743

1.8

%

1,323,347

100.00

%

1,343,531

100.00

%

For the three months ended March 31, 2026, charge-offs were $14 thousand, and recoveries were $12 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.10% at March 31, 2026 and 1.12% at December 31, 2025.

At March 31, 2026, non-performing assets remained steady at $16.5 million, compared to $16.6 million at December 31, 2025. Non-performing assets as a percentage of total loans, net of deferred fees and costs, remained steady at 0.91% for March 31, 2026 compared to 0.91% at December 31, 2025.

Deposits

Total deposits on March 31, 2026, decreased $33.5 million, or 1.70%, when compared to December 31, 2025. The decrease in the Company’s deposits consisted primarily of decreases in certificates of deposit of $53.2 million and interest-bearing demand deposits of $25.3 million, partially offset by increases in money market deposits of $26.5 million, non-interest-bearing demand deposits of $17.2 million, and savings deposits of $1.3 million. On balance sheet liquidity remains strong at March 31, 2025.

At March 31, 2026, the Company had approximately $613.3 million in uninsured deposits, consisting of $84.3 million in non-interest-bearing demand deposits, $220.1 million in interest-bearing demand deposits, $172.5 million in money market accounts, $24.5 million in savings deposit

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-03-13. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented in sections as follows:

•
Overview and Strategy

•
Comparison of Financial Condition at December 31, 2025 and December 31, 2024

•
Comparison of Operating Results for the Years Ended December 31, 2025 and 2024

•
Rate/Volume Analysis

•
Liquidity, Commitments and Capital Resources

•
Off-Balance Sheet Arrangements

•
Impact of Inflation

•
Exposure to Changes in Interest Rates

•
Critical Accounting Policies and Estimates

•
Recently Issued Accounting Standards

Overview and Strategy

We remain focused on establishing and retaining customer relationships by offering a broad range of traditional financial services and products, competitively priced and delivered in a responsive manner to small businesses, to professionals and individuals in our market area. As a community bank, we seek to provide superior customer service that is highly personalized, efficient and responsive to local needs. To better serve our customers, we endeavor to provide advanced delivery systems with ATMs, current operating software, timely reporting, online bill pay and other similar up-to-date products and services. We seek to deliver these products and services with the care and professionalism expected of a community bank and with a special dedication to personalized customer service.

Our primary business objectives are:

•
to provide local businesses, professionals and individuals with banking services responsive to and determined by their needs and local market conditions;

•
to attract deposits and loans through competitive pricing, responsiveness and service; and

•
to provide a reasonable return to stockholders on capital invested.

We also intend to continue pursuing a strategy that includes acquisitions. An acquisition strategy involves significant risks, including the following: finding suitable candidates for acquisition; attracting funding to support additional growth within acceptable risk tolerances; maintaining asset quality; retaining the target’s customers and key personnel; obtaining necessary regulatory approvals; conducting adequate due diligence and managing known and unknown risks and uncertainties; integrating acquired businesses; and maintaining adequate regulatory capital. The market for acquisition targets is highly competitive, which may adversely affect our ability to find acquisition candidates that fit our strategy and standards.

We strive to serve the financial needs of our customers while providing an appropriate return to our stockholders, consistent with safe and sound banking practices. We expect that a financial strategy that utilizes variable rates and matching assets and liabilities will enable us to increase our net interest margin, while managing interest rate risk. We also seek to generate fee income from various sources, subject to our desire to maintain competitive pricing within our market area.

Our recognition of, and commitment to, the needs of the local community, combined with highly personalized and responsive customer service, differentiates us from our competition. We continue to capitalize upon the personal contacts and relationships of our organizers, directors, stockholders and officers to establish and grow our customer base.

43

Comparison of Financial Condition at December 31, 2025 and December 31, 2024

General.

Total assets were $2.29 billion at December 31, 2025, a decrease of $55.1 million, or 2.35% when compared to $2.34 billion at the end of 2024. The primary reason for the decrease in total assets was related to a decrease in investment securities of $64.6 million, partially offset by an increase in cash and cash equivalents of $18.3 million.

Cash and cash equivalents

Cash and cash equivalents increased $18.3 million, or 15.6%, to $135.7 million at December 31, 2025 compared to December 31, 2024.

Investment securities

Total available-for-sale investment securities decreased $64.6 million, or 26.1%, to $182.6 million at December 31, 2025 compared to December 31, 2024. The decrease was primarily due to principal repayments of $77.7 million and $3.5 million of maturities or calls of available-for-sale securities during 2025, partially offset by purchases of available for sale securities in the amount of $11.6 million and a decrease of $5.1 million attributed to the unrealized losses associated with the available-for-sale portfolio.

Loans

Loans, net of deferred loan fees and costs, decreased $2.5 million, or 0.1%, to $1.82 billion at December 31, 2025 compared to December 31, 2024. The decrease in net loans consisted of decreases of $47.7 million in construction loans, $41.6 million in commercial real estate loans, and $16.3 million in commercial and industrial loans, partially offset by increases of $95.8 million in residential mortgages, and $7.2 million in home equity and consumer loans. Commercial loan balances decreased due to increased selectivity in new loan originations and a continued focus on credit quality.

The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and non-owner-occupied CRE loans, was $1.34 billion or 73.9% of total loans of $1.82 billion at December 31, 2025. There were 740 loans in the Company’s CRE portfolio with an average and median loan size of $1.8 million and $0.6 million, respectively. LTV estimates are less than 70% for $1.23 billion or 91.7% of the CRE portfolio and less than 80% for $1.33 billion or 99.3% of the CRE portfolio.

The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value for the periods presented (dollars in thousands):

December 31, 2025

December 31, 2024

Commercial Real Estate

Balance

% of

portfolio

Weighted

Average

LTV

Balance

% of

portfolio

Weighted

Average

LTV

Multi Family

505,267

37.6

%

52.5

%

533,287

38.6

%

53.6

%

Owner Occupied

394,281

29.3

%

34.9

%

407,798

29.4

%

36.3

%

Land

27,514

2.1

%

70.7

%

25,241

1.8

%

73.9

%

Non Owner Occupied

Office Building

9,829

0.7

%

50.9

%

104,388

7.5

%

43.5

%

Retail

80,244

6.0

%

44.5

%

100,771

7.3

%

42.5

%

Industrial/Warehousing

44,198

3.3

%

41.4

%

73,417

5.3

%

44.9

%

Mixed Use

60,520

4.5

%

43.0

%

48,076

3.5

%

43.7

%

Restaurants

20,284

1.5

%

38.0

%

22,650

1.6

%

39.3

%

Healthcare

108,367

8.1

%

41.0

%

10,268

0.7

%

53.3

%

Other

93,027

6.9

%

42.4

%

59,189

4.3

%

45.6

%

Total non owner occupied

416,469

31.0

%

418,759

30.2

%

Total Commercial Real Estate

1,343,531

100.0

%

1,385,085

100.0

%

44

The following table presents the geographic markets of the commercial real estate portfolio for the periods presented (dollars in thousands):

December 31, 2025

December 31, 2024

Balance

% of

portfolio

Balance

% of

portfolio

Geographical Market

New York

629,314

46.8

%

639,994

46.1

%

New Jersey

504,206

37.5

%

540,896

39.1

%

Pennsylvania

186,268

13.9

%

184,084

13.3

%

Other

23,743

1.8

%

20,111

1.5

%

1,343,531

100.00

%

1,385,085

100.00

%

At December 31, 2025, non-performing assets totaled $16.6 million, a decrease of $10.6 million when compared to the amount at December 31, 2024. The decrease was due primarily the result of $10.0 million in charge-offs recorded during 2025, of which $9.9 million was recorded during the second quarter of 2025.

Deposits

Total deposits on December 31, 2025, decreased $56.4 million, or 2.78%, when compared to December 31, 2024. The decrease in the Company’s deposits consisted primarily of decreases in certificates of deposit of $45.0 million, money market deposits of $26.3 million, non-interest-bearing demand deposits of $15.0 million, and savings deposits of $3.1 million, partially offset by an increase in interest-bearing demand deposits of $33.0 million.

Borrowings

The Company had no outstanding borrowings at December 31, 2025 or December 31, 2024.

Stockholders’ equity

Total stockholders’ equity at December 31, 2025, increased $8.7 million or 3.31% when compared to December 31, 2024. The increase was primarily due to an increase in retained earnings of $9.8 million (which consisted of $18.6 million in net income, partially offset by $8.6 million of dividends recorded during the period), an increase in paid-in capital of $3.0 million primarily due to the exercise of stock options, and a decrease in accumulated other comprehensive loss of $3.7 million due to reductions in market interest rates and in investment securities, partially offset by a $7.9 million increase in treasury stock due to our stock repurchase program. The ratio of equity to total assets at December 31, 2025, and at December 31, 2024, was 11.9% and 11.2%, respectively.

We manage our balance sheet based on a number of interrelated criteria, such as changes in interest rates, fluctuations in certain asset and liability categories whose changes are not totally controlled by us, changes in deposit account balances driven by depositors’ needs, prepayments and issuer call options exercised on securities available for sale, early payoffs on loans, investment opportunities presented by market conditions, lending originations, capital provided by earnings, and active management of our overall liquidity positions. The management of these dynamic and interrelated elements of our balance sheet results in fluctuations in balance sheet items throughout the year.

Comparison of Operating Results for the Years Ended December 31, 2025, and December 31, 2024

General.

For the year ended December 31, 2025, the Company recorded net income of $18.6 million, or $2.71 per diluted common share, compared to $10.2 million, or $1.55 per diluted common share, for 2024. This increase was primarily the result of the purchase accounting adjustments recorded in 2024 reducing net income, which were related to the Cornerstone "CFC" acquisition, and included merger related expenses of $7.8 million.

45

Net interest income.

Net interest income for the twelve-month period ended December 31, 2025, was $75.8 million, an increase of $9.3 million, or 14.0%, from 2024. The increase from the previous year was the result of an increase in interest income of $7.6 million, or 6.2%, and a decrease in interest expense of $1.7 million, or 3.0%.

Total interest and dividend income.

Total interest and dividend income increased $7.6 million, or 6.2%, to $130.6 million for the year ended December 31, 2025, compared to $122.9 million for the prior year. The improvement in interest income resulted from an increase in average interest-earning assets of $148.2 million, partially offset by a decrease in the yield on earning assets of 8 basis points to 6.17% for the twelve-month period ended December 31, 2025.

Interest income and fees on loans increased $9.2 million, or 8.5%, to $117.8 million for the year ended December 31, 2025, compared to $108.6 million for the prior year. The increase was attributable to a $166.0 million increase in the average balance, partially offset by a 9 basis point decrease in the year-over-year average yield on loans to 6.44%, due to declining interest rates over the period.

Interest income on securities increased approximately $4.0 million, or 65.3%, for the year ended December 31, 2025, compared to the prior year. The increase was attributable to both a $73.9 million increase in the average balance and a 44 basis point increase in the year-over-year average yield on investments to 4.50%

Other interest and dividends decreased $5.5 million, or 67%, to $2.7 million for the year ended December 31, 2025, compared to $8.3 million for the prior year due to a decrease of $88.2 million in the average balances Due from Federal Reserve Bank, and a 113 basis point decrease in the yield on respective funds.

Interest expense.

Total interest expense decreased $1.7 million, or 3.0%, for the year ended December 31, 2025 compared to the prior year. This decrease was the result of a 37 basis point decrease in the cost of interest-bearing deposits and partially offset by an increase of $125.2 million in average interest-bearing deposits.

Interest expense on borrowings was not significant for either period presented.

Provision for credit losses.

The provision for credit losses for the twelve months ended December 31, 2025, was $6.7 million compared with a provision of $5.1 million for the 2024 period. The $6.7 million provision for 2025 consists of a $6.6 million provision associated with the Company’s loan portfolio, and a provision of $38 thousand associated with unfunded commitments. See the section above titled “Analysis of Allowance for Credit Losses” for a discussion of our allowance for credit losses methodology, including additional information regarding the determination of the provision for credit losses.

Non-interest income.

Total non-interest income for the year ended December 31, 2025, increased $312 thousand, or by 3.8%, primarily due an increase in bank owned life insurance of $326 thousand, and in fees and service charges of $247 thousand, partially offset by a decrease in loan fees of $278 thousand.

Non-interest expense.

For the year ended December 31, 2025, non-interest expense was $53.9 million, compared to $56.8 million for 2024. The decrease of $2.8 million was primarily attributed to acquisition related expenses of $7.8 million recorded in 2024, partially offset by increases in salaries and employee benefits of $1.7 million, data processing and communications of $1.1 million, professional fees of $763 thousand, occupancy and equipment of $527 thousand, and federal deposit insurance of $448 thousand during 2025 over the same period in 2024.

46

Income tax expense.

For the year ended December 31, 2025, income tax expense was $5.1 million resulting in an effective tax rate of 21.4% compared to income tax expense of $2.6 million and an effective tax rate of 20.1% for the year ended December 31, 2024. This increase in income taxes was due to the decrease in merger related expenses of $7.8 million when comparing the years ended December 31, 2025 and 2024.

Average Balance Sheets. The following table sets forth average balance sheets, yields and costs, and certain other information for the years indicated. The average yields and costs of funds shown are derived by dividing income or expense by the daily average balance of assets or liabilities, respectively, for the periods presented. Nonaccrual loans are included in the average balance of loans receivable, net for all periods presented. No tax-equivalent adjustments have been made as they were deemed insignificant.

Twelve Months Ended December 31,

2025

2024

Change 2025 vs 2024

Average

Balances

Income/

Expense

Yield

Rates

Average

Balances

Income/

Expense

Yield

Rates

Average

Balances

Yield

Rates

(Dollars in thousands)

Interest-earning assets:

Loans receivable

$

1,829,038

$

117,768

6.44

%

$

1,663,013

$

108,586

6.53

%

$

166,025

(0.09

)%

Securities

Taxable available-for-sale

183,722

8,925

4.86

%

109,145

4,928

4.51

%

74,577

0.35

%

Tax exempt available-for-sale

39,562

1,117

2.82

%

40,239

1,142

2.84

%

(677

)

(0.02

)%

Held-to-maturity

157

8

5.33

%

169

9

5.27

%

(12

)

0.06

%

Due from Federal Reserve Bank

47,855

1,983

4.14

%

136,281

7,188

5.27

%

(88,426

)

(1.13

)%

Other interest earning-assets

16,068

751

4.68

%

19,337

1,093

5.65

%

(3,269

)

(0.97

)%

Total interest-earning assets

2,116,402

$

130,552

6.17

%

1,968,184

$

122,946

6.25

%

148,218

(0.08

)%

Other non-earnings assets

168,805

151,600

17,205

Total assets

$

2,285,207

$

2,119,784

$

165,423

Interest-bearing liabilities

Demand

$

313,269

$

6,298

2.01

%

$

258,462

$

4,941

1.91

%

$

54,807

0.10

%

Savings

169,486

3,857

2.28

%

157,538

3,974

2.52

%

11,948

(0.24

)%

Money markets

469,061

14,639

3.12

%

421,934

15,971

3.79

%

47,127

(0.67

)%

Certificates of deposit

735,427

29,884

4.06

%

724,060

31,528

4.35

%

11,367

(0.29

)%

Total deposit

1,687,243

54,678

3.24

%

1,561,994

56,414

3.61

%

125,249

(0.37

)%

Borrowings

1,262

58

4.59

%

—

—

—

1,262

4.59

%

Total interest-bearing liabilities

1,688,505

$

54,736

3.24

%

1,561,994

$

56,414

3.61

%

126,511

(0.37

)%

Non-interest-bearing deposits

291,084

264,418

26,666

Other liabilities

40,619

43,955

(3,336

)

Total liabilities

2,020,208

1,870,367

149,841

Stockholders’ equity

264,999

249,417

15,582

Total liabilities and stockholder’s

   equity

$

2,285,207

$

2,119,784

$

165,423

Net interest-earnings assets

$

427,897

$

406,189

$

21,708

Net interest income; interest rate

   spread

2.93

%

2.64

%

0.29

%

Net interest margin

$

75,816

3.58

%

$

66,532

3.38

%

$

—

0.20

%

47

Rate/Volume Analysis

The following table reflects the sensitivity of our interest income and interest expense to changes in volume and in yields on interest-earning assets and costs of interest-bearing liabilities during the periods indicated.

Twelve Months Ended

December 31, 2025 vs . 2024

Increase (Decrease) Due to

Rate

Volume

Net

(In thousands)

Interest and dividend income:

Loans receivable, including fees

$

(1,461

)

$

10,643

$

9,182

Securities available-for-sale

Taxable

413

3,584

3,997

Tax-exempt

(7

)

(18

)

(25

)

Securities held-to-maturity

—

(1

)

(1

)

Due from Federal Reserve Bank

(1,296

)

(3,909

)

(5,205

)

Other interest and dividend income

(172

)

(170

)

(342

)

Total interest and dividend income

$

(2,523

)

$

10,129

$

7,606

Interest expense:

Demand

$

265

$

1,092

$

1,357

Savings

(552

)

435

(117

)

Money market

(3,637

)

2,305

(1,332

)

Certificates of deposit

(2,140

)

496

(1,644

)

Borrowings

—

58

58

Total interest expense

$

(6,064

)

$

4,386

$

(1,678

)

Change in net interest income

$

3,541

$

5,743

$

9,284

Liquidity, Commitments and Capital Resources

Liquidity. Our liquidity, represented by cash and due from banks, is a product of our operating, investing and financing activities. Our primary sources of funds are deposits, principal repayments of securities and outstanding loans, and funds provided from operations. In addition, we invest excess funds in short-term interest-earnings assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.

We strive to maintain sufficient liquidity to fund operations, loan demand and to satisfy fluctuations in deposit levels. We are required to have enough investments that qualify as liquid assets in order to maintain sufficient liquidity to ensure safe and sound banking operations. Liquidity may increase or decrease depending upon the availability of funds and comparative yields on investments in relation to the return on loans. We attempt to maintain adequate but not excessive liquidity, and liquidity management is both a daily and long-term function of our business management. We manage our liquidity in accordance with a board of directors-approved asset-liability policy, which is administered by our asset-liability committee (“ALCO”). ALCO reports interest rate sensitivity, liquidity, capital and investment-related matters on a quarterly basis to the Company's board of directors.

We review cash flow projections regularly and update them in order to maintain liquid assets at levels believed to meet the requirements of normal operations, including loan commitments and potential deposit outflows from maturing certificates of deposit and savings withdrawals.

While deposits are our primary source of funds, when needed we are also able to generate cash through borrowings from the FHLB-NY. At December 31, 2025, we had remaining available capacity with FHLB-NY, subject to certain collateral restrictions, of $548.4 million.

48

Additionally, we are a shareholder of Atlantic Community Bancshares, Inc., and as such, as of December 31, 2025, we had available capacity with its subsidiary, Atlantic Community Bankers Bank of $10.0 million to provide short-term liquidity generally for a period of not more than fourteen days.

Contractual Obligations. We have non-cancelable operating leases for branch offices and our operations center. The following table is a schedule of future payments under operating leases with initial terms longer than 12 months at December 31, 2025:

Amount

Years Ended December 31

(in thousands)

2026

$

3,730

2027

3,463

2028

3,354

2029

2,733

2030

2,598

Thereafter

12,113

Total

$

27,991

The following table summarizes our contractual cash obligations relating to certificates of deposits:

Amount

Years Ended December 31

(in thousands)

2026

$

687,049

2027

31,709

2028

2,436

2029

2,807

2030 and thereafter

706

Total

$

724,707

Capital Resources. Consistent with our goals to operate as a sound and profitable financial institution, we actively seek to maintain our status as a well-capitalized institution in accordance with regulatory standards. As of December 31, 2025, we met the capital requirements to be considered “well capitalized.” See Note 16 – “Regulatory Matters” in the Notes to Consolidated Financial Statements included within this Form 10-K for more information regarding our capital resources.

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of our business of investing in loans and securities as well as in the normal course of maintaining and improving our facilities. These financial instruments include significant purchase commitments, such as commitments related to capital expenditure plans and commitments to purchase investment securities or mortgage-backed securities, and commitments to extend credit to meet the financial needs of our customers.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the loan contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by our customers. Our exposure to credit loss in the event of non-performance by the counterparty to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

49

We had the following off-balance sheet financial instruments whose contract amounts represent credit risk at December 31, 2025:

2025

2024

(In thousands)

Performance and standby letters of credit

$

590

$

700

Undisbursed construction loans-in-process

100,639

61,223

Commitments to fund loans

69,619

51,883

Unfunded commitments under lines of credit

19,500

18,801

Total

$

190,348

$

132,607

For additional information regarding our outstanding lending commitments at December 31, 2025, see Note 9 – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements contained in this Form 10-K.

Impact of Inflation

The financial statements included in this Form 10-K have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the measurement of financial position and results of operations in terms of historical dollars, without considering changes in the relative purchasing power of money, over time, due to inflation. Our primary assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates, however, do not necessarily move in the same direction or with the same magnitude as the price of goods and services, since such prices are affected by inflation.

Exposure to Changes in Interest Rates

Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring the Bank’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to affect adversely net interest income.

50

The table on the next page sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at December 31, 2025, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown. Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at December 31, 2025, on the basis of contractual maturities, anticipated prepayments, and scheduled rate adjustments period and subsequent selected time intervals. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and anticipated prepayments of adjustable-rate loans and fixed-rate loans, and as a result of contractual rate adjustments on adjustable-rate loans.

3 Months or

Less

More than 3 Months to 1 Year

More than 1

Year to 3 Years

More than 3 Years to 5 Years

More than 5

Years

Non-Rate

Sensitive

Total Amount

(Dollars in thousands)

Interest-earning assets: (1)

Investment securities

$

31,049

$

38,467

$

35,353

$

23,105

$

54,595

$

—

$

182,569

Loans receivable

364,896

263,016

654,877

416,104

119,849

(22,651

)

1,796,091

Other interest-earnings assets (2)

121,014

—

—

—

—

—

121,014

Total interest-earning assets

$

516,959

$

301,483

$

690,230

$

439,209

$

174,444

$

(22,651

)

$

2,099,674

Interest-bearing liabilities:

Checking and savings accounts

$

501,268

$

—

$

—

$

—

$

—

$

501,268

Money market accounts

464,205

—

—

—

—

—

464,205

Certificate accounts

307,642

381,215

32,337

3,513

—

—

724,707

Borrowings

—

—

—

—

—

—

—

Total interest-bearing liabilities

$

1,273,115

$

381,215

$

32,337

$

3,513

$

—

$

—

$

1,690,180

Interest-earning assets less interest-bearing

   liabilities

$

(756,156

)

$

(79,732

)

$

657,893

$

435,696

$

174,444

$

(22,651

)

$

409,494

Cumulative interest-rate sensitivity gap (3)

$

(756,156

)

$

(835,888

)

$

(177,995

)

$

257,701

$

432,145

Cumulative interest-rate gap as a percentage

   of total assets at December 31, 2025

(33.09

)%

(36.58

)%

(7.81

)%

11.28

%

18.92

%

Cumulative interest-earning assets as a

   percentage of cumulative interest-bearing

   liabilities at December 31, 2025

40.61

%

49.47

%

89.42

%

115.25

%

125.59

%

(1)
Interest-earnings assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities.

(2)
Includes interest-bearing bank balances, FHLB Stock and Federal Funds Sold

(3)
Interest-rate sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features which restrict changes in interest rates both on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase.

51

Net Portfolio Value Analysis. Our interest rate sensitivity also is monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The following table sets forth our NPV as of December 31, 2025 and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.

Change in

Interest Rates

Net Portfolio Value

NPV as % of Portfolio

Value of Assets

In Basis Points

(Rate Shock)

Amounts

$ Change

% Change

EVE/EVA1

Change

(Dollars in thousands)

 300

$

323,707

$

(29,733

)

(8.41

)%

14.89

%

(0.47

)

 200

$

335,871

$

(17,569

)

(4.97

)%

15.17

%

(0.19

)

 100

$

344,775

$

(8,665

)

(2.45

)%

15.28

%

(0.08

)

Static

$

353,440

$

—

15.36

%

 (100)

$

350,890

$

(2,550

)

(0.72

)%

15.00

%

(0.36

)

 (200)

$

335,285

$

(18,155

)

(5.14

)%

14.16

%

(1.20

)

 (300)

$

315,529

$

(37,911

)

(10.73

)%

13.16

%

(2.20

)

1.
Economic Value of Equity (EVE) divided by Economic Value of Assets (EVA)

As is the case with the GAP Table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV model provides an indication of interest rate risk exposure at a particular point in time, such model is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

Critical Accounting Policies and Estimates

In the preparation of our financial statements, we have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States and in accordance with general practices within the banking industry. Our significant accounting policies are described in our financial statements under Note 1- “Summary of Significant Accounting Policies.” While all these policies are important to understanding the financial statements, certain accounting policies described below involve significant judgment and assumptions by management that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting estimates to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and assumptions that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

Allowance for Credit Losses. The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents our estimate of losses expected in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents our estimate of losses expected in our unfunded loan commitments and is recorded in other liabilities on the balance sheet. The allowance for credit losses is increased by the provision for credit losses and recoveries and decreased by charge-offs. Generally, loans deemed to be uncollectible are charged-off against the allowance for credit losses, and subsequent recoveries, if any, are credited to the allowance for loan losses. All, or part, of the principal balance of loans receivable are charged off to the allowance for credit losses when it is determined that the repayment of all, or part, of the principal balance is highly unlikely.

52

Recently Issued Accounting Standards

See Note 1- “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements contained in this Annual Report on Form 10-K for a discussion of recently issued accounting standards.

Cautionary Note Regarding Forward-Looking Statements

The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the SEC, in its reports to stockholders and in other communications by the Company (including this report), which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act.

These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the potential impact of partial government shutdown caused by budget stalemate in Congress, higher tariffs imposed by the Trump administration, higher inflation levels, and general economic concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the global impact of foreign military conflicts; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes in consumer spending and saving habits; those risks described in Item 1. “Business,” Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report; and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as required by applicable law or regulation.