ECB Bancorp, Inc. /MD/ (ECBK)
SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6036 Savings Institutions, Not Federally Chartered
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1914605. Latest filing source: 0001437749-26-009778.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 78,180,000 | USD | 2025 | 2026-03-25 |
| Net income | 7,772,000 | USD | 2025 | 2026-03-25 |
| Assets | 1,605,653,000 | USD | 2025 | 2026-03-25 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001914605.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Revenue | 22,375,000 | 29,157,000 | 54,776,000 | 67,045,000 | 78,180,000 | |
| Net income | 4,042,000 | 2,720,000 | 4,456,000 | 3,991,000 | 7,772,000 | |
| Diluted EPS | 0.32 | 0.52 | 0.48 | 0.94 | ||
| Operating cash flow | 6,449,000 | 7,770,000 | 6,434,000 | 6,228,000 | 9,220,000 | |
| Capital expenditures | 104,000 | 216,000 | 335,000 | 60,000 | 214,000 | |
| Share buybacks | 2,225,000 | 2,722,000 | 4,610,000 | |||
| Assets | 666,489,000 | 1,064,462,000 | 1,280,335,000 | 1,418,153,000 | 1,605,653,000 | |
| Liabilities | 589,216,000 | 901,732,000 | 1,115,434,000 | 1,249,885,000 | 1,433,719,000 | |
| Stockholders' equity | 73,034,000 | 77,273,000 | 162,730,000 | 164,901,000 | 168,268,000 | 171,934,000 |
| Free cash flow | 6,345,000 | 7,554,000 | 6,099,000 | 6,168,000 | 9,006,000 |
Ratios
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Net margin | 18.06% | 9.33% | 8.13% | 5.95% | 9.94% | |
| Return on equity | 5.23% | 1.67% | 2.70% | 2.37% | 4.52% | |
| Return on assets | 0.61% | 0.26% | 0.35% | 0.28% | 0.48% | |
| Liabilities / equity | 7.63 | 5.54 | 6.76 | 7.43 | 8.34 |
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/CIK0001914605.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q3 | 2022-09-30 | -0.12 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.11 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 13,651,000 | 1,425,000 | 0.17 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 14,166,000 | 1,341,000 | 0.16 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 14,897,000 | 789,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 15,694,000 | 621,000 | 0.07 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 16,386,000 | 791,000 | 0.09 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 17,155,000 | 1,133,000 | 0.14 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 17,811,000 | 1,446,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 17,621,000 | 1,297,000 | 0.16 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 19,101,000 | 1,440,000 | 0.17 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 20,417,000 | 2,439,000 | 0.29 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 21,039,000 | 2,596,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 21,614,000 | 3,122,000 | 0.38 | reported discrete quarter |
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: 0001437749-26-015758.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations General Management’s discussion and analysis of the financial condition at March 31, 2026 compared to December 31, 2025 and results of operations for the three months ended March 31, 2026 and 2025 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “intend,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to: ● statements of our goals, intentions and expectations; ● statements regarding our business plans, prospects, growth and operating strategies; ● statements regarding the quality of our loan portfolio; and ● estimates of our risks and future costs and benefits. These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: ● changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; ● our ability to access cost-effective funding; ● fluctuations in real estate values and both residential and commercial real estate market conditions; ● demand for loans and deposits in our market area; ● our ability to implement and change our business strategies; ● competition among depository and other financial institutions; ● inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments, or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; ● adverse changes in the securities or secondary mortgage markets; ● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; ● changes in the quality or composition of our loan or investment portfolios; ● technological changes that may be more difficult or expensive than expected; ● the inability of third-party providers to perform as expected; ● a failure or breach of our operational or security systems or infrastructure, including cyberattacks; ● our ability to manage market risk, credit risk and operational risk; ● our ability to enter new markets successfully and capitalize on growth opportunities; 24 ● changes in consumer spending, borrowing and savings habits; ● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; ● the risk of adverse changes in business conditions due to geo-political tensions; ● our ability to attract and retain key employees; and ● changes in the financial condition, results of operations or future prospects of issuers of securities that we own. Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Significant Accounting Policies There are no material changes to the significant accounting policies disclosed in ECB Bancorp, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2026. Critical Accounting Estimates The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with generally accepted accounting principles used in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of income and expenses. We consider the accounting policies discussed below to be critical accounting estimates. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations. Allowance for Credit Losses The Company estimates the allowance for credit losses in accordance with the CECL methodology for loans measured at amortized cost. The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses. Arriving at an appropriate amount of allowance for credit losses involves a high degree of judgment. The Company estimates credit losses on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. Management's judgment is required for the selection and application of these factors which are derived from historical loss experience as well as assumptions surrounding expected future losses and economic forecasts. Loans that no longer share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting. For the loans that are individually assessed, the Company uses either a discounted cash flow (“DCF”) approach or a fair value of collateral approach. The latter approach is used for loans deemed to be collateral dependent or when foreclosure is probable. Changes in these judgments and assumptions could be due to a number of circumstances which may have a direct impact on the provision for credit losses and may result in changes to the amount of allowance. The allowance for credit losses is increased by the provision for credit losses and by recoveries of loans previously charged off. Credit losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan. Comparison of Financial Condition at March 31, 2026 and December 31, 2025 Total Assets. Total assets were $1.65 billion at March 31, 2026, as compared to $1.61 billion at December 31, 2025, or an increase of $44.6 million, or 2.8%. Cash and Cash Equivalents. Cash and cash equivalents were $111.3 million at March 31, 2026, as compared to $86.9 million at December 31, 2025, or an increase of $24.4 million, or 28.0%. The increase in cash and cash equivalents was driven by strong deposit growth that outpaced our loan growth for the quarter. Interest-Bearing Time Deposits. Interest-bearing time deposits were $11.5 million at March 31, 2026, as compared to $8.0 million at December 31, 2025, or an increase of $3.5 million, or 43.7%. This increase was due to purchases of new short-term interest-bearing time deposits. Investment Securities Available for Sale. Investments in securities available for sale were $37.1 million at March 31, 2026, as compared to $34.3 million at December 31, 2025, or an increase of $2.7 million, or 8.0%. This increase was due to purchases of new securities. Investment Securities Held to Maturity. Investments in securities held to maturity were $51.6 million at March 31, 2026, as compared to $55.8 million at December 31, 2025, or a decrease of $4.1 million, or 7.4%. This decrease was due to maturities and principal paydowns of securities. Loans. Total gross loans were $1.40 billion at March 31, 2026, as compared to $1.38 billion at December 31, 2025, or an increase of $19.8 million, or 1.4%. ● One-to-four family residential real estate loans increased $18.1 million, or 3.8%, to $491.5 million at March 31, 2026, from $473.4 million at December 31, 2025. ● Construction loans increased $5.6 million, or 6.3%, to $94.5 million at March 31, 2026 from $89.0 million at December 31, 2025. ● Home equity lines of credit increased $2.3 million, or 4.6%, to $52.2 million at March 31, 2026, from $49.9 million at December 31, 2025. ● Commercial loans decreased $77,000, or 1.0%, to $7.86 million at March 31, 2026 from $7.94 million at December 31, 2025. ● Consumer loans decreased $704,000, or 81.0%, to $165,000 at March 31, 2026, from $869,000 at December 31, 2025. ● Commercial real estate loans decreased $1.0 million, or 0.3%, to $335.4 million at March 31, 2026 from $336.4 million at December 31, 2025. ● Multi-family real estate loans decreased $4.3 million, or 1.0%, to $421.1 million at March 31, 2026 from $425.4 million at December 31, 2025. Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $11.1 million and $11.9 million at March 31, 2026 and December 31, 2025, respectively. The amount of stock we are required to purchase is in proportion to our FHLB borrowings and level of total assets. Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance was $15.5 million at March 31, 2026, as compared to $15.4 million at December 31, 2025, or an increase of $117,000, or 0.8%. The increase was due to an increase of the cash surrender value of our bank-owned life insurance portfolio. 25 Deposits. Total deposits were $1.20 billion at March 31, 2026, as compared to $1.13 billion at December 31, 2025, or an increase of $67.1 million, or 5.9%. ● Certificates of deposit increased $67.3 million, or 9.2%, to $795.6 million at March 31, 2026 from $728.3 million at December 31, 2025. ● Interest-bearing checking accounts increased $6.4 million, or 32.8%, to $25.7 million at March 31, 2026 from $19.4 million at December 31, 2025. ● Money market deposit accounts increased $1.8 million, or 0.8%, to $213.5 million at March 31, 2026 from $211.8 million at December 31, 2025. ● Demand deposit accounts decreased $1.3 million, or 1.6%, to $80.2 million at March 31, 2026 from $81.5 million at December 31, 2025. ● Savings accounts decreased $7.1 million, or 7.8%, to $84.3 million at March 31, 2026 from $91.4 million at December 31, 2025. Fe [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This discussion and analysis reflects our financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the audited financial statements, which appear beginning on page 55 of this Annual Report on Form 10-K.
Overview
Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one-to-four family residential real estate loans, commercial real estate loans, multifamily real estate loans, construction loans, home equity lines of credit and loans and commercial loans. At December 31, 2025, $473.4 million, or 34.2%, of our total loan portfolio was comprised of one-to-four family residential real estate loans, $425.4 million, or 30.8%, of our total loan portfolio was comprised of multifamily real estate loans, $336.4 million, or 24.3%, of our total loan portfolio was comprised of commercial real estate loans, $89.0 million, or 6.4%, of our total loan portfolio was comprised of construction loans, $49.9 million, or 3.6%, of our total loan portfolio was comprised of home equity lines of credit and loans and $7.9 million, or 0.6% of our total loan portfolio was comprised of commercial loans. We also invest in securities, consisting primarily of U.S. government and federal agency obligations, collateralized mortgage obligations, mortgage-backed securities and corporate bonds. We offer a variety of deposit accounts, including certificate of deposit accounts, individual retirement accounts, money market accounts, savings accounts and interest-bearing and noninterest-bearing checking accounts. At December 31, 2025, $728.3 million, or 64.3%, of our total deposit accounts was comprised of certificate of deposit accounts, $211.8 million, or 18.7%, of our total deposit accounts was comprised of money market accounts, $91.4 million, or 8.1%, of our total deposit accounts was comprised of savings accounts, $81.5 million, or 7.2% of our total deposit accounts was comprised of noninterest bearing demand deposit accounts and $19.4 million, or 1.7%, of our total deposit accounts was comprised of interest-bearing demand deposit accounts. In addition to customer deposits, in recent years, we have also accepted brokered deposits as a non-retail funding source to supplement our customer deposits and fund our operations. At December 31, 2025, we had $134.0 million of brokered deposits. We also have utilized advances from the Federal Home Loan Bank of Boston (the “FHLB”) as an additional funding source to fund our operations and we had $284.8 million of FHLB advances outstanding at December 31, 2025.
For the years ended December 31, 2025 and 2024, we had net income of $7.8 million and $4.0 million, respectively. Our current business strategy includes continuing to focus on originating and growing our commercial real estate, multifamily real estate and construction loan portfolios as well as the origination of one-to-four family residential real estate loans and home equity lines of credit and loans. To a lesser extent, we also originate other commercial loans and consumer loans.
Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities. Our results of operations also are affected by our provision for credit losses, noninterest income and noninterest expense. Noninterest income currently consists primarily of fees and service charges, gains on sales of loans and income on bank-owned life insurance. Noninterest expense currently consists primarily of expenses related to salary and employee benefits and director fees, occupancy and equipment, data processing, computer software and licensing fees, advertising, professional fees, FDIC deposit insurance and other general and administrative expenses.
Our results of operations also may be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities.
Business Strategy
Our principal objective is to build long-term value for our shareholders by operating a profitable community-oriented financial institution dedicated to meeting the banking needs of our customers. Highlights of our current business strategy include:
•
Continuing to focus on enhancing our commercial real estate and multifamily real estate lending. In order to increase the yield on our loan portfolio and maintain a reduced term to maturity of our loan portfolio, we intend to continue our focus on growing the originations of commercial real estate loans and multifamily real estate loans while maintaining what we believe are prudent underwriting standards and we expect that these loan categories will comprise a greater percentage of our total loan portfolio. In order to execute on this strategy, in January 2022 we hired a new Chief Lending Officer. Since then, we have continued to add some additional commercial lending and credit analyst personnel. The capital raised in the offering has allowed us to increase our commercial lending capacity by enabling us to originate and retain all or a greater portion of loans that we historically participated out to other local institutions. Given that our regulatory loans to one borrower limits have increased with our increase in capital, we have revised our lending policies and loans to one borrower limitations to increase our lending limits and the type and size of loans we choose to originate and hold in our portfolio. Our commercial real estate and multifamily real estate loan portfolios increased to $336.4 million and $425.4 million, respectively, at December 31, 2025 from $229.0 million and $344.0 million, respectively, at December 31, 2024.
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•
Reduced emphasis on one-to-four family residential real estate lending. We have been, and will continue to be, a one-to-four family residential real estate lender for borrowers in our market area and such lending will remain a core focus, but we expect that our lending strategy will result in a decrease to one-to-four family residential loans as a percentage of our total loan portfolio as we increase our focus on commercial real estate and multifamily real estate lending. As of December 31, 2025, $473.4 million, or 34.2%, of our total loan portfolio, consisted of one-to-four family residential real estate loans and at that date an additional $49.9 million, or 3.6%, of our total loan portfolio, consisted of home equity lines of credit and loans. We expect that one-to-four family residential real estate lending will remain one of our primary lending activities.
•
Maintaining our strong asset quality through prudent loan underwriting. As we seek to grow our loan portfolio, we intend to maintain prudent loan underwriting and credit monitoring processes. At December 31, 2025 and 2024, non-performing assets totaled $1.1 million and $2.0 million, respectively, which represented 0.07% and 0.14% of total assets at those dates, respectively.
•
Continuing to attract and retain customers in our market area and increase our deposits. Our strategy to enhance and grow our commercial real estate and multifamily real estate lending in a diligent and orderly manner is also designed to encourage relationship banking and increase operating deposit relationships, including noninterest-bearing transaction accounts, while maintaining a balanced and diversified funding base that includes certificates of deposit. We plan to leverage our increased focus on commercial real estate and commercial lending efforts to also increase our opportunities to develop commercial business deposit relationships. Additionally, we believe the recent hire of our Senior Vice President of Retail Operations, who brings 39 years of banking experience to our retail sales and administrative team, will be invaluable to the implementation of the added product delivery channels and technological services such as additional electronic and mobile banking applications and cash management services, which we believe will increase our core deposits.
•
Remaining a community-oriented institution and relying on high quality service to maintain and build a loyal local customer base. We were established in 1890 and have been operating continuously in and around Everett, Massachusetts since that time. By using our recognized brand name and the goodwill developed over years of providing timely, efficient banking services, we believe we have been able to attract a solid base of local retail customers on which to continue to build our banking business. Additionally, we believe that the establishment and funding of the charitable foundation will further promote our relationships and exposure in our market area through our support of charitable organizations operating in our local community now and in the future.
•
Expanding our banking franchise as opportunities arise through de novo branching and/or branch acquisitions. We historically operated from our two full-service banking offices in Everett, MA and Lynnfield, MA. During 2023 we successfully opened our third branch which is located in Woburn, MA. In January 2026, we announced that we are filing an application to establish a new branch office in Medford, MA. We believe there are branch expansion opportunities that exist within our primary market area. We intend to evaluate branch expansion opportunities, including through establishing one or more de novo branches and/or branch acquisitions as such opportunities arise.
Summary of Significant Accounting Policies
The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S. GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be significant accounting policies. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances.
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Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.
The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company” we have elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
The following represent our significant accounting policies:
Allowance for Credit Losses. On January 1, 2023, the Company adopted a Current Expected Credit Loss (CECL) methodology for estimating the credit losses for loans. This methodology replaced the incurred loss and impairment methodology. The CECL methodology reflects expected credit losses and requires consideration of historical experience, current conditions, and reasonable and supportable forecasts of future economic conditions. Management uses forward-looking information to estimate the expected credit loss on a loan at the time of origination. The change from the incurred loss methodology to the CECL methodology was recognized through an adjustment to retained earnings.
Actual credit losses, net of recoveries, are deducted from the allowance for credit losses. Loans are charged off when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance for credit losses. A provision for credit losses, which is a charge against earnings, is recorded to bring the allowance for credit losses to a level that, in management’s judgment, is adequate to absorb expected lifetime credit losses in the loan portfolio. Management’s evaluation process used to determine the appropriateness of the allowance for credit losses is subject to the use of estimates, assumptions, and judgment. The evaluation process involves gathering and interpreting many qualitative and quantitative factors which could affect expected credit losses. Because interpretation and analysis involves judgment, current economic or business conditions can change, and future events are inherently difficult to predict, the anticipated amount of estimated credit losses and therefore the appropriateness of the allowance for credit losses could change significantly.
The allocation methodology applied by ECB Bancorp is designed to assess the appropriateness of the allowance for credit losses and includes allocations for individually evaluated loans and loss factor allocations for all remaining loans, with a quantitative model with an assessment of certain qualitative factors. The methodology includes evaluation and consideration of several factors, such as, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, internal historical and industry loss experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, the fair value of underlying collateral, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions or circumstances underlying the collectability of loans. Because each of the criteria used is subject to change, the allocation of the allowance for credit losses is made for analytical purposes and is not necessarily indicative of the trend of future credit losses in any particular loan category. The total allowance is available to absorb losses from any segment of the loan portfolio. Management believes the allowance for credit losses was adequate at December 31, 2025. The allowance analysis is reviewed by the board of directors on a quarterly basis in compliance with regulatory requirements. In addition, various regulatory agencies periodically review the allowance for credit losses. As a result of such reviews, we may choose to adjust our allowance for credit losses. However, regulatory agencies are not directly involved in the process of establishing the allowance for credit losses as the process is the responsibility of ECB Bancorp. and any increase or decrease in the allowance is the responsibility of management.
As noted above, we consider a number of variables in our evaluation of the adequacy of the allowance for credit losses, with one of the more significant variables being prepayment rates in the various segments of our loan portfolio. Based on our model, if all segments of our loan portfolio experienced a 50% decrease in estimated prepayment rates and curtailment rates, our allowance for credit losses as of December 31, 2025 would have increased $1.6 million to $11.8 million, holding all other variables constant.
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Comparison of Financial Condition at December 31, 2025 and December 31, 2024
Total Assets. Total assets increased $187.5 million, or 13.2%, to $1.61 billion at December 31, 2025 from $1.42 billion at December 31, 2024. The increase was primarily the result of increases in loans.
Cash and Cash Equivalents. Cash and cash equivalents decreased $70.7 million, or 44.9%, to $86.9 million at December 31, 2025 from $157.6 million at December 31, 2024. The decrease in cash and cash equivalents was driven by growth in both loans and investments that in aggregate was greater than our growth in deposits and borrowings.
Interest-Bearing Time Deposits. Interest-bearing time deposits were $8.0 million at December 31, 2025, as compared to $100,000 at December 31, 2024, or an increase of $7.9 million. This increase was due to purchases of new interest-bearing time deposits.
Investments in Securities Available for Sale. Investments in securities available for sale were $34.3 million at December 31, 2025, as compared to $6.6 million at December 31, 2024, or an increase of $27.8 million, or 422.8%. This increase was due to purchases of new securities.
Investments in Securities Held to Maturity. Investments in securities held to maturity were $55.8 million at December 31, 2025, as compared to $73.2 million at December 31, 2024, or a $17.5 million, or 23.8%, decrease. This decrease was due to maturities and principal paydowns of securities.
Loans. Total gross loans were $1.38 billion at December 31, 2025, as compared to $1.15 billion at December 31, 2024, or an increase of $237.0 million, or 20.7%.
•
Commercial real estate loans increased $107.4 million, or 46.9%, to $336.4 million at December 31, 2025, from $229.0 million at December 31, 2024.
•
Multi-family real estate loans increased $81.5 million, or 23.7%, to $425.4 million at December 31, 2025, from $344.0 million at December 31, 2024.
•
Residential real estate loans increased $50.6 million, or 12.0%, to $473.4 million at December 31, 2025, from $422.8 million at December 31, 2024.
•
Home equity lines of credit increased $4.7 million, or 10.4%, to $49.9 million at December 31, 2025, from $45.2 million at December 31, 2024.
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•
Consumer loans increased $728,000, or 516.3%, to $869,000 at December 31, 2025, from $141,000 at December 31, 2024.
•
Construction loans decreased $1.9 million, or 2.1%, to $89.0 million at December 31, 2025, from $90.9 million at December 31, 2024.
•
Commercial loans decreased $5.9 million, or 42.7%, to $7.9 million at December 31, 2025, from $13.8 million at December 31, 2024.
The increase in these loan portfolios reflects our strategy to grow the balance sheet by continuing to diversify into higher-yielding commercial real estate and multi-family real estate loans to improve net margins and manage interest rate risk.
Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $11.9 million and $10.0 million at December 31, 2025 and 2024, respectively. The amount of stock we are required to purchase is in proportion to our FHLB borrowings and level of total assets.
Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance increased $475,000, or 3.2%, to $15.4 million at December 31, 2025 from $14.9 million at December 31, 2024. The increase was due to an increase in cash surrender value of our bank-owned life insurance portfolio during the year ended December 31, 2025.
Deposits. Total deposits were $1.13 billion at December 31, 2025, as compared to $998.5 million at December 31, 2024, or an increase of $133.8 million, or 13.4%.
•
Certificates of deposit increased $122.8 million, or 20.3%, to $728.3 million at December 31, 2025 from $605.5 million at December 31, 2024;
•
Money market deposit accounts increased $27.2 million, or 14.7%, to $211.8 million at December 31, 2025 from $184.6 million at December 31, 2024;
•
Interest-bearing checking accounts decreased $1.2 million, or 5.7%, to $19.4 million at December 31, 2025 from $20.5 million at December 31, 2024;
•
Demand deposit accounts decreased $3.5 million, or 4.1%, to $81.5 million at December 31, 2025 from $85.0 million at December 31, 2024; and
•
Savings accounts decreased $11.6 million, or 11.2%, to $91.4 million at December 31, 2025 from $102.9 million at December 31, 2024.
Federal Home Loan Bank Advances. FHLB advances increased $50.8 million, or 21.7%, to $284.8 million at December 31, 2025 from $234.0 million at December 31, 2024. The increase in FHLB advances was used primarily to fund loan growth.
Shareholders’ Equity. Total shareholders' equity increased $3.7 million, or 2.2%, to $171.9 million as of December 31, 2025 from $168.3 million as of December 31, 2024. This increase is primarily the result of earnings of $7.8 million. Partially offsetting the increase from earnings were decreases in additional paid-in capital ("APIC") and accumulated other comprehensive income ("AOCI") of $3.2 million and $1.3 million, respectively. The decrease in APIC was driven by $4.6 million in shares repurchased under our share repurchase plan, partially offset by an increase in APIC of $1.5 million related to stock-based compensation and ESOP shares committed to be released. The decrease in AOCI was driven by a decrease in the fair value of cash flow hedges. Book value per share increased $1.05 to $19.55 at December 31, 2025 from $18.50 at December 31, 2024.
Comparison of Operating Results for the Years Ended December 31, 2025 and December 31, 2024
Net Income. Net income was $7.8 million for the year ended December 31, 2025, compared to net income of $4.0 million for the year ended December 31, 2024, an increase of $3.8 million, or 94.7%.
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Interest and Dividend Income. Interest and dividend income increased $11.1 million, or 16.6%, to $78.2 million for the year ended December 31, 2025 from $67.0 million for the year ended December 31, 2024 driven by an $11.2 million increase in interest and fees on loans, an $822,000 increase in interest and dividends on securities and a $114,000 increase in interest on interest-bearing time deposits, partially offset by a $1.0 million decrease in interest on short-term investments. The increase in interest and fees on loans was driven by an increase of $158.5 million in the average balance of the loan portfolio to $1.26 billion for the year ended December 31, 2025 from $1.10 billion for the year ended December 31, 2024, as well as an increase in the yield of 23 basis points to 5.47% during the year ended December 31, 2025 from 5.24% during the year ended December 31, 2024. The yield for the year ended December 31, 2025 benefited from new loans with higher rates as well as loans repricing higher. Interest and dividends on securities increased $822,000, or 25.8%, to $4.0 million for the year ended December 31, 2025 from $3.2 million for the year ended December 31, 2024. This increase was driven by an increase in the yield of investment securities of 82 basis points to 3.77% for the year ended December 31, 2025, from 2.95% for the year ended December 31, 2024 and an increase in the average balance of $6.2 million from $80.1 million during the year ended December 31, 2024 to $86.2 million during the year ended December 31, 2025. Interest on short term investments decreased $1.0 million, or 17.2%, to $5.0 million for the year ended December 31, 2025 from $6.0 million for the year ended December 31, 2024. This decrease was driven by the yield of short-term investments decreasing 92 basis points to 4.33% for the year ended December 31, 2025 from 5.25% for the year ended December 31, 2024. The increase in interest on interest-bearing time deposits was driven by an increase in the average balance of $2.6 million to $2.7 million for the year ended December 31, 2025, from $64,000 for the year ended December 31, 2024.
Average interest-earning assets increased $167.7 million to $1.47 billion for the year ended December 31, 2025 from $1.30 billion for the year ended December 31, 2024. The yield on interest earning-assets increased 18 basis points to 5.28% for the year ended December 31, 2025 from 5.10% for the year ended December 31, 2024.
Interest Expense. Total interest expense increased $4.2 million, or 10.0%, to $46.3 million for the year ended December 31, 2025 from $42.1 million for the year ended December 31, 2024. Interest expense on deposit accounts increased $3.6 million, or 10.8%, to $37.1 million for the year ended December 31, 2025 from $33.4 million for the year ended December 31, 2024, due to an increase in the average balance of interest-bearing deposits of $143.2 million, or 16.7%, to $1.0 billion for the year ended December 31, 2025 from $858.4 million for the year ended December 31, 2024, partially offset by a decrease in the weighted average rate on interest-bearing deposits of 20 basis points to 3.70% for the year ended December 31, 2025 from 3.90% for the year ended December 31, 2024.
Interest expense on Federal Home Loan Bank advances increased $580,000, or 6.7%, to $9.2 million for the year ended December 31, 2025 from $8.6 million for the year ended December 31, 2024. The average balance of Federal Home Loan Bank advances increased $16.5 million, or 7.6%, to $233.5 million for the year ended December 31, 2025 from $217.1 million for the year ended December 31, 2024. For the year ended December 31, 2025, the weighted average cost of Federal Home Loan Bank Advances was 3.94%, as compared to 3.97% for the year ended December 31, 2024.
Net Interest and Dividend Income. Net interest and dividend income before provision for credit losses was $31.9 million for the year ended December 31, 2025, as compared to $25.0 million for the year ended December 31, 2024, or an increase of $6.9 million, or 27.7%. This increase was primarily due to increases in the average balance and yields on loans as well as a decrease in the average cost of interest-bearing liabilities. The resulting net interest margin expanded 26 basis points to 2.12% for the year ended December 31, 2025 as compared to 1.86% for the year ended December 31, 2024.
Provision for Credit Losses. The provision for credit losses was $1.5 million for the year ended December 31, 2025, as compared to $174,000 for the year ended December 31, 2024. The increase in the provision was driven by higher loan growth during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
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Noninterest Income. Noninterest income was $1.3 million for the year ended December 31, 2025, as compared to $1.2 million for the year ended December 31, 2024, or an increase of $100,000, or 8.2%. The table below sets forth our noninterest income for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
Change
2025
2024
Amount
Percent
(Dollars in thousands)
Customer service fees
$
598
$
577
$
21
3.6
%
Income from bank-owned life insurance
475
473
2
0.4
Net gain on sales of loans
132
119
13
10.9
Other
121
57
64
112.3
Total noninterest income
$
1,326
$
1,226
$
100
8.2
%
Noninterest Expense. Noninterest expense was $21.3 million for year ended December 31, 2025, as compared to $20.7 million for the year ended December 31, 2024, or an increase of $661,000, or 3.2%. The table below sets forth our noninterest expense for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
Change
2025
2024
Amount
Percent
(Dollars in thousands)
Salaries and employee benefits
$
13,188
$
13,062
$
126
1.0
%
Director compensation
797
834
(37
)
(4.4
)
Occupancy and equipment
1,102
1,033
69
6.7
Data processing
1,297
1,198
99
8.3
Computer software and licensing fees
441
443
(2
)
(0.5
)
Advertising and promotions
639
551
88
16.0
Professional fees
1,368
1,258
110
8.7
Federal Deposit Insurance Corporation deposit insurance
883
752
131
17.4
Other expense
1,615
1,538
77
5.0
Total noninterest expense
$
21,330
$
20,669
$
661
3.2
%
Income Tax Expense. Income tax expense was $2.6 million for the year ended December 31, 2025, as compared to $1.4 million for the year ended December 31, 2024, reflecting effective tax rates of 25.1% and 25.7%, respectively.
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Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the years indicated. Average balances are daily average balances. The Company has no tax-equivalent yield adjustments. Non-accrual loans are included in average balances only. Average yields include the effect of deferred costs and fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.
For the Year Ended December 31,
2025
2024
Average
Average
Outstanding
Outstanding
Balance
Interest
Yield/ Rate
Balance
Interest
Yield/ Rate
(Dollars in thousands)
Interest-earning assets:
Total loans
$
1,262,768
$
69,085
5.47
%
$
1,104,288
$
57,852
5.24
%
Securities (1)
86,237
3,251
3.77
80,057
2,363
2.95
Short term investments
114,707
4,970
4.33
114,295
6,004
5.25
Interest-bearing time deposits
2,693
117
4.34
64
3
5.44
Total interest-earning assets
1,466,405
77,423
5.28
%
1,298,704
66,222
5.10
%
Non-interest-earning assets
38,362
34,056
Total assets
$
1,504,767
$
1,332,760
Interest-bearing liabilities:
Checking accounts
$
18,888
$
16
0.08
%
$
18,891
$
14
0.07
%
Savings accounts
92,923
1,888
2.03
111,858
3,048
2.72
Money market accounts
208,732
6,888
3.30
158,405
5,669
3.58
Certificates of deposit
681,002
28,269
4.15
569,199
24,704
4.34
Total interest-bearing deposits
1,001,545
37,061
3.70
858,353
33,435
3.90
Federal Home Loan Bank advances
233,545
9,202
3.94
217,087
8,622
3.97
Total interest-bearing liabilities
1,235,090
46,263
3.75
%
1,075,440
42,057
3.91
%
Non-interest-bearing demand deposits
85,436
77,721
Non-interest-bearing liabilities
14,400
12,661
Total liabilities
1,334,926
1,165,822
Shareholders' equity
169,841
166,938
Total liabilities and shareholders' equity
$
1,504,767
$
1,332,760
Net interest income
$
31,160
$
24,165
Net interest rate spread (2)
1.53
%
1.19
%
Net interest-earning assets (3)
$
231,315
$
223,264
Net interest margin (4)
2.12
%
1.86
%
Average interest-earning assets to interest-bearing liabilities
118.73
%
120.76
%
(1)
Excludes interest and dividends on cost method investments of $757,000 and $823,000 for the years ended December 31, 2025 and 2024, respectively.
(2)
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(3)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)
Net interest margin represents net interest income divided by average total interest-earning assets.
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Table of Contents
Rate/Volume Analysis. The following tables present the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior period volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. There were no out-of-period items or adjustments required to be excluded from the table below.
Years Ended December 31, 2025 vs. 2024
Increase (Decrease) Due to
Total Increase
Volume
Rate
(Decrease)
(in thousands)
Interest-earning assets:
Loans
$
8,584
$
2,649
$
11,233
Securities
193
695
888
Short term investments
22
(1,056
)
(1,034
)
Interest-bearing time deposits
115
(1
)
114
Total interest-earning assets
$
8,914
$
2,287
$
11,201
Interest-bearing liabilities:
Checking accounts
$
—
$
2
$
2
Savings accounts
(464
)
(696
)
(1,160
)
Money market deposits
1,688
(469
)
1,219
Certificates of deposit
4,679
(1,114
)
3,565
Total deposits
5,903
(2,277
)
3,626
Advances from the Federal Home Loan Bank
649
(69
)
580
Total interest-bearing liabilities
$
6,552
$
(2,346
)
$
4,206
Change in net interest income
$
2,362
$
4,633
$
6,995
Management of Market Risk
General. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. The Asset-Liability Management Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors. The Asset-Liability Management Committee meets at least quarterly and is comprised of senior management and a member of the Board of Directors and reports to the full Board of Directors on at least a quarterly basis. We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.
We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates. We have implemented the following strategies to manage our interest rate risk:
•
maintaining capital levels that exceed the thresholds for well-capitalized status under federal regulations;
•
maintaining a prudent level of liquidity;
•
growing our volume of deposit accounts;
•
managing our investment securities portfolio to maintain a prudent balance between enhancing profitability and protecting the balance sheet against sensitivity to changes in interest rates;
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Table of Contents
•
managing our utilization of wholesale funding with borrowings from the Federal Home Loan Bank and brokered deposits in a prudent manner;
•
continuing to diversify our loan portfolio by adding more commercial-related loans, which typically have shorter maturities and/or balloon payments; and
•
beginning in January of 2024 we began to utilize interest rate swaps to help manage our interest rate risk.
By following these strategies, we believe that we are better positioned to react to increases and decreases in market interest rates.
Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income sensitivity model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest expense we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by various basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100-basis point increase in the “Change in Interest Rates” column below.
The table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.
As of December 31, 2025
Change in Interest Rates (basis points) (1)
Net Interest Income Year 1 Forecast
Year 1 Change from Level
(Dollars in thousands)
+400
$
32,063
-19.0
%
+300
34,084
-13.9
%
+200
36,105
-8.8
%
+100
38,025
-3.9
%
Level
39,576
0.0
%
-100
40,449
2.2
%
-200
40,802
3.1
%
-300
40,400
2.1
%
-400
37,895
-4.2
%
(1) Assumes an immediate uniform change in interest rates at all maturities.
The tables above indicate that at December 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a decrease in net interest income of 8.8%, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 3.1% increase in net interest income.
Economic Value of Equity. We also compute amounts by which the net present value of our assets and liabilities (economic value of equity or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases and decreases instantaneously by 100, 200, 300 and 400 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
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The table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.
As of December 31, 2025
Estimated Increase (Decrease) in EVE
EVE as a Percentage of Present Value of Assets (3)
Change in Interest Rates
Increase (Decrease)
(basis points) (1)
Estimated EVE (2)
Amount
Percent
EVE Ratio (4)
(basis points)
(Dollars in thousands)
+400
$
113,955
$
(72,352
)
-38.8
%
7.7
%
(393
)
+300
134,168
(52,139
)
-28.0
%
8.9
%
(275
)
+200
151,739
(34,568
)
-18.6
%
9.9
%
(179
)
+100
169,613
(16,694
)
-9.0
%
10.8
%
(84
)
—
186,307
—
0.0
%
11.6
%
—
-100
198,922
12,615
6.8
%
12.2
%
57
-200
206,781
20,474
11.0
%
12.5
%
85
-300
208,372
22,065
11.8
%
12.4
%
79
-400
212,731
26,424
14.2
%
12.6
%
91
(1)
Assumes an immediate uniform change in interest rates at all maturities.
(2)
EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
(3)
Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
(4)
EVE Ratio represents EVE divided by the present value of assets.
The table above indicates that at December 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience an 18.6% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience an 11.0% increase in EVE.
Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The net interest income and net economic value tables 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 assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates, and actual results may differ.
Interest rate risk calculations also may not reflect the fair values of financial instruments. For example, increases in market interest rates can decrease the fair values of our loans but increase the fair value of deposits and borrowings.
Liquidity and Capital Resources
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We are also able to borrow from the Federal Home Loan Bank of Boston, the Federal Reserve Bank and the Atlantic Community Bankers Bank. At December 31, 2025, we had outstanding advances of $284.8 million from the Federal Home Loan Bank. At December 31, 2025, we had unused borrowing capacity of $395.4 million with the Federal Home Loan Bank, $75.7 million with Federal Reserve Bank and $15.0 million with the Atlantic Community Bankers Bank.
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets are dependent on our operating, financing, and investing activities during any given period.
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Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
At December 31, 2025, we had $30.6 million in loan commitments outstanding. In addition to commitments to originate loans, we had $93.2 million in unused lines of credit to borrowers and $47.7 million in unadvanced construction loans.
Non brokered certificates of deposit due within one year of December 31, 2025 totaled $451.1 million, or 39.8%, of total deposits. If these deposits do not remain with us, we may be required to seek other sources of funds, including brokered deposits and FHLB advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before December 31, 2026, or on our savings and money market accounts.
We believe, however, based on historical experience and current market interest rates that we will retain upon maturity a large portion of our certificates of deposit with maturities of one year or less as of December 31, 2025.
Our primary investing activity is originating loans. During the years ended December 31, 2025 and 2024, we originated and purchased $429.6 million and $160.4 million of loans, respectively.
Financing activities consist primarily of activity in deposit accounts as well as FHLB advances. We experienced net increases in deposits of $133.8 million and $130.3 million for the years ended December 31, 2025 and 2024, respectively. Deposit flows are affected primarily by the overall level of interest rates and the interest rates and products offered by us and our competitors. At December 31, 2025 and 2024, the level of brokered time deposits was $134.0 million and $125.6 million, respectively. At December 31, 2025 and 2024 the level of FHLB advances was $284.8 and $234.0 million, respectively.
For additional information, see the consolidated statements of cash flows for the years ended December 31, 2025 and 2024 included as part of the consolidated financial statements appearing elsewhere in this 10-K.
We are committed to maintaining a strong liquidity position. We continuously monitor our liquidity position and adjustments are made to the balance between sources and uses of funds as deemed appropriate by management. Liquidity risk management is an important element in our asset/liability management process. We regularly model liquidity stress scenarios to assess potential liquidity outflows or funding problems resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into our contingency funding planning process, which provides the basis for the identification of our liquidity needs. We anticipate that we will have sufficient funds to meet our current funding commitments. In addition, based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.
At December 31, 2025, Everett Co-operative Bank exceeded all of its regulatory capital requirements, and was categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change our category. See Note 16 of the notes to consolidated financial statements.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2025, we had outstanding commitments to originate loans of $30.6 million. We anticipate that we will have sufficient funds available to meet our current lending commitments. Non brokered time deposits that are scheduled to mature in less than one year from December 31, 2025 totaled $451.1 million. Management expects that a substantial portion of these time deposits will be retained. However, if a substantial portion of these time deposits is not retained, we may utilize advances from the Federal Home Loan Bank, brokered deposits or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
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Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.
Recent Accounting Pronouncements
See Note 2 to the notes to the consolidated financial statements for a description of recent accounting pronouncements that may affect our financial condition and results of operations.
Impact of Inflation and Changing Price
The consolidated financial statements and related data presented in this 10-K have been prepared in accordance with U.S. GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.