NorthEast Community Bancorp, Inc./MD/ (NECB)

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

Forward-Looking Statements

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Statements contained in this report that are not historical facts may constitute forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended), which involve significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “plan,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted. The Company undertakes no obligation to update these forward-looking statements in the future.

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The Company cautions readers of this report that a number of important factors could cause the Company’s actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to:

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Critical Accounting Policies

We consider accounting policies involving significant judgements and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider these accounting policies to be our crucial accounting policies. The judgements and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgements and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations. There have been no changes in the critical accounting policies since the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Balance Sheet Analysis

General

Total assets decreased $38.4 million, or 1.9%, to $2.0 billion at March 31, 2026, from $2.1 billion at December 31, 2025. The decrease in assets was primarily due to decreases in net loans of $31.8 million, cash and cash equivalents of $5.0 million, and other assets of $2.0 million.

Cash and cash equivalents decreased $5.0 million, or 6.1%, to $76.1 million at March 31, 2026 from $81.2 million at December 31, 2025. The decrease in cash and cash equivalents partially funded a decrease of $50.0 million in borrowings.

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Equity securities increased $879,000, or 3.3%, to $27.4 million at March 31, 2026 from $26.6 million at December 31, 2025. The increase in equity securities was attributable to the purchase of $1.0 million in equity securities during the three months ended March 31, 2026, partially offset by market depreciation of $121,000 due to market interest rate volatility during the three months ended March 31, 2026.

Securities held-to-maturity decreased $150,000, or 0.8%, to $18.2 million at March 31, 2026 from $18.3 million at December 31, 2025 due to pay-downs of various investment securities.

Loans, net of the allowance for credit losses, decreased $31.8 million, or 1.7%, to $1.8 billion at March 31, 2026 from $1.9 billion at December 31, 2025. The decrease in loans consisted of decreases of $16.1 million in construction loans, $14.3 million in multi-family loans, $610,000 in commercial and industrial loans, $494,000 in mixed-use loans, $258,000 in non-residential loans, $34,000 in one-to-four family loans, and $21,000 in consumer loans. The decrease in our construction loan portfolio was due to normal pay-downs and principal reductions as construction projects were completed and either condominium units were sold to end buyers or multi-family rental buildings were refinanced by other financial institutions.

During the three months ended March 31, 2026, we originated loans totaling $266.1 million, which includes commitments and funded loans, consisting primarily of $244.2 million in construction loans and $21.8 million in commercial and industrial loans. The $244.2 million in construction loans had $99.5 million, or 40.7%, disbursed at loan closing, with the remaining funds to be disbursed over the terms of the construction loans. The commercial and industrial loans had $18.9 million, or 86.7%, disbursed at loan closing.

The allowance for credit losses related to loans decreased to $4.6 million as of March 31, 2026, from $4.7 million as of December 31, 2025. The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $27,000 and a provision for credit losses reduction of $112,000 to the allowance for credit losses related to loans due to a decrease of $31.8 million in the loan portfolio. The provision for credit losses reduction of $112,000 to the allowance for credit losses related to loans was offset by a provision for credit losses of $112,000 to the allowance for credit losses related to off-balance sheet commitments.

Premises and equipment decreased $199,000, or 0.8%, to $25.2 million at March 31, 2026 from $25.4 million at December 31, 2025 primarily due to the amortization of fixed assets. Federal Home Loan Bank stock was $410,000 and property held for investment was $1.3 million at both March 31, 2026 and December 31, 2025. Bank owned life insurance (“BOLI”) increased $179,000, or 0.7%, to $26.6 million at March 31, 2026 from $26.4 million at December 31, 2025 due to increases in the BOLI cash value. Accrued interest receivable decreased $152,000, or 1.2%, to $12.1 million at March 31, 2026 from $12.2 million at December 31, 2025 due to a decrease of $31.9 million in the loan portfolio.

Right of use assets — operating decreased $179,000, or 3.8%, to $4.5 million at March 31, 2026 from $4.7 million at December 31, 2025, primarily due to depreciation of the right of use assets.

Other assets decreased $2.0 million, or 18.0%, to $9.0 million at March 31, 2026 from $11.0 million at December 31, 2025 due to decreases of $2.2 million in tax assets, partially offset by increases of $143,000 in prepaid expenses and $57,000 in suspense accounts.

Total deposits increased $9.4 million, or 0.6%, to $1.6 billion at March 31, 2026 from $1.6 billion at December 31, 2025. The increase in deposits was primarily due to increases in NOW/money market accounts of $50.0 million, or 16.5% and non-interest bearing deposits of $25.0 million, or 9.2%, partially offset by decreases in certificates of deposit of $57.1 million, or 6.3%, and savings account balances of $8.5 million, or 6.0%. The decrease of $57.1 million in certificates of deposit consisted of decreases in brokered certificates of deposit of $40.6 million, or 11.0%, non-brokered listing services certificates of deposit of $5.4 million, or 6.2%, and retail certificates of deposit of $11.2 million, or 2.5%.

The decrease in brokered certificates of deposit and non-brokered listing services certificates of deposit was due to management’s strategy to reduce the cost of funds by “calling” higher rate brokered deposits on their call dates and to rely less on brokered deposits and non-brokered listing service deposits. The decrease in retail certificates of deposit was due to a shift in deposits to our retail high yield money market accounts.

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Advance payments by borrowers for taxes and insurance increased $572,000, or 24.3%, to $2.9 million at March 31, 2026 from $2.4 million at December 31, 2025 due primarily to accumulation of real estate tax payments from borrowers.

Borrowings decreased $50.0 million, or 71.4%, to $20.0 million at March 31, 2026 from $70.0 million at December 31, 2025 due primarily to management’s strategy to reduce the cost of funds.

Lease liability – operating decreased $163,000, or 3.4%, to $4.6 million at March 31, 2026 from $4.8 million at December 31, 2025, primarily due to the amortization of the lease liability.

Accounts paya

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis reflects our consolidated 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 consolidated financial statements of the Company that appear beginning on page F-1 of this report.

Executive Summary

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, consisting primarily of loans, investment securities, mortgage-backed securities and other interest-earning assets (primarily cash and cash equivalents), and the interest we pay on our interest-bearing liabilities, consisting of money market accounts, statement savings accounts, individual retirement accounts and certificates of deposit. Our results of operations also are affected by our provisions for credit losses, non-interest income and non-interest expense. Non-interest income currently consists primarily of loan fees, service charges, and earnings on bank owned life insurance. Non-interest expense currently consists primarily of salaries and employee benefits, deposit insurance premiums, directors’ fees, occupancy and equipment, data processing and professional fees. 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

Growing our assets with a continued focus on the origination of construction loans.

At December 31, 2025, $1.3 billion, or 71.8%, of our total loan portfolio, net of loans in process, consisted of construction loans primarily located in high demand and high absorption areas in the New York Metropolitan Area. There continues to be a significant need for construction financing within the high absorption, homogeneous

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communities served by the Bank and we intend to continue to support the growth of these communities through the financing of condominium and apartment construction loans within the communities.

Maintaining strong asset quality and managing credit risk.

Strong asset quality is a key to the long-term financial success of any financial institution. We have been successful in maintaining strong asset quality in recent years. Our ratio of non-performing assets to total assets was 0.00%, 0.25%, and 0.33%, at December 31, 2025, 2024 and 2023, respectively. We attribute this credit quality to a conservative credit culture and an effective credit risk management environment. We have an experienced team of credit professionals, well-defined and implemented credit policies and procedures, what we believe to be conservative loan underwriting criteria, and active credit monitoring policies and procedures. Our senior management team also spends substantial time conducting construction site visits and visiting regularly with community leaders and borrowers in our high absorption communities, which enables us to understand the needs of our communities and to stay informed as to matters affecting those communities.

Continuing to grow our non-interest bearing deposit accounts through the maintenance of low customer fees and charges.

We believe that as a community bank we should maintain the fees and charges we charge our customers as low as possible. By doing so, we have been able to attract and retain supermarkets and other businesses as customers of the Bank and at the same time increase the amount of our non-interest bearing business accounts.

Expanding our franchise through de novo branching or branch acquisitions.

As the communities we serve continue to grow and expand into new areas, we believe there will be branch expansion opportunities within our market area and in the newly developing communities expanding outward from existing high absorption, homogeneous communities where our branches are currently located. We intend to continue to explore opportunities as they arise to expand our branch network.

Expanding our employee base, infrastructure and technology, as necessary, to support future growth.

We have already made significant investments in our infrastructure, technology and employee base to support the growth in our construction portfolio and the increased compliance responsibilities due to such growth, including experienced Bank Secrecy Act professionals. The additional capital raised in the 2021 second-step conversion offering provided us with additional resources to attract and retain the necessary talent and continue to enhance our infrastructure and technology to support our growth following the conversion.

Implement a stockholder-focused strategy for management of our capital.

We recognize that a strong capital position is essential to achieving our long-term objective of building stockholder value, and we believe that our capital position will support our future growth and expansion, and will give us flexibility to pursue other capital management strategies to enhance stockholder value.

Critical Accounting Policies

In the preparation of our consolidated financial statements, we have adopted various accounting policies that govern the application of U.S. generally accepted accounting principles (“GAAP”) and to general practices within the banking industry. Our significant accounting policies are described in note one to the consolidated financial statements included in this report.

Certain accounting policies involve significant judgments and assumptions by us that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies, which are discussed below, 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. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

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Allowance for Credit Losses - Loans

The allowance for credit losses related to loans is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The allowance for credit losses related to loans is measured on a collective (pool) basis when similar risk characteristics exist. If the risk characteristics of a loan change, such that they are no longer similar to other loans in the pool, the Company will evaluate the loan with a different pool of loans that share similar risk characteristics. If the loan does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. The Company evaluates the pooling methodology at least annually. Loans are charged off against the allowance for credit losses related to loans when the Company believes the balances to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off.

The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. Such segments include residential real estate, non-residential real estate, construction, commercial and industrial business, and consumer. For most segments, the Company calculates estimated credit losses using a probability of default and loss given default methodology, the results of which are applied to each individual loan within the segment. The point in time probability of default and loss given default are then conditioned by macroeconomic scenarios to incorporate reasonable and supportable forecasts that affect the collectability of the reported amount.

The Company estimates the allowance for credit losses related to loans via a quantitative analysis which considers relevant available information from internal and external sources related to past events and current conditions, as well as the incorporation of reasonable and supportable forecasts. The Company evaluates a variety of factors including third party economic forecasts, industry trends and other available published economic information in arriving at its forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the renewal option is included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company.

Also included in the allowance for credit losses related to loans are qualitative reserves to cover losses that are expected but, in the Company’s assessment, might not be adequately represented in the quantitative analysis or the forecasts described above. Factors that the Company considers include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and non-accrual loans, the effect of external factors such as competition, legal and regulatory requirements, among others. Qualitative loss factors are applied to each portfolio segment with the amounts judgmentally determined by the relative risk to the most severe loss periods identified in the historical loan charge-offs of the Company.

The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income.

On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on the loan’s disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, the loan’s observable market price or, for collateral-dependent loans, the fair

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value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.

Balance Sheet Analysis

General

Total assets increased $53.9 million, or 2.7%, to $2.1 billion at December 31, 2025, from $2.0 billion at December 31, 2024. The increase in assets was primarily due to increases in net loans of $47.8 million, equity securities of $4.6 million, securities held-to-maturity of $3.7 million, and cash and cash equivalents of $2.9 million, partially offset by decreases in real estate owned of $5.1 million and accrued interest receivable of $1.3 million.

Cash and cash equivalents increased $2.9 million, or 3.7%, to $81.2 million at December 31, 2025 from $78.3 million at December 31, 2024. The increase in cash and cash equivalents was a result of an increase of $70.0 million in borrowings that funded increases of $47.8 million in loans, $4.6 million in equity securities, and $3.7 million in securities held-to-maturity, and a decrease of $53.5 million in deposits.

Equity securities increased $4.6 million, or 20.8%, to $26.6 million at December 31, 2025 from $22.0 million at December 31, 2024. The increase in equity securities was attributable to the purchase of $4.0 million in equity securities during the year ended December 31, 2025 and market appreciation of $521,000 due to market interest rate volatility during the year ended December 31, 2025.

Securities held-to-maturity increased $3.7 million, or 25.3%, to $18.3 million at December 31, 2025 from $14.6 million at December 31, 2024 due to purchases of $4.8 million in municipal bonds, partially offset by $1.1 million in maturities and pay-downs of various investment securities.

Loans, net of the allowance for credit losses, increased $47.8 million, or 2.6%, to $1.9 billion at December 31, 2025 from $1.8 billion at December 31, 2024. The increase in loans consisted of increases of $99.9 million in multi-family loans of which $59.6 million is attributed to residential cooperative building loans, $31.7 million in commercial and industrial loans, and $9.0 million in non-residential loans. The increases in these loan categories were partially offset by decreases of $89.8 million in construction loans, $1.6 million in consumer loans, $1.4 million in mixed-use loans, and $358,000 in one-to-four family loans. The decrease in our construction loan portfolio was due to normal pay-downs and principal reductions as construction projects were completed and either condominium units were sold to end buyers or multi-family rental buildings were refinanced by other financial institutions.

During the year ended December 31, 2025, we originated loans totaling $860.7 million consisting primarily of $665.1 million in construction loans, $119.9 million in multi-family loans of which $49.6 million is attributed to residential cooperative building loans, $64.0 million in commercial and industrial loans, $11.1 million in non-residential loans, and $730,000 in mixed-use loans. The $665.1 million in construction loans had 41.2% disbursed at loan closing, with the remaining funds to be disbursed over the terms of the construction loans.

The allowance for credit losses related to loans decreased to $4.7 million as of December 31, 2025, from $4.8 million as of December 31, 2024. The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $701,000 and negative provision for credit losses totaling $272,000, offset by recoveries totaling $875,000.

Premises and equipment increased $572,000, or 2.3%, to $25.4 million at December 31, 2025 from $24.8 million at December 31, 2024 primarily due to the purchases of additional fixed assets and the expansion of our Kiryas Joel branch office.

Federal Home Loan Bank stock increased $13,000, or 3.3%, to $410,000 at December 31, 2025 from $397,000 at December 31, 2024 primarily due to an increase in mortgage-related assets.

Bank owned life insurance (“BOLI”) increased $695,000, or 2.7%, to $26.4 million at December 31, 2025 from $25.7 million at December 31, 2024 due to increases in the BOLI cash value.

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Accrued interest receivable decreased $1.3 million, or 9.3%, to $12.2 million at December 31, 2025 from $13.5 million at December 31, 2024 due to a 75 basis point decrease in the Prime Rate that occurred in 2025, partially offset by an increase of $47.4 million in the loan portfolio.

Real estate owned decreased $5.1 million, or 100.0%, to none at December 31, 2025 from $5.1 million at December 31, 2024 due to the sale of two foreclosed properties to two independent third parties.

Property held for investment decreased $36,000, or 2.6%, to $1.3 million at December 31, 2025 from $1.4 million at December 31, 2024 due to the amortization of property.

Right of use assets — operating increased $655,000, or 16.4%, to $4.7 million at December 31, 2025 from $4.0 million at December 31, 2024, primarily due to the physical expansion of a branch office and the resulting amendment of the operating lease and the renewal of another branch operating lease, partially offset by the amortization of the right of use assets.

Other assets decreased $621,000, or 5.4%, to $11.0 million at December 31, 2025 from $11.6 million at December 31, 2024 due to decreases of $2.5 million in tax assets and $9,000 in miscellaneous assets, partially offset by increases of $1.1 million in prepaid expenses and $819,000 in suspense accounts.

Total deposits decreased $53.5 million, or 3.2%, to $1.6 billion at December 31, 2025 from $1.7 billion at December 31, 2024. The decrease in deposits was primarily due to decreases in certificates of deposit of $101.3 million, or 10.1% and non-interest bearing deposits of $15.2 million, or 5.3%, partially offset by increases in NOW/money market accounts of $59.1 million, or 24.3%, and savings account balances of $3.9 million, or 2.9%. The decrease of $101.3 million in certificates of deposit consisted of decreases in retail certificates of deposit of $69.8 million, or 13.6% and brokered certificates of deposit of $65.5 million, or 15.0%, partially offset by an increase in non-brokered listing services certificates of deposit of $34.0 million, or 101.3%.

The decrease in brokered certificates of deposit was due to management’s strategy to reduce the cost of funds by “calling” higher rate brokered deposits on their call dates and to rely less on brokered deposits. The decrease in retail certificates of deposit was due to a shift in deposits to our retail high yield money market accounts. The increase in non-brokered listing services certificates of deposits was due to management’s strategy to diversify funding sources.

Advance payments by borrowers for taxes and insurance increased $734,000, or 45.4%, to $2.4 million at December 31, 2025 from $1.6 million at December 31, 2024 due primarily to accumulation of real estate tax payments from borrowers.

Borrowings increased to $70.0 million at December 31, 2025 from none at December 31, 2024 due primarily to management’s strategy to diversify funding sources.

Lease liability – operating increased $688,000, or 16.7%, to $4.8 million at December 31, 2025 from $4.1 million at December 31, 2024, primarily due to the physical expansion of a branch office and the resulting amendment of the operating lease and the renewal of another branch operating lease, partially offset by the amortization of the lease liability.

Accounts payable and accrued expenses increased $2.8 million, or 19.2%, to $17.3 million at December 31, 2025 from $14.5 million at December 31, 2024 due primarily to increases in accrued expense of $812,000, accrued dividends payable of $673,000, deferred compensation of $615,000, accrued borrowing interest expense of $512,000, and the allowance for credit losses for off-balance sheet commitments of $175,000, partially offset by a decrease in suspense account-loan closings of $12,000.

The allowance for credit losses for off-balance sheet commitments increased $175,000, or 24.9%, to $879,000 at December 31, 2025 from $704,000 at December 31, 2024 due primarily to an increase of $117.7 million, or 20.9%, in off-balance sheet commitments from December 31, 2024 to December 31, 2025.

Stockholders’ equity increased $33.4 million, or 10.5% to $351.7 million at December 31, 2025, from $318.3 million at December 31, 2024. The increase in stockholders’ equity was due to net income of $44.4 million for

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the year ended December 31, 2025, an increase of $1.1 million in earned employee stock ownership plan shares coupled with a reduction of $869,000 in unearned employee stock ownership plan shares, the amortization expense of $2.0 million relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, and $9,000 in other comprehensive income, partially offset by dividends declared of $13.4 million, stock repurchases of $1.6 million, and $18,000 in stock options exercised.

Loans

Our loan portfolio consists primarily of construction loans, commercial and industrial loans, multifamily and mixed-use residential real estate loans and non-residential real estate loans. We also have a limited amount of one- to four-family residential real estate loans, which we no longer originate, and consumer loans, which we originate on a very limited basis.

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The following table shows the loan portfolio at the dates indicated:

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Loan Maturity.  The following table sets forth certain information at December 31, 2025 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience

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to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.

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The following table sets forth all loans at December 31, 2025 that are due after December 31, 2025 and have either fixed interest rates or floating or adjustable interest rates:

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Securities

Our investment portfolio consists primarily of mutual funds, residential mortgage-backed securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae primarily with stated final maturities of 10 years or more, and municipal securities with maturities of one year or more.

The following table sets forth the stated maturities and weighted average yields of investment securities at December 31, 2025. Weighted average yields on tax-exempt securities are presented on a tax equivalent basis using a combined federal and state marginal rate of 28.4%. Certain securities have adjustable interest rates and will reprice monthly, quarterly, semi-annually or annually within the various maturity ranges. Equity securities are not included in the table based on lack of a maturity date. The table presents contractual maturities for mortgage-backed securities and does not reflect repricing or the effect of prepayments.

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Deposits

Deposits are a major source of our funds for lending and other investment purposes, and our deposits are provided primarily by individuals within our market area. In addition, we rely on brokered, listing and military deposits, which represent a viable and cost effective addition to our deposit gathering and maintenance strategy, often at a lower “all-in” cost when compared to our retail branch network. Use of these types of deposits allows us to match the maturity

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of these deposits to the term of our construction loans. The following table sets forth the deposits as a percentage of total deposits for the dates indicated:

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As of December 31, 2025 and 2024, the aggregate amount of uninsured deposits (deposits in amounts greater than $250,000, which is the maximum amount for federal deposit insurance) was $361.0 million and $346.9 million, respectively. In addition, as of December 31, 2025, the aggregate amount of all our uninsured certificates of deposit was $172.0 million. We have no deposits that are uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.

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The following table sets forth the portion of the Bank’s certificates of deposit, by remaining time until maturity, that are in excess of the FDIC insurance limit as of December 31, 2025:

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Average Balance Sheets

The following tables set forth average balance sheets, average yields and costs, and certain other information for the years indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial.  All average balances are daily average balances.  Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan cost totaled $268,000 and deferred loan fees totaled $49,000 for the years ended December 31, 2025 and 2024, respectively. Loan balances exclude loans held for sale.

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Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior 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. or purposes of this table, changes attributable to both rate and volume,

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which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.

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

Financial Highlights

Net income for the year ended December 31, 2025 was $44.4 million compared to net income of $47.1 million for the year ended December 31, 2024. Net income for the year ended December 31, 2025 was lower than net income for the year ended December 31, 2024 primarily due to a decrease in net interest income and an increase in non-interest expense, partially offset by a decrease in the provision for credit losses, an increase in non-interest income, and a decrease in income tax expense.

Summary Income Statements

The following table sets forth the income summary for the periods indicated:

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Net Interest Income

Net interest income totaled $100.7 million for the year ended December 31, 2025, as compared to $102.8 million for the year ended December 31, 2024. The decrease in net interest income of $2.1 million, or 2.0%, was primarily due to a decrease in interest income that exceeded a decrease in interest expense caused by a decrease in the yield on interest-earning assets that exceeded the decrease in the cost of funds for interest-bearing liabilities. The

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decrease in the yield on interest-earning assets and the cost of funds for interest-bearing liabilities was due primarily to a 175 basis points decrease in the Federal Funds rate from September 2024 to December 2025.

The decrease in yields and cost of funds was partially offset by an increase in the average balance of interest-earning assets that exceeded an increase in the average balance of interest-bearing liabilities. In this regard, the increase in the average balances of loans receivable and investment securities exceeded the decrease in the average balances of FHLB stock and other interest-earning assets. In addition, the increase in the average balances of interest-bearing demand deposits and borrowed money exceeded the decrease in the average balances of certificates of deposits and savings and club deposits.

Total interest and dividend income decreased $5.9 million, or 3.7%, to $154.1 million for the year ended December 31, 2025 from $160.0 million for the year ended December 31, 2024. The decrease in interest and dividend income was due to a decrease in the yield on interest-earning assets by 71 basis points from 8.75% for the year ended December 31, 2024 to 8.04% for the year ended December 31, 2025, partially offset by an increase in the average balance of interest-earning assets of $88.2 million, or 4.8%, to $1.9 billion for the year ended December 31, 2025 from $1.8 billion for the year ended December 31, 2024.

The increase in the average balance of interest-earning assets was due to an increase in the average balances of loans receivable of $104.6 million, or 6.1%, to $1.8 billion for the year ended December 31, 2025 from $1.7 billion for the year ended December 31, 2024 and an increase in the average balances of investment securities of $4.5 million, or 13.1%, to $39.3 million for the year ended December 31, 2025 from $34.8 million for the year ended December 31, 2024. These increases were partially offset by a decrease in the average balances of other interest-earning assets of $20.8 million, or 22.5%, to $71.8 million for the year ended December 31, 2025 from $92.6 million for the year ended December 31, 2024 and a decrease in the average balances of FHLB stock of $97,000, or 14.3%, to $580,000 for the year ended December 31, 2025 from $677,000 for the year ended December 31, 2024.

Interest expense decreased $3.9 million, or 6.7%, to $53.4 million for the year ended December 31, 2025 from $57.2 million for the year ended December 31, 2024. The decrease in interest expense was due to a decrease in the cost of interest-bearing liabilities by 46 basis points from 4.35% for the year ended December 31, 2024 to 3.89% for the year ended December 31, 2025, partially offset by an increase in average interest-bearing liabilities of $56.7 million, or 4.3%, to $1.4 billion for the year ended December 31, 2025 from $1.3 billion for the year ended December 31, 2024.

The cost of interest-bearing liabilities was partially impacted by a shift to interest-bearing demand deposits and borrowed money from savings and club deposits and interest-bearing certificates of deposits. In this regard, the average balances of interest-bearing demand deposits increased by $83.0 million, or 39.5%, to $293.0 million for the year ended December 31, 2025 from $210.0 million for the year ended December 31, 2024 and the average balances of borrowed money increased by $50.8 million, or 153.4%, to $83.9 million for the year ended December 31, 2025 from $33.1 million for the year ended December 31, 2024. The average balances of interest-bearing certificates of deposits decreased by $59.6 million, or 6.5%, to $858.1 million for the year ended December 31, 2025 from $917.7 million for the year ended December 31, 2024 and the average balances of savings and club deposits decreased by $17.5 million, or 11.4%, to $136.9 million for the year ended December 31, 2025 from $154.4 million for the year ended December 31, 2024. In addition, the average balances of our non-interest bearing demand deposits decreased by $3.9 million, or 1.4%, from $277.9 million for the year ended December 31, 2024 to $274.0 million for the year ended December 31, 2025.

The increase in the average balances of interest-bearing demand deposits and borrowed money was used primarily to fund the loan portfolio growth and the decreases in other interest-earning assets, interest-bearing certificates of deposits, savings and club deposits, and non-interest bearing demand deposits.

Net interest margin decreased 37 basis points, or 6.6%, to 5.25% for the year ended December 31, 2025 compared to 5.62% for the year ended December 31, 2024. The decrease in the net interest margin was due to a 175 basis points decrease in the Federal Funds rate from September 2024 to December 2025 that resulted in a decrease in the yield on interest-earning assets, partially offset by a larger decrease in the cost of funds on interest-bearing liabilities.

Credit Loss Expense.  A credit loss expense reduction of $97,000 was recorded for the year ended December 31, 2025 compared to a credit loss expense of $740,000 for the year ended December 31, 2024. The credit loss expense

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reduction of $97,000 for the year ended December 31, 2025 was comprised of a credit loss expense reduction for loans of $272,000, offset by a credit loss expense for off-balance sheet commitments of $175,000.

The credit loss expense reduction for loans of $272,000 for the year ended December 31, 2025 was primarily due to a credit loss expense reduction of $334,000 during the fourth quarter of 2025 due to a recovery of unused interest reserve deposits totaling $334,000 from a foreclosed construction loan, offset by a credit loss expense of $62,000 during the first quarter of 2025 due to an increase in the multi-family loan portfolio.

The credit loss expense of $740,000 for the year ended December 31, 2024 was comprised of a credit loss expense for loans of $1.0 million, partially offset by a credit loss expense reduction for off-balance sheet commitments of $334,000 and a credit loss expense reduction for held-to-maturity investment securities of $10,000.

The credit loss expense for loans of $1.0 million for the year ended December 31, 2024 was primarily attributed to charge-offs totaling $1.3 million, partially offset by favorable trends in the economy. The credit loss expense reduction for off-balance sheet commitments of $334,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $157.6 million in the level of off-balance sheet commitments. The credit loss expense reduction for held-to-maturity investment securities of $10,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $708,000 in the level of applicable held-to-maturity investment securities.

We charged-off $702,000 during the year ended December 31, 2025 as compared to charge-offs of $347,000 during the year ended December 31, 2024. The charge-offs in both years were against various unpaid overdrafts in our demand deposit accounts.

We recorded recoveries of $875,000 during the year ended December 31, 2025 compared to no recoveries during the year ended December 31, 2024. The recoveries of $875,000 during the year ended December 31, 2025 were comprised of recoveries of $350,000 from a previously charged-off non-residential mortgage loan, $334,000 from unused interest reserve deposits from a construction loan, and $191,000 from previously charged-off unpaid overdrafts on demand deposit accounts.

Based on a review of our loan portfolio, held-to-maturity investment securities, and off-balance sheet commitments at December 31, 2025, management believes that the allowance is maintained at a level that represents its best estimate of expected future losses in the loan portfolio, held-to-maturity investment securities, and off-balance sheet commitments that were both probable and reasonably estimable.

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Management uses available information to establish the appropriate level of the allowance for credit losses. Future additions or reductions to the allowance may be necessary based on estimates that are susceptible to change as a result of changes in economic conditions and other factors. As a result, our allowance for credit losses may not be sufficient to cover actual loan losses, and future provisions for credit losses could materially adversely affect our operating results. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for credit losses. Such agencies may require us to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

Non-Interest Income

The following table sets forth a summary of non-interest income for the periods indicated:

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Non-interest income for the year ended December 31, 2025 was $4.1 million compared to non-interest income of $2.8 million for the year ended December 31, 2024. The increase in total non-interest income of $1.3 million, or 47.1%, was primarily due to increases of $686,000 in unrealized gain on equity securities, $616,000 in other loan fees and service charges, and $39,000 in BOLI income, partially offset by decreases of $28,000 in net gain on disposition of fixed assets and $2,000 in miscellaneous other non-interest income.

The increase in unrealized gain on equity securities was due to an unrealized gain of $577,000 on equity securities during the year ended December 31, 2025 compared to an unrealized loss of $109,000 on equity securities during the year ended December 31, 2024. Both the unrealized gain/loss on equity securities during the 2025 and 2024 periods were due to market interest rate volatility during the respective periods. The increase of $616,000 in other loan fees and service charges was due to increases of $425,000 in miscellaneous loan fees, $188,000 in ATM/debit card/ACH fees, and $2,000 in deposit account fees. The increase in BOLI income of $39,000 was due to an increase in the yield on BOLI assets.

Regarding the sale/disposition of fixed assets, we recorded losses of $6,000 during the year ended December 31, 2025 compared to gains of $22,000 during the year ended December 31, 2024.

Non-Interest Expense

The following table sets forth an analysis of non-interest expense for the periods indicated:

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Non-interest expense increased $3.6 million, or 9.2%, to $42.7 million for the year ended December 31, 2025 from $39.1 million for the year ended December 31, 2024. The increase resulted primarily from increases of $2.2 million in salaries and employee benefits, $626,000 in other operating expense, $474,000 in outside data processing expense, $164,000 in occupancy expense, $114,000 in real estate owned expense, and $8,000 in advertising expense, partially offset by a decrease of $22,000 in equipment expense.

Salaries and employee benefits increased by $2.2 million, or 10.7%, to $23.2 million in 2025 from $20.9 million in 2024 primarily due to the hiring of additional personnel to support the growth of the Company, an increase in personnel compensation and benefits cost in order to remain competitive in recruiting and retaining personnel, an increase in the ESOP compensation cost due to an increase in the value of the Company’s stock, and an increase in the amortization of expenses related to the 2022 Equity Incentive Plan awards of restricted stocks and options, partially offset by an increase in loan origination offset expenses related to loan origination fees due to an increase in loan originations.

Other non-interest expense increased by $626,000 or 5.9%, to $11.3 million in 2025 from $10.6 million in 2024 due mainly to increases of $426,000 in miscellaneous other non-interest expense, $371,000 in legal fees, $84,000 in service contracts expense, $55,000 in dues and subscriptions, $14,000 in audit and accounting fees, $14,000 in insurance expense, and $9,000 in recruitment expense. These increases were partially offset by decreases of $234,000 in directors compensation, $42,000 in consulting fees, $30,000 in telephone expense, $23,000 in directors, officers, and employee expenses, and $9,000 in office supplies.

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The increase of $426,000 in miscellaneous other non-interest expense was mainly due to increases of $280,000 in regulatory insurance premiums and assessments due to an increase in our total assets, $137,000 in other non-interest expense, $71,000 in public company expense, $21,000 in check charges and correspondent bank service charges, and $10,000 in postage expense, partially offset by a decrease of $93,000 in miscellaneous charge-offs.

Real estate owned expense increased by $114,000, or 15.6%, to $845,000 in 2025 from $731,000 in 2024 due to the write down and losses totaling $495,000 on the sale of a foreclosed property located in Pittsburgh, Pennsylvania, $232,000 in closing costs related to the sale of a foreclosed property located in the Bronx in 2025, and operating expenses totaling $118,000. In 2024, we wrote down $689,000 in the value of the Pittsburgh foreclosed property and experienced operating expenses totaling $42,000. The write downs on the fair market value of the Pittsburgh foreclosed property in 2025 and 2024 was due to the decrease in demand for office space in that area.

Outside data processing expense increased by $474,000, or 18.2%, to $3.1 million in 2025 from $2.6 million in 2024 to an increase in transactions and additional services required in 2025 to support the Company’s growth. Occupancy expense increased by $164,000, or 5.8%, to $3.0 million in 2025 from $2.8 million in 2024 primarily as a result of the increased cost of operating office space. Advertising expenses increased by $8,000, or 1.9%, to $426,000 in 2025 from $418,000 in 2024 due mainly to a nominal increase in promotional products and advertisements. Equipment expense decreased by $22,000, or 2.5%, to $868,000 in 2025 from $890,000 in 2024 due to a reduced need to purchase additional equipment in 2025.

Income Taxes.  The Company recorded income tax expense of $17.8 million and $18.7 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, the Company had approximately $867,000 in tax exempt income, compared to $$802,000 in tax exempt income for the year ended December 31, 2024. The increase in tax exempt income was due to an increase in tax exempt municipal bonds to $13.4 million as of December 31, 2025 from $9.1 million as of December 31, 2024 and an increase of $40,000 in BOLI income from 2024 to 2025.

Risk Management

Overview

Managing risk is an essential part of successfully managing a financial institution. Our most prominent risk exposures are credit risk, interest rate risk and market risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan or investment when it is due. Interest rate risk is the potential reduction of interest income as a result of changes in interest rates. Market risk arises from fluctuations in interest rates that may result in changes in the values of financial instruments, such as available-for-sale securities that are accounted for at fair value. Other risks that we face are operational risk, liquidity risk and reputation risk. Operational risk includes risks related to fraud, regulatory compliance, processing errors, technology, and disaster recovery. Liquidity risk is the possible inability to fund obligations to depositors, lenders or borrowers. Reputation risk is the risk that negative publicity or press, whether true or not, could cause a decline in our customer base or revenue.

Management of Credit Risk

The objective of our credit risk management strategy is to quantify and manage credit risk and to limit the risk of loss resulting from an individual customer default. Our credit risk management strategy focuses on conservatism, an excellent knowledge of the communities we lend in, and significant levels of monitoring. Our lending practices include conservative exposure limits and underwriting, extensive documentation and collection standards. Our credit risk management strategy also emphasizes diversification at the borrower level as well as regular credit examinations, continuous site visits by executive management and management reviews of large credit exposures and credits that might experience deterioration of credit quality.

As part of its risk management process, the Bank conducts stress testing on its commercial real estate portfolio, performs a global cash flow analysis for loans associated with multiple properties and/or guarantors and also operates a loan review program for all real estate loans (including construction loans) with terms more than 12 months. In addition, we track our board approved limits for each commercial real estate category on a monthly basis.

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Analysis of Non-Performing, Troubled Debt Restructurings and Classified Assets.

Classified Assets.  FDIC regulations and our Asset Classification Policy provide that loans and other assets considered to be of lesser quality be classified as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. We classify an asset as “special mention” if the asset has a potential weakness that warrants management’s escalated level of attention. While such assets are not impaired, management has concluded that if the potential weakness in the asset is not addressed, the value of the asset may deteriorate, adversely affecting the repayment of the asset. Loans classified as impaired for financial reporting purposes are generally those loans classified as substandard or doubtful for regulatory reporting purposes.

An insured institution is required to establish allowances for credit losses in an amount deemed prudent by management for loans classified as substandard or doubtful, as well as for other problem loans. General allowances represent loss allowances which have been established to recognize the inherent losses associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. When an insured institution classifies problem assets as “loss,” it is required to charge off such amounts. An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the FDIC.

The following table sets forth information with respect to our non-performing assets at the dates indicated.

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We had no non-performing assets at December 31, 2025 compared to $5.1 million in non-performing assets at December 31, 2024. Non-performing assets as of December 31, 2024 consisted of a foreclosed property totaling $4.3 million located in the Bronx, New York and a foreclosed property totaling $767,000 located in Pittsburgh, Pennsylvania.

The Bronx property was sold on June 30, 2025 to a third-party buyer at no loss to the Company which, in connection therewith, we provided the financing to complete the multi-family project. We charged off $222,000 in September 2025 on the Pittsburgh property and we sold the property on December 30, 2025 at a loss of $273,000.

In 2025, we collected no interest income from loans that were in non-accrual status in 2025. In 2024, we collected no interest income from loans that were in non-accrual status in 2024.

From time to time, as part of our loss mitigation strategy, we may modify loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no new loan modifications to borrowers experiencing financial difficulties during the years ended December 31, 2025 and 2024. At December 31, 2025 and 2024, we had no loans modified to borrowers experiencing financial difficulty.

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The following table summarizes classified and criticized assets of all portfolio types at the dates indicated:

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On the basis of management’s review of our assets, we had no loans classified as substandard at December 31, 2025 compared to one loan with a balance of $241,000 classified as substandard at December 31, 2024. This one loan with a current balance of $226,000 was subsequently upgraded to special mention at December 31, 2025, representing all of our special mention loans as of that date, compared to no loans classified as special mention at December 31, 2024. This loan was current and performing according to its loan terms at December 31, 2025.

There were no assets classified as doubtful or loss at December 31, 2025 or 2024. The loan portfolio is reviewed on a regular basis to determine whether any loans require classification in accordance with applicable regulations. Not all classified assets constitute non-performing assets.

Delinquent Loans

The following table provides information about delinquencies in our loan portfolio at the dates indicated:

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Analysis and Determination of the Allowance for Credit Losses - Loans

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The allowance for credit losses (“ACL”) is a valuation account that reflects management's evaluation of expected future losses in the loan portfolio.  We evaluate the need to establish allowances against credit losses on loans on a quarterly basis.  When additional allowances are necessary, a provision for credit losses is charged to earnings.  The ACL is maintained at a level that management considers adequate to provide for estimated losses and impairment based upon an evaluation of known and inherent risk in the loan portfolio.  The ACL consists of two elements: (1) identification of loans that must be individually analyzed for credit loss and (2) establishment of an ACL for loans collectively analyzed.

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Individually Analyzed Loans. Management regularly monitors the condition of borrowers and assesses both internal and external factors in determining whether any relationships have deteriorated, considering factors such as historical loss experience, trends in delinquency and non-performing loans, changes in risk composition and underwriting standards, and regional and national economic conditions and trends.

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Our loan officers, loan servicing staff, and internal loan review personnel identify and manage potential problem loans within our mortgage, construction, and commercial and industrial loan portfolio.  Non-performing assets within

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these loan portfolios are transferred to the Special Assets Department for workout or litigation.  The Special Assets Department reports directly to the Executive Committee.  Changes in management, financial or operating performance, company behavior, industry factors and external events and circumstances are evaluated on an ongoing basis to determine whether potential impairment is evident and additional analysis is needed.  For our loan portfolio, risk ratings are assigned to each individual loan to differentiate risk within the portfolio and are reviewed on an ongoing basis by the Internal Loan Review Department and revised, if needed, to reflect the borrower’s current risk profiles and the related collateral positions.

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The risk ratings consider factors such as property location, property type, loan duration, debt capacity and coverage ratios, absorption rate and marketability, borrower’s experience, borrower’s financial condition, and borrower’s credit quality.  When a credit’s risk rating is downgraded to a certain level, the relationship must be reviewed and detailed reports completed that document risk management strategies for the credit going forward, and the appropriate accounting actions to take in accordance with generally accepted accounting principles in the United States.  When credits are downgraded beyond a certain level, our Special Assets Department becomes responsible for managing the credit risk.

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The Executive Committee reviews risk rating actions (specifically downgrades or upgrades between pass and the criticized and classified categories) recommended by Internal Loan Review and/or Special Assets Departments on a quarterly basis.  Our Lending, Loan Servicing and Internal Loan Review Departments monitor our mortgage, construction, and commercial and industrial loan portfolios for credit risk and deterioration considering factors such as delinquency, loan to value ratios and credit scores.

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When problem loans are identified that are secured with collateral, management examines the loan files to evaluate the nature and type of collateral supporting the loans.  Management documents the collateral type, date of the most recent valuation, and whether any liens exist, to determine the value to compare against the committed loan amount.  If a loan is identified as impaired and is collateral dependent, an in-house analysis is performed and/or an updated appraisal is obtained to provide a baseline in determining the property’s fair value.  A collateral dependent impaired loan is written down to its appraised value and an allowance is established to cover potential selling costs.  If the collateral value is subject to significant volatility (due to location of asset, obsolescence, etc.) an appraisal is obtained more frequently.  In-house revaluations are typically performed on a quarterly basis and updated appraisals are obtained annually, if determined necessary.

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When we determine that the value of an impaired loan is less than its carrying amount, we recognize impairment through a charge-off to the allowance for credit losses.  We perform these assessments on an ongoing basis.  For mortgage, construction, and commercial and industrial loans, a charge-off is recorded when management determines we will not collect 100% of a loan based on the fair value of the collateral or the net present value of expected future cash flows.  The collateral deficiency on consumer loans and residential loans are generally charged-off when deemed to be uncollectible or delinquent 180 days, whichever comes first, unless it can be clearly demonstrated that repayment will occur regardless of the delinquency status.  Examples that would demonstrate repayment include a loan that is secured by adequate collateral and is in the process of collection, a loan supported by a valid guarantee or insurance, or a loan supported by a valid claim against a solvent estate.

Collectively Analyzed Loans. Additionally, we reserve for certain inherent, but undetected, losses that are probable within the loan portfolio.  This is due to several factors, such as, but not limited to, inherent delays in obtaining information regarding a customer’s financial condition or changes in their unique business conditions and the interpretation of economic trends.  While this analysis is conducted at least quarterly, we have the ability to revise the allowance factors whenever necessary to address improving or deteriorating credit quality trends or specific risks associated with a given loan pool classification.

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A comprehensive analysis of the allowance for credit losses on loans is performed on a quarterly basis.  The entire allowance for credit losses on loans is available to absorb losses in the loan portfolio irrespective of the amount of each separate element of the ACL.  Our principal focus, therefore, is on the adequacy of the total allowance for credit losses.

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Although we believe we have established and maintained the ACL on loans at appropriate levels, changes in reserves may be necessary if actual economic and other conditions differ substantially from the forecast used in estimating

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the ACL.  See note 1 to our consolidated financial statements for a detailed discussion of our accounting policies and methodologies for establishing the ACL.

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The allowance for credit losses is subject to review by our banking regulators.  The FDIC and the New York State Department of Financial Services, as an integral part of their examination process, periodically review our allowance for credit losses and make an assessment regarding its adequacy and the methodology employed in its determination.  As a result, our banking regulators could require us to increase our allowance for credit losses - loans.

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The following table sets forth the breakdown of the allowance for credit losses by loan category at the dates indicated:

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The following table sets forth an analysis of the activity in the allowance for credit losses related to loans for the periods indicated:

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The allowance for credit losses related to loans decreased by $99,000 to $4.7 million at December 31, 2025 from $4.8 million at December 31, 2024. The decrease in the allowances for credit losses was due primarily to the charge-offs of $702,000 during the year ended December 31, 2025 that were comprised of charge-offs against various unpaid overdrafts in our demand deposit accounts, partially offset by a provision for credit losses reduction of $272,000 and recoveries totaling $875,000.

The credit loss expense reduction for loans of $272,000 for the year ended December 31, 2025 was primarily due to a credit loss expense reduction of $334,000 during the fourth quarter of 2025 resulting from a recovery of unused interest reserve deposits totaling $334,000 from a foreclosed construction loan, offset by a credit loss expense of $62,000 during the first quarter of 2025 due to an increase in the multi-family loan portfolio.

We recorded recoveries of $875,000 during the year ended December 31, 2025 compared to no recoveries during the year ended December 31, 2024. The recoveries of $875,000 during the year ended December 31, 2025 were comprised of recoveries of $350,000 from a previously charged-off non-residential mortgage loan, $334,000 from unused interest reserve deposits from a construction loan, and $191,000 from previously charged-off unpaid overdrafts on demand deposit accounts.

Loans evaluated collectively totaled $1.9 billion at December 31, 2025 compared to $1.8 billion at December 31, 2024. We had no loans evaluated individually at December 31, 2025 compared to $241,000 at December 31, 2024.

The allowance for credit losses related to off-balance sheet commitments increased by $175,000 to $879,000 at December 31, 2025 from $704,000 at December 31, 2024 due primarily to an increase in the amount of off-balance sheet commitments. The allowance for credit losses related to held-to-maturity of debt securities remained the same at $126,000 at December 31, 2025 and 2024.

Interest Rate Risk Management

Interest rate risk is defined as the exposure to current and future earnings and capital that arises from adverse movements in interest rates. Depending on a bank’s asset/liability structure, adverse movements in interest rates could be either rising or falling interest rates. For example, a bank with predominantly long-term fixed-rate assets and short-term liabilities could have an adverse earnings exposure to a rising rate environment. Conversely, a short-term or variable-rate asset base funded by longer-term liabilities could be negatively affected by falling rates. This is referred to as re-pricing or maturity mismatch risk.

Interest rate risk also arises from changes in the slope of the yield curve (yield curve risk), from imperfect correlations in the adjustment of rates earned and paid on different instruments with otherwise similar re-pricing characteristics (basis risk), and from interest rate related options embedded in our assets and liabilities (option risk).

Our objective is to manage our interest rate risk by determining whether a given movement in interest rates affects our net interest income and the market value of our portfolio equity in a positive or negative way and to execute strategies to maintain interest rate risk within established limits. The results at December 31, 2025 indicate the level of risk within the parameters of our model. Our management believes that the December 31, 2025 results indicate a profile that reflects interest rate risk exposures in both rising and declining rate environments for both net interest income and economic value.

Model Simulation Analysis.  We view interest rate risk from two different perspectives. The traditional accounting perspective, which defines and measures interest rate risk as the change in net interest income and earnings caused by a change in interest rates, provides the best view of short-term interest rate risk exposure. We also view interest rate risk from an economic perspective, which defines and measures interest rate risk as the change in the market value of portfolio equity caused by changes in the values of assets and liabilities, which fluctuate due to changes in interest rates. The market value of portfolio equity, also referred to as the economic value of equity, is defined as the present value of future cash flows from existing assets, minus the present value of future cash flows from existing liabilities.

These two perspectives give rise to income simulation and economic value simulation, each of which presents a unique picture of our risk of any movement in interest rates. Income simulation identifies the timing and magnitude of

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changes in income resulting from changes in prevailing interest rates over a short-term time horizon (usually one or two years). Economic value simulation reflects the interest rate sensitivity of assets and liabilities in a more comprehensive fashion, reflecting all future time periods. It can identify the quantity of interest rate risk as a function of the changes in the economic values of assets and liabilities, and the corresponding change in the economic value of equity of the Bank. Both types of simulation assist in identifying, measuring, monitoring and controlling interest rate risk and are employed by management to ensure that variations in interest rate risk exposure will be maintained within policy guidelines.

We produce these simulation reports and discuss them with our management Asset and Liability Committee on a quarterly basis. The simulation reports compare baseline (no interest rate change) to the results of an interest rate shock, to illustrate the specific impact of the interest rate scenario tested on income and equity. The model, which incorporates asset and liability rate information, simulates the effect of various interest rate movements on income and equity value. The reports identify and measure our interest rate risk exposure present in our current asset/liability structure. Management considers both a static (current position) and dynamic (forecast changes in volume) analysis as well as non-parallel and gradual changes in interest rates and the yield curve in assessing interest rate exposures.

If the results produce quantifiable interest rate risk exposure beyond our limits, then the testing will have served as a monitoring mechanism to allow us to initiate asset/liability strategies designed to reduce and therefore mitigate interest rate risk. The table below sets forth an approximation of our interest rate risk exposure. The simulation uses projected repricing of assets and liabilities at December 31, 2025. The income simulation analysis presented represents a one-year impact of the interest scenario assuming a static balance sheet. Various assumptions are made regarding the prepayment speed and optionality of loans, investment securities and deposits, which are based on analysis and market information. The assumptions regarding optionality, such as prepayments of loans and the effective lives and repricing of non-maturity deposit products, are documented periodically through evaluation of current market conditions and historical correlations to our specific asset and liability products under varying interest rate scenarios.

Because the prospective effects of hypothetical interest rate changes are based on a number of assumptions, these computations should not be relied upon as indicative of actual results. While we believe such assumptions to be reasonable, assumed prepayment rates may not approximate actual future prepayment activity on mortgage-backed securities or agency issued collateralized obligations (secured by one- to four-family loans and multifamily loans). Further, the computation does not reflect any actions that management may undertake in response to changes in interest rates and assumes a constant asset base. Management periodically reviews the rate assumptions based on existing and projected economic conditions and consults with industry experts to validate our model and simulation results.

The table below sets forth, as of December 31, 2025, the Bank’s net portfolio value, the estimated changes in our net portfolio value and net interest income that would result from the designated instantaneous parallel changes in market interest rates.

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As of December 31, 2025, based on the scenarios above, net interest income would increase by approximately 8.69% to 25.83%, over a one-year time horizon in a rising interest rate environment. One-year net interest income would decrease by approximately 9.61% to 27.76% in a declining interest rate environment over the same period.

Economic value at risk would be positively impacted by a rise in interest rates and negatively impacted by a decline in interest rates. We have established an interest rate floor of zero percent for measuring interest rate risk. The

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difference between the two results reflects the relatively long terms of a portion of our assets which is captured by the economic value at risk but has less impact on the one year net interest income sensitivity.

Overall, our December 31, 2025 results indicate that we are adequately positioned with an acceptable net interest income and economic value at risk and that all interest rate risk results continue to be within our policy guidelines.

Liquidity and Capital Resources

We maintain liquid assets at levels we believe are adequate to meet our liquidity needs. We established a liquidity ratio policy that identify three liquidity ratios consisting of (1) Cash/Deposits & Short-Term Borrowings (“Cash Liquidity”), (2) Cash & Investments/Deposits & Short-Term Borrowings (“On Balance Sheet Liquidity”), and (3) Cash & Investments & Borrowing Capacity/Deposits & Short-Term Borrowings (“On Balance Sheet Liquidity & Borrowing Capacity”) to assist in the management of our liquidity. We also establish targets of 2.0% for the Cash Liquidity ratio, 5.0% for the On Balance Sheet Liquidity ratio, and 20.0% for the On Balance Sheet Liquidity & Borrowing Capacity ratio.

Our Cash Liquidity ratio, On Balance Sheet Liquidity ratio, and On Balance Sheet Liquidity & Borrowing Capacity ratio averaged 5.0%, 7.4%, and 59.9%, respectively, for the year ended December 31, 2025 compared to 6.7%, 8.8%, and 65.6%, respectively, for the year ended December 31, 2024. We adjust our liquidity levels to fund deposit outflows, pay real estate taxes on real estate loans, repay our borrowings, and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives. However, during the interest rate environment in 2024, we have strategically allowed these metrics to fall below the minimum thresholds at times to provide for the effective management of extension risk and other interest rate risks.

Our liquidity ratios cannot be calculated using amounts disclosed in our consolidated financial statements, as many of the calculations involve monthly, quarterly or annual averages. To calculate our liquidity ratios, the average liquidity base from the prior month is used as the denominator to calculate a daily liquidity ratio. The liquidity base consists of savings account balances, certificates of deposit balances, checking and money market balances, deposit loans and borrowings. The daily balances of these components are averaged to arrive at the liquidity base for the month, and the daily cash balances in selected general ledger accounts are used to derive our liquidity position. A daily liquidity ratio is calculated using the liquidity for the day divided by the prior month’s average liquidity base. At the end of each month, a monthly liquidity position is calculated using the average liquidity position for the month divided by the prior month’s average liquidity base. To calculate quarterly and annual liquidity ratios, we take the average liquidity for the three- or twelve-month period, respectively, and average it.

Given the rapid movement of deposits in today’s banking environment, the Company also manages its liquidity position through a time-series approach to liquidity availability.  Traditional liquidity management focuses on on-balance sheet capacity; however, converting those assets into cash may involve delays or market-driven losses.  To address this, the Company emphasizes the actual accessibility of liquidity as measured by when cash becomes available in the Company’s Cash Accounts rather than simply its balance sheet presence.

This time-series liquidity framework is analyzed across the following intervals: Minute 1, Day 1, Week 1, Month 1, and Year 1.  This structure ensures a proactive and disciplined approach to managing liquidity risk.

Minute 1: Represents the amount of cash the Company can immediately access and disperse within one minute while remaining solvent.  It is defined as the cash and cash equivalents currently on the balance sheet and typically covers daily cash needs.

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Day 1: In the event of a liquidity run, this is the amount of cash that the Company can access and disperse within one day.  It includes Minute 1 liquidity plus total borrowing capacity from the Federal Home Loan Bank, Federal Reserve Bank, and other secured and unsecured sources.

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Week 1: In a prolonged liquidity event, this is the amount of cash available over one week.  Week 1 liquidity includes Day 1 liquidity plus the estimated collateral value of unpledged investments that can be pledged or sold, as well

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as a portion (typically 10% each) of the Company’s brokered and listing service deposit capacity expected to be accessible within the week.

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Month 1: Represents the total cash the Company can access and disperse over a one-month period while remaining solvent.  It includes Week 1 liquidity plus the remaining brokered and listing service deposit capacity not already included in Week 1.

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Year 1: Reflects the amount of liquidity the Company can access and deploy over a one-year time period.  It includes Month 1 liquidity plus the value of unpledged but pledgeable loans available on the balance sheet.

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To assess the adequacy of its liquidity, the Company compares time-series liquidity against Total Non-Contractual Deposits defined as total deposits less (1) brokered deposits outstanding, (2) other contractual funding outstanding, and (3) collateralized municipal deposits outstanding.

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At December 31, 2025, the Company’s ratios of Cash and Borrowing Capacity/Total Non-Contractual Deposits and Cash, Borrowing Capacity and Sourced Deposits Capacity/Total Non-Contractual Deposits were 71.7% and 119.4%, respectively.  These figures demonstrate that the Company has sufficient liquidity resources to meet sudden and unexpected deposit outflow.

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Our primary sources of liquidity are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities, other short-term investments, earnings, and funds provided from operations.  While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by our competition.  We set the interest rates on our deposits to maintain a desired level of total deposits.  In addition, we invest excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements.

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Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Consolidated Statements of Cash Flows included with the Consolidated Financial Statements which begin on page F-1 of the Consolidated Financial Statements in this report.

Our primary investing activities are the origination of construction loans, commercial and industrial loans, multifamily loans, and to a lesser extent, mixed-use real estate loans and other loans. For the years ended December 31, 2025 and 2024, our loan originations totaled $860.7 million and $656.0 million, respectively. Cash received from the sales, calls, maturities and pay-downs on securities totaled $1.1 million and $1.2 million for the years ended December 31, 2025 and 2024, respectively. We purchased $8.8 million and $4.0 million in securities for the years ended December 31, 2025 and 2024, respectively.

Deposit flows are generally affected by the level of interest rates we offer, the interest rates and products offered by local competitors, and other factors. Total deposits decreased by $53.5 million at December 31, 2025 due to decreases in certificates of deposits and non-interest bearing demand deposits, offset by increases in NOW/money market deposits and savings account deposits.

Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of New York to provide advances. As a member of the Federal Home Loan Bank of New York, we are required to own capital stock in the Federal Home Loan Bank of New York and are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to credit-worthiness have been met. We had an available borrowing limit of $35.8 million and $18.2 million from the Federal Home Loan Bank of New York as of December 31, 2025 and 2024, respectively. We had no Federal Home Loan Bank advances at December 31, 2025 and 2024.

The Federal Reserve Bank of New York (“FRBNY”) approved on August 30, 2023 the Bank’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Bank to borrow from the Discount Window at the FRBNY. We had an available borrowing limit of $768.8 million and $834.7 million from the

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FRBNY as of December 31, 2025 and 2024, respectively. We had $70.0 million in FRBNY borrowings at December 31, 2025 compared to no FRBNY borrowings at December 31, 2024.

In addition, we have a borrowing agreement with Atlantic Community Bankers Bank (“ACBB”) to provide short-term borrowings of $8.0 million at December 31, 2025 and 2024. There were no outstanding borrowings with ACBB at December 31, 2025 and 2024.

We have elected to withdraw the loans we have pledged to secure Federal Home Loan Bank of New York advances and some of our correspondent banking services to become effective in or around March 2026, but we will remain a member of the Federal Home Loan Bank of New York after such withdrawals become effective. We intend to utilize the FRBNY for some of our future correspondent banking services.

At December 31, 2025, we had unfunded commitments on construction loans of $404.8 million, unfunded commitments under lines of credit of $71.0 million, outstanding commitments to originate loans of $189.7 million, and unfunded standby letters of credit of $14.2 million. At December 31, 2025, certificates of deposit scheduled to mature in less than one year totaled $832.2 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as various types of sourced deposits, Federal Home Loan Bank advances, and/or FRBNY borrowings, in order to maintain our level of assets. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents. In addition, the cost of such deposits may be significantly higher or lower depending on market interest rates at the time of renewal.

The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its stockholders, and interest and principal on outstanding debt, if any. The Company’s primary sources of income are interest income derived from investments in loans and interest bearing accounts at other financial institutions and dividends received from the Bank. At December 31, 2025, the Company had liquid assets of $5.2 million and $3.1 million in loan participations originated by the Bank which are held by the Company.

Off-Balance Sheet Arrangements

For the year ended December 31, 2025, we did not engage in any off-balance sheet transactions reasonably likely to have a material adverse effect on our financial condition, results of operations or cash-flows.

Recent Accounting Pronouncements

For a discussion of the impact of recent accounting pronouncements, see note 23 in the notes to the consolidated financial statements of the Company included in this report.

Impact of Inflation and Changing Prices

The consolidated financial statements and related notes of the Company have been prepared in accordance with GAAP, which generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.

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