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What changed in ECB Bancorp, Inc. /MD/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ECB Bancorp, Inc. /MD/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+256 added−259 removedSource: 10-K (2025-03-26) vs 10-K (2024-03-29)

Top changes in ECB Bancorp, Inc. /MD/'s 2024 10-K

256 paragraphs added · 259 removed · 228 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

142 edited+17 added−18 removed233 unchanged
Biggest changeThe following table sets forth activity in our allowance for credit losses for the years indicated: At December 31, 2023 2022 (in thousands) Allowance for credit losses at beginning of year $ 7,200 $ 4,236 Cumulative effect accounting adjustment 182 — Provision for credit losses 1,210 2,940 Charge-offs: Real estate loans: One-to-four family residential — — Multi-family — — Commercial — — Home equity lines of credit and loans — — Construction — — Commercial — — Consumer (2 ) (2 ) Total charge-offs $ (2 ) $ (2 ) Recoveries: Real estate loans: One-to-four family residential — — Multi-family — — Commercial — 25 Home equity lines of credit and loans — — Construction — — Commercial — — Consumer 1 1 Total recoveries 1 26 Net (charge-offs) recoveries $ (1 ) $ 24 Allowance for credit losses at end of year $ 8,591 $ 7,200 Allowance for credit losses to non-performing loans 708.24 % 1097.56 % Allowance for credit losses to total loans outstanding at end of year 0.82 % 0.81 % Net (charge offs) recoveries to average loans outstanding during the year 0.00 % 0.00 % 17 Allocation of Allowance for Credit Losses.
Biggest changeHowever, regulatory agencies are not directly involved in the process for establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. 17 The following table sets forth activity in our allowance for credit losses on loans for the years indicated: At December 31, 2024 2023 (in thousands) Allowance for credit losses on loans at beginning of year $ 8,591 $ 7,200 Cumulative effect accounting adjustment — 182 Provision for credit losses 296 1,210 Charge-offs: Real estate loans: One-to-four family residential — — Multi-family — — Commercial — — Home equity lines of credit and loans — — Construction — — Commercial — — Consumer (4 ) (2 ) Total charge-offs $ (4 ) $ (2 ) Recoveries: Real estate loans: One-to-four family residential — — Multi-family — — Commercial — — Home equity lines of credit and loans — — Construction — — Commercial — — Consumer 1 1 Total recoveries 1 1 Net (charge-offs) recoveries $ (3 ) $ - $ (1 ) Allowance for credit losses on loans at end of year $ 8,884 $ - $ 8,591 Allowance for credit losses on loans to non-performing loans 453.96 % 708.24 % Allowance for credit losses on loans to total loans outstanding at end of year 0.78 % 0.82 % Net (charge offs) recoveries to average loans outstanding during the year 0.00 % 0.00 % 18 Allocation of Allowance for Credit Losses on Loans.
We conduct business from our three full-service banking offices located in Everett, Massachusetts, Lynnfield, Massachusetts and Woburn, Massachusetts, which are located in the greater Boston metropolitan area in Middlesex and Essex Counties. Everett is adjacent to Boston and is approximately three miles from Boston’s financial district, and Lynnfield is located approximately 10 miles to the north in Essex County.
We conduct business from our three full-service banking offices located in Everett, Lynnfield and Woburn, Massachusetts, which are located in the greater Boston metropolitan area in Middlesex and Essex Counties. Everett is adjacent to Boston and is approximately three miles from Boston’s financial district, and Lynnfield is located approximately 10 miles to the north in Essex County.
Historically, given our size, capital position and lending team experience and capacity, we have originated for participation to other local banking institutions our larger commercial real estate and commercial loans.
Historically, given our size, capital position and lending team experience and capacity, we have originated for participation to other local banking institutions our larger commercial real estate and commercial loans.
As we continue to enhance our commercial real estate team and infrastructure and with the increase in capital resulting from the conversion, we are able to selectively retain larger loans that we historically would have originated for participation with other local institutions.
As we continue to enhance our commercial real estate team and infrastructure and with the increase in capital resulting from the conversion, we are able to selectively retain larger loans that we historically would have originated for participation with other local institutions.
Loans secured by commercial real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential real estate loans. The primary concern in commercial real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project.
Loans secured by commercial real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential real estate loans. The primary concern in commercial real estate lending is the borrower’s creditworthiness, the feasibility and cash flow potential of the project.
Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio.
Because of the inherent uncertainties in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio.
The deposit operations of Everett Co-operative Bank also are subject to, among others, the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; and • Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
The deposit operations of Everett Co-operative Bank also are subject to, among others, the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; and 31 • Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
The USA PATRIOT Act, which amended the BSA, together with the implementing regulations of various federal regulatory agencies, has caused financial 28 institutions, such as Everett Co-operative Bank, to adopt and implement additional policies or amend existing policies and procedures with respect to, among other things, anti-money laundering compliance, suspicious activity, currency transaction reporting, customer identity verification and customer risk analysis.
The USA PATRIOT Act, which amended the BSA, together with the implementing regulations of various federal regulatory agencies, has caused financial institutions, such as Everett Co-operative Bank, to adopt and implement additional policies or amend existing policies and procedures with respect to, among other things, anti-money laundering compliance, suspicious activity, currency transaction reporting, customer identity verification and customer risk analysis.
Change in Control Regulations Under the Change in Bank Control Act, no person or group of persons may acquire “control” of a bank holding company, such as ECB Bancorp, unless the Federal Reserve Board has been given 60 days’ prior written notice and has 30 not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.
Change in Control Regulations Under the Change in Bank Control Act, no person or group of persons may acquire “control” of a bank holding company, such as ECB Bancorp, unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.
Assets classified as “doubtful” have all of the weaknesses inherent in those classified 15 “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.
Assets classified as “doubtful” have all of the weaknesses inherent in those classified “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.
Reflecting our focus on our community, in connection with our mutual to stock conversion and initial public offering which closed in July 2022, we established the Everett Co-operative Bank Charitable Foundation and funded it with $600,000 in cash and 260,000 shares of our common stock, for a total contribution of $3,200,000 based on the 5 $10.00 per share offering price.
Reflecting our focus on our community, in connection with our mutual to stock conversion and initial public offering which closed in July 2022, we established the Everett Co-operative Bank Charitable Foundation (the "Foundation") and funded it with $600,000 in cash and 260,000 shares of our common stock, for a total contribution of $3,200,000 based on the $10.00 per share offering price.
The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or perpetual preferred stock if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.
The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or 32 perpetual preferred stock if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.
Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities. 11 Loan Underwriting Risks Adjustable-Rate Residential Real Estate Loans.
Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities. Loan Underwriting Risks Adjustable-Rate Residential Real Estate Loans.
Interest income on restructured loans is accrued after the 14 borrower demonstrates the ability to pay under the restructured terms through a sustained period of repayment performance, which is generally six consecutive months. Delinquent Loans . The following table sets forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated.
Interest income on restructured loans is accrued after the borrower demonstrates the ability to pay under the restructured terms through a sustained period of repayment performance, which is generally six consecutive months. Delinquent Loans . The following table sets forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated.
We make commercial loans and lines of credit primarily to small businesses in our market area. These loans and lines of credit are generally secured by business assets, such as equipment and accounts receivable. Commercial loans and lines of credit are made with both adjustable and fixed-interest rates and for terms generally up to 60 months or on demand.
We make commercial loans and lines of credit primarily to small businesses in our market area. These loans and lines of credit are generally secured by business assets, such as equipment and accounts receivable. Commercial loans and lines of credit are made with both adjustable and fixed-interest rates and for terms generally up to 60 months or on 11 demand.
We make construction loans, primarily to developers, contractors and builders of apartment buildings, single-family homes and condominiums and individuals for the construction of their primary residences. We also make a limited amount of land loans that will be used for residential or commercial development. Land loans also include loans secured by land purchased for investment purposes.
We make construction loans, primarily to developers, contractors and builders of apartment buildings, for single-family homes and condominiums and to individuals for the construction of their primary residences. We also generate a limited amount of land loans that will be used for residential or commercial development. Land loans also include loans secured by land purchased for investment purposes.
As we continue to enhance our commercial real estate team and infrastructure and with the increase in capital resulting from the conversion, we are now able to selectively retain larger loans that we historically would have originated for participation with other local institutions.
As we continue to enhance our commercial real estate team and infrastructure and with the increase in capital resulting from the conversion, we are now able to selectively retain larger loans that we historically would have originated for participation with other local financial institutions.
These loans often involve the 12 disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest.
These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest.
In this regard, 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 hold in our portfolio. Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated.
In this regard, 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 hold in our portfolio. 6 Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated.
Although these securities may have a yield somewhat higher than the yield of similar securities without such features, these securities are subject to the risk that they may be redeemed by the issuer prior to maturing in the event general interest rates decline.
Although these securities may have a yield somewhat higher than the yield of similar securities without such features, these securities are subject to the risk that they may be redeemed by 19 the issuer prior to maturing in the event general interest rates decline.
Lending Activities Our principal lending activity is originating one-to-four family residential real estate loans, commercial real estate and multifamily real estate loans, construction and land loans and home equity lines of credit and loans. To a much lesser extent, we also originate commercial and consumer loans.
Lending Activities Our principal lending activity is originating one-to-four family residential real estate loans, commercial real estate and multifamily real estate loans, construction and land loans and home equity lines of credit and loans. To a much lesser extent, we also originate commercial business loans and consumer loans.
Among other things, these provisions generally require that extensions of credit to insiders: • be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and 26 • not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Everett Co-operative Bank’s capital.
Among other things, these provisions generally require that extensions of credit to insiders: 28 • be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and • not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Everett Co-operative Bank’s capital.
Furthermore, if an insured depository institution is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the 27 appropriate federal banking agency, and the holding company must guarantee the performance of that plan.
Furthermore, if an insured depository institution is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the appropriate federal banking agency, and the holding company must guarantee the performance of that plan.
As such, ECB Bancorp is registered with the Federal Reserve Board and is subject to regulations, examinations, supervision 29 and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Board has enforcement authority over ECB Bancorp and its non-bank subsidiaries.
As such, ECB Bancorp is registered with the Federal Reserve Board and is subject to regulations, examinations, supervision and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Board has enforcement authority over ECB Bancorp and its non-bank subsidiaries.
Located adjacent to major transportation corridors, the Boston metropolitan area provides a highly diversified economic base, with major employment sectors ranging from services, manufacturing and wholesale/retail trade, to finance, technology and medical care.
Located adjacent to major transportation corridors, the Boston 5 metropolitan area provides a highly diversified economic base, with major employment sectors ranging from services, manufacturing and wholesale/retail trade, to finance, technology and medical care.
We expect to lose our status as an emerging growth company effective December 31, 2027, which is the end of the fifth year after the completion date of the conversion and offering. 31 TAXATION Federal Taxation General.
We expect to lose our status as an emerging growth company effective December 31, 2027, which is the end of the fifth year after the completion date of the conversion and offering. 34 TAXATION Federal Taxation General.
An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%.
An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio 29 of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%.
At December 31, 2023, our corporate bond portfolio consisted of investment grade securities with maturities shorter than ten years. Our investment policy provides that we may invest up to 10% of our tier-one risk-based capital in corporate bonds from individual issuers which, at the time of purchase, are within the three highest investment-grade ratings from Standard & Poor’s or Moody’s.
At December 31, 2024, our corporate bond portfolio consisted of investment grade securities with maturities shorter than ten years. Our investment policy provides that we may invest up to 10% of our tier-one risk-based capital in corporate bonds from individual issuers which, at the time of purchase, are within the three highest investment-grade ratings from Standard & Poor’s or Moody’s.
A financial institution or business corporation is generally entitled to special tax treatment as a “security corporation” under Massachusetts law provided that: (a) its activities are limited to buying, selling, dealing in or holding 32 securities on its own behalf and not as a broker; and (b) it has applied for, and received, classification as a “security corporation” by the Commissioner of the Massachusetts Department of Revenue.
A financial institution or business corporation is generally entitled to special tax treatment as a “security corporation” under Massachusetts law provided that: (a) its activities are limited to buying, selling, dealing in or holding 35 securities on its own behalf and not as a broker; and (b) it has applied for, and received, classification as a “security corporation” by the Commissioner of the Massachusetts Department of Revenue.
The vast majority of the one-to-four family residential real estate loans that we originate are secured by properties located in our primary market area.
The majority of the one-to-four family residential real estate loans that we originate are secured by properties located in our primary market area.
As a result of out stock offering which closed in July 2022, our regulatory loans-to-one borrower limit has increased and, as we continue to enhance our commercial real estate team and infrastructure and our increased capital position, we are now able to selectively retain larger loans that we historically would have originated for participation with other local institutions.
As a result of our stock offering which closed in July 2022, our regulatory loans-to-one borrower limit has increased and, as we continue to enhance our commercial real estate team and infrastructure and our increased capital position, we are now able to selectively retain larger loans that we historically would have originated for participation with other local financial institutions.
The following table sets forth the allowance for credit losses allocated by loan category and the percent of loans in each category to total loans at the dates indicated.
The following table sets forth the allowance for credit losses on loans allocated by loan category and the percent of loans in each category to total loans at the dates indicated.
Additionally, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation).
Additionally, we do not offer “subprime loans” (loans that are made to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation).
The following tables set forth the contractual maturities of our total loan portfolio at December 31, 2023. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. Because the tables present contractual maturities and do not reflect repricing or the effect of prepayments, actual maturities may differ.
The following tables set forth the contractual maturities of our total loan portfolio at December 31, 2024. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. Because the tables present contractual maturities and do not reflect repricing or the effect of prepayments, actual maturities may differ.
There were no other loans at December 31, 2023 that are not already disclosed where there is information about possible credit problems of borrowers that caused management to have serious doubts about the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure of such loans in the future. Allowance for Credit Losses.
There were no other loans at December 31, 2024 that are not already disclosed where there is information about possible credit problems of borrowers that caused management to have serious doubts about the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure of such loans in the future. Allowance for Credit Losses.
Failure to meet the qualifying criteria within the grace period or maintain a leverage ratio of 8% or greater requires the institution to comply with the generally applicable regulatory capital requirements. At December 31, 2023, Everett Co-operative Bank had not opted into the community bank leverage ratio framework and its capital ratios exceeded all applicable requirements. Capital Distributions.
Failure to meet the qualifying criteria within the grace period or maintain a leverage ratio of 8% or greater requires the institution to comply with the generally applicable regulatory capital requirements. At December 31, 2024, Everett Co-operative Bank had not opted into the community bank leverage ratio framework and its capital ratios exceeded all applicable requirements. Capital Distributions.
At December 31, 2023, our largest multifamily real estate loan totaled $20.0 million and was secured by five properties with a total of 118 residential units located in our primary market area. At December 31, 2023, this loan was performing in accordance with its repayment terms. We consider a number of factors in originating commercial real estate and multifamily loans.
At December 31, 2024, our largest multifamily real estate loan totaled $20.0 million and was secured by five properties with a total of 118 residential units located in our primary market area. At December 31, 2024, this loan was performing in accordance with its repayment terms. We consider a number of factors in originating commercial real estate and multifamily loans.
All of our deposits are fully insured due to the additional insurance provided to a Massachusetts cooperative bank, such as Everett Co-operative Bank, under the Depositors Insurance Fund, a private industry-sponsored insurance fund in Massachusetts that insures all deposits at Everett Co-operative Bank above FDIC limits. Borrowings . At December 31, 2023, total borrowings were $234.0 million.
All of our deposits are fully insured due to the additional insurance provided to a Massachusetts cooperative bank, such as Everett Co-operative Bank, under the Depositors Insurance Fund, a private industry-sponsored insurance fund in Massachusetts that insures all deposits at Everett Co-operative Bank above FDIC limits. Borrowings . At December 31, 2024, total borrowings were $234.0 million.
We historically have utilized advances from the Federal Home Loan Bank of Boston (the “FHLB”) to fund our operations and we had $234.0 million of FHLB advances outstanding at December 31, 2023. Additionally, in recent years, we have also accepted brokered deposits as a non-retail funding source to fund our operations.
We historically have utilized advances from the Federal Home Loan Bank of Boston (the “FHLB”) to fund our operations and we had $234.0 million of FHLB advances outstanding at December 31, 2024. Additionally, in recent years, we have also accepted brokered deposits as a non-retail funding source to fund our operations.
Members of a Federal Home Loan Bank are required to acquire and hold shares of capital stock in their Federal Home Loan Bank. Everett Co-operative Bank complied with this requirement at December 31, 2023. Based on redemption provisions of the Federal Home Loan Bank of Boston, the stock has no quoted market value and is carried at cost.
Members of a Federal Home Loan Bank are required to acquire and hold shares of capital stock in their Federal Home Loan Bank. Everett Co-operative Bank complied with this requirement at December 31, 2024. Based on redemption provisions of the Federal Home Loan Bank of Boston, the stock has no quoted market value and is carried at cost.
We believe that deposits are a stable source of funds, but our ability to attract and maintain deposits at favorable rates will be affected by market conditions, including competition and prevailing interest rates. 21 The following table sets forth the distribution of total deposits, by account type, at the dates indicated.
We believe that deposits are a stable source of funds, but our ability to attract and maintain deposits at favorable rates will be affected by market conditions, including competition and prevailing interest rates. 22 The following table sets forth the distribution of total deposits, by account type, at the dates indicated.
At December 31, 2023, Everett Co-operative Bank was in compliance with the loans-to-one borrower limitations. Loans to a Bank’s Insiders. Under Massachusetts law, a Massachusetts-chartered bank must comply with Regulation O of the Federal Reserve Board, and the Commissioner retains examination and enforcement authority to ensure compliance. Investment Activities.
At December 31, 2024, Everett Co-operative Bank was in compliance with the loans-to-one borrower limitations. Loans to a Bank’s Insiders. Under Massachusetts law, a Massachusetts-chartered bank must comply with Regulation O of the Federal Reserve Board, and the Commissioner retains examination and enforcement authority to ensure compliance. Investment Activities.
At December 31, 2023, Everett Co-operative Bank met the criteria for being considered “well capitalized.” Insurance of Deposit Accounts. The Deposit Insurance Fund of the FDIC insures deposits at FDIC-insured financial institutions such as Everett Co-operative Bank, generally up to a maximum of $250,000 per separately insured depositor.
At December 31, 2024, Everett Co-operative Bank met the criteria for being considered “well capitalized.” Insurance of Deposit Accounts. The Deposit Insurance Fund of the FDIC insures deposits at FDIC-insured financial institutions such as Everett Co-operative Bank, generally up to a maximum of $250,000 per separately insured depositor.
Management believes that we have a good working relationship with our employees. 22 SUPERVISION AND REGULATION General Everett Co-operative Bank is a Massachusetts-chartered stock cooperative bank and is the wholly owned subsidiary of ECB Bancorp, a Maryland corporation, which is a registered bank holding company.
Management believes that we have a good working relationship with our employees. 24 SUPERVISION AND REGULATION General Everett Co-operative Bank is a Massachusetts-chartered stock cooperative bank and is the wholly owned subsidiary of ECB Bancorp, a Maryland corporation, which is a registered bank holding company.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. An 25 institution that temporarily ceases to meet any qualifying criteria is provided with a two-quarter grace period to regain compliance.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. An 27 institution that temporarily ceases to meet any qualifying criteria is provided with a two-quarter grace period to regain compliance.
The Company reviews its investment in capital stock of the FHLB for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. At December 31, 2023, no impairment had been recognized. Holding Company Regulation ECB Bancorp is a bank holding company within the meaning of Bank Holding Company of 1956, as amended.
The Company reviews its investment in capital stock of the FHLB for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. At December 31, 2024, no impairment had been recognized. Holding Company Regulation ECB Bancorp is a bank holding company within the meaning of Bank Holding Company of 1956, as amended.
At December 31, 2023, Everett Co-operative Bank had no minimum tax credit carryovers. Net Operating Loss Carryovers. As a result of the Tax Cuts and Jobs Act generally, a financial institution may carry federal net operating losses forward indefinitely. At December 31, 2023, Everett Co-operative Bank had no federal net operating loss carryforwards. Charitable Contribution Carryovers.
At December 31, 2024, Everett Co-operative Bank had no minimum tax credit carryovers. Net Operating Loss Carryovers. As a result of the Tax Cuts and Jobs Act generally, a financial institution may carry federal net operating losses forward indefinitely. At December 31, 2024, Everett Co-operative Bank had no federal net operating loss carryforwards. Charitable Contribution Carryovers.
At December 31, 2023, Everett Co-operative Bank had no capital loss carryovers. Corporate Dividends. ECB Bancorp may generally exclude from its income 100% of dividends received from Everett Co-operative Bank as a member of the same affiliated group of corporations. Audit of Tax Returns.
At December 31, 2024, Everett Co-operative Bank had no capital loss carryovers. Corporate Dividends. ECB Bancorp may generally exclude from its income 100% of dividends received from Everett Co-operative Bank as a member of the same affiliated group of corporations. Audit of Tax Returns.
Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy.
Repayments of loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy.
It is not practicable to determine the fair value of FHLB common stock due to restrictions placed on its transferability. Under current FHLB rules, we will be required to purchase additional FHLB common stock if we increase borrowings in the future. 19 Securities Portfolio.
It is not practicable to determine the fair value of FHLB common stock due to restrictions placed on its transferability. Under current FHLB rules, we will be required to purchase additional FHLB common stock if we increase borrowings in the future. 20 Securities Portfolio.
At December 31, 2023, our largest commercial real estate loan totaled $10.5 million and was secured by a warehouse distribution center located in our primary market area. At December 31, 2023, this loan was performing in accordance with its repayment terms.
At December 31, 2024, our largest commercial real estate loan totaled $10.5 million and was secured by a warehouse distribution center located in our primary market area. At December 31, 2024, this loan was performing in accordance with its repayment terms.
The description is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on Everett Co-operative Bank and ECB Bancorp. 23 Massachusetts Banking Laws and Supervision General.
The description is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on Everett Co-operative Bank and ECB Bancorp. 25 Massachusetts Banking Laws and Supervision General.
Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business, and the collateral securing these loans may fluctuate in value.
Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income streams, and which are secured by real property 12 whose value tends to be more easily ascertainable, commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business operation, and the collateral securing these loans may fluctuate in value.
We originate our adjustable-rate one-to-four family residential real estate loans with initial interest rate adjustment periods of three, five, seven and 10 years, based on changes in a designated market index.
We originate our adjustable-rate one-to-four family residential real estate loans with initial interest rate adjustment periods of three, five, seven and ten years, based on changes in a designated market index.
The following tables set forth the stated maturities and weighted average yields of our investment securities which are classified as held-to-maturity and available-for-sale at December 31, 2023. Certain securities have adjustable interest rates and will reprice periodically within the various maturity ranges. These repricing schedules are not reflected in the table below.
The following tables set forth the stated maturities and weighted average yields of our investment securities which are classified as held-to-maturity and available-for-sale at December 31, 2024. Certain securities have adjustable interest rates and will reprice periodically within the various maturity ranges. These repricing schedules are not reflected in the table below. Prepayments are not reflected in the table below.
All Massachusetts-chartered cooperative banks are members of the Depositors Insurance Fund, a private industry-sponsored insurance fund in Massachusetts that insures all deposits at Everett Co-operative Bank above FDIC limits. 24 Protection of Personal Information.
All Massachusetts-chartered cooperative banks are members of the Depositors Insurance Fund, a private industry-sponsored insurance fund in Massachusetts that insures all deposits at Everett Co-operative Bank above FDIC limits. 26 Protection of Personal Information.
Underwriting is focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage their operations. Construction lending involves additional risks when compared with permanent lending because funds are advanced upon the security of the project, which is of uncertain value before its completion.
Underwriting is focused on the borrower's financial strength, credit history and demonstrated ability to produce a quality product, effectively market it and manage their operations effectively. Construction lending involves additional risks when compared with permanent lending because funds are advanced upon the security of the project, which is of uncertain value before its completion.
Loan Approval Procedures and Authority The maximum amount that we may lend to one borrower and the borrower’s related entities is generally limited, by statute, to 20% of the Bank's capital, which is defined under Massachusetts law as the sum of our surplus account, undivided profits and, after the completion of the conversion, capital stock.
Loan Approval Procedures and Authority The maximum amount that we may lend to one borrower and the borrower’s related entities is generally limited, by statute, to 20% of the Bank's capital, which is defined under Massachusetts law as the sum of our surplus account, undivided profits and capital stock.
ECB Bancorp will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the completion of the conversion and offering; (ii) the first fiscal year after our annual gross revenues are $1.235 billion (adjusted for inflation) or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million at the end of the second quarter of that fiscal year.
Such an election is irrevocable during the period a company is an emerging growth company. 33 ECB Bancorp will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the completion of the conversion and offering; (ii) the first fiscal year after our annual gross revenues are $1.235 billion (adjusted for inflation) or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million at the end of the second quarter of that fiscal year.
When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions.
When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning and/or managing similar property and the borrower’s repayment history with us and other financial institutions.
As of December 31, 2023, we maintained no “other real estate owned” as a result of foreclosures (or the acceptance of a deed in lieu of foreclosure). Commercial Loans.
As of December 31, 2024, we maintained no “other real estate owned” as a result of foreclosures (or the acceptance of a deed in lieu of foreclosure). Commercial Loans.
At December 31, 2023, the Company had a charitable contribution carryover of $1,810,000 which expires on December 31, 2027. Capital Loss Carryovers. A corporation cannot recognize capital losses in excess of capital gains generated. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years.
At December 31, 2024, the Company had a charitable contribution carryover of $1,356,000 which expires on December 31, 2027. Capital Loss Carryovers. A corporation cannot recognize capital losses in excess of capital gains generated. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years.
The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of Everett Co-operative Bank. For 2023 the FDIC insurance expense for Everett Co-operative Bank was approximately $793,000. We cannot predict what assessment rates will be in the future.
The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of Everett Co-operative Bank. For 2024 the FDIC insurance expense for Everett Co-operative Bank was approximately $752,000. We cannot predict what assessment rates will be in the future.
Unless the approval of the FDIC is obtained, Everett Co-operative Bank may not declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of its net income during the current calendar year and the retained net income of the prior two calendar years.
Unless the approval of the FDIC is obtained, Everett Co-operative Bank may not declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of its net income during the current calendar year and the retained net income, not previously used for dividents, of the prior two calendar years.
These factors affect the demand for residential homes, multifamily apartments, office buildings, shopping centers, industrial warehouses and other commercial properties. According to the United States Department of Labor, the Boston metropolitan area was one of the United States' twelve largest metropolitan statistical areas in December 2023.
These factors affect the demand for residential homes, multifamily apartments, office buildings, shopping centers, industrial warehouses and other commercial properties. According to the United States Department of Labor, the Boston metropolitan area was one of the United States' twelve largest metropolitan statistical areas in June 2024.
As of December 31, 2023, our average outstanding one-to-four family residential real estate loan balance was $428,000 and our largest outstanding loan secured by one-to-four family residential restate had a principal balance of $5.0 million, which, as of December 31, 2023, was performing in accordance with its repayment terms.
As of December 31, 2024, our average outstanding one-to-four family residential real estate loan balance was $439,000 and our largest outstanding loan secured by one-to-four family residential restate had a principal balance of $5.0 million, which, as of December 31, 2024, was performing in accordance with its repayment terms.
At December 31, 2023, our construction loans included $3.0 million in lines of credit secured by land. While we may originate loans to builders whether or not the collateral property underlying the loan is under contract for sale, we consider each project carefully in light of current residential real estate market conditions.
At December 31, 2024, our construction loans included $3.4 million in lines of credit secured by land. 10 While we may originate loans to builders whether or not the collateral property underlying the loan is under contract for sale, we consider each project carefully in light of current residential real estate market conditions.
On January 1, 2023, the Company adopted the ASU 2016-13 Current Expected Credit Loss (CECL) methodology for estimating the credit losses for loans. This methodology replaced the previous incurred loss and impairment methodology with a methodology referred to as CECL.
On January 1, 2023, the Company adopted the ASU 2016-13 Current Expected Credit Loss (CECL) methodology for estimating the credit losses for loans and off-balance sheet commitments. This methodology replaced the previous incurred loss and impairment methodology with a methodology referred to as CECL.
This loan relationship was performing in accordance with its original repayment terms at December 31, 2023.
This loan relationship was performing in accordance with its original repayment terms at December 31, 2024.
To a much lesser extent, we offer a variety of consumer loans to individuals who reside or work in our market area, including new and used automobile loans, unsecured overdraft lines of credit and loans secured by savings accounts. At December 31, 2023, our consumer loan portfolio totaled $173,000, or 0.02%, of our total loan portfolio.
To a much lesser extent, we offer a variety of consumer loans to individuals who reside or work in our market area, including new and used automobile loans, unsecured overdraft lines of credit and loans secured by savings accounts. At December 31, 2024, our consumer loan portfolio totaled $141,000, or 0.01%, of our total loan portfolio.
At December 31, 2023, we had $14.5 million in bank-owned life insurance. Other Securities . We hold common stock of the FHLB in connection with our borrowing activities. The FHLB common stock is carried at cost and classified as restricted equity securities.
At December 31, 2024, we had $14.9 million in bank-owned life insurance. Other Securities . We hold common stock of the FHLB in connection with our membership with the FHLB and our borrowing activities. The FHLB common stock is carried at cost and classified as restricted equity securities.
In addition, Everett Co-operative Bank and ECB Bancorp has entered into an agreement to establish a method for allocating and for reimbursing the payment of their consolidated tax liability. Personnel As of December 31, 2023, we had 68 full-time equivalent employees. Our employees are not represented by any collective bargaining group.
In addition, Everett Co-operative Bank and ECB Bancorp have entered into an agreement to establish a method for allocating and for reimbursing the payment of their consolidated tax liability. 23 Personnel As of December 31, 2024, we had 64 full-time equivalent employees. Our employees are not represented by any collective bargaining group.
Under his leadership, the Company has developed new high yield consumer products as well as introduced an array of cash management services designed to attract new business relationships to the bank. In addition, in September of 2023, the Company opened a new branch in Woburn, MA, increasing our retail network to three branches.
The Company has developed new high yield consumer and business products as well as introducing an array of cash management services designed to attract new business relationships to the bank. In addition, in September of 2023, the Company opened a new branch in Woburn, MA, increasing our retail network to three branches.
Each borrower’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates which are reviewed when received. Our loans-to-one borrower limit is 20% of the Bank’s capital, which limit was $27.9 million at December 31, 2023.
Each borrower’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates which are reviewed when received. Our loans-to-one borrower limit is 20% of the Bank’s capital, which limit was $29.1 million at December 31, 2024.
Particularly with respect to our home equity loans and lines of credit, decreases in real estate values could adversely affect our ability to fully recover the loan balance in the event of a default. Commercial Loans. At December 31, 2023, commercial loans were $9.2 million, or 0.9% of total loans.
Particularly with respect to our home equity loans and lines of credit, decreases in real estate values could adversely affect our ability to fully recover the loan balance in the event of a default. Commercial Loans. At December 31, 2024, commercial loans were $13.8 million, or 1.2% of total loans.
During the year ended December 31, 2023, we sold $346,000 of one-to-four family owner-occupied residential real estate loans. Subject to market and economic conditions, management intends to continue this sales activity in future periods to generate gain on sale income.
During the year ended December 31, 2024, we sold $7.8 million of one-to-four family owner-occupied residential real estate loans. Subject to market and economic conditions, management intends to continue this sales activity in future periods to generate gain on sale income.
The shares of the Company’s common stock sold in the offering began trading on the Nasdaq Capital Market on July 28, 2022 under the symbol “ECBK.” Since being incorporated, other than holding the common stock of Everett Co-operative Bank, retaining approximately 22% of the net cash proceeds of the stock conversion offering and making a loan to the Bank’s employee stock ownership plan, we have not engaged in any material business activities to date.
The shares of the Company’s common stock sold in the offering began trading on the Nasdaq Capital Market on July 28, 2022 under the symbol “ECBK.” Since being incorporated, other than holding the common stock of Everett Co-operative Bank, engaging in share repurchases and making a loan to the Bank’s employee stock ownership plan, we have not engaged in any material business activities to date.
We generally will limit the maximum number of speculative units (units that are not pre-sold) approved for each builder, typically starting with one speculative loan per builder until we develop a relationship with the builder. At December 31, 2023, speculative construction loans totaled $33.9 million.
We generally limit the maximum number of speculative units (units that are not pre-sold) approved for each builder, typically starting with one speculative loan per builder until we develop a relationship with the builder. At December 31, 2024, speculative construction loans totaled $28.1 million.
At December 31, 2023 2022 (in thousands) Non-accrual loans: Real estate loans: One-to-four family residential $ 1,191 $ 656 Multi-family — — Commercial — — Home equity lines of credit and loans 22 — Construction — — Commercial — — Consumer — — Total non-accrual loans $ 1,213 $ 656 Accruing loans past due 90 days or more: Real estate loans: One-to-four family residential $ — $ — Multi-family — — Commercial — — Home equity lines of credit and loans — — Construction — — Bank Owned Property held for sale — — Total real estate owned — — Total non-performing assets $ 1,213 $ 656 Total non-performing loans to total loans 0.12 % 0.07 % Total non-performing loans to total assets 0.09 % 0.06 % Total non-performing assets to total assets 0.09 % 0.06 % Classified Assets .
At December 31, 2024 2023 (in thousands) Non-accrual loans: Real estate loans: One-to-four family residential $ 1,872 $ 1,191 Multi-family — — Commercial — — Home equity lines of credit and loans 85 22 Construction — — Commercial — — Consumer — — Total non-accrual loans $ 1,957 $ 1,213 Accruing loans past due 90 days or more: Real estate loans: One-to-four family residential $ — $ — Multi-family — — Commercial — — Home equity lines of credit and loans — — Construction — — Bank owned property held for sale — — Total real estate owned — — Total non-performing assets $ 1,957 $ 1,213 Total non-performing loans to total loans 0.17 % 0.12 % Total non-performing loans to total assets 0.14 % 0.09 % Total non-performing assets to total assets 0.14 % 0.09 % Classified Assets .
In this regard, 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 hold in our portfolio. Construction and Land Loans . At December 31, 2023, we had $112.0 million in construction and land loans, or 10.7% of total loans.
In this regard, 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 hold in our portfolio. Construction and Land Loans . At December 31, 2024, we had $90.9 million in construction and land loans, or 7.9% of total loans.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CIO and ISO are responsible for implementing and maintaining the IRP, which includes: a) Identifying the incident response team (“IRT”) and any appropriate sub-teams to address specific information security incidents, or categories of information security incidents. b) Coordinating IRT activities, including developing, maintaining, and following appropriate procedures to respond to and document identified information security incidents. c) Conducting post-incident reviews to gather feedback on information security incident response procedures and address any identified gaps in security measures. d) Providing training and conducting periodic exercises to promote employee and stakeholder preparedness and awareness of the IRP. e) Reviewing the IRP at least annually, or whenever there is a material change in the Company’s business practices that may reasonably affect its cyber incident response procedures. 35
Biggest changeThe CIO and ISO are responsible for implementing and maintaining the IRP, which includes: a) Identifying the incident response team (“IRT”) and any appropriate sub-teams to address specific information security incidents, or categories of information security incidents. b) Coordinating IRT activities, including developing, maintaining, and following appropriate procedures to respond to and document identified information security incidents. c) Conducting post-incident reviews to gather feedback on information security incident response procedures and address any identified gaps in security measures. d) Providing training and conducting periodic exercises to promote employee and stakeholder preparedness and awareness of the IRP. e) Reviewing the IRP at least annually, or whenever there is a material change in the Company’s business practices that may reasonably affect its cyber incident response procedures. 38
The CIO has more than 37 years of relevant experience both with the Company and with other organizations in the IT field. The CIO also oversees the Company’s Information Security Program and manages a third-party consultant that is an expert in the Information Security field and acts as our Information Security Officer (“ISO”).
The CIO has more than 38 years of relevant experience both with the Company and with other organizations in the IT field. The CIO also oversees the Company’s Information Security Program and manages a third-party consultant that is an expert in the Information Security field and acts as our Information Security Officer (“ISO”).
In order to mitigate the operational, informational and other risks associated with the use of vendors, the Company maintains a Third-Party Risk Management Program, which is implemented through a Third-Party Risk Management Policy and includes a detailed onboarding process and periodic reviews of vendors with access to sensitive 34 Company data.
In order to mitigate the operational, informational and other risks associated with the use of vendors, the Company maintains a Third-Party Risk Management Program, which is implemented through a Third-Party Risk Management Policy and includes a detailed onboarding process and periodic reviews of vendors with access to sensitive 37 Company data.
The CIO is a member of various management committees, chairs 33 the Company’s management-level Information Technology and Information Security Committee (“IT/IS Committee”), and presents information security and cybersecurity updates on a monthly basis to the IT/IS Committee and periodically to the Board of Directors. The IT/IS Committee provides oversight, from a risk perspective, of information systems security.
The CIO is a member of various management committees, chairs 36 the Company’s management-level Information Technology and Information Security Committee (“IT/IS Committee”), and presents information security and cybersecurity updates on a monthly basis to the IT/IS Committee and periodically to the Board of Directors. The IT/IS Committee provides oversight, from a risk perspective, of information systems security.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAt December 31, 2023 the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $3.8 million.
Biggest changeAt December 31, 2024 the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $3.5 million.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at December 31, 2023, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations. ITEM 4.
Biggest changeWe are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at December 31, 2024, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations. ITEM 4.
Mine Safet y Disclosures Not applicable. 36 PART II
Mine Safet y Disclosures Not applicable. 39 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth the information regarding the Company's common stock repurchase activities during the three months ended December 31, 2023: 37 Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Number of Shares That May Yet Be Purchased Under the Program From October 1, 2023 to October 31, 2023 30,868 $ 10.33 30,868 378,652 From November 1, 2023 to November 30, 2023 36,649 $ 10.99 36,649 342,003 From December 1, 2023 to December 31, 2023 72,635 $ 12.49 72,635 269,368 Total 140,152 $ 11.62 140,152 ITEM 6. [Res erved] 38
Biggest changeThe following table sets forth the information regarding the Company's common stock repurchase activities during the three months ended December 31, 2024: 40 Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Number of Shares That May Yet Be Purchased Under the Program From October 1, 2024 to October 31, 2024 32,082 $ 14.40 32,082 96,756 From November 1, 2024 to November 30, 2024 10,462 $ 14.92 10,462 86,294 From December 1, 2024 to December 31, 2024 18,142 $ 15.06 18,142 68,152 Total 60,686 $ 14.70 60,686 ITEM 6. [Res erved] 41
Information regarding stock-based compensation awards outstanding and available for future grants as of December 31, 2023 is presented in the table below. Additional information regarding stock-based compensation plans is presented in Note 10-Stock-Based Compensation in Item 8.
Information regarding stock-based compensation awards outstanding and available for future grants as of December 31, 2024 is presented in the table below. Additional information regarding stock-based compensation plans is presented in Note 10-Stock-Based Compensation in Item 8.
ITEM 5. Market for Registrant’s Common E quity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market, Holder and Dividend Information. The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “ECBK.” The approximate number of holders of record of ECB Bancorp common stock as of March 28, 2024 was 404.
ITEM 5. Market for Registrant’s Common E quity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market, Holder and Dividend Information. The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “ECBK.” The approximate number of holders of record of ECB Bancorp common stock as of March 25, 2025 was 380.
Plan Category Number of Shares to be Issued Upon Exercise of Outstanding Awards Weighted-Average Exercise Price of Outstanding Awards Number of Shares Available for Future Grants Plans approved by shareholders 763,969 $ 10.50 178,207 Plans not approved by shareholders — — — Total 763,969 $ 10.50 178,207 Other than the stock-based compensation awards, ECB Bancorp has an Employee Stock Ownership Plan.
Plan Category Number of Shares to be Issued Upon Exercise of Outstanding Awards Weighted-Average Exercise Price of Outstanding Awards Number of Shares Available for Future Grants Plans approved by shareholders 758,137 $ 10.49 177,207 Plans not approved by shareholders — — — Total 758,137 $ 10.49 177,207 Other than the stock-based compensation awards, ECB Bancorp has an Employee Stock Ownership Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the Year Ended December 31, 2023 2022 Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate (Dollars in thousands) Interest-earning assets: Total loans $ 994,834 $ 48,330 4.86 % $ 643,298 $ 26,954 4.19 % Securities (1) 81,300 2,079 2.56 74,950 1,387 1.85 Short term investments 71,918 3,745 5.21 41,831 714 1.71 Interest bearing time deposits 62 - 0.70 238 1 0.60 Total interest-earning assets 1,148,114 54,154 4.72 % 760,317 29,056 3.82 % Non-interest-earning assets 32,755 27,486 Total assets $ 1,180,869 $ 787,803 Interest-bearing liabilities: Checking accounts $ 21,939 $ 18 0.08 % $ 35,900 $ 29 0.08 % Savings accounts 164,087 4,074 2.48 70,106 461 0.66 Money market accounts 105,793 2,412 2.28 177,549 864 0.49 Certificates of deposit 410,704 14,909 3.63 254,543 3,212 1.26 Total interest-bearing deposits 702,523 21,413 3.05 538,098 4,566 0.85 Federal Home Loan Bank advances 217,771 8,573 3.94 39,859 948 2.38 Other borrowings - - 0.00 27 1 3.70 Total interest-bearing liabilities 920,294 29,986 3.26 % 577,984 5,515 0.95 % Non-interest-bearing demand deposits 84,546 86,646 Non-interest-bearing liabilities 11,148 8,344 Total liabilities 1,015,988 672,974 Shareholders' equity 164,881 114,829 Total liabilities and shareholders' equity $ 1,180,869 $ 787,803 Net interest income $ 24,168 $ 23,541 Net interest rate spread (2) 1.46 % 2.87 % Net interest-earning assets (3) $ 227,820 $ 182,333 Net interest margin (4) 2.11 % 3.10 % Average interest-earning assets to interest- bearing liabilities 124.76 % 131.55 % (1) Excludes interest and dividends on cost method investments of $622,000 and $101,000 for the years ended December 31, 2023 and December 31, 2022, respectively.
Biggest changeFor the Year Ended December 31, 2024 2023 Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate (Dollars in thousands) Interest-earning assets: Total loans $ 1,104,288 $ 57,852 5.24 % $ 994,834 $ 48,330 4.86 % Securities (1) 80,057 2,363 2.95 81,300 2,079 2.56 Short term investments 114,295 6,004 5.25 71,918 3,745 5.21 Interest-bearing time deposits 64 3 5.44 62 — 0.70 Total interest-earning assets 1,298,704 66,222 5.10 % 1,148,114 54,154 4.72 % Non-interest-earning assets 34,056 32,755 Total assets $ 1,332,760 $ 1,180,869 Interest-bearing liabilities: Checking accounts $ 18,891 $ 14 0.07 % $ 21,939 $ 18 0.08 % Savings accounts 111,858 3,048 2.72 164,087 4,074 2.48 Money market accounts 158,405 5,669 3.58 105,793 2,412 2.28 Certificates of deposit 569,199 24,704 4.34 410,704 14,909 3.63 Total interest-bearing deposits 858,353 33,435 3.90 702,523 21,413 3.05 Federal Home Loan Bank advances 217,087 8,622 3.97 217,771 8,573 3.94 Total interest-bearing liabilities 1,075,440 42,057 3.91 % 920,294 29,986 3.26 % Non-interest-bearing demand deposits 77,721 84,546 Non-interest-bearing liabilities 12,661 11,148 Total liabilities 1,165,822 1,015,988 Shareholders' equity 166,938 164,881 Total liabilities and shareholders' equity $ 1,332,760 $ 1,180,869 Net interest income $ 24,165 $ 24,168 Net interest rate spread (2) 1.19 % 1.46 % Net interest-earning assets (3) $ 223,264 $ 227,820 Net interest margin (4) 1.86 % 2.11 % Average interest-earning assets to interest- bearing liabilities 120.76 % 124.76 % (1) Excludes interest and dividends on cost method investments of $823,000 and $622,000 for the years ended December 31, 2024 and 2023, respectively.
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 and home equity lines of credit and loans.
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.
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 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.
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.
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 42 requirement for a member to gain access to funding.
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.
At December 31, 2023, 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.
At December 31, 2024, 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.
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. 50 Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations.
However, if a substantial portion of these time deposits is not retained, we 53 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. Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations.
For corporate bonds classified as held-to-maturity, a probability of default and loss given default analysis is performed to determine the allowance for credit losses. We monitor the investment portfolio and credit performance on a quarterly basis to determine if any allowance is considered necessary. Comparison of Financial Condition at December 31, 2023 and December 31, 2022 Total Assets.
For corporate bonds classified as held-to-maturity, a probability of default and loss given default analysis is performed to determine the allowance for credit losses. We monitor the investment portfolio and credit performance on a quarterly basis to determine if any allowance is considered necessary. Comparison of Financial Condition at December 31, 2024 and December 31, 2023 Total Assets.
Management believes the allowance for credit losses was adequate at December 31, 2023. 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.
Management believes the allowance for credit losses was adequate at December 31, 2024. 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.
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, 2023. Our primary investing activity is originating loans.
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, 2024. Our primary investing activity is originating loans.
The capital raised in the offering has and will continue to allow us to increase our commercial lending capacity by enabling us to originate and retain all or a greater portion of loans that we 39 historically participated out to other local institutions.
The capital raised in the offering has and will continue to allow us to increase our 42 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.
For additional information, see the consolidated statements of cash flows for the years ended December 31, 2023 and 2022 included as part of the consolidated financial statements appearing elsewhere in this 10-K. We are committed to maintaining a strong liquidity position.
For additional information, see the consolidated statements of cash flows for the years ended December 31, 2024 and 2023 included as part of the consolidated financial statements appearing elsewhere in this 10-K. We are committed to maintaining a strong liquidity position.
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, 2024, or on our savings and money market accounts.
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, 2025, or on our savings and money market accounts.
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.
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.
(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. 46 Rate/Volume Analysis.
(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. 49 Rate/Volume Analysis.
Additionally, we believe the recent hire of our Senior Vice President of Retail Operations, who brings 36 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, 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 .
Additionally, we believe the recent hire of our Senior Vice President of Retail Operations, who brings 38 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 .
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. 48 The table below sets forth, as of December 31, 2023, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.
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. 51 The table below sets forth, as of December 31, 2024, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.
The table below sets forth, as of December 31, 2023, 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.
The table below sets forth, as of December 31, 2024, 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.
The information in this section has been derived from the audited financial statements, which appear beginning on page 52 of this Annual Report on Form 10-K.
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.
At December 31, 2023 and 2022, non-performing assets totaled $1.2 million and $656,000, respectively, which represented 0.09% and 0.06% of total assets at those dates, respectively. • Continuing to attract and retain customers in our market area and build our “core” deposits consisting of interest-bearing and noninterest-bearing checking, savings and money market accounts.
At December 31, 2024 and 2023, non-performing assets totaled $2.0 million and $1.2 million, respectively, which represented 0.14% and 0.09% of total assets at those dates, respectively. • Continuing to attract and retain customers in our market area and build our “core” deposits consisting of interest-bearing and noninterest-bearing checking, savings and money market accounts.
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 $9.9 million and $7.3 million at December 31, 2023 and 2022, respectively.
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 $10.0 million and $9.9 million at December 31, 2024 and 2023, respectively.
For the year ended December 31, 2023, the weighted average cost of Federal Home Loan Bank Advances was 3.94%, as compared to 2.38% for the year ended December 31, 2022. Net Interest and Dividend Income.
For the year ended December 31, 2024, the weighted average cost of Federal Home Loan Bank Advances was 3.97%, as compared to 3.94% for the year ended December 31, 2023. Net Interest and Dividend Income.
Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2023, we had outstanding commitments to originate and purchase loans of $23.1 million. We anticipate that we will have sufficient funds available to meet our current lending commitments.
Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2024, we had outstanding commitments to originate loans of $21.5 million. We anticipate that we will have sufficient funds available to meet our current lending commitments.
Time deposits that are scheduled to mature in less than one year from December 31, 2023 totaled $232.7 million. Management expects that a substantial portion of these time deposits will be retained.
Non brokered time deposits that are scheduled to mature in less than one year from December 31, 2024 totaled $321.7 million. Management expects that a substantial portion of these time deposits will be retained.
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 core 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; • managing our utilization of wholesale funding with borrowings from the Federal Home Loan Bank and brokered deposits in a prudent manner; and • continuing to diversify our loan portfolio by adding more commercial-related loans, which typically have shorter maturities and/or balloon payments. 47 By following these strategies, we believe that we are better positioned to react to increases and decreases in market 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 core 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; • 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 50 • beginning in January of 2024 we began to utilize interest rate swaps to help manage our interest rate risk.
Based on our model, if all segments of our loan portfolio experienced a 50% decrease in estimated prepayment rates, our allowance for credit losses as of December 31, 2023 would have increased $1.4 million to $9.9 million, holding all other variables constant. Income Taxes. We use the liability method of accounting for income taxes.
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, 2024 would have increased $2.4 million to $11.3 million, holding all other variables constant. 44 Income Taxes. We use the liability method of accounting for income taxes.
Our commercial real estate and multifamily real estate loan portfolios increased to $196.4 million and $287.4 million, respectively, at December 31, 2023 from $156.2 million and $242.0 million, respectively, at December 31, 2022. • Reduced emphasis on one-to-four family residential real estate lending.
Our commercial real estate and multifamily real estate loan portfolios increased to $229.0 million and $344.0 million, respectively, at December 31, 2024 from $196.4 million and $287.4 million, respectively, at December 31, 2023. • Reduced emphasis on one-to-four family residential real estate lending.
The tables above indicate that at December 31, 2023, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a decrease in net interest income of 1.8%, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 7.9% decrease in net interest income.
The tables above indicate that at December 31, 2024, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a decrease in net interest income of 4.2%, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.2% decrease in net interest income.
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.
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.
The table above indicates that at December 31, 2023, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 53.6% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 16.9% increase in EVE.
The table above indicates that at December 31, 2024, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience an 18.7% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 13.6% increase in EVE.
Based on management’s analysis of the adequacy of the allowance for credit losses, a provision for credit losses of $803,000 was recorded for the year ended December 31, 2023 in accordance with the CECL standard, compared to a provision for credit losses of $2.9 million for the year ended December 31, 2022 in accordance with the incurred loss methodology standard.
Based on management’s analysis of the adequacy of the allowance for credit losses, a provision for credit losses of $174,000 was recorded for the year ended December 31, 2024 in accordance with the CECL standard, compared to a provision for credit losses of $803,000 for the year ended December 31, 2023.
Cash and cash equivalents increased $57.0 million, or 91.8%, to $119.0 million at December 31, 2023 from $62.1 million at December 31, 2022. Cash and cash equivalents increased primarily due to increases in deposits and borrowings that were greater than our loan growth as we have focused on maintaining strong levels of liquidity. Loans.
Cash and cash equivalents increased $38.6 million, or 32.4%, to $157.6 million at December 31, 2024 from $119.0 million at December 31, 2023. Cash and cash equivalents increased primarily due to increases in deposits that were greater than our loan growth as we have focused on maintaining strong levels of liquidity. Loans.
The increase in interest and fees on loans was driven by an increase of $351.5 million in the average balance of the loan portfolio to $994.8 million for the year ended December 31, 2023 from $643.3 million for the year ended December 31, 2022, as well as an increase in the yield of 67 basis points to 4.86% during the year ended December 31, 2023 from 4.19% during the year ended December 31, 2022.
The increase in interest and fees on loans was driven by an increase of $109.5 million in the average balance of the loan portfolio to $1.10 billion for the year ended December 31, 2024 from $994.8 million for the year ended December 31, 2023, as well as an increase in the yield of 38 basis points to 5.24% during the year ended December 31, 2024 from 4.86% during the year ended December 31, 2023.
The amount of stock we are required to purchase is in proportion to our FHLB borrowings and level of total assets. Accordingly, the increase in the FHLB stock is due to increased borrowing. Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations.
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.
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.
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.
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, charitable contributions and other general and administrative expenses.
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.
Interest expense on deposit accounts increased $16.8 million, or 369.0%, to $21.4 million for the year ended December 31, 2023 from $4.6 million for the year ended December 31, 2022, due to an increase in the weighted average rate on interest-bearing deposits of 220 basis points to 3.05% for the year ended December 31, 2023 from 0.85% for the year ended December 31, 2022, as well as an increase in the average balance of interest-bearing deposits of $164.4 million, or 30.6%, to $702.5 million for the year ended December 31, 2023 from $538.1 million for the year ended December 31, 2022.
Interest expense on deposit accounts increased $12.0 million, or 56.1%, to $33.4 million for the year ended December 31, 2024 from $21.4 million for the year ended December 31, 2023, due to an increase in the average balance of interest-bearing deposits of $155.8 million, or 22.2%, to $858.4 million for the year ended December 31, 2024 from $702.5 million for the year ended December 31, 2023, as well as an increase in the weighted average rate on interest-bearing deposits of 85 basis points to 3.90% for the year ended December 31, 2024 from 3.05% for the year ended December 31, 2023.
The yield for the year ended December 31, 2023 benefited from new loans with higher rates as well as adjustable-rate loans repricing higher. Interest and dividends on securities increased $1.2 million, or 81.5%, to $2.7 million for the year ended December 31, 2023 from $1.5 million for the year ended December 31, 2022.
The yield for the year ended December 31, 2024 benefited from new loans with higher rates as well as loans repricing higher. Interest and dividends on securities increased $485,000, or 18.0%, to $3.2 million for the year ended December 31, 2024 from $2.7 million for the year ended December 31, 2023.
As of December 31, 2023, $410.1 million, or 39.1%, of our total loan portfolio, consisted of one-to-four family residential real estate loans and at that date an additional $33.4 million, or 3.2%, of our total loan portfolio, consisted of home equity lines of credit and loans.
As of December 31, 2024, $422.8 million, or 36.9%, of our total loan portfolio, consisted of one-to-four family residential real estate loans and at that date an additional $45.2 million, or 4.0%, of our total loan portfolio, consisted of home equity lines of credit and loans.
Total assets increased $215.9 million, or 20.3%, to $1.28 billion at December 31, 2023 from $1.06 billion at December 31, 2022. The increase was primarily the result of increases in loans and cash and cash equivalents. Cash and Cash Equivalents.
Total assets increased $137.8 million, or 10.8%, to $1.42 billion at December 31, 2024 from $1.28 billion at December 31, 2023. The increase was primarily the result of increases in loans and cash and cash equivalents. Cash and Cash Equivalents.
This increase was driven by an increase in the yield of investment securities of 71 basis points to 2.56% for the year ended December 31, 2023, from 1.85% for the year ended December 31, 2022 resulting from the higher market interest rate environment, as well as an increase in the average balance of $6.3 million from $75.0 million during the year ended December 31, 2022 to $81.3 million during the year ended December 31, 2023.
This increase was driven by an increase in the yield of investment securities of 39 basis points to 2.95% for the year ended December 31, 2024, from 2.56% for the year ended December 31, 2023 resulting from the higher market interest rate environment, partially offset by a decrease in the average balance of $1.2 million from $81.3 million during the year ended December 31, 2023 to $80.1 million during the year ended December 31, 2024.
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.
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.
The yield on interest earning-assets increased 90 basis points to 4.72% for the year ended December 31, 2023 from 3.82% for the year ended December 31, 2022. Interest Expense. Total interest expense increased $24.5 million, or 443.7%, to $30.0 million for the year ended December 31, 2023 from $5.5 million for the year ended December 31, 2022.
The yield on interest earning-assets increased 38 basis points to 5.10% for the year ended December 31, 2024 from 4.72% for the year ended December 31, 2023. Interest Expense. Total interest expense increased $12.1 million, or 40.3%, to $42.1 million for the year ended December 31, 2024 from $30.0 million for the year ended December 31, 2023.
Interest expense on Federal Home Loan Bank advances increased $7.6 million, or 804.3%, to $8.6 million for the year ended December 31, 2023 from $948,000 for the year ended December 31, 2022.
Interest expense on Federal Home Loan Bank advances increased $49,000, or 0.57%, to $8.62 million for the year ended December 31, 2024 from $8.57 million for the year ended December 31, 2023.
During the years ended December 31, 2023 and 2022, we originated and purchased $268.1 million and $557.7 million of loans, respectively. Financing activities consist primarily of activity in deposit accounts, as well as both FHLB advances and brokered deposits.
During the years ended December 31, 2024 and 2023, we originated and purchased $160.4 million and $268.1 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 $130.3 million and $150.1 million for the years ended December 31, 2024 and 2023, respectively.
Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance increased $405,000, or 2.9%, to $14.5 million at December 31, 2023 from $14.1 million at December 31, 2022. The increase was due to a $405,000 increase in cash surrender value of our bank-owned life insurance portfolio during the year ended December 31, 2023. Deposits.
Bank-owned life insurance increased $473,000, or 3.3%, to $14.9 million at December 31, 2024 from $14.5 million at December 31, 2023. The increase was due to an increase in cash surrender value of our bank-owned life insurance portfolio during the year ended December 31, 2024. Deposits.
These judgments may require us to make projections of future taxable income and/or to carryback to taxable income in prior years. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change.
The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets. Securities Valuation and Allowance for Credit Losses .
At December 31, 2023, we had outstanding advances of $234.0 million from the Federal Home Loan Bank. At December 31, 2023, we had unused borrowing capacity of $200.8 million with the Federal Home Loan Bank and $10.0 million with the Atlantic Community Bankers Bank.
At December 31, 2024, we had unused borrowing capacity of $328.5 million with the Federal Home Loan Bank, $15.1 million with Federal Reserve Bank and $10.0 million with the Atlantic Community Bankers Bank.
Interest and dividend income increased $25.6 million, or 87.9%, to $54.8 million for the year ended December 31, 2023 from $29.2 million for the year ended December 31, 2022 due to a $21.4 million increase in interest and fees on loans, a $1.2 million increase in interest and dividends on securities and a $3.0 million increase in other interest income.
Interest and dividend income increased $12.3 million, or 22.4%, to $67.0 million for the year ended December 31, 2024 from $54.8 million for the year ended December 31, 2023 due to a $9.5 million increase in interest and fees on loans, a $485,000 increase in interest and dividends on securities and a $2.3 million 46 increase in interest on short term investments.
We historically have utilized advances from the Federal Home Loan Bank of Boston (the “FHLB”) to fund our operations and we had $234.0 million of FHLB advances outstanding at December 31, 2023. Additionally, in recent years, we have also accepted brokered deposits as a non-retail funding source to fund our operations.
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 $234.0 million of FHLB advances outstanding at December 31, 2024. For the years ended December 31, 2024 and 2023, we had net income of $4.0 million and $4.5 million, respectively.
At December 31, 2023, $410.1 million, or 39.1%, of our total loan portfolio was comprised of one-to-four family residential real estate loans, $287.4 million, or 27.4%, of our total loan portfolio was comprised of multifamily real estate loans, $196.4 million, or 18.7%, of our total loan portfolio was comprised of commercial real estate loans, $112.0 million, or 10.7%, of our total loan portfolio was comprised of construction loans, $33.4 million, or 3.2%, of our total loan portfolio was comprised of home equity lines of credit and loans and $9.2 million, or 0.9% of our total loan portfolio was comprised of commercial loans.
At December 31, 2024, $422.8 million, or 36.9%, of our total loan portfolio was comprised of one-to-four family residential real estate loans, $344.0 million, or 30.0%, of our total loan portfolio was comprised of multifamily real estate loans, $229.0 million, or 20.0%, of our total loan portfolio was comprised of commercial real estate loans, $90.9 million, or 7.9%, of our total loan portfolio was comprised of construction loans, $45.2 million, or 4.0%, of our total loan portfolio was comprised of home equity lines of credit and loans and $13.8 million, or 1.2% of our total loan portfolio was comprised of commercial loans.
Noninterest expense increased $447,000, or 2.4%, to $19.1 million for the year ended December 31, 2023 from $18.6 million for the year ended December 31, 2022.
Noninterest expense increased $1.6 million, or 8.5%, to $20.7 million for the year ended December 31, 2024 from $19.1 million for the year ended December 31, 2023.
Deposits increased $150.1 million, or 20.9%, to $868.2 million at December 31, 2023 from $718.1 million at December 31, 2022. • Certificates of deposit increased $178.7 million, or 55.9%, to $498.5 million at December 31, 2023 from $319.8 million at December 31, 2022; • Savings accounts decreased $10.5 million, or 7.1%, to $137.8 million at December 31, 2023 from $148.4 million at December 31, 2022; • Interest-bearing checking accounts decreased $6.8 million, or 23.4%, to $22.2 million at December 31, 2023 from $28.9 million at December 31, 2022; • Demand deposit accounts decreased $6.6 million, or 7.7%, to $78.3 million at December 31, 2023 from $84.9 million at December 31, 2022; and • Money market deposit accounts decreased $4.7 million, or 3.5%, from $136.1 million at December 31, 2022 to $131.4 million at December 31, 2023.
Deposits increased $130.3 million, or 15.0%, to $998.5 million at December 31, 2024 from $868.2 million at December 31, 2023. • Certificates of deposit increased $107.0 million, or 21.5%, to $605.5 million at December 31, 2024 from $498.5 million at December 31, 2023; • Money market deposit accounts increased $53.2 million, or 40.5%, to $184.6 million at December 31, 2024 from $131.4 million at December 31, 2023; • Demand deposit accounts increased $6.6 million, or 8.4%, to $85.0 million at December 31, 2024 from $78.3 million at December 31, 2023; • Savings accounts decreased $34.9 million, or 25.3%, to $102.9 million at December 31, 2024 from $137.8 million at December 31, 2023; and • Interest-bearing checking accounts decreased $1.6 million, or 7.3%, to $20.5 million at December 31, 2024 from $22.2 million at December 31, 2023.
We obtain our fair values from one or more third-party services. This service’s fair value calculations are based on quoted market prices when such prices are available.
We classify our investments in debt securities as either held-to-maturity or available-for-sale. Securities classified as held-to-maturity are recorded at amortized cost. Available-for-sale securities are carried at fair value. We obtain our fair values from one or more third-party services. This service’s fair value calculations are based on quoted market prices when such prices are available.
The $2.1 million, or 72.7%, decrease in the provision was driven by lower loan growth during the year ended December 31, 2023 as compared to the year ended December 31, 2022. Noninterest Income. Noninterest income decreased $349,000, or 24.9%, to $1.1 million for the year ended December 31, 2023 from $1.4 million for the year ended December 31, 2022.
The $629,000, or 78.3%, decrease in the provision was driven by lower loan growth during the year ended December 31, 2024 as compared to the year ended December 31, 2023. Noninterest Income.
Certificates of deposit due within one year of December 31, 2023 totaled $232.7 million, or 26.8%, 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.
If these deposits do not remain with us, we may be required to seek other sources of funds, including brokered deposits and FHLB advances.
Income tax expense increased $753,000, or 97.0%, to $1.5 million for the year ended December 31, 2023 from $776,000 for the year ended December 31, 2022. The effective tax rate was 25.5% and 22.2% for the years ended December 31, 2023 and 2022, respectively.
Income tax expense decreased $149,000, or 9.7%, to $1.4 million for the year ended December 31, 2024 from $1.5 million for the year ended December 31, 2023. The effective tax rate was 25.7% and 25.5% for the years ended December 31, 2024 and 2023, respectively. 48 Average Balances and Yields.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences 41 are expected to be recovered or settled.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax asset will not be realized.
Our current business strategy includes continuing to focus on originating and growing our commercial real estate, multifamily real estate and construction loan portfolios and the origination of one-to-four family residential real estate loans. Our results of operations depend primarily on our net interest income.
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.
As of December 31, 2023 Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) 400 23,724 -3.1 % 300 23,881 -2.5 % 200 24,037 -1.8 % 100 24,435 -0.2 % Level 24,489 0.0 % -100 23,372 -4.6 % -200 22,557 -7.9 % -300 21,872 -10.7 % -400 21,288 -13.1 % ____________________ 1.
As of December 31, 2024 Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +400 $ 26,718 -8.7 % +300 27,364 -6.5 % +200 28,037 -4.2 % +100 28,683 -2.0 % Level 29,261 0.0 % -100 29,467 0.7 % -200 28,916 -1.2 % -300 28,257 -3.4 % -400 26,279 -10.2 % ____________________ 1.
The lower effective tax rate in 2022 was driven by non-taxable death benefits received on bank-owned life insurance. 45 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. Non-accrual loans are included in average balances only.
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.
The table below sets forth our noninterest income for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 Amount Percent (Dollars in thousands) Customer service fees $ 508 $ 446 $ 62 13.9 % Income from bank-owned life insurance 479 828 (349 ) (42.1 ) Net gain on sales of loans 21 84 (63 ) (75.0 ) Other 44 43 1 2.3 Total noninterest income $ 1,052 $ 1,401 $ (349 ) (24.9 ) % 44 Noninterest Expense.
The table below sets forth our noninterest income for the years ended December 31, 2024 and 2023: 47 Year Ended December 31, Change 2024 2023 Amount Percent (Dollars in thousands) Customer service fees $ 577 $ 516 $ 61 11.8 % Income from bank-owned life insurance 473 479 (6 ) (1.3 ) Net gain on sales of loans 119 21 98 466.7 Other 57 36 21 58.3 Total noninterest income $ 1,226 $ 1,052 $ 174 16.5 % Noninterest Expense.
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. 40 The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.
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. 43 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.
Comparison of Operating Results for the Years Ended December 31, 2023 and December 31, 2022 Net Income. Net income was $4.5 million for the year ended December 31, 2023, compared to net income of $2.7 million for the year ended December 31, 2022, an increase of $1.7 million, or 63.8%. Interest and Dividend Income.
Net income was $4.0 million for the year ended December 31, 2024, compared to net income of $4.5 million for the year ended December 31, 2023, a decrease of $465,000, or 10.4%. Interest and Dividend Income.
Significant changes are as follows: • Salaries and employee benefits increased $1.8 million, or 17.6%, driven by additional staffing to support our strategic plan, including the opening of our office in Woburn, MA, merit increases, as well as expenses related to the ESOP which did not exist in the first half of 2022 and expenses related to the 2023 Equity Incentive Plan which did not exist in 2022; • Director compensation increased $152,000, or 35.4%, driven by $103,000 in stock-based compensation recorded in the year ended December 31, 2023, related to the 2023 Equity Incentive Plan.
Significant changes are as follows: • Salaries and employee benefits increased $1.4 million, or 11.8%, driven by $974,000 in stock based compensation recorded during the year ended December 31, 2024, related to the 2023 Equity Incentive Plan, as compared to $165,000 in stock based compensation recorded during the year ended December 31, 2023.
The table below sets forth our noninterest expense for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 Amount Percent (Dollars in thousands) Salaries and employee benefits $ 11,679 $ 9,928 $ 1,751 17.6 % Director Compensation 581 429 152 35.4 Occupancy and equipment 941 753 188 25.0 Data processing 1,093 850 243 28.6 Computer software and licensing fees 286 259 27 10.4 Advertising and promotions 794 752 42 5.6 Professional fees 1,355 846 509 60.2 FDIC deposit insurance 793 225 568 252.4 Charitable contributions 17 3,256 (3,239 ) (99.5 ) Other expense 1,515 1,309 206 15.7 Total noninterest expense $ 19,054 $ 18,607 $ 447 2.4 % Income Tax Expense.
The table below sets forth our noninterest expense for the years ended December 31, 2024 and 2023: Year Ended December 31, Change 2024 2023 Amount Percent (Dollars in thousands) Salaries and employee benefits $ 13,062 $ 11,679 $ 1,383 11.8 % Director compensation 834 581 253 43.5 Occupancy and equipment 1,033 941 92 9.8 Data processing 1,198 1,093 105 9.6 Computer software and licensing fees 443 375 68 18.1 Advertising and promotions 551 794 (243 ) (30.6 ) Professional fees 1,258 1,355 (97 ) (7.2 ) Federal Deposit Insurance Corporation deposit insurance 752 793 (41 ) (5.2 ) Other expense 1,538 1,443 95 6.6 Total noninterest expense $ 20,669 $ 19,054 $ 1,615 8.5 % Income Tax Expense.
At December 31, 2023 and 2022, the level of brokered time deposits was $115.5 million and $100.8 million, respectively. At December 31, 2023 and 2022 the level of FHLB advances was $234.0 million and $174.0 million, respectively.
Deposit flows are affected primarily by the overall level of interest rates and the interest rates and products offered by us and our competitors. At December 31, 2024 and 2023, the level of brokered time deposits was $125.6 million and $115.5 million, respectively. At December 31, 2024 and 2023 the level of FHLB advances was $234.0 million.
Total shareholders’ equity increased $2.2 million, or 1.3%, to $164.9 million at December 31, 2023 from $162.7 million at December 31, 2022.
Federal Home Loan Bank Advances. Advances from the Federal Home Loan Bank remained the same at $234.0 million at December 31, 2024 and December 31, 2023. Shareholders’ Equity. Total shareholders’ equity increased $3.4 million, or 2.0%, to $168.3 million at December 31, 2024 from $164.9 million at December 31, 2023.
The average balance of Federal Home Loan Bank advances increased $177.9 million, or 446.4%, to $217.8 million for the year ended December 31, 2023 from $39.9 million for the year ended December 31, 2022. The increase in FHLB advances was used to fund loan growth and for liquidity management.
The average balance of Federal Home Loan Bank advances decreased $684,000, or 0.3%, to $217.1 million for the year ended December 31, 2024 from $217.8 million for the year ended December 31, 2023.
Other interest income increased $3.0 million, or 423.8% to $3.7 million for the year ended December 31, 2023 from $715,000 43 for the year ended December 31, 2022. This increase was due to the yield on short-term investments increasing by 3.5% to 5.21% for the year ended December 31, 2023 from 1.71% for the year ended December 31, 2022.
Interest on short term investments increased $2.3 million, or 60.4% to $6.0 million for the year ended December 31, 2024 from $3.7 million for the year ended December 31, 2023.
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. 49 At December 31, 2023, we had $23.1 million in loan commitments outstanding. In addition to commitments to originate and purchase loans, we had $78.4 million in unused lines of credit to borrowers and $53.0 million in unadvanced construction loans.
The levels of these assets are dependent on our operating, financing, and investing activities during any given period. 52 Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. At December 31, 2024, we had $21.5 million in loan commitments outstanding.
The increase in yield was driven by increases in the rate paid on reserves at the Federal Reserve Bank. Average interest-earning assets increased $387.8 million to $1.15 billion for the year ended December 31, 2023 from $760.3 million for the year ended December 31, 2022.
This increase was driven by the average balance of short-term investments increasing $42.4 million to $114.3 million for the year ended December 31, 2024 from $71.9 million for the year ended December 31, 2023. Average interest-earning assets increased $150.6 million to $1.30 billion for the year ended December 31, 2024 from $1.15 billion for the year ended December 31, 2023.
Years Ended December 31, 2023 vs. 2022 Increase (Decrease) Due to Total Increase Volume Rate (Decrease) (in thousands) Interest-earning assets: Loans $ 16,547 $ 4,829 $ 21,376 Securities 125 567 692 Short term investments 787 2,244 3,031 Interest bearing time deposits (1 ) - (1 ) Total interest-earning assets $ 17,458 $ 7,640 $ 25,098 Interest-bearing liabilities: Checking accounts $ (11 ) $ - $ (11 ) Savings accounts 1,177 2,436 3,613 Money market deposits (476 ) 2,024 1,548 Certificates of deposit 2,882 8,815 11,697 Total deposits 3,572 13,275 16,847 Advances from the Federal Home Loan Bank 6,649 976 7,625 Other interest-bearing liabilities (1 ) - (1 ) Total interest-bearing liabilities $ 10,220 $ 14,251 $ 24,471 Change in net interest income $ 7,238 $ (6,611 ) $ 627 Management of Market Risk General .
Years Ended December 31, 2024 vs. 2023 Increase (Decrease) Due to Total Increase Volume Rate (Decrease) (in thousands) Interest-earning assets: Loans $ 5,561 $ 3,961 $ 9,522 Securities (33 ) 317 284 Short term investments 2,226 33 2,259 Interest-bearing time deposits - 3 3 Total interest-earning assets $ 7,754 $ 4,314 $ 12,068 Interest-bearing liabilities: Checking accounts $ (2 ) $ (2 ) $ (4 ) Savings accounts (1,394 ) 368 (1,026 ) Money market deposits 1,518 1,739 3,257 Certificates of deposit 6,500 3,295 9,795 Total deposits 6,622 5,400 12,022 Advances from the Federal Home Loan Bank (27 ) 76 49 Total interest-bearing liabilities $ 6,595 $ 5,476 $ 12,071 Change in net interest income $ 1,159 $ (1,162 ) $ (3 ) Management of Market Risk General .
As of December 31, 2023 Estimated Increase (Decrease) in EVE EVE as a Percentage of Present Value of Assets (3) Change in Interest Rates (basis points) (1) Estimated EVE (2) Amount Percent EVE Ratio (4) Increase (Decrease) (basis points) (Dollars in thousands) 400 2,429 (59,108 ) -96.1 % 0.2 % (492 ) 300 15,240 (46,297 ) -75.2 % 1.4 % (376 ) 200 28,539 (32,998 ) -53.6 % 2.5 % (262 ) 100 46,501 (15,036 ) -24.4 % 4.0 % (115 ) — 61,537 0 0.0 % 5.1 % 0 -100 67,146 5,609 9.1 % 5.5 % 32 -200 71,913 10,376 16.9 % 5.7 % 57 -300 75,518 13,981 22.7 % 5.9 % 72 -400 66,575 5,038 8.2 % 5.1 % (6 ) (1) Assumes an immediate uniform change in interest rates at all maturities.
As of December 31, 2024 Estimated Increase (Decrease) in EVE EVE as a Percentage of Present Value of Assets (3) Change in Interest Rates (basis points) (1) Estimated EVE (2) Amount Percent EVE Ratio (4) Increase (Decrease) (basis points) (Dollars in thousands) +400 $ 105,756 $ (58,357 ) -35.6 % 8.4 % (355 ) +300 119,094 (45,019 ) -27.4 % 9.3 % (269 ) +200 133,497 (30,616 ) -18.7 % 10.1 % (179 ) +100 148,957 (15,156 ) -9.2 % 11.1 % (86 ) — 164,113 — 0.0 % 11.9 % — -100 177,434 13,321 8.1 % 12.6 % 70 -200 186,368 22,255 13.6 % 13.0 % 108 -300 190,748 26,635 16.2 % 13.1 % 115 -400 189,593 25,480 15.5 % 12.8 % 89 (1) Assumes an immediate uniform change in interest rates at all maturities.
The increase was primarily due to net income of $4.5 million for the year ended December 31, 2023 partially offset by a $678,000 reduction in retained earnings related to adoption of CECL and a $2.2 million reduction in additional paid-in-capital related to share repurchases.
Noninterest income was $1.2 million for the year ended December 31, 2024, as compared to $1.1 million for the year ended December 31, 2023, or an increase of $174,000, or 16.5%. The increase was primarily due to increases in net gains on sales of loans.
Loans increased $154.1 million, or 17.4%, to $1.04 billion at December 31, 2023 from $885.7 million at December 31, 2022. • One-to-four family residential real estate loans increased $54.8 million, to $410.1 million at December 31, 2023 from $355.4 million at December 31, 2022; • Multi-family real estate loans increased $45.4 million, to $287.4 million at December 31, 2023 from $242.0 million at December 31, 2022; and • Commercial real estate loans increased $40.2 million, to $196.4 million at December 31, 2023 from $156.2 million at December 31, 2022.
Total gross loans increased $97.2 million, or 9.3%, to $1.15 billion at December 31, 2024 from $1.05 billion at December 31, 2023. • Multi-family real estate loans increased $56.6 million, or 19.7%, to $344.0 million at December 31, 2024, from $287.4 million at December 31, 2023. • Commercial real estate loans increased $32.6 million, or 16.6%, to $229.0 million at December 31, 2024, from $196.4 million at December 31, 2023. • Residential real estate loans increased $12.7 million, or 3.1%, to $422.8 million at December 31, 2024, from $410.1 million at December 31, 2023. • Home equity lines of credit increased $11.8 million, or 35.4%, to $45.2 million at December 31, 2024, from $33.4 million at December 31, 2023. 45 • Commercial loans increased $4.6 million, or 50.2%, to $13.8 million at December 31, 2024, from $9.2 million at December 31, 2023. • Construction loans decreased $21.1 million, or 18.8%, to $90.9 million at December 31, 2024, from $112.0 million at December 31, 2023.
Removed
At December 31, 2023, we had $115.5 million of brokered deposits. For the years ended December 31, 2023 and 2022, we had net income of $4.5 million and $2.7 million, respectively. Our 2022 net income was affected by an after-tax charge of $2.3 million related to a charitable contribution to the Everett Co-operative Bank Charitable Foundation.
Added
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, 2024, we had $125.6 million of brokered deposits.
Removed
Noninterest income currently consists primarily of fees and service charges, gains on sales of loans and income on bank-owned life insurance.
Added
We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments may require us to make projections of future taxable income and/or to carryback to taxable income in prior years.
Removed
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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