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What changed in ECB Bancorp, Inc. /MD/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ECB Bancorp, Inc. /MD/'s 2024 and 2025 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 2025 report.

+231 added−241 removedSource: 10-K (2026-03-25) vs 10-K (2025-03-26)

Top changes in ECB Bancorp, Inc. /MD/'s 2025 10-K

231 paragraphs added · 241 removed · 212 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

123 edited+7 added−10 removed259 unchanged
Biggest changeTreasury securities 5,467 4.99 % — — — — — — 5,467 5,488 4.99 % Total $ 12,563 2.62 % $ 20,284 4.31 % $ 4,998 5.61 % $ 35,370 2.15 % $ 73,215 $ 67,505 3.06 % One Year or Less More than One Year to Five Years More than Five Years to Ten Years More than Ten Years Total Weighted Weighted Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Amortized Average Amortized Fair Average Cost Yield Cost Yield Cost Yield Cost Yield Cost Value Yield (Dollars in thousands) Securities available-for-sale Mortgage-backed securities $ 2,009 4.32 % $ 2,155 3.62 % $ — — $ — — $ 4,164 $ 4,126 3.96 % Collateralized Mortgage Obligation — — — — — — 1,452 3.78 % 1,452 1,438 3.78 % Corporate bonds — — — — 1,000 8.00 % — — 1,000 1,000 8.00 % Total $ 2,009 4.32 % $ 2,155 3.62 % $ 1,000 8.00 % $ 1,452 3.78 % $ 6,616 $ 6,564 4.53 % For additional information regarding our investment securities portfolio, see Note 3 of the consolidated financial statements. 21 Sources of Funds General.
Biggest changeMore than One More than Five More than One Year or Less Year to Five Years Years to Ten Years Ten Years Total Weighted Weighted Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Amortized Average Amortized Fair Average Cost Yield Cost Yield Cost Yield Cost Yield Cost Value Yield (Dollars in thousands) Securities held-to-maturity: Mortgage-backed securities $ 20 1.65 % $ 3,722 4.38 % $ 2,501 2.49 % $ 30,402 2.12 % $ 36,645 $ 33,280 2.37 % Corporate bonds 7,501 2.13 % 5,903 7.16 % 5,715 6.94 % — — 19,119 19,046 5.12 % Total $ 7,521 2.13 % $ 9,625 6.09 % $ 8,216 5.58 % $ 30,402 2.12 % $ 55,764 $ 52,326 3.32 % More than One More than Five More than One Year or Less Year to Five Years Years to Ten Years Ten Years Total Weighted Weighted Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Amortized Average Amortized Fair Average Cost Yield Cost Yield Cost Yield Cost Yield Cost Value Yield (Dollars in thousands) Securities available-for-sale Mortgage-backed securities $ 1,365 3.53 % $ 4,150 4.40 % $ — — $ 896 5.41 % $ 6,411 $ 6,459 4.36 % Collateralized Mortgage Obligation — — — — — — 10,937 4.80 % 10,937 10,948 4.80 % Corporate bonds — — 5,543 7.98 % 11,189 6.80 % — — 16,732 16,910 7.19 % Total $ 1,365 3.53 % $ 9,693 6.44 % $ 11,189 6.80 % $ 11,833 4.84 % $ 34,080 $ 34,317 5.89 % For additional information regarding our investment securities portfolio, see Note 3 of the consolidated financial statements. 21 Table of Contents Sources of Funds General.
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.
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.
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 with 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.
Net operating losses can, in general, offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. The Tax Cuts and Jobs Act repealed the alternative minimum tax for income generated after January 1, 2018.
Net operating losses can, in general, offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. The Tax Cuts and Jobs Act ("JOBs Act") repealed the alternative minimum tax for income generated after January 1, 2018.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: • general economic conditions, either nationally or in our market areas, that are worse than expected including as a result of employment levels and labor shortages, and the effects of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise; • the extent, severity or duration of a pandemic on us and on our customers, employees and third-party service providers; • changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; • our ability to access cost-effective funding; • fluctuations in real estate values and both residential and commercial real estate market conditions; • demand for loans and deposits in our market area; • our ability to implement and change our business strategies; • competition among depository and other financial institutions; • inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments, or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; • adverse changes in the securities or secondary mortgage markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; • changes in the quality or composition of our loan or investment portfolios; • technological changes that may be more difficult or expensive than expected; • the inability of third-party providers to perform as expected; 1 • a failure or breach of our operational or security systems or infrastructure, including cyberattacks; • our ability to manage market risk, credit risk and operational risk; • our ability to enter new markets successfully and capitalize on growth opportunities; • changes in consumer spending, borrowing and savings habits; • changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; • our ability to attract and retain key employees; and • changes in the financial condition, results of operations or future prospects of issuers of securities that we own.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: • general economic conditions, either nationally or in our market areas, that are worse than expected including as a result of employment levels and labor shortages, and the effects of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise; • the extent, severity or duration of a pandemic on us and on our customers, employees and third-party service providers; • changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; • our ability to access cost-effective funding; • fluctuations in real estate values and both residential and commercial real estate market conditions; • demand for loans and deposits in our market area; • our ability to implement and change our business strategies; • competition among depository and other financial institutions; • inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments, or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; • adverse changes in the securities or secondary mortgage markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; • changes in the quality or composition of our loan or investment portfolios; • technological changes that may be more difficult or expensive than expected; • the inability of third-party providers to perform as expected; 1 Table of Contents • a failure or breach of our operational or security systems or infrastructure, including cyberattacks; • our ability to manage market risk, credit risk and operational risk; • our ability to enter new markets successfully and capitalize on growth opportunities; • changes in consumer spending, borrowing and savings habits; • changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; • our ability to attract and retain key employees; and • changes in the financial condition, results of operations or future prospects of issuers of securities that we own.
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.
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 • 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.
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.
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 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.
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.
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.
We generally do not offer “interest-only” mortgage loans on one-to-four family residential real estate loans nor do we offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on his loan, resulting in an increased principal balance during the life of the loan.
We generally do not offer “interest-only” mortgage loans on one-to-four family residential real estate loans nor do we offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan.
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 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 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.
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 Table of Contents The following table sets forth the distribution of total deposits, by account type, at the dates indicated.
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.
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 dividends, of the prior two calendar years.
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.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. An institution that temporarily ceases to meet any qualifying criteria is provided with a two-quarter grace period to regain compliance.
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.
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 Table of Contents 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 19 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 the issuer prior to maturing in the event general interest rates decline.
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.
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.
Loans of between $1.0 million and $3.5 million require the approval of the Loan Committee, which is comprised of senior management of the Bank as well as the Chief Executive Officer, and loans or relationships in excess of $3.5 million require approval of the full Board of Directors.
Loans of between $1.0 million and $5.0 million require the approval of the Loan Committee, which is comprised of senior management of the Bank as well as the Chief Executive Officer, and loans or relationships in excess of $5.0 million require approval of the full Board of Directors.
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%.
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%.
The Federal Deposit Insurance Act generally provides that an insured depository institution may not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement.
Capital Distributions. The Federal Deposit Insurance Act generally provides that an insured depository institution may not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement.
In addition, we sometimes refer to ECB Bancorp, Inc. as “ECB Bancorp,” and to Everett Co-operative Bank as the “Bank.” 2 BUSINESS OF ECB BANCORP ECB Bancorp (sometimes herein, the “Company”) is a Maryland corporation that was incorporated in March 2022 for the purpose of becoming the registered bank holding company for Everett Co-operative Bank (the “Bank”) upon the consummation of the Bank’s mutual to stock conversion and initial stock offering which was completed on July 27, 2022.
In addition, we sometimes refer to ECB Bancorp, Inc. as “ECB Bancorp,” and to Everett Co-operative Bank as the “Bank.” 2 Table of Contents BUSINESS OF ECB BANCORP ECB Bancorp (sometimes herein, the “Company”) is a Maryland corporation that was incorporated in March 2022 for the purpose of becoming the registered bank holding company for Everett Co-operative Bank (the “Bank”) upon the consummation of the Bank’s mutual to stock conversion and initial stock offering which was completed on July 27, 2022.
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.
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, 2025. 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.
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.
The following tables set forth the contractual maturities of our total loan portfolio at December 31, 2025. 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, 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.
There were no other loans at December 31, 2025 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.
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.
At December 31, 2025, 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, 2025, this loan was performing in accordance with its repayment terms. We consider a number of factors in originating commercial real estate and multifamily loans.
Everett Co-operative Bank’s most recent 2022 CRA performance rating under Massachusetts law was “Satisfactory.” Transactions with Related Parties. An insured depository institution’s authority to engage in transactions with its affiliates is generally limited by Sections 23A and 23B of the Federal Reserve Act and federal regulation.
Everett Co-operative Bank’s most recent 2025 CRA performance rating under Massachusetts law was “Satisfactory.” Transactions with Related Parties. An insured depository institution’s authority to engage in transactions with its affiliates is generally limited by Sections 23A and 23B of the Federal Reserve Act and federal regulation.
Everett Co-operative Bank is subject to comprehensive regulation and examination by the Massachusetts Commission of Banks ("Commissioner"), as its chartering agency, and the Federal Deposit Insurance Corporation (“FDIC”) as its primary federal regulator and primary insurer of its deposits. See “Supervision and Regulation.” Our executive offices are located at 419 Broadway, Everett, Massachusetts 02149.
Everett Co-operative Bank is subject to comprehensive regulation and examination by the Massachusetts Commissioner of the Division of Banks ("Commissioner"), as its chartering agency, and the Federal Deposit Insurance Corporation (“FDIC”) as its primary federal regulator and primary insurer of its deposits. See “Supervision and Regulation.” Our executive offices are located at 419 Broadway, Everett, Massachusetts 02149.
This loan was performing in accordance with its repayment terms at December 31, 2024. Home Equity Loans and Lines of Credit . In addition to one-to-four family residential real estate loans, we offer home equity loans and lines of credit that are secured by the borrower’s primary, secondary residence or investment property.
This loan was performing in accordance with its repayment terms at December 31, 2025. Home Equity Loans and Lines of Credit . In addition to one-to-four family residential real estate loans, we offer home equity loans and lines of credit that are secured by the borrower’s primary residence, secondary residence or investment property.
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.
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 2025.
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.
At December 31, 2025, 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.
We have generally required that the properties securing these real estate loans have an aggregate debt service ratio, including the guarantor’s cash flows and the borrower’s other projects, of at least 1.20x. We pull an environmental report with every new loan request.
We have generally required that the properties securing these real estate loans have an aggregate debt service ratio, including the guarantor’s cash flows and the borrower’s other projects, of at least 1.20x. We obtain an environmental report with every new loan request.
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, 2025, 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, 2025, Everett Co-operative Bank had no federal net operating loss carryforwards. Charitable Contribution Carryovers.
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.
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 Table of Contents Securities Portfolio.
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.
At December 31, 2025, 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.
Information on our website is not incorporated into this Annual Report on Form 10-K and should not be considered part of this Annual Report. 3 BUSINESS OF EVERETT CO-OPERATIVE BANK General Everett Co-operative Bank is a Massachusetts-chartered stock cooperative bank headquartered in Everett, Massachusetts.
Information on our website is not incorporated into this Annual Report on Form 10-K and should not be considered part of this Annual Report. 3 Table of Contents BUSINESS OF EVERETT CO-OPERATIVE BANK General Everett Co-operative Bank is a Massachusetts-chartered stock cooperative bank headquartered in Everett, Massachusetts.
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.
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. Personnel As of December 31, 2025, we had 64 full-time equivalent employees. Our employees are not represented by any collective bargaining group.
At December 31, 2024, our largest commercial loan totaled $4.5 million and was secured by a security interest in a mortgage and note. At December 31, 2024, this loan was performing in accordance with its repayment terms. Consumer Lending.
At December 31, 2025, our largest commercial loan totaled $4.5 million and was secured by a security interest in a mortgage and note. At December 31, 2025, this loan was performing in accordance with its repayment terms. Consumer Lending.
We will additionally try to contact the borrower by telephone after the 30 th day after the due date. 14 Generally, when a loan becomes 90 days past due, the loan is turned over to our attorneys to ensure that further collection activities are conducted in accordance with applicable laws and regulations.
We will additionally try to contact the borrower by telephone after the 30 th day after the due date. 14 Table of Contents Generally, when a loan becomes 90 days past due, the loan is turned over to our attorneys to ensure that further collection activities are conducted in accordance with applicable laws and regulations.
These regulatory policies may affect the ability of ECB Bancorp to pay dividends, repurchase shares of common stock or otherwise engage in capital distributions. Massachusetts Holding Company Regulation. Under Massachusetts banking laws, a company owning or controlling two or more banking institutions, including a cooperative bank, is regulated by the Commissioner as a bank holding company.
These regulatory policies may affect the ability of ECB Bancorp to pay dividends, repurchase shares of common stock or otherwise engage in capital distributions. 31 Table of Contents Massachusetts Holding Company Regulation. Under Massachusetts banking laws, a company owning or controlling two or more banking institutions, including a cooperative bank, is regulated by the Commissioner as a bank holding company.
ITEM 1. Busin ess FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning.
ITEM 1. Business FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning.
In order to execute ths growth strategy in an orderly and diligent manner, we enhanced our commercial real estate and multifamily lending infrastructure and engaged a group of experienced credit analysts.
In order to execute this growth strategy in an orderly and diligent manner, we enhanced our commercial real estate and multifamily lending infrastructure and engaged a group of experienced credit analysts.
We believe we have been effective in competing against both larger regional banks and local community banks operating in our market. We compete against the larger banks through our responsive and personalized service, providing our customers with quicker decision making, customized products where appropriate and access to our senior managers.
We believe we have been effective in competing against both larger regional banks and local community banks operating in our market. We compete against the larger banks through our responsive and personalized service, providing our customers with quicker decision making, certainty of execution and customized products where appropriate and access to our senior managers.
Everett Co-operative Bank’s deposits are insured up to applicable limits by the FDIC and by the Depositors Insurance Fund for amounts in excess of the FDIC insurance limits. Everett Co-operative Bank is subject to extensive regulation by the Commissioner, as its chartering agency, and by the FDIC, its primary federal regulator and deposit insurer.
Everett Co-operative Bank’s deposits are insured up to applicable limits by the FDIC and by the Depositors Insurance Fund for amounts in excess of the FDIC insurance limits. Everett Co-operative Bank is subject to extensive regulation by the Commissioner of the Massachusetts Division of Banks, as its chartering agency, and by the FDIC, its primary federal regulator and deposit insurer.
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.
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.
We also invest in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities and corporate bonds. We offer a variety of deposit accounts, including certificate of deposit accounts, IRAs, money market accounts, savings accounts and both interest-bearing and noninterest-bearing checking accounts.
We also invest in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, collateralized mortgage obligations and corporate bonds. We offer a variety of deposit accounts, including certificate of deposit accounts, Individual Retirement Accounts ("IRAs"), money market accounts, savings accounts and both interest-bearing and noninterest-bearing checking accounts.
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.
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 2025 the FDIC insurance expense for Everett Co-operative Bank was approximately $883,000. We cannot predict what assessment rates will be in the future.
In connection with the filing of our quarterly reports with the FDIC and in accordance with our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations. 16 On the basis of this review of our assets, our classified and special mention assets at the dates indicated were as follows: At December 31, 2024 2023 (in thousands) Substandard assets $ 99 $ — Doubtful assets — — Loss assets — — Total classified assets $ 99 $ — Special mention assets $ 1,739 $ 1,282 Foreclosed real estate and other assets $ — $ — Other Loans of Concern.
In connection with the filing of our quarterly reports with the FDIC and in accordance with our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations. 16 Table of Contents On the basis of this review of our assets, our classified and special mention assets at the dates indicated were as follows: At December 31, 2025 2024 (in thousands) Substandard assets $ 99 $ 99 Doubtful assets — — Loss assets — — Total classified assets $ 99 $ 99 Special mention assets $ 1,241 $ 1,739 Foreclosed real estate and other assets $ — $ — Other Loans of Concern.
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.
Management believes that we have a good working relationship with our employees. 23 Table of Contents 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.
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.
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, 2025, speculative construction loans totaled $39.1 million.
The Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted in 2018, amends the Federal Deposit 30 Insurance Act to exempt a capped amount of reciprocal deposits from treatment as brokered deposits for certain insured depository institutions. Privacy Regulations.
The Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted in 2018, amends the Federal Deposit Insurance Act to exempt a capped amount of reciprocal deposits from treatment as brokered deposits for certain insured depository institutions. 29 Table of Contents Privacy Regulations.
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.
At December 31, 2025, the Company had a charitable contribution carryover of $160,000 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 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.
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. 24 Table of Contents Massachusetts Banking Laws and Supervision General.
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, 2025, 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.
The purpose of this foundation is to make contributions to support various charitable organizations operating in our community now and in the future. During the year ended December 31, 2024, the Foundation made $129,000 in contributions to local non-profit charities and organizations.
The purpose of this foundation is to make contributions to support various charitable organizations operating in our community now and in the future. During the year ended December 31, 2025, the Foundation made $113,000 in contributions to local non-profit charities and organizations.
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.
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. 25 Table of Contents Protection of Personal Information.
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.
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. 32 Table of Contents TAXATION Federal Taxation General.
This loan relationship was performing in accordance with its original repayment terms at December 31, 2024.
This loan relationship was performing in accordance with its original repayment terms at December 31, 2025.
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.
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. 26 Table of Contents At December 31, 2025, Everett Co-operative Bank had not opted into the community bank leverage ratio framework and its capital ratios exceeded all applicable requirements.
The income earned on FESC, Inc.’s securities is subject to a significantly lower rate of state tax than that assessed on income earned on securities maintained at Everett Co-operative Bank. At December 31, 2024, FESC, Inc. had total assets of $52.3 million, substantially all of which were in securities and cash to be invested.
The income earned on FESC, Inc.’s securities is subject to a significantly lower rate of state tax than that assessed on income earned on securities maintained at Everett Co-operative Bank. At December 31, 2025, FESC, Inc. had total assets of $53.7 million, substantially all of which were in securities and cash to be invested.
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.
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, 2025, total borrowings were $284.8 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, 2024. 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 $284.8 million of FHLB advances outstanding at December 31, 2025. Additionally, in recent years, we have also accepted brokered deposits as a non-retail funding source to fund our operations.
Depending on the complexity of the construction project, the term of an “interest-only” construction loan may be extended if circumstances warrant it up to an additional three to six months with a maximum interest only term of 36 months. At December 31, 2024, the additional unadvanced portions of these construction loans totaled $54.6 million.
Depending on the complexity of the construction project, the term of an “interest-only” construction loan may be extended if circumstances warrant it up to an additional three to six months with a maximum interest only term of 36 months. At December 31, 2025, the additional unadvanced portions of these construction loans totaled $47.7 million.
At December 31, 2024, our average commercial real estate loan had a balance of $1.1 million and our average multifamily loan had a balance of $2.7 million.
At December 31, 2025, our average commercial real estate loan had a balance of $1.5 million and our average multifamily loan had a balance of $2.7 million.
At December 31, 2024, we had $125.6 million of brokered deposits outstanding. Business Strategy One of the key features of our business strategy has been to grow our loan portfolio, primarily through an increased focus on growing our commercial real estate and multifamily lending operations.
At December 31, 2025, we had $134.0 million of brokered deposits outstanding. Business Strategy One of the key features of our business strategy has been to grow our loan portfolio, primarily through an increased focus on growing our commercial real estate and multifamily lending operations.
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.
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 $30.9 million at December 31, 2025.
Construction projects over $2 million require an approved construction consultant to review the construction budget, complete a feasibility analysis, monitor construction progress and manage construction draws. At December 31, 2024, our largest construction loan was for $16.8 million and was for the construction of a mixed-use building in our market area.
Construction projects over $2 million require an approved construction consultant to review the construction budget, complete a feasibility analysis, monitor construction progress and manage construction draws. At December 31, 2025, our largest construction loan was for $6.1 million and was for the construction of a mixed-use building in our market area.
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 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. 30 Table of Contents Federal Home Loan Bank System Everett Co-operative Bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks.
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.
At December 31, 2025, our construction loans included $10.0 million in lines of credit and loans secured by land. 10 Table of Contents 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, 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.
At December 31, 2025, we had $15.4 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.
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.
As of December 31, 2025, we maintained no “other real estate owned” as a result of foreclosures (or the acceptance of a deed in lieu of foreclosure). 12 Table of Contents Commercial Loans.
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.
As of December 31, 2025, our average outstanding one-to-four family residential real estate loan balance was $481,000 and our largest outstanding loan secured by one-to-four family residential restate had a principal balance of $7.9 million, which, as of December 31, 2025, was performing in accordance with its repayment terms.
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.
To a much lesser extent, we offer a variety of consumer loans to individuals who reside or work in our market area, including unsecured overdraft lines of credit and loans secured by savings accounts. At December 31, 2025, our consumer loan portfolio totaled $869,000, or 0.1%, of our total loan portfolio.
Loans secured by a first mortgage on residential property occupied by the borrower are excluded from this limit. At December 31, 2024, our regulatory limit on loans-to-one borrower was $29.1 million.
Loans secured by a first mortgage on residential property occupied by the borrower are excluded from this limit. At December 31, 2025, our regulatory limit on loans-to-one borrower was $30.9 million.
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 .
At December 31, 2025 2024 (in thousands) Non-accrual loans: Real estate loans: One-to-four family residential $ 1,096 $ 1,872 Multi-family — — Commercial — — Home equity lines of credit and loans 43 85 Construction — — Commercial — — Consumer — — Total non-accrual loans $ 1,139 $ 1,957 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 $ 1,139 $ 1,957 Total non-performing loans to total loans 0.08 % 0.17 % Total non-performing loans to total assets 0.07 % 0.14 % Total non-performing assets to total assets 0.07 % 0.14 % Classified Assets .
If either condition is met, management will recognized a write-down to fair value through a charge to earnings. For all other debt securities, management evaluates their expected credit losses over the remaining term. The majority of the Company’s debt securities consist of mortgage-backed securities, U.S. Treasury securities and debt securities issued by U.S. government-sponsored enterprises.
If either condition is met, management will recognized a write-down to fair value through a charge to earnings. For all other debt securities, management evaluates their expected credit losses over the remaining term. The majority of the Company’s debt securities consist of mortgage-backed securities and collateralized mortgage obligations.
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.
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, 2025, commercial loans were $7.9 million, or 0.6% 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.
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, 2025, we had $89.0 million in construction and land loans, or 6.4% of total loans.
We are a small community savings institution and as of June 30, 2024 (the latest date for which information is available), our market share was 0.89% of total FDIC-insured deposits in Middlesex County, Massachusetts making us the 25th largest out of 48 financial institutions in Middlesex County, and our market share was 0.68% of total FDIC-insured deposits in Essex County, Massachusetts making us the 22nd largest out of 36 financial institutions in Essex County.
We are a small community savings institution and as of June 30, 2025 (the latest date for which information is available), our market share was 0.98% of total FDIC-insured deposits in Middlesex County, Massachusetts making us the 24th largest out of 47 financial institutions in Middlesex County, and our market share was 0.83% of total FDIC-insured deposits in Essex County, Massachusetts making us the 22nd largest out of 34 financial institutions in Essex County.
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.
During the year ended December 31, 2025, we sold $10.1 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. At December 31, 2025, we had $357,000 loans held for sale.
However, 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.
However, 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 Table of Contents The following table sets forth activity in our allowance for credit losses on loans for the years indicated: At December 31, 2025 2024 (in thousands) Allowance for credit losses on loans at beginning of year $ 8,884 $ 8,591 Provision for credit losses 1,457 296 Charge-offs: Real estate loans: One-to-four family residential — — Multi-family — — Commercial — — Home equity lines of credit and loans — — Construction — — Commercial (81 ) — Consumer (6 ) (4 ) Total charge-offs $ (87 ) $ (4 ) 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 $ (86 ) $ (3 ) Allowance for credit losses on loans at end of year $ 10,255 $ 8,884 Allowance for credit losses on loans to non-performing loans 900.35 % 453.96 % Allowance for credit losses on loans to total loans outstanding at end of year 0.74 % 0.78 % Net charge offs to average loans outstanding during the year 0.01 % 0.00 % 18 Table of Contents Allocation of Allowance for Credit Losses on Loans.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, independent third-party penetration testing to test the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted by the risk assessment or other external factors. Management determines the scope and objectives of the penetration analysis. Service Providers. Like many companies, the Company relies on third-party vendor solutions to support its operations.
Biggest changeIn addition, independent third -party penetration testing to test the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted by the risk assessment or other external factors. Management determines the scope and objectives of the penetration analysis. Service Providers.
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.
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 Company data.
The Information Technology (“IT”) Department of the Company is primarily responsible for identifying, assessing and managing material risks from cybersecurity threats. The Information Technology Department is managed by the Chief Information Officer (the “CIO”) who reports directly to the Company’s Chief Operating Officer and Chief Financial Officer.
The Information Technology (“IT”) Department of the Company is primarily responsible for identifying, assessing and managing material risks from cybersecurity threats. The Information Technology Department is managed by the Chief Information Officer (the “CIO”) who reports directly to the Company’s Chief Operating Officer.
The 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 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. 36 Table of Contents
The Third-Party Risk Management Policy applies to any business arrangement between the Company and another individual or entity, by contract or otherwise, in compliance with the Interagency Guidance on Third-Party Relationships: Risk Management. The Third-Party Risk Management Program is audited as part of the Company’s annual Internal Audit Risk Assessment. Employees and Training.
The Third-Party Risk Management Policy applies to any business arrangement between the Company and another individual or entity, by contract or otherwise, in compliance with the Interagency Guidance on Third-Party Relationships: Risk Management. The Third-Party Risk Management Program is audited as part of the Company’s annual Internal Audit Risk Assessment. 35 Table of Contents Employees and Training.
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.
The CIO is a member of various management committees, chairs 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. 34 Table of Contents The IT/IS Committee provides oversight, from a risk perspective, of information systems security.
Many of these vendors, especially in the financial services industry, have access to sensitive and proprietary information.
Like many companies, the Company relies on third -party vendor solutions to support its operations. Many of these vendors, especially in the financial services industry, have access to sensitive and proprietary information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Prop erties We conduct our business through our main office located in Everett, Massachusetts, and our branch offices located in Lynnfield, Massachusetts, both of which we own, and through our branch office in Woburn, Massachusetts, which we lease. Additionally, we lease office space in Everett, Massachusetts which services back office and loan administration functions.
Biggest changeITEM 2. Properties We conduct our business through our main office located in Everett, Massachusetts, and our branch offices located in Lynnfield, Massachusetts, both of which we own, and through our branch office in Woburn, Massachusetts, which we lease. Additionally, we lease office space in Everett, Massachusetts which services back office and loan administration functions.
At December 31, 2024 the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $3.5 million.
At December 31, 2025 the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $3.4 million.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−1 removed3 unchanged
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.
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, 2025, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations.
Removed
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, 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
Biggest changeThe following table sets forth the information regarding the Company's common stock repurchase activities during the three months ended December 31, 2025: Total Number of Maximum Number of Shares Purchased Shares That May Total Number of Average Price as Part of Publicly Yet Be Purchased Shares Purchased Paid Per Share Announced Program Under the Program From October 1, 2025 to October 31, 2025 26,184 $ 15.59 26,184 230,833 From November 1, 2025 to November 30, 2025 1,029 $ 16.40 1,029 229,804 From December 1, 2025 to December 31, 2025 5,229 $ 16.84 5,229 224,575 Total 32,442 $ 15.82 32,442
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.
Information regarding stock-based compensation awards outstanding and available for future grants as of December 31, 2025 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 25, 2025 was 380.
ITEM 5. Market for Registrant ’ s Common Equity, 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 23, 2026 was 369.
Report of Offering of Securities and Use of Proceeds Therefrom. Not applicable. Issuer Purchases of Equity Securities. On August 10, 2023, the Company announced the commencement of a stock repurchase program to acquire up to 458,762 shares, or 5% of the Company’s then outstanding common stock.
Not applicable. Issuer Purchases of Equity Securities. On August 10, 2023, the Company announced the commencement of a stock repurchase program to acquire up to 458,762 shares, or 5% of the Company’s then outstanding common stock. On April 11, 2025, the Company completed the stock repurchase 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.
Number of Shares to be Issued Upon Weighted-Average Number of Shares Exercise of Exercise Price of Available for Plan Category Outstanding Awards Outstanding Awards Future Grants Plans approved by shareholders 728,977 $ 10.44 208,716 Plans not approved by shareholders — — — Total 728,977 $ 10.44 208,716 Other than the stock-based compensation awards, ECB Bancorp has an Employee Stock Ownership Plan. 38 Table of Contents Report of Offering of Securities and Use of Proceeds Therefrom.
Added
On May 8, 2025, the Company announced an additional stock repurchase plan that authorizes the Company to repurchase up to 451,092 shares, or approximately 5%, of the Company's then outstanding common stock.

Item 7. Management's Discussion & Analysis

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

74 edited+11 added−18 removed55 unchanged
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.
Biggest changeFor the Year Ended December 31, 2025 2024 Average Average Outstanding Outstanding Balance Interest Yield/ Rate Balance Interest Yield/ Rate (Dollars in thousands) Interest-earning assets: Total loans $ 1,262,768 $ 69,085 5.47 % $ 1,104,288 $ 57,852 5.24 % Securities (1) 86,237 3,251 3.77 80,057 2,363 2.95 Short term investments 114,707 4,970 4.33 114,295 6,004 5.25 Interest-bearing time deposits 2,693 117 4.34 64 3 5.44 Total interest-earning assets 1,466,405 77,423 5.28 % 1,298,704 66,222 5.10 % Non-interest-earning assets 38,362 34,056 Total assets $ 1,504,767 $ 1,332,760 Interest-bearing liabilities: Checking accounts $ 18,888 $ 16 0.08 % $ 18,891 $ 14 0.07 % Savings accounts 92,923 1,888 2.03 111,858 3,048 2.72 Money market accounts 208,732 6,888 3.30 158,405 5,669 3.58 Certificates of deposit 681,002 28,269 4.15 569,199 24,704 4.34 Total interest-bearing deposits 1,001,545 37,061 3.70 858,353 33,435 3.90 Federal Home Loan Bank advances 233,545 9,202 3.94 217,087 8,622 3.97 Total interest-bearing liabilities 1,235,090 46,263 3.75 % 1,075,440 42,057 3.91 % Non-interest-bearing demand deposits 85,436 77,721 Non-interest-bearing liabilities 14,400 12,661 Total liabilities 1,334,926 1,165,822 Shareholders' equity 169,841 166,938 Total liabilities and shareholders' equity $ 1,504,767 $ 1,332,760 Net interest income $ 31,160 $ 24,165 Net interest rate spread (2) 1.53 % 1.19 % Net interest-earning assets (3) $ 231,315 $ 223,264 Net interest margin (4) 2.12 % 1.86 % Average interest-earning assets to interest-bearing liabilities 118.73 % 120.76 % (1) Excludes interest and dividends on cost method investments of $757,000 and $823,000 for the years ended December 31, 2025 and 2024, respectively.
We also invest in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities and corporate bonds. We offer a variety of deposit accounts, including certificate of deposit accounts, individual retirement accounts, money market accounts, savings accounts and interest-bearing and noninterest-bearing checking accounts.
We also invest in securities, consisting primarily of U.S. government and federal agency obligations, collateralized mortgage obligations, mortgage-backed securities and corporate bonds. We offer a variety of deposit accounts, including certificate of deposit accounts, individual retirement accounts, money market accounts, savings accounts and interest-bearing and noninterest-bearing checking accounts.
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 .
Additionally, we believe the recent hire of our Senior Vice President of Retail Operations, who brings 39 years of banking experience to our retail sales and administrative team, will be invaluable to the implementation of the added product delivery channels and technological services such as additional electronic and mobile banking applications and cash management services, which we believe will increase our core deposits. • Remaining a community-oriented institution and relying on high quality service to maintain and build a loyal local customer base .
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.
At December 31, 2025, Everett Co-operative Bank exceeded all of its regulatory capital requirements, and was categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change our category. See Note 16 of the notes to consolidated financial statements.
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.
Management believes the allowance for credit losses was adequate at December 31, 2025. The allowance analysis is reviewed by the board of directors on a quarterly basis in compliance with regulatory requirements. In addition, various regulatory agencies periodically review the allowance for credit losses. As a result of such reviews, we may choose to adjust our allowance for credit losses.
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.
We believe, however, based on historical experience and current market interest rates that we will retain upon maturity a large portion of our certificates of deposit with maturities of one year or less as of December 31, 2025. Our primary investing activity is originating loans.
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.
For additional information, see the consolidated statements of cash flows for the years ended December 31, 2025 and 2024 included as part of the consolidated financial statements appearing elsewhere in this 10-K. We are committed to maintaining a strong liquidity position.
We 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.
We have implemented the following strategies to manage our interest rate risk: • maintaining capital levels that exceed the thresholds for well-capitalized status under federal regulations; • maintaining a prudent level of liquidity; • growing our volume of deposit accounts; • managing our investment securities portfolio to maintain a prudent balance between enhancing profitability and protecting the balance sheet against sensitivity to changes in interest rates; 48 Table of Contents • managing our utilization of wholesale funding with borrowings from the Federal Home Loan Bank and brokered deposits in a prudent manner; • continuing to diversify our loan portfolio by adding more commercial-related loans, which typically have shorter maturities and/or balloon payments; and • beginning in January of 2024 we began to utilize interest rate swaps to help manage our interest rate risk.
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.
Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before December 31, 2026, or on our savings and money market accounts.
In order to increase the yield on our loan portfolio and reduce the term to maturity of our loan portfolio, we intend to continue our focus on growing the originations of commercial real estate loans and multifamily real estate loans while maintaining what we believe are prudent underwriting standards and we expect that these loan categories will comprise a greater percentage of our total loan portfolio.
In order to increase the yield on our loan portfolio and maintain a reduced term to maturity of our loan portfolio, we intend to continue our focus on growing the originations of commercial real estate loans and multifamily real estate loans while maintaining what we believe are prudent underwriting standards and we expect that these loan categories will comprise a greater percentage of our total loan portfolio.
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.
We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $11.9 million and $10.0 million at December 31, 2025 and 2024, respectively.
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.
For the year ended December 31, 2025, the weighted average cost of Federal Home Loan Bank Advances was 3.94%, as compared to 3.97% for the year ended December 31, 2024. Net Interest and Dividend Income.
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 table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.
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 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. 49 Table of Contents The table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.
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.
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. 41 Table of Contents 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.
Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. The following represent our significant accounting policies: Allowance for Credit Losses . On January 1, 2023, the Company adopted the ASU 2016-13 Current Expected Credit Loss (CECL) methodology for estimating the credit losses for loans.
Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. The following represent our significant accounting policies: Allowance for Credit Losses . On January 1, 2023, the Company adopted a Current Expected Credit Loss (CECL) methodology for estimating the credit losses for loans.
(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.
(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. 47 Table of Contents Rate/Volume Analysis.
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.
The capital raised in the offering has allowed us to increase our commercial lending capacity by enabling us to originate and retain all or a greater portion of loans that we historically participated out to other local institutions.
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.
Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2025, we had outstanding commitments to originate loans of $30.6 million. We anticipate that we will have sufficient funds available to meet our current lending commitments.
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.
We also have utilized advances from the Federal Home Loan Bank of Boston (the “FHLB”) as an additional funding source to fund our operations and we had $284.8 million of FHLB advances outstanding at December 31, 2025. For the years ended December 31, 2025 and 2024, we had net income of $7.8 million and $4.0 million, respectively.
Our chief financial officer is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors.
The Asset-Liability Management Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors.
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.
Deposit flows are affected primarily by the overall level of interest rates and the interest rates and products offered by us and our competitors. At December 31, 2025 and 2024, the level of brokered time deposits was $134.0 million and $125.6 million, respectively. At December 31, 2025 and 2024 the level of FHLB advances was $284.8 and $234.0 million, respectively.
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.
In addition to customer deposits, in recent years, we have also accepted brokered deposits as a non-retail funding source to supplement our customer deposits and fund our operations. At December 31, 2025, we had $134.0 million of brokered deposits.
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.
The tables above indicate that at December 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a decrease in net interest income of 8.8%, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 3.1% increase in net interest income.
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.
Non brokered time deposits that are scheduled to mature in less than one year from December 31, 2025 totaled $451.1 million. Management expects that a substantial portion of these time deposits will be retained.
We are also able to borrow from the Federal Home Loan Bank of Boston, the Federal Reserve Bank and the Atlantic Community Bankers Bank. At December 31, 2024, we had outstanding advances of $234.0 million from the Federal Home Loan Bank.
We are also able to borrow from the Federal Home Loan Bank of Boston, the Federal Reserve Bank and the Atlantic Community Bankers Bank. At December 31, 2025, we had outstanding advances of $284.8 million from the Federal Home Loan Bank.
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.
Bank-owned life insurance increased $475,000, or 3.2%, to $15.4 million at December 31, 2025 from $14.9 million at December 31, 2024. The increase was due to an increase in cash surrender value of our bank-owned life insurance portfolio during the year ended December 31, 2025. Deposits.
ITEM 7. Management’s Dis cussion and Analysis of Financial Condition and Results of Operations This discussion and analysis reflects our financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations.
ITEM 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations This discussion and analysis reflects our financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations.
The 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.
The table above indicates that at December 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience an 18.6% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience an 11.0% increase in EVE.
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.
During the years ended December 31, 2025 and 2024, we originated and purchased $429.6 million and $160.4 million of loans, respectively. Financing activities consist primarily of activity in deposit accounts as well as FHLB advances. We experienced net increases in deposits of $133.8 million and $130.3 million for the years ended December 31, 2025 and 2024, respectively.
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.
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. 51 Table of Contents Contractual Obligations.
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 levels of these assets are dependent on our operating, financing, and investing activities during any given period. 50 Table of Contents Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. At December 31, 2025, we had $30.6 million in loan commitments outstanding.
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.
The yield for the year ended December 31, 2025 benefited from new loans with higher rates as well as loans repricing higher. Interest and dividends on securities increased $822,000, or 25.8%, to $4.0 million for the year ended December 31, 2025 from $3.2 million for the year ended December 31, 2024.
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 increase in interest and fees on loans was driven by an increase of $158.5 million in the average balance of the loan portfolio to $1.26 billion for the year ended December 31, 2025 from $1.10 billion for the year ended December 31, 2024, as well as an increase in the yield of 23 basis points to 5.47% during the year ended December 31, 2025 from 5.24% during the year ended December 31, 2024.
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.
Our commercial real estate and multifamily real estate loan portfolios increased to $336.4 million and $425.4 million, respectively, at December 31, 2025 from $229.0 million and $344.0 million, respectively, at December 31, 2024. 40 Table of Contents • Reduced emphasis on one-to-four family residential real estate lending.
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.
As of December 31, 2025, $473.4 million, or 34.2%, of our total loan portfolio, consisted of one-to-four family residential real estate loans and at that date an additional $49.9 million, or 3.6%, of our total loan portfolio, consisted of home equity lines of credit and loans.
The book value per share increased $0.75 to $18.50 at December 31, 2024 from $17.75 at December 31, 2023. Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023 Net Income.
Book value per share increased $1.05 to $19.55 at December 31, 2025 from $18.50 at December 31, 2024. Comparison of Operating Results for the Years Ended December 31, 2025 and December 31, 2024 Net Income.
In order to execute on this strategy, in January 2022 we hired a new Chief Lending Officer as well as some additional commercial lending and credit analyst personnel throughout 2022 and 2023.
In order to execute on this strategy, in January 2022 we hired a new Chief Lending Officer. Since then, we have continued to add some additional commercial lending and credit analyst personnel.
Net interest and dividend income before provision for credit losses was $25.0 million for the year ended December 31, 2024, compared to $24.8 million for the year ended December 31, 2023, or an increase of $198,000, or 0.8%.
Net interest and dividend income before provision for credit losses was $31.9 million for the year ended December 31, 2025, as compared to $25.0 million for the year ended December 31, 2024, or an increase of $6.9 million, or 27.7%.
In addition to commitments to originate and purchase loans, we had $80.2 million in unused lines of credit to borrowers and $54.6 million in unadvanced construction loans. Non brokered certificates of deposit due within one year of December 31, 2024 totaled $321.7 million, or 32.2%, of total deposits.
In addition to commitments to originate loans, we had $93.2 million in unused lines of credit to borrowers and $47.7 million in unadvanced construction loans. Non brokered certificates of deposit due within one year of December 31, 2025 totaled $451.1 million, or 39.8%, of total deposits.
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.
At December 31, 2025, we had unused borrowing capacity of $395.4 million with the Federal Home Loan Bank, $75.7 million with Federal Reserve Bank and $15.0 million with the Atlantic Community Bankers Bank.
Our strategy to enhance and grow our commercial real estate and multifamily real estate lending in a diligent and orderly manner is also designed to encourage relationship banking and increase our core deposits, including noninterest-bearing transaction accounts, and decrease our dependence on certificates of deposit.
Our strategy to enhance and grow our commercial real estate and multifamily real estate lending in a diligent and orderly manner is also designed to encourage relationship banking and increase operating deposit relationships, including noninterest-bearing transaction accounts, while maintaining a balanced and diversified funding base that includes certificates of deposit.
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.
Interest expense on Federal Home Loan Bank advances increased $580,000, or 6.7%, to $9.2 million for the year ended December 31, 2025 from $8.6 million for the year ended December 31, 2024.
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.
At December 31, 2025, $473.4 million, or 34.2%, of our total loan portfolio was comprised of one-to-four family residential real estate loans, $425.4 million, or 30.8%, of our total loan portfolio was comprised of multifamily real estate loans, $336.4 million, or 24.3%, of our total loan portfolio was comprised of commercial real estate loans, $89.0 million, or 6.4%, of our total loan portfolio was comprised of construction loans, $49.9 million, or 3.6%, of our total loan portfolio was comprised of home equity lines of credit and loans and $7.9 million, or 0.6% of our total loan portfolio was comprised of commercial loans.
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.
Interest on short term investments decreased $1.0 million, or 17.2%, to $5.0 million for the year ended December 31, 2025 from $6.0 million for the year ended December 31, 2024.
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.
At December 31, 2025 and 2024, non-performing assets totaled $1.1 million and $2.0 million, respectively, which represented 0.07% and 0.14% of total assets at those dates, respectively. • Continuing to attract and retain customers in our market area and increase our d eposits.
The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation.
Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.
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.
The table below sets forth our noninterest income for the years ended December 31, 2025 and 2024: Year Ended December 31, Change 2025 2024 Amount Percent (Dollars in thousands) Customer service fees $ 598 $ 577 $ 21 3.6 % Income from bank-owned life insurance 475 473 2 0.4 Net gain on sales of loans 132 119 13 10.9 Other 121 57 64 112.3 Total noninterest income $ 1,326 $ 1,226 $ 100 8.2 % Noninterest Expense.
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.
This increase was driven by an increase in the yield of investment securities of 82 basis points to 3.77% for the year ended December 31, 2025, from 2.95% for the year ended December 31, 2024 and an increase in the average balance of $6.2 million from $80.1 million during the year ended December 31, 2024 to $86.2 million during the year ended December 31, 2025.
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.
Based on our model, if all segments of our loan portfolio experienced a 50% decrease in estimated prepayment rates and curtailment rates, our allowance for credit losses as of December 31, 2025 would have increased $1.6 million to $11.8 million, holding all other variables constant. 42 Table of Contents Comparison of Financial Condition at December 31, 2025 and December 31, 2024 Total Assets.
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.
The average balance of Federal Home Loan Bank advances increased $16.5 million, or 7.6%, to $233.5 million for the year ended December 31, 2025 from $217.1 million for the year ended December 31, 2024.
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.
Interest expense on deposit accounts increased $3.6 million, or 10.8%, to $37.1 million for the year ended December 31, 2025 from $33.4 million for the year ended December 31, 2024, due to an increase in the average balance of interest-bearing deposits of $143.2 million, or 16.7%, to $1.0 billion for the year ended December 31, 2025 from $858.4 million for the year ended December 31, 2024, partially offset by a decrease in the weighted average rate on interest-bearing deposits of 20 basis points to 3.70% for the year ended December 31, 2025 from 3.90% for the year ended December 31, 2024.
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.
Total assets increased $187.5 million, or 13.2%, to $1.61 billion at December 31, 2025 from $1.42 billion at December 31, 2024. The increase was primarily the result of increases in loans. Cash and Cash Equivalents. Cash and cash equivalents decreased $70.7 million, or 44.9%, to $86.9 million at December 31, 2025 from $157.6 million at December 31, 2024.
We intend to evaluate branch expansion opportunities, including through establishing one or more de novo branches and/or branch acquisitions as such opportunities arise. Summary of Significant Accounting Policies The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S. GAAP.
Summary of Significant Accounting Policies The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S. GAAP.
The 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.
Total interest expense increased $4.2 million, or 10.0%, to $46.3 million for the year ended December 31, 2025 from $42.1 million for the year ended December 31, 2024.
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.
The table below sets forth our noninterest expense for the years ended December 31, 2025 and 2024: Year Ended December 31, Change 2025 2024 Amount Percent (Dollars in thousands) Salaries and employee benefits $ 13,188 $ 13,062 $ 126 1.0 % Director compensation 797 834 (37 ) (4.4 ) Occupancy and equipment 1,102 1,033 69 6.7 Data processing 1,297 1,198 99 8.3 Computer software and licensing fees 441 443 (2 ) (0.5 ) Advertising and promotions 639 551 88 16.0 Professional fees 1,368 1,258 110 8.7 Federal Deposit Insurance Corporation deposit insurance 883 752 131 17.4 Other expense 1,615 1,538 77 5.0 Total noninterest expense $ 21,330 $ 20,669 $ 661 3.2 % Income Tax Expense.
We historically operated from our two full-service banking offices in Everett, MA and Lynnfield, MA. During 2023 we successfully opened our third branch which is located in Woburn, MA. We believe there are branch expansion opportunities that exist within our primary market area.
We historically operated from our two full-service banking offices in Everett, MA and Lynnfield, MA. During 2023 we successfully opened our third branch which is located in Woburn, MA. In January 2026, we announced that we are filing an application to establish a new branch office in Medford, MA.
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.
Noninterest income was $1.3 million for the year ended December 31, 2025, as compared to $1.2 million for the year ended December 31, 2024, or an increase of $100,000, or 8.2%.
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.
Net income was $7.8 million for the year ended December 31, 2025, compared to net income of $4.0 million for the year ended December 31, 2024, an increase of $3.8 million, or 94.7%. 44 Table of Contents Interest and Dividend Income.
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.
Total deposits were $1.13 billion at December 31, 2025, as compared to $998.5 million at December 31, 2024, or an increase of $133.8 million, or 13.4%. • Certificates of deposit increased $122.8 million, or 20.3%, to $728.3 million at December 31, 2025 from $605.5 million at December 31, 2024; • Money market deposit accounts increased $27.2 million, or 14.7%, to $211.8 million at December 31, 2025 from $184.6 million at December 31, 2024; • Interest-bearing checking accounts decreased $1.2 million, or 5.7%, to $19.4 million at December 31, 2025 from $20.5 million at December 31, 2024; • Demand deposit accounts decreased $3.5 million, or 4.1%, to $81.5 million at December 31, 2025 from $85.0 million at December 31, 2024; and • Savings accounts decreased $11.6 million, or 11.2%, to $91.4 million at December 31, 2025 from $102.9 million at December 31, 2024.
Impact of Inflation and Changing Price The consolidated financial statements and related data presented in this 10-K have been prepared in accordance with U.S. GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.
GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs.
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.
Interest and dividend income increased $11.1 million, or 16.6%, to $78.2 million for the year ended December 31, 2025 from $67.0 million for the year ended December 31, 2024 driven by an $11.2 million increase in interest and fees on loans, an $822,000 increase in interest and dividends on securities and a $114,000 increase in interest on interest-bearing time deposits, partially offset by a $1.0 million decrease in interest on short-term investments.
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.
Income tax expense was $2.6 million for the year ended December 31, 2025, as compared to $1.4 million for the year ended December 31, 2024, reflecting effective tax rates of 25.1% and 25.7%, respectively. 46 Table of Contents Average Balances and Yields.
The net interest margin for the year ended December 31, 2024 was 1.86% as compared to 2.11% for the year ended December 31, 2023. The decrease in the net interest margin was driven by increases in the cost of interest bearing liabilities that were higher than increases in yields on interest earning assets during 2024. Provision for Credit Losses.
This increase was primarily due to increases in the average balance and yields on loans as well as a decrease in the average cost of interest-bearing liabilities. The resulting net interest margin expanded 26 basis points to 2.12% for the year ended December 31, 2025 as compared to 1.86% for the year ended December 31, 2024. Provision for Credit Losses.
Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities. Recent Accounting Pronouncements See Note 2 to the notes to the consolidated financial statements for a description of recent accounting pronouncements that may affect our financial condition and results of operations.
In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.
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.
Total gross loans were $1.38 billion at December 31, 2025, as compared to $1.15 billion at December 31, 2024, or an increase of $237.0 million, or 20.7%. • Commercial real estate loans increased $107.4 million, or 46.9%, to $336.4 million at December 31, 2025, from $229.0 million at December 31, 2024. • Multi-family real estate loans increased $81.5 million, or 23.7%, to $425.4 million at December 31, 2025, from $344.0 million at December 31, 2024. • Residential real estate loans increased $50.6 million, or 12.0%, to $473.4 million at December 31, 2025, from $422.8 million at December 31, 2024. • Home equity lines of credit increased $4.7 million, or 10.4%, to $49.9 million at December 31, 2025, from $45.2 million at December 31, 2024. 43 Table of Contents • Consumer loans increased $728,000, or 516.3%, to $869,000 at December 31, 2025, from $141,000 at December 31, 2024. • Construction loans decreased $1.9 million, or 2.1%, to $89.0 million at December 31, 2025, from $90.9 million at December 31, 2024. • Commercial loans decreased $5.9 million, or 42.7%, to $7.9 million at December 31, 2025, from $13.8 million at December 31, 2024.
The $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.
The provision for credit losses was $1.5 million for the year ended December 31, 2025, as compared to $174,000 for the year ended December 31, 2024. The increase in the provision was driven by higher loan growth during the year ended December 31, 2025 as compared to the year ended December 31, 2024. 45 Table of Contents Noninterest Income.
This increase is primarily the result of net income of $4.0 million and a $1.5 million increase in additional paid-in capital related to stock-based compensation. Partially offsetting this was a decrease in additional paid-in capital of $2.7 million related to shares repurchased under our share repurchase plan.
The decrease in APIC was driven by $4.6 million in shares repurchased under our share repurchase plan, partially offset by an increase in APIC of $1.5 million related to stock-based compensation and ESOP shares committed to be released. The decrease in AOCI was driven by a decrease in the fair value of cash flow hedges.
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 .
Years Ended December 31, 2025 vs. 2024 Increase (Decrease) Due to Total Increase Volume Rate (Decrease) (in thousands) Interest-earning assets: Loans $ 8,584 $ 2,649 $ 11,233 Securities 193 695 888 Short term investments 22 (1,056 ) (1,034 ) Interest-bearing time deposits 115 (1 ) 114 Total interest-earning assets $ 8,914 $ 2,287 $ 11,201 Interest-bearing liabilities: Checking accounts $ — $ 2 $ 2 Savings accounts (464 ) (696 ) (1,160 ) Money market deposits 1,688 (469 ) 1,219 Certificates of deposit 4,679 (1,114 ) 3,565 Total deposits 5,903 (2,277 ) 3,626 Advances from the Federal Home Loan Bank 649 (69 ) 580 Total interest-bearing liabilities $ 6,552 $ (2,346 ) $ 4,206 Change in net interest income $ 2,362 $ 4,633 $ 6,995 Management of Market Risk General .
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.
Noninterest expense was $21.3 million for year ended December 31, 2025, as compared to $20.7 million for the year ended December 31, 2024, or an increase of $661,000, or 3.2%.
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.
As of December 31, 2025 Estimated Increase (Decrease) in EVE EVE as a Percentage of Present Value of Assets (3) Change in Interest Rates Increase (Decrease) (basis points) (1) Estimated EVE (2) Amount Percent EVE Ratio (4) (basis points) (Dollars in thousands) +400 $ 113,955 $ (72,352 ) -38.8 % 7.7 % (393 ) +300 134,168 (52,139 ) -28.0 % 8.9 % (275 ) +200 151,739 (34,568 ) -18.6 % 9.9 % (179 ) +100 169,613 (16,694 ) -9.0 % 10.8 % (84 ) — 186,307 — 0.0 % 11.6 % — -100 198,922 12,615 6.8 % 12.2 % 57 -200 206,781 20,474 11.0 % 12.5 % 85 -300 208,372 22,065 11.8 % 12.4 % 79 -400 212,731 26,424 14.2 % 12.6 % 91 (1) Assumes an immediate uniform change in interest rates at all maturities.
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.
Federal Home Loan Bank Advances. FHLB advances increased $50.8 million, or 21.7%, to $284.8 million at December 31, 2025 from $234.0 million at December 31, 2024. The increase in FHLB advances was used primarily to fund loan growth. Shareholders ’ Equity.
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.
As of December 31, 2025 Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +400 $ 32,063 -19.0 % +300 34,084 -13.9 % +200 36,105 -8.8 % +100 38,025 -3.9 % Level 39,576 0.0 % -100 40,449 2.2 % -200 40,802 3.1 % -300 40,400 2.1 % -400 37,895 -4.2 % (1) Assumes an immediate uniform change in interest rates at all maturities.
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.
The increase in interest on interest-bearing time deposits was driven by an increase in the average balance of $2.6 million to $2.7 million for the year ended December 31, 2025, from $64,000 for the year ended December 31, 2024.
Removed
Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Added
At December 31, 2025, $728.3 million, or 64.3%, of our total deposit accounts was comprised of certificate of deposit accounts, $211.8 million, or 18.7%, of our total deposit accounts was comprised of money market accounts, $91.4 million, or 8.1%, of our total deposit accounts was comprised of savings accounts, $81.5 million, or 7.2% of our total deposit accounts was comprised of noninterest bearing demand deposit accounts and $19.4 million, or 1.7%, of our total deposit accounts was comprised of interest-bearing demand deposit accounts.
Removed
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.
Added
We believe there are branch expansion opportunities that exist within our primary market area. We intend to evaluate branch expansion opportunities, including through establishing one or more de novo branches and/or branch acquisitions as such opportunities arise.
Removed
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.
Added
The decrease in cash and cash equivalents was driven by growth in both loans and investments that in aggregate was greater than our growth in deposits and borrowings. Interest-Bearing Time Deposits. Interest-bearing time deposits were $8.0 million at December 31, 2025, as compared to $100,000 at December 31, 2024, or an increase of $7.9 million.

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