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What changed in PARKE BANCORP, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PARKE BANCORP, INC.'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.

+156 added−149 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-12)

Top changes in PARKE BANCORP, INC.'s 2025 10-K

156 paragraphs added · 149 removed · 133 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

61 edited+13 added−10 removed133 unchanged
Biggest changeThe following table sets forth information regarding deposit categories of the Bank. 2024 Average Balance Yield/Rate Percent of Total ( Dollars in thousands) NOWs $ 63,871 0.97% 4.22 % Money markets 583,158 4.77% 38.52 % Savings 66,369 1.13% 4.38 % Time deposits 442,664 4.31% 29.24 % Brokered CDs 170,454 5.30% 11.26 % Total interest-bearing deposits 1,326,516 4.32% Non-interest bearing demand deposits 187,588 12.38 % Total deposits $ 1,514,104 100.00 % Uninsured deposits at the end of the period $ 642,730 2023 Average Balance Yield/Rate Percent of Total ( Dollars in thousands) NOWs $ 86,932 1.58% 5.79 % Money markets 403,292 4.25% 26.84 % Savings 127,442 1.17% 8.48 % Time deposits 498,089 3.06% 33.15 % Brokered CDs 121,702 4.97% 8.10 % Total interest-bearing deposits 1,237,457 3.33% Non-interest bearing demand deposits 265,148 17.65 % Total deposits $ 1,502,605 100.00 % Uninsured deposits at the end of the period $ 601,456 The following table indicates the amount of the Company’s certificates of deposit of $250,000 or more, and the portion that are in excess of the Federal Deposit Insurance ("FDIC") limit, by time remaining until maturity as of December 31, 2024.
Biggest changeThe Bank’s CDARS™ and ICS™ deposits included within the brokered deposit total amounted to $56.6 million and $13.5 million at December 31, 2025 and 2024, respectively. 11 Table of Contents The following table sets forth information regarding deposit categories of the Bank. 2025 Average Percent of Balance Yield/Rate Total (Dollars in thousands) NOWs $ 60,065 0.91 % 3.59 % Money markets 773,369 4.26 % 46.22 % Savings 50,416 1.07 % 3.01 % Time deposits 490,411 4.24 % 29.31 % Brokered CDs 117,108 4.28 % 7.00 % Total interest-bearing deposits 1,491,369 4.01 % Non-interest bearing demand deposits 181,897 10.87 % Total deposits $ 1,673,266 100.00 % Uninsured deposits at the end of the period $ 728,398 (1) (1) The Company had a $75.0 million letter of credit with the FHLBNY to secure public funds at December 31, 2025, which is not included in uninsured deposits balance at the end of the period. 2024 Average Percent of Balance Yield/Rate Total (Dollars in thousands) NOWs $ 63,871 0.97 % 4.22 % Money markets 583,158 4.77 % 38.52 % Savings 66,369 1.13 % 4.38 % Time deposits 442,664 4.31 % 29.24 % Brokered CDs 170,454 5.30 % 11.26 % Total interest-bearing deposits 1,326,516 4.32 % Non-interest bearing demand deposits 187,588 12.39 % Total deposits $ 1,514,104 100.00 % Uninsured deposits at the end of the period $ 642,730 The following table indicates the amount of the Company’s certificates of deposit of $250,000 or more, and the portion that are in excess of the Federal Deposit Insurance ("FDIC") limit, by time remaining until maturity as of December 31, 2025.
Banks that are less than well capitalized or are not in one of the two highest examination rating categories may not accept brokered deposits absent a waiver from the FDIC and may not pay interest on brokered deposits that they are permitted to accept at a rate that is more than 75 basis points greater than the average national rate paid on deposits of similar size and 9 maturity.
Banks that are less than well capitalized or are not in one of the two highest examination rating categories may not accept brokered deposits absent a waiver from the FDIC and may not pay interest on brokered deposits that they are permitted to accept at a rate that is more than 75 basis points greater than the average national rate paid on deposits of similar size and maturity.
As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. 4 The Bank seeks to reduce the risks associated with commercial mortgage lending by generally lending in its primary market area and obtaining periodic financial statements and tax returns from borrowers.
As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. The Bank seeks to reduce the risks associated with commercial mortgage lending by generally lending in its primary market area and obtaining periodic financial statements and tax returns from borrowers.
These activities include securities underwriting and dealing, insurance agency and underwriting, and making merchant banking investments. The Company has not submitted notice to the Federal Reserve of its intent to be deemed a financial holding company. 11 Regulatory Capital Requirements.
These activities include securities underwriting and dealing, insurance agency and underwriting, and making merchant banking investments. The Company has not submitted notice to the Federal Reserve of its intent to be deemed a financial holding company. Regulatory Capital Requirements.
This increased credit risk is a result of several factors, including the concentration of principal in a limited 3 number of loans and borrowers, the mobility of collateral, the effects of general economic conditions and the increased difficulty of evaluating and monitoring these types of loans.
This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the mobility of collateral, the effects of general economic conditions and the increased difficulty of evaluating and monitoring these types of loans.
The regulations of the FDIC and the NJDOBI affect virtually all activities of the Bank, including the minimum level of capital the Bank must maintain, the ability of 12 the Bank to pay dividends, the ability of the Bank to expand through new branches or acquisitions and various other matters.
The regulations of the FDIC and the NJDOBI affect virtually all activities of the Bank, including the minimum level of capital the Bank must maintain, the ability of the Bank to pay dividends, the ability of the Bank to expand through new branches or acquisitions and various other matters.
Source of Strength Doctrine. A bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner.
A bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner.
In accordance with accounting guidance, the Company classifies the majority of its portfolio of investment securities as “available for sale” with the remainder, which are a mix of municipal bonds and mortgage-backed-securities held for Community Reinvestment Act purposes, as “held to maturity.” At December 31, 2024, the Bank’s investment policy allowed investments in instruments such as: (i) U.S.
In accordance with accounting guidance, the Company classifies the majority of its portfolio of investment securities as “available for sale” with the remainder, which are a mix of municipal bonds and mortgage-backed-securities held for Community Reinvestment Act purposes, as “held to maturity.” At December 31, 2025, the Bank’s investment policy allowed investments in instruments such as: (i) U.S.
At December 31, 2024, the Bank was in compliance with this requirement. Community Reinvestment Act and Fair Lending Laws. Under the Community Reinvestment Act, every insured depository institution, including the Bank, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
At December 31, 2025, the Bank was in compliance with this requirement. Community Reinvestment Act and Fair Lending Laws. Under the Community Reinvestment Act, every insured depository institution, including the Bank, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
As of December 31, 2024, the Bank was in compliance with all regulatory capital standards and qualified as “well capitalized.” See Note 13 of Notes to Consolidated Financial Statements. Bank Secrecy Act / Anti-Money Laundering Laws. The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations, including the USA PATRIOT Act of 2001.
As of December 31, 2025, the Bank was in compliance with all regulatory capital standards and qualified as “well capitalized.” See Note 13 of Notes to Consolidated Financial Statements. Bank Secrecy Act / Anti-Money Laundering Laws. The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations, including the USA PATRIOT Act of 2001.
Prompt Corrective Regulatory Action . Under applicable federal statute, the federal bank regulatory agencies are required to take “prompt corrective action” with respect to institutions that do not meet specified minimum capital requirements. For these purposes, the statute establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
Under applicable federal statute, the federal bank regulatory agencies are required to take “prompt corrective action” with respect to institutions that do not meet specified minimum capital requirements. For these purposes, the statute establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
In 2010, the FDIC and the other federal bank regulatory agencies issued comprehensive guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
The FDIC and the other federal bank regulatory agencies issued comprehensive guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
Throughout the relationship, we continue monitoring the business, including site visits, to ensure that the business continues to meet our stringent requirements, including maintenance of required licenses and periodic financial reviews of the business. While we believe we are operating in compliance with the FinCEN guidelines, there can be no assurance that federal enforcement guidelines will not change.
Throughout the relationship, we continue monitoring the business, including site visits, to ensure that the business continues to meet our stringent requirements, including maintenance of required licenses and periodic financial reviews of the business. 4 Table of Contents While we believe we are operating in compliance with the FinCEN guidelines, there can be no assurance that federal enforcement guidelines will not change.
The following table sets forth the contractual maturity of certain loan categories and the dollar amount of loans in certain loan categories due after December 31, 2024, which have predetermined interest rates and which have floating or adjustable interest rates at December 31, 2024.
The following table sets forth the contractual maturity of certain loan categories and the dollar amount of loans in certain loan categories due after December 31, 2025, which have predetermined interest rates and which have floating or adjustable interest rates at December 31, 2025.
Finally, under the federal prompt corrective action regulations, the Federal Reserve may prohibit a bank holding company from paying any dividends if the holding company’s bank subsidiary is classified as “undercapitalized.” As a majority of the Company’s revenues result from dividends paid to the Company by the Bank, the Company’s ability to pay dividends to our shareholders largely depends on the receipt of such dividends from the Bank.
Finally, under the federal prompt corrective action regulations, the Federal Reserve may prohibit a bank holding company from paying any dividends if the holding company’s bank subsidiary is classified as “undercapitalized.” 15 Table of Contents As a majority of the Company’s revenues result from dividends paid to the Company by the Bank, the Company’s ability to pay dividends to our shareholders largely depends on the receipt of such dividends from the Bank.
An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0% The prompt corrective action regulations provide for the imposition of a variety of requirements and limitations on institutions that fail to meet the above capital requirements.
An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0% 17 Table of Contents The prompt corrective action regulations provide for the imposition of a variety of requirements and limitations on institutions that fail to meet the above capital requirements.
The interest rates on second mortgages are generally fixed, while interest rates on home equity lines of credit are variable. Loans to One Borrower and Concentration of Loans. Federal regulations limit loans to one borrower in an amount equal to 15% of unimpaired capital and unimpaired surplus.
The interest rates on second mortgages are generally fixed, while interest rates on home equity lines of credit are variable. 7 Table of Contents Loans to One Borrower and Concentration of Loans. Federal regulations limit loans to one borrower in an amount equal to 15% of unimpaired capital and unimpaired surplus.
Under the terms of the Consent Orders, the Bank and/or its Board of Directors is required to take certain actions which include, but are not limited to: • Increase supervision and direction of the Bank’s BSA compliance program and assume full responsibility for the approval and implementation of sound BSA policies and procedures; • Creation of a compliance committee of the Board of Directors of the Bank with the responsibility of overseeing compliance with the Orders, BSA and the BSA compliance program; • Designate a qualified individual(s) acceptable to the FDIC and the NJDOBI as a BSA Officer; • Review and improve the Bank’s BSA compliance program, BSA risk assessment, system of BSA internal controls, and customer due diligence policies; • Develop, adopt and implement effective training programs for the Board and management on all relevant aspects of laws, regulations and policies relating to BSA and ensure that an adequate number of qualified staff have been retained for the Bank’s BSA Department; • Ensure the Bank’s adherence to a written program of policies and procedures to provide for BSA compliance and the appropriate identification and monitoring of transactions that pose greater than normal risk for BSA compliance; • Development and implementation of a customer due diligence program to enhance customer due diligence and risk assessment processes; • Review and improve policies and procedures for monitoring and reporting suspicious activity; • Conduct independent testing for compliance with BSA by either a qualified outside party or Bank personnel who are independent of the BSA function and are qualified to perform such testing; and • Hire a qualified firm acceptable to the FDIC and the NJDOBI to conduct a look back review of accounts and transaction activity for the time period beginning January 1, 2019, through the effective date of the Orders.
Under the terms of the Consent Orders, the Bank and/or its Board of Directors is required to take certain actions which include, but are not limited to: • Increase supervision and direction of the Bank’s BSA compliance program and assume full responsibility for the approval and implementation of sound BSA policies and procedures; • Creation of a compliance committee of the Board of Directors of the Bank with the responsibility of overseeing compliance with the Orders, BSA and the BSA compliance program; • Designate a qualified individual(s) acceptable to the FDIC and the NJDOBI as a BSA Officer; • Review and improve the Bank’s BSA compliance program, BSA risk assessment, system of BSA internal controls, and customer due diligence policies; • Develop, adopt and implement effective training programs for the Board and management on all relevant aspects of laws, regulations and policies relating to BSA and ensure that an adequate number of qualified staff have been retained for the Bank’s BSA Department; • Ensure the Bank’s adherence to a written program of policies and procedures to provide for BSA compliance and the appropriate identification and monitoring of transactions that pose greater than normal risk for BSA compliance; • Development and implementation of a customer due diligence program to enhance customer due diligence and risk assessment processes; • Review and improve policies and procedures for monitoring and reporting suspicious activity; • Conduct independent testing for compliance with BSA by either a qualified outside party or Bank personnel who are independent of the BSA function and are qualified to perform such testing; and • Hire a qualified firm acceptable to the FDIC and the NJDOBI to conduct a look back review of accounts and transaction activity for the time period beginning January 1, 2019, through the effective date of the Orders. 13 Table of Contents Numerous actions have already been taken or commenced by the Bank, which will assist in complying with the Consent Orders and strengthen its BSA compliance practices, policies, procedures and controls.
At December 31, 2024, no one issuer of investment securities represented 10% or more of the Company’s stockholders’ equity. 7 Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, amortized costs, estimated fair values, and weighted average yields for the Bank’s investment securities portfolio at December 31, 2024, by contractual maturity.
At December 31, 2025, no one issuer of investment securities represented 10% or more of the Company’s stockholders’ equity. 10 Table of Contents Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, amortized costs, estimated fair values, and weighted average yields for the Bank’s investment securities portfolio at December 31, 2025, by contractual maturity.
It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers and assignments of all leases related to the collateral. Our commercial real estate mortgage portfolio was $531.7 million at December 31, 2024. Within the portfolio, we designate certain sectors of loans as high risk to monitor more closely, given the current economic conditions.
It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers and assignments of all leases related to the collateral. Our commercial real estate mortgage portfolio was $660.8 million at December 31, 2025. Within the portfolio, we designate certain sectors of loans as high risk to monitor more closely, given the current economic conditions.
Management also periodically performs valuations of real estate owned and establishes allowances to reduce book values of the properties to their net realizable values when necessary. Any write-down of real estate owned is charged to operations. Real estate owned at December 31, 2024 and December 31, 2023, was $1.6 million.
Management also periodically performs valuations of real estate owned and establishes allowances to reduce book values of the properties to their net realizable values when necessary. Any write-down of real estate owned is charged to operations. Real estate owned at December 31, 2025 and December 31, 2024, was $2.9 million, and $1.6 million, respectively.
Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for credit losses or that additional increases in the allowance for credit losses will not be required. 6 Allocation of Allowance for Credit Losses on Loans.
Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for credit losses or that additional increases in the allowance for credit losses will not be required. 9 Table of Contents Allocation of Allowance for Credit Losses on Loans.
Personnel At December 31, 2024, the Bank had 99 full-time and 9 part-time employees. Regulation Set forth below is a brief description of certain laws that relate to the regulation of the Bank and the Company. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.
Personnel At December 31, 2025, the Bank had 103 full-time and 8 part-time employees. Regulation Set forth below is a brief description of certain laws that relate to the regulation of the Bank and the Company. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.
At December 31, 2024 and 2023, the Bank had cannabis-related loans in the amounts of $43.4 million and $27.1 million, respectively. 2 Lending Activities Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing primarily in and around southern New Jersey, southeastern Pennsylvania, and the Brooklyn and Bronx sections of New York, New York.
At December 31, 2025 and 2024, the Bank had cannabis-related loans in the amounts of $47.0 million and $43.4 million, respectively. Lending Activities Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing primarily in and around southern New Jersey, southeastern Pennsylvania, and the Brooklyn and Bronx sections of New York, New York.
Real estate owned consisted of two commercial owner occupied properties as of December 31, 2024. Allowance for Credit Losses. It is the policy of management to estimate for possible losses on all loans in its portfolio, whether classified or not.
Real estate owned consisted of two commercial owner-occupied properties, and one non-owner-occupied property as of December 31, 2025. Allowance for Credit Losses. It is the policy of management to estimate for possible losses on all loans in its portfolio, whether classified or not.
At December 31, 2024, the high risk sectors consisted of office, hotel, retail, and restaurant loans. All of these sectors combined represent 11.5% of total loan receivable, with no individual sector higher than 3.9%. Residential Real Estate Mortgage Loans. The Bank originates adjustable and fixed-rate residential mortgage loans.
At December 31, 2025, the high risk sectors consisted of office, hotel, retail, and restaurant loans. All of these sectors combined represent 16.3% of total loan receivable, with no individual sector higher than 6.3%. Residential Real Estate Mortgage Loans. The Bank originates adjustable and fixed-rate residential mortgage loans.
Generally, this provision provides that a bank may not extend credit, lease or sell property, or furnish any service to a customer on the condition that the customer obtain additional credit or service from the bank, the bank holding company, or any other subsidiary of the bank holding company or on the condition that the customer not obtain other credit or service from a competitor of the bank, the bank holding company, or any subsidiary of the bank.
Generally, this provision provides that a bank may not extend credit, lease or sell property, or furnish any service to a customer on the condition that the customer obtain additional credit or service from the bank, the bank holding company, or any other subsidiary of the bank holding company or on the condition that the customer not obtain other credit or service from a competitor of the bank, the bank holding company, or any subsidiary of the bank. 14 Table of Contents Source of Strength Doctrine.
Total deposits were $1.63 billion at December 31, 2024. Deposits are obtained primarily from communities that the Bank serves, however, the Bank held brokered deposits of $215.7 million and $223.4 million at December 31, 2024, and 2023, respectively. At December 31, 2024, the Bank held brokered deposit balances in money market, and time deposit categories.
Total deposits were $1.76 billion at December 31, 2025. Deposits are obtained primarily from communities that the Bank serves, however, the Bank held brokered deposits of $215.3 million and $215.7 million at December 31, 2025, and 2024, respectively. At December 31, 2025, the Bank held brokered deposit balances in NOWs, money market, and time deposit categories.
The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, is based upon the principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk 15 management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.
The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, is based upon the principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. 19 Table of Contents The SEC has adopted a rule implementing the incentive-based compensation recovery (“clawback”) provisions of the Dodd-Frank Act.
At December 31, 2024 and 2023, deposit balances from cannabis customers were approximately $151.9 million and $96.7 million, or 9.3% and 6.2% of total deposits, respectively, with two customers accounting for 59.4% and 60.6% of the total at December 31, 2024 and 2023.
At December 31, 2025 and 2024, deposit balances from cannabis customers were approximately $61.9 million and $151.9 million, or 3.5% and 9.3% of total deposits, respectively, with two customers accounting for 30.7% and 59.4% of the total at December 31, 2025 and 2024.
At December 31, 2024, the Bank's loan portfolio consists of residential, commercial real estate loans, construction loans, commercial and industry loans as well as consumer loans. Non-Performing and Problem Assets Non-Performing Assets. Non-accrual loans are loans on which the accrual of interest has ceased.
The Bank places limits on loans to one borrower; one industry; as well as product concentrations. At December 31, 2025, the Bank's loan portfolio consists of residential, commercial real estate loans, construction loans, commercial and industry loans as well as consumer loans. Non-Performing and Problem Assets Non-Performing Assets. Non-accrual loans are loans on which the accrual of interest has ceased.
The Consent Orders do not require the Bank to pay any civil money penalty or require additional capital. 10 The foregoing summary description of the Consent Orders is not complete and is qualified by reference to the full text of the Consent Orders, copies of which are filed as Exhibits 99.1 and 99.2 to this Annual Report on Form 10-K.
The foregoing summary description of the Consent Orders is not complete and is qualified by reference to the full text of the Consent Orders, copies of which are filed as Exhibits 99.1 and 99.2 to this Annual Report on Form 10-K.
Generally, these loans are extended only when the borrower provides evidence that the lots under development will be sold to potential buyers satisfactory to the Bank. The Bank also originates loans to individuals for construction of single family dwellings. These loans are for the construction of the individual’s primary residence.
Loans to residential developers are made only to developers with a proven sales record. Generally, these loans are extended only when the borrower provides evidence that the lots under development will be sold to potential buyers satisfactory to the Bank. The Bank also originates loans to individuals for construction of single family dwellings.
To mitigate the potential negative impact associated with brokered deposits, the Bank joined the IntraFi network ("IntraFi") to secure an additional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS ™ settlement process and their overnight ICS ™ money market product.
For an additional source of brokered liquidity, the Bank joined the IntraFi network ("IntraFi") to secure an additional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS™ settlement process and their overnight and term ICS™ money market product.
Federal Home Loan Bank System. The Bank is a member of the Federal Home Loan Bank (“FHLB”) of New York, which is one of 11 regional FHLBs. Each FHLB serves as a reserve or central bank for its members within its assigned region.
The Bank is a member of the Federal Home Loan Bank (“FHLB”) of New York, which is one of 11 regional FHLBs. Each FHLB serves as a reserve or central bank for its members within its assigned region. It is funded primarily from funds deposited by member institutions and proceeds from the sale of consolidated obligations of the FHLB System.
Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
Significant increases in assessments may have an adverse effect on the operating expenses and results of operations of the Bank. 16 Table of Contents Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
Such interest, when ultimately collected, is applied either to the outstanding principal or recorded as interest income, depending on management’s assessment of ultimate collectability of principal and interest. Foreclosed Real Estate.
Interest accrued and unpaid at the time a loan is placed on non-accrual status is charged against interest income. Such interest, when ultimately collected, is applied either to the outstanding principal or recorded as interest income, depending on management’s assessment of ultimate collectability of principal and interest. Foreclosed Real Estate.
Consequently, a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse. Competition The Bank faces significant competition, both in making loans and attracting deposits.
A decline in local economic conditions could adversely affect the values of such real estate. Consequently, a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse.
There were no loans included in individually evaluated loans at December 31, 2024 and 2023, respectively, that had been modified to borrowers in financial distress. 5 As of December 31, 2024, there was $21.8 million in loans which were not then on non-accrual status or modified but where there is a potential weakness or pose unwarranted financial risk to the Bank, even though the asset value is not currently impaired.
As of December 31, 2025, there was $20.5 million in loans which were not then on non-accrual status or modified but where there is a potential weakness or pose unwarranted financial risk to the Bank, even though the asset value is not currently impaired.
The Bank’s competition in both areas comes principally from other commercial banks, thrift and savings institutions, including savings and loan associations and credit unions, and other types of financial institutions, including brokerage firms and credit card companies. The Bank faces additional competition for deposits from short-term money market mutual funds and other corporate and government securities funds.
Competition The Bank faces significant competition, both in making loans and attracting deposits. The Bank’s competition in both areas comes principally from other commercial banks, thrift and savings institutions, including savings and loan associations and credit unions, and other types of financial institutions, including brokerage firms and credit card companies.
In certain instances, the Bank may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize their financial affairs. If the loan continues in a delinquent status for 90 days or more, the Bank generally will initiate foreclosure proceedings.
In certain instances, the Bank may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize their financial affairs.
December 31, 2024 December 31, 2023 Amount % of Loans to total Loans Net charge off/(recovery) Net charge off to average loans outstanding Amount % of Loans to total Loans Net charge off/(recovery) Net charge off to average loans outstanding (Dollars in thousands) Commercial and Industrial $ 1,097 1.9 % $ (28) — % $ 926 2.0 % $ (15) — % Construction 3,037 8.0 — — % 3,347 8.8 — — % Real Estate Mortgage: Commercial – Owner Occupied 1,871 8.6 (1) — % 1,795 7.9 (3) — % Commercial – Non-owner Occupied 6,300 19.7 — — % 7,108 20.7 — — % Residential – 1 to 4 Family 9,166 24.0 — — % 9,061 25.2 — — % Residential - 1 to 4 Family Investment 8,832 28.1 8,783 29.3 Residential – Multifamily 2,203 9.4 — — % 1,049 5.8 — — % Consumer 67 0.3 (53) — % 62 0.3 — — % Total allowance for credit losses $ 32,573 100.0 % $ (82) — % $ 32,131 100.0 % $ (18) — % Period-end loans outstanding (net of deferred costs/fees) $ 1,868,153 $ 1,787,340 Average loans outstanding $ 1,810,931 $ 1,782,055 Total non-accrual loans $11,773 $7,238 Allowance as a percentage of period end loans 1.74 % 1.80 % Non-accrual loans as a percentage of period end loans 0.63 % 0.40 % Allowance as a percentage of non-performing loans 276.68 % 443.92 % Investment Activities General .
December 31, 2025 December 31, 2024 Net charge off Net charge off % of Loans Net charge off/ to average loans % of Loans Net charge off/ to average loans Amount to total Loans (recovery) outstanding Amount to total Loans (recovery) outstanding (Dollars in thousands) Commercial and Industrial $ 1,008 1.9 % (5 ) — % $ 1,097 1.9 % (28 ) — % Construction 4,032 10.4 — — % 3,037 8.0 — — % Real Estate Mortgage: Commercial – Owner Occupied 2,239 9.0 — — % 1,871 8.6 (1 ) — % Commercial – Non-owner Occupied 9,661 23.5 202 0.01 % 6,300 19.7 — — % Residential – 1 to 4 Family 8,205 22.2 250 0.01 % 9,166 24.0 — — % Residential - 1 to 4 Family Investment 7,601 24.3 — — % 8,832 28.1 Residential – Multifamily 1,845 8.5 — — % 2,203 9.4 — — % Consumer 58 0.2 — — % 67 0.3 (53 ) — % Total allowance for credit losses $ 34,649 100.0 % $ 447 0.02 % $ 32,573 100.0 % $ (82 ) — % Period-end loans outstanding (net of deferred costs/fees) $ 2,035,227 $ 1,868,153 Average loans outstanding $ 1,924,254 $ 1,810,931 Total non-accrual loans $ 10,793 $ 11,773 Allowance as a percentage of period end loans 1.70 % 1.74 % Non-accrual loans as a percentage of period end loans 0.53 % 0.63 % Allowance as a percentage of non-performing loans 321.03 % 276.68 % Investment Activities General .
It is funded primarily from funds deposited by member institutions and proceeds from the sale of consolidated obligations of the FHLB System. It makes loans to members (i.e., advances) in accordance with policies and procedures established by the Board of Directors of the FHLB.
It makes loans to members (i.e., advances) in accordance with policies and procedures established by the Board of Directors of the FHLB.
Further, to assure that reliance is not placed solely on the value of the underlying property, the Bank considers the financial condition and reputation of the borrower and any guarantors, the amount of the borrower’s equity in the project, independent appraisals, costs estimates and pre-construction sale information.
Further, to assure that reliance is not placed solely on the value of the underlying property, the Bank considers the financial condition and reputation of the borrower and any guarantors, the amount of the borrower’s equity in the project, independent appraisals, costs estimates and pre-construction sale information. 6 Table of Contents Loans to residential builders are for the construction of residential homes for which a binding sales contract exists and the prospective buyers have been pre-qualified for permanent mortgage financing.
Maturity Period Certificates of Deposit Portion in Excess of FDIC Insurance Limit ( Dollars in thousands) Within three months $ 58,381 $ 39,381 Over three through six months 37,624 12,874 Over six through twelve months 37,705 24,955 Over twelve months 2,650 1,400 Total $ 136,360 $ 78,610 Under FDIC regulations, insured banks that are well capitalized with examination ratings in one of the two highest categories are permitted to accept brokered deposits and are not restricted as to the rates that can be paid on such deposits.
Certificates Portion in Excess of Maturity Period of Deposit FDIC Insurance Limit (Dollars in thousands) Within three months $ 41,306 $ 15,056 Over three through six months 41,248 14,998 Over six through twelve months 17,073 5,323 Over twelve months 4,406 2,656 Total $ 104,033 $ 38,033 12 Table of Contents Under FDIC regulations, insured banks that are well capitalized with examination ratings in one of the two highest categories are permitted to accept brokered deposits and are not restricted as to the rates that can be paid on such deposits.
They are typically secured by the property under construction, occasionally include additional collateral (such as a second mortgage on the borrower’s present home), and commonly have maturities of six to twelve months. Construction financing is labor intensive for the Bank, requiring employees of the Bank to expend substantial time and resources in monitoring and servicing each construction loan to completion.
These loans are for the construction of the individual’s primary residence. They are typically secured by the property under construction, occasionally include additional collateral (such as a second mortgage on the borrower’s present home), and commonly have maturities of six to twelve months.
Most of the Bank’s competitors, whether traditional or nontraditional financial institutions, have a longer history and significantly greater financial and marketing resources than does the Bank.
The Bank faces additional competition for deposits from short-term money market mutual funds and other corporate and government securities funds. Most of the Bank’s competitors, whether traditional or nontraditional financial institutions, have a longer history and significantly greater financial and marketing resources than does the Bank.
Most of the Bank’s customers are individuals and small to medium-sized businesses which are dependent upon the regional economy. Adverse changes in economic and business conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loans and to borrow additional funds, and consequently the Bank’s financial condition and performance.
Adverse changes in economic and business conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loans and to borrow additional funds, and consequently the Bank’s financial condition and performance. Additionally, most of the Bank’s loans are secured by real estate located in Southern New Jersey and the Philadelphia area.
Section 23B and Regulation W also require a bank’s transactions with affiliates to be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliated companies. 14 The Bank is also subject to certain restrictions under Sections 22(g) and 22(h) of the Federal Reserve Act on extensions of credit to the executive officers, directors, principal shareholders of the Bank and the Company, as well as to entities controlled by such persons.
The Bank is also subject to certain restrictions under Sections 22(g) and 22(h) of the Federal Reserve Act on extensions of credit to the executive officers, directors, principal shareholders of the Bank and the Company, as well as to entities controlled by such persons.
At December 31, 2024, the Bank’s loan to one borrower limit was approximately $56.2 million and the Bank had no borrowers with loan balances in excess of this amount. At December 31, 2024, the Bank’s largest loan to one borrower was a commercial owner occupied real estate loan with a balance of $21.0 million that was secured by the property.
At December 31, 2025, the Bank’s loan to one borrower limit was approximately $55.6 million and the Bank had no borrowers with loan balances in excess of this amount.
Brokered deposits do not increase the deposit franchise of the Bank, and in a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate.
Brokered deposits do not increase the deposit franchise of the Bank, and in a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate. The Bank primarily utilizes brokered relationships with Piper Sandler, and Wells Fargo. As of December 31, 2025, the Company had $156.7 million sourced from these relationships.
Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate.
Construction financing is labor intensive for the Bank, requiring employees of the Bank to expend substantial time and resources in monitoring and servicing each construction loan to completion. Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate.
The Bank may engage in loan participations with other banks for loans in excess of the Bank’s legal lending limits. However, no assurance can be given that such participations will be available at all or on terms which are favorable to the Bank and its customers.
However, no assurance can be given that such participations will be available at all or on terms which are favorable to the Bank and its customers. The Bank establishes policies and methods to determine concentrations of credit risk and to maintain discipline in lending practices with a focus on portfolio diversification.
The capital buffer requirement effectively raises the minimum required risk-based capital ratios to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital on a fully phased-in basis. 13 In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but also qualitative factors, and has the authority to establish higher capital requirements for individual institutions where necessary.
The capital buffer requirement effectively raises the minimum required risk-based capital ratios to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital on a fully phased-in basis.
At December 31, 2024, this loan was current and performing in accordance with the terms of the loan agreement. The size of loans which the Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors with larger capitalization are able to offer.
The size of loans which the Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors with larger capitalization are able to offer. The Bank may engage in loan participations with other banks for loans in excess of the Bank’s legal lending limits.
Loans are generally placed on non-accrual status when either principal or interest is 90 days or more past due. Interest accrued and unpaid at the time a loan is placed on non-accrual status is charged against interest income.
If the loan continues in a delinquent status for 90 days or more, the Bank generally will initiate foreclosure proceedings. 8 Table of Contents Loans are generally placed on non-accrual status when either principal or interest is 90 days or more past due.
Total non-performing loans, which include non-accrual loans, were $12.2 million and $7.2 million at December 31, 2024 and 2023, respectively.
Total non-performing loans, which include non-accrual loans, were $10.8 million and $12.2 million at December 31, 2025 and 2024, respectively. There were no loans included in individually evaluated loans at December 31, 2025 and 2024, respectively, that had been modified to borrowers in financial distress.
At December 31, 2024 One Year or Less After One Through Five Years After Five Years Through Ten Years After Ten Years Total Investment Securities Amortized Cost Amortized Cost Amortized Cost Amortized Cost Amortized Cost Fair Value (Dollars in thousands) Securities Held to Maturity : State and political subdivisions $ — $ 1,481 $ 1,507 $ 965 $ 3,953 $ 3,441 Yield — % 4.76 % 1.90 % 1.93 % 2.96 % Residential mortgage-backed securities — — — 5,256 5,256 4,051 Yield — % — % — % 1.91 % 1.91 % Total securities held to maturity — 1,481 1,507 6,221 9,209 7,492 Weighted Average Yield — % 4.76 % 1.90 % 1.92 % 2.36 % Securities Available for Sale : Residential mortgage-backed securities — 2,117 727 3,161 6,005 5,551 Yield — % 2.24 % 1.99 % 2.69 % 2.43 % Total securities available for sale — 2,117 727 3,161 6,005 5,551 Weighted Average Yield — % 2.24 % 1.99 % 2.69 % 2.43 % Total Investment Securities $ — $ 3,598 $ 2,234 $ 9,382 $ 15,214 $ 13,043 Total Weighted Average Yield — % 3.14 % 1.93 % 2.19 % 2.39 % Yields are calculated on a weighted average basis using the investments amortized cost and respective average yields for each investment category.
At December 31, 2025 After One After Five Years One Year or Less Through Five Years Through Ten Years After Ten Years Total Investment Securities Amortized Amortized Amortized Amortized Amortized Fair Cost Cost Cost Cost Cost Value (Dollars in thousands) Securities Held to Maturity: State and political subdivisions $ — $ 1,553 $ 2,471 $ — $ 4,024 $ 3,679 Yield — % 4.76 % 1.91 % — % 3.00 % Residential mortgage-backed securities — — — 4,753 4,753 3,808 Yield — % — % — % 1.78 % 1.78 % Total securities held to maturity — 1,553 2,471 4,753 8,777 7,487 Weighted Average Yield — % 4.76 % 1.91 % 1.78 % 2.32 % Securities Available for Sale: Corporate debt obligations $ — $ — $ 500 $ — $ 500 $ 500 Yield — % — % 2.63 % — % 2.63 % Residential mortgage-backed securities 9 1,726 828 1,952 4,515 4,246 Yield 0.12 % 2.26 % 1.94 % 2.82 % 2.42 % Total securities available for sale 9 1,726 1,328 1,952 5,015 4,746 Weighted Average Yield 0.12 % 2.26 % 2.18 % 2.82 % 2.44 % Total Investment Securities $ 9 $ 3,279 $ 3,799 $ 6,705 $ 13,792 $ 12,233 Total Weighted Average Yield 0.12 % 3.27 % 2.01 % 2.09 % 2.36 % Yields are calculated on a weighted average basis using the investments amortized cost and respective average yields for each investment category.
Market Area Substantially all of the Bank’s business is with customers in its market areas of Southern New Jersey, the Philadelphia area of Pennsylvania, and New York, New York. We have carefully expanded our lending footprint in other areas, including 1 adding lending capabilities in South Carolina.
At December 31, 2025, we had total assets of $2.25 billion, including loans of $2.04 billion, total deposits of $1.76 billion and total equity of $324.5 million. 3 Table of Contents Market Area Substantially all of the Bank’s business is with customers in its market areas of Southern New Jersey, the Philadelphia area of Pennsylvania, and New York, New York.
Investors are encouraged to access these reports and other information about our business on our website. At December 31, 2024, we had total assets of $2.14 billion, including loans of $1.87 billion, total deposits of $1.63 billion and total equity of $300.1 million.
Investors are encouraged to access these reports and other information about our business on our website.
Numerous actions have already been taken or commenced by the Bank, which will assist in complying with the Consent Orders and strengthen its BSA compliance practices, policies, procedures and controls. The Consent Orders have resulted, and are expected to continue to result, in additional BSA compliance expenses for the Bank and the Company.
The Consent Orders have resulted, and are expected to continue to result, in additional BSA compliance expenses for the Bank and the Company. The Consent Orders do not otherwise impact the Bank’s business activities outside of BSA. The Consent Orders do not require the Bank to pay any civil money penalty or require additional capital.
Removed
Additionally, most of the Bank’s loans are secured by real estate located in Southern New Jersey and the Philadelphia area. A decline in local economic conditions could adversely affect the values of such real estate.
Added
We have carefully expanded our lending footprint in other areas, including adding lending capabilities in South Carolina. Most of the Bank’s customers are individuals and small to medium-sized businesses which are dependent upon the regional economy.
Removed
Due within one year or less Due after one through five years Due after five through fifteen years Due after fifteen years Total ( Dollars in thousands) Commercial and Industrial $ 20,040 $ 10,790 $ 4,551 $ — $ 35,381 Construction 137,534 11,497 315 — 149,346 Commercial Real Estate Mortgage: Commercial - Owner Occupied 5,812 84,613 68,273 1,743 160,441 Commercial - Non-Owner Occupied 41,084 243,195 87,019 — 371,298 Residential - 1 to 4 family 3,725 93,731 33,283 317,141 447,880 Residential - 1 to 4 family investment — — 8,615 515,552 524,167 Residential - multifamily 1,842 76,860 96,054 — 174,756 Consumer 20 396 3,833 635 4,884 Total $ 210,057 $ 521,082 $ 301,943 $ 835,071 $ 1,868,153 The following table presents the distribution of those loans that mature in more than one year between predetermined rates and floating or adjustable rates as of December 31, 2024.
Added
Due within Due after Due after one year one through five through Due after or less five years fifteen years fifteen years Total (Dollars in thousands) Commercial and Industrial $ 22,649 $ 11,417 $ 4,606 $ — $ 38,672 Construction 156,546 55,129 307 325 212,307 Commercial Real Estate Mortgage: Commercial - Owner Occupied 8,316 31,850 141,041 1,322 182,529 Commercial - Non-Owner Occupied 41,511 143,762 293,022 — 478,295 Residential - 1 to 4 family 6,233 70,470 58,317 316,443 451,463 Residential - 1 to 4 family investment — — 6,789 487,439 494,228 Residential - multifamily 2,555 32,974 138,082 — 173,611 Consumer 10 302 2,931 879 4,122 Total $ 237,820 $ 345,904 $ 645,095 $ 806,408 $ 2,035,227 5 Table of Contents The following table presents the distribution of those loans that mature in more than one year between predetermined rates and floating or adjustable rates as of December 31, 2025.
Removed
Predetermined Rates Floating or Adjustable Rates Total (Dollars in thousand) Commercial and Industrial $ 311 $ 15,030 $ 15,341 Construction — 11,813 11,813 Commercial Real Estate Mortgage: Commercial - Owner Occupied 15,991 138,638 154,629 Commercial - Non-Owner Occupied 18,178 312,036 330,214 Residential - 1 to 4 family 34,288 409,884 444,172 Residential - 1 to 4 family investment 12,302 511,847 524,149 Residential - multifamily 4,176 168,738 172,914 Consumer 4,855 9 4,864 Total $ 90,101 $ 1,567,995 $ 1,658,096 Commercial and Industrial Loans.
Added
Predetermined Floating or Rates Adjustable Rates Total (Dollars in thousand) Commercial and Industrial $ 4,636 $ 11,387 $ 16,023 Construction — 55,761 55,761 Commercial Real Estate Mortgage: Commercial - Owner Occupied 14,760 159,453 174,213 Commercial - Non-Owner Occupied 11,424 425,360 436,784 Residential - 1 to 4 family 26,977 418,253 445,230 Residential - 1 to 4 family investment 10,118 484,110 494,228 Residential - multifamily 850 170,206 171,056 Consumer 4,103 9 4,112 Total $ 72,868 $ 1,724,539 $ 1,797,407 Commercial and Industrial Loans.
Removed
Loans to residential builders are for the construction of residential homes for which a binding sales contract exists and the prospective buyers have been pre-qualified for permanent mortgage financing. Loans to residential developers are made only to developers with a proven sales record.
Added
At December 31, 2025, the Bank’s largest loan to one borrower was a construction loan with a balance of $23.4 million that was secured by the property, as well as personal guarantees from the borrower. At December 31, 2025, this loan was current and performing in accordance with the terms of the loan agreement.
Removed
The Bank establishes policies and methods to determine concentrations of credit risk and to maintain discipline in lending practices with a focus on portfolio diversification. The Bank places limits on loans to one borrower; one industry; as well as product concentrations.
Added
In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but also qualitative factors, and has the authority to establish higher capital requirements for individual institutions where necessary. Prompt Corrective Regulatory Action .
Removed
The Bank’s CDARS ™ and ICS ™ deposits included within the brokered deposit total amounted to $13.5 million and $216.9 million at December 31, 2024 and 2023, respectively. Additionally, we have access to other brokered deposit funding sources that we utilize as a source of additional 8 liquidity.
Added
Section 23B and Regulation W also require a bank’s transactions with affiliates to be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliated companies.
Removed
In addition to IntraFi, we utilize Wells Fargo, Piper Sandler, and Stonecastle to obtain brokered deposits, and as of December 31, 2024, the Company had $202.2 million sourced from these broker relationships.
Added
Commercial Real Estate Lending Concentrations. The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending.
Removed
The Consent Orders do not otherwise impact the Bank’s business activities outside of BSA.
Added
The particular focus is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be sensitive to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).
Removed
Significant increases in assessments may have an adverse effect on the operating expenses and results of operations of the Bank.
Added
The purpose of the guidance is not to limit a bank’s commercial real estate lending but to guide banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations.
Removed
In 2016, the U.S. financial regulators, including the FDIC, the Federal Reserve and the SEC, proposed revised rules on incentive-based payment arrangements at financial institutions having at least $1 billion in total assets. These proposed rules have not been finalized.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed12 unchanged
Biggest changeIdentify the types of customer information potentially affected. 16 Once the Department Manager has determined that unauthorized access, manipulation of data or theft of any item identified under GLBA Inventory and Asset Classification has occurred, Senior Management, the Compliance Officer and the Information Technology Administrator must be contacted immediately.
Biggest changeIdentify the types of customer information potentially affected. 20 Table of Contents Once the Department Manager has determined that unauthorized access, manipulation of data or theft of any item identified under GLBA Inventory and Asset Classification has occurred, Senior Management, the Compliance Officer and the Information Technology Administrator must be contacted immediately.
During the fiscal year ended December 31, 2024, the risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, its business strategy, results of operations, or financial condition.
During the fiscal year ended December 31, 2025, the risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, its business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeJimmy Leeds Road Galloway Township, NJ 08205 Collingswood Branch 2016 Owned 1150 Haddon Avenue Collingswood, NJ 08108 Arch Street Branch 2016 Leased 1032 Arch Street Philadelphia, PA 19108 Philadelphia Lending Office 2023 Leased 1817 E. Venango St. Philadelphia, PA 19108 17
Biggest changeJimmy Leeds Road Galloway Township, NJ 08205 Collingswood Branch 2016 Owned 1150 Haddon Avenue Collingswood, NJ 08108 Arch Street Branch 2016 Leased 1032 Arch Street Philadelphia, PA 19108 Philadelphia Lending Office 2023 Leased 1817 E. Venango St. Philadelphia, PA 19108 21 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−1 removed6 unchanged
Biggest changeIssuer Purchases of Equity Securities 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 August 1 - 31, 2024 50,001 $ 19.41 50,001 563,095 September 1 - 30, 2024 49,999 20.79 49,999 513,096 October 1 - 31, 2024 16,500 21.26 16,500 496,596 November 1 - 30, 2024 45,088 22.65 45,088 451,508 December 1 - 31, 2024 38,412 22.58 38,412 413,096 Total 200,000 $ 21.28 200,000 Shareholders wishing to change the name, address or ownership of the Company’s stock, report lost certificates or consolidate accounts are asked to contact the Company’s Transfer Agent and Registrar directly: Computershare Investor Services ("Computershare"), P.O.
Biggest changeIssuer Purchases of Equity Securities Total Number of Maximum Number of Shares Purchased Shares that May Yet Total Number of Average Price as Part of Publicly Be Purchased Shares Purchased Paid Per Share Announced Program Under the Program July 1 - 31, 2025 50,000 $ 21.76 50,000 363,096 August 1 - 31, 2025 200,000 21.37 200,000 163,096 September 1 - 30, 2025 50,000 22.25 50,000 113,096 Total 300,000 $ 21.58 300,000 Shareholders wishing to change the name, address or ownership of the Company’s stock, report lost certificates or consolidate accounts are asked to contact the Company’s Transfer Agent and Registrar directly: Computershare Investor Services ("Computershare"), P.O.
Each share of Series B Preferred Stock is convertible, at the option of the holder into approximately 137.6 shares of Common Stock at December 31, 2024. Upon full conversion of the outstanding shares of the Series B Preferred Stock, the Company will issue approximately 44,720 shares of Common Stock assuming that the conversion rate does not change.
Each share of Series B Preferred Stock is convertible, at the option of the holder into approximately 137.6 shares of Common Stock at December 31, 2025. Upon full conversion of the outstanding shares of the Series B Preferred Stock, the Company will issue approximately 44,720 shares of Common Stock assuming that the conversion rate does not change.
During 2024, the Company paid a total of $8.6 million in common stock cash dividends. The Company also has 325 shares of 6% non-Cumulative Series B Preferred Stock outstanding at December 31, 2024. The preferred stock has a liquidation preference of $1,000 per share.
During 2025, the Company paid a total of $8.4 million in common stock cash dividends. The Company also has 325 shares of 6% non-Cumulative Series B Preferred Stock outstanding at December 31, 2025. The preferred stock has a liquidation preference of $1,000 per share.
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol of "PKBK". The number of shareholders of record of common stock as of December 31, 2024, was approximately 223.
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol of "PKBK". The number of shareholders of record of common stock as of December 31, 2025, was approximately 213.
The conversion rate and the total number of shares to be issued would be adjusted for future stock dividends, stock splits and other corporate actions. The Company has recorded dividends on preferred stock in the approximate amount of $20,250 and $26,000 for the years ended December 31, 2024 and 2023, respectively.
The conversion rate and the total number of shares to be issued would be adjusted for future stock dividends, stock splits and other corporate actions. The Company has recorded dividends on preferred stock in the approximate amount of $19,500 and $20,250 for the years ended December 31, 2025 and 2024, respectively.
This does not reflect the number of persons or entities who held stock in nominee or "street" name through various brokerage firms. As of March 11, 2024, there were 11,842,596 shares of our common stock issued and outstanding. The Company paid a $0.18 per share quarterly common stock cash dividend during each quarter of 2024.
This does not reflect the number of persons or entities who held stock in nominee or "street" name through various brokerage firms. As of March 9, 2026, there were 11,730,950 shares of our common stock issued and outstanding. The Company paid an $0.18 per share quarterly common stock cash dividend during each quarter of 2025.
Box 43078, Providence, Rhode Island 02940-3078. Shareholders may also contact Computershare at 1-800-942-5909 and www.computershare.com.
Box 43078, Providence, Rhode Island 02940-3078. Shareholders may also contact Computershare at 1-800-942-5909 and www.computershare.com. Item 6. [Reserved] Not applicable
The Company paid quarterly cash dividends of $15 per share on the preferred stock for the years 2024 and 2023. During 2024, preferred stockholders converted 50 shares of preferred shares into 6,877 shares of common stock. The preferred stock qualifies, and is accounted, as equity securities and is included in the Company’s Tier I capital since issued.
The Company paid quarterly cash dividends of $15 per share on the preferred stock for the years 2025 and 2024. During 2025, there were no conversions of preferred stock performed. The preferred stock qualifies, and is accounted, as equity securities and is included in the Company’s Tier I capital since issued.
The New Jersey Department of Banking and Insurance has similar power to issue cease and desist orders to prohibit 18 what might constitute unsafe or unsound practices. The payment of dividends may also be affected by other factors (e.g., the need to maintain adequate capital or to meet loan loss reserve requirements).
The New Jersey Department of Banking and Insurance has similar power to issue cease and desist orders to prohibit what might constitute unsafe or unsound practices.
Removed
Repurchases of the Company's Common Stock during the twelve months ended December 31, 2024 totaled 200,000 shares at an average price of $21.28. Set forth below is information regarding the Company's stock repurchases during the fiscal year ended December 31, 2024.
Added
The payment of dividends may also be affected by other factors (e.g., the need to maintain adequate capital or to meet loan loss reserve requirements). 22 Table of Contents Set forth below is information regarding the Company's stock repurchases during the fiscal year ended December 31, 2025.

Item 7. Management's Discussion & Analysis

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

60 edited+9 added−5 removed31 unchanged
Biggest changeThe yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense. 20 For the Years Ended December 31, 2024 2023 Average Balance Interest Income/ Expense Yield/ Cost Average Balance Interest Income/ Expense Yield/ Cost ( Dollars in thousands) Assets Loans (1) (2) $ 1,810,931 $ 117,834 6.51 % $ 1,782,055 $ 106,061 5.95 % Investment securities 23,679 1,042 4.40 % 25,168 1,048 4.16 % Deposits with banks 124,037 6,237 5.03 % 114,880 5,595 4.87 % Total interest-earning assets 1,958,647 $ 125,113 6.39 % 1,922,103 $ 112,704 5.86 % Non-interest earning assets 65,939 78,253 Allowance for credit losses (32,321) (31,965) Total assets $ 1,992,265 $ 1,968,391 Liabilities and Equity Interest bearing deposits NOWs $ 63,871 $ 618 0.97 % $ 86,932 $ 1,377 1.58 % Money markets 583,158 27,812 4.77 % 403,292 17,120 4.25 % Savings 66,369 750 1.13 % 127,442 1,486 1.17 % Time deposits 442,664 19,099 4.31 % 498,089 15,232 3.06 % Brokered certificates of deposit 170,454 9,033 5.30 % 121,702 6,044 4.97 % Total interest-bearing deposits 1,326,516 57,312 4.32 % 1,237,457 41,259 3.33 % Borrowings 165,753 9,093 5.49 % 170,093 7,231 4.25 % Total interest-bearing liabilities 1,492,269 $ 66,405 4.45 % 1,407,550 $ 48,490 3.44 % Non-interest bearing deposits 187,588 265,148 Other liabilities 18,261 16,802 Total liabilities 1,698,118 1,689,500 Equity 294,147 278,891 Total liabilities and equity $ 1,992,265 $ 1,968,391 Net interest income $ 58,708 $ 64,214 Interest rate spread 1.94 % 2.42 % Net interest margin 3.00 % 3.34 % (1) Interest income includes $3.6 million and $3.8 million of net fee income for the years ended 2024 and 2023, respectively.
Biggest changeThe yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense. 24 Table of Contents For the Years Ended December 31, 2025 2024 Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost (Dollars in thousands) Assets Loans (1) (2) $ 1,924,254 $ 135,189 7.03 % $ 1,810,931 $ 117,834 6.51 % Investment securities (3) 21,015 921 4.38 % 23,679 1,042 4.40 % Deposits with banks 154,645 6,567 4.25 % 124,037 6,237 5.03 % Total interest-earning assets 2,099,914 $ 142,677 6.79 % 1,958,647 $ 125,113 6.39 % Non-interest earning assets 66,693 65,939 Allowance for credit losses (33,431 ) (32,321 ) Total assets $ 2,133,176 $ 1,992,265 Liabilities and Equity Interest bearing deposits NOWs $ 60,065 $ 545 0.91 % $ 63,871 $ 618 0.97 % Money markets 773,369 32,971 4.26 % 583,158 27,812 4.77 % Savings 50,416 537 1.07 % 66,369 750 1.13 % Time deposits 490,411 20,784 4.24 % 442,664 19,099 4.31 % Brokered certificates of deposit 117,108 5,011 4.28 % 170,454 9,033 5.30 % Total interest-bearing deposits 1,491,369 59,848 4.01 % 1,326,516 57,312 4.32 % Borrowings 127,358 6,371 5.00 % 165,753 9,093 5.49 % Total interest-bearing liabilities 1,618,727 $ 66,219 4.09 % 1,492,269 $ 66,405 4.45 % Non-interest bearing deposits 181,897 187,588 Other liabilities 19,563 18,261 Total liabilities 1,820,187 1,698,118 Equity 312,989 294,147 Total liabilities and equity $ 2,133,176 $ 1,992,265 Net interest income $ 76,458 $ 58,708 Interest rate spread 2.70 % 1.94 % Net interest margin 3.64 % 3.00 % (1) Interest income includes $4.4 million and $3.6 million of net fee income for the years ended December 31, 2025 and 2024, respectively.
Our interest income is primarily generated from our lending and investment activities. Our deposit products include checking, savings, money market accounts, and certificates 19 of deposit. The majority of our deposit accounts are obtained through our retail banking business, which provides us with low cost funding to grow our lending efforts.
Our interest income is primarily generated from our lending and investment activities. Our deposit products include checking, savings, money market accounts, and certificates of deposit. The majority of our deposit accounts are obtained through our retail banking business, which provides us with low cost funding to grow our lending efforts.
When we make commitments, we are exposed to credit risk. However, the maximum credit risk for 27 these commitments will generally be lower than the contractual amount because a significant portion of these commitments is expected to expire without being used by the customer.
When we make commitments, we are exposed to credit risk. However, the maximum credit risk for these commitments will generally be lower than the contractual amount because a significant portion of these commitments is expected to expire without being used by the customer.
This range was deemed immaterial to the overall ACL reserve balance. The process of determining the level of the allowance for credit losses requires a high degree of judgment. To the extent actual outcomes differ from our estimates, additional provision for loan and lease losses may be required that would reduce future earnings. Item 7A.
This range was deemed immaterial to the overall ACL reserve balance. The process of determining the level of the allowance for credit losses requires a high degree of judgment. To the extent actual outcomes differ from our estimates, additional provision for loan and lease losses may be required that would reduce future earnings.
The interest rate sensitivity position as of December 31, 2024 is presented in the following table. Assets and liabilities are scheduled based on maturity or re-pricing data except for mortgage loans and mortgage-backed securities, which are based on prevailing prepayment assumptions and expected maturities and deposits which are based on recent retention experience of core deposits.
The interest rate sensitivity position as of December 31, 2025 is presented in the following table. Assets and liabilities are scheduled based on maturity or re-pricing data except for mortgage loans and mortgage-backed securities, which are based on prevailing prepayment assumptions and expected maturities and deposits which are based on recent retention experience of core deposits.
There were no outstanding balances with the FRB as of December 31, 2024. Our investment portfolio primarily consists of mortgage-backed available for sale securities issued by US government agency and government sponsored entities. These available for sale securities are readily marketable and are available to meet our additional liquidity needs.
There were no outstanding balances with the FRB as of December 31, 2025. Our investment portfolio primarily consists of mortgage-backed available for sale securities issued by US government agency and government sponsored entities. These available for sale securities are readily marketable and are available to meet our additional liquidity needs.
To provide a sensitivity of the impact to the ACL estimate, management adjusted the average lives of the vintage pools, by both increasing and decreasing the prepayment speeds by 20%, which provided an estimated range of impact between $0.9 million for a lower prepayment speed and $(1.2) million for a higher prepayment speed.
To provide a sensitivity of the impact to the ACL estimate, management adjusted the average lives of the vintage pools, by both increasing and decreasing the prepayment speeds by 20%, which provided an estimated range of impact between $0.9 million for a lower prepayment speed and $(1.7) million for a higher prepayment speed.
Capital Adequacy Consistent with the goal to operate a sound and profitable financial organization, the Company and Bank actively seeks to maintain their status as well-capitalized in accordance with regulatory standards. As of December 31, 2024, the Company and the Bank exceeded all applicable regulatory capital requirements.
Capital Adequacy Consistent with the goal to operate a sound and profitable financial organization, the Company and Bank actively seeks to maintain their status as well-capitalized in accordance with regulatory standards. As of December 31, 2025, the Company and the Bank exceeded all applicable regulatory capital requirements.
At December 31, 2024, we had contractual obligations primarily relating to commitments to extend credits, deposits, secured and unsecured borrowings, and operating leases. We have adequate resources to fund all unfunded commitments to the extent required and meet all contractual obligations as they come due.
At December 31, 2025, we had contractual obligations primarily relating to commitments to extend credits, deposits, secured and unsecured borrowings, and operating leases. We have adequate resources to fund all unfunded commitments to the extent required and meet all contractual obligations as they come due.
Comparative Average Balances, Yields and Rates The following table presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the years ended December 31, 2024 and 2023.
Comparative Average Balances, Yields and Rates The following table presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the years ended December 31, 2025 and 2024.
We are unable to determine the extent, if any, to which properties securing our loans have appreciated in dollar value due to inflation. Critical Accounting Policies The Company’s accounting policies are more fully described in Note 1 - Description of Business and Summary of Significant Accounting Policies in the Consolidated Financial Statements.
We are unable to determine the extent, if any, to which properties securing our loans have appreciated in dollar value due to inflation. 32 Table of Contents Critical Accounting Policies The Company’s accounting policies are more fully described in Note 1 - Description of Business and Summary of Significant Accounting Policies in the Consolidated Financial Statements.
We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities. 21 Rate/Volume Analysis For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume ( i.e. , changes in volume multiplied by the previous rate) and (ii) changes in rate ( i.e. , changes in rate multiplied by old volume).
We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities. 25 Table of Contents Rate/Volume Analysis For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume ( i.e. , changes in volume multiplied by the previous rate) and (ii) changes in rate ( i.e. , changes in rate multiplied by old volume).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview We are a bank holding company and are headquartered in Washington Township, New Jersey. Through the Bank, we provide personal and business financial services to individuals and small to mid-sized businesses primarily in New Jersey, Pennsylvania, and New York.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. Overview We are a bank holding company and are headquartered in Washington Township, New Jersey. Through the Bank, we provide personal and business financial services to individuals and small to mid-sized businesses primarily in New Jersey, Pennsylvania, and New York.
At December 31, 2024, our cash position was $221.5 million. We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve. Our primary source of funding has been deposits. Funds from other operations, financing arrangements, investment securities available-for-sale also provide significant sources of funding.
At December 31, 2025, our cash position was $156.9 million. We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve. Our primary source of funding has been deposits. Funds from other operations, financing arrangements, investment securities available-for-sale also provide significant sources of funding.
In addition, during the fiscal year ended December 31, 2024 we returned $8.6 million of capital to our common shareholders through cash dividends, and we repurchased 200,000 common stock shares at a total cost of $4.3 million. Our business operations are subject to risks and uncertainties that could materially affect our operating results.
In addition, during the fiscal year ended December 31, 2025 we returned $8.4 million of capital to our common shareholders through cash dividends, and we repurchased 300,000 common stock shares at a total cost of $6.5 million. Our business operations are subject to risks and uncertainties that could materially affect our operating results.
Additionally, we have access to other brokered deposit funding sources that we utilize as a source of additional liquidity. In addition to IntraFi, we utilize Wells Fargo, Piper Sandler, and Stonecastle to obtain brokered deposits, and as of December 31, 2024, the Company had $202.2 million sourced from these broker relationships.
Additionally, we have access to other brokered deposit funding sources that we utilize as a source of additional liquidity. In addition to IntraFi, we utilize Piper Sandler, Wells Fargo, and Stonecastle to obtain brokered deposits, and as of December 31, 2025, the Company had $158.7 million sourced from these broker relationships.
(2) Average balances are net of unearned income and include nonperforming loans. Net interest income and the net interest margin in any one period can be significantly affected by a variety of factors including the mix and overall size of our earning assets portfolio and the cost of funding those assets.
(2) Average balances are net of unearned income and include nonperforming loans. (3) Includes restricted stock and related dividend income. Net interest income and the net interest margin in any one period can be significantly affected by a variety of factors including the mix and overall size of our earning assets portfolio and the cost of funding those assets.
The Bank joined the IntraFi network to secure an additional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. As of December 31, 2024, the Company has $13.5 million of brokered deposits from IntraFi.
The Bank joined the IntraFi network to secure an additional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. As of December 31, 2025, the Company has $56.6 million of brokered deposits from IntraFi.
At December 31, 2024 and December 31, 2023, unused commitments to extend credit amounted to approximately $122.5 million and $93.8 million, respectively. Commitments to fund fixed-rate loans were immaterial at December 31, 2024. Variable-rate commitments are generally issued for less than one year and carry market rates of interest.
At December 31, 2025 and December 31, 2024, unused commitments to extend credit amounted to approximately $158.3 million and $122.5 million, respectively. Commitments to fund fixed-rate loans were immaterial at December 31, 2025. Variable-rate commitments are generally issued for less than one year and carry market rates of interest.
The fee income for the year ended December 31, 2024 from the commercial deposit accounts of depositors who do business in the cannabis industry totaled $1.1 million and is included in service fees on deposit accounts in the accompanying consolidated statements of income. Such deposit fee income totaled $3.4 million during the year ended December 31, 2023.
The fee income for the year ended December 31, 2025 from the commercial deposit accounts of depositors who do business in the cannabis industry totaled $0.9 million and is included in service fees on deposit accounts in the accompanying consolidated statements of income. Such deposit fee income totaled $1.0 million during the year ended December 31, 2024.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2024 and December 31, 2023, standby letters of credit with customers were $0.6 million and $1.5 million, respectively.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2025 and December 31, 2024, standby letters of credit with customers were $0.6 million.
The increase in total shareholders' equity was primarily due to the retention of earnings from the period, partially offset by the recognition of $8.6 million of cash dividend, and repurchases of shares of the Company's common stock in the amount of $4.3 million during the year ended December 31, 2024. 25 Liquidity and Capital Resources Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis.
The increase in total shareholders' equity was primarily due to the retention of earnings from the period, partially offset by the recognition of $8.5 million of cash dividends, and repurchases of shares of the Company's common stock in the amount of $6.5 million during the year ended December 31, 2025. 29 Table of Contents Liquidity and Capital Resources Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis.
To lessen the impact of interest rate movements, management endeavors to structure the balance sheet so that repricing opportunities exist for both assets and liabilities in roughly equivalent amounts at approximately the same time intervals. Imbalances in these repricing opportunities at any point in time constitute interest rate sensitivity.
To lessen the impact of interest rate movements, management endeavors to structure the balance sheet so that repricing opportunities exist for both assets and liabilities in roughly equivalent amounts at approximately the same time intervals.
At December 31, 2024, the Company's investment securities portfolio classified as available for sale was $5.6 million. We had unused loan commitments of $122.5 million at December 31, 2024. Our loan commitments are normally originated with the full amount of collateral. Such commitments have historically been drawn at only a fraction of the total commitment.
At December 31, 2025, the Company's investment securities portfolio classified as available for sale was $4.7 million. We had unused loan commitments of $158.3 million at December 31, 2025. Our loan commitments are normally originated with the full amount of collateral. Such commitments have historically been drawn at only a fraction of the total commitment.
The extent of such impact will depend on future developments, which are highly uncertain. There continues to be various other risks and uncertainties that could impact the Company’s businesses and future results, such as changes to the U.S. economic condition, market interest rates, the Federal Reserve Board's monetary policy, other government policies, and actions of regulatory agencies.
The extent of such impact will depend on future developments, which are highly uncertain. There continues to be various other risks and uncertainties that could impact the Company’s businesses and future results, such as changes to the economic conditions in the United States, market interest rates, the Federal Reserve's monetary policy, other government policies, and actions of regulatory agencies.
The increase was mainly due to an increase in deposits and borrowings, partially offset by an increase in loans. Investment securities Total investment securities decreased to $14.8 million at December 31, 2024, from $16.4 million at December 31, 2023, a decrease of $1.6 million or 9.9%.
The decrease was mainly due to an increase in loans, and a decrease in borrowings, partially offset by an increase in deposits. Investment securities Total investment securities decreased to $13.5 million at December 31, 2025, from $14.8 million at December 31, 2024, a decrease of $1.2 million or 8.4%.
We recorded a provision for credit losses of $0.7 million and a recovery for credit losses of $2.1 million in 2024 and 2023, respectively. The provision (recovery) for credit losses as a percentage of interest income was 0.58% and 1.82% in 2024 and 2023, respectively.
We recorded a provision for credit losses of $2.5 million and $0.7 million in 2025 and 2024, respectively. The provision for credit losses as a percentage of interest income was 1.74% and 0.58% in 2025 and 2024, respectively.
The Company also generates income from loan and deposit fees and other non-interest related activities. The Company's non-interest expense primarily consists of employee compensation, administration, and other operating expenses. As of December 31, 2024, we had total assets of $2.14 billion, total liabilities of $1.84 billion, and total shareholders' equity of $300.1 million.
The Company also generates income from loan and deposit fees and other non-interest related activities. The Company's non-interest expense primarily consists of employee compensation, administration, and other operating expenses. 23 Table of Contents As of December 31, 2025, we had total assets of $2.25 billion, total liabilities of $1.92 billion, and total shareholders' equity of $324.5 million.
Net income available to common shareholders for 2024 was $27.5 million. In 2024, net income available to common shareholders decreased 3.3% over the previous year primarily due to a decrease in net interest income, an increase in the provision for credit losses, and a decrease in non-interest income, partially offset by a decrease in non-interest expense.
In 2025, net income available to common shareholders increased 37.3% over the previous year primarily due to an increase in net interest income, partially offset by an increase in the provision for credit losses, a decrease in non-interest income, and an increase in non-interest expense.
At December 31, 2024, total assets increased 5.9% and total equity increased 5.5%, compared to December 31, 2023. Our risk based tier 1 capital ratio was 21.2% at December 31, 2024.
At December 31, 2025, total assets increased 5.0% and total equity increased 8.1%, compared to December 31, 2024. Our risk based tier 1 capital ratio was 20.5% at December 31, 2025.
Interest income for 2024 increased to $125.1 million, an increase of $12.4 million, or 11.0%, from $112.7 million for 2023, primarily due to an increase in interest and fees on loans of $11.8 million, or 11.1%.
Interest income for 2025 increased to $142.7 million, an increase of $17.6 million, or 14.0%, from $125.1 million for 2024, primarily due to an increase in interest and fees on loans of $17.4 million, or 14.7%.
The decrease was primarily due to pay downs of $1.8 million, partially offset by a $0.1 million valuation increase. 24 Loans, net unearned income Loans receivable increased to $1.87 billion at December 31, 2024, from $1.79 billion at December 31, 2023.
The decrease was primarily due to pay downs of $1.7 million, partially offset by the purchase of a $0.5 million corporate security. Loans, net unearned income Loans receivable increased to $2.04 billion at December 31, 2025, from $1.87 billion at December 31, 2024.
At December 31, 2024, the Company had a $740.5 million line of credit from the FHLBNY, of which $145.0 million was outstanding, $50.0 million was a letter of credit to secure public deposits, and $545.5 million was unused. As of December 31, 2024, the Company had a borrowing capacity through the FRB discount window of $252.0 million.
At December 31, 2025, the Company had a $611.8 million line of credit from the FHLBNY, of which $130.0 million was outstanding, $75.0 million was a letter of credit to secure public deposits, and $406.8 million was unused. As of December 31, 2025, the Company had a borrowing capacity through the FRB discount window of $391.3 million.
Interest and fees on loans increased during the year ended December 31, 2024, due to higher average outstanding loan balances and higher market interest rates. Interest expense increased to $66.4 million for 2024, from $48.5 million for 2023, an increase of $17.9 million, or 36.9%.
Interest and fees on loans increased during the year ended December 31, 2025, due to higher average outstanding loan balances and higher market interest rates. Interest expense decreased to $66.2 million for 2025, from $66.4 million for 2024, a decrease of $0.2 million, or 0.3%.
Our provision for credit losses increased by $2.8 million in 2024 compared to 2023 primarily as a result of an increase in outstanding loan balances, partially offset by a decrease in loss rates. Additionally, the provision for unfunded commitments contributed to $369.0 thousand of the increase.
Our provision for credit losses increased by $1.8 million in 2025 compared to 2024 primarily as a result of an increase in outstanding loan balances, partially offset by a decrease in loss rates. Additionally, the provision for unfunded commitments decreased slightly at December 31, 2025, from the prior year.
Results of Operations Net Income We recorded net income available to common shareholders of $27.5 million or $2.30 per basic common share and $2.27 per diluted common share, for the year ended December 31, 2024, compared to $28.4 million, or $2.38 per basic common share and $2.35 per diluted common share, for the year ended December 31, 2023, a decrease of $0.9 million or 3.3%.
Results of Operations Net Income We recorded net income available to common shareholders of $37.8 million or $3.20 per basic common share and $3.16 per diluted common share, for the year ended December 31, 2025, compared to $27.5 million, or $2.30 per basic common share and $2.27 per diluted common share, for the year ended December 31, 2024, an increase of $10.3 million or 37.3%.
Non-Interest Expense The following table displays the components of non-interest expense for 2024 and 2023. 2024 2023 $ Change % Change ( Dollars in thousands) Compensation and benefits $ 12,768 $ 12,340 $ 428 3.5 % Professional services 2,730 2,328 402 17.3 % Occupancy and equipment 2,598 2,604 (6) (0.2) % Data processing 1,366 1,385 (19) (1.4) % FDIC insurance and other assessments 1,306 1,292 14 1.1 % OREO expense 835 839 (4) (0.5) % Other operating expense 4,381 14,479 (10,098) (69.7) % Total non-interest expense $ 25,984 $ 35,267 $ (9,283) (26.3) % Non-interest expense decreased $9.3 million to $26.0 million for the year ended December 31, 2024, from $35.3 million for 2023 primarily due to a decrease in other operating expense of $10.1 million, partially offset by an increase in compensation and benefits of $0.4 million, and an increase in professional services of $0.4 million.
Non-Interest Expense The following table displays the components of non-interest expense for the years ended December 31, 2025 and 2024. 2025 2024 $ Change % Change (Dollars in thousands) Compensation and benefits $ 13,314 $ 12,768 $ 546 4.3 % Professional services 3,428 2,730 698 25.6 % Occupancy and equipment 2,760 2,598 162 6.2 % Data processing 1,544 1,366 178 13.0 % FDIC insurance and other assessments 1,449 1,306 143 10.9 % OREO expense 649 835 (186 ) (22.3 )% Other operating expense 4,830 4,381 449 10.2 % Total non-interest expense $ 27,974 $ 25,984 $ 1,990 7.7 % Non-interest expense increased $2.0 million to $28.0 million for the year ended December 31, 2025, from $26.0 million for 2024 primarily due to an increase in professional services of $0.7 million, an increase in compensation and benefits expense of $0.5 million, and an increase in other operating expense of $0.5 million, partially offset by a decrease in OREO expense of $0.2 million.
The increase in borrowings was primarily due to an increase in FHLBNY advances of $20.0 million. Equity Total shareholders’ equity increased to $300.1 million at December 31, 2024, from $284.3 million at December 31, 2023, an increase of $15.8 million or 5.5%.
The decrease in borrowings was primarily due to the repayment of $30.0 million of subordinated debt, and a decrease in FHLB advances of $15.0 million. Equity Total shareholders’ equity increased to $324.5 million at December 31, 2025, from $300.1 million at December 31, 2024, an increase of $24.4 million or 8.1%.
Total equity was $300.1 million and $284.3 million at December 31, 2024 and December 31, 2023, respectively, an increase of $15.8 million from December 31, 2023.
Total equity was $324.5 million and $300.1 million at December 31, 2025 and December 31, 2024, respectively, an increase of $24.4 million from December 31, 2024.
Net Interest Income Net interest income decreased $5.5 million, or 8.6%, to $58.7 million for the year ended 2024 compared to $64.2 million for the year ended 2023. The decrease in net interest income was primarily due to an increase in interest expense of $17.9 million, partially offset by an increase in interest income of $12.4 million.
Net Interest Income Net interest income increased $17.8 million, or 30.2%, to $76.5 million for the year ended December 31, 2025 compared to $58.7 million for the year ended December 31, 2024. The increase in net interest income was primarily due to an increase in interest income of $17.6 million, and a decrease in interest expense of $0.2 million.
The effective income tax rates for 2024 and 2023 were 24.2% and 24.5%, respectively. Financial Condition General At December 31, 2024, the Company’s total assets were $2.14 billion, an increase of $118.7 million or 5.9%, from December 31, 2023. The increase in total assets was primarily attributable to an increase in cash and cash equivalents and total loans outstanding.
The effective income tax rates for 2025 and 2024 were 23.5% and 24.2%, respectively. Financial Condition General At December 31, 2025, the Company’s total assets were $2.25 billion, an increase of $107.2 million or 5.0%, from December 31, 2024.
The measurement of our interest rate sensitivity, or "gap," is one of the principal techniques used in asset/liability management.
Imbalances in these repricing opportunities at any point in time constitute interest rate sensitivity. 30 Table of Contents The measurement of our interest rate sensitivity, or "gap," is one of the principal techniques used in asset/liability management.
These critical estimates include significant use of our own historical data and other qualitative, and quantitative data. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Our allowance for credit losses is comprised of two components, a specific allowance and a general calculation.
These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Our allowance for credit losses is comprised of two components, a specific allowance and a general calculation. A specific allowance is calculated for loans and leases that do not share similar risk characteristics with other financial assets, and include collateral dependent loans.
The increase in deposits was primarily attributed to an increase in time deposits of $108.1 million, and money market deposits of $48.4 million, partially offset by a decrease in non-interest bearing demand deposits of $48.2 million, and savings deposits of $27.6 million.
The increase in deposits was primarily attributed to an increase in money market deposits of $130.5 million, interest checking deposits of $49.4 million, and non-interest checking of $12.5 million, partially offset by a decrease in brokered time deposits of $41.9 million, time deposits of $11.4 million, and savings deposits of $11.4 million.
Interest sensitive gap is the dollar difference between assets and liabilities that are subject to interest-rate pricing within a given time period, including both floating rate or adjustable rate instruments and instruments that are approaching maturity. 26 Our management and the Board of Directors oversee the asset/liability management function through the asset/liability committee of the Board that meets periodically to monitor and manage the balance sheet, control interest rate exposure, and evaluate our pricing strategies.
Interest sensitive gap is the dollar difference between assets and liabilities that are subject to interest-rate pricing within a given time period, including both floating rate or adjustable rate instruments and instruments that are approaching maturity.
The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments. 28 Allowance for Credit Losses : Our allowances for credit losses represents management's best estimate of probable losses inherent in our investment and loan portfolios, excluding those loans accounted for under fair value.
The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments.
While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB"). During 2024, the Company reallocated a portion of its eligible collateral from the FHLBNY to the FRB discount window in order to diversify its borrowing capabilities.
While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB").
The increase was primarily due to an increase in residential multi-family loans of $71.4 million, and commercial owner-occupied loans of $18.7 million, partially offset by a decrease in construction loans of $8.2 million. Allowance for credit losses Allowance for credit losses increased $0.4 million, to $32.6 million, or 1.38%, at December 31, 2024, from $32.1 million at December 31, 2023.
Allowance for credit losses Allowance for credit losses increased $2.1 million, to $34.6 million, or 6.4%, at December 31, 2025, from $32.6 million at December 31, 2024. The increase was primarily due to an increase in the portfolio balance, and an increase in specific reserves for individually evaluated loans, partially offset by a decrease in historical loss rates.
Total liabilities were $1.84 billion at December 31, 2024. This represented a $103.0 million, or 5.9%, increase from $1.74 billion at December 31, 2023. The increase in total liabilities was primarily due to an increase in deposits. Total deposits increased $78.2 million, or 5.0%, to $1.63 billion at December 31, 2024, from $1.55 billion at December 31, 2023.
This represented a $82.8 million, or 4.5%, increase from $1.84 billion at December 31, 2024. The increase in total liabilities was primarily due to an increase in deposits, partially offset by a decrease in borrowings. Total deposits increased $127.6 million, or 7.8%, to $1.76 billion at December 31, 2025, from $1.63 billion at December 31, 2024.
Refer to Note 1 in the Notes to the Consolidated Financial Statements for further information. Our determination of the allowance for credit losses is based on periodic evaluations of the loan and lease portfolios and other relevant factors, broken down into vintage based on year of origination.
Our determination of the allowance for credit losses is based on periodic evaluations of the loan and lease portfolios and other relevant factors, broken down into vintage based on year of origination. These critical estimates include significant use of our own historical data and other qualitative, and quantitative data.
Loans and Allowance for Credit Losses in the Notes to the Consolidated Financial Statements. 22 Non-interest Income The table below shows the components of non-interest income for the years ended December 31, 2024 and 2023. 2024 2023 $ Change % Change ( Dollars in thousands) Service fees on deposit accounts $ 1,387 $ 3,872 $ (2,485) (64.2) % Other Loan fees 849 851 (2) (0.2) % Bank owned life insurance income 655 737 (82) (11.1) % Gain on sale of SBA loans 23 — 23 100.0 % Gain on sale and valuation adjustments of OREO — 38 (38) (100.0) % Other 1,387 1,194 193 16.2 % Total non-interest income $ 4,301 $ 6,692 $ (2,391) (35.7) % Non-interest income decreased by $2.4 million to $4.3 million during the year ended December 31, 2024 compared to 2023, primarily due to a decrease in fee income related to cannabis related business deposit fees and other loan fees.
Loans and Allowance for Credit Losses in the Notes to the Consolidated Financial Statements. 26 Table of Contents Non-interest Income The table below shows the components of non-interest income for the years ended December 31, 2025 and 2024. 2025 2024 $ Change % Change (Dollars in thousands) Service fees on deposit accounts $ 1,232 $ 1,387 $ (155 ) (11.2 )% Other Loan fees 676 849 (173 ) (20.4 )% Bank owned life insurance income 740 655 85 13.0 % Other 759 1,410 (651 ) (46.2 )% Total non-interest income $ 3,407 $ 4,301 $ (894 ) (20.8 )% Non-interest income decreased by $0.9 million to $3.4 million during the year ended December 31, 2025 compared to 2024, primarily due to a decrease in other income as a result of a decrease in one-time insurance payments and settlements received in 2024.
The increase in compensation and benefits during the year ended December 31, 2024, was primarily due to a $0.4 million increase in salaries, and a $0.2 million decrease in deferred loan origination costs attributable to a reduction in the number of loans originated, partially offset by a $0.2 million decrease in SERP expense.
The increase in compensation and benefits expense was primarily due to an increase in salaries of $0.4 million, and a $0.1 million decrease in deferred loan origination costs attributable to a reduction in the number of loans originated. 27 Table of Contents Income Tax Income tax expense increased $2.8 million to $11.6 million on income before taxes of $49.4 million for 2025, compared to income tax expense of $8.8 million on income before taxes of $36.3 million for 2024.
Deposits from the cannabis industries increased to $151.9 million at December 31, 2024, from $96.7 million at December 31, 2023. Total borrowings were $188.3 million at December 31, 2024, an increase of $20.2 million, compared to December 31, 2023, primarily due to an increase in FHLB advances of $20.0 million.
Deposits from the cannabis industries decreased to $61.9 million at December 31, 2025, from $151.9 million at December 31, 2024. Total borrowings were $143.4 million at December 31, 2025, a decrease of $44.9 million, compared to December 31, 2024, primarily due to the repayment of $30.0 million of subordinated debt, and a decrease in FHLB advances of $15.0 million.
The following table presents certain key condensed balance sheet data as of December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 $ Change % Change ( Dollars in thousands) Cash and cash equivalents $ 221,527 $ 180,376 $ 41,151 22.8 % Investment securities 14,760 16,387 (1,627) (9.9) % Loans, net of unearned income 1,868,153 1,787,340 80,813 4.5 % Allowance for credit losses (32,573) (31,845) (728) 2.3 % Total assets 2,142,236 2,023,500 118,736 5.9 % Total deposits 1,631,050 1,552,827 78,223 5.0 % FHLBNY borrowings 145,000 125,000 20,000 16.0 % Subordinated debt 43,300 43,111 189 0.4 % Total liabilities 1,842,163 1,739,183 102,980 5.9 % Total equity 300,073 284,317 15,756 5.5 % Total liabilities and equity 2,142,236 2,023,500 118,736 5.9 % Cash and cash equivalents Cash and cash equivalents increased $41.2 million to $221.5 million at December 31, 2024, from $180.4 million at December 31, 2023, an increase of 22.8%.
The following table presents certain key condensed balance sheet data as of December 31, 2025 and December 31, 2024: December 31, December 31, 2025 2024 $ Change % Change (Dollars in thousands) Cash and cash equivalents $ 156,863 $ 221,527 $ (64,664 ) (29.2 )% Investment securities 13,523 14,760 (1,237 ) (8.4 )% Loans, net of unearned income 2,035,227 1,868,153 167,074 8.9 % Allowance for credit losses (34,649 ) (32,573 ) (2,076 ) 6.4 % Total assets 2,249,436 2,142,236 107,200 5.0 % Total deposits 1,758,669 1,631,050 127,619 7.8 % FHLBNY borrowings 130,000 145,000 (15,000 ) (10.3 )% Subordinated debt 13,403 43,300 (29,897 ) (69.0 )% Total liabilities 1,924,918 1,842,163 82,755 4.5 % Total equity 324,518 300,073 24,445 8.1 % Total liabilities and equity 2,249,436 2,142,236 107,200 5.0 % 28 Table of Contents Cash and cash equivalents Cash and cash equivalents decreased $64.7 million to $156.9 million at December 31, 2025, from $221.5 million at December 31, 2024, a decrease of 29.2%.
The increase in interest expense was primarily due to an increase in market interest rates on deposit accounts at the Bank, as well as a change in the deposit mix. In addition, a decrease in non-interest bearing demand balances and an increase in interest-bearing deposit balances contributed to the increase in interest expense during the 2024 fiscal year..
The decrease in interest expense was primarily due to a decrease interest on borrowings, a decrease in borrowing levels and a decrease in market interest rates. The decrease was partially offset by an increase in interest expense on deposits during the year ended December 31, 2025, due to a change in the deposit mix.
Years ended December 31, 2024 vs 2023 Variance due to change in Average Volume Average Rate Net Increase/ (Decrease) ( Dollars in thousands) Interest Income: Loans (net of deferred costs/fees) $ 1,719 $ 10,054 $ 11,773 Investment securities (62) 56 (6) Deposits with banks 446 196 642 Total interest income 2,103 10,306 12,409 Interest Expense: NOWs (365) (394) (759) Money markets 7,635 3,056 10,691 Savings (712) (24) (736) Time deposits (1,695) 5,562 3,867 Brokered CDs 2,421 568 2,989 Borrowed funds (185) 2,048 1,863 Total interest expense 7,099 10,816 17,915 Net interest income $ (4,996) $ (510) $ (5,506) Provision for credit losses Our provision for credit losses in each period is driven by net charge-offs and changes to the allowance for credit losses.
Years ended December 31, 2025 vs 2024 Variance due to change in Net Average Average Increase/ Volume Rate (Decrease) (Dollars in thousands) Interest Income: Loans (net of deferred costs/fees) $ 7,374 $ 9,981 $ 17,355 Investment securities (117 ) (4 ) (121 ) Deposits with banks 1,539 (1,209 ) 330 Total interest income 8,796 8,768 17,564 Interest Expense: NOWs (37 ) (35 ) (72 ) Money markets 9,072 (3,913 ) 5,159 Savings (180 ) (33 ) (213 ) Time deposits 2,060 (375 ) 1,685 Brokered CDs (2,827 ) (1,195 ) (4,022 ) Borrowed funds (2,107 ) (616 ) (2,723 ) Total interest expense 5,981 (6,167 ) (186 ) Net interest income $ 2,815 $ 14,935 $ 17,750 Provision for credit losses Our provision for credit losses in each period is driven by net charge-offs and changes to the allowance for credit losses.
The increase was primarily due to an increase in the portfolio balance, partially offset by a decrease in historical loss rates. Deposits At December 31, 2024, the Bank’s total deposits increased to $1.63 billion from $1.55 billion at December 31, 2023, an increase of $78.2 million, or 5.0%.
BOLI increased $6.3 million at December 31, 2025, primarily due to the purchase of additional insurance policies. The increase in assets was partially offset by a decrease in cash and cash equivalents of $64.7 million, or 29.2%, from December 31, 2024. Total liabilities were $1.92 billion at December 31, 2025.
Cash and cash equivalents increased $41.2 million, to $221.5 million at December 31, 2024. Total loans outstanding increased $80.8 million at December 31, 2024, primarily due to an increase in residential multi-family loans of $71.4 million, and commercial owner-occupied loans of $18.7 million, partially offset by a decrease in construction loans of $8.2 million.
Gross loans increased $167.1 million, to $2.04 billion at December 31, 2025 primarily due to an increase in the CRE non-owner occupied loan portfolio of $107.0 million, an increase in the construction portfolio loan balance of $63.0 million, and an increase in the CRE owner occupied loan portfolio balance of $22.1 million, partially offset by a decrease in the residential 1 - 4 family investment portfolio balance of $29.9 million.
A specific allowance is calculated for loans and leases that do not share similar risk characteristics with other financial assets, and include collateral dependent loans. A loan is considered to be collateral dependent when foreclosure of the underlying collateral is probable.
A loan is considered to be collateral dependent when foreclosure of the underlying collateral is probable.
Deposits from the cannabis businesses increased to $151.9 million at December 31, 2024, from $96.7 million at December 31, 2023, an increase of $55.2 million. Borrowings At December 31, 2024, total borrowings increased $20.2 million to $188.3 million at December 31, 2024, from $168.1 million at December 31, 2023.
Deposits At December 31, 2025, the Bank’s total deposits increased to $1.76 billion from $1.63 billion at December 31, 2024, an increase of $127.6 million, or 7.8%.
Removed
The decrease in other operating expense was primarily driven from the recognition of a one-time contingent loss during 2023 of $9.5 million.
Added
Net income available to common shareholders for the year ended December 31, 2025 was $37.8 million.
Removed
The increase in professional fees of $0.4 million was primarily due to a $0.7 million increase in consulting fees attributed to our Bank Secrecy Act compliance, partially offset by a decrease of $0.3 million decrease in legal expense. 23 Income Tax Income tax expense decreased $0.4 million to $8.8 million on income before taxes of $36.3 million for 2024, compared to income tax expense of $9.2 million on income before taxes of $37.7 million for 2023.
Added
Please refer to "Forward-Looking Statements" above for further information about risks and uncertainties that could affect our operating results.
Removed
As of December 31, 2024 3 Months or Less Over 3 Months Through 12 Months Over 1 Year Through 3 Years Over 3 Years Through 5 Years Over 5 Years Total (Dollars in thousands) Interest-earning assets: Loans (1) $ 283,271 $ 446,949 $ 785,851 $ 212,231 $ 49,112 $ 1,777,414 Investment securities 8,127 1,442 3,676 4,049 7,272 24,566 Cash and cash equivalents 167,659 — — — — 167,659 Total interest-earning assets $ 459,057 $ 448,391 $ 789,527 $ 216,280 $ 56,384 $ 1,969,639 Interest-bearing liabilities: NOW, Saving and Money market deposits $ 33,543 $ 100,627 $ 345,578 $ 203,450 $ 30,370 $ 713,568 Retail time deposits 153,882 257,720 35,947 2,937 — 450,486 Brokered time deposits 106,692 49,150 742 — — 156,584 Borrowed funds 43,403 — 95,000 — 30,000 168,403 Total interest-bearing liabilities $ 337,520 $ 407,497 $ 477,267 $ 206,387 $ 60,370 $ 1,489,041 Interest rate sensitive gap $ 121,537 $ 40,894 $ 312,260 $ 9,893 $ (3,986) $ 480,598 Cumulative interest rate gap $ 121,537 $ 162,431 $ 474,691 $ 484,584 $ 480,598 $ — Ratio of rate-sensitive assets to rate-sensitive liabilities 136.0 % 110.0 % 165.4 % 104.8 % 93.4 % 132.3 % Cumulative interest sensitivity gap to total assets 5.7 % 7.6 % 22.2 % 22.6 % 22.4 % — (1) Loan balances exclude non-accruing loans, deferred fees and costs, and loan discounts.
Added
The increase in professional services during the year ended December 31, 2025, was primarily due to a $0.6 million increase in legal fees.
Removed
Off-Balance Sheet Arrangements and Contractual Obligations In the ordinary course of business, we engage in financial transactions that are not recorded on the balance sheet, or may be recorded on the balance sheet in amounts that are different from the full contract or notional amount of the transaction.
Added
The increase in total assets was primarily attributable to an increase in gross loans outstanding, and an increase in banked owned life insurance ("BOLI"), partially offset by a decrease in cash and cash equivalents.
Removed
Quantitative and Qualitative Disclosures About Market Risk. Not applicable
Added
The increase was primarily due to an increase in the CRE non-owner occupied loan portfolio of $107.0 million, an increase in the construction portfolio loan balance of $63.0 million, and an increase in the CRE owner occupied loan portfolio balance of $22.1 million, partially offset by a decrease in the residential 1 - 4 family investment portfolio balance of $29.9 million.
Added
Brokered interest checking deposits, included in the above balances, increased $45.0 million at December 31, 2025, from zero at December 31, 2024. Borrowings At December 31, 2025, total borrowings decreased $44.9 million to $143.4 million, from $188.3 million at December 31, 2024.
Added
Our management and the Board of Directors oversee the asset/liability management function through the asset/liability committee of the Board that meets periodically to monitor and manage the balance sheet, control interest rate exposure, and evaluate our pricing strategies.
Added
As of December 31, 2025 3 Months Over 3 Months Over 1 Year Over 3 Years or Less Through 12 Months Through 3 Years Through 5 Years Over 5 Years Total (Dollars in thousands) Interest-earning assets: Loans (1) $ 185,672 $ 643,865 $ 759,404 $ 204,235 $ 231,287 $ 2,024,463 Investment securities 8,243 1,284 4,510 2,085 5,486 21,608 Cash and cash equivalents 149,125 — — — — 149,125 Total interest-earning assets $ 343,040 $ 645,149 $ 763,914 $ 206,320 $ 236,773 $ 2,195,196 Interest-bearing liabilities: NOW, Saving and Money market deposits $ 62,276 $ 126,829 $ 337,626 $ 257,872 $ 115,728 $ 900,331 Retail time deposits 179,095 288,064 12,748 5,785 — 485,692 Brokered time deposits 118,425 57,716 — — — 176,141 Borrowed funds 123,403 20,000 — — — 143,403 Total interest-bearing liabilities $ 483,199 $ 492,609 $ 350,374 $ 263,657 $ 115,728 $ 1,705,567 Interest rate sensitive gap $ (140,159 ) $ 152,540 $ 413,540 $ (57,337 ) $ 121,045 $ 489,629 Cumulative interest rate gap $ (140,159 ) $ 12,381 $ 425,921 $ 368,584 $ 489,629 $ — Ratio of rate-sensitive assets to rate-sensitive liabilities 71.0 % 131.0 % 218.0 % 78.3 % 204.6 % 128.7 % Cumulative interest sensitivity gap to total assets (6.2 )% 0.6 % 18.9 % 16.4 % 21.8 % — (1) Loan balances exclude non-accruing loans, deferred fees and costs, and loan discounts. 31 Table of Contents Off-Balance Sheet Arrangements and Contractual Obligations In the ordinary course of business, we engage in financial transactions that are not recorded on the balance sheet, or may be recorded on the balance sheet in amounts that are different from the full contract or notional amount of the transaction.
Added
Allowance for Credit Losses : Our allowances for credit losses represents management's best estimate of probable losses inherent in our investment and loan portfolios, excluding those loans accounted for under fair value. Refer to Note 1 in the Notes to the Consolidated Financial Statements for further information.

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