Princeton Bancorp, Inc.: Form 10-Q for the period ended Sep 30, 2025

You should read the following discussion and analysis in conjunction with the unaudited consolidated interim financial statements contained in Part I, Item 1 of this report, and with our audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in our Form 10-K as of and for the year ended December 31, 2024.

Cautionary Statement Regarding Forward-Looking Statements

The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission, in its reports to stockholders and in other communications by the Company (including this press release), which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing federal budget stalemate in Congress, the ongoing impact of higher tariffs imposed by the Trump administration, higher inflation levels, and general economic and recessionary concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the global impact of the military conflicts in the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Bank’s Annual Report on Form 10-K for the year ended December 31, 2024, and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as required by applicable law or regulation.

Throughout this document, references to “we,” “us,” or “our” refer to the Company and the Bank.

Executive Overview

The Company is the holding company for The Bank of Princeton (the “Bank”), a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation (“FDIC”).

The Company’s common stock trades on the “Nasdaq Global Select Market” under ticker symbol, “BPRN.”

Critical Accounting Policies and Estimates

The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the consolidated financial statements included in the 2024 Annual Report on Form 10-K. There have been no changes to the Critical Accounting Estimates since the Company filed its Annual Report on Form 10-K for the year ended December 31, 2024.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements included in the 2024 Annual Report on Form 10-K and Note 1- Summary of Significant Accounting Policies in this document.

Economy

The 3rd quarter kicked off with a bang with the passage of the One Big Beautiful Bill Act, signed into law on July 4. The legislation made permanent many of the 2017 TCJA tax cuts, increased and inflation-adjusted the child tax credit, raised the SALT cap to $40k, and added a number of temporary tax cuts. It also ended a number of clean energy subsidies and credits, added work and residency requirements for Medicaid and SNAP programs, and increased border security funding. The net effect of the package is projected to boost economic growth fractionally in 2026, but investment incentives and tax certainty could eventually yield a larger impact.

Comparison of Financial Condition at September 30, 2025 and December 31, 2024

General

Total assets were $2.23 billion at September 30, 2025, a decrease of $111.1 million , or 4.75% when compared to $2.34 billion at the end of 2024. The primary reasons for the decrease in total assets were related to decreases in cash and cash equivalents of $44.5 million, investment securities of $37.2 million, and net loans of $25.1 million.

Cash and cash equivalents

Cash and cash equivalents decreased $44.5 million, or 37.9%, to $72.9 million at September 30, 2025 compared to December 31, 2024.

Investment securities

Total available-for-sale investment securities decreased $37.2 million, or 15.1%, to $209.9 million at September 30, 2025 compared to December 31, 2024. This decrease was related to the payoffs of mortgage-backed securities of U.S. government sponsored enterprises and U.S government agency securities during the nine months ended September 30, 2025.

Loans

Loans, net of deferred loan fees and costs, decreased $25.1 million, or 1.38%, to $1.79 billion at September 30, 2025 compared to December 31, 2024. The decrease in the Company’s net loans consisted of decreases of $54.2 million in construction loans, $32.0 million in commercial real estate loans, and $11.5 million in commercial and industrial loans, partially offset by increases of $67.9 million in residential mortgages, and $4.7 million in home equity and consumer loans.

The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and non-owner-occupied CRE loans, was $1.35 billion or 75.3% of total loans of $1.79 billion at September 30, 2025. There were 748 loans in the Company’s CRE portfolio with an average and median loan size of $1.8 million and $0.6 million, respectively. Loan to Value (“LTV”) estimates are less than 70% for $1.25 billion or 92.7% of the CRE portfolio and less than 80% for $1.34 billion or 99.6% of the CRE portfolio.

The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value for the periods presented (dollars in thousands):

The following table presents the geographic markets of the commercial real estate portfolio for the periods presented (dollars in thousands):

For the three and nine months ended September 30, 2025, charge-offs were $0 and $10.0 million, and recoveries were $86 thousand and $302 thousand, respectively. For the three-month and nine-month periods ended September 30, 2024, charge-offs were $278 thousand and $645 thousand, and recoveries were $172 thousand and $378 thousand, respectively. The coverage ratio of the allowance for credit losses to period end loans was 1.14% at September 30, 2025 and 1.30% at December 31, 2024.

At September 30, 2025, non-performing assets totaled $16.7 million, a decrease of $10.1 million when compared to the amount at December 31, 2024. Non-performing assets as a percentage of total loans, net of deferred fees and costs, was 0.93% at September 30, 2025 and 1.47% at December 31, 2024.

Deposits

Total deposits on September 30, 2025, decreased $104.0 million, or 5.12%, when compared to December 31, 2024. The decrease in the Company’s deposits consisted primarily of decreases in certificates of deposit of $62.8 million, money market deposits of $25.3 million, non-interest-bearing demand deposits of $6.6 million, interest-bearing demand deposits of $6.3 million, and savings deposits of $2.9 million. On balance sheet liquidity remains strong at September 30, 2025.

At September 30, 2025, the Company had approximately $585.2 million in uninsured deposits, consisting of $91.6 million in non-interest-bearing demand deposits, $197.3 million in interest-bearing demand deposits, $156.1 million in money market accounts, $26.1 million in savings deposits and $114.1 million in certificates of deposits.

Borrowings

The Company had no outstanding borrowings at September 30, 2025 and December 31, 2024.

Stockholders’ equity

Total stockholders’ equity at September 30, 2025, increased $4.6 million or 1.74% when compared to December 31, 2024. The increase was primarily due to an increase in retained earnings of $6.2 million (which consisted of $12.5 million in net income, partially offset by $6.3 million of cash dividends recorded during the period), an increase in paid-in capital of $2.7 million primarily due to the exercise of stock options, and a decrease in accumulated other comprehensive loss of $3.3 million, partially offset by a $7.6 million increase in treasury stock due to our stock repurchase program. The ratio of equity to total assets at September 30, 2025, and at December 31, 2024, was 12.0% and 11.2%, respectively.

Liquidity

Our liquidity, represented by cash and cash equivalents, is a product of our operating, investing and financing activities. Our primary sources of funds are deposits, principal repayments of securities and outstanding loans, and funds provided from operations. In addition, we invest excess funds in short-term interest-earnings assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.

As a member of the FHLB we are eligible to borrow funds in an aggregate amount of up to 50% of the Company’s total assets, subject to its collateral requirements. The Company maintained a $60.0 million letter of credit with the FHLB supporting municipal deposits as of September 30, 2025. Based on available eligible securities and qualified real estate loan collateral, the Company had the ability to borrow an additional $542.0 million as of September 30, 2025.

As of September 30, 2025, the Bank was eligible to use the Federal Reserve discount window for borrowings, based on assets pledged as collateral as of the applicable date. As of September 30, 2025, the Company had no outstanding advances from the discount window.

The Company is also a shareholder of Atlantic Community Bancshares, Inc., the parent company of Atlantic Community Bankers Bank (“ACBB”). As of September 30, 2025, the Company had available borrowing capacity with ACBB of $10.0 million to provide short-term liquidity generally for a period of not more than fourteen days. No amounts were outstanding under our line of credit with ACBB at September 30, 2025.

We believe that our current sources of funds provide adequate liquidity for our current cash flow needs.

Capital Resources

Regulatory Capital Requirements. Because the Company qualifies as a “small bank holding company” under the Federal Reserve’s Small Bank Holding Company Policy Statement, it is exempt from the Federal Reserve’s risk-based capital and leverage rules. With respect to the Bank, Federally insured, state-chartered non-member banks such as the Bank are required to maintain minimum levels of regulatory capital. Current FDIC capital standards require these institutions to satisfy a common equity Tier 1 capital requirement and a Tier 1 capital requirement, a leverage capital requirement and a risk-based capital requirement.

In addition, in order to make capital distributions and pay discretionary bonuses to executive officers without restriction, an institution must also maintain additional common equity in excess of the minimum requirements. This excess is referred to as a capital conservation buffer. At September 30, 2025, the required capital conservation buffer is 2.50%.

Under the risk-based capital requirements, “total” capital (a combination of core and “supplementary” capital) must equal at least 8.0% of “risk-weighted” assets. The FDIC also is authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis. Management believes, as of September 30, 2025, that the Bank meets all capital adequacy requirements to which it is subject and is “well capitalized” under applicable regulations.

The Bank’s actual capital amounts and ratios and the regulatory requirements at September 30, 2025 and December 31, 2024 are presented below:

(Dollars in thousands)

30

Comparison of Operating Results for the three months ended September 30, 2025 and 2024

General

The Company reported net income of $6.5 million, or $0.95 per diluted common share, for the third quarter of 2025, compared to a net loss of ($4.5) million, or ($0.68) per diluted common share, for the third quarter of 2024. The increase in net income for the third quarter of 2025 when compared to the third quarter of 2024 was primarily due to $7.8 million in Cornerstone Bank merger-related expenses recorded in the third quarter of 2024 and an increase of $2.5 million in net-interest income, and a decrease in the provision for credit losses of $5.3 million, partially offset by an increase in other non-interest expenses of $1.6 million, and an increase of $2.9 million in income tax expense.

Interest income

Interest income increased $935 thousand for the three months ended September 30, 2025, compared to the same period in 2024. Interest income on loans increased $1.8 million due to an increase in the average balance of loans of $125.9 million, partially offset by a decrease of 9 basis points on the yield on loans. Other interest and dividend income decreased $1.8 million due to a decrease in average balances of $126.7 million and a decrease in the yield of 86 basis points. Interest on taxable available-for-sale securities increased $941 thousand due to a 39 basis point increase in yield and a $67.3 million increase in the average balance of taxable available-for-sale securities.

Interest expense

Interest expense decreased $1.6 million to $13.1 million for the three months ended September 30, 2025, compared to the same period in 2024. Interest expense decreased primarily due to a decrease of 53 basis points in the rate paid on interest-bearing deposits over the same prior year period, partially offset by an increase in the average balance of interest-bearing deposits of $53.3 million.

Provision for credit losses

The Company recorded a reversal of credit losses of $672 thousand during the third quarter of 2025, which consisted of a $658 thousand decrease recorded to the allowance of credit losses due to updated peer loss rate data, and a decrease to the provision for credit losses of $14 thousand related to unfunded commitments, which are recorded in other liabilities on the Company’s statements of financial condition. There were no charge-offs recorded, and recoveries were $86 thousand, for the three months ended September 30, 2025.

Non-interest income

Total non-interest income was $1.9 million for the three months ended September 30, 2025, a decrease of $148 thousand or 7.2% when compared to the same prior year period. The decrease over the prior year’s third quarter was primarily due to a decrease in other non-interest income of $414 thousand, partially offset by an increase in loan fees of $142 thousand and an increase in income from bank owned life insurance of $83 thousand. The decrease in other non-interest income for the third quarter was related to a net loss on an equity investment in the amount of $471 thousand.

Non-interest expense

Total non-interest expense was $13.9 million for the three months ended September 30, 2025, a decrease of $6.2 million or 30.9% when compared to the same prior year period. This decrease was primarily related to Cornerstone Bank merger-related expenses of $7.8 million recorded in the third quarter of 2024, partially offset by increases in salaries and employee benefits expense of $537 thousand, professional fees of $413 thousand, data processing and communications expense of $252 thousand, and other non-interest expenses of $241 thousand.

Provision for income taxes

For the three months ended September 30, 2025, the Company recorded an income tax expense of $1.8 million, resulting in an effective tax rate of 21.9%, compared to an income tax benefit of ($1.1) million resulting in an effective tax rate of (20.1) % for the three months ended September 30, 2024.

Average Balances, Net Interest Income, and Yields Earned and Rates Paid

The following table shows for the three-month period indicated the total dollar amount of interest earned from average interest earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates. Average loan receivables balances include non-accrual loans. Average yields have been annualized. Tax-exempt incomes and yields have not been adjusted to a tax-equivalent basis.

(Dollars in thousands)

32

Rate/Volume Analysis

The following table reflects the changes in our interest income and interest expense segregated into amounts attributable to changes in volume and in yields on interest-earning assets and interest-bearing liabilities during the periods indicated.

(In thousands)

33

Comparison of Operating Results for the nine months ended September 30, 2025 and 2024

General

The Company reported net income of $12.5 million, or $1.82 per diluted common share, for the nine months ended September 30, 2025, compared to net income of $5.0 million, or $0.77 per diluted common share, for the same period in 2024. The increase in net income for the nine months ended September 30, 2025, compared to the same period in 2024, was primarily due to $7.8 million in Cornerstone Bank merger-related expenses recorded in the third quarter of 2024, and an increase of $8.7 million in net-interest income, partially offset by an increase in other non-interest expenses of $5.0 million, an increase of $2.3 million in income tax expense, and an increase in the provision for credit losses of $1.9 million..

Interest income

Interest income increased $9.5 million for the nine months ended September 30, 2025, compared to the same period in 2024. Interest income on loans increased $10.1 million due to an increase in the average balance of loans of $228.3 million partially as a result of the Cornerstone Bank acquisition, partially offset by a decrease in the yield of 7 basis points. Other interest and dividend income decreased $4.8 million due to a decrease in average balances of $109.5 million and a decrease in the yield of 93 basis points. Interest on taxable available-for-sale securities increased $4.3 million due to a 57 basis point increase in yield and a $105.9 million increase in the average balance of taxable available-for-sale securities, partially as a result of the Cornerstone Bank acquisition.

Interest expense

Interest expense on deposits increased $849 thousand to $41.6 million for the nine months ended September 30, 2025, due to an increase in the average balance of interest-bearing deposits of $190.7 million, partially as a result of the Cornerstone Bank acquisition, partially offset by a decrease on the rate paid on interest-bearing deposits of 34 basis points over the same prior year period.

Provision for credit losses

The Company recorded a $6.6 million provision for credit losses for the nine months ended September 30, 2025 and recorded $4.7 million provision for credit losses for the nine months ended September 30, 2024. The increase for the nine months ended September 30, 2025, compared with the same prior year period, is primarily due to a net charge-off of $7.5 million recorded in the second quarter of 2025, partially offset by a decrease in net loans of $25.1 million since December 31, 2024. $3.2 million of the $4.7 million provision for credit losses for the nine months ended September 30, 2024 was due to a $3.2 million provision for credit loss for the purchased non-credit deteriorated loans recorded in 2024 related to the Cornerstone Bank acquisition. For the nine months ended September 30, 2025, charge-offs were $10.0 million and recoveries were $301 thousand.

Non-interest income

For the nine months ended September 30, 2025, non-interest income increased $221 thousand or 3.6%, from the same nine-month period in 2024.

Non-interest expense

For the nine months ended September 30, 2025, non-interest expense was $41.2 million, compared to $44.0 million for the same period in 2024. This decrease was primarily due to Cornerstone merger-related expenses of $7.8 million recorded in 2024, partially offset by increases in salaries and employee benefits of $1.8 million, data processing and communications expense of $857 thousand, professional fees of $769 thousand, occupancy and equipment expense of $612 thousand and federal deposit insurance assessments of $450 thousand.

Provision for income taxes

For the nine months ended September 30, 2025, the Bank recorded an income tax expense of $3.3 million, resulting in an effective tax rate of 20.5%, compared to an income tax expense of $1.0 million resulting in an effective tax rate of 16.3% for the nine months ended September 30, 2024.

Average Balances, Net Interest Income, and Yields Earned and Rates Paid

The following table shows for the nine-month period indicated the total dollar amount of interest earned from average interest earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates. Average loan receivables balances include non-accrual loans. Average yields have been annualized. Tax-exempt incomes and yields have not been adjusted to a tax-equivalent basis.

(Dollars in thousands)

35

Rate/Volume Analysis

The following table reflects the changes in our interest income and interest expense segregated into amounts attributable to changes in volume and in yields on interest-earning assets and interest-bearing liabilities during the periods indicated.

(In thousands)

How We Manage Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk which is inherent in our lending, investment and deposit gathering activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.

The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with approved guidelines. We seek to manage our exposure to risks from changes in interest rates while at the same time trying to improve our net interest spread. We monitor interest rate risk as such risk relates to our operating strategies. We have established an Asset/Liability Committee which is comprised of both Management and members of the Board of Directors. The Asset/Liability Committee meets on a regular basis and is responsible for reviewing our asset/liability policies and interest rate risk position. Both the extent and direction of shifts in interest rates are uncertainties that could have a negative impact on future earnings.

Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring the Company’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to affect adversely net interest income.

The table below sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at September 30, 2025, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the “GAP Table”). Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at September 30, 2025, based on contractual maturities, anticipated prepayments, and scheduled rate adjustments within a three-month period and subsequent selected time intervals. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and anticipated prepayments of adjustable-rate loans and fixed-rate loans, and as a result of contractual rate adjustments on adjustable-rate loans.

(In thousands)

(1) Interest-earnings assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities.

(2) Includes interest-bearing bank balances, FHLB Stock and Federal Funds Sold

(3) Interest-rate sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features which restrict changes in interest rates both on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase.

Net Portfolio Value Analysis. Our interest rate sensitivity is also monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The following table sets forth our NPV as of September 30, 2025, and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.

(Dollars in thousands)

1. Economic Value of Equity (EVE) divided by Economic Value of Assets (EVA)

As is the case with the GAP Table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV model provides an indication of interest rate risk exposure at a particular point in time, such model is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

A smaller reporting company, such as the Company, is not required to provide the information by this Item. Certain market risk disclosure is set forth in Item 2 above under “How We Manage Market Risk.”

Disclosure Controls and Procedures

Management, with the participation of the Company’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5 (e) promulgated under the Exchange Act) as of September 30, 2025. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of September 30, 2025 to ensure that the information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in FDIC rules and forms.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting identified during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no material changes to the risk factors set forth under the Part I, Item 1.A. Risk Factors as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.