# NorthEast Community Bancorp, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [NorthEast Community Bancorp, Inc.](/companies/necb.md) (CIK 1847398)
- Form: 10-Q
- Filed: 2025-08-08
- Accepted by EDGAR: Aug 8, 2025, 10:19 ET
- Period: 2025-06-30
- Accession: 0001558370-25-010872
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1847398/000155837025010872/necb-20250630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1847398/000155837025010872/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $4.3m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $8.3m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $11.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $21.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.82 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.60 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.85 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.65 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 13,568,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 13,563,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $26.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $1.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2025-01-01 to 2025-06-30 | $4.9m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-06-30 | $59.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-06-30 | $1.97bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $1.64bn | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $135.0m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-06-30 | $336.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 59,608 characters.

### Forward-Looking Statements

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

The Company cautions readers of this report that a number of important factors could cause the Company’s actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to: (i) general economic conditions, including higher inflation or recessionary conditions, either nationally or in our market area, that are worse than expected; (ii) changes in the interest rate environment that reduce our interest margins, reduce the fair value of financial instruments or reduce the demand for our loan products; (iii) increased competitive pressures among financial services companies; (iv) changes in consumer spending, borrowing and savings habits; (v) changes in the quality and composition of our loan or investment portfolios and the adequacy of credit loss reserves; (vi) changes in real estate market values in our market area; (vii) decreased demand for loan products, deposit flows, competition, or decreased demand for financial services in our market area; (viii) major catastrophes such as earthquakes, floods or other natural or human disasters and pandemics or infectious disease outbreaks, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on us and our customers and other constituencies; (ix) legislative or regulatory changes that adversely affect our business or changes in the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; (x) the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts; (xi) technological changes that may be more difficult or expensive than expected; (xii) success or consummation of new business initiatives may be more difficult or expensive than expected; (xiii) the inability to successfully integrate acquired businesses and financial institutions into our business operations; (xiv) adverse changes in the securities markets; (xv) the impact of failures or disruptions in or breaches of the Company’s operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; (xvi) the inability of third party service providers to perform; and (xvii) changes in accounting policies and practices, as may be adopted by bank regulatory agencies or the Financial Accounting Standards Board.

### Critical Accounting Policies

We consider accounting policies involving significant judgements and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider these accounting policies to be our crucial accounting policies. The judgements and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgements and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

### Balance Sheet Analysis

### General

Total assets decreased $35.7 million, or 1.8%, to $2.0 billion at June 30, 2025, from $2.0 billion at December 31, 2024. The decrease in assets was primarily due to decreases in cash and cash equivalents of $18.9 million, net loans of $14.9 million, and real estate owned of $4.4 million, partially offset by an increase of $3.4 million in equity securities.

Cash and cash equivalents decreased $18.9 million, or 24.1%, to $59.4 million at June 30, 2025 from $78.3 million at December 31, 2024. The decrease in cash and cash equivalents was a result of a decrease in deposits of $191.2 million, partially offset by increases of $135.0 million in borrowings, decreases of $14.9 million in net loans, and increases of $3.4 million in equity securities.

Equity securities increased $3.4 million, or 15.2%, to $25.3 million at June 30, 2025 from $22.0 million at December 31, 2024. The increase in equity securities was attributable to the purchase of $3.0 million in equity securities during the six months ended June 30, 2025 and market appreciation of $351,000 due to market interest rate volatility during the six months ended June 30, 2025.

Securities held-to-maturity decreased $218,000, or 1.5%, to $14.4 million at June 30, 2025 from $14.6 million at December 31, 2024 due to $485,000 in maturities and pay-downs of various investment securities.

Loans, net of the allowance for credit losses, decreased $14.9 million, or 0.8%, to $1.8 billion at June 30, 2025 from $1.8 billion at December 31, 2024. The decrease in loans consisted of decreases of $102.7 million in construction loans, $1.6 million in consumer loans, $482,000 in mixed-use loans, $475,000 in non-residential loans, and $74,000 in one-to-four family loans. The decrease in our construction loan portfolio was due to normal pay-downs and principal reductions as construction projects were completed and either condominium units were sold to end buyers or multi-family rental buildings were refinanced by other financial institutions. The decrease in construction loans was offset by increases of $85.9 million in multi-family loans of which $43.2 million is attributed to residential cooperative building loans, and $4.3 million in commercial and industrial loans.

During the six months ended June 30, 2025, we originated loans totaling $462.7 million consisting primarily of $338.8 million in construction loans, $95.4 million in multi-family loans of which $32.9 million is attributed to residential cooperative building loans, $27.8 million in commercial and industrial loans, and $730,000 in mixed-use loans. The $338.8 million in construction loans had 41.6% disbursed at loan closing, with the remaining funds to be disbursed over the terms of the construction loans.

The allowance for credit losses related to loans decreased to $4.7 million as of June 30, 2025, from $4.8 million as of December 31, 2024. The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $602,000, offset by recoveries totaling $434,000 and provision for credit losses totaling $62,000.

Premises and equipment increased $536,000, or 2.2%, to $25.3 million at June 30, 2025 from $24.8 million at December 31, 2024 primarily due to the purchases of additional fixed assets.

Federal Home Loan Bank stock increased $688,000, or 173.3%, to $1.1 million at June 30, 2025 from $397,000 at December 31, 2024 primarily due to an increase in borrowings from the Federal Home Loan Bank.

Bank owned life insurance (“BOLI”) increased $336,000, or 1.3%, to $26.1 million at June 30, 2025 from $25.7 million at December 31, 2024 due to increases in the BOLI cash value.

Accrued interest receivable decreased $1.4 million, or 10.1%, to $12.1 million at June 30, 2025 from $13.5 million at December 31, 2024 due to a decrease of $14.9 million in the loan portfolio.

Real estate owned decreased $4.4 million, or 85.0%, to $767,000 at June 30, 2025 from $5.1 million at December 31, 2024 due to the sale of a foreclosed property to an independent third party.

Property held for investment was $1.4 million at both June 30, 2025 and December 31, 2024.

Right of use assets — operating increased $382,000, or 9.6%, to $4.4 million at June 30, 2025 from $4.0 million at December 31, 2024, primarily due to the physical expansion of a branch office and the resulting revision to the operating lease, partially offset by the amortization of the right of use assets.

Other assets decreased $1.2 million, or 10.5%, to $10.4 million at June 30, 2025 from $11.6 million at December 31, 2024 due to decreases of $1.2 million in tax assets and $118,000 in prepaid expenses, partially offset by an increase of $116,000 in suspense accounts.

Total deposits decreased $191.2 million, or 11.5%, to $1.5 billion at June 30, 2025 from $1.7 billion at December 31, 2024. The decrease in deposits was primarily due to a decrease in certificates of deposit of $251.5 million, or 25.1%, partially offset by increases in NOW/money market accounts of $56.4 million, or 23.2%, savings account balances of $3.3 million, or 2.4%, and non-interest bearing deposits of $2.2 million, or 0.8%. The decrease of $251.5 million in certificates of deposit consisted of a decrease in retail certificates of deposit of $134.2 million, or 26.2%, and a decrease in brokered certificates of deposit of $129.1 million, or 29.7%, partially offset by an increase in non-brokered listing services certificates of deposit of $11.7 million, or 35.0%.

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

Advance payments by borrowers for taxes and insurance increased $804,000, or 49.7%, to $2.4 million at June 30, 2025 from $1.6 million at December 31, 2024 due primarily to accumulation of real estate tax payments from borrowers.

Borrowings increased to $135.0 million at June 30, 2025 from none at December 31, 2024 due primarily to management’s strategy to diversify funding sources.

Lease liability – operating increased $389,000, or 9.5%, to $4.5 million at June 30, 2025 from $4.1 million at December 31, 2024, primarily due to the physical expansion of a branch office and the resulting revision to the operating lease, partially offset by the amortization of the lease liability.

Accounts payable and accrued expenses increased $970,000, or 6.7%, to $15.5 million at June 30, 2025 from $14.5 million at December 31, 2024 due primarily to increases in accrued borrowing interest expense of $905,000, accounts payable of $666,000, deferred compensation of $312,000, and suspense accounts for loan closings of $269,000, and the allowance for credit losses for off-balance sheet commitments of $175,000, partially offset by a decrease in accrued expense of $1.4 million.

The allowance for credit losses for off-balance sheet commitments increased $175,000, or 24.8%, to $879,000 at June 30, 2025 from $704,000 at December 31, 2024 due primarily to an increase of $74.5 million, or 13.3%, in off-balance sheet commitments since December 31, 2024.

Stockholders’ equity increased $18.3 million, or 5.8% to $336.7 million at June 30, 2025, from $318.3 million at December 31, 2024. The increase in stockholders’ equity was due to net income of $21.7 million for the six months ended June 30, 2025, an increase of $638,000 in earned employee stock ownership plan shares coupled with a reduction of $435,000 in unearned employee stock ownership plan shares, and the amortization expense of $894,000 relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, partially offset by dividends declared of $5.4 million and $4,000 in other comprehensive loss.

### Results of Operations for the Three Months Ended June 30, 2025 and 2024

### Financial Highlights

Net income for the three months ended June 30, 2025 was $11.2 million compared to net income of $12.8 million for the three months ended June 30, 2024. The decrease in net income of $1.6 million, or 12.7%, between periods was primarily due to a decrease of $1.1 million in net interest income, an increase of $1.0 million in non-interest expense, and no credit loss expense for the three months ended June 30, 2025 compared to a credit loss expense reduction of $226,000 for the three months ended June 30, 2024, partially offset by an increase of $127,000 in non-interest income and a decrease of $629,000 in income tax expense.

### Net Interest Income

Net interest income was $25.1 million for the three months ended June 30, 2025, as compared to $26.2 million for the three months ended June 30, 2024. The decrease in net interest income of $1.1 million, or 4.4%, was primarily due to a decrease in interest income that exceeded a decrease in interest expense and a decrease in the yield on interest earning assets, partially offset by a smaller decrease in the cost of funds for interest bearing liabilities.

Total interest and dividend income decreased $2.2 million, or 5.5%, to $38.0 million for the three months ended June 30, 2025 from $40.2 million for the three months ended June 30, 2024. The decrease in interest and dividend income was due to a decrease in the yield on interest earning assets by 78 basis points from 8.89% for the three months ended June 30, 2024 to 8.11% for the three months ended June 30, 2025, partially offset by an increase in the average balance of interest earning assets of $64.9 million, or 3.6%, to $1.9 billion for the three months ended June 30, 2025 from $1.8 billion for the three months ended June 30, 2024.

Interest expense decreased $1.1 million, or 7.5%, to $13.0 million for the three months ended June 30, 2025 from $14.0 million for the three months ended June 30, 2024. The decrease in interest expense was due to a decrease in the cost of interest bearing liabilities by 45 basis points from 4.33% for the three months ended June 30, 2024 to 3.88% for the three months ended June 30, 2025, partially offset by an increase in average interest bearing liabilities of $41.9 million, or 3.2%, to $1.3 billion for the three months ended June 30, 2025 from $1.3 billion for the three months ended June 30, 2024.

Our net interest margin decreased 44 basis points, or 7.6%, to 5.35% for the three months ended June 30, 2025 compared to 5.79% for the three months ended June 30, 2024. The decrease in the net interest margin was due to a 100 basis points decrease in the Federal Funds rate from September 2024 to December 2024 that resulted in a decrease in the yield on interest-earning assets, partially offset by a smaller decrease in the cost of funds on interest-bearing liabilities.

### Credit Loss Expense

The Company recorded no credit loss expense for the three months ended June 30, 2025 compared to a credit loss expense reduction of $226,000 for the three months ended June 30, 2024.

The credit loss expense reduction of $226,000 for the three months ended June 30, 2024 was comprised of a credit loss expense reduction for off-balance sheet commitments of $218,000 and a credit loss expense reduction for held-to-maturity investment securities of $8,000. The credit loss expense reduction for off-balance sheet commitments of $218,000 for the three months ended June 30, 2024 was primarily attributable to a reduction of $30.4 million in the level of off-balance sheet commitments and favorable trends in the economy.

With respect to the allowance for credit losses for loans, we charged-off $485,000 during the three months ended June 30, 2025 as compared to charge-offs of $12,000 during the three months ended June 30, 2024. The charge-offs during both periods were against various unpaid overdrafts in our demand deposit accounts.

We recorded recoveries of $82,000 during the three months ended June 30, 2025 compared to no recoveries during the three months ended June 30, 2024. The recoveries of $82,000 during the three months ended June 30, 2025 comprised of recoveries from a previously charged-off unpaid overdraft on a demand deposit account.

### Non-Interest Income

Non-interest income for the three months ended June 30, 2025 was $858,000 compared to non-interest income of $731,000 for the three months ended June 30, 2024. The increase of $127,000, or 17.4%, in total non-interest income was primarily due to increases of $71,000 in unrealized gain on equity securities, $48,000 in other loan fees and service charges, and $8,000 in BOLI income.

The increase in unrealized gain on equity securities was due to an unrealized gain of $51,000 on equity securities during the three months ended June 30, 2025 compared to an unrealized loss of $20,000 on equity securities during the three months ended June 30, 2024. Both the unrealized gain of $51,000 on equity securities during the three months ended June 30, 2025 and the unrealized loss of $20,000 on equity securities during the three months ended June 30, 2024 were due to market interest rate volatility during both periods.

The increase of $48,000 in other loan fees and service charges was due to an increase of $60,000 in ATM/debit card/ACH fees and an increase of $2,000 in deposit account fees, partially offset by a decrease of $14,000 in other loan fees and loan servicing fees. The increase in BOLI income of $8,000 was due to an increase in the yield on BOLI assets.

### Non-Interest Expense

Non-interest expense increased $1.0 million, or 10.6%, to $10.5 million for the three months ended June 30, 2025 from $9.5 million for the three months ended June 30, 2024. The increase resulted primarily from increases of $398,000 in salaries and employee benefits, $220,000 in real estate owned expense, $151,000 in outside data processing expense, $111,000 in other operating expense, $69,000 in occupancy expense, $32,000 in equipment expense, and $29,000 in advertising expense.

Salaries and employee benefits increased $398,000, or 7.6%, to $5.7 million for the three months ended June 30, 2025 from $5.3 million for the three months ended June 30, 2024 primarily due to the hiring of additional personnel to support the growth of the Company and an increase in employee compensation and benefits expense in order to retain key personnel, partially offset by an increase in loan origination offset expenses.

Real estate owned expense increased $220,000, or 814.8%, to $247,000 for the three months ended June 30, 2025 from $27,000 for the three months ended June 30, 2024 due to closing costs of $231,000 associated with the sale of a foreclosed property during the three months ended June 30, 2025.

Outside data processing expense increased $151,000, or 24.9%, to $758,000 for the three months ended June 30, 2025 from $607,000 for the three months ended June 30, 2024 due to an increase in transactions and additional data processing services.

Other non-interest expense increased $111,000, or 4.2%, to $2.7 million for the three months ended June 30, 2025 from $2.6 million for the three months ended June 30, 2024 due mainly to increases of $117,000 in miscellaneous other non-interest expense, $45,000 in legal fees, $24,000 in expenses related to the recruitment of personnel, $24,000 in service contracts expense, and $7,000 in audit and accounting fees. These increases were partially offset by decreases of $42,000 in consulting fees, $21,000 in directors compensation, $16,000 in insurance expense, $13,000 in telephone expense, $9,000 in office supplies, and $5,000 in directors, officers, and employee expenses.

The increase of $117,000 in miscellaneous other non-interest expense was mainly due to increases of $54,000 in regulatory insurance premiums and assessments due to an increase in our total assets, $30,000 in dues and subscriptions, $14,000 in miscellaneous charge-offs, $7,000 in check and correspondence bank charges, $6,000 in miscellaneous expenses, $4,000 in public company expenses, and $2,000 in postage expense.

Legal fees increased $45,000, or 37.5%, to $165,000 for the three months ended June 30, 2025 from $120,000 for the three months ended June 30, 2024 due to legal proceedings to resolve problem loans, recovery efforts for losses incurred from previously charged-off loans and overdrafts, and general legal services. Recruiting expense increased $24,000, or 2,400.0%, to $25,000 for the three months ended June 30, 2025 from $1,000 for the three months ended June 30, 2024 due to our increased usage of traditional recruiting firms in 2025 for personnel hirings.

Service contracts expense increased $24,000, or 5.7%, to $445,000 for the three months ended June 30, 2025 from $421,000 for the three months ended June 30, 2024 due to the increased cost to support the growth of the Company. Audit and accounting expense increased $7,000, or 5.0%, to $147,000 for the three months ended June 30, 2025 from $140,000 for the three months ended June 30, 2024 due to normal increases by the Company’s accounting firms.

Consultant fees decreased $42,000, or 24.9%, to $127,000 for the three months ended June 30, 2025 from $169,000 for the three months ended June 30, 2024 due to less reliance on consultants in 2025. Directors’ compensation decreased $21,000, or 8.8%, to $219,000 for the three months ended June 30, 2025 from $240,000 for the three months ended June 30, 2024 due to a reduction in the amortization expense related to the 2022 Equity Incentive Plan.

Due to efforts to contain cost, insurance expense decreased $16,000, or 14.6%, to $94,000 for the three months ended June 30, 2025 from $110,000 for the three months ended June 30, 2024, telephone expense decreased $13,000, or 8.0%, to $150,000 for the three months ended June 30, 2025 from $163,000 for the three months ended June 30, 2024, office supplies expense decreased $9,000, or 15.8%, to $48,000 for the three months ended June 30, 2025 from $57,000 for the three months ended June 30, 2024, and directors, officers, and employee expenses decreased $5,000, or 6.2%, to $76,000 for the three months ended June 30, 2025 from $81,000 for the three months ended June 30, 2024.

Occupancy expense increased $69,000, or 10.2%, to $743,000 for the three months ended June 30, 2025 from $674,000 for the three months ended June 30, 2024 primarily as a result of the increased cost of operating office space. Equipment expense increased $32,000, or 14.5%, to $253,000 for the three months ended June 30, 2025 from $221,000 for the three months ended June 30, 2024 due to upgrades of equipment. Advertising expense increased $29,000, or 30.9%, to $123,000 for the three months ended June 30, 2025 from $94,000 for the three months ended June 30, 2024 due to an increase in various marketing campaigns.

### Income Taxes

We recorded income tax expense of $4.3 million and $4.9 million for the three months ended June 30, 2025 and 2024, respectively. For the three months ended June 30, 2025, we had approximately $210,000 in tax exempt income, compared to approximately $199,000 in tax exempt income for the three months ended June 30, 2024. Our effective income tax rates were 27.6% for the three months ended June 30, 2025 and June 30, 2024.

### Results of Operations for the Six Months Ended June 30, 2025 and 2024

### Financial Highlights

Net income for the six months ended June 30, 2025 was $21.7 million compared to net income of $24.2 million for the six months ended June 30, 2024. The decrease in net income of $2.4 million, or 10.1%, between periods was primarily due to a decrease of $1.9 million in net interest income, an increase of $1.9 million in non-interest expense, and an increase of $628,000 in credit loss expense, partially offset by an increase of $808,000 in non-interest income and a decrease of $1.2 million in income tax expense.

### Net Interest Income

Net interest income was $49.3 million for the six months ended June 30, 2025 as compared to $51.2 million for the six months ended June 30, 2024. The decrease in net interest income of $1.9 million, or 3.7%, was primarily due to a decrease in interest income that exceeded a decrease in interest expense and a decrease in the yield on interest earning assets, partially offset by a smaller decrease in the cost of funds for interest bearing liabilities.

Total interest and dividend income decreased $2.1 million, or 2.7%, to $76.2 million for the six months ended June 30, 2025 from $78.4 million for the six months ended June 30, 2024. The decrease in interest and dividend income was due to a decrease in the yield on interest earning assets by 75 basis points from 8.83% for the six months ended June 30, 2024 to 8.08% for the six months ended June 30, 2025, partially offset by an increase in the average balance of interest earning assets of $112.3 million, or 6.3%, to $1.9 billion for the six months ended June 30, 2025 from $1.8 billion for the six months ended June 30, 2024.

Interest expense decreased $242,000, or 0.9%, to $26.9 million for the six months ended June 30, 2025 from $27.2 million for the six months ended June 30, 2024. The decrease in interest expense was due to a decrease in the cost of interest bearing liabilities by 34 basis points from 4.31% for the six months ended June 30, 2024 to 3.97% for the six months ended June 30, 2025, partially offset by an increase in average interest bearing liabilities of $95.7 million, or 7.6%, to $1.4 billion for the six months ended June 30, 2025 from $1.3 billion for the six months ended June 30, 2024.

Net interest margin decreased 54 basis points, or 9.4%, to 5.23% for the six months ended June 30, 2025 compared to 5.77% for the six months ended June 30, 2024. The decrease in the net interest margin was due to a 100 basis points decrease in the Federal Funds rate from September 2024 to December 2024 that resulted in a decrease in the yield on interest-earning assets, partially offset by a smaller decrease in the cost of funds on interest-bearing liabilities.

### Credit Loss Expense

The Company recorded a credit loss expense of $237,000 for the six months ended June 30, 2025 compared to a credit loss expense reduction of $391,000 for the six months ended June 30, 2024. The credit loss expense of $237,000 for the six months ended June 30, 2025 was comprised of credit loss expense for loans of $62,000 and credit loss expense for off-balance sheet commitments of $175,000.

The credit loss expense for loans of $62,000 for the six months ended June 30, 2025 was primarily due to an increase in the multi-family loan portfolio. The credit loss expense for off-balance sheet commitments of $175,000 for the six months ended June 30, 2025 was primarily due to an increase in unfunded off-balance sheet commitments.

The credit loss expense reduction of $391,000 for the six months ended June 30, 2024 was comprised of a credit loss expense reduction for off-balance sheet commitments of $235,000, a credit loss expense reduction for loans of $145,000, and a credit loss expense reduction for held-to-maturity investment securities of $11,000. The credit loss expense reduction for off-balance sheet commitments of $235,000 for the six months ended June 30, 2024 was primarily attributed to a reduction of $27.2 million in the level of off-balance sheet commitments and favorable trends in the economy. The credit loss expense reduction for loans of $145,000 for the six months ended June 30, 2024 was primarily attributed to favorable trends in the economy.

With respect to the allowance for credit losses for loans, we charged-off $602,000 during the six months ended June 30, 2025 as compared to charge-offs of $33,000 during the six months ended June 30, 2024. The charge-offs during both periods were against various unpaid overdrafts in our demand deposit accounts.

We recorded recoveries of $434,000 during the six months ended June 30, 2025 compared to no recoveries during the six months ended June 30, 2024. The recoveries of $434,000 during the six months ended June 30, 2025 comprised of recoveries of $350,000 with respect to a previously charged-off non-residential mortgage loan and $84,000 from previously charged-off unpaid overdrafts on demand deposit accounts.

### Non-Interest Income

Non-interest income for the six months ended June 30, 2025 was $2.1 million compared to non-interest income of $1.3 million for the six months ended June 30, 2024. The increase of $808,000, or 62.9%, in total non-interest income was primarily due to increases of $453,000 in unrealized gain on equity securities, $326,000 in other loan fees and service charges, $17,000 in BOLI income, and $12,000 in miscellaneous other non-interest income.

The increase in unrealized gain on equity securities was due to an unrealized gain of $351,000 on equity securities during the six months ended June 30, 2025 compared to an unrealized loss of $102,000 on equity securities during the six months ended June 30, 2024. Both the unrealized gain of $351,000 on equity securities during the 2025 period and the unrealized loss of $102,000 on equity securities during the 2024 period were due to market interest rate volatility during both periods.

The increase of $326,000 in other loan fees and service charges was due to increases of $232,000 in other loan fees and loan servicing fees, $91,000 in ATM/debit card/ACH fees, and $3,000 in deposit account fees. The increase in BOLI income of $17,000 was due to an increase in the yield on BOLI assets.

### Non-Interest Expense

Non-interest expense increased $1.9 million, or 10.2%, to $21.1 million for the six months ended June 30, 2025 from $19.2 million for the six months ended June 30, 2024. The increase resulted primarily from increases of $980,000 in salaries and employee benefits, $332,000 in other operating expense, $251,000 in outside data processing expense, $238,000 in real estate owned expense, $108,000 in occupancy expense, and $43,000 in advertising expense, partially offset by a decrease of $4,000 in equipment expense.

Salaries and employee benefits increased $980,000, or 9.2%, to $11.6 million for the six months ended June 30, 2025 from $10.6 million for the six months ended June 30, 2024 primarily due to the hiring of additional personnel to support the growth of the Company and an increase in employee compensation and benefits expense in order to retain key personnel, partially offset by an increase in loan origination offset expenses.

Other non-interest expense increased $332,000, or 6.3%, to $5.6 million for the six months ended June 30, 2025 from $5.3 million for the six months ended June 30, 2024 due mainly to increases of $380,000 in miscellaneous other non-interest expense, $78,000 in legal fees, $29,000 in expenses related to the recruitment of personnel, $23,000 in service contracts expense, and $14,000 in audit and accounting fees. These increases were partially offset by decreases of $82,000 in consulting fees, $40,000 in telephone expense, $30,000 in directors compensation, $25,000 in directors, officers, and employee expenses, $12,000 in insurance expense, and $3,000 in office supplies.

The increase of $380,000 in miscellaneous other non-interest expense was mainly due to increases of $160,000 in regulatory insurance premiums and assessments due to an increase in our total assets, $62,000 in miscellaneous charge-offs, $58,000 in miscellaneous expenses, $45,000 in public company expenses, $35,000 in dues and subscriptions, $12,000 in check and correspondence bank charges, and $8,000 in postage expense.

Legal fees increased $78,000, or 42.2%, to $263,000 for the six months ended June 30, 2025 from $185,000 for the six months ended June 30, 2024 due to legal proceedings to resolve problem loans, recovery efforts for losses incurred from previously charged-off loans and overdrafts, and general legal services. Recruiting expense increased $29,000, or 103.6%, to $57,000 for the six months ended June 30, 2025 from $28,000 for the six months ended June 30, 2024 due to our increased usage of traditional recruiting firms in 2025 for personnel hirings.

Service contracts expense increased $23,000, or 2.7%, to $868,000 for the six months ended June 30, 2025 from $845,000 for the six months ended June 30, 2024 due to the increased cost to support the growth of the Company. Audit and accounting expense increased $14,000, or 5.1%, to $290,000 for the six months ended June 30, 2025 from $276,000 for the six months ended June 30, 2024 due to normal increases by the Company’s accounting firms.

Consultant fees decreased $82,000, or 20.5%, to $318,000 for the six months ended June 30, 2025 from $400,000 for the six months ended June 30, 2024 due to less reliance on consultants in 2025. Directors’ compensation decreased $30,000, or 6.2%, to $456,000 for the six months ended June 30, 2025 from $486,000 for the six months ended June 30, 2024 due to a reduction in the amortization expense related to the 2022 Equity Incentive Plan.

Due to efforts to contain cost, telephone expense decreased $40,000, or 12.0%, to $293,000 for the six months ended June 30, 2025 from $333,000 for the six months ended June 30, 2024, directors, officers, and employee expenses decreased $25,000, or 15.6%, to $135,000 for the six months ended June 30, 2025 from $160,000 for the six months ended June 30, 2024, insurance expense decreased $12,000, or 5.7%, to $200,000 for the six months ended June 30, 2025 from $212,000 for the six months ended June 30, 2024, and office supplies expense decreased $3,000, or 2.8%, to $105,000 for the six months ended June 30, 2025 from $108,000 for the six months ended June 30, 2024.

Outside data processing expense increased $251,000, or 20.2%, to $1.5 million for the six months ended June 30, 2025 from $1.2 million for the six months ended June 30, 2024 due to an increase in transactions and additional data processing services.

Real estate owned expense increased $238,000, or 610.3%, to $277,000 for the six months ended June 30, 2025 from $39,000 for the six months ended June 30, 2024 due to closing costs of $231,000 associated with the sale of a foreclosed property during the six months ended June 30, 2025.

Occupancy expense increased $108,000, or 7.8%, to $1.5 million for the six months ended June 30, 2025 from $1.4 million for the six months ended June 30, 2024 primarily as a result of the increased cost of operating office space. Advertising expense increased $43,000, or 23.6%, to $225,000 for the six months ended June 30, 2025 from $182,000 for the six months ended June 30, 2024 due to an increase in various marketing campaigns.

Equipment expense decreased $4,000, or 0.8%, to $470,000 for the six months ended June 30, 2025 from $474,000 for the six months ended June 30, 2024 due to a reduced need to purchase additional equipment.

### Income Taxes

We recorded income tax expense of $8.3 million and $9.5 million for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, we had approximately $415,000 in tax exempt income, compared to approximately $394,000 in tax exempt income for the six months ended June 30, 2024. Our effective income tax rates were 27.7% and 28.3% for the six months ended June 30, 2025 and 2024, respectively.

### Average Balances and Yields

The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average daily balances of assets or liabilities, respectively, for the periods presented. Loan fees, including prepayment fees, are included in interest income on loans and are not material. Non-accrual loans are included in the average balances only. In addition, yields are not presented on a tax-equivalent basis. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant.

| ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ | ​ ​ ​ Three Months Ended June 30, 2025 Average Balance ​ ​ ​ ​ | ​ ​ Interest and Dividends ​ ​ | ​ ​ ​ | ​ ​ ​ Yield/ Cost ​ ​ ​ | ​ ​ ​ 2024 Average Balance ​ ​ ​ ​ | ​ ​ Interest and Dividends ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Yield/ Cost ​ ​ ​ |
| --- | --- | ---: | --- | --- | ---: | ---: | --- | --- | ---: |
| Loans receivable | ​ | $1,754,363 ​ | $36,740 |  | 8.38% | $1,687,029 ​ | $38,634 |  | 9.16% |
| Securities | ​ | 37,839 ​ | ​ 265 |  | 2.80 ​ | 33,438 ​ | ​ 199 |  | 2.38 ​ |
| Federal Home Loan Bank stock | ​ | ​ 438 ​ | ​ 7 | ​ | 6.39 ​ | ​ 704 ​ | ​ 19 | ​ | 10.80 ​ |
| Other interest-earning assets | ​ | 83,135 ​ | ​ 1,027 |  | 4.94 ​ | 89,736 ​ | ​ 1,385 |  | 6.17 ​ |
| Total interest-earning assets | ​ | 1,875,775 ​ | ​ 38,039 |  | 8.11 ​ | 1,810,907 ​ | ​ 40,237 |  | 8.89 ​ |
| Allowance for credit losses | ​ | (5,122) ​ | ​ ​ |  | ​ ​ | (4,927) ​ | ​ ​ |  | ​ ​ |
| Non-interest-earning assets | ​ | 95,651 ​ | ​ ​ |  | ​ ​ | 91,085 ​ | ​ ​ |  | ​ ​ |
| Total assets | ​ | $1,966,304 ​ | ​ ​ | ​ | ​ ​ | $1,897,065 ​ | ​ ​ |  | ​ ​ |
| ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ |
| Interest bearing demand | ​ | $298,689 ​ | $2,401 | ​ | 3.22% | $205,536 ​ | $1,930 | ​ | 3.76% |
| Savings and club accounts | ​ | 141,238 ​ | ​ 761 | ​ | 2.16 ​ | 158,292 ​ | ​ 982 | ​ | 2.48 ​ |
| Certificates of deposit | ​ | 815,000 ​ | ​ 8,891 | ​ | 4.36 ​ | 884,626 ​ | ​ 10,523 | ​ | 4.76 ​ |
| Interest-bearing deposits | ​ | 1,254,927 ​ | ​ 12,053 | ​ | 3.84 ​ | 1,248,454 ​ | ​ 13,435 |  | 4.30 ​ |
| Borrowed money | ​ | $82,712 ​ | ​ 912 | ​ | 4.41 ​ | 47,276 ​ | ​ 580 | ​ | 4.91 ​ |
| Interest-bearing liabilities | ​ | 1,337,639 ​ | ​ 12,965 | ​ | 3.88 ​ | 1,295,730 ​ | ​ 14,015 |  | 4.33 ​ |
| Non-interest-bearing demand | ​ | 274,466 ​ | ​ ​ | ​ | ​ ​ | 285,368 ​ | ​ ​ |  | ​ ​ |
| Other non-interest-bearing liabilities | ​ | 20,114 ​ | ​ ​ | ​ | ​ ​ | 19,641 ​ | ​ ​ |  | ​ ​ |
| Total liabilities | ​ | 1,632,219 ​ | ​ ​ | ​ | ​ ​ | 1,600,739 ​ | ​ ​ |  | ​ ​ |
| Equity | ​ | 334,085 ​ | ​ ​ | ​ | ​ ​ | 296,326 ​ | ​ ​ |  | ​ ​ |
| Total liabilities and equity | ​ | $1,966,304 ​ | ​ ​ | ​ | ​ ​ | $1,897,065 ​ | ​ ​ |  | ​ ​ |
| Net interest income/interest spread | ​ | ​ ​ ​ | $25,074 | ​ | 4.23% | ​ ​ | $26,222 |  | 4.56% |
| Net interest margin | ​ | ​ ​ | ​ | ​ | 5.35% | ​ |  |  | 5.79% |
| Net interest-earning assets | ​ | $538,136 ​ | ​ ​ | ​ | ​ ​ | $515,177 ​ |  |  | ​ |
| Average interest-earning assets to interest-bearing liabilities | ​ | 140.23% | ​ | ​ | ​ ​ | 139.76% |  |  | ​ |

45

| ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ | ​ ​ ​ Six Months Ended June 30, 2025 Average Balance ​ ​ ​ ​ | ​ ​ Interest and Dividends ​ ​ | ​ ​ ​ | ​ ​ ​ Yield/ Cost ​ ​ ​ | ​ ​ ​ 2024 Average Balance ​ ​ ​ ​ | ​ ​ Interest and Dividends ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Yield/ Cost ​ ​ ​ | ​ ​ ​ ​ ​ ​ |
| --- | --- | ---: | --- | --- | ---: | ---: | --- | --- | ---: | --- |
| Loans receivable | ​ | $1,761,069 ​ | $73,622 |  | 8.36% | $1,649,686 ​ | $75,337 |  | 9.13% | ​ |
| Securities(1) | ​ | 37,298 ​ | ​ 500 |  | 2.68 ​ | 33,643 ​ | ​ 396 |  | 2.35 ​ | ​ |
| Federal Home Loan Bank stock | ​ | ​ 418 ​ | ​ 16 | ​ | 7.66 ​ | ​ 773 ​ | ​ 40 | ​ | 10.35 ​ | ​ |
| Other interest-earning assets | ​ | 88,277 ​ | ​ 2,108 |  | 4.78 ​ | 90,644 ​ | ​ 2,585 |  | 5.70 ​ | ​ |
| Total interest-earning assets | ​ | 1,887,062 ​ | ​ 76,246 |  | 8.08 ​ | 1,774,746 ​ | ​ 78,358 |  | 8.83 ​ | ​ |
| Allowance for credit losses | ​ | (4,978) ​ | ​ ​ |  | ​ ​ | (5,009) ​ | ​ ​ |  | ​ ​ | ​ |
| Non-interest-earning assets | ​ | 96,071 ​ | ​ ​ |  | ​ ​ | 89,972 ​ | ​ ​ |  | ​ ​ | ​ |
| Total assets | ​ | $1,978,155 ​ | ​ ​ | ​ | ​ ​ | $1,859,709 ​ | ​ ​ |  | ​ ​ | ​ |
| ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest bearing demand | ​ | $286,726 ​ | $4,846 | ​ | 3.38% | $188,510 ​ | $3,483 |  | 3.70% | ​ |
| Savings and club accounts | ​ | 140,077 ​ | ​ 1,491 | ​ | 2.13 ​ | 170,531 ​ | ​ 2,184 |  | 2.56 ​ | ​ |
| Certificates of deposit | ​ | 888,136 ​ | ​ 19,649 | ​ | 4.42 ​ | 847,606 ​ | ​ 20,162 |  | 4.76 ​ | ​ |
| Interest-bearing deposits | ​ | 1,314,939 ​ | ​ 25,986 | ​ | 3.95 ​ | 1,206,647 ​ | ​ 25,829 |  | 4.28 ​ | ​ |
| Borrowed money | ​ | ​ 41,584 ​ | ​ 922 | ​ | 4.43 ​ | 54,184 ​ | ​ 1,321 |  | 4.88 ​ | ​ |
| Interest-bearing liabilities | ​ | 1,356,523 ​ | ​ 26,908 | ​ | 3.97 ​ | 1,260,831 ​ | ​ 27,150 |  | 4.31 ​ | ​ |
| Non-interest-bearing demand | ​ | 272,680 ​ | ​ ​ | ​ | ​ ​ | 288,639 ​ | ​ ​ |  | ​ ​ | ​ |
| Other non-interest-bearing liabilities | ​ | 19,107 ​ | ​ ​ | ​ | ​ ​ | 18,865 ​ | ​ ​ |  | ​ ​ | ​ |
| Total liabilities | ​ | 1,648,310 ​ | ​ ​ | ​ | ​ ​ | 1,568,335 ​ | ​ ​ |  | ​ ​ | ​ |
| Equity | ​ | 329,845 ​ | ​ ​ | ​ | ​ ​ | 291,374 ​ | ​ ​ |  | ​ ​ | ​ |
| Total liabilities and equity | ​ | $1,978,155 ​ | ​ ​ | ​ | ​ ​ | $1,859,709 ​ | ​ ​ |  | ​ ​ | ​ |
| Net interest income/interest spread | ​ | ​ ​ ​ | $49,338 | ​ | 4.11% | ​ ​ | $51,208 |  | 4.52% | ​ |
| Net interest margin | ​ | ​ ​ | ​ | ​ | 5.23% | ​ |  |  | 5.77% | ​ |
| Net interest-earning assets | ​ | $530,539 ​ | ​ ​ | ​ | ​ ​ | $513,915 ​ |  |  | ​ | ​ |
| Average interest-earning assets to interest-bearing liabilities | ​ | 139.11% | ​ | ​ | ​ ​ | 140.76% |  |  | ​ | ​ |

### Rate/Volume Analysis

The following tables set forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns.

*(Dollars in thousands)*

| ​ ​ ​ ​ ​ ​ ​ ​ Interest income: | ​ ​ ​ ​ ​ ​ ​ | ​ ​ Three Months Ended 6/30/2025 Compared to Three Months Ended 6/30/2024 Increase (Decrease) Due to Volume ​ | ​ | ​ ​ Rate ​ | ​ | ​ ​ Total ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Loans receivable | ​ | $7,808 | ​ | $(9,702) | ​ | $(1,894) |
| Securities | ​ | 28 | ​ | 38 | ​ | 66 |
| Federal Home Loan Bank stock | ​ | ​ (6) | ​ | ​ (6) | ​ | ​ (12) |
| Other interest-earning assets | ​ | (96) | ​ | (262) | ​ | (358) |
| Total | ​ | $7,734 | ​ | $(9,932) | ​ | $(2,198) |
| **Interest expense:** | ​ |  | ​ |  | ​ |  |
| Interest bearing demand deposit | ​ | $2,044 | ​ | $(1,573) | ​ | $471 |
| Savings accounts | ​ | (100) | ​ | (121) | ​ | (221) |
| Certificates of deposits | ​ | (795) | ​ | (837) | ​ | (1,632) |
| Borrowed money | ​ | 706 | ​ | (374) | ​ | 332 |
| Total | ​ | 1,855 | ​ | (2,905) | ​ | (1,050) |
| Net change in net interest income | ​ | $5,879 | ​ | $(7,027) | ​ | $(1,148) |

46

*(Dollars in thousands)*

| ​ ​ ​ ​ ​ ​ ​ ​ Interest income: | ​ ​ ​ ​ ​ ​ ​ | ​ ​ Six Months Ended 6/30/2025 Compared to Six Months Ended 6/30/2024 Increase (Decrease) Due to Volume ​ | ​ | ​ ​ Rate ​ | ​ | ​ ​ Total ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Loans receivable | ​ | $10,553 | ​ | $(12,268) | ​ | $(1,715) |
| Securities | ​ | 46 | ​ | 58 | ​ | 104 |
| Federal Home Loan Bank stock | ​ | ​ (15) | ​ | ​ (9) | ​ | ​ (24) |
| Other interest-earning assets | ​ | (66) | ​ | (411) | ​ | (477) |
| Total | ​ | $10,518 | ​ | $(12,630) | ​ | $(2,112) |
| **Interest expense:** | ​ |  | ​ |  | ​ |  |
| Interest bearing demand deposit | ​ | $2,192 | ​ | $(829) | ​ | $1,363 |
| Savings accounts | ​ | (356) | ​ | (337) | ​ | (693) |
| Certificates of deposits | ​ | 2,082 | ​ | (2,595) | ​ | (513) |
| Borrowed money | ​ | (287) | ​ | (112) | ​ | (399) |
| Total | ​ | 3,631 | ​ | (3,873) | ​ | (242) |
| Net change in net interest income | ​ | $6,887 | ​ | $(8,757) | ​ | $(1,870) |

### Asset Quality

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

*(Dollars in thousands)*

| ​ ​ ​ ​ | ​ ​ | ​ ​ ​ June 30, ​ 2025 | ​ ​ ​ December 31, ​ 2024 ​ ​ | ​ |
| --- | --- | ---: | ---: | --- |
| Total non-accrual loans | ​ | $— ​ | $— ​ | ​ |
| Total accruing loans past due 90 days or more | ​ | — ​ | — ​ | ​ |
| Total non-performing loans | ​ | — ​ | — ​ | ​ |
| Real estate owned | ​ | 767 ​ | 5,120 ​ | ​ |
| Total non-performing assets | ​ | $767 ​ | $5,120 ​ | ​ |
| Total non-performing loans to total loans | ​ | —% | —% | ​ |
| Total non-performing assets to total assets | ​ | 0.04% | 0.25% | ​ |

Non-performing assets totaled $767,000 at June 30, 2025 and $5.1 million at December 31, 2024. The non-performing assets at June 30, 2025 consisted of one foreclosed property located in Pittsburgh, Pennsylvania compared to two foreclosed properties at December 31, 2024. We sold one foreclosed property totaling $4.3 million located in the Bronx, New York on June 30, 2025 to a third-party buyer at no loss to the Company and in connection therewith we provided the financing to complete the multi-family project.

During the three and six months ended June 30, 2025 and 2024, we did not collect any interest income from loans that were in non-accrual status.

From time to time, as part of our loss mitigation strategy, we may modify loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. There were no new loan modifications to borrowers experiencing financial difficulties during the three and six months ended June 30, 2025 or 2024.

At June 30, 2025 and December 31, 2024, we had no loans modified to borrowers experiencing financial difficulty.

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

*(Dollars In Thousands)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ June 30, ​ 2025 | ​ ​ ​ December 31, ​ 2024 ​ ​ | ​ ​ ​ |
| --- | --- | ---: | ---: | --- |
| Allowance at beginning of period | ​ | $4,830 ​ | $5,093 ​ | ​ |
| Provision for credit losses | ​ | 62 ​ | 1,084 ​ | ​ |
| Net Charge-offs: | ​ | ​ ​ | ​ | ​ |
| Residential real estate loans: | ​ | ​ | ​ | ​ |
| One- to four-family | ​ | — ​ | — ​ | ​ |
| Multifamily | ​ | — ​ | — ​ | ​ |
| Mixed-use | ​ | — ​ | — ​ | ​ |
| Total residential real estate loans | ​ | — ​ | — ​ | ​ |
| Non-residential real estate loans | ​ | (350) ​ | — ​ | ​ |
| Construction loans | ​ | — ​ | — ​ | ​ |
| Commercial and industrial loans | ​ | — ​ | 1,000 ​ | ​ |
| Consumer loans | ​ | 518 ​ | 347 ​ | ​ |
| Total net charge-offs | ​ | 168 ​ | 1,347 ​ | ​ |
| Allowance at end of period | ​ | $4,724 ​ | $4,830 ​ | ​ |
| Total loans outstanding | ​ | $1,797,618 ​ | $1,812,598 ​ | ​ |
| Average loans outstanding | ​ | 1,761,069 ​ | 1,701,079 ​ | ​ |
| Ratio of allowance to non-performing loans | ​ | —% | —% | ​ |
| Ratio of allowance to total loans | ​ | 0.26% | 0.27% | ​ |
| Ratio of net charge-offs to average loans | ​ | 0.01% | 0.08% | ​ |
| Non-performing loans | ​ | $— ​ | $— ​ | ​ |

The Company’s allowance for credit losses related to loans totaled $4.7 million, or 0.26% of total loans as of June 30, 2025 compared to $4.8 million, or 0.27% of total loans as of December 31, 2024. In addition, the Company’s allowance for credit losses related to off-balance sheet commitments totaled $879,000 as of June 30, 2025 compared to $704,000 at December 31, 2024. The allowance for credit losses related to held-to-maturity debt securities totaled $126,000 as of June 30, 2025 and December 31, 2024, respectively.

The allowance for credit losses related to loans decreased $106,000 to $4.7 million at June 30, 2025 from $4.8 million at December 31, 2024. The decrease in the allowance for credit losses was due primarily to charge-offs totaling $603,000, partially offset by recoveries of $434,000 and a credit loss expense of $62,000.

The allowance for credit losses related to off-balance sheet commitments increased $175,000 to $879,000 at June 30, 2025 from $704,000 due to a credit loss expense of $175,000 at June 30, 2025.

### Liquidity and Capital Resources

We maintain liquid assets at levels we believe are adequate to meet our liquidity needs. We established a liquidity ratio policy that identifies three liquidity ratios consisting of (1) Cash/Deposits & Short Term Borrowings (“Cash Liquidity”), (2) Cash & Investments/Deposits & Short Term Borrowings (“On Balance Sheet Liquidity”), and (3) Cash & Investments & Borrowing Capacity/Deposits & Short Term Borrowings (“On Balance Sheet Liquidity & Borrowing Capacity”) to assist in the management of our liquidity. We also establish targets of 2.0% for the Cash Liquidity ratio, 8.0% for the On Balance Sheet Liquidity ratio, and 20.0% for the On Balance Sheet Liquidity & Borrowing Capacity ratio.

Our Cash Liquidity ratio, On Balance Sheet Liquidity ratio, and On Balance Sheet Liquidity & Borrowing Capacity ratio averaged 5.7%, 8.0%, and 64.8%, respectively, for the six months ended June 30, 2025 compared to 6.7%, 8.8%, and 65.6%, respectively, for the year ended December 31, 2024. We adjust our liquidity levels to fund deposit outflows, pay real estate taxes on real estate loans, repay our borrowings, and fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.

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

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

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

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

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

Week 1: In a prolonged liquidity event, this is the amount of cash available over one week. Week 1 liquidity includes Day 1 liquidity plus the estimated collateral value of unpledged investments that can be pledged or sold, as well as a portion (typically 10% each) of the Company’s brokered and listing service deposit capacity expected to be accessible within the week.

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

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

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

As of June 30, 2025, the Company’s ratios of Cash and Borrowing Capacity/Total Non-Contractual Deposits and Cash, Borrowing Capacity and Sourced Deposits Capacity/Total Non-Contractual Deposits were 70.9% and 95.9%, respectively. These figures demonstrate that the Company has sufficient liquidity resources to meet sudden and unexpected deposit outflow.

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

Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Consolidated Statements of Cash Flows included with our Consolidated Financial Statements.

Our primary investing activities are the origination of construction loans, commercial and industrial loans, multifamily loans, and to a lesser extent, mixed-use real estate loans and other loans. For the six months ended June 30, 2025 and 2024, our loan originations totaled $462.7 million and $364.7 million, respectively. Cash received from the maturities and pay-downs on securities totaled $485,000 and $476,000 for the six months ended June 30, 2025 and 2024, respectively. We purchased $3.0 million in equity securities and $270,000 in municipal securities during the six months ended June 30, 2025 compared to no purchases during the six months ended June 30, 2024.

Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of New York to provide advances. As a member of the Federal Home Loan Bank of New York, we are required to own capital stock in the Federal Home Loan Bank of New York and are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to credit-worthiness have been met. We had an available borrowing limit of $23.1 million and $18.2 million from the Federal Home Loan Bank of New York as of June 30, 2025 and December 31, 2024, respectively. We had $15.0 million in Federal Home Loan Bank advances at June 30, 2025 compared to none at December 31, 2024.

The Federal Reserve Bank of New York (“FRBNY”) approved on August 30, 2023 the Bank’s eligibility to pledge loans under the Borrower-in-Custody program of the FRBNY thereby allowing the Bank to borrow from the Discount Window at the FRBNY. We had an available borrowing limit of $740.2 million and $834.7 million from the FRBNY as of June 30, 2025 and December 31, 2024, respectively. We had $120.0 million in FRBNY borrowings at June 30, 2025 compared to none at December 31, 2024.

In addition, we are party to a loan agreement with ACBB under which we can borrow up to $8.0 million in short-term borrowings. There were no outstanding borrowings with ACBB at June 30, 2025 and December 31, 2024.

At June 30, 2025, we had unfunded commitments on construction and multi-family mortgage loans of $426.3 million, outstanding commitments to originate loans of $110.6 million, unfunded commitments under lines of credit of $85.6 million, and unfunded standby letters of credit of $14.0 million. At June 30, 2025, certificates of deposit scheduled to mature in less than one year totaled $688.8 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as various types of sourced deposits, Federal Home Loan Bank advances, or Federal Reserve Bank borrowings, in order to maintain our level of assets. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents. In addition, the cost of such deposits may be significantly higher or lower depending on market interest rates at the time of renewal.

The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its stockholders and for the repurchase, if any, of its shares of common stock. At June 30, 2025, the Company had liquid assets of $12.2 million and $4.1 million in loan participations originated by the Bank which are held by the Company.

### Off-Balance Sheet Arrangements

For the three and six months ended June 30, 2025, we did not engage in any off-balance sheet transactions reasonably likely to have a material adverse effect on our financial condition, results of operations or cash-flows.

### Impact of Inflation and Changing Prices

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

## Market risk

As filed, 7,826 characters.

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

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

Our objective is to manage our interest rate risk by determining whether a given movement in interest rates affects our net interest income and the market value of our portfolio equity in a positive or negative way and to execute strategies to maintain interest rate risk within established limits. The results at June 30, 2025 indicate the level of risk within the parameters of our model. Our management believes that the June 30, 2025 results indicate a profile that reflects interest rate risk exposures in both rising and declining rate environments for both net interest income and economic value.

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

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

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

If the results produce quantifiable interest rate risk exposure beyond our limits, then the testing will have served as a monitoring mechanism to allow us to initiate asset/liability strategies designed to reduce and therefore mitigate interest rate risk. The table below sets forth an approximation of our interest rate risk exposure. The simulation uses projected repricing of assets and liabilities at June 30, 2025. The income simulation analysis presented represents a one-year impact of the interest scenario assuming a static balance sheet. Various assumptions are made regarding the prepayment speed and optionality of loans, investment securities and deposits, which are based on analysis and market information. The assumptions regarding optionality, such as prepayments of loans and the effective lives and repricing of non-maturity deposit products, are documented periodically through evaluation of current market conditions and historical correlations to our specific asset and liability products under varying interest rate scenarios.

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

The table below sets forth, as of June 30, 2025, NorthEast Community Bank’s net portfolio value, the estimated changes in our net portfolio value and net interest income that would result from the designated instantaneous parallel changes in market interest rates.

| ​ ​ ​ ​ Change in Interest Rates (Basis Points) | ​ ​ ​ ​ | ​ ​ Twelve Month ​ Net Interest Income ​ Percent ​ of Change | ​ ​ ​ ​ Net Portfolio Value ​ ​ Estimated NPV | ​ ​ ​ | ​ ​ ​ ​ ​ Percent of Change |
| ---: | --- | ---: | ---: | --- | ---: |
| +200 |  | 13.63% | $366,754 |  | 1.24% |
| +100 |  | 6.86 ​ | 365,106 |  | 0.78 ​ |
| 0 |  | — ​ | 362,275 |  | — ​ |
| -100 | ​ | (7.64) ​ | ​ 356,257 | ​ | (1.66) ​ |
| -200 |  | (15.46)% | 347,310 |  | (4.13)% |

As of June 30, 2025, based on the scenarios above, net interest income would increase by approximately 6.86% to 13.63%, over a one-year time horizon in a rising interest rate environment. One-year net interest income would decrease by approximately 7.64% to 15.46% in a declining interest rate environment over the same period.

Economic value at risk would be positively impacted by a rise in interest rates and negatively impacted by a decline in interest rates. We have established an interest rate floor of zero percent for measuring interest rate risk. The difference between the two results reflects the relatively long terms of a portion of our assets which is captured by the economic value at risk but has less impact on the one year net interest income sensitivity.

Overall, our June 30, 2025 results indicate that we are adequately positioned with an acceptable net interest income and economic value at risk and that all interest rate risk results continue to be within our policy guidelines.

## Controls and procedures

As filed, 1,294 characters.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure (1) that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms; and (2) that they are alerted in a timely manner about material information relating to the Company required to be filed in its periodic Securities and Exchange Commission filings.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 423 characters.

For information regarding the Company’s risk factors, refer to “*Item 1A: Risk* Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 14, 2025. As of June 30, 2025, the risk factors of the Company have not changed materially from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Filed Aug 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001558370-25-010872. Last ingested by Listed: Nov 2, 2026, 09:07 ET. No prices; not investment advice.