Third Quarter 2026 Highlights

During the third quarter, we continued to make meaningful progress in building a stronger, more scalable franchise. Our results reflect the continued growth of the Bank, with total assets increasing 15% year over year to $180.1 million, gross loans growing 15% to $146.9 million, and total deposits increasing 13% to $148.9 million. We are particularly encouraged by the continued strengthening of our deposit franchise, including $20.2 million of year-to-date growth in money market deposits and $1.9 million of growth in noninterest-bearing demand deposits, while reducing our reliance on higher-cost institutional certificates of deposit.

At the same time, we continued to improve the underlying economics of the Bank. Net interest margin increased to 3.89% at September 30, compared with 3.83% at June 30 and 3.73% at March 31. We also reduced Federal Home Loan Bank borrowings from $29 million at June 30 to $11 million at September 30, contributing to a reduction in quarterly borrowing expense from $247,000 to $163,000. These improvements, combined with continued growth in our loan portfolio, contributed to higher net interest income during the quarter.

We believe the Bank has established a solid foundation for its next phase of growth. We remain focused on expanding relationship-based core deposits, maintaining disciplined loan growth, improving our funding mix and operating efficiency, and building sustainable value for our shareholders. With strong liquidity, improving margins, continued year-over-year growth, and favorable quality deal flow for both loans and deposits, we are optimistic about the opportunities ahead.

Thomas J. "Chip" Inserra

President & CEO

Progress. Growth. Opportunity.

Building momentum for continued growth and opportunity

Asset Growth

Total Assets: $180.1 million as of September 30, 2026
- Increased $23.6 million (15%) compared to September 30, 2025
- Increased $3.4 million (2%) from December 31, 2025

Loan Portfolio

Gross Loans: $146.9 million as of September 30, 2026
- Increased $18.8 million (15%) from September 30, 2025
- Increased $2.8 million (2%) from December 31, 2025
Loan Yield: Average yield of 7.36%
Net Interest Margin: Improved to 3.89%
Credit Quality:
- No other loans past due as of September 30, 2026; $990,000 in government-guaranteed loans were on nonaccrual
- Included $32.7 million in State and SBA guaranteed loans
- Allowance for credit losses totaled $1.446 million, or 0.98% of total loans

Deposits

Total Deposits: $148.9 million as of September 30, 2026
- Increased $16.9 million (13%) over the prior 12 months
- Increased $5.4 million (4%) from December 31, 2025
The Bank reduced institutional CD balances by $11.6 million
- Money market deposits increased $20.2 million (37%) from December 31, 2025
- Noninterest-bearing demand deposits increased $1.9 million
- Resulted in an increase in core deposits

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Earnings Performance

Q3 2026 Net Loss: $263.5 thousand
- Compared to net income of $111.8 thousand in Q2 2026
- Excluding credit loss provisions, Q3 2026 net income was $72.5 thousand
Year-to-Date 2026 Results:
- Reported net loss of approximately $304 thousand
- Excluding credit loss provisions, year-to-date net income was $32.5 thousand
- After excluding all one-time non-recurring expenses and provisions, year-to-date net income was $185.4 thousand

Liquidity & Funding

Total Liquidity: $30.7 million
- Represents 17.02% of total assets
Available Contingent Borrowing Sources: $38.5 million
- Represents 21% of total assets
Overall liquidity remains strong

Earnings Fundamentals

Average loan yield was 7.36%, contributing to a 3.89% net interest margin.
Net interest margin improved from 3.83% as of June 30, 2026 and 3.73% as of March 31, 2026.

Credit Loss Reserves

Allowance for Credit Losses: $1.446 million
- 0.98% of total loans
- 1.13% excluding loans held-for-sale
- 1.27% excluding government-guaranteed loan portions
The loan portfolio included $32.7 million in State and SBA guaranteed loans
No other loans were past due as of September 30, 2026; $990 thousand in loans were on nonaccrual, representing 0.67% of total loans

Performance