SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2025

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                         to                        

Commission File No. 001-42198

Fifth District Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	99-1897673
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
4000 General DeGaulle Drive, New Orleans, Louisiana	70114
(Address of Principal Executive Offices)	(Zip Code)

(504) 362-7544

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	FDSB	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

5,559,473 shares of the registrant’s common stock, par value $0.01 per share, were outstanding as of May 12, 2025.

Fifth District Bancorp, Inc.

Form 10-Q

Index

		Page
Part I. – Financial Information
Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (unaudited)	2
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (unaudited)	3
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (unaudited)	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	41
Part II. – Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
	Signature Page	44

i

Part I. – Financial Information

Item 1.Financial Statements

FIFTH DISTRICT BANCORP, INC.

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

	March 31,		December 31,
	2025		2024
	(Unaudited)		(Audited)
Assets
Cash and Due from Banks	$	5,451	$	5,850
Interest-Bearing Deposits at Other Financial Institutions		24,652		32,066
Total Cash and Cash Equivalents		30,103		37,916
Investment Securities Available-for-Sale, at Fair Value (amortized cost $103,260 and $101,712 respectively)		96,228		92,987
Restricted Stock		916		910
Loans Receivable, Net of Unearned Income		377,969		369,032
Allowance for Credit Losses		(1,699)		(1,699)
Loans Receivable, Net		376,270		367,333
Bank Owned Life Insurance		10,773		10,685
Premises and Equipment, Net		11,811		11,923
Accrued Interest Receivable		2,216		1,967
Real Estate Owned		42		42
Deferred Tax Asset, Net		2,092		2,447
Other Assets		618		1,097
Total Assets	$	531,069	$	527,307
Liabilities and Stockholders' Equity
Liabilities
Deposits
Interest-Bearing	$	392,923		389,860
Noninterest-Bearing		1,462		1,616
Advances from Borrowers for Taxes, Insurance, and Repairs		4,266		5,280
Other Liabilities		5,157		4,776
Total Liabilities		403,808		401,532
Stockholders' Equity
Preferred Stock - $0.01 Par Value; 1,000,000 Shares Authorized, None issued and Outstanding at March 31, 2025 and December 31, 2024		—		—
Common Stock - $0.01 Par Value; 20,000,000 Shares Authorized: 5,559,473 Shares Issued and Outstanding at both March 31, 2025 and December 31, 2024		56		56
Additional Paid-In Capital		53,178		53,163
Unearned ESOP Stock		(4,171)		(4,226)
Retained Earnings		83,771		83,693
Accumulated Other Comprehensive Loss		(5,573)		(6,911)
Total Stockholders' Equity		127,261		125,775
Total Liabilities and Stockholders' Equity	$	531,069	$	527,307

The accompanying notes are an integral part of these consolidated financial statements.

1

FIFTH DISTRICT BANCORP, INC.

Consolidated Statements of Operations (Unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2025		2024
Interest and Dividend Income
Loans, Including Fees	$	4,015	$	3,702
Investment Securities		901		396
Other Interest-Earning Assets		293		202
Total Interest and Dividend Income		5,209		4,300
Interest Expense
Deposits		2,272		2,247
Short-Term Federal Home Loan Bank Advances		—		5
Total Interest Expense		2,272		2,252
Net Interest Income		2,937		2,048
Recovery of Credit Losses on Loans		—		(100)
Net Interest Income After Recovery of Credit Losses		2,937		2,148
Non-Interest Income
Deposit Service Charges and Fees		51		54
ATM and Check Card Fees		96		97
Bank Owned Life Insurance		88		83
Loss on Investments Securities		—		(1,144)
Gain on Sale of Real Estate Owned		13		—
Other		14		13
Total Non-Interest Income (Loss)		262		(897)
Non-Interest Expense
Salaries and Employee Benefits		1,822		1,564
Occupancy and Equipment		479		429
Federal Deposit Insurance		53		50
Directors		73		72
Professional and Legal		60		38
Audit and Examination		85		63
Data Processing		318		294
Advertising		19		28
Other		191		146
Total Non-Interest Expense		3,100		2,684
Income (Loss) Before Income Taxes		99		(1,433)
Income Tax Expense (Benefit)		21		(301)
Net Income (Loss)	$	78	$	(1,132)
Earnings per Share - Basic and Diluted	$	0.02		N/A

The accompanying notes are an integral part of these consolidated financial statements.

2

FIFTH DISTRICT BANCORP, INC.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2025		2024
Net Income (Loss)	$	78	$	(1,132)
Other Comprehensive Income
Unrealized Net Gain on Investment Securities Available-for-Sale Arising During the Period		1,692		1,526
Reclassification Adjustment for Net Losses Realized		—		(1,144)
Net Loss on Defined Benefit Pension Plan		1		—
Tax Effect		(355)		(81)
Total Other Comprehensive Income		1,338		301
Comprehensive Income (Loss)	$	1,416	$	(831)

The accompanying notes are an integral part of these consolidated financial statements.

3

FIFTH DISTRICT BANCORP, INC.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(in thousands)

									Accumulated
			Additional		Unearned				Other		Total
	Common		Paid-In		ESOP		Retained		Comprehensive		Stockholders'
(in thousands)	Stock		Capital		Shares		Earnings		Loss		Equity
Balance at December 31, 2023	$	—	$	—	$	—	$	84,771	$	(6,973)	$	77,798
Net Loss		—		—		—		(1,132)		—		(1,132)
Other Comprehensive Income		—		—		—		—		301		301
Balance at March 31, 2024	$	—	$	—	$	—	$	83,639	$	(6,672)	$	76,967
Balance at December 31, 2024		56		53,163		(4,226)		83,693		(6,911)		125,775
Net Income		—		—		—		78		—		78
Other Comprehensive Income		—		—		—		—		1,338		1,338
Issuance of Common Stock		—		—		—		—		—		—
ESOP Shares Released for Allocation		—		15		55		—		—		70
Balance at March 31, 2025	$	56	$	53,178	$	(4,171)	$	83,771	$	(5,573)	$	127,261

Note:  The balances as of December 31, 2024 and 2023 were audited.

The accompanying notes are an integral part of these consolidated financial statements.

4

FIFTH DISTRICT BANCORP, INC.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended
	March 31,
(in thousands)	2025		2024
Cash Flows from Operating Activities
Net Income (Loss)	$	78	$	(1,132)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by (Used in) Operating Activities
Recovery of Credit Losses		—		(100)
Gain on Sale of Real Estate Owned		(13)		—
Depreciation		170		165
Net Amortization (Accretion) of Deferred Loan Costs		(46)		7
Net Amortization on Investment Securities		49		68
Loss on Sale of Investment Securities		—		1,144
Federal Home Loan Bank Stock Dividend		(7)		(7)
Deferred Tax Expense		(262)		—
Increase in Cash Surrender Value on Bank Owned Life Insurance		(88)		(83)
ESOP Compensation Expense		70		—
Changes in Operating Assets and Liabilities
Accrued Interest Receivable		(249)		(165)
Other Assets		741		(957)
Other Liabilities		380		290
Net Cash Provided by (Used in) Operating Activities		823		(770)
Cash Flows from Investing Activities
Proceeds from Sale or Maturities of Investment Securities
Available-for-Sale		3,405		19,741
Purchases of Investment Securities Available-for-Sale		(4,999)		(6,445)
Increase in Loans Receivable, Net		(9,021)		(272)
Proceeds from Sale of Real Estate Owned		142		—
Purchases of Premises and Equipment		(58)		(344)
Net Cash Provided by (Used in) Investing Activities		(10,531)		12,680

The accompanying notes are an integral part of these consolidated financial statements.

5

FIFTH DISTRICT BANCORP, INC.

Consolidated Statements of Cash Flows (Continued) (Unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2025		2024
Cash Flows from Financing Activities
Increase in Deposits, Net		2,909		10,383
Federal Home Loan Bank Advances		—		(4,000)
Advances by Borrowers for Taxes,				—
Insurance, and Repairs		(1,014)		(974)
Net Cash Provided by Financing Activities		1,895		5,409
Net Increase (Decrease) in Cash and Cash Equivalents		(7,813)		17,319
Cash and Cash Equivalents, Beginning of Year		37,916		19,306
Cash and Cash Equivalents, End of Year	$	30,103	$	36,625
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Period for Interest	$	2,353		2,135
Cash Paid During the Period for Taxes	$	—		—
Non-Cash Investing and Financing Activities
Real Estate Owned Acquired Through Foreclosure	$	130	$	—

The accompanying notes are an integral part of these consolidated financial statements.

6

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies (Unaudited)

Description of Business

Fifth District Bancorp, Inc. (“Fifth District Bancorp” or the “Company”) is a Maryland corporation incorporated on February 15, 2024, to serve as the bank holding company for Fifth District Savings Bank (“Fifth District” or the “Bank”) in connection with the Bank’s conversion from the mutual to stock form of organization (the “Conversion”). The Conversion was completed on July 31, 2024.  In connection with the Conversion, Fifth District Bancorp acquired 100% ownership of Fifth District and the Company offered and sold 5,459,473 shares of its common stock at $10.00 per share, for gross offering proceeds of $54,594,730. The cost of the Conversion and issuance of common stock was approximately $2,400,000, which was deducted from the gross offering proceeds.  Additionally, the Company contributed 100,000 shares to a newly formed charitable foundation.  The Bank’s employee stock ownership plan (“ESOP”) purchased 444,758 shares of the common stock sold by the Company, which was equal to 8% of the 5,559,473 shares of common stock issued by the Company.  The ESOP purchased the shares using a loan from the Company.  The Company contributed approximately $26,097,000 of the net proceeds from the offering to the Bank, loaned $4,447,580 of the net proceeds to the ESOP and retained approximately $21,400,000 of the net proceeds.  

The Bank is a federally-chartered stock savings bank which attracts deposits from the general public and uses such deposits primarily to originate loans secured by first mortgages on owner-occupied, family residences.  The Bank’s primary regulator is the Office of the Comptroller of the Currency (OCC). The Bank’s activities are provided to customers of the Bank by branch offices located in the greater New Orleans area; however, loan and deposit customers are found dispersed in a wider geographical area covering southeast Louisiana. The Bank operates as one reporting segment.  

Basis of Presentation

The accounting and reporting policies and practices of the Company conform with accounting principles generally accepted in the United States of America (U.S. GAAP) and predominant practices within the banking industry.

The unaudited consolidated financial statements of the Company were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes for a complete presentation of financial condition, results of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows in conformity with U.S. GAAP.  In the opinion of management, the unaudited consolidated financial statements include all adjustments considered necessary to present fairly the Company’s financial position.  The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results which may be expected for the entire fiscal year.  These statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2024.  

Principles of Consolidation

The consolidated financial statements as of and for the period ended March 31, 2025 include the amounts of Fifth District Bancorp and its wholly-owned subsidiary, Fifth District. All intercompany transactions and balances have been eliminated.  

The financial statements for the period ended March 31, 2024 are those of the Bank only, as the conversion to stock form, including the formation of Fifth District Bancorp, was completed on July 31, 2024. References herein

7

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

to the “Company” for periods prior to the completion of the stock conversion should be deemed to refer to the “Bank”.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Material estimates that are particularly susceptible to significant change in the near-term relate to the valuation of the allowance for credit losses, deferred taxes, and fair value of financial instruments.

The determination of the adequacy of the allowance for credit losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of estimated losses on loans and unfunded commitments, management obtains independent appraisals for significant collateral. While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination processes, periodically review the estimated losses on loans. Based on such reviews the Company may determine to recognize additional losses based on their judgements about information available to them at the time of their examination.  Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near-term. However, the amount of the change that is reasonably possible cannot be estimated.

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash on hand, cash items, amounts due from banks, and interest-bearing deposits at other financial institutions with an original maturity of 90 days or less, and federal funds sold. Generally, federal funds are sold for one-day periods.

Cash and due from banks include bank deposit accounts aggregating approximately $20,887,000 and $27,315,000  in excess of the Federal Deposit Insurance Corporation limit of $250,000 per insured account on March 31, 2025 and December 31, 2024, respectively. The Company has not experienced any losses and does not believe that significant credit risk exists as a result of this practice.

The Company may be required to maintain cash reserves with the Federal Reserve Bank. The requirement is dependent upon the Company’s cash on hand or noninterest-bearing balances. There was no reserve requirement as of March 31, 2025, and December 31, 2024.

Investment Securities

Debt securities classified as held-to-maturity are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs, or changes in general economic conditions. These securities are carried at cost, adjusted for amortization of premium and accretion of discounts. Purchase premiums and discounts are recognized in interest income using the effective interest method over the terms of the securities, identified as the call date as to premiums and maturity date as to discounts. The Company held no held-to-maturity securities as of March 31, 2025 or December 31, 2024.

Debt securities classified as available-for-sale are those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available-

8

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

for-sale would be based on various factors, including significant movement in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. These securities are carried at estimated fair value by a third-party pricing service with any unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of stockholders’ equity, net of the related deferred tax effect.

Debt securities that are classified as trading are acquired and held principally for the purpose of selling in the near term. These securities are carried at estimated fair value by a third-party pricing service with any unrealized gains or losses included in net income and reported in non-interest income in the consolidated statements of operations. The Company held no trading securities as of March 31, 2025 or December 31, 2024.

Gains and losses realized on sales of debt securities, determined using the adjusted cost basis of the specific securities sold, are included in non-interest income in the statements of operations.  Dividend and interest income, including amortization of premium and accretion of discount arising at acquisition, from all categories of investment securities are included in interest income in the consolidated statements of operations.

Restricted Stock

Restricted stock is stock from the Federal Home Loan Bank (FHLB) and First National Bankers Bank (FNBB), which is restricted as to its marketability. Because no ready market exists for these investments and they have no quoted market value, the Company’s investment in these stocks is carried at cost. A determination as to whether there has been an impairment of a restricted stock investment is performed on an annual basis and includes a review of the current financial condition of the issuer.

Allowance for Credit Losses - Investment Securities Available-for-Sale

For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell or is required to sell the security, the security is written down to fair value, and the entire loss is recorded in earnings.

If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments, and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected is compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited to the amount that the fair value is less than the amortized cost basis, recognized as a provision for credit loss in the statements of operations. Any amount of noncredit related unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit loss are recorded as provision for (or recovery of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At March 31, 2025 and December 31, 2024, there was no allowance for credit loss related to the available-for-sale portfolio.

Accrued interest receivable on available-for-sale securities totaled approximately $407,000 and $348,000 at March 31, 2025 and December 31, 2024, respectively, and was excluded from the estimate of credit losses.

9

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Loans Receivable

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred fees and costs.

Accrued interest receivable related to loans totaled approximately $1,809,000 and $1,619,000 at March 31, 2025, and December 31, 2024, respectively, and was reported in accrued interest receivable on the balance sheets. Interest income is accrued on the unpaid principal balance as earned using the interest method over the life of the loan. Loan origination and commitment fees and certain direct loan origination costs are deferred and amortized as an adjustment to the related loan’s yield using the effective interest method over the contractual life of the loan.

The accrual of interest is generally discontinued when a loan becomes 90 days past due, is not well collateralized and in the process of collection, or when management believes, after considering economic and business conditions and collection efforts, that the principal or interest will not be collectible in the normal course of business. Past due status is based on contractual terms of the loan. A loan is considered to be past due when a scheduled payment has not been received 30 days after the contractual due date.

All accrued interest is reversed against interest income when a loan is placed on nonaccrual status. Interest received on such loans is accounted for using the cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, there is a sustained period of repayment performance, and future payments are reasonably assured.

Allowance for Credit Losses - Loans Receivable

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate amounts previously charged-off and expected to be charged-off. Accrued interest receivable is excluded from the estimate of credit losses.

The allowance for credit losses represents management’s estimate of lifetime credit losses in loans as of the balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

Expected credit losses are measured on a pooled basis when similar risk characteristics exist using the modified open pool method. The modified open pool method applies a loss rate to a given pool of loans over the estimated remaining life of the given pool, which is based on historical data. Loan losses are calculated using the modified open pool method due to the nature and limited complexity of the loan portfolio.

10

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The Company has identified and calculates the allowance for credit losses for each of the following portfolio segments:

Loan Pool	Risk Characteristics
One-to-Four Family Mortgages	This category consists of loans secured by residential real estate. The performance of these loans may be adversely affected by, among other factors, local residential real estate market conditions, the interest rate environment, and inflation.
Construction Loans	This category consists of loans to finance the ground-up construction and/or improvement of residential and vacant lot loans. The performance of construction loans is generally dependent upon the successful completion of improvements and/or land development for the end user. The successful completion of planned improvements and development may be adversely affected by changes in the estimated property value upon completion of construction, projected costs, and other conditions leading to project delays.
Home Equity Loans/ Lines of Credit	This category consists of loans secured by first and junior liens on residential real estate. The performance of these loans may be adversely affected by, among other factors, local residential real estate market conditions, the interest rate environment, and inflation.
Commercial Loans	This category consists of loans primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including hotel and restaurants.  The performance of these loans may be adversely affected by, among other factors, conditions specific to the relevant industry, the real estate market for the property type and geographic region where the property of the borrower is located.   This category consists of loans to finance the ground-up construction and/or improvement of commercial properties. The performance of these loans is generally dependent upon the successful completion of improvements and/or land development for the end user.  The successful completion of planned improvements and development may be adversely affected by changes in the estimated property value upon completion of construction, projected costs and other conditions leading to project delays. This category consists of purchased business loans made to various practitioners and other professionals. These loans are often originally secured by blanket UCC-1 filings. When the loan is purchased, the Bank purchases 100% of the loan and remits 97% of the loan balance to the seller and the seller establishes a reserve deposit account with the Bank equal to 3% of the loan balance. If a loan becomes delinquent, the Bank withdraws payment from the reserve deposit account. If a loan becomes 90 days delinquent, the seller typically replaces the delinquent loan with a performing loan of equal or greater balance (although this is not a contractual obligation of the seller). The performance of these loans may be adversely affected by, among other factors, local and national market conditions, the interest rate environment and inflation.

11

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Consumer Loans This category consists of loans to individuals for household, family, and other personal use. The performance of these loans may be adversely affected by national and local economic conditions, inflation, and other factors affecting the borrower’s income available to service the debt.

Additionally, the allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending management experience and risk tolerance, loan review and audit results, asset quality and portfolio trends, loan portfolio growth, industry concentrations, trends in underlying collateral, external factors, and economic conditions not already captured. The Company estimates reasonable and supportable forecasts of expected credit losses and reverts to historical loss information for periods beyond the forecast period for the remaining life of the loan pool.

Loans that do not share risk characteristics are evaluated on an individual basis. When the borrower is experiencing financial difficulty and repayment is expected to be provided through the operation or sale of the collateral, the expected credit losses are based on the fair value of collateral at the reporting date, adjusted for estimated selling costs, as appropriate.

Allowance for Credit Losses - Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the consolidated statements of operations. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for unfunded commitments is included in other liabilities on the consolidated balance sheets.

Bank Owned Life Insurance

The Bank is the beneficiary of life insurance contracts purchased on the lives of certain officers of the Bank which are reported at their cash surrender value. At March 31, 2025 and December 31, 2024, life insurance contracts totaled approximately $10,773,000 and $10,685,000, respectively. Appreciation in the cash surrender value amounted to approximately $88,000 and $83,000 for the three months ended March 31, 2025 and 2024, respectively.  Appreciation in value of the insurance policies is included in bank owned life insurance within non-interest income in the consolidated statements of operations.

Premises and Equipment

Premises and equipment are carried at cost, less accumulated depreciation. Depreciation is computed generally on the straight-line method based upon the estimated useful lives of the assets. Estimated useful lives for building and improvements range from 15 to 40 years, and for furniture and fixtures from 5 to 10 years.

12

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Major expenditures for property acquisitions and those expenditures which substantially increase useful lives are capitalized. Expenditures for maintenance, repairs, and minor replacements that do not significantly improve or extend the lives of the respective assets are charged to expense as incurred.

When assets are retired or otherwise disposed of, their cost and related accumulated depreciation are removed from the respective accounts, and any gain or loss is reflected in other non-interest income or expense.

Real Estate Owned

Real estate acquired through, or in lieu of, loan foreclosure is initially recorded at fair value on the date of acquisition, less estimated costs to sell. Any write-downs at the time of acquisition are charged to the allowance for credit losses. Subsequent to acquisition, a valuation allowance is established, if necessary, to report these assets at the lower of (a) fair value minus estimated costs to sell or (b) cost.

The ability of the Company to recover the carrying value of real estate is based upon future sales of the real estate owned. The ability to effect such recovery is subject to market conditions and other factors, many of which are beyond the Company’s control. Operating income of such properties, net of related expenses, and gains and losses on their disposition, are included in the consolidated statements of operations. The Company had $42,000 of real estate owned as of March 31, 2025 and December 31, 2024.

Income Taxes

Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the financial statement carrying amounts and the tax bases of the Company’s assets and liabilities. Deferred income tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more-likely-than-not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the consolidated balance sheets, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the consolidated statements of operations.

Accounting principles generally accepted in the United States of America provide accounting and disclosure guidance about positions taken by an entity in its tax returns that might be uncertain. The Company believes that it has appropriate support for any tax positions taken, and management has determined that there are no uncertain tax positions that are material to the consolidated financial statements.

13

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The Company had no amount of interest and/or penalties recognized in the consolidated statements of operations for the three months ended March 31, 2025 and 2024, nor any amount of interest and/or penalties payable that were recognized in the consolidated balance sheets as of March 31, 2025 and December 31, 2024, in relation to its income tax returns. Any penalties or interest would be recognized in income tax expense.

The Company is no longer subject to U.S. federal examinations for years prior to 2021.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), net of applicable income taxes. Other comprehensive income (loss) includes unrealized gains and losses on available-for-sale securities and pension-related changes other than net periodic pension cost. Accumulated other comprehensive (loss) consists of the cumulative unrealized gains and losses on available-for-sale securities and the cumulative unrealized gain or loss for the funded status of the pension plan liability, net of tax.

Earnings per Share

Basic earnings (loss) per share (“EPS”) represents income available or loss attributable to common shareholders divided by the weighted average number of common shares outstanding during the period. Unallocated common shares held by the ESOP are shown as a reduction in stockholders’ equity and are excluded from the weighted-average common shares outstanding for both basic and diluted earnings per share calculations until they are committed to be released.  

The Company had no dilutive or potentially dilutive securities during the period ended March 31, 2025. At and during the period ended March 31, 2024, the company did not have any common shares outstanding as its initial public offering of stock in connection with the Bank’s conversion from mutual to stock form of organization was completed on July 31, 2024.

Revenue Recognition

In the ordinary course of business, the Company recognizes income from various revenue generating activities. Revenue from contracts with customers within the scope of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606 is measured based on the consideration the Company expects to be entitled to receive in exchange for those goods or services as the related performance obligation is satisfied. Some obligations are satisfied at a point in time while others are satisfied over a period of time. A performance obligation is deemed to be satisfied when the control over goods or services is transferred to the customer.

The majority of the Company’s revenue is specifically excluded from the scope of ASC 606. Service charges on deposit accounts and ATM and check card fees are the most significant categories of revenue within the scope of ASC 606 and is included in non-interest income on the consolidated statements of operations.

Service charges on deposit accounts include charges related to depository accounts under standard service agreements. Fees are generally recognized at a point in time as services are delivered to or consumed by the customer or as penalties are assessed.

ATM and check card fees includes interchange fees from credit and debit cards processed through card association networks, annual fees, and other transaction and account management fees. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. The Company records interchange fees as services are provided. Transaction and account management fees are recognized as services are provided,

14

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

except for annual fees which are recognized over the applicable period. The costs of related loyalty rewards programs are netted against interchange revenue as a direct cost of the revenue generating activity.

Non-Direct-Response Advertising

The Company expenses all advertising costs, except for direct-response advertising, as incurred. Advertising and promotional expenses totaled approximately $19,000 and $28,000 for the three months ended March 31, 2025 and 2024, respectively. If the Company incurs expenses for material direct-response advertising, it will be amortized over the estimated benefit period. Direct-response advertising consists of advertising whose primary purpose is to elicit sales to customers who could be shown to have responded specifically to the advertising and results in probable future benefits. For the three months ended March 31, 2025 and 2024, the Company did not incur any direct-response advertising costs.

Segment Reporting

The Company adopted Accounting Standards Update (ASU) 2023-07 “Segment Reporting (Topic 280) - Improvement to Reportable Segment Disclosures” on January 1, 2024. The Company has determined that all of its banking divisions and subsidiaries meet the aggregation criteria of ASC 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar base of clients utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company’s Chief Executive Officer, who has been identified as the chief operating decision maker (CODM).

The Company has a single operating segment and thus a single reporting segment. The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income (loss) reported in the Company’s consolidated statements of operations. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of operations.

Recent Accounting Pronouncements – Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amended the Income Taxes topic in the ASC 742 to improve the transparency of income tax disclosures. The amendments are effective for annual periods beginning after December 15, 2024 and interim periods thereafter.  Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires the disaggregation of certain expenses in the notes to the consolidated financial statements, to provide enhanced transparency into the expense captions presented on the face of the consolidated statement of operations. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 31, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either prospectively or retrospectively. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.  

15

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Note 2. Investment Securities

The amortized cost and estimated fair values of investment securities available-for-sale at March 31, 2025 and December 31, 2024 are as follows:

	March 31, 2025
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value
U.S. Government Agencies	$	1,000	$	—	$	—	$	1,000
Mortgage-Backed Securities		94,205		287		(7,218)		87,274
Collateralized Mortgage Obligations		2,305		—		(101)		2,204
Corporate Bonds		5,750		—		—		5,750
Total	$	103,260	$	287	$	(7,319)	$	96,228

	December 31, 2024
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value
U.S. Government Agencies	$	1,000	$	—	$	(4)	$	996
Mortgage-Backed Securities		94,003		90		(8,674)		85,419
Collateralized Mortgage Obligations		2,459		—		(137)		2,322
Corporate Bonds		4,250		—		—		4,250
Total	$	101,712	$	90	$	(8,815)	$	92,987

The following tables show the gross unrealized losses and estimated fair value of investment securities available-for-sale for which an allowance for credit losses has not been recorded by category and length of time that securities have been in a continuous unrealized loss position at March 31, 2025, and December 31, 2024:

	March 31, 2025
	Securities				Securities
	With Losses Under				With Losses Over
	12 Months				12 Months				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Loss		Value		Loss		Value		Loss
U.S. Government Agencies	$	—	$	—	$	1,000	$	—	$	1,000	$	—
Mortgage-Backed Securities		28,633		(153)		39,147		(7,065)		67,780		(7,218)
Collateralized Mortgage Obligations		884		(10)		1,320		(91)		2,204		(101)
Total	$	29,517	$	(163)	$	41,467	$	(7,156)	$	70,984	$	(7,319)

16

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

	December 31, 2024
	Securities				Securities
	With Losses Under				With Losses Over
	12 Months				12 Months				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Loss		Value		Loss		Value		Loss
U.S. Government Agencies	$	—	$	—	$	996	$	(4)	$	996	$	(4)
Mortgage-Backed Securities		38,128		(433)		39,103		(8,241)		77,231		(8,674)
Collateralized Mortgage Obligations		962		(10)		1,360		(127)		2,322		(137)
Total	$	39,090	$	(443)	$	41,459	$	(8,372)	$	80,549	$	(8,815)

At March 31, 2025, 76 of the Company’s available-for-sale securities had unrealized losses totaling 9.3% of the individual securities’ amortized cost basis and 7.1% of the Company’s total amortized cost basis of the investment securities portfolio. At March 31, 2025, 57 of these 76 securities had been in a continuous loss position for over 12 months. At December 31, 2024, 80 of the Company’s available-for-sale securities had unrealized losses totaling 9.9% of the individual securities’ amortized cost basis and 8.7% of the Company’s total amortized cost basis of the investment securities portfolio.  At December 31, 2024, 57 of the 80 securities had been in a continuous loss position over 12 months.  The unrealized losses of these securities are believed to be caused by interest rate increases and changing market conditions and the Company does not intend to sell the securities, and it is not likely to be required to sell these securities prior to maturity. Management has determined that the declines in the fair value of these securities are not attributable to credit losses.

The Company’s securities in an unrealized loss position are issued by U.S. government agencies or U.S. government-sponsored enterprises.  These securities carry the implicit guarantee of the U.S. government and have a long history of zero credit loss. No allowance for credit losses was recorded for available-for-sale securities at March 31, 2025 or December 31, 2024.  

The amortized cost and estimated fair value of securities classified as available-for-sale at March 31, 2025, by contractual maturity, are shown in the table below (in thousands). Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. The expected maturity of a security may differ from its contractual maturity because of the exercise of call options and potential paydowns. Accordingly actual maturities may differ from contractual maturities.

	Amortized		Fair
(in thousands)	Cost		Value
Available-for-Sale
Due in 1 Year or Less	$	—	$	—
Due after 1 Year through 5 Years		1,614		1,611
Due after 5 Years through 10 Years		10,555		10,049
Due after 10 Years		91,091		84,568
Total	$	103,260	$	96,228

There were no sales of available-for-sale securities during the three months ended March 31, 2025.  The Company sold $18,685,000 securities available-for-sale and recorded a loss of $1,144,000 during the three months ended March 31, 2024.      

17

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Note 3. Restricted Stock

The following table shows the amount of restricted stock as of March 31, 2025, and December 31, 2024:

(in thousands)	2025		2024
Federal Home Loan Bank	$	566	$	560
First National Bankers Bank		350		350
Total	$	916	$	910

Note 4. Loans Receivable and Allowance for Credit Losses

Loans receivable at March 31, 2025, and December 31, 2024 are summarized as follows:

(in thousands)	2025		2024
One-to-Four Family Mortgages	$	336,313	$	332,659
Home Equity Lines of Credit		8,476		7,952
Construction Loans		11,550		9,588
Consumer Loans		4,788		3,699
Commercial Loans		16,109		14,355
Total Loans Receivable		377,236		368,253
Allowance for Credit Losses		(1,699)		(1,699)
Net Deferred Loan Costs		733		779
Total Loans Receivable, Net	$	376,270	$	367,333

The following tables present an analysis of past-due loans as of March 31, 2025, and December 31, 2024:

	March 31, 2025
					Loans 90 Days  or
	30-59 Days		60-89 Days		More Past Due and		Nonaccrual		Current		Total Loans
(in thousands)	Past Due		Past Due		Still Accruing		Loans		Loans		Receivable
One-to-Four Family Mortgages	$	3,550	$	—	$	—	$	758	$	332,005	$	336,313
Home Equity Lines of Credit		—		—		—		—		8,476		8,476
Construction Loans		—		—		—		—		11,550		11,550
Consumer Loans		7		—		—		—		4,781		4,788
Commercial Loans		—		33		—		—		16,076		16,109
Total	$	3,557	$	33	$	—	$	758	$	372,888	$	377,236

18

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

	December 31, 2024
					Loans 90 Days  or
	30-59 Days		60-89 Days		More Past Due and		Nonaccrual		Current		Total Loans
(in thousands)	Past Due		Past Due		Still Accruing		Loans		Loans		Receivable
One-to-Four Family Mortgages	$	2,925	$	1,011	$	—	$	956	$	327,767	$	332,659
Home Equity Lines of Credit		—		—		—		—		7,952		7,952
Construction Loans		332		—		—		119		9,137		9,588
Consumer Loans		91		—		—		—		3,608		3,699
Commercial Loans		—		—		—		—		14,355		14,355
Total	$	3,348	$	1,011	$	—	$	1,075	$	362,819	$	368,253

Credit Quality Indicators

The Company uses the following criteria to assess risk ratings with respect to its loan portfolio, which are consistent with regulatory guidelines:

Pass - Loans that comply in all material respects with the loan policies that are adequately secured with conforming collateral and that are extended to borrowers with documented ability to safely cover their total debt service requirements.

Special Mention - Includes loans that do not warrant adverse classification but do possess credit deficiencies or potential weaknesses that deserve close attention.

Substandard - Includes loans that are inadequately protected by the collateral pledged or the current net worth and paying capacity of the borrower. Such loans have one or more weaknesses that jeopardize the liquidation of the debt and expose the Company to loss if the weaknesses are not corrected.

The Company’s credit quality indicators are reviewed and updated annually.

19

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The following table presents the Company’s recorded investment in loans by credit quality indicator by year of origination as of March 31, 2025:

	Term Loans by Year of Origination
(in thousands	2025		2024		2023		2022		2021		Prior		Revolving		Total
One-to-Four Family Mortgages
Pass	$	5,389	$	11,567	$	23,180	$	39,759	$	54,970	$	197,729	$	—	$	332,594
Special Mention		—		—		—		687		831		1,443		—		2,961
Substandard		—		—		—		—		401		357		—		758
Total One-to-Four Family Mortgages	$	5,389	$	11,567	$	23,180	$	40,446	$	56,202	$	199,529	$	—	$	336,313
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home Equity Lines of Credit
Pass	$	345	$	455	$	66	$	88	$	—	$	520	$	6,926	$	8,400
Special Mention		—		—		—		—		—		—		76		76
Substandard		—		—		—		—		—		—		—		—
Total Home Equity Lines of Credit	$	345	$	455	$	66	$	88	$	—	$	520	$	7,002	$	8,476
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction Loans
Pass	$	1,831	$	8,753	$	282	$	61	$	396	$	227	$	—	$	11,550
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total Construction Loans	$	1,831	$	8,753	$	282	$	61	$	396	$	227	$	—	$	11,550
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer Loans
Pass	$	1,348	$	2,815	$	231	$	36	$	34	$	324	$	—	$	4,788
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total Consumer Loans	$	1,348	$	2,815	$	231	$	36	$	34	$	324	$	—	$	4,788
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Loans
Pass	$	2,553	$	4,689	$	5,714	$	3,057	$	—	$	96	$	—	$	16,109
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total Commercial Loans	$	2,553	$	4,689	$	5,714	$	3,057	$	—	$	96	$	—	$	16,109
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

20

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The following table presents the Company’s recorded investment in loans by credit quality indicator as of December 31, 2024:

	Term Loans by Year of Origination
(in thousands)	2024		2023		2022		2021		2020		Prior		Revolving		Total
One-to-Four Family Mortgages
Pass	$	10,209	$	22,131	$	39,963	$	55,912	$	46,651	$	152,989	$	—	$	327,855
Special Mention		—		—		778		836		357		1,877		—		3,848
Substandard		—		—		—		406		—		550		—		956
Total One-to-Four Family Mortgages	$	10,209	$	22,131	$	40,741	$	57,154	$	47,008	$	155,416	$	—	$	332,659
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home Equity Lines of Credit
Pass	$	378	$	66	$	82	$	—	$	—	$	531	$	6,819	$	7,876
Special Mention		—		—		—		—		—		—		76		76
Substandard		—		—		—		—		—		—		—		—
Total Home Equity Lines of Credit	$	378	$	66	$	82	$	—	$	—	$	531	$	6,895	$	7,952
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	3	$	3
Construction Loans
Pass	$	7,385	$	1,360	$	62	$	400	$	113	$	149	$	—	$	9,469
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		119		—		—		—		—		119
Total Construction Loans	$	7,385	$	1,360	$	181	$	400	$	113	$	149	$	—	$	9,588
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer Loans
Pass	$	3,002	$	236	$	55	$	35	$	71	$	300	$	—	$	3,699
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total Consumer Loans	$	3,002	$	236	$	55	$	35	$	71	$	300	$	—	$	3,699
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Loans
Pass	$	5,119	$	6,004	$	3,133	$	—	$	—	$	99	$	—	$	14,355
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total Commercial Loans	$	5,119	$	6,004	$	3,133	$	—	$	—	$	99	$	—	$	14,355
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

21

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Nonaccrual Loans

The following table is a summary of the Company’s nonaccrual loans by major categories for the period indicated:

	March 31, 2025						December 31, 2024
	Nonaccrual		Nonaccrual				Nonaccrual		Nonaccrual		Total
	Loans		Loans				Loans		Loans
	with		with		Total		with		with
	No		an		Nonaccrual		No		an		Nonaccrual
(in thousands)	Allowance		Allowance		Loans		Allowance		Allowance		Loans
One-to-Four Family Mortgages	$	758	$	—	$	758	$	956	$	—	$	956
Home Equity Lines of Credit		—		—		—		—		—		—
Construction Loans		—		—		—		119		—		119
Consumer Loans		—		—		—		—		—		—
Commercial Loans		—		—		—		—		—		—
Total	$	758	$	—	$	758	$	1,075	$	—	$	1,075

Interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Payments received while on nonaccrual status are applied to the principal balance of nonaccrual loans. The Company does not recognize interest income while loans are on nonaccrual status.

The following table represents the accrued interest receivables written off by reversing interest income during the three months ended March 31, 2025 and 2024:

	For the Three Months Ended March 31,
(in thousands)	2025		2024
One-to-Four Family Mortgages	$	10	$	6
Home Equity Lines of Credit		—		—
Construction Loans		—		—
Consumer Loans		—		—
Commercial Loans		—		—
Total	$	10	$	6

Collateral-Dependent Loans

The Company designates individually evaluated loans on nonaccrual status as collateral-dependent loans, as well as other loans that management of the Company designates as having higher risk. Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. For collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

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FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The following table presents an analysis of collateral-dependent loans of the Company as of March 31, 2025 and December 31, 2024:

	March 31, 2025
	Residential				Business
(in thousands)	Properties		Land		Assets		Other		Total
One-to-Four Family Mortgages	$	758	$	—	$	—	$	—	$	758
Home Equity Lines of Credit		—		—		—		—		—
Construction Loans		—		—		—		—		—
Consumer Loans		—		—		—		—		—
Commercial Loans		—		—		—		—		—
Total	$	758	$	—	$	—	$	—	$	758

	December 31, 2024
	Residential				Business
(in thousands)	Properties		Land		Assets		Other		Total
One-to-Four Family Mortgages	$	956	$	—	$	—	$	—	$	956
Home Equity Lines of Credit		—		—		—		—		—
Construction Loans		—		119		—		—		119
Consumer Loans		—		—		—		—		—
Commercial Loans		—		—		—		—		—
Total	$	956	$	119	$	—	$	—	$	1,075

23

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Allowance for Credit Losses

The following table summarizes the activity related to the allowance for credit losses for the three months ended March 31, 2025 and 2024 (in thousands):

	One-to-Four		Home Equity
	Family		Loans / Lines		Construction		Consumer		Commercial
Three Months Ended March 31, 2025	Mortgages		of Credit		Loans		Loans		Loans		Unallocated		Total
Allowance for Credit Losses
Beginning Balance	$	1,526	$	45	$	13	$	28	$	80	$	7	$	1,699
Recovery of Credit Loss		(85)		(2)		13		(1)		(37)		112		—
Loans Charged-Off		—		—		—		—		—		—		—
Recoveries Collected		—		—		—		—		—		—		—
Ending Balance	$	1,441	$	43	$	26	$	27	$	43	$	119	$	1,699
Three Months Ended March 31, 2024
Allowance for Credit Losses
Beginning Balance	$	2,554	$	57	$	32	$	9	$	126	$	24	$	2,802
Recovery of Credit Loss		(5)		—		2		(9)		(67)		(22)		(100)
Loans Charged-Off		—		(3)		—		—		—		—		(3)
Recoveries Collected		—		—		—		—		—		—		—
Ending Balance	$	2,549	$	54	$	34	$	—	$	59	$	2	$	2,699

Modifications Made to Borrowers Experiencing Financial Difficulty

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness on certain of its loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

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FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Upon determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectable, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

The Company had no loans with modifications to borrowers experiencing financial difficulty as of March 31, 2025, and December 31, 2024.

There were no modifications to borrower’s experiencing financial difficulty entered into during the three months ended March 31, 2025 and 2024 and no loans which had defaults during the three months ended March 31, 2025 and 2024 which have been modified due to the borrower experiencing financial difficulty.

Unfunded Commitments

For the three month periods ended March 31, 2025 and 2024, provision for credit losses on unfunded commitments totaled $-0-. At March 31, 2025 and December 31, 2024, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was $15,000.

Related Party Loans

In the normal course of business, loans are made to officers and directors of the Company, as well as to their affiliates. Such loans are made in the ordinary course of business with substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons. They do not involve more than normal risk of collectability or present other unfavorable features.

An analysis of the related party activity during the three months ended March 31, 2025 and 2024 is as follows:

	March 31,
(in thousands)	2025		2024
Balance, Beginning of the Year	$	511	$	546
New Loans		—		—
Change in Related Parties, Net		—		—
Repayments, Net		(9)		(9)
Balance, End of Year	$	502	$	537

Related Party Other

The Company generally requires an inspection of the property before disbursement of funds during the term of the construction loan and inspections are typically performed by one of the Company’s directors. There is no revenue or expense recorded by the Company related to those services as the customer pays these fees through their closing costs.  

25

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Note 5. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the OCC. Failure to meet the minimum regulatory capital requirements can initiate certain mandatory, and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, Tier I capital and total capital to risk-weighted assets and Tier I capital to average assets. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel Ill rules) became fully effective for the Company on January 1, 2019. Management believes, as of March 31, 2025 and December 31, 2024, that the Company meets all capital adequacy requirements to which it is subject.

As of March 31, 2025 and December 31, 2024, the most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total ratios as disclosed in the table below. There are no conditions or events since the notification that management believes have changed the Bank’s prompt corrective action category.

The Bank’s actual capital amounts and ratios as of March 31, 2025 and December 31, 2024 are also presented in the table below (dollar amounts in thousands):

									Required to Be Well-
					Required for				Capitalized Under
					Capital Adequacy				Prompt Corrective
	Actual				Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
March 31, 2025
Tier 1 Capital to Average Assets	$	110,856	20.71	%	$	21,409	4.00	%	$	26,761	5.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets		110,856	41.88			11,911	4.50			17,205	6.50
Tier 1 Capital to Risk-Weighted Assets		110,856	41.88			15,882	6.00			21,176	8.00
Total Capital to Risk-Weighted Assets		112,570	42.53			21,176	8.00			26,470	10.00
December 31, 2024
Tier 1 Capital to Average Assets	$	110,777	20.78	%	$	21,322	4.00	%	$	26,653	5.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets		110,777	43.24			11,529	4.50			16,654	6.50
Tier 1 Capital to Risk-Weighted Assets		110,777	43.24			15,373	6.00			20,497	8.00
Total Capital to Risk-Weighted Assets		112,491	43.91			20,497	8.00			25,621	10.00

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FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Note 6. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the Company’s consolidated balance sheets.

The contract amounts of those instruments reflect the extent of the involvement the Company has in particular classes of financial instruments. As of March 31, 2025 and December 31, 2024, the Bank had made various commitments to extend credit totaling approximately $25,908,000 and $34,607,000, respectively. Of these commitments, approximately $14,209,000 and $13,372,000 are at variable rates as of March 31, 2025 and December 31, 2024, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being fully drawn upon, the total commitment amount disclosed above does not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Note 7. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, accounting guidance has established a hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

Level 1    Quoted prices for identical assets or liabilities in instruments traded in active markets that the entity has the ability to access as of the  measurement date.

Level 2    Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in  markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3  Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would  use in pricing an asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Assets and Liabilities Measured on a Recurring Basis

The following describes the hierarchy designation, valuation methodology, and key inputs to measure fair value on a recurring basis for designated financial instruments:

27

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Investment Securities Available-for-Sale

Where available, fair value estimates for available-for-sale securities are based on quoted market prices in an active market (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of securities with similar characteristics, quoted prices of identical securities in less active markets, discounted cash flow techniques or matrix pricing models (Level 2). In certain cases where Level 1 or Level 2 are not available, securities are classified as Level 3 of the hierarchy. The carrying amount of accrued interest on securities approximates its fair value.

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 are summarized below:

	March 31, 2025
							Total
	Fair Value Measurements						Estimated
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Investment Securities Available-for-Sale
U.S. Government Agencies	$	—	$	1,000	$	—	$	1,000
Mortgage-Backed Securities		—		87,274		—		87,274
Collateralized Mortgage Obligations		—		2,204		—		2,204
Corporate Bonds		—		5,750		—		5,750
Total	$	—	$	96,228	$	—	$	96,228

	December 31, 2024
							Total
	Fair Value Measurements						Estimated
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Investment Securities Available-for-Sale
U.S. Government Agencies	$	—	$	996	$	—	$	996
Mortgage-Backed Securities		—		85,419		—		85,419
Collateralized Mortgage Obligations				2,322		—		2,322
Corporate Bonds		—		4,250		—		4,250
Total	$	—	$	92,987	$	—	$	92,987

The Company did not record any liabilities at fair market value for which measurement of the fair value was made on a recurring basis at March 31, 2025 and December 31, 2024.

There were no transfers into, out of, purchases, or sales of Level 3 securities during the three months ended March 31, 2025 and 2024.

Assets and Liabilities Measured on a Non-Recurring Basis

The following describes the hierarchy designation, valuation methodologies, and key inputs for those assets that are measured at fair value on a non-recurring basis:

Collateral Dependent Loans

For collateral dependent loans, fair value is measured based on the value of the collateral securing these loans and is classified at a Level 3 in the fair value hierarchy. Collateral dependent loans consist of one-to-four family

28

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

mortgages secured by residential properties. The value of residential property collateral is determined based on appraisal by qualified licensed appraisers hired by the Company. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

Foreclosed Assets and Real Estate Owned

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired and classified at a Level 3 in the fair value hierarchy. These assets are subsequently accounted for at the lower of cost or fair value less estimated cost to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

The following tables present the Company’s assets and liabilities measured at fair value on a non-recurring basis at March 31, 2025 and December 31, 2024:

	March 31, 2025
							Total
	Fair Value Measurements						Estimated
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Collateral Dependent Loans	$	—	$	—	$	758	$	758
Real Estate Owned		—		—		42		42
Total	$	—	$	—	$	800	$	800

	December 31, 2024
							Total
	Fair Value Measurements						Estimated
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Collateral Dependent Loans	$	—	$	—	$	1,075	$	1,075
Real Estate Owned		—		—		42		42
Total	$	—	$	—	$	1,117	$	1,117

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FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The following tables show significant unobservable inputs used in the fair value measurement of Level 3 assets:

	Valuation	Unobservable	Range of	Weighted Average
March 31, 2025	Technique	Inputs	Discount	Discount
Collateral Dependent Loans	Third-party appraisals and discounted cash flows	Collateral discounts and estimated costs to sell	6% - 10%	6%
Real Estate Owned	Third-party appraisals, sales contracts or brokered price options	Collateral discounts and estimated costs to sell	6% - 10%	6%

	Valuation	Unobservable	Range of	Weighted Average
December 31, 2024	Technique	Inputs	Discount	Discount
Collateral Dependent Loans	Third-party appraisals and discounted cash flows	Collateral discounts and estimated costs to sell	6% - 10%	6%
Real Estate Owned	Third-party appraisals, sales contracts or brokered price options	Collateral discounts and estimated costs to sell	6% - 10%	6%

The following methods and assumptions were used by the Company to estimate fair value of financial instruments.

Cash and Cash Equivalents - Fair value approximates carrying value.

Investment Securities Available-for-Sale - Fair value is obtained from an independent pricing service based on quoted market prices or quoted market prices of securities with similar characteristics, quoted prices of identical securities in less active markets, discounted cash flow techniques, or matrix pricing models.

Restricted Stock - Consists of stock held as required by the respective institutions for membership and are carried at cost. While a fixed stock amount is required, the Federal Home Loan Bank stock requirement increases or decreases with the level of borrowing activity.

Loans Receivable, Net – Fair value is estimated by discounting the future cash flows using the current rate at which similar loans would be made to borrowers with similar credit rating and for the same remaining maturity. The fair value of loans is measured using an exit price notion.

Bank Owned Life Insurance - Fair value approximates carrying value.

Deposits - For NOW, savings and certain money market fund accounts, fair value is equal to the amount payable on demand or carrying value. For time deposits, fair value is estimated using a discounted cash flow method.

30

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

The carrying amount and estimated fair value of the Company’s financial instruments are as follows:

	March 31, 2025
	Carrying		Fair Value Measurements
(in thousands)	Value		Level 1		Level 2		Level 3
Financial Assets
Cash and Cash Equivalents	$	30,103	$	30,103	$	—	$	—
Investment Securities Available-for-Sale		96,228		—		96,228		—
Restricted Stock		916		—		—		916
Loans Receivable, Net		376,270		—		—		321,920
Bank Owned Life Insurance		10,773		—		10,773		—
Financial Liabilities
Deposits		394,385		—		—		352,879

	December 31, 2024
	Carrying		Fair Value Measurements
(in thousands)	Value		Level 1		Level 2		Level 3
Financial Assets
Cash and Cash Equivalents	$	37,916	$	37,916	$	—	$	—
Investment Securities Available-for-Sale		92,987		—		92,987		—
Restricted Stock		910		—		—		910
Loans Receivable, Net		367,333		—		—		308,645
Bank Owned Life Insurance		10,685		—		10,685		—
Financial Liabilities
Deposits		391,476		—		—		351,041

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Fair value estimates may not be realizable in an immediate settlement of the instrument. In some instances, there are no quoted market prices for the Company’s various financial instruments, in which case fair values may be based on estimates using the present value or other valuation techniques, or based on judgements regarding future expected loss experience, current economic conditions, risk characteristics of financial instruments, or other factors. Those techniques are significantly affected by assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.

31

FIFTH DISTRICT BANCORP, INC.

Notes to Consolidated Financial Statements

Note 8. ESOP

In connection with the Conversion, the Company established an ESOP for the exclusive benefit of eligible employees. The Company makes quarterly contributions to the ESOP in amounts as defined by the plan document. The contributions are used to pay debt services. Certain ESOP shares are pledged as collateral for debt. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of debt service paid during the period.

In connection with the Company’s initial public offering, the ESOP borrowed $4,447,580 payable to the Company for the purpose of purchasing shares of the Company’s common stock. A total of 444,758 shares were purchased with loan proceeds. Common stock acquired by the ESOP is shown as a reduction of stockholders’ equity. The loan is expected to be repaid over a period of up to 20 years.

Contributions to the ESOP totaled $112,000 during the three months ended March 31, 2025. Compensation expense is recognized over the service period based on the average fair value of the shares and totaled $70,000 for the three months ended March 31, 2025.  There were no contributions to the ESOP or compensation expense recognized during the three months ended March 31, 2024, as the Bank’s conversion from mutual to stock form of organization was completed on July 31, 2024.  

Note 9: Earnings per Share

Earnings (loss) per common share was computed based on the following:

	Three Months Ended
	March 31,
(In thousands, except per share data)	2025		2024
Numerator:
Net Income Available to Common Stockholders	$	78	$	—
Denominator:
Weighted Average Common Shares Outstanding		5,559		—
Weighted Average Unearned ESOP Shares		(420)		—
Weighted Average Shares		5,139		—
Income per Common Share - Basic and Diluted	$	0.02	$	—

At and during the period ended March 31, 2024, the company did not have any common shares outstanding as its initial public offering of stock in connection with the Bank’s conversion from mutual to stock form of organization was completed on July 31, 2024.

Note 10. Subsequent Events

In accordance with the subsequent events topic of the FASB ASC 855, the Company evaluates events and transactions that occur after the consolidated balance sheets date for potential recognition in the consolidated financial statements. The effects of all subsequent events that provide additional evidence of conditions that existed at the consolidated balance sheets date are recognized in the consolidated financial statements as of March 31, 2025 and December 31, 2024. In preparing these consolidated financial statements, the Company evaluated the events and transactions that occurred through the date the consolidated financial statements were issued. Management has concluded that there are no additional events, other than disclosed above, which require disclosure.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Management’s discussion and analysis is intended to enhance your understanding of our financial condition and results of operations. The financial information in this section is derived from the accompanying consolidated financial statements. You should read the financial information in this section in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on March 26, 2025.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

● statements of our goals, intentions and expectations;

● statements regarding our business plans, prospects, growth and operating strategies;

● statements regarding the asset quality of our loan and investment portfolios; and

● estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this quarterly report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

● general economic conditions, either nationally or in our market area, which are worse than expected;

● inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of our financial instruments, or our loan origination volume, or increase the level of defaults, losses and prepayments within our loan portfolio;

● changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

● our ability to access cost-effective funding;

● our ability to maintain adequate liquidity, primarily through deposits;

● fluctuations in real estate values and in the conditions of the residential real estate market;

● demand for loans and deposits in our market area;

● our ability to implement and change our business strategies;

33

● competition among depository and other financial institutions;

● adverse changes in the securities markets;

● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums;

● changes in the quality or composition of our loan or investment portfolios;

● technological changes that may be more difficult or expensive than expected;

● the inability of third-party providers to perform as expected;

● a failure or breach of our operational or information security systems or infrastructure, including cyberattacks;

● our ability to manage market risk, credit risk, operational risk and reputation risk;

● our ability to enter new markets successfully and capitalize on growth opportunities;

● changes in consumer spending, borrowing and savings habits;

● changes in accounting policies and practices, as may be adopted by bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

● our ability to retain key employees; and

● changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.

Critical Accounting Policies and Use of Critical Accounting Estimates

The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with GAAP.  The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses.  We consider the accounting policies discussed below to be critical accounting policies.  The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances.  Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.  As an “emerging growth company” we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies.  We intend to take advantage of the benefits of this extended transition period.  Accordingly, our consolidated financial statements may not be comparable to companies that comply with such new or revised accounting standards.

34

We consider the accounting policy for the allowance for credit losses to be our critical accounting policy.  Effective January 1, 2023, we adopted CECL.  Under the CECL methodology, the allowance for credit losses represents management’s estimate of lifetime credit losses in loans as of the balance sheet date using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.  

Deferred income tax assets and liabilities are computed using the asset and liability method, which recognizes a liability or asset representing the tax effects, based on current tax law, of future deductible or taxable amounts attributable to events recognized in the financial statements. A valuation allowance may be established to the extent necessary to reduce the deferred tax asset to a level at which it is “more likely than not” that the tax asset or benefit will be realized. Realization of tax benefits depends on having sufficient taxable income, available tax loss carrybacks or credits, the reversal of taxable temporary differences and/or tax planning strategies within the reversal period, and that current tax law allows for the realization of recorded tax benefits.

Certain assets and liabilities are measured at fair value on a recurring basis, including securities and derivative instruments. Assets and liabilities carried at fair value inherently include subjectivity and may require the use of significant assumptions, adjustments and judgments including, among others, discount rates, rates of return on assets, cash flows, default rates, loss rates, terminal values and liquidation values. A significant change in assumptions may result in a significant change in fair value, which in turn, may result in a higher degree of financial statement volatility and could result in significant impact on our results of operations, financial condition or disclosures of fair value information.

The fair value hierarchy requires use of observable inputs first and subsequently unobservable inputs when observable inputs are not available. Fair value measurements involve inputs that are observable (Level 1 or Level 2 in fair value hierarchy), when available. The level of judgment required to determine fair value is dependent on the methods or techniques used in the process. Assets and liabilities that are measured at fair value using quoted prices in active markets (Level 1) do not require significant judgment while the valuation of assets and liabilities when quoted market prices are not available (Levels 2 and 3) may require significant judgment to assess whether observable or unobservable inputs for those assets and liabilities provide reasonable determination of fair value.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Total Assets. Total assets were $531.1 million at March 31, 2025, an increase of $3.8 million, or 0.7%, compared to $527.3 million at December 31, 2024. This increase is primarily due to $3.2 million increase in investment securities available-for-sale, an $8.9 million increase in loans receivable, net, offset by a $7.8 million decrease in cash and cash equivalents.

Cash and Cash Equivalents. Cash and cash equivalents decreased by $7.8 million, or 20.6%, to $30.1 million at March 31, 2025 from $37.9 million at December 31, 2024.  This decrease is primarily due to the purchase of investments available for sale and the origination of commercial loans.  

Investment Securities Available-for-Sale. Investment securities available-for-sale increased $3.2 million, or 3.4%, to $96.2 million at March 31, 2025 from $93.0 million at December 31, 2024. Securities purchased totaled $5.0 million during the three months ended March 31, 2025, and calls, maturities, and repayments totaled $3.4 million.  

Loans Receivable, Net. Loans receivable, net, increased by $9.0 million, or 2.5%, to $376.3 million at March 31, 2025 from $367.3 million at December 31, 2024. During the three months ended March 31, 2025, loan originations were $17.8 million and loan repayments totaled $8.9 million.  During the three months ended March 31, 2025, commercial loans increased by $1.8 million, primarily from the origination of commercial real estate loans, and the purchase of Bankers Healthcare loans, 1-4 single family mortgages increased by $3.7 million, home equity loans increased by $524,000, consumer loans increased by $1.1 million, and construction loans increased by $2.0 million.  

Deposits. Deposits increased by $2.9 million, or 0.7%, to $394.4 million at March 31, 2025, from $391.5 million at December 31, 2024.  Certificates of deposit increased $601,000, or .25%, to $239.4 million at March 31, 2025, from $238.8 million at December 31, 2024. The majority of the increase in certificates of deposit was driven by new customer

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activity and migration from lower yielding money markets accounts.  NOW accounts increased $1.8 million, or 3.2%, to $55.7 million at March 31, 2025, from $53.9 million at December 31, 2024. MMDA accounts decreased $1.4 million, or 6.2%, to $21.3 million at March 31, 2025, from $22.7 million at December 31, 2024.  Savings Accounts increased $2.0 million, or 2.6%, to $78.0 million at March 31, 2025, from $76.0 million at December 31, 2024.  

Total Stockholders’ Equity. Total stockholders’ equity increased by $1.5 million, or 1.2%, to $127.3 million at March 31, 2025, from $125.8 million at December 31, 2024. The increase resulted primarily from the accumulated other comprehensive loss (as a result of market value adjustment of investment securities available-for-sale due to the rise in market interest rates during the period) declining $1.3 million and retained earnings increasing $78,000 due to the net income for the period ended March 31, 2025.

Average Balances and Yields. The following table sets forth average balance sheets, average yields and rates, and other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects are immaterial. Average balances are calculated using daily average balances. Non-accrual loans are included in average balances only. Average yields include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Net deferred loan fees/costs are immaterial.

	For the Three Months Ended March 31,
	2025						2024
	Average						Average
	Outstanding				Average		Outstanding				Average
	Balance		Interest		Yield/Rate (4)		Balance		Interest		Yield/Rate (4)
Interest-earning assets:
Cash and cash equivalents	$	28,812	$	286	4.03	%	$	20,625	$	195	3.78	%
Investment securities available-for-sale		94,601		901	3.86			66,288		396	2.39
Loans receivable, net		370,376		4,015	4.40			365,035		3,702	4.06
Restricted stock		910		7	3.12			881		7	3.18
Total interest-earning assets		494,699		5,209	4.27			452,829		4,300	3.80
Noninterest-earning assets		32,158						27,209
Total assets	$	526,857					$	480,038
Interest-bearing liabilities:
Savings accounts	$	77,024		19	0.10	%	$	83,508		21	0.10	%
NOW accounts		52,761		3	0.02			50,089		3	0.02
Money market accounts		21,684		27	0.50			25,679		33	0.51
Certificates of deposit		238,182		2,223	3.79			234,269		2,190	3.74
Total interest-bearing deposits		389,651		2,272	2.36			393,545		2,247	2.28
Federal Home Loan Bank advances		—		—	—			348		5	4.60
Total interest-bearing liabilities		389,651		2,272	2.36			393,893		2,252	2.29
Noninterest-bearing demand deposits		2,012						971
Other noninterest-bearing liabilities		8,898						8,371
Total liabilities		400,561						403,235
Total stockholders' equity		126,296						76,803
Total liabilities and stockholders' equity		526,857						480,038
Net interest income			$	2,937					$	2,048
Net interest rate spread (1)					1.91	%					1.51	%
Net interest-earning assets (2)	$	105,048					$	58,936
Net interest margin (3)					2.41	%					1.81	%
Average interest-earning assets to interest-bearing liabilities					126.96	%					114.96	%

(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

(4) Average yield/rate is an annualized amount.

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Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

General. Net income (loss) for the three months ended March 31, 2025, was $78,000, an increase of $1.2 million, or 106.9%, compared to ($1.1) million for the three months ended March 31, 2024. The net income was primarily from an increase in interest income of $909,000, an increase in non-interest income of $1.2 million, partially offset by a $416,000 increase in non-interest expense, and a $322,000 increase in provision for income taxes.  

Interest and Dividend Income. Interest and dividend income increased by $909,000, or 21.0%, to $5.2 million for the three months ended March 31, 2025, compared to $4.3 million for the three months ended March 31, 2024. The increase is attributed to a $313,000, or 8.5%, increase in interest on loans, a $91,000, or 45.1%, increase in interest on other interest-earning assets and $505,000, or 127.5%, increase in interest on investment securities available-for-sale.

During the three months ended March 31, 2025, average loans receivable, net, increased by $5.3 million, or 1.5%, from the three months ended March 31, 2024. The average yield on loans increased to 4.40% for the three months ended March 31, 2025, from 4.06% for the three months ended March 31, 2024, due to the rising market rate environment.

The average balance of investment securities available-for-sale increased $28.3 million, or 42.7%, to $94.6 million for the three months ended March 31, 2025, from $66.3 million for the three months ended March 31, 2024. The average yield on available-for-sale investment securities increased to 3.86% for the three months ended March 31, 2025, from 2.39% for the three months ended March 31, 2024. The increase in the average yield on available-for-sale investment securities was primarily due to the rising market interest rate environment as well as reinvesting in higher yielding bonds

Interest income on cash and cash equivalents, comprised primarily of overnight deposits, increased by $91,000, or 46.7%, for the three months ended March 31, 2025, primarily due to an increase in the average yield to 4.03% for the three months ended March 31, 2025, from 3.78% for the three months ended March 31, 2024.  The increase in average yield was due to the rise in market interest rates.  The average balance of cash and cash equivalents increased by $8.2 million to $28.8 million from the three months ended March 31, 2025, from $20.6 million for the three months ended March 31, 2024.

Interest Expense. Total interest expense increased $20,000 or 0.9%, to $2.3 million for the three months ended March 31, 2025, from $2.3 million for the three months ended March 31, 2024. The increase was primarily due to the increase in the average cost of deposits to 2.36% for the three months ended March 31, 2025, from 2.29% for the three months ended March 31, 2024, reflecting the rising market interest rate environment. The average balance of interest-bearing deposits decreased by $3.9 million, or 1.0%, to $389.7 million for the three months ended March 31, 2025, from $393.5 million for the three months ended March 31, 2024.

Net Interest Income. Net interest income increased $889,000, or 43.4%, to $2.9 million for the three months ended March 31, 2025, compared to $2.0 million for the three months ended March 31, 2024. The increase reflects the increase in the interest rate spread to 1.91% for the three months ended March 31, 2025, from 1.51% for the three months ended March 31, 2024, while average net interest-earning assets increased $46.1 million period-to-period. The net interest margin increased to 2.41% for the three months ended March 31, 2025, from 1.81% for the three months ended March 31, 2024.  The average yield on interest-earning assets increased from 3.80% for the three months ended March 31, 2024, to 4.27% for the three months ended March 31, 2025. The average rate paid on interest-bearing liabilities increased from 2.28% for the three months ended March 31, 2024, to 2.36% for the three months ended March 31, 2025, primarily due to an increase in the average rate paid on certificates of deposit from 3.74% in 2024 to 3.79% in 2025. The increase in the average rate paid on certificates of deposit contributed to migration from lower yielding savings accounts and money market accounts, to higher yielding certificates of deposit. The average balance of certificates of deposit increased from $234.3 million as of March 31, 2024, to $238.2 million as March 31, 2025, while over the same period the average balance of savings accounts decreased from $83.5 million to $77.0 million, and the average balance of money market accounts decreased from $25.7 million to $21.7 million.

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Provision (Recovery) for Credit Losses. The recovery of credit losses on loans decreased $100,000 to $0 for the three months ended March 31, 2025, compared to $100,000 for the three months ended March 31, 2024.   The allowance for credit losses on loans represented 0.45% of total loans at March 31, 2025 and 0.46% of total loans at March 31, 2024. The recovery of credit losses is based on our evaluation of the adequacy of the allowance for credit losses throughout the reporting period.

Total non-performing loans were $758,000 at March 31, 2025, compared to $753,000 at March 31, 2024. We had $145,000 of loans over 90 days delinquent at March 31, 2025, compared to $753,000 at March 31, 2024.  Classified loans totaled $758,000 at March 31, 2025, compared to $212,000 at March 31, 2024. As a percentage of nonperforming loans, the allowance for credit losses on loans was 224.1% at March 31, 2025, and 225.6% at March 31, 2024.

Noninterest Income (loss). Noninterest income (loss) totaled $262,000 for the three months ended March 31, 2025, an increase of $1.2 million, or 129.2%, from ($897,000) for the three months ended March 31, 2024. A $1.1 million realized loss on the sale of investment securities available-for-sale was recorded during the three months ended March 31, 2024, compared to no such realized losses recorded during the three months ended March 31, 2025.

Noninterest Expense. Noninterest expense increased $416,000, or 15.5%, to $3.1 million for the three months ended March 31, 2025, compared to $2.7 million for the three months ended March 31, 2024. The increase was primarily due to an increase in salaries and employee benefits of $258,000, or 16.5%, an increase in occupancy and equipment expense of $50,000, or 11.7%, an increase in professional and legal fees of $22,000, or 57.9%, an increase in data processing expense of $24,000, or 8.2%, an increase in audit and examination fees of $22,000, or 34.9%, and an increase in other expenses of $45,000, or 30.8%, partially offset by a $9,000, or 32.1%, decrease advertising.

Provision (Benefit) for Income Taxes. The provision (benefit) for income taxes increased by $322,000, or 107.0%, to $21,000 for the three months ended March 31, 2025, compared to ($301,000) for the three months ended March 31, 2024. The increase was due to a $1.5 million, or 106.9%, increase in pretax income. The effective tax rate was 21% for both periods.

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and from two correspondent banks and, until March 11, 2024, had the ability to obtain advances under the Federal Reserve Board’s Bank Term Funding Program. Under the terms of the Bank Term Funding Program, advances cannot be obtained after March 11, 2024. At March 31, 2025, we had no outstanding advances from the Federal Home Loan Bank of Dallas. At March 31, 2025, we had no outstanding balances under the correspondent bank credit facilities and no outstanding balance under the Bank Term Funding Program.

Time deposits that meet or exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 at March 31, 2025 and December 31, 2024 were $45.3 million and $48.3 million, respectively.

Based on collateral pledged, consisting of all shares of FHLB stock owned and the blanket pledge of approximately $234.2 million of its qualifying mortgage loans as of March 31, 2025, the Bank was eligible to borrow up to an additional $184.5 million as of March 31, 2025.  

The Bank has an unsecured federal funds line of credit with FNBB that expires on June 30, 2025.  The Bank is eligible to borrow up to $27.2 million.  There was no amount outstanding on this line of credit as of March 31, 2025 and December 31, 2024.  

The Bank is eligible to borrow from TIB’s Federal Funds Purchase Line Program, which provides overnight liquidity through pledge of certain qualifying securities.  The Bank is eligible to borrow up to $15.0 million and repayment is due the next day.  There was no amount outstanding on this line of credit as of March 31, 2025 and December 31, 2024.  

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While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets depend on our operating, financing, lending, and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. See the accompanying Statements of Cash Flows for further information.

Fifth District Bancorp, Inc. is a separate legal entity from Fifth District Savings Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At March 31, 2025, the Company (on an unconsolidated basis) had liquid assets of $21.8 million.

We believe we maintain a strong liquidity position, and are committed to maintaining it. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.

At March 31, 2025, the Bank was categorized as well-capitalized under applicable bank regulatory capital guidelines. Management is not aware of any conditions or events since the most recent notification that would change its category.

Off-Balance Sheet Arrangements

At March 31, 2025, we had $24.6 million of outstanding commitments to originate loans, which primarily consists of $9.9 million of remaining funds to be disbursed on construction loans in process and $14.2 million of unused balances of home equity lines of credit. At March 31, 2025, certificates of deposit that are scheduled to mature on or before March 31, 2026 totaled $215.2 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may raise interest rates on deposits to attract new accounts or utilize Federal Home Loan Bank of Dallas advances, which may result in higher levels of interest expense.

Management of Market Risk

General. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. All directors participate in discussions during the regular board meetings evaluating the interest rate risk inherent in our assets and liabilities, and the level of risk that is appropriate. These discussions take into consideration our business strategy, operating environment, capital, liquidity and performance objectives consistent with the policy and guidelines approved by them. The board of directors establishes policies and guidelines for managing interest rate risk.

Our asset/liability management strategy attempts to manage the impact of changes in interest rates on net interest income, our primary source of earnings. Among the techniques we are using to manage interest rate risk are:

● maintaining capital levels that substantially exceed the thresholds for well-capitalized status under federal regulations;

● maintaining a high liquidity level;

● growing our core deposit accounts; and

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● managing our investment securities portfolio to reduce the average maturity and effective life of the portfolio.

By following these strategies, we believe that we are better positioned to react to increases and decreases in market interest rates.

We have not engaged in hedging activities, such as investing in futures or options. We do not anticipate entering into hedging transactions in the future.

Economic Value of Equity. We compute amounts by which the net present value of our assets and liabilities (economic value of equity or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases instantaneously by 100, 200, 300 and 400 basis point increments or decreases instantaneously by 100, 200, 300 and 400 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.

The following table sets forth, as of March 31, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. All estimated changes presented in the table are within the policy limits established by the board of directors.

At March 31, 2025
							EVE as a Percentage of Present Value
							of Assets (3)
			Estimated Increase (Decrease) in						Increase
			EVE						(Decrease)
Change in Interest Rates (basis points) (1)	Estimated EVE (2)		Amount		Percent		EVE Ratio (4)		(basis points)
(Dollars in thousands)
400	$	56,785	$	(55,030)	(49.22)	%	14.40	%	(911)
300		67,986		(43,830)	(39.20)	%	16.53	%	(698)
200		81,087		(30,728)	(27.48)	%	18.83	%	(468)
100		95,505		(16,311)	(14.59)	%	21.14	%	(237)
Level		111,815		—	—	%	23.51	%	—
(100)		124,396		12,581	11.25	%	24.90	%	139
(200)		133,446		21,630	19.34	%	25.57	%	206
(300)		139,858		28,043	25.08	%	25.72	%	221
(400)		144,080		32,265	28.86	%	25.47	%	196

(1) Assumes an immediate uniform change in interest rates at all maturities.

(2) EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4) EVE Ratio represents EVE divided by the present value of assets.

The table above indicates that at March 31, 2025, we would have experienced a 27.48% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 19.34% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.

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Change in Net Interest Income. The following table sets forth, as of March 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. All estimated changes presented in the table are within the policy limits established by the board of directors.

At March 31, 2025
Change in Interest Rates	Net Interest Income Year 1
(basis points) (1)	Forecast		Year 1 Change from Level
	(Dollars in thousands)
400	$	8,679	(31.93)	%
300		9,727	(23.71)
200		10,749	(15.70)
100		11,746	(7.88)
Level		12,751	—
(100)		13,076	2.55
(200)		13,325	4.50
(300)		13,495	5.83
(400)		13,665	7.17

(1) Assumes an immediate uniform change in interest rates at all maturities.

The table above indicates that as of March 31 2025, we would have experienced a 15.70% decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 4.50% increase in net interest income in the event of an instantaneous 200 basis point decrease in market interest rates.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurement. Modeling changes in EVE and NII require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. For instance, the EVE and NII tables presented above 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 or repricing of specific assets and liabilities. However, the shape of the yield curve changes constantly and the value and pricing of our assets and liabilities, including our deposits, may not closely correlate with changes in market interest rates. Accordingly, although the EVE and NII tables may provide an indication of our interest rate risk exposure at a particular point in time and in the context of a particular yield curve, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on EVE and NII and will differ from actual results.

EVE and net interest NII calculations also may not reflect the fair values of financial instruments. For example, decreases in market interest rates can increase the fair values of our loans, deposits and borrowings.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

The information in Item 2 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Management of Market Risk” is incorporated in this Item 3 by reference.

Item 4.Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2025. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended March 31, 2025, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II – Other Information

Item 1.Legal Proceedings

The Company is not subject to any pending legal proceedings. The Bank is subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial condition or results of operations.

Item 1A. Risk Factors

Not applicable, as the Company is a smaller reporting company.

Item 2.Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

During the quarter ended March 31, 2025, the Company did not sell any equity securities that were not registered under the Securities Act of 1933, as amended.

The Company did not repurchase any shares of its common stock during the quarter ended March  31, 2025.

Item 3.Defaults Upon Senior Securities

Not applicable.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

During the three months ended March 31, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of SEC Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement“ (as such term is defined in Item 408 of SEC Regulation S-K).

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Item 6.Exhibits

3.1	Articles of Incorporation of Fifth District Bancorp, Inc. (1)
3.2	Bylaws of Fifth District Bancorp, Inc. (2)
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials for the quarter ended March 31, 2025, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive (Loss) Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements
104	Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)

(1) Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-277776), initially filed on March 8, 2024.

(2) Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-277776), initially filed on March 8, 2024.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FIFTH DISTRICT BANCORP, INC.
Date: May 13, 2025	/s/ Brian W. North
	Brian W. North
	President and Chief Executive Officer (Duly Authorized Representative and Principal Executive Officer)

Date: May 13, 2025	/s/ Melissa C. Burns
	Melissa C. Burns
	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer

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