LOANS

9 Months Ended

Sep. 30, 2025

LOANS

LOANS

4. LOANS

Net loans at September 30, 2025 and December 31, 2024 were as follows:

	September 30, 2025		December 31, 2024
	(In thousands)
	Unaudited
Mortgage loans on real estate:
One-to four-family first lien residential	$	93,492	$	101,236
Residential construction		1,985		1,288
Home equity loans and lines of credit		15,184		11,916
Commercial		73,390		59,505
Total mortgage loans on real estate		184,051		173,945
Commercial and industrial		26,386		23,411
Consumer loans		4,784		5,339
Total loans		215,221		202,695
Allowance for credit losses		(1,794)		(1,804)
Net deferred loan origination (fees) and costs		1,382		1,538
Net loans	$	214,809	$	202,429

Residential real estate loans serviced for others, by the Company, not included in net loans totaled $34.6 million and $29.4 million at September 30, 2025 and December 31, 2024 respectively.

Loan Origination/Risk Management

The Company has lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by frequently providing management with reports related to loan production, loan quality, loan delinquencies, non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Risk Characteristics of Portfolio Segments

The risk characteristics within the loan portfolio vary depending on the loan segment. Consumer loans generally are repaid from personal sources of income. Risks associated with consumer loans primarily include general economic risks such as declines in the local economy creating higher rates of unemployment. Those conditions may also lead to a decline in collateral values should the Company be required to repossess the collateral securing consumer loans. These economic risks also impact the commercial loan segment, however commercial loans are considered to have greater risk than consumer loans as the primary source of repayment is from the cash flow of the business customer. Real estate loans, including residential mortgages, manufactured housing, commercial and home equity loans, comprised approximately 85.5% and 85.8% of the portfolio at September 30, 2025 and December 31, 2024, respectively. Loans secured by real estate provide the best collateral protection and thus significantly reduce the inherent risk in the portfolio.

Management has reviewed its loan portfolio and determined that, to the best of its knowledge, little or no exposure exists to sub-prime or other high-risk residential mortgages. The Company is not in the practice of originating these types of loans.

Description of Credit Quality Indicators

Real estate, commercial and consumer loans are assigned a “Pass” rating unless the loan has demonstrated signs of weakness as indicated by the ratings below:

· Special Mention:   The relationship is protected but are potentially weak. These assets may constitute an undue and unwarranted credit risk but not to the point of justifying a substandard rating. All loans 60 days past-due are classified Special Mention. The loan is not upgraded until it has been current for six consecutive months.

· Substandard:   The relationship is inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledge, if any. Assets so classified have a well-defined weakness or a weakness that jeopardized the liquidation of the debt. All loans 90 days past-due are classified Substandard. A loan is not upgraded until it has been current for six consecutive months.

· Doubtful/Loss:   Loans are considered uncollectible and of such little value that continuance as bankable assets are not warranted. It is not practicable or desirable to defer writing off this basically worthless asset even though partial recovery may be possible in the future.

The risk ratings are evaluated at least annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial, real estate or consumer loans.

The following tables present loans as of September 30, 2025, based on year of origination within each credit quality indicator:

At September 30, 2025

Unaudited

(In thousands)

															Revolving
															Loans
															Converted
													Revolving		to Term
													Loans		Loans
													Amortized		Amortized
	2025		2024		2023		2022		2021		Prior		Cost Basis		Cost Basis		Total
Mortgage loans on real estate:
One-to-four-family first lien residential:
Pass	$	612	$	2,728	$	10,818	$	17,025	$	10,543	$	51,766	$	—	$	—	$	93,492
Total		612		2,728		10,818		17,025		10,543		51,766		—		—		93,492
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Residential construction:
Pass		968		754		—		115		—		148		—		—		1,985
Total		968		754		—		115		—		148		—		—		1,985
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Home equity loans and lines of credit:
Pass		222		642		—		—		—		59		14,071		190		15,184
Total		222		642		—		—		—		59		14,071		190		15,184
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Commercial:
Pass		17,858		9,221		11,449		7,456		6,673		17,297		—		—		69,954
Special Mention		—		580		—		—		—		—		—		—		580
Substandard		—		493		735		—		—		1,628		—		—		2,856
Total		17,858		10,294		12,184		7,456		6,673		18,925		—		—		73,390
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Commercial and Industrial:
Pass		10,633		4,756		4,232		1,769		2,076		2,370		—		—		25,836
Special Mention		32		306		102		110		—		—		—		—		550
Total		10,665		5,062		4,334		1,879		2,076		2,370		—		—		26,386
Current period gross write-offs		—		—		652		7		4		14		—		—		677
Consumer:
Pass		627		1,878		797		990		246		168		77		1		4,784
Total		627		1,878		797		990		246		168		77		1		4,784
Current period gross write-offs	$	—	$	28	$	5	$	—	$	—	$	1	$	—	$	—	$	34

The following table presents loans as of December 31, 2024, based on year of origination within each credit quality indicator:

At December 31, 2024

(In thousands)

															Revolving
															Loans
															Converted
													Revolving		to Term
													Loans		Loans
													Amortized		Amortized
	2024		2023		2022		2021		2020		Prior		Cost Basis		Cost Basis		Total
Mortgage loans on real estate:
One-to-four-family first lien residential:
Pass	$	5,633	$	12,938	$	18,451	$	11,101	$	7,929	$	45,184	$	—	$	—	$	101,236
Total		5,633		12,938		18,451		11,101		7,929		45,184		—		—		101,236
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Residential construction:
Pass		1,006		—		120		—		101		61		—		—		1,288
Total		1,006		—		120		—		101		61		—		—		1,288
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Home equity loans and lines of credit:
Pass		768		—		—		—		—		65		10,895		188		11,916
Total		768		—		—		—		—		65		10,895		188		11,916
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Commercial:
Pass		9,609		12,513		8,375		6,939		4,434		15,124		—		—		56,994
Substandard		500		—		—		—		97		1,914		—		—		2,511
Total		10,109		12,513		8,375		6,939		4,531		17,038		—		—		59,505
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Commercial and Industrial:
Pass		6,145		5,802		5,975		1,656		1,502		1,593		—		—		22,673
Substandard		738		—		—		—		—		—		—		—		738
Total		6,883		5,802		5,975		1,656		1,502		1,593		—		—		23,411
Current period gross write-offs		—		31		—		25		—		22		—		—		78
Consumer:
Pass		2,536		1,038		1,406		271		47		41		—		—		5,339
Total		2,536		1,038		1,406		271		47		41		—		—		5,339
Current period gross write-offs	$	4	$	10	$	4	$	—	$	—	$	—	$	—	$	—	$	18

At September 30, 2025, a loan relationship consisting of one commercial real estate loan totaling $735 thousand was downgraded to substandard, offset by four substandard loans that were paid off during the third quarter of 2025, resulting in a decrease of substandard loans by $393 thousand compared to December 31, 2024.

Loans are considered past-due if the required principal and interest payments have not been received within thirty days of the payment due date. An age analysis of past-due loans, segregated by class of loans, are as follows:

	September 30, 2025
	(Unaudited)
	(In thousands)
	30-59 Days		60-89 Days		90 Days		Total Past-				Total Loans
	Past-Due		Past-Due		Past-Due		Due		Current		Receivable
Mortgage loans on real estate:
One-to four-family first lien residential	$	2,230	$	561	$	602	$	3,393	$	90,099	$	93,492
Residential construction		—		—		—		—		1,985		1,985
Home equity loans and lines of credit		—		60		32		92		15,092		15,184
Commercial		1,160		—		—		1,160		72,230		73,390
Total mortgage loans on real estate		3,390		621		634		4,645		179,406		184,051
Commercial and industrial		—		—		97		97		26,289		26,386
Consumer loans		—		28		2		30		4,754		4,784
Total loans	$	3,390	$	649	$	733	$	4,772	$	210,449	$	215,221

	December 31, 2024
	(In thousands)
	30-59 Days		60-89 Days		90 Days		Total Past-				Total Loans
	Past-Due		Past-Due		Past-Due		Due		Current		Receivable
Mortgage loans on real estate:
One-to four-family first lien residential	$	1,089	$	230	$	369	$	1,688	$	99,548	$	101,236
Residential construction		—		—		—		—		1,288		1,288
Home equity loans and lines of credit		1		—		32		33		11,883		11,916
Commercial		371		—		—		371		59,134		59,505
Total mortgage loans on real estate		1,461		230		401		2,092		171,853		173,945
Commercial and industrial		513		—		—		513		22,898		23,411
Consumer loans		5		9		—		14		5,325		5,339
Total loans	$	1,979	$	239	$	401	$	2,619	$	200,076	$	202,695

At September 30, 2025, we had approximately $32,000 of home equity loans and lines of credit past-due 90 days and still accruing. Nonaccrual loans, segregated by class of loan as of September 30, 2025 are as follows:

September 30, 2025 Unaudited
(In thousands)
			Nonaccrual
			loans
			without
			related
			allowance
			for		Recognized
	Nonaccrual		credit		interest
	loans		losses		income
Mortgage loans on real estate:
One-to four-family first lien	$	540	$	540	$	—
Residential construction		—		—		—
Home equity loans and lines of credit		—		—		—
Commercial		42		42		—
Consumer loans		—		—		—
Total nonaccrual loans	$	582	$	582	$	—

At December 31, 2024, we had approximately $32,000 of home equity loans and lines of credit past-due 90 days and still accruing. Nonaccrual loans, segregated by class of loan as of December 31, 2024 are as follows:

December 31, 2024
(In thousands)
			Nonaccrual
			loans
			without
			related
			allowance
			for		Recognized
	Nonaccrual		credit		interest
	loans		losses		income
Mortgage loans on real estate:
One-to four-family first lien	$	369	$	369	$	—
Residential construction		—		—		—
Home equity loans and lines of credit		—		—		—
Commercial		46		—		—
Consumer loans		—		—		—
Total nonaccrual loans	$	415	$	369	$	—

Collateral-dependent loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral. Loans considered collateral-dependent were as follows:

September 30, 2025 (Unaudited)
(In thousands)
	Amortized cost		Collateral type
Real estate:
Residential one-to four-family	$	540	Residential real estate property
Home equity line of credit		32	Residential real estate property
Commercial real estate		13	Commercial real estate property
Total real estate	$	585
Commercial and industrial loans	$	47	Commercial business assets
Total commercial and industrial	$	47

December 31, 2024
(In thousands)
	Amortized cost		Collateral type
Real estate:
Residential one-to four-family	$	620	Residential real estate property
Home equity line of credit		32	Residential real estate property
Total real estate	$	652

There were no loans modified to borrowers experiencing financial difficulty during the three or nine months ended September 30, 2025. During the year ended December 31, 2024, two commercial loans to one borrower were combined into one loan to extend the terms of the loans and increase the collateral coverage of the portfolio relationship.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted (numbers in thousands):

Term Extension

	Amortized Cost
	Basis		% of Total Class
	at September 30, 2025		of Financing
	(Unaudited)		Receivable
Mortgage loans on real estate:
Commercial	$	493	0.67	%
Total	$	493

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2024:

Term Extension

Mortgage loans on real estate:	Financial Effect
Commercial	Added a weighted-average 20 years to the life of loans, which reduced monthly payment amounts for the borrower.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a 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 closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Loans modified to borrowers experiencing financial difficulty did not have payment default during the nine months ended September 30, 2025 or the year ended December 31, 2024.

Changes in the allowance for credit losses for the nine months ended September 30, 2025 and 2024 are as follows:

	September 30, 2025
	Unaudited
	(In thousands)
	Mortgage		Commercial
	Loans		and
	on Real		Industrial		Consumer
	Estate		Loans		Loans		Unallocated		Total
Allowance for credit losses:
Beginning balance	$	1,071	$	372	$	144	$	217	$	1,804
Charge-offs		—		(679)		(39)		—		(718)
Recoveries		—		2		5		—		7
Provision		193		712		(4)		(200)		701
Ending balance	$	1,264	$	407	$	106	$	17	$	1,794

	September 30, 2024
	Unaudited
	(In thousands)
	Mortgage		Commercial
	Loans		and
	on Real		Industrial		Consumer
	Estate		Loans		Loans		Unallocated		Total
Allowance for credit losses:
Beginning balance	$	1,218	$	325	$	93	$	409	$	2,045
Charge-offs		—		(78)		(12)		—		(90)
Recoveries		—		—		—		—		—
Provision		(127)		135		96		(89)		15
Ending balance	$	1,091	$	382	$	177	$	320	$	1,970

Changes in the allowance for credit losses for the three months ended September 30, 2025 and 2024 are as follows:

	September 30, 2025
	(In thousands)
	Mortgage		Commercial
	Loans		and
	on Real		Industrial		Consumer
	Estate		Loans		Loans		Unallocated		Total
Allowance for credit losses:
Beginning balance	$	1,213	$	435	$	120	$	(17)	$	1,751
Charge-offs		—		(24)		(15)		—		(39)
Recoveries		—		—		2		—		2
Provision		51		(4)		(1)		34		80
Ending balance	$	1,264	$	407		106	$	17	$	1,794

	September 30, 2024
	(In thousands)
	Mortgage		Commercial
	Loans		and
	on Real		Industrial		Consumer
	Estate		Loans		Loans		Unallocated		Total
Allowance for credit losses:
Beginning balance	$	1,107	$	467	$	144	$	334	$	2,052
Charge-offs		—		(78)		(4)		—		(82)
Recoveries		—		—		—		—		—
Provision		(16)		(7)		37		(14)		—
Ending balance	$	1,091	$	382		177	$	320	$	1,970

In the ordinary course of business, the Company makes loans to its directors and officers, including their families and companies in which certain directors are principal owners. All such loans were made on substantially the same terms including interest rates and collateral, as those prevailing at the same time for comparable transactions with unrelated persons. Loans to directors and officers are listed below and are included in loans on the statement of financial condition.

	September 30,		December 31,
	2025		2024
	Unaudited
Balance, beginning of period	$	780	$	924
Proceeds		297		—
Payments		(165)		(144)
Balance, end of period	$	912	$	780