EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2025

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

10. EMPLOYEE BENEFIT PLANS

Supplemental Executive Retirement Plan (“SERP”)

Beginning in 2016, the Company instituted a SERP for its executive officers. All benefits provided under the SERP are unfunded and, as the executive officers retire, the Company will make a payment to the participant. At December 31, 2025 and 2024, the Company recorded $219,000 and $194,000, respectively, for the SERP in other liabilities on the consolidated statements of financial condition. Expenses for the SERP are included in compensation and employee benefits on the consolidated statements of income and were approximately $25,000 and $24,000, respectively, for the years ended December 31, 2025 and 2024.

Defined Benefit Plan

The Company provides pension benefits for eligible employees through a noncontributory defined benefit pension plan (the “Pension Plan”). Substantially all employees participate in the retirement plan on a noncontributing basis and are fully vested after five years of service.

On October 13, 2017, the Compensation Committee elected to soft-freeze the defined benefit pension plan effective January 1, 2018. All employees hired after that date will not be eligible to participate in the defined benefit pension plan; they will, however, be able to participate in a 401k plan that the Company will match up to 50% of the employee elected contribution amount capped at 5% of the employee’s earnings. Expense for the 401k is included in the compensation and employee benefits on the consolidated statement of income and was $82,000 and $51,000, respectively for the years ended December 31, 2025 and 2024.

The mortality table used in 2025 and 2024 was RP-2014 (adjusted) with MP-2021 mortality improvements.

Information pertaining to the activity in the Pension Plan for the years ended December 31, 2025 and 2024 is as follows:

	At December 31,
	2025		2024
Change in benefit obligation:
Benefit obligation at beginning of year	$	8,641	$	8,815
Service cost		231		215
Interest cost		514		501
Actuarial loss (gain)		145		(89)
Benefits paid		(1,276)		(801)
Benefit obligation at end of year		8,255		8,641
Change in plan assets:
Fair value of plan assets at beginning of year	$	15,886	$	15,155
Actual return on plan assets		1,650		1,532
Benefits paid		(1,276)		(801)
Fair value of plan assets at end of year		16,260		15,886
Net amount recognized, funded status	$	8,005	$	7,245

The accumulated benefit obligation was $8.3 million and $8.6 million at December 31, 2025 and 2024, respectively.

The assumptions used to determine the benefit obligation at December 31, 2025 and 2024 are as follows:

	At December 31,
	2025		2024
Discount rate	6.14	%	6.17	%
Rate of increase in compensation levels	3.00	%	3.00	%

The components of net periodic pension cost and amounts recognized in other comprehensive income for the years ended December 31, 2025 and 2024 are as follows:

	Year Ended December 31,
(In thousands)	2025		2024
Net periodic expenses recognized in income:
Service cost	$	231	$	215
Interest cost		514		501
Expected return on assets		(1,119)		(1,118)
Net periodic pension benefit		(374)		(402)
Total recognized in other comprehensive income		(386)		(503)
Total recognized in net periodic pension cost and other comprehensive income	$	(760)	$	(905)

The assumptions used to determine net periodic pension cost for the years ended December 31, 2025 and 2024 are as follows:

	At December 31,
	2025		2024
Discount rate	6.17	%	5.84	%
Expected long-term rate of return on plan assets	7.00	%	7.00	%
Rate of increase in compensation levels	3.00	%	3.00	%

The long-term rate of return on assets assumption was set based on historical returns earned by the asset allocation of the investments currently used by the Pension Plan, which are expected to continue in the future.

Pension Plan assets are invested in diversified funds under the advice of Edgewater Advisors, Ltd. The investment funds include a series of mutual funds, each with its own investment objectives, investment strategies and risks.

The fair values of the Company’s Pension Plan assets by asset category are as follows (dollars in thousands):

			At December 31, 2025
	Asset Category	Total		Level 1		Level 2
	Equities & Commodities:
(1)	Equity Income Separate Account-Z	$	834	$	—	$	834
(2)	LargeCap S&P 500 Index Separate Account-Z		3,245		—		3,245
(3)	Blue Chip Separate Account-Z		782		—		782
(4)	MidCap S&P 400 Index Separate Account-Z		1,961		—		1,961
(5)	SmallCap S&P 600 Index Separate Account-Z		1,643		—		1,643
(6)	Global Emerging Markets Separate Account-Z		814		—		814
(7)	Real Estate Securities Sep Acct-Z		478		—		478
	Fixed Income:
(8)	LDI Short Duration Separate Account-Z		1,605		—		1,605
(9)	Core Fixed Income Separate Account-Z		1,602		—		1,602
(10)	Core Plus Bond Separate Account-Z		1,612		—		1,612
(11)	Inflation Protection Separate Account-Z 3-BlackRock		797		—		797
(12)	High Yield Separate Account-Z		810		—		810
(13)	Liquid Asset Separate Account-Z		77		—		77
	Total Market Value	$	16,260	$	—	$	16,260

		At December 31, 2024
	Asset Category	Total		Level 1		Level 2
	Equities & Commodities:
(1)	Equity Income Separate Account-Z	$	775	$	—	$	775
(2)	LargeCap S&P 500 Index Separate Account-Z		3,229		—		3,229
(3)	Blue Chip Separate Account-Z		816		—		816
(4)	MidCap S&P 400 Index Separate Account-Z		1,907		—		1,907
(5)	SmallCap S&P 600 Index Separate Account-Z		1,602		—		1,602
(6)	Global Emerging Markets Separate Account-Z		734		—		734
(7)	Real Estate Securities Sep Acct-Z		456		—		456
	Fixed Income:
(8)	LDI Short Duration Separate Account-Z		1,603		—		1,603
(9)	Core Fixed Income Separate Account-Z		1,564		—		1,564
(10)	Core Plus Bond Separate Account-Z		1,571		—		1,571
(11)	Inflation Protection Separate Account-Z 3-BlackRock		777		—		777
(12)	High Yield Separate Account-Z		798		—		798
(13)	Liquid Asset Separate Account-Z		54				54
	Total Market Value	$	15,886	$	—	$	15,886

Level 1 — Quoted Prices in Active Markets for Identical Assets

Level 2 — Significant Observable Inputs

Level 3 — Significant Unobservable Inputs

There were no Level 3 plan assets as of December 31, 2025 and 2024.

Fund Descriptions:

(1) Equity Income Separate Account-Z: The investment seeks to provide current income and long-term growth of income and capital. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in dividend-paying equity securities at the time of purchase. It usually invests in equity securities of companies with large and medium market capitalizations. The fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued.

(2) Large Cap S&P 500 Index Separate Account-Z: The investment option normally invests the majority of assets in common stocks of companies that compose the S&P 500 Index. Management attempts to mirror the investment performance of the index by allocating assets in approximately the same weightings as the S&P 500 Index. Over the long-term, management seeks a very close correlation between the performance of the Separate Account before expenses and that of the S&P 500 Index.

(3) Blue Chip Separate Account-Z: The investment seeks long-term growth of capital. The fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with large market capitalizations at the time of purchase that, in the fund’s investment advisor’s opinion, display characteristics of a “blue chip” company. The advisor tends to focus on securities of companies that show potential for growth of capital as well as an expectation for above average earnings. The fund invests in securities of foreign companies, as well as companies with medium market capitalizations.

(4) Mid Cap S&P 400 Index Separate Account-Z: The investment option normally invests the majority of assets in common stocks of companies that compose the S&P MidCap 400 Index. Management attempts to mirror the investment performance of the index by allocating assets in approximately the same weightings as the S&P MidCap 400 Index. Over the long-term, management seeks a very close correlation between the performance of the Separate Account before expenses and that of the S&P MidCap 400 Index.

(5) Small Cap S&P 600 Index Separate Account-Z: The investment seeks long-term growth of capital and normally invests the majority of assets in common stocks of companies that compose the S&P SmallCap 600 Index. Management attempts to mirror the investment performance of the index by allocating assets in approximately the same weightings as the S&P 600 Index. Over the long-term, management seeks a very close correlation between the performance of the Separate Account before expenses and that of the S&P 600 Index.

(6) Global Emerging Markets Separate Act-Z: The investment option normally invests the majority of assets in equities of companies in emerging market countries. It invests in securities of companies with their principal place of business or principal office in emerging market countries; companies for which the principal securities trade in an emerging market; or companies, regardless of where their securities are traded, that derive 50% of their total revenue from either goods or services produced in emerging market countries. The fund may invest in securities of companies with small to medium market capitalizations.

(7) Real Estate Securities Sep Acct-Z: The investment seeks to generate a total return. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies principally engaged in the real estate industry at the time of purchase. It invests in equity securities regardless of market capitalization (small, medium or large). The fund concentrates its investments (invest more than 25% of its net assets) in securities in the real estate industry. It is non-diversified.

(8) LDI Short Duration Separate Account-Z: The investment seeks to maximize total returns from the universe of debt securities in which the Portfolio invests. As a non-fundamental policy, under normal circumstances, the Portfolio will invest at least 80% of its net assets in fixed income securities considered to be investment grade quality. In addition, the Portfolio is authorized to invest more than 25% of its total assets in U.S. Treasury bonds, bills and notes, and obligations of federal agencies and instrumentalities.

(9) Core Fixed Income Separate Account-Z: The investment seeks to provide a high level of current income consistent with preservation of capital. The fund invests primarily in a diversified pool of investment grade fixed-income securities, including corporate securities, U.S. government securities, asset-backed securities and mortgage-backed securities. It maintains an average portfolio duration that is within from 75% to 125% of the duration of the Bloomberg Barclays US Aggregate Bond Index.

(10) Core Plus Bond Separate Account-Z: The investment option invests primarily in intermediate-term, fixed-income investments such as public and private corporate bonds, commercial and residential mortgages, asset-backed securities, and US government and agency-backed securities. Value is added primarily through sector allocation and security selection. The Separate Account may enter into reverse repurchase agreements to attempt to enhance portfolio return and income.

(11) Inflation Protection Separate Account-Z 3-BlackRock: The investment seeks to provide current income and real (after inflation) total returns. The fund invests primarily in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and U.S. and non-U.S. corporations. It normally maintains an average portfolio duration that is within from 80% to 120% of the duration of the Bloomberg U.S. Treasury Inflation Protected Securities (TIPS) Index. The fund is not managed to a particular maturity.

(12) High Yield Sep Acct Z: The investment seeks to provide a high level of current income. The fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in below investment grade bonds and bank loans (sometimes called “high yield” or “junk”) which are rated, at the time of purchase, Ba1 or lower by Moody’s and BB+ or lower by S&P Global. It also invests in investment grade bank loans (also known as senior floating rate interests) and securities of foreign issuers, including those located in developing or emerging markets.

(13) Liquid Assets Separate Account-Z: The investment seeks as high a level of current income as is considered consistent with preservation of principal and maintenance of liquidity. It invests in a portfolio of high quality, short-term instruments. The investments are U.S. dollar denominated securities which the sub-advisor believes present minimal credit risks. The sub-advisor maintains a dollar weighted average portfolio maturity of 60 days or less.

The fair values of mutual funds are based upon quoted prices of each fund’s underlying securities. The Company was not required to make any contributions to its defined benefit pension plan in 2025 and 2024.

Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows (dollars in thousands):

Estimated pension payments:
2026	$	574
2027	$	577
2028	$	563
2029	$	555
2030	$	687
2031-2035	$	3,338

EMPLOYEE STOCK OWNERSHIP PLAN (“ESOP”)

Effective upon the completion of the Company’s initial public stock offering in October 2017, the Bank established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees. The ESOP used $775,740 in proceeds from a term loan obtained from the Company to purchase 77,574 original shares of common stock on the open market at an average price of  $10.00 per share. Also, as part of the recent Conversion, the Company sold 83,588 shares of its common stock to the ESOP at a price of $10.00 per share. The outstanding balance of the October 2017 ESOP loan ($687,687 and the new ESOP loan $835,880) were combined as of the date of the recent Conversion. The new ESOP loan will be repaid principally from the Bank’s contribution to the ESOP in annual payments through 2049 at a fixed interest rate of 7.25%. Shares are released to participants on a straight-line basis over the loan term and allocated based on participant compensation. The Bank recognizes compensation benefit expense as shares are committed for release at their current market price. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends on allocated shares, if applicable, are recorded as a reduction of retained earnings and dividends on unallocated shares are recorded as a reduction of debt. The Company recognized approximately $84,000 and $24,000 of compensation expense related to this plan for the year ended December 31, 2025 and December 31, 2024 respectively.

At December 31, 2025, there were 135,698 shares not yet released having an aggregate market value of approximately $1.4 million. Participant vesting provisions for the ESOP are 20% per year and will be fully vested upon completion of six years of credited service. Eligible employees who were employed with the Bank shall receive credit for vesting purposes for each year of continuous employment prior to adoption of the ESOP.

STOCK-BASED COMPENSATION

In August 2019, the Board of Directors of the Company approved the grant of stock option awards to its Directors and Executive Officers under the 2019 Equity Plan that had 96,967 original shares authorized for option awards. A total of 47,500 original stock option awards were granted to five Directors and nine Officers of the Company at an exercise price of $9.20 per share. The awards vest ratably over five years (20% per year for each year of the participant’s service with the Company) and will expire ten years from the date of the grant, or September 2029. The fair value of each option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted average assumptions: risk-free interest rate of 1.5%; volatility factors of the expected market price of the Company’s common stock of 21.23%; weighted average expected lives of the options of 7.5 years. Based upon these assumptions, the weighted average fair value of options granted was $2.52.

In May 2020, the Board of Directors of the Company approved the grant of stock option awards to Executive Officers under the 2019 Stock Option Plan. A total of 5,000 original stock option awards were granted to five officers of the Company at an exercise price of $6.52. The awards vest ratably over five years (20% per year for each year of the participant’s service with the Company) and will expire ten years from the date of the grant, or June 2030. The fair value of each option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted average assumptions for the options granted in May of 2020: risk-free interest rate of 0.49%; volatility factors of the expected market price of the Company’s common stock of 34.21%; weighted average expected lives of the options of 6.5 years. Based upon these assumptions, the weighted average fair value of options granted was $2.27.

In June 2021, the Board of Directors of the Company approved the grant of stock option awards to Executive Officers and Directors under the 2019 Stock Option Plan. A total of 15,900 original stock option awards were granted to directors and executive officers of the Company at an exercise price of $9.75. The awards vest ratably over five years (20% per year for each year of the participant’s service with the Company) and will expire ten years from the date of the grant, or July 2031. The fair value of each option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted average assumptions for the options granted in June of 2021: risk-free interest rate of 1.14%; volatility factors of the expected market price of the Company’s common stock of 29.06%; weighted average expected lives of the options of 6.5 years. Based upon these assumptions, the weighted average fair value of options granted was $3.08.

In May 2022, the Board of Directors of the Company approved the grant of stock option awards to Executive Officers and Directors under the 2019 Stock Option Plan. A total of 4,800 original stock option awards were granted to directors and executive officers of the Company at an exercise price of $11.25. The awards vest ratably over five years (20% per year for each year of the participant’s service with the Company) and will expire ten years from the date of the grant, or June 2032. The fair value of each option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted average assumptions for the options granted in May of 2022: risk-free interest rate of 2.99%; volatility factors of the expected market price of the Company’s common stock of 28.68%; weighted average expected lives of the options of 6.5 years. Based upon these assumptions, the weighted average fair value of options granted was $4.02.

In May 2023, the Board of Directors of the Company approved the grant of stock option awards to Executive Officers and Directors under the 2019 Stock Option Plan. A total of 2,000 original stock option awards were granted to Directors and Executive Officers of the Company at an exercise price of $8.83. The awards vest ratably over five years (20% per year for each year of the participant’s service with the Company) and will expire ten years from the date of the grant, or June 2033. The fair value of each option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted average assumptions for the options granted in May of 2023: risk-free interest rate of 3.53%; volatility factors of the expected market price of the Company’s common stock of 29.22%; weighted average expected lives of the options of 6.5 years. Based upon these assumptions, the weighted average fair value of options granted was $2.93.

In November 2025, the Board of Directors of the Company approved the grant of stock option awards to Directors under the 2019 Stock Option Plan. A total of 5,600 stock option awards were granted to Directors at an exercise price of $9.78. Of the total awards, 800 stock option awards vest ratably over three years (33% per year for each year of the participant’s service with the Company) and 4,800 stock option awards vest ratably over five years (20% per year for each year of the participant’s service with the Company), however, all 5,600 stock option awards will expire ten years from the date of the grant, or November 2035. The fair value of each option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted average assumptions for the options granted in November of 2025: risk-free interest rate of 3.82%; volatility factors of the expected market price of the Company’s common stock of 26.84%; weighted average expected lives of the options of 6.5 years. Based upon these assumptions, the weighted average fair value of options granted was $2.80.

A summary of the Company’s option activity and related information for its equity incentive plan for the years ended December 31, 2025 and 2024 is as follows (prior period reflects conversion ratio):

	Year Ended December 31,
	2025			2024
		Weighted			Weighted
		Average			Average
		Exercise			Exercise
		Price Per			Price Per
	Options	Share		Options	Share
Outstanding at the beginning of the period	59,034	$	9.27	60,990	$	9.27
Grants	5,600		9.78	—		—
Exercised	—		—	—		—
Forfeitures	(3,448)	$	(9.21)	(1,956)		(9.20)
Outstanding at period end	61,186	$	9.32	59,034	$	9.27
Vested at end of year	50,415	$	9.18	49,040	$	9.17
Exercisable	50,415	$	9.18	49,040	$	9.17

The intrinsic value of options outstanding at December 31, 2025 and 2024 is $75,543 and $4,745, respectively.

The grants to Senior Management and Directors generally vest over a five-year period in equal installments, with the first installment vesting on the anniversary date of the grant and succeeding installments on each anniversary thereafter, through 2030.

The Company recorded compensation expense in the amount of $15,000 for the year ended December 31, 2025 and approximately $27,000 for the year ended December 31, 2024. The Company has $26,000 of compensation expense remaining to be recognized at December 31, 2025.

Compensation costs related to share-based payments transactions are recognized based on the grant-date fair value of the stock-based compensation issued. Compensation costs are recognized over the period that an employee provides service in exchange for the award. Compensation costs related to the employee stock ownership plan are dependent upon the average stock price and the shares committed to be released to the plan participants through the period in which income is reported.

In both May 2023 and 2022, the Company awarded 12,000 original shares of restricted stock to senior management. The restricted stock vests 20% per year on the specified vesting date, until 100% vested on the specified vesting date of the fifth year after the restricted stock was granted. In November 2025, the Company awarded 10,000 shares of restricted stock to senior management.  Of the total restricted shares granted, 5,000 shares will become 100% vested on the first anniversary of the grant date and the remaining 5,000 shares will vest 50% per year until 100% vested on the specified vesting date of the second year after the restricted stock was granted. The Company recorded compensation expense in the amount of $46,000 for the year ended December 31, 2025 and $46,000 for the year ended December 31, 2024. The Company has $178,000 of compensation expenses remaining to be recognized at December, 31, 2025.

The Company had 4,648 shares of restricted stock vest during the year ended December 31, 2025.  There were no shares of restricted stock forfeited during the year ended December 31, 2025.