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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2026

1. BASIS OF PRESENTATION

Seneca Bancorp, Inc. (the “Company”) is a Maryland corporation that was incorporated in June 2025 to become the registered bank holding company for Seneca Savings Bank, National Association (“Seneca Savings” or the “Bank”) upon the conversion of Seneca Financial MHC (the “Mutual Holding Company”), a federally chartered mutual holding company, from the mutual-to-stock form of organization, which occurred on October 15, 2025 (the “Conversion”). In connection with the Conversion, the Mutual Holding Company ceased to exist. The Company sold 1,044,858 shares of its common stock, which included 83,588 shares issued to the Employee Stock Ownership Plan (“ESOP”) at a price of $10.00 per share, for gross proceeds of approximately $10.4 million. Offering expenses in connection with the Conversion were $1.9 million which were netted against the gross proceeds. Shares of the Company’s common stock began being quoted on the OTCQX Market on October 16, 2025 under the trading symbol “SNNF.”

The Company is the successor corporation to Seneca Financial Corp., the former federally chartered mid-tier stock holding company, which was formed in connection with the conversion of Seneca Savings Bank into the mutual holding company form of organization in October 2017, which in turn was a subsidiary of the Mutual Holding Company, which owned a majority of Seneca Financial Corp.’s outstanding common stock.

Upon completion of the Conversion, the outstanding shares of Seneca Financial Corp.’s common stock owned by stockholders other than the Mutual Holding Company were converted into shares of the Company’s common stock based on an exchange ratio of 0.9684 of a share of Company common stock for each share of Seneca Financial Corp.’s common stock, so that Seneca Financial Corp.’s existing stockholders owned approximately the same percentage of the Company’s common stock upon the completion of the Conversion as they owned of Seneca Financial Corp.’s common stock immediately prior to the Conversion.

In connection with the Conversion, the Company provided a term loan to the ESOP to finance the ESOP’s purchase of the 83,588 shares noted above. The Company combined its existing outstanding ESOP loan in the amount of $688,000 with this new loan resulting in a new term loan to the ESOP of $1.5 million which will be repaid in annual installments over 25 years.

Finally, as a result of the Conversion, all existing stock options and restricted stock awards outstanding on October 15, 2025 were adjusted based on the exchange ratio of 0.9684-to-1 including those described in Note 9 to the accompanying consolidated financial statements. All historical share and per share information also has been restated to reflect the 0.9684-to-1 exchange ratio.

Seneca Savings maintains its executive offices and main branch in Baldwinsville, New York, with branches in Liverpool, North Syracuse, Manlius, and Bridgeport, New York. The Bank is a community-oriented national bank whose business primarily consists of accepting deposits from customers within its market area and investing those funds primarily in residential mortgage and commercial loans.

Disposal of Financial Quest

On October 21, 2026, the Bank entered into a definitive agreement to sell substantially all of the business assets of Financial Quest (as defined below) for $1,400,000; the transaction closed on October 26, 2026.

As of September 30, 2026, the Company determined that the applicable criteria for classification as held-for-sale had been met. Accordingly, the assets and liabilities associated with the planned disposition have been classified as held-for-sale, as applicable, and the disposal group was evaluated in accordance with U.S. GAAP.

The carrying amount of the disposal group includes the assets and liabilities directly associated with the transaction, including goodwill and identifiable intangible assets attributable to the book of business. In connection with the planned disposition, the Company evaluated the recoverability of the related assets under the applicable impairment guidance, including the guidance applicable to goodwill and intangible assets. The disposal group is reported at the lower of its applicable carrying amount or fair value less costs to sell.

At September 30, 2026, the major classes of assets and liabilities associated with the disposal group were as follows:


		At September 30,
(In thousands)		2026
		(Unaudited)
ASSETS
Cash		$	628
Intangible assets			311
Goodwill			412
Other assets			33
Assets held-for-sale		$	1,384

LIABILITIES
Other liabilities		$	140
Total liabilities associated with assets held-for-sale		$	140

Based upon the expected consideration and the carrying amounts of the assets and liabilities associated with the disposal, no impairment loss related to the book of business sale was recognized as of September 30, 2026.

Upon completion of the transaction, the Company will derecognize the assets and liabilities associated with the disposed book of business, including the related goodwill and intangible assets, and recognize the resulting gain or loss on sale based on the difference between the consideration received, net of applicable transaction costs, and the carrying amount of the net assets disposed.

Assets classified as held-for-sale as of September 30, 2026 consisted of goodwill, intangible assets, and a non-banking commercial building totaling $1.1 million.

Discontinued Operations

As discussed above, Financial Quest’s book of business was sold to a third-party on October 26, 2026. Management concluded that the operations of Financial Quest’s book of business met the criteria of discontinued operations under Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations. Management has made the strategic business decision to cease the existing operations of the entity. As such, the operating results of Financial Quest have been classified as discontinued operations on the accompanying consolidated statements of income.

Management determined that as of September 30, 2026, Financial Quest’s affected assets should be classified as held for sale.

The operating results of the discontinued operations for Financial Quest are summarized as follows for the three and nine months ended September 30:


		Three Months Ended September 30,			Nine Months Ended September 30,
(In thousands)		2026			2026

NONINTEREST INCOME
Income from financial services			254			761
Fee income			8			24
Total noninterest income			262			785
NONINTEREST EXPENSE
Compensation and employee benefits			143			423
Premises and equipment			6			18
Professional fees			—			20
Postage and office supplies			—			2
Advertising			—			1
Directors Fees			—			1
Intangible asset amortization			39			117
Other			15			42
Total noninterest expense			203			624
Net income attributable to discontinued operations		$	59		$	161

As of September 30, 2026, the Company’s assets and liabilities that related to discontinued operations for Financial Quest were as follows:


		At September 30,
(In thousands)		2026
		(Unaudited)

ASSETS
Intangible assets		$	311
Goodwill			412
Other assets			33
		$	756

LIABILITIES		$	140

Assets Held-for-Sale

Long-lived assets and disposal groups are classified as held-for-sale when the applicable criteria under U.S. GAAP have been met and are reported at the lower of their carrying amount or fair value less costs to sell. Assets and liabilities associated with a disposal group, including related goodwill and intangible assets, are evaluated under the applicable impairment guidance prior to disposal. Goodwill and intangible assets attributable to the disposed business are derecognized upon completion of the sale and are included in determining the resulting gain or loss on disposal.

In connection with the Company’s decision to discontinue operations of Financial Quest, the Company determined that certain assets of Financial Quest met the held-for-sale criteria as of September 30, 2026. The assets were sold in the fourth quarter of 2026 for cash consideration of $1,400,000.

The interim condensed consolidated financial statements as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025, are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Such adjustments are the only adjustments contained in these unaudited consolidated financial statements. The unaudited condensed financial statements have been prepared according to the

rules and regulations of the Securities and Exchange Commission, and therefore certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2026, or any other period.

The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in Note 2 of the audited financial statements and notes for the year ended December 31, 2025 and are contained in the Company’s Annual Report on Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2025.