PVBC 10-Q Quarterly Report June 30, 2025

PROVIDENT BANCORP, INC. /MD/

10-Ks and 10-Qs

10-Q	Quarter ended Sept. 30, 2025
10-Q	Quarter ended June 30, 2025
10-Q	Quarter ended March 31, 2025
10-K	Fiscal year ended Dec. 31, 2024
10-Q	Quarter ended Sept. 30, 2024
10-Q	Quarter ended June 30, 2024
10-Q	Quarter ended March 31, 2024
10-K	Fiscal year ended Dec. 31, 2023
10-Q	Quarter ended Sept. 30, 2023
10-Q	Quarter ended June 30, 2023
10-Q	Quarter ended March 31, 2023
10-K	Fiscal year ended Dec. 31, 2022
10-Q	Quarter ended Sept. 30, 2022
10-Q	Quarter ended June 30, 2022
10-Q	Quarter ended March 31, 2022
10-K	Fiscal year ended Dec. 31, 2021
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10-Q	Quarter ended June 30, 2021
10-Q	Quarter ended March 31, 2021
10-K	Fiscal year ended Dec. 31, 2020
10-Q	Quarter ended Sept. 30, 2020
10-Q	Quarter ended June 30, 2020
10-Q	Quarter ended March 31, 2020
10-K	Fiscal year ended Dec. 31, 2019
10-Q	Quarter ended Sept. 30, 2019

PROXIES

DEF 14A	Filed on May 15, 2025
DEF 14A	Filed on April 15, 2025
DEF 14A	Filed on April 16, 2024
DEF 14A	Filed on April 18, 2023
DEF 14A	Filed on April 19, 2022
DEF 14A	Filed on April 19, 2021
DEF 14A	Filed on Oct. 19, 2020
DEF 14A	Filed on May 11, 2020

pvbc20250630_10q.htm

Table of Contents

UNITED STATES

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 June 30, 2025

☐	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. 001-39090

Provident Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland		84-4132422
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

5 Market Street , Amesbury , Massachusetts		01913
(Address of Principal Executive Offices)		Zip Code

( 877 ) 487-2977

(Registrant’s telephone number)

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		Name of each exchange on which registered
Common stock		PVBC		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 Exchange Act). Yes ☐ No ☒

As of August 08, 2025, there were 17,784,048 shares of the Registrant’s common stock, $0.01 par value per share, outstanding.

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Provident Bancorp, Inc.

Form 10-Q

Part I.	Financial Information	Page

Item 1.	Financial Statements		2

	Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024		2

	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)		3

	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)		4

	Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)		5

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)		7

	Notes to Consolidated Financial Statements (unaudited)		8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation		30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		41

Item 4.	Controls and Procedures		41

Part II.	Other Information		42

Item 1.	Legal Proceedings		42

Item 1A.	Risk Factors		42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		42

Item 3.	Defaults upon Senior Securities		42

Item 4.	Mine Safety Disclosures		42

Item 5.	Other Information		42

Item 6.	Exhibits		43

Signatures			44

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

PROVIDENT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)	At June 30, 2025			At December 31, 2024
	(unaudited)
Assets
Cash and due from banks	$	21,700		$	27,536
Short-term investments		107,209			141,606
Cash and cash equivalents		128,909			169,142
Debt securities available-for-sale (at fair value)		24,534			25,693
Federal Home Loan Bank stock, at cost		2,242			2,697
Total loans		1,314,265			1,326,595
Allowance for credit losses for loans		( 20,796	)		( 21,087	)
Net loans		1,293,469			1,305,508
Bank owned life insurance		46,679			46,017
Premises and equipment, net		10,127			10,188
Accrued interest receivable		4,877			5,296
Right-of-use assets		5,488			3,429
Deferred tax asset, net		12,631			13,808
Other assets		11,925			11,392
Total assets	$	1,540,881		$	1,593,170

Deposits:
Noninterest-bearing	$	287,927		$	351,528
Interest-bearing		970,051			957,432
Total deposits		1,257,978			1,308,960
Borrowings:
Short-term borrowings		25,000			35,000
Long-term borrowings		9,495			9,563
Total borrowings		34,495			44,563
Operating lease liabilities		5,939			3,862
Commitments and contingencies		350			—
Other liabilities		4,748			4,698
Total liabilities		1,303,510			1,362,083
Shareholders' equity:
Preferred stock, $ 0.01 par value, 50,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $ 0.01 par value, 100,000,000 shares authorized; 17,785,538 and 17,788,543 shares issued and outstanding at June 30, 2025 and December 31, 2024		178			178
Additional paid-in capital		126,329			125,446
Retained earnings		118,555			113,561
Accumulated other comprehensive loss		( 1,578	)		( 1,625	)
Unearned compensation - ESOP		( 6,113	)		( 6,473	)
Total shareholders' equity		237,371			231,087
Total liabilities and shareholders' equity	$	1,540,881		$	1,593,170

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

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PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
(Dollars in thousands, except per share data)	2025			2024			2025			2024
Interest and dividend income:
Interest and fees on loans	$	20,085		$	20,311		$	39,392		$	40,380
Interest and dividends on debt securities available-for-sale		231			243			491			480
Interest on short-term investments		984			1,318			1,997			3,047
Total interest and dividend income		21,300			21,872			41,880			43,907
Interest expense:
Interest on deposits		7,261			9,607			14,630			18,947
Interest on short-term borrowings		482			281			788			459
Interest on long-term borrowings		30			31			60			62
Total interest expense		7,773			9,919			15,478			19,468
Net interest and dividend income		13,527			11,953			26,402			24,439
Credit loss (benefit) expense - loans		( 384	)		6,467			( 314	)		924
Credit loss expense (benefit) - off-balance sheet credit exposures		6			( 9	)		( 76	)		( 47	)
Total credit loss (benefit) expense		( 378	)		6,458			( 390	)		877
Net interest and dividend income after credit loss (benefit) expense		13,905			5,495			26,792			23,562
Noninterest income:
Customer service fees on deposit accounts		690			665			1,405			1,339
Service charges and fees - other		442			349			718			658
Bank owned life insurance income		335			319			662			621
Other income		764			190			826			261
Total noninterest income		2,231			1,523			3,611			2,879
Noninterest expense:
Salaries and employee benefits		7,338			7,293			14,914			15,438
Occupancy expense		376			407			824			850
Equipment expense		120			160			264			312
Deposit insurance		294			321			626			654
Data processing		410			402			831			815
Marketing expense		62			76			107			94
Professional fees		1,124			984			1,693			2,298
Directors' compensation		197			177			392			351
Software depreciation and implementation		532			584			1,085			1,127
Insurance expense		224			303			445			604
Service fees		371			234			689			476
Other		1,043			653			1,653			1,310
Total noninterest expense		12,091			11,594			23,523			24,329
Income (loss) before income tax expense		4,045			( 4,576	)		6,880			2,112
Income tax expense (benefit)		1,221			( 1,268	)		1,886			439
Net income (loss)	$	2,824		$	( 3,308	)	$	4,994		$	1,673
Earnings (loss) per share:
Basic	$	0.17		$	( 0.20	)	$	0.30		$	0.10
Diluted		0.17		$	( 0.20	)	$	0.29		$	0.10
Weighted Average Shares:
Basic		16,860,744			16,706,793			16,841,577			16,688,122
Diluted		16,954,078			16,706,793			16,938,788			16,723,763

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

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PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
(In thousands)
Net income (loss)	$	2,824		$	( 3,308	)	$	4,994		$	1,673
Other comprehensive (loss) income:
Unrealized holding (losses) gains arising during the period on debt securities available-for-sale		( 131	)		( 43	)		67			( 182	)
Unrealized (loss) gain		( 131	)		( 43	)		67			( 182	)
Income tax effect		29			8			( 20	)		41
Total other comprehensive (loss) gain		( 102	)		( 35	)		47			( 141	)
Comprehensive income (loss)	$	2,722		$	( 3,343	)	$	5,041		$	1,532

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

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PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

	For the three months ended June 30, 2025 and 2024
												Accumulated
	Shares of					Additional						Other			Unearned
	Common			Common		Paid-in			Retained			Comprehensive			Compensation
(In thousands, except share data)	Stock			Stock		Capital			Earnings			(Loss) Income			ESOP			Total
Balance, March 31, 2025		17,788,543		$	178	$	125,895		$	115,731		$	( 1,476	)	$	( 6,293	)	$	234,035
Net income		—			—		—			2,824			—			—			2,824
Other comprehensive loss		—			—		—			—			( 102	)		—			( 102	)
Stock-based compensation expense, net of forfeitures		—			—		364			—			—			—			364
Restricted stock forfeitures		( 2,500	)		—		—			—			—			—			—
Shares surrendered related to tax withholdings on restricted stock awards		( 505	)		—		( 5	)		—			—			—			( 5	)
ESOP shares earned		—			—		75			—			—			180			255
Balance, June 30, 2025		17,785,538		$	178	$	126,329		$	118,555		$	( 1,578	)	$	( 6,113	)	$	237,371

Balance, March 31, 2024		17,659,146		$	177	$	124,415		$	111,266		$	( 1,602	)	$	( 7,013	)	$	227,243
Net loss		—			—		—			( 3,308	)		—			—			( 3,308	)
Dividends forfeited		—			—		—			5			—			—			5
Other comprehensive loss		—			—		—			—			( 35	)		—			( 35	)
Stock-based compensation expense, net of forfeitures		—			—		262			—			—			—			262
Restricted stock award grants, net		( 4,734	)		—		( 22	)		—			—			—			( 22	)
Stock options exercised, net		12,915			—		( 18	)		—			—			—			( 18	)
ESOP shares earned		—			—		28			—			—			180			208
Balance, June 30, 2024		17,667,327		$	177	$	124,665		$	107,963		$	( 1,637	)	$	( 6,833	)	$	224,335

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PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)

(Unaudited)

	For the six months ended June 30, 2025 and 2024
											Accumulated
	Shares of					Additional					Other			Unearned
	Common			Common		Paid-in			Retained		Comprehensive			Compensation
(In thousands, except share data)	Stock			Stock		Capital			Earnings		(Loss) Income			ESOP			Total
Balance, December 31, 2024		17,788,543		$	178	$	125,446		$	113,561	$	( 1,625	)	$	( 6,473	)	$	231,087
Net income		—			—		—			4,994		—			—			4,994
Other comprehensive income		—			—		—			—		47			—			47
Stock-based compensation expense, net of forfeitures		—			—		730			—		—			—			730
Restricted stock forfeitures		( 2,500	)		—		—			—		—			—			—
Shares surrendered related to tax withholdings on restricted stock awards		( 505	)		—		( 5	)		—		—			—			( 5	)
ESOP shares earned		—			—		158			—		—			360			518
Balance, June 30, 2025		17,785,538		$	178	$	126,329		$	118,555	$	( 1,578	)	$	( 6,113	)	$	237,371

Balance, December 31, 2023		17,677,479		$	177	$	124,129		$	106,285	$	( 1,496	)	$	( 7,193	)	$	221,902
Net income		—			—		—			1,673		—			—			1,673
Dividends forfeited		—			—		—			5		—			—			5
Other comprehensive loss		—			—		—			—		( 141	)		—			( 141	)
Stock-based compensation expense, net of forfeitures		—			—		523			—		—			—			523
Restricted stock award grants, net		( 23,067	)		—		( 42	)		—		—			—			( 42	)
Stock options exercised, net		12,915			—		( 18	)		—		—			—			( 18	)
ESOP shares earned		—			—		73			—		—			360			433
Balance, June 30, 2024		17,667,327		$	177	$	124,665		$	107,963	$	( 1,637	)	$	( 6,833	)	$	224,335

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

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PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	June 30,
(In thousands)	2025			2024
Cash flows from operating activities:
Net income	$	4,994		$	1,673
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of securities premiums, net of accretion		49			65
ESOP expense		518			433
Change in deferred loan fees, net		( 563	)		( 578	)
(Benefit) provision for credit losses		( 390	)		877
Depreciation and amortization		428			558
Decrease (increase) in accrued interest receivable		419			( 306	)
Deferred tax expense		1,156			40
Share-based compensation expense		730			523
Bank-owned life insurance income		( 662	)		( 621	)
Principal repayments of operating lease obligations		( 59	)		( 53	)
Net (increase) decrease in other assets		( 533	)		3,391
Net increase (decrease) in other liabilities		476			( 2,206	)
Net cash provided by operating activities		6,563			3,796

Cash flows from investing activities:
Proceeds from pay downs, maturities and calls of debt securities available-for-sale		1,177			996
Redemption (purchase) of Federal Home Loan Bank stock		455			( 1,065	)
Loan principal collections, net of (loan originations)		12,916			( 28,544	)
Additions to premises and equipment		( 289	)		( 209	)
Net cash provided by (used in) investing activities		14,259			( 28,822	)

Cash flows from financing activities:
Net (decrease) increase in noninterest-bearing accounts		( 63,601	)		3,045
Net increase (decrease) in interest-bearing accounts		12,619			( 69,612	)
Net cash dividends forfeited on common stock		—			5
Payments from exercise of stock options, net		—			( 18	)
Net change in short-term borrowings		( 10,000	)		43,000
Repayments on long-term borrowings		( 68	)		( 67	)
Shares surrendered related to tax withholdings on restricted stock awards		( 5	)		( 42	)
Net cash used in financing activities		( 61,055	)		( 23,689	)
Net decrease in cash and cash equivalents		( 40,233	)		( 48,715	)
Cash and cash equivalents at beginning of period		169,142			220,332
Cash and cash equivalents at end of period	$	128,909		$	171,617

Supplemental disclosures:
Interest paid	$	15,477		$	19,458
Income taxes paid		232			244
Recognition of operating lease liabilities		2,136			—
Receivable for sale of main office branch included in other assets		3,000			—

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PROVIDENT BANCORP, INC.

Notes to Consolidated Financial Statements

(Unaudited)

( 1 ) Basis of Presentation

The accompanying unaudited financial statements of Provident Bancorp, Inc. (the “Company”) were prepared in accordance with the instructions for Form 10 -Q and with Regulation S- X and do not include information or footnotes necessary for a complete presentation of the financial condition, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). However, in the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for future periods, including the entire fiscal year. These financial statements should be read in conjunction with the annual financial statements and notes thereto included in the annual report on Form 10 -K the Company filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025.

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiary BankProv (the “Bank”), and the Bank’s wholly owned subsidiaries, Provident Security Corporation, and 5 Market Street Security Corporation. Provident Security Corporation and 5 Market Street Security Corporation were established to buy, sell, and hold investments for their own account.

( 2 ) Merger

On June 5, 2025, NB Bancorp, Inc. (the “Buyer”), Needham Bank, a wholly-owned subsidiary of the Buyer, 1828 MS, Inc., a wholly owned subsidiary of the Buyer formed solely to facilitate the transaction (the “Merger Sub” and together with the Buyer and Needham Bank, “Needham”), the Company and the Bank, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Needham will acquire the Company and the Bank through the merger of the Merger Sub with and into the Company (the “Merger”) followed as soon as reasonably practicable by the merger of the Company with and into the Buyer, with the Buyer as the surviving entity (the “Holdco Merger”). After the Holdco Merger, at a time selected by Buyer, the Bank will merge with and into Needham Bank, with Needham Bank as the surviving entity.

Prior to the effective time of the Merger, shareholders of the Company will have the right to elect to receive for each share of the Company’s common stock either (i) 0.691 shares of the Buyer’s common stock (the “Stock Consideration”) or (ii) $ 13.00 in cash, subject to proration procedures to ensure that holders of 50 % of the shares of the Company’s common stock receive the Stock Consideration.

The completion of the Merger is subject to various closing conditions, including the receipt of shareholder and regulatory approvals.

( 3 ) Corporate Structure

The Company is a Maryland corporation whose primary purpose is to act as the holding company for BankProv. The Bank’s headquarters and main office are located in Amesbury, Massachusetts, and it operates two branch offices in Northeastern Massachusetts, three branch offices in Southeastern New Hampshire and one branch in Bedford, New Hampshire. The Bank also has a loan production office in Ponte Vedra, Florida. BankProv is a Massachusetts-chartered stock savings bank that offers both traditional and innovative banking solutions to its consumer and commercial customers. The Bank’s primary deposit products are checking, savings, and term certificate accounts and its primary lending products are commercial real estate, commercial, and mortgage warehouse loans.

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( 4 ) Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2023 - 09, Income Taxes (Topic 740 ) - Improvements to Income Tax Disclosures (“ASU 2023 - 09” ), to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023 - 09 requires annual disclosure of specific categories in the rate reconciliation table and separate disclosure for reconciling items that exceed a quantitative threshold. ASU 2023 - 09 also requires annual disclosure of the amount of income taxes paid disaggregated by federal, state, and foreign taxes, and separately, the amount of income taxes paid disaggregated by individual taxing jurisdictions in which income taxes paid exceed a quantitative threshold. ASU 2023 - 09 is effective for the Company for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of this Accounting Standard Update with respect to its consolidated financial statements.

( 5 ) Debt Securities

Debt securities are classified as available-for-sale when they might be sold before maturity. Debt securities available-for-sale are valued at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

The following table summarizes the amortized cost, allowance for credit losses, and fair value of debt securities available-for-sale at June 30, 2025 and December 31, 2024 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:

	Amortized		Gross		Gross		Allowance
	Cost		Unrealized		Unrealized		for Credit		Fair
(In thousands)	Basis		Gains		Losses		Losses		Value
June 30, 2025
State and municipal securities	$	11,081	$	2	$	913	$	—	$	10,170
Asset-backed securities		7,560		13		560		—		7,013
Government mortgage-backed securities		7,931		—		580		—		7,351
Total debt securities available-for-sale	$	26,572	$	15	$	2,053	$	—	$	24,534

December 31, 2024
State and municipal securities	$	11,130	$	2	$	581	$	—	$	10,551
Asset-backed securities		7,961		—		745		—		7,216
Government mortgage-backed securities		8,707		—		781		—		7,926
Total debt securities available-for-sale	$	27,798	$	2	$	2,107	$	—	$	25,693

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are generally amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

There were no realized gains or losses on sales or calls of securities during the six months ended June 30, 2025 or June 30, 2024 .

Securities with carrying amounts of $6.0 million and $ 6.6 million were pledged to secure available borrowings with the Federal Home Loan Bank at June 30, 2025 and December 31, 2024 , respectively.

The scheduled maturities of debt securities at June 30, 2025 are summarized in the table below. Actual maturities of asset and mortgage-backed securities may differ from contractual maturities because the assets and mortgages underlying the securities may be repaid without any penalties. Because asset- and mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary:

	Available-for-Sale
	Amortized		Fair
(In thousands)	Cost		Value
Due in one year	$	—	$	—
Due after one year through five years		599		601
Due after five years through ten years		2,580		2,515
Due after ten years		7,902		7,054
Government mortgage-backed securities		7,931		7,351
Asset-backed securities		7,560		7,013
	$	26,572	$	24,534

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At the time a debt security is placed on non-accrual status, generally when any principal or interest payments become 90 days or more delinquent or if full collection of interest or principal becomes uncertain, interest accrued but not received is reversed against interest income. There were no debt securities on non-accrual status and therefore there was no accrued interest related to debt securities reversed against interest income during the six months ended June 30, 2025 or June 30, 2024 .

The aggregate fair value and unrealized losses of securities that have been in a continuous unrealized loss position for less than twelve months and for twelve months or longer are as follows at June 30, 2025 and December 31, 2024 :

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
June 30, 2025
Temporarily impaired securities:
State and municipal securities	$	2,892	$	57	$	6,677	$	856	$	9,569	$	913
Asset-backed securities		—		—		5,368		560		5,368		560
Government mortgage-backed securities		72		1		7,279		579		7,351		580
Total temporarily impaired debt securities	$	2,964	$	58	$	19,324	$	1,995	$	22,288	$	2,053

December 31, 2024
Temporarily impaired securities:
State and municipal	$	2,935	$	21	$	7,015	$	560	$	9,950	$	581
Asset-backed securities		1,752		11		5,463		734		7,215		745
Government mortgage-backed securities		—		—		7,848		781		7,848		781
Total temporarily impaired debt securities	$	4,687	$	32	$	20,326	$	2,075	$	25,013	$	2,107

The Company expects to recover its amortized cost basis on all debt securities. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell the securities in an unrealized loss position as of June 30, 2025 , prior to their recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

As a result of the analysis below, which is presented by investment type, we determined that no allowance for credit loss for investment securities was required as of June 30, 2025 .

State and municipal securities: At June 30, 2025 , 16 of the 18 securities in the Company’s portfolio of state and municipal securities were in unrealized loss positions. Aggregate unrealized losses represented 8.7 % of the amortized cost of state and municipal securities in unrealized loss positions. The Company continually monitors the state and municipal securities sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company believes the securities in this portfolio carry minimal risk of default. There were no material underlying downgrades during the quarter. All securities are performing.

Asset-backed securities: At June 30, 2025 , four of the five securities in the Company’s portfolio of asset-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 9.4 % of the amortized cost of asset-backed securities in unrealized loss positions. The U.S. Small Business Administration guarantees the contractual cash flows of all the Company’s asset-backed securities. The securities are investment grade and there were no material underlying credit downgrades during the quarter. All securities are performing.

Government mortgage-backed securities: At June 30, 2025 , all 29 securities in the Company’s portfolio of government mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 7.3 % of the amortized cost of government mortgage-backed securities in unrealized loss positions. The Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Government National Mortgage Association guarantee the contractual cash flows of all the Company’s mortgage-backed securities. The securities are investment grade and there were no material underlying credit downgrades during the quarter. All securities are performing.

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Allowance for Credit Losses – Available-For-Sale Securities:

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses charged to earnings. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive (loss) income.

Changes in the allowance for credit losses are recorded as credit loss expense (or benefit). Losses are charged against the allowance when management believes an available for sale security is uncollectible, or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale debt securities totaled $ 177,000 and $ 182,000 at June 30, 2025 and December 31, 2024 , respectively, and was included in accrued interest receivable on the Consolidated Balance Sheets and was excluded from the estimate of credit losses.

( 6 ) Loans and Allowance for Credit Losses for Loans

Loans:

A summary of loans is as follows:

	At			At
	June 30,			December 31,
(In thousands)	2025			2024
Commercial real estate	$	580,750		$	559,325
Construction and land development		37,362			28,097
Residential real estate		4,936			6,008
Mortgage warehouse		284,154			259,181
Commercial		160,596			163,927
Enterprise value		246,382			309,786
Consumer		85			271
Total loans		1,314,265			1,326,595
Allowance for credit losses for loans		( 20,796	)		( 21,087	)
Net loans	$	1,293,469		$	1,305,508

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, net of the allowance for credit losses for loans. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred loan fees and costs. Accrued interest receivable on loans totaled $ 4.7 million and $ 5.1 million at June 30, 2025 and December 31, 2024 , respectively, and was included in accrued interest receivable on the Consolidated Balance Sheets and is excluded from the estimate of credit losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using either the level-yield or straight-line method without anticipating prepayments.

At the time a loan is placed on non-accrual status, generally at 90 days past due, or earlier if collection of principal or interest is considered doubtful, all interest accrued but not received is reversed against interest income. Interest received on such loans is accounted for on the cost-recovery or cash-basis method, until qualifying for a return to accrual status. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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Allowance for Credit Losses for Loans:

The allowance for credit losses for loans (“ACLL”) is a valuation account that is deducted from the amortized cost basis of the loans to present the net amount expected to be collected. Loans are charged off against the allowance when management believes the collectability of a loan balance is no longer probable. Subsequent recoveries, if any, are credited to the allowance and do not exceed the aggregate of amounts previously charged-off. The Company employs a process and methodology to estimate the ACLL that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors involves pooling loans into portfolio segments that share similar risk characteristics.

The ACLL is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments:

Commercial real estate : Loans in this segment are primarily income-producing properties throughout Massachusetts and New Hampshire. The underlying cash flows generated by the properties can be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn can have an effect on the credit quality in this segment. Management periodically obtains rent rolls and continually monitors the cash flows of these loans.

Construction and land development : Loans in this segment primarily include speculative and pre-sold real estate development loans for which payment is derived from sale of the property or a conversion of the construction loans to permanent loans for which payment is then derived from cash flows of the property. Credit risk is affected by cost overruns, time to sell at an adequate price, inaccurate estimates of the value of the completed project, and market conditions.

Residential real estate : All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will affect the credit quality in this segment. We no longer originate residential real estate loans, and previously we did not typically originate loans with a loan-to-value ratio greater than 80 % or grant subprime loans.

Mortgage warehouse : Loans in this segment are primarily facility lines to non-bank mortgage origination companies. The underlying collateral of these loans are residential real estate loans. Loans are originated by the mortgage companies for sale into secondary markets, which is typically within 15 days of the loan closing. The primary source of repayment is the cash flows upon the sale of the loans. The credit risk associated with this type of lending is the risk that the mortgage companies are unable to sell the loans.

Commercial : Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, can have an effect on the credit quality in this segment.

Enterprise value: Loans in this segment are made to small- and medium-size businesses in a senior secured position and are generally secured by the enterprise value of the business. The enterprise value consists of the going concern value of the business and takes into account the value of business assets (both tangible and intangible). Repayment is expected from the cash flows of the business. Economic and industry specific conditions can affect the credit quality of this segment.

Consumer : Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower.

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Management estimates the ACLL balance using relevant and reliable information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Generally, management considers its forecasts to be reasonable and supportable for a period of up to four quarters and then utilizes a four -quarter straight-line reversion period. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as portfolio mix, delinquency levels, or term, as well as for changes in economic conditions, such as changes in unemployment rates, property values, gross domestic product (“GDP”), the home pricing index (“HPI”), or other relevant factors. Incorporated in the estimate for the ACLL is consideration of qualitative factors, which include the following for all loan pools:

●

Changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices;

●

Changes in the experience, depth, and ability of lending management;

●

Changes in the quality of the organization's loan review system;

●

The existence and effect of any concentrations of credit and changes in the levels of such concentrations;

	●	The effect of other external factors (i.e., legal and regulatory requirements) on the level of estimated credit losses; and
	●	Changes in amount and trends in classified loans, delinquencies, and loans on non-accrual status.

In addition to the above, the mortgage warehouse pool includes a qualitative factor for changes in international, national, regional, and local conditions as the ACLL model for this loan pool does not apply an economic regression model in the calculation of the estimated loss rate. The determination of qualitative factors involves significant judgment.

The allowance for unfunded commitments is maintained by the Company at a level determined to be sufficient to absorb current expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit).

The Company measures the ACLL using the following methods:

Portfolio Segment	Measurement Method	Loss Driver
Commercial real estate	Discounted cash flow	National unemployment rate, national GDP
Construction and land development	Discounted cash flow	National unemployment rate, national GDP
Residential real estate	Discounted cash flow	National unemployment rate, national HPI
Mortgage warehouse	Remaining life method	Not applicable
Commercial	Discounted cash flow	National unemployment rate, national GDP
Enterprise value	Discounted cash flow	National unemployment rate, national GDP
Consumer	Discounted cash flow	National unemployment rate, national GDP

When the discounted cash flow method is used to determine the ACLL, management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either: management has a reasonable expectation at the reporting date that a modification will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

When the remaining life method is used to determine the ACLL, a calculated loss rate is applied to the pool of loans based on the remaining life expectancy of the pool. The remaining life expectancy is based on management’s reasonable expectation at the reporting date.

Loans that do not share risk characteristics, whether or not they are performing in accordance with their loan terms, are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. The Company will individually evaluate a loan when, based on current information and events, it is probable that it will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in making this determination include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Insignificant payment delays and payment shortfalls generally are not considered reason enough to individually analyze a loan. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. When management determines that a loan should be individually analyzed, expected credit losses are based on either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral at the reporting date, adjusted for selling costs, as appropriate.

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The following table presents the activity in the allowance for credit losses for loans by portfolio segment for the three and six months ended June 30, 2025 and 2024 :

(In thousands)	Commercial real estate			Construction and land development			Residential real estate			Mortgage warehouse		Commercial			Enterprise value			Digital asset			Consumer			Total
Balance at March 31, 2025	$	4,041		$	121		$	113		$	76	$	2,215		$	14,591		$	—		$	3		$	21,160
Charge-offs		—			—			—			—		—			—			—			( 14	)		( 14	)
Recoveries		—			—			14			—		20			—			—			—			34
Provision (credit)		( 8	)		21			( 18	)		2		( 97	)		( 296	)		—			12			( 384	)
Balance at June 30, 2025	$	4,033		$	142		$	109		$	78	$	2,138		$	14,295		$	—		$	1		$	20,796

Balance at March 31, 2024	$	4,521		$	389		$	72		$	54	$	2,278		$	6,567		$	2,124		$	1		$	16,006
Charge-offs		—			—			—			—		—			—			( 2,124	)		( 11	)		( 2,135	)
Recoveries		—			—			2			—		—			—			—			1			3
Provision (credit)		322			( 117	)		( 5	)		11		( 302	)		6,548			—			10			6,467
Balance at June 30, 2024	$	4,843		$	272		$	69		$	65	$	1,976		$	13,115		$	—		$	1		$	20,341

(In thousands)	Commercial real estate		Construction and land development			Residential real estate			Mortgage warehouse		Commercial			Enterprise value			Digital asset			Consumer			Total
Balance at December 31, 2024	$	3,715	$	104		$	120		$	71	$	2,198		$	14,875		$	—		$	4		$	21,087
Charge-offs		—		—			—			—		—			—			—			( 22	)		( 22	)
Recoveries		—		—			14			—		31			—			—			—			45
Provision (credit)		318		38			( 25	)		7		( 91	)		( 580	)		—			19			( 314	)
Balance at June 30, 2025	$	4,033	$	142		$	109		$	78	$	2,138		$	14,295		$	—		$	1		$	20,796

Balance at December 31, 2023	$	4,471	$	407		$	75		$	42	$	2,493		$	8,166		$	5,915		$	2		$	21,571
Charge-offs		—		—			—			—		( 5	)		—			( 2,124	)		( 29	)		( 2,158	)
Recoveries		—		—			2			—		—			—			—			2			4
(Credit) provision		372		( 135	)		( 8	)		23		( 512	)		4,949			( 3,791	)		26			924
Balance at June 30, 2024	$	4,843	$	272		$	69		$	65	$	1,976		$	13,115		$	—		$	1		$	20,341

The following table presents loan delinquencies by portfolio segment at June 30, 2025 and December 31, 2024 :

					90 Days		Total
	30 - 59		60 - 89		or More		Past		Total		Total
(In thousands)	Days		Days		Past Due		Due		Current		Loans
June 30, 2025
Commercial real estate	$	—	$	—	$	—	$	—	$	580,750	$	580,750
Construction and land development		—		—		—		—		37,362		37,362
Residential real estate		237		—		207		444		4,492		4,936
Mortgage warehouse		—		—		—		—		284,154		284,154
Commercial		18		—		1,536		1,554		159,042		160,596
Enterprise value		—		—		5,316		5,316		241,066		246,382
Consumer		—		—		—		—		85		85
Total	$	255	$	—	$	7,059	$	7,314	$	1,306,951	$	1,314,265

December 31, 2024
Commercial real estate	$	—	$	—	$	—	$	—	$	559,325	$	559,325
Construction and land development		—		—		—		—		28,097		28,097
Residential real estate		285		69		241		595		5,413		6,008
Mortgage warehouse		—		—		—		—		259,181		259,181
Commercial		50		—		1,543		1,593		162,334		163,927
Enterprise value		—		—		—		—		309,786		309,786
Consumer		—		—		1		1		270		271
Total	$	335	$	69	$	1,785	$	2,189	$	1,324,406	$	1,326,595

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The following table presents the amortized cost basis of loans on non-accrual with no allowance for credit loss, loans on non-accrual, and loans 90 days or more past due but still accruing as of June 30, 2025 and December 31, 2024 :

	Non-accrual				90 Days
	With No				or More
	Allowance		Non-accrual		Past Due
(In thousands)	for Credit Loss		Loans		and Accruing
June 30, 2025
Commercial real estate	$	54	$	54	$	—
Residential real estate		—		420		—
Commercial		1,536		1,536		—
Enterprise value		14,850		32,430		—
Total	$	16,440	$	34,440	$	—

December 31, 2024
Commercial real estate	$	57	$	57	$	—
Residential real estate		—		366		—
Commercial		1,543		1,543		—
Enterprise value		1,338		18,920		—
Consumer		—		1		—
Total	$	2,938	$	20,887	$	—

The Company did not recognize interest income on non-accrual loans during the six months ended June 30, 2025 or 2024 .

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The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2025 and December 31, 2024 :

	Commercial				Business
	Real		Business		Enterprise
(In thousands)	Estate		Assets		Value
June 30, 2025
Commercial real estate	$	54	$	—	$	—
Commercial		—		1,536		—
Enterprise value		—		—		36,014
Total	$	54	$	1,536	$	36,014

December 31, 2024
Commercial real estate	$	19,690	$	—	$	—
Commercial		—		1,543		—
Enterprise value		—		—		22,567
Total	$	19,690	$	1,543	$	22,567

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty by providing the following types of modifications: principal forgiveness, other-than-insignificant payment delays, term extensions, interest rate reductions, or a combination of these modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses on loans.

The following table presents the amortized cost basis of loans at June 30, 2025 or 2024 that were both experiencing financial difficulty and modified during the three months ended June 30, 2025 and 2024 , respectively, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below:

(Dollars in thousands)	Other-Than-Insignificant Payment Delay		Term Extension		Combination Term Extension and Other-Than-Insignificant Payment Delay		Total Class of Financing Receivable $		Total Class of Financing Receivable %
June 30, 2025
Commercial	$	—	$	42	$	—	$	42		0.03	%
Enterprise value		22,294		—		—		22,294		9.05
Total	$	22,294	$	42	$	—	$	22,336		1.70	%

June 30, 2024
Commercial real estate	$	1,467	$	—	$	18,228	$	19,695		3.86	%
Enterprise value		21,600		960		—		22,560		5.72
Total	$	23,067	$	960	$	18,228	$	42,255		3.08	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three months ended June 30, 2025 and 2024 :

	Weighted-Average Other-Than-Insignificant Payment Delay		Weighted-Average Term Extension		Weighted-Average Term Extension and Other-Than-Insignificant Payment Delay
	Months		Months		Months		Months
June 30, 2025
Commercial		—		3.00		—		—
Enterprise value		5.53		—		—		—

June 30, 2024
Commercial real estate		3.00		—		3.00		3.00
Enterprise value		4.00		3.00		—		—

The following table presents the amortized cost basis of loans at June 30, 2025 and 2024 that were both experiencing financial difficulty and modified during the six months ended June 30, 2025 and 2024 , respectively, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below:

(Dollars in thousands)	Other-Than-Insignificant Payment Delay		Term Extension		Combination Term Extension and Other-Than-Insignificant Payment Delay		Total Class of Financing Receivable $		Total Class of Financing Receivable %
June 30, 2025
Commercial	$	—	$	42	$	—	$	42		0.03	%
Enterprise value		27,239		—		—		27,239		11.06
Total	$	27,239	$	42	$	—	$	27,281		2.08	%

June 30, 2024
Commercial real estate	$	1,783	$	—	$	18,228	$	20,011		3.92	%
Commercial		1,575		—		—		1,575		1.09
Enterprise value		21,600		960		—		22,560		5.72
Total	$	24,958	$	960	$	18,228	$	44,146		3.22	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the six months ended June 30, 2025 or 2024 :

	Weighted-Average Other-Than-Insignificant Payment Delay		Weighted-Average Term Extension		Weighted-Average Term Extension and Other-Than-Insignificant Payment Delay
	Months		Months		Months		Months
June 30, 2025
Commercial		—		3.00		—		—
Enterprise value		5.52		—		—		—

June 30, 2024
Commercial real estate		7.94		—		9.00		9.00
Commercial		3.00		—		—		—
Enterprise value		4.00		3.00		—		—

In certain instances, if a borrower continues to experience financial difficulty following a modification, additional concessions may be granted. Of the $ 27.3 million in modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2025, $ 26.9 million related to loans that had previously received modifications due to financial difficulty during 2024. These included $ 17.6 million related to a single enterprise value relationship that previously received four -month payment deferrals in the second, third, and fourth quarters of 2024, a $ 3.7 million enterprise value relationship that previously received four -month payment deferrals in the second and fourth quarters of 2024, a $ 3.6 million and a $ 1.1 million enterprise value relationship that were both previously granted four -month payment deferrals in the fourth quarter of 2024, and a $ 922,000 loan that was previously granted a three -month term extension in the second quarter of 2024.

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As of June 30, 2025 and June 30, 2024 , the Company had no additional commitments to lend to borrowers experiencing financial difficulty whose loan terms were modified during the six months preceding each respective date. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The table below shows the delinquency status of loans that were modified to borrowers experiencing financial difficulty within the preceding 12 months of June 30, 2025 or 2024 :

			30 - 59		60 - 89		90
(In thousands)	Current		Days Past Due		Days Past Due		Days or More Past Due		Total Past Due
June 30, 2025
Commercial real estate	$	19,440	$	—	$	—	$	—	$	—
Commercial		42		—		—		—		—
Enterprise value		29,839		—		—		1,280		1,280
Total	$	49,321	$	—	$	—	$	1,280	$	1,280

June 30, 2024
Commercial real estate	$	20,011	$	—	$	—	$	—	$	—
Commercial		1,575		—		—		—		—
Enterprise value		22,560		—		—		—		—
Total	$	44,146	$	—	$	—	$	—	$	—

As of June 30, 2025, the $ 1.3 million in loans that are 90 days or more past due pertain to a single borrower who received a three -month term extension on a $ 922,000 loan in the second quarter of 2024, and then subsequently received a four -month payment delay during the first quarter of 2025 on this loan and another loan for $ 358,000 .

The following table provides the amortized cost basis of loans that had a payment default during the six months ended June 30, 2025 and were modified within the preceding 12 months from default to borrowers experiencing financial difficulty:

(Dollars in thousands)	Other-Than-Insignificant Payment Delay		Total Class of Financing Receivable
June 30, 2025
Enterprise value	$	1,280	$	1,280
Total	$	1,280	$	1,280

As of June 30, 2024 , there were no subsequent defaults related to loans modified to borrowers experiencing financial difficulty within the preceding 12 months.

Credit Quality Information

The Company utilizes a seven -grade internal loan risk rating system for commercial real estate, construction and land development, commercial, and enterprise value loans as follows:

Loans rated 1 - 3 : Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 4 : Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated 5 : Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.

Loans rated 6 : Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 7 : Loans in this category are considered uncollectible “loss” and of such little value that their continuance as loans is not warranted.

On an annual basis, or more often if needed, the Company formally reviews the ratings on all commercial real estate, construction and land development, commercial, and enterprise value loans.

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On an annual basis, or more often if needed, the Company completes a credit recertification on all mortgage warehouse originators.

For residential real estate loans, the Company initially assesses credit quality based upon the borrower’s ability to pay and rates such loans as pass. Ongoing monitoring is based upon the borrower’s payment activity.

Consumer loans are not formally rated.

Based on the most recent analysis performed, the risk category of loans by class of loans and their corresponding gross write-offs for the six months ended June 30, 2025 is presented below:

	Term Loans at Amortized Cost by Origination Year
(In thousands)	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost		Revolving Loans Converted to Term Loans		Total
Commercial real estate
Pass	$	36,691	$	87,444	$	30,268	$	73,561	$	122,393	$	200,051	$	21,307	$	135	$	571,850
Special mention		—		—		—		—		—		5,078		—		—		5,078
Substandard		—		—		—		—		—		3,822		—		—		3,822
Total commercial real estate		36,691		87,444		30,268		73,561		122,393		208,951		21,307		135		580,750
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Construction and land development
Pass		3,712		12,089		5,016		9,942		115		1,306		5,182		—		37,362
Total construction and land development		3,712		12,089		5,016		9,942		115		1,306		5,182		—		37,362
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Residential real estate
Pass		—		—		—		—		—		2,975		1,432		206		4,613
Substandard		—		—		—		—		—		260		63		—		323
Total residential real estate		—		—		—		—		—		3,235		1,495		206		4,936
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Mortgage warehouse
Pass		—		—		—		—		—		—		284,154		—		284,154
Total mortgage warehouse		—		—		—		—		—		—		284,154		—		284,154
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		3,765		12,651		10,925		19,247		41,187		34,287		27,887		994		150,943
Special mention		—		—		—		617		—		826		5,331		—		6,774
Substandard		—		—		—		—		—		2,654		225		—		2,879
Total commercial		3,765		12,651		10,925		19,864		41,187		37,767		33,443		994		160,596
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Enterprise Value
Pass		3,698		29,301		44,111		45,441		48,222		21,952		6,329		—		199,054
Special mention		—		—		—		2,405		5,139		3,497		272		—		11,313
Substandard		9,510		—		2,429		13,661		4,841		4,149		1,425		—		36,015
Total enterprise value		13,208		29,301		46,540		61,507		58,202		29,598		8,026		—		246,382
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Consumer
Not formally rated		—		—		—		—		—		39		45		1		85
Total consumer		—		—		—		—		—		39		45		1		85
Current period gross write-offs		20		—		—		—		—		2		—		—		22

Total loans	$	57,376	$	141,485	$	92,749	$	164,874	$	221,897	$	280,896	$	353,652	$	1,336	$	1,314,265

Total current period gross write-offs	$	20	$	—	$	—	$	—	$	—	$	2	$	—	$	—	$	22

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The following table presents the risk category of loans by class of loans as of December 31, 2024 and their corresponding gross write-offs for the year then ended:

	Term Loans at Amortized Cost by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost		Revolving Loans Converted to Term Loans		Total
Commercial real estate
Pass	$	88,884	$	34,606	$	74,412	$	118,094	$	23,848	$	167,174	$	18,916	$	569	$	526,503
Special mention		—		—		—		—		1,045		27,872		—		—		28,917
Substandard		—		—		—		—		—		3,905		—		—		3,905
Total commercial real estate		88,884		34,606		74,412		118,094		24,893		198,951		18,916		569		559,325
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Construction and land development
Pass		9,072		5,220		9,941		42		—		1,315		2,507		—		28,097
Total construction and land development		9,072		5,220		9,941		42		—		1,315		2,507		—		28,097
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Residential real estate
Pass		—		—		—		—		4		3,452		1,842		376		5,674
Substandard		—		—		—		—		—		269		65		—		334
Total residential real estate		—		—		—		—		4		3,721		1,907		376		6,008
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Mortgage warehouse
Pass		—		—		—		—		—		—		259,181		—		259,181
Total mortgage warehouse		—		—		—		—		—		—		259,181		—		259,181
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		8,319		5,092		20,697		51,004		7,922		33,221		28,325		154		154,734
Special mention		—		—		869		24		—		993		4,209		—		6,095
Substandard		—		—		—		—		—		2,873		225		—		3,098
Total commercial		8,319		5,092		21,566		51,028		7,922		37,087		32,759		154		163,927
Current period gross write-offs		—		—		—		96		—		5		—		—		101
Enterprise Value
Pass		31,684		55,609		60,965		69,599		30,421		6,949		7,621		—		262,848
Special mention		—		—		2,591		5,528		1,862		2,224		705		—		12,910
Substandard		—		—		13,199		5,308		4,954		1,123		8,522		922		34,028
Total enterprise value		31,684		55,609		76,755		80,435		37,237		10,296		16,848		922		309,786
Current period gross write-offs		—		—		—		—		—		—		—		—		—
Digital asset
Current period gross write-offs		—		—		2,124		—		—		—		—		—		2,124
Consumer
Not formally rated		—		—		—		—		—		225		46		—		271
Total consumer		—		—		—		—		—		225		46		—		271
Current period gross write-offs		43		—		—		—		—		7		—		—		50

Total loans	$	137,959	$	100,527	$	182,674	$	249,599	$	70,056	$	251,595	$	332,164	$	2,021	$	1,326,595

Total current period gross write-offs	$	43	$	—	$	2,124	$	96	$	—	$	12	$	—	$	—	$	2,275

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( 7 ) Deposits

A summary of deposit balances, by type is as follows:

	At		At
	June 30,		December 31,
(In thousands)	2025		2024
Noninterest-bearing:
Demand	$	287,927	$	351,528
Interest-bearing:
NOW		103,115		83,270
Regular savings		105,123		132,198
Money market deposits		463,100		463,687
Certificates of deposit:
Certificate accounts of $250,000 or more		60,163		67,009
Certificate accounts less than $250,000		238,550		211,268
Total interest-bearing		970,051		957,432
Total deposits	$	1,257,978	$	1,308,960

At June 30, 2025 and December 31, 2024 , the aggregate amount of brokered certificates of deposit was $ 165.0 million and $ 150.2 million, respectively. All brokered certificates of deposit are in denominations less than $250,000 listed above. Listing service deposits were primarily included in savings accounts shown in the table above and totaled $ 24.1 million and $ 47.6 million at June 30, 2025 and December 31, 2024 , respectively.

( 8 ) Borrowings

Advances consist of funds borrowed from the Federal Home Loan Bank (the “FHLB”). Maturities of advances from the FHLB as of June 30, 2025 are summarized as follows:

(In thousands)
Fiscal Year-End
2025	$	30,068
2026		138
2027		139
2028		141
2029		143
Thereafter		3,866
Total	$	34,495

Advances from the FHLB are secured by qualified collateral, consisting primarily of certain commercial real estate loans, qualified mortgage-backed government securities and certain loans with mortgages secured by one - to four -family properties. At June 30, 2025 , advances from the FHLB consisted of one short-term advance of $ 25.0 million and long-term advances with original maturities more than one year of $ 9.5 million. The interest rate on the short-term advance from the FHLB was 4.24 % at June 30, 2025 . The interest rates on FHLB long-term advances ranged from 1.21 % to 1.32 %, with a weighted average interest rate of 1.26 % at June 30, 2025 . At June 30, 2025 , the Company had the ability to borrow $ 154.1 million from the FHLB, of which $ 34.5 million was outstanding as of that date.

Borrowings from the FRB Borrower-in-Custody program are secured by a Uniform Commercial Code financing statement on qualified collateral, consisting of certain commercial loans. The Company had the ability to borrow $ 319.8 million from the FRB at June 30, 2025 . There were no outstanding advances from the FRB at June 30, 2025 .

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( 9 ) Fair Value Measurements

The Company reports certain assets at fair value in accordance with GAAP, which defines fair value and establishes a framework for measuring fair value in accordance with generally accepted accounting principles. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (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. The guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values:

Basis of Fair Value Measurements

●

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

●

Level 2 – Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability;

●

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

An asset’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Fair Values of Assets Measured on a Recurring Basis

The Company’s investments in state and municipal, asset-backed and government mortgage-backed debt securities available-for-sale are generally classified within Level 2 of the fair value hierarchy. For these investments, the Company obtains fair value measurements from independent pricing services. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instrument’s terms and conditions.

The following summarizes financial instruments measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024 :

	Fair Value Measurements at Reporting Date Using
					Significant		Significant
					Other Observable		Unobservable
					Inputs		Inputs
(In thousands)	Total		Level 1		Level 2		Level 3
June 30, 2025
State and municipal securities	$	10,170	$	—	$	10,170	$	—
Asset-backed securities		7,013		—		7,013		—
Government mortgage-backed securities		7,351		—		7,351		—
Total	$	24,534	$	—	$	24,534	$	—

December 31, 2024
State and municipal securities	$	10,551	$	—	$	10,551	$	—
Asset-backed securities		7,216		—		7,216		—
Government mortgage-backed securities		7,926		—		7,926		—
Total	$	25,693	$	—	$	25,693	$	—

Fair Values of Assets Measured on a Non-Recurring Basis

The Company may also be required, from time to time, to measure certain other assets at fair value on a non-recurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from the application of lower-of-cost-or market accounting or write-downs of individual assets.

Certain loans were adjusted to fair value, less cost to sell, of the underlying collateral securing these loans resulting in losses. The loss is not recorded directly as an adjustment to current earnings, but rather as a component in determining the allowance for credit losses for loans. Fair value was measured using appraised values of collateral and adjusted as necessary by management based on unobservable inputs for specific properties.

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The following summarizes assets measured at fair value on a nonrecurring basis at June 30, 2025 and December 31, 2024 :

	Fair Value Measurements at Reporting Date Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other Observable		Unobservable
			Identical Assets		Inputs		Inputs
(In thousands)	Total		Level 1		Level 2		Level 3
June 30, 2025
Loans
Enterprise value	$	6,806	$	—	$	—	$	6,806
Total	$	6,806	$	—	$	—	$	6,806

December 31, 2024
Loans
Enterprise value	$	7,471	$	—	$	—	$	7,471
Total	$	7,471	$	—	$	—	$	7,471

The following is a summary of the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis at June 30, 2025 and December 31, 2024 :

(In thousands)

Fair Value

Valuation Technique

Unobservable Input

Range

June 30, 2025

Loans

Enterprise value

6,806

Business valuation

Market assumptions

0 % - 5 %

December 31, 2024

Loans

Enterprise value

7,471

Business valuation

Market assumptions

0 % - 5 %

At June 30, 2025 , the contractual balance of enterprise value loans measured at fair value on a nonrecurring basis was $ 17.7 million, net of reserves of $ 10.8 million and deferred fees and costs of $ 129,000 . At December 31, 2024 , the contractual balance of loans measured at fair value on a nonrecurring basis was $ 17.7 million, net of reserves of $ 10.1 million and deferred fees and costs of $ 126,000 for the enterprise value segment.

Fair Values of Financial Instruments

GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Certain financial instruments and all nonfinancial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

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The carrying amounts and estimated fair values of the Company’s financial instruments, all of which are held or issued for purposes other than trading, are as follows at June 30, 2025 and December 31, 2024 :

	Carrying		Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
June 30, 2025
Financial assets:
Cash and cash equivalents	$	128,909	$	128,909	$	—	$	—	$	128,909
Available-for-sale debt securities		24,534		—		24,534		—		24,534
Federal Home Loan Bank of Boston stock		2,242		N/A		N/A		N/A		N/A
Loans, net		1,293,469		—		—		1,269,988		1,269,988
Accrued interest receivable		4,877		—		4,877		—		4,877
Financial liabilities:
Deposits		1,257,978		—		1,258,464		—		1,258,464
Borrowings		34,495		—		33,560		—		33,560

December 31, 2024
Financial assets:
Cash and cash equivalents	$	169,142	$	169,142	$	—	$	—	$	169,142
Available-for-sale debt securities		25,693		—		25,693		—		25,693
Federal Home Loan Bank of Boston stock		2,697		N/A		N/A		N/A		N/A
Loans, net		1,305,508		—		—		1,272,387		1,272,387
Accrued interest receivable		5,296		—		5,296		—		5,296
Assets held for sale		2,256		—		2,950		—		2,950
Financial liabilities:
Deposits		1,308,960		—		1,309,492		—		1,309,492
Borrowings		44,563		—		43,492		—		43,492

The carrying amounts of financial instruments shown above are included in the consolidated balance sheets under the indicated captions.

( 10 ) Regulatory Capital

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

The Bank is subject to capital regulations that require a Common Equity Tier 1 ( “CET1” ) capital ratio of 4.5 %, a minimum Tier 1 capital to risk-weighted assets ratio of 6.0 %, a minimum total capital to risk-weighted assets ratio of 8.0 % and a minimum Tier 1 leverage ratio of 4.0 %. CET1 generally consists of common stock and retained earnings, subject to applicable adjustments and deductions. To be considered “well capitalized,” the Bank must maintain a CET1 capital ratio of 6.5 % and a Tier 1 ratio of 8.0 %, a total risk-based capital ratio of 10 % and a Tier 1 leverage ratio of 5.0 %.

Federal banking agencies have established a community bank leverage ratio (“CBLR”) framework for community banking organizations having total consolidated assets of less than $ 10 billion, having a leverage ratio of greater than 9 %, and satisfying other criteria, such as limitations on the amount of off-balance sheet exposures and on trading assets and liabilities. A community banking organization that qualifies for and elects to use the CBLR framework and that maintains a leverage ratio, calculated as Tier 1 capital to average total consolidated assets, greater than 9 % will be considered to have satisfied the generally applicable risk-based and leverage capital requirements in the banking agencies’ generally applicable capital rules and, if applicable, will be considered to have met the well-capitalized ratio requirements for federal law. As of June 30, 2025 and December 31, 2024 , the Bank elected to be subject to the CBLR framework and was categorized by the FDIC as well capitalized under the regulatory framework for prompt corrective action.

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The Bank’s actual capital amounts and ratios at June 30, 2025 and December 31, 2024 are summarized as follows:

	Actual					To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount			Ratio
June 30, 2025
Community Bank Leverage Ratio	$	212,286		13.91	%	$	137,306	>		9.0	%

December 31, 2024
Community Bank Leverage Ratio	$	204,059		12.74	%	$	144,099	>		9.0	%

Liquidation Accounts

Upon the completion of the Company’s initial stock offering in 2015 and the second step offering in 2019, liquidation accounts were established for the benefit of certain depositors of the Bank in amounts equal to:

The product of (i) the percentage of the stock issued in the initial stock offering in 2015 to persons other than Provident Bancorp, the top tier mutual holding company (“MHC”) of the Company and (ii) the net worth of the mid-tier holding company as of the date of the latest balance sheet contained in the prospectus utilized in connection with the offering; and

The MHC’s ownership interest in the retained earnings of the Company as of the date of the latest balance sheet contained in the 2019 prospectus plus the MHC’s net assets (excluding its ownership of the Company).

The Company and the Bank are not permitted to pay dividends on their capital stock if the shareholders’ equity of the Company, or the shareholder’s equity of the Bank, would be reduced below the amount of the respective liquidation accounts. The liquidation accounts will be reduced annually to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases will not restore an eligible account holder’s interest in the liquidation accounts.

Other Restrictions

The Company’s principal source of funds for dividend payments is dividends received from the Bank. Federal and state banking regulations restrict the amount of dividends that may be paid in a year, without prior approval of regulatory agencies, to the net income of the Bank for the year plus the retained net income of the previous two years. For the six months ended June 30, 2025 , the Bank reported net income of $ 5.8 million. For the years ended December 31, 2024 and 2023 , the Bank reported net income of $ 7.1 million and $ 10.7 million, respectively. There were no dividends paid during the six months ended June 30, 2025 .

The Company may, at times, repurchase its own shares in the open market. Such transactions are subject to the notice provisions for stock repurchases of the Board of Governors of the Federal Reserve System. In December 2024, the Company announced its receipt of non-objection from the FRB to repurchase 883,366 shares of its common stock. The Company did not repurchase any common stock under this program during the six months ended June 30, 2025 , and following its entry into the Merger Agreement on June 5, 2025, the Company suspended the repurchase program.

( 11 ) Employee Stock Ownership Plan

The Bank maintains an employee stock ownership plan (the “ESOP”) to provide eligible employees the opportunity to own Company stock. The plan is a tax-qualified plan for the benefit of all eligible Bank employees. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax law limits. The ESOP acquired 1,538,868 shares between the initial and second -step stock offerings with the proceeds of a loan totaling $ 11.8 million. The loan is payable over 15 years at a rate per annum equal to 5.00 %. Shares used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. The number of shares committed to be released per year through 2033 is 89,758 .

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Shares held by the ESOP include the following:

	June 30, 2025		December 31, 2024
Allocated		731,046		641,288
Committed to be allocated		44,879		89,758
Unallocated		762,943		807,822
Total		1,538,868		1,538,868

The fair value of unallocated shares was approximately $ 9.5 million at June 30, 2025 .

Total compensation expense recognized in connection with the ESOP for the three months ended June 30, 2025 and 2024 was $ 255,000 and $ 208,000 , respectively. Total compensation expense recognized for the six months ended June 30, 2025 and 2024 was $ 518,000 and $ 433,000 .

( 12 ) Earnings (Loss) Per Common Share

Basic earnings (loss) per share represents income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of incremental common shares (computed using the treasury method) that would have been outstanding if all potentially dilutive common stock equivalents were issued during the period. For periods in which the Company has reported net loss, diluted loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Unallocated ESOP shares, treasury stock, and unvested restricted stock are not deemed outstanding for earnings (loss) per share calculations.

	Three Months Ended						Six Months Ended
(Dollars in thousands, except per share	June 30,			June 30,			June 30,			June 30,
amounts)	2025			2024			2025			2024
Net income (loss) attributable to common shareholders	$	2,824		$	( 3,308	)	$	4,994		$	1,673

Average number of common shares issued		17,785,538			17,663,303			17,787,032			17,664,347
Less:
Average unallocated ESOP shares		( 770,423	)		( 860,183	)		( 781,580	)		( 871,403	)
Average unvested restricted stock		( 154,371	)		( 96,327	)		( 163,875	)		( 104,822	)
Average number of common shares outstanding to calculate basic earnings per common share		16,860,744			16,706,793			16,841,577			16,688,122

Effect of dilutive unvested restricted stock and stock option awards		93,334			—			97,211			35,641
Average number of common shares outstanding to calculate diluted earnings per common share		16,954,078			16,706,793			16,938,788			16,723,763

Earnings (loss) per common share:
Basic	$	0.17		$	( 0.20	)	$	0.30		$	0.10
Diluted	$	0.17		$	( 0.20	)	$	0.29		$	0.10

Stock options for 672,713 shares of common stock were not considered in computing diluted earnings per common share for the three months ended June 30, 2025 because they were anti-dilutive, meaning the exercise price for such options was higher than the average market price for the Company for such period. For the six months ended June 30, 2025 and 2024 , stock options for 675,686 and 817,070 shares, respectively, were not considered in computing diluted earnings per common share because they were anti-dilutive.

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( 13 ) Share-Based Compensation

The Company maintains the Provident Bancorp, Inc. 2020 Equity Incentive Plan (the “2020 Equity Plan”) and the Provident Bancorp, Inc. 2016 Equity Incentive Plan (the “2016 Equity Plan”, and collectively with the 2020 Equity Plan, the “Equity Plans”). Under the Equity Plans, the Company may grant options, restricted stock, restricted units or performance awards to its directors, officers, and employees. Both incentive stock options and non-qualified stock options may be granted under the Equity Plans, with 902,344 and 1,021,239 shares reserved for options under the 2016 Equity Plan and 2020 Equity Plan, respectively. The exercise price of each option equals the market price of the Company’s stock on the date of grant and the maximum term of each option is ten years. The total number of shares reserved for restricted stock or restricted units is 360,935 and 408,495 under the 2016 Equity Plan and 2020 Equity Plan, respectively. The value of restricted stock grants is based on the market price of the stock on grant date. Options and awards vest ratably over three to five years. The Company has elected to recognize forfeitures of awards as they occur.

Expense related to options and restricted stock granted to directors is recognized in directors’ compensation within non-interest expense.

Stock Options

The fair value of each option is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

●

Expected volatility is based on historical volatility of the Company’s common stock price;

●

Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term, and the vesting period;

●

The dividend yield assumption is based on the Company’s expectation of dividend payouts; and

●

The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option.

There were no options granted during the six months ended June 30, 2025 .

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A summary of the status of the Company’s stock options for the six months ended June 30, 2025 is presented in the table below:

	Stock Option Awards			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2024		1,116,092		$	11.17
Granted		—			—
Forfeited		( 5,000	)		11.64
Expired		( 3,000	)		15.00
Exercised		—			—
Outstanding at June 30, 2025		1,108,092		$	11.16		5.66	$	1,944,000
Outstanding and expected to vest at June 30, 2025		1,108,092		$	11.16		5.66	$	1,944,000
Vested and Exercisable at June 30, 2025		728,829		$	11.02		4.50	$	1,396,000
Unrecognized compensation cost	$	1,432,000
Weighted average remaining recognition period (years)		3.20

For the three months ended June 30, 2025 and 2024 , expense for the stock options was $ 173,000 and $ 131,000 , respectively. For the six months ended June 30, 2025 and 2024 , expense for the stock options was $ 347,000 and $ 261,000 , respectively. There were no stock options exercised during the three or six months ended June 30, 2025 . There were 124,346 stock options exercised during the three and six months ended June 30, 2024 with an intrinsic value of $ 144,000 .

Restricted Stock

Shares issued upon the granting of restricted stock may be either authorized but unissued shares or reacquired shares held by the Company. Any shares forfeited because vesting requirements are not met will be available for issuance under the Equity Plans. The fair market value of shares awarded, based on the market prices at the date of grant, is recorded as unearned compensation and amortized over the applicable vesting period.

The following table presents the activity in restricted stock awards under the Equity Plans for the six months ended June 30, 2025 :

	Unvested Restricted Stock Awards			Weighted Average Grant Date Price
Unvested restricted stock awards at December 31, 2024		206,594		$	11.40
Granted		—			—
Forfeited		( 2,500	)		11.64
Vested		( 24,329	)		12.29
Unvested restricted stock awards at June 30, 2025		179,765		$	11.28
Unrecognized compensation cost	$	1,632,000
Weighted average remaining recognition period (years)		3.33

For the three months ended June 30, 2025 and 2024 , expense for the restricted stock awards was $ 191,000 and $ 131,000 , respectively. For the six months ended June 30, 2025 and 2024 expense for the restricted stock awards was $ 383,000 and $ 262,000 , respectively. The tax benefit from restricted awards was $ 53,000 and $ 37,000 for the three months ended June 30, 2025 and 2024 , respectively. The tax benefit from restricted awards was $ 107,000 and $ 77,000 for the six months ended June 30, 2025 and 2024 , respectively. The total fair value of shares vested during the three months ended June 30, 2025 and 2024 was $ 120,000 and $ 79,000 , respectively. The total fair value of shares vested during the six months ended June 30, 2025 and 2024 was $ 282,000 and $163,000, respectively.

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( 14 ) Leases

The Company has committed to rent premises used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the Company’s balance sheet.

During the second quarter of 2025, the Bank executed on a sale and leaseback transaction for its main office building located in Amesbury, Massachusetts. This transaction resulted in a $ 745,000 gain related to the sale of the building, reported as other income on the Consolidated Statements of Operations, and a $ 2.1 million ROU asset and operating lease liability on the Company’s balance sheet.

Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For the leases that do not provide an implicit rate, the Company used its incremental collateralized borrowing rates commensurate with the underlying lease terms to determine present value of operating lease liabilities. The Company’s lease terms may include lease extension and termination options when it is reasonably certain that the Company will exercise the option. The Company recognized ROU assets totaling $ 5.5 million and $ 3.4 million at June 30, 2025 and December 31, 2024 , respectively, and operating lease liabilities totaling $ 5.9 million and $ 3.9 million at June 30, 2025 and December 31, 2024 , respectively. The lease liabilities recognized by the Company represent three leased branch locations and one loan production office.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease components, such as fair market value adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For the three months ended June 30, 2025 and 2024 , rent expense, including variable lease components, for the operating leases totaled $ 95,000 and $ 86,000 , respectively. For the six months ended June 30, 2025 and 2024 , rent expense, including variable lease components, for the operating leases totaled $ 191,000 and $ 173,000 , respectively.

The following table presents information regarding the Company’s operating leases:

	June 30,			December 31,
	2025			2024
Weighted-average discount rate		5.54	%		5.83	%
Range of lease expiration dates (in years)		3 - 10 years			3 - 11 years
Range of lease renewal options (in years)		0 - 30 years			0 - 30 years
Weighted-average remaining lease term (in years)		22.5 years			24.1 years

The following table presents the undiscounted annual lease payments under the terms of the Company’s operating leases at June 30, 2025 and December 31, 2024 , including a reconciliation to the present value of operating lease liabilities recognized in the Consolidated Balance Sheets:

	June 30,			December 31,
Fiscal Year-End	2025			2024
(In thousands)
2025	$	243		$	346
2026		496			357
2027		502			359
2028		419			272
2029		411			261
Thereafter		8,362			5,499
Total lease payments		10,433			7,094
Less imputed interest		( 4,494	)		( 3,232	)
Total lease liabilities	$	5,939		$	3,862

The lease liabilities recognized include certain lease extensions as it is expected that the Company will use substantially all lease renewal options.

( 15 ) Revenue Recognition

Revenue from contracts with customers in the scope of Accounting Standards Codification (“ASC Topic 606” ) is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations.

The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements.

The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction.

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( 16 ) Qualified Affordable Housing Project Investments

The Bank invests in qualified affordable housing projects. At June 30, 2025 and December 31, 2024 , the balance of the investment for qualified affordable housing projects was $ 5.0 million and $ 5.4 million, respectively. These balances are reflected in the other assets line on the Consolidated Balance Sheets. Under the proportional amortization method, the Company recognized amortization expense of $ 179,000 and tax credits of $ 208,000 for the three months ended June 30, 2025 . For the three months ended June 30, 2024 , the Company recognized amortization expense of $ 178,000 and tax credits of $ 218,000 . The Company recognized amortization expense of $ 358,000 and tax credits of $ 415,000 for the six months ended June 30, 2025 . The Company recognized amortization expense of $ 356,000 and tax credits of $ 437,000 for the six months ended June 30, 2024 .

( 17 ) Segment Information

The Company's sole reportable segment is determined by the Chief Financial Officer, who is the designated chief operating decision maker, based upon information provided to him regarding the Company's banking products and services offered. Please refer to the consolidated statements of operations and the consolidated balance sheets included herein.

The Company only has one reportable segment, distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the Company, which are then aggregated since operating performance, products and service, and customers are similar. The chief operating decision maker assesses the financial performance of the Company's business components by evaluating revenue streams and significant expenses in determining the Company's segment and the allocation of resources. The chief operating decision maker uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. Consolidated net income is used by the chief operating decision maker to benchmark the Company against its competitors. The benchmarking analysis is used in assessing performance and establishing compensation.

( 18 ) Commitments and Contingencies

On October 24, 2024, the Company received a letter from the staff of the Boston Regional Office of the SEC informing the Company that the staff had made a preliminary determination to recommend that the SEC file an action against the Company for violating certain sections of the federal securities laws (the “Wells Notice”). The staff has indicated that the Wells Notice relates to the Company’s disclosures regarding loans that the Company made to companies engaged in the mining of cryptocurrency – a line of business the Company ceased originating new loans in as of October 2022. The Wells Notice indicates that the staff’s recommendation to the SEC may involve a civil injunction action or other action allowed by law, and may seek remedies that include an injunction, disgorgement, pre-judgment interest, civil money penalties, and such other relief as may be available.

The Company is pursuing the Wells Notice process and continues to explore a potential resolution with the SEC staff. As of June 30, 2025, the Bank has recorded a contingency of $ 350,000 in connection with this matter. However, the ultimate outcome, including the results, timing, costs, and other potential consequences, remains uncertain and could differ significantly from current estimates. Associated legal costs are expensed as incurred.

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

Management’s discussion and analysis of financial condition and results of operations at June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025 and 2024 is intended to assist in understanding our financial condition and results of operations. Operating results for the three- and six-month periods ended June 30, 2025 may not be indicative of results for all of 2025 or any other period. The information contained in this section should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto, appearing in Part 1, Item 1 of this report.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” 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 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 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.

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:

	●	failure to complete the proposed merger with NB Bancorp, Inc. (“NB Bancorp”) or unexpected delays related to the merger or either party’s inability to satisfy closing conditions required to complete the merger;
	●	failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed merger);
	●	certain restrictions during the pendency of the proposed merger with NB Bancorp that may impact the Company’s ability to pursue certain business opportunities or strategic transactions;
	●	the diversion of management’s attention from ongoing business operations and opportunities;
	●	general economic conditions, either nationally or in our market areas, that are worse than expected, including potential recessionary conditions or slowed economic growth caused by tariffs, inflation, supply chain disruptions or otherwise;
	●	any concentration risk within our lending and deposit portfolio;
	●	changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of or methodology for the calculation of the allowance for credit losses;
	●	our ability to access cost-effective funding;
	●	fluctuations in real estate values and commercial real estate market conditions;
	●	demand for loans and deposits in our market area;
	●	changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board;
	●	negative impact from unfavorable regulatory penalties and/or settlements;
	●	cyber attacks, computer viruses and other technological risks that may breach the security of our websites or other systems, or those of third parties upon which we rely, to obtain unauthorized access to confidential information and destroy data or disable our systems;
	●	technological changes that may be more difficult or expensive than expected;
	●	the ability of third-party providers to perform their obligations to us;
	●	competition among depository and other financial institutions;
	●	inflation and changes in the interest rate environment that reduce our margins and yields, reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary markets;
	●	adverse changes in the securities markets;
	●	changes in and impacts of laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, tax policy and rates, and capital requirements, and our ability to comply with such laws and regulations;
	●	our ability to address any issues raised in regulatory examinations;
	●	our ability to manage market risk, credit risk and operational risk;
	●	changes in investor sentiment and consumer spending, borrowing and savings habits;
	●	changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;
	●	the effect of potential future supervisory action against us or BankProv and our ability to address any issues raised in our regulatory exams;
	●	our ability to retain key employees;
	●	effects of natural disasters and global pandemics;
	●	the effects of domestic and international hostilities, including terrorism;
	●	the implementation of tariffs, and the potential for retaliatory trade measures from other nations, which could raise the cost of goods and services;
	●	our ability to control costs and expenses, particularly in relation to the non-discretionary costs associated with operating as a publicly traded company;
	●	our compensation expense associated with equity allocated or awarded to our employees; and
	●	changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

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Critical Accounting Policies

Critical accounting estimates are necessary in the application of certain accounting policies and procedures and are particularly susceptible to significant change. Critical accounting policies are defined as those involving significant judgments and assumptions by management that could have a material impact on the carrying value of certain assets or on income under different assumptions or conditions. Management believes that the most critical accounting policy, which involves the most complex or subjective decisions or assessments, is as follows:

Allowance for Credit Losses for Loans. The allowance for credit losses for loans (“ACLL”) represents management’s estimate of expected credit losses over the expected contractual life of our loan portfolio. Determining the appropriateness of the ACLL is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the ACLL in those future periods.

The appropriateness of the ACLL could change significantly because current economic conditions and forecasts can change and future events are inherently difficult to predict. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. One of the most significant judgments used in determining the allowance for credit losses is the macroeconomic forecast provided by a third party. Changes in the macroeconomic forecast, especially for the national unemployment rate, could significantly impact the calculated estimated credit losses.

While management utilizes its best judgment and information available, the ultimate adequacy of our ACLL is dependent upon a variety of factors beyond our control, including the performance of our loan portfolios, the economy, and changes in interest rates. For more information regarding the Allowance for Credit Losses for Loans refer to Note 6 - Loans and Allowance for Credit Losses for Loans of the Notes to the Unaudited Consolidated Financial Statements.

Recent Events

On June 5, 2025, NB Bancorp, Inc. (the “Buyer”), Needham Bank, a wholly-owned subsidiary of the Buyer, 1828 MS, Inc., a wholly owned subsidiary of the Buyer formed solely to facilitate the transaction (the “Merger Sub” and together with the Buyer and Needham Bank, “Needham”), the Company and the Bank, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Needham will acquire the Company and the Bank through the merger of the Merger Sub with and into the Company (the “Merger”) followed as soon as reasonably practicable by the merger of the Company with and into the Buyer, with the Buyer as the surviving entity (the “Holdco Merger”). After the Holdco Merger, at a time selected by Buyer, the Bank will merge with and into Needham Bank, with Needham Bank as the surviving entity.

Prior to the effective time of the Merger, shareholders of the Company will have the right to elect to receive for each share of the Company’s common stock either (i) 0.691 shares of the Buyer’s common stock (the “Stock Consideration”) or (ii) $13.00 in cash, subject to proration procedures to ensure that the holders of 50% of the shares of the Company’s common stock receive the Stock Consideration.

The completion of the Merger is subject to various closing conditions, including the receipt of shareholder and regulatory approvals.

On July 4, 2025, President Trump signed into law the legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” and commonly referred to as the One Big Beautiful Bill (“the Act”). The Company is currently evaluating income tax implications of the Act. The Company does not expect the Act to have a material impact on the Company’s financial statements.

Balance Sheet Analysis

Assets . Total assets were $1.54 billion at June 30, 2025, a decrease of $52.3 million, or 3.3%, from $1.59 billion at December 31, 2024.

Cash and Cash Equivalents. Cash and cash equivalents decreased $40.2 million, or 23.8%, to $128.9 million at June 30, 2025, compared to $169.1 million at December 31, 2024, primarily due to a decrease in deposits. For more information on cash sources and uses please refer to “– Liquidity and Capital Resources”.

Loan Portfolio Analysis . Net loans were $1.29 billion at June 30, 2025, a decrease of $12.0 million, or 0.9%, from December 31, 2024. The decrease in net loans was primarily driven by a decrease in enterprise value loans of $63.4 million, or 20.5%. Since December 31, 2024, the decrease in the loan portfolio, caused by strategic runoff in the enterprise value portfolio, has been partially offset by targeted growth in the commercial real estate portfolio of $21.4 million, the construction and land development portfolio of $9.3 million, and the mortgage warehouse portfolio of $25.0 million.

Loan Portfolio Concentrations. The following table provides information with respect to our loan portfolio concentrations at June 30, 2025 and December 31, 2024:

	At June 30, 2025						At December 31, 2024
(Dollars in thousands)	Amount			Percent of total loans			Amount			Percent of total loans
Commercial real estate	$	580,750			44.19	%	$	559,325			42.16	%
Construction and land development		37,362			2.84			28,097			2.12
Residential real estate		4,936			0.37			6,008			0.45
Mortgage warehouse		284,154			21.62			259,181			19.54
Commercial		160,596			12.22			163,927			12.36
Enterprise value		246,382			18.75			309,786			23.35
Consumer		85			0.01			271			0.02
Total loans		1,314,265			100.00	%		1,326,595			100.00	%
Allowance for credit losses for loans		(20,796	)					(21,087	)
Net loans	$	1,293,469					$	1,305,508

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Commercial Real Estate Concentrations. The following table provides information with respect to our commercial real estate concentrations at June 30, 2025 and December 31, 2024:

	At June 30, 2025								At December 31, 2024
			Percent of			Percent of					Percent of			Percent of
(Dollars in thousands)	Amortized cost		commercial real estate			total loans			Amortized cost		commercial real estate			total loans
Industrial/manufacturing/warehouse	$	91,848		15.81	%		6.99	%	$	93,551		16.73	%		7.05	%
Self-storage facility		79,364		13.67			6.04			80,301		14.36			6.05
Multifamily		72,510		12.49			5.52			67,068		11.99			5.06
Office		61,151		10.53			4.65			62,228		11.13			4.69
Mixed use		43,459		7.48			3.31			44,322		7.92			3.34
Mobile home park		40,770		7.02			3.10			32,124		5.74			2.42
Hotel/motel/inn		36,521		6.29			2.78			40,118		7.17			3.02
Campground/RV park		34,469		5.93			2.62			22,176		3.96			1.67
Retail		28,721		4.95			2.18			20,621		3.69			1.55
Residential one-to-four family		27,448		4.73			2.09			27,699		4.95			2.09
Other commercial real estate		64,489		11.10			4.91			69,117		12.36			5.22
Total	$	580,750		100.00	%		44.19	%	$	559,325		100.00	%		42.16	%

Enterprise Value Concentrations. The Bank has focused on reducing the risk exposure in this portfolio, which has included building our credit management practices with improved analytics that provide for enhanced monitoring of early warning risk indicators. This effort has resulted in more detailed industry information, as noted in the table below where loans previously classified as Other were re-classified during the first quarter of 2025 to improve the reporting of our concentrations and industry diversification. The following table provides information with respect to our enterprise value concentrations at June 30, 2025 and December 31, 2024:

	As of June 30, 2025								At December 31, 2024
			Percent of			Percent of					Percent of			Percent of
(Dollars in thousands)	Amortized cost		enterprise value			total loans			Amortized cost		enterprise value			total loans
Consulting services	$	50,104		20.34	%		3.81	%	$	61,840		19.96	%		4.66	%
Healthcare and social assistance		35,192		14.28			2.68			33,352		10.77			2.51
Professional services		32,467		13.18			2.47			37,898		12.23			2.86
Advertising		27,201		11.04			2.07			36,464		11.77			2.75
Construction		24,846		10.08			1.89			13,895		4.49			1.05
Personal services		23,751		9.64			1.81			26,035		8.40			1.96
Industrial/manufacturing/warehouse		19,724		8.00			1.50			24,697		7.97			1.86
Real estate services		17,732		7.20			1.35			27,935		9.02			2.11
Other		15,365		6.24			1.17			47,670		15.39			3.59
Total	$	246,382		100.00	%		18.75	%	$	309,786		100.00	%		23.35	%

Credit Risk Management . Our strategy for credit risk management focuses on having well-defined credit policies, uniform underwriting criteria, and providing prompt attention to potential problem loans. Management of asset quality is accomplished through strong internal controls, monitoring and reporting of key risk indicators, and both internal and independent third-party loan reviews. The primary objective of our loan review process is to measure borrower performance and assess risk to identify loan weakness in order to minimize loan loss exposure. From the time of loan origination through final repayment, commercial real estate, enterprise value, construction and land development and commercial loans are assigned a risk rating. We use an internal loan grading system and formally review the ratings annually for most loans, in addition to independent third-party review.

Internal and independent third-party loan reviews vary by loan type and, depending on the size and complexity of the loan, some loans may warrant detailed individual review, while other loans may have less risk, based upon size, or inclusion in a homogeneous pool, reducing the need for detailed individual analysis. Assets with these characteristics, such as consumer loans and residential mortgages, may be reviewed based on risk indicators such as delinquency or credit rating. In cases of significant concern, a total re-evaluation of a loan and its associated risks are documented. We may re-evaluate the fair market value or net realizable value to determine the likelihood of potential loss exposure and, consequently, the adequacy of specific and general credit loss reserves.

When a borrower fails to make a required loan payment, we take steps to have the borrower cure the delinquency and restore the loan to current status, including contacting the borrower at regular intervals. When the borrower is in default, we may commence collection proceedings. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure sale, the property securing the loan generally is sold at foreclosure. On a monthly and/or quarterly basis, management provides the Board of Directors delinquency reports and analysis, including information on any foreclosures, if applicable.

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Delinquencies. Total past due loans increased $5.1 million to $7.3 million at June 30, 2025 from $2.2 million at December 31, 2024. The increase was primarily driven by a $5.6 million enterprise value relationship that went on non-accrual status after becoming 90+ days past due during the second quarter of 2025. This relationship was individually analyzed for reserves as of June 30, 2025 and, based on a third-party valuation which indicated sufficient collateral, the Bank has not taken a reserve against this relationship as of that date.

Non-performing Assets . Non-performing assets include loans that are 90 or more days past due or on non-accrual status and real estate and other loan collateral acquired through foreclosure and repossession. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as foreclosed real estate until it is sold. When property is acquired, it is initially recorded at fair value less costs to sell, establishing a new cost basis. Declines in fair value subsequent to foreclosure will result in charges against income, while operating costs after acquisition are expensed.

The following table sets forth information regarding our non-performing assets at the dates indicated:

(Dollars in thousands)	At June 30, 2025			At December 31, 2024
Non-accrual loans:
Commercial real estate	$	54		$	57
Residential real estate		420			366
Commercial		1,536			1,543
Enterprise value		32,430			18,920
Consumer		—			1
Total non-accrual loans		34,440			20,887
Total non-performing assets	$	34,440		$	20,887

Allowance for credit losses for loans as a percent of non-performing loans		60.38	%		100.96	%
Non-performing loans as a percent of total loans (1)		2.62	%		1.57	%
Non-performing loans as a percent of total assets		2.24	%		1.31	%

(1)	Loans are presented at amortized cost.

Non-accrual loans increased $13.6 million, or 64.9%, to $34.4 million, or 2.62% of total loans outstanding at June 30, 2025, from $20.9 million, or 1.57% of total loans outstanding at December 31, 2024. The increase in non-accrual loans as of June 30, 2025 was primarily driven by a $10.5 million enterprise value relationship that was placed on non-accrual status and individually analyzed for reserves during the first quarter of 2025. The enterprise value relationship is with a behavioral health company with multiple mental health and addiction treatment facilities located in Massachusetts. During the second quarter of 2025, the Bank executed a workout transaction that included a $1.0 million paydown and a $9.5 million extension of credit to a new operator. This relationship will remain on nonaccrual status until consistent performance is demonstrated. Also, contributing to the increase in non-accrual loans was the $5.6 million enterprise value relationship that was placed on non-accrual status after becoming 90 days past due during the second quarter of 2025.

Repayment of non-performing loans is largely dependent on the return of such loans to performing status or the liquidation of the underlying collateral. The Company pursues the resolution of all non-performing loans through collections, modifications, voluntary liquidation of collateral by the borrower and, where necessary, legal action. When attempts to work with a customer to return a loan to performing status, including restructuring the loan, are unsuccessful, the Company will initiate appropriate legal action seeking to acquire property by deed in lieu of foreclosure or through foreclosure, or to liquidate business assets.

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Activity in the Allowance for Credit Losses for Loans . The following table sets forth activity in our allowance for credit losses for the periods indicated:

	Six Months Ended June 30,
(Dollars in thousands)	2025			2024
Allowance at beginning of period	$	21,087		$	21,571
Credit loss (benefit) expense for loans		(314	)		924
Charge-offs:
Commercial		—			5
Digital asset		—			2,124
Consumer		22			29
Total charge-offs		22			2,158

Recoveries:
Residential real estate		14			2
Commercial		31			—
Consumer		—			2
Total recoveries		45			4

Net (recoveries) charge-offs		(23	)		2,154

Allowance at end of period	$	20,796		$	20,341

Allowance to total loans outstanding at end of period		1.58	%		1.49	%
Net charge-offs to average loans outstanding during the period (annualized)		—	%		0.32	%

The increase in the allowance between June 30, 2025 and June 30, 2024 was primarily due to one enterprise value relationship with an amortized cost of $17.6 million, which incurred an additional $3.7 million in individually analyzed reserves since June 30, 2024. The increase in the allowance for credit losses for loans was partially offset by an $880,000 recovery and reductions in the general allowance due to updated loss rates resulting from the annual refresh of our current expected credit loss model in the fourth quarter of 2024, and changes in the loan portfolio mix since June 30, 2024.

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Deposits . Total deposits were $1.26 billion at June 30, 2025, a decrease of $51.0 million, or 3.9%, from $1.31 billion at December 31, 2024. This decrease was primarily due to a $42.3 million decrease in retail deposits and a $23.5 million decrease in listing service deposits, partially offset by a $14.8 million increase in brokered deposits. The $42.3 million decrease in retail deposits since December 31, 2024, was primarily attributable to a $37.5 million decrease in deposits related to areas where the Bank has intentionally scaled back its strategic focus.

The following table sets forth the distribution of total deposits by account type at the dates indicated:

	At June 30, 2025					At December 31, 2024
(Dollars in thousands)	Amount		Percent			Amount		Percent
Noninterest-bearing:
Retail deposits
Demand	$	287,927		22.89	%	$	351,528		26.86	%
Interest-bearing:
Retail deposits
NOW		103,115		8.20	%		83,270		6.36	%
Regular savings		81,020		6.44	%		87,340		6.67	%
Money market deposits		463,099		36.81	%		463,686		35.42	%
Certificates of deposit		133,713		10.63	%		125,365		9.58	%
Brokered deposits
Money market deposits		1		—	%		1		—	%
Certificates of deposit		165,000		13.12	%		150,189		11.47	%
Listing service deposits
Regular savings		24,103		1.91	%		44,858		3.43	%
Certificates of deposit		—		—	%		2,723		0.21	%
Total	$	1,257,978		100.00	%	$	1,308,960		100.00	%

Borrowings. Total borrowings were $34.5 million at June 30, 2025, a decrease of $10.1 million, or 22.6%, from December 31, 2024, due to the maturity of a short-term advance from the FHLB.

Shareholders ’ Equity. As of June 30, 2025, shareholders’ equity totaled $237.4 million, an increase of $6.3 million, or 2.7%, from December 31, 2024. The increase includes the Company's net income, which totaled $5.0 million for the six months ended June 30, 2025. Shareholders’ equity to total assets was 15.4% at June 30, 2025, compared to 14.5% at December 31, 2024. Book value per share was $13.35 at June 30, 2025, an increase from $12.99 at December 31, 2024. As of June 30, 2025, the Bank was categorized as well capitalized under the Federal Deposit Insurance Corporation regulatory framework for prompt corrective action.

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Results of Operations for the Three Months Ended June 30, 2025 and 2024

General . The Company reported net income for the quarter ended June 30, 2025 of $2.8 million, or $0.17 per diluted share, compared to a net loss of $3.3 million, or $0.20 per diluted share, for the quarter ended June 30, 2024. The Company’s return on average assets was 0.74% for the quarter ended June 30, 2025, compared to a loss on average assets of 0.85% for the quarter ended June 30, 2024. The Company's return on average equity was 4.77% for the quarter ended June 30, 2025, compared to a loss on average equity of 5.80% for the quarter ended June 30, 2024.

Net Interest and Dividend Income . Net interest and dividend income was $13.5 million, an increase of $1.6 million, or 13.2%, compared to the quarter ended June 30, 2024. The interest rate spread and net interest margin were 2.79% and 3.77%, respectively, for the quarter ended June 30, 2025, compared to 2.10% and 3.27%, respectively, for the quarter ended June 30, 2024.

Average Balance Sheet and Related Yields and Rates. The following table sets forth the average balance sheets, annualized average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the amount of tax-free interest-earning assets was immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.

	For the Three Months Ended
	June 30, 2025								June 30, 2024
				Interest								Interest
	Average			Earned/		Yield/			Average			Earned/		Yield/
(Dollars in thousands)	Balance			Paid		Rate (5)			Balance			Paid		Rate (5)
Assets:
Interest-earning assets:
Loans (1)	$	1,320,244		$	20,085		6.09	%	$	1,328,650		$	20,311		6.11	%
Short-term investments		87,843			984		4.48	%		102,395			1,318		5.15	%
Debt securities available-for-sale		24,786			182		2.94	%		27,485			206		3.00	%
Federal Home Loan Bank stock		2,596			49		7.55	%		1,865			37		7.94	%
Total interest-earning assets		1,435,469			21,300		5.94	%		1,460,395			21,872		5.99	%
Noninterest earning assets		87,489								104,388
Total assets	$	1,522,958							$	1,564,783
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	106,622		$	215		0.81	%	$	215,344		$	1,646		3.06	%
Money market accounts		446,440			3,733		3.34	%		456,566			4,499		3.94	%
NOW accounts		92,260			395		1.71	%		69,737			225		1.29	%
Certificates of deposit		287,166			2,918		4.06	%		251,361			3,237		5.15	%
Total interest-bearing deposits		932,488			7,261		3.11	%		993,008			9,607		3.87	%
Borrowings
Short-term borrowings		43,989			482		4.38	%		17,439			281		6.45	%
Long-term borrowings		9,507			30		1.26	%		9,642			31		1.29	%
Total borrowings		53,496			512		3.83	%		27,081			312		4.61	%
Total interest-bearing liabilities		985,984			7,773		3.15	%		1,020,089			9,919		3.89	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		292,421								306,081
Other noninterest-bearing liabilities		7,920								10,519
Total liabilities		1,286,325								1,336,689
Total equity		236,633								228,094
Total liabilities and equity	$	1,522,958							$	1,564,783
Net interest income				$	13,527							$	11,953
Interest rate spread (2)							2.79	%							2.10	%
Net interest-earning assets (3)	$	449,485							$	440,306
Net interest margin (4)							3.77	%							3.27	%
Average interest-earning assets to interest-bearing liabilities		145.59	%							143.16	%

(1)	Interest earned/paid on loans includes $659,000 and $660,000 in loan fee income for the three months ended June 30, 2025 and June 30, 2024, respectively.

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

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

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

(5)	Annualized.

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Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effect attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.

	For the Three Months Ended June 30, 2025
	Compared to the Three Months Ended June 30, 2024
	Increase (Decrease) Due to						Total
(In thousands)	Rate			Volume			Increase (Decrease)
Interest-earning assets:
Loans	$	(98	)	$	(128	)	$	(226	)
Short-term investments		(159	)		(175	)		(334	)
Debt securities available-for-sale		(4	)		(20	)		(24	)
Federal Home Loan Bank stock		(2	)		14			12
Total interest-earning assets		(263	)		(309	)		(572	)
Interest-bearing liabilities:
Savings accounts		(849	)		(582	)		(1,431	)
Money market accounts		(668	)		(98	)		(766	)
NOW accounts		86			84			170
Certificates of deposit		(741	)		422			(319	)
Total interest-bearing deposits		(2,172	)		(174	)		(2,346	)
Borrowings
Short-term borrowings		(114	)		315			201
Long-term borrowings		(1	)		—			(1	)
Total borrowings		(115	)		315			200
Total interest-bearing liabilities		(2,287	)		141			(2,146	)
Change in net interest income	$	2,024		$	(450	)	$	1,574

Interest and Dividend Income . Total interest and dividend income was $21.3 million for the quarter ended June 30, 2025, a decrease of $572,000, or 2.6%, from the quarter ended June 30, 2024. The Company’s yield on interest-earning assets was 5.94% for the quarter ended June 30, 2025, down five basis from the quarter ended June 30, 2024. Interest on short-term investments decreased $334,000, or 25.3%, from the quarter ended June 30, 2024. This decrease was primarily driven by a decrease in the average balance of short-term investments of $14.6 million, or 14.2%, from June 30, 2024 and a decrease in the yield on short-term investments to 4.48% for the quarter, which represents a decrease of 67 basis points from the quarter ended June 30, 2024. Interest and fees on loans decreased $226,000, or 1.1%, from the quarter ended June 30, 2024. This decrease was primarily driven by a decrease in the average balance of loans of $8.4 million, or 0.6%, from June 30, 2024 and a decrease in the yield on loans to 6.09% for the quarter, which represents a decrease of two basis points from the quarter ended June 30, 2024.

Interest Expense . Total interest expense was $7.8 million for the quarter ended June 30, 2025, a decrease of $2.1 million, or 21.6%, from the quarter ended June 30, 2024. This decrease was primarily due to a $2.3 million, or 24.4%, decrease in interest on deposits, primarily driven by a 76 basis point reduction in the cost of interest-bearing deposits to 3.11% for the quarter ended June 30, 2025, compared to 3.87% for the quarter ended June 30, 2024. The Company’s total cost of interest-bearing liabilities was 3.15% for the quarter ended June 30, 2025, a decrease of 74 basis points from the quarter ended June 30, 2024.

Provision for Credit Losses . The Company recognized a $378,000 credit loss benefit for the quarter ended June 30, 2025, compared to a $6.5 million provision for the quarter ended June 30, 2024. The benefit for the quarter ended June 30, 2025 was primarily driven by a reduction in pooled reserves, largely reflecting a decline in total loans, specifically within the enterprise value portfolio, which typically carries a higher reserve rate than other loan categories. The $6.5 million provision for the quarter ended June 30, 2024 was primarily due to a $7.1 million individually analyzed reserve on a $17.6 million enterprise value relationship.

Noninterest Income . Noninterest income was $2.2 million for the quarter ended June 30, 2025 an increase of $708,000, or 46.5%, from the quarter ended June 30, 2024. During the second quarter of 2025, noninterest income included a $745,000 gain on a sale/leaseback transaction for the Bank's main office building.

Noninterest Expense . Noninterest expense was $12.1 million for the quarter ended June 30, 2025, compared to $11.6 million for the quarter ended June 30, 2024. The $497,000, or 4.3%, increase was primarily attributable to $543,000 of merger-related expenses included in professional fees for the second quarter of 2025, and a contingency included in other expenses related to the previously-disclosed Wells Notice received from the SEC. Merger-related fees included in noninterest expenses were more than offset by improvements in organizational efficiency and the successful reduction of operating costs.

Income Tax Expense . The Company recorded an income tax provision of $1.2 million for the quarter ended June 30, 2025, reflecting an effective tax rate of 30.2%, compared to a benefit of $1.3 million, or an effective tax rate of 27.7%, for the quarter ended June 30, 2024. The increase in the effective tax rate for the current quarter was primarily attributable to non-deductible merger-related expenses and higher pre-tax income.

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Results of Operations for the Six Months Ended June 30, 2025 and 2024

General . The Company reported net income for the six months ended June 30, 2025 of $5.0 million, or $0.29 per diluted share, compared to $1.7 million, or $0.10 per diluted share, for the six months ended June 30, 2024. The Company’s return on average assets was 0.66% for the six months ended June 30, 2025, compared to 0.21% for the six months ended June 30, 2024. The Company's return on average equity was 4.25% for the six months ended June 30, 2025, compared to 1.48% for the six months ended June 30, 2024.

Net Interest and Dividend Income . Net interest and dividend income was $26.4 million, an increase of $2.0 million, or 8.0%, compared to $24.4 million for the six months ended June 30, 2024. The interest rate spread and net interest margin were 2.70% and 3.71%, respectively, for the six months ended June 30, 2025, compared to 2.19% and 3.33%, respectively, for the six months ended June 30, 2024.

	For the Six Months Ended
	June 30, 2025								June 30, 2024
				Interest								Interest
	Average			Earned/		Yield/			Average			Earned/		Yield/
(Dollars in thousands)	Balance			Paid		Rate (5)			Balance			Paid		Rate (5)
Assets:
Interest-earning assets:
Loans (1)	$	1,305,993		$	39,392		6.03	%	$	1,325,955		$	40,380		6.09	%
Short-term investments		89,014			1,997		4.49	%		112,971			3,047		5.39	%
Debt securities available-for-sale		25,187			371		2.95	%		27,859			411		2.95	%
Federal Home Loan Bank stock		2,646			120		9.07	%		1,824			69		7.57	%
Total interest-earning assets		1,422,840			41,880		5.89	%		1,468,609			43,907		5.98	%
Noninterest earning assets		89,870								101,639
Total assets	$	1,512,710							$	1,570,248
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	112,635		$	479		0.85	%	$	229,746		$	3,607		3.14	%
Money market accounts		447,112			7,489		3.35	%		455,724			8,737		3.83	%
NOW accounts		82,630			652		1.58	%		76,284			408		1.07	%
Certificates of deposit		278,073			6,010		4.32	%		240,989			6,195		5.14	%
Total interest-bearing deposits		920,450			14,630		3.18	%		1,002,743			18,947		3.78	%
Borrowings
Short-term borrowings		40,972			788		3.85	%		14,811			459		6.20	%
Long-term borrowings		9,524			60		1.26	%		9,658			62		1.28	%
Total borrowings		50,496			848		3.36	%		24,469			521		4.26	%
Total interest-bearing liabilities		970,946			15,478		3.19	%		1,027,212			19,468		3.79	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		298,477								306,215
Other noninterest-bearing liabilities		8,097								11,280
Total liabilities		1,277,520								1,344,707
Total equity		235,190								225,541
Total liabilities and equity	$	1,512,710							$	1,570,248
Net interest income				$	26,402							$	24,439
Interest rate spread (2)							2.70	%							2.19	%
Net interest-earning assets (3)	$	451,894							$	441,397
Net interest margin (4)							3.71	%							3.33	%
Average interest-earning assets to interest-bearing liabilities		146.54	%							142.97	%

(1)	Interest earned/paid on loans includes $1.4 million in loan fee income for the six months ended June 30, 2025 and June 30, 2024.

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

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

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

(5)	Annualized.

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Rate/Volume Analysis

	For the Six Months Ended June 30, 2025
	Compared to the Six Months Ended June 30, 2024
	Increase (Decrease) Due to						Total
(In thousands)	Rate			Volume			Increase (Decrease)
Interest-earning assets:
Loans	$	(384	)	$	(604	)	$	(988	)
Short-term investments		(464	)		(586	)		(1,050	)
Debt securities available-for-sale		(1	)		(39	)		(40	)
Federal Home Loan Bank stock		16			35			51
Total interest-earning assets		(833	)		(1,194	)		(2,027	)
Interest-bearing liabilities:
Savings accounts		(1,841	)		(1,287	)		(3,128	)
Money Market accounts		(1,086	)		(162	)		(1,248	)
NOW accounts		208			36			244
Certificates of deposit		(1,064	)		879			(185	)
Total interest-bearing deposits		(3,783	)		(534	)		(4,317	)
Borrowings
Short-term borrowings		(229	)		558			329
Long-term borrowings		(1	)		(1	)		(2	)
Total borrowings		(230	)		557			327
Total interest-bearing liabilities		(4,013	)		23			(3,990	)
Change in net interest income	$	3,180		$	(1,217	)	$	1,963

Interest and Dividend Income . Total interest and dividend income was $41.9 million for the six months ended June 30, 2025, a decrease of $2.0 million, or 4.6%, from the six months ended June 30, 2024. The Company’s yield on interest-earning assets was 5.89% for the six months ended June 30, 2025, down nine basis points from the six months ended June 30, 2024. Interest on short-term investments decreased $1.1 million, or 34.5%, from the six months ended June 30, 2024. This decrease was primarily driven by decreases in the average balance of short-term investments of $24.0 million, or 21.2%, from the six months ended June 30, 2024 and in the yield on short-term investments to 4.49% for the six months ended June 30, 2025, which represents a decrease of 90 basis points from the six months ended June 30, 2024. Interest and fees on loans decreased $988,000, or 2.4%, from the six months ended June 30, 2024. This decrease was primarily driven by decreases in the average balance of loans of $20.0 million, or 1.5%, from June 30, 2024 and in the yield on loans to 6.03% for the six months ended June 30, 2025, which represents a decrease of six basis points from the six months ended June 30, 2024.

Interest Expense . Total interest expense was $15.5 million for the six months ended June 30, 2025, a decrease of $4.0 million, or 20.5%, from the six months ended June 30, 2024. The decrease in interest expense was primarily driven by a decrease in the cost and, to a lesser extent, average balance of interest-bearing deposits. Interest expense on deposits was $14.6 million for the six months ended June 30, 2025, a decrease of $4.3 million, or 22.8%, from $18.9 million for the six months ended June 30, 2024. This decrease was primarily driven by a 60 basis point decrease in the average cost of interest-bearing deposits, from 3.78% to 3.18% and a decrease in the average balance of deposits, primarily due to a decrease in higher-cost savings accounts obtained through listing services. For the six months ended June 30, 2025, interest expense on borrowings increased $327,000, or 62.8%, primarily due to a $26.0 million, or 106.4%, increase in the average balance of borrowings, partially offset by a 90 basis point decrease in the average cost of borrowings. The Company's total cost of interest-bearing liabilities was 3.19% for the six months ended June 30, 2025, a decrease of 60 basis points from 3.79% for the six months ended June 30, 2024. The significant decrease in interest expense compared to the prior year is a reflection of the Bank’s strategic re-balancing of its funding sources.

Provision for Credit Losses . The Company recognized a $390,000 credit loss benefit for the six months ended June 30, 2025, compared to a provision of $877,000 for the six months ended June 30, 2024. The credit loss benefit for the six months ended June 30, 2025 was primarily driven by a reduction in pooled reserves, largely reflecting a decline in total loans, specifically within the enterprise value portfolio, which typically carries a higher reserve rate than other loan categories. This benefit was partially offset by a year-to-date increase of $662,000 in individually analyzed reserves, primarily recorded in the first quarter of 2025.

Noninterest Income . Noninterest income was $3.6 million for the six months ended June 30, 2025, an increase of $732,000, or 25.4%, from the six months ended June 30, 2024. During the second quarter of 2025, noninterest income included a $745,000 gain on a sale/leaseback transaction for the Bank's main office building.

Noninterest Expense . Noninterest expense was $23.5 million for the six months ended June 30, 2025, compared to $24.3 million for the six months ended June 30, 2024. The $806,000, or 3.3%, decrease was primarily due to decreases in professional fees of $605,000, or 26.3%, and salaries and employee benefits of $524,000, or 3.4%, partially offset by a $343,000, or 26.2%, increase in other expenses which include a contingency related to the previously-disclosed Wells Notice received from the SEC. Merger-related expenses of $543,000, included in professional fees, were more than offset by improvements in organizational efficiency and the successful reduction of operating costs.

Income Tax Expense . The Company recorded an income tax provision of $1.9 million for the six months ended June 30, 2025, reflecting an effective tax rate of 27.4%, compared to $439,000, or an effective tax rate of 20.8%, for the six months ended June 30, 2024. The increase in effective tax rate is primarily attributable to non-deductible merger-related expenses and higher pre-tax income.

Management of Market Risk

Net Interest Income Simulation. We analyze our sensitivity to changes in interest rates through a net interest income simulation model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period in the current interest rate environment. We then calculate what the net interest income would be for the same period under the assumption that interest rates increase or decrease by 100, 200, and 300 basis points from current market rates, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.

Table of Contents

The following table presents the estimated changes in net interest income of the Company that would result from changes in market interest rates over the twelve-month period beginning June 30, 2025:

	At June 30, 2025
(Dollars in thousands)	Estimated Net Interest Income Over Next 12 Months		Change
Changes in Interest Rates (Basis Points)
300	$	53,642		(6.90	)%
200		55,041		(4.40	)%
100		56,371		(2.10	)%
0		57,601		—
(100)		57,508		(0.20	)%
(200)		56,947		(1.10	)%
(300)		55,771		(3.20	)%

Economic Value of Equity Simulation. We also analyze the sensitivity of our financial condition to changes in interest rates through an economic value of equity (“EVE”) model. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. The EVE ratio represents the dollar amount of our EVE divided by the present value of our total assets for a given interest rate scenario. EVE attempts to quantify our economic value using a discounted cash flow methodology while the EVE ratio reflects that value as a form of capital ratio. We estimate what our EVE would be as of a specific date. We then calculate what EVE would be as of the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve. We currently calculate EVE under the assumptions that interest rates increase or decrease by 100, 200, and 300 basis points from current market rates.

The following table presents the estimated changes in EVE of the Company that would result from changes in market interest rates as of June 30, 2025:

	At June 30, 2025
(Dollars in thousands)	Economic Value of Equity		Change
Changes in Interest Rates (Basis Points)
300	$	276,050		(6.20	)%
200		281,544		(4.30	)%
100		288,365		(2.00	)%
0		294,284		—
(100)		292,863		(0.50	)%
(200)		287,313		(2.40	)%
(300)		275,524		(6.40	)%

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes 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. In this regard, the 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 assume 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. Accordingly, although the tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

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Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, borrowings, and loan repayments and maturities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, mortgage prepayments and sales of securities are greatly influenced by general interest rates, economic conditions and competition.

We regularly review the need to adjust our investments in liquid assets based upon our assessment of: (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities, and (4) the objectives of our asset/liability management program. Excess liquid assets are generally invested in interest-earning deposits and short- and intermediate-term securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At June 30, 2025, cash and cash equivalents totaled $128.9 million. Debt securities classified as available-for-sale, which provide additional sources of liquidity, totaled $24.5 million at June 30, 2025. Warehouse loans, which have a short-term duration, totaled $251.0 million as of June 30, 2025, also provide an additional source of liquidity.

At June 30, 2025, we had a borrowing capacity of $154.1 million with the Federal Home Loan Bank of Boston, of which $25.0 million in short-term advances and $9.5 million in advances with original maturities greater than one year were outstanding. At June 30, 2025, we also had an available line of credit with the Federal Reserve Bank of Boston’s borrower-in-custody program of $319.8 million, none of which was outstanding.

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit, which involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. At June 30, 2025 and December 31, 2024, we had $21.2 million and $15.0 million in loan commitments outstanding, respectively. In addition to commitments to originate loans, at June 30, 2025 and December 31, 2024, we had $133.6 million and $156.5 million in unadvanced funds to borrowers, respectively. We also had $1.6 million and $1.5 million in outstanding letters of credit at June 30, 2025 and December 31, 2024, respectively.

We have no material commitments or demands that are likely to affect our liquidity other than as set forth below. In the event unforeseen loan demand or commitment utilization were to occur, or we experienced unexpected deposit outflows, we could access our borrowing capacity with the Federal Home Loan Bank of Boston or the Federal Reserve Bank of Boston, or obtain additional funds through brokered deposit markets.

A significant decrease in deposits could result in the Company having to seek other sources of funds, including brokered deposits, listing service deposits, Federal Home Loan Bank of Boston advances, and borrowings through the borrower-in-custody program with the Federal Reserve Bank of Boston. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay. We believe, however, based on past experience that a significant portion of our deposits will remain with us and we are confident in our ability to attract and retain deposits by adjusting the interest rates offered to meet customer expectations.

The Company maintains access to multiple sources of liquidity. If funding costs are elevated for an extended period of time, it could have an adverse effect on the Company’s net interest margin. If economic conditions cause large numbers of the Company’s deposit customers to withdraw their funds, the Company might become more reliant on volatile or more expensive sources of funding.

BankProv is subject to various regulatory capital requirements administered by Massachusetts Commissioner of Banks and the FDIC. At June 30, 2025, BankProv exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines. See Note 10 – Regulatory Capital of the Notes to the Unaudited Consolidated Financial Statements for additional information.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Management Market Risk”.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the President and Chief Executive Officer and the Executive Vice President 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 June 30, 2025. Based on that evaluation, the Company’s management, including the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2025, there were no changes in the Company’s internal control 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

On October 24, 2024, the Company received a letter from the staff of the Boston Regional Office of the SEC informing the Company that the staff had made a preliminary determination to recommend that the SEC file an action against the Company for violating certain sections of the federal securities laws (the “Wells Notice”). The staff has indicated that the Wells Notice relates to the Company’s disclosures regarding loans that the Company made to companies engaged in the mining of cryptocurrency – a line of business the Company ceased originating new loans in as of October 2022. The Wells Notice indicates that the staff’s recommendation to the SEC may involve a civil injunction action or other action allowed by law, and may seek remedies that include an injunction, disgorgement, pre-judgment interest, civil money penalties, and such other relief as may be available.

The Company is pursuing the Wells Notice process and continues to explore a potential resolution with the SEC staff. As of June 30, 2025, the Bank has recorded a contingency of $350,000 in connection with this matter. However, the ultimate outcome, including the results, timing, costs, and other potential consequences, remains uncertain and could differ significantly from current estimates. Associated legal costs are expensed as incurred.

Item 1A. Risk Factors

There have been no material changes in risk factors applicable to the Company from those disclosed in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the “Risk Factors” section contained in the Proxy Statement/Prospectus for the Company's Special Meeting of Stockholders as filed with the SEC by NB Bancorp, Inc. on July 30, 2025.

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

(a)

Not applicable.

(b)

Not applicable.

(c)

The Company may, at times, repurchase its own shares in the open market. Such transactions are subject to the notice provisions for stock repurchases of the Board of Governors of the Federal Reserve System. In December 2024, the Company announced its receipt of non-objection from the FRB to repurchase 883,366 shares of its common stock. The Company did not repurchase any common stock under this program during the six months ended June 30, 2025, and following its entry into the Merger Agreement on June 5, 2025, the Company suspended the repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Director and Section 16 Officer Rule 10b5 - 1 Trading Arrangements

During the three months ended June 30, 2025 , no director or officer of the Company adopted or terminated a “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement,” as each term is defined in Item 408 (a) of Regulation S-K.

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Item 6. Exhibits

2.1	Agreement and Plan of Merger by and among NB Bancorp, Inc., Needham Bank, 1828 MS, Inc., Provident Bancorp, Inc., and BankProv, dated as of June 5, 2025 (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K file with the Securities and Exchange Commission on June 5, 2025)
3.1	Articles of Incorporation of Provident Bancorp, Inc. (1)
3.2	Bylaws of Provident Bancorp, Inc. (1)
3.3	Amendment to Bylaws of Provident Bancorp, Inc. (2)
3.4	Amendment to Bylaws of Provident Bancorp, Inc. (3)
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	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial statements from the Provident Bancorp, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets at June 30, 2025 and December 31, 2024; (ii) Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024; (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2025 and 2024; (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024; and (vi) Notes to Unaudited Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as iXBRL and contained in exhibit 101).

(1)	Incorporated by reference to the Company’s Registration Statement on Form S-1 (file no. 333-232018), initially filed with the Securities and Exchange Commission on June 7, 2019.
(2)	Incorporated by reference to the Company’s Current Report on Form 8-K (file no. 001-39090), filed with the Securities and Exchange Commission on March 29, 2021.
(3)	Incorporated by reference to the Company’s Current Report on Form 8-K (file no. 001-39090), filed with the Securities and Exchange Commission on January 26, 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.

	PROVIDENT BANCORP, INC.

Date: August 14, 2025	/s/ Joseph B. Reilly
	Joseph B. Reilly
	President and Chief Executive Officer

Date: August 14, 2025	/s/ Kenneth R. Fisher
	Kenneth R. Fisher
	Executive Vice President and Chief Financial Officer

TABLE OF CONTENTS

Part I Item 1. Financial Statements Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Part II Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities, Use Of Proceeds, and Issuer Purchases Of Equity Securities Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

2.1 Agreement and Plan of Merger by and among NB Bancorp, Inc., Needham Bank, 1828 MS, Inc., Provident Bancorp, Inc., and BankProv, dated as of June 5, 2025(incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K file with the Securities and Exchange Commission on June 5, 2025) 3.1 Articles of Incorporation of Provident Bancorp, Inc. (1) 3.2 Bylaws of Provident Bancorp, Inc. (1) 3.3 Amendment to Bylaws of Provident Bancorp, Inc. (2) 3.4 Amendment to Bylaws of Provident Bancorp, Inc. (3) 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 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

PVBC 10-Q Quarter ended June 30, 2025

Exhibits