BCB Bancorp(BCBP) - 2025 Q1 - Quarterly Report

PART I. CONSOLIDATED FINANCIAL INFORMATION ITEM I. CONSOLIDATED FINANCIAL STATEMENTS This section presents the unaudited consolidated financial statements of BCB Bancorp, Inc. and its subsidiaries for the periods ended March 31, 2025, and December 31, 2024, including the Statements of Financial Condition, Operations, Comprehensive Income (Loss), Changes in Stockholders' Equity, and Cash Flows Consolidated Statements of Financial Condition Consolidated financial position shows a decrease in total assets and liabilities, with a modest decline in stockholders' equity | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $3,473,822 | $3,599,118 | | Total Liabilities | $3,159,100 | $3,275,193 | | Total Stockholders' Equity | $314,722 | $323,925 | - Total Assets decreased by $125.3 million (3.5%) from December 31, 2024, to March 31, 2025, primarily due to decreases in net loans and cash and cash equivalents[11][150] - Total Liabilities decreased by $116.093 million from December 31, 2024, to March 31, 2025, mainly driven by a reduction in deposits and FHLB advances[11][154][155] - Total Stockholders' Equity decreased by $9.2 million (2.8%) from December 31, 2024, to March 31, 2025, primarily due to a decrease in retained earnings[11][156] Consolidated Statements of Operations The company reported a net loss in Q1 2025, primarily due to a significant increase in the provision for credit losses | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total interest and dividend income | $44,192 | $49,285 | $42,352 | | Total interest expense | $22,187 | $26,142 | $14,881 | | Net interest income | $22,005 | $23,143 | $27,471 | | Provision for credit losses | $20,845 | $2,088 | $622 | | Net (Loss) Income | $(8,324) | $5,866 | $8,106 | | Net (Loss) Income available to common stockholders | $(8,806) | $5,432 | $7,933 | | Basic EPS | $(0.51) | $0.32 | $0.47 | | Diluted EPS | $(0.51) | $0.32 | $0.46 | - The Company reported a net loss of $8.3 million for Q1 2025, a significant decline from net income of $5.9 million in Q1 2024, primarily due to an $18.8 million increase in the provision for credit losses[14][162] - Net interest income decreased by $1.1 million (4.9%) to $22.0 million in Q1 2025 compared to $23.1 million in Q1 2024, as lower interest income was partially offset by lower interest expense[14][162] Consolidated Statements of Comprehensive Income (Loss) The company experienced a comprehensive loss in Q1 2025, primarily driven by the net loss, despite positive other comprehensive income | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net (Loss) Income | $(8,324) | $5,866 | $8,106 | | Other comprehensive income (loss) | $970 | $(133) | $(122) | | Comprehensive (loss) income | $(7,354) | $5,733 | $7,984 | - Comprehensive loss for Q1 2025 was $(7.354) million, a significant decrease from comprehensive income of $5.733 million in Q1 2024, mainly driven by the net loss[16] - Other comprehensive income for Q1 2025 was $970 thousand, a positive change compared to a loss of $(133) thousand in Q1 2024, primarily due to unrealized holding gains on available-for-sale debt securities[16] Consolidated Statement of Changes in Stockholders' Equity Stockholders' equity decreased in Q1 2025 due to a net loss and common stock dividends, partially offset by other comprehensive income and preferred stock issuance | Metric | Balance at January 1, 2025 (in thousands) | Balance at March 31, 2025 (in thousands) | | :----------------------------------- | :-------------------------------------- | :------------------------------------- | | Total Stockholders' Equity | $323,925 | $314,722 | | Net loss | - | $(8,324) | | Other comprehensive income | - | $970 | | Issuance of Series K Preferred Stock | - | $520 | | Stock-based compensation expense | - | $321 | | Dividends payable on preferred stock | - | $(482) | | Cash dividends on common stock | - | $(2,679) | | Dividend reinvestment plan | - | - | | Stock Purchase Plan | - | $471 | - Stockholders' equity decreased from $323.925 million at January 1, 2025, to $314.722 million at March 31, 2025, primarily due to the net loss and common stock dividends, partially offset by other comprehensive income and preferred stock issuance[18] Consolidated Statements of Cash Flows Net cash used in financing activities significantly impacted cash and cash equivalents, leading to a decrease in the ending balance for Q1 2025 | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Cash Provided by Operating Activities | $5,008 | $8,288 | $16,414 | | Net Cash Provided by (Used in) Investing Activities | $46,980 | $51,910 | $(185,704) | | Net Cash Provided by (Used in) Financing Activities | $(116,520) | $12,727 | $201,006 | | Net Increase (Decrease) in Cash and Cash Equivalents | $(64,532) | $72,925 | $31,716 | | Cash and Cash Equivalents-Ending | $252,750 | $352,448 | $261,075 | - Net cash used in financing activities was $(116.520) million in Q1 2025, a significant shift from net cash provided of $12.727 million in Q1 2024, primarily due to a net decrease in deposits and repayment of FHLB advances[20] - Cash and cash equivalents decreased by $64.532 million in Q1 2025, resulting in an ending balance of $252.750 million, compared to an increase of $72.925 million in Q1 2024[20] Notes to Unaudited Consolidated Financial Statements This section provides detailed disclosures and explanations for the unaudited consolidated financial statements, covering the basis of presentation, recent accounting pronouncements, equity incentive plans, securities, loans and allowance for credit losses, stockholders' equity, bank-owned life insurance, goodwill and other intangibles, fair values of financial instruments, subordinated debt, lease obligations, and subsequent events Note 1 – Basis of Presentation This note outlines the company's structure as a New Jersey bank holding company, its NASDAQ listing, and its primary business operations - BCB Bancorp, Inc. is a New Jersey bank holding company, with its common stock listed on NASDAQ under 'BCBP'[23] - The Company's primary business is the ownership and operation of BCB Community Bank, which operates 27 locations in New Jersey and New York, attracting deposits and investing in securities and loans[24] - The Company operates as a single reportable segment, with the President & CEO as the Chief Operating Decision Maker, evaluating performance using net interest income and net income[26] Note 2 - Recent Accounting Pronouncements This note details the impact of recent accounting pronouncements on the company's financial statements and disclosures - ASU 2024-02 (Codification Improvements) became effective January 1, 2025, and did not have a material impact on the Company's financial statements[30] - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, and the Company is currently evaluating its impact on disclosures[31] - ASU 2023-07 (Segment Reporting) did not have an impact on the consolidated financial statements upon adoption[32] - Starting Q1 2025, the Company includes cannabis-related loans as a separate segment for allowance for credit losses calculation due to their unique characteristics, with a portfolio of $103.6 million at March 31, 2025[36] Note 3 – Reclassification This note clarifies that certain amounts have been reclassified for presentation consistency, without affecting financial results or position - Certain amounts have been reclassified to conform to the current period's presentation, with no effect on the Company's results of operations or financial position[41] Note 4 – Equity Incentive Plans This note describes the company's active equity incentive plans, including stock options and restricted stock awards for employees and directors | Metric | March 31, 2025 | March 31, 2024 | | :----------------------------------- | :------------- | :------------- | | Non-vested Restricted Shares (Number) | 107,273 | 64,402 | | Weighted Average Grant Date Fair Value (Restricted Shares) | $10.93 | $14.73 | | Restricted stock expense (Q1) | $257,000 | $156,000 | | Outstanding Stock Options (Number) | 957,738 | N/A | | Weighted Average Exercise Price (Stock Options) | $11.64 | N/A | | Stock option compensation expense (Q1) | $64,000 | $39,000 | - The Company has three active equity incentive plans (2023, 2018, 2011) authorizing the issuance of common stock through stock options, restricted stock awards, and performance awards to employees and directors[43][44][45] - As of March 31, 2025, 63,763 stock options were granted to officers, and 43,773 shares of restricted stock were awarded to Board members[46][47] Note 5 – Net (Loss) Income per Common Share This note details the calculation of basic and diluted earnings per share, highlighting the impact of net loss on dilution | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net (loss) income available to common stockholders (in thousands) | $(8,806) | $5,432 | $7,933 | | Basic EPS | $(0.51) | $0.32 | $0.47 | | Diluted EPS | $(0.51) | $0.32 | $0.46 | | Weighted average common shares outstanding (Basic) | 17,113 | 16,930 | 16,949 | | Weighted average common shares outstanding (Diluted) | 17,113 | 16,939 | 17,208 | - Dilution is not applicable in periods of net loss, as seen in Q1 2025 where basic and diluted EPS were both $(0.51)[54][55] - There were 950,000 outstanding options considered anti-dilutive for Q1 2025, compared to 508,000 in Q1 2024[54] Note 6 - Securities This note provides details on the company's securities portfolio, including net gains/losses on equity securities and fair value changes in available-for-sale debt securities | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net (losses) gains on equity securities | $(115) | $130 | $(3,227) | | Debt Securities Available for Sale | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Amortized Cost | $122,082 | $108,590 | | Gross Unrealized Gains | $437 | $188 | | Gross Unrealized Losses | $6,023 | $7,061 | | Fair Value | $116,496 | $101,717 | - As of March 31, 2025, the fair value of debt securities available for sale increased to $116.496 million from $101.717 million at December 31, 2024, with a decrease in gross unrealized losses[57] | Unrealized Losses on AFS Securities | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Total Fair Value | $87,521 | $90,134 | | Total Unrealized Losses | $6,023 | $7,061 | | Unrealized Losses (12 Months or Less) | $23 | $146 | | Unrealized Losses (More than 12 Months) | $6,000 | $6,915 | Note 7 - Loans Receivable and Allowance for Credit Losses This note details the composition of the loan portfolio, changes in the allowance for credit losses, and delinquency status | Loan Segment | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Residential one-to-four family | $232,456 | $239,870 | | Commercial and multi-family | $2,131,047 | $2,155,929 | | Cannabis related | $103,579 | $103,206 | | Construction | $113,934 | $130,589 | | Commercial business | $234,048 | $242,239 | | Business express | $87,747 | $92,947 | | Home equity | $66,479 | $66,769 | | Consumer | $2,271 | $2,235 | | Total Gross Loans | $2,971,561 | $3,033,784 | | Allowance for credit losses | $(51,484) | $(34,789) | | Total Loans, net | $2,917,610 | $2,996,259 | - Total net loans decreased by $78.6 million (2.6%) from December 31, 2024, to March 31, 2025, with decreases across most loan categories[59][152] - The allowance for credit losses increased significantly by $16.7 million to $51.5 million at March 31, 2025, representing 1.73% of gross loans, up from 1.15% at December 31, 2024[59][152][166] | Allowance for Credit Losses Activity (in thousands) | Q1 2025 | Q1 2024 | Q1 2023 | | :-------------------------------------------------- | :------ | :------ | :------ | | Beginning Balance | $34,789 | $33,608 | $28,208 | | Charge-offs | $(4,198) | $(1,151) | $(1) | | Recoveries | $48 | $18 | $53 | | Provision (benefit) | $20,845 | $2,088 | $622 | | Ending Balance | $51,484 | $34,563 | $28,882 | - The provision for credit losses surged to $20.8 million in Q1 2025 from $2.088 million in Q1 2024, driven by a $13.7 million specific reserve for a cannabis sector loan and a $3.1 million increase for the Business Express Loan portfolio[70][166] | Delinquency Status (in thousands) | March 31, 2025 | December 31, 2024 | | :---------------------------------- | :------------- | :---------------- | | Total Past Due | $87,603 | $76,703 | | Current | $2,883,958 | $2,957,081 | | Total Loans Receivable | $2,971,561 | $3,033,784 | | Loans Receivable >90 Days Past Due and Accruing | $0 | $7,726 | - Non-accrual loans increased significantly to $99.8 million (3.36%) of gross loans at March 31, 2025, from $44.7 million (1.48%) of gross loans at December 31, 2024[90][92][166] | Loan Modifications (Q1 2025) | Number | Total Principal (in thousands) | | :----------------------------------- | :----- | :----------------------------- | | Commercial business (Term Extension) | 3 | $1,006 | | Business express (Term Extension) | 65 | $15,563 | | Total | 68 | $16,569 | - During the preceding twelve months, five Business express loans totaling $1.2 million subsequently defaulted and were charged-off in full after modification[87] Note 8 – Stockholders' Equity This note details changes in stockholders' equity, including preferred stock issuances and redemptions - On March 15, 2025, the Company completed a private placement of 52 shares of Series K 6.0% Noncumulative Perpetual Stock, generating gross proceeds of $520,000[103] - In 2024, the Company closed multiple private placements of Series J Noncumulative Perpetual Stock, totaling $4.72 million in gross proceeds[103][104] - The Company redeemed all outstanding shares of its Series H 3.5% Noncumulative Perpetual Preferred Stock in 2023, totaling $11.22 million[106] Note 9 – Bank-Owned Life Insurance This note reports the value of the company's Bank-Owned Life Insurance (BOLI) holdings - At March 31, 2025, the Bank held $76.6 million in Bank-Owned Life Insurance (BOLI), recorded at its net realizable value[107] Note 10 – Goodwill and Other Intangible Assets This note provides information on the company's goodwill and other intangible assets, including amortization status - The Company's goodwill remained at $5.2 million at March 31, 2025, 2024, and 2023, with no impairment recognized[109][111] - Core deposit intangibles were fully amortized during the year ended December 31, 2023[109] Note 11 – Fair Values of Financial Instruments This note presents the fair values of the company's financial instruments, including securities, loans, deposits, and borrowings | Assets Measured at Fair Value (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------------- | :------------- | :---------------- | | Debt Securities Available for Sale (Level 2) | $116,496 | $101,717 | | Marketable Equities (Level 1) | $9,357 | $9,472 | | Total Securities | $125,853 | $111,189 | | Assets Measured at Fair Value on a Nonrecurring Basis (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------------------------------------------------- | :------------- | :---------------- | | Individually Evaluated Loans (Level 3) | $28,954 | $19,391 | - Losses on individually evaluated loans for Q1 2025 were $15.5 million, compared to $7.6 million for the twelve months ended December 31, 2024[117] | Carrying Values and Estimated Fair Values (in thousands) | March 31, 2025 (Carrying Value) | March 31, 2025 (Fair Value) | December 31, 2024 (Carrying Value) | December 31, 2024 (Fair Value) | | :------------------------------------------------------- | :------------------------------ | :-------------------------- | :--------------------------------- | :----------------------------- | | Cash and cash equivalents | $252,750 | $252,750 | $317,282 | $317,282 | | Loans receivable, net | $2,917,610 | $2,834,828 | $2,996,259 | $2,900,892 | | Deposits | $2,686,508 | $2,686,343 | $2,750,858 | $2,751,625 | | Borrowings | $405,499 | $407,161 | $455,361 | $456,290 | | Subordinated debentures | $43,024 | $41,262 | $42,961 | $41,594 | Note 12 – Subordinated debt This note describes the company's subordinated debt, including recent issuances and repurchases, and their capital treatment - On August 29, 2024, the Company issued $40 million of fixed-to-floating subordinated debentures with a 10-year term, bearing a fixed interest rate of 9.250% for the first five years[135] - The new debentures qualify as Tier 2 capital for the Company and Tier 1 capital for the Bank, and the proceeds were used to repurchase $33.5 million of older subordinated debt[135] - The Company also has $4.1 million in mandatory redeemable trust preferred securities, with an interest rate of 7.211% at March 31, 2025, adjusted quarterly based on three-month CME Term SOFR plus a spread adjustment[136][137] Note 13 – Lease Obligations This note provides details on the company's operating lease costs, right-of-use assets, liabilities, and maturity schedules | Lease Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost (Q1) | $940 | $885 | | Variable lease cost-operating leases (Q1) | $284 | $282 | | Operating lease right-of-use assets | $12,622 | $12,686 | | Total operating lease liabilities | $13,087 | $13,139 | | Weighted average remaining lease term | 5.21 years | 5.39 years | | Weighted average discount rate | 3.48% | 3.40% | | Maturities of Lease Liabilities (in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------------------------------- | :------------- | :---------------- | | One year or less | $2,477 | $3,189 | | Over one year through three years | $5,987 | $5,680 | | Over three years through five years | $3,533 | $3,213 | | Over five years | $2,405 | $2,406 | | Gross Operating Lease Liabilities | $14,402 | $14,488 | | Imputed Interest | $(1,315) | $(1,349) | | Total Operating Lease Liabilities | $13,087 | $13,139 | Note 14 – Subsequent Events This note reports a cash dividend declared by the Board of Directors after the reporting period - On April 22, 2025, the Board of Directors declared a cash dividend of $0.16 per share for common stockholders, payable on May 21, 2025[141] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, including an overview of its business, critical accounting estimates, analysis of financial condition changes, net interest income, and a comparison of operating results for the three months ended March 31, 2025, and 2024 Forward-Looking Statements This section highlights that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties, including the impact of higher inflation, interest rates, general economic concerns, and geopolitical risks[142][143] Overview This overview describes BCB Bancorp, Inc. as a bank holding company operating BCB Community Bank, offering diverse banking services and products | Metric | March 31, 2025 (in thousands) | | :----------------------------------- | :----------------------------- | | Consolidated Assets | $3,474,000 | | Deposits | $2,687,000 | | Consolidated Stockholders' Equity | $314,700 | - BCB Bancorp, Inc. is the holding company for BCB Community Bank, which operates 23 branches in New Jersey and New York[145][146] - The Bank offers FDIC-insured deposit products and invests funds in various loans (commercial, residential, home equity, construction, consumer, commercial business) and investment securities, along with retail and commercial banking services[148][158] Critical Accounting Estimates This section identifies the Allowance for Credit Losses as a critical accounting estimate due to its inherent judgment and sensitivity to economic forecasts - The Allowance for Credit Losses is identified as a critical accounting estimate due to the high degree of judgment, subjectivity of assumptions, and potential for changes in the forecasted economic environment[148] Financial Condition This section analyzes changes in the company's financial condition, including decreases in assets, cash, loans, deposits, and debt obligations | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total Assets | $3,474,000 | $3,599,000 | $(125,000) | (3.5%) | | Total cash and cash equivalents | $252,800 | $317,300 | $(64,500) | (20.3%) | | Loans receivable, net | $2,918,000 | $2,996,000 | $(78,000) | (2.6%) | | Total investment securities | $125,900 | $111,200 | $14,700 | 13.2% | | Deposits | $2,687,000 | $2,751,000 | $(64,000) | (2.3%) | | Debt obligations | $448,500 | $498,300 | $(49,800) | (10.0%) | | Stockholders' equity | $314,700 | $323,900 | $(9,200) | (2.8%) | - The decrease in cash and cash equivalents was primarily due to the reduction of wholesale funding by paying down high-cost brokered deposits[151] - Brokered deposits decreased by $112.5 million, partially offset by increases in other deposit categories[154] Net Interest Income Analysis This section analyzes the company's net interest income, net interest rate spread, and net interest margin, highlighting changes in asset yields and liability costs | Metric | Q1 2025 | Q1 2024 | | :----------------------------------- | :------ | :------ | | Net interest income (in thousands) | $22,005 | $23,143 | | Net interest rate spread | 1.87% | 1.79% | | Net interest margin | 2.59% | 2.50% | | Average yield on interest-earning assets | 5.20% | 5.33% | | Average cost of interest-bearing liabilities | 3.33% | 3.54% | - Net interest margin increased to 2.59% in Q1 2025 from 2.50% in Q1 2024, driven by a decrease in the cost of interest-bearing liabilities, partially offset by a decrease in the yield on interest-earning assets[165] Results of Operations Comparison for the Three Months Ended March 31, 2025 and 2024 This section compares the company's operating results for Q1 2025 and Q1 2024, focusing on net loss, interest income/expense, and non-interest items - Net loss of $8.3 million in Q1 2025 compared to net income of $5.9 million in Q1 2024, primarily due to an $18.8 million increase in provision for credit losses[162] - Interest income decreased by $5.1 million (10.3%) to $44.2 million in Q1 2025, while interest expense decreased by $4.0 million (15.1%) to $22.2 million[163][164] - Net charge-offs were $4.2 million in Q1 2025, up from $1.1 million in Q1 2024[166] | Classified Loans > $5M (March 31, 2025) | Balance (in thousands) | Loan to Value | | :-------------------------------------- | :--------------------- | :------------ | | Flex/Industrial (Cannabis) | $24,475 | 80% | | Industrial loft and Industrial Warehouse (CRE) | $16,311 | 64% | | Vacant Land (CRE) | $15,523 | 64% | | Multi-family (Construction) | $14,996 | 25% | | Mixed Use -retail/office (CRE) | $15,071 | 94% | - Non-interest income decreased by $318 thousand to $1.8 million, mainly due to decreases in gains on equity securities and BOLI income[168] - Non-interest expense decreased by $178 thousand (1.2%) to $14.7 million, driven by lower regulatory assessment charges offset by higher salaries and employee benefits[169] - The income tax provision shifted to a benefit of $3.4 million in Q1 2025 from a $2.5 million provision in Q1 2024[170] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section discusses the Company's management of market risk, primarily interest rate risk, through its Asset/Liability Management Committee and provides a quantitative analysis of Net Portfolio Value (NPV) sensitivity to interest rate changes Management of Market Risk This section outlines the company's approach to managing market risk, particularly interest rate risk, through its Asset/Liability Committee - Interest rate risk is a significant market risk due to the longer maturities of assets (mortgage loans) compared to liabilities (deposits)[186] - The Asset/Liability Committee is responsible for evaluating and managing interest rate risk, with senior management monitoring risk levels regularly[186] Quantitative Analysis This section provides a quantitative analysis of the company's Net Portfolio Value (NPV) sensitivity to changes in interest rates | Change in Interest Rates | Net Portfolio Value (in thousands) | % Change from PAR | NPV Ratio | | :----------------------- | :--------------------------------- | :---------------- | :-------- | | +100bp | $358,537 | (4.85)% | 10.77% | | PAR | $376,808 | 0.00% | 11.13% | | -100bp | $390,727 | 3.69% | 11.35% | | -200bp | $397,794 | 5.57% | 11.37% | | -300bp | $408,422 | 8.39% | 11.44% | - At March 31, 2025, a 100-basis point decrease in interest rates would result in a 0.22% increase in Net Portfolio Value (NPV), indicating a positive sensitivity to falling rates[188][189] - The NPV calculations rely on assumptions about interest rates, loan prepayment rates, and core deposit duration, and may not precisely forecast the effect of interest rate changes[187][190] Item 4. Controls and Procedures This section confirms the effectiveness of the Company's disclosure controls and procedures and states that there have been no material changes to internal controls over financial reporting during the quarter - The Company's disclosure controls and procedures were evaluated as effective as of March 31, 2025[191] - There were no material changes to internal controls over financial reporting during the most recent fiscal quarter[192] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section states that the Company is not involved in any material legal proceedings that would have a material adverse effect on its financial condition or results of operations - As of March 31, 2025, the Company was not involved in any material legal proceedings[194] Item 1A. Risk Factors This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes to the risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2024[195] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities and use of proceeds occurred[196] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities - Not applicable; no defaults upon senior securities[196] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the Company - Not applicable; no mine safety disclosures[196] Item 5. Other Information This section states that there is no other information to report - Not applicable; no other information to report[197] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including certifications and XBRL documents - Exhibits include CEO and Principal Accounting Officer certifications (31.1, 31.2, 32) and various XBRL taxonomy extension documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[198] Signatures This section contains the signatures of the Company's President and Chief Executive Officer and Chief Financial Officer, certifying the filing of the report - The report is signed by Michael A. Shriner, President and Chief Executive Officer, and Jawad Chaudhry, Chief Financial Officer, on May 7, 2025[202]