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Equibles

10-Q

ECB Bancorp, Inc. /MD/ (ECBK)

10-Q 2025-05-09 For: 2025-03-31
View Original
Added on April 08, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________________ to ______________________

Commission File Number: 001-41456

ECB Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland 88-1502079
( State or other jurisdiction of<br><br>incorporation or organization) (I.R.S. Employer<br>Identification No.)
419 Broadway<br><br>Everett, Massachusetts 02149
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (617) 387-1110

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Ticker Symbol Name of each exchange on which registered
Common Stock, $0.01 par value ECBK 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 [ X ] 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 [X] 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  [X] Smaller reporting company [X]
Emerging growth company [X]

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 Act). Yes [ ] No [X]

As of May 8, 2025, 9,027,681 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding.

ECB Bancorp, Inc.

Form 10-Q

Index

Page
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 1
Consolidated Statements of Income for the Three Months Ended March 31, 2025 and 2024 2
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 2024 3
Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2025 and 2024 4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 5
Notes to Consolidated Financial Statements 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29
Item 3. Quantitative and Qualitative Disclosures about Market Risk 37
Item 4. Controls and Procedures 37
Part II. Other Information
Item 1. Legal Proceedings 38
Item 1A. Risk Factors 38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38
Item 3. Defaults upon Senior Securities 38
Item 4. Mine Safety Disclosures 38
Item 5. Other Information 38
Item 6. Exhibits 39
Signature Page 40

ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Income

(unaudited)

(Dollars in thousands, except share data)

Three months ended
March 31,
2025 2024
Interest and dividend income:
Interest and fees on loans $ 15,142 $ 13,446
Interest and dividends on securities 853 764
Interest on short term investments 1,625 1,484
Interest on interest-bearing deposits 1 —
Total interest and dividend income 17,621 15,694
Interest expense:
Interest on deposits 8,859 7,524
Interest on Federal Home Loan Bank advances 2,114 2,267
Total interest expense 10,973 9,791
Net interest and dividend income 6,648 5,903
(Benefit) provision for credit losses (10 ) 147
Net interest and dividend income after (benefit) provision for credit losses 6,658 5,756
Noninterest income:
Customer service fees 140 142
Income from bank-owned life insurance 116 117
Net gain on sales of loans — 35
Other income 15 13
Total noninterest income 271 307
Noninterest expense:
Salaries and employee benefits 3,260 3,311
Director compensation 216 209
Occupancy and equipment 281 274
Data processing 311 311
Computer software and licensing 109 109
Advertising and promotions 132 131
Professional fees 310 360
Federal Deposit Insurance Corporation deposit insurance 185 179
Other expense 404 347
Total noninterest expense 5,208 5,231
Income before income tax expense 1,721 832
Income tax expense 424 211
Net income $ 1,297 $ 621
Share data:
Weighted average shares outstanding, basic 8,210,782 8,299,775
Weighted average shares outstanding, diluted 8,343,771 8,375,335
Basic earnings per share $ 0.16 $ 0.07
Diluted earnings per share $ 0.16 $ 0.07

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

ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income

(unaudited)

(Dollars in thousands)

Three months ended
March 31,
2025 2024
Net income $ 1,297 $ 621
Other comprehensive (loss) income, net of tax:
Net change in fair value of securities available-for-sale 53 (3 )
Net change in fair value of cash flow hedges (820 ) 456
Other comprehensive (loss) income, net of tax (767 ) 453
Comprehensive income $ 530 $ 1,074

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

ECB Bancorp, Inc. and Subsidiary

Statements of Changes in Shareholders' Equity

(unaudited)

(in thousands except share data)

Three months ended
Shares of Common Stock Outstanding Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Unallocated Common Stock Held by ESOP Total
Balance at December 31, 2023 9,291,810 $ 93 $ 87,431 $ 83,854 $ 129 $ (6,606 ) $ 164,901
Net income - - - 621 - - 621
Other comprehensive income, net of tax - - - - 453 - 453
ESOP shares committed to be released (9,125 shares) - - 28 - - 91 119
Shares repurchased under share repurchase plan (48,232 ) (1 ) (628 ) - - - (629 )
Stock-based compensation - - 324 - - - 324
Balance at March 31, 2024 9,243,578 $ 92 $ 87,155 $ 84,475 $ 582 $ (6,515 ) $ 165,789
Balance at December 31, 2024 9,095,833 $ 91 $ 86,189 $ 87,845 $ 382 $ (6,239 ) $ 168,268
Net income - - - 1,297 - - 1,297
Other comprehensive loss, net of tax - - - - (767 ) - (767 )
ESOP shares committed to be released (9,049 shares) - - 40 - - 91 131
Shares repurchased under share repurchase plan (46,043 ) (1 ) (672 ) - - - (673 )
Stock-based compensation - - 322 - - - 322
Balance at March 31, 2025 9,049,790 $ 90 $ 85,879 $ 89,142 $ (385 ) $ (6,148 ) $ 168,578

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

ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

Three Months Ended
March 31,
2025 2024
Cash flows from operating activities:
Net income $ 1,297 $ 621
Adjustments to reconcile net income to net cash provided by operating activities:
(Accretion) amortization of securities, net (73 ) 10
(Benefit) provision for credit losses (10 ) 147
Change in deferred loan costs/fees 76 51
Gain on sales of loans, net — (35 )
Proceeds from sales of loans — 2,309
Loans originated for sale, net (83 ) (2,274 )
Depreciation and amortization expense 75 75
Increase in accrued interest receivable (328 ) (285 )
Increase in accrued interest payable 670 381
Increase in bank-owned life insurance (116 ) (118 )
Deferred income tax expense 294 174
ESOP expense 131 119
Stock-based compensation expense 322 324
Increase in other assets (243 ) (237 )
Decrease in other liabilities (2,643 ) (1,691 )
Net cash used in operating activities (631 ) (429 )
Cash flows from investing activities:
Purchases of held-to-maturity securities — (1,500 )
Proceeds from paydowns and maturities of held-to-maturity securities 5,160 1,154
Purchases of available-for-sale securities (8,088 ) —
Proceed from payments and maturities of available-for-sale securities 822 2,500
Investment in low-income housing tax credit fund (2,992 ) —
Purchase of Federal Home Loan Bank Stock (730 ) —
Redemption of Federal Home Loan Bank Stock 730 115
Loan originations and principal collections, net (41,176 ) (27,346 )
Purchase of loans — (3,945 )
Capital expenditures (18 ) (20 )
Net cash used in investing activities (46,292 ) (29,042 )
Cash flows from financing activities:
Net change in demand deposits, interest-bearing checking, savings and money market accounts 6,679 (3,660 )
Net increase in time deposits 31,408 37,092
Proceeds from long-term Federal Home Loan Bank advances 25,000 —
Repayments of long-term Federal Home Loan Bank advances (25,000 ) (25,000 )
Net change in short-term Federal Home Loan Bank advances — 15,000
Payments for shares repurchased under share repurchase plan (673 ) (629 )
Net cash provided by financing activities 37,414 22,803
Net increase in cash and cash equivalents (9,509 ) (6,668 )
Cash and cash equivalents at beginning of year 157,617 119,036
Cash and cash equivalents at end of period $ 148,108 $ 112,368
Supplemental disclosures:
Interest paid $ 11,643 $ 10,172
Income taxes paid 225 210

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

ECB Bancorp, Inc. and Subsidiary

Form 10-Q

Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 1 - CONVERSION

Effective July 27, 2022, Everett Co-operative Bank (the "Bank") completed its conversion to a Massachusetts stock co-operative bank and became the wholly owned subsidiary of ECB Bancorp, Inc. (the “Company”). In the offering, the Company sold 8,915,247 shares of common stock at a per share price of $10.00 for gross offering proceeds of $89.2 million. Additionally, the Company contributed 260,000 shares and $600,000 in cash to the Everett Co-operative Bank Charitable Foundation (the “Foundation”).

The Bank has established a Liquidation Account in an amount equal to the net worth of the Bank as of the date of the latest consolidated balance sheet contained in the final prospectus distributed in connection with the Company’s stock conversion and stock offering. The function of the Liquidation Account is to establish a priority on liquidation of the Bank. The Liquidation Account will be maintained by the Bank for the benefit of the eligible account holders who continue to maintain deposit accounts with the Bank, following the conversion. Each eligible account holder, with respect to each deposit account, holds a related inchoate interest in a portion of the Liquidation Account balance, in relation to each deposit account balance at the eligibility record date, or to such balance as it may be subsequently reduced, as hereinafter provided. The initial Liquidation Account balance will not be increased, and is subject to downward adjustment to the extent of any downward adjustment of any subaccount balance of any eligible account holder in accordance with the regulations of the Division of Banks of the Commonwealth of Massachusetts.

In the unlikely event of a complete liquidation of the Bank (and only in such event), following all liquidation payments to creditors (including those to depositors to the extent of their deposit accounts) each eligible account holder shall be entitled to receive a liquidating distribution from the Liquidation Account, in the amount of the then-adjusted subaccount balances for his or her deposit accounts then held, before any liquidating distribution may be made to any holder of the Bank’s capital stock.

The Bank may not declare or pay a cash dividend on its outstanding capital stock if the effect thereof would cause its regulatory capital to be reduced below the amount required to maintain the Liquidation Account and under FDIC rules and regulations.

NOTE 2 – BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of ECB Bancorp, Inc. have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The consolidated financial statements of ECB Bancorp, Inc. (referred to herein as "the Company," “we,” “us,” or “our”) include the balances and results of operations of the Company and the Bank, its wholly-owned subsidiary, as well as First Everett Securities Corporation, a wholly-owned subsidiary of the Bank. Intercompany transactions and balances are eliminated in consolidation.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the Company's financial position as of March 31, 2025 and the results of operations and cash flows for the interim periods ended March 31, 2025 and 2024. Such adjustments were of a normal recurring nature. Interim amounts have not been audited, and the results of operations for the interim periods herein are not necessarily indicative of the results of operations to be expected for the fiscal year. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024 and accompanying notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The Company qualifies as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012 and has elected to defer the adoption of new or revised accounting standards until the nonpublic company effective dates. As such, the Company will adopt standards on the nonpublic company effective dates until such time that we no longer qualify as an EGC.

Certain previously reported amounts have been reclassified to conform to the current period’s presentation.

RECENT ACCOUNTING STANDARDS

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. These amendments require that public business entities on an annual basis disclose specific categories in the rate reconciliation. ASU 2023-09 also requires entities to provide additional information for reconciling items that meet a quantitative threshold. As an emerging growth company, the amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2025 with early adoption permitted. ASU 2023-09 is not expected to have a significant impact on the company's consolidated financial statements.

In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures, but expects additional disclosures upon adoption.

NOTE 3 – INVESTMENTS IN SECURITIES

Held to Maturity Securities

Investments in securities have been classified in the consolidated balance sheets according to management’s intent. The following tables summarize the amortized cost, allowance for credit losses, and fair value of securities and their corresponding amounts of unrealized gains and losses of held to maturity securities at the dates indicated:

Gross Gross Allowance
Amortized Unrealized Unrealized for Credit Fair
Held-to-maturity: Cost Gains Losses Losses Value
(in thousands)
March 31, 2025
Debt securities issued by U.S. government-sponsored enterprises $ 5,588 $ — $ (85 ) $ — $ 5,503
Mortgage-backed securities 43,099 42 (4,515 ) — 38,626
Corporate bonds 16,399 216 (396 ) — 16,219
U.S. Treasury securities 2,995 12 — — 3,007
Total held-to-maturity securities $ 68,081 $ 270 $ (4,996 ) $ — $ 63,355
December 31, 2024
Debt securities issued by U.S. government-sponsored enterprises $ 5,588 $ — $ (138 ) $ — $ 5,450
Mortgage-backed securities 44,261 20 (5,334 ) — 38,947
Corporate bonds 17,899 192 (471 ) — 17,620
U.S. Treasury securities 5,467 21 — — 5,488
Total held-to-maturity securities $ 73,215 $ 233 $ (5,943 ) $ — $ 67,505

The Company measures expected credit losses on held to maturity securities on a collective basis by major security type. Management classifies the held-to maturity portfolio into the following major security types: U.S. Government Sponsored Enterprises, U.S. Treasury, Agency Mortgage-Backed Securities, and Corporate Bonds.

Held to maturity securities are guaranteed by the U.S. federal government or other government sponsored agencies and have a long history of no credit losses. As a result, management has determined these securities to have a zero loss expectation and therefore the Company did not record a provision for estimated credit losses on any held to maturity securities during the three months ended March 31, 2025 and 2024. The Company's investments in corporate bonds are deemed “investment grade” and (a) the Company does not intend to sell these securities before recovery and (b) it is more likely than not that the Company will not be required to sell these securities before recovery. Excluded from the table above is accrued interest on held to maturity securities of $296,000 and $378,000 at March 31, 2025 and December 31, 2024, respectively, which is included within accrued interest receivable in the Consolidated Balance Sheets. Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities for the three months ended March 31, 2025 and 2024. No securities held by the Company were delinquent on contractual payments at March 31, 2025 and December 31, 2024, nor were any securities placed on non-accrual status for the three months ended March 31, 2025 and 2024.

Available for Sale Securities

The following tables summarize the amortized cost, allowance for credit losses, and fair value of securities and their corresponding amounts of unrealized gains and losses of available for sale securities at the dates indicated:

Gross Gross Allowance
Amortized Unrealized Unrealized for Credit Fair
Available-for-sale Cost Gains Losses Losses Value
(in thousands)
March 31, 2025
Mortgage-backed securities $ 7,483 $ 21 $ (19 ) $ — $ 7,485
Collateralized mortgage obligation 1,446 — (18 ) — 1,428
Corporate bonds 5,000 50 (13 ) — 5,037
Total available-for-sale securities $ 13,929 $ 71 $ (50 ) $ — $ 13,950
December 31, 2024
Mortgage-backed securities $ 4,164 $ — $ (38 ) $ — $ 4,126
Collateralized mortgage obligation 1,452 — (14 ) — 1,438
Corporate bonds 1,000 — — — 1,000
Total available-for-sale securities $ 6,616 $ — $ (52 ) $ — $ 6,564

The Company's available for sale securities are carried at fair value. For available for sale securities in an unrealized loss position, management will first evaluate whether there is intent to sell a security, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis. If either of these criteria are met, the Company will record a write-down of the security's amortized cost basis to fair value through income. For those available for sale securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors. In performing this assessment, Management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S. federal government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors. If this assessment indicates the existence of credit losses, an allowance for credit losses will be established, as determined by a discounted cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when a security is determined to be uncollectible, or when either of the afore-mentioned criteria surrounding intent or requirement to sell have been met. No allowance for credit losses was recorded for AFS securities as of March 31, 2025 and December 31, 2024.

The Company did not record a provision for estimated credit losses on any available for sale securities for the three months ended March 31, 2025 and 2024. Excluded from the table above is accrued interest on available for sale securities of $49,000 and $16,000 at March 31, 2025 and December 31, 2024, respectively, which is included within accrued interest receivable in the Consolidated Balance Sheets. Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities for the three months ended March 31, 2025 and 2023. No securities held by the Company were delinquent on contractual payments at March 31, 2025 and December 31, 2024, nor were any securities placed on non-accrual status for the three months ended March 31, 2025 and 2024.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. There were no sales of securities during the three months ended March 31, 2025 and 2024.

The aggregate fair value and unrealized losses of available-for-sale securities that have been in a continuous unrealized loss position for less than twelve months and for twelve months or more, and have no allowance for credit losses, are as follows as of March 31, 2025 and December 31, 2024:

Less than 12 Months 12 Months or Longer Total
# of Fair Unrealized Fair Unrealized Fair Unrealized
Holdings Value Losses Value Losses Value Losses
(Dollars in thousands)
March 31, 2025
Available for Sale:
Mortgage-backed securities 2 $ 3,364 $ (19 ) $ — $ — $ 3,364 $ (19 )
Collateralized mortgage obligation 1 1,428 (18 ) — — 1,428 (18 )
Corporate bonds 1 987 (13 ) — — 987 (13 )
Total 4 $ 5,779 $ (50 ) $ — $ — $ 5,779 $ (50 )
December 31, 2024
Available for Sale:
Mortgage-backed securities 2 $ 4,126 $ (38 ) $ — $ — $ 4,126 $ (38 )
Collateralized mortgage obligation 1 1,438 (14 ) — — 1,438 (14 )
Total 3 $ 5,564 $ (52 ) $ — $ — $ 5,564 $ (52 )

Management evaluates securities for expected credit losses at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.

Held to Maturity and Available for Sale Securities

The actual maturities of certain available-for-sale or held-to-maturity securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of available-for-sale and held-to-maturity securities as of March 31, 2025 is presented below:

Available-for-sale Held-to-maturity
Fair Amortized Fair
Value Cost Value
(in thousands)
Within 1 year $ 1,999 $ 14,308 $ 14,180
After 1 year through 5 years 5,485 14,434 14,402
After 5 years through 10 years 988 4,918 4,714
After 10 years 5,478 34,421 30,059
Total $ 13,950 $ 68,081 $ 63,355

The carrying value of securities pledged to secure advances from the Federal Home Loan Bank of Boston (“FHLBB”) was $55.5 million as of March 31, 2025 and December 31, 2024.

The carrying value of securities pledged to secure advances from the Federal Reserve Bank (“FRB”) was $18.2 million and $16.0 million as of March 31, 2025 and December 31, 2024, respectively.

NOTE 4 – LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Loans

Loans that the Company has the intent and ability to hold until maturity or payoff are carried at amortized cost (net of the allowance for credit losses). Amortized cost is the principal amount outstanding, adjusted by partial charge-offs and net of deferred loan origination costs and fees. For originated loans, loan fees and certain direct origination costs are deferred and amortized into interest income over the contractual life of the loan using the level-yield method. When a loan is paid off, the unamortized portion is recognized in interest income. Interest income on loans is accrued based upon the daily principal amount outstanding except for loans on nonaccrual status. As a general rule, loans more than 90 days past due with respect to principal or interest, or sooner if management considers such action to be prudent, are classified as nonaccrual loans. However, loans that are more than 90 days past due may be kept on an accruing status if the loan is well secured and in the process of collection. Income accruals are suspended on all nonaccrual loans in a timely manner and all previously accrued and uncollected interest is reversed against current income. A loan can be returned to accrual status when collectibility of principal and interest is reasonably assured and the loan has performed for a period of time, generally six months. When doubt exists as to the collectability of a loan, any payments received are applied to reduce the amortized cost of the loan to the extent necessary to eliminate such doubt. For all loan portfolios, a charge-off occurs when the Company determines that a specific loan, or portion thereof, is uncollectible. This determination is made based on management's review of specific facts and circumstances of the individual loan, including the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform.

Allowance for Credit Losses - Loans Held for Investment

The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses on loans measured at amortized cost. Credit losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan. Subsequent recoveries, if any, are credited to the allowance. Under the current expected credit loss (CECL) methodology, the Company estimates credit losses for financial assets on a collective basis for loans sharing similar risk characteristics. The Company segments financial assets with similar risk characteristics and has elected to segment its loans based on Federal Call codes used for reporting loans to the Federal Deposit Insurance Corporation as part of the Call Report process. These segments are collectively evaluated for expected credit losses using a quantitative Discounted Cash Flow ("DCF") model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The Company has elected to use this approach because DCF models allow for effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner and peer data is available for certain inputs such as the probability of default and the loss given default. The quantitative model utilizes a loss factor based approach to estimate expected credit losses, which are derived from internal historical and industry peer loss experience. The model estimates expected credit losses using loan level data over the estimated life of the exposure, considering the effect of prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the historical long-run average using the straight-line reversion method. Management periodically evaluates a reasonable and supportable forecast period and a reversion period to be appropriate for purposes of estimating expected credit losses. The qualitative risk factors impacting the expected risk of loss within the portfolio include the following:

  • Lending policies and procedures
  • Economic and business conditions
  • Nature and volume of loans
  • Changes in management
  • Changes in credit quality
  • Changes in loan review system
  • Changes to underlying collateral values
  • Concentrations of credit risk
  • Other external factors

Loans that do not share similar risk characteristics with any pools of assets are subject to individual evaluation and are removed from the collectively assessed pools to avoid double counting. This includes loans on non-accrual and loans that are 90 days or greater past due. For the loans that will be individually evaluated, the Company will use either a discounted cash flow ("DCF") approach or a fair value of collateral approach. The latter approach will be used for loans deemed to be collateral dependent or when foreclosure is probable. Accrued interest receivable amounts are excluded from balances of loans held at amortized cost and are included within accrued interest receivable in the consolidated balance sheets. Management has elected not to measure an allowance for credit losses on these amounts as the Company employs a timely write-off policy. Consistent with the Company's policy for nonaccrual loans, accrued interest receivable is typically written off when loans reach 90 days past due and are placed on nonaccrual status.

In the ordinary course of business, the Company enters into commitments to extend credit. Such financial instruments are recorded in the financial statements when they are funded. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for credit losses on loans with an additional assumption of probability of funding. The reserve for unfunded lending commitments is included in other liabilities in the consolidated balance sheets.

Loans consisted of the following as of the dates indicated:

At March 31, At December 31,
2025 2024
Amount Percent Amount Percent
(Dollars in thousands)
Real estate loans:
One-to-four family residential $ 434,371 36.6 % $ 422,841 36.9 %
Multi-family 371,014 31.3 % 343,970 30.0 %
Commercial 255,066 21.5 % 228,991 20.0 %
Home equity lines of credit and loans 44,032 3.7 % 45,154 4.0 %
Construction 69,684 5.9 % 90,894 7.9 %
Other loans:
Commercial 12,553 1.0 % 13,844 1.2 %
Consumer 209 0.0 % 141 0.0 %
Total loans, gross 1,186,929 100.0 % 1,145,835 100.0 %
Less:
Net deferred loan fees (578 ) (502 )
Allowance for credit losses (8,808 ) (8,884 )
Total loans, net $ 1,177,543 $ 1,136,449

The carrying value of loans pledged to secure advances from the FHLBB were $731.2 million and $744.6 million as of March 31, 2025 and December 31, 2024, respectively.

The following tables set forth information regarding the allowance for credit losses on loans as of and for the three months ended March 31, 2025 and 2024:

For the three months ended March 31, 2025
(in thousands)
Beginning <br>Balance Charge-offs Recoveries (Benefit) provision Ending <br>Balance(1)
Real estate loans:
One-to-four family residential $ 2,928 $ - $ - $ (230 ) $ 2,698
Multi-family 2,422 - - 210 2,632
Commercial 2,260 - - 272 2,532
Home equity lines of credit and loans 118 - - 1 119
Construction 1,036 - - (328 ) 708
Other loans:
Commercial 119 (81 ) - 80 118
Consumer 1 (1 ) - 1 1
Total $ 8,884 $ (82 ) $ - $ 6 $ 8,808
For the three months ended March 31, 2024
--- --- --- --- --- --- --- --- --- --- --- ---
(in thousands)
Beginning <br>Balance Charge-offs Recoveries (Benefit) provision Ending <br>Balance(1)
Real estate loans:
One-to-four family residential $ 3,555 $ - $ - $ (44 ) $ 3,511
Multi-family 1,190 - - 93 1,283
Commercial 1,636 - - 36 1,672
Home equity lines of credit and loans 321 - - (2 ) 319
Construction 1,757 - - (76 ) 1,681
Other loans:
Commercial 131 - - 72 203
Consumer 1 - - - 1
Total $ 8,591 $ - $ - 79 $ 8,670

(1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $3.8 million and $3.5 million as of March 31, 2025 and December 31, 2024.

The following tables show the age analysis of past due loans as of the dates indicated:

30–59 Days 60–89 Days 90 Days<br>or More Total<br>Past Due Total<br>Current Total<br>Loans 90 days <br>or more past due and accruing Loans on Non-accrual
(in thousands)
As of March 31, 2025
Real estate loans:
One-to-four family residential $ 623 $ — $ 106 $ 729 $ 433,642 $ 434,371 $ — $ 959
Multi-family — — — — 371,014 371,014 — —
Commercial — — — — 255,066 255,066 — —
Home equity lines of credit and loans 193 — 12 205 43,827 44,032 — 305
Construction — — — — 69,684 69,684 — —
Other loans:
Commercial — — — — 12,553 12,553 — —
Consumer — — — — 209 209 — —
$ 816 $ — $ 118 $ 934 $ 1,185,995 $ 1,186,929 $ — $ 1,264
30–59 Days 60–89 Days 90 Days<br>or More Total<br>Past Due Total<br>Current Total<br>Loans 90 days <br>or more past due and accruing Loans on Non-accrual
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(in thousands)
As of December 31, 2024
Real estate loans:
One-to-four family residential $ 1,260 $ — $ 1,077 $ 2,337 $ 420,504 $ 422,841 $ — $ 1,872
Multi-family — — — — 343,970 343,970 — —
Commercial — — — — 228,991 228,991 — —
Home equity lines of credit and loans 405 — 85 490 44,664 45,154 — 85
Construction — — — — 90,894 90,894 — —
Other loans:
Commercial — — — — 13,844 13,844 — —
Consumer — — — — 141 141 — —
$ 1,665 $ — $ 1,162 $ 2,827 $ 1,143,008 $ 1,145,835 $ — $ 1,957

During the three months ended March 31, 2025 and 2024, interest income recognized on nonaccrual loans amounted to $39,000 and $15,000, respectively. The following tables show information regarding nonaccrual loans as of the dates indicated:

As of March 31, 2025 Three Months Ended March 31, 2025
With an Allowance for Credit Losses Without an Allowance for Credit Losses Total Interest Income Recognized
(in thousands)
Real estate loans:
One-to-four family residential $ — $ 959 $ 959 $ 28
Home equity lines of credit and loans — 305 305 11
Total nonaccrual loans $ — $ 1,264 $ 1,264 $ 39
As of December 31, 2024 Year Ended December 31, 2024
--- --- --- --- --- --- --- --- ---
With an Allowance for Credit Losses Without an Allowance for Credit Losses Total Interest Income Recognized
(in thousands)
Real estate loans:
One-to-four family residential $ — $ 1,872 $ 1,872 $ 53
Home equity lines of credit and loans — 85 85 1
Total nonaccrual loans $ — $ 1,957 $ 1,957 $ 54

Credit Quality Information

The Company's loan rating system for multi-family and commercial real estate, construction, commercial loans and certain residential and home equity lines of credit is as follows:

Loans rated 1 – 6: Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 7: 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 8: 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 Bank will sustain some loss if the weakness is not corrected.

Loans rated 9: 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 10: 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 loans with aggregate potential outstanding balances of $500,000 or more, and all commercial real estate loans (including multi-family and construction loans as well as residential and home equity line of credit loans to commercial borrowers) with aggregate potential outstanding balances of $2.0 million or more. For loans that are not formally rated, the Company initially assesses credit quality based upon the borrower’s ability to pay and subsequently monitors these loans based on the borrower’s payment activity.

The following tables detail the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of March 31, 2025 and December 31, 2024:

Term Loans Amortized Cost Basis by Origination Year Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
2025 2024 2023 2022 2021 Prior
As of March 31, 2025 (in thousands)
One-to-four family residential
Pass $ 5,059 $ 8,874 $ 14,022 $ 34,310 $ 15,014 $ 15,380 $ — $ — $ 92,659
Special Mention — — 523 — 371 495 — — 1,389
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) 10,101 29,826 47,074 82,289 67,885 103,148 — — 340,323
Total $ 15,160 $ 38,700 $ 61,619 $ 116,599 $ 83,270 $ 119,023 $ — $ — $ 434,371
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Multi-family
Pass $ 21,403 $ 24,918 $ 57,090 $ 205,573 $ 35,081 $ 17,246 $ 9,703 $ — $ 371,014
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) — — — — — — — — —
Total $ 21,403 $ 24,918 $ 57,090 $ 205,573 $ 35,081 $ 17,246 $ 9,703 $ — $ 371,014
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Commercial real estate
Pass $ 12,918 $ 28,514 $ 38,761 $ 98,669 $ 25,030 $ 46,010 $ 5,164 $ — 255,066
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) — — — — — — — — —
Total $ 12,918 $ 28,514 $ 38,761 $ 98,669 $ 25,030 $ 46,010 $ 5,164 $ — $ 255,066
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Home equity lines of credit and loans
Pass $ — $ 198 $ 321 $ — $ — $ — $ 6,370 $ — $ 6,889
Special Mention — — — — — 6 297 — 303
Substandard — — — — — — 99 — 99
Doubtful — — — — — — — — —
Loans not formally rated (1) 90 175 375 26 6 67 35,161 841 36,741
Total $ 90 $ 373 $ 696 $ 26 $ 6 $ 73 $ 41,927 $ 841 $ 44,032
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Construction
Pass $ 3,644 $ 34,215 $ 13,419 $ 11,623 $ 1,355 $ 2,988 $ — $ — $ 67,244
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) 701 1,291 448 — — — — — 2,440
Total $ 4,345 $ 35,506 $ 13,867 $ 11,623 $ 1,355 $ 2,988 $ — $ — $ 69,684
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Commercial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Pass $ — $ 4,501 $ 4,401 $ 2,453 $ 301 $ 172 $ 725 $ — $ 12,553
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) — — — — — — — — —
Total $ - $ 4,501 $ 4,401 $ 2,453 $ 301 $ 172 $ 725 $ — $ 12,553
Current-period gross charge-offs $ — $ — $ — $ — $ — $ 16 $ 65 $ — $ 81
Consumer
Pass $ — $ — $ — $ — $ — $ — $ — $ — $ —
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) 78 7 14 27 37 5 41 — 209
Total $ 78 $ 7 $ 14 $ 27 $ 37 $ 5 $ 41 $ — $ 209
Current-period gross charge-offs $ 1 $ — $ — $ — $ — $ — $ — $ — $ 1
Term Loans Amortized Cost Basis by Origination Year Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
2024 2023 2022 2021 2020 Prior
As of December 31, 2024 (in thousands)
One-to-four family residential
Pass $ 8,351 $ 12,065 $ 34,466 $ 15,123 $ 3,979 $ 11,766 $ — $ — $ 85,750
Special Mention — — — — 636 771 — — 1,407
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) 30,905 46,491 84,245 68,818 48,728 56,497 — — 335,684
Total $ 39,256 $ 58,556 $ 118,711 $ 83,941 $ 53,343 $ 69,034 $ — $ — $ 422,841
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Multi-family
Pass $ 24,006 $ 55,612 $ 201,562 $ 35,315 $ 8,611 $ 8,792 $ 10,072 $ — $ 343,970
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) — — — — — — — — —
Total $ 24,006 $ 55,612 $ 201,562 $ 35,315 $ 8,611 $ 8,792 $ 10,072 $ — $ 343,970
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Commercial real estate
Pass $ 28,614 $ 40,935 $ 82,054 $ 25,215 $ 15,447 $ 32,071 $ 4,655 $ — $ 228,991
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) — — — — — — — — —
Total $ 28,614 $ 40,935 $ 82,054 $ 25,215 $ 15,447 $ 32,071 $ 4,655 $ — $ 228,991
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Home equity lines of credit and loans
Pass $ 199 $ 323 $ — $ — $ — $ — $ 8,083 $ — $ 8,605
Special Mention — — — — — 10 322 — 332
Substandard — — — — — — 99 — 99
Doubtful — — — — — — — — —
Loans not formally rated (1) 176 382 27 7 — 71 34,618 837 36,118
Total $ 375 $ 705 $ 27 $ 7 $ — $ 81 $ 43,122 $ 837 $ 45,154
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Construction
Pass $ 30,986 $ 19,398 $ 32,483 $ 2,493 $ — $ 2,988 $ — $ — $ 88,348
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) 1,116 1,430 — — — — — — 2,546
Total $ 32,102 $ 20,828 $ 32,483 $ 2,493 $ — $ 2,988 $ — $ — $ 90,894
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Commercial
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Pass $ 4,501 $ 4,410 $ 2,597 $ 340 $ — $ 195 $ 1,801 $ — $ 13,844
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) — — — — — — — — —
Total $ 4,501 $ 4,410 $ 2,597 $ 340 $ — $ 195 $ 1,801 $ — $ 13,844
Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Consumer
Pass $ — $ — $ — $ — $ — $ — $ — $ — $ —
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Loans not formally rated (1) 7 16 29 39 — 6 44 — 141
Total $ 7 $ 16 $ 29 $ 39 $ — $ 6 $ 44 $ — $ 141
Current-period gross charge-offs $ 4 $ — $ — $ — $ — $ — $ — $ — $ 4

(1) Non-accrual loans that were not formally rated amounted to $51,000 and $526,000 as of March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025, the Company had one consumer mortgage loan secured by residential real estate property in the process of foreclosure for $107,000. At December 31, 2024, the Company had one consumer mortgage loan secured by residential real estate property in the process of foreclosure for $335,000.

For the three months ended March 31, 2025 and 2024, the Company did not provide loan restructurings involving borrowers that are experiencing financial difficulty.

NOTE 5 - STOCK-BASED COMPENSATION

On September 7, 2023, the Company adopted the ECB Bancorp, Inc. 2023 Equity Incentive Plan ("2023 Equity Plan”). The 2023 Equity Plan authorizes 1,248,133 shares of common stock for equity based compensation awards including restricted stock awards, restricted stock units, stock options, and incentive stock options.

The following table summarizes the Company's stock option activities for the periods indicated:

Three months ended March 31, 2025
Outstanding and exercisable Non-vested
Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price
Balance at beginning of period 146,962 $ 10.45 611,175 $ 10.50
Granted - - - -
Vested - - - -
Exercised - - - -
Forfeited or expired - - - -
Balance at end of period 146,962 $ 10.45 611,175 $ 10.50
Three months ended March 31, 2024
--- --- --- --- --- --- --- --- ---
Outstanding and exercisable Non-vested
Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price
Balance at beginning of period - $ - 763,969 $ 10.50
Granted - - - -
Vested - - - -
Exercised - - - -
Forfeited or expired - - - -
Balance at end of period - $ - 763,969 $ 10.50

The restricted stock awards are measured based on grant-date fair value, which reflects the closing price of our stock on the date of grant. All of the restricted stock awards which have been granted to date vest over five years in equal portions beginning on the first anniversary date of the restricted stock award. The following table represents information regarding non-vested restricted stock award activities for the periods indicated:

Three Months Ended
March 31, 2025
Number of Shares Weighted-Average Grant Date Fair Value Per Share
Balance at beginning of period 245,766 $ 10.51
Granted - -
Vested - -
Forfeited - -
Balance at end of period 245,766 $ 10.51
Three Months Ended
--- --- --- --- ---
March 31, 2024
Number of Shares Weighted-Average Grant Date Fair Value Per Share
Balance at beginning of period 305,957 $ 10.50
Granted - -
Vested - -
Forfeited - -
Balance at end of period 305,957 $ 10.50

The following table represents the compensation expense and income tax benefits recognized for stock options and restricted stock awards for the periods indicated:

Three months ended Three months ended
March 31, 2025 March 31, 2024
(in thousands)
Stock-based compensation expense
Stock options $ 163 $ 164
Restricted stock awards 159 160
Total stock-based compensation expense $ 322 $ 324
Related tax benefits recognized in earnings $ 70 $ 69

The following table sets forth the total compensation cost related to non-vested awards not yet recognized and the weighted average period (in years) over which it is expected to be recognized as of the periods indicated:

March 31, 2025 December 31, 2024
Amount Weighted average period Amount Weighted average period
(Dollars in thousands)
Stock options $ 2,338 3.55 $ 2,501 3.80
Restricted stock awards 2,290 3.55 2,449 3.80
Total $ 4,628 $ 4,950

NOTE 6 - FAIR VALUE MEASUREMENTS

ASC 820-10, Fair Value Measurement – Overall, provides a framework for measuring fair value under U.S. GAAP. This guidance also allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis.

In accordance with ASC 820-10, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 – Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 – Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities.

Level 3 – Valuations for assets and liabilities that are derived from other methodologies, including option pricing models, discounted cash flow models and similar techniques, and are not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets and liabilities.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value for March 31, 2025 and December 31, 2024.

Cash and Cash Equivalents

For these financial instruments, which have original maturities of 90 days or less, their carrying amounts reported in the Consolidated Balance Sheets approximate fair value.

Available-for-Sale and Held-to-Maturity Securities

The Company’s investments in debt securities are generally classified within Level 2 of the fair value hierarchy. The Company obtains fair value measurements from independent pricing services which are not adjusted by management. The fair value measurements consider observable data that considers standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data.

FHLB Stock

The fair value of FHLB stock approximates the carrying amount based on the redemption provisions of the FHLB. These assets were classified as Level 2.

Loans

The fair value of loans is measured on an exit price basis incorporating discounts for credit, liquidity and marketability factors. Loans were classified as Level 3 since the valuation methodology utilizes significant unobservable inputs.

Loans Held for Sale

The fair value of loans held for sale, whose carrying amounts approximate fair value, was estimated using quoted market prices provided by investors. These assets were classified as Level 2 given the use of observable inputs.

Bank-Owned Life Insurance

The fair value of bank-owned life insurance was based upon quotations received from bank-owned life insurance dealers. These assets were classified as Level 2 given the use of observable inputs.

Accrued Interest Receivable

For these financial instruments, which have original maturities of 90 days or less, their carrying amounts reported in the Consolidated Balance Sheets approximate fair value.

Deposits

The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, interest-bearing demand deposits, savings and money market accounts, was equal to their carrying amount. The fair value of certificates of deposits is valued using a replacement cost of funds approach, and discounted to the market rates and based on weighted remaining maturity. Deposits were classified as Level 2 given the use of observable market inputs.

Accrued Interest Payable

For these financial instruments, which have original maturities of 90 days or less, their carrying amounts reported in the Consolidated Balance Sheets approximate fair value.

Derivative Instruments

The fair value of interest rate swaps was determined using discounted cash flow analysis on the expected cash flows of the interest rate swaps. This analysis reflects the contractual terms of the interest rate swaps, including the period of maturity, and uses observable market-based inputs including interest rate curves. The inputs used to value the Company’s interest rate swaps fall within Level 2 of the fair value hierarchy and as a result, the interest rate swaps were categorized as Level 2 within the fair value hierarchy.

As of March 31, 2025 and December 31, 2024, the following summarizes assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements at Reporting Date Using
Total Quoted Prices Significant Significant
in Active Other Unobservable
Markets for Observable Inputs
Identical Assets Inputs Level 3
Level 1 Level 2
(in thousands)
March 31, 2025
Assets:
Available-for-sale securities
Mortgage-backed securities $ 7,485 $ — $ 7,485 $ —
Collateralized mortgage obligation 1,428 — 1,428 —
Corporate bonds 5,037 — 5,037 —
Derivative instruments 39 — 39 —
Total assets measured at fair value on a recurring basis $ 13,989 $ — $ 13,989 $ —
Liabilities:
Derivative instruments $ 795 $ — $ 795 $ —
Total liabilities measured at fair value on a recurring basis $ 795 $ — $ 795 $ —
December 31, 2024
Assets:
Available-for-sale securities
Mortgage-backed securities $ 4,126 $ — $ 4,126 $ —
Collateralized mortgage obligation 1,438 — 1,438 —
Corporate bonds 1,000 — 1,000 —
Derivative instruments 557 — 557 —
Total assets measured at fair value on a recurring basis $ 7,121 $ — $ 7,121 $ —
Liabilities:
Derivative instruments $ 173 $ — $ 173 $ —
Total liabilities measured at fair value on a recurring basis $ 173 $ — $ 173 $ —

Under certain circumstances, the Company makes fair value adjustments to its assets and liabilities although they are not measured at fair value on an ongoing basis.

As of March 31, 2025 and December 31, 2024, the Bank had no assets or liabilities for which a nonrecurring change in fair value had been recorded.

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value are discussed above. The estimated fair values and related carrying amounts of assets and liabilities for which fair value is only disclosed are shown below at the dates indicated:

March 31, 2025
Carrying Fair
Amount Value Level 1 Level 2 Level 3
(in thousands)
Financial assets:
Cash and cash equivalents $ 148,108 $ 148,108 $ 148,108 $ - $ -
Interest-bearing time deposits 100 100 - 100 -
Held-to-maturity securities 68,081 63,355 - 63,355 -
Federal Home Loan Bank stock 10,000 10,000 - 10,000 -
Loans, net 1,177,543 1,127,467 - - 1,127,467
Loans held for sale 83 83 - 83 -
Accrued interest receivable 4,343 4,343 4,343 - -
Bank-owned life insurance 15,061 15,061 - 15,061 -
Financial liabilities:
Deposits, other than certificates of deposit $ 399,697 $ 399,697 $ - $ 399,697 $ -
Certificates of deposit 636,923 637,601 - 637,601 -
Federal Home Loan Bank advances 234,000 234,213 - 234,213 -
Accrued interest payable 1,537 1,537 1,537 - -
December 31, 2024
--- --- --- --- --- --- --- --- --- --- ---
Carrying Fair
Amount Value Level 1 Level 2 Level 3
(in thousands)
Financial assets:
Cash and cash equivalents $ 157,617 $ 157,617 $ 157,617 $ - $ -
Interest-bearing time deposits 100 100 - 100 -
Held-to-maturity securities 73,215 67,505 - 67,505 -
Federal Home Loan Bank stock 10,000 10,000 - 10,000 -
Loans, net 1,136,449 1,079,916 - - 1,079,916
Accrued interest receivable 4,015 4,015 4,015 - -
Bank-owned life insurance 14,945 14,945 - 14,945 -
Financial liabilities:
Deposits, other than certificates of deposit $ 393,018 $ 393,018 $ - $ 393,018 $ -
Certificates of deposit 605,515 606,387 - 606,387 -
Federal Home Loan Bank advances 234,000 232,027 - 232,027 -
Accrued interest payable 2,207 2,207 2,207 - -

NOTE 7 – COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies but usually includes income producing commercial properties or residential real estate.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance by a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of March 31, 2025 and December 31, 2024, the maximum potential amount of the Company’s obligation was $50,000, for standby letters of credit. The Company’s outstanding letters of credit generally have a term of less than one year. If a letter of credit is drawn upon, the Company may seek recourse through the customer’s underlying line of credit. If the customer’s line of credit is also in default, the Company may take possession of the collateral, if any, securing the line of credit.

Amounts of financial instruments whose contract amounts represent off-balance sheet credit risk are as follows as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024
(in thousands)
Commitments to originate loans $ 30,514 $ 21,542
Commitments to purchase loans 496 -
Unadvanced funds on lines of credit 89,021 80,156
Unadvanced funds on construction loans 52,444 54,636
Letters of credit 50 50
$ 172,525 $ 156,384

The Company accrues for credit losses related on off-balance sheet financial instruments. Expected losses on off-balance sheet loan commitments are estimated using the same risk factors used to determine the allowance for credit losses on loans, adjusted for the likelihood that funding will occur. The allowance for off-balance sheet commitments is recorded within other liabilities on the consolidated balance sheets and amounted to $618,000 and $634,000 as of March 31, 2025 and December 31, 2024, respectively. For the three months ended March 31, 2025, a benefit of $16,000 was recorded to reflect a reduction in allowance for off-balance sheet commitment. For the three months ended March 31, 2024, the provision recorded for off-balance sheet commitments was $68,000.

NOTE 8 – OTHER COMPREHENSIVE INCOME (LOSS)

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the shareholders' equity section of the consolidated balance sheets, such items, along with net income, are components of comprehensive income.

The components of other comprehensive income (loss) and related tax effects are as follows for the three months ended March 31, 2025 and 2024:

Three months ended
March 31,
2025 2024
(in thousands)
Available-for-sale securities:
Net unrealized holding gains (losses) on available-for-sale securities $ 73 $ (3 )
Reclassification adjustment for realized gains in net income — —
Total 73 (3 )
Income tax expense (20 ) —
Net-of-tax amount 53 (3 )
Net change in fair value of cash flow hedges
Change in fair value of cash flow hedges $ (1,044 ) $ 784
Reclassification adjustment for cash flow hedge gains into net income (96 ) (151 )
Total (1,140 ) 633
Income expense benefit (expense) 320 (177 )
Net-of-tax amount (820 ) 456
Other comprehensive (loss) income, net of tax $ (767 ) $ 453

Accumulated other comprehensive (loss) income as of March 31, 2025 and December 31, 2024 consists of unrecognized benefit costs, net of taxes, unrealized holding gains on securities available for sale, net of tax, and fair value of cash flow hedges, net of tax as follows:

As of March 31, 2025 As of December 31, 2024
(in thousands)
Net unrealized holding gains (losses) on securities available-for-sale, net of tax $ 13 $ (40 )
Unrecognized SERP gain, net of tax 70 70
Unrecognized DFCP gain, net of tax 75 75
Fair value of cash flow hedges, net of tax (543 ) 277
Accumulated other comprehensive (loss) income $ (385 ) $ 382

NOTE 9 – REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. 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 Company’s financial statements.

Management believes, as of March 31, 2025, that the Bank meets all capital adequacy requirements to which it is subject.

As of March 31, 2025, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The Bank’s actual capital amounts and ratios are presented in the table as of the dates indicated:

Minimum For Capital Minimum To Be Well
Adequacy Purposes Capitalized Under
Plus Capital Prompt Corrective
Actual Conservation Buffer Action Provisions
Amount Ratio Amount Ratio Amount Ratio
(dollars in thousands)
As of March 31, 2025
Total Capital (to Risk Weighted Assets) $ 156,357 16.23% $ 101,157 10.50% $ 96,340 10.00%
Tier 1 Capital (to Risk Weighted Assets) 146,931 15.25% 81,889 8.50% 77,072 8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets) 146,931 15.25% 67,438 7.00% 62,621 6.50%
Tier 1 Capital (to Average Assets) 146,931 10.31% 56,997 4.00% 71,246 5.00%
As of December 31, 2024
Total Capital (to Risk Weighted Assets) $ 154,753 16.58% $ 98,010 10.50% $ 93,343 10.00%
Tier 1 Capital (to Risk Weighted Assets) 145,235 15.56% 79,342 8.50% 74,674 8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets) 145,235 15.56% 65,340 7.00% 60,673 6.50%
Tier 1 Capital (to Average Assets) 145,235 10.47% 55,479 4.00% 69,349 5.00%

NOTE 10 - EARNINGS PER SHARE ("EPS")

Basic earnings per share is calculated by dividing the income available to common shares by the weighted-average number of common shares outstanding during the period. Diluted earnings per share have been calculated 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

additional common shares that would have been outstanding if all potentially dilutive common shares (such as those resulting from the exercise of stock options) were issued during the period, computed using the treasury stock method. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations.

Three months ended
March 31,
2025 2024
(Dollars in thousands, except per share data)
Net income allocated to common stock $ 1,297 $ 621
Weighted-average common shares outstanding used to calculate basic earnings per common share 8,210,782 8,299,775
Add: Dilutive effect of restricted stock awards 132,989 75,560
Weighted-average common shares outstanding used to calculate diluted earnings per common share 8,343,771 8,375,335
Earnings per common share
Basic $ 0.16 $ 0.07
Diluted $ 0.16 $ 0.07

For the three months ended March 31, 2025, the shares that were anti-dilutive, and therefore excluded from the calculation of diluted earnings per share, included options to purchase 169,128 shares of common stock. For the three months ended March 31, 2024, the shares that were anti-dilutive, and therefore excluded from the calculation of diluted earnings per share, included options to purchase 763,969 shares of common stock.

NOTE 11 - DERIVATIVE AND HEDGING ACTIVITIES

The Company uses derivative financial instruments to manage its interest rate risk resulting from the differences in the amount, timing, and duration of known or expected cash payments. The Company has entered into interest rate swaps to add stability to interest expense and manage exposure to interest rate movements as part of an overall risk management strategy.

An interest rate swap is an agreement whereby one party agrees to pay a floating rate of interest on a notional principal amount in exchange for receiving a fixed rate of interest on the same notional amount, for a predetermined period of time, from a second party. The amounts relating to the notional principal amount are not actually exchanged. The Company has entered into interest rate swaps in which it pays fixed and receives floating interest in order to manage its interest rate risk exposure to the variability in interest cash flows on certain floating-rate FHLB Advances and brokered certificates of deposit. The interest rate swaps effectively convert the floating rate payments made on the FHLB Advances and brokered certificates of deposit to a fixed rate and consequently reduce the Company’s exposure to variability in short-term interest rates.

Derivative instruments are carried at fair value in the Company’s Consolidated Financial Statements. The accounting for changes in the fair value of a derivative instrument is dependent upon whether or not the instrument qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship.

The Company’s interest rate swaps have been designated as and are accounted for as cash flow hedges. The changes in fair value are included in other comprehensive income and reclassified into net income in the same period or periods during which the hedged forecasted transaction affects net income.

Cash flow hedges are initially assessed for effectiveness using regression analysis. Changes in the fair value of derivatives that are designated as and that qualify as cash flow hedges are recorded in OCI and are subsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. Quarterly, a quantitative analysis is performed to monitor the ongoing effectiveness of the hedging instrument. All derivative positions were initially, and continue to be, highly effective at March 31, 2025.

The following table reflects the Company's derivative position at the date indicated below for the interest rate swaps:

As of March 31, 2025
(Dollars in thousands)
Notional amount $ 100,000
Weighted-average pay rate 3.84 %
Weighted-average receive rate 4.34 %
Weighted-average maturity in years 3.65

The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets as of March 31, 2025:

Asset Derivatives Liability Derivatives
Balance Sheet Location Fair Value Balance Sheet Location Fair Value
(in thousands)
Derivatives designated as hedging instruments
Interest rate swaps Other assets $ 39 Other liabilities $ (795 )
Total $ 39 $ (795 )

For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company expects approximately $84,000 to be reclassified as a decrease to interest expense from OCI related to the Company’s cash flow hedges in the twelve months following March 31, 2025. This reclassification is due to anticipated payments that will be received on the swaps based upon the forward curve at March 31, 2025.

The maximum length of time over which the Company is currently hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable interest on existing financial instruments is

4.9

years. The pre-tax effects of cash flow hedges on accumulated other comprehensive income and current earnings for the period indicated are as follows:

Three Months Ended Three Months Ended
March 31, 2025 March 31, 2024
(in thousands)
Interest rate swaps
Amount of (loss) gain recognized in OCI on derivatives $ (1,140 ) $ 633
Gain reclassified from OCI into interest expense $ 96 $ 151

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty not secured by variation margin plus any initial margin collateral posted. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with those counterparties is remote. As of March 31, 2025, the Company has pledged cash collateral to a derivative counterparty totaling $2.0 million. The Company may need to post additional collateral or may receive additional collateral in the future in proportion to potential changes in the overall unrealized gain or loss position.

The Company had no derivatives as of December 31, 2023.

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

General

Management’s discussion and analysis of the financial condition at March 31, 2025 compared to December 31, 2024 and results of operations for the three months ended March 31, 2025 and 2024 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “intend,” “target” 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 portfolio; and
  • estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently 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:

  • changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

  • our ability to access cost-effective funding;

  • fluctuations in real estate values and both residential and commercial real estate market conditions;

  • demand for loans and deposits in our market area;

  • our ability to implement and change our business strategies;

  • competition among depository and other financial institutions;

  • inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments, or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make;

  • adverse changes in the securities or secondary mortgage markets;

  • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums;

  • changes in the quality or composition of our loan or investment portfolios;

  • technological changes that may be more difficult or expensive than expected;

  • the inability of third-party providers to perform as expected;

  • a failure or breach of our operational or security systems or infrastructure, including cyberattacks;

  • our ability to manage market risk, credit risk and operational risk;

  • our ability to enter new markets successfully and capitalize on growth opportunities;

  • changes in 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 risk of adverse changes in business conditions due to geo-political tensions;

  • our ability to attract and retain key employees; and

  • changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

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

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in ECB Bancorp, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2025.

Critical Accounting Estimates

The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with generally accepted accounting principles used in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of income and expenses. We consider the accounting policies discussed below to be critical accounting policies. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

Allowance for Credit Losses

The Company estimates the allowance for credit losses in accordance with the CECL methodology for loans measured at amortized cost. The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses. Arriving at an appropriate amount of allowance for credit losses involves a high degree of judgment.

The Company estimates credit losses on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. Management's judgment is required for the selection and application of these factors which are derived from historical loss experience as well as assumptions surrounding expected future losses and economic forecasts.

Loans that no longer share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting. For the loans that are individually assessed, the Company uses either a discounted cash flow (“DCF”) approach or a fair value of collateral approach. The latter approach is used for loans deemed to be collateral dependent or when foreclosure is probable. Changes in these judgments and assumptions could be due to a number of circumstances which may have a direct impact on the provision for credit losses and may result in changes to the amount of allowance. The allowance for credit losses is increased by the provision for credit losses and by recoveries of loans previously charged off. Credit losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan.

Income Taxes

We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are

reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax asset will not be realized. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments may require us to make projections of future taxable income and/or to carryback to taxable income in prior years. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets.

Securities Valuation

We classify our investments in debt securities as either held-to-maturity or available-for-sale. Securities classified as held-to maturity are recorded at amortized cost. Available-for-sale securities are carried at fair value. We obtain our fair values from one or more third-party services. This service’s fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting our financial position, results of operations and cash flows.

For any debt security with a fair value less than its amortized cost basis, we will determine whether we have the intent to sell the debt security or whether it is more likely than not we will be required to sell the debt security before the recovery of its amortized cost basis. If either condition is met, the Company will recognize a full impairment charge to earnings. For all other debt securities that don't meet either condition and that have expected credit losses, the credit loss will be recognized in earnings. Any non-credit related loss impairment related to all other factors will be recorded in other comprehensive income (loss). Management also assesses the nature of the unrealized losses taking into consideration factors such as changes in risk-free interest rates, general credit spread widening, market supply and demand, creditworthiness of the issuer, and quality of the underlying collateral.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Total Assets. Total assets were $1.45 billion at March 31, 2025, as compared to $1.42 billion at December 31, 2024, or an increase of $34.0 million, or 2.4%.

Cash and Cash Equivalents. Cash and cash equivalents were $148.1 million at March 31, 2025, as compared to $157.6 million at December 31, 2024, or a decrease of $9.5 million, or 6.0%. The decrease in cash and cash equivalents was driven by growth in both loans and investments that in aggregate, was greater than our growth in deposits.

Investment Securities Available for Sale. Investments in securities available for sale were $14.0 million at March 31, 2025, as compared to $6.6 million at December 31, 2024, or an increase of $7.4 million, or 112.5%. This increase was due to purchases of securities.

Investment Securities Held to Maturity. Investments in securities held to maturity were $68.1 million at March 31, 2025, as compared to $73.2 million at December 31, 2024, or a decrease of $5.1 million, or 7.0%. This decrease was due to maturities of securities.

Loans. Total gross loans were $1.19 billion at March 31, 2025, as compared to $1.15 billion at December 31, 2024, or an increase of $41.1 million, or 3.6%.

  • Multi-family real estate loans increased $27.0 million, or 7.9%, to $371.0 million at March 31, 2025 from $344.0 million at December 31, 2024.

  • Commercial real estate loans increased $26.1 million, or 11.4%, to $255.1 million at March 31, 2025 from $229.0 million at December 31, 2024.

  • Residential real estate loans increased $11.5 million, or 2.7%, to $434.4 million at March 31, 2025, from $422.8 million at December 31, 2024.

  • Construction loans decreased $21.2 million, or 23.3%, to $69.7 million at March 31, 2025 from $90.9 million at December 31, 2024.

  • Commercial loans decreased $1.3 million, or 9.3%, to $12.6 million at March 31, 2025 from $13.8 million at December 31, 2024.

  • Home equity lines of credit decreased $1.1 million, or 2.5%, to $44.0 million at March 31, 2025, from $45.2 million at December 31, 2024.

Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $10.0 million at March 31, 2025 and December 31, 2024.

Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance increased $116,000, or 0.8%, to $15.1 million at March 31, 2025 from $14.9 million at December 31, 2024. The increase was due to an increase of $116,000 in the cash surrender value of our bank-owned life insurance portfolio during the three months ended March 31, 2025.

Deposits. Total deposits were $1.04 billion at March 31, 2025, as compared to $998.5 million at December 31, 2024, or an increase of $38.1 million, or 3.8%.

  • Certificates of deposit increased $31.4 million, or 5.2%, to $636.9 million at March 31, 2025 from $605.5 million at December 31, 2024.
  • Money market deposit accounts increased $19.7 million, or 10.7%, to $204.3 million at March 31, 2025 from $184.6 million at December 31, 2024.
  • Demand deposit accounts decreased $5.1 million, or 6.0%, to $79.9 million at March 31, 2025 from $85.0 million at December 31, 2024.
  • Savings accounts decreased $4.4 million, or 4.2%, to $98.6 million at March 31, 2025 from $102.9 million at December 31, 2024.
  • Interest bearing checking accounts decreased $3.5 million, or 17.2%, to $17.0 million at March 31, 2025 from $20.5 million at December 31, 2024.

Core deposits (defined as all deposits other than certificates of deposit) increased $6.7 million, or 1.7%, to $399.7 million at March 31, 2025 from $393.0 million at December 31, 2024.

Federal Home Loan Bank Advances. Advances from the Federal Home Loan Bank remained unchanged at $234.0 million from December 31, 2024 to March 31, 2025.

Shareholders' Equity. Total shareholders' equity increased $310,000, or 0.2%, to $168.6 million as of March 31, 2025 from $168.3 million as of December 31, 2024. This increase is primarily the result of earnings of $1.3 million. Partially offsetting the increase from earnings were decreases in additional paid-in capital ("APIC") and accumulated other comprehensive income ("AOCI") of $310,000 and $767,000, respectively. The decrease in APIC was driven by $672,000 in shares repurchased under our share repurchase plan, partially offset by an increase in APIC of $362,000 related to stock-based compensation and ESOP shares committed to be released. The decrease in AOCI was driven by a decrease in the fair value of cash flow hedges. Our book value per share increased by $0.13 to $18.63 at March 31, 2025 from $18.50 at December 31, 2024.

Comparison of Operating Results for the Three Months Ended March 31, 2025 and March 31, 2024

Net Income. We recorded net income of $1.3 million for the three months ended March 31, 2025, compared to net income of $621,000 for the three months ended March 31, 2024, or an increase of $676,000, or 108.9% in net income.

Interest and Dividend Income. Interest and dividend income increased $1.9 million, or 12.3%, to $17.6 million for the three months ended March 31, 2025 from $15.7 million for the three months ended March 31, 2024. This increase was due to a $1.7 million increase in interest and fees on loans, an $89,000 increase in interest and dividends on investment securities and a $141,000 increase in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $100.0 million in the average balance of the loan portfolio to $1.16 billion for the three months ended March 31, 2025 from $1.06 billion for the three months ended March 31, 2024, as well as an increase in the average yield of 19 basis points to 5.30% during the three months ended March 31, 2025 from 5.11% during the three months ended March 31, 2024. The yield for the three months ended March 31, 2025

benefited from new loans with higher rates. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 59 basis points to 3.37% during the three months ended March 31, 2025 from 2.78% during the three months ended March 31, 2024. The increase in interest on short term investments was driven by an increase of $39.3 million in the average balance of short term investments to $148.3 million for the three months ended March 31, 2025 from $109.0 million for the three months ended March 31, 2024, partially offset by a decrease in the yield of 103 basis points to 4.45% for three months ended March 31, 2025, from 5.48% for three months ended March 31, 2024.

Average interest-earning assets increased $139.7 million to $1.39 billion for the three months ended March 31, 2025 from $1.25 billion for the three months ended March 31, 2024. The yield on interest-earning assets increased 11 basis points to 5.10% for the three months ended March 31, 2025 from 4.99% for the three months ended March 31, 2024.

Interest Expense. Total interest expense increased $1.2 million, or 12.1%, to $11.0 million for the three months ended March 31, 2025 from $9.8 million for the three months ended March 31, 2024. Interest expense on deposit accounts increased $1.3 million, or 17.7%, to $8.9 million for the three months ended March 31, 2025 from $7.5 million for the three months ended March 31, 2024, primarily due to an increase in the average balance of interest-bearing deposits of $144.5 million, or 18.1%, to $944.4 million for the three months ended March 31, 2025 from $799.9 million for the three months ended March 31, 2024 as well as an increase in the cost of interest bearing deposits of 2 basis points to 3.80% for the three months ended March 31, 2025 from 3.78% for the three months ended March 31, 2024. Interest expense on FHLB advances decreased $153,000, or 6.7%, to $2.1 million for the three months ended March 31, 2025 from $2.3 million for the three months ended March 31, 2024, primarily due to a decrease in the average balance of FHLB advances of $10.1 million, or 4.4%, to $217.1 million for the three months ended March 31, 2025 from $227.2 million for the three months ended March 31, 2024 as well as a decrease in the cost of FHLB advances of 6 basis points to 3.95% for the three months ended March 31, 2025 from 4.01% for the three months ended March 31, 2024.

Net Interest and Dividend Income. Net interest and dividend income increased $745,000, or 12.6%, to $6.6 million for the three months ended March 31, 2025 from $5.9 million for the three months ended March 31, 2024, primarily due to a $5.2 million increase in the average balance of net interest-earning assets during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 as well as an increase in the interest rate spread of 11 basis points to 1.27% for three months ended March 31, 2025 from 1.16% for the three months ended March 31, 2024. The resulting net interest margin expanded by five basis points to 1.89% for the three months ended March 31, 2025 as compared to 1.84% for the three months ended March 31, 2024.

Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the benefit for credit losses was $10,000 for the three months ended March 31, 2025 compared to provision expense of $147,000 for the three months ended March 31, 2024.

Noninterest Income. Noninterest income was $271,000 for the three months ended March 31, 2025, as compared to $307,000 for the three months ended March 31, 2024, or a decrease of $36,000, or 11.7%. The decrease was primarily due to decreases in net gains on sales of loans as we did not sell any loans during the three months ended March 31, 2025. The table below sets forth our noninterest income for three months ended March 31, 2025 and 2024:

Three Months Ended<br>March 31, Change
2025 2024 Amount Percent
(Dollars in thousands)
Customer service fees $ 140 $ 142 $ (2 ) (1.4 ) %
Income from bank-owned life insurance 116 117 (1 ) (0.9 )
Net gain on sales of loans - 35 (35 ) (100.0 )
Other 15 13 2 (15.4 )
Total noninterest income $ 271 $ 307 $ (36 ) (11.7 ) %

Noninterest Expense. Noninterest expense was $5.2 million for the quarter ended March 31, as compared to $5.2 million for the quarter ended March 31, 2024, or a decrease of $23,000, or 0.4%. The table below sets forth our noninterest expense for the three months ended March 31, 2025 and 2024:

Three Months Ended<br>March 31, Change
2025 2024 Amount Percent
(Dollars in thousands)
Salaries and employee benefits $ 3,260 $ 3,311 $ (51 ) (1.5 ) %
Director compensation 216 209 7 3.3
Occupancy and equipment 281 274 7 2.6
Data processing 311 311 - -
Computer software and licensing fees 109 109 - -
Advertising and promotions 132 131 1 0.8
Professional fees 310 360 (50 ) (13.9 )
FDIC deposit insurance 185 179 6 3.4
Other expense 404 347 57 16.4
Total noninterest expense $ 5,208 $ 5,231 $ (23 ) (0.4 ) %

Income Tax Expense. Income tax expense increased $213,000, or 100.9%, to $424,000 for the three months ended March 31, 2025 from $211,000 for the three months ended March 31, 2024. The effective tax rate was 24.6% and 25.4% for the three months ended March 31, 2025 and 2024, respectively.

Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Average balances are daily average balances. Non-accrual loans are included in average balances only. Average yields include the effect of deferred costs and fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.

For the Three Months Ended March 31,
2025 2024
Average Outstanding Balance Interest Yield/ Rate(5) Average Outstanding Balance Interest Yield/ Rate(5)
(Dollars in thousands)
Interest-earning assets:
Total loans $ 1,157,934 $ 15,142 5.30 % $ 1,057,907 $ 13,446 5.11 %
Securities (1) 80,925 672 3.37 80,667 557 2.78
Short term investments 148,262 1,625 4.45 108,970 1,484 5.48
Interest-bearing time deposits 100 1 4.06 - - 0.00
Total interest-earning assets 1,387,221 17,440 5.10 % 1,247,544 15,487 4.99 %
Non-interest-earning assets 38,096 34,098
Total assets $ 1,425,317 $ 1,281,642
Interest-bearing liabilities:
Checking accounts 17,462 3 0.07 % 19,509 4 0.08 %
Savings accounts 98,934 513 2.10 120,115 828 2.77
Money market accounts 189,339 1,564 3.35 143,792 1,256 3.51
Certificates of deposit 638,676 6,779 4.30 516,471 5,436 4.23
Total interest-bearing deposits 944,411 8,859 3.80 799,887 7,524 3.78
Federal Home Loan Bank advances 217,111 2,114 3.95 227,187 2,267 4.01
Total interest-bearing liabilities 1,161,522 10,973 3.83 % 1,027,074 9,791 3.83 %
Non-interest-bearing demand deposits 79,781 76,505
Non-interest-bearing liabilities 14,741 12,199
Total liabilities 1,256,044 1,115,778
Shareholders' Equity 169,273 165,864
Total liabilities and shareholders' equity $ 1,425,317 $ 1,281,642
Net interest income $ 6,467 $ 5,696
Net interest rate spread (2) 1.27 % 1.16 %
Net interest-earning assets (3) $ 225,699 $ 220,470
Net interest margin (4) 1.89 % 1.84 %
Average interest-earning assets to interest-<br>   bearing liabilities 119.43 % 121.47 %

(1) Excludes interest and dividends on cost method investments of $181,000 and $207,000 for the three months ended March 31, 2025 and 2024, respectively.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate 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

Rate/Volume Analysis. The following tables present the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior period volume). The volume column shows the effects 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 both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. There were no out-of-period items or adjustments required to be excluded from the table below.

Three Months Ended March 31, 2025 vs. 2024
Increase (Decrease) Due to Total Increase
Volume Rate (Decrease)
(In thousands)
Interest-earning assets:
Loans $ 1,215 $ 481 $ 1,696
Securities 2 113 115
Short term investments 457 (316 ) 141
Interest-bearing time deposits 1 — 1
Total interest-earning assets $ 1,675 $ 278 $ 1,953
Interest-bearing liabilities:
Checking accounts $ — $ (1 ) $ (1 )
Savings accounts (133 ) (182 ) (315 )
Money market accounts 370 (62 ) 308
Certificates of deposit 1,254 89 1,343
Total interest-bearing deposits 1,491 (156 ) 1,335
Federal Home Loan Bank advances (112 ) (41 ) (153 )
Total interest-bearing liabilities $ 1,379 $ (197 ) $ 1,182
Change in net interest income $ 296 $ 475 $ 771

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We are also able to borrow from the Federal Home Loan Bank of Boston, the Federal Reserve Bank and the Atlantic Community Bankers Bank. At March 31, 2025, we had outstanding advances of $234.0 million from the Federal Home Loan Bank. At March 31, 2025, we had unused borrowing capacity of $328.3 million with the Federal Home Loan Bank, $16.8 million with the Federal Reserve Bank and $10.0 million with the Atlantic Community Bankers Bank.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets are dependent on our operating, financing and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.

At March 31, 2025, we had $31.0 million in loan commitments outstanding. In addition to commitments to originate and purchase loans, we had $89.0 million in unused lines of credit to borrowers and $52.4 million in unadvanced construction loans.

Non brokered certificates of deposit due within one year of March 31, 2025 totaled $383.9 million, or 37.0%, of total deposits. If these deposits do not remain with us, we may be required to seek other sources of funds, including brokered deposits and FHLB advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before March 31, 2026, or on our savings and money market accounts.

We believe, however, based on historical experience and current market interest rates that we will retain upon maturity a large portion of our certificates of deposit with maturities of one year or less as of March 31, 2025.

Our primary investing activity is originating loans. During the three months ended March 31, 2025 and the year ended December 31, 2024, we originated and purchased $54.9 million and $160.4 million of loans, respectively.

Financing activities consist primarily of activity in deposit accounts and FHLB advances. We experienced net increases in deposits of $38.1 million and $130.3 million for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively. At March 31, 2025 and December 31, 2024, the level of brokered time deposits was $133.9 million and $125.6 million, respectively. Deposit flows are affected primarily by the overall level of interest rates and the interest rates and products offered by us and our competitors. At March 31, 2025 and December 31, 2024, the level of FHLB advances was $234.0 million.

For additional information, see the consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 included as part of the consolidated financial statements appearing elsewhere in this Form 10-Q.

We are committed to maintaining a strong liquidity position. We continuously monitor our liquidity position and adjustments are made to the balance between sources and uses of funds as deemed appropriate by management. Liquidity risk management is an important element in our asset/liability management process. We regularly model liquidity stress scenarios to assess potential liquidity outflows or funding problems resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into our contingency funding planning process, which provides the basis for the identification of our liquidity needs. We anticipate that we will have sufficient funds to meet our current funding commitments. In addition, based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.

At March 31, 2025, Everett Co-operative Bank exceeded all of its regulatory capital requirements, and was categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change our category. See Note 9 of the notes to consolidated financial statements.

Impact of Inflation and Changing Prices

The consolidated financial statements and related data presented in this Form 10-Q have been prepared in accordance with U.S. GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Registrant is a smaller reporting company.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the 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 March 31, 2025. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Registrant’s disclosure controls and procedures were effective.

During the quarter ended March 31, 2025, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 6. Exhibits

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.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.

ECB BANCORP, INC.
Date: May 9, 2025 /s/Richard J. O'Neil, Jr.
Richard J. O’Neil, Jr.
President and Chief Executive Officer
Date: May 9, 2025 /s/Brandon N. Lavertu
Brandon N. Lavertu
Executive Vice President and Chief Financial Officer

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard J. O’Neil, Jr., certify that:

  • I have reviewed this Quarterly Report on Form 10-Q of ECB Bancorp, Inc.;

  • Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

  • Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

  • The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

  • Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  • Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  • Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  • Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

  • The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

  • All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

  • Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2025 /s/Richard J. O'Neil, Jr.
Richard J. O’Neil, Jr.
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Brandon N. Lavertu, certify that:

  • I have reviewed this Quarterly Report on Form 10-Q of ECB Bancorp, Inc.;

  • Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

  • Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

  • The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

  • Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  • Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  • Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  • Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

  • The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

  • All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

  • Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2025 /s/Brandon N. Lavertu
Brandon N. Lavertu
Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Richard J. O’Neil, Jr., President and Chief Executive Officer of ECB Bancorp, Inc., (the “Company”) and Brandon N. Lavertu, Executive Vice President and Chief Financial Officer of the Company, each certify in their capacity as an officer of the Company that they have reviewed the quarterly report on Form 10-Q for the quarter ended March 31, 2025 (the “Report”) and that to the best of their knowledge:

  • the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  • the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2025 /s/Richard J. O'Neil, Jr.
Richard J. O’Neil, Jr.
President and Chief Executive Officer
Date: May 9, 2025 /s/Brandon N. Lavertu
Brandon N. Lavertu
Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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