URSB Bancorp, Inc 10-K, filed Apr 9, 2026
URSB Bancorp, Inc. (URSB)
About this 10-K
URSB Bancorp, Inc filed this 10-K on April 9, 2026, covering the fiscal year ended December 31, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
SPECIAL REPORT PURSUANT TO RULE 15d-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Contains only the certified consolidated financial statements for the fiscal year ended December 31, 2025)
Commission File Number: 000-56829
URSB Bancorp, Inc.
(Exact Name of Registrant as Specified in its Charter)
Maryland | 39-4348578 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
11-15 Cooke Avenue, Carteret, New Jersey | 07008 | |
(Address of principal executive offices) | (Zip code) |
(732) 541-5445
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | |||
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
Securities registered pursuant to Section 12(g) of the Act: Common stock, $0.01 par value per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | | | | | | |
Emerging growth company | ☒ | | | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock at the end of the last business day of the most recently completed second fiscal quarter on June 30, 2025, was $-0-.
The number of shares of the Registrant’s common stock outstanding as of April 3, 2026, was 2,334,375.
2
On January 9, 2026, the U.S. Securities and Exchange Commission declared effective the Registration Statement on Form S-1, as amended (the “Form S-1”), filed by URSB Bancorp, Inc. (the “Company”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to the shares of the Company’s common stock to be issued in connection with the mutual-to-stock conversion of United Roosevelt, MHC, the mutual holding company of United Roosevelt Savings Bank.
Rule 15d-2 under the Securities Exchange Act of 1934, as amended, generally provides that if a registrant’s registration statement filed under the Securities Act does not contain certified financial statements for its last full fiscal year preceding the year in which the registration statement becomes effective, then the registrant must, within 90 days after the effective date of the registration statement, file a special financial report furnishing certified financial statements for the last full fiscal year meeting the requirements of the form appropriate for the registrant’s annual reports. Rule 15d-2 further provides that the special financial report is to be filed under cover of the facing sheet of the form appropriate for the registrant’s annual reports.
The Form S-1 contains the unaudited consolidated financial statement of United Roosevelt, MHC for the period ended September 30, 2025, but does not contain its certified consolidated financial statements for the fiscal year ended December 31, 2025. Accordingly, the Company is hereby filing the certified consolidated financial statements of United Roosevelt, MHC for the fiscal year ended December 31, 2025 under cover of the facing page of an Annual Report on Form 10-K, as required by Rule 15d-2.
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Report of Independent Registered Public Accounting Firm
To the Board of Directors of United Roosevelt MHC:
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial condition of United Roosevelt MHC and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
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Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditor since 2023.
/s/ Wolf & Company, P.C.
Boston, Massachusetts
April 9, 2026
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United Roosevelt MHC and Subsidiaries
Consolidated STATEMENTS OF FINANCIAL CONDITION
(In Thousands)
| | December 31, | ||||
| | 2025 | | 2024 | ||
Assets | | | |
| | |
Cash and due from banks | | $ | 1,902 | | $ | 750 |
Interest-bearing deposits | |
| 6,489 | |
| 9,977 |
Cash and cash equivalents | |
| 8,391 | |
| 10,727 |
Investment in certificates of deposit | |
| — | |
| 4,296 |
Securities available for sale (amortized cost of $26,329 and $19,128, respectively) | |
| 25,834 | |
| 17,906 |
Securities held to maturity, net of allowance for credit losses of $75 and $86, respectively (fair value of $12,532 and $19,365, respectively) | |
| 12,789 | |
| 20,082 |
Loans receivable, net of allowance for credit losses of $2,277 and $1,363, respectively | |
| 300,438 | |
| 248,025 |
Premises and equipment, net | |
| 2,509 | |
| 2,757 |
Federal Home Loan Bank of New York stock, at cost | |
| 2,369 | |
| 1,941 |
Atlantic Community Bankers Bank stock, at cost | |
| 80 | |
| 80 |
Accrued interest receivable | |
| 1,481 | |
| 1,270 |
Bank owned life insurance (BOLI) | |
| 7,026 | |
| 5,730 |
Other assets | |
| 7,056 | |
| 3,049 |
Total assets | | $ | 367,973 | | $ | 315,863 |
Liabilities and Equity | |
| | |
| |
Liabilities: | |
| | |
| |
Deposits | | $ | 290,950 | | $ | 246,079 |
Advance payments by borrowers for taxes and insurance | |
| 1,401 | |
| 1,168 |
Borrowings | |
| 53,572 | |
| 49,135 |
Other liabilities | |
| 2,056 | |
| 1,138 |
Total liabilities | |
| 347,979 | |
| 297,520 |
| | | | | | |
Equity: | |
| | |
| |
Retained earnings | |
| 20,464 | |
| 19,961 |
Accumulated other comprehensive loss | |
| (470) | |
| (1,618) |
Total equity | |
| 19,994 | |
| 18,343 |
Total liabilities and equity | | $ | 367,973 | | $ | 315,863 |
See accompanying notes to consolidated financial statements.
6
United Roosevelt MHC and Subsidiaries
Consolidated StatementS of OPERATIONS
(In Thousands)
| | | ||||
| | Years Ended | ||||
| | December 31, | ||||
| | 2025 | | 2024 | ||
Interest and dividend income: |
| | | | | |
Loans | | $ | 15,396 | | $ | 12,578 |
Securities | |
| 1,341 | |
| 1,160 |
Other earning assets | |
| 794 | |
| 1,043 |
Total interest and dividend income | |
| 17,531 | |
| 14,781 |
Interest expense: | |
| | |
| |
Deposits: | |
| | |
| |
NOW and money market | |
| 1,187 | |
| 1,551 |
Savings and club | |
| 65 | |
| 44 |
Certificates of deposit | |
| 5,734 | |
| 4,381 |
Borrowings | |
| 2,114 | |
| 1,393 |
Total interest expense | |
| 9,100 | |
| 7,369 |
Net interest income | |
| 8,431 | |
| 7,412 |
Provision for credit losses | |
| 801 | |
| 118 |
Net interest income after provision for credit losses | |
| 7,630 | |
| 7,294 |
Non-interest income: | |
| | |
| |
Fees and service charges | |
| 212 | |
| 169 |
Increase in cash surrender value of BOLI | |
| 183 | |
| 122 |
Loss on sales of securities | |
| (186) | |
| (119) |
Other | |
| 24 | |
| — |
Total non-interest income | |
| 233 | |
| 172 |
Non-interest expenses: | |
| | |
| |
Salaries and employee benefits | |
| 3,788 | |
| 3,639 |
Occupancy expense | |
| 388 | |
| 384 |
Equipment | |
| 1,074 | |
| 915 |
Directors' compensation | |
| 227 | |
| 256 |
Professional fees | |
| 491 | |
| 523 |
Advertising | |
| 282 | |
| 226 |
Federal deposit insurance premium | |
| 341 | |
| 288 |
Other | |
| 624 | |
| 534 |
Total non-interest expenses | |
| 7,215 | |
| 6,765 |
Net income before taxes | |
| 648 | |
| 701 |
Income tax expense | |
| 145 | |
| 125 |
Net income | | $ | 503 | | $ | 576 |
See accompanying notes to consolidated financial statements.
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United Roosevelt MHC and Subsidiaries
Consolidated StatementS of COMPREHENSIVE INCOME
(In Thousands)
| | Years Ended | ||||
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | | | | | |
Net income | | $ | 503 | | $ | 576 |
Other comprehensive income: | |
| | |
| |
Unrealized (losses) gains on securities: | |
| | |
| |
Unrealized holding (losses) gains on available for sale securities | |
| 541 | |
| (42) |
Reclassification adjustment for losses realized in income | |
| 186 | |
| 119 |
Net unrealized gains | |
| 727 | |
| 77 |
Tax effects | |
| (194) | |
| (24) |
Net-of-tax amount | |
| 533 | |
| 53 |
Defined benefit pension plans: | |
| | |
| |
Gains (losses) arising during the period | |
| 856 | |
| (76) |
Tax effects | |
| (241) | |
| 1 |
Net-of-tax amount | |
| 615 | |
| (75) |
Total other comprehensive income (loss) | |
| 1,148 | |
| (22) |
Comprehensive income | | $ | 1,651 | | $ | 554 |
See accompanying notes to consolidated financial statements.
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United Roosevelt MHC and Subsidiaries
Consolidated StatementS of CHANGES IN EQUITY
(In Thousands)
| | | | | Accumulated | | | | |
| | | | | Other | | | | |
| | Retained | | Comprehensive | | | | ||
| | Earnings | | Income (Loss) | | Total | |||
Balance, December 31, 2023 | | $ | 19,385 | | $ | (1,596) | | $ | 17,789 |
Net income | |
| 576 | |
| — | |
| 576 |
Other comprehensive loss | |
| — | |
| (22) | |
| (22) |
Balance, December 31, 2024 | | $ | 19,961 | | $ | (1,618) | | $ | 18,343 |
Net income | |
| 503 | |
| — | |
| 503 |
Other comprehensive income | |
| — | |
| 1,148 | |
| 1,148 |
Balance, December 31, 2025 | | $ | 20,464 | | $ | (470) | | $ | 19,994 |
See accompanying notes to consolidated financial statements.
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United Roosevelt MHC and Subsidiaries
Consolidated StatementS of Cash flows
(IN Thousands)
| | Years Ended | ||||
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | | | | | |
Cash flows from operating activities: |
| | | | | |
Net income | | $ | 503 | | $ | 576 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |
| | |
| |
Provisions for credit losses | |
| 801 | |
| 118 |
Depreciation of premises and equipment | |
| 266 | |
| 272 |
Amortization (accretion) of deferred loan fees, net | |
| 368 | |
| (10) |
Amortization (accretion) of premiums and discounts, net | |
| (37) | |
| (3) |
Loss on sale of available for sale securities | |
| 186 | |
| 119 |
Deferred income tax (benefit) expense | |
| (266) | |
| 94 |
Increase in cash surrender value of bank owned life insurance | |
| (183) | |
| (122) |
Net change in: | |
| | |
| |
Accrued interest receivable | |
| (211) | |
| (139) |
Other assets | |
| (846) | |
| (164) |
Other liabilities | |
| 959 | |
| (298) |
Net cash provided by operating activities | |
| 1,540 | |
| 443 |
Cash flows from investing activities: | |
| | |
| |
Available for sale: | | | | | | |
Proceeds from sales | |
| 2,815 | |
| 1,373 |
Purchases | |
| (14,298) | |
| (9,972) |
Proceeds from maturities, calls and principal repayments | |
| 4,127 | |
| 1,143 |
Held to maturity: | | | | | | |
Purchases | |
| — | |
| (7,743) |
Proceeds from maturities, calls and principal repayments | |
| 7,309 | |
| 12,988 |
Purchases of certificate of deposit investments | |
| — | |
| (3,798) |
Proceeds from maturity of certificate of deposit investments | |
| 4,296 | |
| 747 |
Purchases of BOLI investments | |
| (2,000) | |
| (1,000) |
Surrender of BOLI investments | |
| 887 | |
| — |
Purchases of annuity investments | |
| (2,473) | |
| — |
Loan principal (originations) collections, net | |
| (53,634) | |
| (26,446) |
Purchases of premises and equipment | |
| (18) | |
| (73) |
Purchase of Federal Home Loan Bank of New York stock | |
| (4,023) | |
| (7,348) |
Redemption of Federal Home Loan Bank of New York stock | |
| 3,595 | |
| 6,699 |
Net cash used in investing activities | |
| (53,417) | |
| (33,430) |
Cash flows from financing activities: | |
| | |
| |
Net increase in deposits | |
| 44,871 | |
| 13,923 |
Net change in FRB short term advances | |
| (5,000) | |
| 5,000 |
Net change in FHLB short term advances | |
| (2,000) | |
| (8,000) |
Proceeds from FHLB long term advances | |
| 34,112 | |
| 22,185 |
Repayment of FHLB long term advances | |
| (23,325) | |
| (500) |
Net proceeds from issuance of senior notes | |
| 650 | |
| 1,025 |
Net proceeds from borrowers for taxes and insurance | |
| 233 | |
| 199 |
Net cash provided by financing activities | |
| 49,541 | |
| 33,832 |
Net change in cash and cash equivalents | |
| (2,336) | |
| 845 |
Cash and cash equivalents, beginning of period | |
| 10,727 | |
| 9,882 |
Cash and cash equivalents, end of period | | $ | 8,391 | | $ | 10,727 |
Supplementary cash flows information | | | | | | |
Interest paid | | $ | 9,028 | | $ | 7,267 |
Income taxes paid, net | | $ | 288 | | $ | 248 |
See accompanying notes to consolidated financial statements.
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United Roosevelt MHC and Subsidiaries
NOTES TO Consolidated FINANCIAL StatementS
December 31, 2025 and 2024
1. Organization
United Roosevelt MHC (the “MHC”) is a mutual holding company. United Roosevelt Bancorp, Inc. (the “Bancorp”) is a Stock Holding Company and wholly-owned subsidiary of the MHC. United Roosevelt Savings Bank (the “Bank”) is a state-chartered stock savings bank and is a wholly-owned subsidiary of the Bancorp. United Roosevelt Securities Corp. (the “Investment Corp.”) is a wholly-owned subsidiary of the Bank. Currently, the only business activity of the MHC is to hold all of the outstanding stock of the Bancorp and the only business activity of the Bancorp is to hold all of the outstanding stock of the Bank. The Investment Corp. is a New Jersey investment company formed primarily to hold investments and mortgage-backed securities.
Plan of Reorganization
URSB Bancorp, Inc., a Maryland corporation, was formed on September 8, 2025 to serve as the bank holding company for United Roosevelt Savings Bank and its Subsidiary as part of the Bank's mutual holding company reorganization. As of December 31, 2025 the reorganization had not been completed, and, as of that date, the Registrant had no assets or liabilities, and had not conducted any business other than that of an organizational nature. Accordingly, financial and other information of the MHC is included in this Annual Report.
2. Summary of Significant Accounting Policies
Basis of the Consolidated Financial Statement Presentation
The consolidated financial statements include the accounts of the MHC and its wholly owned subsidiaries, the Bancorp, the Bank and the Investment Corp. (collectively the “Company”), and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financials and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses.
Cash and Cash Equivalents
Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits having original maturities of three months or less.
Investment in Certificates of Deposit
Certificates of deposit are held with other depository institutions, have maturities less than two years and are carried at cost.
Securities
Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Debt securities not classified as held to maturity are classified as “available for sale” and
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recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income.
Purchase discounts are recognized in interest income using the interest method over the terms of the securities. Purchase premiums are recognized in interest income using the interest method through the earliest call date. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.
Each reporting period, the Company evaluates all securities classified as available for sale with a decline in fair value below the amortized cost of the investment to determine whether or not an allowance for credit losses should be recorded. The Company first assesses if there is intent to sell, or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses charged to earnings. For debt securities available for sale that the Company intends to hold, management evaluates whether the decline in fair value has resulted from credit losses or other factors. The Company considers both quantitative and qualitative factors in making this assessment. Credit loss is measured based on discounted cash flow analysis and recorded in a valuation allowance. The allowance is limited by the amount that the fair value is less than the amortized cost basis. Impairment that has not been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes. Changes in the allowance is recorded in the period of the change as credit loss expense (or reversal of credit loss expense).
The Company measures expected credit losses on held to maturity securities on a collective basis by major security type in accordance with the current expected credit loss (“CECL”) methodology.
Debt securities are placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.
Loans Receivable
Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for credit losses, premiums on purchased loans, and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual lives of the loans. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method or a method that approximates such method.
The loans receivable portfolio is segmented into residential loans, commercial real estate loans, commercial and industrial loans, and consumer loans. Residential loans consist of 1-4 family mortgage loans, home equity term loans, and home equity lines of credit. Commercial real estate loans consist of mortgage loans, multi-family, and construction. Commercial and industrial loans consist of loans secured by other than real estate, unsecured loans, SBA/USDA guaranteed loans purchased, and loans acquired through Bankers Healthcare Group (BHG); the BHG loans are listed as their own category. Consumer loans consist of unsecured loans acquired through BHG, auto loans acquired through Woodside Credit, unsecured loans acquired through Lending Club, advances for taxes and insurance, loans secured by deposit accounts, and overdrafts.
For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90-days past due or when management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest is charged to income in the current year. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six consecutive months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.
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Concentration of Risk
Financial instruments, which potentially subject the Company and its subsidiaries to concentrations of credit risk, consist of cash and cash equivalents, investment and mortgage-backed securities and loans. Cash and cash equivalents include amounts placed with highly rated financial institutions. Securities primarily include mortgage-backed securities, U.S. Government agency obligations, corporate bonds and subordinated debt. The Company’s lending activity is concentrated in loans collateralized by real estate primarily in the State of New Jersey. As a result, credit risk is broadly dependent on the real estate market and general economic conditions in the State.
Current Expected Credit Loss (CECL)
The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term). The allowance for credit losses on loans is established through a provision for credit losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.
The allowance for credit losses on loans is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
The Company measures the allowance for credit losses using the SCALE method which is a simple, spreadsheet-based method developed by the Federal Reserve to assist community banks in calculating a CECL compliant allowance for credit losses using proxy expected lifetime loss rates. The SCALE tool is a template designed for smaller community banks with total assets of less than $1 billion. It uses publicly available data from Schedule RI-C of the Call Report to derive the initial proxy lifetime loss rates.
As of December 31, 2025, the Company changed its CECL estimation methodology from WARM to a SCALE framework to better align with its size and complexity, which represents a change in accounting estimate and did not have a material impact on the allowance for credit losses.
Qualitative and quantitative adjustments related to current conditions and the reasonable and supportable forecast period consider all of the following: the borrower’s creditworthiness, changes in lending policy and procedures, changes in nature and volume of the loan portfolio and in the terms of loans, changes in experience, ability and depth of lending management and staff, changes in the quality of the loan review system, changes in the value of underlying collateral for collateral-dependent loans, existence and effect of any concentration of credit and changes in the level of such concentrations, effect of other external forces such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing portfolio, and the current and forecasted direction of the economic and business environment.
The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:
Residential real estate – The Company generally does not originate loans with a loan-to-value ratio greater than 80 percent and does not generally grant loans that would be classified as subprime upon origination. The Company has 1st or 2nd lien position on property securing equity lines-of-credit. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.
Commercial real estate – Loans in this segment are primarily income-producing properties throughout New Jersey. The underlying cash flows generated by the properties can be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on the credit quality in this segment. Management obtains rent rolls annually and continually monitors the cash flows of these loans. This segment also includes construction loans which primarily include speculative real estate development loans for which payment is
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derived from sale of the property. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.
Commercial loans – Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, could have an effect on the credit quality in this segment. In addition, this segment includes a small portion of purchased loans guaranteed by the Small Business Administration (SBA) and/or the U.S. Department of Agriculture (USDA). Because these loans are guaranteed they are not allocated a general reserve; the Company has not experienced losses on such loans and management expects the guarantees will be effective, if necessary.
BHG Commercial Loans – Loans in this segment are commercial loans acquired from BHG. BHG is a non-bank lender generating small business loans. A weakened economy, and resultant decreased consumer spending, could have an effect on the credit quality in this segment.
Consumer loans – Historically, loans in this segment include loans that are secured by certificates of deposit or savings accounts; this category also includes advances for taxes and insurance on respective loans. Beginning in 2025, the Company began purchasing consumer loans from Lending Club, Woodside Credit, and BHG which are unsecured. Repayment is generally dependent on the credit quality of the individual borrower.
Individually Evaluated Loans
Loans that do not have shared risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. For loans that are collateral dependent, that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.
Allowance for Credit Losses – Off-Balance Sheet Credit Exposures
The Company has off-balance sheet financial instruments, which include commitments to extend credit, standby letters of credit and commercial letters of credit. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The Company’s allowance for credit losses on off-balance sheet credit exposures is recognized in other liabilities on the consolidated statements of financial condition, with adjustments to the reserve recognized in the provision for credit losses in the consolidated statements of operation. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.
Premises and Equipment
Premises and equipment are comprised of land, at cost, and building, building improvements, and furnishings and equipment, at cost, less accumulated depreciation. Depreciation charges are computed using the straight-line method over the following estimated useful lives:
| | Years |
Buildings and improvements |
| 10-40 |
Furnishings and equipment |
| 3-10 |
Software |
| 1-7 |
Significant renewals and betterments are charged to the premises and equipment account. Maintenance and repair expenses are charged to operations in the year incurred.
14
Leases
The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets are included in other assets and operating lease liabilities are included in other liabilities in the consolidated statements of financial condition. The Company does not have any finance leases.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company used the incremental borrowing rate, which is generally the Federal Home Loan Bank classic advance rate, based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset is net of lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For operating leases, lease expense is recognized on a straight-line basis over the lease term.
Federal Home Loan Bank of New York (“FHLB”) Stock
Federal law requires a member institution of the Federal Home Loan Bank system to hold restricted stock of its district Federal Home Loan Bank according to a predetermined Form ula which is reviewed at least annually. The restricted stock is carried at cost.
Management evaluates the restricted stock for impairment. Management’s determination of whether this investment is impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB. Management believes no impairment charge is necessary related to the FHLB stock as of December 31, 2025 and 2024.
Atlantic Community Bankers Bank (“ACBB”) Stock
ACBB shareholders receive an annual dividend, as well as a monthly loyalty benefit, which offsets service charges. Institutions are not required to be shareholders, although shareholders receive additional benefits. Shareholder institutions may apply for a formal loan arrangement or an overnight Federal Funds Borrowing facility from ACBB (subject to underwriting and approval). In addition, shareholders receive preferential borrowing rates and priority funding on overnight Federal Funds borrowings. Management evaluates the stock for impairment. Management’s determination of whether this investment is impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. Management believes no impairment charge is necessary related to the ACBB stock as of December 31, 2025 and 2024.
Real Estate Owned
Real estate owned is property acquired through foreclosure or deed in lieu of foreclosure. When property is acquired, it is initially recorded at fair value, less estimated costs to sell, at the date of foreclosure establishing a new cost basis. After acquisition, foreclosed properties are held for sale and carried at the lower of cost or fair value less estimated selling costs. Fair value is estimated through current appraisals, where practical, or an inspection and a comparison of the property securing the loan with similar properties in the area by either a licensed appraiser or real estate broker. Subsequent provisions for losses, which may result from the ongoing periodic valuations of these properties, are charged to income in the period in which they are identified. Carrying costs, such as maintenance and taxes, are charged to operating expenses as incurred. As of December 31, 2025 and 2024, the Company had no real estate owned.
15
Bank Owned Life Insurance
Bank owned life insurance (“BOLI”) is recorded at its realizable value. The change in the net asset value is recorded as non-interest income. BOLI involves purchasing life insurance by the Company on an eligible employee or director. The Company is the owner and the Company and covered employee/directors are the beneficiaries of the policies. The employee/director receive split payouts which applies when death occurs. The payout for the CEO is the net at risk amount. The payout for the Non-CEO director is $125,000. The payout for the CFO is $50,000.
Income Taxes
The Company files a consolidated federal income tax return. Income taxes are allocated to the MHC and its subsidiaries based on the contribution of their income or use of their losses in the consolidated return. Separate state income tax returns are filed by the MHC and its subsidiaries.
Federal and state income taxes have been provided on the basis of reported income. The amounts reflected on the tax returns differ from those provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. Deferred income tax expense or benefit is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the consolidated 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.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. The realization of deferred tax assets is assessed, and a valuation allowance provided, when necessary, for that portion of the asset which is not likely to be realized. Management believes, based upon current facts, that it is more likely than not that there will be sufficient taxable income in future years to realize all deferred tax assets.
The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements in accordance with accounting guidance which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended December 31, 2025 and 2024. The Company recognizes interest and penalties, if any, on unrecognized tax benefits in income taxes expense in the Consolidated Statement of Operations. There were no interest and penalties included in income tax expense for the years ended December 31, 2025 and 2024. The tax years subject to examination by the taxing authorities are the years ended December 31, 2022, through 2025 for federal and the years ended December 31, 2022 through 2025 for New Jersey.
Fair Value Hierarchy
The Company groups its assets and 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 – Valuation is based on quoted prices in active markets for identical assets or liabilities. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2 – Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using unobservable inputs to pricing models, discounted cash flow methodologies, or similar
16
techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
Interest Rate Risk
The Company is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to primarily make loans secured by real estate and to purchase securities. The potential for interest-rate risk exists as a result of the generally shorter duration of the Company’s interest-sensitive liabilities compared to the generally longer duration of its interest-sensitive assets. In a rising rate environment, liabilities will reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Company’s interest-sensitive assets and interest-bearing liabilities in order to measure its level of interest-rate risk and its plan for future volatility.
Transfers of Financial Assets
Transfers of financial assets, including loan and loan participation sales, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
As of December 31, 2025 and 2024, the Company has not recorded loan servicing assets due to the immateriality of the amount that would have been capitalized.
Advertising Costs
The Company follows the policy of charging the costs of advertising to expense as incurred.
Retirement Plan
The compensation cost of an employee’s pension benefit is recognized on the projected unit credit method over the employee’s approximate service period. The aggregate cost method is utilized for funding purposes.
The Company accounts for its defined benefit pension plan using an actuarial model that allocates pension costs over the service period of employees in the plan. The Company accounts for the over-funded or under-funded status of its defined benefit plan as an asset or liability in its consolidated statements of financial condition and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income or loss.
Other Comprehensive Income
The Company records unrealized gains and losses, net of deferred income taxes, on available for sale securities in accumulated other comprehensive income. Realized gains and losses, if any, are reclassified to non-interest income upon sale of the related securities or upon the recognition of an impairment loss. Other comprehensive income also includes benefit plan amounts recognized, net of tax, for transition obligations, prior service costs, and unrealized net actuarial gains and losses.
17
The components of accumulated other comprehensive loss included in equity are as follows:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Net unrealized loss on securities available for sale | | $ | (495) | | $ | (1,222) |
Tax effect | |
| 147 | |
| 341 |
Net of tax amount | |
| (348) | |
| (881) |
Benefit plan adjustments | |
| (169) | |
| (1,025) |
Tax effect | |
| 47 | |
| 288 |
Net of tax amount | |
| (122) | |
| (737) |
Accumulated other comprehensive loss | | $ | (470) | | $ | (1,618) |
Reclassification
Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year presentation when necessary.
Operating Segments
Management, which includes the Chief Executive Officer who acts as the Chief Operating Decision Maker (“CODM”), monitors the revenue streams of its various products and services, operating results and financial performance on a company-wide basis. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM uses net income reporting in the Company’s consolidated statements of operations to make operating and strategic decisions. Accordingly, there is only one reportable segment. The Company adopted ASU 2023-07 during the year ended December 31, 2024 noting no material impact.
Recently Adopted Accounting Pronouncements
On January 1, 2025, the Company adopted Accounting Standards Update (ASU) 2023-09, Income Taxes – Improvements to Income Tax Disclosures (Topic 740), which requires entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. On an annual basis, entities must disclose: (1) the amount of income taxes paid, net of refunds, disaggregated by federal, state, and foreign; and (2) the amount of income taxes paid, net of refunds, disaggregated by individual jurisdictions in which income taxes paid, net of refunds received, for amounts equal to or greater than 5% or total income taxes paid. Further, the amendments also require entities to disclose: (1) income or loss from continued operations before income tax expense (or benefit) disaggregated between domestic and foreign sources; and (2) income or loss from continued operations disaggregated by federal, state, and foreign sources. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements.
Recent Accounting Pronouncement
As an emerging growth company, we have elected to use the extended transition period to delay the adoption of new or re-issued accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans. The amendments in this Update expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this Update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” (defined below) are purchased seasoned loans and accounted for using the gross-up approach at acquisition. Specifically, after an entity determines that a loan is a non-PCD asset based on its assessment of credit deterioration experienced since origination, the entity should apply the guidance described in the amendments to determine whether the loan is seasoned and, therefore, should be accounted for using the gross-up
18
approach. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is not expecting a significant impact on its financial statements as a result of this Update.
3. Securities Available for Sale
The carrying value and estimated fair value of securities available for sale are presented below by contractual final maturity. Actual maturities may differ from below as the loans underlying some securities are subject to prepayment and regular monthly principal repayment.
| | December 31, 2025 | ||||||||||
| | Amortized | | Gross Unrealized | | Fair | ||||||
| | Cost | | Gains | | Losses | | Value | ||||
| | (In thousands) | ||||||||||
Mortgage-Backed Securities: | | | | | | | | | | | | |
Due after one through five years | | $ | 1 | | $ | — | | $ | — | | $ | 1 |
Due after ten years | |
| 4,250 | |
| 33 | |
| (555) | |
| 3,728 |
| |
| 4,251 | |
| 33 | |
| (555) | |
| 3,729 |
Collateralized Mortgage Obligations (CMO): | | | | | | | | | | | | |
Due within one year | |
| 578 | |
| — | |
| (2) | |
| 576 |
Due after ten years | |
| 13,387 | |
| 164 | |
| — | |
| 13,551 |
| |
| 13,965 | |
| 164 | |
| (2) | |
| 14,127 |
Corporate Bonds: | | | | | | | | | | | | |
Due after five through ten years | |
| 1,000 | |
| 15 | |
| — | |
| 1,015 |
| |
| 1,000 | |
| 15 | |
| — | |
| 1,015 |
Agency Securities | | | | | | | | | | | | |
Due after one through five years | |
| 2,000 | |
| — | |
| (114) | |
| 1,886 |
| |
| 2,000 | |
| — | |
| (114) | |
| 1,886 |
Small Business Administration: | | | | | | | | | | | | |
Due after ten years | |
| 5,113 | |
| — | |
| (36) | |
| 5,077 |
| |
| 5,113 | |
| — | |
| (36) | |
| 5,077 |
| | | | | | | | | | | | |
| | $ | 26,329 | | $ | 212 | | $ | (707) | | $ | 25,834 |
19
The age of unrealized losses and fair value of related securities available for sale were as follows:
| | December 31, 2025 | ||||||||||||||||
| | Less than 12 Months | | 12 Months or More | | Total | ||||||||||||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | ||||||
| | Value | | Losses | | Value | | Losses | | Value | | Losses | ||||||
| | (In thousands) | ||||||||||||||||
Mortgage-Backed Securities | | $ | — | | $ | — | | $ | 2,652 | | $ | (555) | | $ | 2,652 | | $ | (555) |
CMO | |
| — | |
| — | |
| 576 | |
| (2) | |
| 576 | |
| (2) |
Agency Securities | |
| — | |
| — | |
| 1,886 | |
| (114) | |
| 1,886 | |
| (114) |
Small Business Admin. | |
| — | |
| — | |
| 5,077 | |
| (36) | |
| 5,077 | |
| (36) |
| | $ | — | | $ | — | | $ | 10,191 | | $ | (707) | | $ | 10,191 | | $ | (707) |
| | December 31, 2024 | ||||||||||
| | Amortized | | Gross Unrealized | | Fair | ||||||
| | Cost | | Gains | | Losses | | Value | ||||
| | (In thousands) | ||||||||||
Mortgage-Backed Securities: | | | | | | | | | | | | |
Due within one year | | $ | 1 | | $ | — | | $ | — | | $ | 1 |
Due after one through five years | |
| 4 | |
| — | |
| — | |
| 4 |
Due after ten years | |
| 3,473 | |
| — | |
| (713) | |
| 2,760 |
| |
| 3,478 | |
| — | |
| (713) | |
| 2,765 |
CMO: | | | | | | | | | | | | |
Due after one through five years | |
| 597 | |
| — | |
| (2) | |
| 595 |
Due after ten years | |
| 4,190 | |
| — | |
| (23) | |
| 4,167 |
| |
| 4,787 | |
| — | |
| (25) | |
| 4,762 |
Corporate Bonds: | | | | | | | | | | | | |
Due after one through five years | |
| 2,000 | |
| — | |
| (153) | |
| 1,847 |
| |
| 2,000 | |
| — | |
| (153) | |
| 1,847 |
Agency Securities | | | | | | | | | | | | |
Due after one through five years | |
| 3,000 | |
| — | |
| (281) | |
| 2,719 |
| |
| 3,000 | |
| — | |
| (281) | |
| 2,719 |
Small Business Administration: | | | | | | | | | | | | |
Due after ten years | |
| 5,863 | |
| — | |
| (50) | |
| 5,813 |
| |
| 5,863 | |
| — | |
| (50) | |
| 5,813 |
| | | | | | | | | | | | |
| | $ | 19,128 | | $ | — | | $ | (1,222) | | $ | 17,906 |
The age of unrealized losses and fair value of related securities available for sale were as follows:
| | December 31, 2024 | ||||||||||||||||
| | Less than 12 Months | | 12 Months or More | | Total | ||||||||||||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | ||||||
| | Value | | Losses | | Value | | Losses | | Value | | Losses | ||||||
| | (In thousands) | ||||||||||||||||
Mortgage-Backed Securities |
| $ | — | | $ | — | | $ | 2,762 | | $ | (713) | | $ | 2,762 | | $ | (713) |
CMO | | | 3,290 | | | (23) | | | 595 | | | (2) | | | 3,885 | | | (25) |
Corporate Bonds | | | — | | | — | | | 1,847 | | | (153) | | | 1,847 | | | (153) |
Agency Securities | | | — | | | — | | | 2,719 | | | (281) | | | 2,719 | | | (281) |
Small Business Admin. | | | 5,812 | | | (50) | | | — | | | — | | | 5,812 | | | (50) |
|
| $ | 9,102 | | $ | (73) | | $ | 7,923 | | $ | (1,149) | | $ | 17,025 | | $ | (1,222) |
20
For the year ended December 31, 2025, proceeds from sales of securities available for sale amounted to $2,815,000. Gross realized losses amounted to $186,000. There were no gains realized on any sales during this twelve-month period.
For the year ended December 31, 2024, proceeds from sales of securities available for sale amounted to $1,373,000. Gross realized losses amounted to $119,000. There were no gains realized on any sales in 2024.
At December 31, 2025, seventeen AFS debt securities had unrealized losses with aggregate depreciation of 6.5% from the Company’s amortized cost basis.
At December 31, 2024, twenty-five AFS debt securities had unrealized losses with aggregate depreciation of 6.7% from the Company’s amortized cost basis.
Management does not believe that any individual unrealized loss at December 31, 2025 and 2024 represent a credit-related unrealized loss. Management believes that all unrealized losses are due to changes in interest rates.
Management does not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell the securities reflected in the above tables prior to full recovery of fair value to a level which equals or exceeds amortized cost. All mortgage-backed securities are issued by U.S. Government sponsored entities and are collateralized by residential mortgages.
Allowance for Credit Losses – Available for Sale Securities
Available for sale securities which are guaranteed by government agencies do not currently have an allowance for credit loss as the Company determined these securities are either backed by the full faith and credit of the U.S. government and/or there is an unconditional commitment to make interest payments and to return the principal investment in full to investors when a debt security reaches maturity. In assessing the Company’s investments in government-sponsored and U.S. government guaranteed mortgage-backed securities and government-sponsored enterprise obligations, the contractual cash flows of these investments are guaranteed by the respective government-sponsored enterprise. Accordingly, it is expected that the securities would not be settled at a price less than the par value of the Company’s investments. The Company will evaluate this position no less than annually, however, certain items which may cause the Company to change this methodology include legislative changes that remove a government-sponsored enterprise’s ability to draw funds from the U.S. government, or legislative changes to housing policy that reduce or eliminate the U.S. government’s implicit guarantee on such securities. There were no allowance for credit losses established on available for sale debt securities during the year ended December 31, 2025 or 2024.
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4. Securities HELD TO MATURITY
The carrying value and estimated fair value of securities held to maturity are presented below by contractual final maturity. Actual maturities may differ from below as the loans underlying some securities are subject to prepayment and regular monthly principal repayment.
| | December 31, 2025 | |||||||||||||
| | Amortized | | Allowance for | | Gross Unrealized | | Fair | |||||||
| | Cost | | Credit Losses | | Gains | | Losses | | Value | |||||
| | (In thousands) | |||||||||||||
Mortgage-Backed Securities: | | | | | | | | | | | | | | | |
Due after ten years |
| $ | 864 | | $ | — | | $ | 25 | | $ | — | | $ | 889 |
| | | 864 | | | — | | | 25 | | | — | | | 889 |
Corporate Bonds: | | | | | | | | | | | | | | | |
Due after one through five years | | | 2,500 | | | (30) | | | — | | | (77) | | | 2,393 |
Due after five through ten years | | | 4,500 | | | (45) | | | 28 | | | (139) | | | 4,344 |
| | | 7,000 | | | (75) | | | 28 | | | (216) | | | 6,737 |
Agency Securities | | | | | | | | | | | | | | | |
Due within one year | | | 4,000 | | | — | | | — | | | (41) | | | 3,959 |
Due after one through five years | | | 1,000 | | | — | | | — | | | (53) | | | 947 |
| | | 5,000 | | | — | | | — | | | (94) | | | 4,906 |
|
| $ | 12,864 | | $ | (75) | | $ | 53 | | $ | (310) | | $ | 12,532 |
| | December 31, 2024 | |||||||||||||
| | Amortized | | Allowance for | | Gross Unrealized | | Fair | |||||||
| | Cost | | Credit Losses | | Gains | | Losses | | Value | |||||
| | (In thousands) | |||||||||||||
Mortgage-Backed Securities: | | | | | | | | | | | | | | | |
Due after ten years |
| $ | 918 | | $ | — | | $ | 1 | | $ | (3) | | $ | 916 |
| | | 918 | | | — | | | 1 | | | (3) | | | 916 |
Corporate Bonds: | | | | | | | | | | | | | | | |
Due after one through five years | | | 2,500 | | | (36) | | | — | | | (183) | | | 2,281 |
Due after five through ten years | | | 5,000 | | | (50) | | | 34 | | | (240) | | | 4,744 |
| | | 7,500 | | | (86) | | | 34 | | | (423) | | | 7,025 |
Agency Securities | | | | | | | | | | | | | | | |
Due within one year | | | 5,750 | | | — | | | — | | | (62) | | | 5,688 |
Due after one through five years | | | 6,000 | | | — | | | — | | | (264) | | | 5,736 |
| | | 11,750 | | | — | | | — | | | (326) | | | 11,424 |
|
| $ | 20,168 | | $ | (86) | | $ | 35 | | $ | (752) | | $ | 19,365 |
At December 31, 2025 and 2024, U.S. Government obligations with a carrying value of $30,190,000 and $21,959,000, respectively, were pledged to secure public deposits.
Allowance for Credit Losses – Securities Held to Maturity
Held to maturity securities which are issued by the United States Treasury or are guaranteed by government agencies do not currently have an allowance for credit loss as the Company determined these securities are either backed by the full faith and credit of the U.S. government and/or there is an unconditional commitment to make interest payments and to return the principal investment in full to investors when a debt security reaches maturity. In assessing the Company’s investments in government-sponsored and U.S. government guaranteed mortgage-backed securities and government-sponsored enterprise obligations, the contractual cash flows of these investments are guaranteed by the respective government-sponsored enterprise. Accordingly, it is expected that the securities would not be settled at a price less than the par value of the Company’s investments. The Company will evaluate this position no less than annually, however,
22
certain items which may cause the Company to change this methodology include legislative changes that remove a government-sponsored enterprise’s ability to draw funds from the U.S. government, or legislative changes to housing policy that reduce or eliminate the U.S. government’s implicit guarantee on such securities. Any expected credit losses on held to maturity securities would be presented as an allowance for credit loss.
The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the periods ended December 31, 2025 and 2024:
| | Corporate | |
| | Bonds | |
| | (In thousands) | |
Balance at December 31, 2023 | | $ | — |
Provision (reversal) for credit losses | | | 86 |
Balance at December 31, 2024 | | | 86 |
Provision (reversal) for credit losses | | | (11) |
Balance at December 31, 2025 |
| $ | 75 |
5. LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES
A summary of the balances of loans follows:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Residential real estate | | $ | 143,600 | | $ | 111,556 |
Commercial real estate | | | 88,100 | | | 86,876 |
Commercial and industrial | | | 7,940 | | | 10,890 |
BHG loans | | | 34,778 | | | 39,073 |
Consumer loans | | | 26,544 | | | 137 |
Total loans | | | 300,962 | | | 248,532 |
Allowance for credit losses on loans | | | (2,277) | | | (1,363) |
Premiums on loans purchased | | | 566 | | | 23 |
Deferred loan fees, net | | | 1,187 | | | 833 |
| | | (524) | | | (507) |
Net loans | | $ | 300,438 | | $ | 248,025 |
The Company grants loans to its officers and directors and to their associates. Related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than normal risk of collectability. Activity in such loans for the year ended December 31, 2025 and 2024 is as follows:
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Balance, beginning | | $ | 680 | | $ | 707 |
Loans originated | | | 34 | | | — |
Collection of principal | | | (59) | | | (27) |
Balance, ending | | $ | 655 | | $ | 680 |
23
The following tables summarize the activity in the allowance for credit losses by loan class and information in regard to the allowance for credit losses and the recorded investment in loans receivable by loan class as of December 31, 2025 and 2024:
| | Year Ended December 31, 2025 | |||||||||||||
| | Allowance for Credit Losses on Loans | |||||||||||||
| | Beginning | | Charge- | | | | | Provisions | | Ending | ||||
| | Balance | | offs | | Recoveries | | (Credits) | | Balance | |||||
| | (In thousands) | |||||||||||||
Residential | | $ | 142 | | $ | — | | $ | — | | $ | 636 | | $ | 778 |
Commercial real estate | |
| 1,034 | |
| — | |
| — | |
| (376) | |
| 658 |
Commercial and industrial | |
| 90 | |
| — | |
| 90 | |
| (112) | |
| 68 |
BHG Commercial loans | |
| 97 | |
| — | |
| — | |
| (65) | |
| 32 |
Consumer | |
| — | |
| (29) | |
| — | |
| 770 | |
| 741 |
Unallocated | |
| — | |
| — | |
| — | |
| — | |
| — |
| | $ | 1,363 | | $ | (29) | | $ | 90 | | $ | 853 | | $ | 2,277 |
| | Year Ended December 31, 2024 | |||||||||||||
| | Allowance for Credit Losses on Loans | |||||||||||||
| | Beginning | | Charge- | | | | | Provisions | | Ending | ||||
| | Balance | | offs | | Recoveries | | (Credits) | | Balance | |||||
| | (In thousands) | |||||||||||||
Residential | | $ | 788 | | $ | — | | $ | — | | $ | (646) | | $ | 142 |
Commercial real estate | |
| 438 | |
| — | |
| — | |
| 596 | |
| 1,034 |
Commercial and industrial | |
| 24 | |
| (90) | |
| — | |
| 156 | |
| 90 |
BHG loans | |
| 136 | |
| — | |
| — | |
| (39) | |
| 97 |
Consumer | |
| 15 | |
| — | |
| — | |
| (15) | |
| — |
Unallocated | |
| 77 | |
| — | |
| — | |
| (77) | |
| — |
| | $ | 1,478 | | $ | (90) | | $ | — | | $ | (25) | | $ | 1,363 |
The Company experienced significant loan growth in 2025 along with an increase in consumer loans resulting in a large increase to the allowance for credit loss.
The following tables summarize the activity in the allowance for credit losses by all credit categories as of and for the year ended December 31, 2025 and 2024:
| | December 31, 2025 | ||||||||||
| | | | | Unfunded | | Debt | | | | ||
| | Loans | | Loan | | Securities | | Aggregate | ||||
| | Receivable | | Commitments | | (HTM) | | ACL | ||||
| | (In thousands) | ||||||||||
Beginning balance | | $ | 1,363 | | $ | 57 | | $ | 86 | | $ | 1,506 |
Provisions, net of credit adjustments | | | 853 | | | (41) | | | (11) | | | 801 |
Recoveries, net of charge-offs |
| | 61 |
| | — |
| | — |
| | 61 |
Ending balance | | $ | 2,277 | | $ | 16 | | $ | 75 | | $ | 2,368 |
24
| | December 31, 2024 | ||||||||||
| | | | | Unfunded | | Debt | | | | ||
| | Loans | | Loan | | Securities | | Aggregate | ||||
| | Receivable | | Commitments | | (HTM) | | ACL | ||||
| | (In thousands) | ||||||||||
Beginning balance | | $ | 1,478 | | $ | — | | $ | — | | $ | 1,478 |
Provisions, net of credit adjustments | | | (25) | | | 57 | | | 86 | | | 118 |
Charge-offs, net of recoveries |
| | (90) |
| | — |
| | — |
| | (90) |
Ending balance | | $ | 1,363 | | $ | 57 | | $ | 86 | | $ | 1,506 |
The Company utilizes an eight-grade internal loan rating system for commercial real estate, construction and commercial loans as follows:
Loans rated 1 – 5: Loans in these categories are considered “pass” rated loans with low to average risk.
Loans rated 6: Loans in this category are considered “watch”. The loans show no signs of serious problems but do not meet all the criteria for a satisfactory loan. These loans will be followed closely in order to promptly detect any sign of deterioration.
Loans rated 7: Loans in this category are considered “special mention”. A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date.
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 Company will sustain some loss if the weakness is not corrected.
On an annual basis, or more often if needed, the Company formally reviews the ratings on all commercial real estate, construction and commercial loans. Additionally, the Company engages an independent third-party to review a significant portion of loans within these segments on an annual basis. Management uses the results of these reviews as part of its own annual review process. In addition, management utilizes delinquency reports, the watch list and other loan reports to monitor credit quality of other loan segments.
The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2025 and 2024. Residential real estate and consumer loans are grouped as performing or nonperforming based on
25
accrual status and retail credit guidance. Gross write-offs for the year ended December 31, 2025 and 2024 are also presented in the tables below:
| | December 31, 2025 | ||||||||||||||||||||||
| | Loans By Risk Rating by Origination Year | ||||||||||||||||||||||
| | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | 2020 | | Prior | | Total | ||||||||
Rating: | | (In thousands) | ||||||||||||||||||||||
Residential real estate: |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Performing | | $ | 42,621 | | $ | 29,684 | | $ | 27,356 | | $ | 8,878 | | $ | 10,777 | | $ | 4,543 | | $ | 19,699 | | $ | 143,558 |
Nonperforming | |
| — | |
| — | |
| 42 | |
| — | |
| — | |
| — | |
| — | |
| 42 |
Total | | $ | 42,621 | | $ | 29,684 | | $ | 27,398 | | $ | 8,878 | | $ | 10,777 | | $ | 4,543 | | $ | 19,699 | | $ | 143,600 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Pass | | $ | 6,251 | | $ | 12,710 | | $ | 11,054 | | $ | 23,473 | | $ | 18,277 | | $ | 6,810 | | $ | 8,505 | | $ | 87,080 |
Special mention | |
| — | |
| 941 | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 941 |
Substandard | |
| — | |
| — | |
| 70 | |
| — | |
| 9 | |
| — | |
| — | |
| 79 |
Total | | $ | 6,251 | | $ | 13,651 | | $ | 11,124 | | $ | 23,473 | | $ | 18,286 | | $ | 6,810 | | $ | 8,505 | | $ | 88,100 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
C&I - Other: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Pass | | $ | 3,811 | | $ | 2,084 | | $ | 1,582 | | $ | 362 | | $ | 101 | | $ | — | | $ | — | | $ | 7,940 |
Total | | $ | 3,811 | | $ | 2,084 | | $ | 1,582 | | $ | 362 | | $ | 101 | | $ | — | | $ | — | | $ | 7,940 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
C&I - Bankers Health Group: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Pass | | $ | 7,718 | | $ | 9,049 | | $ | 6,739 | | $ | 6,643 | | $ | 732 | | $ | 773 | | $ | 285 | | $ | 31,939 |
Substandard | |
| — | |
| 106 | |
| 901 | |
| 1,386 | |
| 29 | |
| 340 | |
| 77 | |
| 2,839 |
Total | | $ | 7,718 | | $ | 9,155 | | $ | 7,640 | | $ | 8,029 | | $ | 761 | | $ | 1,113 | | $ | 362 | | $ | 34,778 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Performing | | $ | 26,442 | | $ | 60 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 42 | | $ | 26,544 |
Nonperforming | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — |
Total | | $ | 26,442 | | $ | 60 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 42 | | $ | 26,544 |
Current period gross write-offs | | $ | 29 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 29 |
| | | | | | | | | | | | | | | | | | | | | | | | |
Grand Total | | $ | 86,843 | | $ | 54,634 | | $ | 47,744 | | $ | 40,742 | | $ | 29,925 | | $ | 12,466 | | $ | 28,608 | | $ | 300,962 |
Current period gross write-offs | | $ | 29 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 29 |
26
| | December 31, 2024 | ||||||||||||||||||||||
| | Loans By Risk Rating by Origination Year | ||||||||||||||||||||||
| | 2024 | | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | | Prior | | Total | ||||||||
Rating: | | (In thousands) | ||||||||||||||||||||||
Residential real estate: |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Performing | | $ | 32,585 | | $ | 28,919 | | $ | 9,703 | | $ | 12,199 | | $ | 5,201 | | $ | 3,198 | | $ | 18,962 | | $ | 110,767 |
Nonperforming | |
| 532 | |
| — | |
| — | |
| — | |
| — | |
| 129 | |
| 128 | |
| 789 |
Total | | $ | 33,117 | | $ | 28,919 | | $ | 9,703 | | $ | 12,199 | | $ | 5,201 | | $ | 3,327 | | $ | 19,090 | | $ | 111,556 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Pass | | $ | 10,742 | | $ | 13,429 | | $ | 24,386 | | $ | 19,596 | | $ | 7,004 | | $ | 2,779 | | $ | 6,472 | | $ | 84,408 |
Special Mention | |
| — | |
| 886 | |
| — | |
| 602 | |
| — | |
| — | |
| — | |
| 1,488 |
Substandard | |
| — | |
| — | |
| 980 | |
| — | |
| — | |
| — | |
| — | |
| 980 |
Total | | $ | 10,742 | | $ | 14,315 | | $ | 25,366 | | $ | 20,198 | | $ | 7,004 | | $ | 2,779 | | $ | 6,472 | | $ | 86,876 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
C&I - Other: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Pass | | $ | 3,482 | | $ | 2,802 | | $ | 463 | | $ | 1,391 | | $ | — | | $ | 1,494 | | $ | 753 | | $ | 10,385 |
Special Mention | |
| — | |
| 423 | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 423 |
Substandard | |
| — | |
| 82 | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 82 |
Total | | $ | 3,482 | | $ | 3,307 | | $ | 463 | | $ | 1,391 | | $ | — | | $ | 1,494 | | $ | 753 | | $ | 10,890 |
Current period gross write-offs | | $ | — | | $ | 90 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 90 |
| | | | | | | | | | | | | | | | | | | | | | | | |
C&I - Bankers Health Group: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Pass | | $ | 12,261 | | $ | 10,000 | | $ | 10,273 | | $ | 1,433 | | $ | 1,564 | | $ | 489 | | $ | 312 | | $ | 36,332 |
Substandard | |
| 91 | |
| 1,008 | |
| 1,084 | |
| 58 | |
| 311 | |
| 144 | |
| 45 | |
| 2,741 |
Total | | $ | 12,352 | | $ | 11,008 | | $ | 11,357 | | $ | 1,491 | | $ | 1,875 | | $ | 633 | | $ | 357 | | $ | 39,073 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Performing | | $ | 86 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 51 | | $ | — | | $ | 137 |
Nonperforming | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — |
Total | | $ | 86 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 51 | | $ | — | | $ | 137 |
Current period gross write-offs | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
Grand Total | | $ | 59,779 | | $ | 57,549 | | $ | 46,889 | | $ | 35,279 | | $ | 14,080 | | $ | 8,284 | | $ | 26,672 | | $ | 248,532 |
Current period gross write-offs | | $ | — | | $ | 90 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 90 |
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2025 and 2024:
| | December 31, 2025 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | Loans | |
| | | | | | | | | | | | | | | | | | | | Receivable | |
|
| 30-59 |
| 60-89 |
| Greater | | | | | | | | Total | | >90 Days | |||||
|
| Days |
| Days |
| Than |
| Total |
| | |
| Loans | | and | ||||||
|
| Past Due | | Past Due | | 90 Days | | Past Due | | Current | | Receivables | | Accruing | |||||||
|
| (In thousands) | |||||||||||||||||||
Residential | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 143,600 | | $ | 143,600 | | $ | — |
Commercial real estate | |
| — | |
| — | |
| 79 | |
| 79 | |
| 88,021 | |
| 88,100 | |
| — |
Commercial and industrial | |
| 449 | |
| — | |
| — | |
| 449 | |
| 7,491 | |
| 7,940 | |
| — |
BHG loans | |
| — | |
| — | |
| — | |
| — | |
| 34,778 | |
| 34,778 | |
| — |
Consumer | |
| — | |
| — | |
| — | |
| — | |
| 26,544 | |
| 26,544 | |
| — |
| | $ | 449 | | $ | — | | $ | 79 | | $ | 528 | | $ | 300,434 | | $ | 300,962 | | $ | — |
27
| | December 31, 2024 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | Loans | |
| | | | | | | | | | | | | | | | | | | | Receivable | |
|
| 30-59 |
| 60-89 |
| Greater | | | | | | | | Total | | >90 Days | |||||
|
| Days |
| Days |
| Than |
| Total |
| | |
| Loans | | and | ||||||
|
| Past Due | | Past Due | | 90 Days | | Past Due | | Current | | Receivables | | Accruing | |||||||
|
| (In thousands) | |||||||||||||||||||
Residential | | $ | 796 | | $ | — | | $ | 129 | | $ | 925 | | $ | 110,631 | | $ | 111,556 | | $ | — |
Commercial real estate | |
| — | |
| — | |
| — | |
| — | |
| 86,876 | |
| 86,876 | |
| — |
Commercial and industrial | |
| 98 | |
| — | |
| — | |
| 98 | |
| 10,792 | |
| 10,890 | |
| — |
BHG loans | |
| — | |
| — | |
| — | |
| — | |
| 39,073 | |
| 39,073 | |
| — |
Consumer | |
| — | |
| — | |
| — | |
| — | |
| 137 | |
| 137 | |
| — |
| | $ | 894 | | $ | — | | $ | 129 | | $ | 1,023 | | $ | 247,509 | | $ | 248,532 | | $ | — |
At December 31, 2025, there were three loans in non-accrual status totaling $121,000; one residential mortgage loan totaling $42,000 was not included in the above table because it was current as of December 31, 2025, however continued payment performance is required in order to return the loan to accrued status.
At December 31, 2024, there were four loans in non-accrual status totaling $868,000.
The following table presents information regarding non-accrual loans:
| | December 31, 2025 | |||||||
| | | | | Non-accrual Loans | | | | |
| | Non-accrual Loans | | without Allowance | | Total Loans | |||
| | with Allowance for | | for | | on | |||
| | Credit Loss | | Credit Loss | | Non-accrual | |||
|
| (In thousands) | |||||||
Residential | | $ | — | | $ | 42 | | $ | 42 |
Commercial real estate | |
| — | |
| 79 | |
| 79 |
| | $ | — | | $ | 121 | | $ | 121 |
| | December 31, 2024 | |||||||
| | | | | Non-accrual Loans | | | | |
| | Non-accrual Loans | | without Allowance | | Total Loans | |||
| | with Allowance for | | for | | on | |||
|
| Credit Loss | | Credit Loss | | Non-accrual | |||
|
| (In thousands) | |||||||
Residential | | $ | — | | $ | 789 | | $ | 789 |
Commercial and industrial | |
| — | |
| 79 | |
| 79 |
| | $ | — | | $ | 868 | | $ | 868 |
When a loan is placed on non-accrual status, any accrued interest is reversed from loan interest income. The Company reversed interest on nonaccrual loans of $11,000 and $12,000 for the years ended December 31, 2025 and 2024, respectively.
Modified Loans
Occasionally, the Company will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. Typically, such modifications may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, extension of additional credit based on receipt of adequate collateral, or a deferment or reduction of payments (principal or interest) which materially alters the Company’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination.
28
When principal forgiveness is provided, the amount forgiven is charged-off against the allowance for credit losses on loans. The following table shows the amortized cost basis at December 31, 2025 and 2024, respectively, of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:
| | Year Ended December 31, 2025 | ||||
| | | | % of Total | ||
| | | | Class of | ||
| | Payment | | Financing | ||
| | Deferred | | Receivable | ||
|
| (Dollars in thousands) | ||||
Residential real estate | | $ | 42 | | 0.03 | % |
Total | | $ | 42 | | | — |
| | Year Ended December 31, 2024 | ||||
| | | | % of Total | ||
| | | | Class of | ||
| | Payment | | Financing | ||
| | Deferred | | Receivable | ||
|
| (Dollars in thousands) | ||||
Residential real estate | | $ | 796 | | 0.71 | % |
BHG loans | | $ | 49 | | 0.13 | % |
Total | | $ | 845 | | | — |
There were no charge-offs or payment defaults for any of these modified loans; the loans remained current as of December 31, 2025 and 2024, respectively.
6. PREMISES AND EQUIPMENT
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Land | | $ | 194 | | $ | 194 |
Buildings and improvements | |
| 3,214 | |
| 3,213 |
Accumulated depreciation | |
| (1,489) | |
| (1,392) |
| |
| 1,725 | |
| 1,821 |
Furnishings and equipment | |
| 1,937 | |
| 1,919 |
Accumulated depreciation | |
| (1,358) | |
| (1,199) |
| |
| 579 | |
| 720 |
Software | |
| 291 | |
| 291 |
Accumulated depreciation | |
| (280) | |
| (269) |
| |
| 11 | |
| 22 |
| | $ | 2,509 | | $ | 2,757 |
Depreciation expense for the years ended December 31, 2025 and 2024 amounted to $266,000 and $272,000, respectively.
7. LEASES
During 2023, the Company entered into an operating lease agreement for its branch location. This lease has a lease term of seven years and an option to extend the lease for up to five years. This option has not been included in the lease term as it was determined that it was not reasonably certain that the Company will exercise the option. The Company does not have any material short-term leases. The right-of-use (ROU) asset and related liability are included in other assets and other liabilities in the consolidated statements of financial condition.
29
| | December 31, | |||||
| | 2025 | | 2024 | | ||
| | (Dollars in thousands) | |||||
Operating cash flow from operational leases | | $ | 78 | | $ | 78 | |
Weighted average remaining lease term (in years) | |
| 4.2 | |
| 5.2 | |
Weighted average discount rate | |
| 3.96 | % |
| 3.96 | % |
Maturity of the lease liability is as follows:
| | December 31, | |
| | 2025 | |
| | (In thousands) | |
2026 | | $ | 78 |
2027 | |
| 78 |
2028 | |
| 78 |
2029 | |
| 78 |
2030 | |
| 13 |
Total lease payments | |
| 325 |
less imputed interest | |
| (26) |
Lease liability | | $ | 299 |
8. DEPOSITS
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Interest checking | | $ | 66,119 | | $ | 65,629 |
Non-Interest checking | |
| 9,938 | |
| 5,734 |
Money market | |
| 15,988 | |
| 17,389 |
Savings and club | |
| 24,080 | |
| 25,965 |
Total non-certificate accounts | |
| 116,125 | |
| 114,717 |
Certificates of deposit (1) | |
| 174,825 | |
| 131,362 |
Total deposits | | $ | 290,950 | | $ | 246,079 |
(1)Included in certificates of deposit are brokered deposits that amounted to $68,702,000 and $55,547,000, at December 31, 2025 and 2024, respectively.
Certificates of deposit with balances of more than $250,000 totaled approximately $100,844,000 and $72,987,000, at December 31, 2025 and 2024, respectively.
30
The scheduled maturities of certificates of deposit were as follows:
| | December 31, | |||||||||||
| | 2025 | | 2024 | | ||||||||
| | | | | Weighted | | | | | Weighted | | ||
| | | | | Average | | | | | Average | | ||
Maturity | | Amount | | Rate | | Amount | | Rate | | ||||
| | (Dollars in thousands) | |||||||||||
2025 | | $ | — |
| | 0.00 | % | $ | 73,536 |
| | 3.95 | % |
2026 | |
| 108,878 |
| | 3.38 | |
| 25,302 |
| | 1.79 | |
2027 | |
| 33,724 |
| | 3.61 | |
| 14,149 |
| | 3.37 | |
2028 | |
| 14,182 |
| | 4.31 | |
| 10,172 |
| | 4.46 | |
2029 | |
| 8,937 |
| | 4.35 | |
| 6,203 |
| | 4.50 | |
2030 | |
| 5,104 |
| | 3.87 | |
| — |
| | 0.00 | |
2033 | |
| — |
| | 0.00 | |
| 2,000 |
| | 5.45 | |
2035 | |
| 4,000 |
| | 4.10 | |
| — |
| | 0.00 | |
| | $ | 174,825 | | | 3.58 | % | $ | 131,362 | | | 3.56 | % |
9. BORROWINGS
| | December 31, | |||||||||
| | 2025 | | 2024 | | ||||||
| | | | | Weighted Average | | | | | Weighted Average | |
| | Amount | | Rate | | Amount | | Rate | | ||
Federal Home Loan Bank | | (Dollars in thousands) | |||||||||
Fixed Rate Advances: | | | |
| |
| | |
| |
|
Overnight borrowing | | $ | — |
| 0.00 | % | $ | 2,000 |
| 4.69 | % |
2025 | |
| — |
| 0.00 | |
| 8,325 |
| 3.99 | |
2026 | |
| 9,000 |
| 4.06 | |
| 4,000 |
| 4.00 | |
2027 | |
| 7,686 |
| 4.08 | |
| 6,685 |
| 3.84 | |
2028 | |
| 8,111 |
| 3.89 | |
| 6,500 |
| 3.84 | |
2029 | |
| 5,000 |
| 4.01 | |
| 5,000 |
| 4.01 | |
2030 | |
| 10,000 |
| 3.75 | |
| — |
| 0.00 | |
2034 | |
| 1,000 |
| 3.42 | |
| 3,500 |
| 3.18 | |
2035 | |
| 6,000 |
| 3.42 | |
| 2,000 |
| 3.48 | |
Total FHLB Advances (1) | | | 46,797 |
| 3.87 | | | 38,010 |
| 3.88 | |
FRB Advances | | | |
| | | | |
| | |
2025 | | | — |
| 0.00 | | | 5,000 |
| 4.50 | |
Total FRB Advances | | | — |
| 0.00 | | | 5,000 |
| 4.50 | |
Senior Notes (UR Bancorp) | | | |
| | | | |
| | |
2025 | | | — |
| 0.00 | | | 1,600 |
| 6.13 | |
2026 | | | 4,000 |
| 6.19 | | | 4,000 |
| 6.19 | |
2027 | | | 1,175 | | 6.50 | | | 525 | | 6.50 | |
2028 | | | 1,600 |
| 6.13 | | | — |
| — | |
Total Senior Notes | | | 6,775 |
| 6.23 | | | 6,125 |
| 6.20 | |
Total Borrowings | | $ | 53,572 |
| 4.17 | % | $ | 49,135 |
| 4.23 | % |
(1)Includes various advances callable by the FHLB totaling $19,000,000 as of December 31, 2025 and $15,500,000 as of December 31, 2024.
The Bank obtains advances from the FHLB which are secured by securities or mortgage loans under a collateral pledge agreement. The Bank also has the ability to borrow from the FRB Discount window which is also collateralized by securities and loans. The available borrowing capacity with the FHLB at December 31, 2025 and 2024 was $44,356,000 and $23,300,000, respectively. The available borrowing capacity with the FRB at December 31, 2025 and 2024 was $23,273,000 and $23,750,000, respectively.
31
United Roosevelt Bancorp, in November 2022, commenced a private offering via a Private Placement memorandum to qualified investors of senior unsecured notes. The notes issued carry interest rates and maturities as outlined in the above table. The Bancorp may commence additional offerings of new tranches of senior notes if opportunities arise and the returns on the additional amounts raised is determined to be economically viable.
The Company had municipal letters of credit with the FHLB in the amounts of $5,900,000 and $7,000,000, as of December 31, 2025 and 2024, respectively. The letters of credit serve as collateral for certain municipal deposits. As of December 31, 2025, and 2024, there were no outstanding balances on these letters of credit.
10. Regulatory Capital
The following table presents a reconciliation of capital per GAAP and regulatory capital and information as to the Bank’s capital levels at the dates presented:
|
| December 31, | ||||
|
| 2025 | | 2024 | ||
|
| (In thousands) | ||||
Bank GAAP surplus and retained earnings | | $ | 26,072 | | $ | 23,717 |
Unrealized loss (gain) on securities available for sale | |
| 349 | |
| 881 |
Benefit plan adjustments | |
| 121 | |
| 737 |
Core and tangible capital | |
| 26,542 | |
| 25,335 |
Allowance for credit losses | |
| 2,367 | |
| 1,506 |
Total regulatory capital | | $ | 28,909 | | $ | 26,841 |
Federal regulations require federally insured depository institutions to meet several minimum capital standards as set forth in the tables below.
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 consolidated financial statements. Under capital adequacy guidelines and regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices.
Capital amounts and classifications also are subject to qualitative judgments by the regulators about capital components, risk weighting, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
Federal banking regulations require the bank to maintain minimum amounts and ratios of common equity Tier 1, Tier 1 and total capital to risk-weighted assets and Tier 1 capital to average assets, as set forth in the table below. Additionally, community banking institutions must maintain a capital conservation buffer of common equity Tier I capital in an amount greater than 2.5% total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonuses.
| | December 31, 2025 |
| |||||||||||||
| | | | | | | | | | | | To be Well Capitalized | | |||
| | | | | | | For Capital Adequacy | | Under Prompt Corrective |
| ||||||
| | Bank Actual | | Purposes | | Action Provisions | | |||||||||
| | Amount | | Ratio | | Amount | | Ratio | | Amount | | Ratio |
| |||
| | (Dollar amounts in thousands) |
| |||||||||||||
Total capital (to risk-weighted assets) | | $ | 28,909 |
| 11.58 | % | $ | 19,965 |
| 8.00 | % | $ | 24,956 |
| 10.00 | % |
Tier 1 capital (to risk-weighted assets) | |
| 26,542 |
| 10.64 | % |
| 14,974 |
| 6.00 | % |
| 19,965 |
| 8.00 | % |
Common equity Tier 1 (to risk-weighted assets) | |
| 26,542 |
| 10.64 | % |
| 11,230 |
| 4.50 | % |
| 16,222 |
| 6.50 | % |
Tier 1 capital (Leverage) (to average total assets) | |
| 26,542 |
| 7.38 | % |
| 14,379 |
| 4.00 | % |
| 17,974 |
| 5.00 | % |
32
| | December 31, 2024 |
| |||||||||||||
| | | | | | | | | | | | To be Well Capitalized | | |||
| | | | | | | For Capital Adequacy | | Under Prompt Corrective |
| ||||||
| | Bank Actual | | Purposes | | Action Provisions | | |||||||||
| | Amount | | Ratio | | Amount | | Ratio | | Amount | | Ratio |
| |||
| | (Dollar amounts in thousands) |
| |||||||||||||
Total capital (to risk-weighted assets) | | $ | 26,841 |
| 12.58 | % | $ | 17,075 |
| 8.00 | % | $ | 21,344 |
| 10.00 | % |
Tier 1 capital (to risk-weighted assets) | |
| 25,335 |
| 11.87 | % |
| 12,807 |
| 6.00 | % |
| 17,075 |
| 8.00 | % |
Common equity Tier 1 (to risk-weighted assets) | |
| 25,335 |
| 11.87 | % |
| 9,605 |
| 4.50 | % |
| 13,874 |
| 6.50 | % |
Tier 1 capital (Leverage) (to average total assets) | |
| 25,335 |
| 8.10 | % |
| 12,509 |
| 4.00 | % |
| 15,636 |
| 5.00 | % |
As of the most recent notification from the Federal Deposit Insurance Corporation, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. There are no conditions existing or events which have occurred since notification that management believes have changed the Bank’s category.
11. Benefit Plans
Employee Pension Plan
The Company has a non-contributory defined benefit pension plan covering all eligible employees. This plan was frozen to new employees in 2015. The Company’s funding policy is to contribute annually an amount that can be deducted for federal income tax purposes.
Changes in the benefit plan for the years ended December 31, 2025 and 2024 figures are presented below:
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Projected benefit obligation, beginning | | $ | 3,795 | | $ | 3,956 |
Interest cost | |
| 193 | |
| 189 |
Actuarial loss (gain) | |
| (656) | |
| (4) |
Annuity payments | |
| (388) | |
| (346) |
Projected benefit obligation, ending | |
| 2,944 | |
| 3,795 |
Plan assets at fair value, beginning | |
| 5,083 | |
| 5,136 |
Actual return on assets | |
| 485 | |
| 293 |
Annuity payments | |
| (388) | |
| (346) |
Plan assets at fair value, ending | |
| 5,180 | |
| 5,083 |
Accrued pension cost included in other assets | | $ | 2,236 | | $ | 1,288 |
Weighted-Average assumptions used to determine the benefit obligations were as follows at December 31, 2025 and 2024:
| | 2025 | | 2024 |
|
Discount rate | | 5.20 | % | 5.35 | % |
Rate of increase in compensation levels | | N/A |
| N/A | |
33
The following table sets forth the components of net periodic pension cost for the years ended December 31, 2025 and 2024:
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Net periodic pension cost included the following components: | | | |
| | |
Interest cost | | $ | 193 | | $ | 189 |
Expected return on plan assets | |
| (284) | |
| (373) |
Net periodic pension cost | |
| (91) | |
| (184) |
Changes in benefit obligation recognized in other comprehensive income | |
| | |
| |
Net loss arising during the year | |
| (856) | |
| 76 |
Total recognized in other comprehensive income | |
| (856) | |
| 76 |
Total recognized in net periodic pension cost and other comprehensive income | | $ | (947) | | $ | (108) |
Weighted-Average assumptions used to determine the net periodic benefit cost for the years ended December 31, 2025 and 2024 were as follows (beginning of year assumptions):
| | 2025 | | 2024 | |
Discount rate | | 5.35 | % | 5.00 | % |
Expected long-term rate of return | | 6.25 | % | 6.75 | % |
Rate of increase in compensation levels | | N/A |
| N/A |
|
At, December 31, 2025 and 2024, unrecognized actuarial loss of $168,527 and $1,024,666, respectively, were included in accumulated other comprehensive income.
Investment Policies and Strategies
The primary long-term objective for the Plan is to maintain assets at a level that will sufficiently cover future beneficiary obligations. A secondary long-term objective is to achieve long-term growth in assets. The Plan is structured to mitigate the volatility of the Plan’s funded status and expected contribution volatility and includes a growth component (the equity commitment) and volatility reducing component (the fixed income commitment).
To achieve the Plan sponsor’s long-term investment objectives, the Trustee will invest the assets of the Plan in a diversified combination of asset classes, investment strategies, and pooled vehicles. The asset allocation guidelines in the table below reflect the plan sponsor’s risk tolerance and long-term objectives for the Plan. These parameters will be reviewed on a regular basis and subject to change following discussions between the plan sponsor and the Trustee.
Initially, the following asset allocation targets and ranges will guide the Trustee in structuring the overall allocation in the Plan’s investment portfolio. The Plan sponsor or the Trustee may amend these allocations to reflect the most appropriate standards consistent with changing circumstances. Any such fundamental amendments in strategy will be discussed between the Plan sponsor and Trustee prior to implementation.
34
Based on the above considerations, the following asset allocation ranges will be implemented:
| | Asset Allocation |
|
| | Parameters by | |
| | Asset Class | |
| | Target |
|
Domestic Equity: | | |
|
Large-Cap U.S. | | 19.3 | % |
Mid-Cap U.S. | | 1.2 | % |
Small-Cap U.S. | | 0.5 | % |
Total - Domestic Equity | | 21.0 | % |
| | | |
International Equity: | | | |
Overseas | | 2.4 | % |
Origin Emerging Markets | | 1.5 | % |
Diversified International | | 5.1 | % |
Total - International Equity | | 9.0 | % |
| | | |
Fixed Income: | | | |
LDI Long Duration | | 14.6 | % |
LDI Intermediate Duration | | 55.4 | % |
Total - Fixed Income | | 70.0 | % |
The parameters for each asset class provide the Trustee with the latitude for managing the Plan within a minimum and maximum range. The Trustee will have full discretion to buy, sell, invest and reinvest in these asset segments based on these guidelines which includes allowing the underlying investments to fluctuate within the stated policy ranges. The Plan will maintain a cash equivalents component (not to exceed 3% under normal circumstances) within the fixed income allocation for liquidity purposes.
The Trustee will monitor the actual asset segment exposures of the Plan on a regular basis and, periodically, may adjust the asset allocation within the ranges set forth above as it deems appropriate. Periodic reallocations of assets will be based on the Trustee’s perception of the changing risk/return opportunities of the respective asset classes.
Determination of Long-Term Rate-of-Return
The long-term rate-of-return-on-assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn long-term rates of return in the ranges of 6-8% and 3-5%, respectively, with an assumed long-term inflation rate of 2.5% reflected within these ranges. When these overall return expectations are applied to the plan’s target allocation, the result is an expected rate of return of 5% to 7%.
35
The market values invested in each investment category at December 31, 2025, are as follows:
| | | | | |
| | | | Assets at Fair | |
| | | | Value as of | |
| | | | December 31, | |
Asset Class: | | Investment Option |
| 2025 | |
| | |
| (In thousands) | |
Fixed Income |
| LDI Intermediate Duration Separate Acct | | $ | 2,750 |
Fixed Income |
| LDI Long Duration Separate Acct | |
| 729 |
Large U.S. Equity |
| LargeCap S&P 500 Index Separate Acct | |
| 1,095 |
Global/International Equity |
| Overseas Separate Acct | |
| 140 |
Global/International Equity |
| Diversified International Separate Acct | |
| 373 |
Small/Mid U.S. Equity |
| MidCap S&P 400 Index Separate Acct | |
| 65 |
Small/Mid U.S. Equity |
| SmallCap S&P 600 Index Separate Acct | |
| 28 |
Total |
| | | $ | 5,180 |
The market values invested in each investment category at December 31, 2024, are as follows:
| | | | Assets at Fair | |
| | | | Value as of | |
| | | | December 31, | |
Asset Class: | | Investment Option |
| 2024 | |
| | |
| (In thousands) | |
Fixed Income |
| LDI Intermediate Duration Separate Acct | | $ | 2,837 |
Fixed Income |
| LDI Long Duration Separate Acct | |
| 726 |
Large U.S. Equity |
| LargeCap S&P 500 Index Separate Acct | |
| 982 |
Global/International Equity |
| Overseas Separate Acct | |
| 121 |
Global/International Equity |
| Diversified International Separate Acct | |
| 334 |
Small/Mid U.S. Equity |
| MidCap S&P 400 Index Separate Acct | |
| 59 |
Small/Mid U.S. Equity |
| SmallCap S&P 600 Index Separate Acct | |
| 24 |
Total |
| | | $ | 5,083 |
The Plan Assets are invested with Principal. Principal uses Pooled Separate Accounts, not publicly traded Mutual Funds. The above assets are considered Level 1 – quoted prices in active markets for identical assets.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
Years ending December 31: | | (In thousands) | |
2026 | | $ | 260 |
2027 | |
| 250 |
2028 | |
| 250 |
2029 | |
| 250 |
2030 | |
| 240 |
2031-2035 | |
| 1,150 |
401k and Profit Sharing Plan
The Company has a 401k and non-contributory profit sharing plan covering all eligible employees. Employees may contribute a portion of their compensation subject to certain limits based on federal tax laws. The Company makes matching contributions equal to 100 percent of the first 6 percent of an employee’s compensation contributed to the Plan. Matching contributions vest to the employee over a two-year period. For the year ended December 31, 2025 and 2024, 401k related expenses amounted to $138,978 and $122,102, respectively. There were no profit-sharing related plan expenses for the years ended December 31, 2025 and 2024.
36
Deferred Compensation Plan
The Company has a nonqualified deferred compensation plan for a select group of management effective October 1, 2021. The liability and related expense was as follows:
| | As of and for the period ending | ||
| | December 31, | ||
| | 2025 | | 2024 |
| | (In thousands) | ||
Deferred compensation liability | | 485 |
| 276 |
Deferred compensation expense | | 17 |
| 13 |
12. Income Taxes
The Bank qualifies as a savings institution under the provisions of the Internal Revenue Code and, therefore, must calculate its bad debt deduction using either the experience or the specific charge-off method. Retained earnings at December 31, 2025 include approximately $3 million of bad debt deductions, which resulted from the use of the formerly permitted percentage of taxable income method, for which income taxes have not been provided. If such amount is used for purposes other than for bad debt losses, including distributions in liquidation, it will be subject to income tax at the then current rate.
The components of income taxes are summarized below:
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Current income tax expense: | | | | | | |
Federal income | | $ | 357 | | $ | 21 |
State income | |
| 54 | |
| 10 |
| |
| 411 | |
| 31 |
| | | | | | |
Deferred income tax expense (benefit): | |
| | |
| |
Federal income | |
| (220) | |
| 100 |
State income | |
| (46) | |
| (6) |
| |
| (266) | |
| 94 |
| | $ | 145 | | $ | 125 |
37
The tax effects of existing temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are as follows:
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (In thousands) | ||||
Deferred income tax assets: | | | | | | |
Allowance for credit losses | | $ | 640 | | $ | 383 |
Benefit plan AOCI adjustment, net | |
| 47 | |
| 288 |
Unrealized loss on securities available for sale | |
| 147 | |
| 341 |
NJ NOL carryover | |
| — | |
| 24 |
Other | |
| 134 | |
| 116 |
| |
| 968 | |
| 1,152 |
| | | | | | |
Deferred income tax liabilities: | |
| | |
| |
Prepaid expenses of benefit plans | |
| 675 | |
| 650 |
Depreciation | |
| 204 | |
| 243 |
| |
| 879 | |
| 893 |
Net deferred tax assets included in other assets | | $ | 89 | | $ | 259 |
The following table presents a reconciliation between the reported income taxes and the income taxes which would be computed by applying the normal federal income tax rate of 21% to income before income taxes for the year ended December 31, 2025 and 2024:
| | December 31, | ||||||||||
| | 2025 | | 2024 | ||||||||
| | | | | | | | |||||
| | (Dollars in thousands) | ||||||||||
Federal income tax | | $ | 136 | | 21.00 | % | | $ | 147 | | 21.00 | % |
Increases (reductions) in income taxes resulting from: | |
| | | | | |
| | | | |
New Jersey tax, net of federal income tax effect | |
| 6 | | 0.93 | | |
| 3 | | 0.43 | |
Bank-owned life insurance | |
| (9) | | (1.39) | | |
| (26) | | (3.71) | |
Other items, net | |
| 12 | | 1.84 | | |
| 1 | | 0.11 | |
Effective income tax expense | | $ | 145 | | | | | $ | 125 | | | |
Effective income tax rate | | | | | 22.38 | % | | | | | 17.83 | % |
The following table presents income taxes paid (net of refunds received) by jurisdiction as follows:
| | December 31, | ||||||||
| | 2025 | | 2024 | ||||||
| | (In thousands) | ||||||||
Federal | | $ | 283 | 98 | % | | $ | 129 | 52 | % |
State (NJ) | |
| 5 | 2 | | |
| 119 | 48 | |
Total, net | | $ | 288 | 100 | % | | $ | 248 | 100 | % |
13. 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 and to reduce its own exposure to fluctuations in interest rates. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the statement of financial condition. The contract amounts of those instruments reflect the extent of involvement the Company has in those particular classes of financial instruments.
The Company, at December 31, 2025, had undisbursed funds from approved lines of credit under the homeowners’ equity lending program amounting to approximately $2,826,000. Unless they are specifically cancelled by notice to or
38
from the Company, these funds represent firm commitments available to the respective borrowers on demand. The interest rates charged on funds disbursed under this program are at the prime rate. Similarly, there were approximately $1,193,000 in commitments for undisbursed commercial lines of credit; and zero in commitments for construction loans. There were three Letters of Credit issued by the Company totaling $85,000; outstanding balance at December 31, 2025 was zero. The allowance for credit losses on these off-balance sheet credit exposures was $16,000 at December 31, 2025.
The Company, at December 31, 2024, had undisbursed funds from approved lines of credit under the homeowners’ equity lending program amounting to approximately $2,190,000. Unless they are specifically cancelled by notice to or from the Company, these funds represent firm commitments available to the respective borrowers on demand. The interest rates charged on funds disbursed under this program are at the prime rate. Similarly, there were approximately $2,335,000 in commitments for undisbursed commercial lines of credit; and $1,807,000 in commitments for construction loans. There were two Letters of Credit issued by the Company totaling $55,000; outstanding balance at December 31, 2024 was zero. The allowance for credit losses on these off-balance sheet credit exposures was $57,000 at December 31, 2024.
The Company has, in the normal course of business, commitments for services and supplies. Management does not anticipate losses on any of these transactions.
The Company, from time to time, may be party to litigation arising primarily in the ordinary course of business. In the opinion of management, the ultimate disposition of such litigation should not have a material effect on the consolidated financial position or operations.
14. Fair Value Measurements
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sale transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.
There were no liabilities measured at fair value on a recurring basis as of the periods presented. For assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2025 and 2024 are as follows:
| | Assets at Fair Value | ||||||||||
| | as of December 31, 2025 | ||||||||||
| | Assets at Fair Value | ||||||||||
| | Level 1 | | Level 2 | | Level 3 | | Total | ||||
| | (In thousands) | ||||||||||
Securities available for sale: |
| | |
| | |
| | |
| | |
Mortgage-Backed Securities | | $ | — | | $ | 3,729 | | $ | — | | $ | 3,729 |
CMO | |
| — | |
| 14,127 | |
| — | |
| 14,127 |
Corporate Bonds | |
| — | |
| 1,015 | |
| — | |
| 1,015 |
Agency Securities | |
| — | |
| 1,886 | |
| — | |
| 1,886 |
Small Business Administration | |
| — | |
| 5,077 | |
| — | |
| 5,077 |
| | $ | — | | $ | 25,834 | | $ | — | | $ | 25,834 |
39
| | Assets at Fair Value | ||||||||||
| | as of December 31, 2024 | ||||||||||
| | Level 1 | | Level 2 | | Level 3 | | Total | ||||
| | (In thousands) | ||||||||||
Securities available for sale: |
| | |
| | |
| | |
| | |
Mortgage-Backed Securities | | $ | — | | $ | 2,765 | | $ | — | | $ | 2,765 |
CMO | |
| — | |
| 4,762 | |
| — | |
| 4,762 |
Corporate Bonds | |
| — | |
| 1,847 | |
| — | |
| 1,847 |
Agency Securities | |
| — | |
| 2,719 | |
| — | |
| 2,719 |
Small Business Administration | |
| — | |
| 5,813 | |
| — | |
| 5,813 |
| | $ | — | | $ | 17,906 | | $ | — | | $ | 17,906 |
The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein do not represent the underlying fair value of the Company.
| | | | | Fair Value | |||||||
| | Carrying | | | | | | | | | | |
| | Amount | | Level 1 | | Level 2 | | Level 3 | ||||
| | (In thousands) | ||||||||||
December 31, 2025 | | | | | | | | | | | | |
Financial assets: | | | | | | | | | | | | |
Cash and cash equivalents (including CD investments) | | $ | 8,391 | | $ | 8,391 | | $ | — | | $ | — |
Securities available for sale | |
| 25,834 | |
| — | |
| 25,834 | |
| — |
Securities held to maturity | |
| 12,789 | |
| — | |
| 10,032 | |
| 2,500 |
Restricted stock in banks | |
| 2,449 | |
| — | |
| — | |
| 2,449 |
Loans, net | |
| 300,438 | |
| — | |
| — | |
| 302,035 |
Accrued interest receivable | |
| 1,481 | |
| — | |
| 1,481 | |
| — |
Financial liabilities: | |
| | |
| | |
| | |
| |
Deposits | |
| 290,950 | |
| — | |
| — | |
| 281,244 |
Mortgagors' escrow accounts | |
| 1,401 | |
| — | |
| 1,401 | |
| — |
Federal Home Loan Bank advances | |
| 46,797 | |
| — | |
| 47,049 | |
| — |
Senior notes payable | |
| 6,775 | |
| — | |
| — | |
| 6,689 |
Accrued interest payable | |
| 352 | |
| — | |
| 352 | |
| — |
| | | | | | | | | | | | |
December 31, 2024 | |
| | |
| | |
| | |
| |
Financial assets: | |
| | |
| | |
| | |
| |
Cash and cash equivalents (including CD investments) | | $ | 15,023 | | $ | 15,023 | | $ | — | | $ | — |
Securities available for sale | |
| 17,906 | |
| — | |
| 17,906 | |
| — |
Securities held to maturity | |
| 20,082 | |
| — | |
| 16,365 | |
| 3,000 |
Restricted stock in banks | |
| 2,021 | |
| — | |
| — | |
| 2,021 |
Loans, net | |
| 248,025 | |
| — | |
| — | |
| 242,853 |
Accrued interest receivable | |
| 1,270 | |
| — | |
| 1,270 | |
| — |
Financial liabilities: | |
| | |
| | |
| | |
| |
Deposits | |
| 246,079 | |
| — | |
| — | |
| 233,250 |
Mortgagors' escrow accounts | |
| 1,168 | |
| — | |
| 1,168 | |
| — |
Federal Home Loan Bank and FRB advances | |
| 43,010 | |
| — | |
| 41,982 | |
| — |
Senior notes payable | |
| 6,125 | |
| — | |
| — | |
| 5,937 |
Accrued interest payable | |
| 280 | |
| — | |
| 280 | |
| — |
| | | | | | | | | | | | |
The following valuation techniques were used to measure fair value of assets in the tables above.
40
The fair value of securities available for sale and held-to-maturity are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities, which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3).
The fair value of cash and cash equivalents, restricted bank stock, accrued interest receivable, mortgage escrows, and accrued interest payable are measured at the Company’s carrying amount.
The fair value of loans, deposits, borrowings, and senior notes payable are measured on a discounted cash flow basis using current rates and terms.
15. Plan of Conversion and Change in Corporate Form
On September 8, 2025, United Roosevelt, MHC, United Roosevelt Bancorp and United Roosevelt Savings Bank adopted a Plan of Conversion (the “Plan”) pursuant to which United Roosevelt, MHC will convert from the mutual to stock form of organization and United Roosevelt Savings Bank will become the wholly-owned subsidiary of a new stock holding company incorporated under Maryland law and known as URSB Bancorp, Inc. (the “Holding Company”). Pursuant to the Plan, (i)United Roosevelt, MHC will merge with and into United Roosevelt Bancorp, with United Roosevelt Bancorp as the surviving entity, (ii)United Roosevelt Bancorp will merge with and into the Holding Company, with the Holding Company as the surviving entity, resulting in United Roosevelt Savings Bank becoming a wholly-owned subsidiary of the Holding Company, and (iii)the Holding Company will offer and sell shares of its common stock to depositors of United Roosevelt Savings Bank and other persons in the manner and subject to the priorities set forth in the Plan pursuant to a prospectus contained in a registration statement declared effective by the U.S. Securities and Exchange Commission. United Roosevelt Savings Bank will adopt an employee stock ownership plan which will subscribe for 8% of the sum of the number of shares of common stock sold in the stock offering and will contribute to a charitable foundation to be established and funded in connection with the conversion.
At the time of conversion, the Holding Company and United Roosevelt Savings Bank each established a liquidation account in an amount equal to United Roosevelt, MHC’s total equity as reflected in the latest consolidated balance sheet contained in the final offering prospectus for the conversion. The liquidation account established by United Roosevelt Savings Bank would be used only if the Holding Company does not have sufficient assets to fund its obligations under its liquidation account. The liquidation accounts are maintained for the benefit of eligible account holders (as defined in the Plan) and supplemental eligible account holders (as defined in the Plan) (collectively, “eligible depositors”) who continue to maintain their deposit accounts in United Roosevelt Savings Bank after the conversion. In the event of a complete liquidation of either (i)United Roosevelt Savings Bank or (ii)United Roosevelt Savings Bank and the Holding Company (and only in such events), eligible depositors who continue to maintain their deposit accounts in United Roosevelt Savings Bank will be entitled to receive a distribution from the liquidation accounts before any distribution may be made with respect to the common stock of the Holding Company or of United Roosevelt Savings Bank. Neither the Holding Company nor United Roosevelt Savings Bank may declare or pay a cash dividend if the effect thereof would cause its equity to be reduced below either the amount required for the liquidation accounts or the regulatory capital requirements imposed by its respective bank regulators.
The cost of reorganization and stock issuance is being deferred and will be deducted from the sales proceeds of the offering. As of March 31, 2026, $1,739,780 of reorganization costs had been incurred. On March 26, 2026, the Bank completed the transactions contemplated by the Plan, including the sale of 2,334,375 shares of common stock in the stock offering at a per share price of $10.00 per share.
41
Exhibit | | Description |
10.1 | | Employment Agreement Between United Roosevelt Savings Bank and Kenneth Totten |
10.2 | | Employment Agreement Between United Roosevelt Savings Bank and David Van Steyn |
10.3 | | |
10.4 | | |
10.5 | | Split Dollar Agreement Between United Roosevelt Savings Bank and David Van Steyn |
10.6 | | |
31.1 | | |
31.2 | | |
32.1 | | |
32.2 | |
42
Pursuant to the requirements of Section 13 or 15(d) 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.
URSB BANCORP, INC. | ||||
| | | ||
Date: | April 9 | , 2026 | By: | /s/ Kenneth R. Totten |
Kenneth R. Totten | ||||
Chairman, President and Chief Executive Officer | ||||
(Duly Authorized Representative) | ||||
Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures | | Title | | Date | ||
| | | | | ||
| | | | | ||
/s/ Kenneth R. Totten | | Chairman, President and Chief | | April 9 | , 2026 | |
Kenneth R. Totten | | Executive Officer and a Director | | | ||
| | (Principal Executive Officer) | | | ||
| | | | | ||
/s/ David Van Steyn | | Chief Financial Officer and | | April 9 | , 2026 | |
David Van Steyn | | Treasurer (Principal Financial and Accounting Officer) | | | ||
| | | | | ||
| | | | | ||
/s/ Patrick J. DeBlasio | | Director | | | April 9 | , 2026 |
Patrick J. DeBlasio | | | | |||
| | | | | ||
| | | | | ||
/s/ John F. Kwasnik | | Director | | | April 9 | , 2026 |
John F. Kwasnik | | | | |||
| | | | | ||
| | | | | ||
/s/ David J. Reiman | | Director | | | April 9 | , 2026 |
David J. Reiman | | | | |||
| | | | | ||
| | | | | ||
/s/ Timothy D. Touhey | | Director | | | April 9 | , 2026 |
Timothy D. Touhey | | | | |||
| | | | | ||
43
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made and entered into as of the 17th day of December 2025, to be effective as of the Effective Date (as defined in Section 18 below) by and between United Roosevelt Savings Bank, a New Jersey-chartered savings bank (the “Bank”) and Kenneth R. Totten (the “Executive”). Any reference to the “Company” shall mean URSB Bancorp, Inc., a Maryland corporation to be formed, which will be the Bank’s stock holding company following the consummation of the Conversion (as defined below).
RECITALS
WHEREAS, the Executive is presently serving as the President and Chief Executive Officer, and as Chairman of the Board of Directors of the Bank and is a party to an employment agreement with the Bank and its affiliates, dated as of January 10, 2017 (the “Prior Agreement”); and
WHEREAS, United Roosevelt, MHC has adopted a Plan of Conversion pursuant to which it will convert from the mutual to the stock form of organization (the “Conversion”); and
WHEREAS, the parties desire to enter into this Agreement to induce the Executive to continue employment with the Bank, and to provide further incentive for Executive to achieve the financial and performance objectives of the Bank and the Company following the Conversion; and
WHEREAS, this Agreement shall supersede and replace the Prior Agreement on the Effective Date.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:
1.POSITION AND RESPONSIBILITIES.
(a)Employment. During the Term (as defined in Section 2(a)) of this Agreement, the Executive agrees to serve as President and Chief Executive Officer of the Bank and the Company or any successor executive position with the Bank and the Company that is consented to, in writing, by the Executive (the “Executive Position”), and will perform the duties of and have all powers associated with the Executive Position as are customary for a person in the position of the Executive Position, as well as those as shall be assigned by the Board of Directors of the Bank (the “Board of Directors”). As President and Chief Executive Officer, the Executive will report directly to the boards of directors of the Bank and the Company. The Executive currently serves and shall continue to serve as a member of the Board of Directors and as a member of the board of directors the Company. During the term of this Agreement, the Executive also agrees to serve, if elected, as an officer, director or trustee of any affiliate of the Bank and the Company and in that capacity to carry out the duties and responsibilities reasonably appropriate to any such position.
(b)Responsibilities. During the Executive’s employment hereunder, the Executive will be employed on a full-time basis and devote the Executive’s full business time and best efforts, business judgment, skill and knowledge to the performance of the duties and responsibilities attendant to the Executive Position. Except as otherwise provided in Section 1(c), or as may be approved by the Board of Directors, the Executive will not engage in any other business activity during the Term.
(c)Other Activities. The Bank encourages participation by the Executive on community boards and committees and in activities generally considered to be in the public interest and the Executive may devote a reasonable amount of time to civic, charitable, religious, trade association, political and similar activities. However, if the Board of Directors determines, in its sole discretion, that the Executive’s participation in any such activities materially hinders the Executive’s ability to perform the duties of the Executive Position or is detrimental to the Bank or the Company or either of their reputations, then the Board shall provide written notice to the Executive of such determination and the Executive shall promptly discontinue his participation in the applicable activity(ies).
2.TERM.
(a)Term and Annual Renewal. The initial term of this Agreement will begin as of the Effective Date and continue for a period of three (3) years (the “Term”). Commencing as of the first anniversary of the Effective Date, and continuing on each anniversary of that date thereafter (each a “Renewal Date”), the Term of this Agreement shall renew for an additional year such that the remaining Term is three (3) years from the applicable Renewal Date; provided, however, that in order for this Agreement to renew, the disinterested members of the Board of Directors of the Bank (the “Board of Directors”) must take the following actions within the following time frames prior to each Renewal Date: (i) at least thirty (30) days prior to the Renewal Date, conduct or review a comprehensive performance evaluation of the Executive for purposes of determining whether to extend the Term; and (ii) affirmatively approve the renewal or non-renewal of the Term, which decision will be documented in the minutes of the meeting of the Board of Directors. If the Board of Directors selects not to renew the Term, then the Board of Directors will provide the Executive with a written notice of non-renewal (“Non-Renewal Notice”) prior to the applicable Renewal Date and the Agreement will expire at the end of the current Term. Notwithstanding the foregoing, if the Board of Directors fails to perform the actions set forth above, the Term of this Agreement will automatically be deemed to have renewed for an additional year. For purposes of this Agreement the term “disinterested member” generally means any member of the Board of Directors who does not have a personal or other material conflict of interest with respect to the specific matter being decided by the Board of Directors. For avoidance of doubt, any extension to the Term will become the new “Term” for purposes of this Agreement.
(b)Change in Control. Notwithstanding the foregoing, in the event the Bank or the Company has entered into an agreement to effect a transaction that would be considered a Change in Control, as defined in Section 5, the Term of this Agreement will automatically extend so that it expires three (3) years beyond the effective date of the Change in Control, subject to extensions as set forth in Section 2(a).
(c)Continued Employment Following Expiration of Term. Nothing in this Agreement will mandate or prohibit a continuation of the Executive’s employment following the expiration of the Term upon such terms and conditions as the parties may mutually agree.
3.COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a)Base Salary. In consideration of the Executive’s performance of the responsibilities and duties set forth in this Agreement, the Executive will receive an annual base salary of not less than $425,000 per year (“Base Salary”). The Bank will pay the Base Salary in accordance with its customary payroll practices. During the Term, the Board of Directors (or the Compensation Committee of the Board of Directors (the “Compensation Committee”)) may increase but not decrease (unless the decrease is proportionate to any Bank-wide decrease in officer base salaries), the Executive’s Base Salary. Any increase or decrease (as provided for above) in Base Salary will become the new “Base Salary” for purposes of this Agreement.
(b)Bonus and Incentive Compensation. The Executive (i) shall be eligible to participate in any bonus plan or arrangement of the Bank in which senior management is eligible to participate, pursuant to which a bonus may be paid to the Executive in accordance with the applicable plan or arrangement; and/or (ii) may receive a bonus, if any, on a discretionary basis, as determined by the Board of Directors or the Compensation Committee in good faith.
(c)Benefit Plans. The Executive will be entitled to participate in all employee benefit plans, arrangements and perquisites offered to senior management of the Bank, on terms and conditions no less favorable than the plans, arrangements and perquisites available to other members of senior management of the Bank. Without limiting the generality of the foregoing provisions of this Section 3(c), the Executive also will be entitled to participate in any employee benefit plans including but not limited to retirement plans, pension plans, profit-sharing plans, health-and-accident plans, or any other employee benefit plan or arrangement made available by the Bank in the future to management employees, subject to and on a basis consistent with the terms, conditions and overall administration of the plans and arrangements as applicable to other management employees. Notwithstanding the foregoing, the Executive will be provided with, at the Bank’s sole expense, life insurance coverage with a death benefit equal to the lesser of (i) three (3) times the Executive’s Base Salary or (ii) $1,000,000 (or such higher maximum limit as permitted by the Bank’s insurance provider). The Bank shall not, without Executive’s prior written consent, make any changes to any such employee benefits plans, arrangements and perquisites that would adversely affect Executive’s rights or
2
benefits thereunder, except as to any changes that are applicable to all participating employees or where such consent would trigger tax penalties under Section 409A of the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”).
(d)Leave and Paid Time Off. The Executive will be entitled to paid time off each year during the term of this Agreement measured on a calendar year basis, in accordance with the Bank’s customary practices and in accordance with the Bank’s policies and procedures for officers, in addition to all holidays observed by the Bank. Any unused paid time off during an annual period will be treated in accordance with the Bank’s personnel policies as in effect from time to time. Notwithstanding the foregoing, the Executive will be entitled to at least six (6) weeks of vacation time each calendar year.
(e)Automobile. The Bank will provide the Executive with an automobile allowance of $1,000 per month and shall reimburse the Executive for fuel and maintenance expenses.
(f)Expense Reimbursements. The Bank will reimburse the Executive for all reasonable travel, entertainment and other expenses incurred by the Executive in performing the Executive’s obligations under this Agreement, including, without limitation, fees for memberships in organizations that the Executive and the Board of Directors or the Compensation Committee agree are necessary and appropriate in connection with the performance of the Executive’s duties under this Agreement. All reimbursements will be made as soon as practicable upon substantiation of the expenses by the Executive in accordance with the applicable policies and procedures of the Bank and, in any event, not later than the last day of the calendar year immediately following the calendar year in which the Executive incurred the expense. To be reimbursed for any expenses, including the expenses provided for in Section 3(e) and 3(f), the Executive must charge the expenses to a Bank-issued credit card, and the charges are subject to a review by the chair of the Audit Committee.
4.TERMINATION AND TERMINATION PAY.
Subject to Section 5, which governs the occurrence of a Change in Control, the Executive’s employment under this Agreement will terminate under the circumstances set forth in this Section 4.
(a)Definition of Accrued Obligations. For purposes of this Agreement, the term “Accrued Obligations” means the sum of: (i) any Base Salary earned but unpaid through the Executive’s Date of Termination (as defined in Section 4(h) hereof), (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 3(f)), (iii) unused paid time off accrued through the Date of Termination (subject to an in accordance with Section 3(d)), (iv) any unpaid short-term and long-term incentive compensation for the year immediately preceding the year of termination paid in accordance with the terms of the applicable arrangement, and (v) any vested benefits the Executive may have under any employee benefit plan(s) of the Bank through the Date of Termination, which vested benefits will be paid and/or provided in accordance with the terms of such employee benefit plan(s). Unless otherwise provided by the applicable employee benefit plan, the Accrued Obligations, if any, will be paid to the Executive (or the Executive’s estate or beneficiary) in a lump sum within thirty (30) days following the Executive’s Date of Termination.
(b)Death. This Agreement and the Executive’s employment with the Bank will automatically terminate upon the Executive’s death, in which event the Bank’s sole obligation under this Agreement will be to pay or provide the Executive’s estate or beneficiary any Accrued Obligations and the life insurance benefits provided for under Section 3(c) and under any plan or program maintained by the Bank.
(c)Disability. The Board of Directors shall be entitled to terminate the Executive’s employment and this Agreement due to the Executive’s Disability upon thirty (30) days’ prior written notice to the Executive. If the Board of Directors terminates the Executive’s employment due to the Executive’s Disability, the Bank’s sole obligation under this Agreement shall be to pay or provide the Executive any Accrued Obligations and the Executive shall receive benefits provided under any disability program maintained by the Bank. For these purposes, the term “Disability” means the Executive is deemed disabled for purposes of the Bank’s long-term disability plan or policy that covers the Executive or is determined to be disabled by the Social Security Administration.
3
(d)Termination for Cause. The Board of Directors may immediately terminate the Executive’s employment and this Agreement at any time for “Cause.” In the event the Executive’s employment is terminated for Cause, the Bank’s sole obligation will be to pay or provide to the Executive any Accrued Obligations other than the benefits provided for under Section 4(a)(iv). For purposes of this Agreement, the term “Cause” means termination because of, in the good faith determination of the Board of Directors:
(i)the conviction of the Executive of a felony or of any lesser criminal offense involving moral turpitude;
(ii)the willful commission by the Executive of a criminal or other act (other than traffic violations or similar offenses) that, in the reasonable and good faith judgment of the Board of Directors will likely cause substantial and demonstrable economic damage to the Company, the Bank or any subsidiary or substantial injury to the business reputation of the Company, the Bank or any subsidiary;
(iii)the commission by the Executive of an act of fraud in the performance of his duties on behalf of the Company, the Bank or any subsidiary;
(iv)the continuing willful failure of the Executive to perform his material duties to the Company, the Bank or any subsidiary (other than any such failure resulting from the Executive’s death or Disability (including, without limitation, Executive’s incapacity due to physical or mental illness or the Executive declining to perform any assigned duties to the extent such assignment or duties would constitute a violation of law) after written notice thereof and a reasonable opportunity to cure;
(v)a material breach by the Executive of the Bank’s or the Company’s Code of Ethics or similar policy(ies) in effect from time-to-time; or
(vi)an order from a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Executive’s employment with the Bank or the Company.
Any determination of Cause under this Agreement will be made by resolution adopted by the Board of Directors at a meeting called and held for that purpose. The Executive will be provided with reasonable notice of the meeting, and the Executive will be given an opportunity to be heard before a vote is taken by the disinterested members of the Board of Directors regarding the determination of Cause and the termination of Executive’s employment.
(e)Resignation by Executive without Good Reason. During the Term, the Executive may resign from employment without Good Reason upon at least sixty (60) days’ prior written notice to the Board of Directors, provided, however, that the Bank may accelerate the Date of Termination upon receipt of written notice of the Executive’s resignation (in which case, the Bank will continue to pay the Executive’s Base Salary through the remainder of the 60-day period). In the event the Executive resigns without Good Reason, the Bank’s sole obligation under this Agreement will be to pay or provide any Accrued Obligations to the Executive.
(f)Termination Without Cause or With Good Reason.
(i)The Board of Directors may immediately terminate the Executive’s employment at any time for a reason other than Cause (a termination “Without Cause”), and the Executive may, by written notice to the Board of Directors, terminate his employment at any time within ninety (90) days following an event constituting “Good Reason” (a termination “With Good Reason”); provided, however, that the Bank will have thirty (30) days to cure the “Good Reason” condition, but the Bank may waive its right to cure. In the event of a termination of employment described under this Section 4(f)(i) during the Term and subject to the requirements of Section 4(f)(iii), the Bank will pay or provide the Executive with the following as severance pay or liquidated damages or both:
(A)any Accrued Obligations;
(B)a cash payment equal to two (2) times the Executive’s Base Salary; payable in a lump sum within sixty (60) days of the Executive’s Date of Termination; and
4
(C)provided that the Executive or his dependents has elected continued health care coverage in accordance with the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), reimbursement of the Executive’s COBRA health care costs for twelve (12) months or until the Executive attains age 65, whichever is earlier.
(ii)“Good Reason” exists if, without the Executive’s express written consent, any of the following occur:
(A)a material reduction in the Executive’s Base Salary (other than as provided for in Section 3(a)) and/or any aggregate incentive compensation opportunities under the Bank’s annual and long-term incentive plans or programs or other benefits or perquisites, as applicable; notwithstanding the foregoing, the Bank or Company may eliminate and/or modify the Executive’s Base Salary, incentive compensation opportunities, any existing employee benefit, retirement, or fringe benefit plans and coverage levels or perquisites on a consistent and non-discriminatory basis applicable to all executive officers;
(B)a material reduction in the Executive’s title, authority, duties or responsibilities from the position and attributes associated with the Executive Position without Executive’s prior written consent (and any such reduction shall be deemed a continuing material breach of this Agreement by the Bank);
(C)the failure to re-appoint the Executive to the Executive Position set forth under Section 1(a), or a failure to nominate and recommend the election of the Executive to the Board of Directors of the Company or to appoint or nominate and elect the Executive to the Board of Directors of the Bank;
(D)a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from the location of the Bank’s main office as of the Effective Date of this Agreement;
(E)a material breach of this Agreement by the Bank; or
(F)a liquidation or dissolution of the Bank.
(iii)Notwithstanding anything to the contrary in Section 4(f)(i), the Executive will not receive any payments or benefits under Sections 4(f)(i)(B) or 4(f)(i)(C) unless and until the Executive executes a release of claims (the “Release”) against the Bank and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which the Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement. The Release must be executed and become irrevocable by the 60th day following the Date of Termination, provided that if the 60-day period spans two (2) calendar years, then, to the extent necessary to comply with Section 409A of the Code, the payments and benefits described in this Section 4(f) will be paid, or commence, in the second calendar year.
(g)Effect on Status as a Director. In the event of the Executive’s termination of employment under this Agreement for any reason, whether by the Bank and the Company or by the Executive, and unless otherwise agreed to by the mutual consent of the Executive and the Bank and the Company, the termination will also constitute the Executive’s resignation as a director of the Bank and the Company, as well as a director of any subsidiary or affiliate thereof, to the extent the Executive is serving as a director of any of the aforementioned entities.
(h)Notice; Effective Date of Termination. Any Notice of Termination of employment under this Agreement must be communicated by or to the Executive or the Bank, as applicable, in accordance with Section 16. For purposes of this Agreement, the term “Date of Termination” means the Executive’s termination of employment pursuant to this Agreement, which will be effective on the earliest of: (i) immediately after the Bank gives notice to the Executive of the Executive’s termination Without Cause, unless the parties agree to a later date, in which case, termination will be effective as of such later date; (ii) immediately upon approval by the Board of Directors of termination of the Executive’s employment for Cause; (iii) immediately upon the Executive’s death, and thirty (30) days following the
5
date of the notice required by Section 4(c) in the case of Executive’s Disability; (iv) thirty (30) days after the Executive gives written notice to the Bank of the Executive’s resignation from employment (including With Good Reason), provided that the Bank may set an earlier termination date at any time prior to the date of termination of employment, in which case the Executive’s resignation shall be effective as of that date; or (v) in the event of the Executive’s termination With Good Reason under Section 4(f)(ii)(A), the date on which the Executive provides Notice of Termination in accordance with Section 4(f)(i). Notwithstanding the pendency of a dispute regarding the Executive’s termination, the Bank may discontinue paying the Executive’s compensation until the dispute is finally resolved in accordance with this Agreement. If it is determined that the Executive is entitled to compensation and benefits under this Agreement, the payment of such compensation and benefits by the Bank shall commence immediately following the date of resolution, with interest due the Executive on the cash amount that would have been paid pending resolution (at the prime rate as published in The Wall Street Journal from time to time).
5.CHANGE IN CONTROL.
(a)Change in Control Defined. For purposes of this Agreement, the term “Change in Control” means: (i) a change in the ownership of the Corporation; (ii) a change in the effective control of the Corporation; (iii) a change in the ownership of a substantial portion of the assets of the Corporation as defined in accordance with Code Section 409A. For purposes of this Section 5(a), the term “Corporation” means the Bank, the Company or any of their successors, as applicable.
(i)A change in the ownership of a Corporation occurs on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or combined voting power of the outstanding securities of the Corporation (excluding any securities purchased by any employee stock ownership plan or trust established by the Corporation).
(ii)A change in the effective control of the Corporation occurs on the date that either (A) any one person, or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(vi)(D)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing thirty percent (30%) or more of the total voting power of the stock of the Corporation, or (B) a majority of the members of the board of directors of the Corporation is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors prior to the date of the appointment or election, provided that this clause “(B)” is inapplicable where a majority stockholder of the Corporation is another corporation.
(iii)A change in a substantial portion of the Corporation’s assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of (A) all of the assets of the Corporation, or (B) the value of the assets being disposed of, either of which is determined without regard to any liabilities associated with such assets.
For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulation 1.409A-3(i)(5), except to the extent that such regulations are superseded by subsequent guidance.
For the avoidance of doubt and notwithstanding anything herein to the contrary, a Change in Control will not be deemed to have occurred for purposes of this Agreement as a result of the Conversion.
(b)Change in Control Benefits. Upon the termination of the Executive’s employment by the Bank or the Company (or any successor) Without Cause or by the Executive With Good Reason during the Term on or within two years after the effective time of a Change in Control, the Bank (or any successor) will pay or provide the Executive, or the Executive’s estate in the event of the Executive’s death, with the following:
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(ii)a cash payment equal to three (3) times the sum of: (A) the Executive’s Base Salary at the Date of Termination (or the Executive’s Base Salary in effect during any of the prior three years, if higher); and (B) the average annual total incentive bonus earned by the Executive for three (3) most recently completed calendar years prior to the Change Control, or if greater, the annual total incentive bonus that would have been earned in the year of the Change of Control at target bonus opportunity; which cash payment shall be paid in a lump sum within thirty (30) days of the Executive’s Date of Termination; and
(iii)the value of health care costs for twenty-four (24) months (based on the COBRA cost in effect for continued insurance coverage at the Date of Termination, whether or not the Executive elects COBRA); which shall be paid in cash in a lump sum within thirty (30) days of the Executive’s Date of Termination.
Notwithstanding the foregoing, the payments and benefits provided in this Section 5(b) will be payable to the Executive in lieu of any payments or benefits that are payable under Section 4(f).
6.COVENANTS OF EXECUTIVE.
(a)Non-Solicitation/Non-Compete. The Executive hereby covenants and agrees that during the “Restricted Period,” the Executive will not, without the written consent of the Bank, either directly or indirectly:
(i)solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Bank, or any of its subsidiaries or affiliates, to terminate his or her employment with the Bank and/or accept employment with any business whatsoever that competes with the Bank or any of its subsidiaries or affiliates or has headquarters or offices within the Restricted Territory (as defined in clause (ii) below), provided that this provision shall not apply with respect to any officer or employee of the Bank who responds to a general advertisement not targeted at any specific officers or employees of the Bank, or to any officer or employee of the Bank who independently seeks employment with Executive’s subsequent employer through no solicitation, contact or referral by Executive, either directly or indirectly, including through a recruiter or headhunter; or
(ii)become an officer, employee, consultant, director, trustee, independent contractor, agent, joint venturer, partner or trustee of any commercial bank, savings bank, savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other entity that competes with the business of the Bank or any of its direct or indirect subsidiaries or affiliates that: (A) has a headquarters within the New Jersey counties of Middlesex or any other county in which the Bank has a branch or loan production office (the “Restricted Territory”), or (B) has one or more offices, but is not headquartered, within the Restricted Territory, but in the latter case, only if the Executive would be employed, conduct business or have other responsibilities or duties within the Restricted Territory; or
(iii)solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any customer of the Bank to terminate an existing business or commercial relationship with the Bank.
Except as otherwise provided for in Section 17, for purposes of this Section 6(a), the “Restricted Period” will be: (i) at all times during Executive’s period of employment with the Bank; and (ii) except as provided above, during the period beginning on Executive’s Date of Termination and ending on the one-year anniversary of the Date of Termination.
(b)Confidentiality. The Executive recognizes and acknowledges that the Executive has been and will be the recipient of confidential and proprietary business information concerning the Bank, including without limitation, past, present, planned or considered business activities of the Bank, and the Executive acknowledges and agrees that the Executive will not, during or after the term of the Executive’s employment, disclose such confidential and
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proprietary information for any purposes whatsoever, except as may be necessary in connection with Executive’s performance of the duties and responsibilities of the Executive Position to persons or entities bound by similar obligations of confidentiality, as may be expressly permitted in a writing signed by the Bank, or as may be required by regulatory inquiry, law or court order.
(c)Information/Cooperation. The Executive will, upon reasonable notice, furnish any information and assistance to the Bank as may be reasonably required by the Bank, at the expense of the Bank, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that the Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Bank or any other subsidiaries or affiliates. The Executive will be reimbursed for reasonable expenses incurred in providing such information and assistance to the Bank.
(d)Reliance. Except as otherwise provided, all payments and benefits to the Executive under this Agreement will be subject to the Executive’s compliance with this Section 6, to the extent applicable. The parties hereto, recognizing that irreparable injury will result to the Bank, its business and property in the event of the Executive’s breach of this Section 6, agree that, in the event of any such breach by the Executive, the Bank will be entitled, in addition to any other remedies and damages available, to seek an injunction to restrain the violation hereof by the Executive and all persons acting for or with the Executive. The Executive represents to the Bank that the Executive’s experience and capabilities are such that the Executive can obtain employment in a business engaged in other lines of business than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from the Executive.
7.SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid by check or direct deposit from the general funds of the Bank (or any successor of the Bank).
8.EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement or understanding between the Bank or any predecessor of the Bank and the Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to the Executive under another plan, program or agreement (other than an employment agreement) between the Bank and the Executive (including unpaid compensation in respect of Executive’s employment with the Bank prior to the Effective Date of this Agreement).
9.NO ATTACHMENT; BINDING ON SUCCESSORS.
(a)Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.
(b)The Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place. A successor’s failure to assent to this Agreement following a Change in Control shall be deemed to be a material breach of this Agreement under Section 4(f) hereof entitling the Executive to the change in control benefits provided for under Section 5(b).
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10.MODIFICATION AND WAIVER.
(a)This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto, subject to approval of the Board of Directors. The Bank represents and warrants that the terms and execution of this Agreement by the undersigned officer of the Bank has been duly authorized by the Board of Directors.
(b)No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of the term or condition for the future as to any act other than that specifically waived.
11.CERTAIN APPLICABLE LAW.
Notwithstanding anything herein contained to the contrary, the following provisions shall apply:
(a)The Bank may terminate the Executive’s employment at any time, but any termination by the Bank other than termination for Cause shall not prejudice the Executive’s right to compensation or other benefits under this Agreement. The Executive shall have no right to receive compensation or other benefits under this Agreement for any period after the Executive’s termination for Cause, other than the Accrued Obligations (as set forth in Section 4(d)).
(b)In no event shall the Bank (nor any affiliate) be obligated to make any payment pursuant to this Agreement that is prohibited by Section 18(k) of the Federal Deposit Insurance Act (codified at 12 U.S.C. sec. 1828(k)), 12 C.F.R. Part 359, or any other applicable law.
(c)Notwithstanding anything in this Agreement to the contrary, to the extent that a payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that the payment or benefit is payable upon the Executive’s termination of employment, then the payments or benefits will be payable only upon the Executive’s Separation from Service. For purposes of this Agreement, a “Separation from Service” will have occurred if the Bank and the Executive reasonably anticipate that either no further services will be performed by the Executive after the Date of Termination (whether as an employee or as an independent contractor) or the level of further services performed is less than fifty (50) percent of the average level of bona fide services in the thirty-six (36) months immediately preceding the termination. For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-l(h)(ii).
(d)Notwithstanding the foregoing, if the Executive is a “Specified Employee” (i.e., a “key employee” of a publicly traded company within the meaning of Section 409A of the Code and the regulations issued thereunder) and any payment under this Agreement is triggered due to the Executive’s Separation from Service, then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment will be made during the first six (6) months following the Executive’s Separation from Service. Rather, any payment which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent payments shall be paid in the manner specified in this Agreement.
(e)To the extent not specifically provided in this Agreement, any compensation or reimbursements payable to Executive shall be paid or provided no later than two and one-half (2.5) months after the calendar year in which such compensation is no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-l(d).
(f)Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes Treasury Regulation Section 1.409A-2(b)(2).
(g)Notwithstanding anything in this Agreement to the contrary, the Executive understands that nothing contained in this Agreement limits the Executive’s ability to file a charge or complaint with the Securities and
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Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”) about a possible securities law violation without approval of the Bank (or any affiliate). The Executive further understands that this Agreement does not limit the Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Bank (or any affiliate) related to the possible securities law violation. This Agreement does not limit the Executive’s right to receive any resulting monetary award for information provided to any Government Agency. In addition, pursuant to the Defend Trade Secrets Act of 2016, the Executive understands that an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual (y) files any document containing the trade secret under seal; and (z) does not disclose the trade secret, except pursuant to court order.
12.SEVERABILITY.
If any provision of this Agreement is determined to be void or unenforceable, then the remaining provisions of this Agreement will remain in full force and effect.
13.GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New Jersey, but only to the extent not superseded by federal law. The parties to this Agreement further agree that venue in the event of any dispute shall be exclusively in district court in the New Jersey county of Middlesex or the applicable federal court encompassing that jurisdiction, at the sole option of the Bank, and the Executive agrees not to object to venue.
14.INDEMNIFICATION.
The Bank will provide the Executive (including the Executive’s heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability insurance policy at its expense, and will indemnify the Executive (and the Executive’s heirs, executors and administrators) in accordance with the charter and bylaws of the Bank and to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by the Executive in connection with or arising out of any action, suit or proceeding in which the Executive may be involved by reason of having been a trustee, director or officer of the Bank or any subsidiary or affiliate of the Bank.
15.TAX WITHHOLDING.
The Bank may withhold from any amounts payable to the Executive hereunder all federal, state, local or other taxes that the Bank may reasonably determine are required to be withheld pursuant to any applicable law or regulation (it being understood that Executive is responsible for payment of all taxes in respect of the payments and benefits provided herein).
16.NOTICE.
For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below.
| To the Bank: | United Roosevelt Savings Bank |
| | 11-15 Cooke Ave. |
| Carteret, NJ 07008 | |
| Attention: Vice Chair of the Board of Directors and Chair of the Audit Committee | |
| | |
| To Executive: | Most recent address on file with the Bank |
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17.TAX MATTERS.
(a)If the Executive’s employment is terminated following a Change in Control, the non-competition and non-solicitation restrictions set forth in Section 6(a) of this Agreement shall apply for the period mutually agreed to by the parties, and in no event shall be less than six months or exceed two years (or such longer period as permitted under state or federal law). The Bank and the Executive hereby recognize that: (i) the non-solicitation restriction and non-competition restriction under Sections 6(a) have value, and (ii) the value shall be recognized in any calculations the Bank and the Executive perform with respect to determining the affect, if any, of the parachute payment provisions of Section 280G of the Code (“Section 280G”), by allocating a portion of any payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2)), including the payments under Section 5(b) of this Agreement, to the fair value of the non-solicitation and non-competition restriction under Section 6(a) of this Agreement (the “Appraised Value”). The Bank, at the Bank’s expense, shall obtain an independent appraisal to determine the Appraised Value no later than forty-five (45) days after entering into an agreement, that if completed, would constitute a Change in Control as defined in Section 5(a). The Appraised Value will be considered reasonable compensation for post change in control services within the meaning of Q&A-40 of the regulations under Section 280G; and accordingly, any aggregate parachute payments, as defined in Section 280G, will be reduced by the Appraised Value.
(b)After taking into account the Appraised Value, in the event the receipt of all payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2)), whether paid or payable pursuant to Section 5(b) of this Agreement or otherwise (the “Change in Control Benefits”) would subject the Executive to an excise tax imposed by Code Sections 280G and 4999, then the payments and/or benefits payable under this Agreement (the “Payments”) shall be reduced by the minimum amount necessary so that no portion of the Payments under this Agreement are non-deductible to the Bank pursuant to Code Section 280G and subject to the excise tax imposed under Code Section 4999 (the “Reduced Amount”). Notwithstanding the foregoing, the Payments will not be reduced if it is determined that without such reduction, the Change in Control Benefits received by the Executive on a net after-tax basis (including without limitation, any excise taxes payable under Code Section 4999) is greater than the Change in Control Benefits that the Executive would receive, on a net after-tax benefit, if the Executive is paid the Reduced Amount under the Agreement.
(c)Unless otherwise agreed in writing by the parties, all calculations with respect to Sections 280G and 4999 of the Code required under this Section 17 shall be determined by a nationally recognized firm with appropriate expertise mutually agreeable to the Bank and the Executive (the “Firm”) whose determination will be conclusive and binding on all parties. The Bank shall pay all fees charged by the Firm for this purpose. The Bank and the Executive shall provide the Firm with all information or documents it reasonably requests, and the Firm will be entitled to rely on such information and on reasonable estimates and assumptions and interpretations of the provisions of Sections 280G and 4999 of the Code. If it is determined that the Payments should be reduced as a result of the Section 280G calculations performed by the Firm, the Bank shall promptly give (or cause the Firm to give) the Executive notice to that effect (and a copy of the detailed calculations thereof) and, to the extent consistent with Section 409A of the Code, the Executive may determine which benefits are to be reduced. All determinations made under this Section 17 shall be made as soon as reasonably practicable and in no event later than ten (10) days prior to the Date of Termination.
18.EFFECTIVE DATE AND TERMINATION OF PRIOR AGREEMENT.
(a)Effective Date. Notwithstanding anything to the contrary contained herein, this Agreement shall be subject to the completion of the Conversion and shall become effective as of the effective date of the Conversion (which for purposes of this Agreement shall be referred to as the “Effective Date”). In the event the Conversion is terminated for any reason, or in the event the Executive fails to remain an employee of the Bank as of the Effective Date, this Agreement shall automatically terminate and become null and void.
(b)Termination of Prior Agreement. The Prior Agreement shall remain in full force and effect until the Effective Date. On the Effective Date, the Executive and the Bank hereby agree that the Prior Agreement shall be terminated without any further action from any of the parties hereto or thereto. The Executive hereby acknowledges and agrees that the Executive has no contractual rights to any payments or benefits under the Prior Agreement as of the Effective Date.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| UNITED ROOSEVELT SAVINGS BANK | |
| | |
| By: | /s/ Amanda D’Alessio |
| Name: | Amanda D’Alessio |
| Title: | Corporate Secretary |
| EXECUTIVE |
| |
| /s/ Kenneth R. Totten |
| Kenneth R. Totten |
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Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made and entered into as of the 17th day of December 2025, to be effective as of the Effective Date (as defined in Section 18 below), by and between United Roosevelt Savings Bank, a New Jersey-chartered savings bank (the “Bank”) and David Van Steyn (the “Executive”). Any reference to the “Company” shall mean URSB Bancorp, Inc., a Maryland corporation to be formed, which will be the Bank’s stock holding company following the consummation of the Conversion (as defined below).
RECITALS
WHEREAS, the Executive has been employed by the Bank since September 17, 2019, as the Bank’s Vice President and Chief Risk Officer, and has served since April 8, 2024, and is presently serving, as the Bank’s Executive Vice President and Chief Financial Officer; and
WHEREAS, United Roosevelt, MHC has adopted a Plan of Conversion pursuant to which it will convert from the mutual to the stock form of organization (the “Conversion”); and
WHEREAS, the parties desire to enter into this Agreement to induce the Executive to continue employment with the Bank, and to provide further incentive for Executive to achieve the financial and performance objectives of the Bank and the Company following the Conversion.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:
1.POSITION AND RESPONSIBILITIES.
(a)Employment. During the Term (as defined in Section 2(a)) of this Agreement), the Executive agrees to serve as Chief Financial Officer and Treasurer of the Bank and the Company or any successor executive position with the Bank and the Company that is consented to, in writing, by the Executive (the “Executive Position”), and will perform the duties of, and have all powers associated with, the Executive Position as are customary for a person in the position of the Executive Position, as well as those as shall be assigned by the President and Chief Executive Officer or the Board of Directors of the Bank (the “Board of Directors”). As Chief Financial Officer and Treasurer, the Executive will report directly to the President and Chief Executive Officer of the Bank and the Company. During the Term, the Executive also agrees to serve, if elected, as an officer, director or trustee of any affiliate of the Bank and the Company and in that capacity to carry out the duties and responsibilities reasonably appropriate to any such position.
(b)Responsibilities. During the Executive’s employment hereunder, the Executive will be employed on a full-time basis and devote the Executive’s full business time and best efforts, business judgment, skill and knowledge to the performance of the duties and responsibilities attendant to the Executive Position. Except as otherwise provided in Section 1(c), or as may be approved by the Board of Directors, the Executive will not engage in any other business activity during the Term.
(c)Other Activities. The Bank encourages participation by the Executive on community boards and committees and in activities generally considered to be in the public interest and the Executive may devote a reasonable amount of time to civic, charitable, religious, trade association, political and similar activities. However, if the Board of Directors determines, in its sole discretion, that the Executive’s participation in any such activities materially hinders the Executive’s ability to perform the duties of the Executive Position or is detrimental to the Bank or the Company or either of their reputations, then the Board shall provide written notice to the Executive of such determination and the Executive shall promptly discontinue his participation in the applicable activity(ies).
2.TERM.
(a)Term and Annual Renewal. The initial term of this Agreement will begin as of the Effective Date and continue for a period of two (2) years (the “Term”). Commencing as of the first anniversary of the Effective Date, and continuing on each anniversary of that date thereafter (each a “Renewal Date”), the Term of this Agreement
shall renew for an additional year such that the remaining Term is two (2) years from the applicable Renewal Date; provided, however, that in order for this Agreement to renew, the disinterested members of the Board of Directors of the Bank (the “Board of Directors”) must take the following actions within the following time frames prior to each Renewal Date: (i) at least thirty (30) days prior to the Renewal Date, conduct or review a comprehensive performance evaluation of the Executive for purposes of determining whether to extend the Term; and (ii) affirmatively approve the renewal or non-renewal of the Term, which decision will be documented in the minutes of the meeting of the Board of Directors. If the Board of Directors elects not to renew the Term, then the Board of Directors will provide the Executive with a written notice of non-renewal (“Non-Renewal Notice”) prior to the applicable Renewal Date and this Agreement will expire at the end of the current Term. Notwithstanding the foregoing, if the Board of Directors fails to perform the actions set forth above, the Term of this Agreement will be automatically be deemed to have renewed for an additional year. For purposes of this Agreement the term “disinterested member” generally means any member of the Board of Directors who does not have a personal or other material conflict of interest with respect to the specific matter being decided by the Board of Directors. For avoidance of doubt, any extension to the Term will become the new “Term” for purposes of this Agreement.
(b)Change in Control. Notwithstanding the foregoing, in the event the Bank or the Company has entered into an agreement to effect a transaction that would be considered a Change in Control, as defined in Section 5, the Term of this Agreement will automatically extend so that it expires two (2) years beyond the effective date of the Change in Control, subject to extensions as set forth in Section 2(a).
(c)Continued Employment Following Expiration of Term. Nothing in this Agreement will mandate or prohibit a continuation of the Executive’s employment following the expiration of the Term upon such terms and conditions as the parties may mutually agree.
3.COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a)Base Salary. In consideration of the Executive’s performance of the responsibilities and duties set forth in this Agreement, the Executive will receive an annual base salary of not less than $300,000 per year (“Base Salary”). The Bank will pay the Base Salary in accordance with its customary payroll practices. During the Term, the Board of Directors (or the Compensation Committee of the Board of Directors (the “Compensation Committee”)) may increase but not decrease (unless the decrease is proportionate to any Bank-wide decrease in officer base salaries), the Executive’s Base Salary. Any increase or decrease (as provided for above) in Base Salary will become the new “Base Salary” for purposes of this Agreement.
(b)Bonus and Incentive Compensation. The Executive (i) shall be eligible to participate in any bonus plan or arrangement of the Bank in which senior management is eligible to participate, pursuant to which a bonus may be paid to the Executive in accordance with the applicable plan or arrangement; and/or (ii) may receive a bonus, if any, on a discretionary basis, as determined by the Board of Directors or the Compensation Committee in good faith.
(c)Benefit Plans. The Executive will be entitled to participate in all employee benefit plans, arrangements and perquisites offered to senior management of the Bank, on terms and conditions no less favorable than the plans, arrangements and perquisites available to other members of senior management of the Bank. Without limiting the generality of the foregoing provisions of this Section 3(c), the Executive also will be entitled to participate in any employee benefit plans including but not limited to retirement plans, pension plans, profit-sharing plans, health-and-accident plans, or any other employee benefit plan or arrangement made available by the Bank in the future to management employees, subject to and on a basis consistent with the terms, conditions and overall administration of the plans and arrangements as applicable to other management employees. Notwithstanding the foregoing, the Executive will be provided with, at the Bank’s sole expense, life insurance coverage with a death benefit equal to three (3) times the Executive’s Base Salary. The Bank shall not, without Executive’s prior written consent, make any changes to any such employee benefits plans, arrangements and perquisites that would adversely affect Executive’s rights or benefits thereunder, except as to any changes that are applicable to all participating employees or where such consent would trigger tax penalties under Section 409A of the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”).
(d)Leave and Paid Time Off. The Executive will be entitled to paid time off each year during the term of this Agreement measured on a calendar year basis, in accordance with the Bank’s customary practices and in accordance
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with the Bank’s policies and procedures for officers, in addition to all holidays observed by the Bank. Any unused paid time off during an annual period will be treated in accordance with the Bank’s personnel policies as in effect from time to time. Notwithstanding the foregoing, the Executive will be entitled to at least four (4) weeks of vacation time each calendar year.
(e)Automobile. The Bank will provide the Executive with an automobile allowance of $500 per month and shall reimburse the Executive for fuel and maintenance expenses.
(f)Expense Reimbursements. The Bank will reimburse the Executive for all reasonable travel, entertainment and other expenses incurred by the Executive in performing the Executive’s obligations under this Agreement, including, without limitation, fees for memberships in organizations that the Executive and the Board of Directors or the Compensation Committee agree are necessary and appropriate in connection with the performance of the Executive’s duties under this Agreement. All reimbursements will be made as soon as practicable upon substantiation of the expenses by the Executive in accordance with the applicable policies and procedures of the Bank and, in any event, not later than the last day of the calendar year immediately following the calendar year in which the Executive incurred the expense. To be reimbursed for any expenses, including the expenses provided for in Section 3(e) and 3(f), the Executive must charge the expenses to a Bank-issued credit card, and the charges are subject to a review by the chair of the Audit Committee.
4.TERMINATION AND TERMINATION PAY.
Subject to Section 5, which governs the occurrence of a Change in Control, the Executive’s employment under this Agreement will terminate under the circumstances set forth in this Section 4.
(a)Definition of Accrued Obligations. For purposes of this Agreement, the term “Accrued Obligations” means the sum of: (i) any Base Salary earned but unpaid through the Executive’s Date of Termination (as defined in Section 4(h) hereof), (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 3(f)), (iii) unused paid time off accrued through the Date of Termination (subject to an in accordance with Section 3(d)), (iv) any unpaid short-term and long-term incentive compensation for the year immediately preceding the year of termination paid in accordance with the terms of the applicable arrangement, and (v) any vested benefits the Executive may have under any employee benefit plan(s) of the Bank through the Date of Termination, which vested benefits will be paid and/or provided in accordance with the terms of such employee benefit plan(s). Unless otherwise provided by the applicable employee benefit plan, the Accrued Obligations, if any, will be paid to the Executive (or the Executive’s estate or beneficiary) in a lump sum within thirty (30) days following the Executive’s Date of Termination.
(b)Death. This Agreement and the Executive’s employment with the Bank will automatically terminate upon the Executive’s death, in which event the Bank’s sole obligation under this Agreement will be to pay or provide the Executive’s estate or beneficiary any Accrued Obligations and the life insurance benefits provided for under Section 3(c) and under any plan or program maintained by the Bank.
(c)Disability. The Board of Directors shall be entitled to terminate the Executive’s employment and this Agreement due to the Executive’s Disability upon thirty (30) days’ prior written notice to the Executive. If the Board of Directors terminates the Executive’s employment due to the Executive’s Disability, the Bank’s sole obligation under this Agreement shall be to pay or provide the Executive any Accrued Obligations and the Executive shall receive benefits provided under any disability program maintained by the Bank. For these purposes, the term “Disability” means the Executive is deemed disabled for purposes of the Bank’s long-term disability plan or policy that covers the Executive or is determined to be disabled by the Social Security Administration.
(d)Termination for Cause. The Board of Directors may immediately terminate the Executive’s employment and this Agreement at any time for “Cause.” In the event the Executive’s employment is terminated for Cause, the Bank’s sole obligation will be to pay or provide to the Executive any Accrued Obligations other than the benefits provided for under Section 4(a)(iv). For purposes of this Agreement, the term “Cause” means termination because of, in the good faith determination of the Board of Directors:
(i)the conviction of the Executive of a felony or of any lesser criminal offense involving moral turpitude;
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(ii)the willful commission by the Executive of a criminal or other act (other than traffic violations or similar offenses) that, in the reasonable and good faith judgment of the Board of Directors will likely cause substantial and demonstrable economic damage to the Company, the Bank or any subsidiary or substantial injury to the business reputation of the Company, the Bank or any subsidiary;
(iii)the commission by the Executive of an act of fraud in the performance of his duties on behalf of the Company, the Bank or any subsidiary;
(iv)the continuing willful failure of the Executive to perform his material duties to the Company, the Bank or any subsidiary (other than any such failure resulting from the Executive’s death or Disability (including, without limitation, Executive’s incapacity due to physical or mental illness) or the Executive declining to perform any assigned duties to the extent such assignment or duties would constitute a violation of law) after written notice thereof and a reasonable opportunity to cure;
(v)a material breach by the Executive of the Bank’s or the Company’s Code of Ethics or similar policy(ies) in effect from time-to-time; or
(vi)an order from a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Executive’s employment with the Bank or the Company.
Any determination of Cause under this Agreement will be made by resolution adopted by the Board of Directors at a meeting called and held for that purpose. The Executive will be provided with reasonable notice of the meeting, and the Executive will be given an opportunity to be heard before a vote is taken by the disinterested members of the Board of Directors regarding the determination of Cause and the termination of Executive’s employment.
(e)Resignation by Executive without Good Reason. During the Term, the Executive may resign from employment without Good Reason upon at least sixty (60) days’ prior written notice to the Board of Directors, provided, however, that the Bank may accelerate the Date of Termination upon receipt of written notice of the Executive’s resignation (in which case, the Bank will continue to pay the Executive’s Base Salary through the remainder of the 60-day period). In the event the Executive resigns without Good Reason, the Bank’s sole obligation under this Agreement will be to pay or provide any Accrued Obligations to the Executive.
(f)Termination Without Cause or With Good Reason.
(i)The Board of Directors may immediately terminate the Executive’s employment at any time for a reason other than Cause (a termination “Without Cause”), and the Executive may, by written notice to the Board of Directors, terminate his employment at any time within ninety (90) days following an event constituting “Good Reason” (a termination “With Good Reason”); provided, however, that the Bank will have thirty (30) days to cure the “Good Reason” condition, but the Bank may waive its right to cure. In the event of a termination of employment described under this Section 4(f)(i) during the Term and subject to the requirements of Section 4(f)(iii), the Bank will pay or provide the Executive with the following as severance pay or liquidated damages or both:
(A)any Accrued Obligations;
(B)a cash payment equal to two (2) times the Executive’s Base Salary; payable in a lump sum within sixty (60) days of the Executive’s Date of Termination; and
(C)provided that the Executive or his dependents has elected continued health care coverage in accordance with the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), reimbursement of the Executive’s COBRA health care costs for twelve (12) months or until the Executive attains age 65, whichever is earlier.
(ii)“Good Reason” exists if, without the Executive’s express written consent, any of the following occur:
(A)a material reduction in the Executive’s Base Salary (other than as provided for in Section 3(a)) and/or any aggregate incentive compensation opportunities under the Bank’s annual and long-term incentive
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plans or programs or other benefits or perquisites, as applicable; notwithstanding the foregoing, the Bank or Company may eliminate and/or modify the Executive’s Base Salary, incentive compensation opportunities, any existing employee benefit, retirement, or fringe benefit plans and coverage levels or perquisites on a consistent and non-discriminatory basis applicable to all executive officers;
(B)a material reduction in the Executive’s title, authority, duties or responsibilities from the position and attributes associated with the Executive Position without Executive’s prior written consent (and any such reduction shall be deemed a continuing material breach of this Agreement by the Bank);
(C)the failure to re-appoint the Executive to the Executive Position set forth under Section 1(a);
(D)a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from the location of the Bank’s main office as of the Effective Date of this Agreement;
(E)a material breach of this Agreement by the Bank; or
(F)a liquidation or dissolution of the Bank.
(iii)Notwithstanding anything to the contrary in Section 4(f)(i), the Executive will not receive any payments or benefits under Sections 4(f)(i)(B) or 4(f)(i)(C) unless and until the Executive executes a release of claims (the “Release”) against the Bank and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which the Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement. The Release must be executed and become irrevocable by the 60th day following the Date of Termination, provided that if the 60-day period spans two (2) calendar years, then, to the extent necessary to comply with Section 409A of the Code, the payments and benefits described in this Section 4(f) will be paid, or commence, in the second calendar year.
(g)Effect on Status as a Director. In the event of the Executive’s termination of employment under this Agreement for any reason, whether by the Bank and the Company or by the Executive, and unless otherwise agreed to by the mutual consent of the Executive and the Bank and the Company, the termination will also constitute the Executive’s resignation as a director of the Bank and the Company, as well as a director of any subsidiary or affiliate thereof, to the extent the Executive is serving as a director of any of the aforementioned entities.
(h)Notice; Effective Date of Termination. Any Notice of Termination of employment under this Agreement must be communicated by or to the Executive or the Bank, as applicable, in accordance with Section 16. For purposes of this Agreement, the term “Date of Termination” means the Executive’s termination of employment pursuant to this Agreement, which will be effective on the earliest of: (i) immediately after the Bank gives notice to the Executive of the Executive’s termination Without Cause, unless the parties agree to a later date, in which case, termination will be effective as of such later date; (ii) immediately upon approval by the Board of Directors of termination of the Executive’s employment for Cause; (iii) immediately upon the Executive’s death, and thirty (30) days following the date of the notice required by Section 4(c) in the case of Executive’s Disability; (iv) thirty (30) days after the Executive gives written notice to the Bank of the Executive’s resignation from employment (including With Good Reason), provided that the Bank may set an earlier termination date at any time prior to the date of termination of employment, in which case the Executive’s resignation shall be effective as of that date; or (v) in the event of the Executive’s termination With Good Reason under Section 4(f)(ii)(A), the date on which the Executive provides Notice of Termination in accordance with Section 4(f)(i). Notwithstanding the pendency of a dispute regarding the Executive’s termination, the Bank may discontinue paying the Executive’s compensation until the dispute is finally resolved in accordance with this Agreement. If it is determined that the Executive is entitled to compensation and benefits under this Agreement, the payment of such compensation and benefits by the Bank shall commence immediately following the date of resolution, with interest due the Executive on the cash amount that would have been paid pending resolution (at the prime rate as published in The Wall Street Journal from time to time).
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5.CHANGE IN CONTROL.
(a)Change in Control Defined. For purposes of this Agreement, the term “Change in Control” means: (i) a change in the ownership of the Corporation; (ii) a change in the effective control of the Corporation; (iii) a change in the ownership of a substantial portion of the assets of the Corporation as defined in accordance with Code Section 409A. For purposes of this Section 5(a), the term “Corporation” means the Bank, the Company or any of their successors, as applicable.
(i)A change in the ownership of a Corporation occurs on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or combined voting power of the outstanding securities of the Corporation (excluding any securities purchased by any employee stock ownership plan or trust established by the Corporation).
(ii)A change in the effective control of the Corporation occurs on the date that either (A) any one person, or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(vi)(D)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing thirty percent (30%) or more of the total voting power of the stock of the Corporation, or (B) a majority of the members of the board of directors of the Corporation is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors prior to the date of the appointment or election, provided that this clause “(B)” is inapplicable where a majority stockholder of the Corporation is another corporation.
(iii)A change in a substantial portion of the Corporation’s assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of (A) all of the assets of the Corporation, or (B) the value of the assets being disposed of, either of which is determined without regard to any liabilities associated with such assets.
For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulation 1.409A-3(i)(5), except to the extent that such regulations are superseded by subsequent guidance.
For the avoidance of doubt and notwithstanding anything herein to the contrary, a Change in Control will not be deemed to have occurred for purposes of this Agreement as a result of the Conversion.
(b)Change in Control Benefits. Upon the termination of the Executive’s employment by the Bank or the Company (or any successor) Without Cause or by the Executive With Good Reason during the Term on or within two years after the effective time of a Change in Control, the Bank (or any successor) will pay or provide the Executive, or the Executive’s estate in the event of the Executive’s death, with the following:
(i)any Accrued Obligations;
(ii)a cash payment equal to three (3) times the sum of: (A) the Executive’s Base Salary at the Date of Termination (or the Executive’s Base Salary in effect during any of the prior three years, if higher); and (B) the average annual total incentive bonus earned by the Executive for three (3) most recently completed calendar years prior to the Change Control, or if greater, the annual total incentive bonus that would have been earned in the year of the Change of Control at target bonus opportunity; which cash payment shall be paid in a lump sum within thirty (30) days of the Executive’s Date of Termination; and
(iii)the value of health care costs for twenty-four (24) months (based on the COBRA cost in effect for continued insurance coverage at the Date of Termination, whether or not the Executive elects COBRA); which shall be paid in cash in a lump sum within thirty (30) days of the Executive’s Date of Termination.
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Notwithstanding the foregoing, the payments and benefits provided in this Section 5(b) will be payable to the Executive in lieu of any payments or benefits that are payable under Section 4(f).
6.COVENANTS OF EXECUTIVE.
(a)Non-Solicitation/Non-Compete. The Executive hereby covenants and agrees that during the Restricted Period, the Executive will not, without the written consent of the Bank, either directly or indirectly:
(i)solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Bank, or any of its subsidiaries or affiliates, to terminate his or her employment with the Bank and/or accept employment with any business whatsoever that competes with the Bank or any of its subsidiaries or affiliates or has headquarters or offices within the Restricted Territory (as defined in clause (ii) below), provided that this provision shall not apply with respect to any officer or employee of the Bank who responds to a general advertisement not targeted at any specific officers or employees of the Bank, or to any officer or employee of the Bank who independently seeks employment with Executive’s subsequent employer through no solicitation, contact or referral by Executive, either directly or indirectly, including through a recruiter or headhunter; or
(ii)become an officer, employee, consultant, director, trustee, independent contractor, agent, joint venturer, partner or trustee of any commercial bank, savings bank, savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other entity that competes with the business of the Bank or any of its direct or indirect subsidiaries or affiliates that: (A) has a headquarters within the New Jersey counties of Middlesex or any other county in which the Bank has a branch or loan production office (the “Restricted Territory”), or (B) has one or more offices, but is not headquartered, within the Restricted Territory, but in the latter case, only if the Executive would be employed, conduct business or have other responsibilities or duties within the Restricted Territory; or
(iii)solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any customer of the Bank to terminate an existing business or commercial relationship with the Bank.
Except as otherwise provided for in Section 17, for purposes of this Section 6(a), the “Restricted Period” will be: (i) at all times during Executive’s period of employment with the Bank; and (ii) except as provided above, during the period beginning on Executive’s Date of Termination and ending on the one-year anniversary of the Date of Termination.
(b)Confidentiality. The Executive recognizes and acknowledges that the Executive has been and will be the recipient of confidential and proprietary business information concerning the Bank, including without limitation, past, present, planned or considered business activities of the Bank, and the Executive acknowledges and agrees that the Executive will not, during or after the term of the Executive’s employment, disclose such confidential and proprietary information for any purposes whatsoever, except as may be necessary in connection with Executive’s performance of the duties and responsibilities of the Executive Position to persons or entities bound by similar obligations of confidentiality, as may be expressly permitted in a writing signed by the Bank, or as may be required by regulatory inquiry, law or court order.
(c)Information/Cooperation. The Executive will, upon reasonable notice, furnish any information and assistance to the Bank as may be reasonably required by the Bank, at the expense of the Bank, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that the Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Bank or any other subsidiaries or affiliates. The Executive will be reimbursed for reasonable expenses incurred in providing such information and assistance to the Bank.
(d)Reliance. Except as otherwise provided, all payments and benefits to the Executive under this Agreement will be subject to the Executive’s compliance with this Section 6, to the extent applicable. The parties hereto,
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recognizing that irreparable injury will result to the Bank, its business and property in the event of the Executive’s breach of this Section 6, agree that, in the event of any such breach by the Executive, the Bank will be entitled, in addition to any other remedies and damages available, to seek an injunction to restrain the violation hereof by the Executive and all persons acting for or with the Executive. The Executive represents to the Bank that the Executive’s experience and capabilities are such that the Executive can obtain employment in a business engaged in other lines of business than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from the Executive.
7.SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid by check or direct deposit from the general funds of the Bank (or any successor of the Bank).
8.EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement or understanding between the Bank or any predecessor of the Bank and the Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to the Executive under another plan, program or agreement (other than an employment agreement) between the Bank and the Executive (including unpaid compensation in respect of Executive’s employment with the Bank prior to the Effective Date of this Agreement).
9.NO ATTACHMENT; BINDING ON SUCCESSORS.
(a)Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.
(b)The Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place. A successor’s failure to assent to this Agreement following a Change in Control shall be deemed to be a material breach of this Agreement under Section 4(f) hereof entitling the Executive to the change in control benefits provided for under Section 5(b).
10.MODIFICATION AND WAIVER.
(a)This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto, subject to approval of the Board of Directors. The Bank represents and warrants that the terms and execution of this Agreement by the undersigned officer of the Bank has been duly authorized by the Board of Directors.
(b)No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of the term or condition for the future as to any act other than that specifically waived.
11.CERTAIN APPLICABLE LAW.
Notwithstanding anything herein contained to the contrary, the following provisions shall apply:
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Agreement. The Executive shall have no right to receive compensation or other benefits under this Agreement for any period after the Executive’s termination for Cause, other than the Accrued Obligations (as set forth in Section 4(d)).
(b)In no event shall the Bank (nor any affiliate) be obligated to make any payment pursuant to this Agreement that is prohibited by Section 18(k) of the Federal Deposit Insurance Act (codified at 12 U.S.C. sec. 1828(k)), 12 C.F.R. Part 359, or any other applicable law.
(c)Notwithstanding anything in this Agreement to the contrary, to the extent that a payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that the payment or benefit is payable upon the Executive’s termination of employment, then the payments or benefits will be payable only upon the Executive’s Separation from Service. For purposes of this Agreement, a “Separation from Service” will have occurred if the Bank and the Executive reasonably anticipate that either no further services will be performed by the Executive after the Date of Termination (whether as an employee or as an independent contractor) or the level of further services performed is less than fifty (50) percent of the average level of bona fide services in the thirty-six (36) months immediately preceding the termination. For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-l(h)(ii).
(d)Notwithstanding the foregoing, if the Executive is a “Specified Employee” (i.e., a “key employee” of a publicly traded company within the meaning of Section 409A of the Code and the regulations issued thereunder) and any payment under this Agreement is triggered due to the Executive’s Separation from Service, then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment will be made during the first six (6) months following the Executive’s Separation from Service. Rather, any payment which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent payments shall be paid in the manner specified in this Agreement.
(e)To the extent not specifically provided in this Agreement, any compensation or reimbursements payable to Executive shall be paid or provided no later than two and one-half (2.5) months after the calendar year in which such compensation is no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-l(d).
(f)Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes Treasury Regulation Section 1.409A-2(b)(2).
(g)Notwithstanding anything in this Agreement to the contrary, the Executive understands that nothing contained in this Agreement limits the Executive’s ability to file a charge or complaint with the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”) about a possible securities law violation without approval of the Bank (or any affiliate). The Executive further understands that this Agreement does not limit the Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Bank (or any affiliate) related to the possible securities law violation. This Agreement does not limit the Executive’s right to receive any resulting monetary award for information provided to any Government Agency. In addition, pursuant to the Defend Trade Secrets Act of 2016, the Executive understands that an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual (y) files any document containing the trade secret under seal; and (z) does not disclose the trade secret, except pursuant to court order.
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12.SEVERABILITY.
If any provision of this Agreement is determined to be void or unenforceable, then the remaining provisions of this Agreement will remain in full force and effect.
13.GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New Jersey, but only to the extent not superseded by federal law. The parties to this Agreement further agree that venue in the event of any dispute shall be exclusively in district court in the New Jersey county of Middlesex or the applicable federal court encompassing that jurisdiction, at the sole option of the Bank, and the Executive agrees not to object to venue.
14.INDEMNIFICATION.
The Bank will provide the Executive (including the Executive’s heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability insurance policy at its expense, and will indemnify the Executive (and the Executive’s heirs, executors and administrators) in accordance with the charter and bylaws of the Bank and to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by the Executive in connection with or arising out of any action, suit or proceeding in which the Executive may be involved by reason of having been a trustee, director or officer of the Bank or any subsidiary or affiliate of the Bank.
15.TAX WITHHOLDING.
The Bank may withhold from any amounts payable to the Executive hereunder all federal, state, local or other taxes that the Bank may reasonably determine are required to be withheld pursuant to any applicable law or regulation (it being understood that Executive is responsible for payment of all taxes in respect of the payments and benefits provided herein).
16.NOTICE.
For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below.
| To the Bank: | United Roosevelt Savings Bank |
| | 11-15 Cooke Ave. |
| | Carteret, NJ 07008 |
| | Attention: Vice Chair of the Board of Directors, President of the Bank and Chair of the Audit Committee |
| | |
| To Executive: | Most recent address on file with the Bank |
17.TAX MATTERS.
(a)If the Executive’s employment is terminated following a Change in Control, the non-competition and non-solicitation restrictions set forth in Section 6(a) of this Agreement shall apply for the period mutually agreed to by the parties, and in no event shall be less than six months or exceed two years (or such longer period as permitted under state or federal law). The Bank and the Executive hereby recognize that: (i) the non-solicitation restriction and non-competition restriction under Sections 6(a) have value, and (ii) the value shall be recognized in any calculations the Bank and the Executive perform with respect to determining the affect, if any, of the parachute payment provisions of Section 280G of the Code (“Section 280G”), by allocating a portion of any payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2)), including the payments under Section 5(b) of this Agreement, to the fair value of the non-solicitation and non-competition restriction under Section 6(a) of this Agreement (the “Appraised Value”). The Bank, at the Bank’s expense, shall obtain an independent appraisal to determine the Appraised Value no later than forty-five (45) days after entering into an agreement, that if completed, would constitute a Change in Control as defined in Section 5(a). The Appraised Value will be considered reasonable compensation for post change in control services within the meaning of Q&A-40 of the regulations under Section 280G; and accordingly, any aggregate parachute payments, as defined in Section 280G, will be reduced by the Appraised Value.
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(b)After taking into account the Appraised Value, in the event the receipt of all payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2)), whether paid or payable pursuant to Section 5(b) of this Agreement or otherwise (the “Change in Control Benefits”) would subject the Executive to an excise tax imposed by Code Sections 280G and 4999, then the payments and/or benefits payable under this Agreement (the “Payments”) shall be reduced by the minimum amount necessary so that no portion of the Payments under this Agreement are non-deductible to the Bank pursuant to Code Section 280G and subject to the excise tax imposed under Code Section 4999 (the “Reduced Amount”). Notwithstanding the foregoing, the Payments will not be reduced if it is determined that without such reduction, the Change in Control Benefits received by the Executive on a net after-tax basis (including without limitation, any excise taxes payable under Code Section 4999) is greater than the Change in Control Benefits that the Executive would receive, on a net after-tax benefit, if the Executive is paid the Reduced Amount under the Agreement.
(c)Unless otherwise agreed in writing by the parties, all calculations with respect to Sections 280G and 4999 of the Code required under this Section 17 shall be determined by a nationally recognized firm with appropriate expertise mutually agreeable to the Bank and the Executive (the “Firm”) whose determination will be conclusive and binding on all parties. The Bank shall pay all fees charged by the Firm for this purpose. The Bank and the Executive shall provide the Firm with all information or documents it reasonably requests, and the Firm will be entitled to rely on such information and on reasonable estimates and assumptions and interpretations of the provisions of Sections 280G and 4999 of the Code. If it is determined that the Payments should be reduced as a result of the Section 280G calculations performed by the Firm, the Bank shall promptly give (or cause the Firm to give) the Executive notice to that effect (and a copy of the detailed calculations thereof) and, to the extent consistent with Section 409A of the Code, the Executive may determine which benefits are to be reduced. All determinations made under this Section 17 shall be made as soon as reasonably practicable and in no event later than ten (10) days prior to the Date of Termination.
18.EFFECTIVE DATE AND TERMINATION OF PRIOR AGREEMENT.
Notwithstanding anything to the contrary contained herein, this Agreement shall be subject to the completion of the Conversion and shall become effective as of the effective date of the Conversion (which for purposes of this Agreement shall be referred to as the “Effective Date”). In the event the Conversion is terminated for any reason, or in the event the Executive fails to remain an employee of the Bank as of the Effective Date, this Agreement shall automatically terminate and become null and void.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| UNITED ROOSEVELT SAVINGS BANK | |
| | |
| By: | /s/ Kenneth R. Totten |
| Name: | Kenneth R. Totten |
| Title: | President and CEO |
| EXECUTIVE |
| |
| /s/ David Van Steyn |
| David Van Steyn |
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Exhibit 10.3
UNITED ROOSEVELT SAVINGS BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This United Roosevelt Savings Bank Supplemental Executive Retirement Plan (“Plan”) is adopted as of this 8th day April 2026 (the “Effective Date”) by United Roosevelt Savings Bank, a New Jersey chartered savings bank (the “Employer” or the “Bank”) for the benefit of Kenneth Totten (the “Executive”). The purpose of the Plan is to provide supplemental nonqualified pension benefits to the Executive and incentivize Executive to continue to make substantial contributions to the success of the Employer.
This Plan is intended to be and shall be administered as an income tax nonqualified, unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Sections 201(2), 301(a)(3), and 401(a)(1). This Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, the intent of the parties hereto is that the Plan shall be operated and interpreted consistent with the requirements thereof.
ARTICLE 1
DEFINITIONS
Whenever used in this Plan, the following terms have the meanings specified:
1.1.“Account Balance” means, as of any date, the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) on behalf of the Executive.
1.2. “Annuity Contract” means the following annuity contract(s) purchased and solely owned by the Bank: a Flexible Premium Indexed Deferred Annuity Contract issued by Nationwide Mutual Insurance Company, contract #07-3025300 or such other annuity contracts (a) as the Bank may purchase from time to time in accordance with Section 2.3 or otherwise, the income value of which the Bank intends to serve as the measure of the Plan benefit for the Executive and (b) are identified by Policy number in writing by the Bank as an “Annuity Contract” under this Plan.
1.3.“Beneficiary” means the person or entity designated, or otherwise determined in accordance with Article 4, in writing by the Executive to receive death benefits pursuant to this Plan in the event of the Executive’s death.
1.4.“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.
1.5.“Board” means the Board of Directors of the Bank.
1.6.“Change in Control” means the occurrence, through sale, exchange, merger, redemption or otherwise of a (i) change in ownership as defined in Treasury Regulation §l.409A-3(i)(5)(v), (ii) change in effective control as defined in Treasury Regulation §l.409A-3(i)(5)(vi), or (iii) change in the ownership of a substantial portion of the assets of the Bank as defined in Treasury Regulation §1.409A-3(i)(5)(vii) as currently in effect and as may hereafter from time to time be amended.
1.7.“Disability” shall mean the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to
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result in death or can be expected to last for a continuous period of net less than twelve (12) months or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer.
Determination of such disability shall be made by the provider of such accident, long-term disability or health plan covering said Executive or by the Social Security Administration. Upon the request of Employer, Executive must submit proof to Employer of the provider’s determination or Social Security Administration’s determination of disability.
1.8.“Rider” means the income rider attached to the Annuity Contract as an endorsement or other product feature that operates as an income rider, with such feature providing for a withdrawal or payment feature for the life of the annuitant.
1.9.“Normal Retirement Age” means age seventy-two (72).
1.10.“Plan Administrator” means the Board.
1.11.“Separation from Service” means separation from service as that term is defined and interpreted in Section 409A of the Code and Treasury Regulation §1.409A-1(h) or in subsequent regulations or other guidance issued by the Internal Revenue Service.
ARTICLE 2
ASSET FINANCING, OWNERSHIP AND RIGHTS
2.1.Annuity Contract and Other Investments. For purposes of satisfying its obligations to provide benefits under this Plan, the Bank has initially invested in the Annuity Contract and may invest in other investments. However, nothing in this Section 2.1 shall require the Bank to invest in any particular form of investment.
2.2.Ownership of the Annuity Contract. The Bank is the sole owner of the Annuity Contract, and other such investments, and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the death proceeds of the Annuity Contract. The Bank shall at all times be entitled to the Annuity Contract’s cash surrender value, as that term is defined in the Annuity Contract.
2.3.Right to Annuity Contract. Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender any Annuity Contract without terminating this Plan, provided the Bank replaces the Annuity Contract with a comparable annuity policy, or asset of comparable value, with a comparable lifetime withdrawal feature and comparable benefit value. Without limitation, the Annuity Contract at all times shall be the exclusive property of the Bank and shall be subject to the claims of the Bank’s creditors.
2.4.Rabbi Trust. The Bank may establish a “rabbi trust” to which contributions may be made to provide the Bank with a source of funds for purposes of satisfying the obligations of the Bank under the Plan. The trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan. Neither the Executive nor the Beneficiary shall have any beneficial ownership interest in any assets held in the trust.
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ARTICLE 3
RETIREMENT AND OTHER BENEFITS
3.1.Normal Retirement Benefit. Upon the Executive's Separation from Service after reaching Normal Retirement Age for any reason other than death, the Executive will be entitled to the monthly benefit payment described in this Section 3.1. The amount of the monthly benefit will equal the amount that is paid from the Annuity Contracts designated under this Plan to benefit the Executive through the Rider (the “Normal Retirement Benefit”) based on the Executive's age on the date of his Separation from Service. The Normal Retirement Benefit will commence on the first (1st) day of the second month following the date of the Executive's Separation from Service, payable monthly and continuing for his lifetime. This shall be the Executive's benefit in lieu of any other benefit under this Plan.
3.2.Early Retirement Benefit. In the event the Executive should incur a Separation from Service prior to Normal Retirement Age for any reason other than death, Disability or Change in Control, the Executive will be entitled to a monthly benefit equal to a vested percentage of the amount that is paid from the Annuity Contracts designated under this Plan to benefit the Executive through the Rider (the “Early Retirement Benefit”). The percentage is the ratio of the Account Balance at Separation from Service to the Account Balance at Normal Retirement Age. The Early Retirement Benefit will be determined by applying this percentage to the amount that is payable from the Annuity Contract through the Rider at the Executive's Normal Retirement Age. The Early Retirement Benefit will commence on the first day of the second month following the Executive's Normal Retirement Age and will continue monthly thereafter for the Executive's lifetime. This shall be the Executive's benefit in lieu of any other benefit under this Plan. For purposes of this Section 3.2, the Executive shall be 100% vested.
3.3.Change in Control Benefit. If the Executive is actively employed at the time of a Change in Control and incurs a Separation from Service within twenty-four (24) months following the Change in Control, the Executive will be entitled to the Normal Retirement Benefit (as if he had attained his Normal Retirement Age at the time of the Separation from Service) as set forth in Section 3.1. The Employer may establish a “rabbi trust”, if one has not already been established, for the purposes of this Plan, to which assets will be contributed to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan. The amount of the contribution to the “rabbi trust” will be the amount sufficient to satisfy the benefit under this Section 3.3. Benefit payments will commence on the first day of the second month following the later of the Executive’s Normal Retirement Age or Separation from Service and will continue for the Executive's lifetime.
3.4.Death Benefits.
(a)Death During Active Service. Upon the death of the Executive while in active service with the Employer, the Employer shall pay to the Executive’s Beneficiary the Executive’s Account Balance, payable to the Beneficiary in a single lump sum no later than sixty (60) days following receipt proof of death.
(b)Death After Benefits are Due or Have Commenced. Upon death of the Executive after benefit payments are due to be paid or have commenced but before receiving a total of one hundred eighty (180) monthly payments, the Employer shall make payments or continue to make payments to the Executive’s Beneficiary as if the Executive had survived, until a total of one hundred eighty (180) monthly payments have been made. If the Executive dies after having received one hundred eighty (180) payments, this Agreement will terminate and no payments will be made to the Executive’s primary or contingent Beneficiary under the Plan. If the Beneficiary dies while payments are being made to the Beneficiary but before the total of one hundred eighty (180) monthly payments have been made, as
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described in this Section 3.4(b), the remaining payments, if any, will be paid in a lump sum to the Contingent Beneficiary as named by the Executive.
3.5.Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Plan regarding timing of payments, the following special rules shall apply if the stock of the Employer is publicly traded at the time of the Executive’s Separation from Service in order for this Plan to comply with Code Section 409A of the Code: (i) to the extent the Executive is a “specified employee” (as defined under Code Section 409A of the Code) at the time of a distribution and to the extent such applicable provisions of Code Section 409A of the Code and the regulations thereunder require a delay of such distributions by a six-month period after the date of the Executive’s Separation from Service with the Employer, no such distribution shall be made prior to the date that is six months after the date of the Executive’s Separation from Service with the Employer, and (ii) any such delayed payments shall be paid to the Executive in a single lump sum within five (5) business days after the end of the six (6) month delay.
3.6.Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3G)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with the ethics laws or conflicts of interest laws; (iii) in limited cashouts (but not in excess of the limit under Code Section 402(g)(l)(B)); (iv) to pay employment-related taxes; or (v) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.
ARTICLE 4
BENEFICIARIES
4.1.Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Plan upon the death of the Executive. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.
4.2.Beneficiary Designation; Changes. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.
4.3.Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received in writing by the Plan Administrator or its designated agent.
4.4.No Beneficiary Designation. If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be distributed to the personal representative of the Executive’s estate.
4.5.Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Employer may pay such
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benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Employer may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Employer from all liability for the benefit.
ARTICLE 5
GENERAL LIMITATIONS
5.1.Limits on Payments. Notwithstanding anything contained in this Plan to the contrary, it is understood and agreed that the Bank shall not be required to make any payment or take any action under this Plan if: (a) such payment or action is prohibited by any governmental agency having jurisdiction over the Bank (hereinafter referred to as “Regulatory Authority”) in light of the fact that the Bank has been declared by Regulatory Authority to be troubled, or operating in an unsafe or unsound matter; or (b) such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to the Bank, as now in effect or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory Authority.
5.2.Termination for Cause. Notwithstanding anything to the contrary contained herein, in the event of the Executive's termination for Cause, this Plan shall terminate and no benefits shall be payable under the Plan. For this purpose, “Cause” shall be defined in the same manner as it is defined in any employment agreement in effect between the Bank and the Executive. If there is no such employment agreement in effect, then the term shall be defined as (i) conviction of a crime involving moral turpitude; (ii) willful misconduct or gross neglect of duties which, in either case, has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided that within 30 days after receiving notice of such misconduct or neglect, on which the Board is relying to terminate you for cause, you are provided the opportunity defend yourself before the Board; or (iii) a repeated failure by Executive to follow the written directives of the Board or any written Bank policy or guidelines expressly approved by the Board which has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided, however, that if you initially refuse to obey the written directives of the Board, (a) you are furnished a written statement by the Board that it believes in good faith that the acts or non-acts in respect of the direction that is given you is in the best interests of the Bank, and (b) you are provided the opportunity to discuss with the Board reasons for not complying with the Board's directives; provided further that your refusal to follow any written directive of the Board that would cause you to commit any illegal act or engage in any illegal course of conduct shall not be grounds for terminating your employment for Cause.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1.Claims Procedure. A person or Beneficiary (a “claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows:
(a)Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after the notice was received by the claimant. All other claims must be made within one hundred eighty (180) days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant.
(b)Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim, (within forty-five (45) days for Disability
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benefits). If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days, (thirty (30) days for Disability), by notifying the claimant in writing, prior to the end of the initial ninety (90)-day period (or forty-five (45) days, as applicable), that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. If the extension is with respect to Disability benefits, the notice shall specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the claimant shall be given 45 days to provide the specified information. The time period shall begin at the time a claim is filed, whether or not all information necessary for a determination accompanies the filing. If the time period is extended due to insufficient information needed to decide a Disability claim, the period for making the Disability determination shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.
(c)Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i)The specific reasons for the denial,
(ii)A reference to the specific provisions of the Plan on which the denial is based,
(iii)A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,
(iv)An explanation of the Plan’s review procedures and the time limits applicable to such procedures, and
(v)in the case involving Disability, a copy of any internal rule, guideline, protocol or other similar criterion that was relied upon in making the decision and, if based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided free of charge upon request.
6.2.Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows:
(a)Initiation - Written Request. To initiate the review, the claimant, within sixty (60) days (180 days for a Disability claim) after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.
(b)Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
(c)Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
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(d)Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.
(e)Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i)The specific reasons for the denial,
(ii)A reference to the specific provisions of the Plan on which the denial is based,
(iii)A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and
(iv)A statement of the claimant’s right to bring a civil action under ERISA Section 502(a), and
(v)in the case involving Disability benefits, a copy of any internal rule, guideline, protocol or other similar criterion that was relied upon in making the decision and, if the adverse determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided free of charge upon request; and the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find what may be available is to contact your local U.S. Department of Labor Office or your State insurance regulatory agency.
ARTICLE 7
MISCELLANEOUS
7.1.Amendments and Termination. Subject to Section 7.12 of this Plan, this Agreement may be amended or terminated solely by a written agreement signed by the Bank and by the Executive.
7.2.No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Executive the right to remain an employee of the Employer, nor does it interfere with the Employer’s right to discharge the Executive. It also does not require any Executive to remain an employee nor interfere with any Executive’s right to terminate employment at any time.
7.3.Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.
7.4.Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.
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7.5.Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction and performance of this Plan shall be governed by and construed in accordance with the laws of the State of New Jersey, without giving effect to the principles of conflict of laws of such state.
7.6.Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Plan. The benefits represent the mere promise by the Employer to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance, annuity contract or other asset purchased by Employer to fund its obligations under this Plan shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.
7.7.Benefit Provision. Notwithstanding the provisions of this Plan in the payment of the benefits under Article 3, any benefits payable under this Plan are contingent solely upon the amount that is provided by the Annuity Contract(s) as identified in this Plan or other provision as provided for in Article 2.
7.8.Severability. If any provision of this Plan is held invalid, such invalidity shall not affect any other provision of this Plan, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Plan is held invalid in part, such invalidity shall not affect the remainder of the provision, and the remainder of such provision together with all other provisions of this Plan shall continue in full force and effect to the full extent consistent with law.
7.9.Headings. The headings of articles herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.
7.10.Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board, at the Bank’s main office.
7.11.Payment of Legal Fees. In the event litigation ensues between the parties concerning the enforcement of the obligations of the parties under this Plan, the Employer shall pay all costs and expenses in connection with such litigation until such time as a final determination (excluding any appeals) is made with respect to the litigation. If the Employer prevails on the substantive merits of each material claim in dispute in such litigation, the Employer shall be entitled to receive from the Executive all reasonable costs and expenses, including without limitation attorneys’ fees, incurred by the Employer on behalf of the Executive in connection with such litigation, and the Executive shall pay such costs and expenses to the Employer promptly upon demand by the Employer.
7.12.Termination or Modification of Plan Because of Changes in Law, Rules or Regulations. The Employer is entering into this Plan on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form. If that assumption materially changes and the change has a material detrimental effect on this Plan, then the Employer reserves the right to terminate or modify this Plan accordingly.
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ARTICLE 8
ADMINISTRATION OF AGREEMENT
8.1.Plan Administrator Duties. This Plan shall be administered by a Plan Administrator consisting of the Board or such committee or person(s) as the Board shall appoint. The Plan Administrator shall have the sole and absolute discretion and authority to interpret and enforce all appropriate rules and regulations for the administration of this Plan and the rights of the Executive under this Plan, to decide or resolve any and all questions or disputes arising under this Plan, including benefits payable under this Plan and all other interpretations of this Plan, as may arise in connection with the Plan. No benefit shall be payable hereunder to any person unless the Plan Administrator, in its sole discretion, determines such benefit is due.
8.2.Agents. In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Employer.
8.3.Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
8.4.Indemnity of Plan Administrator. The Plan Administrator shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless such action or omission is attributable to the willful misconduct of the Plan Administrator or any of its members. The Employer shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Plan Administrator or any of its members.
8.5.Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.
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This Supplemental Executive Retirement Plan Agreement is hereby adopted as of the date written above.
EXECUTIVE: | | UNITED ROOSEVELT SAVINGS BANK | |
| | | |
| | | |
/s/ Kenneth R. Totten | | By: | Timothy Touhey |
| | | |
| | Title: | Timothy Touhey, Vice Chairman of the Board |
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Exhibit 10.4
UNITED ROOSEVELT SAVINGS BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This United Roosevelt Savings Bank Supplemental Executive Retirement Plan (“Plan”) is adopted as of this 8th day April 2026 (the “Effective Date”) by United Roosevelt Savings Bank, a New Jersey chartered savings bank (the “Employer” or the “Bank”) for the benefit of David Van Steyn (the “Executive”). The purpose of the Plan is to provide supplemental nonqualified pension benefits to the Executive and incentivize Executive to continue to make substantial contributions to the success of the Employer.
This Plan is intended to be and shall be administered as an income tax nonqualified, unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Sections 201(2), 301(a)(3), and 401(a)(1). This Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, the intent of the parties hereto is that the Plan shall be operated and interpreted consistent with the requirements thereof.
ARTICLE 1
DEFINITIONS
Whenever used in this Plan, the following terms have the meanings specified:
1.1.“Account Balance” means, as of any date, the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) on behalf of the Executive.
1.2. “Annuity Contract” means the following annuity contract(s) purchased and solely owned by the Bank: a Flexible Premium Indexed Deferred Annuity Contract issued by National Western Life Insurance Company, contract # 01E7022311 or such other annuity contracts (a) as the Bank may purchase from time to time in accordance with Section 2.3 or otherwise, the income value of which the Bank intends to serve as the measure of the Plan benefit for the Executive and (b) are identified by Policy number in writing by the Bank as an “Annuity Contract” under this Plan.
1.3.“Beneficiary” means the person or entity designated, or otherwise determined in accordance with Article 4, in writing by the Executive to receive death benefits pursuant to this Plan in the event of the Executive’s death.
1.4.“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.
1.5.“Board” means the Board of Directors of the Bank.
1.6.“Change in Control” means the occurrence, through sale, exchange, merger, redemption or otherwise of a (i) change in ownership as defined in Treasury Regulation §l.409A-3(i)(5)(v), (ii) change in effective control as defined in Treasury Regulation §l.409A-3(i)(5)(vi), or (iii) change in the ownership of a substantial portion of the assets of the Bank as defined in Treasury Regulation §1.409A-3(i)(5)(vii) as currently in effect and as may hereafter from time to time be amended.
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1.7.“Disability” shall mean the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of net less than twelve (12) months or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer.
Determination of such disability shall be made by the provider of such accident, long-term disability or health plan covering said Executive or by the Social Security Administration. Upon the request of Employer, Executive must submit proof to Employer of the provider’s determination or Social Security Administration’s determination of disability.
1.8.“Rider” means the income rider attached to the Annuity Contract as an endorsement or other product feature that operates as an income rider, with such feature providing for a withdrawal or payment feature for the life of the annuitant.
1.9.“Normal Retirement Age” means age sixty-five (65).
1.10.“Plan Administrator” means the Board.
1.11.“Separation from Service” means separation from service as that term is defined and interpreted in Section 409A of the Code and Treasury Regulation §1.409A-1(h) or in subsequent regulations or other guidance issued by the Internal Revenue Service.
ARTICLE 2
ASSET FINANCING, OWNERSHIP AND RIGHTS
2.1.Annuity Contract and Other Investments. For purposes of satisfying its obligations to provide benefits under this Plan, the Bank has initially invested in the Annuity Contract and may invest in other investments. However, nothing in this Section 2.1 shall require the Bank to invest in any particular form of investment.
2.2.Ownership of the Annuity Contract. The Bank is the sole owner of the Annuity Contract, and other such investments, and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the death proceeds of the Annuity Contract. The Bank shall at all times be entitled to the Annuity Contract’s cash surrender value, as that term is defined in the Annuity Contract.
2.3.Right to Annuity Contract. Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender any Annuity Contract without terminating this Plan, provided the Bank replaces the Annuity Contract with a comparable annuity policy, or asset of comparable value, with a comparable lifetime withdrawal feature and comparable benefit value. Without limitation, the Annuity Contract at all times shall be the exclusive property of the Bank and shall be subject to the claims of the Bank’s creditors.
2.4.Rabbi Trust. The Bank may establish a “rabbi trust” to which contributions may be made to provide the Bank with a source of funds for purposes of satisfying the obligations of the Bank under the Plan. The trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan. Neither the Executive nor the Beneficiary shall have any beneficial ownership interest in any assets held in the trust.
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ARTICLE 3
RETIREMENT AND OTHER BENEFITS
3.1.Normal Retirement Benefit. Upon the Executive's Separation from Service after reaching Normal Retirement Age for any reason other than death, the Executive will be entitled to the monthly benefit payment described in this Section 3.1. The amount of the monthly benefit will equal the amount that is paid from the Annuity Contracts designated under this Plan to benefit the Executive through the Rider (the “Normal Retirement Benefit”) based on the Executive's age on the date of his Separation from Service. The Normal Retirement Benefit will commence on the first (1st) day of the second month following the date of the Executive's Separation from Service, payable monthly and continuing for his lifetime. This shall be the Executive's benefit in lieu of any other benefit under this Plan.
3.2.Early Retirement Benefit. In the event the Executive should incur a Separation from Service prior to Normal Retirement Age for any reason other than death, Disability or Change in Control, the Executive will be entitled to a monthly benefit equal to a vested percentage of the amount that is paid from the Annuity Contracts designated under this Plan to benefit the Executive through the Rider (the “Early Retirement Benefit”). The percentage is the ratio of the Account Balance at Separation from Service to the Account Balance at Normal Retirement Age. The Early Retirement Benefit will be determined by applying this percentage to the amount that is payable from the Annuity Contract through the Rider at the Executive's Normal Retirement Age. The Early Retirement Benefit will commence on the first day of the second month following the Executive's Normal Retirement Age and will continue monthly thereafter for the Executive's lifetime. This shall be the Executive's benefit in lieu of any other benefit under this Plan. For purposes of this Section 3.2, the Executive shall be [60%] as of the Effective Date and the Executive shall earn an additional 10% toward his vesting percentage each calendar year, so that he will become 100% vested on December 31, 2031, provided he remains employed by the Bank as of that date.
3.3.Change in Control Benefit. If the Executive is actively employed at the time of a Change in Control and incurs a Separation from Service within twenty-four (24) months following the Change in Control, the Executive will be entitled to the Normal Retirement Benefit (as if he had attained his Normal Retirement Age at the time of the Separation from Service) as set forth in Section 3.1. The Employer may establish a “rabbi trust”, if one has not already been established, for the purposes of this Plan, to which assets will be contributed to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan. The amount of the contribution to the “rabbi trust” will be the amount sufficient to satisfy the benefit under this Section 3.3. Benefit payments will commence on the first day of the second month following the later of the Executive’s Normal Retirement Age or Separation from Service and will continue for the Executive's lifetime.
3.4.Death Benefits.
(a)Death During Active Service. Upon the death of the Executive while in active service with the Employer, the Employer shall pay to the Executive’s Beneficiary the Executive’s Account Balance, payable to the Beneficiary in a single lump sum no later than sixty (60) days following receipt proof of death.
(b)Death After Benefits are Due or Have Commenced. Upon death of the Executive after benefit payments are due to be paid or have commenced but before receiving a total of one hundred eighty (180) monthly payments, the Employer shall make payments or continue to make payments to the Executive’s Beneficiary as if the Executive had survived, until a total of one hundred eighty (180) monthly payments have been made. If the Executive dies after having received one hundred eighty (180)
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payments, this Agreement will terminate and no payments will be made to the Executive’s primary or contingent Beneficiary under the Plan. If the Beneficiary dies while payments are being made to the Beneficiary but before the total of one hundred eighty (180) monthly payments have been made, as described in this Section 3.4(b), the remaining payments, if any, will be paid in a lump sum to the Contingent Beneficiary as named by the Executive.
3.5.Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Plan regarding timing of payments, the following special rules shall apply if the stock of the Employer is publicly traded at the time of the Executive’s Separation from Service in order for this Plan to comply with Code Section 409A of the Code: (i) to the extent the Executive is a “specified employee” (as defined under Code Section 409A of the Code) at the time of a distribution and to the extent such applicable provisions of Code Section 409A of the Code and the regulations thereunder require a delay of such distributions by a six-month period after the date of the Executive’s Separation from Service with the Employer, no such distribution shall be made prior to the date that is six months after the date of the Executive’s Separation from Service with the Employer, and (ii) any such delayed payments shall be paid to the Executive in a single lump sum within five (5) business days after the end of the six (6) month delay.
3.6.Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3G)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with the ethics laws or conflicts of interest laws; (iii) in limited cashouts (but not in excess of the limit under Code Section 402(g)(l)(B)); (iv) to pay employment-related taxes; or (v) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.
ARTICLE 4
BENEFICIARIES
4.1.Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Plan upon the death of the Executive. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.
4.2.Beneficiary Designation; Changes. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.
4.3.Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received in writing by the Plan Administrator or its designated agent.
4.4.No Beneficiary Designation. If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be distributed to the personal representative of the Executive’s estate.
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4.5.Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Employer may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Employer from all liability for the benefit.
ARTICLE 5
GENERAL LIMITATIONS
5.1.Limits on Payments. Notwithstanding anything contained in this Plan to the contrary, it is understood and agreed that the Bank shall not be required to make any payment or take any action under this Plan if: (a) such payment or action is prohibited by any governmental agency having jurisdiction over the Bank (hereinafter referred to as “Regulatory Authority”) in light of the fact that the Bank has been declared by Regulatory Authority to be troubled, or operating in an unsafe or unsound matter; or (b) such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to the Bank, as now in effect or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory Authority.
5.2.Termination for Cause. Notwithstanding anything to the contrary contained herein, in the event of the Executive's termination for Cause, this Plan shall terminate and no benefits shall be payable under the Plan. For this purpose, “Cause” shall be defined in the same manner as it is defined in any employment agreement in effect between the Bank and the Executive. If there is no such employment agreement in effect, then the term shall be defined as (i) conviction of a crime involving moral turpitude; (ii) willful misconduct or gross neglect of duties which, in either case, has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided that within 30 days after receiving notice of such misconduct or neglect, on which the Board is relying to terminate you for cause, you are provided the opportunity defend yourself before the Board; or (iii) a repeated failure by Executive to follow the written directives of the Board or any written Bank policy or guidelines expressly approved by the Board which has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided, however, that if you initially refuse to obey the written directives of the Board, (a) you are furnished a written statement by the Board that it believes in good faith that the acts or non-acts in respect of the direction that is given you is in the best interests of the Bank, and (b) you are provided the opportunity to discuss with the Board reasons for not complying with the Board's directives; provided further that your refusal to follow any written directive of the Board that would cause you to commit any illegal act or engage in any illegal course of conduct shall not be grounds for terminating your employment for Cause.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1.Claims Procedure. A person or Beneficiary (a “claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows:
(a)Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after the notice was received by the claimant. All other claims must be made within one hundred eighty (180) days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant.
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(b)Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim, (within forty-five (45) days for Disability benefits). If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days, (thirty (30) days for Disability), by notifying the claimant in writing, prior to the end of the initial ninety (90)-day period (or forty-five (45) days, as applicable), that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. If the extension is with respect to Disability benefits, the notice shall specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the claimant shall be given 45 days to provide the specified information. The time period shall begin at the time a claim is filed, whether or not all information necessary for a determination accompanies the filing. If the time period is extended due to insufficient information needed to decide a Disability claim, the period for making the Disability determination shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.
(c)Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i)The specific reasons for the denial,
(ii)A reference to the specific provisions of the Plan on which the denial is based,
(iii)A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,
(iv)An explanation of the Plan’s review procedures and the time limits applicable to such procedures, and
(v)in the case involving Disability, a copy of any internal rule, guideline, protocol or other similar criterion that was relied upon in making the decision and, if based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided free of charge upon request.
6.2.Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows:
(a)Initiation - Written Request. To initiate the review, the claimant, within sixty (60) days (180 days for a Disability claim) after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.
(b)Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
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(c)Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
(d)Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.
(e)Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i)The specific reasons for the denial,
(ii)A reference to the specific provisions of the Plan on which the denial is based,
(iii)A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and
(iv)A statement of the claimant’s right to bring a civil action under ERISA Section 502(a), and
(v)in the case involving Disability benefits, a copy of any internal rule, guideline, protocol or other similar criterion that was relied upon in making the decision and, if the adverse determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided free of charge upon request; and the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find what may be available is to contact your local U.S. Department of Labor Office or your State insurance regulatory agency.
ARTICLE 7
MISCELLANEOUS
7.1.Amendments and Termination. Subject to Section 7.12 of this Plan, this Agreement may be amended or terminated solely by a written agreement signed by the Bank and by the Executive.
7.2.No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Executive the right to remain an employee of the Employer, nor does it interfere with the Employer’s right to discharge the Executive. It also does not require any Executive to remain an employee nor interfere with any Executive’s right to terminate employment at any time.
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7.3.Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.
7.4.Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.
7.5.Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction and performance of this Plan shall be governed by and construed in accordance with the laws of the State of New Jersey, without giving effect to the principles of conflict of laws of such state.
7.6.Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Plan. The benefits represent the mere promise by the Employer to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance, annuity contract or other asset purchased by Employer to fund its obligations under this Plan shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.
7.7.Benefit Provision. Notwithstanding the provisions of this Plan in the payment of the benefits under Article 3, any benefits payable under this Plan are contingent solely upon the amount that is provided by the Annuity Contract(s) as identified in this Plan or other provision as provided for in Article 2.
7.8.Severability. If any provision of this Plan is held invalid, such invalidity shall not affect any other provision of this Plan, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Plan is held invalid in part, such invalidity shall not affect the remainder of the provision, and the remainder of such provision together with all other provisions of this Plan shall continue in full force and effect to the full extent consistent with law.
7.9.Headings. The headings of articles herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.
7.10.Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board, at the Bank’s main office.
7.11.Payment of Legal Fees. In the event litigation ensues between the parties concerning the enforcement of the obligations of the parties under this Plan, the Employer shall pay all costs and expenses in connection with such litigation until such time as a final determination (excluding any appeals) is made with respect to the litigation. If the Employer prevails on the substantive merits of each material claim in dispute in such litigation, the Employer shall be entitled to receive from the Executive all reasonable costs and expenses, including without limitation attorneys’ fees, incurred by the Employer on behalf of the Executive in connection with such litigation, and the Executive shall pay such costs and expenses to the Employer promptly upon demand by the Employer.
7.12.Termination or Modification of Plan Because of Changes in Law, Rules or Regulations. The Employer is entering into this Plan on the assumption that certain existing tax laws, rules,
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and regulations will continue in effect in their current form. If that assumption materially changes and the change has a material detrimental effect on this Plan, then the Employer reserves the right to terminate or modify this Plan accordingly.
ARTICLE 8
ADMINISTRATION OF AGREEMENT
8.1.Plan Administrator Duties. This Plan shall be administered by a Plan Administrator consisting of the Board or such committee or person(s) as the Board shall appoint. The Plan Administrator shall have the sole and absolute discretion and authority to interpret and enforce all appropriate rules and regulations for the administration of this Plan and the rights of the Executive under this Plan, to decide or resolve any and all questions or disputes arising under this Plan, including benefits payable under this Plan and all other interpretations of this Plan, as may arise in connection with the Plan. No benefit shall be payable hereunder to any person unless the Plan Administrator, in its sole discretion, determines such benefit is due.
8.2.Agents. In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Employer.
8.3.Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
8.4.Indemnity of Plan Administrator. The Plan Administrator shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless such action or omission is attributable to the willful misconduct of the Plan Administrator or any of its members. The Employer shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Plan Administrator or any of its members.
8.5.Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.
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This Supplemental Executive Retirement Plan Agreement is hereby adopted as of the date written above.
EXECUTIVE: | | UNITED ROOSEVELT SAVINGS BANK | |
| | | |
/s/ David Van Steyn | | By: | /s/ Timothy Touhey |
| | | |
| | Title: Vice Chairman of the Board | |
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Exhibit 10.5
UNITED ROOSEVELT SAVINGS BANK
SPLIT DOLLAR AGREEMENT
THIS SPLIT DOLLAR AGREEMENT (this “Agreement”) is entered into this 11th day of December 2025 with an effective date of December 11, 2025 (the “Effective Date”) by and between United Roosevelt Savings Bank, a state-chartered savings bank located in Carteret, New Jersey (the “Bank”), and David VanSteyn (the “Participant”). This Split Dollar Agreement shall append the Split Dollar Policy Endorsement entered into as of the Effective Date herewith or as subsequently amended by and between the aforementioned parties.
INTRODUCTION
To encourage the Participant to remain an employee or director of the Bank, the Bank is willing to divide the death proceeds of a life insurance Policy on the Participant’s life. The Bank will pay life insurance premiums from its general assets.
AGREEMENT
The Bank and the Participant agree as follows:
ARTICLE 1
General Definitions
The following terms shall have the meanings specified:
“Administrator” means the administrator described in Article 7.
“Insured” means the Participant.
“Insurer” means each life insurance carrier that has a Split Dollar Policy Endorsement attached to this Agreement.
“Participant’s Interest” means the rights of the Participant or his transferee under the Policies as set forth in Section 2.2 of this Agreement.
“Policy” or “Policies” means the specific life insurance policy contract(s) on the life of the Insured issued by the Insurer.
“Split Dollar Policy Agreement” or “Agreement” means this Agreement between the Bank and the Participant.
“Split Dollar Policy Endorsement” means the form required by the Administrator or the Insurer to indicate the Participant’s Interest , if any, in a Policy on the Participant’s life.
“Termination of Service” means the Participant ceasing to be in the employ or service of the Bank for any reason whatsoever, other than by reason of Participant’s death or due to a Bank-approved leave of
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absence. For purposes of this Split Dollar Agreement, if there is a dispute regarding the status of the Participant’s employment or service (or termination thereof) or the date of the Participant’s Termination of Service, the Bank shall have the sole and absolute right to decide the dispute.
ARTICLE 2
Policy Ownership/Interests
2.1Bank Ownership. The Bank is the sole owner of the Policies and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the Policies to the extent of each Policy’s cash surrender value, if any, plus any death proceeds from the Policies remaining after applying those amounts explicitly assigned to the Participant’s beneficiary(ies) pursuant to Section 2.2 below.
2.2Participant’s Interest. In the case of the Participant’s death during such time that this Split Dollar Agreement shall be in effect, the Participant shall have the right to designate the beneficiary(ies) of the death proceeds with respect to the Policies in the aggregate amount lesser of $50,000 (“Death Benefit”), or the net at risk amount. For this purpose, “net at risk” is equal to the total death proceeds less the cash value of the policy. Notwithstanding the above, in the event the Participant shall incur a Termination of Service prior to attainment of age sixty-five (65), except in the event of a change in control, this Agreement shall terminate and no benefit shall be payable hereunder. The amount of the Death Benefit set forth in this Section 2.2 that may be payable upon the death of the Participant is hereinafter referred to as the Participant’s Interest.
Subject to the terms of this Split Dollar Agreement, including but not limited to the Bank’s right to terminate this Split Dollar Agreement under Section 8.8, the Bank hereby endorses the Participant’s Interest to the Participant and agrees to execute any other or further documents that may be required to effectuate this Split Dollar Agreement. The Participant shall have the right to designate in writing the beneficiary of such Participant’s Interest on such forms as are provided by the Bank and maintained by the Bank (“Beneficiary Designation Form”). The Participant shall also have the right to elect and change such designated beneficiaries from time to time by filing an updated Beneficiary Designation Form with the Bank. In the absence of a properly executed and delivered Beneficiary Designation Form, the beneficiaries of the Participant’s Interest shall be the Participant’s surviving spouse, if any, and otherwise, the Participant’s estate. However, neither the Participant nor the Participant’s beneficiary shall have any rights or interests in the Policies with respect to any portion of the Death Benefit designated in this Section 2.2 in the event of the Participant’s Termination of Service prior to attainment of age sixty-five (65).
2.3Change in Control. Notwithstanding anything herein to the contrary, in the event of a Change in Control, this Agreement shall continue as if the Employee had continued employment to age sixty-five (65). For this purpose, Change in Control shall have the meaning ascribed to the term in the Employee’s Employment Agreement. If no such Employment Agreement exists, then Change in Control shall mean: (i) any person becomes the beneficial owner, directly or indirectly, of securities of the Bank representing 50% or more of the total voting power represented by the Bank’s then outstanding voting securities pursuant to a transaction or a series of related transactions of which the Board does not approve; (ii) a merger or consolidation of the Bank, whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Bank outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least 50% of the total voting power represented by the
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voting securities of the Bank or such surviving entity or parent of such corporation outstanding immediately after such merger or consolidation; or (iii) the stockholders of the Bank approve an agreement for the sale or disposition by the Bank of all or substantially all of the Bank’s assets.
2.4Suicide or Misstatement. No benefits shall be payable if the Participant commits suicide within two years after the date of this Agreement, or if the insurance company denies coverage (a) for material misstatements of fact made by the Participant on any application for life insurance purchased by the Bank, or (b) for any other reason; provided, however that the Bank shall evaluate the reason for the denial , and upon advice of legal counsel and in its sole discretion, consider judicially challenging any denial.
ARTICLE3
Premiums
3.1Premium Payment. The Bank shall pay any premiums due on the Policies so long as the Bank chooses to maintain the Policies in force.
3.2Economic Benefit. The Bank, or its agent, shall determine the economic benefit attributable to the Participant with respect to the Participant’s Interest based on the amount of the current term rate for the Participant’s age multiplied by the aggregate Death Benefit payable to the Participant’s beneficiary. The “current term rate” is the minimum amount required to be imputed under guidance published pursuant to Treasury Regulation§ l.61-22(d), or any subsequent applicable authority.
3.3Imputed Income. The Bank shall report the economic benefit of the Participant’s Interest under this Agreement to the Participant on an annual basis on IRS Form W-2 or 1099, as applicable.
ARTICLE4
Assignment
Except as otherwise provided herein, the Participant may assign without consideration all of the Participant’s Interests in the Policies and in this Agreement to any person, entity or trust. In the event the Participant transfers all of the Participant’s Interest in the Policies, then all of the Participant’s Interest in the Policies and in the Agreement shall be vested in the Participant’s transferee, who shall be substituted as a party hereunder and the Participant shall have no further interest in the Policies or in this Agreement.
ARTICLE 5
Insurer
The Insurers shall be bound only by the terms of the Policies. Any payments the Insurer makes or actions it takes in accordance with the Policies shall fully discharge it from all claims, suits and demands of all entities or persons. The Insurer shall not be bound by or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
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Claims and Review Procedures
6.1Claims Procedure. Any person or entity who has not received benefits under the Agreement that he or she believes should be paid (the “claimant”) shall make a claim for such benefits as follows:
(a)Initiation - Written Claim. The claimant initiates a claim by submitting to the Administrator a written claim for the benefits.
(b)Timing of Bank Response. The Bank shall respond to such claimant within 90 days after receiving the claim. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.
(c)Notice of Decision. If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i) | The specific reasons for the denial, |
(ii) | A reference to the specific provisions of the Agreement on which the denial is based, |
(iii) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, |
(iv) | An explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and |
(v) | A statement of the claimant’s right to bring a civil action under the Employee Retirement Income Security Act of 1974 (“ERISA”) Section 502(a) following an adverse benefit determination on review, if applicable. |
6.2Review Procedure. If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows:
(a)Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Bank’s notice of denial, must file with the Administrator a written request for review.
(b)Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
(c)Considerations on Review. In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
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(d)Timing of Bank Response. The Bank shall respond in writing to such claimant within 60 days after receiving the request for review. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.
(e)Notice of Decision. The Bank shall notify the claimant in writing of its decision on review. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i) | The specific reasons for the denial, |
(ii) | A reference to the specific provisions of the Agreement on which the denial is based, |
(iii) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and |
(iv) | A statement of the claimant’s right to bring a civil action under ERISA Section 502(a), if applicable. |
ARTICLE 7
Administration of Agreement
7.1Administrator Duties. This Split Dollar Agreement shall be administered by an Administrator, which shall consist of the Bank’s board of directors or such committee as the board shall appoint. The Participant may be a member of the Administrator. The Administrator shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Split Dollar Agreement and (b) decide or resolve any and all questions, including interpretations of this Split Dollar Agreement, as may arise in connection with the Split Dollar Agreement.
7.2Agents. In the administration of this Split Dollar Agreement, the Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank.
7.3Binding Effect of Decisions. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of this Split Dollar Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Split Dollar Agreement.
7.4Indemnity of Administrator. The Bank shall indemnify and hold harmless the members of the Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Split Dollar Agreement, except in the case of willful misconduct by the Administrator or any of its members .
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7.5Information. To enable the Administrator to perform its functions, the Bank shall supply full and timely information to the Administrator on all matters relating to the date and circumstances of the death or Termination of Service of the Participant and such other pertinent information as the Administrator may reasonably require.
ARTICLE 8
Miscellaneous
8.1Binding Effect. This Split Dollar Agreement shall bind the Participant and the Bank and their beneficiaries, survivors, executors, administrators and transferees, and any Policy beneficiary.
8.2No Guarantee of Employment or Continued Service. This Split Dollar Agreement is not an employment or service contract. It does not give the Participant the right to remain in the employ or service of the Bank, nor does it interfere with the Bank’s right to discharge the Participant or terminate his or her service to the Bank. It also does not require the Participant to remain an employee nor interfere with the Participant’s right to terminate employment at any time.
8.3Applicable Law. This Split Dollar Agreement and all rights hereunder shall be governed by and construed according to the laws of the State of New Jersey, except to the extent preempted by the laws of the United States of America. Notwithstanding anything herein to the contrary, any payments made to the Participant or beneficiaries pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and the Federal Deposit Insurance Corporation (“FDIC”) Regulations at 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments, promulgated thereunder.
8.4Entire Agreement. This Split Dollar Agreement (and any related Beneficiary Designation Form and Split Dollar Policy Endorsements) constitutes the entire agreement between the Bank and the Participant concerning the subject matter hereof. No rights are granted to the Participant under this Split Dollar Agreement other than those specifically set forth herein.
8.5Severability. If for any reason any provision of this Split Dollar Agreement is held invalid, such invalidity shall not affect any other provision of this Split Dollar Agreement, and each such other provision shall continue in full force and effect to the full extent consistent with la w. If any provision of this Split Dollar Agreement is held invalid in part, such invalidity shall not affect the remainder of such provision, and the remainder of such provision, together with all other provisions of this Split Dollar Agreement shall continue in full force and effect to the full extent consistent with law.
8.6Headings. Section headings are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Split Dollar Agreement.
8.7Notices. All notices, requests , demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice: (a) if to the Bank, to the Board of Directors, 11-15 Cooke Avenue, Carteret, New Jersey 07008-2699 and (b) if to the Participant, to the address of the Participant on the Bank’s
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records, and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice.
8.8Amendment and Termination. This Split Dollar Agreement shall terminate upon the occurrence of any one of the following:
(a)voluntary or involuntary termination of employment or service with the Bank prior to the Participant’s attainment of age sixty-five (65), or
(b)surrender, lapse, or other termination of the Policy by the Bank, which the Bank reserves the absolute right to do,
(c)cessation of the Bank’s business, which is not continued by the Bank’s successor, if any,
(d)written notice of termination of the Agreement by either of the Bank or the Participant,
(e)bankruptcy, receivership, or dissolution of the Bank, or
(f)distribution of the Death Benefit in accordance with Section 2.2 above.
If this Split Dollar Agreement is terminated, the Bank may in its sole discretion retain or terminate the Policy.
8.9Successors. By an assumption agreement in form and substance satisfactory to the Participant, the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Bank to expressly assume and agree to perform this Split Dollar Agreement in the same manner and to the same extent that the Bank would be required to perform this Split Dollar Agreement if no succession had occurred.
IN WITNESS WHEREOF, the parties have executed this Split Dollar Agreement as of the day and year first above written.
| | BANK: | |
PARTICIPANT: | | UNITED ROOSEVELT SAVINGS BANK | |
| | | |
/s/ David Van Steyn | | By: | /s/ Amanda J. D’Alessio |
David Van Steyn | | | |
| | Name: | Amanda J. D’Alessio |
| | | |
| | Title: | Corporate Secretary |
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Exhibit 10.6
FORM OF
UNITED ROOSEVELT SAVINGS BANK
SPLIT DOLLAR AGREEMENT
THIS SPLIT DOLLAR AGREEMENT (this “Agreement”) is entered into this ____ day of _______, 2025 with an effective date of _____, 2025 (the “Effective Date”) by and between United Roosevelt Savings Bank, a state-chartered savings bank located in Carteret, New Jersey (the “Bank”), and ___________ (the “Participant”).
INTRODUCTION
To encourage the Participant to remain an employee or director of the Bank, the Bank is willing to divide the death proceeds of a life insurance Policy on the Participant’s life. The Bank will pay life insurance premiums from its general assets.
AGREEMENT
The Bank and the Participant agree as follows:
ARTICLE 1
General Definitions
The following terms shall have the meanings specified:
“Administrator” means the administrator described in Article 7.
“Insured” means the Participant.
“Insurer” means each life insurance carrier that has a Split Dollar Policy Endorsement attached to this Agreement.
“Participant’s Interest” means the rights of the Participant or his transferee under the Policies as set forth in Section 2.2 of this Agreement.
“Policy” or “Policies” means the specific life insurance policy contract(s) on the life of the Insured issued by the Insurer.
“Split Dollar Policy Agreement” or “Agreement” means this Agreement between the Bank and the Participant.
“Split Dollar Policy Endorsement” means the form required by the Administrator or the Insurer to indicate the Participant’s Interest, if any, in a Policy on the Participant’s life.
“Termination of Service” means the Participant ceasing to be in the employ or service of the Bank for any reason whatsoever, other than by reason of Participant’s death or due to a Bank-approved leave of absence. For purposes of this Split Dollar Agreement, if there is a dispute regarding the status of the
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Participant‘s employment or service (or termination thereof) or the date of the Participant’s Termination of Service, the Bank shall have the sole and absolute right to decide the dispute.
ARTICLE 2
Policy Ownership/Interests
2.1Bank Ownership. The Bank is the sole owner of the Policies and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the Policies to the extent of each Policy’s cash surrender value, if any, plus any death proceeds from the Policies remaining after applying those amounts explicitly assigned to the Participant’s beneficiary(ies) pursuant to Section 2.2 below.
2.2Participant’s Interest. In the case of the Participant’s death during such time that this Split Dollar Agreement shall be in effect, the Participant shall have the right to designate the beneficiary(ies) of the death proceeds with respect to the Policies in the aggregate amount lesser of $125,000 (“Death Benefit”), or the net at risk amount. For this purpose, “net at risk” is equal to the total death proceeds less the cash value of the policy. The amount of the Death Benefit set forth in this Section 2.2 that may be payable upon the death of the Participant is hereinafter referred to as the Participant’s Interest.
Subject to the terms of this Split Dollar Agreement, including but not limited to the Bank’s right to terminate this Split Dollar Agreement under Section 8.8, the Bank hereby endorses the Participant’s Interest to the Participant and agrees to execute any other or further documents that may be required to effectuate this Split Dollar Agreement. The Participant shall have the right to designate in writing the beneficiary of such Participant’s Interest on such forms as are provided by the Bank and maintained by the Bank (“Beneficiary Designation Form”). The Participant shall also have the right to elect and change such designated beneficiaries from time to time by filing an updated Beneficiary Designation Form with the Bank. In the absence of a properly executed and delivered Beneficiary Designation Form, the beneficiaries of the Participant’s Interest shall be the Participant’s surviving spouse, if any, and otherwise, the Participant’s estate.
2.3Suicide or Misstatement. No benefits shall be payable if the Participant commits suicide within two years after the date of this Agreement, or if the insurance company denies coverage (a) for material misstatements of fact made by the Participant on any application for life insurance purchased by the Bank, or (b) for any other reason; provided, however that the Bank shall evaluate the reason for the denial , and upon advice of legal counsel and in its sole discretion, consider judicially challenging any denial.
ARTICLE3
Premiums
3.1Premium Payment. The Bank shall pay any premiums due on the Policies so long as the Bank chooses to maintain the Policies in force.
3.2Economic Benefit. The Bank, or its agent, shall determine the economic benefit attributable to the Participant with respect to the Participant’s Interest based on the amount of the current term rate for the Participant’s age multiplied by the aggregate Death Benefit payable to the Participant’s beneficiary. The
2
“current term rate” is the minimum amount required to be imputed under guidance published pursuant to Treasury Regulation§ l.61-22(d), or any subsequent applicable authority.
3.3Imputed Income. The Bank shall report the economic benefit of the Participant’s Interest under this Agreement to the Participant on an annual basis on IRS Form W-2 or 1099, as applicable.
ARTICLE4
Assignment
Except as otherwise provided herein, the Participant may assign without consideration all of the Participant’s Interests in the Policies and in this Agreement to any person, entity or trust. In the event the Participant transfers all of the Participant’s Interest in the Policies, then all of the Participant’s Interest in the Policies and in the Agreement shall be vested in the Participant’s transferee, who shall be substituted as a party hereunder and the Participant shall have no further interest in the Policies or in this Agreement.
ARTICLE 5
Insurer
The Insurers shall be bound only by the terms of the Policies. Any payments the Insurer makes or actions it takes in accordance with the Policies shall fully discharge it from all claims, suits and demands of all entities or persons. The Insurer shall not be bound by or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
Claims and Review Procedures
6.1Claims Procedure. Any person or entity who has not received benefits under the Agreement that he or she believes should be paid (the “claimant”) shall make a claim for such benefits as follows:
(a)Initiation - Written Claim. The claimant initiates a claim by submitting to the Administrator a written claim for the benefits.
(b)Timing of Bank Response. The Bank shall respond to such claimant within 90 days after receiving the claim. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.
(c)Notice of Decision. If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i) | The specific reasons for the denial, |
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(ii) | A reference to the specific provisions of the Agreement on which the denial is based, |
(iii) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, |
(iv) | An explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and |
(v) | A statement of the claimant’s right to bring a civil action under the Employee Retirement Income Security Act of 1974 (“ERISA”) Section 502(a) following an adverse benefit determination on review, if applicable. |
6.2Review Procedure. If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows:
(a)Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Bank’s notice of denial, must file with the Administrator a written request for review.
(b)Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
(c)Considerations on Review. In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
(d)Timing of Bank Response. The Bank shall respond in writing to such claimant within 60 days after receiving the request for review. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.
(e)Notice of Decision. The Bank shall notify the claimant in writing of its decision on review. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:
(i) | The specific reasons for the denial, |
(ii) | A reference to the specific provisions of the Agreement on which the denial is based, |
(iii) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and |
(iv) | A statement of the claimant’s right to bring a civil action under ERISA Section 502(a), if applicable. |
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ARTICLE 7
Administration of Agreement
7.1Administrator Duties. This Split Dollar Agreement shall be administered by an Administrator, which shall consist of the Bank’s board of directors or such committee as the board shall appoint. The Participant may be a member of the Administrator. The Administrator shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Split Dollar Agreement and (b) decide or resolve any and all questions, including interpretations of this Split Dollar Agreement, as may arise in connection with the Split Dollar Agreement.
7.2Agents. In the administration of this Split Dollar Agreement, the Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank.
7.3Binding Effect of Decisions. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of this Split Dollar Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Split Dollar Agreement.
7.4Indemnity of Administrator. The Bank shall indemnify and hold harmless the members of the Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Split Dollar Agreement, except in the case of willful misconduct by the Administrator or any of its members.
7.5Information. To enable the Administrator to perform its functions, the Bank shall supply full and timely information to the Administrator on all matters relating to the date and circumstances of the death or Termination of Service of the Participant and such other pertinent information as the Administrator may reasonably require.
ARTICLE 8
Miscellaneous
8.1Binding Effect. This Split Dollar Agreement shall bind the Participant and the Bank and their beneficiaries, survivors, executors, administrators and transferees, and any Policy beneficiary.
8.2No Guarantee of Employment or Continued Service. This Split Dollar Agreement is not an employment or service contract. It does not give the Participant the right to remain in the employ or service of the Bank, nor does it interfere with the Bank’s right to discharge the Participant or terminate his or her service to the Bank. It also does not require the Participant to remain an employee nor interfere with the Participant’s right to terminate employment at any time.
8.3Applicable Law. This Split Dollar Agreement and all rights hereunder shall be governed by and construed according to the laws of the State of New Jersey, except to the extent preempted by the laws of the United States of America. Notwithstanding anything herein to the contrary, any payments made
5
to the Participant or beneficiaries pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and the Federal Deposit Insurance Corporation (“FDIC”) Regulations at 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments, promulgated thereunder.
8.4Entire Agreement. This Split Dollar Agreement (and any related Beneficiary Designation Form and Split Dollar Policy Endorsements) constitutes the entire agreement between the Bank and the Participant concerning the subject matter hereof. No rights are granted to the Participant under this Split Dollar Agreement other than those specifically set forth herein.
8.5Severability. If for any reason any provision of this Split Dollar Agreement is held invalid, such invalidity shall not affect any other provision of this Split Dollar Agreement, and each such other provision shall continue in full force and effect to the full extent consistent with la w. If any provision of this Split Dollar Agreement is held invalid in part, such invalidity shall not affect the remainder of such provision, and the remainder of such provision, together with all other provisions of this Split Dollar Agreement shall continue in full force and effect to the full extent consistent with law.
8.6Headings. Section headings are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Split Dollar Agreement.
8.7Notices. All notices, requests , demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice: (a) if to the Bank, to the Board of Directors, 11-15 Cooke Avenue, Carteret, New Jersey 07008-2699 and (b) if to the Participant, to the address of the Participant on the Bank’s records, and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice.
8.8Amendment and Termination. This Split Dollar Agreement shall terminate upon the occurrence of any one of the following:
(a)surrender, lapse, or other termination of the Policy by the Bank, which the Bank reserves the absolute right to do,
(b)cessation of the Bank’s business, which is not continued by the Bank’s successor, if any,
(c)written notice of termination of the Agreement by either of the Bank or the Participant,
(d)bankruptcy, receivership, or dissolution of the Bank, or
(e)distribution of the Death Benefit in accordance with Section 2.2 above.
If this Split Dollar Agreement is terminated, the Bank may in its sole discretion retain or terminate the Policy.
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8.9Successors. By an assumption agreement in form and substance satisfactory to the Participant, the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Bank to expressly assume and agree to perform this Split Dollar Agreement in the same manner and to the same extent that the Bank would be required to perform this Split Dollar Agreement if no succession had occurred.
IN WITNESS WHEREOF, the parties have executed this Split Dollar Agreement as of the day and year first above written.
| BANK: | ||
PARTICIPANT: | UNITED ROOSEVELT SAVINGS BANK | ||
| | ||
| | By: | |
| | Name: | |
| | | |
| Title: | | |
| | ||
7
FORM OF
UNITED ROOSEVELT SAVINGS BANK
SPLIT DOLLAR POLICY ENDORSEMENT
Insured:
Insurer: Protective Life | Policy No.: 85311420 |
Pursuant to the terms of the United Roosevelt Savings Bank Split Dollar Agreement effective as of ___________, 2025, the undersigned Owner requests that the above-referenced policy issued by the Insurer provide for the following beneficiary designation and payment from the policy proceeds upon the death of the Insured, as follows:
1.Provided the United Roosevelt Savings Bank Split Dollar Agreement identified above is in effect at the date of the death of the Insured, then the lesser of $125,000 (“Death Benefit”) or the net at risk amount shall be paid in one sum in accordance with the Beneficiary Designation Form on file with the Bank. Such Beneficiary Designation Form may be updated by the Insured from time to time and filed with the Bank. The exclusive right to change the beneficiary for the proceeds payable under this paragraph and to assign all rights and interests granted under this paragraph is hereby granted to the Insured. The sole signature of the Insured on such Beneficiary Designation Form and receipt by the Bank shall be sufficient to exercise said rights. In the absence of a properly executed and delivered Beneficiary Designation Form, the beneficiaries of the Death Benefit shall be the Insured’s surviving spouse, if any, and otherwise, the Insured’s estate. The Owner retains all contract rights not granted to the Insured under this paragraph.
2.Upon the death of the Insured, all proceeds in the policy in excess of any amounts payable in accordance with paragraph 1. (above), plus any cash value attributable to such policy, shall be paid in one sum to the Owner, its successors or assigns.
3.It is agreed by the undersigned that this policy endorsement and limited assignment of rights shall be subject in all respects to the contractual terms of the policy.
4.Any payment directed by the Owner under this endorsement shall be a full discharge of the Insurer, and such discharge shall be binding on all parties claiming any interest under the policy.
The undersigned for the Owner is signing in a representative capacity and warrants that he or she has the authority to bind the entity on whose behalf this document is being executed.
Signed at Carteret, New Jersey, this _______ day of ___________, 2025.
| BANK: | ||
PARTICIPANT: | UNITED ROOSEVELT SAVINGS BANK | ||
| | ||
| | By: | |
| | Name: | |
| | | |
| Title: | | |
| | ||
8
Exhibit 31.1
Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Kenneth R. Totten, certify that:
1. | I have reviewed this annual report on Form 10-K of URSB Bancorp, Inc.; |
2. | 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; |
3. | Based on my knowledge, the 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; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant is made known to me by others within the entity, particularly during the period in which this report is being prepared; |
b) | 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 |
c) | 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 |
5. | I have disclosed, based on my 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: |
a) | 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 |
b) | 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: | April 9 | , 2026 | /s/ Kenneth R. Totten |
| | Kenneth R. Totten | |
| | Chairman, President and Chief Executive Officer | |
Exhibit 31.2
Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, David Van Steyn, certify that:
1. | I have reviewed this annual report on Form 10-K of URSB Bancorp, Inc.; |
2. | 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; |
3. | Based on my knowledge, the 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; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant is made known to me by others within the entity, particularly during the period in which this report is being prepared; |
b) | 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 |
c) | 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 |
5. | I have disclosed, based on my 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: |
a) | 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 |
b) | 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: | April 9 | , 2026 | /s/ David Van Steyn |
| | David Van Steyn | |
| | Chief Financial Officer and Treasurer | |
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Kenneth R. Totten, Chairman, President and Chief Executive Officer of URSB Bancorp, Inc. (the “Company”), hereby certify in my capacity as an executive officer of the Company that I have reviewed the Form 10-K for the year ended December 31, 2025 (the “Report”) and that, to the best of my knowledge:
1. | The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | April 9 | , 2026 | /s/ Kenneth R. Totten |
| | Kenneth R. Totten | |
| | Chairman, President and Chief Executive 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.
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, David Van Steyn, Chief Financial Officer and Treasurer of URSB Bancorp, Inc. (the “Company”), hereby certify in my capacity as an executive officer of the Company that I have reviewed the Form 10-K for the year ended December 31, 2025 (the “Report”) and that, to the best of my knowledge:
1. | The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | April 9 | , 2026 | /s/ David Van Steyn |
| | David Van Steyn | |
| | Chief Financial Officer and Treasurer | |
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.