Pioneer Bancorp, Inc. PBFS Form 10-Q filing Q2 FY2026

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PART I - FINANCIAL INFORMATION

Item 1. – Consolidated Financial Statements-unaudited

Item 1 – Consolidated Financial Statements

PIONEER BANCORP, INC.

CONSOLIDATED STATEMENTS OF CONDITION (unaudited)

(in thousands, except share and per share amounts)

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See accompanying notes to unaudited consolidated financial statements.

PIONEER BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except share and per share amounts)

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See accompanying notes to unaudited consolidated financial statements.

PIONEER BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(in thousands)

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See accompanying notes to unaudited consolidated financial statements.

PIONEER BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

(in thousands, except share amounts)

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See accompanying notes to unaudited consolidated financial statements.

PIONEER BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

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See accompanying notes to unaudited consolidated financial statements.

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PIONEER BANCORP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2026

**1.**NATURE OF OPERATIONS

Pioneer Bancorp, Inc. (the “Company”) is a mid-tier stock holding company whose wholly owned subsidiaries are Pioneer Bank, National Association (the “Bank”) and Pioneer Capital Markets, Inc.

The Bank and its subsidiaries, with 23 offices in the Capital Region of New York State, offers a broad array of deposit, lending, and other financial services, including insurance, employee benefit, human resources consulting, and wealth management services to individuals, businesses, and municipalities. The Bank’s subsidiary, Targeted Lending Co., LLC (“Targeted Lending”), through its originator-centric equipment finance platform provides financing solutions nationwide for essential income-producing equipment to small and mid-sized businesses across diverse industries. The Bank acquired Targeted Lending on April 24, 2026. Pioneer Capital Markets, Inc., is a Financial Industry Regulatory Authority (“FINRA”) registered broker-dealer focused on municipal bond trading and commenced operations on January 2, 2026.

The interim financial data as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025, respectively, is unaudited and reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented in conformance with accounting principles generally accepted in the United States of America (“GAAP”). The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be achieved for the remainder of fiscal 2026 or any other period.

These unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, for the year ended December 31, 2025.

**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Company’s subsidiaries, and their subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ substantially from those estimates. The allowance for credit losses, valuation of securities and other financial instruments, the funded status and expense of employee benefit plans, legal proceedings and other contingent liabilities, and the realizability of deferred tax assets are particularly subject to change.

Reclassifications

Amounts in the prior period’s consolidated financial statements are reclassified whenever necessary to conform to the current period’s presentation.

Segment Reporting

The Company’s reportable segments are determined by the Chief Executive Officer, who is designated as the chief operating decision maker, based on information provided about the Company’s products and services offered. The

Company’s operations are primarily in the community banking industry and includes retail and commercial banking services. The Company also sells commercial and consumer insurance products and employee benefit products and services through Pioneer Insurance Agency, Inc., provides wealth management services through Pioneer Financial Services, Inc. and operates a broker-dealer Pioneer Capital Markets, Inc. focused on municipal bond trading. The segment is also distinguished by the level of information provided to the chief operating decision maker, who uses that information to review performance of various components of the business. The chief operating decision maker will evaluate the financial performance of the Company’s business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company’s segment and in the determination of allocating resources. The chief operating decision maker uses consolidated net income to benchmark the Company against its competitors. The benchmarking analysis along with monitoring budget to actual results are used in assessing performance. The financial information used for performance assessment by the chief operating decision maker is the same as the financial information included in the consolidated statements of condition and consolidated statements of operations.

Adoption of Recent Accounting Pronouncements

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In November 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-08—Financial Instruments—Credit Losses (Topic 326): Purchased Loans, which expands the gross-up approach under CECL beyond purchased credit-deteriorated assets to include certain purchased seasoned loans. Under the amendments, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned,” as defined in the ASU, are considered purchased seasoned loans and accounted for using the gross-up approach at acquisition. Seasoned loans include all loans acquired in a business combination, that do not have “more-than-insignificant” deterioration of credit quality since origination, as well as loans purchased at least 90 days after origination, where the purchaser was not involved in the origination of the loans. Subsequent changes in the allowance for credit losses are reported in earnings within provision for credit losses. The ASU also clarifies that any difference between the unpaid principal balance and the grossed-up basis is a non-credit discount or premium, which is to be accreted or amortized into interest income over the term of the loan. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The amendments are to be applied prospectively. The Company adopted this ASU during the three months ended June 30, 2026.

The following significant accounting policies have been added since the Company's 2025 Annual Report on Form 10-K to reflect the adoption of ASU 2025-08.

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Acquired loans - Purchased Credit Deteriorated

Loans acquired in a business combination are recognized on the acquisition date at their estimated fair value based on expected future cash flows discounted at a market-based rate of interest and inclusive of adjustments for credit risk, interest rate risk, liquidity, and other factors. Acquired loans that have experienced more-than-insignificant deterioration in credit quality since origination are classified as purchased credit deteriorated ("PCD") loans. An allowance for credit losses is established for the initial estimate of expected credit losses on PCD loans as of the acquisition date and recorded through a gross-up adjustment to the loan’s amortized cost basis.

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Acquired loans - Purchased Seasoned Loans

Non-PCD loans acquired in a business combination are deemed purchased seasoned loans (“PSL”) with an allowance for credit losses established for the initial estimate of expected credit losses as of the acquisition date and recorded through a gross-up adjustment to the loans’ amortized cost basis. See Note 3 “Acquisition” for additional information on loans acquired in a business combination.

Impact of Recent Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this ASU require disclosure, in the notes to the consolidated financial statements, of specified

information about certain costs and expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact this will have on the consolidated financial statements.

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**3.**ACQUISITIONS

Targeted Lending Co., LLC

On April 24, 2026, the Bank completed the acquisition of 100% of the membership interests of Targeted Lending, an independent equipment financing company, in an all-cash transaction. Targeted Lending, as a subsidiary of the Bank, will operate as the newly formed Specialty Financing division, expanding the Bank’s commercial lending capabilities and extending the Bank’s reach into nationwide equipment finance markets.

Total consideration for the transaction was $144.1 million, comprised of $98.7 million to settle certain debt of Targeted Lending, cash of $43.8 million, and potential performance-based cash consideration (“Contingent Consideration”), which was determined to have a fair value of $1.6 million as of April 24, 2026. This Contingent Consideration can be earned over a three-year period commencing with the date of acquisition, and the potential payment of which ranges from zero to $3.0 million. This Contingent Consideration is included in Other liabilities in the Consolidated Statements of Condition.

The acquisition of Targeted Lending was accounted for as a business combination using the purchase method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, which requires assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date, including the identifiable intangible assets acquired. Goodwill has been recorded representing the excess of the purchase price over the fair value of the net assets acquired and is not expected to be tax-deductible. The goodwill recognized is the result of expected synergies and operational efficiencies, among other factors. The Company’s accounting for the acquisition has not been finalized as the Company continues to evaluate the post-closing adjustment amount, which is expected to have an insignificant effect on the value of the goodwill recognized as of April 24, 2026. The allocation will be updated, if necessary, through the measurement period, which ends no later than one year from the acquisition date.

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The following table presents the estimated fair value of the assets acquired and liabilities assumed (dollars in thousands):

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The fair value estimates used in valuing certain acquired assets and liabilities are based, in part, on inputs that are unobservable.

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Loans

Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, interest rate, term, amortization term and current discount rates. Loans were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans was a risk-adjusted discount rate based on a weighted average cost of capital considering the cost of equity and cost of debt. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD loans. The remaining loans were classified as PSLs. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit losses on loans on the date of acquisition using the same methodology as other loans receivables. The Company adopted ASU 2025-08 "Financial Instruments - Credit Losses (Topic 326): Purchased Loans" during the three months ended June 30, 2026. Accordingly, the initial estimate of expected credit losses recognized in the allowance for credit losses on loans included both PCD loans and PSL. A non-credit discount/premium is allocated to the loans.

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The following table includes the fair value and unpaid principal balance of the acquired loans as of April 24, 2026 (dollars in thousands):

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The following valuation approaches were utilized to estimate the acquisition-date fair value for the intangible assets acquired:

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Customer Relationships: Represents the fair value of the originator network acquired. Fair value was estimated with an income approach using a multi-period excess earnings method which discounts expected future cash flows, taking into account historic customer attrition rates and contributory asset charges, among other factors. The intangible asset is being amortized over an estimated useful life of 15 years.

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Developed technologies: Fair value was estimated with income approach using a relief from royalty method, taking into account attributable revenue and obsolescence patterns, among other factors. The intangible asset is being amortized over an estimated useful life of 3 years.

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Targeted Lending contributed revenues of $3.2 million and earnings of $1.2 million to the Company’s consolidated results for the period from April 24, 2026 to June 30, 2026.

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The following table shows the Company and Targeted Lending proforma combined net interest income, non-interest income and net income. The proforma financial information presented in the table below was computed by combining the historical financial information of the Company and Targeted Lending along with the effects of the acquisition method of accounting for business combinations as though the Company acquired Targeted Lending on January 1, 2025. Also included in the proforma financial information are certain adjustments, including $1.2 million of acquisition-related costs, as well as adjustments related to amortization expense of the intangible assets acquired in the Targeted Lending acquisition. The proforma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues or other factors and therefore does not represent what the actual net revenues and net income would have been had the Company actually acquired Targeted Lending as of this date.

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Other Acquisitions

On April 20, 2026, the Company, through its subsidiary Pioneer Insurance Agency, Inc., completed the acquisitions of certain assets of Reiser Consulting Group, Inc. of Albany, NY (“Reiser Consulting Group”) and Wyndham Benefits, LLC (“Wyndham Benefits”) of Ballston Spa, NY. The Company paid an aggregate of $1.2 million in cash and recorded $645,000 in contingent consideration payable to acquire the assets. The Company recorded a $745,000 customer list intangible asset and goodwill in the amount of $1.1 million in conjunction with the acquisitions. The goodwill from the acquisitions are expected to be deductible for tax purposes. The acquisitions of Reiser Consulting Group and Wyndham Benefits were made to expand the Company’s employee benefit products and services.

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**4.**INVESTMENT SECURITIES

The amortized cost and estimated fair value of securities available for sale are as follows (dollars in thousands):

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The Company elected to exclude accrued interest receivable from the amortized cost basis of debt securities. Accrued interest receivable on available for sale debt securities totaled $857,000 at June 30, 2026 and $1.2 million at December 31, 2025, respectively, and is excluded from the estimate of credit losses and reported in accrued interest receivable in the consolidated statements of condition.

There was no allowance for credit losses for securities available for sale as of June 30, 2026 and December 31, 2025.

The amortized cost and estimated fair value of securities held to maturity are as follows (dollars in thousands):

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Accrued interest receivable on held to maturity debt securities totaled $502,000 and $382,000 at June 30, 2026 and December 31, 2025, respectively, and is excluded from the estimate of credit losses and is reported in accrued interest receivable in the consolidated statements of condition.

There were no held to maturity securities that were 30 days or more past due or classified as non-accrual as of June 30, 2026 and December 31, 2025.

The following tables present the activity in the allowance for credit losses on securities held to maturity (dollars in thousands):

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The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands):

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Unrealized losses on securities available for sale have not been recognized into income because the issuers' debt securities are of high credit quality (rated AA or higher), management does not intend to sell, and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. The fair value is expected to recover as the securities approach maturity.

The Company does not believe the available for sale securities that were in an unrealized loss position as of June 30, 2026 and December 31, 2025, which consisted of 26 and 16 individual securities, respectively, represented a credit loss impairment. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of June 30, 2026 and December 31, 2025, the majority of the available for sale securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity.

None of the Company’s held to maturity debt securities were past due or on nonaccrual status as of June 30, 2026 and December 31, 2025. There was no accrued interest reversed against interest income for the three and six months ended June 30, 2026 and 2025, as all securities remained on accrual status. In addition, there were no collateral dependent held to maturity debt securities as of June 30, 2026 and December 31, 2025. An allowance for credit losses on held to maturity debt securities is recorded to account for expected lifetime credit losses.

The following table sets forth information with regard to contractual maturities of debt securities (dollars in thousands). Securities not due at a single maturity date are shown separately.

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Maturities of mortgage-backed securities and collateralized mortgage obligations are included based on their contractual lives. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were no sales of securities available for sale for the three and six months ended June 30, 2026 and 2025.

There were no sales of securities held to maturity for the three and six months ended June 30, 2026 and 2025.

The following table sets forth information with regard to gains on trading securities reported in other noninterest income on the consolidated statements of operations (dollars in thousands):

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At June 30, 2026, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of the Company’s equity. As of June 30, 2026 and December 31, 2025, the carrying value of available for sale securities pledged to secure Federal Home Loan Bank of New York (“FHLBNY”) advances and municipal deposits was $195.7 million and $216.4 million, respectively.

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**5.**NET LOANS RECEIVABLE

A summary of net loans receivable is as follows (dollars in thousands):

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Accrued interest receivable on loans totaled $8.1 million and $7.4 million at June 30, 2026 and December 31, 2025, respectively. Accrued interest receivable on loans is included in accrued interest receivable on the consolidated statements of condition, and is excluded from the estimate of credit losses.

Net deferred loan costs totaled $12.6 million and $11.7 million at June 30, 2026 and December 31, 2025, respectively, and are included in net loans receivable.

The allowance for credit losses on loans estimate uses a four quarter reasonable and supportable forecast period based on economic forecast from the Federal Open Market Committee (“FOMC”) of the Federal Reserve's projections of civilian unemployment and year-over-year U.S. gross domestic product (“GDP”) growth. The forecast will revert to long-term economic conditions over a four quarter reversion period on a straight-line basis. A qualitative factor framework has been developed to adjust the quantitative loss rates for asset-specific risk characteristics or current conditions at the reporting date.

The following tables present the activity in the allowance for credit losses by portfolio segment (dollars in thousands):

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The following tables present the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment (dollars in thousands):

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Interest income on nonaccrual loans is recognized using the cost recovery method. Interest income on impaired loans that were on nonaccrual status and cash-basis interest income for the three and six months ended June 30, 2026 and 2025 was immaterial.

The Company may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty. Substantially all of these modifications include one or a combination of the following: extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; temporary reduction in the interest rate; change in scheduled payment amount including interest only; or extensions of additional credit for payment of delinquent real estate taxes or other costs.

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The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted (dollars in thousands):

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The modifications to borrowers experiencing financial difficulty during the three and the six months ended June 30, 2026 provided partial payment deferrals for a weighted average of 0.67 years.

There were no modifications to loans where the borrower is considered to be experiencing financial difficulty for the three and six months ended June 30, 2025.

The Company closely monitors the performance of the loans that are modified. The loans that were modified during the prior twelve months preceding June 30, 2026 were all performing within their modified terms with no payment defaults.

At June 30, 2026, loans modified to borrowers experiencing financial difficulty were on non-accrual status. Non-accrual loans that are modified to borrowers experiencing financial difficulty remain on non-accrual status until the borrower has demonstrated performance under the modified terms.

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The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans (dollars in thousands):

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Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated loans.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral.

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The following tables present the amortized cost basis of collateral-dependent loans by class of loans (dollars in thousands):

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The following tables present the aging of the recorded investment in loans by class of loans (dollars in thousands):

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The Company categorizes commercial loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Commercial loans not meeting the criteria above are considered to be pass rated loans.

The Company grades residential mortgages, home equity loans and lines of credit and consumer loans as either non-performing or performing.

Non-performing – Loans that are over 90 days past due and still accruing interest or on nonaccrual.

Performing – Loans not meeting any of the above criteria are considered to be performing loans.

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The following table presents loans summarized by segment and class, and the risk category (dollars in thousands):

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As of June 30, 2026 and December 31, 2025, the Company had pledged $814.8 million and $777.1 million respectively, of residential mortgage, home equity and commercial loans as collateral for FHLBNY borrowings and stand-by letters of credit.

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**6.**DERIVATIVES

In the normal course of servicing our commercial customers, the Company acts as an interest rate swap counterparty for certain commercial borrowers. The Company manages its exposure to such interest rate swaps by entering into corresponding and offsetting interest rate swaps with third parties that match the terms of the interest rate swap with the commercial borrowers. These positions directly offset each other and the Company’s exposure is the fair value of the derivatives due to potential changes in credit risk of our commercial borrowers and third parties.

The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. At June 30, 2026, the Company held derivatives not designated as hedging instruments, comprised of back-to-back interest rate swaps, with a total notional amount of $405.0 million, consisting of $202.5 million of interest rate swaps with commercial borrowers and $202.5 million of offsetting interest rate swaps with third-party counterparties on substantially the same terms. At December 31, 2025, the Company held derivatives not designated as hedging instruments, comprised of back-to-back interest rate swaps, with a total notional amount of $408.4 million, consisting of $204.2 million of interest rate swaps with commercial borrowers and $204.2 million of offsetting interest rate swaps with third-party counterparties on substantially the same terms.

The fair value of derivatives are classified as other assets and other liabilities on the consolidated statements of condition. Derivative assets and derivative liabilities with the same counterparty are presented on a net basis when master netting agreements are in place. The estimated fair value of derivatives not designated as hedging instruments are as follows (dollars in thousands):

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Under terms of the agreements with the third-party counterparties, the Company provides cash collateral to the counterparty, when required, for the initial trade. Subsequent to the trade, the margin is exchanged in either direction, based upon the estimated fair value of the underlying contracts. At June 30, 2026, the Company had received $8.1 million and deposited none as collateral for swap agreements with third-party counterparties. At December 31, 2025, the Company had received $6.5 million and deposited none as collateral for swap agreements with third-party counterparties.

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**7.**OTHER COMPREHENSIVE INCOME

Reclassifications out of accumulated other comprehensive income (loss) were as follows (dollars in thousands):

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The balances and changes in the components of accumulated other comprehensive income, net of tax, are as follows (dollars in thousands):

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The amounts of income tax expense (benefit) allocated to each component of other comprehensive income were as follows (dollars in thousands):

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**8.**EMPLOYEE BENEFIT PLANS

The Company maintains a noncontributory defined benefit pension plan and a defined benefit post-retirement plan. Plan assets and obligations that determine the funded status are measured as of the end of the fiscal year.

Pension Plan

The Company maintains a noncontributory defined benefit pension plan covering substantially all of its full-time employees twenty-one years of age or older, with at least one year of service hired before September 1, 2019. Through December 31, 2009, pensions were paid as an annuity using a pension formula of 2.0% of the average of the five highest consecutive years of total compensation over the last ten years multiplied by credited service up to thirty years. Effective January 1, 2010, the plan was amended and service rendered thereafter is paid using a pension formula of 1.5%. Amounts contributed to the plan are determined annually on the basis of (a) the maximum amount allowable under Internal Revenue Service regulations and (b) the amount certified by a consulting actuary as necessary to avoid an accumulated funding deficiency as defined by the Employee Retirement Income Security Act of 1974 (“ERISA”). The defined benefit pension plan was amended, effective August 31, 2019, to close the plan to new employees hired on or after September 1, 2019, therefore, no new employees hired on or after September 1, 2019 would be eligible to participate in the defined benefit pension plan.

Net periodic pension (income) cost included the following components (dollars in thousands):

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The service cost component of the net periodic (income) cost is included in salaries and employee benefits and the interest cost, expected return on plan assets and amortization of net actuarial gain components are included in other noninterest expense on the consolidated statements of operations.

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Contributions

For the three and six months ended June 30, 2026 and 2025, the Company made no cash contributions to the plan.

Post-Retirement Healthcare Plan

The Company offers a defined benefit post-retirement plan which provides medical and life insurance benefits to employees meeting certain requirements. Effective October 1, 2006, the plan was amended so that there have been no new plan participants for medical benefits. The cost of post-retirement plan benefits is recognized on an accrual basis as employees perform services. Active employees are eligible for retiree medical coverage upon reaching age sixty with twenty-five or more years of service. Employees with a minimum of thirty years of service are eligible for individual and spousal coverage. Retirees are eligible to participate in any bank-sponsored health insurance programs. The Company’s contributions for retiree medical are limited to a monthly premium of $210 for individual coverage and $420 for employee and spousal coverage. The Company’s funding policy is to pay insurance premiums as they come due.

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Net periodic post-retirement benefit (income) cost included the following components (dollars in thousands):

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The service cost component of the net periodic post-retirement benefit (income) cost is included in salaries and employee benefits and the interest cost and amortization of net actuarial gain components are included in other noninterest expense on the consolidated statements of operations.

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Employee Stock Ownership Plan

On July 17, 2019, the Company established an Employee Stock Ownership Plan (“ESOP”) to provide eligible employees the opportunity to own Company stock. The ESOP is a tax-qualified retirement plan for the benefit of Company employees. The Company granted a loan to the ESOP for the purchase of 1,018,325 shares of the Company’s common stock at an average price of $13.40 per share. The loan obtained by the ESOP from the Company to purchase the common stock is payable annually over 20 years at a rate per annum equal to the Prime Rate. Loan payments are principally funded by cash contributions from the Bank. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. The balance of the ESOP loan at June 30, 2026 was $10.1 million. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The number of shares committed to be released annually is 50,916 through the year 2038. Participants may receive the shares at the end of employment.

Shares held by the ESOP include the following:

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Total compensation expense recognized in connection with the ESOP for the three and six months ended June 30, 2026 was $192,000 and $371,000, respectively.

Total compensation expense recognized in connection with the ESOP for the three and six months ended June 30, 2025 was $146,000 and $294,000, respectively.

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**9.**COMMITMENTS AND CONTINGENT LIABILITIES

Off-Balance-Sheet Financing and Concentrations of Credit

The Company is a party to certain financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include the Company’s commitments to extend credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the consolidated statements of condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit is represented by the contractual notional amounts of those instruments which are presented in the tables below (dollars in thousands). The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

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Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and require payment of a fee. Since certain commitments are expected to expire without being fully drawn, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral, if any, required by the Company for the extension of credit is based on management’s credit evaluation of the customer.

Commitments to extend credit may be written on a fixed rate basis thus exposing the Company to interest rate risk, given the possibility that market rates may change between commitment and actual extension of credit.

Standby letters of credit are conditional commitments issued by the Company to guarantee payment on behalf of a customer or to guarantee the performance of a customer to a third party. The credit risk involved in issuing these instruments is essentially the same as that involved in extending loans to customers. Since a portion of these instruments will expire unused, the total amounts do not necessarily represent future cash requirements. Each customer is evaluated individually for creditworthiness under the same underwriting standards used for commitments to extend credit and on-balance-sheet instruments. Bank policies governing loan collateral apply to standby letters of credit at the time of credit extension.

Certain residential mortgage loans are written on an adjustable basis and include interest rate caps which limit annual and lifetime increases in interest rates. Generally, adjustable rate mortgages have an annual rate increase cap of 2% to 5% and lifetime rate increase cap of 5% to 6% above the initial loan rate. These caps expose the Company to interest rate risk should market rates increase above these limits. At June 30, 2026, approximately $323.6 million of adjustable rate residential mortgage loans had interest rate caps. In addition, certain adjustable rate residential mortgage loans have a conversion option whereby the borrower may elect to convert the loan to a fixed rate during a designated time period. At June 30, 2026, approximately $186,000 of the adjustable rate mortgage loans had conversion options.

The Company periodically sells residential mortgage loans to the Federal National Mortgage Association (“FNMA”). At June 30, 2026 and December 31, 2025, the Bank had no loans held for sale. In addition, the Bank had no loan commitments with borrowers at June 30, 2026 and December 31, 2025 with rate lock agreements which are intended to be held for sale, if closed. The Company generally determines whether or not a loan is held for sale at the time that loan commitments are entered into or at the time a convertible adjustable-rate mortgage loan converts to a fixed interest rate. In order to reduce the interest rate risk associated with the portfolio of loans held for sale, as well as loan commitments with locked interest rates which are intended to be held for sale if closed, the Company enters into agreements to sell loans in the secondary market. At June 30, 2026 and December 31, 2025, the Company had no commitments to sell loans to unrelated investors.

Concentrations of Credit

The Company primarily grants loans to customers located in the New York State counties of Albany, Greene, Rensselaer, Schenectady, Saratoga, and Warren. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent upon the real estate and construction-related sectors of the economy, and general economic conditions in the Company’s market area. In addition the Bank’s subsidiary, Targeted Lending provides financing solutions nationwide for essential income-producing equipment to small and mid-sized businesses across diverse industries.

Legal Proceedings and Other Contingent Liabilities

In the ordinary course of business, the Company and the Bank are involved in a number of legal, regulatory, governmental and other proceedings, claims or investigations that could result in losses, including damages, fines and/or civil penalties, which could be significant concerning matters arising from the conduct of their business, including the matters described below. In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek large or indeterminate damages, the Company generally cannot predict the eventual outcome of the pending matters, timing of the ultimate resolution of these matters, or eventual loss, fines or penalties related to each pending matter. In accordance with applicable accounting guidance, the Company establishes an accrued liability when those matters present loss contingencies that are both probable and estimable. The Company’s estimates of potential losses change over time, and the actual losses may vary significantly, and there may be an exposure to loss in excess of any amount accrued. As a matter develops, management, in conjunction with any outside counsel handling the matter, evaluate on an ongoing basis whether such matter presents a loss contingency that is probable and estimable; or where a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, whether it is possible to estimate a range of possible loss. Once the loss contingency is deemed to be both probable and estimable, the Company establishes an accrued liability and records a corresponding amount of litigation-related expense. The Company continues to monitor the matters for further developments that could affect the amount of the accrued liability that has been previously established and makes adjustments upward or downward, as appropriate. Excluding legal fees and expenses, litigation-related expense of $2.9 million was recognized for the three months ended June 30, 2026. Excluding legal fees and expenses, net litigation-related expense of $3.3 million was recognized for the six months ended June 30, 2026. During the six months ended June 30, 2026, the Company reversed a previously recognized litigation-related accrued liability of $4.5 million related to a regulatory matter, reflecting recent developments. The reversal partially offset other litigation-related expense recognized during the six months ended June 30, 2026. No litigation-related expense was recognized for the three and six months ended June 30, 2025. For those matters for which a loss is reasonably possible and estimable, whether in excess of an accrued liability or where there is no accrued liability, the Company’s estimated range of possible loss is $0 to $18.1 million in excess of the accrued liability, if any, as of June 30, 2026. These estimates are based upon currently available information and are subject to significant judgment, a variety of assumptions and known and unknown uncertainties. The matters underlying the accrued liability and estimated range of possible losses are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual. The estimated range of possible losses does not represent the Company’s maximum loss exposure.

Information is provided below regarding the nature of the matters and associated claimed damages. The Company and the Bank are defending each of these matters vigorously, dispute the assertions and claims in each of the matters noted below, and the Company believes that it and the Bank have substantial defenses, including affirmative defenses, counterclaims and crossclaims to the various allegations that have been asserted. In light of the significant judgment, variety of assumptions and uncertainties involved in the matters described below, some of which are beyond the Company’s control, and the large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters, or matters related to or resulting from the matters described below, could have an adverse material impact on the Company’s business, prospects, financial condition, results of operations, cash flows, or cause significant reputational harm and subject the Company to face civil litigation, significant fines, damage awards or other material regulatory consequences.

Mann Entities Related Fraudulent Activity

During the quarter ended September 30, 2019, the Company became aware of potentially fraudulent activity associated with transactions by an established business customer of the Bank. The customer and various affiliated entities (collectively, the “Mann Entities”) had numerous accounts with the Bank. The transactions in question related both to deposit and lending activity with the Mann Entities.

The ultimate timing and outcome of the proceedings described herein, involving the Company, or the Bank, cannot be predicted with any certainty. The Company’s and the Bank’s legal fees and expenses related to these actions are significant and are expected to continue being significant. The Bank does not expect to recognize any insurance recoveries in the future, as the applicable policy limits and deductibles have been exceeded.

Legal Proceedings

On October 31, 2019, Southwestern Payroll Services, Inc. (“Southwestern”) filed a complaint against the Company and the Bank (“Pioneer Parties”), Michael T. Mann, Valuewise Corporation, MyPayrollHR, LLC and Cloud Payroll, LLC (collectively, the “Mann Parties”) in the United States District Court for the Northern District of New York. Subsequently, Southwestern amended its complaint and added Granite Solutions Groupe, Inc. (“Granite Solutions”) as a plaintiff. The parties are asserting claims against the Pioneer Parties for declaratory judgment, conversion, fraud, negligence/gross negligence, unjust enrichment/money had and received, violations of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, aiding and abetting conversion, and aiding and abetting fraud. The plaintiffs are seeking a monetary judgment of at least $39.0 million, allegedly comprised of compensatory damages in excess of $13.0 million, penalties and interest, treble damages, and punitive damages. The trial date is currently set for September 28, 2026.

On December 10, 2019, National Payment Corp. (“NatPay”) filed a motion to intervene as a plaintiff in Southwestern’s lawsuit against the Pioneer Parties and the Mann Parties as described above. On April 13, 2023, NatPay filed an amended complaint asserting claims against the Pioneer Parties for declaratory judgment, conversion, fraud, negligence/gross negligence, unjust enrichment/money had and received, violations of RICO, aiding and abetting conversion, and aiding and abetting fraud. The amended complaint seeks a monetary judgment of at least $11.4 million, allegedly comprised of compensatory damages in excess of $3.8 million, penalties and interest, treble damages, and punitive damages. The trial date is currently set for September 28, 2026.

On January 20, 2022, Cachet Financial Services (“Cachet”), a third-party automated clearing house service provider filed an adversary proceeding complaint against the Pioneer Parties in the United States Bankruptcy Court for the Central District of California, Los Angeles Division (“Bankruptcy Court”). The parties were litigating Cachet’s claims for conversion, unjust enrichment, and money had and received, which were the claims that remained following motion practice with respect to Cachet’s second amended complaint in 2024. Cachet sought to recover approximately $8.5 million in alleged damages with respect to the remaining claims. On May 27, 2026, the Bankruptcy Court entered an order approving the parties’ May 22, 2026 stipulation of dismissal of the adversary proceeding in its entirety with prejudice, in light of the parties’ execution of a confidential settlement agreement and mutual releases resolving all claims they had against each other.

On February 4, 2020, Berkshire Hills Bancorp Inc.’s wholly owned subsidiary Berkshire Bank (“Berkshire Bank”) filed a complaint against the Bank in the Supreme Court of the State of New York for Albany County resulting from Berkshire Bank’s participation interest in the commercial loan relationship to the Mann Entities. On December 16,

2025, the parties filed a stipulation discontinuing the action in its entirety with prejudice, in light of their entry into a confidential settlement resolving all claims and counterclaims asserted in the action.

On February 4, 2020, Chemung Financial Corporation’s wholly owned subsidiary, Chemung Canal Trust Company (“Chemung”), filed a complaint against the Bank in the Supreme Court of the State of New York for Albany County resulting from Chemung’s participation interest in the commercial loan relationship to the Mann Entities. Chemung asserts that the Bank breached the participation agreement between the Bank and Chemung, engaged in fraudulent activities, engaged in constructive fraud, and further asserts claims for breach of contract, unjust enrichment, and breach of the covenant of good faith and fair dealing arising out of the Bank’s recovery of settlement proceeds in connection with the Bank’s claims against outside auditors for alleged professional malpractice in auditing the annual consolidated financial statements of Valuewise Corporation and its subsidiaries for the fiscal years 2010 to 2018. The complaint seeks to recover approximately $4.6 million and additional damages. Discovery has concluded, and the parties are awaiting briefing of dispositive motions pending the outcome of a confidential mediation.

On August 31, 2020, AXH Air-Coolers, LLC (“AXH”) filed a complaint against the Pioneer Parties, and unnamed employees of the Pioneer Parties in the United States District Court for the Northern District of New York. The complaint alleges that the Pioneer Parties wrongfully converted certain tax funds belonging to AXH, were unjustly enriched by the wrongful taking of tax funds belonging to AXH and were grossly negligent in allowing AXH’s tax funds to be misappropriated, offset, converted, or stolen. The prayer for relief in AXH’s complaint seeks $336,000, plus penalties and interest, attorney’s fees, and punitive damages. On December 7, 2025, the Court entered an order staying the action pending the outcome of the anticipated trial in the Southwestern Payroll and NatPay matters described above.

On May 14, 2021, the Bank filed a verified petition for a hearing, pursuant to 21 U.S.C. § 853(n)(2), to adjudicate the validity of the Bank’s interest in approximately $14.9 million in cash and securities forfeited by Michael Mann pursuant to a preliminary order of forfeiture in a proceeding in the United States District Court for the Northern District of New York. The Bank’s petition alleges that it has a valid security interest in the forfeited property, and that the forfeited property should thus be turned over to the Bank.

On September 2, 2022, two substantially similar putative class action complaints were filed against the Pioneer Parties in the Supreme Court of the State of New York for Albany County. The first complaint was filed by Brandes & Yancy PLLC and Ricardo’s Restaurant, Inc., two alleged clients of Southwestern which seek to assert claims on behalf of all current or former Southwestern clients based on the same set of facts as the AXH, and Granite Solutions complaints as described above, and the alleged taxes sought in the Southwestern, and NatPay complaints. The second complaint was filed by O’Malley’s Oven LLC and Legat Architects, Inc., two alleged clients of MyPayrollHR.Com, LLC and ProData Payroll Services, Inc., affiliates of Cloud Payroll, LLC (collectively, “Cloud Payroll”). Similar to the first complaint described above, the two named plaintiffs in the second complaint seek to assert claims on behalf of all current or former Cloud Payroll clients based on the same set of facts as the AXH, and Granite Solutions complaints as described above, and the alleged taxes sought in the Southwestern, and NatPay complaints. Both complaints assert claims against the Pioneer Parties for conversion, gross negligence, unjust enrichment, money had and received, tortious interference with contract, aiding and abetting fraud, and a declaratory judgment. Both complaints also seek to recover compensatory and punitive damages, plus pre-judgment interest, costs, expenses, disbursements, and reasonable attorneys’ fees.

Historically, the Bank was regulated by the New York State Department of Financial Services (the “NYSDFS”), and as such, NYSDFS took certain investigatory actions with respect to the Bank’s practices associated with the Mann Parties. As of April 1, 2024, the Bank converted from a New York chartered savings bank to a national bank, with the approval of the Office of the Comptroller of the Currency (the “OCC”). The OCC has now assumed the regulatory oversight responsibilities previously held by NYSDFS.

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**10.**FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other 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.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The fair values of securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The fair value of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2). The fair value of derivatives are classified as a component of other assets and other liabilities on the consolidated statements of condition.

The fair value of individually evaluated loans are valued at the lower of cost or fair value. Individually evaluated loans carried at fair value have been partially charged-off or receive a specific allocation of the allowance for credit losses on loans. For collateral dependent loans, fair value is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value.

Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at fair value, less costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Repossessed assets consists of commercial business equipment.

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands):

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(1) Additional information regarding impact of netting derivative assets and derivative liabilities, as well as the impact of offsetting cash collateral can be found in Note 6 – Derivatives.

(2) Included in other liabilities in the consolidated statement of condition.

Assets and Liabilities Measured on a Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below (dollars in thousands):

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Individually evaluated loans had a carrying amount of $844,000 with a valuation allowance of $123,000 resulting in an estimated fair value of $721,000 as of December 31, 2025.

The Company had no other real estate owned at June 30, 2026 and December 31, 2025. At June 30, 2026 the Company had $297,000 of repossessed assets which consisted of repossessed business equipment recorded at the lower of carrying amount or fair market value.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands):

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(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not observable.

(2) Estimated selling costs.

The carrying and estimated fair values of financial assets and liabilities were as follows (dollars in thousands):

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(1) Additional information regarding impact of netting derivative assets and derivative liabilities, as well as the impact of offsetting cash collateral can be found in Note 6 – Derivatives.

(2) Included in other liabilities in the consolidated statement of condition.

Short-Term Financial Instruments

The fair value of certain financial instruments are estimated to approximate their carrying amounts because the remaining term to maturity or period to repricing of the financial instrument is less than ninety days. Such financial instruments include cash and cash equivalents, accrued interest receivable, and mortgagor’s escrow deposits.

Securities

Fair values of trading, securities available for sale, securities held to maturity and short positions are determined as outlined earlier in this footnote.

FHLBNY and FRBNY Stock

The fair value of FHLBNY and FRBNY stock approximates its carrying value due to transferability restrictions.

Loans

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including residential real estate, commercial real estate, and consumer loans and whether the interest rates are fixed and/or variable.

The estimated fair values of performing loans are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the respective loan portfolio.

Estimated fair values for nonperforming loans are based on estimated cash flows discounted using a rate commensurate with the credit risk involved. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information.

Derivatives

Fair values of derivative assets and liabilities are determined as outlined earlier in this footnote.

Deposits

The estimated fair value of deposits with no stated maturity, such as savings, money market and demand deposits, is regarded to be the amount payable on demand. The estimated fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using market rates for time deposits with similar maturities. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposits as compared to the cost of borrowing funds in the market.

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**11.**REVENUE RECOGNITION

In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions primarily relate to insurance and brokerage commissions, and fees derived from our customers' use of various interchange and ATM/debit card networks.

Revenue associated with financial instruments, including revenue from loans and securities is excluded from the scope of the accounting guidance for revenue from contracts with customers. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the accounting guidance for revenue from contracts with customers. The accounting guidance for revenue from contracts with customers is applicable to noninterest revenue streams such as deposit related fees, interchange fees, and insurance and wealth management services commissions.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of the accounting guidance for revenue from contracts with customers:

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**12.**EARNINGS PER SHARE

The following table summarizes the calculation of basic and diluted earnings per common share:

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Potential common shares from stock options that were not included in the computation of diluted earnings per common share, because they were anti-dilutive under the treasury stock method, were 202,500 and 212,500 for the three and six months ended June 30, 2026, respectively, and were 852,500 for the three and six months ended June 30, 2025.

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

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“More Than a Bank” Strategy

At the heart of our success is our distinctive business strategy to operate as a diversified financial institution focused on our relationship-based model of creating client advocacy through our highly engaged employees.

We have continued to thrive through our focused approach to executing on key elements of our business strategy, including strategically growing through deepening client relationships, maintaining an appropriate balance in the overall loan portfolio, diversifying and growing our products and services, working to increase our share of lower-cost core deposits, evaluating opportunities for selective acquisitions, and our ongoing focus on our commitment to an engaged workforce.

Recent Acquisitions:

Targeted Lending Co., LLC (“Targeted Lending”)

As we continue to execute on our business strategy, on April 24, 2026 we completed the acquisition of 100% of the membership interests of Targeted Lending, an independent equipment financing company with approximately $120 million of loans on its balance sheet.

Total consideration for the transaction was $144.1 million, comprised of $98.7 million to settle certain debt of Targeted Lending, cash of $43.8 million, and potential performance-based cash consideration (“Contingent Consideration”), which was determined to have a fair value of $1.6 million as of April 24, 2026. This Contingent Consideration can be earned over a three-year period commencing with the date of acquisition, and the potential payment of which ranges from zero to $3.0 million.

Targeted Lending, as a subsidiary of Pioneer Bank, National Association, will operate as the newly formed Specialty Financing division, expanding our commercial lending capabilities and extending our reach into nationwide equipment finance markets. Targeted Lending through its originator-centric equipment finance platform provides financing solutions for essential, income-producing equipment, offering loans to small and mid-sized businesses across diverse industries.

Expansion of Employee Benefits Division

On April 20, 2026, we completed the acquisitions of Reiser Consulting Group, Inc. and Wyndham Benefits, LLC. The acquisitions significantly increased the size of our Employee Benefits division and strengthens our ability to deliver expanded services and product offerings for both current and prospective clients.

Acquisition of The College Advisor of New York

On July 16, 2026, Pioneer completed the acquisition of CAONY, Inc., operating under the name of The College Advisors of New York, a specialized firm that helps families navigate the college search and admissions process with personalized guidance, hands on support, and assistance identifying colleges that are the right academic, personal, and financial fit.

These acquisitions further advance Pioneer’s “More Than a Bank” strategy by expanding our capabilities, diversifying revenue streams, and strengthening the value we deliver to clients.

As we look forward, our strategic focus remains clear: to deliver long-term value to our stockholders while serving the needs of our clients, employees, and communities. Our strategy of being “More Than a Bank” will continue to prioritize growth in key markets, disciplined lending, diversifying revenue streams and expanding our product and service offerings to meet evolving client needs.

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Critical Accounting Policies and Estimates

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

The following represent our critical accounting policies and estimates:

Allowance for Credit Losses. The allowance for credit losses consists of the allowance for credit losses on loans, securities held to maturity and unfunded commitments. The measurement of Current Expected Credit Losses (“CECL”) on financial instruments requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, macroeconomic variables (e.g., civilian unemployment and U.S. gross domestic product (“GDP”)), and reasonable and supportable forecasts from the Federal Open Market Committee (“FOMC”) that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, the Company considers forecasts about future economic conditions that are reasonable and supportable. On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the estimated fair value of the collateral, as applicable. The allowance for credit losses on loans and securities held to maturity, as reported in our consolidated statements of condition, are adjusted by a provision for credit losses, which is recognized in earnings, and reduced by the charge-offs, net of recoveries. The allowance for credit losses on unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws and is included in other liabilities on the Company’s consolidated statements of condition.

As a substantial percentage of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans are critical in determining the amount of the allowance required for specific loans. Assumptions are instrumental in determining the value of properties. Overly optimistic assumptions or negative changes to assumptions could significantly affect the valuation of a property securing a loan and the related allowance determined. Management carefully reviews the assumptions supporting such appraisals to determine that the resulting values reasonably reflect amounts realizable on the related loans.

Management of the Company considers the accounting policy relating to the allowance for credit losses to be a critical accounting estimate given the uncertainty in evaluating the level of the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of our loan portfolios. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain, including making significant estimates of current credit risks and trends using existing quantitative and qualitative information, and reasonable and supportable forecasts of future economic conditions, which may undergo frequent and material changes. Subsequent evaluations of the then-existing loan portfolios, in light of changes in economic conditions, new information regarding existing loans and other factors, may result in significant changes in the allowance for credit losses in those future periods. For example, changes to the FOMC’s forecasted civilian unemployment rate and year-over-year U.S. GDP growth could have a material impact on the model’s estimation of the allowance for credit losses on loans. An immediate increase of 100 basis points in the FOMC’s projected rate of civilian unemployment and a decrease of 100 basis points in the FOMC’s projected rate of U.S. GDP growth would increase the model’s total calculated

allowance for credit losses on loans by $1.7 million, or 6.1%, as of June 30, 2026 assuming qualitative adjustments are kept at current levels. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions. Additionally, changes in those factors and inputs may not occur at the same rate and inputs may be directionally inconsistent, such that improvements in one factor may offset deterioration in others. Going forward, the impact of utilizing the CECL approach to calculate the allowance for credit losses will be significantly influenced by the composition, characteristics and quality of our loan portfolios, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to our reported earnings.

Actual loan losses may be significantly more than the allowance we have established which could have a material negative effect on our financial results.

Legal Proceedings and Other Contingent Liabilities. In the ordinary course of business, we are involved in a number of legal, regulatory, governmental and other proceedings, claims or investigations that could result in losses, including damages, fines and/or civil penalties, which could be significant concerning matters arising from the conduct of our business. In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek large or indeterminate damages, we generally cannot predict the eventual outcome of the pending matters, timing of the ultimate resolution of these matters, or eventual loss, fines or penalties related to each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability when those matters present loss contingencies that are both probable and estimable. Our estimate of potential losses will change over time and the actual losses may exceed these estimates, and there may be an exposure to loss in excess of any amounts accrued. As a matter develops, management, in conjunction with any outside counsel handling the matter, evaluate on an ongoing basis whether such matter presents a loss contingency that is probable and estimable; or where a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, whether it is possible to estimate a range of possible loss. Once the loss contingency is deemed to be both probable and estimable, we establish an accrued liability and record a corresponding amount of litigation-related expense. We continue to monitor the matters for further developments, including our interactions with various regulatory agencies with supervisory authority over us, that could affect the amount of the accrued liability that has been previously established and make adjustments upward or downward, as appropriate. These estimates are based upon currently available information and are subject to significant judgment, a variety of assumptions and known and unknown uncertainties. The matters underlying the accrued liability and estimated range of possible losses are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual which could have a material negative effect on our financial results. The estimated range of possible loss does not represent our maximum loss exposure.

Business Combinations. The acquisition method of accounting generally requires that the identifiable assets acquired and liabilities assumed in business combinations are recorded at fair value as of the acquisition date. Goodwill represents the cost of the acquired business in excess of the fair value of the related net assets acquired. The determination of fair value often involves the use of internal or third-party valuation techniques, such as discounted cash flow analyses or appraisals. Particularly, the valuation techniques used to estimate the fair value of loans and the customer relationships intangible asset acquired in the Targeted Lending acquisition include assumptions that are inherently subjective. The valuation of acquired loans relied on a discounted cash flow approach applied on an individual loan basis, with certain pool level assumptions. This methodology segmented the acquired loan portfolio by loan type and incorporated specific key valuation assumptions, encompassing probability of default, loss given default, and the discount rate to ascertain the fair value of these assets. Given the inherent subjectivity and reliance on future cash flows and market conditions, this process involves considerable judgment and estimation uncertainty. In addition the fair value of the customer relationships intangible asset was estimated with an income approach using a multi-period excess earnings method which discounts expected future cash flows, taking into account historic customer attrition rates and contributory asset charges, among other factors. The fair value of the developed technologies intangible asset was estimated with an income approach using a relief from royalty method, taking into account attributable revenue and obsolescence patterns, among other factors.

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Average Balances and Yields

The following tables set forth average balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable.

(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

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

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

(4) Annualized.

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(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

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

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

(4) Annualized.

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Rate/Volume Analysis

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

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Comparison of Financial Condition at June 30, 2026 and December 31, 2025

Total Assets. Total assets of $2.36 billion at June 30, 2026 increased $213.0 million, or 9.9%, from $2.15 billion at December 31, 2025. The increase was due primarily to an increase of $224.6 million, or 13.6%, in net loans receivable and an increase of $22.0 million, or 100.0%, in trading securities, offset in part by a decrease of $39.1 million, or 29.3% in cash and cash equivalents and a decrease of $19.5 million, or 8.9%, in securities available for sale.

Cash and Cash Equivalents. Total cash and cash equivalents of $94.6 million at June 30, 2026, decreased $39.1 million, or 29.3%, from $133.7 million at December 31, 2025.

Securities Available for Sale. Total securities available for sale of $200.9 million at June 30, 2026 decreased $19.5 million, or 8.9%, from $220.4 million at December 31, 2025. The decrease was primarily due to maturities, paydowns and calls of $45.8 million, offset in part by purchases of $28.0 million of securities during the six months ended June 30, 2026.

Securities Held to Maturity. Total securities held to maturity of $44.8 million at June 30, 2026 increased $3.3 million, or 7.8%, from $41.5 million at December 31, 2025. The increase was primarily due to purchases of $3.7 million during the six months ended June 30, 2026.

Trading Securities. Total trading securities was $22.0 million at June 30, 2026 compared to none at December 31, 2025. The increase in trading securities was a result of the commencement of operations of our broker-dealer subsidiary, Pioneer Capital Markets, Inc. in January 2026.

Net Loans Receivable. Net loans receivable of $1.87 billion at June 30, 2026 increased $224.6 million, or 13.6%, from $1.65 billion at December 31, 2025. The increase in net loans receivable was primarily a result of growth in the commercial and industrial loan portfolio which increased by $147.4 million, or 118.0%, to $272.3 million at June 30, 2026 from $124.9 million at December 31, 2025. The residential mortgage loan portfolio increased by $46.2 million, or 5.8%,

to $839.9 million at June 30, 2026 from $793.7 million at December 31, 2025 and the commercial construction loan portfolio increased by $39.9 million, or 23.5%, to $209.6 million at June 30, 2026 from $169.7 million at December 31, 2025, offset in part by a decrease in commercial real estate loans by $5.0 million, or 1.1%, to $461.4 million at June 30, 2026 from $466.4 million at December 31, 2025.

The increase in commercial and industrial loans was primarily due to the acquisition of Targeted Lending during the three months ended June 30, 2026. The increase in residential mortgage loans was primarily related to the Bank’s relationship with a third-party mortgage banking company which facilitated an increase in residential mortgage loan volume, despite the higher interest rate environment. The increase in commercial construction loans was due to funding of increased construction commitments. The decrease in commercial real estate loans was due to loan payoffs outpacing loan funding.

The following table presents our commercial real estate loan portfolio by industry sector at June 30, 2026.

Our commercial real estate loans are secured primarily by multi-family properties, office buildings, industrial facilities, retail facilities and other commercial properties, substantially all of which are located in our primary market area.

Deposits. Deposits of $1.97 billion at June 30, 2026 increased $229.8 million, or 13.2%, from $1.74 billion at December 31, 2025. By deposit category, certificates of deposits increased by $201.7 million, or 74.9%, to $471.2 million at June 30, 2026 from $269.5 million at December 31, 2025 (included in certificates of deposit were brokered deposits which increased by $174.5 million to $284.7 million at June 30, 2026 from $110.2 million at December 31, 2025), and money market accounts increased by $24.7 million, or 3.9%, to $658.2 million at June 30, 2026 from $633.5 million at December 31, 2025.

The increase in certificates of deposit was primarily due to an increase in brokered deposits, and by a migration of funds from non-interest bearing demand, savings and other lower rate interest-bearing accounts. The increase in money market accounts was primarily due to a migration of funds from non-interest bearing demand, savings and other lower rate interest-bearing accounts. The increase in brokered deposits was primarily to fund loan growth and the acquisition of Targeted Lending.

The following table sets forth the distribution of total deposits by depositor type as of the dates indicated.

Uninsured deposits represents the portion of deposit accounts that exceed FDIC insurance limits. The Company calculates its uninsured deposit balances based on the same methodologies and assumptions used for regulatory reporting requirements, which includes collateralized deposits.

The following table estimates uninsured deposits after certain exclusions:

Uninsured deposits after exclusions represented 13.4% and 16.6% of total deposits as of June 30, 2026 and December 31, 2025, respectively. The Company believes that this presentation of uninsured deposits provides a more accurate view of deposits at risk as affiliate deposits are not customer facing and therefore are eliminated upon consolidation, and collateralized deposits are fully secured by investments and municipal letters of credit.

Borrowings from Federal Home Loan Bank of New York (“FHLBNY”). There were no borrowings from FHLBNY at June 30, 2026, compared to $50.0 million at December 31, 2025. The decrease in borrowings from FHLBNY was due to the payoff of the borrowings during the six months ended June 30, 2026.

Total Shareholders’ Equity. Shareholders’ equity of $328.3 million at June 30, 2026 increased $4.4 million, or 1.4%, from $323.9 million at December 31, 2025 primarily as a result of net income of $8.8 million, offset in part by a decrease in accumulated other comprehensive income of $1.9 million and by the repurchase of common stock of $3.6 million.

Comparison of Operating Results for the Three Months Ended June 30, 2026 and June 30, 2025

General. Net income decreased by $3.0 million to $3.5 million for the three months ended June 30, 2026 as compared to $6.5 million for the three months ended June 30, 2025. The decrease was primarily due to an increase in non-interest expense of $7.5 million, partially offset by an increase in net interest income of $3.3 million, an increase of non-interest income of $658,000, and a decrease in income tax expense of $385,000.

Interest and Dividend Income. Interest and dividend income increased $4.9 million, or 18.0%, to $31.9 million for the three months ended June 30, 2026, from $27.0 million for the three months ended June 30, 2025. The increase was the result of a 32 basis points increase in the average yield on interest-earning assets to 6.04% for the three months ended June 30, 2026, from 5.72% for the three months ended June 30, 2025. The increase in the average yield on interest-earning assets was driven by market-related increases in interest rates on new loans and on investment securities and loans acquired from the Targeted Lending acquisition. Average interest-earning assets increased by $232.2 million from $1.93 billion for the three months ended June 30, 2025 to $2.16 billion for the three months ended June 30, 2026 primarily due to the increase in the average balance of loans.

Interest income on loans increased $5.5 million, or 24.6%, to $27.8 million for the three months ended June 30, 2026 from $22.3 million for the three months ended June 30, 2025. Interest income on loans increased due to a $303.2 million increase in the average balance of loans to $1.82 billion for the three months ended June 30, 2026 from

$1.52 billion for the three months ended June 30, 2025 and a 24 basis points increase in the average yield on loans to 6.28% for the three months ended June 30, 2026 from 6.04% for the three months ended June 30, 2025. The increase in the average balance of loans was primarily due to the acquisition of Targeted Lending during the three months ended June 30, 2026 and by purchases of residential mortgage loans and increased originations of commercial construction loans. The increase in average yield on loans was primarily due to market related increases in interest rates on new loans and the acquisition of Targeted Lending during the three months ended June 30, 2026.

Interest income on securities decreased $966,000, or 24.5%, to $3.0 million for the three months ended June 30, 2026 from $3.9 million for the three months ended June 30, 2025. Interest income on securities decreased due to a $109.1 million decrease in the average balance of securities to $243.8 million for the three months ended June 30, 2026 from $352.9 million for the three months ended June 30, 2025, partially offset by a 43 basis points increase in the average yield on securities to 4.99% for the three months ended June 30, 2026 from 4.56% for the three months ended June 30, 2025. The decrease in the average balance of securities was due to the maturities of U.S. government and agency and municipal obligation securities, outpacing purchases during the three months ended June 30, 2026. The increase in the average yield of securities was primarily due to the higher market interest rates for new securities that were purchased replacing maturities of lower yielding securities.

Interest income on interest-earning deposits with banks, trading securities, and other increased $344,000 to $1.1 million for the three months ended June 30, 2026 from $732,000 for the three months ended June 30, 2025. Interest income on interest-earning deposits with banks, trading securities, and other increased due to a $38.2 million increase in the average balances to $102.7 million for the three months ended June 30, 2026 from $64.5 million for the three months ended June 30, 2025, primarily due to an increase in the average balance of trading securities and interest-earning deposits with banks, partially offset by an 36 basis points decrease in the average yield to 4.27% for the three months ended June 30, 2026 from 4.63% for the three months ended June 30, 2025 primarily due to changes in market interest rates.

Interest Expense. Interest expense increased $1.6 million, or 21.9%, to $9.0 million for the three months ended June 30, 2026 from $7.4 million for the three months ended June 30, 2025, primarily as a result of an increase in interest expense on deposits. The increase was primarily due to a four basis points increase in the average cost of interest-bearing liabilities to 2.45% for the three months ended June 30, 2026 from 2.41% for the three months ended June 30, 2025, as well as a shift in the mix of interest-bearing liabilities to higher interest rate liability accounts.

Interest expense on interest-bearing deposits increased $1.8 million, or 25.7%, to $8.6 million for the three months ended June 30, 2026 from $6.8 million for the three months ended June 30, 2025. Interest expense on interest-bearing deposits increased primarily due to an eight basis points increase in the average cost of interest-bearing deposits to 2.42% for the three months ended June 30, 2026 from 2.34% for the three months ended June 30, 2025 and an increase in average interest-bearing deposits of $251.5 million to $1.44 billion for the three months ended June 30, 2026 from $1.19 billion for the three months ended June 30, 2025. The increase in the average cost of interest-bearing deposits was primarily due to a shift in the mix of deposits towards higher cost interest-bearing deposit accounts. The increase in the average balance of interest-bearing deposits was primarily due to higher average money market and certificates of deposit balances. The increase in certificates of deposit balances was the result of an increase in brokered deposits.

Interest expense on borrowings and other liabilities decreased $139,000 to $415,000 for the three months ended June 30, 2026 from $554,000 for the three months ended June 30, 2025 due primarily to a decrease in average cost of borrowings and other liabilities of 80 basis points to 3.31% for the three months ended June 30, 2026 from 4.11% for the three months ended June 30, 2025 and by a decrease in the average borrowings and other liabilities of $3.8 million to $51.0 million for the three months ended June 30, 2026 from $54.8 million for the three months ended June 30, 2025.

Net Interest Income. Net interest income of $22.9 million for the three months ended June 30, 2026 increased $3.3 million, or 16.5%, compared to $19.6 million for the three months ended June 30, 2025 as net interest margin increased 17 basis points to 4.30% for the three months ended June 30, 2026 from 4.13% for the three months ended June 30, 2025, partially offset by a decrease in net interest-earning assets of $15.4 million to $677.5 million for the three months ended June 30, 2026 from $692.9 million for the three months ended June 30, 2025. Net interest rate spread increased 27 basis points to 3.58% for the three months ended June 30, 2026 from 3.31% for the three months ended June 30, 2025.

Provision for Credit Losses. The provision for credit losses was $1.4 million for the three months ended June 30, 2026, as compared to a provision for credit losses of $1.6 million for the three months ended June 30, 2025. The decrease in the provision for credit losses for the three months ended June 30, 2026 was primarily due to improvement in the loan portfolio credit quality, offset by growth in the loan portfolio and an increase in net charge-offs for the three months ended June 30, 2026.

Non-Interest Income. Non-interest income increased $658,000, or 13.7%, to $5.5 million for the three months ended June 30, 2026 as compared to $4.8 million for the three months ended June 30, 2025. The increase in noninterest income for the three months ended June 30, 2026 was primarily due to an increase in insurance and wealth management services income, an increase in bank fees and service charges, and an increase in net gain on sale of loans, offset in part by a decrease in other noninterest income. The increase in insurance and wealth management services income was as a result of organic growth related to our wealth management services and the acquisition of Brown Financial Management Group during the three months ended December 31, 2025. The increase in bank fees and service charges and net gain on sale of loans was a result of the acquisition of Targeted Lending during the three months ended June 30, 2026. The decrease in other noninterest income was primarily due to $550,000 of bank-owned life insurance income as a result of a death benefit recognized during the three months ended June 30, 2025.

Non-Interest Expense. Non-interest expense increased $7.5 million, or 50.6%, to $22.2 million for the three months ended June 30, 2026 as compared to $14.7 million for the three months ended June 30, 2025. The increase in noninterest expense for the three months ended June 30, 2026 was primarily due to an increase in professional fees, an increase in salaries and employee benefits, and an increase in other noninterest expense. The increase in professional fees for the three months ended June 30, 2026 was primarily due to higher legal fees and expenses and partially related to expenses in connection with the completion of our recent acquisitions described above during the three months ended June 30, 2026. Salaries and employee benefits increased for the three months ended June 30, 2026 primarily due to compensation expense from annual merit increases and an increase in the number of employees from acquisitions completed during the three months ended June 30, 2026. The increase in other non-interest expense for the three months ended June 30, 2026 was primarily due to an increase of $2.9 million in litigation-related expense (see Part I, Item 1 – Consolidated Financial Statements – Note 9 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities” for details).

Income Tax Expense. Income tax expense decreased $385,000 to $1.3 million for the three months ended June 30, 2026 as compared to $1.7 million for the three months ended June 30, 2025. Our effective tax rate was 27.2% for the three months ended June 30, 2026 compared to 20.7% for the three months ended June 30, 2025. The increase in the effective tax rate for the three months ended June 30, 2026 was due to an increase in non-deductible expenses.

Comparison of Operating Results for the Six Months Ended June 30, 2026 and June 30, 2025

General. Net income decreased by $3.4 million to $8.8 million for the six months ended June 30, 2026 as compared to $12.2 million for the six months ended June 30, 2025. The decrease was primarily due to an increase in non-interest expense of $11.0 million, partially offset by an increase in net interest income of $4.9 million, an increase of non-interest income of $793,000, and a decrease in income tax expense of $1.6 million.

Interest and Dividend Income. Interest and dividend income increased $7.3 million, or 14.0%, to $60.2 million for the six months ended June 30, 2026, from $52.9 million for the six months ended June 30, 2025. The increase was the result of a 23 basis points increase in the average yield on interest-earning assets to 5.86% for the six months ended June 30, 2026, from 5.63% for the six months ended June 30, 2025. The increase in the average yield on interest-earning assets was driven by market-related increases in interest rates on new loans and on investment securities and loans acquired from the Targeted Lending acquisition. Average interest-earning assets increased by $182.6 million from $1.92 billion for the six months ended June 30, 2025 to $2.10 billion for the six months ended June 30, 2026 primarily due to the increase in the average balance of loans.

Interest income on loans increased $8.7 million, or 20.1%, to $52.2 million for the six months ended June 30, 2026 from $43.5 million for the six months ended June 30, 2025. Interest income on loans increased due to a $257.3 million increase in the average balance of loans to $1.75 billion for the six months ended June 30, 2026 from $1.49 billion for the six months ended June 30, 2025 and a 14 basis points increase in the average yield on loans to 6.11% for the six months

ended June 30, 2026 from 5.97% for the six months ended June 30, 2025. The increase in the average balance of loans was primarily due to the acquisition of Targeted Lending during the six months ended June 30, 2026 and by purchases of residential mortgage loans and increased originations of commercial construction loans. The increase in average yield on loans was primarily due to market related increases in interest rates on new loans and the acquisition of Targeted Lending during the six months ended June 30, 2026.

Interest income on securities decreased $1.7 million, or 22.5%, to $6.0 million for the six months ended June 30, 2026 from $7.7 million for the six months ended June 30, 2025. Interest income on securities decreased due to a $105.7 million decrease in the average balance of securities to $249.3 million for the six months ended June 30, 2026 from $355.0 million for the six months ended June 30, 2025, partially offset by a 46 basis points increase in the average yield on securities to 4.90% for the six months ended June 30, 2026 from 4.44% for the six months ended June 30, 2025. The decrease in the average balance of securities was due to the maturities of U.S. government and agency and municipal obligation securities, outpacing purchases during the six months ended June 30, 2026. The increase in the average yield of securities was primarily due to the higher market interest rates for new securities that were purchased replacing maturities of lower yielding securities.

Interest income on interest-earning deposits with banks, trading securities, and other increased $399,000 to $2.0 million for the six months ended June 30, 2026 from $1.6 million for the six months ended June 30, 2025. Interest income on interest-earning deposits with banks, trading securities, and other increased due to a $31.1 million increase in the average balances to $103.3 million for the six months ended June 30, 2026 from $72.2 million for the six months ended June 30, 2025, primarily due to an increase in the average balance of trading securities and interest-earning deposits with banks, partially offset by a 60 basis points decrease in the average yield to 4.00% for the six months ended June 30, 2026 from 4.60% for the six months ended June 30, 2025 primarily due to changes in market interest rates.

Interest Expense. Interest expense increased $2.4 million, or 17.5%, to $16.6 million for the six months ended June 30, 2026 from $14.2 million for the six months ended June 30, 2025, primarily as a result of an increase in interest expense on deposits. The increase was primarily due to a four basis points increase in the average cost of interest-bearing liabilities to 2.39% for the six months ended June 30, 2026 from 2.35% for the six months ended June 30, 2025, as well as a shift in the mix of interest-bearing liabilities to higher interest rate liability accounts.

Interest expense on interest-bearing deposits increased $2.7 million, or 20.3%, to $16.0 million for the six months ended June 30, 2026 from $13.3 million for the six months ended June 30, 2025. Interest expense on interest-bearing deposits increased primarily due to a seven basis points increase in the average cost of interest-bearing deposits to 2.36% for the six months ended June 30, 2026 from 2.29% for the six months ended June 30, 2025, and an increase in average interest-bearing deposits of $197.9 million to $1.37 billion for the six months ended June 30, 2026 from $1.18 billion for the six months ended June 30, 2025. The increase in the average cost of interest-bearing deposits was primarily due to a shift in the mix of deposits towards higher cost interest-bearing deposit accounts. The increase in the average balance of interest-bearing deposits was primarily due to higher average money market and certificates of deposit balances. The increase in certificates of deposit balances was the result of an increase in brokered deposits.

Interest expense on borrowings and other liabilities decreased $213,000 to $688,000 for the six months ended June 30, 2026 from $901,000 for the six months ended June 30, 2025 due primarily to a decrease in average cost of borrowings and other liabilities of 70 basis points to 3.40% for the six months ended June 30, 2026 from 4.10% for the six months ended June 30, 2025 and by a decrease in the average borrowings and other liabilities of $3.6 million to $41.2 million for the six months ended June 30, 2026 from $44.8 million for the six months ended June 30, 2025.

Net Interest Income. Net interest income of $43.6 million for the six months ended June 30, 2026 increased $4.9 million, or 12.7%, compared to $38.7 million for the six months ended June 30, 2025 as net interest margin increased 11 basis points to 4.23% for the six months ended June 30, 2026 from 4.12% for the six months ended June 30, 2025, partially offset by a decrease in net interest-earning assets of $11.7 million to $686.7 million for the six months ended June 30, 2026 from $698.4 million for the six months ended June 30, 2025. Net interest rate spread increased 20 basis points to 3.48% for the six months ended June 30, 2026 from 3.28% for the six months ended June 30, 2025.

Provision for Credit Losses. The provision for credit losses was $2.1 million for the six months ended June 30, 2026, as compared to a provision for credit losses of $2.4 million for the six months ended June 30, 2025. The decrease in

the provision for credit losses for the six months ended June 30, 2026 was primarily due to improvement in the loan portfolio credit quality, offset by growth in the loan portfolio and an increase in net charge-offs for the six months ended June 30, 2026.

Non-Interest Income. Non-interest income increased $793,000, or 9.3%, to $9.3 million for the six months ended June 30, 2026 as compared to $8.5 million for the six months ended June 30, 2025. The increase in noninterest income for the six months ended June 30, 2026 was primarily due to an increase in insurance and wealth management services income, an increase in bank fees and service charges, and an increase in net gain on sale of loans, offset in part by a decrease in other noninterest income. The increase in insurance and wealth management services income was as a result of organic growth related to our wealth management services and the acquisition of Brown Financial Management Group during the three months ended December 31, 2025. The increase in bank fees and service charges and net gain on sale of loans was a result of the acquisition of Targeted Lending during the six months ended June 30, 2026. The decrease in other noninterest income was primarily due to $550,000 of bank-owned life insurance income as a result of a death benefit recognized during the six months ended June 30, 2025.

Non-Interest Expense. Non-interest expense increased $11.0 million, or 37.5%, to $40.3 million for the six months ended June 30, 2026 as compared to $29.3 million for the six months ended June 30, 2025. The increase in noninterest expense for the six months ended June 30, 2026 was primarily due to an increase in professional fees, an increase in salaries and employee benefits, and an increase in other noninterest expense. The increase in professional fees for the six months ended June 30, 2026 was primarily due to higher legal fees and expenses and partially related to the expenses in connection with the completion of our recent acquisitions described above during the three months ended June 30, 2026. Salaries and employee benefits increased for the six months ended June 30, 2026 primarily due to compensation expense from annual merit increases and an increase in the number of employees from acquisitions completed during the six months ended June 30, 2026. The increase other non-interest expense for the six months ended June 30, 2026 was primarily due to a net increase of $3.3 million in litigation-related expense (see Part I, Item 1 – Consolidated Financial Statements – Note 9 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities” for details).

Income Tax Expense. Income tax expense decreased $1.6 million to $1.7 million for the six months ended June 30, 2026 as compared to $3.3 million for the six months ended June 30, 2025. Our effective tax rate was 16.4% for the six months ended June 30, 2026 compared to 21.5% for the six months ended June 30, 2025. The decrease in the effective tax rate for the six months ended June 30, 2026 was primarily due to a discrete tax item related to a reversal of an accrued liability for a previously non-deductible expense, offset in part by an increase in non-deductible expenses.

Asset Quality and Allowance for Credit Losses

Asset Quality. Non-accrual loans are loans for which collectability is questionable and, therefore, interest on such loans will no longer be recognized on an accrual basis. All loans that become 90 days or more delinquent are placed on non-accrual status unless the loan is well secured and in the process of collection. When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received on a cash basis or cost recovery method.

When we acquire real estate as a result of foreclosure, the real estate is classified as real estate owned. The real estate owned is recorded at the lower of carrying amount or fair market value, less estimated costs to sell. Any excess of the recorded value of the loan over the fair market value of the property is charged against the allowance for credit losses, or, if the existing allowance is inadequate, charged to expense in the current period. After acquisition, all costs incurred in maintaining the property are expensed. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell.

The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.

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Non-accrual loans decreased $2.1 million to $9.1 million at June 30, 2026 from $11.2 million at December 31, 2025 primarily due to paydowns of $2.7 million on a commercial real estate loan relationship secured by multiple office, warehouse and industrial properties during the six months ended June 30, 2026, the payoff of a $820,000 commercial real estate loan and the paydown and partial charge-off of a $844,000 commercial real estate loan that was secured by manufactured housing parks. The decrease in non-accrual loans was partially offset by an increase in commercial and industrial non-accrual equipment loans as a result of the Targeted Lending acquisition and an increase in non-accrual residential mortgages.

At June 30, 2026, repossessed assets consisted of repossessed business equipment recorded at the lower of carrying amount or fair market value less estimated cost to sell.

Classified Assets**.** Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss allowance is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated as “special mention.”

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The following table sets forth our amounts of all classified loans and loans designated as special mention as of June 30, 2026 and December 31, 2025.

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Total substandard loans decreased $10.6 million to $15.5 million at June 30, 2026 from $26.1 million at December 31, 2025 primarily due to the migration from the substandard category to the pass category of a $6.4 million commercial real estate loan as a result of being refinanced to a new ownership group, and due to paydowns of $2.6 million on a commercial real estate loan relationship secured by multiple office, warehouse and industrial properties during the six months ended June 30, 2026.

Total special mention loans decreased by $5.4 million to $2.0 million at June 30, 2026 from $7.4 million at December 31, 2025 primarily due to the migration from the special mention category to the pass category of a $4.9 million commercial real estate loan secured by senior housing property.

Total doubtful loans decreased by $857,000 to $62,000 at June 30, 2026 from $919,000 at December 31, 2025 primarily due to the paydown and partial charge-off of a $844,000 commercial real estate loan that was secured by manufactured housing parks.

Allowance for Credit Losses on Loans. The measurement of CECL on loans requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, the Company considers forecasts about future economic conditions that are reasonable and supportable. On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the estimated fair value of the collateral, as applicable. The allowance for credit losses on loans, as reported in our consolidated statements of condition, is adjusted by a provision for credit losses, which is recognized in earnings, and reduced by the charge-off of loans, net of recoveries.

Determining the appropriateness of the allowance is complex and requires judgments by our management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolios, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions. The impact of utilizing the CECL approach to calculate the allowance for credit losses is significantly influenced by the composition, characteristics and quality of our loan portfolios, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to our reported earnings.

In addition, bank regulators periodically review our allowance for credit losses on loans and as a result of such reviews, we may have to materially adjust our allowance for credit losses on loans or recognize further loan charge-offs.

The following table sets forth activity in our allowance for credit losses on loans for the periods indicated.

(1) Annualized.

The increase in net charge-offs for the six months ended June 30, 2026 was primarily due to an increase in commercial and industrial loan net charge-offs due to an $854,000 charge-off related to one commercial borrower, as well as net charge-offs on the acquired Targeted Lending loans during the three months ended June 30, 2026. The increase in commercial real estate net charge-offs was due to an $232,000 charge-off on a previously non-accrual loan that was secured by manufactured housing parks.

Liquidity and Capital Resources

Liquidity. Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from calls, maturities and sales of securities. We also have the ability to borrow from the FHLBNY. At June 30, 2026, we had the ability to borrow up to $653.4 million from the FHLBNY, of which none was utilized for borrowings and $297.0 million was utilized as collateral for letters of credit issued to secure municipal deposits. At June 30, 2026, we also had a $20.0 million unsecured line of credit with a correspondent bank with no outstanding balance, as well as the ability to borrow from the Federal Reserve Bank of New York through the discount window lending program, and access to the reciprocal and brokered deposit markets.

We cannot accurately predict what the impact of the events described in the “Legal Proceedings” section may have on our liquidity and capital resources. For example, costs associated with prosecuting, litigating or settling any litigation, satisfying any adverse judgments, if any, could be significant. We continue to monitor these matters for further developments that could affect the amount of the accrued liability that has been established. See “Part II, Item 1 – Legal Proceedings” and “Part I, Item 1 – Consolidated Financial Statements – Note 9 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities” elsewhere in this report for more information. For those matters for which a loss is reasonably possible and estimable, whether in excess of an accrued liability or where there is no accrued liability, the Company’s estimated range of possible loss is $0 to $18.1 million in excess of the accrued liability, if any, as of June 30, 2026. These estimates are based upon currently available information and are subject to significant judgment, a variety of assumptions and known and unknown uncertainties. The matters underlying the accrued liability and estimated range of possible losses are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual. The estimated range of possible loss does not represent the Company’s maximum loss exposure. These legal, regulatory, governmental and other proceedings, claims or investigations, costs, settlements, judgments, sanctions or other expenses could have a material adverse effect on our business, prospects, financial condition, results of operations or cash flows or cause significant reputational harm and subject us to civil litigation, significant fines, damage awards or other material regulatory consequences.

The board of directors is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. We believe that we had enough sources of liquidity to satisfy our short and long-term liquidity needs as of June 30, 2026.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any period. At June 30, 2026, cash and cash equivalents totaled $94.6 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $200.9 million at June 30, 2026.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of June 30, 2026 totaled $465.1 million, or 23.6%, of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and FHLBNY advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Capital Resources. We are subject to various regulatory capital requirements administered by the Office of the Comptroller of the Currency (the “OCC”). At June 30, 2026, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines.

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by

regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, banks must meet specific capital guidelines that involve quantitative measures of the bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy requires the Bank to maintain minimum capital amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to average assets (as defined), and common equity Tier 1, Tier 1 and total capital (as defined) to risk-weighted assets (as defined). Under Basel III rules, banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios in order to avoid limitations on distributions and certain discretionary bonus payments to executive officers. The required capital conservation buffer is 2.50%.

The federal banking agencies, including the OCC, issued a rule pursuant to The Economic Growth Regulatory Relief and Consumer Protection Act of 2018 (the “Regulatory Relief Act”) to establish for institutions with assets of less than $10 billion a “community bank leverage ratio” (the ratio of a bank’s tier 1 capital to average total consolidated assets) of 9% that qualifying institutions may elect to use in lieu of the generally applicable leverage and risk-based capital requirements under Basel III. If an election to use the community bank leverage ratio capital framework is made, a qualifying bank with less than $10 billion in assets with capital exceeding the specified community bank leverage ratio is considered compliant with all applicable regulatory capital and leverage requirements, including the requirement to be “well capitalized.” Effective July 1, 2026, the OCC revised the minimum capital for the community bank leverage ratio to 8.00%. As of June 30, 2026, the Bank had not elected to be subject to the alternative community bank leverage ratio framework.

As of June 30, 2026, the Bank met all capital adequacy requirements to which it was subject. Further, the most recent OCC notification categorized the Bank as a well capitalized institution under the prompt corrective action regulations. There have been no conditions or events since the notification that management believes have changed the Bank’s capital classification.

The actual capital amounts and ratios for the Bank are presented in the following tables (dollars in thousands):

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Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Off-Balance Sheet Arrangements. We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. The financial instruments include commitments to originate loans, unused lines of credit and standby letters of credit, which involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of condition. Our exposure to credit loss is represented by the contractual amount of the instruments. We use the same credit policies in making commitments as we do for on-balance sheet instruments.

At June 30, 2026, we had $372.5 million of commitments to originate or purchase loans, comprised of $238.2 million of commitments under commercial loans and lines of credit (including $100.0 million of unadvanced portions of commercial construction loans), $84.7 million of commitments under home equity loans and lines of credit, $42.7 million of commitments to purchase residential mortgage loans and $6.9 million of unfunded commitments under consumer lines of credit. In addition, at June 30, 2026, we had $26.5 million in standby letters of credit outstanding.

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

Impact of Inflation and Changing Prices

Our consolidated financial statements and related notes have been prepared in accordance with GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.