Ballston Spa Bancorp, Inc.

Current report (Form 8-K) · Jun 12, 2026 · Financial statements

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Jun 12, 2026

Overview Analysis Documents(10)Full text Exhibits(3)

EX-99.1 · tm2617581d1_ex99-1.htm

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EX-99.1

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tm2617581d1_ex99-1.htm

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EX-99.1 · tm2617581d1_ex99-1.htm EX-99.1 3 tm2617581d1_ex99-1.htm EXHIBIT 99.1 Exhibit 99.1 NBC BANCORP, INC. AND SUBSIDIARY Consolidated Financial Statements as of December 31, 2025 and 2024 Together with Independent Auditor’s Report NBC BANCORP, INC. AND SUBSIDIARY TABLE OF CONTENTS DECEMBER 31, 2025 AND 2024 Page INDEPENDENT AUDITOR’S REPORT 1 - 2 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets 3 Consolidated Statements of Comprehensive Income 4 Consolidated Statements of Changes in Stockholders’ Equity 6 Consolidated Statements of Cash Flows 7 Notes to Consolidated Financial Statements 8 - 41 INDEPENDENT AUDITOR’S REPORT To the Board of Directors and Stockholders of NBC Bancorp, Inc. and Subsidiary: Opinion We have audited the accompanying consolidated financial statements of NBC Bancorp, Inc. and Subsidiary, which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NBC Bancorp, Inc. and Subsidiary as of December 31, 2025 and 2024 and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of NBC Bancorp, Inc. and Subsidiary and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about NBC Bancorp, Inc. and Subsidiary’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued. Auditor’s Responsibilities for the Audit of the Financial Statements 432 North Franklin Street, #60 Syracuse, NY 13204 p (315) 476-4004 f (315) 254-2384 www.bonadio.com Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements. (Continued) ALBANY&ensp; •&ensp; BUFFALO&ensp; •&ensp; DALLAS&ensp; •&ensp; EAST AURORA&ensp; •&ensp; NEW YORK CITY&ensp; •&ensp; ROCHESTER&ensp; •&ensp; RUTLAND&ensp; •&ensp; SARASOTA&ensp; •&ensp; SYRACUSE&ensp; •&ensp; UTICA&ensp; •&ensp; VIRGINIA BEACH&ensp; •&ensp; WILMINGTON 1 INDEPENDENT AUDITOR’S REPORT (Continued) Auditor’s Responsibilities for the Audit of the Financial Statements (Continued) In performing an audit in accordance with generally accepted auditing standards, we: · Exercise professional judgment and maintain professional skepticism throughout the audit. · Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. · Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of NBC Bancorp, Inc. and Subsidiary’s internal control. Accordingly, no such opinion is expressed. · Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. · Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about NBC Bancorp, Inc. and Subsidiary’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. /s/ Bonadio & Co. LLP March 18, 2026 NBC BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 AND 2024 2025 2024 ASSETS Cash and due from banks $ 33,028,780 $ 13,455,208 Federal funds sold 454,188 135,386 Total cash and cash equivalents 33,482,968 13,590,594 Debt securities available-for-sale, at fair value 100,914,774 118,062,757 Debt securities held-to-maturity (fair value of $3,909,197 and $3,981,570, respectively) 3,783,547 3,961,052 Federal Reserve Bank stock 852,250 852,250 Federal Home Loan Bank stock 1,077,200 1,516,800 Loans, less allowance for credit losses of $3,679,678 and $4,028,458, respectively 362,675,863 384,069,378 Premises, furniture and fixtures, net 4,265,258 4,492,112 Right of use asset 1,431,580 1,562,544 Other assets 3,066,466 4,095,108 Other real estate owned - 172,968 Total assets $ 511,549,906 $ 532,375,563 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest bearing deposit accounts $ 105,287,426 $ 107,554,623 Interest bearing deposit accounts 345,785,150 352,582,221 Total deposits 451,072,576 460,136,844 Borrowed funds 12,407,257 28,315,961 Subordinated debentures 9,550,000 9,550,000 Lease liability 1,495,797 1,616,074 Accrued interest payable 553,213 534,850 Other liabilities 279,507 552,110 Total liabilities 475,358,350 500,705,839 STOCKHOLDERS' EQUITY: Common stock, $5 par value; shares 1,000,000 authorized at December 31, 2025 and 2024; issued and outstanding 473,239 at December 31, 2025 and 2024 2,366,195 2,366,195 Additional paid-in capital 17,491,445 17,491,445 Retained earnings 19,820,786 18,744,467 Accumulated other comprehensive loss (3,486,870 ) (6,932,383 ) Total stockholders' equity 36,191,556 31,669,724 Total liabilities and stockholders' equity $ 511,549,906 $ 532,375,563 The accompanying notes are an integral part of these consolidated financial statements. 3 NBC BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 2025 2024 INTEREST INCOME: Interest and fees on loans $ 20,115,079 $ 19,875,129 Interest on debt securities: Taxable 1,291,989 1,713,317 Tax exempt 613,493 620,399 Interest on federal funds sold and other interest bearing deposits 733,173 411,532 22,753,734 22,620,377 INTEREST EXPENSE: Time deposits of $250,000 or more 1,334,959 1,264,128 Other deposits 7,238,838 6,133,451 Borrowed funds and subordinated debentures 1,427,646 2,925,873 Total interest expense 10,001,443 10,323,452 Net interest income 12,752,291 12,296,925 PROVISION FOR CREDIT LOSSES Loans (350,000 ) 100,000 Unfunded commitments - - Debt securities - - Total provision for credit losses (350,000 ) 100,000 Net interest income after provision for loan losses 13,102,291 12,196,925 NONINTEREST INCOME: Service charges 445,851 413,861 Interchange fee income 932,790 957,034 Mortgage recording tax refunds - 189,054 Other noninterest income 429,154 280,587 Total noninterest income 1,807,795 1,840,536 NONINTEREST EXPENSE: Salaries and employee benefits 6,936,683 6,649,949 Premises 1,441,979 1,478,863 Computer service fees 664,576 730,536 Data processing fees 588,744 434,436 Internet banking fees 559,586 506,567 Assessments 491,577 434,478 Bank card supplies and expenses 459,427 485,314 Merger related expenses 444,727 - Professional fees 364,544 313,455 Advertising 225,445 213,110 Directors fees 217,300 211,600 Consulting fees 213,990 161,753 Stationery and supplies 144,103 118,155 Other noninterest expenses 857,410 894,953 Total noninterest expenses 13,610,091 12,633,169 INCOME BEFORE PROVISION FOR INCOME TAXES 1,299,995 1,404,292 PROVISION FOR INCOME TAXES 223,676 187,968 Net income $ 1,076,319 $ 1,216,324 The accompanying notes are an integral part of these consolidated financial statements. 4 NBC BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Continued) FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 2025 2024 COMPREHENSIVE INCOME Net Income $ 1,076,319 $ 1,216,324 Other comprehensive income, net of tax: Unrealized holding gains arising during period 4,361,407 1,660,730 Reclassification adjustment for losses included in net income - - Other comprehensive gain 4,361,407 1,660,730 Tax effect 915,894 348,754 Other comprehensive gain, net of tax 3,445,513 1,311,976 Comprehensive income $ 4,521,832 $ 2,528,300 The accompanying notes are an integral part of these consolidated financial statements. 5 NBC BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 Accumulated Other Common Additional Retained Comprehensive Stock Paid-In Capital Earnings (Loss) Income Total BALANCES, JANUARY 1, 2024 $ 2,366,195 $ 17,491,445 $ 17,646,453 $ (8,244,359 ) $ 29,259,734 Net income - - 1,216,324 - 1,216,324 Dividends - - (118,310 ) - (118,310 ) Other comprehensive gain - - - 1,311,976 1,311,976 BALANCES, DECEMBER 31, 2024 2,366,195 17,491,445 18,744,467 (6,932,383 ) 31,669,724 Net income - - 1,076,319 - 1,076,319 Other comprehensive gain - - - 3,445,513 3,445,513 BALANCES, DECEMBER 31, 2025 $ 2,366,195 $ 17,491,445 $ 19,820,786 $ (3,486,870 ) $ 36,191,556 The accompanying notes are an integral part of these consolidated financial statements. 6 NBC BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 2025 2024 CASH FLOW FROM OPERATING ACTIVITIES: Net income $ 1,076,319 $ 1,216,324 Adjustments to reconcile net income to net cash flow from operating activities: Provision for credit losses (350,000 ) 100,000 Operating lease payments (182,697 ) (177,895 ) Gain on the sale of other real estate owned (132,330 ) - Deferred income tax benefit (30,275 ) (36,166 ) Depreciation 463,718 544,553 Net amortization of bond premiums and discounts 220,790 40,645 Net amortization of right of use asset and lease liability 193,383 193,403 Decrease (increase) in accrued interest receivable 106,259 8,951 Decrease (increase) in other assets 36,763 777,049 Increase in accrued interest payable 18,363 47,607 Decrease in other liabilities (272,601 ) (516,765 ) Net cash flow from operating activities 1,147,692 2,197,706 CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from sales, maturities, calls and principal payments of available for sale debt securities 21,288,600 46,151,840 Purchase of available for sale securities - (29,708,058 ) Proceeds from maturities, calls and principal payments of held-to-maturity debt securities 930,961 1,097,183 Purchases of debt securities held to maturity (753,456 ) (365,905 ) Purchases of Federal Reserve Bank stock - (46,500 ) Redemptions of Federal Home Loan Bank Stock 439,600 535,700 Net decrease (increase) in loans 21,743,515 (998,483 ) Proceeds from the sale of other real estate 305,298 - Purchase of premises, furniture and fixtures (236,864 ) (212,866 ) Net cash flow from investing activities 43,717,654 16,452,911 CASH FLOW FROM FINANCING ACTIVITIES: Net (decrease) increase in deposits (9,064,268 ) 27,202,678 Advances of long-term borrowings 331,510 12,611,647 Net change in short-term borrowings (16,240,214 ) (55,000,000 ) Dividends paid - (118,310 ) Net cash flow from financing activities (24,972,972 ) (15,303,985 ) CHANGE IN CASH AND CASH EQUIVALENTS 19,892,374 3,346,632 CASH AND CASH EQUIVALENTS - beginning of year 13,590,594 10,243,962 CASH AND CASH EQUIVALENTS - end of year $ 33,482,968 $ 13,590,594 SUPPLEMENTARY CASH FLOWS INFORMATION: $ 549,402 $ 446,268 Income taxes paid Interest paid $ 9,983,080 $ 10,191,442 NON-CASH DISCLOSURES: Transfer of loans to other real estate owned and repossessed assets $ - $ 172,968 The accompanying notes are an integral part of these consolidated financial statements. 7 NBC BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations NBC Bancorp, Inc. (the Corporation) provides a full range of banking services to individual and small business customers through its wholly owned subsidiary, The National Bank of Coxsackie. NBC Bancorp, Inc. and its wholly owned subsidiary, The National Bank of Coxsackie (collectively, the “Bank”), operate in Coxsackie, New York, with branches in Athens, Cairo, Greenville, Middleburgh, Ravena, West Coxsackie, and Glenmont, New York. The Bank also maintains a loan production office in Latham, New York. The Corporation and the Bank are subject to the regulations of certain Federal agencies and undergo periodic examinations by those regulatory authorities. Basis of Consolidation The accompanying consolidated financial statements include the accounts of the Bank. Significant intercompany accounts and transactions have been eliminated from the consolidated financial statements. Estimates In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and income and expenses for the period. Actual results could differ significantly from those estimates, and such differences, may be significant. Cash and Cash Equivalents Cash and cash equivalents include cash, deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. The Bank may be required to maintain a reserve fund in cash or on deposit with the Federal Reserve Bank. As of December 31, 2025 and 2024, there was no required reserve. The Bank may also be required to maintain clearing balance funds on deposit with the Federal Reserve Bank. There was no required minimum clearing balance at December 31, 2025 and 2024. Presentation of Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, and federal funds sold. Generally, federal funds are purchased or sold for one day periods. Debt Securities Debt securities that management has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and recorded at amortized cost. Securities not classified as held-to-maturity are classified as "available-for-sale" and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. 8 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Debt Securities (Continued) Interest and dividend income is recognized when earned. Purchase premiums and discounts are recognized in interest income using the interest method. Purchase premiums on callable debt securities are amortized to the first call date while all other premiums and discounts are amortized over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. A debt security is placed on nonaccrual status at the time any principal or interest payments become delinquent. A security is considered to be delinquent once it is 90 days contractually past due under the terms of the agreement. Interest accrued but not received for a security placed on non-accrual is reversed against interest income. Debt securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain debt securities, it is at least reasonably possible that changes in the values of debt securities will occur in the near term and the amounts reported in the accompanying consolidated financial statements. Allowance for Credit Losses – Held-to-Maturity Securities Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. The Bank’s portfolio for HTM securities is primarily made up of New York State local municipal bonds that are not rated. The accrued interest receivable on held-to-maturity debt securities totaled $37,116 and $37,840 at December 31, 2025 and 2024, respectively, and is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information, if available, and payment history. The Bank determined that no allowance for credit losses was required on its HTM portfolio as of December 31, 2025 and 2024. Allowance for Credit Losses – Available-For-Sale Securities The impairment model for AFS debt securities differs from the CECL approach utilized for HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. For available-for-sale debt securities in an unrealized loss position, the Bank assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. 9 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Allowance for Credit Losses – Available-For-Sale Securities (Continued) Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Debt securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain debt securities, it is at least reasonably possible that changes in the values of debt securities will occur in the near term and the amounts reported in the accompanying consolidated financial statements. The balance of accrued interest receivable for available-for-sale securities was $272,470 and $334,177 as of December 31, 2025 and 2024, respectively, and was excluded from the estimate of credit losses. Restricted Stock The Bank has restricted investments in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) stocks. Federal law requires a member institution to hold stock of its district FRB and FHLB according to predetermined formulas. The stock is carried at cost and periodically reviewed for impairment based on ultimate recovery of par value. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are stated at their outstanding unpaid principal balances, less the allowance for credit losses. Interest income is accrued on the unpaid principal balances using the effective interest method. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The loans portfolio is segmented into residential real estate mortgages, commercial and consumer loans. Commercial loans consist of commercial real estate and other commercial loans. Consumer loans include home equity and junior liens and other consumer loans. The risk characteristics within the loan portfolio vary depending on the loan segment. Consumer loans generally are repaid from personal sources of income. Risks associated with consumer loans primarily include general economic risks such as declines in the local economy creating higher rates of unemployment. Those conditions may also lead to a decline in collateral values should the Bank be required to foreclose on or repossess the collateral securing consumer loans. These economic risks also impact the commercial loan segment, however commercial loans are considered to have greater risk than consumer loans as the primary source of repayment is from the cash flow of the business customer. Real estate loans, including residential mortgages, commercial real estate loans and home equity loans comprise approximately 97% and 95% of the portfolio at December 31, 2025 and 2024, respectively. Loans secured by real estate provide the best collateral protection and thus significantly reduce the inherent risk in the portfolio. Non-accrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received within thirty days of the payment due date. 10 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Non-accrual and Past Due Loans (Continued) For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan may be currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on non-accrual status, unpaid interest is reversed and charged to interest income. Interest received on non-accrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. When future collectability of the recorded loan balance is expected, interest income may be recognized on a cash basis. In the case where a non-accrual loan had been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Cash interest receipts in excess of that amount are recorded as recoveries to allowance for loan losses until prior charge-offs have been fully recovered. Modifications for Debtors Experiencing Financial Difficulty The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty, if applicable. The Bank uses a weighted average remaining life methodology to determine the allowance for credit losses. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Bank modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, the Bank will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. 11 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Allowance for Credit Losses on Off-Balance Sheet Credit Exposures The Bank maintains a separate reserve for credit losses on off-balance-sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheet. The reserve for credit losses on off balance-sheet credit exposures is adjusted as a provision for credit losses in the income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Bank's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Bank has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by the Bank or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. At December 31, 2025 and 2024, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was approximately $177,000 and no provision for credit losses was recorded during the year. Allowance for credit losses on loans The allowance for credit losses is a valuation account that is deducted the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience is generally the starting point for estimating expected credit losses. The Bank 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 is used. The Banks historical loss experience is supplemented with peer information across all loan pools. Peer selection is based on a review of institutions within the state of New York and asset size between $300 million and $1 billion. Finally, the Bank considers forecasts about future economic conditions that are reasonable and supportable. Significant management judgment is required at various points in the measurement process. The Bank utilizes the remaining life methodology on all pools. The calculated historical loss rates are adjusted for forecasted economic conditions. These forecasts are applied over a period that management has determined to be reasonable and supportable. Beyond the period over which management can develop or source a reasonable and supportable forecast, the model will revert to the long-term average historical loss using a straight-line, time-based methodology. 12 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Allowance for credit losses on loans (Continued) After quantitative considerations, management applies additional qualitative adjustments so that the allowance for credit losses is reflective of the estimate of lifetime losses that exist in the loan portfolio at the balance sheet date. Qualitative considerations include limitations inherent in the quantitative model; trends experienced in nonperforming and delinquent loans; changes in value of underlying collateral; changes in lending policies and procedures; nature and composition of loans; portfolio concentrations that may affect loss experience across one or more components of the portfolio; the experience, ability and depth of lending management and staff; the Bank’s credit review system; and the effect of external factors; such as competition, legal and regulatory requirements. The allowance for credit losses is measured on a collective pool basis with receivables that have similar risk characteristics. The Bank has developed segmentation based upon federal call report segmentation and subsegmented commercial mortgages that are categorized as 1-4 family residential mortgages in the federal call report. Loans that do not share risk characteristics and meet materiality criteria are evaluated on an individual basis and are excluded from the pooled evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. If the loan is not collateral dependent, the allowance for credit losses related to individually assessed loans is based on discounted expected cash flows using the loan’s initial effective interest rate. The allowance for credit losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and it is recorded as a reduction of loans. The allowance is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for credit losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans are charged against the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weakness may result in deterioration of the repayment prospects. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of debt. They include loans that are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as loss are considered uncollectible and are charged to the allowance for credit losses. Loans that are not classified are rated as pass. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for credit losses and may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for credit losses is adequate. 13 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Accrued Interest Receivable Accrued interest receivable balances are presented separately within other assets balance sheet line item. The Company has excluded interest receivable that is included in amortized cost of financing receivables from related disclosures requirements and accrued interest receivable is written off by reversing interest income. For loans, write off typically occurs upon becoming over 90 to 120 days past due and therefore the amount of such write offs are immaterial. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities. The balance of accrued interest receivable for loans at December 31, 2025 and 2024 $1,061,591 and $1,105,419, respectively. The amounts are included in other assets. Premises, Furniture and Fixtures Premises, furniture and fixtures are stated on the basis of cost less accumulated depreciation. Depreciation is charged to current operations using the straight-line method over the estimated useful lives of the assets. Buildings have an estimated useful life of 39 years and furniture and equipment have estimated useful lives of 5 to 7 years. Maintenance and repairs are charged to operations as incurred. Leases Options to renew or terminate the lease are recognized as part of the right-of-use asset and lease liability when it is reasonably certain the options will be exercised. The lease agreements contain both lease and non-lease components, such as maintenance costs, which are accounted for separately. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. In addition, the Bank does not recognize right-of-use assets or lease liabilities for short-term leases with a term of twelve months or less, which are also expensed as incurred. Foreclosed Real Estate Real estate properties acquired through foreclosure or by deed in lieu of loan foreclosure are initially recorded at fair value less estimated selling cost at the date of physical possession. Physical possession of residential real estate property collateralizing a residential mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses. After foreclosure, property held for sale is carried at the lower of the new cost basis or fair value less cost to sell. Costs of significant property improvements are capitalized, whereas costs relating to holding property are expensed. Valuations are periodically performed by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to its fair value less cost to sell. As of December 31, 2025 and 2024 the balance of other real estate owned was $0 and $172,968, respectively. Dividend Restriction Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Corporation or by the Corporation to the stockholders. 14 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Mortgage Recording Tax The Mortgage Recording Tax (MRT) is a tax paid when a mortgage is recorded by the Bank at a respective county office. For New York State (NYS) purposes, a dollar for dollar tax credit is allowed for the special additional mortgage recording tax paid on residential mortgages if the real property is located within an eligible county. The special additional mortgage recording tax credits may be used to reduce business income tax or capital base tax, but shall not reduce the tax below the fixed dollar minimum. Effective for tax years beginning on or after January 1, 2015, a taxpayer who has a mortgagee paid special additional mortgage recording tax on residential mortgages, may elect to treat any unused portion of the credit as an overpayment of tax to be credited to future periods or refunded, instead of as a carryforward. Any carryforward credit from a prior period is not eligible to be refunded. Prevailing practice in financial reporting for these credits is that a claim for refund should be recognized only when the claim is probable as it is defined in FASB ASC 450, Contingencies. Accordingly, if the Bank feels that it is probable that it will recover amounts previously paid via the MRT, then the bank should recognize a receivable for amounts to be received for the amounts paid to be recovered via the MRT refund. These refunds are however subject to regular audit by NYS and therefore any uncertainties related to qualifying for the MRT refund should be assessed as to whether the claim for the refund is probable. The Bank does not believe that the claim process adequately meets the probably threshold and therefore does not recognize the MRT refund until it is received. The refund is reported on the Mortgage Reporting Tax Refund line item within the Noninterest Income section of the Consolidated Statements of Comprehensive Income. Advertising Costs The Bank expenses advertising costs as incurred. Advertising expenses were approximately $225,000 and $213,000 for the years ended December 31, 2025 and 2024. Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the financial reporting and income tax basis of available-for-sale securities, the allowance for credit losses, deferred loan origination fees, premises and equipment. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in the laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Interest and penalties assessed by taxing authorities, if any, are included in the provision for income taxes. Net Income Per Common Share The Corporation has a simple capital structure. Net income and dividends per share are computed on the weighted average number of shares outstanding which was 473,239 in 2025 and 2024. Basic earnings per share was $2.27 and $2.57 for the years ended December 31, 2025 and 2024, respectively. There were no dilutive shares for the years ended December 31, 2025 and 2024. 15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’ equity section of the statements of financial condition, such items along with net income are components of comprehensive income. 2. DEBT SECURITIES The amortized cost and fair value of debt securities at December 31 are as follows: 2025 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value AVAILABLE-FOR-SALE: U.S. Treasuries $ 48,831,226 $ - $ (1,559,898 ) $ 47,271,328 U.S. Government agencies 9,080,013 - (309,652 ) 8,770,361 Residential mortgage backed 8,395,749 34,187 (272,686 ) 8,157,250 State and local governments 39,021,546 - (2,305,711 ) 36,715,835 $ 105,328,535 $ 34,187 $ (4,447,947 ) $ 100,914,774 HELD-TO-MATURITY: Corporate $ 1,000,000 $ - $ - $ 1,000,000 State and local governments 2,783,547 126,358 (708 ) 2,909,197 $ 3,783,547 $ 126,358 $ (708 ) $ 3,909,197 2024 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value AVAILABLE-FOR-SALE U.S. Treasuries $ 54,726,697 $ - $ (3,613,259 ) $ 51,113,438 U.S. Government agencies 20,123,905 695 (913,023 ) 19,211,577 Residential mortgage backed 12,267,686 8 (623,799 ) 11,643,895 State and local governments 39,719,636 - (3,625,789 ) 36,093,847 $ 126,837,924 $ 703 $ (8,775,870 ) $ 118,062,757 HELD-TO-MATURITY: Corporate $ 1,000,000 $ - $ - $ 1,000,000 State and local governments 2,961,052 63,971 (43,453 ) 2,981,570 $ 3,961,052 $ 63,971 $ (43,453 ) $ 3,981,570 16 2. DEBT SECURITIES (Continued) All U.S. Government, U.S. Government agencies and residential mortgage-backed securities are issued by U.S. government agencies or U.S. government sponsored enterprises. The following tables set forth the Bank’s investment in securities with unrealized losses of less than twelve months and unrealized losses of twelve months or more at December 31: 2025 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses AVAILABLE-FOR-SALE: U.S. Treasuries $ - $ - $ 47,271,328 $ 1,559,898 $ 47,271,328 $ 1,559,898 U.S. Government agencies - - 8,770,362 309,652 8,770,362 309,652 Residential mortgage backed - - 5,711,664 272,686 5,711,664 272,686 State and local governments 150,306 27 36,565,530 2,305,684 36,715,836 2,305,711 $ 150,306 $ 27 $ 98,318,884 $ 4,447,920 $ 98,469,190 $ 4,447,947 2024 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses AVAILABLE-FOR-SALE: U.S. Treasuries $ - $ - $ 51,113,438 $ 3,613,259 $ 51,113,438 $ 3,613,259 U.S. Government agencies - - 17,212,800 913,023 17,212,800 913,023 Residential mortgage backed 3,149,682 31,592 8,493,851 592,207 11,643,533 623,799 State and local governments 355,649 860 35,738,197 3,624,929 36,093,846 3,625,789 $ 3,505,331 $ 32,452 $ 112,558,286 $ 8,743,418 $ 116,063,617 $ 8,775,870 As of December 31, 2025 there were 1 and 133 AFS securities with an unrealized loss of less than 12 months and 12 months or more, respectively. At December 31, 2024 there were 5 and 151 AFS securities with an unrealized loss of less than 12 months and 12 months or more, respectively. Unrealized losses on these available-for-sale debt securities have not been recognized into earnings because the issuers of the securities are of high credit quality, as these securities are backed by U.S. government agencies, U.S. sponsored enterprises, or are general obligation bonds issued by New York State municipalities. Therefore, management has determined these securities to be of high credit quality, management does not intend to sell, and 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 bonds. The fair values are expected to recover as the bonds approach maturity. The Bank did not record any credit losses on available-for-sale securities during the year ended December 31, 2025 or 2024. 17 2. DEBT SECURITIES (Continued) The amortized cost and fair value of debt securities at December 31, 2025, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations without call or prepayment penalties. Available-for-Sale Held-to-Maturity Amortized Fair Amortized Fair Cost Value Cost Value Due in one year or less $ 26,702,632 $ 26,363,000 $ 110,953 $ 112,543 Due from one year to five years 69,441,898 66,209,826 2,230,460 2,277,578 Due from five years to ten years 9,184,005 8,341,948 1,096,019 1,168,553 Due after ten years - - 346,115 350,523 $ 105,328,535 $ 100,914,774 $ 3,783,547 $ 3,909,197 The Bank had no gross realized gains or gross realized losses during the year ended December 31, 2025 or 2024. The carrying amount of debt securities pledged to secure certain lines of credit with the FRB amounted to $0 at December 31, 2025 and approximately $35,400,000 at December 31, 2024. The carrying amount of debt securities pledged to secure certain deposits amounted to approximately $42,221,000 and $61,742,000 at December 31, 2025 and 2024, respectively. 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES Loan classification as of December 31 is as follows: 2025 2024 Residential real estate mortgage $ 223,819,306 $ 244,308,524 Commercial real estate 123,118,719 117,572,431 Other commercial 7,083,153 11,938,039 Home equity and junior liens 7,802,246 7,550,224 Other consumer 4,532,117 6,728,618 Total loans 366,355,541 388,097,836 Less: Allowance for credit losses (3,679,678 ) (4,028,458 ) Loans, net $ 362,675,863 $ 384,069,378 Net deferred loan origination fees totaled approximately $121,000 and $164,000 at December 31, 2025 and 2024, respectively, were included in total loans. 18 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) As of December 31, 2025 and 2024, residential real estate mortgages with a carrying balance of approximately $130,587,000 and $148,043,000, respectively, have been pledged by the Bank to the FHLBNY under a blanket collateral agreement to secure the Bank’s line of credit and term borrowings. Additionally, at December 31, 2025 and 2024, commercial real estate loans with a carrying balance of approximately $49,253,000 and $51,504,000, respectively, were pledged to the FHLBNY under the same agreement. As of December 31, 2025 and 2024 commercial real estate loans with a carrying balance of approximately $56,939,000 and $55,688,000, respectively, have been pledged to the Federal Reserve Bank. At December 31, 2025 and 2024, the recorded investment of residential mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was approximately $91,000 and $409,000, respectively. At December 31, 2025 and 2024, the recorded investment of commercial mortgage loans secured by commercial real estate for which formal foreclosure proceedings were in process was approximately $209,000 and $752,000, respectively. The following tables present the classes of the loan portfolio summarized by the pass rating and the classified ratings of special mention, substandard and doubtful within the Bank’s internal risk rating system at December 31, 2025 and 2024. 2025 Special Pass Mention Substandard Doubtful Total Commercial real estate $ 110,728,824 $ 48,108 $ 12,341,787 $ - $ 123,118,719 Other commercial $ 6,981,569 $ - $ 101,584 $ - $ 7,083,153 $ 117,710,393 $ 48,108 $ 12,443,371 $ - $ 130,201,872 Non Performing Performing Total Residential real estate mortgage $ 222,571,238 $ 1,248,068 $ 223,819,306 Home equity and junior liens 7,802,246 - 7,802,246 Other consumer 4,463,638 68,479 4,532,117 $ 234,837,122 $ 1,316,547 $ 236,153,669 The increase in substandard loans over the prior year relates to one larger credits that was rated substandard during the current year. 19 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) 2024 Special Pass Mention Substandard Doubtful Total Commercial real estate $ 107,148,954 $ 4,861,498 $ 5,561,979 $ - $ 117,572,431 Other commercial $ 11,693,869 $ 203,640 $ 40,530 $ - $ 11,938,039 $ 118,842,823 $ 5,065,138 $ 5,602,509 $ - $ 129,510,470 Non Performing Performing Total Residential real estate mortgage $ 243,035,693 $ 1,272,831 $ 244,308,524 Home equity and junior liens 7,550,224 - 7,550,224 Other consumer 6,550,777 177,841 6,728,618 $ 257,136,694 $ 1,450,672 $ 258,587,366 There were no loans classified as loss at December 31, 2025 and 2024. The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by past due status as of December 31, 2025 and 2024: 2025 Greater than 90 Loans >90 30-59 Days 60-89 Days Days Past Total Past Days and Past Due Past Due Due Due Current Total Loans Accruing Residential real estate mortgage $ 765,359 $ 530,616 $ 749,207 $ 2,045,182 $ 211,774,124 $ 223,819,306 $ - Commercial real estate 5,985,153 301,024 - 6,286,177 116,832,542 123,118,719 - Other commercial - - - - 7,083,153 7,083,153 - Home equity and junior liens 61,700 - - 61,700 7,740,546 7,802,246 - Other consumer 67,805 67,760 - 135,565 4,396,552 4,532,117 - $ 6,880,017 $ 899,400 $ 749,207 $ 8,528,624 $ 357,826,917 $ 366,355,541 $ - 2024 Greater than 90 Loans >90 30-59 Days 60-89 Days Days Past Total Past Days and Past Due Past Due Due Due Current Total Loans Accruing Residential real estate mortgage $ 1,254,999 $ 246,079 $ 380,096 $ 1,881,174 $ 242,427,350 $ 244,308,524 $ - Commercial real estate 243,743 1,238,752 727,928 2,210,423 115,362,008 117,572,431 - Other commercial 20,219 - 177,841 198,060 11,739,979 11,938,039 - Home equity and junior liens - - - - 7,550,224 7,550,224 - Other consumer - - - - 6,728,618 6,728,618 - $ 1,518,961 $ 1,484,831 $ 1,285,865 $ 4,289,657 $ 383,808,179 $ 388,097,836 $ - 20 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) Information pertaining to changes in the allowance for credit losses for the years ended December 31, 2025 and 2024 and the allocation of the allowance for credit losses and balances of the allowance for credit losses and loans based on individual and collective impairment evaluation by loan portfolio class as of December 31, 2025 and 2024 are as follows: 2025 Residential real Commercial real Other Home equity and estate mortgage estate commercial junior liens Other consumer Unallocated Total Allowance for credit losses: Beginning Balance $ 2,158,956 $ 1,167,061 $ 122,658 $ 93,526 $ 117,448 $ 368,809 $ 4,028,458 Loans charged off - - - - (214,271 ) - (214,271 ) Recoveries 7,781 - 2,376 1,975 203,359 - 215,491 Provisions for loan losses (264,230 ) 142,130 (44,978 ) (7,537 ) (29,104 ) (146,281 ) (350,000 ) Ending balance $ 1,902,507 $ 1,309,191 $ 80,056 $ 87,964 $ 77,432 $ 222,528 $ 3,679,678 2024 Residential real Commercial real Other Home equity and estate mortgage estate commercial junior liens Other consumer Unallocated Total Allowance for credit losses: Beginning Balance $ 2,802,240 $ 789,717 $ 105,451 $ 94,645 $ 141,049 $ - $ 3,933,102 Loans charged off - - - - (26,857 ) - (26,857 ) Recoveries - - 2,410 5,500 14,303 - 22,213 Provisions for loan losses (643,284 ) 377,344 14,797 (6,619 ) (11,047 ) 368,809 100,000 Ending balance $ 2,158,956 $ 1,167,061 $ 122,658 $ 93,526 $ 117,448 $ 368,809 $ 4,028,458 21 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) The following table provides loans on nonaccrual status. In connection with the adoption of ASC 326, nonaccrual loans may have an allowance for credit losses or a negative allowance for credit losses from expected recoveries of amounts previously written off. Nonaccrual loans may not have an allowance for credit losses if the loss expectations are zero given solid collateral value. Amortized cost Nonaccrual loans without related allowance for credit Nonaccrual loans losses Recognized interest income December 31, 2025 Residential real estate mortgage $ 1,248,067 $ 1,038,959 $ 264,211 Commercial real estate - - - Other commercial - - - Home equity and junior liens - - - Other consumer 68,479 68,479 12,641 Total $ 1,316,546 $ 1,107,438 $ 276,852 December 31, 2024 Residential real estate mortgage $ 1,272,831 $ 922,751 $ 53,902 Commercial real estate 751,803 - 23,875 Other commercial - - - Home equity and junior liens - - - Other consumer 177,841 177,841 - Total $ 2,202,475 $ 1,100,592 $ 77,777 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. Loans considered collateral-dependent were as follows: 2025 Amortized Cost Collateral type Real estate: Residential real estate mortgage $ 195,126 Residential real estate Commercial real estate - Commercial real estate Total real estate $ 195,126 2024 Amortized Cost Collateral type Real estate: Residential real estate mortgage $ 326,410 Residential real estate Commercial real estate 2,139,716 Commercial real estate Total real estate $ 2,466,126 As of December 31, 2025 there were no modifications made to borrowers experiencing financial difficulty and immaterial amount of modifications were made as of December 31, 2024. 22 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) The Bank has developed an internal loan grading system to evaluate and quantify the Bank’s commercial loan portfolio with respect to quality and risk. The system focuses on, among other things, financial strength of borrowers, experience and depth of borrower’s management, primary and secondary sources of repayment, payment history, nature of the business and outlook on particular industries. Pass - Loans graded as Pass encompass all loans not graded as Loss, Doubtful, Substandard or Special Mention. Pass loans are in compliance with loan covenants and payments are generally made as agreed. Pass loans range from superior quality to fair quality. Special Mention - A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. They pose elevated risk, but their weakness does not yet justify a substandard classification. Although a special mention asset has a higher probability of default than a pass asset, its default is not imminent. Special mention is not a compromise between pass and substandard and should not be used to avoid exercising such judgment. Substandard - A substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. Substandard assets have a high probability of payment default, or they have other well-defined weaknesses. They require more intensive supervision by bank management. Loss – A loan classified as loss is considered uncollectible and of such little value that their continuance as bankable assets are not warranted. The following grading systems below are used to rate residential and consumer loans. Performing and Non-performing – A loan is defined as non-performing if it is 90 days past due or on non-accrual status, performing loans are less than 90 days past due and not nonaccrual. 23 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) The following tables present the loans to customers as of December 31, 2025 and 2024, based on year of origination within each credit quality indicator: At December 31, 2025 2025 2024 2023 2022 Prior Total Residential real estate Performing $ 5,307,340 $ 6,336,047 $ 29,422,583 $ 60,937,546 $ 120,567,722 $ 222,571,238 Non performing - - - - 1,248,068 1,248,068 Total residential real estate $ 5,307,340 $ 6,336,047 $ 29,422,583 $ 60,937,546 $ 121,815,790 $ 223,819,306 Current period net recoveries $ - $ - $ - $ - $ 7,781 $ 7,781 Commercial real estate Pass $ 16,420,487 $ 14,728,235 $ 33,318,543 $ 20,147,659 $ 26,113,900 $ 110,728,824 Special Mention - - - - 48,108 48,108 Substandard - - 6,932,689 - 5,409,098 12,341,787 Total commercial real estate $ 16,420,487 $ 14,728,235 $ 40,251,232 $ 20,147,659 $ 31,571,106 $ 123,118,719 Other commercial Pass $ 1,617,577 $ 2,045,745 $ 1,139,919 $ 514,975 $ 1,663,353 $ 6,981,569 Special Mention - - - - - - Substandard - - - 46,149 55,435 101,584 Total other commercial $ 1,617,577 $ 2,045,745 $ 1,139,919 $ 561,124 $ 1,718,788 $ 7,083,153 Current period net recoveries $ - $ - $ - $ - $ 2,376 $ 2,376 Home equity and junior lien Performing $ 1,283,953 $ 904,252 $ 680,451 $ 1,341,892 $ 3,591,698 $ 7,802,246 Current period net recoveries $ - $ - $ - $ - $ 1,975 $ 1,975 Other consumer Performing $ 1,112,448 $ 1,323,790 $ 1,291,395 $ 559,856 $ 244,628 $ 4,532,117 Non performing - - - - - - Total other consumer $ 1,112,448 $ 1,323,790 $ 1,291,395 $ 559,856 $ 244,628 $ 4,532,117 Current period gross write-offs $ 5,382.00 $ 2,804 $ 206,085 $ - $ 214,271 Current period recoveries - - 200,462 - 2,897 203,359 Current period net (write-offs) recoveries $ (5,382.00 ) $ (2,804 ) $ (5,623 ) $ - $ 2,897 $ (10,912 ) Total Loans $ 25,741,805 $ 25,338,069 $ 72,785,580 $ 83,548,077 $ 158,942,010 $ 366,355,541 24 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) At December 31, 2024 2024 2023 2022 2021 Prior Total Residential real estate Performing $ 6,808,280 $ 33,586,282 $ 65,497,275 $ 58,559,559 $ 78,584,297 $ 243,035,693 Non performing - - - 697,441 575,390 1,272,831 Total residential real estate $ 6,808,280 $ 33,586,282 $ 65,497,275 $ 59,257,000 $ 79,159,687 $ 244,308,524 Commercial real estate Pass $ 11,693,554 $ 42,743,567 $ 22,200,495 $ 6,007,176 $ 24,504,162 $ 107,148,954 Special Mention - - - 1,666,966 3,194,532 4,861,498 Substandard - 183,358 - 1,882,454 3,496,167 5,561,979 Total commercial real estate $ 11,693,554 $ 42,926,925 $ 22,200,495 $ 9,556,596 $ 31,194,861 $ 117,572,431 Other commercial Pass $ 6,216,218 $ 1,776,623 $ 1,225,901 $ 1,268,486 $ 1,206,641 $ 11,693,869 Special Mention - - - - 203,640 203,640 Substandard - - 40,530 - - 40,530 Total other commercial $ 6,216,218 $ 1,776,623 $ 1,266,431 $ 1,268,486 $ 1,410,281 $ 11,938,039 Current period net recoveries $ - $ - $ - $ - $ 2,410 $ 2,410 Home equity and junior lien Performing $ 950,313 $ 762,141 $ 1,741,110 $ 659,891 $ 3,436,769 $ 7,550,224 Current period net recoveries $ - $ - $ - $ - $ 5,500 $ 5,500 Other consumer Performing $ 2,315,764 $ 2,269,978 $ 1,300,580 $ 371,178 $ 293,277 $ 6,550,777 Non performing - 177,841 - - - 177,841 Total other consumer $ 2,315,764 $ 2,447,819 $ 1,300,580 $ 371,178 $ 293,277 $ 6,728,618 Current period gross write-offs $ - $ 892 $ 24,173 $ - $ 1,792 $ 26,857 Current period recoveries - - 898 - 13,405 14,303 Current period net (write-offs) recoveries $ - $ (892 ) $ (23,275 ) $ - $ 11,613 $ (12,554 ) Total Loans $ 27,984,129 $ 81,499,790 $ 92,005,891 $ 71,113,151 $ 115,494,875 $ 388,097,836 25 4. PREMISES, FURNITURE AND EQUIPMENT Major classifications of these assets are summarized as follows at December 31: 2025 2024 Land $ 803,149 $ 803,149 Buildings 7,326,157 7,283,384 Furniture and equipment 5,640,639 5,440,671 13,769,945 13,527,204 Less: Accumulated depreciation 9,504,687 9,035,092 $ 4,265,258 $ 4,492,112 Depreciation expense amounted to approximately $464,000 and $545,000 in 2025 and 2024, respectively. 5. PROVISION FOR INCOME TAXES The components of the income tax expense are as follow for the years ended December 31: 2025 2024 Current tax expense: Federal $ 209,211 $ 181,638 State 44,740 42,496 253,951 224,134 Deferred tax benefit: Federal (30,275 ) (36,166 ) State - - (30,275 ) (36,166 ) Total income tax expense $ 223,676 $ 187,968 A reconciliation of the Bank’s effective tax rate for the years ended December 31, 2025 and 2024 are as follows: Rate Reconciliation 2025 2024 2025 $ % of income % of income Federal income tax at statutory rate 274,927 21.0 % 21.0 % State and Local Income Tax, Net of Federal Benefit State tax, net of federal tax benefit (194,446 ) (14.9 ) (15.0 ) Change in Valuation Allowance Valuation Allowance – State 229,791 17.6 17.4 Nontaxable or nondeductible items Tax Exempt Income (101,933 ) (7.8 ) (7.7 ) Other 15,337 1.1 (2.3 ) Effective tax rates 223,676 17.0 % 13.4 % 26 5. PROVISION FOR INCOME TAXES (Continued) Cash paid for income taxes for the year ended December 31, 2025 is as follows: 2025 Federal $ 190,000 State 86,000 Total income tax expense $ 276,000 Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions: State New York $ 86,000 The Bank had gross deferred tax assets and gross deferred tax liabilities as follows as of December 31: 2025 2024 Deferred tax assets: Allowance for credit losses $ 961,684 $ 1,052,838 NYS NOL 839,559 625,101 Net unrealized loss on available-for-sale debt securities 926,891 1,842,785 Transaction costs 108,481 - Other 98,860 98,297 Total deferred tax assets 2,935,475 3,619,021 Deferred tax liabilities: Bond amortization 187,588 173,715 Depreciation 111,058 152,649 Total deferred tax liabilities 298,646 326,364 Net deferred tax assets before valuation allowance 2,636,829 3,292,657 Less: Valuation allowance NY State (1,023,495 ) (793,703 ) Net deferred tax assets $ 1,613,334 $ 2,498,954 The Bank is no longer subject to examination by Federal and State taxing authorities prior to the year ended December 31, 2019. New York State tax law governing community banks permits a permanent tax deduction related to interest income, ultimately resulting in the Bank’s corporate tax calculation to be based upon capital (as opposed to income) for the foreseeable future. Consequently, the Bank has established a full valuation allowance against its New York State net deferred tax asset position at December 31, 2025 and 2024. This valuation allowance increased by approximately $230,000 to $1,023,000 at December 31, 2025, from approximately $794,000 at December 31, 2024. At December 31, 2025 and 2024, the Bank had New York State NOL carry-forwards of approximately $16,350,000 and $12,175,000, respectively, equating to approximately $840,000 and $625,000 in deferred tax assets, all of which have been fully reserved as part of the Bank’s valuation allowance. The New York State NOL carry-forwards begin to expire in 2035. The Bank’s deferred tax assets are recorded within other assets. 27 6. EMPLOYEES’ RETIREMENT 401(K) PLAN Effective January 1, 2024 the Bank established a Safe Harbor 401(k) plan. Contributions to the plan will be made on behalf of eligible employees in accordance with the plan’s terms and conditions. A safe harbor contribution of 3% is made to eligible employees for the year. Prior to January 1, 2024, the Bank maintained a 401(k) plan whereby the Bank matched one-half of employee contributions to the plan up to a maximum of six percent of an employee’s salary. The Bank incurred approximately $111,731 and $115,100 of 401(k) matching contributions during the years ended December 31, 2025 and 2024, respectively. Safe Harbor contributions were approximately $307,000 and $154,000 as of December 31, 2025 and 2024, respectively. The Safe Harbor plan automatically enrolls new employees after six months of service unless they opt out. Employees are fully vested in employee safe harbor contributions and the employer match is fully vested after three-years. 7. LEASES The Bank leases land and a building under a long- term lease agreement with a related party. The lease is an operating lease, with a term of 20 years that began on July 1, 2019, without any renewal options and expires on June 30, 2039. Additionally, the lease did not include any residual value guarantees or covenants. The Bank leases a building for a loan production office. The lease is an operating lease, with a term of 10 years that commenced on June 1, 2023 and expires June 1, 2033. There is a five year extension option at the end of the term. The operating lease cost was approximately $193,000 during the years ended December 31, 2025 and 2024. The extension term is for an additional five years. Right-of-use asset represents the Bank’s right to use an underlying asset for the lease term and lease liability represents the Bank’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based upon the estimated present value of lease payments over the lease term. For the one lease, the Bank used its incremental secured borrowing rate as of the lease commencement date to calculate the present value of lease payments when the rate implicit in a lease is not known. The Bank’s incremental secured borrowing rate is based upon the Federal Home Loan Bank of New York (FHLBNY) advance rate, adjusted for the lease term and other factors, as deemed appropriate. 28 7. LEASES (Continued) Supplemental information related to the leases at December 31 was as follows: 2025 2024 Right-of-use asset: Operating lease $ 1,431,580 $ 1,562,544 Lease liability: Operating lease $ 1,495,797 $ 1,616,074 Operating cash flows paid for operating lease $ 182,697 $ 177,895 Operating lease weighted average remaining lease term 9.8 Years 10.8 Years Operating lease weighted average discount rate 4.02 % 4.02 % The undiscounted cash flows of the operating lease liabilities are as follows at December 31, 2024: 2026 $ 185,407 2027 188,171 2028 190,991 2029 196,226 Thereafter 1,042,349 Total undiscounted cash flows 1,803,144 Less: net present value of adjustments (307,347 ) Lease liability $ 1,495,797 8. RELATED PARTY TRANSACTIONS In the ordinary course of business, the Bank has transactions, including loans and deposit accounts, with its executive officers and directors, and their affiliates. These transactions were on substantially the same terms, including interest rates and collateral, as those prevailing at the time of comparable transactions with other persons, and did not involve more than a normal risk of collectability or present any other unfavorable features. The aggregate amount of loans to such related parties at December 31, 2025 and 2024 was approximately $2,830,000 and $3,083,000, respectively. During 2025, there were no new loans to such related parties and during 2024, there was one new loan to such related parties and repayments amounted to approximately $253,000. The Bank held deposits of approximately $4,237,000 and $8,421,000 for related parties at December 31, 2025 and 2024, respectively. The lessor for the lease described in Note 7 is a company owned by a board member. 9. COMMITMENTS AND CONTINGENCIES Financial Instruments with Off-Balance-Sheet Risk The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated financial statements. 29 9. COMMITMENTS AND CONTINGENCIES (Continued) The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments summarized as follows at December 31, 2025 and 2024: The Bank had the following outstanding commitments at December 31: 2025 2024 Commitments to extend credit: Home equity loan commitments $ 6,800,846 $ 6,575,394 Commercial and other commitments 4,389,706 2,203,009 Standby letters of credit 735,158 702,866 $ 11,925,710 $ 9,481,269 As of December 31, 2025 and 2024, the amount reserved for off balance sheet commitments totaled approximately $177,000. Financial Instruments with Off-Balance-Sheet Risk Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount and type of collateral obtained, if deemed necessary by the Bank upon extension of credit, varies and is based on management’s credit evaluation of the counterparty. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. Risk Participation Agreements Risk participation agreements (“RPAs”) are guarantees issued by the Bank to other parties for a fee, whereby the Bank agrees to participate in the credit risk of a derivative customer of the other party. Under the terms of these agreements, the “participating bank” receives a fee from the “lead bank” in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap. The interest rate swap is transacted such that any and all exchanges of interest payments (favorable and unfavorable) are made between the lead bank and the customer. 30 9. COMMITMENTS AND CONTINGENCIES (Continued) In the event that an early termination of the swap occurs and the customer is unable to make a required close out payment, the participating bank assumes that obligation and is required to make this payment. RPAs where the Bank acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Bank. The Bank’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The Bank has one RPA agreement and the term is less than three years. At December 31, 2025 and 2024, there was no credit exposure associated with the agreement as the effective date is subsequent to December 31, 2025. 10. CONCENTRATIONS OF CREDIT The Bank grants loans to customers primarily located in the Capital Region of New York. The majority of those customers are depositors of the Bank. Investments in state and local government securities also involve governmental entities within the Bank’s market area. The concentrations of credit by loan class are set forth in Note 3. The distribution of commitments to extend credit is set forth in Note 9. The Bank, as matter of policy, does not extend credit to any single borrower, or group of related borrowers in excess of its legal lending limit. The Bank does not have any significant concentrations to any single industry or customer. 11. BORROWINGS AND LINES OF CREDIT The Bank had $12.4 million and $22.3 million in term borrowings with the FHLB as of December 31, 2025 and 2024, respectively. The Bank had no outstanding overnight borrowings on its line of credit with the FHLB at December 31, 2025 and December 31, 2024. Additionally, the Bank had no outstanding borrowings with the Federal Reserve Bank at December 31, 2025 and $6 million outstanding with the Federal Reserve Bank at December 31, 2024. 31 12. BORROWINGS AND LINES OF CREDIT (Continued) The following table sets forth the contractual terms of borrowings with the FHLB and FRB as of December 31: Advance Maturity Interest Date Date Rate 2025 Outstanding Balance 2024 Outstanding Balance 5/19/2020 5/19/2025 0.69 % $ - $ 5,000,000 11/08/2022 11/07/2025 4.96 % - 100,090 11/14/2022 11/14/2025 4.60 % - 70,000 11/21/2022 11/21/2025 4.66 % - 83,005 12/22/2022 12/22/2025 4.33 % - 165,219 12/30/2022 12/30/2025 4.58 % - 160,000 12/30/2022 12/30/2025 4.59 % - 26,000 12/30/2022 12/30/2025 4.59 % - 100,000 5/10/2023 5/10/2028 3.80 % 5,000,000 5,000,000 6/30/2023 6/30/2026 4.79 % 5,000,000 5,000,000 3/26/2024 3/29/2027 4.65 % 257,005 257,005 4/30/2024 4/30/2027 5.11 % 293,310 293,310 5/24/2024 5/24/2027 4.97 % 61,290 61,290 9/16/2024 9/16/2027 3.66 % 1,000,042 1,000,042 12/27/2024 1/15/2025 4.50 % - 6,000,000 12/30/2024 6/30/2025 4.47 % - 5,000,000 7/11/2025 7/13/2026 4.29 % 334,095 - 7/21/2025 7/21/2026 4.25 % 130,005 - 8/19/2025 8/21/2028 3.86 % 331,510 - Total $ 12,407,257 $ 28,315,961 The Bank has access to FHLBNY advances, under which it can borrow at various terms and interest rates. Residential real estate mortgages, as disclosed in Note 3, and FHLB stock with a carrying value of approximately $1,077,200 have been pledged by the Bank under a blanket collateral agreement to secure the Bank’s borrowings at December 31, 2025. The total outstanding indebtedness under borrowing facilities with the FHLB cannot exceed the total value of the assets pledged under the blanket collateral agreement. The Bank had municipal letters of credit outstanding totaling $48.0 million and $45.5 million at December 31, 2025 and 2024. At December 31, 2025, scheduled repayments of long term advances are as follows: 2026 $ 5,464,100 2027 1,611,647 2028 5,331,510 $ 12,407,257 At December 31, 2025, the Bank had a secured line of credit totaling approximately $2,000,000 that must be secured by debt securities with one correspondent bank. The Bank also had unsecured lines of credit totaling approximately $8,000,000 with two correspondent banks. The Bank has a line of credit available at December 31, 2025 with the Federal Reserve Bank of New York through its Discount Window and has pledged debt securities as well as loans to support the line, totaling approximately $66,939,000. 32 12. SUBORDINATED DEBENTURES On June 30, 2020, the Corporation executed a $5,000,000 non-amortizing Subordinated Note with unrelated third parties that is scheduled to mature on June 30, 2030. The Corporation has the right to prepay the Subordinated Note at any time after June 30, 2025 without penalty. The annual interest rate charged to the Corporation will be 5.5% through the maturity date of the subordinated note. The origination and legal fees for this transaction were not significant and were expensed as incurred. The balance outstanding at December 31, 2025 and 2024 was $5,000,000. On August 15, 2023, the Corporation executed a $4,550,000 non-amortizing Subordinated Note. $100,000 of note proceeds were provided from a related party. The note is scheduled to mature on September 1, 2033. The Corporation has the right to prepay the Subordinated Note at any time after September 1, 2028 without penalty. The annual interest rate charged to the Corporation will be 7.0% through the maturity date of the subordinated note. The origination and legal fees for this transaction were not significant and were expensed as incurred. The balance outstanding at December 31, 2025 and 2024 was $4,550,000. 13. DEPOSITS The aggregate amount of time deposits in denominations of $250,000 or more at December 31, 2025 and 2024 was approximately $33,974,000 and $28,274,000, respectively. At December 31, 2025, scheduled maturities of time deposits are as follows: 2026 $ 125,764,478 2027 15,683,443 2028 206,783 2029 57,746 $ 141,712,450 14. REGULATORY CAPITAL AND SUPERVISION The Bank is subject to legal limitations on the amount of dividends that can be paid to its shareholders. At December 31, 2025, approximately $2,969,000 was available for the declaration of dividends subject to regulatory approval as described below. The Bank is subject to various regulatory capital requirements administered by certain federal banking agencies. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and was fully phased on January 1, 2019. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors. 33 14. REGULATORY CAPITAL AND SUPERVISION (Continued) Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and Tier 1 common equity capital (as defined by regulation) and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2025, that the Bank meets all capital adequacy requirements to which it is subject. As of the most recent notification from the Bank’s regulators, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 common equity risk based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Bank’s approximate capital amounts and ratios at December 31 are also presented in the table. 2025 To be Well Capitalized under Prompt Minimum for Capital Adequacy Actual For Capital Adequacy Purposes Corrective Action Provisions with Buffer Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 51,584,000 18.4 % ³ $ 22,396,000 ³ 8.0 % ³ $ 27,995,000 ³ 10.0 % ³ $ 29,395,000 ³ 10.5 % Tier I Capital (to Risk Weighted Assets) 48,081,000 17.2 % ³ 16,797,000 ³ 6.0 % ³ 22,396,000 ³ 8.0 % ³ 23,796,000 ³ 8.5 % Tier 1 Common Equity (to Risk Weighted Assets) 48,081,000 17.2 % ³ 12,598,000 ³ 4.5 % ³ 18,197,000 ³ 6.5 % ³ 19,597,000 ³ 7.0 % Tier I Capital (to Average Assets) 48,081,000 8.9 % ³ 22,262,000 ³ 4.0 % ³ 27,032,000 ³ 5.0 % ³ 27,032,000 ³ 5.0 % 2024 To be Well Capitalized under Prompt Minimum for Capital Adequacy Actual For Capital Adequacy Purposes Corrective Action Provisions with Buffer Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 50,728,000 17.0 % ³ $ 23,851,000 ³ 8.0 % ³ $ 29,813,000 ³ 10.0 % ³ $ 31,304,000 ³ 10.5 % Tier I Capital (to Risk Weighted Assets) 49,996,000 15.8 % ³ 17,888,000 ³ 6.0 % ³ 23,851,000 ³ 8.0 % ³ 25,341,000 ³ 8.5 % Tier 1 Common Equity (to Risk Weighted Assets) 49,996,000 15.8 % ³ 13,416,000 ³ 4.5 % ³ 19,379,000 ³ 6.5 % ³ 20,869,000 ³ 7.0 % Tier I Capital (to Average Assets) 49,996,000 8.5 % ³ 22,230,000 ³ 4.0 % ³ 27,788,000 ³ 5.0 % ³ 27,788,000 ³ 5.0 % 34 15. FAIR VALUE MEASUREMENTS The Bank uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is best determined based upon quoted market prices. However, in some instances, there may be no quoted market prices for the Bank’s various assets and liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Fair value accounting guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The Bank groups its assets and liabilities measured at fair value in three levels based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 : Valuation is based on quoted prices in active markets for identical assets or liabilities that the Bank has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 : Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. An asset’s or liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 35 15. FAIR VALUE MEASUREMENTS (Continued) The following methods and assumptions were used by the Bank in estimating fair value disclosures: Cash and cash equivalents The carrying amounts of cash and cash equivalents approximate their fair values and are classified as Level 1. Debt securities The Bank determines the fair value for its debt securities using an independent bond pricing service for identical assets or significantly similar debt securities (Level 2). The pricing service uses a variety of techniques to arrive at fair value including market maker bids, quotes and pricing models. Inputs to the pricing models include recent trades, benchmark interest rates, spreads and actual and projected cash flows. The Bank’s available for sale debt securities were all classified as Level 2 at December 31, 2025 and 2024. Restricted stock The carrying amounts of investments in Federal Reserve Bank stock and Federal Home Loan Bank stock approximate their fair values and are classified as Level 2. Net loans For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value for other loans is estimated using discounted cash flow analysis, based on interest rates currently being offered in the market for loans with similar terms to borrowers of similar credit quality. Loan value estimates include judgments based on expected prepayment rates. The measurement of fair of loans, including individually evaluated loans, is classified within Level 3 of the fair value hierarchy. Accrued interest receivable and payable The carrying amounts of accrued interest receivable and payable approximate fair value and are classified as Level 1. Deposits The fair values disclosed for demand and savings deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts) and are classified within Level 1 of the fair value hierarchy. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates of deposits to a schedule of aggregated expected monthly maturities on time deposits. Measurements of the fair value of time deposits are classified within Level 2 of the fair value hierarchy. Borrowed Funds The fair value of long-term FHLB and FRB advances are estimated using discounted cash flow analysis, based on quoted priced for new FHLB and FRB advances with similar credit risk characteristics, terms and remaining maturities and are classified within Level 2 of the fair value hierarchy. Subordinated debentures The Bank obtains quotes from its pricing service based upon discounted cash flow methodology or utilizes observations of recent highly similar transactions which result in a Level 2 classification. 36 15. FAIR VALUE MEASUREMENTS (Continued) Collateral Dependent Loans Collateral dependent loans are those for which the Bank has individually calculated the credit loss based on the fair value of the loan’s collateral. For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These real estate appraisals may include up to three approaches to value: the sales comparison approach, the income approach (for income-producing property) and the cost 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, if applicable. Although the fair value of the property normally will be based on an appraisal, the valuation should be consistent with the price that a market participant will pay to purchase the property at the measurement date. Circumstances may exist that indicate that the appraised value is not an accurate measurement of the property’s current fair value. Examples of such circumstances include changed economic conditions since the last appraisal, change in property use, stale appraisals, or imprecision and subjectivity in the appraisal process. Appraisal adjustments may be made by management to reflect these conditions resulting in a discount of the appraised value. In addition, a discount is typically applied to account for estimated costs to sell. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuations, and management’s expertise and knowledge of the client and client’s business. Collateral dependent loans carried at fair value result in a Level 3 fair value classification. Other Real Estate Owned Fair values for other real estate owned are initially recorded based on market value evaluations by third parties, less costs to sell (“initial cost basis”). Any write-downs required when the related loan receivable is exchanged for the underlying real estate collateral at the time of transfer to foreclosed real estate are charged to the allowance for credit losses. Values are derived from appraisals, similar to impaired loans, of underlying collateral or discounted cash flow analysis. Subsequent to foreclosure, valuations are updated periodically, and assets are marked to current fair value, not to exceed the initial cost basis. In the determination of fair value subsequent to foreclosure, management also considers other factors or recent developments, such as, changes in absorption rates and market conditions from the time of valuation and anticipated sales values considering management’s plans for disposition. Either change could result in adjustment to lower the property value estimates indicated in the appraisals. These measurements are classified as Level 3 within the fair value hierarchy. Other real estate owned is subject to nonrecurring fair value adjustment upon initial recognition or subsequent impairment. 37 15. FAIR VALUE MEASUREMENTS (Continued) Assets measured at fair value on a recurring basis at December 31 are as follows: 2025 Description Total Level 1 Level 2 Level 3 Securities available-for-sale: U.S. Treasuries $ 47,271,328 $ - $ 47,271,328 $ - U.S. Government agencies 8,770,361 - 8,770,361 - Residential mortgage backed 8,157,250 - 8,157,250 - State and local governments 36,715,835 - 36,715,835 - $ 100,914,774 $ - $ 100,914,774 $ - 2024 Description Total Level 1 Level 2 Level 3 Securities available-for-sale: U.S. Treasuries $ 51,113,438 $ - $ 51,113,438 $ - U.S. Government agencies 19,211,577 - 19,21,577 - Residential mortgage backed 11,643,895 - 11,643,895 - State and local governments 36,093,847 - 36,093,847 - $ 118,062,757 $ - $ 118,062,757 $ - The following tables summarize fair value disclosures for individually evaluated and other real estate owned at December 31: Fair Value Measurements Using Recorded Related (In thousands) Investment Allowance Fair Value (Level 1) (Level 2) (Level 3) 2025: Individually evaluated $ 1,161,012 $ 16,205 $ 1,144,807 $ - $ - $ 1,144,807 Collateral dependent loans $ - $ - $ - $ - $ - $ - 2024: Individually evaluated $ 2,125,333 $ 24,034 $ 2,101,299 $ - $ - $ 2,101,299 Collateral dependent loans $ - $ - $ - $ - $ - $ - 38 15. FAIR VALUE MEASUREMENTS (Continued) The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs were utilized to determine fair value at December 31: 2025 Fair Value Valuation Technique Unobservable Input Range Weighted Average Individually evaluated $ 1,144,807 Discounted cash flow Discount rate 3.7% - 9.6% 8.38 % 2024 Fair Value Valuation Technique Unobservable Input Range Weighted Average Individually evaluated $ 2,101,299 Discounted cash flow Discount rate 3.9% - 9.9% 5.63 % The carrying amounts and estimated fair values of the Bank’s financial instruments at December 31 were as follows: 2025 2024 Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Total cash and cash equivalents 1 $ 33,482,968 $ 33,482,968 $ 13,590,594 $ 13,590,594 Debt securities: Available-for-sale 2 100,914,774 100,914,774 118,062,757 118,062,757 Held-to-maturity 2 3,783,547 3,909,197 3,961,052 3,981,570 Federal Reserve Bank stock 2 852,250 852,250 852,250 852,250 Federal Home Loan Bank stock 2 1,077,200 1,077,200 1,516,800 1,516,800 Net loans 3 362,675,863 343,363,000 384,069,378 356,756,000 Accrued interest receivable 1 1,371,178 1,371,178 1,477,437 1,477,437 Financial liabilities: Deposits: Demand and savings deposits 1 309,360,126 250,246,000 332,873,631 333,704,000 Time deposits 2 141,712,450 141,814,000 127,263,213 127,097,000 Federal Home Loan Bank: 1 - - 6,000,000 6,001,000 Short-term advances Long-term advances 2 12,407,257 12,482,000 22,315,961 22,173,000 Subordinated debentures 2 9,550,000 9,478,000 9,550,000 8,407,000 Accrued interest payable 1 553,213 553,213 534,850 534,850 39 16. ACCUMULATED COMPREHENSIVE INCOME (LOSS) The balances and changes in components of accumulated other comprehensive income (loss), net of tax, are as follows: Accumulated other comprehensive loss as of January 1, 2024 $ (8,244,359 ) Other comprehensive income before reclassifications, net of tax 1,311,976 Accumulated other comprehensive loss as December 31, 2024 (6,932,383 ) Other comprehensive income before reclassifications, net of tax 3,445,513 Accumulated other comprehensive loss as December 31, 2025 $ (3,486,870 ) The amounts of tax expense allocated to each component of other comprehensive income are as follows for the years ended December 31: 2025 2024 Unrealized gains arising during the year $ 915,894 $ 348,754 Reclassification adjustment for net losses included in net income - - Income tax benefit $ 915,894 $ 348,754 There were no amounts reclassed out of accumulated other comprehensive income for the year ended December 31, 2025 or 2024. 40 17. REVENUE FROM CONTRACTS WITH CUSTOMERS The majority of the Bank’s revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and debt securities which are presented in the income statement as components of net interest income. All of the Bank's revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The following table presents revenues subject to ASC 606 for the years ended December 31, 2025 and 2024, respectively. 2025 2024 Service charges $ 445,851 $ 413,861 Interchange fee income 932,790 957,034 Total service fees $ 1,378,641 $ 1,370,895 The following is a discussion of key revenues within the scope of the revenue guidance: Service charges Revenue from fees on customer accounts is earned at the time that the charge is assessed to the customer's account. Interchange fee income Debit card interchange income consists of interchange fees from consumer debit card networks and other card related services. Interchange rates are set by the card networks. Interchange fees are based on purchase volumes and other factors and are recognized as transactions occur. Other Non-Interest Income Other non-interest income consists of prepayment penalties, gain on sale of other real estate owned and swap fee income and are recognized as transactions occur. 18. SUBSEQUENT EVENTS On September 23, 2025, NBC Bancorp, Inc. entered into an Agreement and Plan of Merger with Ballston Spa Bancorp, Inc. (“Ballston Spa”). Pursuant to the merger agreement, NBC will merge with and into Ballston Spa, with Ballston Spa continuing as the surviving corporation. Immediately following the holding company merger, The National Bank of Coxsackie, a wholly owned subsidiary of NBC, will merge with and into Ballston Spa National Bank, with Ballston Spa National Bank as the surviving bank. Under the terms of the merger agreement, each outstanding share of NBC common stock will be converted into the right to receive 0.8065 shares of Ballston Spa common stock, subject to cash in lieu of fractional shares. The merger is subject to approval by the shareholders of both companies, receipt of required regulatory approvals, and satisfaction of other customary closing conditions. Special meetings of shareholders of both companies are scheduled for March 23, 2026. The Company has evaluated subsequent events through March 18, 2026, the date the consolidated financial statements were available to be issued. As of that date, the merger had not been completed. 41

Document text

EX-99.1 · tm2617581d1_ex99-1.htm

EX-99.1
 3
 tm2617581d1_ex99-1.htm
 EXHIBIT 99.1

 Exhibit 99.1

 NBC BANCORP, INC. AND SUBSIDIARY

 Consolidated Financial
Statements as of

 December 31, 2025
and 2024

 Together with

 Independent Auditor&rsquo;s Report

 NBC BANCORP, INC. AND SUBSIDIARY

 TABLE OF CONTENTS

 DECEMBER 31, 2025 AND 2024

 Page

 INDEPENDENT AUDITOR&rsquo;S REPORT
 1 - 2

 CONSOLIDATED FINANCIAL STATEMENTS

 Consolidated Balance Sheets
 3

 Consolidated Statements of Comprehensive Income
 4

 Consolidated Statements of Changes in Stockholders&rsquo; Equity
 6

 Consolidated Statements of Cash Flows
 7

 Notes to Consolidated Financial Statements
 8 - 41

 INDEPENDENT AUDITOR&rsquo;S REPORT

 To the Board of Directors and Stockholders of NBC Bancorp, Inc. and Subsidiary:

 Opinion

 We have audited the accompanying consolidated financial statements of NBC Bancorp, Inc. and Subsidiary, which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.

 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NBC Bancorp, Inc. and Subsidiary as of December 31, 2025 and 2024 and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor&rsquo;s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of NBC Bancorp, Inc. and Subsidiary and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 Responsibilities of Management for the Financial Statements

 Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about NBC Bancorp, Inc. and Subsidiary&rsquo;s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.

 Auditor&rsquo;s Responsibilities for the Audit of the Financial Statements

 432 North Franklin Street, #60

 Syracuse, NY 13204

 p (315) 476-4004

 f (315) 254-2384

 www.bonadio.com

 Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor&rsquo;s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

 (Continued)

 ALBANY&ensp; &bull;&ensp; BUFFALO&ensp; &bull;&ensp;
DALLAS&ensp; &bull;&ensp; EAST AURORA&ensp; &bull;&ensp; NEW YORK CITY&ensp; &bull;&ensp; ROCHESTER&ensp; &bull;&ensp; RUTLAND&ensp; &bull;&ensp;
SARASOTA&ensp; &bull;&ensp; SYRACUSE&ensp; &bull;&ensp; UTICA&ensp; &bull;&ensp; VIRGINIA BEACH&ensp; &bull;&ensp; WILMINGTON

 1

 INDEPENDENT AUDITOR&rsquo;S REPORT

 (Continued)

 Auditor&rsquo;s Responsibilities for the Audit of the Financial
Statements (Continued)

 In performing an audit in accordance with generally accepted auditing
standards, we:

 &middot; Exercise professional judgment and maintain professional
skepticism throughout the audit.

 &middot; Identify and assess the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

 &middot; Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of NBC Bancorp, Inc. and Subsidiary&rsquo;s internal control. Accordingly, no such opinion is expressed.

 &middot; Evaluate the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the
consolidated financial statements.

 &middot; Conclude whether, in our judgment, there are
conditions or events, considered in the aggregate, that raise substantial doubt about NBC Bancorp, Inc. and Subsidiary&rsquo;s ability
to continue as a going concern for a reasonable period of time.

 We are required to communicate with those charged
with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control related matters that we identified during the audit.

 /s/ Bonadio & Co. LLP

 March 18, 2026

 NBC BANCORP, INC. AND SUBSIDIARY

 CONSOLIDATED BALANCE SHEETS

 DECEMBER 31, 2025 AND 2024

 2025
 2024

 ASSETS

 Cash and due from banks
 $ 33,028,780
 $ 13,455,208

 Federal funds sold
 454,188
 135,386

 Total cash and cash equivalents
 33,482,968
 13,590,594

 Debt securities available-for-sale, at fair value
 100,914,774
 118,062,757

 Debt securities held-to-maturity (fair value of $3,909,197 and $3,981,570, respectively)
 3,783,547
 3,961,052

 Federal Reserve Bank stock
 852,250
 852,250

 Federal Home Loan Bank stock
 1,077,200
 1,516,800

 Loans, less allowance for credit losses of $3,679,678 and
 $4,028,458, respectively
 362,675,863
 384,069,378

 Premises, furniture and fixtures, net
 4,265,258
 4,492,112

 Right of use asset
 1,431,580
 1,562,544

 Other assets
 3,066,466
 4,095,108

 Other real estate owned
 -
 172,968

 Total assets
 $ 511,549,906
 $ 532,375,563

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Deposits:

 Noninterest bearing deposit accounts
 $ 105,287,426
 $ 107,554,623

 Interest bearing deposit accounts
 345,785,150
 352,582,221

 Total deposits
 451,072,576
 460,136,844

 Borrowed funds
 12,407,257
 28,315,961

 Subordinated debentures
 9,550,000
 9,550,000

 Lease liability
 1,495,797
 1,616,074

 Accrued interest payable
 553,213
 534,850

 Other liabilities
 279,507
 552,110

 Total liabilities
 475,358,350
 500,705,839

 STOCKHOLDERS' EQUITY:

 Common stock, $5 par value; shares 1,000,000 authorized at December 31, 2025 and 2024; issued and outstanding 473,239 at December 31, 2025 and 2024
 2,366,195
 2,366,195

 Additional paid-in capital
 17,491,445
 17,491,445

 Retained earnings
 19,820,786
 18,744,467

 Accumulated other comprehensive loss
 (3,486,870 )
 (6,932,383 )

 Total stockholders' equity
 36,191,556
 31,669,724

 Total liabilities and stockholders' equity
 $ 511,549,906
 $ 532,375,563

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

 3

 NBC BANCORP, INC. AND SUBSIDIARY

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

 2025
 2024

 INTEREST INCOME:

 Interest and fees on loans
 $ 20,115,079
 $ 19,875,129

 Interest on debt securities:

 Taxable
 1,291,989
 1,713,317

 Tax exempt
 613,493
 620,399

 Interest on federal funds sold and other interest bearing deposits
 733,173
 411,532

 22,753,734
 22,620,377

 INTEREST EXPENSE:

 Time deposits of $250,000 or more
 1,334,959
 1,264,128

 Other deposits
 7,238,838
 6,133,451

 Borrowed funds and subordinated debentures
 1,427,646
 2,925,873

 Total interest expense
 10,001,443
 10,323,452

 Net interest income
 12,752,291
 12,296,925

 PROVISION FOR CREDIT LOSSES

 Loans
 (350,000 )
 100,000

 Unfunded commitments
 -
 -

 Debt securities
 -
 -

 Total provision for credit losses
 (350,000 )
 100,000

 Net interest income after provision for loan losses
 13,102,291
 12,196,925

 NONINTEREST INCOME:

 Service charges
 445,851
 413,861

 Interchange fee income
 932,790
 957,034

 Mortgage recording tax refunds
 -
 189,054

 Other noninterest income
 429,154
 280,587

 Total noninterest income
 1,807,795
 1,840,536

 NONINTEREST EXPENSE:

 Salaries and employee benefits
 6,936,683
 6,649,949

 Premises
 1,441,979
 1,478,863

 Computer service fees
 664,576
 730,536

 Data processing fees
 588,744
 434,436

 Internet banking fees
 559,586
 506,567

 Assessments
 491,577
 434,478

 Bank card supplies and expenses
 459,427
 485,314

 Merger related expenses
 444,727
 -

 Professional fees
 364,544
 313,455

 Advertising
 225,445
 213,110

 Directors fees
 217,300
 211,600

 Consulting fees
 213,990
 161,753

 Stationery and supplies
 144,103
 118,155

 Other noninterest expenses
 857,410
 894,953

 Total noninterest expenses
 13,610,091
 12,633,169

 INCOME BEFORE PROVISION FOR INCOME TAXES
 1,299,995
 1,404,292

 PROVISION FOR INCOME TAXES
 223,676
 187,968

 Net income
 $ 1,076,319
 $ 1,216,324

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

 4

 NBC BANCORP, INC. AND SUBSIDIARY

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Continued)

 FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

 2025
 2024

 COMPREHENSIVE INCOME

 Net Income
 $ 1,076,319
 $ 1,216,324

 Other comprehensive income, net of tax:

 Unrealized holding gains arising during period
 4,361,407
 1,660,730

 Reclassification adjustment for losses included in net income
 -
 -

 Other comprehensive gain
 4,361,407
 1,660,730

 Tax effect
 915,894
 348,754

 Other comprehensive gain, net of tax
 3,445,513
 1,311,976

 Comprehensive income
 $ 4,521,832
 $ 2,528,300

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

 5

 NBC BANCORP, INC. AND SUBSIDIARY

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

 Accumulated

 Other

 Common
 Additional
 Retained
 Comprehensive

 Stock
 Paid-In Capital
 Earnings
 (Loss) Income
 Total

 BALANCES, JANUARY 1, 2024
 $ 2,366,195
 $ 17,491,445
 $ 17,646,453
 $ (8,244,359 )
 $ 29,259,734

 Net income
 -
 -
 1,216,324
 -
 1,216,324

 Dividends
 -
 -
 (118,310 )
 -
 (118,310 )

 Other comprehensive gain
 -
 -
 -
 1,311,976
 1,311,976

 BALANCES, DECEMBER 31, 2024
 2,366,195
 17,491,445
 18,744,467
 (6,932,383 )
 31,669,724

 Net income
 -
 -
 1,076,319
 -
 1,076,319

 Other comprehensive gain
 -
 -
 -
 3,445,513
 3,445,513

 BALANCES, DECEMBER 31, 2025
 $ 2,366,195
 $ 17,491,445
 $ 19,820,786
 $ (3,486,870 )
 $ 36,191,556

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

 6

 NBC BANCORP, INC. AND SUBSIDIARY

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 FOR
THE YEARS ENDED DECEMBER 31, 2025 AND 2024

 2025
 2024

 CASH
 FLOW FROM OPERATING ACTIVITIES:

 Net
 income
 $ 1,076,319
 $ 1,216,324

 Adjustments
 to reconcile net income to net cash flow from operating activities:

 Provision
 for credit losses
 (350,000 )
 100,000

 Operating
 lease payments
 (182,697 )
 (177,895 )

 Gain
 on the sale of other real estate owned
 (132,330 )
 -

 Deferred
 income tax benefit
 (30,275 )
 (36,166 )

 Depreciation
 463,718
 544,553

 Net
 amortization of bond premiums and discounts
 220,790
 40,645

 Net
 amortization of right of use asset and lease liability
 193,383
 193,403

 Decrease
 (increase) in accrued interest receivable
 106,259
 8,951

 Decrease
 (increase) in other assets
 36,763
 777,049

 Increase
 in accrued interest payable
 18,363
 47,607

 Decrease
 in other liabilities
 (272,601 )
 (516,765 )

 Net
 cash flow from operating activities
 1,147,692
 2,197,706

 CASH
 FLOW FROM INVESTING ACTIVITIES:

 Proceeds
 from sales, maturities, calls and principal payments of available for sale debt securities
 21,288,600
 46,151,840

 Purchase
 of available for sale securities
 -
 (29,708,058 )

 Proceeds
 from maturities, calls and principal payments of held-to-maturity debt securities
 930,961
 1,097,183

 Purchases
 of debt securities held to maturity
 (753,456 )
 (365,905 )

 Purchases
 of Federal Reserve Bank stock
 -
 (46,500 )

 Redemptions
 of Federal Home Loan Bank Stock
 439,600
 535,700

 Net
 decrease (increase) in loans
 21,743,515
 (998,483 )

 Proceeds
 from the sale of other real estate
 305,298
 -

 Purchase
 of premises, furniture and fixtures
 (236,864 )
 (212,866 )

 Net
 cash flow from investing activities
 43,717,654
 16,452,911

 CASH
 FLOW FROM FINANCING ACTIVITIES:

 Net
 (decrease) increase in deposits
 (9,064,268 )
 27,202,678

 Advances
 of long-term borrowings
 331,510
 12,611,647

 Net
 change in short-term borrowings
 (16,240,214 )
 (55,000,000 )

 Dividends
 paid
 -
 (118,310 )

 Net
 cash flow from financing activities
 (24,972,972 )
 (15,303,985 )

 CHANGE
 IN CASH AND CASH EQUIVALENTS
 19,892,374
 3,346,632

 CASH
 AND CASH EQUIVALENTS - beginning of year
 13,590,594
 10,243,962

 CASH
 AND CASH EQUIVALENTS - end of year
 $ 33,482,968
 $ 13,590,594

 SUPPLEMENTARY
 CASH FLOWS INFORMATION:
 $ 549,402
 $ 446,268

 Income
 taxes paid

 Interest
 paid
 $ 9,983,080
 $ 10,191,442

 NON-CASH
 DISCLOSURES:

 Transfer
 of loans to other real estate owned and repossessed assets
 $ -
 $ 172,968

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

 7

 NBC BANCORP, INC. AND SUBSIDIARY

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 DECEMBER
31, 2025 AND 2024

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES

 Nature
of Operations

 NBC Bancorp, Inc.
(the Corporation) provides a full range of banking services to individual and small business customers through its wholly owned subsidiary,
The National Bank of Coxsackie. NBC Bancorp, Inc. and its wholly owned subsidiary, The National Bank of Coxsackie (collectively,
the &ldquo;Bank&rdquo;), operate in Coxsackie, New York, with branches in Athens, Cairo, Greenville, Middleburgh, Ravena, West Coxsackie,
and Glenmont, New York. The Bank also maintains a loan production office in Latham, New York. The Corporation and the Bank are subject
to the regulations of certain Federal agencies and undergo periodic examinations by those regulatory authorities.

 Basis
of Consolidation

 The accompanying
consolidated financial statements include the accounts of the Bank. Significant intercompany accounts and transactions have been eliminated
from the consolidated financial statements.

 Estimates

 In preparing
the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and income
and expenses for the period. Actual results could differ significantly from those estimates, and such differences, may be significant.

 Cash
and Cash Equivalents

 Cash
and cash equivalents include cash, deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold.
The Bank may be required to maintain a reserve fund in cash or on deposit with the Federal Reserve Bank. As of December 31, 2025
and 2024, there was no required reserve. The Bank may also be required to maintain clearing balance funds on deposit with the Federal
Reserve Bank. There was no required minimum clearing balance at December 31, 2025 and 2024.

 Presentation
of Cash Flows

 For purposes
of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, and federal funds sold. Generally, federal
funds are purchased or sold for one day periods.

 Debt
Securities

 Debt
securities that management has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and
recorded at amortized cost. Securities not classified as held-to-maturity are classified as "available-for-sale" and recorded
at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income.

 8

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Debt
Securities (Continued)

 Interest
and dividend income is recognized when earned. Purchase premiums and discounts are recognized in interest income using the interest method.
Purchase premiums on callable debt securities are amortized to the first call date while all other premiums and discounts are amortized
over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using
the specific identification method.

 A debt
security is placed on nonaccrual status at the time any principal or interest payments become delinquent. A security is considered to
be delinquent once it is 90 days contractually past due under the terms of the agreement. Interest accrued but not received for a security
placed on non-accrual is reversed against interest income.

 Debt
securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain
debt securities, it is at least reasonably possible that changes in the values of debt securities will occur in the near term and the
amounts reported in the accompanying consolidated financial statements.

 Allowance
for Credit Losses &ndash; Held-to-Maturity Securities

 Management
measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. The Bank&rsquo;s portfolio
for HTM securities is primarily made up of New York State local municipal bonds that are not rated. The accrued interest receivable on
held-to-maturity debt securities totaled $37,116 and $37,840 at December 31, 2025 and 2024, respectively, and is excluded from the
estimate of credit losses. The estimate of expected credit losses considers historical credit loss information, if available, and payment
history. The Bank determined that no allowance for credit losses was required on its HTM portfolio as of December 31, 2025 and 2024.

 Allowance
for Credit Losses &ndash; Available-For-Sale Securities

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

 9

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Allowance
for Credit Losses &ndash; Available-For-Sale Securities (Continued)

 Changes
in the allowance for credit losses are recorded as provision for (or reversal of) credit losses. Losses are charged against the allowance
when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding
intent or requirement to sell is met. Debt securities are exposed to various risks such as interest rate, market and credit risks. Due
to the level of risk associated with certain debt securities, it is at least reasonably possible that changes in the values of debt securities
will occur in the near term and the amounts reported in the accompanying consolidated financial statements. The balance of accrued interest
receivable for available-for-sale securities was $272,470 and $334,177 as of December 31, 2025 and 2024, respectively, and was excluded
from the estimate of credit losses.

 Restricted
Stock

 The Bank
has restricted investments in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) stocks. Federal law requires a member institution
to hold stock of its district FRB and FHLB according to predetermined formulas. The stock is carried at cost and periodically reviewed
for impairment based on ultimate recovery of par value.

 Loans

 Loans
that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are stated at their outstanding
unpaid principal balances, less the allowance for credit losses. Interest income is accrued on the unpaid principal balances using the
effective interest method. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income
using the level-yield method without anticipating prepayments.

 The loans
portfolio is segmented into residential real estate mortgages, commercial and consumer loans. Commercial loans consist of commercial
real estate and other commercial loans. Consumer loans include home equity and junior liens and other consumer loans.

 The risk
characteristics within the loan portfolio vary depending on the loan segment. Consumer loans generally are repaid from personal sources
of income. Risks associated with consumer loans primarily include general economic risks such as declines in the local economy creating
higher rates of unemployment. Those conditions may also lead to a decline in collateral values should the Bank be required to foreclose
on or repossess the collateral securing consumer loans. These economic risks also impact the commercial loan segment, however commercial
loans are considered to have greater risk than consumer loans as the primary source of repayment is from the cash flow of the business
customer. Real estate loans, including residential mortgages, commercial real estate loans and home equity loans comprise approximately
97% and 95% of the portfolio at December 31, 2025 and 2024, respectively. Loans secured by real estate provide the best collateral
protection and thus significantly reduce the inherent risk in the portfolio.

 Non-accrual
and Past Due Loans

 Loans
are considered past due if the required principal and interest payments have not been received within thirty days of the payment due
date.

 10

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Non-accrual
and Past Due Loans (Continued)

 For all
classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become
90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan may be
currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured.
When a loan is placed on non-accrual status, unpaid interest is reversed and charged to interest income. Interest received on non-accrual
loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management&rsquo;s
judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current,
has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total
contractual principal and interest is no longer in doubt. Non-accrual troubled debt restructurings are restored to accrual status if
principal and interest payments, under the modified terms, are current for six consecutive months after modification.

 When
future collectability of the recorded loan balance is expected, interest income may be recognized on a cash basis. In the case where
a non-accrual loan had been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized
on the recorded loan balance at the contractual interest rate. Cash interest receipts in excess of that amount are recorded as recoveries
to allowance for loan losses until prior charge-offs have been fully recovered.

 Modifications
for Debtors Experiencing Financial Difficulty

 The allowance
for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or
acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses
from modifications of receivables to borrowers experiencing financial difficulty, if applicable. The Bank uses a weighted average remaining
life methodology to determine the allowance for credit losses.

 Because
the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit
losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally
not recorded upon modification. Occasionally, the Bank modifies loans by providing principal forgiveness on certain of its real estate
loans.

 When
principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The
amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a
reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, the Bank will
modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted
initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

 11

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Allowance
for Credit Losses on Off-Balance Sheet Credit Exposures

 The Bank
maintains a separate reserve for credit losses on off-balance-sheet credit exposures, including unfunded loan commitments, which is included
in other liabilities on the consolidated balance sheet. The reserve for credit losses on off balance-sheet credit exposures is adjusted
as a provision for credit losses in the income statement. The estimate includes consideration of the likelihood that funding will occur
and an estimate of expected credit losses on commitments expected to be funded over its estimated life, utilizing the same models and
approaches for the Bank's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics
as its loan portfolio segments. The Bank has identified the unfunded portion of certain lines of credit as unconditionally cancellable
credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance
sheet credit exposures that are unconditionally cancellable by the Bank or for undrawn amounts under such arrangements that may be drawn
prior to the cancellation of the arrangement. At December 31, 2025 and 2024, the liability for credit losses on off-balance-sheet
credit exposures included in other liabilities was approximately $177,000 and no provision for credit losses was recorded during the
year.

 Allowance
for credit losses on loans

 The allowance
for credit losses is a valuation account that is deducted the loans&rsquo; amortized cost basis to present the net amount expected to
be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance
is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

 Management
estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current
conditions, and reasonable and supportable forecasts. Historical loss experience is generally the starting point for estimating expected
credit losses. The Bank 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 is used. The Banks historical
loss experience is supplemented with peer information across all loan pools.

 Peer
selection is based on a review of institutions within the state of New York and asset size between $300 million and $1 billion. Finally,
the Bank considers forecasts about future economic conditions that are reasonable and supportable. Significant management judgment is
required at various points in the measurement process. The Bank utilizes the remaining life methodology on all pools. The calculated
historical loss rates are adjusted for forecasted economic conditions. These forecasts are applied over a period that management has
determined to be reasonable and supportable. Beyond the period over which management can develop or source a reasonable and supportable
forecast, the model will revert to the long-term average historical loss using a straight-line, time-based methodology.

 12

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Allowance for credit losses
on loans (Continued)

 After
quantitative considerations, management applies additional qualitative adjustments so that the allowance for credit losses is reflective
of the estimate of lifetime losses that exist in the loan portfolio at the balance sheet date. Qualitative considerations include limitations
inherent in the quantitative model; trends experienced in nonperforming and delinquent loans; changes in value of underlying collateral;
changes in lending policies and procedures; nature and composition of loans; portfolio concentrations that may affect loss experience
across one or more components of the portfolio; the experience, ability and depth of lending management and staff; the Bank&rsquo;s credit
review system; and the effect of external factors; such as competition, legal and regulatory requirements.

 The allowance
for credit losses is measured on a collective pool basis with receivables that have similar risk characteristics. The Bank has developed
segmentation based upon federal call report segmentation and subsegmented commercial mortgages that are categorized as 1-4 family residential
mortgages in the federal call report.

 Loans
that do not share risk characteristics and meet materiality criteria are evaluated on an individual basis and are excluded from the pooled
evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral
at the reporting date, adjusted for selling costs as appropriate. If the loan is not collateral dependent, the allowance for credit losses
related to individually assessed loans is based on discounted expected cash flows using the loan&rsquo;s initial effective interest rate.

 The allowance
for credit losses represents management&rsquo;s estimate of losses inherent in the loan portfolio as of the balance sheet date and it
is recorded as a reduction of loans. The allowance is increased by the provision for loan losses, and decreased by charge-offs, net of
recoveries. Loans deemed to be uncollectible are charged against the allowance for credit losses, and subsequent recoveries, if any,
are credited to the allowance. All, or part, of the principal balance of loans are charged against the allowance as soon as it is determined
that the repayment of all, or part, of the principal balance is highly unlikely.

 Credit
quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special
mention have potential weaknesses that deserve management&rsquo;s close attention. If uncorrected, the potential weakness may result
in deterioration of the repayment prospects. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize
the liquidation of debt. They include loans that are inadequately protected by the current net worth and paying capacity of the borrower
or of the collateral pledged. Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard with the
added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.

 Loans
classified as loss are considered uncollectible and are charged to the allowance for credit losses. Loans that are not classified are
rated as pass. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Bank&rsquo;s
allowance for credit losses and may require the Bank to recognize additions to the allowance based on their judgments about information
available to them at the time of their examination, which may not be currently available to management. Based on management&rsquo;s comprehensive
analysis of the loan portfolio, management believes the current level of the allowance for credit losses is adequate.

 13

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Accrued
Interest Receivable

 Accrued
interest receivable balances are presented separately within other assets balance sheet line item. The Company has excluded interest
receivable that is included in amortized cost of financing receivables from related disclosures requirements and accrued interest receivable
is written off by reversing interest income.

 For loans,
write off typically occurs upon becoming over 90 to 120 days past due and therefore the amount of such write offs are immaterial. Historically,
the Company has not experienced uncollectible accrued interest receivable on investment securities. The balance of accrued interest receivable
for loans at December 31, 2025 and 2024 $1,061,591 and $1,105,419, respectively. The amounts are included in other assets.

 Premises,
Furniture and Fixtures

 Premises,
furniture and fixtures are stated on the basis of cost less accumulated depreciation. Depreciation is charged to current operations using
the straight-line method over the estimated useful lives of the assets. Buildings have an estimated useful life of 39 years and furniture
and equipment have estimated useful lives of 5 to 7 years. Maintenance and repairs are charged to operations as incurred.

 Leases

 Options
to renew or terminate the lease are recognized as part of the right-of-use asset and lease liability when it is reasonably certain the
options will be exercised. The lease agreements contain both lease and non-lease components, such as maintenance costs, which are accounted
for separately. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. In addition,
the Bank does not recognize right-of-use assets or lease liabilities for short-term leases with a term of twelve months or less, which
are also expensed as incurred.

 Foreclosed
Real Estate

 Real
estate properties acquired through foreclosure or by deed in lieu of loan foreclosure are initially recorded at fair value less estimated
selling cost at the date of physical possession. Physical possession of residential real estate property collateralizing a residential
mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property
to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Any write-downs based on
the asset&rsquo;s fair value at the date of acquisition are charged to the allowance for credit losses.

 After
foreclosure, property held for sale is carried at the lower of the new cost basis or fair value less cost to sell. Costs of significant
property improvements are capitalized, whereas costs relating to holding property are expensed. Valuations are periodically performed
by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a
property to its fair value less cost to sell. As of December 31, 2025 and 2024 the balance of other real estate owned was $0 and
$172,968, respectively.

 Dividend
Restriction

 Banking
regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Corporation or by the Corporation
to the stockholders.

 14

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Mortgage
Recording Tax

 The Mortgage
Recording Tax (MRT) is a tax paid when a mortgage is recorded by the Bank at a respective county office. For New York State (NYS) purposes,
a dollar for dollar tax credit is allowed for the special additional mortgage recording tax paid on residential mortgages if the real
property is located within an eligible county. The special additional mortgage recording tax credits may be used to reduce business income
tax or capital base tax, but shall not reduce the tax below the fixed dollar minimum.

 Effective
for tax years beginning on or after January 1, 2015, a taxpayer who has a mortgagee paid special additional mortgage recording tax
on residential mortgages, may elect to treat any unused portion of the credit as an overpayment of tax to be credited to future periods
or refunded, instead of as a carryforward. Any carryforward credit from a prior period is not eligible to be refunded. Prevailing practice
in financial reporting for these credits is that a claim for refund should be recognized only when the claim is probable as it is defined
in FASB ASC 450, Contingencies. Accordingly, if the Bank feels that it is probable that it will recover amounts previously paid via the
MRT, then the bank should recognize a receivable for amounts to be received for the amounts paid to be recovered via the MRT refund.
These refunds are however subject to regular audit by NYS and therefore any uncertainties related to qualifying for the MRT refund should
be assessed as to whether the claim for the refund is probable. The Bank does not believe that the claim process adequately meets the
probably threshold and therefore does not recognize the MRT refund until it is received. The refund is reported on the Mortgage Reporting
Tax Refund line item within the Noninterest Income section of the Consolidated Statements of Comprehensive Income.

 Advertising
Costs

 The Bank
expenses advertising costs as incurred. Advertising expenses were approximately $225,000 and $213,000 for the years ended December 31,
2025 and 2024.

 Income
Taxes

 Income
taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently
due plus deferred taxes related primarily to differences between the financial reporting and income tax basis of available-for-sale securities,
the allowance for credit losses, deferred loan origination fees, premises and equipment. The deferred tax assets and liabilities represent
the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are
recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred
tax assets or liabilities are expected to be realized or settled. As changes in the laws or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes. Interest and penalties assessed by taxing authorities, if any, are included
in the provision for income taxes.

 Net
Income Per Common Share

 The Corporation
has a simple capital structure. Net income and dividends per share are computed on the weighted average number of shares outstanding
which was 473,239 in 2025 and 2024. Basic earnings per share was $2.27 and $2.57 for the years ended December 31, 2025 and 2024,
respectively. There were no dilutive shares for the years ended December 31, 2025 and 2024.

 15

 1. SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 Comprehensive
Income

 Accounting
principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes
in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component
of the stockholders&rsquo; equity section of the statements of financial condition, such items along with net income are components of
comprehensive income.

 2. DEBT
 SECURITIES

 The amortized cost and fair
value of debt securities at December 31 are as follows:

 2025

 Gross
 Gross

 Amortized
 Unrealized
 Unrealized
 Estimated

 Cost
 Gains
 Losses
 Fair Value

 AVAILABLE-FOR-SALE:

 U.S. Treasuries
 $ 48,831,226
 $ -
 $ (1,559,898 )
 $ 47,271,328

 U.S. Government agencies
 9,080,013
 -
 (309,652 )
 8,770,361

 Residential mortgage backed
 8,395,749
 34,187
 (272,686 )
 8,157,250

 State and local governments
 39,021,546
 -
 (2,305,711 )
 36,715,835

 $ 105,328,535
 $ 34,187
 $ (4,447,947 )
 $ 100,914,774

 HELD-TO-MATURITY:

 Corporate
 $ 1,000,000
 $ -
 $ -
 $ 1,000,000

 State and local
 governments
 2,783,547
 126,358
 (708 )
 2,909,197

 $ 3,783,547
 $ 126,358
 $ (708 )
 $ 3,909,197

 2024

 Gross
 Gross

 Amortized
 Unrealized
 Unrealized
 Estimated

 Cost
 Gains
 Losses
 Fair Value

 AVAILABLE-FOR-SALE

 U.S. Treasuries
 $ 54,726,697
 $ -
 $ (3,613,259 )
 $ 51,113,438

 U.S. Government agencies
 20,123,905
 695
 (913,023 )
 19,211,577

 Residential mortgage backed
 12,267,686
 8
 (623,799 )
 11,643,895

 State and local
 governments
 39,719,636
 -
 (3,625,789 )
 36,093,847

 $ 126,837,924
 $ 703
 $ (8,775,870 )
 $ 118,062,757

 HELD-TO-MATURITY:

 Corporate
 $ 1,000,000
 $ -
 $ -
 $ 1,000,000

 State and local
 governments
 2,961,052
 63,971
 (43,453 )
 2,981,570

 $ 3,961,052
 $ 63,971
 $ (43,453 )
 $ 3,981,570

 16

 2. DEBT
 SECURITIES (Continued)

 All U.S.
Government, U.S. Government agencies and residential mortgage-backed securities are issued by U.S. government agencies or U.S. government
sponsored enterprises.

 The following
tables set forth the Bank&rsquo;s investment in securities with unrealized losses of less than twelve months and unrealized losses of
twelve months or more at December 31:

 2025

 Less than 12
 Months
 12 Months or
 More
 Total

 Fair
 Unrealized
 Fair
 Unrealized
 Fair
 Unrealized

 Value
 Losses
 Value
 Losses
 Value
 Losses

 AVAILABLE-FOR-SALE:

 U.S. Treasuries
 $ -
 $ -
 $ 47,271,328
 $ 1,559,898
 $ 47,271,328
 $ 1,559,898

 U.S. Government agencies
 -
 -
 8,770,362
 309,652
 8,770,362
 309,652

 Residential mortgage backed
 -
 -
 5,711,664
 272,686
 5,711,664
 272,686

 State and local governments
 150,306
 27
 36,565,530
 2,305,684
 36,715,836
 2,305,711

 $ 150,306
 $ 27
 $ 98,318,884
 $ 4,447,920
 $ 98,469,190
 $ 4,447,947

 2024

 Less than 12
 Months
 12 Months or
 More
 Total

 Fair
 Unrealized
 Fair
 Unrealized
 Fair
 Unrealized

 Value
 Losses
 Value
 Losses
 Value
 Losses

 AVAILABLE-FOR-SALE:

 U.S. Treasuries
 $ -
 $ -
 $ 51,113,438
 $ 3,613,259
 $ 51,113,438
 $ 3,613,259

 U.S. Government agencies
 -
 -
 17,212,800
 913,023
 17,212,800
 913,023

 Residential mortgage backed
 3,149,682
 31,592
 8,493,851
 592,207
 11,643,533
 623,799

 State and local governments
 355,649
 860
 35,738,197
 3,624,929
 36,093,846
 3,625,789

 $ 3,505,331
 $ 32,452
 $ 112,558,286
 $ 8,743,418
 $ 116,063,617
 $ 8,775,870

 As of
December 31, 2025 there were 1 and 133 AFS securities with an unrealized loss of less than 12 months and 12 months or more, respectively.
At December 31, 2024 there were 5 and 151 AFS securities with an unrealized loss of less than 12 months and 12 months or more, respectively.

 Unrealized
losses on these available-for-sale debt securities have not been recognized into earnings because the issuers of the securities are of
high credit quality, as these securities are backed by U.S. government agencies, U.S. sponsored enterprises, or are general obligation
bonds issued by New York State municipalities. Therefore, management has determined these securities to be of high credit quality, management
does not intend to sell, and 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 bonds. The fair values are expected to recover as the bonds approach maturity. The Bank did not
record any credit losses on available-for-sale securities during the year ended December 31, 2025 or 2024.

 17

 2. DEBT SECURITIES (Continued)

 The amortized cost and fair value of
debt securities at December 31, 2025, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities
because borrowers may have the right to call or prepay obligations without call or prepayment penalties.

 Available-for-Sale
 Held-to-Maturity

 Amortized
 Fair
 Amortized
 Fair

 Cost
 Value
 Cost
 Value

 Due in one year or less
 $ 26,702,632
 $ 26,363,000
 $ 110,953
 $ 112,543

 Due from one year to five years
 69,441,898
 66,209,826
 2,230,460
 2,277,578

 Due from five years to ten years
 9,184,005
 8,341,948
 1,096,019
 1,168,553

 Due after ten years
 -
 -
 346,115
 350,523

 $ 105,328,535
 $ 100,914,774
 $ 3,783,547
 $ 3,909,197

 The Bank had no gross realized gains
or gross realized losses during the year ended December 31, 2025 or 2024.

 The carrying amount of debt securities
pledged to secure certain lines of credit with the FRB amounted to $0 at December 31, 2025 and approximately $35,400,000 at December 31,
2024. The carrying amount of debt securities pledged to secure certain deposits amounted to approximately $42,221,000 and $61,742,000
at December 31, 2025 and 2024, respectively.

 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

 Loan classification as of December 31
is as follows:

 2025
 2024

 Residential real estate mortgage
 $ 223,819,306
 $ 244,308,524

 Commercial real estate
 123,118,719
 117,572,431

 Other commercial
 7,083,153
 11,938,039

 Home equity and junior liens
 7,802,246
 7,550,224

 Other consumer
 4,532,117
 6,728,618

 Total loans
 366,355,541
 388,097,836

 Less: Allowance for credit losses
 (3,679,678 )
 (4,028,458 )

 Loans, net
 $ 362,675,863
 $ 384,069,378

 Net deferred loan origination fees totaled approximately
$121,000 and $164,000 at December 31, 2025 and 2024, respectively, were included in total loans.

 18

 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 As of December 31, 2025 and 2024,
residential real estate mortgages with a carrying balance of approximately $130,587,000 and $148,043,000, respectively, have been pledged
by the Bank to the FHLBNY under a blanket collateral agreement to secure the Bank&rsquo;s line of credit and term borrowings. Additionally,
at December 31, 2025 and 2024, commercial real estate loans with a carrying balance of approximately $49,253,000 and $51,504,000,
respectively, were pledged to the FHLBNY under the same agreement. As of December 31, 2025 and 2024 commercial real estate loans
with a carrying balance of approximately $56,939,000 and $55,688,000, respectively, have been pledged to the Federal Reserve Bank. At
December 31, 2025 and 2024, the recorded investment of residential mortgage loans secured by residential real estate properties for
which formal foreclosure proceedings were in process was approximately $91,000 and $409,000, respectively. At December 31, 2025 and
2024, the recorded investment of commercial mortgage loans secured by commercial real estate for which formal foreclosure proceedings
were in process was approximately $209,000 and $752,000, respectively.

 The following tables present the classes
of the loan portfolio summarized by the pass rating and the classified ratings of special mention, substandard and doubtful within the
Bank&rsquo;s internal risk rating system at December 31, 2025 and 2024.

 2025

 Special

 Pass
 Mention
 Substandard
 Doubtful
 Total

 Commercial real estate
 $ 110,728,824
 $ 48,108
 $ 12,341,787
 $ -
 $ 123,118,719

 Other commercial
 $ 6,981,569
 $ -
 $ 101,584
 $ -
 $ 7,083,153

 $ 117,710,393
 $ 48,108
 $ 12,443,371
 $ -
 $ 130,201,872

 Non

 Performing
 Performing
 Total

 Residential real estate mortgage
 $ 222,571,238
 $ 1,248,068
 $ 223,819,306

 Home equity and junior liens
 7,802,246
 -
 7,802,246

 Other consumer
 4,463,638
 68,479
 4,532,117

 $ 234,837,122
 $ 1,316,547
 $ 236,153,669

 The increase in substandard loans over the prior year relates
to one larger credits that was rated substandard during the current year.

 19

 3. LOANS
AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 2024

 Special

 Pass
 Mention
 Substandard
 Doubtful
 Total

 Commercial real estate
 $ 107,148,954
 $ 4,861,498
 $ 5,561,979
 $ -
 $ 117,572,431

 Other commercial
 $ 11,693,869
 $ 203,640
 $ 40,530
 $ -
 $ 11,938,039

 $ 118,842,823
 $ 5,065,138
 $ 5,602,509
 $ -
 $ 129,510,470

 Non

 Performing
 Performing
 Total

 Residential real estate mortgage
 $ 243,035,693
 $ 1,272,831
 $ 244,308,524

 Home equity and junior liens
 7,550,224
 -
 7,550,224

 Other consumer
 6,550,777
 177,841
 6,728,618

 $ 257,136,694
 $ 1,450,672
 $ 258,587,366

 There were no loans classified as loss at December 31,
2025 and 2024.

 The performance and credit quality of
the loan portfolio is also monitored by analyzing the age of the loans as determined by the length of time a recorded payment is past
due. The following tables present the classes of the loan portfolio summarized by past due status as of December 31, 2025 and 2024:

 2025

 Greater

 than 90

 Loans >90

 30-59 Days
 60-89 Days
 Days Past
 Total Past

 Days and

 Past
 Due
 Past
 Due
 Due
 Due
 Current
 Total
 Loans
 Accruing

 Residential
 real estate mortgage
 $ 765,359
 $ 530,616
 $ 749,207
 $ 2,045,182
 $ 211,774,124
 $ 223,819,306
 $ -

 Commercial real estate
 5,985,153
 301,024
 -
 6,286,177
 116,832,542
 123,118,719
 -

 Other commercial
 -
 -
 -
 -
 7,083,153
 7,083,153
 -

 Home equity and junior liens
 61,700
 -
 -
 61,700
 7,740,546
 7,802,246
 -

 Other consumer
 67,805
 67,760
 -
 135,565
 4,396,552
 4,532,117
 -

 $ 6,880,017
 $ 899,400
 $ 749,207
 $ 8,528,624
 $ 357,826,917
 $ 366,355,541
 $ -

 2024

 Greater

 than 90

 Loans >90

 30-59 Days
 60-89 Days
 Days Past
 Total Past

 Days and

 Past
 Due
 Past
 Due
 Due
 Due
 Current
 Total
 Loans
 Accruing

 Residential real estate
 mortgage
 $ 1,254,999
 $ 246,079
 $ 380,096
 $ 1,881,174
 $ 242,427,350
 $ 244,308,524
 $ -

 Commercial real estate
 243,743
 1,238,752
 727,928
 2,210,423
 115,362,008
 117,572,431
 -

 Other commercial
 20,219
 -
 177,841
 198,060
 11,739,979
 11,938,039
 -

 Home equity and junior liens
 -
 -
 -
 -
 7,550,224
 7,550,224
 -

 Other consumer
 -
 -
 -
 -
 6,728,618
 6,728,618
 -

 $ 1,518,961
 $ 1,484,831
 $ 1,285,865
 $ 4,289,657
 $ 383,808,179
 $ 388,097,836
 $ -

 20

 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 Information pertaining to changes in
the allowance for credit losses for the years ended December 31, 2025 and 2024 and the allocation of the allowance for credit losses
and balances of the allowance for credit losses and loans based on individual and collective impairment evaluation by loan portfolio class
as of December 31, 2025 and 2024 are as follows:

 2025

 Residential real
 Commercial real
 Other
 Home equity and

 estate
 mortgage
 estate
 commercial
 junior
 liens
 Other
 consumer
 Unallocated
 Total

 Allowance for credit losses:

 Beginning Balance
 $ 2,158,956
 $ 1,167,061
 $ 122,658
 $ 93,526
 $ 117,448
 $ 368,809
 $ 4,028,458

 Loans charged off
 -
 -
 -
 -
 (214,271 )
 -
 (214,271 )

 Recoveries
 7,781
 -
 2,376
 1,975
 203,359
 -
 215,491

 Provisions
 for loan losses
 (264,230 )
 142,130
 (44,978 )
 (7,537 )
 (29,104 )
 (146,281 )
 (350,000 )

 Ending balance
 $ 1,902,507
 $ 1,309,191
 $ 80,056
 $ 87,964
 $ 77,432
 $ 222,528
 $ 3,679,678

 2024

 Residential real
 Commercial real
 Other
 Home equity and

 estate
 mortgage
 estate
 commercial
 junior
 liens
 Other
 consumer
 Unallocated
 Total

 Allowance for credit losses:

 Beginning Balance
 $ 2,802,240
 $ 789,717
 $ 105,451
 $ 94,645
 $ 141,049
 $ -
 $ 3,933,102

 Loans charged off
 -
 -
 -
 -
 (26,857 )
 -
 (26,857 )

 Recoveries
 -
 -
 2,410
 5,500
 14,303
 -
 22,213

 Provisions
 for loan losses
 (643,284 )
 377,344
 14,797
 (6,619 )
 (11,047 )
 368,809
 100,000

 Ending balance
 $ 2,158,956
 $ 1,167,061
 $ 122,658
 $ 93,526
 $ 117,448
 $ 368,809
 $ 4,028,458

 21

 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 The following table provides loans on
nonaccrual status. In connection with the adoption of ASC 326, nonaccrual loans may have an allowance for credit losses or a negative
allowance for credit losses from expected recoveries of amounts previously written off. Nonaccrual loans may not have an allowance for
credit losses if the loss expectations are zero given solid collateral value.

 Amortized cost

 Nonaccrual loans without

 related allowance for credit

 Nonaccrual loans
 losses
 Recognized interest income

 December 31, 2025

 Residential real estate mortgage
 $ 1,248,067
 $ 1,038,959
 $ 264,211

 Commercial real estate
 -
 -
 -

 Other commercial
 -
 -
 -

 Home equity and junior liens
 -
 -
 -

 Other consumer
 68,479
 68,479
 12,641

 Total
 $ 1,316,546
 $ 1,107,438
 $ 276,852

 December 31, 2024

 Residential real estate mortgage
 $ 1,272,831
 $ 922,751
 $ 53,902

 Commercial real estate
 751,803
 -
 23,875

 Other commercial
 -
 -
 -

 Home equity and junior liens
 -
 -
 -

 Other consumer
 177,841
 177,841
 -

 Total
 $ 2,202,475
 $ 1,100,592
 $ 77,777

 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. Loans considered collateral-dependent were as follows:

 2025
 Amortized Cost
 Collateral type

 Real estate:

 Residential real estate mortgage
 $ 195,126
 Residential real estate

 Commercial real estate
 -
 Commercial real estate

 Total real estate
 $ 195,126

 2024
 Amortized Cost
 Collateral type

 Real estate:

 Residential real estate mortgage
 $ 326,410
 Residential real estate

 Commercial real estate
 2,139,716
 Commercial real estate

 Total real estate
 $ 2,466,126

 As of December 31, 2025 there were no
modifications made to borrowers experiencing financial difficulty and immaterial amount of modifications were made as of December 31,
2024.

 22

 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 The Bank has developed an internal
loan grading system to evaluate and quantify the Bank&rsquo;s commercial loan portfolio with respect to quality and risk. The system focuses
on, among other things, financial strength of borrowers, experience and depth of borrower&rsquo;s management, primary and secondary sources
of repayment, payment history, nature of the business and outlook on particular industries.

 Pass - Loans graded as Pass encompass
all loans not graded as Loss, Doubtful, Substandard or Special Mention. Pass loans are in compliance with loan covenants and payments
are generally made as agreed. Pass loans range from superior quality to fair quality.

 Special Mention - A special mention
asset has potential weaknesses that deserve management&rsquo;s close attention. If left uncorrected, these potential weaknesses may result
in deterioration of the repayment prospects for the asset or in the institution&rsquo;s credit position at some future date. Special mention
assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. They pose elevated
risk, but their weakness does not yet justify a substandard classification. Although a special mention asset has a higher probability
of default than a pass asset, its default is not imminent. Special mention is not a compromise between pass and substandard and should
not be used to avoid exercising such judgment.

 Substandard - A substandard asset is
inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified
must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct
possibility that the bank will sustain some loss if the deficiencies are not corrected. Substandard assets have a high probability of
payment default, or they have other well-defined weaknesses. They require more intensive supervision by bank management.

 Loss &ndash; A loan classified as loss
is considered uncollectible and of such little value that their continuance as bankable assets are not warranted.

 The following grading systems below are used to rate residential
and consumer loans.

 Performing and Non-performing &ndash;
A loan is defined as non-performing if it is 90 days past due or on non-accrual status, performing loans are less than 90 days past due
and not nonaccrual.

 23

 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 The following tables present the loans to customers as of
December 31, 2025 and 2024, based on year of origination within each credit quality indicator:

 At December 31,
 2025

 2025
 2024
 2023
 2022
 Prior
 Total

 Residential real estate

 Performing
 $ 5,307,340
 $ 6,336,047
 $ 29,422,583
 $ 60,937,546
 $ 120,567,722
 $ 222,571,238

 Non performing
 -
 -
 -
 -
 1,248,068
 1,248,068

 Total residential
 real estate
 $ 5,307,340
 $ 6,336,047
 $ 29,422,583
 $ 60,937,546
 $ 121,815,790
 $ 223,819,306

 Current
 period net recoveries
 $ -
 $ -
 $ -
 $ -
 $ 7,781
 $ 7,781

 Commercial real estate

 Pass
 $ 16,420,487
 $ 14,728,235
 $ 33,318,543
 $ 20,147,659
 $ 26,113,900
 $ 110,728,824

 Special Mention
 -
 -
 -
 -
 48,108
 48,108

 Substandard
 -
 -
 6,932,689
 -
 5,409,098
 12,341,787

 Total commercial
 real estate
 $ 16,420,487
 $ 14,728,235
 $ 40,251,232
 $ 20,147,659
 $ 31,571,106
 $ 123,118,719

 Other commercial

 Pass
 $ 1,617,577
 $ 2,045,745
 $ 1,139,919
 $ 514,975
 $ 1,663,353
 $ 6,981,569

 Special Mention
 -
 -
 -
 -
 -
 -

 Substandard
 -
 -
 -
 46,149
 55,435
 101,584

 Total other
 commercial
 $ 1,617,577
 $ 2,045,745
 $ 1,139,919
 $ 561,124
 $ 1,718,788
 $ 7,083,153

 Current
 period net recoveries
 $ -
 $ -
 $ -
 $ -
 $ 2,376
 $ 2,376

 Home equity
 and junior lien

 Performing
 $ 1,283,953
 $ 904,252
 $ 680,451
 $ 1,341,892
 $ 3,591,698
 $ 7,802,246

 Current
 period net recoveries
 $ -
 $ -
 $ -
 $ -
 $ 1,975
 $ 1,975

 Other consumer

 Performing
 $ 1,112,448
 $ 1,323,790
 $ 1,291,395
 $ 559,856
 $ 244,628
 $ 4,532,117

 Non performing
 -
 -
 -
 -
 -
 -

 Total other
 consumer
 $ 1,112,448
 $ 1,323,790
 $ 1,291,395
 $ 559,856
 $ 244,628
 $ 4,532,117

 Current period gross write-offs
 $ 5,382.00
 $ 2,804
 $ 206,085
 $ -

 $ 214,271

 Current period recoveries
 -
 -
 200,462
 -
 2,897
 203,359

 Current
 period net (write-offs) recoveries
 $ (5,382.00 )
 $ (2,804 )
 $ (5,623 )
 $ -
 $ 2,897
 $ (10,912 )

 Total Loans
 $ 25,741,805
 $ 25,338,069
 $ 72,785,580
 $ 83,548,077
 $ 158,942,010
 $ 366,355,541

 24

 3. LOANS
AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 At December 31,
 2024

 2024
 2023
 2022
 2021
 Prior
 Total

 Residential
 real estate

 Performing
 $ 6,808,280
 $ 33,586,282
 $ 65,497,275
 $ 58,559,559
 $ 78,584,297
 $ 243,035,693

 Non
 performing
 -
 -
 -
 697,441
 575,390
 1,272,831

 Total
 residential real estate
 $ 6,808,280
 $ 33,586,282
 $ 65,497,275
 $ 59,257,000
 $ 79,159,687
 $ 244,308,524

 Commercial
 real estate

 Pass
 $ 11,693,554
 $ 42,743,567
 $ 22,200,495
 $ 6,007,176
 $ 24,504,162
 $ 107,148,954

 Special Mention
 -
 -
 -
 1,666,966
 3,194,532
 4,861,498

 Substandard
 -
 183,358
 -
 1,882,454
 3,496,167
 5,561,979

 Total
 commercial real estate
 $ 11,693,554
 $ 42,926,925
 $ 22,200,495
 $ 9,556,596
 $ 31,194,861
 $ 117,572,431

 Other commercial

 Pass
 $ 6,216,218
 $ 1,776,623
 $ 1,225,901
 $ 1,268,486
 $ 1,206,641
 $ 11,693,869

 Special Mention
 -
 -
 -
 -
 203,640
 203,640

 Substandard
 -
 -
 40,530
 -
 -
 40,530

 Total
 other commercial
 $ 6,216,218
 $ 1,776,623
 $ 1,266,431
 $ 1,268,486
 $ 1,410,281
 $ 11,938,039

 Current
 period net recoveries
 $ -
 $ -
 $ -
 $ -
 $ 2,410
 $ 2,410

 Home
 equity and junior lien

 Performing
 $ 950,313
 $ 762,141
 $ 1,741,110
 $ 659,891
 $ 3,436,769
 $ 7,550,224

 Current
 period net recoveries
 $ -
 $ -
 $ -
 $ -
 $ 5,500
 $ 5,500

 Other consumer

 Performing
 $ 2,315,764
 $ 2,269,978
 $ 1,300,580
 $ 371,178
 $ 293,277
 $ 6,550,777

 Non
 performing
 -
 177,841
 -
 -
 -
 177,841

 Total
 other consumer
 $ 2,315,764
 $ 2,447,819
 $ 1,300,580
 $ 371,178
 $ 293,277
 $ 6,728,618

 Current period
 gross write-offs
 $ -
 $ 892
 $ 24,173
 $ -
 $ 1,792
 $ 26,857

 Current
 period recoveries
 -
 -
 898
 -
 13,405
 14,303

 Current
 period net (write-offs) recoveries
 $ -
 $ (892 )
 $ (23,275 )
 $ -
 $ 11,613
 $ (12,554 )

 Total
 Loans
 $ 27,984,129
 $ 81,499,790
 $ 92,005,891
 $ 71,113,151
 $ 115,494,875
 $ 388,097,836

 25

 4. PREMISES, FURNITURE AND EQUIPMENT

 Major classifications of these assets are summarized as follows
at December 31:

 2025
 2024

 Land
 $ 803,149
 $ 803,149

 Buildings
 7,326,157
 7,283,384

 Furniture and equipment
 5,640,639
 5,440,671

 13,769,945
 13,527,204

 Less: Accumulated depreciation
 9,504,687
 9,035,092

 $ 4,265,258
 $ 4,492,112

 Depreciation expense amounted
to approximately $464,000 and $545,000 in 2025 and 2024, respectively.

 5. PROVISION FOR INCOME TAXES

 The components of the income tax expense are as follow for
the years ended December 31:

 2025
 2024

 Current tax expense:

 Federal
 $ 209,211
 $ 181,638

 State
 44,740
 42,496

 253,951
 224,134

 Deferred tax benefit:

 Federal
 (30,275 )
 (36,166 )

 State
 -
 -

 (30,275 )
 (36,166 )

 Total income tax expense
 $ 223,676
 $ 187,968

 A reconciliation of the Bank&rsquo;s
effective tax rate for the years ended December 31, 2025 and 2024 are as follows:

 Rate Reconciliation

 2025
 2024

 2025 $
 % of income
 % of income

 Federal income tax at statutory rate
 274,927
 21.0 %
 21.0 %

 State and Local Income Tax, Net of Federal Benefit

 State tax, net of federal tax benefit
 (194,446 )
 (14.9 )
 (15.0 )

 Change in Valuation Allowance

 Valuation Allowance &ndash; State
 229,791
 17.6
 17.4

 Nontaxable or nondeductible items

 Tax Exempt Income
 (101,933 )
 (7.8 )
 (7.7 )

 Other
 15,337
 1.1
 (2.3 )

 Effective tax rates
 223,676
 17.0 %
 13.4 %

 26

 5. PROVISION FOR INCOME TAXES (Continued)

 Cash paid for income taxes for the year ended December 31,
2025 is as follows:

 2025

 Federal
 $ 190,000

 State
 86,000

 Total income tax expense
 $ 276,000

 Income taxes paid (net of refunds)
exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:

 State

 New York
 $ 86,000

 The Bank had gross deferred tax assets and gross deferred
tax liabilities as follows as of December 31:

 2025
 2024

 Deferred tax assets:

 Allowance for credit losses
 $ 961,684
 $ 1,052,838

 NYS NOL
 839,559
 625,101

 Net unrealized loss on available-for-sale debt securities
 926,891
 1,842,785

 Transaction costs
 108,481
 -

 Other
 98,860
 98,297

 Total deferred tax assets
 2,935,475
 3,619,021

 Deferred tax liabilities:

 Bond amortization
 187,588
 173,715

 Depreciation
 111,058
 152,649

 Total deferred tax liabilities
 298,646
 326,364

 Net deferred tax assets before valuation allowance
 2,636,829
 3,292,657

 Less: Valuation allowance NY State
 (1,023,495 )
 (793,703 )

 Net deferred tax assets
 $ 1,613,334
 $ 2,498,954

 The Bank is no longer subject to examination
by Federal and State taxing authorities prior to the year ended December 31, 2019. New York State tax law governing community banks
permits a permanent tax deduction related to interest income, ultimately resulting in the Bank&rsquo;s corporate tax calculation to be
based upon capital (as opposed to income) for the foreseeable future. Consequently, the Bank has established a full valuation allowance
against its New York State net deferred tax asset position at December 31, 2025 and 2024. This valuation allowance increased by approximately
$230,000 to $1,023,000 at December 31, 2025, from approximately $794,000 at December 31, 2024. At December 31, 2025 and
2024, the Bank had New York State NOL carry-forwards of approximately $16,350,000 and $12,175,000, respectively, equating to approximately
$840,000 and $625,000 in deferred tax assets, all of which have been fully reserved as part of the Bank&rsquo;s valuation allowance. The
New York State NOL carry-forwards begin to expire in 2035. The Bank&rsquo;s deferred tax assets are recorded within other assets.

 27

 6. EMPLOYEES&rsquo; RETIREMENT 401(K) PLAN

 Effective January 1, 2024 the Bank
established a Safe Harbor 401(k) plan. Contributions to the plan will be made on behalf of eligible employees in accordance with
the plan&rsquo;s terms and conditions. A safe harbor contribution of 3% is made to eligible employees for the year. Prior to January 1,
2024, the Bank maintained a 401(k) plan whereby the Bank matched one-half of employee contributions to the plan up to a maximum of
six percent of an employee&rsquo;s salary. The Bank incurred approximately $111,731 and $115,100 of 401(k) matching contributions
during the years ended December 31, 2025 and 2024, respectively. Safe Harbor contributions were approximately $307,000 and $154,000
as of December 31, 2025 and 2024, respectively. The Safe Harbor plan automatically enrolls new employees after six months of service
unless they opt out. Employees are fully vested in employee safe harbor contributions and the employer match is fully vested after three-years.

 7. LEASES

 The Bank leases land and a building
under a long- term lease agreement with a related party. The lease is an operating lease, with a term of 20 years that began on July 1,
2019, without any renewal options and expires on June 30, 2039. Additionally, the lease did not include any residual value guarantees
or covenants.

 The Bank leases a building for a loan
production office. The lease is an operating lease, with a term of 10 years that commenced on June 1, 2023 and expires June 1,
2033. There is a five year extension option at the end of the term.

 The operating lease cost was approximately
$193,000 during the years ended December 31, 2025 and 2024. The extension term is for an additional five years.

 Right-of-use asset represents the Bank&rsquo;s
right to use an underlying asset for the lease term and lease liability represents the Bank&rsquo;s obligation to make lease payments
arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based upon the estimated
present value of lease payments over the lease term. For the one lease, the Bank used its incremental secured borrowing rate as of the
lease commencement date to calculate the present value of lease payments when the rate implicit in a lease is not known.

 The Bank&rsquo;s incremental secured
borrowing rate is based upon the Federal Home Loan Bank of New York (FHLBNY) advance rate, adjusted for the lease term and other factors,
as deemed appropriate.

 28

 7. LEASES (Continued)

 Supplemental information related to the leases at December 31
was as follows:

 2025
 2024

 Right-of-use asset:

 Operating lease
 $ 1,431,580
 $ 1,562,544

 Lease liability:

 Operating lease
 $ 1,495,797
 $ 1,616,074

 Operating cash flows paid for operating lease
 $ 182,697
 $ 177,895

 Operating lease weighted average remaining lease term
 9.8 Years
 10.8 Years

 Operating lease weighted average discount rate
 4.02 %
 4.02 %

 The undiscounted cash flows of the operating lease liabilities
are as follows at December 31, 2024:

 2026
 $ 185,407

 2027
 188,171

 2028
 190,991

 2029
 196,226

 Thereafter
 1,042,349

 Total undiscounted cash flows
 1,803,144

 Less: net present value of adjustments
 (307,347 )

 Lease liability
 $ 1,495,797

 8. RELATED PARTY TRANSACTIONS

 In the ordinary course of business,
the Bank has transactions, including loans and deposit accounts, with its executive officers and directors, and their affiliates. These
transactions were on substantially the same terms, including interest rates and collateral, as those prevailing at the time of comparable
transactions with other persons, and did not involve more than a normal risk of collectability or present any other unfavorable features.
The aggregate amount of loans to such related parties at December 31, 2025 and 2024 was approximately $2,830,000 and $3,083,000,
respectively. During 2025, there were no new loans to such related parties and during 2024, there was one new loan to such related parties
and repayments amounted to approximately $253,000.

 The Bank held deposits of approximately
$4,237,000 and $8,421,000 for related parties at December 31, 2025 and 2024, respectively. The lessor for the lease described in
Note 7 is a company owned by a board member.

 9. COMMITMENTS AND CONTINGENCIES

 Financial Instruments with Off-Balance-Sheet
Risk

 The Bank is a party to financial instruments
with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments
include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit
and interest rate risk in excess of the amounts recognized in the consolidated financial statements.

 29

 9. COMMITMENTS AND CONTINGENCIES (Continued)

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

 The Bank&rsquo;s exposure to credit
loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters
of credit is represented by the contractual notional amount of those instruments summarized as follows at December 31, 2025 and 2024:

 The Bank had the following outstanding
commitments at December 31:

 2025
 2024

 Commitments to extend credit:

 Home equity loan commitments
 $ 6,800,846
 $ 6,575,394

 Commercial and other commitments
 4,389,706
 2,203,009

 Standby letters of credit
 735,158
 702,866

 $ 11,925,710
 $ 9,481,269

 As of December 31, 2025 and 2024,
the amount reserved for off balance sheet commitments totaled approximately $177,000.

 Financial Instruments with Off-Balance-Sheet Risk

 Commitments to extend credit are agreements
to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without
being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer&rsquo;s
creditworthiness on a case-by-case basis. The amount and type of collateral obtained, if deemed necessary by the Bank upon extension of
credit, varies and is based on management&rsquo;s credit evaluation of the counterparty.

 Standby letters of credit are conditional
commitments issued by the Bank to guarantee the performance of a customer to a third party. Standby letters of credit generally have fixed
expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit
is essentially the same as that involved in extending loan facilities to customers. The Bank&rsquo;s policy for obtaining collateral,
and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit.

 Risk Participation Agreements

 Risk participation agreements (&ldquo;RPAs&rdquo;)
are guarantees issued by the Bank to other parties for a fee, whereby the Bank agrees to participate in the credit risk of a derivative
customer of the other party. Under the terms of these agreements, the &ldquo;participating bank&rdquo; receives a fee from the &ldquo;lead
bank&rdquo; in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap. The interest rate swap is
transacted such that any and all exchanges of interest payments (favorable and unfavorable) are made between the lead bank and the customer.

 30

 9. COMMITMENTS AND CONTINGENCIES (Continued)

 In the event that an early termination
of the swap occurs and the customer is unable to make a required close out payment, the participating bank assumes that obligation and
is required to make this payment.

 RPAs where the Bank acts as the participating
bank are referred to as &ldquo;participations-in,&rdquo; in reference to the credit risk associated with the counterparty&rsquo;s derivatives
being assumed by the Bank. The Bank&rsquo;s maximum credit exposure is based on its proportionate share of the settlement amount of the
referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued
interest receivables from the customer. The Bank has one RPA agreement and the term is less than three years. At December 31, 2025
and 2024, there was no credit exposure associated with the agreement as the effective date is subsequent to December 31, 2025.

 10. CONCENTRATIONS OF CREDIT

 The Bank grants loans to customers primarily
located in the Capital Region of New York. The majority of those customers are depositors of the Bank. Investments in state and local
government securities also involve governmental entities within the Bank&rsquo;s market area. The concentrations of credit by loan class
are set forth in Note 3. The distribution of commitments to extend credit is set forth in Note 9. The Bank, as matter of policy, does
not extend credit to any single borrower, or group of related borrowers in excess of its legal lending limit. The Bank does not have any
significant concentrations to any single industry or customer.

 11. BORROWINGS AND LINES OF CREDIT

 The Bank had $12.4 million and $22.3
million in term borrowings with the FHLB as of December 31, 2025 and 2024, respectively. The Bank had no outstanding overnight borrowings
on its line of credit with the FHLB at December 31, 2025 and December 31, 2024. Additionally, the Bank had no outstanding borrowings
with the Federal Reserve Bank at December 31, 2025 and $6 million outstanding with the Federal Reserve Bank at December 31,
2024.

 31

 12. BORROWINGS AND LINES OF CREDIT (Continued)

 The following table sets forth the contractual
terms of borrowings with the FHLB and FRB as of December 31:

 Advance
 Maturity
 Interest

 Date
 Date
 Rate
 2025 Outstanding Balance
 2024 Outstanding Balance

 5/19/2020
 5/19/2025
 0.69 %
 $ -
 $ 5,000,000

 11/08/2022
 11/07/2025
 4.96 %
 -
 100,090

 11/14/2022
 11/14/2025
 4.60 %
 -
 70,000

 11/21/2022
 11/21/2025
 4.66 %
 -
 83,005

 12/22/2022
 12/22/2025
 4.33 %
 -
 165,219

 12/30/2022
 12/30/2025
 4.58 %
 -
 160,000

 12/30/2022
 12/30/2025
 4.59 %
 -
 26,000

 12/30/2022
 12/30/2025
 4.59 %
 -
 100,000

 5/10/2023
 5/10/2028
 3.80 %
 5,000,000
 5,000,000

 6/30/2023
 6/30/2026
 4.79 %
 5,000,000
 5,000,000

 3/26/2024
 3/29/2027
 4.65 %
 257,005
 257,005

 4/30/2024
 4/30/2027
 5.11 %
 293,310
 293,310

 5/24/2024
 5/24/2027
 4.97 %
 61,290
 61,290

 9/16/2024
 9/16/2027
 3.66 %
 1,000,042
 1,000,042

 12/27/2024
 1/15/2025
 4.50 %
 -
 6,000,000

 12/30/2024
 6/30/2025
 4.47 %
 -
 5,000,000

 7/11/2025
 7/13/2026
 4.29 %
 334,095
 -

 7/21/2025
 7/21/2026
 4.25 %
 130,005
 -

 8/19/2025
 8/21/2028
 3.86 %
 331,510
 -

 Total
 $ 12,407,257
 $ 28,315,961

 The Bank has access to FHLBNY advances,
under which it can borrow at various terms and interest rates. Residential real estate mortgages, as disclosed in Note 3, and FHLB stock
with a carrying value of approximately $1,077,200 have been pledged by the Bank under a blanket collateral agreement to secure the Bank&rsquo;s
borrowings at December 31, 2025. The total outstanding indebtedness under borrowing facilities with the FHLB cannot exceed the total
value of the assets pledged under the blanket collateral agreement.

 The Bank had municipal letters of credit
outstanding totaling $48.0 million and $45.5 million at December 31, 2025 and 2024.

 At December 31, 2025, scheduled repayments of long term
advances are as follows:

 2026
 $ 5,464,100

 2027
 1,611,647

 2028
 5,331,510

 $ 12,407,257

 At December 31, 2025, the Bank
had a secured line of credit totaling approximately $2,000,000 that must be secured by debt securities with one correspondent bank. The
Bank also had unsecured lines of credit totaling approximately $8,000,000 with two correspondent banks. The Bank has a line of credit
available at December 31, 2025 with the Federal Reserve Bank of New York through its Discount Window and has pledged debt securities
as well as loans to support the line, totaling approximately $66,939,000.

 32

 12. SUBORDINATED DEBENTURES

 On June 30, 2020, the Corporation
executed a $5,000,000 non-amortizing Subordinated Note with unrelated third parties that is scheduled to mature on June 30, 2030.
The Corporation has the right to prepay the Subordinated Note at any time after June 30, 2025 without penalty.

 The annual interest rate charged to
the Corporation will be 5.5% through the maturity date of the subordinated note. The origination and legal fees for this transaction were
not significant and were expensed as incurred. The balance outstanding at December 31, 2025 and 2024 was $5,000,000.

 On August 15, 2023, the Corporation
executed a $4,550,000 non-amortizing Subordinated Note. $100,000 of note proceeds were provided from a related party. The note is scheduled
to mature on September 1, 2033. The Corporation has the right to prepay the Subordinated Note at any time after September 1,
2028 without penalty. The annual interest rate charged to the Corporation will be 7.0% through the maturity date of the subordinated note.
The origination and legal fees for this transaction were not significant and were expensed as incurred. The balance outstanding at December 31,
2025 and 2024 was $4,550,000.

 13. DEPOSITS

 The aggregate amount of time deposits
in denominations of $250,000 or more at December 31, 2025 and 2024 was approximately $33,974,000 and $28,274,000, respectively.

 At December 31, 2025, scheduled maturities of time deposits
are as follows:

 2026
 $ 125,764,478

 2027
 15,683,443

 2028
 206,783

 2029
 57,746

 $ 141,712,450

 14. REGULATORY CAPITAL AND SUPERVISION

 The Bank is subject to legal limitations
on the amount of dividends that can be paid to its shareholders. At December 31, 2025, approximately $2,969,000 was available for
the declaration of dividends subject to regulatory approval as described below.

 The Bank is subject to various regulatory
capital requirements administered by certain federal banking agencies. The final rules implementing Basel Committee on Banking Supervision&rsquo;s
capital guidelines for U.S. banks (Basel III rules) became effective for the Bank on January 1, 2015 with full compliance with all
of the requirements being phased in over a multi-year schedule, and was fully phased on January 1, 2019. Failure to meet minimum
capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken,
could have a direct material effect on the Bank&rsquo;s consolidated financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank&rsquo;s
assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank&rsquo;s capital
amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

 33

 14. REGULATORY CAPITAL AND SUPERVISION (Continued)

 Quantitative measures established by
regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total,
Tier 1 and Tier 1 common equity capital (as defined by regulation) and of Tier 1 capital (as defined) to average assets (as defined).
Management believes, as of December 31, 2025, that the Bank meets all capital adequacy requirements to which it is subject.

 As of the most recent notification
from the Bank&rsquo;s regulators, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action.
To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 common equity risk based,
and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes
have changed the Bank&rsquo;s category. The Bank&rsquo;s approximate capital amounts and ratios at December 31 are also presented
in the table.

 2025

 To be Well Capitalized
 under Prompt
 Minimum for Capital Adequacy

 Actual
 For
 Capital Adequacy Purposes
 Corrective
 Action Provisions
 with
 Buffer

 Amount
 Ratio
 Amount
 Ratio
 Amount
 Ratio
 Amount
 Ratio

 Total Capital

 (to Risk Weighted

 Assets)
 $ 51,584,000
 18.4 %
 &sup3;
 $ 22,396,000
 &sup3; 8.0 %
 &sup3;
 $ 27,995,000
 &sup3; 10.0 %
 &sup3;
 $ 29,395,000
 &sup3; 10.5 %

 Tier I Capital

 (to Risk Weighted

 Assets)
 48,081,000
 17.2 %
 &sup3;
 16,797,000
 &sup3; 6.0 %
 &sup3;
 22,396,000
 &sup3; 8.0 %
 &sup3;
 23,796,000
 &sup3; 8.5 %

 Tier 1 Common Equity

 (to Risk Weighted

 Assets)
 48,081,000
 17.2 %
 &sup3;
 12,598,000
 &sup3; 4.5 %
 &sup3;
 18,197,000
 &sup3; 6.5 %
 &sup3;
 19,597,000
 &sup3; 7.0 %

 Tier I Capital

 (to Average Assets)
 48,081,000
 8.9 %
 &sup3;
 22,262,000
 &sup3; 4.0 %
 &sup3;
 27,032,000
 &sup3; 5.0 %
 &sup3;
 27,032,000
 &sup3; 5.0 %

 2024

 To be Well Capitalized
 under Prompt

 Minimum for Capital Adequacy

 Actual

 For
 Capital Adequacy Purposes

 Corrective
 Action Provisions

 with
 Buffer

 Amount
 Ratio

 Amount
 Ratio

 Amount
 Ratio

 Amount
 Ratio

 Total Capital

 (to Risk Weighted

 Assets)
 $ 50,728,000
 17.0 %
 &sup3;
 $ 23,851,000
 &sup3; 8.0 %
 &sup3;
 $ 29,813,000
 &sup3; 10.0 %
 &sup3;
 $ 31,304,000
 &sup3; 10.5 %

 Tier I Capital

 (to Risk Weighted

 Assets)
 49,996,000
 15.8 %
 &sup3;
 17,888,000
 &sup3; 6.0 %
 &sup3;
 23,851,000
 &sup3; 8.0 %
 &sup3;
 25,341,000
 &sup3; 8.5 %

 Tier 1 Common Equity

 (to Risk Weighted

 Assets)
 49,996,000
 15.8 %
 &sup3;
 13,416,000
 &sup3; 4.5 %
 &sup3;
 19,379,000
 &sup3; 6.5 %
 &sup3;
 20,869,000
 &sup3; 7.0 %

 Tier I Capital

 (to Average Assets)
 49,996,000
 8.5 %
 &sup3;
 22,230,000
 &sup3; 4.0 %
 &sup3;
 27,788,000
 &sup3; 5.0 %
 &sup3;
 27,788,000
 &sup3; 5.0 %

 34

 15. FAIR VALUE MEASUREMENTS

 The Bank uses fair value measurements
to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Fair value is an exit price,
representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants. Fair value is best determined based upon quoted market prices. However, in some instances, there may be no quoted market
prices for the Bank&rsquo;s various assets and liabilities. In cases where quoted market prices are not available, fair values are based
on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement
of the instrument.

 Fair value accounting guidance provides
a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed
sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in
the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques
may be appropriate.

 In such instances, determining the price
at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances
and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair
value under current market conditions.

 The Bank groups its assets and liabilities
measured at fair value in three levels based on the markets in which the assets and liabilities are traded and the reliability of the
assumptions used to determine fair value.

 Level 1 : Valuation
is based on quoted prices in active markets for identical assets or liabilities that the Bank has the ability to access at the measurement
date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations
are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

 Level 2 : Valuation
is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active;
or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

 Level 3: Valuation
is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
and liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted
cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management
judgment or estimation.

 An asset&rsquo;s or liability&rsquo;s categorization within
the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 35

 15. FAIR VALUE MEASUREMENTS (Continued)

 The following methods and assumptions
were used by the Bank in estimating fair value disclosures:

 Cash and cash equivalents

 The carrying amounts of cash and cash
equivalents approximate their fair values and are classified as Level 1.

 Debt securities

 The Bank determines the fair value for
its debt securities using an independent bond pricing service for identical assets or significantly similar debt securities (Level 2).
The pricing service uses a variety of techniques to arrive at fair value including market maker bids, quotes and pricing models. Inputs
to the pricing models include recent trades, benchmark interest rates, spreads and actual and projected cash flows. The Bank&rsquo;s available
for sale debt securities were all classified as Level 2 at December 31, 2025 and 2024.

 Restricted stock

 The carrying amounts of investments
in Federal Reserve Bank stock and Federal Home Loan Bank stock approximate their fair values and are classified as Level 2.

 Net loans

 For variable-rate loans that reprice
frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value for other loans is
estimated using discounted cash flow analysis, based on interest rates currently being offered in the market for loans with similar terms
to borrowers of similar credit quality. Loan value estimates include judgments based on expected prepayment rates. The measurement of
fair of loans, including individually evaluated loans, is classified within Level 3 of the fair value hierarchy.

 Accrued interest receivable and payable

 The carrying amounts of accrued interest
receivable and payable approximate fair value and are classified as Level 1.

 Deposits

 The fair values disclosed for demand
and savings deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts)
and are classified within Level 1 of the fair value hierarchy. Fair values for fixed-rate certificates of deposit are estimated using
a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates of deposits to a
schedule of aggregated expected monthly maturities on time deposits. Measurements of the fair value of time deposits are classified within
Level 2 of the fair value hierarchy.

 Borrowed Funds

 The fair value of long-term FHLB and
FRB advances are estimated using discounted cash flow analysis, based on quoted priced for new FHLB and FRB advances with similar credit
risk characteristics, terms and remaining maturities and are classified within Level 2 of the fair value hierarchy.

 Subordinated debentures

 The Bank obtains quotes from its pricing
service based upon discounted cash flow methodology or utilizes observations of recent highly similar transactions which result in a Level
2 classification.

 36

 15. FAIR VALUE MEASUREMENTS (Continued)

 Collateral Dependent Loans

 Collateral dependent loans are those
for which the Bank has individually calculated the credit loss based on the fair value of the loan&rsquo;s collateral. For collateral
dependent loans, fair value is commonly based on recent real estate appraisals. These real estate appraisals may include up to three approaches
to value: the sales comparison approach, the income approach (for income-producing property) and the cost 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,
if applicable. Although the fair value of the property normally will be based on an appraisal, the valuation should be consistent with
the price that a market participant will pay to purchase the property at the measurement date. Circumstances may exist that indicate that
the appraised value is not an accurate measurement of the property&rsquo;s current fair value. Examples of such circumstances include
changed economic conditions since the last appraisal, change in property use, stale appraisals, or imprecision and subjectivity in the
appraisal process. Appraisal adjustments may be made by management to reflect these conditions resulting in a discount of the appraised
value. In addition, a discount is typically applied to account for estimated costs to sell. Non-real estate collateral may be valued using
an appraisal, net book value per the borrower&rsquo;s financial statements, or aging reports, adjusted or discounted based on management&rsquo;s
historical knowledge, changes in market conditions from the time of the valuations, and management&rsquo;s expertise and knowledge of
the client and client&rsquo;s business. Collateral dependent loans carried at fair value result in a Level 3 fair value classification.

 Other Real Estate Owned

 Fair values for other real estate owned
are initially recorded based on market value evaluations by third parties, less costs to sell (&ldquo;initial cost basis&rdquo;). Any
write-downs required when the related loan receivable is exchanged for the underlying real estate collateral at the time of transfer to
foreclosed real estate are charged to the allowance for credit losses. Values are derived from appraisals, similar to impaired loans,
of underlying collateral or discounted cash flow analysis. Subsequent to foreclosure, valuations are updated periodically, and assets
are marked to current fair value, not to exceed the initial cost basis. In the determination of fair value subsequent to foreclosure,
management also considers other factors or recent developments, such as, changes in absorption rates and market conditions from the time
of valuation and anticipated sales values considering management&rsquo;s plans for disposition. Either change could result in adjustment
to lower the property value estimates indicated in the appraisals. These measurements are classified as Level 3 within the fair value
hierarchy. Other real estate owned is subject to nonrecurring fair value adjustment upon initial recognition or subsequent impairment.

 37

 15. FAIR VALUE MEASUREMENTS (Continued)

 Assets measured at fair value on a recurring
basis at December 31 are as follows:

 2025

 Description
 Total
 Level 1
 Level 2
 Level 3

 Securities available-for-sale:

 U.S. Treasuries
 $ 47,271,328
 $ -
 $ 47,271,328
 $ -

 U.S. Government agencies
 8,770,361
 -
 8,770,361
 -

 Residential mortgage backed
 8,157,250
 -
 8,157,250
 -

 State and local governments
 36,715,835
 -
 36,715,835
 -

 $ 100,914,774
 $ -
 $ 100,914,774
 $ -

 2024

 Description
 Total
 Level 1
 Level 2
 Level 3

 Securities available-for-sale:

 U.S. Treasuries
 $ 51,113,438
 $ -
 $ 51,113,438
 $ -

 U.S. Government agencies
 19,211,577
 -
 19,21,577
 -

 Residential mortgage backed
 11,643,895
 -
 11,643,895
 -

 State and local governments
 36,093,847
 -
 36,093,847
 -

 $ 118,062,757
 $ -
 $ 118,062,757
 $ -

 The following tables summarize fair value disclosures for
individually evaluated and other real estate owned at December 31:

 Fair Value Measurements Using

 Recorded
 Related

 (In thousands)
 Investment
 Allowance
 Fair Value
 (Level 1)
 (Level 2)
 (Level 3)

 2025:

 Individually evaluated
 $ 1,161,012
 $ 16,205
 $ 1,144,807
 $ -
 $ -
 $ 1,144,807

 Collateral dependent loans
 $ -
 $ -
 $ -
 $ -
 $ -
 $ -

 2024:

 Individually evaluated
 $ 2,125,333
 $ 24,034
 $ 2,101,299
 $ -
 $ -
 $ 2,101,299

 Collateral dependent loans
 $ -
 $ -
 $ -
 $ -
 $ -
 $ -

 38

 15. FAIR VALUE MEASUREMENTS (Continued)

 The following table presents additional
quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs were utilized to determine
fair value at December 31:

 2025

 Fair Value
 Valuation Technique
 Unobservable Input
 Range
 Weighted Average

 Individually evaluated
 $ 1,144,807
 Discounted cash flow
 Discount rate
 3.7% - 9.6%
 8.38 %

 2024

 Fair
 Value
 Valuation Technique

 Unobservable Input
 Range
 Weighted
 Average

 Individually evaluated
 $ 2,101,299
 Discounted cash flow

 Discount rate
 3.9% - 9.9%
 5.63 %

 The carrying amounts and estimated fair values of the Bank&rsquo;s
financial instruments at December 31 were as follows:

 2025
 2024

 Fair Value

 Hierarchy
 Carrying

 Amount
 Fair

Value
 Carrying

 Amount
 Fair

Value

 Financial assets:

 Total cash and cash equivalents
 1
 $ 33,482,968
 $ 33,482,968
 $ 13,590,594
 $ 13,590,594

 Debt securities:

 Available-for-sale
 2
 100,914,774
 100,914,774
 118,062,757
 118,062,757

 Held-to-maturity
 2
 3,783,547
 3,909,197
 3,961,052
 3,981,570

 Federal Reserve Bank stock
 2
 852,250
 852,250
 852,250
 852,250

 Federal Home Loan Bank stock
 2
 1,077,200
 1,077,200
 1,516,800
 1,516,800

 Net loans
 3
 362,675,863
 343,363,000
 384,069,378
 356,756,000

 Accrued interest receivable
 1
 1,371,178
 1,371,178
 1,477,437
 1,477,437

 Financial liabilities:

 Deposits:

 Demand and savings deposits
 1
 309,360,126
 250,246,000
 332,873,631
 333,704,000

 Time deposits
 2
 141,712,450
 141,814,000
 127,263,213
 127,097,000

 Federal Home Loan Bank:
 1
 -
 -
 6,000,000
 6,001,000

 Short-term advances

 Long-term advances
 2
 12,407,257
 12,482,000
 22,315,961
 22,173,000

 Subordinated debentures
 2
 9,550,000
 9,478,000
 9,550,000
 8,407,000

 Accrued interest payable
 1
 553,213
 553,213
 534,850
 534,850

 39

 16. ACCUMULATED COMPREHENSIVE INCOME (LOSS)

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

 Accumulated other comprehensive loss as of January 1, 2024
 $ (8,244,359 )

 Other comprehensive income before reclassifications, net of tax
 1,311,976

 Accumulated other comprehensive loss as December 31, 2024
 (6,932,383 )

 Other comprehensive income before reclassifications, net of tax
 3,445,513

 Accumulated other comprehensive loss as December 31, 2025
 $ (3,486,870 )

 The amounts of tax expense allocated to each component of other comprehensive
income are as follows for the years ended December 31:

 2025
 2024

 Unrealized gains arising during the year
 $ 915,894
 $ 348,754

 Reclassification adjustment for net losses included in net income
 -
 -

 Income tax benefit
 $ 915,894
 $ 348,754

 There were no amounts reclassed out of accumulated other comprehensive
income for the year ended December 31, 2025 or 2024.

 40

 17. REVENUE FROM CONTRACTS WITH CUSTOMERS

 The majority of the Bank&rsquo;s revenue-generating
transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and debt securities
which are presented in the income statement as components of net interest income. All of the Bank's revenue from contracts with customers
in the scope of ASC 606 is recognized within non-interest income. The following table presents revenues subject to ASC 606 for the years
ended December 31, 2025 and 2024, respectively.

 2025
 2024

 Service charges
 $ 445,851
 $ 413,861

 Interchange fee income
 932,790
 957,034

 Total service fees
 $ 1,378,641
 $ 1,370,895

 The following is a discussion of key revenues within the
scope of the revenue guidance:

 Service charges

 Revenue from fees on customer accounts
is earned at the time that the charge is assessed to the customer's account.

 Interchange fee income

 Debit card interchange income consists
of interchange fees from consumer debit card networks and other card related services. Interchange rates are set by the card networks.
Interchange fees are based on purchase volumes and other factors and are recognized as transactions occur.

 Other Non-Interest Income

 Other non-interest income consists of
prepayment penalties, gain on sale of other real estate owned and swap fee income and are recognized as transactions occur.

 18. SUBSEQUENT EVENTS

 On September 23, 2025, NBC Bancorp, Inc.
entered into an Agreement and Plan of Merger with Ballston Spa Bancorp, Inc. (&ldquo;Ballston Spa&rdquo;). Pursuant to the merger
agreement, NBC will merge with and into Ballston Spa, with Ballston Spa continuing as the surviving corporation. Immediately following
the holding company merger, The National Bank of Coxsackie, a wholly owned subsidiary of NBC, will merge with and into Ballston Spa National
Bank, with Ballston Spa National Bank as the surviving bank.

 Under the terms of the merger agreement,
each outstanding share of NBC common stock will be converted into the right to receive 0.8065 shares of Ballston Spa common stock, subject
to cash in lieu of fractional shares. The merger is subject to approval by the shareholders of both companies, receipt of required regulatory
approvals, and satisfaction of other customary closing conditions. Special meetings of shareholders of both companies are scheduled for
March 23, 2026.

 The Company has evaluated subsequent
events through March 18, 2026, the date the consolidated financial statements were available to be issued. As of that date, the merger
had not been completed.

 41

EX-99.2 · tm2617581d1_ex99-2.htm

Type

EX-99.2

File

tm2617581d1_ex99-2.htm

Document text
EX-99.2 · tm2617581d1_ex99-2.htm EX-99.2 4 tm2617581d1_ex99-2.htm EXHIBIT 99.2 Exhibit 99.2 BALLSTON SPA BANCORP, INC./NBC BANCORP, INC. THE UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION AS OF, AND FOR THE YEAR ENDED, DECEMBER 31, 2025 On April 1, 2026, Ballston Spa Bancorp, Inc. (“Ballston Spa”) completed its previously announced merger with NBC Bancorp, Inc. (“NBC”), pursuant to the Agreement and Plan of Merger, dated as of September 23, 2025 (the “Merger Agreement”), by and between Ballston Spa and NBC, pursuant to which NBC merged with and into the Ballston Spa, with Ballston Spa as the surviving entity. In addition, The National Bank of Coxsackie, a national bank and a wholly owned subsidiary of NBC, merged with and into Ballston Spa National Bank, a national bank and a wholly owned subsidiary of the Company, with Ballston Spa National Bank as the surviving bank. As a result of the merger, each share of NBC common stock was converted into the right to receive 0.8065 shares of Ballston Spa common stock, with cash payable in lieu of any fractional shares. The following unaudited pro forma condensed combined financial information and accompanying notes are based on and should be read in conjunction with the following historical financial statements and accompanying notes, which are incorporated by reference into this filing: · the historical audited consolidated financial statements of Ballston Spa as of and for the years ended December 31, 2025 and December 31, 2024; and · the historical audited consolidated financial statements of NBC as of and for the years ended December 31, 2025 and December 31, 2024 (which are included in this filing). The unaudited pro forma condensed combined financial information is provided for illustrative information purposes only. The unaudited pro forma condensed combined financial information is not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the merger been completed as of the dates indicated or that may be achieved in the future. The unaudited pro forma combined condensed financial statements have been prepared in accordance with Article 11 of Regulation S-X, and combine the historical consolidated financial position and results of operations of Ballston Spa and NBC using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes. Please note the unaudited pro forma condensed combined financial information does not include management adjustments for any potential effects of changes in market conditions, cost savings, revenue enhancements, or expense efficiencies, among other factors. The following unaudited pro forma combined consolidated balance sheet as of December 31, 2025, combines the historical audited consolidated balance sheet of Ballston Spa as of December 31, 2025, with the historical audited consolidated balance sheet of NBC as of December 31, 2025, as if it had been consummated on December 31, 2025. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2025, combines the historical audited consolidated statements of income of Ballston Spa for the year ended December 31, 2025, with the historical audited consolidated statement of income of NBC for the year ended December 31, 2025, giving effect to the transaction and the common stock as if it had been consummated on January 1, 2025. Certain reclassification adjustments have been made to NBC’s financial statements to conform to Ballston Spa’s financial statement presentation. The acquisition of NBC is accounted for using the acquisition method of accounting. The total purchase price is allocated to the tangible and intangible assets and liabilities acquired based on their respective fair values. The unaudited pro forma condensed combined financial data include an estimated allocation of the purchase price as of March 31, 2026 (the close of business prior to the closing date of April 1, 2026). Any changes to NBC’s shareholders’ equity, including results of operations and certain balance sheet changes from March 31, 2026 through the closing date of April 1, 2026 will also change the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially different from the transaction accounting adjustments presented herein. 1 \| Page The pro forma statements of income and per share data information does not include anticipated cost savings or revenue enhancements. There is no assurance that the anticipated cost savings of merging Ballston Spa’s and NBC’s personnel, benefit plans, premises, equipment, computer systems and service contracts will be realized on the anticipated time schedule or at all. The pro forma combined basic and diluted earnings per share of Ballston Spa common stock is based on the pro forma combined net income per common share for NBC and Ballston Spa divided by the pro forma basic or diluted common shares of the combined entities for the periods presented on such statements of income. The pro forma information includes adjustments related to the fair value of assets and liabilities of NBC and is subject to adjustment as additional information becomes available and as final merger date analyses are performed. The pro forma combined balance sheet and book value per share data includes the adjustment to reflect the accrual of one-time merger-related charges for Ballston Spa and NBC: (a) Ballston Spa pre-tax charges are estimated at $4.3 million ($3.2 million after-tax) and are included as a pro forma liability accrual with the after-tax cost as reduction to retained earnings, and (b) NBC pre-tax charges are estimated at $649 thousand ($569 thousand after-tax) and are included as a pro forma fair value liability accrual. The pro forma statements of income includes an accrual for unaccrued one-time merger-related charges of $4.3 million for Ballston Spa. The pro forma combined book value per share of Ballston Spa common stock is based on the pro forma combined common stockholders’ equity of NBC and Ballston Spa divided by total pro forma common shares of the combined entities. The prospective financial information included in this section has been provided by Ballston Spa’s and NBC’s respective senior management as described in this section. Neither Crowe LLP (Ballston Spa’s independent auditor) nor Bonadio & Co., LLP (NBC’s independent auditor), nor any other independent registered public accounting firm or independent auditor, has audited, reviewed, examined, compiled, or applied agreed-upon procedures with respect to the accompanying prospective financial information. Accordingly, neither Crowe LLP nor Bonadio & Co., LLP expresses an opinion or any other form of assurance with respect thereto or its achievability and assumes no responsibility for the prospective financial information and disclaims any association with the prospective financial information. The report by Crowe LLP included in this proxy statement/prospectus relates to Ballston Spa’s previously issued financial statements. The report by Crowe LLP does not extend to the prospective financial information and should not be read to do so. The unaudited pro forma data are qualified by the statements set forth under this caption and should not be considered indicative of the market value of Ballston Spa common stock or the actual or future results of operations of Ballston Spa for any period. Actual results may be materially different than the pro forma information presented. 2 \| Page Ballston Spa Bancorp, Inc. Unaudited Combined Pro Forma Balance Sheets as of December 31, 2025 ($ In thousands, except per share data) Ballston Spa Bancorp, Inc. NBC Bancorp, Inc. Transaction Accounting Adjustments Pro Forma Combined Before Adjustments Related to Other Transactions Adjustments Related to Other Transactions Pro Forma Combined After Adjustments Related to Other Transactions Assets Cash and due from banks $ 7,385 $ 33,483 $ (2,255 ) (1) $ 38,613 $ - $ 38,613 Short-term investments 20,761 - - 20,761 - 20,761 Federal funds sold - - - - 44,924 (18) 44,924 Securities available for sale 66,562 100,915 (2,500 ) (3) 164,977 (50,221 ) (13) 114,756 Securities held to maturity - 3,784 75 (3) 3,859 - 3,859 FHLB of NY & FHLB stock, at cost 7,908 1,929 - 9,837 - 9,837 Total loans, net of unearned income 803,219 366,356 (20,475 ) (4) 1,149,100 (61,986 ) (14) 1,087,114 Less: allowance for credit losses (8,749 ) (3,680 ) (267 ) (5) (12,696 ) - (12,696 ) Net loans and leases 794,470 362,676 (20,742 ) 1,136,404 (61,986 ) 1,074,418 Bank premises and equipment, net 12,047 4,265 1,404 (6) 17,716 - 17,716 Accrued interest receivable 3,143 1,371 - 4,514 - 4,514 Goodwill 1,595 - 458 (1) 2,053 - 2,053 Intangible assets, net - - 7,170 (7) 7,170 - 7,170 Bank owned life insurance 5,637 - - 5,637 - 5,637 Other assets 8,993 3,127 4,383 (8) 16,503 - 16,503 Total assets $ 928,501 $ 511,550 $ (12,007 ) $ 1,428,044 $ (67,283 ) $ 1,360,761 Liabilities: Deposits: Demand deposits $ 148,536 $ 105,287 $ - $ 253,823 $ - $ 253,823 Savings 87,243 95,251 182,494 - 182,494 NOW and money market 382,252 108,823 491,075 - 491,075 Time deposits 147,202 141,712 (52 ) (9) 288,862 (60,315 ) (15) 228,547 Total deposits 765,233 451,073 (52 ) 1,216,254 (60,315 ) 1,155,939 - - Borrowings 74,000 12,407 (121 ) (10) 86,286 (32,407 ) (16) 53,879 Junior subordinated debentures 7,750 9,550 (2,836 ) (11) 14,464 25,439 (17) 39,903 Other liabilities 10,379 2,329 4,975 (12) 17,683 - 17,683 Total liabilities 857,362 475,359 1,966 1,334,687 (67,283 ) 1,267,404 Shareholders' equity: Common stock 9,600 2,366 2,405 (1)(2) 14,371 - 14,371 Additional paid-in capital 42 17,491 5,369 (1)(2) 22,902 - 22,902 Treasury stock (991 ) - (2,255 ) (1) (3,246 ) - (3,246 ) Retained earnings 61,874 19,821 (22,979 ) (2)(12) 58,716 - 58,716 Accumulated other comprehensive income 614 (3,487 ) 3,487 (2) 614 - 614 Total shareholders' equity 71,139 36,191 (13,973 ) 93,357 - 93,357 Total liabilities and shareholders' equity $ 928,501 $ 511,550 $ (12,007 ) $ 1,428,044 $ (67,283 ) $ 1,360,761 Per Share Data Shares outstanding 742,663 473,239 (115,708 ) (1) 1,100,194 - 1,100,194 Book Value Per Share $ 95.79 $ 76.48 $ 84.86 $ 84.86 3 \| Page Unaudited Pro Forma Combined Statements of Income for the year ended December 31, 2025 ($ In Thousands, Except Per Share Data) Ballston Spa Bancorp, Inc. NBC Bancorp, Inc. Transaction Accounting Adjustments Pro Forma Combined Before Adjustments Related to Other Transactions Adjustments Related to Other Transactions Pro Forma Combined After Adjustments Related to Other Transactions Interest Income Loans, including fees $ 38,647 $ 20,116 $ 2,509 (4) $ 61,272 $ (3,780 ) (14) $ 57,492 Securities available for sale and held to maturity 3,474 1,737 1,776 (3) 6,987 (1,874 ) (13) 5,113 FHLB NY & FRB stock 651 168 - 819 - 819 Short-term investments 160 733 - 893 1,572 (18) 2,465 Total Interest Income 42,932 22,754 4,285 69,971 (4,082 ) 65,889 Interest Expense Deposits 13,360 8,574 61 (9) 21,995 (2,791 ) (15) 19,204 Borrowings 3,117 834 74 (10) 4,025 (1,365 ) (16) 2,660 Junior subordinated debentures 446 594 (81 ) (11) 959 1,974 (17) 2,933 Total Interest Expense 16,923 10,002 54 26,979 (2,182 ) 24,797 Net Interest Income 26,009 12,752 4,231 42,992 (1,900 ) 41,092 Provision for credit losses 630 (350 ) - 280 - 280 Net Interest Income after Provision for Credit Losses 25,379 13,102 4,231 42,712 (1,900 ) 40,812 Non-Interest Income Service charges on deposits 650 446 - 1,096 - 1,096 Trust and investment services income 1,546 - - 1,546 - 1,546 Gain on sale/servicing of loans 322 - - 322 - 322 Debit card interchange income 783 933 - 1,716 - 1,716 Earnings on bank owned life insurance 159 - - 159 - 159 Other 844 429 - 1,273 - 1,273 Total Non-Interest Income 4,304 1,808 - 6,112 - 6,112 Non-Interest Expense Compensation and benefits 14,055 6,937 - 20,992 - 20,992 Occupancy and equipment 2,516 1,442 14 (6) 3,972 - 3,972 FDIC and OCC assessment 790 492 - 1,282 - 1,282 Advertising and public relations 304 225 - 529 - 529 Legal and professional fees 908 365 - 1,273 - 1,273 Merger expenses 1,529 445 4,326 (12) 6,300 - 6,300 Data processing 1,115 589 - 1,704 - 1,704 Debit card processing 536 459 - 995 - 995 Other 2,326 2,656 1,304 (7) 6,286 - 6,286 Total Non-Interest Expense 24,079 13,610 5,644 43,333 - 43,333 Income before Income Tax Expense 5,604 1,300 (1,413 ) 5,491 (1,900 ) 3,591 Income tax expense 1,065 224 (381 ) (8) 908 (513 ) (19) 395 Net Income $ 4,539 $ 1,076 $ (1,032 ) $ 4,583 $ (1,387 ) $ 3,196 Per Common Share Data: Basic earnings per common share $ 6.11 $ 2.27 $ 4.17 $ 2.90 Weighted-average common shares outstanding 742,663 473,239 (115,708 ) (1) 1,100,194 1,100,194 4 \| Page Unaudited Pro Forma Per Share Data For The Year Ended December 31, 2025 ($ in Thousands, Except Per Share Data) Ballston Spa Bancorp, Inc. NBC Bancorp, Inc. Pro Forma Ballston Spa Bancorp, Inc. Combined Pro Forma Equivalent NBC Bancorp, Inc. Share For The Year December 31, 2025: Earnings per share: Net income per share (Basic) $ 6.11 $ 2.27 $ 2.90 $ 2.34 Book value per common share as of December 31, 2025 $ 95.79 $ 76.48 $ 84.86 $ 68.44 5 \| Page NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS TRANSACTION ACCOUNTING ADJUSTMENTS: (1) Under the terms of the Merger Agreement, NBC’s common shares will be converted into the right to receive 0.8065 shares of Ballston Spa common stock. In this pro forma analysis and assuming a Ballston Spa common stock price of $71.00 as of March 31, 2026 (the close of business prior to the closing date of April 1, 2026). The total estimated purchase price for the purpose of this pro forma financial information is $27.6 million. The adjustment for shares outstanding, basic, and diluted weighted average common shares outstanding is an amount to adjust the shares to equal the new common shares issued for the transaction . The following is a summary of the fair value of assets acquired and liabilities assumed resulting in goodwill. Goodwill is created when the purchase price consideration exceeds the fair value of the net assets acquired or a bargain purchase gain results when the current fair value of the net assets acquired exceeds the purchase price consideration. For purposes of this analysis as of December 31, 2025, goodwill of $458 thousand results from the transaction; however, the final purchase accounting analysis will be performed as of the merger date and amounts therein are subject to change based on operations subsequent to December 31, 2025, as additional information becomes available and as additional analyses are performed. (dollars in thousands, except per share data) Purchase Price Consideration - Common Stock (excluding Dissenting shares) NBC Bancorp, Inc. common shares outstanding 473,239 less: Dissenting shares (29,927 ) NBC Bancorp, Inc. common shares to be exchanged for stock consideration 443,312 Exchange Ratio 0.8065 Ballston Spa Bancorp, Inc. shares to be issued in the merger and excludes fractional shares 357,408 Fair Value price per share of Ballston Spa Bancorp, Inc. common stock $ 71.00 Closing Stock Price 3/31/2026 Total Fair Value of Purchase Price Consideration for Common Stock $ 25,376 Purchase Price Consideration - Cash for Dissenting Shares Dissenting shares 29,927 Exchange Ratio 0.8065 Dissenting shares to be settled in cash 24,136 Fair value of Dissenting shares $ 93.41 Total fair value of Dissenting shares 2,255 Total Purchase Price For Accounting Purposes $ 27,631 6 \| Page (dollars in thousands) NBC Bancorp, Inc. Book Value 12/31/2025 Fair Value Adjustments NBC Bancorp, Inc. Fair Value 12/31/2025 Total purchase price consideration $ 27,631 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and cash equivalents $ 33,483 $ - $ 33,483 Securities, available for sale 100,915 - 100,915 Securities, held to maturity 3,784 75 (3) 3,859 Loans gross 366,356 (24,422 ) (4) 341,934 Allowance for credit losses (3,680 ) 3,680 (5) - Loans, net of allowance 362,676 (20,742 ) 341,934 Restricted stock 1,929 - 1,929 Premises and equipment 4,265 1,404 (6) 5,669 Core deposit intangibles - 7,170 (7) 7,170 Deferred tax asset - 3,215 (8) 3,215 Other assets 4,498 - 4,498 Total identifiable assets acquired 511,550 (8,878 ) 502,672 Deposits 451,073 (52 ) (9) 451,021 Borrowings 12,407 (121 ) (10) 12,286 Trust Preferred 9,550 (336 ) (11) 9,214 Other liabilities 2,329 649 (12) 2,978 Total liabilities assumed 475,359 140 475,499 Total identifiable net assets $ 36,191 (9,018 ) $ 27,173 Goodwill $ 458 (2) Balance sheet adjustments to reflect the reversal of NBC’s historical equity accounts to additional paid-in capital (“APIC”) and record the purchase price consideration for common stock. The following tables summarize the transaction accounting adjustments for the equity accounts. Balance Sheet 12/31/2025 Common stock Reversal of NBC Bancorp, Inc.common stock $ (2,366 ) Number of Ballston Spa Bancorp, Inc. shares issued (including Dissenting shares) 381,667 Par value of Ballston Spa Bancorp, Inc. common stock $ 12.50 Par value of Ballston Spa Bancorp, Inc. shares issued for merger 4,771 Total adjustments for common stock $ 2,405 7 \| Page Balance Sheet 12/31/2025 Additional Paid-In Capital Reversal of NBC Bancorp, Inc. Additional Paid-In Capital $ (17,491 ) Impact to Purchase Price Consideration for Common Stock NBC Bancorp, Inc. common shares outstanding 473,239 less: Dissenting shares (29,927 ) NBC Bancorp, Inc. common shares to be exchanged for stock consideration 443,312 Exchange Ratio 0.8065 Ballston Spa Bancorp, Inc. shares to be issued in the merger and excludes fractional shares 357,408 Fair Value price per share of Ballston Spa Bancorp, Inc. common stock Fair value assigned to Ballston Spa Bancorp, Inc. common stock (closing stock price as of March 31, 2026) $ 71.00 Purchase price consideration for common stock $ 25,376 Impact to Purchase Price Consideration - Cash for Dissenting Shares Dissenting shares 29,927 Exchange Ratio 0.8065 Ballston Spa Bancorp, Inc. shares to be issued for Dissenting Shares in the merger and excludes fractional shares 24,136 Fair value assigned to Dissenting shares $ 93.41 Fair value of Dissenting Shares $ 2,255 Impact to Additional Paid In Capital for par value of Ballston Spa Bancorp Inc. shares to be issued Total Ballston Spa Bancorp, Inc. shares to be issued 381,667 Par value of Ballston Spa Bancorp, Inc. shares issued for merger at $12.50 per share $ 12.50 Less: par value of Ballston Spa Bancorp, Inc. common stock 4,771 Net adjustment to additional paid-in capital for stock consideration 22,860 Total adjustments for additional paid-in capital $ 5,369 Balance Sheet 12/31/2025 Treasury stock Purchase of Dissenting shares $ (2,255 ) Total adjustments for treasury stock $ (2,255 ) Balance Sheet 12/31/2025 Retained earnings Reversal of NBC Bancorp, Inc. retained earnings $ (19,821 ) Acquisition activity - Ballston Spa Bancorp, Inc. merger costs (3,158 ) Total adjustments for retained earnings $ (22,979 ) 8 \| Page Balance Sheet 12/31/2025 Aaccumulated other comprehensive loss Reversal of NBC Bancorp, Inc. accumulated other comprehensive loss $ 3,487 Total adjustments for accumulated other comprehensive loss $ 3,487 Balance Sheet December 31, 2025 Cash and due from banks Cash payment for Dissenting shares $ (2,255 ) Total adjustments for cash and due from banks $ (2,255 ) (3) Securities available-for-sale were recorded at fair value at December 31, 2025; therefore, no balance sheet adjustment is necessary. Adjustment to statements of income includes prospective reclassification of existing available-for-sale securities fair value adjustment of $4.4 million to an amortizing discount which will be amortized into income based on the expected life of securities. Balance sheet adjustment to reflect the retirement of NBC junior subordinated debentures owned by Ballston Spa of $1.5 million and the retirement of Ballston Spa junior subordinated debentures owned by NBC of $1.0 million. Statements of income adjustment to reflect the lost income from the retirement of the junior subordinated debentures. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Securities available for sale Securities available for sale amortization adjustment $ - $ 1,936 Retirement of NBC junior subordinated debentures owned by BSPA (1,500 ) (83 ) Retirement of BSPA junior subordinated debentures owned by NBC (1,000 ) (58 ) Total adjustments for securities available for sale $ (2,500 ) $ 1,795 Securities held for maturity balance sheet and statements of income adjustment to reflect the fair value of securities held to maturity of $75 thousand. This adjustment will be recognized over the expected life of the investments. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Securities held to maturity Securities held to maturity fair value adjustment $ 75 $ (19 ) Total adjustments for securities held to maturity $ 75 $ (19 ) 9 \| Page (4) Balance sheet adjustment to reflect the fair value discount for acquired purchased credit deteriorated (“PCD”) loans and Purchased Seasoned Loans (“PSL”) of $24.6 million and other loan adjustments. The accruing loan fair value adjustments will be substantially recognized over the expected life of the loans. Balance sheet and statements of income interest rate adjustment to reflect the reversal of existing deferred net loan fees. In November, the FASB released ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans, introducing significant changes to the Current Expected Credit Loss (CECL) standard. This update aims to enhance comparability and consistency in acquisition reporting. Ballston Spa elected to early adopted ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans and used the gross up approach to record the allowance for credit losses for Purchase Seasoned Loans. Balance sheet adjustment of $3.9 million for acquired loans allowance for credit losses to be recorded as an increase in the allowance for credit losses and gross-up of the loan account for early adoption of ASU 2025-08. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Fair value adjustments on loans acquired PSL fair value $ (22,035 ) $ 2,403 PCD loans fair value (2,185 ) 142 PCD Non-accruing loans fair value (333 ) - Total fair value adjustments for loans (24,553 ) 2,545 Gross up of acquired loans for allowance for credit losses Acquired loans allowance for credit losses 3,947 - Total gross up for acquired loans for allowance for credit losses 3,947 - Total loan fair value adjustments (20,606 ) 2,545 Reversal of deferred loan fees, net 131 (36 ) Total adjustments for loans $ (20,475 ) $ 2,509 (5) Balance sheet adjustment for the reversal of NBC’s existing allowance for loan losses of $3.7 million. Balance sheet adjustment of $3.9 million for acquired loans allowance for credit losses. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Allowance for credit losses Reversal of existing allowance for credit losses $ 3,680 $ - Allowance for credit losses for acquired loans (3,947 ) - Total adjustments for allowance for credit losses $ (267 ) $ - 10 \| Page (6) Balance sheet and statements of income adjustment to reflect the fair value of owned premise of $1.6 million and will be amortized over the expect life of 40 years using the straight-line method. Balance sheet and statements of income adjustment to reflect the fair value of lease properties and will be amortized over the expected life of the lease. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Premises fair value Owned premises fair value adjustment $ 1,647 $ 38 Leased premises fair value adjustment (243 ) (24 ) Total adjustments for premises fair value $ 1,404 $ 14 (7) Balance sheet adjustment to reflect the creation of a core deposit intangible fair value of $7.2 million for acquired core deposit intangible assets. The related statements of income amortization adjustments based upon an expected life of 10 years using sum of the year’s digits method. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Core deposit intangible asset Core deposit intangible asset $ 7,170 $ 1,304 Total adjustments for core deposit intangible asset $ 7,170 $ 1,304 (8) Balance sheet adjustment to reflect the net deferred tax asset, at a statutory rate of 27.0%, related to fair value adjustments and tax benefits related to one-time merger charges and related statements of income adjustments to pro forma adjustments using a statutory tax rate of 27.0% for book income tax expense. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Tax impact Fair value adjustments $ 3,215 $ (787 ) Buyer accrual for one-time merger related charges 1,168 1,168 Total adjustments for taxes $ 4,383 $ 381 (9) Balance sheet and statements of income adjustment related to the fair value of interest-bearing time deposits and corresponding statements of income adjustments related to the amortization of discount on interest-bearing time deposits based on the expected life of interest-bearing time deposits. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Certificates of deposit Certificates of deposit fair value adjustment $ (52 ) $ 61 Total adjustments for certificates of deposits $ (52 ) $ 61 11 \| Page (10) Balance sheet and statements of income adjustment related to the fair value of borrowings and statements of income adjustments related to the amortization of discount based on the expected life of the borrowings. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Borrowings Borrowings fair value adjustment $ (121 ) $ 74 Total adjustments for borrowings $ (121 ) $ 74 (11) Balance sheet adjustment to reflect the fair value discount of $336 thousand for junior subordinated debentures. Statements of income adjustment to reflect the amortization based on the expected life of the junior subordinated debentures. Balance sheet adjustment to reflect the retirement of NBC junior subordinated debentures owned by Ballston Spa of $1.5 million and the retirement of Ballston Spa junior subordinated debentures owned by NBC of $1.0 million. Statements of income adjustment to reflect the reduction of interest expense from the retirement of the junior subordinated debentures. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Junior subordinated debentures Junior subordinated debentures fair value adjustment $ (336 ) $ 60 Retirement of NBC junior subordinated debentures owned by BSPA (1,500 ) (83 ) Retirement of BSPA junior subordinated debentures owned by NBC (1,000 ) (58 ) Total adjustments for junior subordinated debentures $ (2,836 ) $ (81 ) (12) Balance sheet adjustment to reflect the accrual of one-time merger-related charges for Ballston Spa and NBC: (a) NBC pre-tax charges are estimated at $649 thousand ($569 thousand after-tax) and are included as a pro forma fair value liability accrual, and (b) Ballston Spa pre-tax charges are estimated at $4.3 million ($3.2 million after-tax) and are included as a pro forma liability accrual with the after-tax cost as reduction to retained earnings. The pro forma statements of income include one-time Ballston Spa merger-related expenses of $4.3 million which will be expensed against income when incurred. It is noted that a tax benefit was not taken for certain merger obligations and costs that were not considered to be tax deductible. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Other liabilities Ballston Spa Bancorp, Inc. accrual for one-time merger related charges $ 4,326 $ 4,326 NBC Bancorp, Inc. accrual for one-time merger related charges 649 - Total other liabilities adjustments $ 4,975 $ 4,326 12 \| Page ADJUSTMENTS RELATED TO OTHER TRANSACTIONS: (13) Balance Sheet Restructuring #1 : Balance sheet adjustment to reflect the sale of $50.2 million of NBC's Available for Sale Securities at closing. Statements of income reflects lost interest income related to sale of securities as well as the related discount. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Balance Sheet Restructuring #1: Sale of Securities Available for Sale Sale of securities available for sale $ (50,221 ) $ (688 ) Reversal of amortization of fair value discount on securities available for sale - (1,186 ) Total sale of securities available for sale $ (50,221 ) $ (1,874 ) (14) Balance Sheet Restructuring #2 : Balance sheet and statements of income adjustments to reflect the sale of $73.6 million of NBC's residential mortgages with an estimated fair value of $62.0 million. Statements of income adjustments for contractual lost income on the sold loans at an interest rate of 3.40% plus the related fair value amortization income. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Balance Sheet Restructuring #2: Sale of Residential Mortgage Loans Sale of residential mortgage loans $ (61,986 ) $ (2,503 ) Reversal of amortization related to the fair value adjustment - (1,277 ) Total sale of residential mortgages loans $ (61,986 ) $ (3,780 ) (15) Balance Sheet Restructuring #3 : Balance sheet and statements of income adjustment to reflect brokered time deposits that are not intended to be renewed (weighted average rate of 4.63%). Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Balance Sheet Restructuring #3: Maturity of Brokered Time Deposits Maturity of brokered time deposits $ (60,315 ) $ (2,791 ) Total Maturity of Brokered Time Deposits $ (60,315 ) $ (2,791 ) (16) Balance Sheet Restructuring #4 : Balance sheet and statements of income adjustments to reflect the pay-off of borrowings at an interest rate of 4.14% with proceeds from the sale of loans and investment securities available for sale noted above. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Balance Sheet Restructuring #4: Pay-Off of Borrowings Pay off borrowings with funds received from the sale of Securities Available for Sale and Residential Mortgage Loans $ (32,407 ) $ (1,343 ) Reversal of amortization related to the fair value adjustment - (22 ) Total Pay-Off of Borrowings $ (32,407 ) $ (1,365 ) 13 \| Page (17) Capital Initiative #1 : Balance sheet and statements of income adjustments to reflect the issuance of Ballston Spa junior subordinated debentures of $26.0 million (less debt issuance cost) at an interest rate of 7.38% to improve balance sheet liquidity and capital ratios. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Capital Initiative #1: Issuance of Junior Subordinated Debentures Issuance of new junior subordinated debentures at Ballston Spa $ 26,000 $ 1,918 Debt issuance costs (561 ) 56 Total Issuance of Subordinated Debentures $ 25,439 $ 1,974 (18) Impact to Fed Funds Sold related to Balance Sheet Restructuring and Capital Initiatives : Balance sheet and statements of income adjustments to reflect the impact from the Balance Sheet Restructuring and Capital Initiatives (see table below for details) and related statements of income impacts at an interest rate of 3.50%. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Impact to Fed Funds Sold related to Balance Sheet Restructuring and Capital Initiatives Proceeds from the sale of residential mortgage loans $ 61,986 $ 2,170 Proceeds from the sale of securities available for sale 50,221 1,758 Maturity of brokered time deposits (60,315 ) (2,111 ) Pay-off of borrowings (32,407 ) (1,134 ) Issuance of junior subordinated debentures 25,439 889 Total impact to Fed Funds Sold related to Balance Sheet Restructuring and Capital Initiatives $ 44,924 $ 1,572 (19) Tax Impact related to Balance Sheet Restructuring and Capital Initiatives: Balance sheet and statements of income adjustments to reflect the net deferred tax asset, at a statutory rate of 27.0%, related to balance sheet restructuring and capital initiatives. Balance Sheet Statements of Income December 31, 2025 Twelve Months Ended December 31, 2025 Tax impact related to balance sheet restructuring and capital initiatives Sale of securities available for sale $ (50,221 ) $ (506 ) Sale of residential mortgage loans (61,986 ) (1,022 ) Maturity of brokered time deposits 60,315 754 Pay off borrowings with funds received from the sale of securities available for sale and residential mortgage loans 32,407 369 Issuance of new junior subordinated debentures at Ballston Spa (25,439 ) (533 ) Fed funds sold related to balance sheet restructuring and capital initiatives 44,924 425 Total tax impact related to balance sheet restructuring and capital initiatives $ - $ (513 ) 14 \| Page

Document text

EX-99.2 · tm2617581d1_ex99-2.htm

EX-99.2
 4
 tm2617581d1_ex99-2.htm
 EXHIBIT 99.2

 Exhibit 99.2

 BALLSTON SPA BANCORP, INC./NBC BANCORP, INC.

 THE UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION AS OF, AND FOR THE YEAR ENDED, DECEMBER 31, 2025

 On April 1, 2026, Ballston Spa Bancorp, Inc. (&ldquo;Ballston
Spa&rdquo;) completed its previously announced merger with NBC Bancorp, Inc. (&ldquo;NBC&rdquo;), pursuant to the Agreement and Plan of
Merger, dated as of September 23, 2025 (the &ldquo;Merger Agreement&rdquo;), by and between Ballston Spa and NBC, pursuant to which
NBC merged with and into the Ballston Spa, with Ballston Spa as the surviving entity. In addition, The National Bank of Coxsackie, a national
bank and a wholly owned subsidiary of NBC, merged with and into Ballston Spa National Bank, a national bank and a wholly owned subsidiary
of the Company, with Ballston Spa National Bank as the surviving bank. As a result of the merger, each share of NBC common stock was converted
into the right to receive 0.8065 shares of Ballston Spa common stock, with cash payable in lieu of any fractional shares.

 The following unaudited pro forma condensed combined
financial information and accompanying notes are based on and should be read in conjunction with the following historical financial statements
and accompanying notes, which are incorporated by reference into this filing:

 &middot; the historical audited consolidated financial statements of Ballston Spa as of and for the years ended
December 31, 2025 and December 31, 2024; and

 &middot; the historical audited consolidated financial statements of NBC as of and for the years ended
December 31, 2025 and December 31, 2024 (which are included in this filing).

 The unaudited pro forma condensed combined financial
information is provided for illustrative information purposes only. The unaudited pro forma condensed combined financial information is
not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the merger been
completed as of the dates indicated or that may be achieved in the future. The unaudited pro forma combined condensed financial statements
have been prepared in accordance with Article 11 of Regulation S-X, and combine the historical consolidated financial position and results
of operations of Ballston Spa and NBC using the acquisition method of accounting and giving effect to the related pro forma adjustments
described in the accompanying notes. Please note the unaudited pro forma condensed combined financial information does not include management
adjustments for any potential effects of changes in market conditions, cost savings, revenue enhancements, or expense efficiencies, among
other factors.

 The following unaudited pro forma combined
consolidated balance sheet as of December 31, 2025, combines the historical audited consolidated balance sheet of Ballston Spa as of
December 31, 2025, with the historical audited consolidated balance sheet of NBC as of December 31, 2025, as if it had been
consummated on December 31, 2025. The unaudited pro forma condensed combined statements of income for the year ended December 31,
2025, combines the historical audited consolidated statements of income of Ballston Spa for the year ended December 31, 2025, with
the historical audited consolidated statement of income of NBC for the year ended December 31, 2025, giving effect to the
transaction and the common stock as if it had been consummated on January 1, 2025. Certain reclassification adjustments have been
made to NBC&rsquo;s financial statements to conform to Ballston Spa&rsquo;s financial statement presentation.

 The acquisition of NBC is accounted for using the acquisition method
of accounting. The total purchase price is allocated to the tangible and intangible assets and liabilities acquired based on their respective
fair values. The unaudited pro forma condensed combined financial data include an estimated allocation of the purchase price as of March
31, 2026 (the close of business prior to the closing date of April 1, 2026). Any changes to NBC&rsquo;s shareholders&rsquo; equity, including
results of operations and certain balance sheet changes from March 31, 2026 through the closing date of April 1, 2026 will also change
the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially
different from the transaction accounting adjustments presented herein.

 1 | Page

 The pro forma statements of income and per share
data information does not include anticipated cost savings or revenue enhancements. There is no assurance that the anticipated cost savings
of merging Ballston Spa&rsquo;s and NBC&rsquo;s personnel, benefit plans, premises, equipment, computer systems and service contracts
will be realized on the anticipated time schedule or at all.

 The pro forma combined basic and diluted earnings
per share of Ballston Spa common stock is based on the pro forma combined net income per common share for NBC and Ballston Spa
divided by the pro forma basic or diluted common shares of the combined entities for the periods presented on such statements of income.
The pro forma information includes adjustments related to the fair value of assets and liabilities of NBC and is subject to adjustment
as additional information becomes available and as final merger date analyses are performed. The pro forma combined balance sheet and
book value per share data includes the adjustment to reflect the accrual of one-time merger-related charges for Ballston Spa and NBC:
(a) Ballston Spa pre-tax charges are estimated at $4.3 million ($3.2 million after-tax) and are included as a pro forma liability accrual
with the after-tax cost as reduction to retained earnings, and (b) NBC pre-tax charges are estimated at $649 thousand ($569 thousand
after-tax) and are included as a pro forma fair value liability accrual. The pro forma statements of income includes an accrual for unaccrued
one-time merger-related charges of $4.3 million for Ballston Spa. The pro forma combined book value per share of Ballston Spa common stock
is based on the pro forma combined common stockholders&rsquo; equity of NBC and Ballston Spa divided by total pro forma common
shares of the combined entities.

 The prospective financial information included
in this section has been provided by Ballston Spa&rsquo;s and NBC&rsquo;s respective senior management as described in this section. Neither
Crowe LLP (Ballston Spa&rsquo;s independent auditor) nor Bonadio & Co., LLP (NBC&rsquo;s independent auditor), nor any other independent
registered public accounting firm or independent auditor, has audited, reviewed, examined, compiled, or applied agreed-upon procedures
with respect to the accompanying prospective financial information. Accordingly, neither Crowe LLP nor Bonadio & Co., LLP expresses
an opinion or any other form of assurance with respect thereto or its achievability and assumes no responsibility for the prospective
financial information and disclaims any association with the prospective financial information. The report by Crowe LLP included in this
proxy statement/prospectus relates to Ballston Spa&rsquo;s previously issued financial statements. The report by Crowe LLP does not extend
to the prospective financial information and should not be read to do so.

 The unaudited pro forma data are qualified
by the statements set forth under this caption and should not be considered indicative of the market value of Ballston Spa common stock
or the actual or future results of operations of Ballston Spa for any period. Actual results may be materially different than the pro
forma information presented.

 2 | Page

 Ballston Spa Bancorp, Inc.

 Unaudited Combined Pro Forma Balance Sheets as of December 31, 2025

 ($ In thousands, except per share data)

 Ballston Spa

Bancorp, Inc.

 NBC Bancorp,

Inc.

 Transaction

Accounting

Adjustments

 Pro Forma

Combined Before

Adjustments

Related to Other

Transactions

 Adjustments

Related to Other

Transactions

 Pro Forma

Combined After

Adjustments

Related to Other

Transactions

 Assets

 Cash and due from
 banks
 $ 7,385
 $ 33,483
 $ (2,255
 ) (1)
 $ 38,613
 $ -

 $ 38,613

 Short-term investments
 20,761
 -
 -

 20,761
 -

 20,761

 Federal funds sold
 -
 -
 -

 -
 44,924
 (18)
 44,924

 Securities available for sale
 66,562
 100,915
 (2,500
 ) (3)
 164,977
 (50,221
 ) (13)
 114,756

 Securities held to maturity
 -
 3,784
 75
 (3)
 3,859
 -

 3,859

 FHLB of NY & FHLB stock,
 at cost
 7,908
 1,929
 -

 9,837
 -

 9,837

 Total loans, net of unearned
 income
 803,219
 366,356
 (20,475
 ) (4)
 1,149,100
 (61,986
 ) (14)
 1,087,114

 Less:
 allowance for credit losses
 (8,749 )
 (3,680 )
 (267
 ) (5)
 (12,696 )
 -

 (12,696
 )

 Net loans and leases
 794,470
 362,676
 (20,742
 )
 1,136,404
 (61,986
 )
 1,074,418

 Bank premises and equipment,
 net
 12,047
 4,265
 1,404
 (6)
 17,716
 -

 17,716

 Accrued interest receivable
 3,143
 1,371
 -

 4,514
 -

 4,514

 Goodwill
 1,595
 -
 458
 (1)
 2,053
 -

 2,053

 Intangible assets, net
 -
 -
 7,170
 (7)
 7,170
 -

 7,170

 Bank owned life insurance
 5,637
 -
 -

 5,637
 -

 5,637

 Other assets
 8,993
 3,127
 4,383
 (8)
 16,503
 -

 16,503

 Total
 assets
 $ 928,501
 $ 511,550
 $ (12,007
 )
 $ 1,428,044
 $ (67,283
 )
 $ 1,360,761

 Liabilities:

 Deposits:

 Demand deposits
 $ 148,536
 $ 105,287
 $ -

 $ 253,823
 $ -

 $ 253,823

 Savings
 87,243
 95,251

 182,494
 -

 182,494

 NOW and money market
 382,252
 108,823

 491,075
 -

 491,075

 Time deposits
 147,202
 141,712
 (52
 ) (9)
 288,862
 (60,315
 ) (15)
 228,547

 Total deposits
 765,233
 451,073
 (52
 )
 1,216,254
 (60,315
 )
 1,155,939

 -

 -

 Borrowings
 74,000
 12,407
 (121
 ) (10)
 86,286
 (32,407
 ) (16)
 53,879

 Junior subordinated debentures
 7,750
 9,550
 (2,836
 ) (11)
 14,464
 25,439
 (17)
 39,903

 Other liabilities
 10,379
 2,329
 4,975
 (12)
 17,683
 -

 17,683

 Total liabilities
 857,362
 475,359
 1,966

 1,334,687
 (67,283
 )
 1,267,404

 Shareholders' equity:

 Common stock
 9,600
 2,366
 2,405
 (1)(2)
 14,371
 -

 14,371

 Additional paid-in capital
 42
 17,491
 5,369
 (1)(2)
 22,902
 -

 22,902

 Treasury stock
 (991 )
 -
 (2,255
 ) (1)
 (3,246 )
 -

 (3,246
 )

 Retained earnings
 61,874
 19,821
 (22,979
 ) (2)(12)
 58,716
 -

 58,716

 Accumulated
 other comprehensive income
 614
 (3,487 )
 3,487
 (2)
 614
 -

 614

 Total shareholders'
 equity
 71,139
 36,191
 (13,973
 )
 93,357
 -

 93,357

 Total
 liabilities and shareholders' equity
 $ 928,501
 $ 511,550
 $ (12,007
 )
 $ 1,428,044
 $ (67,283
 )
 $ 1,360,761

 Per Share Data

 Shares outstanding
 742,663
 473,239
 (115,708
 ) (1)
 1,100,194
 -

 1,100,194

 Book Value Per Share
 $ 95.79
 $ 76.48

 $ 84.86

 $ 84.86

 3 | Page

 Unaudited Pro Forma Combined Statements of Income for the year ended December 31, 2025

 ($ In Thousands, Except Per Share Data)

 Ballston Spa

 Bancorp, Inc.
 NBC Bancorp,

 Inc.
 Transaction

 Accounting

 Adjustments

 Pro Forma

 Combined Before

 Adjustments

 Related to Other

 Transactions
 Adjustments

 Related to Other

 Transactions

 Pro Forma

 Combined After

 Adjustments

 Related to Other

 Transactions

 Interest Income

 Loans, including fees
 $ 38,647
 $ 20,116
 $ 2,509
 (4)
 $ 61,272
 $ (3,780
 ) (14)
 $ 57,492

 Securities available for sale and held to maturity
 3,474
 1,737
 1,776
 (3)
 6,987
 (1,874
 ) (13)
 5,113

 FHLB NY & FRB stock
 651
 168
 -

 819
 -

 819

 Short-term investments
 160
 733
 -

 893
 1,572
 (18)
 2,465

 Total Interest Income
 42,932
 22,754
 4,285

 69,971
 (4,082
 )
 65,889

 Interest Expense

 Deposits
 13,360
 8,574
 61
 (9)
 21,995
 (2,791
 ) (15)
 19,204

 Borrowings
 3,117
 834
 74
 (10)
 4,025
 (1,365
 ) (16)
 2,660

 Junior subordinated debentures
 446
 594
 (81
 ) (11)
 959
 1,974
 (17)
 2,933

 Total Interest Expense
 16,923
 10,002
 54

 26,979
 (2,182
 )
 24,797

 Net Interest Income
 26,009
 12,752
 4,231

 42,992
 (1,900
 )
 41,092

 Provision for credit losses
 630
 (350 )
 -

 280
 -

 280

 Net Interest Income after Provision for Credit Losses
 25,379
 13,102
 4,231

 42,712
 (1,900
 )
 40,812

 Non-Interest Income

 Service charges on deposits
 650
 446
 -

 1,096
 -

 1,096

 Trust and investment services income
 1,546
 -
 -

 1,546
 -

 1,546

 Gain on sale/servicing of loans
 322
 -
 -

 322
 -

 322

 Debit card interchange income
 783
 933
 -

 1,716
 -

 1,716

 Earnings on bank owned life insurance
 159
 -
 -

 159
 -

 159

 Other
 844
 429
 -

 1,273
 -

 1,273

 Total Non-Interest Income
 4,304
 1,808
 -

 6,112
 -

 6,112

 Non-Interest Expense

 Compensation and benefits
 14,055
 6,937
 -

 20,992
 -

 20,992

 Occupancy and equipment
 2,516
 1,442
 14
 (6)
 3,972
 -

 3,972

 FDIC and OCC assessment
 790
 492
 -

 1,282
 -

 1,282

 Advertising and public relations
 304
 225
 -

 529
 -

 529

 Legal and professional fees
 908
 365
 -

 1,273
 -

 1,273

 Merger expenses
 1,529
 445
 4,326
 (12)
 6,300
 -

 6,300

 Data processing
 1,115
 589
 -

 1,704
 -

 1,704

 Debit card processing
 536
 459
 -

 995
 -

 995

 Other
 2,326
 2,656
 1,304
 (7)
 6,286
 -

 6,286

 Total Non-Interest Expense
 24,079
 13,610
 5,644

 43,333
 -

 43,333

 Income before Income Tax Expense
 5,604
 1,300
 (1,413
 )
 5,491
 (1,900
 )
 3,591

 Income tax expense
 1,065
 224
 (381
 ) (8)
 908
 (513
 ) (19)
 395

 Net Income
 $ 4,539
 $ 1,076
 $ (1,032
 )
 $ 4,583
 $ (1,387
 )
 $ 3,196

 Per Common Share Data:

 Basic earnings per common share
 $ 6.11
 $ 2.27

 $ 4.17

 $ 2.90

 Weighted-average common shares outstanding
 742,663
 473,239
 (115,708
 ) (1)
 1,100,194

 1,100,194

 4 | Page

 Unaudited
Pro Forma Per Share Data

 For
The Year Ended December 31, 2025

 ($
in Thousands, Except Per Share Data)

 Ballston Spa
 Bancorp, Inc.
 NBC Bancorp,
 Inc.
 Pro Forma
 Ballston Spa
 Bancorp, Inc.
 Combined
 Pro Forma
 Equivalent NBC
 Bancorp, Inc.
 Share

 For The Year December 31, 2025:

 Earnings per share:

 Net income per share (Basic)
 $ 6.11
 $ 2.27
 $ 2.90
 $ 2.34

 Book value per common share as of December 31, 2025
 $ 95.79
 $ 76.48
 $ 84.86
 $ 68.44

 5 | Page

 NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

 TRANSACTION ACCOUNTING ADJUSTMENTS:

 (1) Under the terms of the Merger Agreement, NBC&rsquo;s common shares will
be converted into the right to receive 0.8065 shares of Ballston Spa common stock. In this pro forma analysis and assuming a Ballston
Spa common stock price of $71.00 as of March 31, 2026 (the close of business prior to the closing date of April 1, 2026).

 The total estimated purchase price
for the purpose of this pro forma financial information is $27.6 million. The adjustment for shares
outstanding, basic, and diluted weighted average common shares outstanding is an amount to adjust the shares to equal the new common shares
issued for the transaction . The following is a summary of the fair value of assets acquired and liabilities assumed resulting in
goodwill. Goodwill is created when the purchase price consideration exceeds the fair value of the net assets acquired or a bargain purchase
gain results when the current fair value of the net assets acquired exceeds the purchase price consideration. For purposes of this analysis
as of December 31, 2025, goodwill of $458 thousand results from the transaction; however, the final purchase accounting analysis will
be performed as of the merger date and amounts therein are subject to change based on operations subsequent to December 31, 2025, as additional
information becomes available and as additional analyses are performed.

 (dollars in thousands, except per share data)

 Purchase Price Consideration - Common Stock (excluding Dissenting shares)

 NBC Bancorp, Inc. common shares outstanding
 473,239

 less: Dissenting shares
 (29,927 )

 NBC Bancorp, Inc. common shares to be exchanged for stock consideration
 443,312

 Exchange Ratio
 0.8065

 Ballston Spa Bancorp, Inc. shares to be issued in the merger and excludes fractional shares
 357,408

 Fair Value price per share of Ballston Spa Bancorp, Inc. common stock
 $ 71.00 Closing Stock Price 3/31/2026

 Total Fair Value of Purchase Price Consideration for Common Stock

 $ 25,376

 Purchase Price Consideration - Cash for Dissenting Shares

 Dissenting shares
 29,927

 Exchange Ratio
 0.8065

 Dissenting shares to be settled in cash
 24,136

 Fair value of Dissenting shares
 $ 93.41

 Total fair value of Dissenting shares

 2,255

 Total Purchase Price For Accounting Purposes

 $ 27,631

 6 | Page

 (dollars in thousands)
 NBC Bancorp, Inc.
 Book Value
 12/31/2025
 Fair Value
 Adjustments

 NBC Bancorp, Inc.
 Fair Value
 12/31/2025

 Total purchase price consideration

 $ 27,631

 Recognized amounts of identifiable assets acquired and liabilities assumed

 Cash and cash equivalents
 $ 33,483
 $ -

 $ 33,483

 Securities, available for sale
 100,915
 -

 100,915

 Securities, held to maturity
 3,784
 75

 (3)
 3,859

 Loans gross
 366,356
 (24,422
 )
 (4)
 341,934

 Allowance for credit losses
 (3,680 )
 3,680

 (5)
 -

 Loans, net of allowance
 362,676
 (20,742
 )

 341,934

 Restricted stock
 1,929
 -

 1,929

 Premises and equipment
 4,265
 1,404

 (6)
 5,669

 Core deposit intangibles
 -
 7,170

 (7)
 7,170

 Deferred tax asset
 -
 3,215

 (8)
 3,215

 Other assets
 4,498
 -

 4,498

 Total identifiable assets acquired
 511,550
 (8,878
 )

 502,672

 Deposits
 451,073
 (52
 )
 (9)
 451,021

 Borrowings
 12,407
 (121
 )
 (10)
 12,286

 Trust Preferred
 9,550
 (336
 )
 (11)
 9,214

 Other liabilities
 2,329
 649

 (12)
 2,978

 Total liabilities assumed
 475,359
 140

 475,499

 Total identifiable net assets
 $ 36,191
 (9,018
 )

 $ 27,173

 Goodwill

 $ 458

 (2) Balance sheet adjustments
to reflect the reversal of NBC&rsquo;s historical equity accounts to additional paid-in capital (&ldquo;APIC&rdquo;) and record
the purchase price consideration for common stock. The following tables summarize the transaction accounting adjustments for the equity
accounts.

 Balance Sheet

 12/31/2025

 Common stock

 Reversal of NBC Bancorp, Inc.common stock

 $ (2,366 )

 Number of Ballston Spa Bancorp, Inc. shares issued (including Dissenting shares)
 381,667

 Par value of Ballston Spa Bancorp, Inc. common stock
 $ 12.50

 Par value of Ballston Spa Bancorp, Inc. shares issued for merger

 4,771

 Total adjustments for common stock

 $ 2,405

 7 | Page

 Balance Sheet

 12/31/2025

 Additional Paid-In Capital

 Reversal of NBC Bancorp, Inc. Additional Paid-In Capital

 $ (17,491 )

 Impact to Purchase Price Consideration for Common Stock

 NBC Bancorp, Inc. common shares outstanding
 473,239

 less: Dissenting shares
 (29,927 )

 NBC Bancorp, Inc. common shares to be exchanged for stock consideration
 443,312

 Exchange Ratio
 0.8065

 Ballston Spa Bancorp, Inc. shares to be issued in the merger and excludes fractional shares
 357,408

 Fair Value price per share of Ballston Spa Bancorp, Inc. common stock

 Fair value assigned to Ballston Spa Bancorp, Inc. common stock (closing stock price as of March 31, 2026)
 $ 71.00

 Purchase price consideration for common stock
 $ 25,376

 Impact to Purchase Price Consideration - Cash for Dissenting Shares

 Dissenting shares
 29,927

 Exchange Ratio
 0.8065

 Ballston Spa Bancorp, Inc. shares to be issued for Dissenting Shares in the merger and excludes fractional shares
 24,136

 Fair value assigned to Dissenting shares
 $ 93.41

 Fair value of Dissenting Shares
 $ 2,255

 Impact to Additional Paid In Capital for par value of Ballston Spa Bancorp Inc. shares to be issued

 Total Ballston Spa Bancorp, Inc. shares to be issued
 381,667

 Par value of Ballston Spa Bancorp, Inc. shares issued for merger at $12.50 per share
 $ 12.50

 Less: par value of Ballston Spa Bancorp, Inc. common stock
 4,771

 Net adjustment to additional paid-in capital for stock consideration

 22,860

 Total adjustments for additional paid-in capital

 $ 5,369

 Balance Sheet

 12/31/2025

 Treasury stock

 Purchase of Dissenting shares
 $ (2,255 )

 Total adjustments for treasury stock
 $ (2,255 )

 Balance Sheet

 12/31/2025

 Retained earnings

 Reversal of NBC Bancorp, Inc. retained earnings
 $ (19,821 )

 Acquisition activity - Ballston Spa Bancorp, Inc. merger costs
 (3,158 )

 Total adjustments for retained earnings
 $ (22,979 )

 8 | Page

 Balance Sheet

 12/31/2025

 Aaccumulated other comprehensive loss

 Reversal of NBC Bancorp, Inc. accumulated other comprehensive loss
 $ 3,487

 Total adjustments for accumulated other comprehensive loss
 $ 3,487

 Balance Sheet

 December 31, 2025

 Cash and due from banks

 Cash payment for Dissenting shares
 $ (2,255 )

 Total adjustments for cash and due from banks
 $ (2,255 )

 (3) Securities available-for-sale were recorded at fair value at December 31, 2025; therefore, no balance
sheet adjustment is necessary. Adjustment to statements of income includes prospective reclassification
of existing available-for-sale securities fair value adjustment of $4.4 million to an amortizing discount which will be amortized into
income based on the expected life of securities.

 Balance sheet adjustment to
reflect the retirement of NBC junior subordinated debentures owned by Ballston Spa of $1.5 million and the retirement of Ballston Spa junior
subordinated debentures owned by NBC of $1.0 million. Statements of income adjustment to reflect the lost income from the
retirement of the junior subordinated debentures.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Securities available for sale

 Securities available for sale amortization adjustment
 $ -
 $ 1,936

 Retirement of NBC junior subordinated debentures owned by BSPA
 (1,500 )
 (83 )

 Retirement of BSPA junior subordinated debentures owned by NBC
 (1,000 )
 (58 )

 Total adjustments for securities available for sale
 $ (2,500 )
 $ 1,795

 Securities held for maturity balance
sheet and statements of income adjustment to reflect the fair value of securities held to maturity of $75 thousand. This adjustment will
be recognized over the expected life of the investments.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Securities held to maturity

 Securities held to maturity fair value adjustment
 $ 75
 $ (19 )

 Total adjustments for securities held to maturity
 $ 75
 $ (19 )

 9 | Page

 (4) Balance sheet adjustment to reflect the fair value discount for acquired purchased credit deteriorated
(&ldquo;PCD&rdquo;) loans and Purchased Seasoned Loans (&ldquo;PSL&rdquo;) of $24.6 million and other loan adjustments. The accruing loan
fair value adjustments will be substantially recognized over the expected life of the loans. Balance sheet and statements of income interest
rate adjustment to reflect the reversal of existing deferred net loan fees.

 In November, the FASB released ASU
2025-08, Financial Instruments&mdash;Credit Losses (Topic 326): Purchased Loans, introducing significant changes to the Current Expected
Credit Loss (CECL) standard. This update aims to enhance comparability and consistency in acquisition reporting.

 Ballston Spa elected to early
adopted ASU 2025-08, Financial Instruments&mdash;Credit Losses (Topic 326): Purchased Loans and used the gross up approach to record
the allowance for credit losses for Purchase Seasoned Loans.

 Balance sheet adjustment of $3.9 million
for acquired loans allowance for credit losses to be recorded as an increase in the allowance for credit losses and gross-up of the loan
account for early adoption of ASU 2025-08.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Fair value adjustments on loans acquired

 PSL fair value
 $ (22,035 )
 $ 2,403

 PCD loans fair value
 (2,185 )
 142

 PCD Non-accruing loans fair value
 (333 )
 -

 Total fair value adjustments for loans
 (24,553 )
 2,545

 Gross up of acquired loans for allowance for credit losses

 Acquired loans allowance for credit losses
 3,947
 -

 Total gross up for acquired loans for allowance for credit losses
 3,947
 -

 Total loan fair value adjustments
 (20,606 )
 2,545

 Reversal of deferred loan fees, net
 131
 (36 )

 Total adjustments for loans
 $ (20,475 )
 $ 2,509

 (5) Balance sheet adjustment for the reversal of NBC&rsquo;s existing allowance for loan losses of
$3.7 million.

 Balance sheet adjustment of $3.9 million
for acquired loans allowance for credit losses.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Allowance for credit losses

 Reversal of existing allowance for credit losses
 $ 3,680
 $ -

 Allowance for credit losses for acquired loans
 (3,947 )
 -

 Total adjustments for allowance for credit losses
 $ (267 )
 $ -

 10 | Page

 (6) Balance sheet and statements of income adjustment to reflect the fair value of owned premise of $1.6 million
and will be amortized over the expect life of 40 years using the straight-line method.

 Balance sheet and statements of income
adjustment to reflect the fair value of lease properties and will be amortized over the expected life of the lease.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Premises fair value

 Owned premises fair value adjustment
 $ 1,647
 $ 38

 Leased premises fair value adjustment
 (243 )
 (24 )

 Total adjustments for premises fair value
 $ 1,404
 $ 14

 (7) Balance sheet adjustment to reflect the creation of a core deposit intangible fair value of $7.2 million
for acquired core deposit intangible assets. The related statements of income amortization adjustments based upon an expected life of
10 years using sum of the year&rsquo;s digits method.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Core deposit intangible asset

 Core deposit intangible asset
 $ 7,170
 $ 1,304

 Total adjustments for core deposit intangible asset
 $ 7,170
 $ 1,304

 (8) Balance sheet adjustment to reflect the net deferred tax asset, at a statutory rate of 27.0%, related
to fair value adjustments and tax benefits related to one-time merger charges and related statements of income adjustments to pro forma
adjustments using a statutory tax rate of 27.0% for book income tax expense.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Tax impact

 Fair value adjustments
 $ 3,215
 $ (787 )

 Buyer accrual for one-time merger related charges
 1,168
 1,168

 Total adjustments for taxes
 $ 4,383
 $ 381

 (9) Balance sheet and statements of income adjustment related to the fair value of interest-bearing time deposits
and corresponding statements of income adjustments related to the amortization of discount on interest-bearing time deposits based on
the expected life of interest-bearing time deposits.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Certificates of deposit

 Certificates of deposit fair value adjustment
 $ (52 )
 $ 61

 Total adjustments for certificates of deposits
 $ (52 )
 $ 61

 11 | Page

 (10) Balance sheet and statements of income adjustment related to the fair value of borrowings and statements
of income adjustments related to the amortization of discount based on the expected life of the borrowings.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Borrowings

 Borrowings fair value adjustment
 $ (121 )
 $ 74

 Total adjustments for borrowings
 $ (121 )
 $ 74

 (11) Balance sheet adjustment to reflect the fair value discount of $336 thousand for junior subordinated debentures.
Statements of income adjustment to reflect the amortization based on the expected life of the junior subordinated debentures.

 Balance sheet adjustment to
reflect the retirement of NBC junior subordinated debentures owned by Ballston Spa of $1.5 million and the retirement of Ballston
Spa junior subordinated debentures owned by NBC of $1.0 million. Statements of income adjustment to reflect the reduction of
interest expense from the retirement of the junior subordinated debentures.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Junior subordinated debentures

 Junior subordinated debentures fair value adjustment
 $ (336 )
 $ 60

 Retirement of NBC junior subordinated debentures owned by BSPA
 (1,500 )
 (83 )

 Retirement of BSPA junior subordinated debentures owned by NBC
 (1,000 )
 (58 )

 Total adjustments for junior subordinated debentures
 $ (2,836 )
 $ (81 )

 (12) Balance sheet adjustment to reflect the accrual of one-time merger-related charges for Ballston Spa and
NBC: (a) NBC pre-tax charges are estimated at $649 thousand ($569 thousand after-tax) and are included as a pro forma
fair value liability accrual, and (b) Ballston Spa pre-tax charges are estimated at $4.3 million ($3.2 million after-tax) and are included
as a pro forma liability accrual with the after-tax cost as reduction to retained earnings. The pro forma statements of income include
one-time Ballston Spa merger-related expenses of $4.3 million which will be expensed against income when incurred. It is noted that a
tax benefit was not taken for certain merger obligations and costs that were not considered to be tax deductible.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Other liabilities

 Ballston Spa Bancorp, Inc. accrual for one-time merger related charges
 $ 4,326
 $ 4,326

 NBC Bancorp, Inc. accrual for one-time merger related charges
 649
 -

 Total other liabilities adjustments
 $ 4,975
 $ 4,326

 12 | Page

 ADJUSTMENTS RELATED TO OTHER TRANSACTIONS:

 (13) Balance Sheet Restructuring #1 : Balance sheet adjustment to reflect the sale of $50.2 million
of NBC's Available for Sale Securities at closing. Statements of income reflects lost interest income related to sale of securities as
well as the related discount.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Balance Sheet Restructuring #1: Sale of Securities Available for Sale

 Sale of securities available for sale
 $ (50,221 )
 $ (688 )

 Reversal of amortization of fair value discount on securities available for sale
 -
 (1,186 )

 Total sale of securities available for sale
 $ (50,221 )
 $ (1,874 )

 (14) Balance Sheet Restructuring #2 : Balance sheet and statements of income adjustments to reflect
the sale of $73.6 million of NBC's residential mortgages with an estimated fair value of $62.0 million. Statements of income adjustments
for contractual lost income on the sold loans at an interest rate of 3.40% plus the related fair value amortization income.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Balance Sheet Restructuring #2: Sale of Residential Mortgage Loans

 Sale of residential mortgage loans
 $ (61,986 )
 $ (2,503 )

 Reversal of amortization related to the fair value adjustment
 -
 (1,277 )

 Total sale of residential mortgages loans
 $ (61,986 )
 $ (3,780 )

 (15) Balance Sheet Restructuring #3 : Balance sheet and statements of income adjustment to reflect
brokered time deposits that are not intended to be renewed (weighted average rate of 4.63%).

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Balance Sheet Restructuring #3: Maturity of Brokered Time Deposits

 Maturity of brokered time deposits
 $ (60,315 )
 $ (2,791 )

 Total Maturity of Brokered Time Deposits
 $ (60,315 )
 $ (2,791 )

 (16) Balance Sheet Restructuring #4 : Balance sheet and statements of income adjustments to reflect
the pay-off of borrowings at an interest rate of 4.14% with proceeds from the sale of loans and investment securities available for sale
noted above.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Balance Sheet Restructuring #4: Pay-Off of Borrowings

 Pay off borrowings with funds received from the sale of Securities Available for Sale and Residential Mortgage Loans
 $ (32,407 )
 $ (1,343 )

 Reversal of amortization related to the fair value adjustment
 -
 (22 )

 Total Pay-Off of Borrowings
 $ (32,407 )
 $ (1,365 )

 13 | Page

 (17) Capital Initiative #1 : Balance sheet and statements of income adjustments to reflect the
issuance of Ballston Spa junior subordinated debentures of $26.0 million (less debt issuance cost) at an interest rate of 7.38% to improve
balance sheet liquidity and capital ratios.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Capital Initiative #1: Issuance of Junior Subordinated Debentures

 Issuance of new junior subordinated debentures at Ballston Spa
 $ 26,000
 $ 1,918

 Debt issuance costs
 (561 )
 56

 Total Issuance of Subordinated Debentures
 $ 25,439
 $ 1,974

 (18) Impact to Fed Funds Sold related to Balance Sheet Restructuring and Capital Initiatives :
Balance sheet and statements of income adjustments to reflect the impact from the Balance Sheet Restructuring and Capital Initiatives
(see table below for details) and related statements of income impacts at an interest rate of 3.50%.

 Balance Sheet
 Statements of

 Income

 December 31, 2025
 Twelve Months

Ended
 December 31, 2025

 Impact to Fed Funds Sold related to Balance Sheet Restructuring and Capital Initiatives

 Proceeds from the sale of residential mortgage loans
 $ 61,986
 $ 2,170

 Proceeds from the sale of securities available for sale
 50,221
 1,758

 Maturity of brokered time deposits
 (60,315 )
 (2,111 )

 Pay-off of borrowings
 (32,407 )
 (1,134 )

 Issuance of junior subordinated debentures
 25,439
 889

 Total impact to Fed Funds Sold related to Balance Sheet Restructuring and Capital Initiatives
 $ 44,924
 $ 1,572

 (19) Tax Impact related to Balance Sheet Restructuring and Capital Initiatives: Balance sheet
and statements of income adjustments to reflect the net deferred tax asset, at a statutory rate of 27.0%, related to balance sheet restructuring
and capital initiatives.

 Balance Sheet
 Statements of

Income

 December 31, 2025
 Twelve Months

 Ended
 December 31, 2025

 Tax impact related to balance sheet restructuring and capital initiatives

 Sale of securities available for sale
 $ (50,221 )
 $ (506 )

 Sale of residential mortgage loans
 (61,986 )
 (1,022 )

 Maturity of brokered time deposits
 60,315
 754

 Pay off borrowings with funds received from the sale of securities available for sale and residential mortgage loans
 32,407
 369

 Issuance of new junior subordinated debentures at Ballston Spa
 (25,439 )
 (533 )

 Fed funds sold related to balance sheet restructuring and capital initiatives
 44,924
 425

 Total tax impact related to balance sheet restructuring and capital initiatives
 $ -
 $ (513 )

 14 | Page

EX-23.1 · tm2617581d1_ex23-1.htm

Type

EX-23.1

File

tm2617581d1_ex23-1.htm

Document text
EX-23.1 · tm2617581d1_ex23-1.htm EX-23.1 2 tm2617581d1_ex23-1.htm EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITOR We consent to the use in this Form 8-K/A filing of Ballston Spa Bancorp, Inc. of our report dated March 18, 2026 on the consolidated financial statements of NBC Bancorp, Inc. and Subsidiary as of December 31, 2025 and 2024, and for the years then ended. /s/ Bonadio & Co. LLP Syracuse, New York June 12, 2026

Document text

EX-23.1 · tm2617581d1_ex23-1.htm

EX-23.1
 2
 tm2617581d1_ex23-1.htm
 EXHIBIT 23.1

 Exhibit 23.1

 CONSENT OF INDEPENDENT AUDITOR

 We consent to the use in this
Form 8-K/A filing of Ballston Spa Bancorp, Inc. of our report dated March 18, 2026 on the consolidated financial statements of NBC Bancorp, Inc. and Subsidiary as of December 31, 2025 and
2024, and for the years then ended.

 /s/ Bonadio & Co. LLP

 Syracuse, New York

 June 12, 2026

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