URSB 10-K & 10-Q changes, risk factors and insider trading

Management’s discussion and analysis of financial condition and results of operations at MarchJune 31,30, 2026 and December 31, 2025, and for the three and six months ended MarchJune 31,30, 2026 and 2025, is intended to assist in understanding the consolidated financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

Total Assets. Total assets increased $12.6$13.5 million, or 3.4%,3.7%, to $380.6$381.5 million at MarchJune 31,30, 2026 from $368.0 million at December 31, 2025. This increase was primarily the result of increasesincrease in cash and cash equivalents as well as net loans, partially offset by a decrease in other assets.cash.

Cash and Cash Equivalents. Cash and cash equivalents increaseddecreased $9.6$2.4 million, or 114.5%,28.6%, to $18.0$6.0 million at MarchJune 31,30, 2026 from $8.4 million at December 31, 2025, primarily due to capitalredeployment raisedof incash theto conversionfund stockloan offering.growth.

Securities Available for Sale. Securities available-for-sale increased by $0.7$2.7 million, or 2.5%,10.5%, to $26.5$28.5 million at MarchJune 31,30, 2026 from $25.8 million at December 31, 2025. This increase was due to efforts to continue to maintain a diversified balance sheet, replace maturing investments within the securities held-to-maturity portfolio with investments in the securities available-for-sale portfolio, and enhance our liquidity position by purchasing securities available-for-sale and that may be pledged as collateral for potential future borrowing needs.

Securities Held-to-Maturity. Securities held-to-maturity decreased by $1.0$4.0 million, or 7.9%,31.3%, to $11.8$8.8 million at MarchJune 31,30, 2026 from $12.8 million at December 31, 2025, primarily due to maturities. The funds from maturities were used to fund loans and the purchase of securities available-for-sale.

Loans Receivable, Net. Loans receivable, net, increased by $4.3$17.2 million, or 1.4%,5.7%, to $304.7$317.6 million at MarchJune 31,30, 2026 from $300.4 million at December 31, 2025. One- to four-family residential mortgage loans increased by $3.9$12.4 million, or 2.8%,8.6%, to $147.5$156.0 million at MarchJune 31,30, 2026 from $143.6 million at December 31, 2025. Commercial real estate loans (inclusive of multifamily and construction loans) decreasedincreased $1.8by $0.1 million, or 2.0%,0.1%, to $86.3$88.2 million at MarchJune 31,30, 2026 from $88.1 million at December 31, 2025. Commercial and industrial loans purchased from Bankers Healthcare Group, LLC (“Bankers Healthcare Group”) decreased by $2.5$4.8 million, or 7.1%,13.8%, to $32.3$30.0 million at MarchJune 31,30, 2026 from $34.8 million at December 31, 2025. Other commercial and industrial loans increaseddecreased by $87,000,$0.1 million, or 1.1%,1.3%, to $8.0$7.8 million at MarchJune 31,30, 2026 from $7.9 million at December 31, 2025. Consumer loans increased by $4.6$10.0 million, or 17.1%,36.2%, to $31.1$36.1 million at MarchJune 31,30, 2026 from $26.5 million at December 31, 2025.

Bank Owned Life Insurance. Bank owned life insurance increased by $63,000,$127,000, or 0.9%,2.9%, to $7.1$7.2 million at MarchJune 31,30, 2026 from $7.0 million at December 31, 2025, due to an increase in the cash surrender value of the existing policies. We invest in bank owned life insurance to help offset the costs of our employee benefit plan obligations. Bank owned life insurance also generally provides non-interest income that is non-taxable.

Deposits. Deposits decreasedincreased by $5.2$0.9 million, or 1.8%,0.3%, to $285.8$291.9 million at MarchJune 31,30, 2026 from $291.0 million at December 31, 2025. Interest-bearing checking accounts decreasedincreased by $1.2$1.5 million, or 1.8%,2.3%, to $64.9$67.6 million at MarchJune 31,30, 2026 from $66.1 million at December 31, 2025. Non-interest-bearing checking accounts decreased by $1.4$1.5 million, or 14.0%,15.2%, to $8.5$8.4 million at MarchJune 31,30, 2026 from $9.9 million at December 31, 2025. Money market accounts increased by $1.8$10.9 million, or 11.4%,68.1%, to $17.8$26.9 million at MarchJune 31,30, 2026 from $16.0 million at December 31, 2025. Savings and club accounts decreased by $3.1$3.7 million, or 12.9%,15.4%, to $21.0$20.4 million at MarchJune 31,30, 2026 from $24.1 million at December 31, 2025. Brokered Certificates of deposit decreased by $8.1$5.6 million, or 11.7%8.2% to $60.6$63.1 million at MarchJune 31,30, 2026 from $68.7 million at December 31, 2025. Non-Brokered Certificates of deposit increaseddecreased by $6.8$0.7 million, or 6.4%0.7% to $112.9$105.5 million at MarchJune 31,30, 2026 from $106.1$106.2 million at December 31, 2025.

Federal Home Loan Bank Advances. Federal Home Loan Bank advances decreased by $2.0$7.5 million, or 4.3%,16.0%, to $44.8$39.3 million at MarchJune 31,30, 2026 from $46.8 million at December 31, 2025. This decrease was due to the maturity of existing advances and no need to replace the funds.funds due to capital raised in the conversion stock offering.

Total Equity. Total equity increased by $19.8$19.5 million, or 98.9%,97.5%, to $39.8$39.5 million at MarchJune 31,30, 2026 from $20.0 million at December 31, 2025, primarily due to the capital raised in the conversion stock offering as well as net income of $155,000$380,000 for the threesix months ended MarchJune 31,30, 2026, and a decrease in other comprehensive loss of $108,000.$196,000.

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

Comparison of Operating Results for the Three Months Ended MarchJune 31,30, 2026 and 2025

Net Income. Net income was $155,000$225,000 for the three months ended MarchJune 31,30, 2026, compared to $133,000$71,000 for the three months ended MarchJune 31,30, 2025. The increase was primarily due to increases in net interest income and non-interest income,income offsetas bywell increasesas adjustments in the provision for credit loss, offset by increases in non-interest expense, and income tax expense.

Interest and Dividend Income. Interest and dividend income increased $1.0 million,$763,000, or 25.4%,18.0%, to $5.0 million for the three months ended MarchJune 31,30, 2026, from $4.0$4.2 million for the three months ended MarchJune 31,30, 2025, primarily due to an increase in interest and fees on loans and interest on securities available for sale. The increase in interest and fees on loans resulted primarily from a $53.0$57.7 million increase in the average balance of loans to $305.4$313.9 million from $252.4$256.2 million and an increase in the average yield on loans to 5.83%5.72% for the three months ended MarchJune 31,30, 2026, from 5.65%5.67% for the three months ended MarchJune 31,30, 2025. The increase in interest on securities available for sale resulted primarily from an $8.9$10.7 million increase in the average balance of securities available for sale to $26.8$29.2 million from $17.9$18.5 million and an increase in the average yield on securities available for sale to 4.42%4.29% for the three months ended MarchJune 31,30, 2026, from 3.67%3.50% for the three months ended MarchJune 31,30, 2025.

Interest Expense. Interest expense increased $0.5 million,$263,000, or 23.6%,11.8%, to $2.5 million for the three months ended March 31, 2026, from $2.0$2.2 million for the three months ended MarchJune 31,30, 2025. The increase is primarily due to increased interest expense on deposits. Interest expense on deposit accounts increased $467,000,$245,000, or 30.1%,14.0%, to $2.0 million for the three months ended MarchJune 31,30, 2026, from $1.6$1.8 million for the three months ended MarchJune 31,30, 2025 due to an increase in the average balance of interest bearing deposits of $64.1$23.4 million, or 26.6%,0.1%, to $304.8$278.0 million for the three months ended MarchJune 31,30, 2026, from $240.7$254.6 million for the three months ended MarchJune 31,30, 2025 and an increase in the average rate on deposits to 2.69%2.88% for the three months ended MarchJune 31,01, 2026, from 2.61%2.76% for the three months ended MarchJune 31,30, 2025 reflecting a higher market interest rate environment period-over-period.

Net Interest Income. Net interest income increased $538,000,$500,000, or 27.3%,25.0%, to $2.5 million for the three months ended MarchJune 31,30, 2026, from $2.0 million for the three months ended MarchJune 31,30, 2025, primarily due to an increase in the average balance of interest-earning assets of $66.2$45.7 million.million, or 0.2%. Net interest rate spread increased to 2.64%2.47% for the three months ended MarchJune 31,30, 2026, from 2.49%2.39% for the three months ended MarchJune 31,30, 2025, while net interest margin increased to 2.75%2.76% for the three months ended MarchJune 31,30, 2026, from 2.63%2.53% for the three months ended MarchJune 31,30, 2025.

Provision for Credit Losses. Based on management’s analysis of the adequacy of allowance for credit losses, a provision of $99,000$120,000 was recorded for the three months ended MarchJune 31,30, 2026, compared to a credit adjustmentprovision of $41,000$199,000 for the three months ended MarchJune 31,30, 2025. The $140,000$79,000 increasedecrease was primarily due to thehigher additiongrowth of newloan portfolios of consumer loans which historically have had higher delinquency rates, as well aswith increased uncertaintyrisk ascharacteristics tofor futurethe economicperiod conditions.ended June 30, 2025 versus the period ended June 30, 2026.

Non-Interest Income. Non-interest income increased $183,000,$73,000, or 83.0%, to $141,000$161,000 for the three months ended MarchJune 31,30, 2026, from a $42,000$88,000 loss for the three months ended MarchJune 31,30, 2025. The increase was due to an increase in fees and service charges, an increase in the cash surrender value of bank owned life insurance, and duean increase in the value of annuity investments. Fees and service charges increased $24,000, or 52.2%, to a loss on sales of securities$70,000 for the three months ended MarchJune 31,30, 20252026, withfrom no similar activity in the 2026 period. Fees and service charges increased $9,000, or 17.3%, to $61,000$46,000 for the three months ended MarchJune 31, 2026, from $52,000 for the three months ended March 31,30, 2025. The increase in the cash surrender value of bank owned life insurance and annuities was $27,000,$24,000, or 75.0%,60.0%, to $63,000$64,000 for the three months ended MarchJune 31,30, 2026, from $36,000$40,000 for the three months ended MarchJune 31,30, 2025. Securities were sold in the three months ended March 31, 2025, to redeploy the funds into loans and investments available-for-sale at higher prevailing market interest rates.

Non-Interest Expense. Non-interest expense increased $627,000,$456,000, or 35.8%,25.1%, to $2.4$2.3 million for the three months ended MarchJune 31,30, 2026, from $1.8 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to increases in salaries and employee benefits, professional fees, and federal deposit insurance premiumspremiums, and other expenses. Salaries and employee benefits increased $132,000,$294,000, or 14.3%,30.5%, to $1.3 million for the three months ended June 30, 2026, from $1.0 million for the three months ended MarchJune 31, 2026, from $0.9 million for the three months ended March 31,30, 2025, primarily due to the addition of staff to support retail and online banking operations. Professional fees increased $48,000,$98,000, or 40.7%,83.1%, to $166,000$216,000 for the three months ended MarchJune 31,30, 2026, from $118,000 for the three months ended MarchJune 31,30, 2025, primarily due to added costs attributedfor toaudit, capitallegal conversion.and regulatory filing associated with being a public company. Federal deposit insurance premiums increased $30,000,$7,000, or 37.0%,7.7%, to $111,000$98,000 for the three months ended MarchJune 31,30, 2026, from $81,000$91,000 for the three months ended MarchJune 31,30, 2025 primarily related to the growth in deposits. All other expenses increased $57,000, or 8.9%, to $699,000 for the three months ended June 30, 2026, from $642,000 for the three months ended June 30, 2025 due to increases in occupancy, Director compensation, advertising, and other operating expenses.

Income Tax Expense. Income tax expense decreasedincreased $68,000,$42,000, or 75.6%,600.0%, to $22,000$49,000 for the three months ended MarchJune 31,30, 2026, from $90,000$7,000 for the three months ended MarchJune 31,30, 2025, primarily due to lowerhigher pre-tax income. The effective tax rate for the three months ended MarchJune 31,30, 2026 was 12.4%.17.9%. The effective tax rate for the three months ended MarchJune 31,30, 2025 was 40.4%.9.0%.

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. In addition, we have available credit facilities with the Federal Home Loan Bank of New York and the Federal Reserve Bank of New York. At MarchJune 31,30, 2026, we had the ability to borrow $103.1$105.0 million from the Federal Home Loan Bank of New York, of which $50.7$42.3 million was outstanding. At MarchJune 31,30, 2026, we also had available borrowing capacity of $22.1$21.1 million with the Federal Reserve Bank of New York, with no borrowings outstanding. For additional information, see note 7 of notes to consolidated financial statements.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. For additional information, see the consolidated statements of cash flows for the threesix months ended MarchJune 31,30, 2026 and the year ended December 31, 2025 included as part of the consolidated financial statements appearing elsewhere in this Form 10-Q.

URSB Bancorp, Inc. is a separate legal entity from United Roosevelt Savings Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations. URSB Bancorp, Inc’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to URSB Bancorp, Inc. is governed by applicable bank regulations. At MarchJune 31,30, 2026, URSB Bancorp, Inc. (on an unconsolidated basis) had liquid assets of $14.2$10.0 million.

At MarchJune 31,30, 2026, United Roosevelt Savings Bank exceeded all of its regulatory capital requirements and was categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change this categorization. For additional information, including tabular financial information regarding United Roosevelt Savings Bank’s regulatory capital levels relative to the requirements for well-capitalized status, see note 108 of the notes to consolidated financial statements. The net proceeds from the stock offering will increase capital resources.