NorthEast Community Bancorp (NECB) risk factors, FY2025 10-K

Risks Related to Our Lending Activities

1. 01Our emphasis on construction lending involves risks that could adversely affect our financial condition and results of operations
2. 02At December 31, 2025, $334.8 million, or 18.0%, of our loan portfolio consisted of multifamily, mixed-use and non-residential real estate loans. As a result, our credit risk profile is generally higher than traditional thrift institutions that have higher concentrations of one- to four-family residential loans
3. 03Imposition of limits by the bank regulators on construction and multifamily, mixed-use and nonresidential real estate lending activities could curtail our growth and adversely affect our earnings
4. 04Our multifamily and mixed-use loan portfolio may be adversely affected by changes in legislation or regulationsNew
5. 05Our portfolio of commercial and industrial loans may expose us to increased lending risks
6. 06If our allowance for credit losses - loans is not sufficient to cover actual loan losses, our results of operations would be negatively affected
7. 07The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in our primary market area27% rewritten
8. 08Economic conditions could result in increases in our level of non-performing loans and/or reduce demand for our products and services, which could have an adverse effect on our results of operations
9. 09Strong competition within our market area may limit our growth and profitability

Risks Related to Our Operations

1. 10Our reliance on brokered deposits, military deposits and deposits from listing services could adversely affect our liquidity and operating results26% rewritten
2. 11We face a risk of non-compliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
3. 12Because the nature of the financial services business involves a high volume of transactions, we face significant operational risks

Risks Related to Our Growth Strategy

1. 13The building of market share through our branch office strategy, and our ability to achieve profitability on new branch offices, may increase our expenses and negatively affect our earnings

Risks Related to Our Payment of Dividends

1. 14Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our Board of Directors24% rewritten

Risks Related to Our Business and Industry Generally

1. 15Changes in interest rates may hurt our profits and asset values and our strategies for managing interest rate risk may not be effective
2. 16Ineffective liquidity management could adversely affect our financial results and condition
3. 17Financial challenges at other banking institutions could lead to depositor concerns that spread within the banking industry causing disruptive and destabilizing deposit outflows30% rewritten
4. 18Economic, social and political conditions or civil unrest in the United States may affect the markets in which we operate, our customers, our ability to provide customer service, and could have a material adverse impact on our business, results of operations, or financial condition
5. 19Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks
6. 20We depend on our management team to implement our business strategy and execute successful operations and we could be harmed by the loss of their services
7. 21We are a community bank and our ability to maintain our reputation is critical to the success of our business. The failure to do so may adversely affect our performance
8. 22We are dependent on our information technology and telecommunications systems and third-party service providers; systems failures, interruptions and cybersecurity breaches could have a material adverse effect on us
9. 23Security breaches and cybersecurity threats could compromise our information and expose us to liability, which would cause our business and reputation to suffer78% rewritten
10. 24subject to ongoing, continuous attempts to penetrate key systems by individual hackers, organized criminals, and in some cases, state-sponsored organizationsNew
11. 25We must keep pace with technological change to remain competitive
12. 26Acts of terrorism and other external events could impact our business
13. 27Regulation of the financial services industry is intense, and we may be adversely affected by changes in laws and regulations
14. 28We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors