Exhibit 99.3

PRO FORMA VALUATION REPORT
SECOND-STEP CONVERSION
STOCK OFFERING

Seneca Bancorp, Inc. │Baldwinsville, New York

HOLDING COMPANY FOR:

Seneca Savings Bank │ Baldwinsville, New York

Valuation Date: May 16, 2025

1311-A Dolley Madison Boulevard
Suite 2A
McLean, Virginia 22101
703.528.1700
rpfinancial.com

May 16, 2025

Boards of Directors 

Seneca Financial, MHC 

Seneca Financial Corp. 

Seneca Savings 

35 Oswego Street 

Baldwinsville, New York 13027

Members of the Boards of Directors:

At your request, we have completed and hereby provide an independent appraisal ("Appraisal") of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion transaction described below.

This Appraisal is furnished pursuant to the requirements stipulated in the Code of Federal Regulations and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” (the “Valuation Guidelines”) of the Office of Thrift Supervision (“OTS”) and accepted by the Federal Reserve Board (“FRB”), the Federal Deposit Insurance Corporation (“FDIC”), the Office of the Comptroller of the Currency (“OCC”) and the New York State Department of Financial Services, and applicable regulatory interpretations thereof.

Description of Plan of Conversion and Reorganization

The Boards of Directors of Seneca Financial, MHC (the “MHC”), Seneca Bancorp, Inc. (“Seneca Bancorp” or the “Company”), Seneca Financial Corp. (“SNNF”) and Seneca Savings (“Seneca Savings” or the “Bank”) have approved the plan of conversion whereby the MHC will convert to stock form. As a result of the conversion, SNNF, which currently owns all of the issued and outstanding common stock of Seneca Savings, will be succeeded by a new Maryland corporation with the name of Seneca Bancorp, Inc. Following the conversion, the MHC and SNNF will no longer exist. For purposes of this document, the existing consolidated entity will hereinafter also be referred to as Seneca Bancorp or the Company, unless otherwise identified as SNNF. As of March 31, 2025, the MHC had a majority ownership interest in, and its principal asset consisted of, approximately 58.13% of the common stock (the “MHC Shares”) of SNNF. The remaining 41.87% of SNNF’s common stock is owned by public stockholders. Pursuant to the Plan, the Bank will convert from a federal savings bank into an OCC-chartered national bank and change its name to Seneca Savings Bank, National Association.

It is our understanding that Seneca Bancorp will offer its stock, representing the majority ownership interest held by the MHC, in a subscription offering to Eligible Account Holders, Tax-Qualified Plans including the Bank’s employee stock ownership plan (the “ESOP”), Supplemental Eligible Account Holders and Other Members. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to natural persons residing in certain market area counties of the Bank, SNNF’s public shareholders and other members of the general public in a community offering and a syndicated community offering. Upon completing the mutual-to-stock conversion and stock offering (the “second-step conversion”), the Company will be 100% owned by public shareholders, the publicly-held shares of SNNF will be exchanged for shares in the Company at a ratio that retains their ownership interest at the time the conversion is completed and the MHC assets will be consolidated with the Company.

Boards of Directors
May 16, 2025
Page 2

RP^® Financial, LC.

RP^® Financial, LC. (“RP Financial”) is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-1. We believe that, except for the fee we will receive for the Appraisal, we are independent of the Company, SNNF, the Bank, the MHC and the other parties engaged by the Bank or the Company to assist in the second-step conversion process.

Valuation Methodology

In preparing our Appraisal, we have reviewed the regulatory applications of the Company, the Bank and the MHC, including the prospectus as filed with the FRB and the Securities and Exchange Commission (“SEC”). We have conducted a financial analysis of the Company, the Bank and the MHC that has included a review of audited financial information for the years ended December 31, 2020 through December 31, 2024, a review of various unaudited information and internal financial reports through March 31, 2025, and due diligence related discussions with the Company’s management; Bonadio & Co., LLP, the Company’s independent auditor; Luse Gorman, PC, the Company’s conversion counsel and Keefe Bruyette & Woods, A Stifel Company, the Company’s marketing advisor in connection with the stock offering. All assumptions and conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.

We have investigated the competitive environment within which Seneca Bancorp operates and have assessed Seneca Bancorp’s relative strengths and weaknesses. We have kept abreast of the changing regulatory and legislative environment for financial institutions and analyzed the potential impact on Seneca Bancorp and the industry as a whole. We have analyzed the potential effects of the stock conversion on Seneca Bancorp’s operating characteristics and financial performance as they relate to the pro forma market value of Seneca Bancorp. We have analyzed the net assets held by the MHC, which will be consolidated with Seneca Bancorp’s balance sheet pursuant to the completion of the second-step conversion. We have reviewed the economic and demographic characteristics of the Company’s primary market area. We have compared Seneca Bancorp’s financial performance and condition with selected publicly-traded thrifts in accordance with the Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding companies. We have reviewed the current conditions in the securities markets in general and the market for thrift stocks in particular, including the market for existing thrift issues, initial public offerings by thrifts and thrift holding companies and second-step conversion offerings. We have excluded from such analyses thrifts subject to announced or rumored acquisition, and/or institutions that exhibit other unusual characteristics.

Boards of Directors
May 16, 2025
Page 3

The Appraisal is based on Seneca Bancorp’s representation that the information contained in the regulatory applications and additional information furnished to us by Seneca Bancorp and its independent auditor, legal counsel and other authorized agents are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by Seneca Bancorp, or its independent auditor, legal counsel and other authorized agents nor did we independently value the assets or liabilities of Seneca Bancorp. The valuation considers Seneca Bancorp only as a going concern and should not be considered as an indication of Seneca Bancorp’s liquidation value.

Our appraised value is predicated on a continuation of the current operating environment for Seneca Bancorp and for all thrifts and their holding companies. Changes in the local, state and national economy, the legislative and regulatory environment for financial institutions and mutual holding companies, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the value of Seneca Bancorp’s stock alone. It is our understanding that there are no current plans for selling control of Seneca Bancorp following completion of the second-step conversion. To the extent that such factors can be foreseen, they have been factored into our analysis.

The estimated pro forma market value is defined as the price at which Seneca Bancorp’s common stock, immediately upon completion of the second-step stock offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

In preparing the pro forma pricing analysis we have taken into account the pro forma impact of the MHC’s net assets (i.e., unconsolidated equity) that will be consolidated with the Company and thus will increase equity. After accounting for the impact of the MHC’s net assets, the public shareholders’ ownership interest was reduced by approximately 0.23%. Accordingly, for purposes of the Company’s pro forma valuation, the public shareholders’ pro forma ownership interest was reduced from 41.87% to 41.64% and the MHC’s ownership interest was increased from 58.13% to 58.36%.

Valuation Conclusion

It is our opinion that, as of May 16, 2025, the estimated aggregate pro forma valuation of the shares of the Company to be issued and outstanding at the end of the conversion offering – including (1) newly-issued shares representing the MHC’s current ownership interest in the Company and (2) exchange shares issued to existing public shareholders of SNNF – was $17,990,480 at the midpoint, equal to 1,799,048 shares at $10.00 per share. The resulting range of value and pro forma shares, all based on $10.00 per share, are as follows: $15,291,910 or 1,529,191 shares at the minimum, $20,689,050 or 2,068,905 shares at the maximum and $23,792,410 or 2,379,241 shares at the super maximum.

Based on this valuation and taking into account the ownership interest represented by the shares owned by the MHC, the midpoint of the offering range is $10,500,000 equal to 1,050,000 shares at $10.00 per share. The resulting offering range and offering shares, all based on $10.00 per share, are as follows: $8,925,000 or 892,500 shares at the minimum, $12,075,000 or 1,207,500 shares at the maximum and $13,886,250 or 1,388,625 shares at the super maximum.

Boards of Directors
May 16, 2025
Page 4

Establishment of the Exchange Ratio

The conversion regulations provide that in a conversion of a mutual holding company, the minority stockholders are entitled to exchange the public shares for newly issued shares in the fully converted company. The Boards of Directors of the MHC and SNNF have independently determined the exchange ratio, which has been designed to preserve the current aggregate percentage ownership in the Company (adjusted for the dilution resulting from the consolidation of the MHC’s unconsolidated equity into the Company). The exchange ratio to be received by the existing minority shareholders of the Company will be determined at the end of the offering, based on the total number of shares sold in the offering and the final appraisal. Based on the valuation conclusion herein, the resulting offering value and the $10.00 per share offering price, the indicated exchange ratio at the midpoint is 0.9732 shares of the Company’s stock for every one share held by public shareholders. Furthermore, based on the offering range of value, the indicated exchange ratio is 0.8272 at the minimum, 1.1192 at the maximum and 1.2871 at the super maximum. RP Financial expresses no opinion on the proposed exchange of newly issued Company shares for the shares held by the public stockholders or on the proposed exchange ratio.

Limiting Factors and Considerations

The valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is determined in accordance with applicable regulatory guidelines and is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion offering, or prior to that time, will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the estimated pro forma market value thereof. The appraisal reflects only a valuation range as of this date for the pro forma market value of Seneca Bancorp immediately upon issuance of the stock and does not take into account any trading activity with respect to the purchase and sale of common stock in the secondary market on the date of issuance of such securities or at anytime thereafter following the completion of the second-step conversion.

RP Financial’s valuation was based on the financial condition, operations and shares outstanding of SNNF as of March 31, 2025, the date of the financial data included in the prospectus. The proposed exchange ratio to be received by the current public stockholders of SNNF and the exchange of the public shares for newly issued shares of Seneca Bancorp’s common stock as a full public company was determined independently by the Boards of Directors of the MHC and SNNF. RP Financial expresses no opinion on the proposed exchange ratio to public stockholders or the exchange of public shares for newly issued shares.

RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits RP Financial, its principals or employees from purchasing stock of its client institutions.

Boards of Directors
May 16, 2025
Page 5

This valuation may be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the financial performance and condition of Seneca Bancorp, management policies, and current conditions in the equity markets for thrift shares, both existing issues and new issues. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the legislative and regulatory environment for financial institutions, the stock market and the market for thrift stocks, and interest rates. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update. The valuation will also be updated at the completion of Seneca Bancorp’s stock offering.

	Respectfully submitted,
	RP® FINANCIALLC.
	William E. Pommerening
	Managing Director
	James J. Oren
	Director

TABLE OF CONTENTS 

Seneca Bancorp, Inc. 

Baldwinsville, New York

TABLE OF CONTENTS 

Seneca Bancorp, Inc. 

Baldwinsville, New York 

(continued)

LIST OF TABLES
Seneca Bancorp, Inc. 

Baldwinsville, New York

I. Overview and Financial Analysis

Introduction

Seneca Savings was originally chartered in 1928. SNNF is a Maryland-chartered subsidiary holding company organized in 2017 as the holding company for Seneca Savings, a federally chartered stock savings bank headquartered in the town of Baldwinsville, Onondaga County, New York, within the Syracuse metropolitan area. The Bank operates a community banking business through its headquarters office, three additional branch offices in Onondaga County, and a branch office in Madison County. The Bank’s deposit base is generally concentrated in areas surrounding the office locations. The Bank’s primary market area coverage for lending operations expands to the counties contiguous to the two counties noted above. A map of the Bank’s offices is provided in Exhibit I-1.

In October 2017, the Bank was reorganized into a federally-chartered stock savings association within a mutual holding company (“MHC”) structure with a mid-tier holding company and a concurrent minority stock offering. As part of the reorganization, the Company publicly sold a minority portion of the common shares in a subscription and community offering and issued majority ownership of the shares to the MHC. Since that time, the Company has expanded its operations in the greater Syracuse metropolitan area through both growth in existing offices and the opening of the office location in Bridgeport, New York.

SNNF’s principal activity is the ownership of the outstanding shares of the Bank. At March 31, 2025, SNNF had 1,838,278 shares of common stock outstanding, whereby the MHC owned 1,068,618 shares, or 58.13%, and public shareholders owned the remaining 769,660 shares, or 41.87%. The public shares are traded on OTC Pink Marketplace (“OTCPK”) under the trading symbol “SNNF”.

SNNF is regulated by the Federal Reserve while the Bank is regulated by the Office of the Controller of the Currency (“OCC”). The Bank is also a member of the Federal Home Loan Bank (“FHLB”) system. The Bank’s deposits are insured up to the regulatory maximums by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (“FDIC”). Seneca Savings is community-oriented and offers traditional financial services, engaged primarily in the business of attracting local deposits and originates one-to-four family real estate and commercial and multifamily real estate, and to a lesser extent, commercial and industrial, construction and consumer loans. The Bank also invests in securities such as U.S. Government and agency securities, mortgage-backed securities (“MBS”), municipal securities and corporate debt securities.

At March 31, 2025, SNNF reported $280.2 million in assets, $217.3 million in deposits and equity of $24.0 million, equal to 8.55% of assets. For the 12 months ended March 31, 2025, the Company reported net income of $754,000. Excluding a modest amount of losses on sale of other real estate owned (“OREO”), estimated adjusted net income for the same period equaled $758,000, or 1.11% of average assets. SNNF’s audited financial statements are included by reference as Exhibit I-2.

Plan of Reorganization

The Boards of Directors of the MHC, SNNF, Seneca Bancorp and Seneca Savings have approved the plan of conversion whereby the MHC will convert to stock form. As a result of the conversion, the MHC will be merged into Seneca Financial and the MHC will no longer exist. Further, Seneca Financial will merge into a new Maryland corporation named “Seneca Bancorp, Inc.” and as a result Seneca Financial will cease to exist. Simultaneously with the merger of Seneca Financial with and into Seneca Bancorp, Seneca Savings will convert from a federal savings association into a national bank that will be renamed “Seneca Savings Bank, National Association.”

It is our understanding that Seneca Bancorp will offer its common stock, representing the majority ownership interest held by the MHC, in a subscription offering to eligible account holders, tax-qualified plans, supplemental account holders and other members (qualifying depositors) as such terms are defined for purposes of applicable regulatory guidelines governing stock offerings by mutual institutions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and a syndicated community offering or firm commitment public offering. Upon completing the mutual-to-stock conversion and stock offering (the “second-step conversion”), Seneca Bancorp will be 100% owned by public shareholders, the publicly-held shares of the Company will be exchanged for shares in Seneca Bancorp at a ratio that retains their ownership interest at the time the conversion is completed and the MHC assets will be consolidated into Seneca Bancorp.

Strategic Overview

Seneca Savings has been serving the Onondaga County and the related central New York marketplace as a locally-owned and operated financial institution since its founding in 1928. For many years the Bank operated as a traditional thrift institution, originating for portfolio long-term fixed rate residential loans funded with certificates of deposit. In recent years the Bank has continued to update the various operational areas of the Bank, such as credit underwriting, information technology and compliance in order to more fully meet current industry standards. Further, a longer term strategy has been to diversify the loan portfolio into commercial real estate and non-real estate secured loans, An additional benefit of this strategy has been an increase in lower cost core deposit accounts, related to the commercial lending activities. The Bank’s products and services are focused on the lending and investment needs of the local retail and commercial customer base as well as households in the market area. Based on the operating history and growth of the Bank since its founding, the Bank has established, to a certain degree, its name recognition and overall reputation in the Syracuse, New York area. The Bank has also diversified the revenue base by adding the investment services division. In addition, the Bank views itself as an integral part of the local communities served, and thus has historically strongly supported the retail customer base through providing residential loan products.

With the Company’s enhanced equity position following the completion of the offering, Seneca Bancorp intends to continue to pursue the following strategies in order to operate as a well-capitalized and profitable community bank focused on meeting the needs of individuals, small businesses, and community organizations in the Syracuse metropolitan area:

Balance Sheet Trends

Table 1.1 presents summary balance sheet information for SNNF for the five fiscal years ended December 31, 2024 and as of March 31, 2025. From assets of $221.5 million as of December 31, 2020, assets have increased to $280.2 million as of March 31, 2025, funded by increases in deposits representing an annualized growth rate of 5.69%. Loans receivable have remained in the range of 70%-75% of assets over the time period shown in Table 1.1. Cash and investments have been maintained at sufficient levels for liquidity purposes, while some funds have been placed into fixed assets (due to the newly opened Bridgeport office and land acquired for a future office location. Borrowings have fluctuated and remained modest in balance. Equity increased from 2020 to 2021 as a result of profitable operations, while since 2022 equity has been impacted by the loss in the accumulated other comprehensive income (“AOCL”) account in the higher interest rate environment. The equity balance has increased through 2025 from additions to retained earnings and an improvement in the AOCL position. A summary of SNNF’s key operating ratios over the most recent two fiscal years and respective three-month periods is presented in Exhibit I-3.

Table 1.1

Seneca Financial Corp.

Historical Balance Sheets  

Sources:Seneca Financial's audited financial reports and call reports.

The balance of Seneca Savings’ loan portfolio increased over the time period shown in Table 1.1 from a low of $150.0 million, or 69.7% of assets as of December 31, 2021 to a high of $204.3 million, or 72.9% of assets as of March 31, 2025. Loans declined somewhat in fiscal 2021 as a result of rapid repayments of residential loans in the low interest rate environment, along with active sales of longer term residential loans into the secondary market. Loan growth resumed in fiscal 2022 as the overall economy recovered. The loans/deposit ratio trended downward through December 31, 2022 and has fluctuated since then. A majority of the Company’s loans are secured by property within the Syracuse MSA, the location of the Company’s office facilities.

The Association originates both real estate secured and non-real estate secured loans, and lending activities have traditionally emphasized the origination of first and second position mortgage loans secured by owner occupied 1-4 family residential property. Beyond 1-4 family loans, lending diversification by the Company includes non-residential real estate mortgage loans (owner-occupied and non-owner occupied), including loans secured by multi-family properties, 1-4 family residential construction loans and non-mortgage commercial and consumer loans. Seneca Savings originates both fixed rate and adjustable rate 1-4 family residential mortgage loans, and the current practice is to sell certain originations of longer-term fixed rate residential loans into the secondary market on a servicing retained basis. Loans are sold to the FHLB of New York and Freddie Mac. The diversified lending activities represent a primary part of the Corporation’s business strategy to maximize revenue (in terms of yield on portfolio loans) and provide benefits in areas such as interest rate risk, fee income and increases in core deposits.

The intent of the Company’s cash and investment policy is to provide adequate liquidity and to generate a favorable return within the context of supporting SNNF‘s cash operating needs and credit and interest rate risk objectives. Historically, the level of cash and equivalents has fluctuated in the range of 16.5% to 23.2% based on the operating environment, lending volumes and cash needs. The ratio equaled 18.9% as of March 31, 2025.

The intent of the Company’s investment policy is to provide adequate liquidity and to generate a favorable return within the context of supporting SNNF’s overall credit and interest rate risk objectives. Since year end 2020, the Company’s level of investment securities (inclusive of FHLB stock) ranged from a low of 15.0% of assets at year-end 2023 to a high of 21.6% of assets at year-end 2021. The Company maintains a diversified portfolio of corporate bonds, municipal bonds, mortgage-backed securities and US Treasury and Agency securities. As of March 31, 2025, the Association also held $3.1 million of FHLB stock. As of the same date the after-tax AOCL adjustment equaled a net loss of $4.5 million, a decrease from a net loss of $5.0 million as December 31, 2023. As with the industry in general, the market value loss will be recovered upon maturity of the securities held, absent any credit issues. Details of the Bank’s held-to-maturity investment securities portfolio are presented in Exhibit I-4.

The Association also maintains an investment in bank-owned life insurance (“BOLI”) policies, as a source of funding for employee benefit expenses. As of March 31, 2025, the cash surrender value of the Association’s BOLI equaled $2.7 million or 1.0% of assets, which also provides for tax-favorable treatment of income generated. SNNF provides pension benefits for eligible employees through a self-funded and invested defined benefit plan. The participants in this plan were frozen at January 1, 2019, as any employees hired after that date are not eligible for this plan. Following completion of the annual calculations of benefit obligations and fair value of the plan assets, as of March 31, 2025 the plan reported a net funded status of $7.2 million, which is carried as an asset on the balance sheet.

Seneca Savings reported investment in fixed assets as of March 31, 2025 equal to $9.6 million, or 3.4% of assets, representing investment in the five banking office locations and the investment advisory office in Syracuse, including land that has been purchased for a future branch location. There was a zero balance of other real estate owned (“OREO”) at March 31, 2025, and the balance of OREO has remained minimal for the time period included in Table 1.1.

Seneca Savings funds operations through retail and brokered deposits, borrowings, internal cash flows and retained earnings. From fiscal 2020 through March 31, 2025 the Company’s deposits increased at an annual rate of 8.1%. Use of brokered deposits has fluctuated over time and equaled $16.8 million at March 31, 2025. The changes in balances of deposits and other funding sources and assets have resulted in the ratio of deposits-to-assets ranging from 70.4% at fiscal 2020 to 78.6% at December 31, 2022. The Company maintains a full range of core deposit accounts including passbook accounts, interest-bearing and non-interest bearing checking accounts and money market accounts. The Company’s focus has been to increase the level of core accounts given their lower cost and interest rate risk benefits. In 2024 the Association began offering a limited amount of financial products and services to the cannabis industry, including depository products.

Borrowings, consisting solely of FHLB advances, serve as an alternative funding source for the Association to address funding needs for growth and to support management of deposit costs and interest rate risk. From year end 2020 through December 31, 2024, borrowings ranged from a low of $24.95 million or 11.6% of assets at year-end 2021 to a high of $41.2 million or 14.7% of assets at year-end 2024. As of March 31, 2025 FHLB advances totaled $34.8 million.

The equity/assets ratio ranged from a low of 8.49% of assets at year-end 2024 to a high of 11.32% of assets at fiscal year-end 2021, with the balance of equity impacted by net additions to retained earnings, changes to the AFS adjustment and use of equity for stock repurchases. The Association is in compliance with all regulatory capital requirements, qualifying as a “well-capitalized” institution. The Company has not paid any cash dividends to shareholders through March 31, 2025. Tangible book value per share equaled $12.52 at March 31, 2025 based on 1,838,278 common shares outstanding.

Income and Expense Trends

Table 1.2 presents the Company’s historical income statements for the fiscal periods from 2020 through 2024 and for the 12 months ended March 31, 2025. Net income has fluctuated over the time period and reached a high of $1.780 million, or 0.80% of average assets for fiscal 2021, trending lower to income of $712,000, or 0.27% of average assets in fiscal 2024. Estimated reported and core earnings for the most recent 12 month period were equal to $754,000 and 758,000, respectively, or 1.11% of average assets.

Reflecting trends in the interest rate environment of the past few years and the impact of the Association’s asset growth and lending activities, Seneca Savings recorded a rising net interest income ratio from fiscal 2020 to 2022, reaching 3.53% in 2022. The net interest income ratio increased in fiscal 2022 primarily due to the rising interest rate environment, as the Federal Reserve began raising interest rates in March 2022, while most financial institutions delayed a corresponding increase in deposit offering rates. In fiscal 2023 and 2024, the continued increase and higher level of market interest rates, an inverted yield curve, competitive and other factors resulted in a substantial increase in funding costs, leading to a decline in the net interest income ratio from 3.53% for fiscal 2022 to 3.04% for fiscal 2024, resulting in the largest impact on profitability. The net interest income ratio subsequently increased to 3.08% for the 12 months ended March 31, 2025, as funding costs declined by one basis point and interest income increased by two basis points. In the most recent period, growth in deposit funds enabled the reduction in higher cost borrowed funds. These margin trends are indicative of the Association’s increased focus on interest rate risk management and the benefits of the diversified lending activities away from long-term fixed rate residential loans. The Bank’s interest rate spreads and yields and costs for the past three and one-half years are set forth in Exhibits I-3 and I-5.

Table 1.2

Seneca Financial Corp.

Historical Income Statements