URSB Bancorp, Inc.

URSB Bancorp, Inc. is a financial institution that offers various loan products. The company's loan portfolio includes Small Business Administration (SBA) and/or U.S. Department of Agriculture (USDA) guaranteed loans. These guaranteed loans do not have a general reserve allocated, and the company has not experienced losses on them. Another segment is BHG Commercial Loans, which are commercial loans acquired from BHG, a non-bank lender specializing in small business loans. The credit quality in this segment could be affected by a weakened economy and decreased consumer spending. Consumer loans historically included loans secured by certificates of deposit or savings accounts, as well as advances for taxes and insurance on respective loans. Starting in 2025, URSB Bancorp, Inc. began purchasing unsecured consumer loans from Lending Club, Woodside Credit, and BHG, with repayment generally dependent on the individual borrower's credit quality. The company also evaluates loans individually if they do not share common risk characteristics, especially if the borrower is in financial difficulty and repayment relies on the operation or sale of collateral. For these collateral-dependent loans, expected credit losses are based on the collateral's fair value at the reporting date, adjusted for selling costs. URSB Bancorp, Inc. also has off-balance sheet credit exposures, including commitments to extend credit, standby letters of credit, and commercial letters of credit. The company estimates expected credit losses for these exposures over the contractual period, unless the obligation is unconditionally cancellable. The allowance for credit losses on off-balance sheet exposures is recorded in other liabilities on the consolidated statements of financial condition, with adjustments recognized in the provision for credit losses in the consolidated statements of operation.