What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-22 · 240 added, 184 removed, 306 unchanged (58% of the section changed)

9 unchanged sentences

The Bank's results of operations are primarily dependent on its net interest income, which is the difference between interest income on loans and investments and interest expense on deposits and borrowings.

The Bank also generates non-interest income, such as fee income on deposit and loan accounts, merchant credit and debit card processing programs, loan swap fees, investment services, income from its title insurance subsidiary, and net gains on sales of securities and loans.

The level of non-interest expenses, such as salaries and benefits, occupancy and equipment costs, other general and administrative expenses, expenses from the Bank’s title insurance subsidiary, and income tax expense, further affects our net income.

4 unchanged sentences

Note 1 Summary of Significant Accounting Policies (page 53), to the Company’s Audited Consolidated Financial Statement for the year ended December 31, 2024 contains a summary of significant accounting policies.

These accounting policies may require various levels of subjectivity, estimates or judgment by management.

Policies with respect to the methodologies it uses to determine the allowance for credit losses on loans held for investment and fair value of loans acquired in a business combinations are critical accounting policies because they are important to the presentation of the Company’s consolidated financial condition and results of operations.

These critical accounting estimates involve a significant degree of complexity and require management to make difficult and subjective judgments which often necessitate assumptions or estimates about highly uncertain matters.

Policies with respect to the methodologies used to determine the allowance for credit losses on loans held for investment are important to the presentation of the Company’s consolidated financial condition and results of operations.

The use of different judgments, assumptions or estimates could result in material variations in the Company’s consolidated results of operations or financial condition.

10 unchanged sentences

Within the model, assumptions are made in the determination of probability of default, loss given default, reasonable and supportable economic forecasts, prepayment rate, curtailment rate, and recovery lag periods.

Management assesses the sensitivity of key assumptions at least annually by stressing the assumptions to understand the impact on the model.

At June 30, 2023, if the four-quarter national unemployment rate forecast had increased 100 basis points our quantitative ACL reserve would have increased 10.5%.

Changes in quantitative inputs may not occur in the same direction or magnitude across all segments of our loan portfolio and deterioration in some quantitative inputs may offset improvement in others.

This sensitivity analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result to assess the sensitivity of the ACL to a change in a key input.

This sensitivity analysis does not incorporate changes to management’s judgment of qualitative loss factors.

Statistical regression is utilized to relate historical macro-economic variables to historical credit loss experience of a peer group of banks that operate in and around Dime’s footprint.

2 unchanged sentences

These factors include:

(1) lending policies and procedures;

(1) lending policies and procedures and the experience, ability, and depth of the lending management and other relevant staff;

(2) international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio, including the condition of various markets;

(3) the nature and volume of the loan portfolio;

(4) the experience, ability, and depth of the lending management and other relevant staff;

(4) the volume and severity of past due loans;

3 unchanged sentences

and (8) the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

For loans that do not share risk characteristics, the Company evaluates these loans on an individual basis based on various factors.

Factors that may be considered are borrower delinquency trends and non-accrual status, probability of foreclosure or note sale, changes in the borrower’s circumstances or cash collections, borrower’s industry, or other facts and circumstances of the loan or collateral.

The expected credit loss is measured based on net realizable value, that is, the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the amortized cost basis of the loan.

For collateral dependent loans, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, less estimated costs to sell.

Although management believes that it uses the best information available to establish the Allowance for Credit Loss, management assesses the sensitivity of key quantitative assumptions including macroeconomic forecasts and prepayment rate assumptions.

At June 30, 2024, if the four-quarter national unemployment rate forecast had increased 100 basis points our quantitative ACL reserve would have increased 11.8%.

The sensitivity analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result to assess the sensitivity of the ACL to a change in a key quantitative input.

Additionally, the sensitivity analysis described above does not incorporate changes to management’s judgment of qualitative loss factors.

Uncertainties Regarding the Estimate

6 unchanged sentences

If our assumptions prove to be incorrect, the allowance for credit losses may not be sufficient to cover expected losses in the loan portfolio, resulting in additions to the allowance.

Future additions or reductions to the allowance may be necessary based on changes in economic, market or other conditions.

Future additions or reductions to the allowance may be necessary

based on changes in economic, market or other conditions.

Changes in estimates could result in a material change in the allowance through charges to earnings and would materially decrease our net income.

2 unchanged sentences

Such agencies may require the Bank to recognize adjustments to the allowance based on their judgments of the information available to them at the time of their examination.

Fair value of loans acquired in a business combination

Methods and Assumptions Underlying the Estimate

On February 1, 2021, the Company completed a merger of equals business combination accounted for as a reverse merger using the acquisition method of accounting.

As a part of accounting for the Merger, fair value estimates were calculated with a combination of assumptions by management and by using a third party.

The fair value often involved third-party estimates utilizing input assumptions by management which may be complex or uncertain.

The fair value of acquired loans was based on a discounted cash flow methodology that considers factors such as type of loan and related collateral, and requires management’s judgment on estimates about discount rates, expected future cash flows, market conditions and other future events.

For purchased financial loans with credit deterioration (“PCD”), an estimate of expected credit losses was made for loans with similar risk characteristics and was added to the purchase price to establish the initial amortized cost basis of the PCD loans.

Any difference between the unpaid principal balance and the amortized cost basis is considered to relate to non-credit factors and resulted in a discount or premium.

Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans.

For acquired loans not deemed PCD at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans.

Uncertainties Regarding the Estimate

Management relied on economic forecasts, internal valuations, or other relevant factors which were available at the time of the Merger in the determination of the assumptions used to calculate the fair value of the acquired loans.

The estimates about discount rates, expected future cash flows, market conditions and other future events were subjective and may differ from estimates.

Impact on Financial Condition and Results of Operations

The estimate of fair values on acquired loans contributed to the recorded goodwill from the Merger.

In future income statement periods, interest income on loans will include the amortization and accretion of any premiums and discounts resulting from the fair value of acquired loans.

Additionally, the provision for credit losses on acquired individually analyzed PCD loans may be impacted due to changes in the assumptions used to calculate expected cash flows.

Comparison of Operating Results For The Years Ended December 31, 2024, 2023 and 2022

The Company’s results of operations for the year ended December 31, 2021, include income for the eleven months following the Merger and the results of Legacy Dime for the month ended January 31, 2021.

The Company’s historical operating results as of and for periods before February 1, 2021, as presented and discussed in this Annual Report on Form 10-K, do not include the historical results of Bridge.

Net income was $29.1 million in 2024, compared to $96.1 million in 2023, and $152.6 million in 2022.

During 2024, non-interest income decreased by $40.2 million, provision for credit losses increased by $33.3 million and non-interest expense increased by $13.4 million, partially offset by an increase in net interest income of $1.5 million and a decrease in income tax expense of $18.4 million.

During 2023, net interest income decreased by $63.3 million, non-interest expense increased by $12.4 million and non-interest income decreased by $2.0 million, partially offset by a decrease of $18.6 million in income tax expense and a decrease of $2.6 million in provision for credit losses.

During 2022, net interest income increased by $22.3 million, provision for credit losses decreased by $0.8 million, and non-interest expense decreased by $44.6 million, partially offset by a non-interest income decrease of $3.9 million and an income tax expense increase of $15.2 million.

During 2021, net interest income increased by $179.9 million, provision for credit losses decreased by $20.0 million and non-interest income increased $20.8 million, partially offset by a non-interest expense increase of $127.5 million and an income tax expense increase of $31.5 million.

During 2022, net interest income increased by $22.3 million, provision for credit losses decreased by $839 thousand, and non-interest expense decreased by $44.6 million, partially offset by a non-interest income decrease of $3.9 million and an income tax expense increase of $15.2 million.

The discussion of net interest income for the years ended December 31, 2024, 2023, and 2022 should be read in conjunction with the following tables, which set forth certain information related to the consolidated statements of operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated.

8 unchanged sentences

Year Ended December 31,

(Dollars in thousands)

Interest-earning assets:

Real estate loans (1) (4)

Commercial and industrial loans ("C&I") (1)

Business loans (1) (3) (6)

One-to-four family residential, including condo and coop (3) (6)

Multifamily residential and residential mixed-use (3) (6)

Non-owner-occupied commercial real estate (3) (6)

Other loans (3)

5 unchanged sentences

Interest-bearing checking (2)

Certificates of deposit ("CDs")

Total interest-bearing deposits

11 unchanged sentences

Net interest income

Net interest spread (2)

Net interest rate spread (4)

Net interest-earning assets

2 unchanged sentences

Deposits (including non-interest-bearing checking accounts) (2)

(1) Business loans include commercial and industrial loans (“C&I”), owner-occupied commercial real estate loans and SBA Paycheck Protection Program (“PPP”) loans.

(2) Includes mortgage escrow deposits.

(3) Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale.

1 unchanged sentence

(5) Net interest margin represents net interest income divided by average interest-earning assets.

(4) At December 31, 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans.

(6) At December 31, 2024 and 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans .

Rate/Volume Analysis

Year Ended December 31,

Years Ended December 31,

2024 over 2023

2 unchanged sentences

Increase/(Decrease) Due to

(In thousands)

Interest-earning assets:

Real estate loans (1)

Other loans (1)

(In thousands)

Business loans (1) (2)

One-to-four family residential, including condo and coop

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

Other short-term investments

8 unchanged sentences

Net change in net interest income

(1) Business loans include C&I loans, owner-occupied commercial real estate loans and PPP loans.

(2) Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale .

5 unchanged sentences

Interest income was $650.1 million in 2024, $609.4 million in 2023, and $439.2 million in 2022.

During 2023, interest income increased $170.2 million from 2022, primarily reflecting increases in interest income of $119.0 million on real estate loans, $29.1 million on C&I loans and $19.3 million on short-term investments.

The increased interest income on real estate loans was primarily due to an 85-basis point increase in yield and an increase of $909.3 million in the average balances of such loans in the period.

The increased interest income on C&I loans was primarily due to a 218-basis point increase in yield and an increase of $112.4 million in the average balances of such loans in the period.

The increased interest income from short-term investments was primarily due to a 376-basis point increase in yield and an increase of $193.8 million in the average balances of such short-term investments in the period.

Increased yields across interest-earning assets were a result of the rising interest rate environment.

During 2022, interest income increased $54.6 million from 2021, primarily reflecting increases in interest income of $55.7 million on real estate loans and $6.6 million on securities.

The increased interest income on real estate loans was primarily due to an increase of $829.5 million in the average balance of real estate loans and a 28-basis point increase in the yield of such loans.

The increased interest income from securities was primarily due to an increase of $392.4 million in the average balance of securities, offset by a 2-basis point decrease in the yield of such securities.

During 2024, interest income increased $40.7 million from 2023, primarily reflecting increases in interest income of $28.1 million on business loans, $6.7 million on one-to-four family loans, $5.7 million on non-owner-occupied CRE loans, $3.4 million on other short-term investments, $1.5 million on multifamily loans, and $1.4 million in securities.

The increased interest income on business loans was primarily due to an increase of $254.5 million in the average balances of business loans and a 45-basis point increase in yield of such loans in the period.

The increased interest income on one-to-four family loans was primarily due to a 45-basis point increase in the yield of one-to four family loans and an increase of $62.4 million in the average balances of such loans in the period.

The increased interest income on non-owner-occupied CRE loans was primarily due to a 22-basis point increase in yield of non-owner-occupied CRE loans, offset by a decrease of $30.5 million in the average balances of such loans in the period.

The increased interest income from short-term investments was primarily due to an increase of $57.1 million in the average balances of short-term investments and a 9-basis point increase in yield of such investments in the period.

The increased interest income on multifamily loans was primarily due to a 23-basis point increase in yield of multifamily loans, offset by a decrease of $168.9 million in the average balances of such loans in the period.

The increased interest income on securities was primarily due to a 25-basis point increase in yield of securities, offset by a decrease of $124.1 million in the average balances of such securities in the period.

During 2023, interest income increased $170.2 million from 2022, primarily reflecting increases in interest income of $48.2 million on business loans, $45.8 million on non-owner occupied CRE loans, $40.7 million on multifamily loans and $19.3 million on short-term investments.

The increased interest income on business loans was primarily due to an increase of $240.2 million in the average balances of business loans and a 162-basis point increase in the yield of such loans.

The increased interest income on non-owner occupied CRE loans was primarily due to an increase of $282.0 million in the average balances of non-owner occupied CRE loans and a 102-basis point increase in the yield of such loans.

The increased interest income on multifamily loans was primarily due to an increase of $420.4 million in the average balances of multifamily loans and a 60-basis point increase in the yield of such loans.

The increased interest income from short-term investments was primarily due to an increase of $193.8 million in the average balances of short-term investments and a 376-basis point increase in the yield of such investments.

Interest Expense.

Interest expense was $332.1 million in 2024, $292.8 million in 2023, and $59.4 million in 2022.

During 2023, interest expense increased $233.4 million from 2022, primarily reflecting increases in interest expense of $73.1 million on money market accounts, $57.4 million on savings accounts, $49.1 million on Federal Home Loan Bank of New York (“FHLBNY”) advances and $44.7 million on CDs.

The increase in interest expense on money market accounts was primarily due to a 254-basis point increase in rates paid on money market accounts, offset by a decrease of $88.5 million

in the average balances of such deposits in the period.

During 2024, interest expense increased $39.3 million from 2023, primarily reflecting increases in interest expense of $50.4 million on money market accounts, $7.0 million on savings accounts, $4.4 million on CDs, $3.9 million on interest-bearing checking accounts and $3.6 million on subordinated debt.

The increase in interest expense on money market accounts primarily reflects a $767.4 million increase in the average balances of money market accounts and a 77-basis point increase in rates paid on such deposits in the period.

The increase in interest expense on savings accounts was primarily due to a 52-basis point increase in rates paid on saving accounts, offset by a decrease of $133.9 million in the average balances of such deposits in the period.

The increase in interest expense on CDs was primarily due to a 58-basis point increase in rates paid on CDs, offset by a decrease of $93.1 million in the average balances of such deposits in the period.

The increase in interest expense on interest-bearing checking accounts was primarily due to a 60-basis point increase in rates paid on interest-bearing checking accounts, offset by a decrease of $44.2 million in the average balances of such deposits in the period.

The increase in interest expense on subordinated debt primarily reflects a $36.5 million increase in the average balances of subordinated debt and a 71-basis point increase in rates paid on such debt.

The increase in interest expense on money market accounts was primarily due to a 254-basis point increase in rates paid on money market accounts, offset by a decrease of $88.5 million in the average balances of such deposits in the period.

The increase in interest expense on savings accounts was primarily due to a 229-basis point increase in rates paid on savings accounts and an increase of $496.1 million in the average balances of such deposits in the period.

The increase in interest expense on CDs was primarily due to a 277-basis point increase in rates paid on CDs and an increase of $517.7 million in the average balances of such deposits in the period.

The increase in interest expense on FHLBNY advances primarily reflects a $999.0 million increase in the average balance of FHLBNY advances and a 169-basis point increase in rates paid on such advances.

During 2022, interest expense increased $32.3 million from 2021, primarily reflecting increases in interest expense of $15.2 million on savings accounts, $5.1 million on FHLBNY advances, and $4.4 million on money market accounts.

The increase in interest expense on savings accounts was primarily due to an 82-basis point increase in yield on savings account and an increase of $673.1 million in the average balances of such deposits in the period.

The increase in interest expense on FHLBNY advances was primarily due to a 203-basis point increase in rates paid on FHLBNY wholesale borrowings, partially offset by a $6.4 million decrease in the average balance of such borrowings.

The increase in interest expense on money market accounts was primarily due to an 18-basis point increase in rates paid on money market accounts, partially offset by a $520.6 million decrease in the average balance of such accounts.

Provision for Credit Losses.

The Company recognized a provision for credit losses of $36.1 million in 2024, $2.8 million in 2023 and $5.4 million in 2022.

The $36.1 million provision for credit losses recognized in 2024 was related to additional provisioning for the pooled multifamily, C&I, and criticized loan portfolios.

The $2.8 million provision for credit losses recognized in 2023 was associated with increased provisioning for individually analyzed loans.

The $5.4 million provision for credit losses recognized in 2022 was associated with growth in the loan portfolio and a deterioration of forecasted macroeconomic conditions, offset by a reduction in reserves on individually analyzed loans and unfunded commitments.

The $6.2 million provision for credit losses recognized in 2021 included a provision recorded on acquired non-PCD loans for the Day 2 accounting of acquired loans from the Merger, offset by improvements in forecasted macroeconomic conditions, and releases of reserves on individually analyzed loans.

The provision for credit losses recognized in 2023, 2022 and 2021 was calculated in accordance with the CECL Standard adopted by the Company on January 1, 2021.

Non-Interest Income.

Non-interest income was $36.2 million in 2023, $38.2 million in 2022, and $42.1 million in 2021.

During 2023, non-interest income decreased $2.0 million from 2022, primarily due to a decrease of $2.9 million from net gain on sale of securities and other assets, offset by a $3.4 million increase in loan level derivative income.

During 2022, non-interest income decreased $3.9 million from 2021, due primarily to a decrease in gain on the sales of SBA PPP loans, and a decrease in gain on sale of residential loans and other non-interest income of $1.3 million each.

Offsetting these declines was an increase in BOLI income of $3.3 million and no loss on termination of derivatives in 2022 (versus a $16.5 million loss on termination of derivatives in 2021).

Non-interest income was a loss of $4.0 million in 2024, compared to income of $36.2 million in 2023, and income of $38.2 million in 2022.

During 2024, non-interest income decreased $40.2 million from 2023, primarily due to a increase of $41.4 million from net loss on sale of securities as a result of a securities portfolio restructuring in 2024 and a decrease of $5.0 million in loan level derivative income, partially offset by an increase of $7.2 million from a gain on sale of other assets.

During 2023, non-interest income decreased $2.0 million from 2022, due primarily to a decrease of $2.9 million from net gain on sale of securities and other assets, partially offset by a $3.4 million increase in loan level derivative income.

Non-Interest Expense.

Non-interest expense was $226.5 million in 2024, $213.1 million in 2023, and $200.7 million in 2022.

During 2024, non-interest expense increased $13.4 million from 2023, primarily due to a $18.7 million increase in salaries and employee benefits as the Bank continued to add business teams and a $2.5 million increase in professional services, partially offset by a $7.8 million decrease in severance expense.

In addition, during 2024, the Company recorded a $1.2 million loss from a pension settlement.

During 2023, non-interest expense increased $12.4 million from 2022, primarily due to a $6.9 million increase in severance expense, a $5.0 million increase in federal deposit insurance premiums (including $1.0 million of pre-tax expense related to the FDIC special assessment for the recovery of losses related to the closures of Silicon Valley Bank and Signature Bank), partially offset by a $2.7 million decrease in salaries and employee benefits.

During 2022, non-interest expense decreased $44.6 million from 2021, primarily due to not recognizing any merger expenses and transaction costs and branch restructuring costs in 2022 (versus $44.8 million in merger expenses and transaction costs and $5.1 million of branch restructuring costs in 2021).

These declines were offset by an increase of $11.8 million in salaries and employee benefits expenses.

Non-interest expense was 1.66%, 1.56%, and 1.61% of average assets during 2024, 2023, and 2022, respectively.

2 unchanged sentences

Income tax expense decreased $18.4 million during 2024 compared to 2023, primarily as a result of $85.4 million of lower pre-tax income during 2024.

Income tax expense increased $15.2 million during 2022 compared to 2021, primarily as a result of $63.7 million of higher pre-tax income during 2022.

Income tax expense during 2024 included $9.1 million of expense related to the taxable gain and Modified Endowment Contract (“MEC”) Tax on the surrender of legacy BOLI assets.

Income tax expense decreased $18.6 million during 2023 compared to 2022, primarily as a result of $75.0 million of lower pre-tax income during 2023.

The Company’s consolidated tax rate was 43.5%, 29.8% and 28.0% in 2024, 2023, and 2022, respectively.

Comparison of Financial Condition at December 31, 2024 and December 31, 2023

Assets totaled $13.64 billion at December 31, 2023, $446.1 million above their level at December 31, 2022, primarily due to an increase in cash and due from banks of $288.3 million, an increase in the loan portfolio of $218.4

million, partially offset by a decrease in total securities of $55.5 million, and a decrease in derivative assets of $32.4 million.

Assets totaled $14.35 billion at December 31, 2024, $717.3 million above their level at December 31, 2023, primarily due to an increase in cash and due from banks of $826.0 million, an increase in the loan portfolio of $81.5 million and an increase in other assets of $62.8 million, partially offset by a decrease in total securities of $152.8 million, a decrease in BOLI of $59.2 million and a decrease in restricted stock of $29.6 million.

Total net loans held for investment increased $81.5 million during the year ended December 31, 2024, to $10.78 billion at period end.

1 unchanged sentence

Total securities decreased $152.8 million during the year ended December 31, 2024, to $1.32 billion at period end, primarily due to proceeds from principal payments, calls, maturities and sales of $621.6 million offset in part by purchases of $402.8 million and a decrease in unrealized losses of $66.0 million.

There were no transfers to or from securities held-to-maturity for the year ended ended December 31, 2023.

Total liabilities increased $389.4 million during the year ended December 31, 2023, to $12.41 billion at period end, primarily due to an increase of $276.2 in deposits, an increase of $182.0 million in FHLBNY advances, partially offset by a decrease of $44.9 million in derivative cash collateral and a decrease of $16.1 million in derivative liabilities.

We maintained a higher level of borrowings to support loan growth.

There were no transfers to or from securities held-to-maturity for the year ended December 31, 2024 or 2023.

BOLI decreased $59.2 million during the year ended December 31, 2024, to $290.7 million.

The decrease in BOLI is primarily due to the surrender of legacy BOLI assets of $84.5 million, offset by $15.0 million in purchases of new assets and an increase in cash surrender value of $10.3 million.

Premises and fixed assets decreased $10.0 million during the year ended December 30, 2024, to $34.8 million at period end, primarily due to the sale of Bank’s premises and other assets which resulted in a $7.2 million net gain in the current period.

Total restricted stock decreased $29.6 million during the year ended December 30, 2024, to $69.1 million at period end, primarily due to a reduction in FHLBNY advances.

Total liabilities increased $547.0 million during the year ended December 31, 2024, to $12.96 billion at period end, primarily due to an increase in deposits of $1.16 billion, an increase in subordinated debt of $72.1 million and an increase in other short-term borrowings of $50.0 million, partially offset by a decrease in FHLBNY advances of $705.0 million, and a decrease in derivative liabilities of $12.9 million.

Subordinated debt increased $72.1 million during the year ended December 31, 2024, to $272.3 million at period end, due to a registered public offering of the Company’s 9.000% fixed-to-floating rate subordinated notes due 2034 (the “Notes”).

Stockholders’ Equity.

Stockholders’ equity increased $56.6 million during the year ended December 31, 2023 to $1.23 billion at period end, primarily due to net income for the period of $96.1 million, a decrease in accumulated other comprehensive loss of $2.8 million, offset in part by common stock dividends of $38.6 million, preferred stock dividends of $7.3 million and repurchases of shares of common stock of $947 thousand.

Stockholders’ equity increased $170.3 million during the year ended December 31, 2024, to $1.40 billion at period end, primarily due to $135.8 million in net proceeds raised in connection with a common equity offering, net income for the period of $29.1 million and a decrease in accumulated other comprehensive loss of $46.6 million, offset in part by common stock dividends of $40.3 million and preferred stock dividends of $7.3 million.

Additional paid-in capital increased $130.4 million during the year ended December 31, 2024, to $624.8 million at period end, due to the Company completing a public offering of 4,492,187 shares of common stock at a price of $32.00 per share, for gross proceeds of approximately $144.0 million.

The net proceeds of the offering, after deducting underwriting discounts and commissions, and offering expenses, were $135.8 million.

Loan Portfolio Composition

1 unchanged sentence

(In thousands)

One-to-four family, including condominium and cooperative apartment

Business loans (1)

One-to-four family residential and cooperative/condominium apartment

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

Acquisition, development, and construction ("ADC")

Total real estate loans

Fair value hedge basis point adjustments (2)

2 unchanged sentences

Loans held for investment, net

(1) At December 31, 2023, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-to-four family residential mortgage loans, multifamily residential mortgage loans and CRE loans.

During the year ended December 31, 2023, our real estate loans increased $206.7 million and our C&I loans decreased $4.7 million.

(1) Business loans include C&I loans and owner-occupied commercial real estate loans.

(2) The loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged owner-occupied commercial real estate in business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

During the year ended December 31, 2024, business loans increased $417.6 million and one-to-four family loans increased $64.0 million, multifamily loans decreased $196.9 million, non-owner-occupied CRE loans decreased $149.1 million, and ADC loans decreased $32.3 million.

Loan Purchases, Sales and Servicing

In the event that the Bank were to sell loans in the secondary market or through securitization, it generally retains servicing rights on the loans sold.

In the event that the Bank sells loans in the secondary market or through securitization, it generally retains servicing rights on the loans sold.

Servicing fees are typically derived based upon the difference between the actual origination rate and contractual pass-through rate of the loans at the time of sale.

3 unchanged sentences

Loan Maturity and Repricing

As of December 31, 2023, $8.84 billion, or 82.1% of the loan portfolio was scheduled to mature or reprice within five years.

The following table distributes our loans held for investment portfolio at December 31, 2023 by the earlier of the maturity or next repricing date.

ARMs are included in the period during which their interest rates are next scheduled to adjust.

The following table presents the portfolio of fixed and adjustable rate loans (“ARMs”) by the earlier of the maturity or next reprice date as of December 31, 2024.

ARMs have repricing frequencies of greater than or equal to one year and are included in the period during which their interest rates are next scheduled to adjust or mature.

The table does not include scheduled principal amortization.

(In thousands)

5 to 15 years

Over 15 years

Business loans

One-to-four family residential and cooperative/condominium apartment

Multifamily residential and residential mixed-use

Total real estate loans

The following table presents our loans held for investment with maturity or next repricing due after December 31, 2024:

Due after December 31, 2024

Non-owner-occupied commercial real estate

Variable rate loans have repricing frequencies less than one year.

The following table presents variable rate loans by time to maturity as of December 31, 2024:

(In thousands)

One-to-four family residential and cooperative/condominium apartment

Variable rate loans

Concentrations of Lending Activities

Non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans have collectively represented the largest percentage of the Company’s loan portfolio, accounting for 65% and 69% of total loans held for investment as of December 31, 2024 and December 31, 2023, respectively.

Non-owner occupied commercial real estate loans represent 30% and 31% of total loans held for investment as of December 31, 2024 and December 31, 2023, respectively.

Multifamily residential and residential mixed-use loans made up 35% and 37% of total loans held for investment as of December 31, 2024 and December 31, 2023, respectively.

The Company expects that non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans will continue to be a significant portion of the Company’s total loan portfolio.

Non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans are subject to a varying degree of risk associated with changing general economic conditions.

The Company employs heightened risk management practices that address key elements, including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of appropriate capital levels as needed to support lending activities.

Despite the Company's concentration in non-owner occupied commercial real estate and multifamily residential and residential mixed-use loans, the properties securing these portfolios are diversified in terms of type and geographic location.

This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.

As a matter of policy, the non-owner occupied commercial real estate loan and the multifamily residential and residential mixed-use loan portfolios are subject to risk exposure limits by individual asset classes as well as geographic collateral locations outside of our market areas.

We regularly identify and assess concentration levels through ongoing reporting to our Board of Directors as well as committees at both the Board and Management levels.

The management team has extensive knowledge and experience in underwriting non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans.

Management has established the Credit Risk Management Committee which meets quarterly to review all policies and procedures, large lending exposures, and emerging trends including trends related to delinquency, debt service coverage ratios, loan-to-value, and loan ratings to aid in early detection and escalation of potential issues.

The Company has a dedicated team responsible for conducting comprehensive annual reviews of the portfolios, ensuring consistent oversight.

Credit underwriting standards are periodically reviewed and adjusted based upon observations from our ongoing monitoring of economic conditions in major real estate markets in which we lend.

In response to the current dynamic interest rate environment and changes in the benchmark rates that determine loan pricing, the Company has enhanced its stress testing and loan review activities to mitigate interest rate reset risk with a specific emphasis on borrowers' abilities to absorb the impact of higher interest loan rates and measure the resiliency of the portfolios.

As a general rule, Management takes a selective approach to originating non-owner occupied commercial real estate and multifamily residential and residential mixed-use loans, prioritizing quality and strategic alignment.

The following tables present the composition by property type and weighted average loan-to-value (“LTV”) of the Company’s non-owner occupied commercial real estate loans:

December 31, 2024

(Dollars in thousands)

Investor commercial real estate:

Investor office

Warehouse/ Industrial

Supportive housing

Medical office

Educational facility or library

Medical facility

Total investor commercial real estate

(1) Includes various property types such as gas stations, restaurants, storage facilities, and other special use properties.

December 31, 2023

(Dollars in thousands)

Investor commercial real estate:

Investor office

Warehouse/ Industrial

Supportive housing

Medical office

Educational facility or library

Medical facility

Total investor commercial real estate

(1) Includes various property types such as gas stations, restaurants, storage facilities, and other special use properties.

The following tables present the composition by property type and weighted average LTV of the Company’s multifamily residential and residential mixed-use loans:

December 31, 2024

(Dollars in thousands)

Multifamily residential and residential mixed-use:

Total real estate loans

New York City (1)

100% rent regulated (2)

Majority rent regulated (2)

Majority free market

Total New York City

Outside New York City

Total multifamily residential and residential mixed-use

(1) New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(2) Composition based on revenue.

December 31, 2023

(Dollars in thousands)

Multifamily residential and residential mixed-use:

New York City (1)

100% rent regulated (2)

Majority rent regulated (2)

Majority free market

Total New York City

Outside New York City

Total multifamily residential and residential mixed-use

(1) New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(2) Composition based on revenue.

Additional information related to the granularity in the non-owner occupied commercial real estate and multifamily residential and residential mixed-use portfolios is presented in the tables below as of December 31, 2024 and December 31, 2023:

December 31, 2024

(Dollars in thousands)

> $20 million

Investor commercial real estate:

Investor Office

Warehouse/ Industrial

Supportive housing

Medical office

Educational facility or library

Medical facility

Multifamily residential and residential mixed-use:

New York City (2)

100% rent regulated (3)

Majority rent regulated (3)

Majority free market

Outside New York City

(1) Includes various property types such as gas stations, restaurants, storage facilities, and other special use properties.

(2) New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(3) Composition based on revenue.

December 31, 2023

(Dollars in thousands)

> $20 million

Investor commercial real estate:

Investor Office

Warehouse/ Industrial

Supportive housing

Medical office

Educational facility or library

Medical facility

Multifamily residential and residential mixed-use:

New York City (2)

100% rent regulated (3)

Majority rent regulated (3)

Majority free market

Outside New York City

(1) Includes various property types such as gas stations, restaurants, storage facilities, and other special use properties.

(2) New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(3) Composition based on revenue.

Asset Quality

We do not originate or purchase loans, either whole loans or loans underlying mortgage-backed securities (“MBS”), which would have been considered subprime loans at origination, i.e ., real estate loans advanced to borrowers who did not qualify for market interest rates because of problems with their income or credit history.

See Note 4 to our Consolidated Financial Statements for a discussion of evaluation for impaired securities.

See Note 3 of our Consolidated Financial Statements for a discussion of evaluation for impaired securities.

Monitoring and Collection of Delinquent Loans

Our management reviews delinquent loans on a monthly basis and reports to our Board of Directors or Committees of the Board of the Directors at each regularly scheduled Board or Committee meeting regarding the status of all non-performing and otherwise delinquent loans in our loan portfolio.

Our loan servicing policies and procedures require that an automated late notice be sent to a delinquent borrower as soon as possible after a payment is ten days late in the case of multifamily residential, CRE loans, and C&I loans, or fifteen days late in connection with one-to-four family and consumer loans.

Thereafter, periodic letters are mailed and phone calls are placed to the borrower until payment is received.

Our loan servicing policies and procedures require that an automated late notice be sent to a delinquent borrower as soon as possible after a payment is ten days late in the case of business loans, multifamily residential and mixed use, non-owner-occupied commercial real estate loans, and ADC loans, or fifteen days late in connection with one-to-four family and consumer loans.

Thereafter, periodic letters are mailed and phone calls are placed to the borrower until payment is received or the loan is transferred to workout.

When contact is made with the borrower at any time prior to foreclosure, we will attempt to obtain the full payment due or negotiate a repayment schedule with the borrower to avoid foreclosure.

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or (iii) an election has otherwise been made to maintain the loan on a cash basis due to deterioration in the financial condition of the borrower.

Such non-accrual

determination practices are applied consistently to all loans regardless of their internal classification or designation.

Upon entering non-accrual status, we reverse all outstanding accrued interest receivable.

Such non-accrual determination practices are applied consistently to all loans regardless of their internal classification or designation.

Upon entering non-accrual status, the system will reverse all outstanding accrued interest receivable.

We generally initiate foreclosure proceedings on real estate loans when a loan enters non-accrual status based upon non-payment, unless the borrower is paying in accordance with an agreed upon modified payment agreement.

We obtain an updated appraisal upon the commencement of legal action to calculate a potential collateral shortfall and to reserve appropriately for the potential loss.

updated appraisal upon the commencement of legal action to calculate a potential collateral shortfall and to reserve appropriately for the potential loss.

If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure action is completed, the property securing the loan is transferred to Other Real Estate Owned (“OREO”) status.

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In the event that a non-accrual loan is subsequently brought current, it is returned to accrual status once the doubt concerning collectability has been removed and the borrower has demonstrated performance in accordance with the loan terms and has made at least six months of payments.

The C&I portfolio is actively managed by our lenders and underwriters.

The C&I portfolio, which is within our business loans, is actively managed by our lenders.

Most credit facilities typically require an annual review of the exposure and borrowers are required to submit annual financial reporting and loans are structured with financial covenants to indicate expected performance levels.

Smaller C&I loans are monitored based on performance and the ability to draw against a credit line is curtailed if there are any indications of credit deterioration.

Guarantors are also required to update their financial reporting.

All exposures are risk rated and those entering adverse ratings due to financial performance concerns of the borrower or material delinquency of any payments or financial reporting are subjected to added management scrutiny.

Guarantors are also required to update their financial reporting on an annual basis or alternative schedule as provided in their loan documents.

All exposures are credit risk rated and those entering adverse ratings due to financial performance concerns of the borrower or material delinquency of any payments or financial reporting are subjected to added management scrutiny and monitoring.

Measures taken typically include amendments to the amount of the available credit facility, requirements for increased collateral, additional guarantor support or a material enhancement to the frequency and quality of financial reporting.

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Loan Restructurings

The Company adopted ASU No.

2022-02 on January 1, 2023, which eliminates the recognition and measurement of a TDR.

Due to the removal of the TDR designation, the Company applies the loan refinancing and restructuring guidance to determine whether a modification or other forms of restructuring result in a new loan or a continuation of an existing loan.

Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include conditions where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and/or a combinations of these modifications.

The Company applies the loan refinancing and restructuring guidance to determine whether a modification or other forms of restructuring result in a new loan or a continuation of an existing loan.

Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows, include conditions where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and/or a combination of these modifications.

The disclosures related to loan restructuring are only for modifications that directly affect cash flows.

Please refer to Note 5 to our condensed Consolidated Financial Statements for a further discussion loan restructurings.

Troubled Debt Restructurings (“TDRs”)

Prior to the adoption of ASU No.2022-02, we were required to recognize loans for which certain modifications or concessions have been made as TDRs.

A TDR has been created in the event that, for economic or legal reasons, any of the following concessions has been granted that would not have otherwise been considered to a debtor experiencing financial difficulties.

The following criteria are considered concessions:

● A reduction of interest rate has been made for the remaining term of the loan.

● The maturity date of the loan has been extended with a stated interest rate lower than the current market rate for new debt with similar risk.

● The outstanding principal amount and/or accrued interest have been reduced.

In instances in which the interest rate has been reduced, management would not deem the modification a TDR in the event that the reduction in interest rate reflected either a general decline in market interest rates or an effort to maintain a relationship with a borrower who could readily obtain funds from other sources at the current market interest rate, and the terms of the restructured loan are comparable to the terms offered by the Bank to non-troubled debtors.

We modified twelve loans in a manner that met the criteria for a TDR during the year ended December 31, 2022.

Accrual status for TDRs is determined separately for each TDR in accordance with our policies for determining accrual or non-accrual status.

At the time an agreement is entered into between the Bank and the borrower that results in our determination that a TDR has been created, the loan can be on either accrual or non-accrual status.

If a loan is on non-accrual status at the time it is restructured, it continues to be classified as non-accrual until the borrower has demonstrated compliance with the modified loan terms for a period of at least six months.

Conversely, if at the time of restructuring the loan is performing (and accruing) it will remain accruing throughout its restructured period, unless the loan subsequently meets any of the criteria for non-accrual status under our policy and agency regulations.

Within the allowance for credit losses, losses are estimated for TDRs on accrual status as well as TDRs on non-accrual status that are one-to-four family loans or consumer loans, on a pooled basis with loans that share similar risk characteristics.

TDRs on non-accrual status excluding one-to-four family and consumer loans are individually evaluated to determine expected credit losses.

For collateral-dependent TDRs where we have determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the loan to be provided substantially through the operation or sale of the collateral, the allowance for credit losses (“ACL”) is measured based on the difference between the fair value of collateral, less the estimated costs to sell, and the amortized cost basis of the loan as of the measurement date.

For non-collateral-dependent loans, the ACL is measured based on the difference between the present value of expected cash flows and the amortized cost basis of the loan as of the measurement date.

Please refer to Note 5 to our condensed Consolidated Financial Statements for a further discussion of TDRs.

Please refer to Note 4 of our condensed Consolidated Financial Statements for further discussion on loan restructurings.

Property acquired by the Bank, or a subsidiary, as a result of foreclosure on a mortgage loan or a deed in lieu of foreclosure is classified as OREO.

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Loans Delinquent 30 to 59 Days

At December 31, 2023, we had loans totaling $12.0 million that were past due between 30 and 59 days.

At December 31, 2022, we had loans totaling $23.5 million that were past due between 30 and 59 days.

At December 31, 2024, we had loans totaling $10.3 million that were past due between 30 and 59 days, compared to $12.0 million at December 31, 2023.

The 30 to 59-day delinquency levels fluctuate monthly, and are generally considered a less accurate indicator of near-term credit quality trends than non-accrual loans.

Loans Delinquent 60 to 89 Days

At December 31, 2023, we had loans totaling $1.3 million that were past due between 60 and 89 days.

At December 31, 2022, we had loans totaling $0.7 million that were past due between 60 and 89 days.

At December 31, 2024, we had loans totaling $31.3 million that were past due between 60 and 89 days, compared to $1.3 million at December 31, 2023.

The 60 to 89-day delinquency levels fluctuate monthly, and are generally considered a less accurate indicator of near-term credit quality trends than non-accrual loans.

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There were no accruing loans 90 days or more past due at December 31, 2024 or 2023.

Reserve for Loan Commitments

Reserve for Unfunded Loan Commitments

We maintain a reserve, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower.

The amount of reserve was $2.7 million at December 31, 2023 and $2.8 million at December 31, 2022.

This reserve is determined based upon the outstanding volume of loan commitments at each period end.

The amount of reserve was $2.7 million at December 31, 2024 and 2023, respectively.

This reserve is determined based upon the outstanding volume of unfunded loan commitments at each period end.

Any increases or reductions in this reserve are recognized in provision for credit losses.

Allowance for Credit Losses

On January 1, 2021, the Company adopted ASU No.

2016-13 "Financial Instruments – Credit Losses (Topic 326)".

ASU 2016-13 was effective for the Company as of January 1, 2020.

Under Section 4014 of the CARES Act, financial institutions required to adopt ASU 2016-13 as of January 1, 2020 were provided an option to delay the adoption of the CECL framework.

The Company elected to defer adoption of CECL until January 1, 2021.

This standard requires that the measurement of all expected credit losses for financial assets held at the reporting date be based on historical experience, current conditions, and reasonable and supportable forecasts.

This standard requires financial institutions and other organizations to use forward-looking information to better inform their credit loss estimates.

The adoption of the CECL Standard resulted in an initial decrease of $3.9 million to the allowance for credit losses and an increase of $1.4 million to the reserve for unfunded commitments.

The after-tax cumulative-effect adjustment of $1.7 million was recorded as an increase to retained earnings as of January 1, 2021.

A provision of $2.8 million and $5.4 million were recorded during the twelve-month periods ended December 31, 2023 and 2022, respectively.

The $2.8 million provision for credit losses recognized in 2023 was primarily associated with provisioning for individually analyzed loans.

The $5.4 million provision for credit losses recognized in 2022 was associated with growth in the loan portfolio and a deterioration of forecasted economic conditions, offset by a reduction in reserves on individually analyzed loans and unfunded commitments.

Provision for credit losses of $36.1 million and $2.8 million were recorded during the twelve-month periods ended December 31, 2024 and 2023, respectively.

The $36.1 million provision for credit losses recognized in 2024 was related to additional provisioning for the pooled multifamily, C&I, and criticized loan portfolios.

The $2.8 million provision for credit losses recognized in 2023 was associated with provisioning for individually analyzed loans.

For further discussion of the allowance for credit losses and related activity during the years ended December 31, 2024, 2023 and 2022, please see Note 4 to the Consolidated Financial Statements.

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(Dollars in thousands)

Business loans

One-to-four family residential and cooperative/condominium apartment

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

The following table sets forth information about our allowance for credit losses at or for the dates indicated:

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Ratio of net charge-offs to average loans outstanding during the period:

Business loans

One-to-four family residential and cooperative/condominium apartment

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

(1) Total loans represent gross loans (excluding loans held for sale), fair value hedge basis point adjustments, inclusive of deferred fees/costs and premiums/discounts.

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The following table presents the weighted average contractual maturity of our securities available-for-sale:

Treasury securities

Corporate securities

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The weighted average duration of our securities held-to-maturity approximated 5.1 years as of December 31, 2024 when giving consideration to anticipated repayments or possible prepayments, which is significantly less than their weighted average maturity.

The following table presents the weighted average contractual maturity of our securities held-to-maturity:

The following table presents the weighted average contractual maturity of our securities held-to-maturity at the date indicated below:

Corporate securities

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Non-insured deposits (excluding collateralized deposits and deposits with pass through insurance) represented 31.2% and 28.9% of total deposits as of December 31, 2024 and 2023, respectively.

The Bank had $1.88 billion and $1.90 billion of public funds collateralized by securities and Municipal Letters of Credit (“MULOC”), and $680.8 million and $615.6 million of deposits with pass through insurance as of December 31, 2023, and 2022, respectively.

The following table sets forth the amount of time deposits in uninsured accounts by maturity, all of which are CDs at December 31, 2023:

(In thousands)

The Bank had $1.89 billion and $1.88 billion of public funds collateralized by securities and Municipal Letters of Credit (“MULOC”), and $1.55 billion and $680.8 million of deposits with pass through insurance as of December 31, 2024, and 2023, respectively.

The following table presents the time deposits with balances exceeding the $250,000 FDIC insurance limit by maturity at December 31, 2024:

(Dollars in thousands)

Three months or less

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Our Board of Directors authorized the Bank to accept brokered deposits up to an aggregate limit of 10.0% of total assets.

At December 31, 2023, brokered deposits totaled $898.7 million, which included purchased CDs from the CDARS program, purchased MMAs from the ICS program and purchased CDs through a broker.

At December 31, 2022, brokered deposits totaled $538.9 million, which included purchased CDs from the CDARS program, purchased MMAs from the ICS program and purchased CDs through a broker.

At December 31, 2021, brokered deposits totaled $200.0 million, which included purchased MMAs from the ICS program.

Brokered deposits totaled $422.8 million and $898.7 million at December 31, 2024 and 2023, respectively.

Core deposit growth was used to reduce the brokered deposit position over the course of 2024.

The Bank’s total borrowing line with FHLBNY equaled $3.87 billion at December 31, 2024.

The Bank had $1.31 billion of FHLBNY advances outstanding at December 31, 2023, and $1.13 billion at December 31, 2022.

The Bank had $608.0 million of FHLBNY advances outstanding at December 31, 2024, and $1.31 billion at December 31, 2023.

The Bank maintained sufficient collateral, as defined by the FHLBNY (principally in the form of real estate loans), to secure such advances.

The Company had no outstanding securities sold under agreements to repurchase (“repurchase agreements”) at December 31, 2023.

The Company had $1.4 million outstanding of securities sold under agreements to repurchase at December 31, 2022.

The Company had no outstanding securities sold under agreements to repurchase (“repurchase agreements”) at December 31, 2024 or December 31, 2023.

Liquidity and Capital Resources

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The Bank’s Asset Liability Committee (“ALCO”) is responsible for general oversight and strategic implementation of the policy and management of the appropriate departments are designated responsibility for implementing any strategies established by ALCO.

On a daily basis, appropriate senior management receives a current cash position report and one-week forecast to ensure that all short-term obligations are timely satisfied and that adequate liquidity exists to fund future activities.

Reports detailing the Bank’s liquidity reserves are presented to appropriate senior management on a monthly basis, and the Board of Directors at each of its meetings.

On a daily basis, appropriate senior management receives a current cash position report and 30-day forecast to ensure that all short-term obligations are timely satisfied, and that adequate liquidity exists to fund future activities.

Reports detailing the Bank’s liquidity reserves are presented to appropriate senior management on at least a monthly basis, and the Board of Directors at each of its meetings.

In addition, a twelve-month liquidity forecast is presented to ALCO in order to assess potential future liquidity concerns.

A forecast of cash flow data for the upcoming 12 months is presented to the Board of Directors on an annual basis.

A forecast of cash flow data for the upcoming 12 months is presented to the Board of Directors no less than annually.

Given recent banking industry events, management monitors the level of uninsured deposits on a regular basis.

Liquidity is primarily needed to meet customer borrowing commitments and deposit withdrawals, either on demand or on contractual maturity, to repay borrowings as they mature, to fund current and planned expenditures and to make new loans and investments as opportunities arise.

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The availability of funds changes daily.

At December 31, 2024, the Bank had $50.0 million of such borrowings outstanding through the AFX, which is included in other short-term borrowings on the consolidated statements of financial condition.

At December 31, 2023, the Bank did not utilize funds available through the AFX.

The Bank utilizes repurchase agreements as part of its borrowing policy to add liquidity.

Repurchase agreements represent funds received from customers, generally on an overnight basis, which are collateralized by investment securities.

As of December 31, 2023 the Bank did not have any repurchase agreements.

As of December 31, 2022, the Bank’s repurchase agreements totaled $1.4 million, included in other short-term borrowings on the consolidated statements of financial condition.

As of December 31, 2024 and December 31, 2023, the Bank did not have any repurchase agreements.

The Bank gathers deposits in direct competition with commercial banks, savings banks and brokerage firms, many among the largest in the nation.

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However, favorable performance of the equity or bond markets could adversely impact the Bank’s deposit flows.

Total deposits (including mortgage escrow deposits) increased $276.2 million during the year ended December 31, 2023 compared to a decrease of $204.6 million during the year ended December 31, 2022.

The increase in total deposits during the 2023 period was primarily due to an increase in money market deposits.

Within deposits, core deposits ( i.e., non-CDs) decreased $216.1 million during the year ended December 31, 2023 and decreased $466.7 million during the year ended December 31, 2022.

CDs increased $492.3 million during the year ended December 31, 2023 compared to an increase of

$262.1 million during the year ended December 31, 2022.

The increase in CDs during the current period was primarily due to a $359.9 million increase in brokered CDs.

The Bank increased its outstanding FHLBNY advances by $182.0 million during the year ended December 31, 2023, compared to a $1.11 billion increase during the year ended December 31, 2022.

Total deposits (including mortgage escrow deposits) increased $1.16 billion during the year ended December 31, 2024 compared to an increase of $276.2 million during the year ended December 31, 2023.

Within deposits, core deposits ( i.e., non-CDs) increased $1.74 billion during the year ended December 31, 2024 and decreased $216.1 million during the year ended December 31, 2023.

The increase in core deposits during the 2024 period was primarily due to an increase in money market deposits, interest bearing checking and non interest-bearing checking accounts.

During 2024, the Company made significant investments in its Private and Commercial Bank, including the hiring and onboarding of several deposit-gathering teams.

CDs decreased $538.6 million during the year ended December 31, 2024 compared to an increase of $492.3 million during the year ended December 31, 2023.

The decrease in CDs during the current period was primarily due to a $475.9 million decrease in brokered CDs.

The Bank reduced its outstanding FHLBNY advances by $705.0 million during the year ended December 31, 2024, compared to a $182.0 million increase during the year ended December 31, 2023.

“Federal Home Loan Bank Advances” to our Consolidated Financial Statements for further information.

Subordinated debentures totaled $200.2 million at December 31, 2023 and $200.3 million at December 31, 2022.

“Subordinated Debentures” to our Consolidated Financial Statements for further information.

Subordinated debentures totaled $272.3 million at December 31, 2024 compared to $200.2 million at December 31, 2023.

The increase in subordinated debentures was due to the Company’s issuance of subordinated notes that are described in more detail in Note 13, “Subordinated Debentures” to our Consolidated Financial Statements for further information.

In the event that the Bank should require funds beyond its ability or desire to generate them internally, additional sources of liquidity are available through its collateralized borrowing lines at the FHLBNY and the FRB, as well as unsecured borrowing capacity through the AFX and lines of credit with unaffiliated correspondent banks.

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, 4.5% of the Bank’s drawn FHLBNY borrowings).

The Bank also had access to the FRB Discount Window and the FRB Bank Term Funding Program.

The Bank also had access to the FRB Discount Window.

At December 31, 2024, an available line of credit totaling $394.6 million was in place at the FRB backed by investment securities with no advances drawn.

Additionally, at December 31, 2024, a line of credit totaling $3.04 billion was in place at the FRB secured by certain qualifying 1-4 family residential mortgage loans, construction loans and CRE loans with no amounts drawn.

During the year ended December 31, 2023 and 2022, real estate loan originations totaled $885.5 million and $2.67 billion, respectively.

During the year ended December 31, 2023 and 2022, C&I loan originations totaled $112.3 million and $160.1 million, respectively.

Sales of securities available-for-sale totaled $77.8 million during the year ended December 31, 2023.

There were no sales of securities available-for-sale during the year ended December 31, 2022.

Purchases of available-for-sale securities totaled $86.1 million and $39.2 million during the years ended December 31, 2023 and 2022, respectively.

Proceeds from pay downs and calls and maturities of available-for-sale securities were $79.9 million and $165.1 million for the years ended December 31, 2023 and 2022, respectively.

The Bank did not have proceeds from sales of held-to-maturity securities during the years ended December 31, 2023 or 2022.

Purchases of held-to-maturity securities totaled $28.3 million and $63.2 million during the year ended December 31, 2023 and 2022, respectively.

Proceeds from pay downs and calls and maturities of held-to-maturity securities were $23.0 million and $31.7 million for the year ended December 31, 2023 and 2022, respectively.

During the year ended December 31, 2024 and 2023, business loan originations totaled $371.2 million and $343.9 million, respectively.

During the year ended December 31, 2024 and 2023, real estate loan originations (excluding owner-occupied commercial real estate) totaled $199.6 million and $653.7 million, respectively.

The Company and the Bank are subject to minimum regulatory capital requirements imposed by its primary federal regulator.

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At December 31, 2024, each of the Company and the Bank were in compliance with all applicable regulatory capital requirements and the Bank was considered "well capitalized" for all regulatory purposes.

The Holding Company repurchased 36,813 shares of its common stock during the year ended December 31, 2023.

The Holding Company repurchased 1,431,241 shares of its common stock during the year ended December 31, 2022.

The Holding Company did not repurchase any shares of its common stock during the year ended December 31, 2024.

The Holding Company repurchased 36,813 shares of its common stock at an aggregate cost of $947 thousand during the year ended December 31, 2023.

As of December 31, 2024, up to 1,566,947 shares remained available for purchase under the authorized share repurchase programs.

See "Part II - Item 5.

Issuer Purchases of Equity Securities" for additional information about repurchases of common stock.

See "Part II - Item 5, Issuer Purchases of Equity Securities" for additional information about repurchases of common stock.

The Holding Company paid $7.3 million in cash dividends on its preferred stock during the years ended December 31, 2024 and 2023, respectively.

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Contractual Obligations

The Bank generally has outstanding at any time borrowings in the form of FHLBNY advances, short-term or overnight borrowings, subordinated debt, as well as customer CDs with fixed contractual interest rates.

The Bank generally has borrowings outstanding in the form of FHLBNY advances, short-term or overnight borrowings, subordinated debt, as well as customer CDs with fixed contractual interest rates.

In addition, the Bank is obligated to make rental payments under leases on certain of its branches and equipment.

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As of December 31, 2024, the Bank had $77.8 million of firm loan commitments that were accepted by the borrowers.

Additionally, in connection with a loan securitization transaction that was completed in 2017, the Bank executed a reimbursement agreement with FHLMC that obligates the Company to reimburse FHLMC for any contractual principal and interest payments on defaulted loans, not to exceed 10% of the original principal amount of the loans comprising the aggregate balance of the loan pool at securitization.

Additionally, in connection with a loan securitization completed in 2017, the Bank executed a reimbursement agreement with FHLMC that obligates the Company to reimburse FHLMC for any contractual principal and interest payments on defaulted loans, not to exceed 10% of the original principal amount of the loans comprising the aggregate balance of the loan pool at securitization.

The maximum exposure under this reimbursement obligation is $28.0 million.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis