What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-06 · 197 added, 82 removed, 387 unchanged (42% of the section changed)

9 unchanged sentences

These reclassifications did not have an impact on net income or total stockholders' equity.

Recent Developments

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including bonus depreciation.

ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

The Company has evaluated the deferred tax impact under the newly elected tax law and has concluded it will have an immaterial impact on the September 30, 2025 financial statements.

Selected Financial Highlights and Other Data

1 unchanged sentence

At or For the

Three Months Ended

Six Months Ended

Per Share Data:

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The availability of funds changes daily.

At March 31, 2025, the Bank did not have any such borrowings outstanding through the AFX.

At June 30, 2025, the Bank did not have any such borrowings outstanding through the AFX.

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.

1 unchanged sentence

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

As of March 31, 2025 and December 31, 2024, the Bank did not have any repurchase agreements.

As of June 30, 2025 and December 31, 2024, 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.

4 unchanged sentences

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

Total deposits (including mortgage escrow deposits) decreased $70.2 million during the three months ended March 31, 2025, compared to an increase of $368.2 million during the three months ended March 31, 2024.

The decrease in deposits during the current period was primarily due to a decrease in interest bearing and non-interest-bearing checking accounts, offset by the growth in money market accounts, CD’s and savings accounts deposits.

Total deposits (including mortgage escrow deposits) increased $54.0 million during the six months ended June 30, 2025, compared to an increase of $497.8 million during the six months ended June 30, 2024.

The increase in deposits during the current period was primarily due to an increase in non-interest-bearing checking accounts, money market accounts and CD’s, offset by a decline in interest bearing checking accounts and savings accounts deposits.

In the event that the Bank should require funds beyond its ability or desire to generate them internally, additional sources of funds are available through a borrowing line at the FHLBNY, borrowing capacity at the AFX, lines of credit with unaffiliated correspondent banks, and various brokered deposit sources.

At March 31, 2025, the Bank had remaining borrowing capacity of $1.91 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements ( i.e.

At June 30, 2025, the Bank had remaining borrowing capacity of $1.75 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements ( i.e.

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

The Bank also had access to the FRB Discount Window.

At March 31, 2025, an available line of credit totaling $395.9 million was in place at the FRB backed by investment securities with no advances drawn.

Additionally, at March 31, 2025, a line of credit totaling $3.16 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.

The Bank reduced its outstanding FHLBNY advances by $100.0 million during the three months ended March 31, 2025, compared to a reduction of $540.0 million during the three months ended March 31, 2024.

At June 30, 2025, an available line of credit totaling $376.7 million was in place at the FRB backed by investment securities with no advances drawn.

Additionally, at June 30, 2025, a line of credit totaling $3.22

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.

The Bank reduced its outstanding FHLBNY advances by $100.0 million during the six months ended June 30, 2025, compared to a reduction of $680.0 million during the six months ended June 30, 2024.

“FHLBNY Advances” for further information.

Subordinated debentures totaled $272.4 million at March 31, 2025 compared to $272.3 million at December 31, 2024.

Subordinated debentures totaled $272.4 million at June 30, 2025 compared to $272.3 million at December 31, 2024.

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

During the three months ended March 31, 2025 and 2024, business loan originations totaled $42.6 million and $49.0 million, respectively.

During the three months ended March 31, 2025, and 2024, real estate loan originations (excluding owner-occupied commercial real estate) totaled $28.9 million and $49.2 million, respectively.

During the six months ended June 30, 2025 and 2024, business loan originations excluding new lines were $173.7 million and $171.6 million, respectively.

During the six months ended June 30, 2025, and 2024, real estate loan originations excluding new lines (excluding owner-occupied commercial real estate) totaled $125.1 million and $88.2 million, respectively.

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

As a general matter, these capital requirements are based on the amount and composition of an institution’s assets.

At March 31, 2025, both 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.

At June 30, 2025, both 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 following table summarizes Company and Bank capital ratios calculated under the Basel III Capital Rules framework as of the period indicated:

Actual Ratios at March 31, 2025

Actual Ratios at June 30, 2025

To Be Categorized as

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(1) Only the Bank is subject to these requirements.

During the three months ended March 31, 2025 and 2024, the Holding Company did not repurchase any shares of its common stock.

As of March 31, 2025, 1,566,947 shares remained available for purchase under the authorized share repurchase programs.

During the six months ended June 30, 2025 and 2024, the Holding Company did not repurchase any shares of its common stock.

As of June 30, 2025, 1,566,947 shares remained available for purchase under the authorized share repurchase programs.

See “Part II - Item 2.

Other Information - Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities” for additional information about repurchases of common stock.

The Holding Company paid $1.8 million in cash dividends on its preferred stock during the three months ended March 31, 2025, and 2024, respectively.

The Holding Company paid $10.7 million and $9.7 million in cash dividends on its common stock during the three months ended March 31, 2025, and 2024, respectively.

The Holding Company paid $3.6 million in cash dividends on its preferred stock during the six months ended June 30, 2025, and 2024, respectively.

The Holding Company paid $21.4 million and $19.0 million in cash dividends on its common stock during the six months ended June 30, 2025, and 2024, respectively.

Contractual Obligations

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Available lines of credit may not be drawn on or may expire prior to funding, in whole or in part, and amounts are not estimates of future cash flows.

As of March 31, 2025, the Bank had $156.9 million of firm loan commitments that were accepted by the borrowers.

As of June 30, 2025, the Bank had $136.9 million of firm loan commitments that were accepted by the borrowers.

Additionally, in connection with a loan securitization completed in December 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.

2 unchanged sentences

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 64% and 65% of total loans held for investment as of March 31, 2025 and December 31, 2024, respectively.

Non-owner occupied commercial real estate loans represent 29% and 30% of total loans held for investment as of March 31, 2025 and December 31, 2024, respectively.

Multifamily residential and residential mixed-use loans made up 35% of total loans held for investment as of March 31, 2025 and December 31, 2024, respectively.

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 63% and 65% of total loans held for investment as of June 30, 2025 and December 31, 2024, respectively.

Non-owner occupied commercial real estate loans represent 29% and 30% of total loans held for investment as of June 30, 2025 and December 31, 2024, respectively.

Multifamily residential and residential mixed-use loans made up 34% and 35% of total loans held for investment as of June 30, 2025 and December 31, 2024, 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.

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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:

March 31, 2025

June 30, 2025

(Dollars in thousands)

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

March 31, 2025

June 30, 2025

(Dollars in thousands)

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(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 March 31, 2025 and December 31, 2024:

March 31, 2025

June 30, 2025

(Dollars in thousands)

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Non-accrual Loans

Within our held-for-investment loan portfolio, non-accrual loans totaled $58.0 million at March 31, 2025 and $49.5 million at December 31, 2024.

Within our held-for-investment loan portfolio, non-accrual loans totaled $53.2 million at June 30, 2025 and $49.5 million at December 31, 2024.

The following is a reconciliation of non-accrual loans as of the dates indicated:

2 unchanged sentences

Business loans

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

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

Multifamily residential and residential mixed-use

17 unchanged sentences

As a result, OREO properties have generally not warranted subsequent independent appraisals.

There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at March 31, 2025 or December 31, 2024.

We did not recognize any provisions for losses on OREO properties during the three months ended March 31, 2025 or 2024.

There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at June 30, 2025 or December 31, 2024.

We did not recognize any provision for losses on OREO properties during the six months ended June 30, 2025 or 2024.

Past Due Loans

Loans Delinquent 30 to 59 Days

At March 31, 2025, there were $46.0 million of loans that were past due between 30 and 59 days, compared to $10.3 million at December 31, 2024.

At June 30, 2025, there were $28.1 million of loans that were past due between 30 and 59 days, compared to $10.3 million at December 31, 2024.

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 March 31, 2025, there were $2.5 million of loans that were past due between 60 and 89 days past due, compared to $31.3 million at December 31, 2024.

At June 30, 2025, there were $33.4 million of loans that were past due between 60 and 89 days, compared to $31.3 million at December 31, 2024.

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.

Accruing Loans 90 Days or More Past Due

There were no accruing loans 90 days or more past due at March 31, 2025 or at December 31, 2024.

There were no accruing loans 90 days or more past due at June 30, 2025 or at December 31, 2024.

Reserve for Unfunded Loan Commitments

The Bank maintains a reserve, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower.

The amount of our reserve was $2.6 million and $2.7 million at March 31, 2025 and December 31, 2024, respectively.

The amount of our reserve was $2.8 million and $2.7 million at June 30, 2025 and December 31, 2024, respectively.

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

1 unchanged sentence

Allowance for Credit Losses

Provision for credit losses for the three months ended March 31, 2025 and 2024 was $9.6 million and $5.2 million, respectively.

The $9.6 million credit loss provision for the three months ended March 31, 2025, was primarily associated with provisioning for individually analyzed loans.

The $5.2 million credit loss provision for the three months ended March 31, 2024, was primarily associated with provisioning for the Bank’s pooled multifamily loan portfolio.

For a further discussion of the allowance for credit losses and related activity during the three months ended March 31, 2025 and 2024, please see Note 7 to the condensed Consolidated Financial Statements.

Provision for credit losses for the six months ended June 30, 2025 and 2024 was $18.8 million and $10.8 million, respectively.

Included in the provision for credit losses for the six months ended June 30, 2025 was $1.8 million of provision related to one available-for-sale corporate security.

The remainder of the credit loss provision for the six months ended June 30, 2025, was primarily attributable to updates in the macroeconomic forecast and to the loss driver models.

The $10.8 million credit loss provision for the six months ended June 30, 2024, was primarily associated with provisioning for the Bank’s pooled multifamily loan portfolio.

For a further discussion of the allowance for credit losses and related activity during the six months ended June 30, 2025 and 2024, please see Note 6 “Securities” and Note 7 “Loans Held for Investment, Net” to the condensed Consolidated Financial Statements.

The following table presents our allowance for credit losses allocated by loan type and the percent of loans in each category to total loans as of the dates indicated.

March 31, 2025

June 30, 2025

December 31, 2024

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

At or for the Three Months Ended March 31,

At or for the Six Months Ended June 30,

(Dollars in thousands)

8 unchanged sentences

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

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

1 unchanged sentence

(2) Total average loans represent gross loans (including loans held for sale), inclusive of deferred loan fees/costs and premiums/discounts.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Assets totaled $14.10 billion at March 31, 2025, $255.6 million below their level at December 31, 2024, primarily due to decreases of $252.9 million in cash and due from banks, $68.3 million in other assets, $20.1 million in loans held for sale, $17.8 million in derivative assets and $4.9 million in the loan portfolio, partially offset by increases of $98.5 million in BOLI and $13.9 million in total investment securities.

Total loans, net of allowance decreased $4.9 million during the three months ended March 31, 2025, to $10.78 billion at period end.

During the three months ended March 31, 2025, we had loan originations of $71.5 million.

Total investment securities increased $13.9 million during the three months ended March 31, 2025, to $1.34 billion at period end, primarily due to purchases of $29.7 million and a decrease in unrealized losses of $8.9 million, offset by proceeds from principal payments, calls and maturities of $23.8 million.

There were no transfers to or from securities held-to-maturity during the three months ended March 31, 2025.

BOLI increased $98.5 million during the three months ended March 31, 2025, to $389.2 million.

The increase in BOLI is primarily due to completion of the restructuring initiative that begun in late 2024, as well as purchases of new BOLI assets.

Comparison of Financial Condition at June 30, 2025 and December 31, 2024

Assets totaled $14.21 billion at June 30, 2025, $145.3 million below their level at December 31, 2024, primarily due to decreases of $126.8 million in cash and due from banks, $76.3 million in other assets, $25.5 million in derivative assets, $9.0 million in loans held for sale and $5.5 million in the loan portfolio, partially offset by an increase of $102.7 million in BOLI.

Loan originations, excluding new lines, totaled $298.8 million for the six-month period ended June 30, 2025.

Total investment securities increased $617 thousand during the six months ended June 30, 2025, to $1.33 billion at period end, primarily due to purchases of $81.0 million and a decrease in unrealized losses of $12.9 million, offset by proceeds from principal payments, calls and maturities of $68.6 million and proceeds from the sale of available for sale securities of $24.8 million.

There were no transfers to or from securities held-to-maturity during the six months ended June 30, 2025.

BOLI increased $102.7 million during the six months ended June 30, 2025, to $393.3 million.

This increase in BOLI is primarily due to completion of the restructuring initiative that begun in late 2024, as well as purchases of new BOLI assets.

Liabilities .

Total liabilities decreased $271.1 million during the three months ended March 31, 2025, to $12.69 billion at period end, primarily due to decreases of $100.0 million in FHLBNY advances, $70.2 million in deposits (including mortgage escrow accounts), $50.0 million in short-term borrowings, $27.2 million in derivative cash collateral, $15.8 million in derivative liabilities and $7.3 million in other liabilities.

Total liabilities decreased $179.8 million during the six months ended June 30, 2025, to $12.78 billion at period end, primarily due to decreases of $100.0 million in FHLBNY advances, $50.0 million in short-term borrowings, $42.6 million in derivative cash collateral, $22.2 million in derivative liabilities and $17.6 million in other liabilities, partially offset by an increase of $54.0 million in deposits (including mortgage escrow accounts).

Stockholders’ Equity .

Stockholders’ equity increased $15.5 million during the three months ended March 31, 2025, to $1.41 billion at period end, primarily due to net income of $21.5 million and other comprehensive income of $6.0 million, partially offset by common stock dividends of $11.0 million, and preferred stock dividends of $1.8 million.

Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

Net income was $21.5 million during the three months ended March 31, 2025, compared to net income of $17.7 million for the three months ended March 31, 2024.

During the three months ended March 31, 2025, net interest income increased by $22.7 million, non-interest expense increased by $13.0 million, the credit loss provision increased by $4.4 million, non-interest income decreased by $834 thousand and income tax expense increased by $666 thousand, compared to the three months ended March 31, 2024.

The discussion of net interest income for the three months ended March 31, 2025 and 2024 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.

Stockholders’ equity increased $34.5 million during the six months ended June 30, 2025, to $1.43 billion at period end, primarily due to net income of $51.2 million and other comprehensive income of $7.1 million, partially offset by common stock dividends of $21.8 million, and preferred stock dividends of $3.6 million.

Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024

Net income was $29.7 million during the three months ended June 30, 2025, compared to net income of $18.5 million for the three months ended June 30, 2024.

During the three months ended June 30, 2025, net interest income increased by $22.6 million, non-interest expense increased by $4.6 million, the credit loss provision increased by $3.6 million, non-interest income decreased by $213 thousand and income tax expense increased by $2.9 million, compared to the three months ended June 30, 2024.

The discussion of net interest income for the three months ended June 30, 2025 and 2024 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.

The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented.

2 unchanged sentences

The yields include loan fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs, prepayment fees, and late charges that are considered adjustments to yields.

Net loan fees included in interest income were $1.1 million during the three months ended March 31, 2025, compared to a net loan cost of $297 thousand during the three months ended March 31, 2024.

Net loan fees included in interest income were $1.1 million during the three months ended June 30, 2025, compared to a net loan cost of $7 thousand during the three months ended June 30, 2024.

The increase in net loan fees was primarily due to increases in prepayment penalty fees and deferred fees on loans in 2025.

Analysis of Net Interest Income

Three Months Ended March 31,

Three Months Ended June 30,

(Dollars in thousands)

1 unchanged sentence

Business loans (1) (3) (6)

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

One-to-four family residential and coop/condo apartment (3) (6)

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

30 unchanged sentences

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

(6) At March 31, 2025, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

(6) At June 30, 2025 and 2024, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

Rate/Volume Analysis

Three Months Ended March 31, 2025

Compared to Three Months Ended March 31, 2024

Three Months Ended June 30, 2025

Compared to Three Months Ended June 30, 2024

Increase / (Decrease) Due to:

2 unchanged sentences

Business loans (1) (2)

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

One-to-four family residential and coop/condo apartment

Multifamily residential and residential mixed-use

13 unchanged sentences

Net interest income.

Net interest income was $94.2 million during the three months ended March 31, 2025, an increase of $22.7 million from the three months ended March 31, 2024.

Average interest-earning assets were $12.96 billion for the three months ended March 31, 2025, a decrease of $52.4 million from $13.02 billion for the three months ended March 31, 2024.

Net interest margin was 2.95% during the three months ended March 31, 2025, up from 2.21% during the three months ended March 31, 2024.

Net interest income was $98.1 million during the three months ended June 30, 2025, an increase of $22.6 million from the three months ended June 30, 2024.

Average interest-earning assets were $13.20 billion for the three months ended June 30, 2025, an increase of $570.6 million from $12.62 billion for the three months ended June 30, 2024.

The net interest margin was 2.98% during the three months ended June 30, 2025, up from 2.41% during the three months ended June 30, 2024.

Interest Income.

Interest income was $161.9 million during the three months ended March 31, 2025, compared to $161.0 million during the three months ended March 31, 2024.

During the three months ended March 31, 2025, interest income increased $856 thousand from the three months ended March 31, 2024, primarily reflecting increases in interest income of $5.8 million on business loans, $3.4 million in securities and $1.3 million on one-to-four family loans, partially offset by a decrease of $3.7 million on multifamily residential and residential mixed-use loans and a decrease of $3.5 million on non-owner-occupied commercial real estate loans.

The increased interest income on business loans was due to a $439.8 million increase in the average balances, partially offset by an 18-basis point decrease in the yield of such loans in the period.

Interest income was $167.5 million during the three months ended June 30, 2025, compared to $159.4 million during the three months ended June 30, 2024.

During the three months ended June 30, 2025, interest income increased $8.1 million from the three months ended June 30, 2024, primarily reflecting increases in interest income of $6.3 million in other short-term investments, $3.7 million on business loans, $3.4 million on securities and $1.6 million on one-to-four family loans, partially offset by a decrease of $3.3 million on multifamily residential and residential mixed-use loans and a decrease of $2.9 million on non-owner-occupied commercial real estate loans.

The increased interest income on other short-term investments was related to a $680.6 million increase in the average balances, partially offset by a 131-basis point decrease in the yield of such investments in the period.

The increased interest income on business loans was due to a $398.7 million increase in the average balances, partially offset by a 51-basis point decrease in the yield of such loans in the period.

The increased interest income on securities was related to a 127-basis point increase in the yield, partially offset by a decrease of $176.1 million in the average balances of such securities in the period.

The increased interest income on one-to-four family loans was related to a $95.1 million increase in the average balances and a 19-basis point increase in the yield of such loans in the period.

The decreased interest income on multifamily residential and residential mixed-use loans was related to a $217.7 million decrease in the average balance and a 10-basis point decrease in the yield of such loans in the period.

The decreased interest income on non-owner-occupied commercial real estate loans reflected a $183.9 million decrease in the average balance and an 8-basis point decrease in the yield of such loans in the period.

Interest Expense.

Interest expense was $69.5 million during the three months ended June 30, 2025, compared to $83.9 million during the three months ended June 30, 2024.

During the three months ended June 30, 2025, interest expense decreased $14.4 million, primarily reflecting a decrease in interest expense of $12.7 million on deposits, a decrease in

interest expense of $2.4 million on FHLBNY advances and a decrease of $1.1 million in interest expense on derivative cash collateral, partially offset by a $1.7 million increase in interest expense on subordinated debt.

The decreased interest expense on deposits was primarily due to a 105-basis point decrease in rates paid on savings accounts, a $411.0 million decrease in average balances of such deposits, a $317.9 million decrease in the average balance of CDs and a 93-basis point decrease in rates paid on such deposits in the period.

The decreased interest expense on FHLBNY advances was due to a $163.2 million decrease in the average balance and a 65-basis point decrease in the cost of FHLBNY advances in the period.

The decreased interest expense on derivative cash collateral was due to a $66.5 million decrease in the average balance and an 88-basis point decrease in the cost of such derivatives in the period.

The increased interest expense on subordinated debt was due to a $70.2 million increase in the average balance and a 115-basis point increase in the cost of such debt in the period.

Provision for Credit Losses.

We recorded a credit loss provision of $9.2 million and $5.6 million during the three months ended June 30, 2025 and 2024, respectively.

The $9.2 million credit loss provision for the three months ended June 30, 2025, was primarily attributable to updates in the macroeconomic forecast and to the loss driver models.

The $5.6 million credit loss provision for the three months ended June 30, 2024, was primarily associated with increased provisioning for our pooled multifamily loan portfolio.

Non-Interest Income.

Non-interest income totaled $11.6 million for the three months ended June 30, 2025, compared to $11.8 million for the same period in 2024.

The decrease was primarily driven by a $3.7 million reduction in gains from the sale of other assets, partially offset by a $1.7 million increase in BOLI income.

Non-Interest Expense.

Non-interest expense totaled $60.3 million for the three months ended June 30, 2025, compared to $55.7 million for the same period in 2024.

The change was primarily driven by a $4.0 million increase in salaries and employee benefits.

Non-interest expense was 1.72% and 1.66% of average assets during the three months ended June 30, 2025 and 2024, respectively.

Income Tax Expense.

Income tax expense was $10.5 million during the three months ended June 30, 2025, compared to income tax expense of $7.6 million during the three months ended June 30, 2024.

The reported effective tax rate for the three months ended June 30, 2025 and 2024 was 26.1%, and 29.0%, respectively.

Comparison of Operating Results for the Six Months Ended June 30, 2025 and 2024

Net income was $51.2 million during the six months ended June 30, 2025, compared to net income of $36.2 million for the six months ended June 30, 2024.

During the six months ended June 30, 2025, net interest income increased by $45.3 million, credit loss provision increased by $8.1 million, non-interest expense increased by $17.6 million, non-interest income decreased by $1.0 million and income tax expense increased by $3.6 million, compared to the six months ended June 30, 2024.

The discussion of net interest income for the six months ended June 30, 2025 and 2024 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.

The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented.

Average balances were derived from average daily balances.

No tax-equivalent adjustments have been made for interest income exempt from federal, state, and local taxation.

Net loan fees included in interest income were $2.3 million during the six months ended June 30, 2025, compared to a net loan cost of $304 thousand during the six months ended June 30, 2024.

The increase in net loan fees was primarily due to increases in prepayment penalty fees and deferred fees on loans in 2025.

Analysis of Net Interest Income

Six Months Ended June 30,

(Dollars in thousands)

Interest-earning assets:

Business loans (1) (3) (6)

One-to-four family residential and coop/condo apartment (3) (6)

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

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

Other loans (3)

Other short-term investments

Total interest-earning assets

Non-interest earning assets

Liabilities and Stockholders' Equity:

Interest-bearing liabilities:

Interest-bearing checking (2)

Total interest-bearing deposits

FHLBNY advances

Subordinated debt, net

Other short-term borrowings

Total borrowings

Derivative cash collateral

Total interest-bearing liabilities

Non-interest-bearing checking (2)

Other non-interest-bearing liabilities

Total liabilities

Stockholders' equity

Total liabilities and stockholders' equity

Net interest income

Net interest rate spread (4)

Net interest-earning assets

Net interest margin (5)

Ratio of interest-earning assets to interest-bearing liabilities

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

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

(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

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

Rate/Volume Analysis

Six Months Ended June 30, 2025

Compared to Six Months Ended June 30, 2024

Increase / (Decrease) Due to:

Interest-earning assets:

Business loans (1) (2)

One-to-four family residential and coop/condo apartment

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

Other short-term investments

Total interest-earning assets

Interest-bearing liabilities:

Interest-bearing checking

FHLBNY advances

Subordinated debt, net

Other short-term borrowings

Derivative cash collateral

Total interest-bearing liabilities

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.

Net interest income.

Net interest income was $192.3 million during the six months ended June 30, 2025, an increase of $45.3 million from the six months ended June 30, 2024.

Average interest-earning assets were $13.08 billion for the six months ended June 30, 2025, an increase of $259.7 million from $12.82 billion for the six months ended June 30, 2024.

Net interest margin was 2.96% during the six months ended June 30, 2024, up from 2.31% during the six months ended June 30, 2024.

Interest Income.

Interest income was $329.4 million during the six months ended June 30, 2025, compared to $320.4 million during the six months ended June 30, 2024.

During the six months ended June 30, 2025, interest income increased $9.0 million from the six months ended June 30, 2024, primarily reflecting increases in interest income of $9.5 million on business loans, $6.9 million on securities, $4.6 million on other short-term investments and $2.9 million on one-to-four family loans, partially offset by decreases in interest income of $7.0 million on multifamily loans, $6.4 million on non-owner-occupied loans, and $1.4 million on acquisition, development and construction loans.

The increased interest income on business loans was due to a $419.4 million increase in the average balances, partially offset by a 36-basis point decrease in the yield of such loans in the period.

The increased interest income on securities was related to a 131-basis point increase in the yield, partially offset by a decrease of $191.0 million in the average balances of such securities in the period.

The decreased interest income on multifamily residential and residential mixed-use loans was related to a $203.8 million decrease in the average balance and an 11-basis point decrease in the yield of such loans in the period.

The increased interest income on other short-term investments was related to a $355.8 million increase in the average balances, partially offset by a 121-basis point decrease in the yield of such investments in the period.

The increased interest income on one-to-four family loans was related to a $85.3 million increase in the average balances and a 21-basis point increase in the yield of such loans in the period.

The decreased interest income on multifamily residential and residential mixed-use loans was related to a $210.9 million decrease in the average balance and a 10-basis point decrease in the yield of such loans in the period.

The decreased interest income on non-owner-occupied commercial real estate loans reflected a $170.4 million decrease in the average balance and a 10-basis point decrease in the yield of such loans in the period.

The decreased interest income on acquisition, development and construction loan income reflected a $29.7 million decrease in the average balance and a 14-basis point decrease in the yield of such loans in the period.

Interest Expense.

Interest expense was $67.7 million during the three months ended March 31, 2025, compared to $89.5 million during the three months ended March 31, 2024.

During the three months ended March 31, 2025, interest expense decreased $21.8 million, primarily reflecting a decrease in interest expense of $15.0 million on deposits, a decrease in interest expense of $8.1 million on FHLBNY advances and a decrease of $516 thousand in interest expense on derivative cash collateral, partially offset by a $1.7 million increase in interest expense on subordinated debt.

The decreased interest

expense on deposits was primarily due to a $682.8 million decrease in the average balance of CDs and a 96-basis point decrease in such deposits in the period, and due to a 95-basis point decrease in rates paid on savings accounts and a $398.6 million decrease in average balances of such deposits.

The decreased interest expense on FHLBNY advances was due to a $585.1 million decrease in the average balance of such advances and a 122-basis point decrease in the cost of FHLBNY advances in the period.

Interest expense was $137.1 million during the six months ended June 30, 2025, compared to $173.4 million during the six months ended June 30, 2024.

During the six months ended June 30, 2025, interest expense decreased $36.3 million, primarily reflecting decreases in interest expense of $27.7 million on deposits, $10.5 million on FHLBNY advances and $1.6 million in interest expense on derivative cash collateral, partially offset by a $3.4 million increase in interest expense on subordinated debt.

The decreased interest expense on deposits was primarily due to a 101-basis point decrease in rates paid on savings accounts, a $404.9 million decrease in average balances of such deposits, $500.1 million decrease in the average balance of CDs and a 95-basis point decrease in the cost of such deposits in the period, partially offset by a 90-basis point increase in the cost of interest-bearing checking accounts and a $321.6 million increase in the average balance of such deposits in the period.

The decreased interest expense on FHLBNY advances was due to a $374.2 million decrease in the average balance and a 101-basis point decrease in the cost of FHLBNY advances in the period.

The decreased interest expense on derivative cash collateral was due to a $46.3 million decrease in the average balance and a 76-basis point decrease in the cost of such derivatives in the period.

1 unchanged sentence

Provision for Credit Losses.

We recorded a credit loss provision of $9.6 million and $5.2 million during the three months ended March 31, 2025 and 2024, respectively.

The $9.6 million credit loss provision for the three months ended March 31, 2025, was primarily associated with provisioning for individually analyzed loans.

The $5.2 million credit loss provision for the three months ended March 31, 2024, was primarily associated with increased provisioning for our pooled multifamily loan portfolio.

We recorded a credit loss provision of $18.8 million during the six months ended June 30, 2025, compared to a credit loss provision of $10.8 million for the six months ended June 30, 2024.

The $18.8 million credit loss provision for the six months ended June 30, 2025, was primarily attributable to updates in the macroeconomic forecast and to the loss driver models.

The $10.8 million credit loss provision for the six months ended June 30, 2024 was primarily associated with increased provisioning for our pooled multifamily loan portfolio.

Non-Interest Income.

Non-interest income was $9.6 million during the three months ended March 31, 2025, compared to $10.5 million during the three months ended March 31, 2024.

During the three months ended March 31, 2025, non-interest income decreased $834 thousand from the three months ended March 31, 2024, reflecting a decrease of $3.0 million related to a gain on sale of other assets, partially offset by an increase of $1.5 million in BOLI income.

Non-interest income was $21.2 million during the six months ended June 30, 2025, compared to $22.3 million during the six months ended June 30, 2024.

The decrease is primarily driven by a $6.7 million reduction in gains on sale of Bank’s premises, partially offset by an increase of $3.2 million related to BOLI income.

Non-Interest Expense.

Non-interest expense was $65.5 million during the three months ended March 31, 2025, compared to $52.5 million during the three months ended March 31, 2024.

During the three months ended March 31, 2025, non-interest expense increased $13.0 million from the three months ended March 31, 2024, primarily due to the Company recording a $7.2 million loss due to pension settlement and a $3.6 million increase in salaries and employee benefits.

Non-interest expense was 1.90% and 1.52% of average assets during the three months ended March 31, 2025 and 2024, respectively.

Non-interest expense was $125.8 million during the six months ended June 30, 2025, compared to $108.2 million during the six months ended June 30, 2024.

The increase in non-interest expense is primarily due to a $7.6 million increase in salaries and employee benefits and a $7.2 million increase due to the pension settlement loss recorded during the first quarter of 2025.

Non-interest expense was 1.81% and 1.59% of average assets during the six months ended June 30, 2025 and 2024, respectively.

Income Tax Expense.

Income tax expense was $7.3 million during the three months ended March 31, 2025, compared to income tax expense of $6.6 million during the three months ended March 31, 2024.

The reported effective tax rate for the three months ended March 31, 2025 was 25.3%, and 27.1% for the three months ended March 31, 2024.

Income tax expense was $17.7 million during the six months ended June 30, 2025, compared to income tax expense of $14.1 million during the six months ended June 30, 2024.

The reported effective tax rate for the six months ended June 30, 2025 and 2024 was 25.7%, and 28.1%, respectively.

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-Q

Item 2. Management’s Discussion and Analysis