Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
Dime Community Bancshares, Inc., a New York corporation, is a bank holding company formed in 1988. On a parent-only basis, the Holding Company has minimal operations, other than as owner of Dime Community Bank. The Holding Company is dependent on dividends from its wholly-owned subsidiary, Dime Community Bank, its own earnings, additional capital raised, and borrowings as sources of funds. The information in this report reflects principally the financial condition and results of operations of the Bank. 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. Certain reclassifications have been made to prior year amounts and the related discussion and analysis to conform to the current year presentation. 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.
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Selected Financial Highlights and Other Data
(Dollars in Thousands Except Per Share Amounts)
At or For the
At or For the
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Per Share Data:
Reported EPS (Diluted)
$
0.64
$
0.43
$
1.09
$
0.84
Cash dividends paid per common share
0.25
0.25
0.50
0.50
Book value per common share
29.95
28.97
29.95
28.97
Dividend payout ratio
39.06
%
58.14
%
45.87
%
59.52
%
Performance and Other Selected Ratios:
Return on average assets
0.85
%
0.55
%
0.74
%
0.53
%
Return on average equity
8.28
5.88
7.16
5.78
Net interest spread
1.99
1.28
1.97
1.21
Net interest margin
2.98
2.41
2.96
2.31
Average interest-earning assets to average interest-bearing liabilities
146.96
142.23
146.97
140.36
Non-interest expense to average assets
1.72
1.66
1.81
1.59
Efficiency ratio
55.0
63.8
58.9
63.9
Loan-to-deposit ratio at end of period
92.6
98.2
92.6
98.2
Effective tax rate
26.08
29.01
25.73
28.10
Asset Quality Summary:
Non-performing loans (1)
$
53,214
$
24,843
$
53,214
$
24,843
Non-performing assets
53,214
24,843
53,214
24,843
Net charge-offs
5,405
3,640
12,463
4,379
Non-performing assets/Total assets
0.37
%
0.18
%
0.37
%
0.18
%
Non-performing loans/Total loans
0.49
0.23
0.49
0.23
Allowance for credit losses/Total loans
0.86
0.72
0.86
0.72
Allowance for credit losses/Non-performing loans
175.12
313.21
175.12
313.21
(1) Non-performing loans are defined as all loans on non-accrual status.
Critical Accounting Estimates
Note 1. Summary of Significant Accounting Policies, to the Company’s Audited Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2024 contains a summary of significant accounting policies. These critical accounting estimates involve a significant degree of complexity and require management to make difficult 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 and 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.
Management has reviewed the following critical accounting estimates and related disclosures with its Audit Committee.
Allowance for Credit Losses on Loans Held for Investment
Methods and Assumptions Underlying the Estimate
The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis, and additions to the allowance are charged to expense and realized losses, net of recoveries, are charged against the allowance.
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Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In determining the allowance for credit losses for loans that share similar risk characteristics, the Company utilizes a model which compares the amortized cost basis of the loan to the net present value of expected cash flows to be collected. Expected credit losses are determined by aggregating the individual cash flows and calculating a loss percentage by loan segment, or pool, for loans that share similar risk characteristics. For a loan that does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. 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.
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. These models are then utilized to forecast future expected loan losses based on expected future behavior of the same macro-economic variables. Adjustments to the quantitative results are made using qualitative factors, which are subjective and require significant management judgment. These factors include: (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 volume and severity of past due loans; (5) the quality of our loan review system; (6) the value of underlying collateral for collateralized loans; (7) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; 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.
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. 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.
Uncertainties Regarding the Estimate
Estimating the timing and amounts of future losses is subject to significant management judgment as these projected cash flows rely upon the estimates discussed above and factors that are reflective of current or future expected conditions. These estimates depend on the duration of current overall economic conditions, industry, borrower, or portfolio specific conditions. Volatility in certain credit metrics and differences between expected and actual outcomes are to be expected.
Customers may not repay their loans according to the original terms, and the collateral securing the payment of those loans may be insufficient to pay any remaining loan balance. Bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or loan charge-offs.
Impact on Financial Condition and Results of Operations
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. Changes in estimates could result in a material change in the allowance through charges to earnings which would materially decrease our net income.
We may experience significant credit losses if borrowers experience financial difficulties, which could have a material adverse effect on our operating results.
In addition, various regulatory agencies, as an integral part of the examination process, periodically review the allowance for credit losses. 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.
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Liquidity and Capital Resources
The Board of Directors has approved a liquidity policy that it reviews and updates at least annually. Senior management is responsible for implementing the policy. 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 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 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. The Bank’s primary sources of funding for its lending and investment activities include deposits, loan payments, investment security principal and interest payments and advances from the FHLBNY. The Bank may also sell or securitize selected multifamily residential, mixed-use or one-to-four family residential real estate loans to private sector secondary market purchasers and has in the past sold such loans to FNMA and Federal Home Loan Mortgage Corporation (“FHLMC”). The Company may additionally issue debt or equity under appropriate circumstances. Although maturities and scheduled amortization of loans and investments are predictable sources of funds, deposit flows and prepayments on real estate loans and MBS are influenced by interest rates, economic conditions and competition.
The Bank is a member of American Financial Exchange (“AFX”), through which it may either borrow or lend funds on an overnight or short-term basis with other member institutions. The availability of funds changes daily. 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.
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 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. It must additionally compete for deposit monies against the stock and bond markets, especially during periods of strong performance in those arenas. The Bank’s deposit flows are affected primarily by the pricing and marketing of its deposit products compared to its competitors, as well as the market performance of depositor investment alternatives such as the U.S. bond or equity markets. To the extent that the Bank is responsive to general market increases or declines in interest rates, its deposit flows should not be materially impacted. However, favorable performance of the equity or bond markets could adversely impact the Bank’s deposit flows.
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 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 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
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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. See Note 12. “FHLBNY Advances” for further information.
Subordinated debentures totaled $272.4 million at June 30, 2025 compared to $272.3 million at December 31, 2024. See Note 13. “Subordinated Debentures” to our Consolidated Financial Statements for further information.
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 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 June 30, 2025
Basel III
Consolidated
Minimum
To Be Categorized as
Bank
Company
Requirement
“Well Capitalized” (1)
Tier 1 common equity ratio
14.2
%
11.2
%
4.5
%
6.5
%
Tier 1 risk-based capital ratio
14.2
12.3
6.0
8.0
Total risk-based capital ratio
15.1
15.8
8.0
10.0
Tier 1 leverage ratio
10.8
9.4
4.0
5.0
(1) Only the Bank is subject to these requirements.
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 $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
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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Off-Balance Sheet Arrangements
As part of its loan origination business, the Bank generally has outstanding commitments to extend credit to borrowers, which are originated pursuant to its regular underwriting standards. 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 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. The maximum exposure under this reimbursement obligation is $27.9 million. The Bank has pledged $27.9 million of pass-through MBS issued by GSEs as collateral.
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 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.
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.
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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:
June 30, 2025
Weighted
Average Rate
(Dollars in thousands)
NY
NJ
Other
Balance
LTV
Investor commercial real estate:
Retail
$
1,033,852
$
66,818
$
3,529
$
1,104,199
52
%
Investor office
418,353
161,272
3,091
582,716
59
Warehouse/ Industrial
320,596
14,717
68,770
404,083
54
Hotels
330,351
422
11,823
342,596
57
Supportive housing
178,603
—
—
178,603
57
Medical office
100,860
—
28,162
129,022
60
Educational facility or library
113,302
—
—
113,302
57
Medical facility
60,626
—
—
60,626
71
Other (1)
207,582
2,714
2,677
212,973
55
Total investor commercial real estate
$
2,764,125
245,943
118,052
$
3,128,120
55
%
(1) Includes various property types such as gas stations, restaurants, storage facilities, and other special use properties.
December 31, 2024
Weighted
Average Rate
(Dollars in thousands)
NY
NJ
Other
Balance
LTV
Investor commercial real estate:
Retail
$
1,085,618
$
62,990
$
3,594
$
1,152,202
51
%
Investor office
439,359
162,367
3,127
604,853
58
Warehouse/ Industrial
337,288
16,675
69,314
423,277
53
Hotels
356,450
425
11,934
368,809
57
Supportive housing
161,207
—
—
161,207
59
Medical office
106,403
—
28,470
134,873
62
Educational facility or library
120,719
—
—
120,719
59
Medical facility
60,866
—
—
60,866
71
Other (1)
196,304
2,763
4,662
203,729
54
Total investor commercial real estate
$
2,864,214
245,220
121,101
$
3,230,535
55
%
(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:
June 30, 2025
Weighted
Total
Average Rate
(Dollars in thousands)
Balance
LTV
Multifamily residential and residential mixed-use:
New York City (1)
100% rent regulated (2)
$
550,863
58
%
Majority rent regulated (2)
623,104
59
Majority free market
1,781,000
55
Total New York City
2,954,967
56
Outside New York City
738,458
58
Total multifamily residential and residential mixed-use
$
3,693,425
57
%
(1) New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.
(2) Composition based on revenue.
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December 31, 2024
Weighted
Total
Average Rate
(Dollars in thousands)
Balance
LTV
Multifamily residential and residential mixed-use:
New York City (1)
100% rent regulated (2)
$
572,054
58
%
Majority rent regulated (2)
643,908
59
Majority free market
1,846,525
55
Total New York City
3,062,487
56
Outside New York City
757,796
59
Total multifamily residential and residential mixed-use
$
3,820,283
57
%
(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 June 30, 2025 and December 31, 2024:
June 30, 2025
Number of
Average
loans
(Dollars in thousands)
Loan Size
> $20 million
Investor commercial real estate:
Retail
$
2,642
3
Investor Office
6,334
9
Warehouse/ Industrial
3,707
4
Hotels
8,565
8
Supportive housing
19,845
3
Medical office
6,144
2
Educational facility or library
10,300
—
Medical facility
7,578
1
Other (1)
1,990
—
Multifamily residential and residential mixed-use:
New York City (2)
100% rent regulated (3)
2,504
—
Majority rent regulated (3)
3,799
2
Majority free market
3,949
7
Outside New York City
4,674
8
(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.
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December 31, 2024
Number of
Average
loans
(Dollars in thousands)
Loan Size
> $20 million
Investor commercial real estate:
Retail
$
2,613
4
Investor Office
5,989
9
Warehouse/ Industrial
3,779
4
Hotels
8,781
8
Supportive housing
20,151
3
Medical office
6,423
2
Educational facility or library
10,060
—
Medical facility
7,608
1
Other (1)
1,922
—
Multifamily residential and residential mixed-use:
New York City (2)
100% rent regulated (3)
2,487
—
Majority rent regulated (3)
3,810
2
Majority free market
3,864
7
Outside New York City
4,521
8
(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
General
We do not originate or purchase loans, either whole loans or loans underlying 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 6 to our unaudited condensed 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 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 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 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.
Accrual of interest is generally discontinued on a loan that meets any of the following three criteria: (i) full payment of principal or interest is not expected; (ii) principal or interest has been in default for a period of 90 days or more (unless the loan is both deemed to be well secured and in the process of collection); 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, the system will reverse all outstanding accrued interest receivable.
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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. 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. We generally attempt to utilize all available remedies, such as note sales in lieu of foreclosure, in an effort to resolve non-accrual loans and OREO properties as quickly and prudently as possible in consideration of market conditions, the physical condition of the property and any other mitigating circumstances. We have not initiated any expected or imminent foreclosure proceedings that are likely to have a material adverse impact on our consolidated financial statements. 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, 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 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. Loans determined to reach adverse risk rating standards are monitored closely by Credit Administration to identify any potential credit losses. When warranted, loans reaching a Substandard rating could be reassigned to the Workout Group for direct handling.
Non-accrual Loans
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:
June 30,
December 31,
June 30,
(Dollars in thousands)
2025
2024
2024
Non-accrual loans:
Business loans
$
18,007
$
22,624
$
20,287
One-to-four family residential and cooperative/condominium apartment
1,642
3,213
3,884
Multifamily residential and residential mixed-use
—
—
—
Non-owner-occupied commercial real estate
32,908
22,960
15
ADC
657
657
657
Other loans
—
25
—
Total non-accrual loans
$
53,214
$
49,479
$
24,843
Ratios:
Total non-accrual loans to total loans
0.49
%
0.46
%
0.23
%
Total non-performing assets to total assets
0.37
0.34
0.18
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Loan Restructurings
The Company applies the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results 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.
Within the allowance for credit losses, losses are estimated for restructured loans on accrual status as well as restructured loans 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. Restructured loans on non-accrual status excluding one-to-four family and consumer loans are individually evaluated to determine expected credit losses. For restructured loans that are collateral-dependent where the Bank has 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 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 allowance for credit losses 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.
OREO
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. Upon entering OREO status, we obtain a current appraisal on the property and reassess the likely realizable value ( a/k/a fair value) of the property quarterly thereafter. OREO is carried at the lower of the fair value or book balance, with any write downs recognized through a provision recorded in non-interest expense. Only the appraised value, or either a contractual or formal marketed value that falls below the appraised value, is used when determining the likely realizable value of OREO at each reporting period. We typically seek to dispose of OREO properties in a timely manner. 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 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 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 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 June 30, 2025 or at December 31, 2024.
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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 $2.8 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. Any increases or reductions in this reserve are recognized in provision for credit losses.
Allowance for Credit Losses
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.
June 30, 2025
December 31, 2024
Percent
Percent
of Loans
of Loans
in Each
in Each
Category
Category
Allocated
to Total
Allocated
to Total
(Dollars in thousands)
Amount
Loans
Amount
Loans
Business loans
$
42,965
26.70
%
$
42,898
25.08
%
One-to-four family residential and cooperative/condominium apartment
9,567
9.19
9,501
8.75
Multifamily residential and residential mixed-use
13,667
33.97
11,946
35.16
Non-owner-occupied commercial real estate
24,326
28.78
21,876
29.72
ADC
2,380
1.30
2,323
1.25
Other loans
284
0.06
207
0.04
Total
$
93,189
100.00
%
$
88,751
100.00
%
The following table sets forth information about our allowance for credit losses at or for the dates indicated:
At or for the Six Months Ended June 30,
(Dollars in thousands)
2025
2024
Total loans outstanding at end of period (1)
$
10,870,030
$
10,824,518
Average total loans outstanding during the period (2)
10,852,525
10,757,655
Allowance for credit losses balance at end of period
93,189
77,812
Allowance for credit losses to total loans at end of period
0.86
%
0.72
%
Non-performing loans to total loans at end of period
0.49
0.23
Allowance for credit losses to total non-performing loans at end of period
175.12
313.21
Ratio of net charge-offs to average loans outstanding during the period:
Business loans
0.35
%
0.15
%
One-to-four family residential and cooperative/condominium apartment
0.01
—
Multifamily residential and residential mixed-use
—
0.13
Non-owner-occupied commercial real estate
0.47
—
Other loans
0.75
1.33
Total
0.23
0.08
(1) Total loans represent gross loans (excluding loans held for sale), inclusive of deferred fees/costs and premiums/discounts.
(2) Total average loans represent gross loans (including loans held for sale), inclusive of deferred loan fees/costs and premiums/discounts.
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Table of Contents
Comparison of Financial Condition at June 30, 2025 and December 31, 2024
Assets . 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 $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 $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
General. 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. 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. 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 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.
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Table of Contents
Analysis of Net Interest Income
Three Months Ended June 30,
2025
2024
Average
Average
Average
Yield/
Average
Yield/
Balance
Interest
Cost
Balance
Interest
Cost
Assets:
(Dollars in thousands)
Interest-earning assets:
Business loans (1) (3) (6)
$
2,798,899
$
46,593
6.68
%
$
2,400,219
$
42,933
7.19
%
One-to-four family residential and coop/condo apartment (3) (6)
981,138
11,532
4.71
886,037
9,968
4.52
Multifamily residential and residential mixed-use (3) (6)
3,740,939
42,462
4.55
3,958,617
45,775
4.65
Non-owner-occupied commercial real estate (3) (6)
3,175,062
41,822
5.28
3,359,004
44,728
5.36
ADC (3)
136,154
3,009
8.86
164,283
3,638
8.91
Other loans (3)
7,135
30
1.69
5,100
57
4.50
Securities
1,361,383
11,353
3.34
1,537,487
7,907
2.07
Other short-term investments
994,406
10,749
4.34
313,809
4,412
5.65
Total interest-earning assets
13,195,116
167,550
5.09
%
12,624,556
159,418
5.08
%
Non-interest earning assets
818,476
793,885
Total assets
$
14,013,592
$
13,418,441
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking (2)
$
943,716
$
4,141
1.76
%
$
631,403
$
1,499
0.95
%
Money market
4,174,694
32,818
3.15
3,495,989
33,193
3.82
Savings (2)
1,925,224
14,048
2.93
2,336,202
23,109
3.98
CDs
1,075,729
9,174
3.42
1,393,678
15,077
4.35
Total interest-bearing deposits
8,119,363
60,181
2.97
7,857,272
72,878
3.73
FHLBNY advances
508,000
4,053
3.20
671,242
6,429
3.85
Subordinated debt, net
272,385
4,301
6.33
202,232
2,604
5.18
Other short-term borrowings
—
—
—
—
—
—
Total borrowings
780,385
8,354
4.29
873,474
9,033
4.16
Derivative cash collateral
79,188
918
4.65
145,702
2,005
5.53
Total interest-bearing liabilities
8,978,936
69,453
3.10
%
8,876,448
83,916
3.80
%
Non-interest-bearing checking (2)
3,412,215
3,042,382
Other non-interest-bearing liabilities
187,774
242,980
Total liabilities
12,578,925
12,161,810
Stockholders' equity
1,434,667
1,256,631
Total liabilities and stockholders' equity
$
14,013,592
$
13,418,441
Net interest income
$
98,097
$
75,502
Net interest rate spread (4)
1.99
%
1.28
%
Net interest-earning assets
$
4,216,180
$
3,748,108
Net interest margin (5)
2.98
%
2.41
%
Ratio of interest-earning assets to interest-bearing liabilities
146.96
%
142.23
%
Deposits (including non-interest-bearing checking accounts) (2)
$
11,531,578
$
60,181
2.09
%
$
10,899,654
$
72,878
2.69
%
(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.
(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.
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Table of Contents
Rate/Volume Analysis
Rate/Volume Analysis
Three Months Ended June 30, 2025
Compared to Three Months Ended June 30, 2024
Increase / (Decrease) Due to:
Volume
Rate
Total
(Dollars in thousands)
Interest-earning assets:
Business loans (1) (2)
$
6,930
$
(3,270)
$
3,660
One-to-four family residential and coop/condo apartment
1,108
456
1,564
Multifamily residential and residential mixed-use
(2,425)
(888)
(3,313)
Non-owner-occupied commercial real estate
(2,347)
(559)
(2,906)
ADC
(617)
(12)
(629)
Other loans
16
(43)
(27)
Securities
(1,166)
4,612
3,446
Other short-term investments
8,475
(2,138)
6,337
Total interest-earning assets
$
9,974
$
(1,842)
$
8,132
Interest-bearing liabilities:
Interest-bearing checking
$
1,053
$
1,589
$
2,642
Money market
5,965
(6,340)
(375)
Savings
(3,511)
(5,550)
(9,061)
CDs
(3,060)
(2,843)
(5,903)
FHLBNY advances
(1,427)
(949)
(2,376)
Subordinated debt, net
1,011
686
1,697
Other short-term borrowings
—
—
—
Derivative cash collateral
(842)
(245)
(1,087)
Total interest-bearing liabilities
$
(811)
$
(13,652)
$
(14,463)
Net change in net interest income
$
10,785
$
11,810
$
22,595
(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 $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 $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
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Table of Contents
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
General. 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. 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 $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.
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Table of Contents
Analysis of Net Interest Income
Six Months Ended June 30,
2025
2024
Average
Average
Average
Yield/
Average
Yield/
Balance
Interest
Cost
Balance
Interest
Cost
Assets:
(Dollars in thousands)
Interest-earning assets:
Business loans (1) (3) (6)
$
2,773,661
$
91,640
6.66
%
$
2,354,269
$
82,157
7.02
%
One-to-four family residential and coop/condo apartment (3) (6)
971,645
22,601
4.69
886,313
19,738
4.48
Multifamily residential and residential mixed-use (3) (6)
3,768,693
84,791
4.54
3,979,563
91,794
4.64
Non-owner-occupied commercial real estate (3) (6)
3,194,800
83,148
5.25
3,365,221
89,504
5.35
ADC (3)
137,285
5,915
8.69
167,029
7,330
8.83
Other loans (3)
6,441
58
1.82
5,260
141
5.39
Securities
1,366,942
22,676
3.35
1,557,909
15,787
2.04
Other short-term investments
860,392
18,586
4.36
504,592
13,976
5.57
Total interest-earning assets
13,079,859
329,415
5.08
%
12,820,156
320,427
5.03
%
Non-interest earning assets
816,422
786,526
Total assets
$
13,896,281
$
13,606,682
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking (2)
$
928,369
$
8,305
1.80
%
$
606,725
$
2,722
0.90
%
Money market
4,125,924
64,112
3.13
3,427,937
63,831
3.74
Savings (2)
1,947,657
28,233
2.92
2,352,574
45,919
3.93
CDs
1,024,702
17,605
3.46
1,524,780
33,475
4.41
Total interest-bearing deposits
8,026,652
118,255
2.97
7,912,016
145,947
3.71
FHLBNY advances
508,552
8,119
3.22
882,725
18,572
4.23
Subordinated debt, net
272,363
8,603
6.37
201,210
5,157
5.15
Other short-term borrowings
315
13
8.32
39
1
5.16
Total borrowings
781,230
16,735
4.32
1,083,974
23,730
4.40
Derivative cash collateral
91,588
2,115
4.66
137,934
3,718
5.42
Total interest-bearing liabilities
8,899,470
137,105
3.11
%
9,133,924
173,395
3.82
%
Non-interest-bearing checking (2)
3,367,647
2,976,079
Other non-interest-bearing liabilities
200,753
245,348
Total liabilities
12,467,870
12,355,351
Stockholders' equity
1,428,411
1,251,331
Total liabilities and stockholders' equity
$
13,896,281
$
13,606,682
Net interest income
$
192,310
$
147,032
Net interest rate spread (4)
1.97
%
1.21
%
Net interest-earning assets
$
4,180,389
$
3,686,232
Net interest margin (5)
2.96
%
2.31
%
Ratio of interest-earning assets to interest-bearing liabilities
146.97
%
140.36
%
Deposits (including non-interest-bearing checking accounts) (2)
$
11,394,299
$
118,255
2.09
%
$
10,888,095
$
145,947
2.70
%
(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.
(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.
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Rate/Volume Analysis
Six Months Ended June 30, 2025
Compared to Six Months Ended June 30, 2024
Increase / (Decrease) Due to:
Volume
Rate
Total
Interest-earning assets:
Business loans (1) (2)
$
14,143
$
(4,660)
$
9,483
One-to-four family residential and coop/condo apartment
1,918
945
2,863
Multifamily residential and residential mixed-use
(4,941)
(2,062)
(7,003)
Non-owner-occupied commercial real estate
(4,604)
(1,752)
(6,356)
ADC
(1,300)
(115)
(1,415)
Other loans
21
(104)
(83)
Securities
(2,582)
9,471
6,889
Other short-term investments
8,733
(4,123)
4,610
Total interest-earning assets
$
11,388
$
(2,400)
$
8,988
Interest-bearing liabilities:
Interest-bearing checking
$
2,155
$
3,428
$
5,583
Money market
11,798
(11,517)
281
Savings
(6,897)
(10,789)
(17,686)
CDs
(9,811)
(6,059)
(15,870)
FHLBNY advances
(6,940)
(3,513)
(10,453)
Subordinated debt, net
2,023
1,423
3,446
Other short-term borrowings
9
3
12
Derivative cash collateral
(1,164)
(439)
(1,603)
Total interest-bearing liabilities
$
(8,827)
$
(27,463)
$
(36,290)
Net change in net interest income
$
20,215
$
25,063
$
45,278
(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 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.
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Interest Expense. 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. The increased interest expense on subordinated debt was due to a $71.2 million increase in the average balance and a 122-basis point increase in the cost of such debt in the period.
Provision for Credit Losses. 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 $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 $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 $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.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.