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 Company has minimal operations, other than as owner of Dime Community Bank. The 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.
Selected Financial Highlights and Other Data
(Dollars in Thousands Except Per Share Amounts)
At or For the
At or For the
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Per Share Data:
Reported EPS (Diluted)
$
0.59
$
0.29
$
1.67
$
1.13
Cash dividends paid per common share
0.25
0.25
0.75
0.75
Book value per common share
30.44
29.31
30.44
29.31
Dividend payout ratio
42.37
%
86.21
%
44.91
%
66.37
%
Performance and Other Selected Ratios:
Return on average assets
0.77
%
0.39
%
0.75
%
0.49
%
Return on average equity
7.59
4.19
7.31
5.24
Net interest spread
2.00
1.32
1.98
1.24
Net interest margin
3.01
2.50
2.98
2.37
Average interest-earning assets to average interest-bearing liabilities
148.06
144.77
147.35
141.80
Non-interest expense to average assets
1.73
1.71
1.78
1.63
Efficiency ratio
53.8
65.9
57.1
64.6
Loan-to-deposit ratio at end of period
88.9
95.4
88.9
95.4
Effective tax rate
30.98
26.87
27.66
27.77
Asset Quality Summary:
Non-performing loans (1)
$
72,054
$
49,463
$
72,054
$
49,463
Non-performing assets
72,054
49,463
72,054
49,463
Net charge-offs
12,586
4,199
25,049
8,578
Non-performing assets/Total assets
0.50
%
0.36
%
0.50
%
0.36
%
Non-performing loans/Total loans
0.67
0.45
0.67
0.45
Allowance for credit losses/Total loans
0.88
0.78
0.88
0.78
Allowance for credit losses/Non-performing loans
130.54
172.29
130.54
172.29
(1) Non-performing loans are defined as all loans on non-accrual status.
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Critical Accounting Policies
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 methodology used to determine the allowance for credit losses on loans held for investment are important to the presentation of the Company’s consolidated financial condition and results of operations. The use of different judgments, assumptions or estimates could result in material variations in the Company’s consolidated results of operations or financial condition.
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.
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.
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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.
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 Federal National Mortgage Association 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 September 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 September 30, 2025 and December 31, 2024, the Bank did not have any repurchase agreements.
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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 $375.5 million during the nine months ended September 30, 2025, compared to an increase of $886.7 million during the nine months ended September 30, 2024. The increase in deposits during the current period was primarily due to increases in non-interest-bearing checking accounts, money market accounts, CDs and interest bearing checking accounts, partially offset by a decline in 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 September 30, 2025, the Bank had remaining borrowing capacity of $1.78 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 Federal Reserve Bank (“FRB”) Discount Window. At September 30, 2025, an available line of credit totaling $351.6 million was in place at the FRB backed by investment securities with no advances drawn. Additionally, at September 30, 2025, a line of credit totaling $3.32 billion was in place at the FRB secured by certain qualifying 1-4 family residential mortgage loans, construction loans and commercial real estate loans with no amounts drawn.
The Bank reduced its outstanding FHLBNY advances by $100.0 million during the nine months ended September 30, 2025, compared to a reduction of $805.0 million during the nine months ended September 30, 2024. See Note 12. “FHLBNY Advances” for further information.
Subordinated debentures totaled $272.5 million at September 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 nine months ended September 30, 2025 and 2024, business loan originations excluding new lines were $279.5 million and $236.1 million, respectively. During the nine months ended September 30, 2025, and 2024, real estate loan originations excluding new lines (excluding owner-occupied commercial real estate) totaled $196.3 million and $147.2 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 September 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 September 30, 2025
Basel III
Consolidated
Minimum
To Be Categorized as
Bank
Company
Requirement
“Well Capitalized” (1)
Tier 1 common equity ratio
14.5
%
11.5
%
4.5
%
6.5
%
Tier 1 risk-based capital ratio
14.5
12.6
6.0
8.0
Total risk-based capital ratio
15.4
16.2
8.0
10.0
Tier 1 leverage ratio
10.6
9.3
4.0
5.0
(1) Only the Bank is subject to these requirements.
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During the nine months ended September 30, 2025 and 2024, the Company did not repurchase any shares of its common stock. As of September 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 Company paid $5.5 million in cash dividends on its preferred stock during the nine months ended September 30, 2025, and 2024, respectively.
The Company paid $32.2 million and $28.5 million in cash dividends on its common stock during the nine months ended September 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.
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 September 30, 2025, the Bank had $155.7 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 $28.0 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 61% and 65% of total loans held for investment as of September 30, 2025 and December 31, 2024, respectively. Non-owner occupied commercial real estate loans represent 28% and 30% of total loans held for investment as of September 30, 2025 and December 31, 2024, respectively. Multifamily residential and residential mixed-use loans made up 33% and 35% of total loans held for investment as of September 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.
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We regularly identify and assess concentration levels through ongoing reporting to our Board of Directors as well as committees at both the Board and Management levels. The management team has extensive knowledge and experience in underwriting non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans. Management has established the Credit Risk Management Committee which meets quarterly to review all policies and procedures, large lending exposures, and emerging trends including trends related to delinquency, debt service coverage ratios, loan-to-value, and loan ratings to aid in early detection and escalation of potential issues. The Company has a dedicated team responsible for conducting comprehensive annual reviews of the portfolios, ensuring consistent oversight. Credit underwriting standards are periodically reviewed and adjusted based upon observations from our ongoing monitoring of economic conditions in major real estate markets in which we lend. In response to the current dynamic interest rate environment and changes in the benchmark rates that determine loan pricing, the Company has enhanced its stress testing and loan review activities to mitigate interest rate reset risk with a specific emphasis on borrowers' abilities to absorb the impact of higher interest loan rates and measure the resiliency of the portfolios. As a general rule, Management takes a selective approach to originating non-owner occupied commercial real estate and multifamily residential and residential mixed-use loans, prioritizing quality and strategic alignment.
The following tables present the composition by property type and weighted average loan-to-value (“LTV”) of the Company’s non-owner occupied commercial real estate loans:
September 30, 2025
Weighted
Average
(Dollars in thousands)
NY
NJ
Other
Balance
LTV
Investor commercial real estate:
Retail
$
988,425
$
65,898
$
3,496
$
1,057,819
51
%
Investor office
400,430
149,534
3,073
553,037
60
Warehouse/ Industrial
301,722
14,614
68,462
384,798
55
Hotels
311,514
421
11,767
323,702
57
Supportive housing
169,874
—
—
169,874
57
Medical office
76,317
—
28,009
104,326
60
Educational facility or library
112,839
—
—
112,839
56
Medical facility
60,506
—
—
60,506
71
Other (1)
203,018
2,689
2,656
208,363
55
Total investor commercial real estate
$
2,624,645
233,156
117,463
$
2,975,264
55
%
(1) Includes various property types such as gas stations, restaurants, storage facilities, and other special use properties.
December 31, 2024
Weighted
Average
(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.
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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:
September 30, 2025
Weighted
Total
Average
(Dollars in thousands)
Balance
LTV
Multifamily residential and residential mixed-use:
New York City (1)
100% rent regulated (2)
$
503,479
59
%
Majority rent regulated (2)
594,713
59
Majority free market
1,683,562
55
Total New York City
2,781,754
56
Outside New York City
728,040
58
Total multifamily residential and residential mixed-use
$
3,509,794
57
%
(1) New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.
(2) Composition based on revenue.
December 31, 2024
Weighted
Total
Average
(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.
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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 September 30, 2025 and December 31, 2024:
September 30, 2025
Number of
Average
loans
(Dollars in thousands)
Loan Size
> $20 million
Investor commercial real estate:
Retail
$
2,593
3
Investor Office
6,214
8
Warehouse/ Industrial
3,773
4
Hotels
8,518
8
Supportive housing
21,234
3
Medical office
5,491
1
Educational facility or library
10,258
—
Medical facility
7,563
1
Other (1)
1,947
—
Multifamily residential and residential mixed-use:
New York City (2)
100% rent regulated (3)
2,432
—
Majority rent regulated (3)
3,717
2
Majority free market
3,835
6
Outside New York City
4,790
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.
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.
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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.
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.
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Non-accrual Loans
Within our held-for-investment loan portfolio, non-accrual loans totaled $72.1 million at September 30, 2025 and $49.5 million at December 31, 2024.
The following is a reconciliation of non-accrual loans as of the dates indicated:
September 30,
December 31,
September 30,
(Dollars in thousands)
2025
2024
2024
Non-accrual loans:
Business loans
$
21,005
$
22,624
$
25,411
One-to-four family residential and coop/condo apartment
2,440
3,213
3,880
Multifamily residential and residential mixed-use
—
—
—
Non-owner-occupied commercial real estate
47,952
22,960
19,509
ADC
657
657
657
Other loans
—
25
6
Total non-accrual loans
$
72,054
$
49,479
$
49,463
Ratios:
Total non-accrual loans to total loans
0.67
%
0.46
%
0.45
%
Total non-performing assets to total assets
0.50
0.34
0.36
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 September 30, 2025 or December 31, 2024. We did not recognize any provision for losses on OREO properties during the nine months ended September 30, 2025 or 2024.
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Past Due Loans
Loans Delinquent 30 to 59 Days
At September 30, 2025, there were $13.3 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 September 30, 2025, there were $27.8 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 September 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 $2.3 million and $2.7 million at September 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 nine months ended September 30, 2025 and 2024 was $32.1 million and $22.4 million, respectively. Included in the provision for credit losses for the nine months ended September 30, 2025 was $2.1 million of provision related to one available-for-sale corporate security. The remainder of the credit loss provision for the nine months ended September 30, 2025, was attributable to updates in the macroeconomic forecast, updated loss drivers, and charge-offs on loans in the owner-occupied and non-owner-occupied real estate segments. The $22.4 million credit loss provision for the nine months ended September 30, 2024, was related to a combination of factors including, provisioning for growth and individually analyzed loans in the business loan portfolio as well as provisioning for the pooled multifamily loan portfolio.
For a further discussion of the allowance for credit losses and related activity during the nine months ended September 30, 2025 and 2024, please see Note 6 “Securities” and Note 7 “Loans Held for Investment, Net” to the condensed Consolidated Financial Statements.
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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.
September 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
$
47,502
28.56
%
$
42,898
25.08
%
One-to-four family residential and coop/condo apartment
10,031
9.61
9,501
8.75
Multifamily residential and residential mixed-use
12,851
32.72
11,946
35.16
Non-owner-occupied commercial real estate
21,324
27.74
21,876
29.72
ADC
1,994
1.30
2,323
1.25
Other loans
359
0.07
207
0.04
Total
$
94,061
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 Nine Months Ended September 30,
(Dollars in thousands)
2025
2024
Total loans outstanding at end of period (1)
$
10,725,269
$
10,886,387
Average total loans outstanding during the period (2)
10,832,841
10,800,951
Allowance for credit losses balance at end of period
94,061
85,221
Allowance for credit losses to total loans at end of period
0.88
%
0.78
%
Non-performing loans to total loans at end of period
0.67
0.45
Allowance for credit losses to total non-performing loans at end of period
130.54
172.29
Ratio of net charge-offs to average loans outstanding during the period:
Business loans
0.30
%
0.25
%
One-to-four family residential and coop/condo apartment
0.01
—
Multifamily residential and residential mixed-use
—
0.13
Non-owner-occupied commercial real estate
0.78
—
Other loans
0.65
1.19
Total
0.31
0.11
(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.
Comparison of Financial Condition at September 30, 2025 and December 31, 2024
Assets . Assets totaled $14.54 billion at September 30, 2025, $185.7 million above their level at December 31, 2024, primarily due to increases of $431.5 million in cash and due from banks and $106.2 million in BOLI, partially offset by decreases of $151.6 million in the loan portfolio, $95.6 million in other assets, $42.3 million in total securities, $35.1 million in derivative assets and $22.6 million in loans held for sale.
Loan originations, excluding new lines, totaled $475.8 million for the nine-month period ended September 30, 2025.
Total investment securities decreased $42.3 million during the nine months ended September 30, 2025, to $1.29 billion at period end, primarily due to proceeds from principal payments, calls and maturities of $129.7 million and proceeds from the sale of available for sale securities of $38.8 million, offset by purchases of $106.4 million and a decrease in unrealized losses of $19.8 million. There were no transfers to or from securities held-to-maturity during the nine months ended September 30, 2025.
BOLI increased $106.2 million during the nine months ended September 30, 2025, to $396.9 million, due to completion of the restructuring initiative that began in late 2024, as well as purchases of new BOLI assets.
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Table of Contents
Liabilities . Total liabilities increased $129.9 million during the nine months ended September 30, 2025, to $13.09 billion at period end, primarily due to an increase of $375.5 million in deposits (including mortgage escrow accounts), partially offset by decreases of $100.0 million in FHLBNY advances, $55.2 million in derivative cash collateral, $50.0 million in short-term borrowings, $30.7 million in derivative liabilities and $9.0 million in other liabilities.
Stockholders’ Equity . Stockholders’ equity increased $55.8 million during the nine months ended September 30, 2025, to $1.45 billion at period end, primarily due to net income of $78.8 million and other comprehensive income of $11.4 million, partially offset by common stock dividends of $32.8 million, and preferred stock dividends of $5.5 million.
Comparison of Operating Results for the Three Months Ended September 30, 2025 and 2024
General. Net income was $27.7 million during the three months ended September 30, 2025, compared to net income of $13.3 million for the three months ended September 30, 2024. During the three months ended September 30, 2025, net interest income increased by $23.5 million, non-interest income increased by $4.6 million, income tax expense increased by $7.5 million, non-interest expense increased by $4.5 million, and the credit loss provision increased by $1.7 million, compared to the three months ended September 30, 2024.
The discussion of net interest income for the three months ended September 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 $946 thousand during the three months ended September 30, 2025, compared to net loan fees of $849 thousand during the three months ended September 30, 2024. The increase in net loan fees was primarily due to increases in deferred fees and late fees on loans in 2025.
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Analysis of Net Interest Income
Three Months Ended September 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)
$
2,957,434
$
50,271
6.74
%
$
2,609,934
$
46,656
7.11
%
One-to-four family residential and coop/condo apartment (3) (6)
1,023,844
12,120
4.70
924,150
11,024
4.75
Multifamily residential and residential mixed-use (3) (6)
3,591,822
41,712
4.61
3,902,220
45,790
4.67
Non-owner-occupied commercial real estate (3) (6)
3,067,598
40,439
5.23
3,297,760
44,804
5.40
ADC (3)
145,902
3,184
8.66
147,875
3,505
9.43
Other loans (3)
7,515
30
1.58
4,891
49
3.99
Securities
1,340,223
11,338
3.36
1,493,492
7,766
2.07
Other short-term investments
1,503,698
16,449
4.34
353,924
4,645
5.22
Total interest-earning assets
13,638,036
175,543
5.11
%
12,734,246
164,239
5.13
%
Non-interest earning assets
787,966
768,507
Total assets
$
14,426,002
$
13,502,753
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking (2)
$
1,069,761
$
5,306
1.97
%
$
798,024
$
4,635
2.31
%
Money market
4,359,512
34,877
3.17
3,771,562
36,841
3.89
Savings (2)
1,821,289
13,273
2.89
2,102,282
19,492
3.69
CDs
1,116,152
9,494
3.37
1,232,984
13,057
4.21
Total interest-bearing deposits
8,366,714
62,950
2.99
7,904,852
74,025
3.73
FHLBNY advances
508,000
4,104
3.21
528,652
4,455
3.35
Subordinated debt, net
272,429
4,301
6.26
271,450
4,307
6.31
Other short-term borrowings
76
1
5.22
131
2
6.07
Total borrowings
780,505
8,406
4.27
800,233
8,764
4.36
Derivative cash collateral
63,856
788
4.90
91,305
1,526
6.65
Total interest-bearing liabilities
9,211,075
72,144
3.11
%
8,796,390
84,315
3.81
%
Non-interest-bearing checking (2)
3,573,448
3,209,502
Other non-interest-bearing liabilities
183,627
223,546
Total liabilities
12,968,150
12,229,438
Stockholders' equity
1,457,852
1,273,315
Total liabilities and stockholders' equity
$
14,426,002
$
13,502,753
Net interest income
$
103,399
$
79,924
Net interest rate spread (4)
2.00
%
1.32
%
Net interest-earning assets
$
4,426,961
$
3,937,856
Net interest margin (5)
3.01
%
2.50
%
Ratio of interest-earning assets to interest-bearing liabilities
148.06
%
144.77
%
Deposits (including non-interest-bearing checking accounts) (2)
$
11,940,162
$
62,950
2.09
%
$
11,114,354
$
74,025
2.65
%
(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 September 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
Rate/Volume Analysis
Three Months Ended September 30, 2025
Compared to Three Months Ended September 30, 2024
Increase / (Decrease) Due to:
Volume
Rate
Total
(Dollars in thousands)
Interest-earning assets:
Business loans (1) (2)
$
6,139
$
(2,524)
$
3,615
One-to-four family residential and coop/condo apartment
1,203
(107)
1,096
Multifamily residential and residential mixed-use
(3,571)
(507)
(4,078)
Non-owner-occupied commercial real estate
(3,042)
(1,323)
(4,365)
ADC
(40)
(281)
(321)
Other loans
19
(38)
(19)
Securities
(1,042)
4,614
3,572
Other short-term investments
13,859
(2,055)
11,804
Total interest-earning assets
$
13,525
$
(2,221)
$
11,304
Interest-bearing liabilities:
Interest-bearing checking
$
1,469
$
(798)
$
671
Money market
5,323
(7,287)
(1,964)
Savings
(2,296)
(3,923)
(6,219)
CDs
(1,096)
(2,467)
(3,563)
FHLBNY advances
(169)
(182)
(351)
Subordinated debt, net
22
(28)
(6)
Other short-term borrowings
(1)
—
(1)
Derivative cash collateral
(397)
(341)
(738)
Total interest-bearing liabilities
$
2,855
$
(15,026)
$
(12,171)
Net change in net interest income
$
10,670
$
12,805
$
23,475
(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 $103.4 million during the three months ended September 30, 2025, an increase of $23.5 million from the three months ended September 30, 2024. Average interest-earning assets were $13.64 billion for the three months ended September 30, 2025, an increase of $903.8 million from $12.73 billion for the three months ended September 30, 2024. The net interest margin was 3.01% during the three months ended September 30, 2025, up from 2.50% during the three months ended September 30, 2024.
Interest Income. Interest income was $175.5 million during the three months ended September 30, 2025, compared to $164.2 million during the three months ended September 30, 2024. During the three months ended September 30, 2025, interest income increased $11.3 million from the three months ended September 30, 2024, primarily reflecting increases in interest income of $11.8 million in other short-term investments, $3.6 million on business loans, $3.6 million on securities and $1.1 million on one-to-four family residential and coop/condo apartment loans, partially offset by a decrease of $4.4 million on non-owner-occupied commercial real estate loans and a decrease of $4.1 million on multifamily residential and residential mixed-use loans.
The increased interest income on other short-term investments, which is comprised of cash and due from banks and restricted stock, was related to a $1.15 billion increase in the average balances, partially offset by an 88-basis point decrease in the yield of such investments in the period. The increased interest income on business loans was due to a $347.5 million increase in the average balances, partially offset by a 37-basis point decrease in the yield of such loans in the period. The increased interest income on securities was related to a 129-basis point increase in the yield, partially offset by a decrease of $153.3 million in the average balances of such securities in the period. The increased interest income on one-to-four family residential and coop/condo apartment loans was related to a $99.7 million increase in the average balances, partially offset by a 5-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 $230.2 million decrease in the average balance and a 17-basis point decrease 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 $310.4 million decrease in the average balance and a 6-basis point decrease in the yield of such loans in the period.
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Table of Contents
Interest Expense. Interest expense was $72.1 million during the three months ended September 30, 2025, compared to $84.3 million during the three months ended September 30, 2024. During the three months ended September 30, 2025, interest expense decreased $12.2 million, primarily reflecting a decrease in interest expense of $11.1 million on deposits, a decrease in interest expense of $738 thousand on derivative cash collateral, and a decrease in interest expense of $351 thousand on FHLBNY advances.
The decreased interest expense on deposits was primarily due to an 80-basis point decrease in rates paid on savings accounts and a $281.0 million decrease in average balances of such deposits, an 84-basis point decrease in rates paid on CDs and a $116.8 million decrease in the average balance of such deposits, and a 72-basis point decrease in rates paid on money market accounts, partially offset by a $588.0 million increase in average balances of such deposits in the period. The decreased interest expense on derivative cash collateral was due to a $27.5 million decrease in the average balance and a 175-basis point decrease in the cost of such derivatives in the period.
Provision for Credit Losses. We recorded a credit loss provision of $13.3 million and $11.6 million during the three months ended September 30, 2025 and 2024, respectively. The $13.3 million credit loss provision for the three months ended September 30, 2025, was primarily attributable to charge-offs on loans in the owner occupied and non-owner occupied real estate segments. The $11.6 million credit loss provision for the three months ended September 30, 2024, was primarily associated with increased provisioning for the Bank’s business loan portfolio.
Non-Interest Income. Non-interest income totaled $12.2 million for the three months ended September 30, 2025, compared to $7.6 million for the same period in 2024. The increase was primarily driven by a $2.4 million increase in BOLI income and a $1.9 million increase in other non-interest income.
Non-Interest Expense. Non-interest expense totaled $62.2 million for the three months ended September 30, 2025, compared to $57.7 million for the same period in 2024. The change was primarily driven by a $2.2 million increase in salaries and employee benefits.
Non-interest expense was 1.73% and 1.71% of average assets during the three months ended September 30, 2025 and 2024, respectively.
Income Tax Expense. Income tax expense was $12.4 million during the three months ended September 30, 2025, compared to income tax expense of $4.9 million during the three months ended September 30, 2024. The reported effective tax rate for the three months ended September 30, 2025 and 2024 was 31.0%, and 26.9%, respectively.
Comparison of Operating Results for the Nine Months Ended September 30, 2025 and 2024
General. Net income was $78.8 million during the nine months ended September 30, 2025, compared to net income of $49.5 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, net interest income increased by $68.8 million, non-interest income increased by $3.5 million, non-interest expense increased by $22.1 million, income tax expense increased by $11.1 million and the credit loss provision increased by $9.7 million, compared to the nine months ended September 30, 2024.
The discussion of net interest income for the nine months ended September 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 $3.2 million during the nine months ended September 30, 2025, compared to net loan fees of $545 thousand during the nine months ended September 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
Nine Months Ended September 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)
$
2,834,746
$
141,911
6.69
%
$
2,440,113
$
128,813
7.05
%
One-to-four family residential and coop/condo apartment (3) (6)
989,236
34,721
4.69
898,941
30,762
4.57
Multifamily residential and residential mixed-use (3) (6)
3,709,088
126,503
4.56
3,953,593
137,584
4.65
Non-owner-occupied commercial real estate (3) (6)
3,152,779
123,587
5.24
3,342,570
134,308
5.37
ADC (3)
140,189
9,099
8.68
160,598
10,835
9.01
Other loans (3)
6,803
88
1.73
5,136
190
4.94
Securities
1,357,938
34,014
3.35
1,536,280
23,553
2.05
Other short-term investments
1,077,183
35,035
4.35
454,002
18,621
5.48
Total interest-earning assets
13,267,962
504,958
5.09
%
12,791,233
484,666
5.06
%
Non-interest earning assets
806,832
780,477
Total assets
$
14,074,794
$
13,571,710
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking (2)
$
976,018
$
13,611
1.86
%
$
670,957
$
7,357
1.46
%
Money market
4,204,642
98,988
3.15
3,543,314
100,672
3.80
Savings (2)
1,905,071
41,507
2.91
2,268,534
65,411
3.85
CDs
1,055,520
27,099
3.43
1,426,805
46,532
4.36
Total interest-bearing deposits
8,141,251
181,205
2.98
7,909,610
219,972
3.71
FHLBNY advances
508,366
12,223
3.21
763,839
23,027
4.03
Subordinated debt, net
272,385
12,904
6.33
224,794
9,464
5.62
Other short-term borrowings
235
14
7.97
70
3
5.72
Total borrowings
780,986
25,141
4.30
988,703
32,494
4.39
Derivative cash collateral
82,242
2,903
4.72
122,278
5,244
5.73
Total interest-bearing liabilities
9,004,479
209,249
3.11
%
9,020,591
257,710
3.82
%
Non-interest-bearing checking (2)
3,437,001
3,054,455
Other non-interest-bearing liabilities
194,982
238,028
Total liabilities
12,636,462
12,313,074
Stockholders' equity
1,438,332
1,258,636
Total liabilities and stockholders' equity
$
14,074,794
$
13,571,710
Net interest income
$
295,709
$
226,956
Net interest rate spread (4)
1.98
%
1.24
%
Net interest-earning assets
$
4,263,483
$
3,770,642
Net interest margin (5)
2.98
%
2.37
%
Ratio of interest-earning assets to interest-bearing liabilities
147.35
%
141.80
%
Deposits (including non-interest-bearing checking accounts) (2)
$
11,578,252
$
181,205
2.09
%
$
10,964,065
$
219,972
2.68
%
(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 September 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
Nine Months Ended September 30, 2025
Compared to Nine Months Ended September 30, 2024
Increase / (Decrease) Due to:
Volume
Rate
Total
Interest-earning assets:
Business loans (1) (2)
$
20,239
$
(7,141)
$
13,098
One-to-four family residential and coop/condo apartment
3,119
840
3,959
Multifamily residential and residential mixed-use
(8,462)
(2,619)
(11,081)
Non-owner-occupied commercial real estate
(7,547)
(3,174)
(10,721)
ADC
(1,357)
(379)
(1,736)
Other loans
42
(144)
(102)
Securities
(3,606)
14,067
10,461
Other short-term investments
22,897
(6,483)
16,414
Total interest-earning assets
$
25,325
$
(5,033)
$
20,292
Interest-bearing liabilities:
Interest-bearing checking
$
3,789
$
2,465
$
6,254
Money market
17,169
(18,853)
(1,684)
Savings
(9,210)
(14,694)
(23,904)
CDs
(10,808)
(8,625)
(19,433)
FHLBNY advances
(6,910)
(3,894)
(10,804)
Subordinated debt, net
2,123
1,317
3,440
Other short-term borrowings
8
3
11
Derivative cash collateral
(1,566)
(775)
(2,341)
Total interest-bearing liabilities
$
(5,405)
$
(43,056)
$
(48,461)
Net change in net interest income
$
30,730
$
38,023
$
68,753
(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 $295.7 million during the nine months ended September 30, 2025, an increase of $68.8 million from the nine months ended September 30, 2024. Average interest-earning assets were $13.27 billion for the nine months ended September 30, 2025, an increase of $476.7 million from $12.79 billion for the nine months ended September 30, 2024. Net interest margin was 2.98% during the nine months ended September 30, 2025, up from 2.37% during the nine months ended September 30, 2024.
Interest Income. Interest income was $505.0 million during the nine months ended September 30, 2025, compared to $484.7 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, interest income increased $20.3 million from the nine months ended September 30, 2024, primarily reflecting increases in interest income of $16.4 million on other short-term investments, $13.1 million on business loans, $10.5 million on securities, and $4.0 million on one-to-four family residential and coop/condo apartment loans, partially offset by decreases in interest income of $11.1 million on multifamily loans, $10.7 million on non-owner-occupied loans, and $1.7 million on ADC loans.
The increased interest income on other short-term investments (comprised of cash and due from banks and restricted stock) was related to a $623.2 million increase in the average balances, partially offset by a 113-basis point decrease in the yield of such investments in the period. The increased interest income on business loans was due to a $394.6 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 130-basis point increase in the yield, partially offset by a decrease of $178.3 million in the average balances of such securities in the period. The increased interest income on one-to-four family residential and coop/condo apartment loans was related to a $90.3 million increase in the average balances and a 12-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 $244.5 million decrease in the average balance and a 9-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 $189.8 million decrease in the average balance and a 13-basis point decrease in the yield of such loans in the period. The decreased interest income on ADC loan income reflected a $20.4 million decrease in the average balance and a 33-basis point decrease in the yield of such loans in the period.
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Interest Expense. Interest expense was $209.2 million during the nine months ended September 30, 2025, compared to $257.7 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, interest expense decreased $48.5 million, primarily reflecting decreases in interest expense of $38.8 million on deposits, $10.8 million on FHLBNY advances and $2.3 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 94-basis point decrease in rates paid on savings accounts and a $363.5 million decrease in average balances of such deposits. There was a $371.3 million decrease in the average balance of CDs and a 93-basis point decrease in the cost of such deposits in the period. There was a 65-basis point decrease in rates paid on money market accounts, partially offset by a $661.3 million increase in average balances of such deposits. There was a $305.1 million increase in the average balance of interest-bearing checking accounts and a 40-basis point increase in the rates paid on such deposits partially offset the overall decline. The decreased interest expense on FHLBNY advances was due to a $255.5 million decrease in the average balance and an 82-basis point decrease in the cost of FHLBNY advances in the period. The decreased interest expense on derivative cash collateral was due to a $40.0 million decrease in the average balance and a 101-basis point decrease in the cost of such derivatives in the period. The increased interest expense on subordinated debt was due to a $47.6 million increase in the average balance and a 71-basis point increase in the cost of such debt in the period.
Provision for Credit Losses. We recorded a credit loss provision of $32.1 million during the nine months ended September 30, 2025, compared to a credit loss provision of $22.4 million for the nine months ended September 30, 2024. The $32.1 million credit loss provision for the nine months ended September 30, 2025, was attributable to updates in the macroeconomic forecast, updated loss driver models, and charge-offs on loans in the owner occupied and non-owner occupied real estate segments. The $22.4 million credit loss provision for the nine months ended September 30, 2024 was primarily associated with increased provisioning for the Bank’s business and multifamily loan portfolios.
Non-Interest Income. Non-interest income was $33.4 million during the nine months ended September 30, 2025, compared to $29.9 million during the nine months ended September 30, 2024. The increase was primarily driven by a $5.6 million increase in BOLI income, a $2.6 million increase in other non-interest income, a $1.7 million increase in service charges and other fees income and a $1.4 million increase in the fair value change in equity securities and loans held for sale, partially offset by a $7.8 million reduction in gains on sale of Bank’s premises.
Non-Interest Expense. Non-interest expense was $188.0 million during the nine months ended September 30, 2025, compared to $165.9 million during the nine months ended September 30, 2024. The increase in non-interest expense was primarily due to a $9.9 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 1.78% and 1.63% of average assets during the nine months ended September 30, 2025 and 2024, respectively.
Income Tax Expense. Income tax expense was $30.1 million during the nine months ended September 30, 2025, compared to income tax expense of $19.0 million during the nine months ended September 30, 2024. The reported effective tax rate for the nine months ended September 30, 2025 and 2024 was 27.7%, and 27.8%, 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.