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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-20 · 113 added, 110 removed, 436 unchanged (34% of the section changed)

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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.

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.

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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.

Critical Accounting Estimates

Critical accounting estimates are those estimates made in accordance with Generally Accepted Accounting Principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or the results of the operations of the Registrant.

Critical accounting estimates are those estimates made in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”) that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or the results of the operations of the Registrant.

Note 1 Summary of Significant Accounting Policies (page 53), to the Company’s Audited Consolidated Financial Statement for the year ended December 31, 2025 contains a summary of significant accounting policies.

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Methods and Assumptions Underlying the Estimate

On January 1, 2021, we adopted the Current Expected Credit Losses (“CECL”) Standard, which requires that loans held for investment be accounted for under the current expected credit losses model.

The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio.

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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.

Although management believes that it uses the best information available to establish the Allowance for Credit Losses (“ACL”), 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.

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

For example, if at June 30, 2025, the four-quarter national unemployment rate forecast had increased 100 basis points our quantitative ACL reserve would have increased 8.3%, or conversely, if the four-quarter national unemployment rate forecast had decreased 100 basis points our quantitative ACL reserve would have decreased 7.7%.

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

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

Future additions or reductions to the allowance may be necessary

based on changes in economic, market or other conditions.

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

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

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.

In addition, various federal bank regulatory agencies (“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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Net income was $110.7 million in 2025, compared to $29.1 million in 2024, and $96.1 million in 2023.

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

During 2025, net interest income increased by $89.9 million, non-interest income increased by $48.9 million, partially offset by an increase in non-interest expense of $26.6 million, an increase in income tax expense of $23.8 million and an increase in provision for credit losses of $6.9 million.

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

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

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

The discussion of net interest income for the years ended December 31, 2025, 2024, and 2023 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.

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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.

Loan fees included in interest income were $1.0 million in 2024, $1.5 million in 2023, and $3.1 million in 2022.

The decrease in loan fees in 2024 was primarily due to a decline in loan prepayment fees.

There are no out-of-period adjustments included in the rate/volume analysis in the following table.

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

Net loan fees included in interest income were $4.2 million in 2025, $1.0 million in 2024, and $1.5 million in 2023.

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

Average Balance Sheets

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Business loans (1) (3) (6)

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

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

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

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

Acquisition, development, and construction ("ADC") (3)

Other loans (3)

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Interest-bearing checking

Certificates of deposit ("CDs")

Total interest-bearing deposits

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

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

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

(2) Includes mortgage escrow deposits.

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

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

(6) At December 31, 2025 and 2024, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged one-to-four family residential mortgage loans, multifamily residential mortgage loans and commercial real estate (“CRE”) loans .

Rate/Volume Analysis

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Business loans

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

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

Multifamily residential and residential mixed-use

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Net change in net interest income

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

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

Net Interest Income.

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Interest income was $685.4 million in 2025, $650.1 million in 2024, and $609.4 million in 2023.

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

During 2025, interest income increased $35.3 million from 2024, primarily reflecting increases in interest income of $30.9 million on other short-term investments, $19.6 million on business loans, $11.8 million in securities and $5.3 million on one-to-four family loans, partially offset by a decrease of $15.8 million on multifamily residential and residential mixed-use loans and a decrease of $14.4 million on non-owner-occupied commercial real estate loans.

The increased interest income from short-term investments, which is comprised of cash and due from banks and restricted stock, was related to an $867.5 million increase in the average balances, partially offset by an 105-basis point decrease in the yield of such investments in the period.

The increased interest income on business loans was due to a $414.1 million increase in the average balances, partially offset by a 32-basis point decrease in the yield of such loans in the period.

The increased interest income on securities was related to a 113-basis point increase in the yield, partially offset by a decrease of $159.5 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 a result of a $91.4 million increase in the average balances and a 10-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 $280.9 million decrease in the average balance and an 8-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 $219.8 million decrease in the average balance and a 9-basis point decrease in the yield of such loans in the period.

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

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

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

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

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

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

The increased

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

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

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

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

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

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

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

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

Interest Expense.

Interest expense was $277.4 million in 2025, $332.1 million in 2024, and $292.8 million in 2023.

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

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

During 2025, interest expense decreased $54.7 million from 2024, primarily reflecting decreases in interest expense of $27.3 million on savings accounts, $21.2 million on CDs, $10.9 million on FHLBNY advances and $2.9 million on derivative cash collateral, partially offset by an increase in interest expense of $7.5 million on interest-bearing checking accounts and an increase in interest expense of $3.7 million on subordinated debt.

The decreased interest expense on savings accounts was primarily due to an 86-basis point decrease in rates paid on savings accounts and a $307.2 million decrease in average balances of such deposits.

The decrease in interest expense on CDs was related to a decrease of $278.8 million in the average balances of CDs and an 87-basis point decrease in rates paid on CDs.

The decreased interest expense on FHLBNY advances was due to a $191.7 million decrease in the average balance on FHLB advances and a 67-basis point decrease in the cost of such advances in the period.

The decrease in interest expense on money market accounts was due to a 65-basis point decrease in rates paid on money market accounts, partially offset by a $664.2 million increase in average balances of such deposits in the period.

The decreased interest expense on derivative cash collateral was due to a $41.7 million decrease in the average balance of derivative cash collateral and an 81-basis point decrease in the cost of such derivatives in the period.

The increase in interest expense on interest-bearing checking accounts was related to a $310.3 million increase in average balances of interest-bearing checking accounts and a 22-basis point increase in the rates paid on such deposits.

The increase in interest expense on subordinated debt was due to a $35.7 million increase in the average balance of subordinated debt and a 59-basis point increase in the cost of such debt in the period.

During 2024, interest expense increased $39.3 million from 2023, primarily reflecting increases in interest expense of $65.7 million on deposits and $3.6 million on subordinated debt, partially offset by a decrease of $28.9 million in FHLBNY advances.

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

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

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

During 2023, interest expense increased $233.4 million from 2022, primarily reflecting increases in interest expense of $73.1 million on money market accounts, $57.4 million on savings accounts, $49.1 million on FHLBNY advances and $44.7 million on CDs.

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

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

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

The decreased interest expense on FHLBNY advances was related to a $551.9 million decrease in the average balance of FHLB advances and a 58-basis point decrease in the cost of such advances in the period.

Provision for Credit Losses.

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

The Company recorded a credit loss provision of $43.0 million in 2025, $36.1 million in 2024 and $2.8 million in 2023.

The $43.0 million provision for credit losses recognized in 2025 was attributable to updates in the macroeconomic forecast, updated loss driver models, and charge-offs on non-owner-occupied real estate loans.

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

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

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

Non-Interest Income.

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

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

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

Non-interest income was $44.9 million in 2025, compared to a loss of $4.0 million in 2024, and income of $36.2 million in 2023.

During 2025, non-interest income increased $48.9 million from 2024, primarily driven by a $43.0 million change in the net loss on sale of securities resulting from the 2024 securities portfolio restructuring, a $7.0 million increase in BOLI income and a $3.2 million increase in service charges and other fees, partially offset by a change of $8.4 million from gain on sale of other assets.

During 2024, non-interest income decreased $40.2 million from 2023, primarily due to an increase of $41.4 million in net loss on sale of securities resulting from the 2024 securities

portfolio restructuring and a decrease of $5.0 million in loan level derivative income, partially offset by an increase of $7.2 million from a gain on sale of other assets.

Non-Interest Expense.

Non-interest expense was $253.1 million in 2025, $226.5 million in 2024, and $213.1 million in 2023.

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

During 2025, non-interest expense increased $26.6 million from 2024, primarily due to a $14.9 million increase in salaries and employee benefits due to hiring bankers to support core deposit and business loan growth.

In addition, during 2025, the Company recorded a $7.2 million loss from a pension settlement recorded during the first quarter of 2025.

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

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

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

Non-interest expense was 1.77%, 1.66%, and 1.56% of average assets during 2025, 2024, and 2023, respectively.

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Income tax expense was $46.1 million in 2025, $22.4 million in 2024, and $40.8 million in 2023.

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

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

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

Income tax expense increased $23.8 million during 2025 compared to 2024, primarily as a result of higher pre-tax income during 2025 and discrete items related to an uncertain tax position and a deferred tax item from prior tax years.

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

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

The Company’s consolidated tax rate was 29.4%, 43.5% and 29.8% in 2025, 2024, and 2023, respectively.

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

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

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

During the period, the Bank had originations of $570.9 million.

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

Assets totaled $15.34 billion at December 31, 2025, $988.4 million above their level at December 31, 2024, primarily due to an increase in cash and due from banks of $1.07 billion, an increase in BOLI of $110.5 million and an increase in total securities of $88.8 million, partially offset by a decrease in the loan portfolio of $122.4 million, a decrease in other assets of $88.0 million, a decrease in derivative assets of $40.2 million and a decrease in loans held for sale of $20.6 million.

Total net loans held for investment decreased $122.4 million during the year ended December 31, 2025, to $10.66 billion at period end.

During the period, loan originations, excluding new lines, were $701.1 million.

Total securities increased $88.8 million during the year ended December 31, 2025, to $1.42 billion at period end, primarily due to purchases of $274.4 million and a decrease in unrealized losses of $23.7 million, offset in part by proceeds from principal payments, calls and maturities of $170.8 million and the proceeds from the sale of available for sale securities of $38.8 million.

There were no transfers to or from securities held-to-maturity for the year ended December 31, 2025 or 2024.

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

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

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

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

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

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

BOLI increased $110.5 million during the year ended December 31, 2025, to $401.2 million.

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

Total liabilities increased $909.1 million during the year ended December 31, 2025, to $13.87 billion at period end, primarily due to an increase in deposits of $1.16 billion, partially offset by a decrease in FHLBNY advances of $100.0 million, a decrease in derivative cash collateral of $60.0 million, a decrease in other short-term borrowings of $50.0 million and a decrease in derivative liabilities of $34.8 million.

Stockholders’ Equity.

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

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

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

Stockholders’ equity increased $79.3 million during the year ended December 31, 2025, to $1.48 billion at period end, primarily due to net income for the period of $110.7 million and a decrease in accumulated other comprehensive loss of $13.6 million, offset in part by common stock dividends of $43.8 million and preferred stock dividends of $7.3 million.

Loan Portfolio Composition

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Business loans (1)

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

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

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

Acquisition, development, and construction ("ADC")

Fair value hedge basis point adjustments (2)

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

At December 31, 2024 and 2023, the Bank had recorded servicing right assets ("SRAs") of $2.4 million and $2.9 million, respectively, associated with the sale of loans to third-party institutions in which the Bank retained the servicing of the loan.

At December 31, 2025 and 2024, the Bank had recorded servicing rights assets ("SRAs") of $2.1 million and $2.4 million, respectively, associated with the sale of loans to third-party institutions in which the Bank retained the servicing of the loan.

The Bank outsources the servicing of a portion of our one-to-four family mortgage loan portfolio to an unrelated third-party under a sub-servicing agreement.

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(In thousands)

Less than 1 year

Business loans

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

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

Multifamily residential and residential mixed-use

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(In thousands)

Less than 1 year

Variable rate loans

Concentrations of Lending Activities

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

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

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

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 59% and 65% of total loans held for investment as of December 31, 2025 and 2024, respectively.

Non-owner-occupied commercial real estate loans represent 27% and 30% of total loans held for investment as of December 31, 2025 and 2024, respectively.

Multifamily residential and residential mixed-use loans made up 32% and 35% of total loans held for investment as of December 31, 2025 and 2024, respectively.

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

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(2) Composition based on revenue.

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

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.

December 31, 2025

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

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

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

Monitoring and Collection of Delinquent Loans

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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.

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

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.

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Reserve for Unfunded Loan Commitments

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

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

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

The amount of reserve was $2.2 million and $2.7 million at December 31, 2025 and 2024, respectively.

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

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Provision for credit losses of $43.0 million and $36.1 million were recorded during the twelve-month periods ended December 31, 2025 and 2024, respectively.

The credit loss provision for the year ended December 31, 2025, was attributable to updates in the macroeconomic forecast, updated loss driver models, and charge-offs on non-owner-occupied real estate loans.

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

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

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

For further discussion of the allowance for credit losses and related activity during the years ended December 31, 2025, 2024 and 2023, please see Note 4 “Loans Held for Investment, Net” to the Consolidated Financial Statements.

The following table presents our allowance for credit losses allocated by loan type and the percent of each to total loans at the dates indicated:

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Business loans

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

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

Multifamily residential and residential mixed-use

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Business loans

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

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

Multifamily residential and residential mixed-use

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The weighted average duration of our securities available-for-sale approximated 2.7 years as of December 31, 2025, when giving consideration to anticipated repayments or possible prepayments, which is significantly less than their weighted average maturity.

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

The following table presents the weighted average contractual maturity of our securities available-for-sale at December 31, 2025:

Corporate securities

Pass-through MBS issued by U.S.

GSEs and agency collateralized mortgage obligations ("CMOs")

GSEs and agency CMOs

State and municipal obligations

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The weighted average duration of our securities held-to-maturity approximated 4.7 years as of December 31, 2025 when giving consideration to anticipated repayments or possible prepayments, which is significantly less than their weighted average maturity.

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

The following table presents the weighted average contractual maturity of our securities held-to-maturity at December 31, 2025:

Corporate securities

Pass-through MBS issued by GSEs and agency CMOs

Pass-through MBS issued by U.S.

GSEs and agency CMOs

Sources of Funds

The following table presents our deposit accounts and the related weighted average interest rates at the dates indicated (Dollars in thousands):

December 31, 2024

December 31, 2023

December 31, 2022

The following table presents our deposit accounts and the related weighted average interest rates at the dates indicated:

(Dollars in thousands)

Savings accounts

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Non-interest-bearing checking accounts

The weighted average maturity of our CDs at December 31, 2024 was 5.8 months, compared to 5.1 months at December 31, 2023.

The weighted average maturity of our CDs (excluding brokered deposits) at December 31, 2025 was 4.9 months, compared to 5.8 months at December 31, 2024.

Non-insured deposits (excluding collateralized deposits and deposits with pass through insurance) represented 34.0% and 31.2% of total deposits as of December 31, 2025 and 2024, respectively.

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

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

The Bank had $2.12 billion and $1.89 billion of public funds collateralized by securities and Municipal Letters of Credit (“MULOC”), and $1.80 billion and $1.55 billion of deposits with pass through insurance as of December 31, 2025, and 2024, respectively.

The following table presents the time deposits with balances exceeding the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurance limit by maturity at December 31, 2025:

(Dollars in thousands)

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Core deposit growth was used to reduce the brokered deposit position over the course of 2025.

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

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

The Bank’s total borrowing line with Federal Home Loan Bank New York (“FHLBNY”) equaled $3.46 billion at December 31, 2025.

The Bank had $508.0 million of FHLBNY advances outstanding at December 31, 2025, and $608.0 million at December 31, 2024.

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

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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 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 (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”).

The Company may additionally issue debt or equity under appropriate circumstances.

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The availability of funds changes daily.

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

At December 31, 2025, the Bank did not utilize funds available through the AFX.

At December 31, 2024, the Bank had $50.0 million of

such borrowings outstanding through the AFX, which was 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 December 31, 2024 and December 31, 2023, the Bank did not have any repurchase agreements.

The Bank did not have any repurchase agreements as of December 31, 2025 or 2024, respectively.

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

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

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

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

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

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

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

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

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

Total deposits (including mortgage escrow deposits) increased $1.16 billion during the year ended December 31, 2025 and $1.16 billion during the year ended December 31, 2024, respectively.

Within deposits, core deposits ( i.e., non-CDs) increased $1.26 billion during the year ended December 31, 2025 compared to an increase of $1.74 billion during the year ended December 31, 2024.

The increase in core deposits during the 2025 period was primarily due to an increase in money market deposits, non interest bearing checking and interest-bearing checking accounts, partially offset by a decrease in savings accounts.

During 2025 and 2024, the Company made significant investments in its Private and Commercial Bank, including the hiring and onboarding of several deposit-gathering teams.

CDs increased $48.0 million during the year ended December 31, 2025 compared to a decrease of $538.6 million during the year ended December 31, 2024.

The increase in CDs during the current period was primarily due to a $118.0 million increase in non-brokered time deposits, offset by a decrease of $70.0 million in brokered CDs.

The Bank reduced its outstanding FHLBNY advances by $100.0 million during the year ended December 31, 2025, compared to a $705.0 million reduction during the year ended December 31, 2024.

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

Subordinated debentures totaled $272.5 million at December 31, 2025 compared to $272.3 million at December 31, 2024.

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

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

On January 26, 2026 the Company announced that it intends to redeem at par on March 30, 2026 all of its outstanding $40,000,000 principal amount of Fixed/Floating Subordinated Debentures due 2030.

See Note 13, “Subordinated Debentures” to our Consolidated Financial Statements for further information.

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

At December 31, 2025, the Bank had remaining borrowing capacity of $1.52 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements ( i.e.

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At December 31, 2025, an available line of credit totaling $349.2 million was in place at the FRB backed by investment securities with no advances drawn.

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

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

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

Additionally, at December 31, 2025, a line of credit totaling $3.56 billion was in place at the FRB secured by certain qualifying one-to-four family residential mortgage loans, construction loans and CRE loans with no amounts drawn.

During the year ended December 31, 2025 and 2024, business loan originations excluding new lines were $402.2 million and $371.2 million, respectively.

During the year ended December 31, 2025 and 2024, real estate loan originations excluding new lines (excluding owner-occupied commercial real estate) totaled $298.9 million and $199.6 million, respectively.

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

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At December 31, 2025, each of the Company and the Bank were in compliance with all applicable regulatory capital requirements and the Bank was considered "well capitalized" for all regulatory purposes.

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

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

The Company did not repurchase any shares of its common stock during the year ended December 31, 2025 or 2024, respectively.

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

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

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

The Holding Company paid $38.0 million and $37.3 million in cash dividends on its common stock during the years ended December 31, 2024 and 2023, respectively.

The Company paid $7.3 million in cash dividends on its preferred stock during the years ended December 31, 2025 and 2024, respectively.

The Company paid $42.9 million and $38.0 million in cash dividends on its common stock during the years ended December 31, 2025 and 2024, respectively.

Contractual Obligations

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

The Bank has pledged $28.0 million of pass-through MBS issued by GSEs as collateral.

The Bank has pledged $27.9 million of pass-through MBS issued by U.S.

Government-Sponsored Enterprises (“U.S.

GSEs”) as collateral.

Recently Issued Accounting Standards

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

What changed 10-K

Item 7. Management’s Discussion and Analysis