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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-01 · 208 added, 115 removed, 354 unchanged (48% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

Dime Commercial Bancshares, Inc., formerly known as Dime Community Bancshares, Inc., is a New York corporation and bank holding company formed in 1988.

Dime Commercial Bank, formerly known as Dime Community Bank, is the Company’s wholly-owned subsidiary.

The name change became effective during the quarter ended June 30, 2026 and did not affect the Company’s organizational structure, operations, or financial results.

On a parent-only basis, the Company has minimal operations, other than as owner of Dime Commercial Bank.

The Company is dependent on dividends from its wholly-owned subsidiary, Dime Commercial 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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At or for the

Three Months Ended

Six Months Ended

Per Share Data:

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(1) Non-performing loans are defined as all loans on non-accrual status.

(2) March 31, 2026 balance includes one non-performing available for sale security in the amount of $450 thousand.

(2) June 30, 2026 balance includes one non-performing available for sale security in the amount of $450 thousand.

Critical Accounting Policies

46 unchanged sentences

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.

In addition, a twelve-month liquidity forecast is presented to ALCO 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.

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The availability of funds changes daily.

At March 31, 2026 and December 31, 2025, the Bank did not have any such borrowings outstanding through the AFX.

At June 30, 2026 and December 31, 2025, the Bank did not have any such borrowings outstanding through the AFX.

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

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

As of March 31, 2026 and December 31, 2025, the Bank did not have any repurchase agreements.

As of June 30, 2026 and December 31, 2025, the Bank did not have any repurchase agreements.

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

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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) decreased $242.2 million during the three months ended March 31, 2026, compared to a decrease of $70.2 million during the three months ended March 31, 2025.

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

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

Total deposits (including mortgage escrow deposits) decreased $164.1 million during the six months ended June 30, 2026, compared to an increase of $54.0 million during the six months ended June 30, 2025.

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

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

At March 31, 2026, the Bank had remaining borrowing capacity of $1.65 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements ( i.e.

At June 30, 2026, the Bank had remaining borrowing capacity of $1.61 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 March 31, 2026, an available line of credit totaling $339.0 million was in place at the FRB backed by investment securities with no advances drawn.

Additionally, at March 31, 2026, a line of credit totaling $3.65 billion was in place at the FRB secured by certain qualifying one-to-four family residential mortgage loans, construction loans and commercial real estate loans with no amounts drawn.

The Bank reduced its outstanding FHLBNY advances by $73.0 million during the three months ended March 31, 2026, compared to a reduction of $100.0 million during the three months ended March 31, 2025.

At June 30, 2026, an available line of credit totaling $335.4 million was in place at the FRB backed by investment securities with no advances drawn.

Additionally, at June 30, 2026, a line of credit totaling $3.88 billion was in place at the FRB secured by certain qualifying one-to-four family residential mortgage loans, construction loans and commercial real estate loans with no amounts drawn.

The Bank reduced its outstanding FHLBNY advances by $123.0 million during the six months ended June 30, 2026, compared to a reduction of $100.0 million during the six months ended June 30, 2025.

“FHLBNY Advances” for further information.

Subordinated debentures totaled $231.1 million at March 31, 2026 compared to $272.5 million at December 31, 2025.

Subordinated debentures totaled $231.2 million at June 30, 2026 compared to $272.5 million at December 31, 2025.

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

During the three months ended March 31, 2026 and 2025, business loan originations excluding new lines were $170.3 million and $42.6 million, respectively.

During the three months ended March 31, 2026, and 2025, real estate loan originations excluding new lines (excluding owner-occupied commercial real estate) totaled $50.1 million and $28.9 million, respectively.

During the six months ended June 30, 2026 and 2025, business loan originations excluding new lines were $318.4 million and $173.7 million, respectively.

During the six months ended June 30, 2026 and 2025, real estate loan originations excluding new lines (excluding owner-occupied commercial real estate) totaled $157.3 million and $125.1 million, respectively.

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

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

At March 31, 2026, both the Company and the Bank were in compliance with all applicable regulatory capital requirements and the Bank was considered “well capitalized” for all regulatory purposes.

At June 30, 2026, both the Company and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was considered “well capitalized” for all regulatory purposes.

The following table summarizes Company and Bank capital ratios calculated under the Basel III Capital Rules framework as of the period indicated:

Actual Ratios at March 31, 2026

Actual Ratios at June 30, 2026

To Be Categorized as

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

During the three months ended March 31, 2026 and 2025, the Company did not repurchase any shares of its common stock.

As of March 31, 2026, 1,566,947 shares remained available for purchase under the authorized share repurchase programs.

During the six months ended June 30, 2026 and 2025, the Company did not repurchase any shares of its common stock.

As of June 30, 2026, 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 $1.8 million in cash dividends on its preferred stock during the three months ended March 31, 2026 and 2025, respectively.

The Company paid $10.8 million and $10.7 million in cash dividends on its common stock during the three months ended March 31, 2026 and 2025, respectively.

The Company paid $3.6 million in cash dividends on its preferred stock during the six months ended June 30, 2026 and 2025, respectively.

The Company paid $21.6 million and $21.4 million in cash dividends on its common stock during the six months ended June 30, 2026 and 2025, 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.

The Bank generally has outstanding borrowings 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 branches and equipment.

Off-Balance Sheet Arrangements

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

As of March 31, 2026, the Bank had $118.2 million of firm loan commitments that were accepted by the borrowers.

As of June 30, 2026, the Bank had $199.9 million of firm loan commitments that were accepted by the borrowers.

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

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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 57% and 59% of total loans held for investment as of March 31, 2026 and December 31, 2025, respectively.

Non-owner occupied commercial real estate loans represented 27% of total loans held for investment as of March 31, 2026 and December 31, 2025.

Multifamily residential and residential mixed-use loans represented 31% and 32% of total loans held for investment as of March 31, 2026 and December 31, 2025, 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 55% and 59% of total loans held for investment as of June 30, 2026 and December 31, 2025, respectively.

Non-owner occupied commercial real estate loans represented 26% and 27% of total loans held for investment as of June 30, 2026 and December 31, 2025, respectively.

Multifamily residential and residential mixed-use loans represented 29% and 32% of total loans held for investment as of June 30, 2026 and December 31, 2025, respectively.

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

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

March 31, 2026

June 30, 2026

(Dollars in thousands)

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Supportive housing

Medical office

Educational facility or library

Medical facility

Medical office

Total investor commercial real estate

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

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

December 31, 2025

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Supportive housing

Medical office

Educational facility or library

Medical facility

Medical office

Total investor commercial real estate

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

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

March 31, 2026

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

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

June 30, 2026

(Dollars in thousands)

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(2) Composition based on revenue.

Additional information related to the granularity in the non-owner occupied commercial real estate and multifamily residential and residential mixed-use portfolios is presented in the tables below as of March 31, 2026 and December 31, 2025:

March 31, 2026

(Dollars in thousands)

> $20 million

Investor commercial real estate:

Investor Office

Warehouse/ Industrial

Supportive housing

Medical office

Educational facility or library

Medical facility

Multifamily residential and residential mixed-use:

New York City (2)

100% rent regulated (3)

Majority rent regulated (3)

Majority free market (3)

Outside New York City

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

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

(3) Composition based on revenue.

Additional information related to the non-owner occupied commercial real estate and multifamily residential and residential mixed-use portfolios is presented in the table below as of June 30, 2026 and December 31, 2025:

June 30, 2026

December 31, 2025

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> $20 million

Investor commercial real estate:

2 unchanged sentences

Supportive housing

Medical office

Educational facility or library

Medical facility

Medical office

Multifamily residential and residential mixed-use:

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Outside New York City

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

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

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

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When contact is made with the borrower prior to default or foreclosure, servicing will seek to obtain the full payment due.

Once transferred, Workout will attempt to negotiate a repayment plan or other resolution with the borrower to avoid foreclosure, where appropriate.

transferred, Workout will attempt to negotiate a repayment plan or other resolution with the borrower to avoid foreclosure, where appropriate.

Accrual of interest is generally discontinued on a loan that meets any of the following three criteria:

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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.

We have not initiated any expected or imminent foreclosure proceedings that are likely to have a material adverse impact on our consolidated financial statements for the three and six months ended June 30, 2026.

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

There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at March 31, 2026 or December 31, 2025.

We did not recognize any provision for losses on OREO properties during the three months ended March 31, 2026 or 2025.

There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at June 30, 2026 or December 31, 2025.

We did not recognize any provision for losses on OREO properties during the six months ended June 30, 2026 or 2025.

Past Due Loans

Loans Delinquent 30 to 59 Days

At March 31, 2026, there were $72.4 million of loans that were past due between 30 and 59 days, compared to $28.8 million at December 31, 2025.

At June 30, 2026, there were $86.2 million of loans that were past due between 30 and 59 days, compared to $28.8 million at December 31, 2025.

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

Loans Delinquent 60 to 89 Days

At March 31, 2026, there were $11.4 million of loans that were past due between 60 and 89 days, compared to $30.1 million at December 31, 2025.

At June 30, 2026, there were $24.1 million of loans that were past due between 60 and 89 days, compared to $30.1 million at December 31, 2025.

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

Accruing Loans 90 Days or More Past Due

There were no accruing loans 90 days or more past due at March 31, 2026 or at December 31, 2025.

There were no accruing loans 90 days or more past due at June 30, 2026 or at December 31, 2025.

Reserve for Unfunded Loan Commitments

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

The amount of our reserve was $2.6 million and $2.2 million at March 31, 2026 and December 31, 2025, respectively.

The amount of our reserve was $2.6 million and $2.2 million at June 30, 2026 and December 31, 2025, respectively.

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

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Allowance for Credit Losses

Provision for credit losses for the three months ended March 31, 2026 and 2025 was $12.3 million and $9.6 million, respectively.

The $12.3 million credit loss provision for the three months ended March 31, 2026 was attributable to charge-offs and provisioning for individually analyzed loans.

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

For a further discussion of the allowance for credit losses and related activity during the three months ended March 31, 2026 and 2025, please see Note 6 “Securities” and Note 7 “Loans Held for Investment, Net” to the condensed Consolidated Financial Statements.

Provision for credit losses for the six months ended June 30, 2026 and 2025 was $26.2 million and $18.8 million, respectively.

The $26.2 million credit loss provision for the six months ended June 30, 2026 was attributable to charge-offs, provisioning for individually analyzed loans and growth in the business loan portfolio.

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

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

For a further discussion of the allowance for credit losses and related activity during the six months ended June 30, 2026 and 2025, please see Note 6 “Securities” and Note 7 “Loans Held for Investment, Net” to the condensed Consolidated Financial Statements.

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

March 31, 2026

June 30, 2026

December 31, 2025

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

At or for the Three Months Ended March 31,

At or for the Six Months Ended June 30,

(Dollars in thousands)

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

Comparison of Financial Condition at March 31, 2026 and December 31, 2025

Assets totaled $15.00 billion at March 31, 2026, $342.1 million below their level at December 31, 2025, primarily due to decreases of $294.3 million in cash and due from banks, and $148.6 million in the loan portfolio, partially offset by increases of $69.2 million in total securities and $36.2 million in loans held for sale.

Loan originations, excluding new lines, totaled $220.4 million for the three-month period ended March 31, 2026.

Total investment securities increased $69.2 million during the three months ended March 31, 2026, to $1.49 billion at period end, primarily due to purchases of $121.3 million, offset by proceeds from principal payments, calls and maturities of $43.6 million, an increase in unrealized losses of $5.2 million and proceeds from the sale of available for sale securities of $4.0 million.

There were no transfers to or from securities held-to-maturity during the three months ended March 31, 2026.

BOLI increased $3.5 million during the three months ended March 31, 2026, to $404.7 million.

Comparison of Financial Condition at June 30, 2026 and December 31, 2025

Assets totaled $15.04 billion at June 30, 2026, $298.7 million below their level at December 31, 2025, primarily due to decreases of $419.4 million in cash and due from banks, and $61.4 million in the loan portfolio, partially offset by increases of $185.0 million in total securities and $16.3 million in BOLI.

Loan originations, excluding new lines, totaled $475.7 million for the six-month period ended June 30, 2026.

Total investment securities increased $185.0 million during the six months ended June 30, 2026, to $1.60 billion at period end, primarily due to purchases of $285.2 million, offset by proceeds from principal payments, calls and maturities of $89.8 million, an increase in unrealized losses of $6.4 million and proceeds from the sale of available for sale securities of $4.0 million.

There were no transfers to or from securities held-to-maturity during the six months ended June 30, 2026.

BOLI increased $16.3 million during the six months ended June 30, 2026, to $417.5 million.

Liabilities .

Total liabilities decreased $363.3 million during the three months ended March 31, 2026, to $13.50 billion at period end, primarily due to decreases of $242.2 million in deposits (including mortgage escrow accounts), $73.0 million in FHLBNY advances and $41.4 million in subordinated debt.

Total liabilities decreased $343.4 million during the six months ended June 30, 2026, to $13.52 billion at period end, primarily due to decreases of $164.1 million in deposits (including mortgage escrow accounts), $123.0 million in FHLBNY advances and $41.3 million in subordinated debt.

Stockholders’ Equity .

Stockholders’ equity increased $21.2 million during the three months ended March 31, 2026, to $1.50 billion at period end, primarily due to net income of $34.6 million, partially offset by common stock dividends of $10.8 million, preferred stock dividends of $1.8 million and other comprehensive loss of $1.6 million.

Comparison of Operating Results for the Three Months Ended March 31, 2026 and 2025

Net income was $34.6 million during the three months ended March 31, 2026, compared to net income of $21.5 million for the three months ended March 31, 2025.

During the three months ended March 31, 2026, net interest income increased by $18.0 million, income tax expense increased by $6.7 million, non-interest expense decreased by $2.8 million, the credit loss provision increased by $2.7 million, and non-interest income increased by $1.7 million, compared to the three months ended March 31, 2025.

The discussion of net interest income for the three months ended March 31, 2026 and 2025 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated.

Stockholders’ equity increased $44.7 million during the six months ended June 30, 2026, to $1.52 billion at period end, primarily due to net income of $69.4 million, partially offset by common stock dividends of $21.8 million, and preferred stock dividends of $3.6 million.

Comparison of Operating Results for the Three Months Ended June 30, 2026 and 2025

Net income was $34.8 million during the three months ended June 30, 2026, compared to net income of $29.7 million for the three months ended June 30, 2025.

During the three months ended June 30, 2026, net interest income increased by $17.1 million, the credit loss provision increased by $4.7 million, non-interest expense increased by $4.4 million, income tax expense increased by $2.6 million, and non-interest income decreased by $329 thousand, compared to the three months ended June 30, 2025.

The discussion of net interest income for the three months ended June 30, 2026 and 2025 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.

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

Net loan fees included in interest income were $1.5 million during the three months ended March 31, 2026, compared to $1.1 million during the three months ended March 31, 2025.

The increase in net loan fees was primarily due to increases in deferred fees and prepayment penalty on loans in 2026.

Net loan fees included in interest income were $1.7 million during the three months ended June 30, 2026, compared to $1.1 million during the three months ended June 30, 2025.

The increase in net loan fees was primarily due to increases in deferred fees and prepayment penalties on loans in 2026.

Analysis of Net Interest Income

Three Months Ended March 31,

Three Months Ended June 30,

(Dollars in thousands)

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

At June 30, 2025, business loans included balances related to Paycheck Protection Program (“PPP”) loans;

no PPP loans were outstanding at June 30, 2026.

(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 March 31, 2026 and 2025, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

(6) At June 30, 2026 and 2025, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

Rate/Volume Analysis

Three Months Ended March 31, 2026

Compared to Three Months Ended March 31, 2025

Three Months Ended June 30, 2026

Compared to Three Months Ended June 30, 2025

Increase / (Decrease) Due to:

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Net interest income.

Net interest income was $112.3 million during the three months ended March 31, 2026, an increase of $18.0 million from the three months ended March 31, 2025.

Average interest-earning assets were $14.20 billion for the three months ended March 31, 2026, an increase of $1.2 billion from $12.96 billion for the three months ended March 31, 2025.

The net interest margin was 3.21% during the three months ended March 31, 2026, up from 2.95% during the three months ended March 31, 2025.

Net interest income was $115.2 million during the three months ended June 30, 2026, an increase of $17.1 million from the three months ended June 30, 2025.

Average interest-earning assets were $14.09 billion for the three months ended June 30, 2026, an increase of $891.3 million from $13.20 billion for the three months ended June 30, 2025.

The net interest margin was 3.28% during the three months ended June 30, 2026, up from 2.98% during the three months ended June 30, 2025.

Interest Income.

Interest income was $173.4 million during the three months ended March 31, 2026, compared to $161.9 million during the three months ended March 31, 2025.

During the three months ended March 31, 2026, interest income increased $11.5 million from the three months ended March 31, 2025, primarily reflecting increases in interest income of $10.7 million on other short-term investments, $7.4 million on business loans, $1.5 million on securities and $1.3 million on one-to-four family residential and coop/condo apartment loans, partially offset by a decrease in interest income of $4.6 million on multifamily residential and residential mixed-use loans and $3.8 million on non-owner-occupied commercial real estate 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 $1.32 billion increase in the average balances, partially offset by a 71-basis point decrease in the yield of such investments in the period.

Interest income was $175.3 million during the three months ended June 30, 2026, compared to $167.5 million during the three months ended June 30, 2025.

During the three months ended June 30, 2026, interest income increased $7.7 million from the three months ended June 30, 2025, primarily reflecting increases in interest income of $9.9 million on business loans, $6.1 million on other short-term investments, $3.2 million on securities and $1.1 million on one-to-four family residential and coop/condo apartment loans, partially offset by a decrease in interest income of $6.5 million on multifamily residential and residential mixed-use loans, $4.7 million on non-owner-occupied commercial real estate loans and $1.3 million of ADC loans.

The increased interest income on business loans was due to a $690.7 million increase in the average balances, partially offset by an 18-basis point decrease in the yield of such loans in the period.

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 $845.8 million increase in the average balances, partially offset by a 67-basis point decrease in the yield of such investments in the period.

The increased interest income on securities was related to a $220.9 million increase in average balances and a 34-basis point increase in the yield 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 $82.9 million increase in the average balance and a 4-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 $545.6 million decrease in the average balance and a 4-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 $359.4 million decrease in the average balance, partially offset by a 1-basis point increase in the yield of such loans in the period.

The decreased interest income on ADC loans reflected a $45.4 million decrease in the average balance and a 130-basis point decrease in the yield of such loans in the period.

Interest Expense.

Interest expense was $60.1 million during the three months ended June 30, 2026, compared to $69.5 million during the three months ended June 30, 2025.

During the three months ended June 30, 2026, interest expense decreased $9.4 million, primarily reflecting a decrease in interest expense of $8.0 million on deposits.

The decreased interest expense on deposits was primarily due to a 59-basis point decrease in rates paid on savings accounts and a $241.1 million decrease in average balances of such deposits in the period, a 64-basis point decrease in rates paid on money market accounts, partially offset by a $621.3 million increase in average balances of such deposits, and a 20-basis point decrease in rates paid on interest-bearing checking accounts, partially offset by a $97.3 million increase in the average balance of such deposits.

Provision for Credit Losses.

We recorded a credit loss provision of $13.9 million and $9.2 million during the three months ended June 30, 2026 and 2025, respectively.

The $13.9 million credit loss provision for the three months ended June 30, 2026, was attributable to charge-offs, provisioning for individually analyzed loans and growth in the business loan portfolio.

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

Non-Interest Income.

Non-interest income totaled $11.3 million for the three months ended June 30, 2026, compared to $11.6 million for the same period in 2025.

The decrease was primarily driven by a $2.0 million loss on sale of loans and other assets during the three months ended June 30, 2026, partially offset by an increase of $1.8 million in service charges and other fees and an $852 thousand increase in BOLI income.

Non-Interest Expense.

Non-interest expense totaled $64.7 million for the three months ended June 30, 2026, compared to $60.3 million for the same period in 2025.

The increase was primarily driven by $3.6 million of salaries and employee benefits.

Non-interest expense was 1.74% and 1.72% of average assets during the three months ended June 30, 2026 and 2025, respectively.

Income Tax Expense.

Income tax expense was $13.1 million during the three months ended June 30, 2026, compared to income tax expense of $10.5 million during the three months ended June 30, 2025.

The reported effective tax rate for the three months ended June 30, 2026 and 2025 was 27.3%, and 26.1%, respectively.

Comparison of Operating Results for the Six Months Ended June 30, 2026 and 2025

Net income was $69.4 million during the six months ended June 30, 2026, compared to net income of $51.2 million for the six months ended June 30, 2025.

During the six months ended June 30, 2026, net interest income increased by $35.1 million, credit loss provision increased by $7.3 million, non-interest income increased by $1.4 million, non-interest expense increased by $1.6 million and income tax expense increased by $9.3 million, compared to the six months ended June 30, 2025.

The discussion of net interest income for the six months ended June 30, 2026 and 2025 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated.

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

Average balances were derived from average daily balances.

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

Net loan fees included in interest income were $3.2 million during the six months ended June 30, 2026, compared to $2.3 million during the six months ended June 30, 2025.

The increase in net loan fees was primarily due to increases in deferred fees and prepayment penalty fees on loans in 2026.

Analysis of Net Interest Income

Six Months Ended June 30,

(Dollars in thousands)

Interest-earning assets:

Business loans (1) (3) (6)

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

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

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

Other loans (3)

Other short-term investments

Total interest-earning assets

Non-interest earning assets

Liabilities and Stockholders' Equity:

Interest-bearing liabilities:

Interest-bearing checking (2)

Total interest-bearing deposits

FHLBNY advances

Subordinated debt, net

Other short-term borrowings

Total borrowings

Derivative cash collateral

Total interest-bearing liabilities

Non-interest-bearing checking (2)

Other non-interest-bearing liabilities

Total liabilities

Stockholders' equity

Total liabilities and stockholders' equity

Net interest income

Net interest rate spread (4)

Net interest-earning assets

Net interest margin (5)

Ratio of interest-earning assets to interest-bearing liabilities

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

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

At June 30, 2025, business loans included balances related to Paycheck Protection Program (“PPP”) loans;

no PPP loans were outstanding at June 30, 2026.

(2) Includes mortgage escrow deposits.

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

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

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

Rate/Volume Analysis

Six Months Ended June 30, 2026

Compared to Six Months Ended June 30, 2025

Increase / (Decrease) Due to:

Interest-earning assets:

Business loans

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

Multifamily residential and residential mixed-use

Non-owner-occupied commercial real estate

Other short-term investments

Total interest-earning assets

Interest-bearing liabilities:

Interest-bearing checking

FHLBNY advances

Subordinated debt, net

Other short-term borrowings

Derivative cash collateral

Total interest-bearing liabilities

Net change in net interest income

Net interest income.

Net interest income was $227.4 million during the six months ended June 30, 2026, an increase of $35.1 million from the six months ended June 30, 2025.

Average interest-earning assets were $14.14 billion for the six months ended June 30, 2026, an increase of $1.06 billion from $13.08 billion for the six months ended June 30, 2025.

Net interest margin was 3.24% during the six months ended June 30, 2026, up from 2.96% during the six months ended June 30, 2025.

Interest Income.

Interest income was $348.7 million during the six months ended June 30, 2026, compared to $329.4 million during the six months ended June 30, 2025.

During the six months ended June 30, 2026, interest income increased $19.2 million from the six months ended June 30, 2025, primarily reflecting increases in interest income of $17.3 million on business loans, $16.8 million on other short-term investments, $4.6 million on securities, and $2.4 million on one-to-four family loans, partially offset by decreases in interest income of $11.2 million on multifamily loans, $8.5 million on non-owner-occupied loans, and $2.1 million on acquisition, development and construction loans.

The increased interest income on business loans was due to a $609.1 million increase in the average balances, partially offset by a 17-basis point decrease in the yield of such loans in the period.

The increased interest income on securities was related to a $78.9 million in average balances and a 22-basis point increase in the yield 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 $79.8 million increase in the average balances and a 15-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 $433.0 million decrease in the average balance, partially offset by a 3-basis point increase in the yield of such loans in the period.

The increased interest income on other short-term investments was related to a $1.08 billion increase in the average balances, partially offset by a 69-basis point decrease in the yield of such investments in the period.

The increased interest income on securities was related to a $150.3 million increase in the average balances and a 28-basis point increase in the yield of such securities in the period.

The increased interest income on one-to-four family loans was related to a $81.3 million increase in the average balances and a 9-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 $489.6 million decrease in the average balance and a 1-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 $331.8 million decrease in the average balance, partially offset by a 1-basis point increase in the yield of such loans in the period.

The decreased interest income on acquisition, development and construction loan income reflected a $38.6 million decrease in the average balance and a 95-basis point decrease in the yield of such loans in the period.

Interest Expense.

Interest expense was $61.1 million during the three months ended March 31, 2026, compared to $67.7 million during the three months ended March 31, 2025.

During the three months ended March 31, 2026, interest expense decreased $6.5 million, primarily reflecting a decrease in interest expense of $5.7 million on deposits.

The decreased interest expense on deposits was primarily due to a 58-basis point decrease in rates paid on savings accounts and a $228.0 million decrease in average balances of such deposits, a 31-basis point decrease in rates paid on CDs, partially offset by a $132.1 million increase in the average balance of such deposits, and a 66-basis point decrease in rates paid on money market accounts, partially offset by a $685.0 million increase in average balances of such deposits in the period.

Interest expense was $121.2 million during the six months ended June 30, 2026, compared to $137.1 million during the six months ended June 30, 2025.

During the six months ended June 30, 2026, interest expense decreased $15.9 million, primarily reflecting decreases in interest expense of $13.7 million on deposits and $1.1 million in interest expense on derivative cash collateral.

The decrease in interest expense on deposits was primarily due to a 65-basis point decrease in rates paid on money market accounts, partially offset by a $653.0 million increase in average balances of such deposits, a 58-basis point decrease in rates paid on savings accounts and a $234.6 million decrease in average balances of such deposits, and a 32-basis point decrease in rates paid on CDs, partially offset by a $65.7 million increase in the average balance of such deposits in the period.

The decreased interest expense on FHLBNY advances was due to a $59.7 million decrease in the average balance, partially offset by a 10-basis point increase in the cost of FHLBNY advances in the period.

The decreased interest expense on derivative cash collateral was due to a $34.1 million decrease in the average balance and a 105-basis point decrease in the cost of such derivatives in the period.

The decreased interest expense on subordinated debt was due to a $21.1 million decrease in the average balance, partially offset by a 26-basis point increase in the cost of such debt in the period.

Provision for Credit Losses.

We recorded a credit loss provision of $12.3 million and $9.6 million during the three months ended March 31, 2026 and 2025, respectively.

The $12.3 million credit loss provision for the three months ended March 31, 2026, was primarily attributable to charge-offs and provisioning for individually analyzed loans.

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

We recorded a credit loss provision of $26.2 million during the six months ended June 30, 2026, compared to a credit loss provision of $18.8 million for the six months ended June 30, 2025.

The $26.2 million credit loss provision for the six months ended June 30, 2026, was attributable to charge-offs, provisioning for individually analyzed loans and growth in the business loan portfolio.

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

Non-Interest Income.

Non-interest income totaled $11.3 million for the three months ended March 31, 2026, compared to $9.6 million for the same period in 2025.

The increase was primarily driven by a $1.1 million increase in service charges and other fees and a $565 thousand increase in BOLI income.

Non-interest income was $22.6 million during the six months ended June 30, 2026, compared to $21.2 million during the six months ended June 30, 2025.

The increase is primarily driven by a $2.9 million increase in service charges and other fees and a $1.4 million increase in BOLI income, partially offset by a $2.3 million increase in loss (gain) on the sale of securities, loans and other assets.

Non-Interest Expense.

Non-interest expense totaled $62.8 million for the three months ended March 31, 2026, compared to $65.5 million for the same period in 2025.

The decrease was primarily attributable to a $7.2 million pension settlement loss recorded during the three months ended March 31, 2025, with no comparable expense in the current‑year period, partially offset by an increase of $3.9 million of salaries and employee benefits.

Non-interest expense was 1.68% and 1.90% of average assets during the three months ended March 31, 2026 and 2025, respectively.

Non-interest expense was $127.5 million during the six months ended June 30, 2026, compared to $125.8 million during the six months ended June 30, 2025.

The increase in non-interest expense is primarily due to a $7.5 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 1.71% and 1.81% of average assets during the six months ended June 30, 2026 and 2025, respectively.

Income Tax Expense.

Income tax expense was $13.9 million during the three months ended March 31, 2026, compared to income tax expense of $7.3 million during the three months ended March 31, 2025.

The reported effective tax rate for the three months ended March 31, 2026 and 2025 was 28.7%, and 25.3%, respectively.

Income tax expense was $27.0 million during the six months ended June 30, 2026, compared to $17.7 million during the six months ended June 30, 2025.

The reported effective tax rate for the six months ended June 30, 2026 and 2025 was 28.0%, and 25.7%, respectively.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis