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Item 1. Financial Statements

2025-05-08 compared with 2024-11-08 · 181 added, 308 removed, 1063 unchanged (32% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in thousands, except share data) (Unaudited)

32 unchanged sentences

CONSOLIDATED INCOME STATEMENTS

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands, except share and per share data) 2025 2024

21 unchanged sentences

Total noninterest income

11,058 10,464 33,739 30,965

Noninterest expense:

3 unchanged sentences

General, administrative and other 10,343 11,377

Goodwill impairment — — — 39,857

Total noninterest expense

13 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

2 unchanged sentences

Unrealized gain (loss) on investment securities available for sale ("AFS") 8,293 ( 5,759 )

Reclassification for net (gains) losses included in income — — — ( 3 )

Other comprehensive income (loss) before tax 8,293 ( 5,759 )

1 unchanged sentence

Unrealized gain (loss) on investment securities AFS 2,034 ( 1,277 )

Reclassification for net (gains) losses included in income — — — ( 1 )

2,034 ( 1,277 )

Unrealized disparate impact of deferred tax assets valuation allowance - AOCI 1,727 —

Other comprehensive income (loss) 7,986 ( 4,482 )

9 unchanged sentences

income (loss) Total shareholders' equity

For the quarter ended September 30, 2023

Balance, June 30, 2023 18,776,597 $ 228,260 $ 400,132 $ ( 100,769 ) $ 527,623

Net income (loss) — — 2,295 — 2,295

Share-based compensation expense — 712 — — 712

Common stock issued - Stock grants 17,433 — — — —

Other comprehensive income (loss) — — — ( 26,249 ) ( 26,249 )

Dividends declared on common stock ($ 0.10 per share)

— — ( 1,894 ) — ( 1,894 )

Balance, September 30, 2023

18,794,030 $ 228,972 $ 400,533 $ ( 127,018 ) $ 502,487

For the nine months ended September 30, 2023

For the quarter ended March 31, 2024

Balance, December 31, 2023 18,810,055 $ 229,889 $ 395,357 $ ( 86,859 ) $ 538,387

18,730,380 $ 226,592 $ 435,085 $ ( 99,530 ) $ 562,147

Net income (loss) — — ( 7,497 ) — ( 7,497 )

2 unchanged sentences

Other comprehensive income (loss) — — — ( 4,482 ) ( 4,482 )

Dividends declared on common stock ($ 0.55 per share)

— — ( 10,463 ) — ( 10,463 )

Common stock repurchased

( 12,972 ) ( 134 ) — — ( 134 )

Balance, September 30, 2023

18,794,030 $ 228,972 $ 400,533 $ ( 127,018 ) $ 502,487

For the quarter ended September 30, 2024

Balance, June 30, 2024

18,857,565 $ 231,721 $ 381,622 $ ( 93,226 ) $ 520,117

Net income (loss) — — ( 7,282 ) — ( 7,282 )

Share-based compensation expense — 924 — — 924

Other comprehensive income (loss) — — — 24,556 24,556

Balance, September 30, 2024

Balance, March 31, 2024

18,857,566 $ 230,814 $ 387,860 $ ( 91,341 ) $ 527,333

For the nine months ended September 30, 2024

For the quarter ended March 31, 2025

Balance, December 31, 2024

2 unchanged sentences

Share-based compensation expense — 592 — — 592

— 2,890 — — 2,890

Common stock issued - Stock grants 94,688 — — — —

Other comprehensive income (loss) — — — 18,189 18,189

Other comprehensive income — — — 7,986 7,986

Common stock repurchased

( 31,445 ) ( 359 ) — — ( 359 )

Balance, September 30, 2024

Balance, March 31, 2025

18,920,808 $ 233,418 $ 246,548 $ ( 79,215 ) $ 400,751

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

2 unchanged sentences

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Goodwill impairment charge — 39,857

Provision for credit losses 1,000 —

15 unchanged sentences

Amortization of servicing rights 1,354 1,402

Gain on sale of OREO — ( 621 )

Net change in trading securities ( 13,468 ) ( 2,584 )

Increase in other assets

( 2,594 ) ( 42,197 )

Increase in accounts payable and other liabilities 6,133 18,689

Net decrease (increase) in trading securities ( 11,562 ) ( 3,048 )

Decrease (increase) in other assets 7,161 ( 8,813 )

Increase (decrease) in accounts payable and other liabilities ( 3,625 ) 9,484

Net cash used in operating activities ( 22,502 ) ( 7,845 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of investment securities

Proceeds from sale of investment securities — 4,693

Principal payments on investment securities

21,138 83,153

Proceeds from sale of OREO 126 1,725

Net (increase) decrease in LHFI

Purchase of premises and equipment ( 6,427 ) ( 2,667 )

Net cash received from acquisition of branches — 327,901

168,855 ( 22,624 )

Purchases of premises and equipment

( 53 ) ( 6,058 )

Proceeds from sale of Federal Home Loan Bank stock 12,906 30,287

1 unchanged sentence

Net cash provided by investing activities 190,696 36,042

Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

6 unchanged sentences

Repayment of finance lease principal ( 22 ) ( 47 )

Dividends paid on common stock — ( 10,463 )

Net cash used in financing activities ( 177,626 ) ( 236,908 )

Net cash provided by (used in) financing activities

( 322,632 ) 76,466

Net increase (decrease) in cash and cash equivalents

3 unchanged sentences

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

Cash paid (refunds received) during the period for:

Interest $ 54,041 $ 70,701

2 unchanged sentences

Increase in lease assets and lease liabilities 2,305 959

LHFI foreclosed and transferred to OREO — 107

Loans transferred from LHFI to LHFS, net 479 273

Ginnie Mae loans recognized with the right to repurchase, net 1,675 323

Ginnie Mae loans derecognized with the right to repurchase, net — 1,360

Repurchase of common stock-award shares 359 134

Loans acquired — 21,197

Premises and equipment and other assets — 5,845

Liabilities assumed — 377,412

Goodwill and other intangibles — 22,469

See accompanying notes to consolidated financial statements

3 unchanged sentences

NOTE 1– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

HomeStreet, Inc., a State of Washington corporation organized in 1921 (the "Corporation"), is a Washington-based diversified financial services holding company whose operations are primarily conducted through its wholly owned subsidiaries (collectively the "Company") HomeStreet Statutory Trusts and HomeStreet Bank (the "Bank"), and the Bank's subsidiaries, Continental Escrow Company, HomeStreet Foundation, HS Properties, Inc., HS Evergreen Corporate Center LLC, and Union Street Holdings LLC.

The Company is principally engaged in commercial banking, mortgage banking and consumer/retail banking activities serving customers primarily in the Western United States.

HomeStreet, Inc., a State of Washington corporation organized in 1921 (the "Corporation"), is a Washington-based diversified financial services holding company whose operations are primarily conducted through its wholly owned subsidiaries (collectively the "Company") HomeStreet Statutory Trusts and HomeStreet Bank (the "Bank"), and the Bank's subsidiaries, Continental Escrow Company, HS Properties, Inc., HS Evergreen Corporate Center LLC, and Union Street Holdings LLC.

The Company is principally engaged in commercial banking, mortgage banking and consumer/retail banking activities serving customers in the Western United States.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").

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All significant inter-company accounts and transactions have been eliminated in consolidation.

The Company allocates resources and assesses financial performance on a consolidated basis and therefore has one reporting segment.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.

6 unchanged sentences

Securities and Exchange Commission ("SEC").

Branch Acquisition

On February 10, 2023, the Company completed its acquisition of three branches in southern California, whereby we assumed approximately $ 376 million in deposits and purchased approximately $ 21 million in loans.

The application of the acquisition method of accounting resulted in recording goodwill of $ 12 million and a core deposit intangible of $ 11 million.

On April 30, 2024, the Company entered into Amendment No.

1 to the previously announced definitive merger agreement with FirstSun Capital Bancorp (“FirstSun”), the holding company of Sunflower Bank, N.A ("Sunflower Bank"), and Dynamis Subsidiary, Inc., whereby, under the merger agreement, as amended, the Company and the Bank will merge with and into FirstSun and Sunflower Bank, respectively (collectively, the "Merger").

Subject to terms and conditions of the merger agreement, as amended, the companies will combine in an all-stock transaction in which HomeStreet shareholders will receive 0.3867 of a share of FirstSun common stock for each share of HomeStreet common stock.

On October 29, 2024 First Sun and the Company announced that based on discussions with the Federal Reserve and the Texas Department of Banking, regulatory approvals necessary for the Merger to proceed have not been obtained and FirstSun and Sunflower Bank have been asked to withdraw their merger applications.

FirstSun and the Company are discussing the pursuit of an alternative regulatory structure for the Merger.

The parties are also discussing terms on which they would terminate the merger agreement if no alternative structure is feasible.

There can be no assurance that an alternative regulatory structure may ultimately be feasible.

Our chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business activities as one single operating and reportable segment at the consolidated level.

Accordingly, our CODM uses consolidated net income to measure segment profit or loss, allocate resources and assess performance.

Further, the CODM reviews and utilizes net interest income, noninterest income and noninterest expenses (compensation and benefits, information services, occupancy and general, administrative and other) at the consolidated level to manage the Company’s operations.

Recent Developments

On March 28, 2025, the Company entered into a definitive merger agreement with Mechanics Bank, whereby the Company and the Bank will merge with and into Mechanics Bank.

This merger is expected to close in the third quarter of 2025.

Recent Accounting Developments

In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of Topics in the Codification, with the intention of clarifying or improving them and align the requirements in the codification with the SEC's regulations (and will be removed from the SEC regulations).

ASU 2023-06 should be adopted prospectively, and the effective date varies and is determined for each individual disclosure based

on the effective date of the SEC's removal of the related disclosure.

ASU 2023-06 will not have an impact on the Company's financial position or results of operation as it is disclosure only.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

The update will be effective for annual periods beginning after December 15, 2023.

ASU 2023-07 will not have an impact on the Company's financial position or results of operation as it impacts disclosures only.

We are assessing the impact on our disclosures.

In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of Topics in the Codification, with the intention of clarifying or improving them and aligning the requirements in the codification with the SEC's regulations (and will be removed from the SEC regulations).

ASU 2023-06 should be adopted prospectively, and the effective date varies and is determined for each individual disclosure based on the effective date of the SEC's removal of the related disclosure.

We are assessing the impact of ASU 2023-06 and believe it will not have an impact on the Company's financial position or results of operation as it impacts disclosures only.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

2 unchanged sentences

The update will be effective for annual periods beginning after December 15, 2024.

ASU 2023-09 will not have an impact on the Company's financial position or results of operation as it impacts disclosures only.

The adoption of ASU 2023-09 will not have an impact on the Company's financial position or results of operation as it impacts disclosures only.

We are assessing the impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period.

This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization.

In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Implementation of ASU 2024-03 may be applied prospectively or retrospectively.

The adoption of ASU 2024-03 will not have an impact on the Company's financial position or results of operation as it impacts disclosures only.

We are assessing the impact on our disclosures.

NOTE 2– INVESTMENT SECURITIES:

The following table sets forth certain information regarding the amortized cost basis and fair values of our investment securities AFS and held-to-maturity ("HTM"):

At September 30, 2024

At March 31, 2025

(in thousands) Amortized

24 unchanged sentences

$ 2,301 $ — $ ( 28 ) $ 2,273

At September 30, 2024, and December 31, 2023, the Company held $ 38 million and $ 25 million, respectively, of trading securities, consisting of US Treasury notes used as economic hedges of our single family mortgage servicing rights, which are carried at fair value and included within investment securities on the balance sheet.

For the quarters ended September 30, 2024 and 2023, net gains of $ 1.1 million and net losses of $ 0.9 million on trading securities, respectively, and for the nine months ended September 30, 2024 and 2023, net gains of $ 0.2 million and net losses of $ 1.4 million on trading securities, respectively, were recorded in servicing income.

At March 31, 2025, and December 31, 2024, the Company held $ 46 million and $ 35 million, respectively, of trading securities, consisting of US Treasury notes used as economic hedges of our single family mortgage servicing rights, which are carried at fair value and included within investment securities on the balance sheet.

For the quarters ended March 31, 2025 and 2024, net gains of $ 0.8 million and net losses of $ 0.6 million on trading securities, respectively, were recorded in servicing income.

MBS and CMOs represent securities issued or guaranteed by government sponsored enterprises ("GSEs").

1 unchanged sentence

Municipal bonds are comprised of general obligation bonds (i.e., backed by the general credit of the issuer) and revenue bonds (i.e., backed by either collateral or revenues from the specific project being financed) issued by various municipal corporations.

As of September 30, 2024 and December 31, 2023, substantially all securities held, including municipal bonds and corporate debt securities, were rated investment grade based upon nationally recognized statistical rating organizations where available and, where not available, based upon internal ratings.

As of March 31, 2025 and December 31, 2024, substantially all securities held, including municipal bonds and corporate debt securities, were rated investment grade based upon nationally recognized statistical rating organizations where available and, where not available, based upon internal ratings.

Investment securities AFS that were in an unrealized loss position are presented in the following tables based on the length of time the individual securities have been in an unrealized loss position:

At September 30, 2024

At March 31, 2025

Less than 12 months 12 months or more Total

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The decline in value is not related to any issuer- or industry-specific credit event.

The Company has not identified any expected credit losses on its debt securities as of September 30, 2024 or December 31, 2023.

The Company has not identified any expected credit losses on its debt securities as of March 31, 2025 or December 31, 2024.

The Company bases this conclusion in part on its periodic review of the credit ratings of the AFS securities or reviews of the financial condition of the issuers.

In addition, as of September 30, 2024 and December 31, 2023, the Company had not made a decision to sell any of its debt securities held, nor did the Company consider it more likely than not that it would be required to sell such securities before recovery of their amortized cost basis.

In addition, as of March 31, 2025 and December 31, 2024, the Company had not made a decision to sell any of its debt securities held, nor did the Company consider it more likely than not that it would be required to sell such securities before recovery of their amortized cost basis.

The following tables present the fair value of investment securities AFS and HTM by contractual maturity along with the associated contractual yield:

At September 30, 2024

At March 31, 2025

Within one year After one year

39 unchanged sentences

MBS and CMOs are excluded from the tables above because such securities are not due on a single maturity date.

The weighted average yield of MBS and CMOs as of September 30, 2024 and December 31, 2023 was 3.12 % and 3.21 %, respectively.

Sales of AFS investment securities were as follows:

Quarter Ended September 30, Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

Proceeds $ — $ — $ — $ 4,693

Gross gains — — — 3

Gross losses — — — —

The weighted average yield of MBS and CMOs as of March 31, 2025 and December 31, 2024 was 3.00 % and 3.01 %, respectively.

The following table summarizes the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

(in thousands) At September 30, 2024 At December 31, 2023

(in thousands) At March 31, 2025 At December 31, 2024

Federal Reserve Bank to secure borrowings $ 888,706 $ 906,475

3 unchanged sentences

The Company assesses the creditworthiness of the counterparties that hold the pledged collateral and has determined that these arrangements have little credit risk.

Tax-exempt interest income on investment securities was $ 2.8 million for both quarters ended September 30, 2024 and 2023, and $ 8.4 million for both the nine months ended September 30, 2024 and 2023.

Tax-exempt interest income on investment securities was $ 2.7 million and $ 2.8 million for quarters ended March 31, 2025 and 2024, respectively.

NOTE 3- LOANS AND CREDIT QUALITY:

3 unchanged sentences

LHFI consists of the following:

(in thousands) At September 30, 2024 At December 31, 2023

(in thousands) At March 31, 2025 At December 31, 2024

Non-owner occupied CRE $ 545,313 $ 570,750

14 unchanged sentences

$ 6,023,582 $ 6,193,053

(1) Includes $ 1.3 million of loans at both September 30, 2024 and December 31, 2023, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Loans totaling $ 5.2 billion and $ 5.1 billion at September 30, 2024 and December 31, 2023, respectively, were pledged to secure borrowings from the Federal Home Loan Bank ("FHLB") and loans totaling $ 1.3 billion and $ 1.2 billion at September 30, 2024 and December 31, 2023, respectively, were pledged to secure borrowings from the Federal Reserve Bank of San Francisco ("FRBSF").

(1) Includes $ 1.2 million and $ 1.3 million of loans at March 31, 2025 and December 31, 2024, respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Loans totaling $ 3.3 billion and $ 4.0 billion at March 31, 2025 and December 31, 2024, respectively, were pledged to secure borrowings from the Federal Home Loan Bank ("FHLB") and loans totaling $ 1.9 billion and $ 1.4 billion at March 31, 2025 and December 31, 2024, respectively, were pledged to secure borrowings from the Federal Reserve Bank of San Francisco ("FRBSF").

Credit Risk Concentrations

LHFI are primarily secured by real estate located in the Pacific Northwest, California and Hawaii.

At September 30, 2024, and December 31, 2023 single family loans in the state of Washington represented 12 % and 11 % of the total LHFI portfolio.

At September 30, 2024 and December 31, 2023, multifamily loans in California represented 36 % of the total LHFI portfolio.

At March 31, 2025, and December 31, 2024 single family loans in the state of Washington represented 13 % of the total LHFI portfolio, respectively.

At March 31, 2025 and December 31, 2024, multifamily loans in California represented 30 % of the total LHFI portfolio, respectively.

Credit Quality

1 unchanged sentence

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Bank’s historical loss experience and eight qualitative factors for current and forecasted periods.

As of September 30, 2024, the historical expected loss rates increased when compared to December 31, 2023 due to product mix risk and composition changes.

During the nine months ended September 30, 2024, the qualitative factors decreased due to economic conditions and improved collateral conditions, partially offset by increases related to the volume and nature of the portfolio.

As of March 31, 2025, the historical expected loss rates decreased when compared to December 31, 2024 due to product mix risk and composition changes.

During the quarter ended March 31, 2025, the qualitative factors decreased due to improved collateral conditions, offset by increases related to the uncertainty of the business environment and specific reserves for one syndicated relationship.

Additionally, over the two-year forecast period in the markets in which it operates, the Bank expects neutral economic forecasts and neutral to improving collateral forecasts.

In addition to the ACL for LHFI, the Company maintains a separate allowance for unfunded loan commitments which is included in accounts payable and other liabilities on our consolidated balance sheets.

The allowance for unfunded commitments was $ 1.3 million and $ 1.8 million at September 30, 2024 and December 31, 2023, respectively.

The allowance for unfunded commitments was $ 1.3 million and $ 1.1 million at March 31, 2025 and December 31, 2024, respectively.

The Bank has elected to exclude accrued interest receivable from the evaluation of the ACL.

Accrued interest on LHFI was $ 28.5 million and $ 28.9 million at September 30, 2024 and December 31, 2023, respectively, and was reported in other assets in the consolidated balance sheets.

Accrued interest on LHFI was $ 24.2 million and $ 25.1 million at March 31, 2025 and December 31, 2024, respectively, and was reported in other assets in the consolidated balance sheets.

Activity in the ACL for LHFI and the allowance for unfunded commitments was as follows:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

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Activity in the ACL for LHFI by loan portfolio and loan sub-class was as follows:

Quarter Ended September 30, 2024

Quarter Ended March 31, 2025

(in thousands) Beginning balance Charge-offs Recoveries Provision Ending balance

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Total ACL $ 38,743 $ ( 61 ) $ 64 $ 888 $ 39,634

Quarter Ended September 30, 2023

Quarter Ended March 31, 2024

(in thousands) Beginning balance Charge-offs Recoveries Provision

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Total ACL $ 40,500 $ ( 1,105 ) $ 40 $ 242 $ 39,677

Nine Months Ended September 30, 2024

(in thousands) Beginning balance Charge-offs Recoveries Provision Ending

Non-owner occupied CRE $ 2,610 $ — $ — $ ( 798 ) $ 1,812

Multifamily 13,093 — — 2,667 15,760

Construction/land development

Multifamily construction 3,983 — — ( 2,594 ) 1,389

CRE construction 189 — — ( 107 ) 82

Single family construction 7,365 — — ( 178 ) 7,187

Single family construction to permanent 672 — — ( 417 ) 255

Total 27,912 — — ( 1,427 ) 26,485

Commercial and industrial loans

Owner occupied CRE 899 — — ( 260 ) 639

Commercial business 2,950 ( 2,654 ) 365 3,811 4,472

Total 3,849 ( 2,654 ) 365 3,551 5,111

Consumer loans

Single family 5,287 — 5 ( 1,488 ) 3,804

Home equity and other 3,452 ( 139 ) 100 ( 162 ) 3,251

Total 8,739 ( 139 ) 105 ( 1,650 ) 7,055

Total ACL $ 40,500 $ ( 2,793 ) $ 470 $ 474 $ 38,651

Nine Months Ended September 30, 2023

(in thousands) Beginning balance Charge-offs Recoveries Provision Ending

Non-owner occupied CRE $ 2,102 $ — $ — $ 263 $ 2,365

Multifamily 10,974 — — ( 268 ) 10,706

Construction/land development

Multifamily construction 998 — — 594 1,592

CRE construction 196 — — ( 43 ) 153

Single family construction 12,418 — — ( 2,673 ) 9,745

Single family construction to permanent 1,171 — — ( 180 ) 991

Total 27,859 — — ( 2,307 ) 25,552

Commercial and industrial loans

Owner occupied CRE 1,030 — — 72 1,102

Commercial business 3,247 ( 1,342 ) 73 1,623 3,601

Total 4,277 ( 1,342 ) 73 1,695 4,703

Consumer loans

Single family 5,610 — 21 152 5,783

Home equity and other 3,754 ( 232 ) 270 170 3,962

Total 9,364 ( 232 ) 291 322 9,745

Total ACL $ 41,500 $ ( 1,574 ) $ 364 $ ( 290 ) $ 40,000

The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status.

At September 30, 2024

(in thousands) 2024 2023 2022 2021 2020 2019 and prior Revolving Revolving-term Total

At March 31, 2025

(in thousands) 2025 2024 2023 2022 2021 2020 and prior

Revolving Revolving-term Total

COMMERCIAL PORTFOLIO

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The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:

At September 30, 2024

(in thousands) 2024 2023 2022 2021 2020 2019 and prior Revolving Revolving-term Total

At March 31, 2025

(in thousands) 2025 2024 2023 2022 2021 2020 and prior

Revolving Revolving-term Total

CONSUMER PORTFOLIO

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At December 31, 2024

(in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total

(in thousands) 2024 2023 2022 2021 2020 2019 and prior

Revolving Revolving-term Total

COMMERCIAL PORTFOLIO

42 unchanged sentences

At December 31, 2024

(in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total

(in thousands) 2024 2023 2022 2021 2020 2019 and prior

Revolving Revolving-term Total

CONSUMER PORTFOLIO

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The following tables present a vintage analysis of the commercial and consumer portfolio segment by loan sub-class and gross charge-offs:

At September 30, 2024

(in thousands) 2024 2023 2022 2021 2020 2019 and prior Revolving Revolving-term Total

At March 31, 2025

(in thousands) 2025 2024 2023 2022 2021 2020 and prior

Revolving Revolving-term Total

COMMERCIAL PORTFOLIO

6 unchanged sentences

At December 31, 2024

(in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total

(in thousands) 2024 2023 2022 2021 2020 2019 and prior

Revolving Revolving-term Total

COMMERCIAL PORTFOLIO

7 unchanged sentences

The following table presents the amortized cost basis of collateral-dependent loans by loan sub-class and collateral type:

At September 30, 2024

(in thousands) 1-4 Family Multifamily Non-residential real estate Other non-real estate Total

At March 31, 2025

(in thousands) Land 1-4 Family Multifamily Non-residential real estate Other non-real estate Total

Non-owner occupied CRE $ — $ — $ — $ 16,089 $ — $ 16,089

— — 1,915 — — 1,915

Construction/land development

CRE construction 3,796 — — — — 3,796

1 unchanged sentence

Commercial and industrial loans

Owner occupied CRE — — 205 — 205

Commercial business

4,391 2,904 — — 3,226 10,521

2,963 — 4,625 1,573 9,161

Consumer loans

3 unchanged sentences

At December 31, 2024

(in thousands) 1-4 Family Non-residential real estate Other non-real estate Total

(in thousands) Land 1-4 Family Multifamily Non-residential real estate Other non-real estate Total

Non-owner occupied CRE $ — $ — $ — $ 16,230 $ — $ 16,230

— — 1,915 — — 1,915

Construction/land development

2 unchanged sentences

Commercial and industrial loans

Owner occupied CRE — — — 205 — 205

Commercial business

3 unchanged sentences

Single family

— 832 — — — 832

Total collateral-dependent loans $ 8,241 $ 3,759 $ 1,915 $ 16,435 $ 3,269 $ 33,619

1 unchanged sentence

The following table presents nonaccrual status for loans:

At September 30, 2024 At December 31, 2023

At March 31, 2025 At December 31, 2024

(in thousands) Nonaccrual with no related ACL Total Nonaccrual Nonaccrual with no related ACL Total Nonaccrual

15 unchanged sentences

The following tables present an aging analysis of past due loans by loan portfolio segment and loan sub-class:

At September 30, 2024

At March 31, 2025

Past Due and Still Accruing

47 unchanged sentences

% 0.08 % 0.03 % 0.07 % 0.88 % 1.06 % 98.94 % 100.00 %

(1) Includes loans whose repayments are insured by the FHA or guaranteed by the VA or Small Business Administration ("SBA") of $ 11.0 million and $ 12.4 million at September 30, 2024 and December 31, 2023, respectively.

(1) Includes loans whose repayments are insured by the FHA or guaranteed by the VA or Small Business Administration ("SBA") of $ 10.4 million and $ 11.3 million at March 31, 2025 and December 31, 2024, respectively.

(2) FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss.

(3) Includes $ 1.3 million of loans at both September 30, 2024 and December 31, 2023, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in our consolidated income statements.

(3) Includes $ 1.2 million and $ 1.3 million of loans at March 31, 2025 and December 31, 2024, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in our consolidated income statements.

Loan Modifications

1 unchanged sentence

In certain instances, the Company may grant more than one type of modification.

The granting of modifications for the quarters and nine months ended September 30, 2024 and 2023 did not have a material impact on the ACL.

The following tables provide information related to loans modified for the quarters and nine months ended September 30, 2024 and 2023 to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

The granting of modifications for the quarters ended March 31, 2025 and 2024 did not have a material impact on the ACL.

The following tables provide information related to loans modified for the quarters and ended March 31, 2025 and 2024 to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

Significant Payment Delay

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

(in thousands, except percentages) Amortized Cost Basis at Period End % of Total Class of Financing Receivable Amortized Cost Basis at Period End % of Total Class of Financing Receivable Amortized Cost Basis at Period End % of Total Class of Financing Receivable Amortized Cost Basis at Period End % of Total Class of Financing Receivable

Quarter Ended March 31,

(in thousands, except percentages) Amortized Cost Basis at Period End % of Total Class of Financing Receivable Amortized Cost Basis at Period End % of Total Class of Financing Receivable

$ 1,915 0.07 % $ — — %

Commercial business — — % 103 0.03 %

Single family — — % 847 0.08 % $ — — % 847 0.08 %

Term Extension

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

(in thousands, except percentages) Amortized Cost Basis at Period End % of Total Class of Financing Receivable Amortized Cost Basis at Period End % of Total Class of Financing Receivable

Non-owner occupied CRE $ — — % $ 560 0.09 %

Commercial business 251 0.08 % 3,555 0.92 %

Single family — — % 273 0.02 % — — % 273 0.02 %

Significant Payment Delay and Term Extension

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Non-owner occupied CRE $ — — % $ 16,440 2.60 % $ — — % $ 16,440 2.60 %

Construction/land development — — % 3,871 0.68 % — — % 3,871 0.68 %

Single family 1,226 0.11 % 1,167 0.11 % 2,399 0.21 % 2,284 0.21 %

Interest Rate Reduction, Significant Payment Delay and Term Extension

Quarter Ended June 30, Nine Months Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

(in thousands, except percentages) Amortized Cost Basis at Period End % of Total Class of Financing Receivable Amortized Cost Basis at Period End % of Total Class of Financing Receivable

Commercial business $ 1,160 0.39 % $ — — %

Single family 274 0.03 % 1,156 0.10 %

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:

Interest Rate Reduction

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Single family — — — Reduced weighted-average contractual interest rate from 5.25 % to 5.00 %.

Significant Payment Delay

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Non-owner occupied CRE — The weighted average duration of loan payments deferred is 1.6 years

— The weighted average duration of loan payments deferred is 1.6 years.

The weighted average duration of loan payments deferred is 0.5 years

— The weighted average duration of loan payments deferred is 1.5 years

Construction/land development — The weighted average duration of loan payments deferred is 2.1 years.

Quarter Ended March 31,

The weighted average duration of loan payments deferred is 1.8 years

Commercial business The weighted average duration of loan payments deferred is 5.1 years

The weighted average duration of loan payments deferred is 2.8 years.

Single Family Provided payment deferrals to borrowers.

2 unchanged sentences

A weighted average 2.5 % of loan balances were capitalized and added to the remaining term of the loan.

Provided payment deferrals to borrowers.

A weighted average 0.80 % of loan balances were capitalized and added to the remaining term of the loan.

Provided payment deferrals to borrowers.

A weighted average 0.48 % of loan balances were capitalized and added to the remaining term of the loan.

Term Extension

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

Non-owner occupied CRE — Added a weighted average 0.25 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

— Added a weighted average 1.6 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Construction/land development — Added a weighted average 2.1 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

— Added a weighted average 2.1 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Commercial business Added a weighted average 3.8 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 0.4 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 0.3 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 1.2 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Single family Added a weighted average 7.3 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 1.9 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 3.9 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 4.6 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Upon determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

The following table depicts the payment status of loans that were classified as MBFDs on or after July 1, 2023 through June 30, 2024:

Payment Status (Amortized Cost Basis) at September 30, 2024

The following table depicts the payment status of loans that were classified as MBFDs on or after January 1, 2024 through December 31, 2024:

Payment Status (Amortized Cost Basis) at March 31, 2025

(in thousands) Current 30-89 Days Past Due 90+ Days Past Due

Non-owner occupied CRE $ 19,211 $ — $ —

Multifamily — — 1,915

Construction/land development — — 3,796

Owner occupied CRE 254 — —

Commercial business 2,835 — 5,541

1 unchanged sentence

Total $ 25,073 $ 177 $ 11,819

The following table depicts the payment status of loans that were classified as MBFDs on or after July 1, 2022 through June 30, 2023:

Payment Status (Amortized Cost Basis) at September 30, 2023

The following table depicts the payment status of loans that were classified as MBFDs on or after January 1, 2023 through December 31, 2023:

Payment Status (Amortized Cost Basis) at March 31, 2024

(in thousands) Current 30-89 Days Past Due 90+ Days Past Due

4 unchanged sentences

Total $ 31,094 $ 1,109 $ 342

The following table provides the amortized cost basis as of September 30, 2024 of MBFDs on or after July 1, 2023 through June 30, 2024 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Quarter Ended September 30, 2024

(in thousands) Significant Payment Delay Term Extension Interest Rate Reduction and Term Extension Significant Payment Delay and Term Extension Interest Rate Reduction, Significant Payment Delay and Term Extension

Single family $ — $ — $ — $ 419 $ —

Total $ — $ — $ — $ 419 $ —

The following table provides the amortized cost basis as of September 30, 2023 of MBFDs on or after July 1, 2022 through June 30, 2023 and subsequently had a payment default:

The following table provides the amortized cost basis as of March 31, 2025 of MBFDs on or after January 1, 2024 through December 31, 2024 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Quarter Ended September 30, 2023

Quarter Ended March 31, 2025

Commercial business $ — $ 2,990 $ — $ — $ —

Single family $ — $ — $ — $ 325 $ —

Total $ 235 $ 2,990 $ — $ 634 $ 70

The following table provides the amortized cost basis as of September 30, 2024 of MBFDs on or after July 1, 2023 through June 30, 2024 and subsequently had a payment default:

The following table provides the amortized cost basis as of March 31, 2024 of MBFDs on or after January 1, 2023 through December 31, 2023 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Nine Months Ended September 30, 2024

Quarter Ended March 31, 2024

4 unchanged sentences

Total $ 241 $ 4,420 $ — $ 20,415 $ —

The following table provides the amortized cost basis as of September 30, 2023 of MBFDs on or after July 1, 2022 through June 30, 2023 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Nine Months Ended September 30, 2023

Commercial business $ — $ 2,990 $ — $ — $ —

Single family 235 — — 2,879 1,162

Total $ 235 $ 2,990 $ — $ 2,879 $ 1,162

NOTE 4– DEPOSITS:

Deposit balances, including their weighted average rates, were as follows:

At September 30, 2024 At December 31, 2023

At March 31, 2025 At December 31, 2024

(dollars in thousands) Amount Weighted Average Rate Amount Weighted Average Rate

9 unchanged sentences

Total deposits $ 6,090,495 2.42 % $ 6,413,021 2.65 %

There were $ 284 million and $ 255 million in public funds included in deposits at September 30, 2024 and December 31, 2023, respectively.

There were $ 313 million and $ 315 million in public funds included in deposits at March 31, 2025 and December 31, 2024, respectively.

Certificates of deposit outstanding mature as follows:

(in thousands) September 30, 2024

(in thousands) March 31, 2025

Within one year $ 2,794,410

4 unchanged sentences

Total $ 2,816,698

The aggregate amount of certificate of deposits in denominations of more than the FDIC limit of $250 thousand at September 30, 2024 and December 31, 2023 were $ 248 million and $ 194 million, respectively.

The aggregate amount of certificate of deposits in denominations of more than the FDIC limit of $250 thousand at March 31, 2025 and December 31, 2024 were $ 288 million and $ 265 million, respectively.

NOTE 5– DERIVATIVES AND HEDGING ACTIVITIES:

1 unchanged sentence

The notional amounts and fair values for derivatives, all of which are economic hedges are included in other assets or accounts payable and other liabilities on the consolidated balance sheet, consist of the following:

At September 30, 2024

At March 31, 2025

Notional amount Fair value derivatives

21 unchanged sentences

Carrying value on consolidated balance sheet $ 278 $ ( 10,482 )

(1) Includes net cash collateral received of $ 7.2 million and $ 9.9 million at September 30, 2024 and December 31, 2023, respectively.

(1) Includes net cash collateral received of $ 8.3 million and $ 10.2 million at March 31, 2025 and December 31, 2024, respectively.

The following table presents gross fair value and net carrying value information for derivative instruments:

1 unchanged sentence

Carrying value

At September 30, 2024

At March 31, 2025

Derivative assets $ 8,918 $ ( 8,186 ) $ 732

3 unchanged sentences

Derivative liabilities ( 10,701 ) 219 ( 10,482 )

(1) Includes net cash collateral received of $ 7.2 million and $ 9.9 million at September 30, 2024 and December 31, 2023, respectively.

(1) Includes net cash collateral received of $ 8.3 million and $ 10.2 million at March 31, 2025 and December 31, 2024, respectively.

The collateral used under the Company's master netting agreements is typically cash, but securities may be used under agreements with certain counterparties.

3 unchanged sentences

Any securities pledged to counterparties as collateral remain on the consolidated balance sheets.

At September 30, 2024 and December 31, 2023, the Company had liabilities of $ 7.4 million and $ 10.1 million, respectively, in cash collateral received from counterparties and receivables of $ 177 thousand and $ 218 thousand, respectively, in cash collateral paid to counterparties.

At March 31, 2025 and December 31, 2024, the Company had liabilities of $ 8.5 million and $ 10.4 million, respectively, in cash collateral received from counterparties and receivables of $ 0.2 million and $ 0.2 million, respectively, in cash collateral paid to counterparties.

The following table presents the net gain (loss) recognized on economic hedge derivatives, within the respective line items in the consolidated income statements for the periods indicated:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

1 unchanged sentence

Net gain (loss) on loan origination and sale activities (1)

$ ( 469 ) $ 513 $ ( 157 ) $ 780

Loan servicing income (loss) (2)

330 ( 247 ) ( 395 ) ( 1,475 )

( 4 ) 1 ( 1 ) —

(1) Comprised of forward contracts used as an economic hedge of loans held for sale and interest rate lock commitments ("IRLCs") to customers.

1 unchanged sentence

(3) Impact of interest rate swap agreements executed with commercial banking customers and broker dealer counterparties.

The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, were $ 0.3 million for both quarters ended September 30, 2024 and 2023, and was $ 0.9 million and $ 1.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The notional amount of open interest rate swap agreements executed with commercial banking customers and broker dealer counterparties at September 30, 2024 and December 31, 2023 were $ 225 million and $ 236 million, respectively.

The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, were $ 0.4 million and $ 0.3 million for quarters ended March 31, 2025 and 2024, respectively.

The notional amount of open interest rate swap agreements executed with commercial banking customers and broker dealer counterparties at March 31, 2025 and December 31, 2024 were $ 215 million and $ 223 million, respectively.

NOTE 6– MORTGAGE BANKING OPERATIONS:

LHFS consisted of the following:

(in thousands) At September 30, 2024 At December 31, 2023

(in thousands) At March 31, 2025 At December 31, 2024

Single family $ 21,912 $ 20,312

2 unchanged sentences

Loans sold consisted of the following for the periods indicated:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

3 unchanged sentences

Gain on loan origination and sale activities, including the effects of derivative risk management instruments, consisted of the following:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

5 unchanged sentences

The unpaid principal balance of loans serviced for others is as follows:

(in thousands) At September 30, 2024 At December 31, 2023

(in thousands) At March 31, 2025 At December 31, 2024

Single family $ 5,141,876 $ 5,179,373

2 unchanged sentences

The following is a summary of changes in the Company's liability for estimated single-family mortgage repurchase losses:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

3 unchanged sentences

Realized (losses) recoveries, net (2)

( 93 ) ( 10 ) ( 224 ) ( 403 )

Balance, end of period $ 999 $ 1,317

3 unchanged sentences

Advances are also made to fund the foreclosure and collection costs of delinquent loans prior to the recovery of reimbursable amounts from investors or borrowers.

Advances of $ 1.5 million and $ 2.9 million were recorded in other assets as of September 30, 2024 and December 31, 2023, respectively.

Advances of $ 1.5 million and $ 1.6 million were recorded in other assets as of March 31, 2025 and December 31, 2024, respectively.

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that are more than 90 days past due), the Company records the balance of the loans as other assets and other liabilities.

At September 30, 2024 and December 31, 2023, delinquent or defaulted mortgage loans currently in Ginnie Mae pools that the Company has recognized on its consolidated balance sheets totaled $ 7.5 million and $ 5.6 million, respectively.

At March 31, 2025 and December 31, 2024, delinquent or defaulted mortgage loans currently in Ginnie Mae pools that the Company has recognized on its consolidated balance sheets totaled $ 6.8 million and $ 5.1 million, respectively.

Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the following:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

4 unchanged sentences

Amortization of multifamily and SBA MSRs ( 1,354 ) ( 1,402 )

3,603 3,467 10,517 10,429

Risk management, single family MSRs:

Changes in fair value of MSRs due to assumptions (2)

( 1,963 ) 785 ( 816 ) 1,794

Net gain (loss) from economic hedging (3)

4 unchanged sentences

(2) Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.

(3) The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, was $ 0.3 million for both quarters ended September 30, 2024 and 2023, and was $ 0.9 million and $ 1.1 million for the nine months ended September 30, 2024 and 2023, respectively.

(3) The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, was $ 0.4 million and $ 0.3 million for quarters ended March 31, 2025 and 2024, respectively.

The changes in single family MSRs measured at fair value are as follows:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

1 unchanged sentence

Additions and amortization:

707 935 2,177 2,473

Amortization (1)

3 unchanged sentences

Changes in fair value assumptions (2)

( 1,963 ) 785 ( 816 ) 1,794

Ending balance $ 72,285 $ 74,056

2 unchanged sentences

Key economic assumptions used in measuring the initial fair value of capitalized single family MSRs were as follows:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(rates per annum) (1)

2024 2023 2024 2023

Constant prepayment rate ("CPR") (2)

4 unchanged sentences

For single family MSRs, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as significant unobservable inputs as noted in the table below:

At September 30, 2024 At December 31, 2023

At March 31, 2025 At December 31, 2024

Range of Inputs Average (1)

7 unchanged sentences

To compute hypothetical sensitivities of the value of our single family MSRs to immediate adverse changes in key assumptions, we computed the impact of changes to CPRs and in discount rates as outlined below:

(dollars in thousands) At September 30, 2024

(dollars in thousands) At March 31, 2025

Fair value of single family MSR $ 72,285

6 unchanged sentences

The changes in multifamily and SBA MSRs measured at the lower of amortized cost or fair value were as follows:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

4 unchanged sentences

Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(rates per annum) (1)

2024 2023 2024 2023

Discount rate 13.10 % 13.00 %

2 unchanged sentences

Multifamily DUS loans typically contain yield maintenance features that significantly reduce loan prepayments, resulting in a CPR of zero for valuation purposes.

At September 30, 2024 At December 31, 2023

At March 31, 2025 At December 31, 2024

Range of Inputs Average (1)

8 unchanged sentences

For loans that have been sold through this program, a liability is recorded for this loss sharing arrangement under the accounting guidance for guarantees.

At September 30, 2024 and December 31, 2023, the total unpaid principal balance of loans sold under this program was $ 1.7 billion and $ 1.8 billion, respectively.

The Company's reserve liability related to this arrangement totaled $ 0.6 million and $ 0.5 million at September 30, 2024 and December 31, 2023, respectively.

There were no actual losses incurred under this arrangement during the quarters and nine months ended September 30, 2024 and 2023.

At March 31, 2025 and December 31, 2024, the total unpaid principal balance of loans sold under this program was $ 1.8 billion.

The Company's reserve liability related to this arrangement totaled $ 0.6 million and $ 0.7 million at March 31, 2025 and December 31, 2024, respectively.

There were no actual losses incurred under this arrangement during the quarters ended March 31, 2025 and 2024.

In the ordinary course of business, the Company sells residential mortgage loans to GSEs and other entities.

1 unchanged sentence

The Company may be required to repurchase mortgage loans or indemnify loan purchasers due to defects in the origination process of the loan, such as documentation errors, underwriting errors and judgments, early payment defaults and fraud.

The total unpaid principal balance of loans sold on a servicing-retained basis that were subject to the terms and conditions of these representations and warranties totaled $ 5.2 billion and $ 5.3 billion as of September 30, 2024 and December 31, 2023, respectively.

At September 30, 2024 and December 31, 2023, the Company had recorded a mortgage repurchase liability for loans sold on a servicing-retained and servicing-released basis, included in accounts payable and other liabilities on the consolidated balance sheets, of $ 1.1 million and $ 1.5 million, respectively.

The total unpaid principal balance of loans sold on a servicing-retained basis that were subject to the terms and conditions of these representations and warranties totaled $ 5.1 billion and $ 5.2 billion as of March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025 and December 31, 2024, the Company had recorded a mortgage repurchase liability for loans sold on a servicing-retained and servicing-released basis, included in accounts payable and other liabilities on the consolidated balance sheets of $ 1.0 million.

NOTE 8– EARNINGS PER SHARE:

The following table summarizes the calculation of earnings per share:

Quarter Ended September 30, Nine Months Ended September 30,

The following table summarizes the calculation of earnings (loss) per share:

Quarter Ended March 31,

(in thousands, except share and per share data) 2025 2024

9 unchanged sentences

( 0.24 ) ( 0.40 )

(1) Excluded from the computation of diluted earnings per share (due to their antidilutive effect) for the quarters and nine months ended September 30, 2024 and 2023 were certain unvested RSUs and PSUs.

On a weighted average basis 558,665 and 236,628 unvested stock units convertible into shares of common stock were excluded at September 30, 2024 and 2023, respectively, because their effect would have been anti-dilutive.

(1) Excluded from the computation of diluted earnings per share (due to their antidilutive effect) for the quarters ended March 31, 2025 and 2024 were certain unvested RSUs and PSUs.

On a weighted average basis 395,023 and 561,610 unvested stock units convertible into shares of common stock were excluded at March 31, 2025 and 2024, respectively, because their effect would have been anti-dilutive.

NOTE 9– FAIR VALUE MEASUREMENT:

58 unchanged sentences

The following tables presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis:

At September 30, 2024

At March 31, 2025

(in thousands) Fair Value Level 1 Level 2 Level 3

15 unchanged sentences

Single family mortgage servicing rights 72,285 — — 72,285

Futures 2 2 — —

Forward sale commitments 50 — 50 —

3 unchanged sentences

Total assets $ 1,157,398 $ 46,319 $ 1,035,291 $ 75,788

Futures $ 13 $ 13 $ — $ —

Forward sale commitments $ 185 $ — $ 185 $ —

Interest rate lock commitments 59 — — 59

Interest rate swaps 8,301 — 8,301 —

18 unchanged sentences

Single family mortgage servicing rights 72,901 — — 72,901

Futures 1 1 — —

Forward sale commitments 237 — 237 —

3 unchanged sentences

Total assets $ 1,159,871 $ 34,750 $ 1,049,060 $ 76,061

Futures $ 3 $ 3 $ — $ —

Forward sale commitments $ 402 $ — $ 402 $ —

Interest rate lock commitments 49 — — 49

Interest rate swaps 10,250 — 10,250 —

Total liabilities $ 10,701 $ — $ 10,652 $ 49

There were no transfers between levels of the fair value hierarchy during the quarters and nine months ended September 30, 2024 and 2023.

There were no transfers between levels of the fair value hierarchy during the quarters ended March 31, 2025 and 2024.

Level 3 Recurring Fair Value Measurements

The Company's Level 3 recurring fair value measurements consist of investment securities AFS, single family MSRs, single family LHFI where fair value option was elected, certain single family LHFS and interest rate lock commitments, which are accounted for as derivatives.

For information regarding fair value changes and activity for single family MSRs during the quarters and nine months ended September 30, 2024 and 2023, see Note 6, Mortgage Banking Operations of this Quarterly Report on Form 10-Q.

For information regarding fair value changes and activity for single family MSRs during the quarters ended March 31, 2025 and 2024, see Note 6, Mortgage Banking Operations of this Quarterly Report on Form 10-Q.

The fair value of IRLCs considers several factors, including the fair value in the secondary market of the underlying loan resulting from the exercise of the commitment, the expected net future cash flows related to the associated servicing of the loan (referred to as the value of servicing) and the probability that the commitment will not be converted into a funded loan (referred to as a fall-out factor).

17 unchanged sentences

The Company determined these loans to be level 3 recurring assets as the valuation technique included a significant unobservable input.

The total amount of held for investment loans where fair value option election was made was $ 1.3 million at September 30, 2024 and December 31, 2023.

The total amount of held for investment loans where fair value option election was made was $ 1.2 million and $ 1.3 million at March 31, 2025 and December 31, 2024, respectively.

The following information presents significant Level 3 unobservable inputs used to measure fair value of certain assets:

2 unchanged sentences

Inputs Low High Weighted Average

September 30, 2024

March 31, 2025

Investment securities AFS $ 1,699 Income approach Implied spread to benchmark interest rate curve

9 unchanged sentences

Value of servicing 0.78 % 2.15 % 1.37 %

We had no LHFS where the fair value was not derived with significant observable inputs at September 30, 2024 and December 31, 2023.

We had no LHFS where the fair value was not derived with significant observable inputs at March 31, 2025 and December 31, 2024.

The following table presents fair value changes and activity for certain Level 3 assets for the periods indicated:

1 unchanged sentence

Ending balance

Quarter Ended September 30, 2024

Investment securities AFS $ 1,769 $ — $ — $ ( 50 ) $ 85 $ 1,804

Single family LHFI 1,286 — — — 43 1,329

Quarter Ended September 30, 2023

Investment securities AFS $ 1,913 $ — $ — $ ( 48 ) $ ( 70 ) $ 1,795

Single family LHFI 1,269 — — — ( 44 ) 1,225

Nine Months Ended September 30, 2024

Quarter Ended March 31, 2025

Investment securities AFS $ 1,698 $ — $ — $ ( 50 ) $ 51 $ 1,699

Single family LHFS

— — 50 ( 50 ) — $ —

Single family LHFI 1,287 — ( 50 ) — 11 1,248

Nine Months Ended September 30, 2023

Quarter Ended March 31, 2024

Investment securities AFS $ 1,860 $ — $ — $ ( 50 ) $ ( 19 ) $ 1,791

2 unchanged sentences

The following table presents fair value changes and activity for Level 3 interest rate lock commitments:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(in thousands) 2025 2024

Beginning balance, net $ 126 $ 411

Total realized/unrealized gains (losses) 1,954 371 3,543 1,484

Total realized/unrealized gains

Settlements ( 1,417 ) ( 492 )

17 unchanged sentences

Total Gains (Losses)

At or for the Quarter Ended September 30, 2024

LHFI $ 1,573 $ 7

At or for the Quarter Ended September 30, 2023

LHFI $ 3,774 $ ( 579 )

At or for the Nine Months Ended September 30, 2024

At or for the Quarter Ended March 31, 2025

LHFI $ 1,546 $ 698

At or for the Nine Months Ended September 30, 2023

At or for the Quarter Ended March 31, 2024

LHFI $ 423 $ ( 50 )

2 unchanged sentences

The following presents the carrying value, estimated fair value and the levels of the fair value hierarchy for the Company's financial instruments other than assets and liabilities measured at fair value on a recurring basis:

At September 30, 2024

At March 31, 2025

(in thousands) Carrying

3 unchanged sentences

LHFI 6,022,334 5,758,436 — — 5,758,436

LHFS – multifamily and other

12,822 12,822 — 12,822 —

Mortgage servicing rights – multifamily and SBA 25,674 31,468 — — 31,468

10 unchanged sentences

LHFI 6,191,766 5,864,426 — — 5,864,426

LHFS – multifamily and other 6,788 6,871 — 6,871 —

Mortgage servicing rights – multifamily and SBA 26,565 32,361 — — 32,361

6 unchanged sentences

Single family loans held for sale accounted under the fair value option are measured initially at fair value with subsequent changes in fair value recognized in earnings.

Gains and losses from such changes in fair value are recognized in net gain on mortgage loan origination and sale activities within noninterest income.

Gains and losses from such changes in fair value are recognized in net gain on

mortgage loan origination and sale activities within noninterest income.

The change in fair value of loans held for sale is primarily driven by changes in interest rates subsequent to loan funding and changes in fair value of the related servicing asset, resulting in revaluation adjustments to the recorded fair value.

1 unchanged sentence

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale accounted for under the fair value option:

At September 30, 2024 At December 31, 2023

At March 31, 2025 At December 31, 2024

(in thousands) Fair Value Aggregate Unpaid Principal Balance Fair Value Less Aggregated Unpaid Principal Balance Fair Value Aggregate Unpaid Principal Balance Fair Value Less Aggregated Unpaid Principal Balance

Single family LHFS $ 21,912 $ 21,513 $ 399 $ 20,312 $ 20,137 $ 175

NOTE 10– LIHTC INVESTMENTS:

The Company has LIHTC investments that are designed to promote qualified affordable housing programs and generate a return primarily through the realization of federal tax credits.

The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method.

The current balance of these investments, which are included in other assets in the consolidated balance sheets, was $ 35.9 million and $ 37.3 million as of March 31, 2025 and December 31, 2024, respectively.

The following table presents other information related to the Company’s LIHTC investments for the periods indicated:

Quarter Ended March 31,

(in thousands) 2025 2024

Tax credits and other tax benefits recognized $ 1,697 $ 1,668

LIHTC amortization expense 1,405 1,367

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 1. Financial Statements