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Item 1. Financial Statements

2025-08-06 compared with 2025-05-08 · 229 added, 125 removed, 1119 unchanged (24% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands, except share data) (Unaudited)

32 unchanged sentences

CONSOLIDATED INCOME STATEMENTS

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

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

21 unchanged sentences

Total noninterest income

15,100 13,227 27,236 22,681

Noninterest expense:

18 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

18 unchanged sentences

income (loss) Total shareholders' equity

For the quarter ended March 31, 2024

For the quarter ended June 30, 2024

Balance, March 31, 2024

18,857,565 $ 230,814 $ 387,860 $ ( 91,341 ) $ 527,333

Net income (loss) — — ( 6,238 ) — ( 6,238 )

Share-based compensation expense — 907 — — 907

Other comprehensive income (loss) — — — ( 1,885 ) ( 1,885 )

Balance, June 30, 2024

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

For the six months ended June 30, 2024

Balance, December 31, 2023

18,810,055 $ 229,889 $ 395,357 $ ( 86,859 ) $ 538,387

Net income (loss) — — ( 13,735 ) — ( 13,735 )

4 unchanged sentences

( 12,973 ) ( 134 ) — — ( 134 )

Balance, June 30, 2024

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

For the quarter ended June 30, 2025

Balance, March 31, 2025

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

For the quarter ended March 31, 2025

Net income (loss) — — ( 4,412 ) — ( 4,412 )

Share-based compensation expense — 608 — — 608

Other comprehensive income — — — 6,034 6,034

Balance, June 30, 2025

18,920,808 $ 234,026 $ 242,136 $ ( 73,181 ) $ 402,981

For the six months ended June 30, 2025

Balance, December 31, 2024

2 unchanged sentences

Share-based compensation expense

— 1,200 — — 1,200

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

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

Other comprehensive income (loss) — — — 14,020 14,020

Common stock repurchased

( 31,445 ) ( 359 ) — — ( 359 )

Balance, March 31, 2025

Balance, June 30, 2025

18,920,808 $ 234,026 $ 242,136 $ ( 73,181 ) $ 402,981

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Quarter Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

26 unchanged sentences

45,791 110,008

Proceeds from sale of OREO — 126

Net (increase) decrease in LHFI

5 unchanged sentences

Net cash provided by investing activities 342,619 123,044

Quarter Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

6 unchanged sentences

Repayment of finance lease principal ( 36 ) ( 94 )

Net cash provided by (used in) financing activities

( 322,632 ) 76,466

Net cash used in financing activities ( 515,849 ) ( 90,381 )

Net increase (decrease) in cash and cash equivalents

55 unchanged sentences

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 March 31, 2025

At June 30, 2025

(in thousands) Amortized

24 unchanged sentences

$ 2,301 $ — $ ( 28 ) $ 2,273

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.

At June 30, 2025, and December 31, 2024, the Company held $ 41 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 June 30, 2025 and 2024, the Company had net gains of $ 0.2 million and net losses of $ 0.3 million on trading securities, respectively, and for the six months ended June 30, 2025 and 2024, the Company had net gains of $ 1.0 million and net losses of $ 0.9 million on trading securities, respectively, which 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 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.

As of June 30, 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 March 31, 2025

At June 30, 2025

Less than 12 months 12 months or more Total

25 unchanged sentences

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 March 31, 2025 or December 31, 2024.

The Company has not identified any expected credit losses on its debt securities as of June 30, 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 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.

In addition, as of June 30, 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 March 31, 2025

At June 30, 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 March 31, 2025 and December 31, 2024 was 3.00 % and 3.01 %, respectively.

The weighted average yield of MBS and CMOs as of June 30, 2025 and December 31, 2024 was 3.01 %.

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 March 31, 2025 At December 31, 2024

(in thousands) At June 30, 2025 At December 31, 2024

Federal Reserve Bank to secure borrowings $ 864,307 $ 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 $ 2.7 million and $ 2.8 million for quarters ended March 31, 2025 and 2024, respectively.

Tax-exempt interest income on investment securities was $ 2.6 million and $ 2.8 million for quarters ended June 30, 2025 and 2024, and $ 5.3 million and $ 5.6 million for the six months ended June 30, 2025 and 2024, respectively.

NOTE 3- LOANS AND CREDIT QUALITY:

3 unchanged sentences

LHFI consists of the following:

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

(in thousands) At June 30, 2025 At December 31, 2024

Non-owner occupied CRE $ 508,781 $ 570,750

14 unchanged sentences

$ 5,887,333 $ 6,193,053

(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").

(1) Includes $ 1.0 million and $ 1.3 million of loans at June 30, 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 $ 3.2 billion and $ 4.0 billion at June 30, 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 June 30, 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 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.

At June 30, 2025, and December 31, 2024 single family loans in the state of Washington represented 13 % of the total LHFI portfolio.

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

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 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.

As of June 30, 2025, the historical expected loss rates increased when compared to December 31, 2024 due to adverse risk migration.

During the six months ended June 30, 2025, the qualitative factors decreased primarily due to improved collateral conditions.

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 $ 1.1 million at March 31, 2025 and December 31, 2024, respectively.

The allowance for unfunded commitments was $ 1.1 million at both June 30, 2025 and December 31, 2024.

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

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.

Accrued interest on LHFI was $ 23.5 million and $ 25.1 million at June 30, 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

13 unchanged sentences

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

Quarter Ended March 31, 2025

Quarter Ended June 30, 2025

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

16 unchanged sentences

Total ACL $ 39,634 $ ( 47 ) $ 59 $ 6,160 $ 45,806

Quarter Ended March 31, 2024

Quarter Ended June 30, 2024

(in thousands) Beginning balance Charge-offs Recoveries Provision

17 unchanged sentences

Total ACL $ 39,677 $ ( 126 ) $ 62 $ 128 $ 39,741

Six Months Ended June 30, 2025

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

Non-owner occupied CRE $ 1,739 $ — $ — $ 52 $ 1,791

Multifamily 14,909 — — 4,039 18,948

Construction/land development

Multifamily construction 849 — — 310 1,159

CRE construction 66 — — 5 71

Single family construction 6,737 — — ( 1,537 ) 5,200

Single family construction to permanent 184 — — ( 34 ) 150

Total 24,484 — — 2,835 27,319

Commercial and industrial loans

Owner occupied CRE 576 — — 34 610

Commercial business 6,886 ( 41 ) 50 4,255 11,150

Total 7,462 ( 41 ) 50 4,289 11,760

Consumer loans

Single family 3,610 — 3 ( 11 ) 3,602

Home equity and other 3,187 ( 67 ) 70 ( 65 ) 3,125

Total 6,797 ( 67 ) 73 ( 76 ) 6,727

Total ACL $ 38,743 $ ( 108 ) $ 123 $ 7,048 $ 45,806

Six Months Ended June 30, 2024

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

Non-owner occupied CRE $ 2,610 $ — $ — $ ( 833 ) $ 1,777

Multifamily 13,093 — — 3,977 17,070

Construction/land development

Multifamily construction 3,983 — — ( 2,012 ) 1,971

CRE construction 189 — — ( 154 ) 35

Single family construction 7,365 — — ( 1,920 ) 5,445

Single family construction to permanent 672 — — ( 372 ) 300

Total 27,912 — — ( 1,314 ) 26,598

Commercial and industrial loans

Owner occupied CRE 899 — — ( 168 ) 731

Commercial business 2,950 ( 1,120 ) 40 3,725 5,595

Total 3,849 ( 1,120 ) 40 3,557 6,326

Consumer loans

Single family 5,287 — 3 ( 1,446 ) 3,844

Home equity and other 3,452 ( 111 ) 59 ( 427 ) 2,973

Total 8,739 ( 111 ) 62 ( 1,873 ) 6,817

Total ACL $ 40,500 $ ( 1,231 ) $ 102 $ 370 $ 39,741

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

At March 31, 2025

At June 30, 2025

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

44 unchanged sentences

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

At March 31, 2025

At June 30, 2025

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

85 unchanged sentences

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

At March 31, 2025

At June 30, 2025

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

19 unchanged sentences

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

At March 31, 2025

At June 30, 2025

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

1 unchanged sentence

— — 1,915 — — 1,915

Construction/land development

CRE construction 3,771 — — — — 3,771

25 unchanged sentences

The following table presents nonaccrual status for loans:

At March 31, 2025 At December 31, 2024

At June 30, 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 March 31, 2025

At June 30, 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 $ 10.4 million and $ 11.3 million at March 31, 2025 and December 31, 2024, respectively.

(1) Includes loans whose repayments are insured by the FHA or guaranteed by the VA or Small Business Administration ("SBA") of $ 11.4 million and $ 11.3 million at June 30, 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 $ 1.2 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.

(3) Includes $ 1.0 million and $ 1.3 million of loans at June 30, 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 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 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:

The granting of modifications for the quarters and six months ended June 30, 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 six months ended June 30, 2025 and 2024 to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

Significant Payment Delay

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

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(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

$ 1,915 0.07 % $ — — % $ 1,915 0.07 % $ — — %

Commercial business — — % — — % — — % 97 0.03 %

Term Extension

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 %

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Commercial business $ 996 0.35 % $ — — % $ 996 0.35 % $ 3,455 0.92 %

Significant Payment Delay and Term Extension

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

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Commercial business $ 729 0.26 % $ — — % $ 1,840 0.64 % $ — — %

2 unchanged sentences

Significant Payment Delay

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

The weighted average duration of loan payments deferred is 0.3 years

— The weighted average duration of loan payments deferred is 2.0 years

Commercial business The weighted average duration of loan payments deferred is 1.8 years

— The weighted average duration of loan payments deferred is 3.8 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 1.06 % of loan balances were capitalized and added to the remaining term of the loan.

Provided payment deferrals to borrowers.

A weighted average 1.67 % of loan balances were capitalized and added to the remaining term of the loan.

Provided payment deferrals to borrowers.

A weighted average 1.00 % of loan balances were capitalized and added to the remaining term of the loan.

Term Extension

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.

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Commercial business Added a weighted average 1.1 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

— Added a weighted average 2.4 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.

Single family Added a weighted average 5.6 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 2.8 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 6.4 years to the life of loans, which reduced the monthly payment amounts to the borrowers.

Added a weighted average 3.0 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 January 1, 2024 through December 31, 2024:

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

The following table depicts the payment status of loans that were classified as MBFDs on or after April 1, 2024 through March 31, 2025:

Payment Status (Amortized Cost Basis) at June 30, 2025

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

6 unchanged sentences

Total $ 24,138 $ 176 $ 10,466

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

The following table depicts the payment status of loans that were classified as MBFDs on or after April 1, 2023 through March 31, 2024:

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

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

4 unchanged sentences

Total $ 2,752 $ 3,541 $ 25,888

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:

The following table provides the amortized cost basis as of June 30, 2025 of MBFDs on or after April 1, 2024 through March 31, 2025 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Quarter Ended March 31, 2025

Quarter Ended June 30, 2025

(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

Owner occupied CRE $ — $ — $ — $ 254 $ —

Single family — — — 203 —

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:

Total $ — $ — $ — $ 457 $ —

The following table provides the amortized cost basis as of June 30, 2024 of MBFDs on or after April 1, 2023 through March 31, 2024 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Quarter Ended March 31, 2024

Quarter Ended June 30, 2024

Commercial business $ — $ 2,708 $ — $ — $ —

Single family 833 — — — —

Total $ 833 $ 2,708 $ — $ — $ —

The following table provides the amortized cost basis as of June 30, 2025 of MBFDs on or after April 1, 2024 through March 31, 2025 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Six Months Ended June 30, 2025

Owner occupied CRE $ — $ — $ — $ 254 $ —

Single family — — — 378 —

Total $ — $ — $ — $ 632 $ —

The following table provides the amortized cost basis as of June 30, 2024 of MBFDs on or after April 1, 2023 through March 31, 2024 and subsequently had a payment default:

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Six Months Ended June 30, 2024

Non-owner occupied CRE $ — $ — $ — $ 16,240 $ —

5 unchanged sentences

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

At March 31, 2025 At December 31, 2024

At June 30, 2025 At December 31, 2024

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

9 unchanged sentences

Total deposits $ 5,857,284 2.30 % $ 6,413,021 2.65 %

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

There were $ 319 million and $ 315 million in public funds included in deposits at June 30, 2025 and December 31, 2024, respectively.

Certificates of deposit outstanding mature as follows:

(in thousands) March 31, 2025

(in thousands) June 30, 2025

Within one year $ 2,719,131

4 unchanged sentences

Total $ 2,734,586

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.

The aggregate amount of certificate of deposits in denominations of more than the FDIC limit of $250 thousand at June 30, 2025 and December 31, 2024 were $ 277 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 March 31, 2025

At June 30, 2025

Notional amount Fair value derivatives

3 unchanged sentences

Interest rate swaps 204,450 6,583 ( 6,583 )

Futures 11,000 2 —

Options 3,000 9 —

Total derivatives before netting $ 393,688 7,927 ( 7,242 )

14 unchanged sentences

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

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

(1) Includes net cash collateral received of $ 6.7 million and $ 10.2 million at June 30, 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 March 31, 2025

At June 30, 2025

Derivative assets $ 7,927 $ ( 6,932 ) $ 995

3 unchanged sentences

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

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

(1) Includes net cash collateral received of $ 6.7 million and $ 10.2 million at June 30, 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 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.

At June 30, 2025 and December 31, 2024, the Company had liabilities of $ 6.9 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

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

$ 285 $ 226 $ 346 $ 312

Loan servicing income (loss) (2)

( 272 ) ( 225 ) ( 81 ) ( 725 )

(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 $ 0.4 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.

The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, were $ 0.5 million and $ 0.3 million for quarters ended June 30, 2025 and 2024, respectively and were $ 0.9 million and $ 0.6 million for the six months ended June 30, 2025 and 2024, respectively.

The notional amount of open interest rate swap agreements executed with commercial banking customers and broker dealer counterparties at June 30, 2025 and December 31, 2024 were $ 204 million and $ 223 million, respectively.

NOTE 6– MORTGAGE BANKING OPERATIONS:

LHFS consisted of the following:

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

(in thousands) At June 30, 2025 At December 31, 2024

Single family $ 29,999 $ 20,312

2 unchanged sentences

Loans sold consisted of the following for the periods indicated:

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

5 unchanged sentences

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

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

(in thousands) At June 30, 2025 At December 31, 2024

Single family $ 5,107,214 $ 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

Realized (losses) recoveries, net (2)

( 28 ) ( 95 ) 42 ( 131 )

Balance, end of period $ 748 $ 1,202 $ 748 $ 1,202

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

Advances of $ 1.6 million were recorded in other assets as of both June 30, 2025 and December 31, 2024.

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 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.

At June 30, 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 $ 8.6 million and $ 5.1 million, respectively.

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

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Amortization of multifamily and SBA MSRs ( 1,455 ) ( 1,459 ) ( 2,809 ) ( 2,861 )

3,295 3,390 6,866 6,914

Risk management, single family MSRs:

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

4,373 529 4,644 1,147

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 $ 0.4 million and $ 0.3 million for quarters ended March 31, 2025 and 2024, 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 $ 0.5 million and $ 0.3 million for quarters ended June 30, 2025 and 2024, respectively, and $ 0.9 million and $ 0.6 million for the six months ended June 30, 2025 and 2024, respectively.

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

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

Additions and amortization:

931 853 1,626 1,470

Amortization (1)

3 unchanged sentences

Changes in fair value assumptions (2)

4,373 529 4,644 1,147

Ending balance $ 75,991 $ 73,725 $ 75,991 $ 73,725

2 unchanged sentences

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

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(rates per annum) (1)

2025 2024 2025 2024

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 March 31, 2025 At December 31, 2024

At June 30, 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 March 31, 2025

(dollars in thousands) At June 30, 2025

Fair value of single family MSR $ 75,991

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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

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

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(rates per annum) (1)

2025 2024 2025 2024

Discount rate 13.10 % 13.00 % 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 March 31, 2025 At December 31, 2024

At June 30, 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 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.

At June 30, 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 $ 0.9 million and $ 0.7 million at June 30, 2025 and December 31, 2024, respectively.

There were no actual losses incurred under this arrangement during the quarters and six months ended June 30, 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 $ 5.1 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.

At June 30, 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 $ 0.7 million and $ 1.0 million, respectively.

NOTE 8– EARNINGS PER SHARE:

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

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

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

9 unchanged sentences

( 0.23 ) ( 0.33 ) ( 0.47 ) ( 0.73 )

(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.

(1) Excluded from the computation of diluted earnings per share (due to their antidilutive effect) for the quarters and six months ended June 30, 2025 and 2024 were certain unvested RSUs and PSUs.

On a weighted average basis 395,023 and 559,921 unvested stock units convertible into shares of common stock were excluded at June 30, 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 March 31, 2025

At June 30, 2025

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

15 unchanged sentences

Single family mortgage servicing rights 75,991 — — 75,991

Futures 2 2 — —

Forward sale commitments 426 — 426 —

Options 9 9 —

Interest rate lock commitments 918 — — 918

2 unchanged sentences

Forward sale commitments $ 657 $ — $ 657 $ —

Interest rate lock commitments 2 — — 2

Interest rate swaps 6,583 — 6,583 —

28 unchanged sentences

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

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

There were no transfers between levels of the fair value hierarchy during the quarters and six months ended June 30, 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 ended March 31, 2025 and 2024, 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 quarter ended and six months ended June 30, 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).

3 unchanged sentences

The value of servicing is impacted by a variety of factors, including prepayment assumptions, discount rates, delinquency rates, contractually specified servicing fees, servicing costs and underlying portfolio characteristics.

Because these inputs are not observable in market trades, the fall-out factor and value of servicing are considered to be Level 3 inputs.

The fair value of IRLCs decreases

in value upon an increase in the fall-out factor and increases in value upon an increase in the value of servicing.

Because these inputs are not observable in

market trades, the fall-out factor and value of servicing are considered to be Level 3 inputs.

The fair value of IRLCs decreases in value upon an increase in the fall-out factor and increases in value upon an increase in the value of servicing.

Changes in the fall-out factor and value of servicing do not increase or decrease based on movements in other significant unobservable inputs.

9 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 $ 1.2 million and $ 1.3 million at March 31, 2025 and December 31, 2024, respectively.

The total amount of held for investment loans where fair value option election was made was $ 1.0 million and $ 1.3 million at June 30, 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

March 31, 2025

June 30, 2025

Investment securities AFS $ 1,667 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 March 31, 2025 and December 31, 2024.

We had no LHFS where the fair value was not derived with significant observable inputs at June 30, 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 March 31, 2025

Quarter Ended June 30, 2025

Investment securities AFS $ 1,699 $ — $ — $ ( 50 ) $ 18 $ 1,667

Single family LHFS

— — 50 ( 50 ) — $ —

Single family LHFI 1,248 — — ( 282 ) ( 7 ) 959

Quarter Ended March 31, 2024

Quarter Ended June 30, 2024

Investment securities AFS $ 1,791 $ — $ — $ ( 50 ) $ 28 $ 1,769

Single family LHFI 1,285 — — — 1 1,286

Six Months Ended June 30, 2025

Investment securities AFS $ 1,698 $ — $ — $ ( 100 ) $ 69 $ 1,667

Single family LHFI 1,287 — ( 50 ) ( 282 ) 4 959

Six Months Ended June 30, 2024

Investment securities AFS $ 1,860 $ — $ — $ ( 100 ) $ 9 $ 1,769

Single family LHFI 1,280 — — — 6 1,286

(1) Changes in fair value for single LHFI are recorded in other noninterest income on the consolidated income statements.

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

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

Total realized/unrealized gains

2,026 1,172 3,873 1,589

Settlements ( 1,666 ) ( 1,025 ) ( 3,083 ) ( 1,517 )

17 unchanged sentences

Total Gains (Losses)

At or for the Quarter Ended March 31, 2025

At or for the Quarter Ended June 30, 2025

LHFI $ 1,380 $ 5

At or for the Quarter Ended March 31, 2024

At or for the Quarter Ended June 30, 2024

LHFI $ 3,131 $ ( 2,692 )

At or for the Six Months Ended June 30, 2025

LHFI $ 1,380 $ 26

At or for the Six Months Ended June 30, 2024

LHFI $ 3,131 $ ( 2,743 )

(1) Represents the carrying value of loans for which adjustments are based on the fair value of the collateral.

1 unchanged sentence

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 March 31, 2025

At June 30, 2025

(in thousands) Carrying

25 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 March 31, 2025 At December 31, 2024

At June 30, 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 $ 29,999 $ 29,256 $ 743 $ 20,312 $ 20,137 $ 175

NOTE 10– LIHTC INVESTMENTS:

NOTE 10–LOW INCOME HOUSING TAX CREDIT (" 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 current balances of these investments, which are included in other assets in the consolidated balance sheets, were $ 34.5 million and $ 37.3 million as of June 30, 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,

Quarter Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

LIHTC amortization expense 1,405 1,367 2,810 2,734

NOTE 11– SUBSEQUENT EVENTS:

On July 16, 2025, the Company entered into an agreement to sell its Government National Mortgage Association (“Ginnie Mae”) mortgage servicing portfolio to an entity experienced in servicing loans, including Ginnie Mae loans.

The principal balance of the loans in the Ginnie Mae servicing portfolio sold under the purchase agreement was $ 797 million and the value of the related mortgage servicing rights was $ 15.7 million on June 30, 2025.

The sale closed on August 1, 2025 and no gain or loss was recognized.

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