What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 359 added, 229 removed, 1011 unchanged (37% of the section changed)

3 unchanged sentences

Consolidated Statements of Financial Condition

March 31, 2022 (Unaudited) and December 31, 2021

June 30, 2022 (Unaudited) and December 31, 2021

(Dollars in Thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Cash and due from banks $ 176,461 $ 506,270

2 unchanged sentences

Available for sale debt securities, at fair value 1,947,120 2,057,851

Held to maturity debt securities, net (fair value of $ 417,664 and $ 449,709 at March 31, 2022 and December 31, 2021, respectively).

Held to maturity debt securities, net (fair value of $ 399,140 at June 30, 2022 (unaudited) and $ 449,709 at December 31, 2021)

410,745 436,150

24 unchanged sentences

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none issued

Common stock, $ 0.01 par value, 200,000,000 shares authorized, 83,209,012 shares issued and 75,881,889 shares outstanding at March 31, 2022, and 83,209,012 shares issued and 76,969,999 shares outstanding at December 31, 2021, respectively.

Common stock, $ 0.01 par value, 200,000,000 shares authorized, 83,209,012 shares issued and 75,163,718 shares outstanding at June 30, 2022 and 76,969,999 outstanding at December 31, 2021

Additional paid-in capital 976,067 969,815

11 unchanged sentences

Consolidated Statements of Income

Three months ended March 31, 2022 and 2021 (Unaudited)

Three and six months ended June 30, 2022 and 2021 (Unaudited)

(Dollars in Thousands, except per share data)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2022 2021 2022 2021

Interest income:

12 unchanged sentences

Net interest income 99,475 90,905 194,001 180,905

Provision benefit for credit losses ( 6,405 ) ( 15,001 )

Provision charge (benefit) for credit losses 2,996 ( 10,704 ) ( 3,409 ) ( 25,705 )

Net interest income after provision for credit losses 96,479 101,609 197,410 206,610

14 unchanged sentences

Advertising and promotion expense 1,222 927 2,326 1,804

Credit loss benefit for off-balance sheet credit exposures ( 2,390 ) ( 875 )

Credit loss (benefit) expense for off-balance sheet credit exposures ( 973 ) 2,050 ( 3,363 ) 1,175

Other operating expenses 9,826 9,046 19,191 19,149

11 unchanged sentences

Consolidated Statements of Comprehensive Income

Three months ended March 31, 2022 and 2021 (Unaudited)

Three and six months ended June 30, 2022 and 2021 (Unaudited)

(Dollars in Thousands)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2022 2021 2022 2021

Net income $ 39,228 $ 44,789 $ 83,191 $ 93,348

Other comprehensive (loss) income, net of tax:

Other comprehensive income, net of tax:

Unrealized gains and losses on available for sale debt securities:

Net unrealized losses arising during the period ( 84,971 ) ( 9,019 )

Net unrealized (losses) gains arising during the period ( 45,733 ) 2,440 ( 130,704 ) ( 6,579 )

Reclassification adjustment for gains included in net income ( 42 ) — ( 42 ) ( 171 )

Total ( 45,775 ) 2,440 ( 130,746 ) ( 6,750 )

Unrealized gains on derivatives 10,438 4,621

Unrealized gains (losses) on derivatives 2,158 ( 1,224 ) 12,596 3,397

Amortization related to post-retirement obligations ( 236 ) ( 111 ) ( 512 ) ( 220 )

Total other comprehensive loss ( 74,809 ) ( 4,678 )

Total other comprehensive (loss) income ( 43,853 ) 1,105 ( 118,662 ) ( 3,573 )

Total comprehensive (loss) income $ ( 4,625 ) $ 45,894 $ ( 35,471 ) $ 89,775

3 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2021 (Unaudited)

For the three and six months ended June 30, 2021 (Unaudited)

(Dollars in Thousands)

For the three months ended March 31, 2021

COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) TREASURYSTOCK UNALLOCATED ESOP SHARES COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS DEFERRED COMPENSATION PLANS TOTAL STOCKHOLDERS’ EQUITY

For the three months ended June 30, 2021

COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE INCOME TREASURYSTOCK UNALLOCATED ESOP SHARES COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS DEFERRED COMPENSATION PLANS TOTAL STOCKHOLDERS’ EQUITY

Balance at March 31, 2021 $ 832 $ 963,556 $ 748,574 $ 12,977 $ ( 59,261 ) $ ( 19,447 ) $ ( 4,381 ) $ 4,381 $ 1,647,231

Net income — — 44,789 — — — — — 44,789

Other comprehensive income, net of tax — — — 1,105 — — — — 1,105

Cash dividends paid — — ( 18,128 ) — — — — — ( 18,128 )

Distributions from DDFP — 41 — — — — 168 ( 168 ) 41

Purchases of treasury stock — — — — — — — — —

Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 46 ) — — — ( 46 )

Allocation of ESOP shares — 317 — — — 769 — — 1,086

Allocation of Stock Award Plan ("SAP") shares — 1,507 — — — — — — 1,507

Allocation of stock options — 49 — — — — — — 49

Balance at June 30, 2021 $ 832 $ 965,470 $ 775,235 $ 14,082 $ ( 59,307 ) $ ( 18,678 ) $ ( 4,213 ) $ 4,213 $ 1,677,634

For the six months ended June 30, 2021

COMMONSTOCK ADDITIONAL

PAID-IN CAPITAL RETAINEDEARNINGS ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) TREASURYSTOCK UNALLOCATED

ESOP SHARES COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS DEFERRED COMPENSATION PLANS TOTAL

STOCKHOLDERS’ EQUITY

Balance at December 31, 2020 $ 832 $ 962,453 $ 718,090 $ 17,655 $ ( 59,018 ) $ ( 20,215 ) $ ( 4,549 ) $ 4,549 $ 1,619,797

8 unchanged sentences

Allocation of ESOP shares — 462 — — — 1,537 — — 1,999

Allocation of Stock Award Plan ("SAP") shares — 959 — — — — — — 959

Allocation of SAP shares — 2,466 — — — — — — 2,466

Allocation of stock options — 102 — — — — — — 102

Balance at March 31, 2021 $ 832 $ 963,556 $ 748,574 $ 12,977 $ ( 59,261 ) $ ( 19,447 ) $ ( 4,381 ) $ 4,381 $ 1,647,231

Balance at June 30, 2021 $ 832 $ 965,470 $ 775,235 $ 14,082 $ ( 59,307 ) $ ( 18,678 ) $ ( 4,213 ) $ 4,213 $ 1,677,634

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2022 (Unaudited)

For the three and six months ended June 30, 2022 (Unaudited)

(Dollars in Thousands)

For the three months ended March 31, 2022

COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) TREASURY STOCK UNALLOCATED ESOP SHARES COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS DEFERRED COMPENSATION PLANS TOTAL STOCKHOLDERS’ EQUITY

For the three months ended June 30, 2022

COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE (LOSS) TREASURY STOCK UNALLOCATED ESOP SHARES COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS DEFERRED COMPENSATION PLANS TOTAL STOCKHOLDERS’ EQUITY

Balance at March 31, 2022 832 972,552 839,807 ( 67,946 ) ( 109,581 ) ( 14,533 ) ( 3,844 ) 3,844 1,621,131

Net income — — 39,228 — — — — — 39,228

Other comprehensive loss, net of tax — — — ( 43,853 ) — — — — ( 43,853 )

Cash dividends paid — — ( 18,058 ) — — — — — ( 18,058 )

Distributions from DDFP — 41 — — — — 139 ( 139 ) 41

Purchases of treasury stock — — — — ( 17,505 ) — — — ( 17,505 )

Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 5 ) — — — ( 5 )

Stock option exercises — — — — — — — — —

Allocation of ESOP shares — 250 — — — 812 — — 1,062

Allocation of SAP shares — 3,174 — — — — — — 3,174

Allocation of stock options — 50 — — — — — — 50

Balance at June 30, 2022 $ 832 $ 976,067 $ 860,977 $ ( 111,799 ) $ ( 127,091 ) $ ( 13,721 ) $ ( 3,705 ) $ 3,705 $ 1,585,265

For the six months ended June 30, 2022

COMMONSTOCK ADDITIONAL

CAPITAL RETAINED EARNINGS ACCUMULATED

COMPREHENSIVE

INCOME (LOSS) TREASURY

STOCK UNALLOCATED

SHARES COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS DEFERRED COMPENSATION PLANS TOTAL STOCKHOLDERS’ EQUITY

Balance at December 31, 2021 $ 832 $ 969,815 $ 814,533 $ 6,863 $ ( 79,603 ) $ ( 15,344 ) $ ( 3,984 ) $ 3,984 $ 1,697,096

5 unchanged sentences

Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 958 ) — — — ( 958 )

Shares issued dividend reinvestment plan — — — — — — — — —

Stock option exercises — — — — — — — — —

2 unchanged sentences

Allocation of stock options — 99 — — — — — — 99

Balance at March 31, 2022 $ 832 $ 972,552 $ 839,807 $ ( 67,946 ) $ ( 109,581 ) $ ( 14,533 ) $ ( 3,844 ) $ 3,844 $ 1,621,131

Balance at June 30, 2022 $ 832 $ 976,067 $ 860,977 $ ( 111,799 ) $ ( 127,091 ) $ ( 13,721 ) $ ( 3,705 ) $ 3,705 $ 1,585,265

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Cash Flows

Three months ended March 31, 2022 and 2021 (Unaudited)

Six months ended June 30, 2022 and 2021 (Unaudited)

(Dollars in Thousands)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

3 unchanged sentences

Provision benefit for credit losses on loans and securities ( 3,409 ) ( 25,705 )

Credit loss benefit for off-balance sheet credit exposure ( 2,390 ) ( 875 )

Credit loss (benefit) charge for off-balance sheet credit exposure ( 3,363 ) 1,175

Deferred tax expense 3,393 6,211

4 unchanged sentences

Amortization of premiums on purchased loans, net 154 418

Net increase in loans originated for sale — ( 14,492 )

Originations of loans held for sale ( 16,197 ) ( 21,781 )

Proceeds from sales of loans originated for sale 9,881 22,730

1 unchanged sentence

ESOP expense 2,205 1,999

Allocation of stock award shares 2,311 959

Allocation of stock options 49 53

Allocation of stock award expense 5,485 2,466

Allocation of stock option expense 99 102

Net gain on sale of loans ( 824 ) ( 949 )

2 unchanged sentences

Net gain on sale of foreclosed assets ( 16 ) ( 199 )

Decrease (increase) in accrued interest receivable 957 ( 2,567 )

Increase in accrued interest receivable ( 868 ) ( 4,231 )

(Increase) decrease in other assets ( 12,691 ) 36,729

4 unchanged sentences

Purchases of held to maturity debt securities ( 12,369 ) ( 16,630 )

Proceeds from sales of securities — 9,442

Proceeds from maturities and paydowns of available for sale debt securities 84,128 90,807

Proceeds from sales of available for sale debt securities — 9,442

Proceeds from maturities, calls and paydowns of available for sale debt securities 166,855 181,327

Purchases of available for sale debt securities ( 241,725 ) ( 656,314 )

1 unchanged sentence

Purchases of Federal Home Loan Bank stock ( 51,680 ) ( 2,305 )

BOLI claim benefits received — 2,080

Purchases of loans ( 3,422 ) ( 1,500 )

4 unchanged sentences

Cash flows from financing activities:

Net increase in deposits 132,075 459,684

Net (decrease) increase in deposits ( 359,788 ) 752,155

Increase in mortgage escrow deposits 7,906 5,482

Six months ended June 30,

Cash dividends paid to stockholders ( 36,747 ) ( 36,203 )

Purchase of treasury stock ( 46,530 ) ( 48 )

Three months ended March 31,

Purchase of employee restricted shares to fund statutory tax withholding ( 958 ) ( 961 )

2 unchanged sentences

Payments on long-term borrowings ( 579,111 ) ( 1,027,265 )

Net increase (decrease) in short-term borrowings 1,943 ( 16,096 )

Net decrease in short-term borrowings ( 9,161 ) ( 5,370 )

Net cash (used in) provided by financing activities ( 60,389 ) 238,428

21 unchanged sentences

Actual results could differ from these estimates.

The allowance for credit losses and the valuation of deferred tax assets are estimates that are particularly susceptible to change.

The allowance for credit losses and the valuation of deferred tax assets are material estimates that are particularly susceptible to near-term change.

The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for all of 2022.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results of operations that may be expected for all of 2022.

Certain information and note disclosures normally included in financial statements prepared in accordance with U.S.

2 unchanged sentences

Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three months ended March 31, 2022 and 2021 (dollars in thousands, except per share amounts):

Three months ended March 31,

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and six months ended June 30, 2022 and 2021 (dollars in thousands, except per share amounts):

Three months ended June 30,

Income Weighted

8 unchanged sentences

Income available to common stockholders $ 39,228 74,400,788 $ 0.53 $ 44,789 76,753,442 $ 0.58

Anti-dilutive stock options and awards at March 31, 2022 and 2021, totaling 971,452 shares and 1.2 million shares, respectively, were excluded from the earnings per share calculations.

Six months ended June 30,

Income Weighted

Outstanding Per

Income Weighted

Common Shares Outstanding Per

Net income $ 83,191 $ 93,348

Basic earnings per share:

Income available to common stockholders $ 83,191 75,068,154 $ 1.11 $ 93,348 76,580,364 $ 1.22

Dilutive shares 84,132 87,107

Diluted earnings per share:

Income available to common stockholders $ 83,191 75,152,286 $ 1.11 $ 93,348 76,667,471 $ 1.22

Anti-dilutive stock options and awards at June 30, 2022 and 2021, totaling 1.0 million shares, respectively, were excluded from the earnings per share calculations.

Loans Receivable and Allowance for Credit Losses

1 unchanged sentence

Material changes to these and other relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to the Company’s reported earnings.

For the three months ended March 31, 2022, the improved economic outlook and the resulting lower allowance requirements led to reductions to the provisions for credit losses and off-balance sheet credit exposures.

The decrease in the period-over-period provision benefit for both the three and six months ended June 30, 2022 was largely a function of growth in the loan portfolio, the relative change in the economic outlook and the significant favorable impact of the post-pandemic recovery in the prior year period.

See Note 3 to the Consolidated Financial Statements for more information on the allowance for credit losses on loans.

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through purchase acquisitions.

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through business combinations.

In accordance with GAAP, goodwill with an indefinite useful life is not amortized, but is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances indicate potential impairment between annual measurement dates.

2 unchanged sentences

The factors considered in the assessment include macroeconomic conditions, industry and market conditions and overall financial performance of the Company, among others.

The Company completed its annual goodwill impairment test as of July 1, 2021.

As of March 31, 2022, it is not more likely than not that the fair value of Provident Financial Services, Inc., the reporting unit, is below its carrying amount and therefore a test for impairment between annual tests is not required at this time.

The Company completed its annual goodwill impairment test as of July 1, 2022, and it is not more likely than not that the fair value of Provident Financial Services, Inc., the reporting unit, is below its carrying amount.

Investment Securities

At March 31, 2022, the Company had $ 2.07 billion and $ 422.0 million in available for sale debt securities and held to maturity debt securities, respectively.

Many factors, including lack of liquidity in the secondary market for certain securities, variations in pricing information, regulatory actions, changes in the business environment or any changes in the competitive marketplace could have an adverse effect on the Company’s investment portfolio.

The total number of available for sale and held to maturity debt securities in an unrealized loss position at March 31, 2022 totaled 489 , compared with 166 at December 31, 2021.

The increase in the number of securities in an unrealized loss position at March 31, 2022 was due to higher current market interest rates compared to rates at December 31, 2021.

At June 30, 2022, the Company had $ 1.95 billion and $ 410.7 million in available for sale debt securities and held to maturity debt securities, respectively.

Many factors, including lack of liquidity in the secondary market for certain securities, variations in pricing information, changes in interest rates, regulatory actions, changes in the business environment or any changes in the competitive marketplace could have an adverse effect on the Company’s investment portfolio.

The total number of available for sale and held to maturity debt securities in an unrealized loss position at June 30, 2022 totaled 751 , compared with 166 at December 31, 2021.

The increase in the number of securities in an unrealized loss position at June 30, 2022 was due to higher current market interest rates compared to rates at December 31, 2021.

Management measures expected credit losses on held to maturity debt securities on a collective basis by security type.

8 unchanged sentences

government, are highly rated by major rating agencies and have a long history of no credit losses.

The majority of the state and municipal, and corporate obligations carry no lower than A ratings from the rating agencies at March 31, 2022 and the Company had one security rated BBB by Moody’s Investors Service.

The majority of the state and municipal, and corporate obligations carry no lower than A ratings from the rating agencies at June 30, 2022 and the Company had one security rated BBB by Moody’s Investors Service.

The Company adopted CECL using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020.

As a result, the amortized cost basis remains the same before and after the effective date of CECL.

Available for Sale Debt Securities

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for available for sale debt securities at March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for available for sale debt securities at June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022

Treasury obligations $ 275,119 — ( 21,204 ) 253,915

11 unchanged sentences

$ 2,058,135 17,619 ( 17,903 ) 2,057,851

The amortized cost and fair value of available for sale debt securities at March 31, 2022, by contractual maturity, are shown below (in thousands).

The amortized cost and fair value of available for sale debt securities at June 30, 2022, by contractual maturity, are shown below (in thousands).

Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.

March 31, 2022

June 30, 2022

Due in one year or less $ 999 1,000

4 unchanged sentences

Investments which pay principal on a periodic basis totaling $ 1.75 billion at amortized cost and $ 1.60 billion at fair value are excluded from the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

For the three months ended March 31, 2022, no securities were sold or called from the available for sale debt securities portfolio.

For the three months ended March 31, 2021, proceeds from calls on securities in the available for sale debt securities portfolio totaled $ 9.4 million, with gains of $ 230,000 and no loss recognized.

The following tables present the fair values and gross unrealized losses for available for sale debt securities in an unrealized loss position at March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022

For the three and six months ended June 30, 2022 and 2021, no securities were sold from the available for sale debt securities portfolio.

For the three and six months ended June 30, 2022, proceeds from calls on securities in the available for sale debt securities portfolio totaled $ 5.4 million with gains of $ 58,000 and no losses recognized.

For the six months ended June 30,

2021, proceeds from calls on securities in the available for sale debt securities portfolio totaled $ 9.4 million, with gains of $ 230,000 and no losses recognized.

The following tables present the fair values and gross unrealized losses for available for sale debt securities in an unrealized loss position at June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022

Less than 12 months 12 months or longer Total

Treasury obligations $ 260,165 ( 14,711 ) — — 260,165 ( 14,711 )

Agency obligations $ 253,915 ( 21,204 ) — — 253,915 ( 21,204 )

Mortgage-backed securities 1,394,962 ( 128,497 ) 144,609 ( 17,916 ) 1,539,571 ( 146,413 )

11 unchanged sentences

$ 1,277,160 ( 16,516 ) 33,850 ( 1,387 ) 1,311,010 ( 17,903 )

The number of available for sale debt securities in an unrealized loss position at March 31, 2022 totaled 309 , compared with 113 at December 31, 2021.

The increase in the number of securities in an unrealized loss position at March 31, 2022 was due to higher current market interest rates compared to rates at December 31, 2021.

At March 31, 2022, there were three private label mortgage-backed securities in an unrealized loss position, with an amortized cost of $ 3.4 million and an unrealized loss of $ 212,000 .

These private-label mortgage-backed securities were investment grade at March 31, 2022.

The number of available for sale debt securities in an unrealized loss position at June 30, 2022 totaled 408 , compared with 113 at December 31, 2021.

The increase in the number of securities in an unrealized loss position at June 30, 2022 was due to higher current market interest rates compared to rates at December 31, 2021.

At June 30, 2022, there were two private label mortgage-backed securities in an unrealized loss position, with an amortized cost of $ 1.2 million and an unrealized loss of $ 21,000 .

These private-label mortgage-backed securities were unrated at June 30, 2022.

Held to Maturity Debt Securities

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for held to maturity debt securities at March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022

Treasury obligations $ 1,430 — — 1,430

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for held to maturity debt securities at June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022

Agency obligations $ 9,996 — ( 745 ) 9,251

3 unchanged sentences

$ 410,775 951 ( 12,586 ) 399,140

At March 31, 2022, the allowance for credit losses on held to maturity debt securities totaled $ 34,000 and is excluded from amortized cost in the table above.

At June 30, 2022, the allowance for credit losses on held to maturity debt securities totaled $ 30,000 .

December 31, 2021

6 unchanged sentences

The Company generally purchases securities for long-term investment purposes, and differences between amortized cost and fair value may fluctuate during the investment period.

There were no sales of securities from the held to maturity debt securities portfolio for the three months ended March 31, 2022 and 2021.

For the three months ended March 31, 2022, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 15.8 million with gross gains of $ 16,000 and no gross losses.

For the three months ended March 31, 2021, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 6.8 million with gross losses of $ 33,000 and no gross gains.

The amortized cost and fair value of investment securities in the held to maturity debt securities portfolio at March 31, 2022 by contractual maturity are shown below (in thousands).

There were no sales of securities from the held to maturity debt securities portfolio for the three and six months ended June 30, 2022 and 2021.

For the three and six months ended June 30, 2022, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 10.3 million and $ 26.2 million, respectively.

As to these calls on securities for the three and six months ended June 30, 2022, gross gains totaled $ 83,000 and $ 99,000 , respectively, with no gross losses.

For the three and six months ended June 30, 2021, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 6.1 million and $ 12.9 million, respectively.

As to these calls of securities for the three months ended June 30, 2021, there were gross gains of $ 33,500 and no gross losses, and for the six months ended June 30, 2021, there were gross gains of $ 1,000 and no gross losses.

The amortized cost and fair value of investment securities in the held to maturity debt securities portfolio at June 30, 2022 by contractual maturity are shown below (in thousands).

Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.

March 31, 2022

June 30, 2022

Due in one year or less $ 17,038 17,066

3 unchanged sentences

$ 410,768 399,133

Mortgage-backed securities totaling $ 13,000 at amortized cost and $ 13,000 at fair value are excluded from the table above, as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

Mortgage-backed securities totaling $ 7,000 for both amortized cost and fair value are excluded from the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

Additionally, the allowance for credit losses totaling $ 30,000 is excluded from the table above.

The following tables present the fair values and gross unrealized losses for held to maturity debt securities in an unrealized loss position at March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022 Unrealized Losses

The following tables present the fair values and gross unrealized losses for held to maturity debt securities in an unrealized loss position at June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022 Unrealized Losses

Less than 12 months 12 months or longer Total

9 unchanged sentences

$ 44,820 ( 798 ) 5,022 ( 164 ) 49,842 ( 962 )

The number of held to maturity debt securities in an unrealized loss position at March 31, 2022 totaled 180 , compared with 53 at December 31, 2021.

The increase in the number of securities in an unrealized loss position at March 31, 2022, was due to higher current market interest rates compared to rates at December 31, 2021.

The number of held to maturity debt securities in an unrealized loss position at June 30, 2022 totaled 343 , compared with 53 at December 31, 2021.

The increase in the number of securities in an unrealized loss position at June 30, 2022, was due to higher current market interest rates compared to rates at December 31, 2021.

Credit Quality Indicators.

The following table provides the amortized cost of held to maturity debt securities by credit rating as of March 31, 2022 (in thousands):

March 31, 2022

The following table provides the amortized cost of held to maturity debt securities by credit rating as of June 30, 2022 (in thousands):

June 30, 2022

Total Portfolio AAA AA A BBB Not Rated Total

Treasury Obligations $ 1,430 — — — — 1,430

Agency obligations $ 9,996 — — — — 9,996

11 unchanged sentences

Credit quality indicators are metrics that provide information regarding the relative credit risk of debt securities.

At March 31, 2022, the held to maturity debt securities portfolio was comprised of 15 % rated AAA, 73 % rated AA, 11 % rated A, and less than 1 % either below an A rating or not rated by Moody’s Investors Service or Standard and Poor’s.

At June 30, 2022, the held to maturity debt securities portfolio was comprised of 14 % rated AAA, 77 % rated AA, 9 % rated A, and less than 1 % either below an A rating or not rated by Moody’s Investors Service or Standard and Poor’s.

Securities not explicitly rated, such as U.S.

Government mortgage-backed securities, were grouped where possible under the credit rating of the issuer of the security.

At March 31, 2022, the allowance for credit losses on held to maturity debt securities was $ 34,000 , a decrease from $ 39,000 at December 31, 2021.

At June 30, 2022, the allowance for credit losses on held to maturity debt securities was $ 30,000 , a decrease from $ 39,000 at December 31, 2021.

Loans Receivable and Allowance for Credit Losses

Loans receivable at March 31, 2022 and December 31, 2021 are summarized as follows (in thousands):

March 31, 2022 December 31, 2021

Loans receivable at June 30, 2022 and December 31, 2021 are summarized as follows (in thousands):

June 30, 2022 December 31, 2021

Mortgage loans:

8 unchanged sentences

Premiums on purchased loans 1,405 1,451

Net deferred fees and unearned discounts ( 12,520 ) ( 13,706 )

Net deferred fees ( 14,114 ) ( 13,706 )

Total loans $ 9,992,445 9,581,624

The following tables summarize the aging of loans receivable by portfolio segment and class of loans (in thousands):

March 31, 2022

June 30, 2022

30-59 Days 60-89 Days Non-accrual Recorded

1 unchanged sentence

Due Current Total Loans

Receivable Non-accrual loans with no specific allowance

Receivable Non-accrual loans with no related allowance

Mortgage loans:

10 unchanged sentences

accruing Total Past

Due Current Total Loans Receivable Non-accrual loans with no specific allowance

Due Current Total Loans Receivable Non-accrual loans with no related allowance

Mortgage loans:

8 unchanged sentences

Included in loans receivable are loans for which the accrual of interest income has been discontinued due to deterioration in the financial condition of the borrowers.

The principal amounts of these non-accrual loans were $ 44.3 million and $ 48.0 million at March 31, 2022 and December 31, 2021, respectively.

Included in non-accrual loans were $ 20.3 million and $ 23.0 million of loans which were less than 90 days past due at March 31, 2022 and December 31, 2021, respectively.

There were no loans 90 days or greater past due and still accruing interest at March 31, 2022 and December 31, 2021.

Generally, accrued interest is written off by reversing interest income during the quarter the loan is moved from an accrual to a non-accrual status.

The principal amounts of these non-accrual loans were $ 40.4 million and $ 48.0 million at June 30, 2022 and December 31, 2021, respectively.

Included in non-accrual loans were $ 16.3 million and $ 23.0 million of loans which were less than 90 days past due at June 30, 2022 and December 31, 2021, respectively.

There were no loans 90 days or greater past due and still accruing interest at June 30, 2022 and December 31, 2021.

The Company defines an impaired loan as a non-homogeneous loan greater than $ 1.0 million, for which, based on current information, it is not expected to collect all amounts due under the contractual terms of the loan agreement.

10 unchanged sentences

The Company believes there have been no significant time lapses resulting from this process.

At March 31, 2022, there were 134 impaired loans totaling $ 48.3 million.

Included in this total were 105 TDRs related to 102 borrowers totaling $ 20.3 million that were performing in accordance with their restructured terms and which continued to accrue interest at March 31, 2022.

At June 30, 2022, there were 133 impaired loans totaling $ 45.1 million, of which 125 totaling $ 27.7 million were TDRs.

Included in this total were 102 TDRs related to 99 borrowers totaling $ 17.8 million that were performing in accordance with their restructured terms and which continued to accrue interest at June 30, 2022.

At December 31, 2021, there were 155 impaired loans totaling $ 52.3 million, of which 132 loans totaling $ 30.6 million were TDRs.

Included in this total were 115 TDRs to 111 borrowers totaling $ 21.9 million that were performing in accordance with their restructured terms and which continued to accrue interest at December 31, 2021.

At March 31, 2022 and December 31, 2021, the fair value of the assets securing collateral-dependent impaired loans totaled $ 16.2 million and $ 18.2 million, respectively.

These collateral-dependent impaired loans at March 31, 2022 consisted of $ 14.4 million in commercial loans, $ 1.7 million in residential real estate loans, and $ 64,000 in consumer loans.

At June 30, 2022 and December 31, 2021, the Company had $ 15.2 million and $ 18.2 million related to the fair value of underlying collateral-dependent impaired loans, respectively.

These collateral-dependent impaired loans at June 30, 2022 consisted of $ 14.0 million in commercial loans, $ 1.2 million in residential real estate loans, and $ 64,000 in consumer loans.

The collateral for these impaired loans was primarily real estate.

The activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2022 and 2021 was as follows (in thousands):

Three months ended March 31, Mortgage loans Commercial loans Consumer loans Total

The activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

Three months ended June 30, Mortgage loans Commercial loans Consumer loans Total

Balance at beginning of period $ 50,096 23,799 2,380 76,275

Provision benefit to operations ( 1,995 ) ( 4,404 ) ( 1 ) ( 6,400 )

Provision charge (benefit) to operations 5,593 ( 2,710 ) 117 3,000

Recoveries of loans previously charged-off 361 443 109 913

2 unchanged sentences

Balance at beginning of period $ 54,198 26,302 5,091 85,591

Provision charge (benefit) to operations 1,080 ( 10,814 ) ( 966 ) ( 10,700 )

Recoveries of loans previously charged-off 191 5,790 198 6,179

Loans charged-off — ( 16 ) ( 95 ) ( 111 )

Balance at end of period $ 55,469 21,262 4,228 80,959

Six months ended June 30, Mortgage loans Commercial loans Consumer loans Total

Balance at beginning of period $ 52,104 26,343 2,293 80,740

Provision charge (benefit) to operations 3,599 ( 7,115 ) 116 ( 3,400 )

Recoveries of loans previously charged-off 371 2,304 275 2,950

Loans charged-off ( 1,010 ) ( 145 ) ( 119 ) ( 1,274 )

Balance at end of period $ 55,064 21,387 2,565 79,016

Balance at beginning of period $ 68,307 27,084 6,075 101,466

Provision benefit to operations ( 12,387 ) ( 11,281 ) ( 2,032 ) ( 25,700 )

2 unchanged sentences

Balance at end of period $ 55,469 21,262 4,228 80,959

For the three months ended March 31, 2022, the Company recorded a $ 6.4 million provision benefit for credit losses on loans, compared to a $ 15.0 million provision benefit for the same period in 2021.

The decrease in the period-over-period provision benefit was largely a function of the relative change in the economic outlook and the significant favorable impact of the post-pandemic recovery in the prior year period.

For the three and six months ended June 30, 2022, the Company recorded a $ 3.0 million provision for credit losses on loans and a $ 3.4 million negative provision for credit losses on loans, respectively.

The provision for credit losses for the quarter ended June 30, 2022 was largely a function of an increase in total loans outstanding and the relative change in the economic outlook, partially offset by an overall improvement in the Company's asset quality.

The decrease in the period-over-period provision benefit for the six months ended June 30, 2022 was largely a function of the significant favorable impact of the post-pandemic recovery resulting in a larger negative provision taken in the prior year period, partially offset by growth in the loan portfolio.

The following tables summarize loans receivable by portfolio segment and impairment method (in thousands):

March 31, 2022

June 30, 2022

loans Commercial

12 unchanged sentences

The allowance for credit losses is summarized by portfolio segment and impairment classification as follows (in thousands):

March 31, 2022

June 30, 2022

loans Commercial loans Consumer loans Total

12 unchanged sentences

Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

The following tables present the number of loans modified as TDRs during the three months ended March 31, 2022 and 2021, along with their balances immediately prior to the modification date and post-modification as of March 31, 2022 and 2021 (in thousands):

The following tables present the number of loans modified as TDRs during the three and six months ended June 30, 2022 and 2021, along with their balances immediately prior to the modification date and post-modification as of June 30, 2022 and 2021 (in thousands):

For the three months ended

March 31, 2022 March 31, 2021

June 30, 2022 June 30, 2021

Troubled Debt Restructurings Number of

6 unchanged sentences

Mortgage loans:

Residential 2 $ 265 $ 206 1 $ 171 $ 170

Multi Family 1 1,618 1,601 — — —

Total mortgage loans 3 1,883 1,807 1 171 170

Commercial loans 2 378 274 1 1,580 1,089

Total restructured loans 5 $ 2,261 $ 2,081 2 $ 1,751 $ 1,259

For the six months ended

June 30, 2022 June 30, 2021

Troubled Debt Restructurings Number of

Loans Pre-Modification

Investment Post-Modification

Recorded Investment Number of

Loans Pre-Modification

Recorded Investment Post-Modification

Recorded Investment

Mortgage loans:

Residential 2 $ 265 $ 206 1 $ 171 $ 170

Multi Family 1 1,618 1,601 — — —

Total mortgage loans 3 1,883 1,807 1 171 170

Commercial loans 2 378 274 4 2,940 2,363

Total restructured loans 5 $ 2,261 $ 2,081 5 $ 3,111 $ 2,533

All TDRs are impaired loans, which are individually evaluated for impairment.

During the three months ended March 31, 2022, no charge-offs were recorded on collateral-dependent impaired loans, while $ 1.5 million of charge-offs were recorded on collateral-dependent impaired loans during the three months ended March 31, 2021.

For the three months ended March 31, 2022, there was no allowance for credit losses for loans associated with the TDRs presented in the preceding tables.

There were no loans which had a payment default (90 days or more past due) for loans modified as TDRs within the 12 month periods ending March 31, 2022 and March 31, 2021.

During the three and six months ended June 30, 2022, $ 921,000 of charge-offs were recorded on collateral-dependent impaired loans.

During the three months ended June 30, 2021, no charge-offs were recorded on collateral-dependent impaired loans, while $ 1.5 million of charge-offs were recorded on collateral-dependent impaired loans for the six months ended June 30, 2021.

For both the three and six months ended June 30, 2022, the TDRs presented in the preceding tables had a weighted average modified interest rate of 4.26 %, compared to a weighted average rate of 4.30 % prior to modification.

There was one loan totaling $ 209,000 which had a payment default (90 days or more past due) for loans modified as TDRs within the 12 month periods ending June 30, 2022.

For TDRs that subsequently default, the Company determines the amount of the allowance for the respective loans in accordance with the accounting policy for the allowance for credit losses on loans individually evaluated for impairment.

As allowed by CECL, loans acquired by the Company that experience more-than-insignificant deterioration in credit quality after origination, are classified as Purchased Credit Deteriorated ("PCD") loans.

At March 31, 2022, the balance of PCD loans totaled $ 242.7 million with a related allowance for credit losses of $ 2.8 million.

At June 30, 2022, the balance of PCD loans totaled $ 227.1 million with a related allowance for credit losses of $ 2.6 million.

The balance of PCD loans at December 31, 2021 was $ 246.9 million with a related allowance for credit losses of $ 2.8 million.

The following table presents loans individually evaluated for impairment by class and loan category (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Unpaid Principal Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized Unpaid Principal Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized

13 unchanged sentences

Commercial 854 853 14 863 23 871 871 17 894 48

Multi-family — — — — — — — — — —

Total 8,578 8,239 803 8,312 161 8,865 8,523 875 8,636 326

12 unchanged sentences

Total impaired loans $ 52,616 45,052 1,457 50,073 455 59,280 52,254 4,284 53,352 1,265

Specific allocations of the allowance for credit losses attributable to impaired loans totaled $ 2.0 million at March 31, 2022 and $ 4.3 million at December 31, 2021.

At March 31, 2022 and December 31, 2021, impaired loans for which there was no related allowance for credit losses totaled $ 34.1 million and $ 34.2 million, respectively.

The average balance of impaired loans for the three months ended March 31, 2022 and the twelve months ended December 31, 2021 was $ 51.6 million and $ 53.4 million, respectively.

Specific allocations of the allowance for credit losses attributable to impaired loans totaled $ 1.5 million at June 30, 2022 and $ 4.3 million at December 31, 2021.

At June 30, 2022 and December 31, 2021, impaired loans for which there was no related allowance for credit losses totaled $ 33.4 million and $ 34.2 million, respectively.

The average balance of impaired loans for the six months ended June 30, 2022 and the twelve months ended December 31, 2021 was $ 50.1 million and $ 53.4 million, respectively.

Management utilizes an internal nine-point risk rating system to summarize its loan portfolio into categories with similar risk characteristics.

Loans deemed to be “acceptable quality” are rated 1 through 4, with a rating of 1 established for loans with minimal risk.

Loans deemed to be “acceptable quality” are rated 1 through 4, with a rating of 1 established for loans with

minimal risk.

Loans that are deemed to be of “questionable quality” are rated 5 (watch) or 6 (special mention).

7 unchanged sentences

PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company.

As of March 31, 2022, the Company secured 2,067 PPP loans for its customers totaling $ 682.0 million, which includes both the initial round and the second round of PPP.

As of March 31, 2022, 1,994 PPP loans totaling $ 653.1 million were forgiven and repaid by the SBA.

At March 31, 2022, PPP loans totaled $ 28.9 million, and are included in the commercial loan portfolio.

The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades as of March 31, 2022 and December 31, 2021 (in thousands):

Gross Loans Held for Investment by Year of Origination

at March 31, 2022

For both the initial round and second round of PPP, the Company had secured 2,067 PPP loans for its customers totaling $ 682.0 million.

As of June 30, 2022, 2,039 PPP loans totaling $ 665.3 million were forgiven.

At June 30, 2022, PPP loans totaled $ 16.7 million, and are included in the commercial loan portfolio.

The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades as of June 30, 2022 and December 31, 2021 (in thousands):

Gross Loans Held by Investment by Year of Origination

at June 30, 2022

2022 2021 2020 2019 2018 Prior to 2018 Revolving Loans Revolving loans to term loans Total Loans

Residential (1)

Special mention $ — — — — — 1,752 — — 1,752

19 unchanged sentences

Pass/Watch 93,428 149,942 287,937 203,526 175,050 527,004 1,952 1,157 1,439,996

Gross Loans Held by Investment by Year of Origination

at June 30, 2022

2022 2021 2020 2019 2018 Prior to 2018 Revolving Loans Revolving loans to term loans Total Loans

Total multi-family $ 93,428 149,942 288,376 203,526 175,641 531,077 1,952 1,157 1,445,099

3 unchanged sentences

Loss — — — — — — — — —

Gross Loans Held for Investment by Year of Origination

at March 31, 2022

2022 2021 2020 2019 2018 Prior to 2018 Revolving Loans Revolving loans to term loans Total Loans

Total criticized and classified — — — 2,197 21,537 905 — — 24,639

25 unchanged sentences

Substandard — — 1,091 7,127 16,038 101,269 17,374 1,020 143,919

Gross Loans Held by Investment by Year of Origination

at June 30, 2022

2022 2021 2020 2019 2018 Prior to 2018 Revolving Loans Revolving loans to term loans Total Loans

Doubtful — — — — — — — — —

2 unchanged sentences

Pass/Watch 1,009,159 1,642,975 1,467,618 1,188,399 686,227 2,908,266 706,295 87,373 9,696,312

Gross Loans Held for Investment by Year of Origination

at March 31, 2022

2022 2021 2020 2019 2018 Prior to 2018 Revolving Loans Revolving loans to term loans Total Loans

Total gross loans $ 1,009,159 1,642,975 1,481,062 1,224,887 772,634 3,051,553 732,831 90,053 10,005,154

(1) For consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.

Gross Loans Held for Investment by Year of Origination

(1) For residential and consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.

Gross Loans Held by Investment by Year of Origination

at December 31, 2021

2021 2020 2019 2018 2017 Prior to 2017 Revolving Loans Revolving loans to term loans Total Loans

Residential (1)

Special mention $ — — — — 697 434 — — 1,131

20 unchanged sentences

Total multi-family $ 154,419 295,155 166,558 173,583 120,707 449,926 2,880 1,169 1,364,397

Gross Loans Held by Investment by Year of Origination

at December 31, 2021

2021 2020 2019 2018 2017 Prior to 2017 Revolving Loans Revolving loans to term loans Total Loans

Special mention $ — 1,125 — — — — — — 1,125

3 unchanged sentences

Total criticized and classified — 1,125 — 2,365 — — — — 3,490

Gross Loans Held for Investment by Year of Origination

at December 31, 2021

2021 2020 2019 2018 2017 Prior to 2017 Revolving Loans Revolving loans to term loans Total Loans

Pass/Watch 173,843 176,182 219,331 94,363 9,604 103 6,250 679,676

26 unchanged sentences

Loss — — — — — — — — —

Total criticized and classified 1,232 7,586 37,057 68,440 51,092 178,234 23,935 4,070 371,646

Pass/Watch 1,653,537 1,533,512 1,292,138 809,590 799,482 2,460,548 578,942 94,484 9,222,233

Gross Loans Held for Investment by Year of Origination

Gross Loans Held by Investment by Year of Origination

at December 31, 2021

2021 2020 2019 2018 2017 Prior to 2017 Revolving Loans Revolving loans to term loans Total Loans

Total criticized and classified 1,232 7,586 37,057 68,440 51,092 178,234 23,935 4,070 371,646

Pass/Watch 1,653,537 1,533,512 1,292,138 809,590 799,482 2,460,548 578,942 94,484 9,222,233

Total gross loans $ 1,654,769 1,541,098 1,329,195 878,030 850,574 2,638,782 602,877 98,554 9,593,879

(1) For consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.

Deposits at March 31, 2022 and December 31, 2021 are summarized as follows (in thousands):

March 31, 2022 December 31, 2021

(1) For residential and consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.

Deposits at June 30, 2022 and December 31, 2021 are summarized as follows (in thousands):

June 30, 2022 December 31, 2021

Savings $ 1,512,356 1,460,541

5 unchanged sentences

Borrowed Funds

Borrowed funds at March 31, 2022 and December 31, 2021 are summarized as follows (in thousands):

March 31, 2022 December 31, 2021

Borrowed funds at June 30, 2022 and December 31, 2021 are summarized as follows (in thousands):

June 30, 2022 December 31, 2021

Securities sold under repurchase agreements $ 107,711 116,760

FHLB line of credit — —

FHLB overnight borrowings 314,000 —

FHLB advances 580,791 510,014

Total borrowed funds $ 1,002,502 626,774

At March 31, 2022, FHLB advances were at fixed rates and mature between April 2022 and July 2025, and at December 31, 2021, FHLB advances were at fixed rates with maturities between January 2022 and July 2025.

At June 30, 2022, FHLB advances were at fixed rates and mature between July 2022 and July 2025, and at December 31, 2021, FHLB advances were at fixed rates with maturities between January 2022 and July 2025.

These advances are secured by loans receivable under a blanket collateral agreement.

Scheduled maturities of FHLB advances at March 31, 2022 are as follows (in thousands):

Scheduled maturities of FHLB advances and overnight borrowings at June 30, 2022 are as follows (in thousands):

Due in one year or less $ 430,950

2 unchanged sentences

Due after three years through four years 133,160

Total FHLB advances $ 280,848

Scheduled maturities of securities sold under repurchase agreements at March 31, 2022 are as follows (in thousands):

Total FHLB advances and overnight borrowings $ 894,791

Scheduled maturities of securities sold under repurchase agreements at June 30, 2022 are as follows (in thousands):

Due in one year or less $ 107,711

Total securities sold under repurchase agreements $ 107,711

The following tables set forth certain information as to borrowed funds for the periods ended March 31, 2022 and December 31, 2021 (in thousands):

The following tables set forth certain information as to borrowed funds for the periods ended June 30, 2022 and December 31, 2021 (in thousands):

Weighted average

interest rate

March 31, 2022

June 30, 2022

Securities sold under repurchase agreements $ 125,506 116,903 0.32 %

FHLB line of credit — — —

FHLB overnight borrowings 314,000 34,999 2.42

FHLB advances 580,791 386,691 0.87

1 unchanged sentence

Securities sold under repurchase agreements $ 132,005 116,158 0.07 %

FHLB line of credit — 205 0.34

FHLB overnight borrowings — 205 0.34

FHLB advances 941,939 673,014 1.27

1 unchanged sentence

The Bank uses available for sale debt securities to pledge as collateral for the repurchase agreements.

At March 31, 2022 and December 31, 2021, available for sale debt securities pledged as collateral for repurchase agreements totaled $ 133.3 million and $ 136.0 million, respectively.

Interest expense on borrowings for the three months ended March 31, 2022 and 2021 was $ 1.2 million and $ 2.8 million, respectively.

At June 30, 2022 and December 31, 2021, available for sale debt securities pledged as collateral for repurchase agreements totaled $ 134.4 million and $ 136.0 million, respectively.

Interest expense on borrowings for the three and six months ended June 30, 2022 amounted to $ 1.1 million and $ 2.3 million, respectively.

Interest expense on borrowings for the three and six months ended June 30, 2021 amounted to $ 2.6 million and $ 5.4 million, respectively.

Components of Net Periodic Benefit Cost

7 unchanged sentences

Effective January 1, 2007, eligibility for retiree life insurance benefits was frozen as to new entrants and retiree life insurance benefits were eliminated for employees with less than ten years of service as of December 31, 2006.

Net periodic (benefit) increase cost for pension benefits and other post-retirement benefits for the three months ended March 31, 2022 and 2021, includes the following components (in thousands):

Three months ended March 31,

Pension benefits Other post-retirement benefits

Net periodic (decrease) increase in benefit cost for pension benefits and other post-retirement benefits for the three and six months ended June 30, 2022 and 2021 includes the following components (in thousands):

Three months ended June 30, Six months ended June 30,

Pension benefits Other post-retirement benefits Pension benefits Other post-retirement benefits

2022 2021 2022 2021 2022 2021 2022 2021

4 unchanged sentences

Amortization of the net loss (gain) — 118 ( 326 ) ( 268 ) — 236 ( 652 ) ( 536 )

Net periodic (benefit) cost $ ( 650 ) ( 491 ) ( 208 ) ( 153 )

Net periodic (decrease) increase in benefit cost $ ( 650 ) ( 491 ) ( 208 ) ( 153 ) $ ( 1,300 ) ( 982 ) ( 416 ) ( 306 )

In its consolidated financial statements for the year ended December 31, 2021, the Company previously disclosed that it does not expect to contribute to the pension plan in 2022.

As of March 31, 2022, no contributions have been made to the pension plan.

The changes in net periodic benefit cost for pension benefits and other post-retirement benefits for the three months ended March 31, 2022 were calculated using the January 1, 2022 pension and other post-retirement benefits actuarial valuations.

As of June 30, 2022, no contributions have been made to the pension plan.

The changes in net periodic benefit cost for pension benefits and other post-retirement benefits for the three and six months ended June 30, 2022 were calculated using the January 1, 2022 pension and other post-retirement benefits actuarial valuations.

Impact of Recent Accounting Pronouncements

21 unchanged sentences

Early adoption is permitted if an entity has adopted ASU 2017-12.

The Company continues to assess the impact that this guidance will have on the Company’s consolidated financial statements.

The Company does not expect the adoption of this guidance to have a significant impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)," which provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks.

9 unchanged sentences

The working group is comprised of individuals from various functional areas including lending, risk management, finance and credit, among others.

In addition, the

Company has engaged with its regulators and with industry working groups and trade associations to develop strategies for transitioning away from LIBOR.

In addition, the Company has engaged with its regulators and with industry working groups and trade associations to develop strategies for transitioning away from LIBOR.

The Company is currently in the process of transitioning from LIBOR and plans to move to the Secured Overnight Financing Rate ("SOFR") and no longer offers LIBOR as an option to customers.

The Company continues to assess the impacts of this guidance, and has not determined whether LIBOR transition and this guidance will have a material effect on the Company's business operations and consolidated financial statements.

The Company continues to assess the impacts of this guidance, however does not expect the adoption of this guidance to have a significant impact on the Company’s consolidated financial statements.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

1 unchanged sentence

For purposes of estimating the allowance for credit losses for off-balance sheet credit exposures, the exposure at default includes an estimated drawdown of unused credit based on historical credit utilization factors and current loss factors, resulting in a proportionate amount of expected credit losses.

For the three months ended March 31, 2022, the Company recorded a $ 2.4 million benefit to the provision for credit losses for off-balance sheet credit exposures compared to an $ 875,000 benefit to the provision for credit losses for off-balance sheet credit exposures for the same period in 2021.

The increase in the period-over period provision benefit was primarily due to an increase in line of credit utilization.

The allowance for credit losses for off-balance sheet credit exposures was $ 4.1 million and $ 6.5 million at March 31, 2022 and December 31, 2021, respectively, and are included in other liabilities on the Consolidated Statements of Financial Condition.

For the three and six months ended June 30, 2022, the Company recorded a $ 973,000 and $ 3.4 million negative provision for credit losses for off-balance sheet credit exposures, respectively.

For the three and six months ended June 30, 2021, the Company recorded a $ 2.1 million and $ 1.2 million provision for credit losses for off-balance sheet credit exposures, respectively.

The decrease for both periods was primarily the result of a decrease in the pipeline of loans approved and awaiting closing, combined with an increase in line of credit utilization, partially offset by an increase in loss factors.

The allowance for credit losses for off-balance sheet credit exposures was $ 3.2 million and $ 6.5 million at June 30, 2022 and December 31, 2021, respectively, and are included in other liabilities on the Consolidated Statements of Financial Condition.

Fair Value Measurements

5 unchanged sentences

GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1

measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

6 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The valuation techniques described below were used to measure fair value of financial instruments in the table below on a recurring basis as of March 31, 2022 and December 31, 2021.

The valuation techniques described below were used to measure fair value of financial instruments in the table below on a recurring basis as of June 30, 2022 and December 31, 2021.

Available for Sale Debt Securities, at Fair Value

13 unchanged sentences

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

The Company has interest rate derivatives resulting from a service provided to certain qualified borrowers in a loan related

transaction which, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities.

The Company has interest rate derivatives resulting from a service provided to certain qualified borrowers in a loan related transaction which, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities.

As such, all changes in fair value of the Company’s derivatives are recognized directly in earnings.

2 unchanged sentences

These derivatives were used to hedge the variable cash outflows associated with FHLBNY borrowings and brokered demand deposits.

The change in the fair value of these derivatives is recorded in accumulated other comprehensive (loss) income, and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

The fair value of the Company's derivatives is determined using discounted cash flow analysis using observable market-based inputs, which are considered Level 2 inputs.

Assets Measured at Fair Value on a Non-Recurring Basis

The valuation techniques described below were used to estimate fair value of financial instruments measured on a non-recurring basis as of March 31, 2022 and December 31, 2021.

The valuation techniques described below were used to estimate fair value of financial instruments measured on a non-recurring basis as of June 30, 2022 and December 31, 2021.

Collateral-Dependent Impaired Loans

11 unchanged sentences

Operating results from real estate owned, including rental income, operating expenses, and gains and losses realized from the sales of real estate owned, are recorded as incurred.

There were no changes to the valuation techniques for fair value measurements as of March 31, 2022 and December 31, 2021.

The following tables present the assets and liabilities reported on the consolidated statements of financial condition at their fair values as of March 31, 2022 and December 31, 2021, by level within the fair value hierarchy (in thousands):

There were no changes to the valuation techniques for fair value measurements as of June 30, 2022 or December 31, 2021.

The following tables present the assets and liabilities reported on the consolidated statements of financial condition at their fair values as of June 30, 2022 and December 31, 2021, by level within the fair value hierarchy (in thousands):

Fair Value Measurements at Reporting Date Using:

March 31, 2022 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

June 30, 2022 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Measured on a recurring basis:

32 unchanged sentences

$ 26,968 — — 26,968

There were no transfers between Level 1, Level 2 and Level 3 during the three months ended March 31, 2022.

There were no transfers between Level 1, Level 2 and Level 3 during the three and six months ended June 30, 2022.

Other Fair Value Disclosures

3 unchanged sentences

For cash and due from banks, federal funds sold and short-term investments, the carrying amount approximates fair value.

Included in cash and cash equivalents at March 31, 2022 and December 31, 2021 was $ 4.8 million and $ 27.3 million, respectively, representing cash collateral pledged to secure loan level swaps and reserves required by banking regulations.

Included in cash and cash equivalents at June 30, 2022 and December 31, 2021 was $ 70,000 and $ 27.3 million, respectively, representing cash collateral pledged to secure loan level swaps, risk participation agreements and reserves required by banking regulations.

Held to Maturity Debt Securities

30 unchanged sentences

Borrowed Funds

The fair value of borrowed funds was estimated by discounting future cash flows using rates available for debt with similar terms and maturities and is classified by the Company as Level 2 within the fair value hierarchy.

The fair value of borrowed funds was estimated by

discounting future cash flows using rates available for debt with similar terms and maturities and is classified by the Company as Level 2 within the fair value hierarchy.

Commitments to Extend Credit and Letters of Credit

The fair value of commitments to extend credit and letters of credit was estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties.

rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

The Company classifies these commitments as Level 3 within the fair value hierarchy.

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In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The following tables present the Company’s financial instruments at their carrying and fair values as of March 31, 2022 and December 31, 2021.

The following tables present the Company’s financial instruments at their carrying and fair values as of June 30, 2022 and December 31, 2021.

Fair values are presented by level within the fair value hierarchy.

Fair Value Measurements at March 31, 2022 Using:

Fair Value Measurements at June 30, 2022 Using:

(Dollars in thousands) Carrying value Fair value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

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Treasury obligations 253,915 253,915 253,915 — —

Agency obligations — — — — —

Mortgage-backed securities 1,558,951 1,558,951 — 1,558,951 —

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Held to maturity debt securities, net of allowance for credit losses:

US Treasury obligations 1,430 1,430 1,430 — —

Agency obligations 9,996 9,251 9,251 — —

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Treasury obligations 196,329 196,329 196,329 — —

Agency obligations — — — — —

Mortgage-backed securities 1,708,831 1,708,831 — 1,708,831 —

20 unchanged sentences

Derivative liabilities 61,412 61,412 — 61,412 —

Other Comprehensive Income (Loss)

The following table presents the components of other comprehensive loss, both gross and net of tax, for the three months ended March 31, 2022 and 2021 (in thousands):

Three months ended March 31,

Other Comprehensive Income

The following table presents the components of other comprehensive income, both gross and net of tax, for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three months ended June 30,

Components of Other Comprehensive Income:

Unrealized gains and losses on available for sale debt securities:

Net unrealized losses arising during the period $ ( 116,081 ) 31,110 ( 84,971 ) ( 12,152 ) 3,133 ( 9,019 )

Net unrealized (losses) gains arising during the period $ ( 62,477 ) 16,744 ( 45,733 ) 3,288 ( 848 ) 2,440

Reclassification adjustment for gains included in net income ( 58 ) 16 ( 42 ) — — —

Total ( 62,535 ) 16,760 ( 45,775 ) 3,288 ( 848 ) 2,440

Unrealized gains on derivatives (cash flow hedges) 14,260 ( 3,822 ) 10,438 6,226 ( 1,605 ) 4,621

Unrealized gains (losses) on derivatives (cash flow hedges) 2,948 ( 790 ) 2,158 ( 1,649 ) 425 ( 1,224 )

Amortization related to post-retirement obligations ( 322 ) 86 ( 236 ) ( 150 ) 39 ( 111 )

Total other comprehensive (loss) income $ ( 59,909 ) 16,056 ( 43,853 ) 1,489 ( 384 ) 1,105

The following tables present the changes in the components of accumulated other comprehensive (loss) income, net of tax, for the three months ended March 31, 2022 and 2021 (in thousands):

Six months ended June 30,

Components of Other Comprehensive Income:

Unrealized gains and losses on available for sale debt securities:

Net unrealized (losses) arising during the period $ ( 178,558 ) 47,854 ( 130,704 ) ( 8,865 ) 2,286 ( 6,579 )

Reclassification adjustment for gains included in net income ( 58 ) 16 ( 42 ) ( 230 ) 59 ( 171 )

Total ( 178,616 ) 47,870 ( 130,746 ) ( 9,095 ) 2,345 ( 6,750 )

Unrealized gains (losses) on derivatives (cash flow hedges) 17,207 ( 4,611 ) 12,596 4,577 ( 1,180 ) 3,397

Amortization related to post-retirement obligations ( 700 ) 188 ( 512 ) ( 300 ) 80 ( 220 )

Total other comprehensive (loss) $ ( 162,109 ) 43,447 ( 118,662 ) ( 4,818 ) 1,245 ( 3,573 )

The following tables present the changes in the components of accumulated other comprehensive income, net of tax, for the three and six months ended June 30, 2022 and 2021 (in thousands):

Changes in Accumulated Other Comprehensive (Loss) Income by Component, net of tax

for the three months ended March 31,

Unrealized Losses on

for the three months ended June 30,

Available for Sale Debt Securities Post- Retirement

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Comprehensive

Loss Unrealized Gains on

Available for Sale Debt Securities Post- Retirement

Obligations Unrealized Losses on Derivatives (cash flow hedges) Accumulated

Comprehensive Income

March 31, $ ( 85,182 ) 2,705 14,531 ( 67,946 ) 14,500 ( 1,190 ) ( 333 ) 12,977

Current - period other comprehensive (loss) income ( 45,775 ) ( 236 ) 2,158 ( 43,853 ) 2,440 ( 111 ) ( 1,224 ) 1,105

Balance at June 30, $ ( 130,957 ) 2,469 16,689 ( 111,799 ) 16,940 ( 1,301 ) ( 1,557 ) 14,082

Changes in Accumulated Other Comprehensive Income (Loss) by Component, net of tax

for the six months ended June 30,

Available for Sale Debt Securities Post- Retirement

Obligations Unrealized Gains on Derivatives (cash flow hedges) Accumulated

Comprehensive

Income (Loss) Unrealized Gains (Losses) on

1 unchanged sentence

Obligations Unrealized Gains (Losses) on Derivatives (cash flow hedges) Accumulated

Comprehensive Income (Loss)

December 31, $ ( 211 ) 2,981 4,093 6,863 23,690 ( 1,081 ) ( 4,954 ) 17,655

Comprehensive Income

Balance at December 31, $ ( 211 ) 2,981 4,093 6,863 23,690 ( 1,081 ) ( 4,954 ) 17,655

Current - period other comprehensive (loss) ( 130,746 ) ( 512 ) 12,596 ( 118,662 ) ( 6,750 ) ( 220 ) 3,397 ( 3,573 )

Balance at March 31, $ ( 85,182 ) 2,705 14,531 ( 67,946 ) 14,500 ( 1,190 ) ( 333 ) 12,977

The following tables summarize the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of income for the three and three months ended March 31, 2022 and 2021 (in thousands):

Balance at June 30, $ ( 130,957 ) 2,469 16,689 ( 111,799 ) 16,940 ( 1,301 ) ( 1,557 ) 14,082

The following tables summarize the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of income for the three and six months ended June 30, 2022 and 2021 (in thousands):

Reclassifications From Accumulated Other Comprehensive

Income ("AOCI")

Amount reclassified from AOCI for the three months ended March 31, Affected line item in the Consolidated

Amount reclassified from AOCI for the three months ended June 30, Affected line item in the Consolidated

Statement of Income

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Cash flow hedges:

Unrealized losses on derivatives 666 879 Interest expense

Unrealized (gains) losses on derivatives ( 162 ) 947 Interest expense

42 ( 244 ) Income tax expense

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84 39 Income tax expense

Total reclassification $ ( 242 ) ( 111 ) Net of tax

Total reclassifications $ ( 404 ) ( 111 ) Net of tax

Reclassifications From Accumulated Other Comprehensive

Income ("AOCI")

Amount reclassified from AOCI for the six months ended June 30, Affected line item in the Consolidated

Statement of Income

Details of AOCI:

Available for sale debt securities:

Realized net gains on the sale of securities available for sale $ ( 58 ) ( 230 ) Net gain on securities transactions

16 59 Income tax expense

( 42 ) ( 171 ) Net of tax

Cash flow hedges:

Unrealized losses on derivatives 504 1,826 Interest expense

( 136 ) ( 471 ) Income tax expense

Post-retirement obligations:

Amortization of actuarial gains $ ( 652 ) ( 300 ) Compensation and employee benefits (1)

171 80 Income tax expense

Total reclassification $ ( 481 ) ( 220 ) Net of tax

Total reclassifications $ ( 155 ) ( 391 ) Net of tax

11 unchanged sentences

As the Company has not elected to apply hedge accounting and these interest rate swaps do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

At March 31, 2022 and December 31, 2021, the Company had 166 loan related interest rate swaps, with an aggregate notional amount of $ 2.43 billion and $ 2.42 billion, respectively.

At June 30, 2022 and December 31, 2021, the Company had 166 and 164 loan related interest rate swaps, respectively, with aggregate notional amounts of $ 2.48 billion and $ 2.38 billion, respectively.

The Company periodically enters into risk participation agreements ("RPAs"), with the Company functioning as either the lead institution, or as a participant when another company is the lead institution on a commercial loan.

2 unchanged sentences

The Company has minimum collateral posting thresholds with certain of its risk participation counterparties, and has posted collateral of $ 70,000 against the potential risk of default by the borrower under these agreements.

At March 31, 2022 and December 31, 2021, the Company had 13 credit derivatives, with aggregate notional amounts of $ 147.2 million and $ 144.8 million, respectively, from participations in interest rate swaps as part of these loan participation arrangements.

At March 31, 2022 and December 31, 2021, the fair value of these credit derivatives were $ 77,700 and $ 108,800 , respectively.

At June 30, 2022 and December 31, 2021, the Company had 13 credit derivatives, with aggregate notional amounts of $ 149.6 million and $ 144.8 million, respectively, from participations in interest rate swaps as part of these loan participation arrangements.

At June 30, 2022, the asset and liability positions of these fair value credit derivatives totaled $ 47,000 and $ 19,000 , respectively, compared to $ 109,000 and $ 46,000 , respectively, at December 31, 2021.

Cash Flow Hedges of Interest Rate Risk.

2 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable payment amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

Changes in the fair value of derivatives designated and that qualify as cash flow hedges of interest rate risk are recorded in accumulated other comprehensive (loss) income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

During the three months ended March 31, 2022 and 2021, such derivatives were used to hedge the variable cash outflows associated with FHLBNY borrowings and brokered demand deposits.

Amounts reported in accumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s borrowings or demand deposits.

Changes in the fair value of derivatives designated and that qualify as cash flow hedges of interest rate risk are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

During the three and six months ended June 30, 2022 and 2021, such derivatives were used to hedge the variable cash outflows associated with FHLBNY borrowings and brokered demand deposits.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s borrowings or demand deposits.

During the next twelve months, the Company estimates that $ 10.0 million will be reclassified as a reduction to interest expense.

As of March 31, 2022, the Company had 13 outstanding interest rate derivatives with an aggregate notional amount of $ 500.0 million that were each designated as a cash flow hedge of interest rate risk.

At June 30, 2022, the Company had 11 outstanding interest rate derivatives with an aggregate notional amount of $ 460.0 million that were each designated as a cash flow hedge of interest rate risk.

Assets and liabilities relating to certain financial instruments, including derivatives, may be eligible for offset in the Consolidated Statements of Financial Condition and/or subject to enforceable master netting arrangements or similar agreements.

The Company does not offset asset and liabilities under such arrangements in the Consolidated Statements of Financial Condition.

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s financial instruments that are eligible for offset in the Consolidated Statements of Financial Condition at March 31, 2022 and December 31, 2021 (in thousands).

Fair Values of Derivative Instruments as of March 31, 2022

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s financial instruments that are eligible for offset in the Consolidated Statements of Condition at June 30, 2022 and December 31, 2021 (in thousands).

Fair Values of Derivative Instruments as of June 30, 2022

Asset Derivatives Liability Derivatives

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Fair Values of Derivative Instruments as of December 31, 2021

Asset Derivatives Liability Derivatives

Liability Derivatives

Notional Amount Consolidated Statements of Financial Condition Fair

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Therefore, excess cash collateral, if any, is not reflected above.

(2) The fair values related to interest rate products in the above net derivative tables show the total value of assets and liabilities, which include accrued interest receivable and accrued interest payable for the periods ended March 31, 2022 and December 31, 2021.

The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income during the three months ended March 31, 2022 and 2021 (in thousands).

Gain recognized in income on derivatives for the three months ended

Consolidated Statements of Income March 31, 2022 March 31, 2021

The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income during the three and six months ended June 30, 2022 and 2021 (in thousands).

Gain (loss) recognized in income on derivatives for the three months ended

Consolidated Statements of Income June 30, 2022 June 30, 2021

Derivatives not designated as a hedging instrument:

2 unchanged sentences

Total $ 59 ( 299 )

Consolidated Statements of Income Loss recognized in expense on derivatives for the three months ended

March 31, 2022 March 31, 2021

Derivatives designated as a hedging instrument:

1 unchanged sentence

Total $ ( 162 ) 947

Gain (loss) recognized in income on derivatives for the six months ended

Consolidated Statements of Income June 30, 2022 June 30, 2021

Derivatives not designated as a hedging instrument:

Interest rate products Other income $ 443 77

Credit contracts Other income ( 35 ) 47

Total $ 408 124

Derivatives designated as a hedging instrument:

Interest rate products Interest expense $ 504 1,826

Total $ 504 1,826

The Company has agreements with certain of its dealer counterparties which contain a provision that if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be deemed in default on its derivative obligations.

In addition, the Company has agreements with certain of its dealer counterparties which contain a provision that if the Company fails to maintain its status as a well or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

At March 31, 2022, the Company had four dealer counterparties.

The Company had a net liability position with respect to one of the counterparties.

The termination value for this net liability position, which includes accrued interest, was $ 5.6 million at March 31, 2022.

The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of $ 4.8 million against its obligations under these agreements.

If the Company had breached any of these provisions at March 31, 2022, it could have been required to settle its obligations under the agreements at the termination value.

At June 30, 2022, the Company had four dealer counterparties.

The Company had a net asset position with respect to all of its counterparties.

Revenue Recognition

1 unchanged sentence

The guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) does not apply to revenue associated with financial instruments, including interest income on loans and investments, which comprise the majority of the Company's revenue.

For the three months ended March 31, 2022, and 2021 the out-of-scope revenue related to financial instruments was 83.4 % and 82.3 %, respectively, of the Company's total revenue.

For both the three and six months ended June 30, 2022, the out-of-scope revenue related to financial instruments was 83.5 % of the Company's total revenue, compared to 82.6 % and 82.5 % for the three and six months ended June 30, 2021, respectively.

Revenue-generating activities that are within the scope of Topic 606, are components of non-interest income.

1 unchanged sentence

wealth management revenue, insurance agency income and banking service charges and other fees.

The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three months ended March 31, 2022 and 2021 (in thousands):

Three months ended March 31,

The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three months ended June 30, Six months ended June 30,

2022 2021 2022 2021

Non-interest income

23 unchanged sentences

These fees are generally transaction-based, or time-based services.

The Company's performance obligation for these services are generally satisfied,

and revenue recognized, at the time the transaction is completed, or the service rendered.

The Company's performance obligation for these services are generally satisfied, and revenue recognized, at the time the transaction is completed, or the service rendered.

Fees for these services are generally received from the customer either at the time of transaction, or monthly.

6 unchanged sentences

None of these revenue streams are subject to the requirements of Topic 606.

The following table represents the consolidated statements of financial condition classification of the Company’s right-of use-assets and lease liabilities at March 31, 2022 and December 31, 2021 (in thousands):

Classification March 31, 2022 December 31, 2021

The following table represents the consolidated statements of financial condition classification of the Company’s right-of use-assets and lease liabilities at June 30, 2022 and December 31, 2021 (in thousands):

Classification June 30, 2022 December 31, 2021

Lease Right-of-Use Assets:

5 unchanged sentences

If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability.

Generally, the Company considers the first renewal option to be reasonably certain and includes it in the calculation of the right-of use asset and lease liability.

Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable.

2 unchanged sentences

All of the leases in which the Company is the lessee are classified as operating leases and are primarily comprised of real estate properties for branches and administrative offices with terms extending through 2040.

At March 31, 2022, the weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases were 9.2 years and 2.50 %, respectively.

At June 30, 2022, the weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases were 9.0 years and 2.43 %, respectively.

The following tables represent lease costs and other lease information for the Company's operating leases.

The variable lease cost primarily represents variable payments such as common area maintenance and utilities (in thousands):

For the Three Months Ended

March 31, 2022 March 31, 2021

Three months ended June 30, 2022 Three months ended June 30, 2021

Operating lease cost $ 2,586 $ 2,330

1 unchanged sentence

Total lease cost $ 3,304 $ 3,047

For the Three Months Ended

March 31, 2022 March 31, 2021

Six months ended June 30, 2022 Six months ended June 30, 2021

Operating lease cost $ 5,393 $ 5,142

Variable lease cost 1,436 1,519

Total lease cost $ 6,829 $ 6,661

Cash paid for amounts included in the measurement of lease liabilities:

Six months ended June 30, 2022 Six months ended June 30, 2021

Operating cash flows from operating leases $ 4,060 $ 4,575

During the three months ended March 31, 2022, the Company added one new lease obligation related to the Company's new administrative office location in Iselin, New Jersey.

During the six months ended June 30, 2022, the Company added one new lease obligation related to the Company's new administrative office location in Iselin, New Jersey.

The Company recorded a right-of-use asset and lease liability of $ 16.0 million for this lease obligation.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2022, were as follows (in thousands):

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2022, were as follows (in thousands):

Operating leases

6 unchanged sentences

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