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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 297 added, 250 removed, 1257 unchanged (30% of the section changed)

3 unchanged sentences

Consolidated Statements of Financial Condition

June 30, 2024 (Unaudited) and December 31, 2023

September 30, 2024 (Unaudited) and December 31, 2023

(Dollars in Thousands)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and due from banks $ 244,064 $ 180,241

2 unchanged sentences

Available for sale debt securities, at fair value 2,725,110 1,690,112

Held to maturity debt securities, net (fair value of $ 332,691 as of June 30, 2024 (unaudited) and $ 352,601 as of December 31, 2023)

Held to maturity debt securities, (net of $ 15,000 allowance as of September 30, 2024 (unaudited) and $ 31,000 allowance as of December 31, 2023)

332,021 363,080

25 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, 137,565,966 shares issued and 130,380,393 shares outstanding as of June 30, 2024 and 75,537,186 outstanding as of December 31, 2023

Common stock, $ 0.01 par value, 200,000,000 shares authorized, 137,565,966 shares issued and 130,448,599 shares outstanding as of September 30, 2024 and 75,537,186 outstanding as of December 31, 2023

Additional paid-in capital 1,871,343 989,058

11 unchanged sentences

Consolidated Statements of Income

Three and six months ended June 30, 2024 and 2023 (Unaudited)

Three and nine months ended September 30, 2024 and 2023 (Unaudited)

(Dollars in Thousands, except per share data)

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

20 unchanged sentences

Bank-owned life insurance 4,308 1,820 9,448 4,838

Net (loss) gain on securities transactions ( 2,973 ) 29 ( 2,974 ) 24

Net gain (loss) on securities transactions 2 13 ( 2,972 ) 37

Other income 1,478 1,139 3,245 5,691

10 unchanged sentences

Total non-interest expense 136,002 65,625 323,224 199,485

(Loss) Income before income tax expense ( 21,318 ) 43,633 21,651 98,622

Income tax (benefit) expense ( 9,833 ) 11,630 1,055 26,083

Net (loss) income $ ( 11,485 ) $ 32,003 $ 20,596 $ 72,539

Income before income tax expense 65,255 37,390 86,906 136,011

Income tax expense 18,850 8,843 19,905 34,925

Net income $ 46,405 $ 28,547 $ 67,001 $ 101,086

Basic earnings per share $ 0.36 $ 0.38 $ 0.65 $ 1.35

6 unchanged sentences

Consolidated Statements of Comprehensive Income

Three and six months ended June 30, 2024 and 2023 (Unaudited)

Three and nine months ended September 30, 2024 and 2023 (Unaudited)

(Dollars in Thousands)

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Net (loss) income $ ( 11,485 ) $ 32,003 $ 20,596 $ 72,539

Net income $ 46,405 $ 28,547 $ 67,001 $ 101,086

Other comprehensive income, net of tax:

4 unchanged sentences

Unrealized gains and losses on derivatives:

Net unrealized gains arising during the period 941 3,650 4,144 3,033

Net unrealized (losses) gains arising during the period ( 3,395 ) 2,352 810 5,385

Reclassification adjustment for (gains) included in net income ( 2,450 ) ( 3,430 ) ( 7,980 ) ( 9,519 )

2 unchanged sentences

Total other comprehensive income (loss) 46,915 ( 32,563 ) 48,066 ( 30,011 )

Total comprehensive income $ 136 $ 17,656 $ 21,747 $ 75,091

Total comprehensive income (loss) $ 93,320 $ ( 4,016 ) $ 115,067 $ 71,075

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

For the three and six months ended June 30, 2023 (Unaudited)

For the three and nine months ended September 30, 2024 (Unaudited)

(Dollars in Thousands)

For the three months ended June 30, 2023

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

Balance as of March 31, 2023 $ 832 $ 984,089 $ 940,533 $ ( 148,146 ) $ ( 127,814 ) $ ( 9,414 ) $ ( 3,289 ) $ 3,289 $ 1,640,080

For the three months ended September 30, 2024

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 as of June 30, 2024 $ 1,376 $ 1,868,643 $ 957,979 $ ( 139,964 ) $ ( 129,115 ) $ ( 3,273 ) $ ( 2,398 ) $ 2,398 $ 2,555,646

Net income — — 46,405 — — — — — 46,405

6 unchanged sentences

Allocation of ESOP shares — 30 — — — 812 — — 842

Allocation of Stock Award Plan ("SAP") shares — 1,997 — — — — — — 1,997

Allocation of SAP shares — 2,614 — — — — — — 2,614

Shares issued due to acquisition — — — — — — — — —

Allocation of stock options — 17 — — — — — — 17

Balance as of June 30, 2023 $ 832 $ 986,150 $ 954,403 $ ( 162,493 ) $ ( 127,818 ) $ ( 8,603 ) $ ( 3,150 ) $ 3,150 $ 1,642,471

For the six months ended June 30, 2023

Balance as of September 30, 2024 $ 1,376 $ 1,871,343 $ 972,997 $ ( 93,049 ) $ ( 129,148 ) $ ( 2,461 ) $ ( 2,247 ) $ 2,247 $ 2,621,058

For the nine months ended September 30, 2024

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

CAPITAL RETAINED EARNINGS ACCUMULATED

COMPREHENSIVE

LOSS TREASURY

STOCK UNALLOCATED

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

Balance as of December 31, 2023 $ 832 $ 989,058 $ 974,542 $ ( 141,115 ) $ ( 127,825 ) $ ( 4,896 ) $ ( 2,694 ) $ 2,694 $ 1,690,596

2 unchanged sentences

Cash dividends paid — — ( 68,546 ) — — — — — ( 68,546 )

Effect of adopting Cumulative effect of adopting Accounting Standards Update ("ASU") No.

2022-02, net of tax

— — 433 — — — — — 433

Distributions from deferred comp plans — 102 — — — — 447 ( 447 ) 102

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

Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 1,323 ) — — — ( 1,323 )

2 unchanged sentences

Allocation of SAP shares — 6,039 — — — — — — 6,039

Shares issued due to acquisition 544 876,234 — — — — — — 876,778

Allocation of stock options — 61 — — — — — — 61

Balance as of June 30, 2023 $ 832 $ 986,150 $ 954,403 $ ( 162,493 ) $ ( 127,818 ) $ ( 8,603 ) $ ( 3,150 ) $ 3,150 $ 1,642,471

Balance as of September 30, 2024 $ 1,376 $ 1,871,343 $ 972,997 $ ( 93,049 ) $ ( 129,148 ) $ ( 2,461 ) $ ( 2,247 ) $ 2,247 $ 2,621,058

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

For the three and six months ended June 30, 2024 (Unaudited)

For the three and nine months ended September 30, 2023 (Unaudited)

(Dollars in Thousands)

For the three months ended June 30, 2024

Balance as of March 31, 2024 $ 832 $ 990,582 $ 988,480 $ ( 151,585 ) $ ( 129,062 ) $ ( 4,085 ) $ ( 2,546 ) $ 2,546 $ 1,695,162

For the three months ended September 30, 2023

Balance as of June 30, 2023 $ 832 $ 986,150 $ 954,403 $ ( 162,493 ) $ ( 127,818 ) $ ( 8,603 ) $ ( 3,150 ) $ 3,150 $ 1,642,471

Net income — — 28,547 — — — — — 28,547

6 unchanged sentences

Allocation of ESOP shares — ( 24 ) — — — 812 — — 788

Allocation of SAP shares — 1,904 — — — — — — 1,904

Shares issued due to acquisition 544 876,234 — — — — — — 876,778

Allocation of Stock Award Plan ("SAP") shares — 1,805 — — — — — — 1,805

Allocation of stock options — 34 — — — — — — 34

Balance as of June 30, 2024 $ 1,376 $ 1,868,643 $ 957,979 $ ( 139,964 ) $ ( 129,115 ) $ ( 3,273 ) $ ( 2,398 ) $ 2,398 $ 2,555,646

For the six months ended June 30, 2024

Balance as of September 30, 2023 $ 832 $ 988,001 $ 964,802 $ ( 195,056 ) $ ( 127,818 ) $ ( 7,791 ) $ ( 3,013 ) $ 3,013 $ 1,622,970

For the nine months ended September 30, 2023

COMMONSTOCK ADDITIONAL

CAPITAL RETAINED EARNINGS ACCUMULATED

COMPREHENSIVE

LOSS TREASURY

STOCK UNALLOCATED

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

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 as of December 31, 2022 $ 832 $ 981,138 $ 918,158 $ ( 165,045 ) $ ( 127,154 ) $ ( 10,226 ) $ ( 3,427 ) $ 3,427 $ 1,597,703

2 unchanged sentences

Cash dividends paid — — ( 54,875 ) — — — — — ( 54,875 )

Effect of adopting Cumulative effect of adopting Accounting Standards Update ("ASU") No.

2022-02, net of tax

— — 433 — — — — — 433

Distributions from deferred comp plans — 115 — — — — 414 ( 414 ) 115

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

Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 1,671 ) — — — ( 1,671 )

2 unchanged sentences

Allocation of SAP shares — 6,635 — — — — — — 6,635

Shares issued due to acquisition 544 876,234 — — — — — — 876,778

Allocation of stock options — 111 — — — — — — 111

Balance as of June 30, 2024 $ 1,376 $ 1,868,643 $ 957,979 $ ( 139,964 ) $ ( 129,115 ) $ ( 3,273 ) $ ( 2,398 ) $ 2,398 $ 2,555,646

Balance as of September 30, 2023 $ 832 $ 988,001 $ 964,802 $ ( 195,056 ) $ ( 127,818 ) $ ( 7,791 ) $ ( 3,013 ) $ 3,013 $ 1,622,970

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Cash Flows

Six months ended June 30, 2024 and 2023 (Unaudited)

Nine months ended September 30, 2024 and 2023 (Unaudited)

(Dollars in Thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

19 unchanged sentences

Increase in accrued interest receivable ( 3,658 ) ( 3,838 )

(Increase) decrease in other assets ( 27,968 ) 7,490

Increase (decrease) in other liabilities 48,748 ( 17,719 )

Increase in other assets ( 10,591 ) ( 23,596 )

Increase in other liabilities 21,258 9,101

Net cash provided by operating activities 187,093 127,079

Cash flows from investing activities:

Net decrease (increase) in loans 5,236 ( 285,500 )

Net increase in loans ( 28,540 ) ( 420,331 )

Purchases of loans — ( 7,876 )

17 unchanged sentences

Consolidated Statements of Cash Flows

Six months ended June 30, 2024 and 2023 (Unaudited)

Nine months ended September 30, 2024 and 2023 (Unaudited)

(Dollars in Thousands)

Six months ended June 30,

Nine months ended September 30,

Increase in mortgage escrow deposits 5,638 5,614

Cash dividends paid to stockholders ( 68,546 ) ( 54,875 )

Purchase of treasury stock — —

Purchase of employee restricted shares to fund statutory tax withholding ( 1,323 ) ( 1,671 )

48 unchanged sentences

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 and six months ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for all of 2024.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results of operations that may be expected for all of 2024.

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

3 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 and six months ended June 30, 2024 and 2023 (dollars in thousands, except per share amounts):

Three months ended June 30,

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands, except per share amounts):

Three months ended September 30,

Income Weighted

2 unchanged sentences

Outstanding Per

Net (loss) income $ ( 11,485 ) $ 32,003

Net income $ 46,405 $ 28,547

Basic earnings per share:

(Loss) Income available to common stockholders $ ( 11,485 ) 102,957,521 $ ( 0.11 ) $ 32,003 74,823,272 $ 0.43

Income available to common stockholders $ 46,405 129,941,845 $ 0.36 $ 28,547 74,909,083 $ 0.38

Dilutive shares 63,025 5,122

Diluted earnings per share:

(Loss) Income available to common stockholders $ ( 11,485 ) 102,957,521 $ ( 0.11 ) $ 32,003 74,830,187 $ 0.43

Six months ended June 30,

Income available to common stockholders $ 46,405 130,004,870 $ 0.36 $ 28,547 74,914,205 $ 0.38

Nine months ended September 30,

Income Weighted

8 unchanged sentences

Income available to common stockholders $ 67,001 102,845,261 $ 0.65 $ 101,086 74,816,606 $ 1.35

Anti-dilutive stock options and awards as of June 30, 2024 and 2023, totaling 1.5 million shares and 1.3 million shares, respectively, were excluded from the earnings per share calculations.

Anti-dilutive stock options and awards as of September 30, 2024 and 2023, totaling 1.7 million shares and 1.2 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 and six months ended June 30, 2024, an initial CECL provision for credit losses on loans and commitments to extend credit of $ 65.2 million was recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations.

For the three and nine months ended September 30, 2024, an initial CECL provision for credit losses on loans and commitments to extend credit of $ 65.2 million was recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations.

See Notes 4 and 10 to the Consolidated Financial Statements for more information on the allowance for credit losses on loans and off-balance sheet credit exposures.

11 unchanged sentences

("Lakeland"), which added $ 10.91 billion to total assets, $ 7.91 billion to total loans, $ 8.62 billion to total deposits and 68 full-service banking offices in New Jersey and New York.

The Company expects to close 13 of the acquired Lakeland banking offices and nine legacy Bank branches in the third quarter of 2024 due to geographic overlap.

The Company closed 13 of the acquired Lakeland banking offices and nine legacy Bank branches in the third quarter of 2024 due to geographic overlap.

Under the merger agreement, each share of Lakeland common stock was converted into the right to receive 0.8319 shares of the Company's common stock, a total of 54,356,954 shares converted, plus cash in lieu of fractional shares.

29 unchanged sentences

Net assets acquired $ 876,778

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available.

As the Company finalizes its review of the acquired assets and liabilities, certain adjustments to the recorded carrying values and goodwill may be required.

The Company is in the process of finalizing its review of the acquired assets and liabilities, as a result of which certain adjustments to the recorded carrying values and goodwill may be required.

There have been no adjustments to the recorded carrying values or goodwill made to-date.

Fair Value Measurement of Assets Assumed and Liabilities Assumed

13 unchanged sentences

were discounted to present value and summed to arrive at the calculated value of the loans.

The fair value of the acquired loans receivable had a gross amortized cost basis of $ 7.91 billion.

The fair value of the acquired loans, not including allowance for credit losses on PCD loans totaled $ 7.91 billion.

For loans acquired without evidence of more-than-insignificant deterioration in credit quality since origination, the Company recorded interest rate loan fair value and credit fair value adjustments.

33 unchanged sentences

The Company acquired 68 branches from Lakeland, 29 of which were owned premises.

The Company expects to close 13 of the acquired banking offices in the third quarter of 2024.

The Company closed 13 of the acquired banking offices in the third quarter of 2024.

The fair value of Lakeland’s premises was determined based upon independent third-party appraisals performed by licensed appraisers in the market in which the premises are located.

12 unchanged sentences

The fair value adjustment for time deposits represents a discount from the value of the contractual repayments of fixed-maturity deposits using prevailing market interest rates for similar-term time deposits.

The time deposit discount of approximately $ 1.2 million is being amortized into income on a level yield basis over the contractual life of the deposits.

The time deposit discount of approximately $ 1.2 million is being amortized into income on a straight-line method over the contractual life of the deposits.

The fair value of FHLBNY advances was determined based on a discounted cash flow analysis using a discount rate derived from FHLBNY rates as of May 16, 2024.

5 unchanged sentences

Merger-Related Expenses

Merger-related expenses, which is a separate line in non-interest expense on the Consolidated Statements of Income, totaled $ 18.9 million and $ 21.1 million for the three and six months ended June 30, 2024, respectively, compared with $ 2.0 million and $ 3.1 million for the three and six months ended June 30, 2023.

Merger-related expenses, which is a separate line in non-interest expense on the Consolidated Statements of Income, totaled $ 15.6 million and $ 36.7 million for the three and nine months ended September 30, 2024, respectively, compared with $ 2.3 million and $ 5.3 million for the three and nine months ended September 30, 2023.

Investment Securities

As of June 30, 2024, the Company had $ 2.63 billion and $ 350.5 million in available for sale debt securities and held to maturity debt securities, respectively.

The total number of available for sale and held to maturity debt securities in an unrealized loss position as of June 30, 2024 totaled 1,168 , compared with 808 as of December 31, 2023.

The increase in the number of securities in an unrealized loss position as of June 30, 2024, was due to the addition of Lakeland securities, combined with higher current market interest rates compared to rates as of December 31, 2023.

As of September 30, 2024, the Company had $ 2.73 billion and $ 332.0 million in available for sale debt securities and held to maturity debt securities, respectively.

The total number of available for sale and held to maturity debt securities in an unrealized loss position as of September 30, 2024 totaled 803 , compared with 808 as of December 31, 2023.

The decrease in the number of securities in an unrealized loss position as of September 30, 2024, was due to lower current market interest rates compared to rates as of December 31, 2023, offset by the addition of Lakeland securities.

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 as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for available for sale debt securities as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024

Treasury obligations $ 347,717 784 ( 15,707 ) 332,794

13 unchanged sentences

$ 1,901,798 2,159 ( 213,845 ) 1,690,112

Accrued interest on available for sale debt securities, which is excluded from the amortized cost, totaled $ 9.2 million and $ 4.9 million as of June 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The amortized cost and fair value of available for sale debt securities as of June 30, 2024, by contractual maturity, are shown below (in thousands).

Accrued interest on available for sale debt securities, which is excluded from the amortized cost, totaled $ 9.1 million and $ 4.9 million as of September 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The amortized cost and fair value of available for sale debt securities as of September 30, 2024, 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.

June 30, 2024

September 30, 2024

Due in one year or less $ 135,769 136,184

4 unchanged sentences

Investments which pay principal on a periodic basis totaling $ 2.19 billion at amortized cost and $ 2.07 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 and six months ended June 30, 2024, proceeds from sales on securities in the available for sale debt securities portfolio totaled $ 568.4 million, with no gains and $ 3.0 million of losses recognized.

For the three and six months ended June 30, 2023, there were no sales of securities from the available for sale debt securities portfolio.

For the three and six months ended June 30, 2024 and 2023, there were no proceeds from calls on securities in the available for sale debt securities portfolio.

The number of available for sale debt securities in an unrealized loss position as of June 30, 2024 totaled 620 , compared with 436 as of December 31, 2023.

The increase in the number of securities in an unrealized loss position as of June 30, 2024, was primarily due to the addition of Lakeland, combined with higher current market interest rates compared to rates as of December 31, 2023.

All securities in an unrealized loss position were investment grade as of June 30, 2024.

For the three and nine months ended September 30, 2024, proceeds from sales on securities in the available for sale debt securities portfolio totaled $ 568.4 million, with no gains and $ 3.0 million of losses recognized.

For the three and nine months ended September 30, 2023, there were no sales of securities from the available for sale debt securities portfolio.

For the three and nine months ended September 30, 2024, proceeds from calls on securities in the available for sale debt securities portfolio totaled $ 780,000 with no gains and no losses recognized.

For the three and nine months ended September 30, 2023, there were no proceeds from calls on securities in the available for sale debt securities portfolio.

The number of available for sale debt securities in an unrealized loss position as of September 30, 2024 totaled 438 , compared with 436 as of December 31, 2023.

The increase in the number of securities in an unrealized loss position as of September 30, 2024, was primarily due to the addition of Lakeland, offset by lower current market interest rates as of December 31, 2023.

All securities in an unrealized loss position were investment grade as of September 30, 2024.

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, excluding allowances for credit losses of $ 15,000 and $ 31,000 , as of June 30, 2024 and December 31, 2023, respectively (in thousands):

June 30, 2024

Treasury obligations $ 6,984 — — 6,984

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for held to maturity debt securities, excluding allowances for credit losses of $ 15,000 and $ 31,000 , as of September 30, 2024 and December 31, 2023, respectively (in thousands):

September 30, 2024

Government-agency obligations $ 9,999 — ( 347 ) 9,652

8 unchanged sentences

$ 363,111 245 ( 10,755 ) 352,601

Accrued interest on held to maturity debt securities, which is excluded from the amortized cost, totaled $ 3.0 million and $ 3.1 million as of June 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

Accrued interest on held to maturity debt securities, which is excluded from the amortized cost, totaled $ 2.2 million and $ 3.1 million as of September 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

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 and six months ended June 30, 2024 and 2023.

For the three and six months ended June 30, 2024, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 1.2 million and $ 2.4 million, respectively.

As to these calls on securities, for the three months ended June 30, 2024, there were no gross gains or gross losses, while for the six months ended June 30, 2024, there were no gross gains, while gross losses totaled $ 1,200 .

For the three and six months ended June 30, 2023, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 3.5 million and $ 6.6 million, respectively.

As to these calls on securities, for the three months ended June 30, 2023, gross gains totaled $ 28,000 , with no gross losses, while for the six months ended June 30, 2023, gross gains totaled $ 24,000 , with no gross losses.

The amortized cost and fair value of investment securities in the held to maturity debt securities portfolio by contractual maturity, excluding an allowance for credit losses of $ 15,000 , as of June 30, 2024 are shown below (in thousands).

There were no sales of securities from the held to maturity debt securities portfolio for the three and nine months ended September 30, 2024 and 2023.

For the three and nine months ended September 30, 2024, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 2.1 million and $ 4.6 million, respectively.

For the three months ended September 30, 2024, there were no gross gains or gross losses, while for the nine months ended September 30, 2024, there were no gross gains, while gross losses totaled $ 1,200 related to these calls on securities.

For the three and nine months ended September 30, 2023, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 3.2 million and $ 9.8 million, respectively.

For the three months ended September 30, 2023, gross gains totaled $ 16,000 with gross losses of $ 3,000 , while for the nine months ended September 30, 2023, gross gains totaled $ 45,000 , with gross losses of $ 8,000 , related to calls on these securities.

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

June 30, 2024

September 30, 2024

Due in one year or less $ 39,173 38,867

3 unchanged sentences

$ 332,036 322,442

The number of held to maturity debt securities in an unrealized loss position as of June 30, 2024 totaled 548 , compared with 372 as of December 31, 2023.

The increase in the number of securities in an unrealized loss position as of June 30, 2024, was due to higher current market interest rates compared to rates as of December 31, 2023.

The number of held to maturity debt securities in an unrealized loss position as of September 30, 2024 totaled 365 , compared with 372 as of December 31, 2023.

The decrease in the number of securities in an unrealized loss position as of September 30, 2024, was due to lower current market interest rates as of December 31, 2023.

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 credit ratings from the rating agencies as of June 30, 2024 that were no lower than an A rating and the Company had no securities rated BBB or worse by Moody’s Ratings ("Moody's").

The majority of the state and municipal and corporate obligations carry credit ratings from the rating agencies as of September 30, 2024 that were no lower than an A rating and the Company had no securities rated BBB or worse by Moody’s Ratings ("Moody's").

Credit Quality Indicators.

The following table provides the amortized cost of held to maturity debt securities by credit rating as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

The following table provides the amortized cost of held to maturity debt securities by credit rating as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024

Total Portfolio AAA AA A BBB Not Rated Total

Treasury obligations $ 6,984 — — — — 6,984

Government-agency obligations $ 9,999 — — — — 9,999

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

As of June 30, 2024, the held to maturity debt securities portfolio was comprised of 18 % rated AAA, 72 % rated AA, 10 % rated A, and less than 1 % either below an A rating or not rated by Moody’s or Standard and Poor’s.

As of September 30, 2024, the held to maturity debt securities portfolio was comprised of 17 % rated AAA, 73 % rated AA, 10 % rated A, and less than 1 % either below an A rating or not rated by Moody’s or Standard and Poor’s.

Securities not explicitly rated, such as U.S.

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Loans Receivable and Allowance for Credit Losses

Loans receivable as of June 30, 2024 and December 31, 2023 are summarized as follows (in thousands):

June 30, 2024 December 31, 2023

Loans held for investment as of September 30, 2024 and December 31, 2023 are summarized as follows (in thousands):

September 30, 2024 December 31, 2023

Mortgage loans:

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Total loans $ 18,794,609 10,871,916

Accrued interest on loans totaled $ 81.6 million and $ 50.9 million as of June 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

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

June 30, 2024

As of September 30, 2024 and December 31, 2023, the Company had loans held for sale of $ 5.8 million and $ 1.8 million, respectively.

Accrued interest on loans totaled $ 78.8 million and $ 50.9 million as of September 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

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

September 30, 2024

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

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Total gross loans $ 9,942 3,316 49,639 — 62,897 10,820,001 10,882,898 44,433

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 $ 67.9 million and $ 49.6 million as of June 30, 2024 and December 31, 2023, respectively.

Included in non-accrual loans were $ 9.4 million and $ 23.2 million of loans which were less than 90 days past due as of June 30, 2024 and December 31, 2023, respectively.

There were no loans 90

days or greater past due and still accruing interest as of June 30, 2024 and December 31, 2023.

The amount of cash basis interest income that was recognized on impaired loans for the three and six months ended June 30, 2024 was not material.

The activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands):

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

Included in loans held for investment 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 $ 89.9 million

and $ 49.6 million as of September 30, 2024 and December 31, 2023, respectively.

Included in non-accrual loans were $ 27.7 million and $ 23.2 million of loans which were less than 90 days past due as of September 30, 2024 and December 31, 2023, respectively.

There were no loans 90 days or greater past due and still accruing interest as of September 30, 2024 and December 31, 2023.

The amount of cash basis interest income that was recognized on impaired loans for the three and nine months ended September 30, 2024 was not material.

The activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):

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

Balance at beginning of period $ 135,312 48,003 5,016 188,331

Initial allowance on credit loans related to PCD loans 10,628 6,070 490 17,188

Provision charge to operations 58,790 5,038 2,226 66,054

Provision charge (benefit) to operations 855 8,973 ( 228 ) 9,600

Recoveries of loans previously charged-off 16 513 139 668

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Balance at end of period $ 74,657 30,529 2,377 107,563

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

Nine months ended September 30, Mortgage loans Commercial loans Consumer loans Total

Balance at beginning of period $ 73,407 31,475 2,318 107,200

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Balance at end of period $ 74,657 30,529 2,377 107,563

For the three and six months ended June 30, 2024, the Company recorded a $ 66.1 million and a $ 66.3 million provision for credit losses on loans, respectively.

For the three and nine months ended September 30, 2024, the Company recorded a $ 9.6 million and a $ 75.9 million provision for credit losses on loans, respectively.

The increases in provision for both periods was primarily attributable to an initial CECL provision for credit losses on loans of $ 60.1 million recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations.

For the three months ended June 30, 2024, net charge-offs totaled $ 1.3 million, which was primarily attributable to one commercial loan.

For the six months ended June 30, 2024, net charge-offs totaled $ 2.3 million, which was primarily attributable to two commercial loans.

The following table summarizes the Company's gross charge-offs recorded during the three months ended June 30, 2024 by year of origination (in thousands):

For the three months ended September 30, 2024, net charge-offs totaled $ 6.8 million, which was primarily attributable to one commercial loan.

For the nine months ended September 30, 2024, net charge-offs totaled $ 9.1 million, which was primarily attributable to two commercial loans.

The following table summarizes the Company's gross charge-offs recorded during the three months ended September 30, 2024 by year of origination (in thousands):

2024 2023 2022 2021 2020 Prior to 2020 Total Loans

Mortgage loans:

Commercial $ — — — — — 801 801

Residential — — 7 — — — 7

Total mortgage loans — — 7 — — 801 808

Commercial loans — 42 — 6,453 — — 6,495

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Total gross loans $ 7 42 7 6,457 — 808 7,321

(1) During the three months ended June 30, 2024, charge-offs on consumer overdraft accounts totaled $ 74,000 , which are not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the six months ended June 30, 2024 by year of origination (in thousands):

(1) During the three months ended September 30, 2024, charge-offs on consumer overdraft accounts totaled $ 103,000 , which are not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the nine months ended September 30, 2024 by year of origination (in thousands):

2024 2023 2022 2021 2020 Prior to 2020 Total Loans

Mortgage loans:

Commercial $ — — — — — 801 801

Residential — — 7 — — — 7

Total mortgage loans — — 7 — — 801 808

Commercial loans — 41 157 8,500 1,606 207 10,511

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Total gross loans $ 20 41 164 8,505 1,606 1,017 11,353

(1) During the six months ended June 30, 2024, charge-offs on consumer overdraft accounts totaled $ 138,000 , which are not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the three months ended June 30, 2023 by year of origination (in thousands):

(1) During the nine months ended September 30, 2024, charge-offs on consumer overdraft accounts totaled $ 240,000 , which are not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the three months ended September 30, 2023 by year of origination (in thousands):

2023 2022 2021 2020 2019 Prior to 2019 Total Loans

Mortgage loans:

Residential $ — — — — — 3 3

Total mortgage loans — — — — — 3 3

Commercial loans — — — 5,000 — 1,019 6,019

2 unchanged sentences

Total gross loans $ 7 — — 5,000 — 1,022 6,029

(1) During the three months ended June 30, 2023, charge-offs on consumer overdraft accounts totaled $ 75,000 , which is not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the six months ended June 30, 2023 by year of origination (in thousands):

(1) During the three months ended September 30, 2023, charge-offs on consumer overdraft accounts totaled $ 75,000 , which is not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the nine months ended September 30, 2023 by year of origination (in thousands):

2023 2022 2021 2020 2019 Prior to 2019 Total Loans

7 unchanged sentences

Total gross loans $ 16 — — 5,000 — 3,189 8,205

(1) During the six months ended June 30, 2023, charge-offs on consumer overdraft accounts totaled $ 146,000 , which is not included in the table above.

(1) During the nine months ended September 30, 2023, charge-offs on consumer overdraft accounts totaled $ 221,000 , which is not included in the table above.

The Company defines a loan individually evaluated for impairment 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.

As of June 30, 2024, there were 18 loans totaling $ 54.6 million, compared to 17 loans totaling $ 42.3 million as of December 31, 2023, that were individually evaluated for impairment.

As of September 30, 2024, there were 27 loans totaling $ 74.0 million, compared to 17 loans totaling $ 42.3 million as of December 31, 2023, that were individually evaluated for impairment.

A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral.

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The Company believes there have not been any significant time lapses since the receipt of the most recent appraisals.

As of June 30, 2024 and December 31, 2023, the Company had collateral-dependent loans with fair values of $ 18.4 million and $ 24.1 million secured by commercial real estate, respectively.

As of September 30, 2024 and December 31, 2023, the Company had collateral-dependent loans with fair values of $ 13.3 million and $ 24.1 million secured by commercial real estate, respectively.

Loan modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearance, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.

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At adoption, the Company recorded a $ 594,000 reduction to the allowance for credit losses, which resulted in a $ 433,000 cumulative effect adjustment increase, net of tax, to retained earnings.

The following tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2024 (in thousands):

For the three months ended June 30, 2024

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans and Leases

The following tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 (in thousands):

For the three months ended September 30, 2024

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans

Mortgage loans:

Commercial $ — 1,045 — 0.01 %

Multi-family — 1,297 — 0.04 %

Total mortgage loans — 2,342 — 0.02 %

Commercial loans — 5,743 962 0.14 %

Total gross loans $ — 8,085 962 0.05 %

For the six months ended June 30, 2024

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans and Leases

For the nine months ended September 30, 2024

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans

Mortgage loans:

Commercial $ — 1,045 — 0.01 %

Multi-family — 1,297 — 0.04 %

Total mortgage loans — 2,342 — 0.02 %

Commercial loans — 5,743 9,759 0.33 %

Total gross loans $ — 8,085 9,759 0.09 %

There were no loan modifications made to borrowers experiencing financial difficulty during the three months ended June 30, 2023.

The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2023 (in thousands):

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans and Leases

For the three months ended September 30, 2023

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans

Mortgage loans:

Multi-family $ — — 1,508 0.08 %

Total mortgage loans — — 1,508 0.02 %

Total gross loans $ — — 1,508 0.01 %

For the nine months ended September 30, 2023

Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans

Mortgage loans:

Multi-family $ — — 1,508 0.08 %

Total mortgage loans — — 1,508 0.02 %

Commercial loans 3,771 — 1,250 0.21 %

Total gross loans $ 3,771 — 2,758 0.06 %

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended June 30, 2024 (in thousands):

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended September 30, 2024 (in thousands):

Weighted-Average Months of Term Extension Weighted-Average Rate Increase

Mortgage loans:

Commercial 2 4.41 %

Multi-family 0 5.00 %

Total mortgage loans 2 4.41 %

Commercial loans 3 — %

Total gross loans 3 1.23 %

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2024 (in thousands):

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2024 (in thousands):

Weighted-Average Months of Term Extension Weighted-Average Rate Increase

Mortgage loans:

Commercial 2 4.41 %

Multi-family 0 5.00 %

Total mortgage loans 2 4.41 %

Commercial loans 0 0.81 %

Total gross loans 0 1.05 %

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2023 (in thousands):

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended September 30, 2023 (in thousands):

Weighted-Average Months of Term Extension Weighted-Average Rate Change

Commercial loans 10 0.28 %

Mortgage loans:

Multi-family 2 2.23 %

Total mortgage loans 2 2.23 %

Total gross loans 2 2.23 %

There were no loan modifications made to borrowers experiencing financial difficulty that subsequently defaulted during the three and six months ended June 30, 2024 and June 30, 2023, respectively.

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the three months ended June 30, 2024 (in thousands):

Current 30-59 Days Past Due 60-89 Days Past Due 90 days or more Past Due Non- Accrual Total

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023 (in thousands):

Weighted-Average Months of Term Extension Weighted-Average Rate Change

Mortgage loans:

Multi-family 2 2.23 %

Total mortgage loans 2 2.23 %

Commercial loans 10 0.20 %

Total gross loans 9 0.61 %

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2024 (in thousands):

There were no loan modifications made to borrowers experiencing financial difficulty that subsequently defaulted during the three and nine months ended September 30, 2024 and September 30, 2023, respectively.

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the twelve months ended September 30, 2024 (in thousands):

Current 30-59 Days Past Due 60-89 Days Past Due 90 days or more Past Due Non- Accrual Total

Mortgage loans:

Commercial $ 1,045 $ — $ — $ — $ — $ 1,045

Multi-family 481 94 402 320 — 1,297

Total mortgage loans 1,526 94 402 320 — 2,342

Commercial loans 9,562 — — 88 5,852 15,502

Total gross loans $ 11,088 94 402 408 5,852 17,844

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2023 (in thousands):

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023 (in thousands):

Current 30-59 Days Past Due 60-89 Days Past Due 90 days or more Past Due Non- Accrual Total

Mortgage loans:

Multi-family $ 1,508 — — — — 1,508

Total mortgage loans 1,508 — — — — 1,508

Commercial loans 5,021 — — — — 5,021

1 unchanged sentence

Loans acquired by the Company that experienced more-than-insignificant deterioration in credit quality after origination, are classified as PCD loans.

As of June 30, 2024, the balance of PCD loans totaled $ 697.9 million with a related allowance for credit losses of $ 16.4 million.

As of September 30, 2024, the balance of PCD loans totaled $ 619.7 million with a related allowance for credit losses of $ 14.9 million.

The balance of PCD loans as of December 31, 2023 was $ 165.1 million with a related allowance for credit losses of $ 1.7 million.

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Reports by the independent third-parties are presented to the Audit Committee of the Board of Directors.

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, 2024 and December 31, 2023 (in thousands):

The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades as of September 30, 2024 and December 31, 2023 (in thousands):