PROVIDENT FINANCIAL SERVICES INC 10-Q

Item 1. FINANCIAL STATEMENTS. PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Financial Condition March 31, 2025 (Unaudited) and December 31, 2024 (Dollars in Thousands) March 31, 2025 December 31, 2024 ASSETS Cash and due from banks $ 234,076 $ 205,939 Available for sale debt securities, at fair value 2,878,785 2,768,915 Held to maturity debt securities, (net of $ 17,000 allowance as of March 31, 2025 and $ 14,000 allowance as of December 31, 2024) 314,005 327,623 Equity securities, at fair value 19,219 19,110 Federal Home Loan Bank and other bank stock 126,923 112,767 Loans held for sale 149,961 162,453 Loans held for investment 18,791,371 18,659,370 Less allowance for credit losses 191,770 193,432 Net loans 18,749,562 18,628,391 Foreclosed assets, net 6,755 9,473 Banking premises and equipment, net 115,424 119,622 Accrued interest receivable 91,776 91,160 Intangible assets 809,725 819,230 Bank-owned life insurance 407,986 405,893 Other assets 470,523 543,702 Total assets $ 24,224,759 $ 24,051,825 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits: Demand deposits $ 13,612,189 $ 13,775,991 Savings deposits 1,670,920 1,679,667 Certificates of deposit of $250,000 or more 767,626 789,342 Other time deposits 2,398,128 2,378,813 Total deposits 18,448,863 18,623,813 Mortgage escrow deposits 51,261 42,247 Borrowed funds 2,336,191 2,020,435 Subordinated debentures 402,853 401,608 Other liabilities 326,797 362,515 Total liabilities 21,565,965 21,450,618 Stockholders’ Equity: 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 130,663,184 shares outstanding as of March 31, 2025 and 130,489,493 outstanding as of December 31, 2024 1,376 1,376 Additional paid-in capital 1,836,665 1,834,495 Retained earnings 1,021,266 989,111 Accumulated other comprehensive loss ( 110,246 ) ( 135,355 ) Treasury stock ( 90,267 ) ( 88,420 ) Total stockholders’ equity 2,658,794 2,601,207 Total liabilities and stockholders’ equity $ 24,224,759 $ 24,051,825 See accompanying notes to unaudited consolidated financial statements. 3 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Income Three months ended March 31, 2025 and 2024 (Unaudited) (Dollars in Thousands, except per share data) Three months ended March 31, 2025 2024 Interest and dividend income: Real estate secured loans $ 187,054 $ 107,456 Commercial loans 75,819 36,100 Consumer loans 10,158 4,523 Available for sale debt securities, equity securities and Federal Home Loan Bank stock 29,644 12,330 Held to maturity debt securities 1,996 2,268 Deposits, Federal funds sold and other short-term investments 675 1,182 Total interest and dividend income 305,346 163,859 Interest expense: Deposits 97,420 52,534 Borrowed funds 17,778 17,383 Subordinated debt 8,420 272 Total interest expense 123,618 70,189 Net interest income 181,728 93,670 Provision charge (benefit) for credit losses 638 ( 320 ) Net interest income after provision charge for credit losses 181,090 93,990 Non-interest income: Fees 9,655 5,912 Wealth management income 7,328 7,488 Insurance agency income 5,651 4,793 Bank-owned life insurance 2,092 1,817 Net gain (loss) on securities transactions 87 ( 1 ) Other income 2,217 798 Total non-interest income 27,030 20,807 Non-interest expense: Compensation and employee benefits 62,366 40,048 Net occupancy expense 13,927 8,520 Data processing expense 9,605 6,783 FDIC insurance 3,385 2,272 Amortization of intangibles 9,501 705 Advertising and promotion expense 1,060 966 Merger-related expenses — 2,202 Other operating expenses 16,423 10,331 Total non-interest expense 116,267 71,827 Income before income tax expense 91,853 42,970 Income tax expense 27,825 10,888 Net income $ 64,028 $ 32,082 Basic earnings per share $ 0.49 $ 0.43 Weighted average basic shares outstanding 130,325,393 75,260,029 Diluted earnings per share $ 0.49 $ 0.43 Weighted average diluted shares outstanding 130,380,475 75,275,660 See accompanying notes to unaudited consolidated financial statements. 4 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Comprehensive Income Three months ended March 31, 2025 and 2024 (Unaudited) (Dollars in Thousands) Three months ended March 31, 2025 2024 Net income $ 64,028 $ 32,082 Other comprehensive income (loss), net of tax: Unrealized gains and losses on available for sale debt securities: Net unrealized gains (losses) arising during the period 26,786 ( 9,957 ) Reclassification adjustment for gains included in net income ( 62 ) — Total 26,724 ( 9,957 ) Unrealized gains and losses on derivatives: Net unrealized gains arising during the period 106 3,385 Reclassification adjustment for gains included in net income ( 1,391 ) ( 3,069 ) Total ( 1,285 ) 316 Amortization related to post-retirement obligations ( 330 ) ( 829 ) Total other comprehensive income (loss) 25,109 ( 10,470 ) Total comprehensive income $ 89,137 $ 21,612 See accompanying notes to unaudited consolidated financial statements. 5 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Changes in Stockholders’ Equity Three months ended March 31, 2024 (Unaudited) (Dollars in Thousands) For the three months ended March 31, 2024 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 December 31, 2023 $ 832 $ 989,058 $ 974,542 $ ( 141,115 ) $ ( 127,825 ) $ ( 4,896 ) $ ( 2,694 ) $ 2,694 $ 1,690,596 Net income — — 32,082 — — — — — 32,082 Other comprehensive income net of tax — — — ( 10,470 ) — — — — ( 10,470 ) Cash dividends paid — — ( 18,144 ) — — — — — ( 18,144 ) Distributions from deferred comp plans — 33 — — — — 148 ( 148 ) 33 Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 1,237 ) — — — ( 1,237 ) Stock option exercises — — — — — — — — — Allocation of ESOP shares — ( 58 ) — — — 811 — — 753 Allocation of Stock Award Plan ("SAP") shares — 1,521 — — — — — — 1,521 Allocation of stock options — 28 — — — — — — 28 Balance as of March 31, 2024 $ 832 $ 990,582 $ 988,480 $ ( 151,585 ) $ ( 129,062 ) $ ( 4,085 ) $ ( 2,546 ) $ 2,546 $ 1,695,162 See accompanying notes to unaudited consolidated financial statements. PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Changes in Stockholders’ Equity Three months ended March 31, 2025 (Unaudited) (Dollars in Thousands) For the three months ended March 31, 2025 COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE LOSS TREASURY STOCK TOTAL STOCKHOLDERS’ EQUITY Balance as of December 31, 2024 1,376 1,834,495 989,111 ( 135,355 ) ( 88,420 ) 2,601,207 Net income — — 64,028 — — 64,028 Other comprehensive loss, net of tax — — — 25,109 — 25,109 Cash dividends paid — — ( 31,873 ) — ( 31,873 ) Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 1,847 ) ( 1,847 ) Stock option exercises — — — — — — Allocation of SAP shares — 2,153 — — — 2,153 Allocation of stock options — 17 — — — 17 Balance as of March 31, 2025 $ 1,376 $ 1,836,665 $ 1,021,266 $ ( 110,246 ) $ ( 90,267 ) $ 2,658,794 See accompanying notes to unaudited consolidated financial statements. 6 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows Three months ended March 31, 2025 and 2024 (Unaudited) (Dollars in Thousands) Three months ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 64,028 $ 32,082 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangibles 13,165 2,801 Provision charge (benefit) for credit losses on loans and securities 638 ( 320 ) Deferred tax expense 3,600 4,419 Amortization of operating lease right-of-use assets 3,544 2,627 Income on Bank-owned life insurance ( 2,092 ) ( 1,817 ) Net amortization of premiums and discounts on securities 4,272 1,824 Accretion of net deferred loan fees ( 1,522 ) ( 1,866 ) Amortization of premiums on purchased loans, net 62 50 Originations of loans held for sale ( 15,683 ) ( 2,169 ) Proceeds from sales of loans originated for sale 10,640 645 ESOP expense — 753 Allocation of stock award expense 2,153 1,521 Allocation of stock option expense 17 28 Net gain on sale of loans ( 368 ) ( 45 ) Net (gain) loss on securities transactions ( 87 ) 1 Net gain on sale of premises and equipment ( 624 ) — Net gain on sale of foreclosed assets — ( 42 ) (Increase) decrease in accrued interest receivable ( 616 ) 289 Decrease (increase) in other assets 43,106 ( 13,379 ) (Decrease) increase in other liabilities ( 35,718 ) 14,007 Net cash provided by operating activities 88,515 41,409 Cash flows from investing activities: Net (increase) decrease in loans ( 112,317 ) 34,378 Purchases of loans ( 321 ) — Proceeds from sales of foreclosed assets — 98 Proceeds from maturities, calls and paydowns of held to maturity debt securities 14,113 13,983 Purchases of investment securities held to maturity ( 700 ) ( 5,743 ) Proceeds from sales of available for sale debt securities 1,670 — Proceeds from maturities, calls and paydowns of available for sale debt securities 150,843 40,891 Purchases of available for sale debt securities ( 217,721 ) ( 30,775 ) Proceeds from redemption of Federal Home Loan Bank stock 76,930 28,792 Purchases of Federal Home Loan Bank stock ( 91,086 ) ( 27,325 ) BOLI claim benefits received 906 820 Proceeds from sales of premises and equipment 2,348 — Purchases of premises and equipment ( 1,142 ) ( 536 ) Net cash (used in) provided by investing activities ( 176,477 ) 54,583 Cash flows from financing activities: Net decrease in deposits ( 174,950 ) ( 193,622 ) Increase in mortgage escrow deposits 9,014 7,043 Cash dividends paid to stockholders ( 31,874 ) ( 18,144 ) 7 Three months ended March 31, 2025 2024 Purchase of employee restricted shares to fund statutory tax withholding ( 1,847 ) ( 1,237 ) Proceeds from long-term borrowings — — Payments on long-term borrowings ( 254,600 ) — Net increase in short-term borrowings 570,356 88,065 Net cash provided by (used in) financing activities 116,099 ( 117,895 ) Net increase (decrease) in cash and cash equivalents 28,137 ( 21,903 ) Cash and cash equivalents at beginning of period 205,869 180,185 Restricted cash at beginning of period 70 70 Total cash, cash equivalents and restricted cash at beginning of period 205,939 180,255 Cash and cash equivalents at end of period 234,076 158,282 Restricted cash at end of period — 70 Total cash, cash equivalents and restricted cash at end of period $ 234,076 $ 158,352 Cash paid during the period for: Interest on deposits and borrowings $ 125,711 $ 65,911 Income taxes $ 1,029 $ 1,317 Transfer of loans receivable to foreclosed assets $ — $ — See accompanying notes to unaudited consolidated financial statements. 8 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies A. Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements include the accounts of Provident Financial Services, Inc. (the "Company") and its wholly owned subsidiary, Provident Bank (the “Bank") and its wholly owned subsidiaries. In preparing the interim unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Statements of Financial Condition and the Consolidated Statements of Income for the periods presented. Actual results could differ from these estimates. The allowance for credit losses is a material estimate that is 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, 2025 are not necessarily indicative of the results of operations that may be expected for all of 2025. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Additionally, certain comparative balances on the interim unaudited consolidated financial statements have been reclassified to conform to the current year’s presentation. These unaudited consolidated financial statements should be read in conjunction with the December 31, 2024 Annual Report to Stockholders on Form 10-K. B. 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, 2025 and 2024 (dollars in thousands, except per share amounts): Three months ended March 31, 2025 2024 Net Income Weighted Average Common Shares Outstanding Per Share Amount Net Income Weighted Average Common Shares Outstanding Per Share Amount Net income $ 64,028 $ 32,082 Basic earnings per share: Income available to common stockholders $ 64,028 130,325,393 $ 0.49 $ 32,082 75,260,029 $ 0.43 Dilutive shares 55,082 15,631 Diluted earnings per share: Income available to common stockholders $ 64,028 130,380,475 $ 0.49 $ 32,082 75,275,660 $ 0.43 Anti-dilutive stock options and awards totaling 1.4 million shares as of March 31, 2025 and 2024, were excluded from the earnings per share calculations. C. Loans Receivable and Allowance for Credit Losses The impact of utilizing the current expected credit loss ("CECL") methodology approach to calculate the allowance for credit losses on loans is significantly influenced by the composition, characteristics and quality of the Company’s loan portfolio, as well as the prevailing economic conditions and forecast utilized. 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, 2025, an increase in specific reserves on impaired credits led to a provision for credit losses, 9 while an increase in loans approved and awaiting closing led to a provision for credit losses on off-balance sheet credit exposures. 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. D. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through purchase acquisitions. 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. Goodwill is analyzed for impairment at least once a year. As permitted by GAAP, the Company prepares a qualitative assessment in determining whether goodwill may be impaired. 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 most recent annual goodwill impairment test as of July 1, 2024. As of March 31, 2025, the Company performed a qualitative analysis of goodwill and concluded that no triggering events were identified and therefore a test for impairment between annual tests was not required. Note 2. Business Combinations Lakeland Bancorp, Inc. - Merger Agreement On May 16, 2024, the Company completed its merger with Lakeland Bancorp, Inc. ("Lakeland"). 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. The total consideration paid for the acquisition of Lakeland was $ 876.8 million. The acquisition was accounted for under the acquisition method of accounting. Under this method of accounting, the purchase price has been allocated to the respective assets acquired and liabilities assumed based upon their estimated fair values, net of tax. The excess of consideration paid over the estimated fair value of the net assets acquired totaled $ 180.4 million and was recorded as goodwill. While there were no transaction costs related to our merger with Lakeland for the 2025 period, these costs totaled $ 2.2 million for the three months ended March 31, 2024. Merger-related expense is a separate line in non-interest expense on the Consolidated Statements of Income. The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the merger date, net of cash consideration paid (in thousands): 10 As of May 16, 2024 Assets acquired: Cash and cash equivalents, net $ 194,548 Available for sale debt securities 1,585,993 Federal Home Loan Bank stock 46,113 Loans held for sale 1,494 Loans held for investment 7,906,326 Allowance for credit losses on PCD loans ( 17,188 ) Loans, net 7,889,138 Bank-owned life insurance 160,646 Banking premises and equipment 60,578 Accrued interest receivable 27,241 Goodwill 180,446 Other intangibles assets 209,915 Other assets 236,481 Total assets acquired $ 10,592,593 Liabilities assumed: Deposits $ 8,622,924 Mortgage escrow deposits 5,532 Borrowed funds 785,927 Subordinated debentures 166,366 Other liabilities 135,066 Total liabilities assumed $ 9,715,815 Net assets acquired $ 876,779 The Company finalized its review of the acquired assets and liabilities as of December 31, 2024. No adjustments to the recorded carrying values or goodwill were made as of and for the quarter ended March 31, 2025. Note 3. Investment Securities As of March 31, 2025, the Company had $ 2.88 billion and $ 314.0 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, 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. 11 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 March 31, 2025 and December 31, 2024 (in thousands): March 31, 2025 Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury obligations $ 330,547 339 ( 14,574 ) 316,312 Government-agency obligations 48,309 1,187 ( 167 ) 49,329 Mortgage-backed securities 2,399,880 8,690 ( 152,732 ) 2,255,838 Asset-backed securities 45,974 619 ( 207 ) 46,386 State and municipal obligations 125,239 437 ( 10,279 ) 115,397 Corporate obligations 93,229 4,877 ( 2,583 ) 95,523 $ 3,043,178 16,149 ( 180,542 ) 2,878,785 December 31, 2024 Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury obligations $ 348,621 317 ( 18,340 ) 330,598 Government-agency obligations 105,965 1,461 ( 191 ) 107,235 Mortgage-backed securities 2,243,725 4,982 ( 186,548 ) 2,062,159 Asset-backed securities 47,203 645 ( 285 ) 47,563 State and municipal obligations 126,766 243 ( 10,092 ) 116,917 Corporate obligations 103,415 3,958 ( 2,930 ) 104,443 $ 2,975,695 11,606 ( 218,386 ) 2,768,915 Accrued interest on available for sale debt securities, which is excluded from the amortized cost, totaled $ 10.1 million and $ 9.7 million as of March 31, 2025 and December 31, 2024, 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 March 31, 2025, 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, 2025 Amortized cost Fair value Due in one year or less $ 67,891 67,545 Due after one year through five years 303,663 290,043 Due after five years through ten years 111,816 111,182 Due after ten years 70,591 63,419 $ 553,961 532,189 Investments which pay principal on a periodic basis, and are primarily related to mortgage-backed securities totaling $ 2.49 billion at amortized cost and $ 2.35 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, 2025 proceeds from sales on securities in the available for sale debt portfolio totaled $ 1.7 million with gross gains of $ 87,000 and no losses recognized, while calls from securities from the available for sale debt portfolio totaled $ 9.6 million with no gross gains and no losses recognized. For March 31, 2024, no securities were sold or called from the available for sale debt securities portfolio. 12 The number of available for sale debt securities in an unrealized loss position as of March 31, 2025 totaled 502 , compared with 646 as of December 31, 2024. The decrease in the number of securities in an unrealized loss position as of March 31, 2025 was due to lower current market interest rates compared to rates as of December 31, 2024. All securities in an unrealized loss position were investment grade as of March 31, 2025. 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 as of March 31, 2025 and December 31, 2024 (in thousands): March 31, 2025 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Government-agency obligations $ 9,999 — ( 198 ) 9,801 State and municipal obligations 297,966 14 ( 12,540 ) 285,440 Corporate obligations 6,057 — ( 108 ) 5,949 $ 314,022 14 ( 12,846 ) 301,190 December 31, 2024 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Government-agency obligations $ 9,999 — ( 292 ) 9,707 State and municipal obligations 311,118 689 ( 14,133 ) 297,674 Corporate obligations 6,520 — ( 168 ) 6,352 $ 327,637 689 ( 14,593 ) 313,733 Accrued interest on held to maturity debt securities, which is excluded from the amortized cost, totaled $ 2.3 million and $ 2.9 million as of March 31, 2025 and December 31, 2024, 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 months ended March 31, 2025 and 2024. For the three months ended March 31, 2025, proceeds from calls of securities in the held to maturity debt securities portfolio totaled $ 5.0 million, with no gross gains and no gross losses. For the three months ended March 31, 2024, proceeds from calls of securities in the held to maturity debt securities portfolio totaled $ 1.2 million with no gross gains and gross losses of $ 1,200 . The amortized cost and fair value of investment securities in the held to maturity debt securities portfolio as of March 31, 2025 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, 2025 Amortized cost Fair value Due in one year or less $ 48,529 48,232 Due after one year through five years 160,896 158,405 Due after five years through ten years 87,360 81,152 Due after ten years 17,237 13,401 $ 314,022 301,190 The allowance for credit losses on held to maturity debt securities as of March 31, 2025 and December 31, 2024 was $ 17,000 and $ 14,000 , respectively, and are excluded from amortized cost in the table above. The number of held to maturity debt securities in an unrealized loss position as of March 31, 2025 totaled 479 , compared with 512 as of December 31, 2024. The decrease in the number of securities in an unrealized loss position as of March 31, 2025, was due to lower current market interest rates compared to rates as of December 31, 2024. 13 Management measures expected credit losses on held to maturity debt securities on a collective basis by security type. Management classifies the held to maturity debt securities portfolio into the following security types: • Government-agency obligations; • Mortgage-backed securities; • State and municipal obligations; and • Corporate obligations. All of the agency obligations held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. 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 March 31, 2025, 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 March 31, 2025 and December 31, 2024 (in thousands): March 31, 2025 Total Portfolio AAA AA A BBB Not Rated Total Government-agency obligations 9,999 — — — — 9,999 State and municipal obligations 44,785 223,348 24,938 — 4,895 297,966 Corporate obligations 500 2,005 3,527 — 25 6,057 $ 55,284 225,353 28,465 — 4,920 314,022 December 31, 2024 Total Portfolio AAA AA A BBB Not Rated Total Government-agency obligations $ 9,999 — — — — 9,999 State and municipal obligations 44,821 234,212 28,735 — 3,350 311,118 Corporate obligations 501 2,013 3,981 — 25 6,520 $ 55,321 236,225 32,716 — 3,375 327,637 Credit quality indicators are metrics that provide information regarding the relative credit risk of debt securities. As of March 31, 2025, the held to maturity debt securities portfolio was comprised of 18 % rated AAA, 72 % rated AA, 9 % 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. Government mortgage-backed securities, were grouped where possible under the credit rating of the issuer of the security. 14 Note 4. Loans Receivable and Allowance for Credit Losses Loans held for investment as of March 31, 2025 and December 31, 2024 are summarized as follows (in thousands): March 31, 2025 December 31, 2024 Mortgage loans: Commercial $ 7,295,651 7,228,078 Multi-family 3,458,190 3,382,933 Construction 756,356 823,503 Residential 1,994,404 2,010,637 Total mortgage loans 13,504,601 13,445,151 Commercial loans 4,682,902 4,608,600 Consumer loans 613,453 613,819 Total gross loans 18,800,956 18,667,570 Premiums on purchased loans 1,337 1,338 Net deferred fees ( 10,922 ) ( 9,538 ) Total loans held for investment $ 18,791,371 18,659,370 Accrued interest on loans totaled $ 79.3 million and $ 78.5 million as of March 31, 2025 and December 31, 2024, respectively, and is presented within total accrued interest receivable on the Consolidated Statements of Financial Condition. The following tables summarize the aging of loans by portfolio segment and class of loans (in thousands): March 31, 2025 30-59 Days 60-89 Days Non-accrual Recorded Investment > 90 days accruing Total Past Due Current Total Loans Receivable Non-accrual loans with no related allowance Mortgage loans: Commercial $ 13,696 196 42,931 — 56,823 7,238,828 7,295,651 35,753 Multi-family 7,433 — 7,294 — 14,727 3,443,463 3,458,190 7,294 Construction — — 18,929 — 18,929 737,427 756,356 18,930 Residential 6,905 5,009 5,246 — 17,160 1,977,244 1,994,404 5,246 Total mortgage loans 28,034 5,205 74,400 — 107,639 13,396,962 13,504,601 67,223 Commercial loans 12,422 2,849 23,580 — 38,851 4,644,051 4,682,902 18,570 Consumer loans 1,604 854 1,352 — 3,810 609,643 613,453 1,352 Total gross loans $ 42,060 8,908 99,332 — 150,300 18,650,656 18,800,956 87,145 December 31, 2024 30-59 Days 60-89 Days Non-accrual Recorded Investment > 90 days accruing Total Past Due Current Total Loans Receivable Non-accrual loans with no related allowance Mortgage loans: Commercial $ 8,538 3,954 20,883 — 33,375 7,194,703 7,228,078 13,575 Multi-family — — 7,498 — 7,498 3,375,435 3,382,933 7,498 Construction — — 13,246 — 13,246 810,257 823,503 13,246 Residential 6,388 5,049 4,535 — 15,972 1,994,665 2,010,637 4,535 Total mortgage loans 14,926 9,003 46,162 — 70,091 13,375,060 13,445,151 38,854 Commercial loans 4,248 2,377 24,243 — 30,868 4,577,732 4,608,600 15,164 Consumer loans 3,152 856 1,656 — 5,664 608,155 613,819 1,656 Total gross loans $ 22,326 12,236 72,061 — 106,623 18,560,947 18,667,570 55,674 15 The increase in accruing past due loans versus the trailing quarter was primarily attributable to two loans: a $ 10.5 million commercial real estate loan which is expected to be fully resolved in the second quarter through the completion of a pending note sale with no anticipated loss and a $ 7.4 million commercial real estate loan that is in the process of refinancing with the Bank. As of March 31, 2025 and December 31, 2024, total non-accrual loans held for sale, which are not in the tables above, totaled $ 3.9 million and $ 2.4 million, respectively. Additionally, total past due loans held for sale, including non-accrual loans held for sale, totaled $ 5.8 million and $ 4.8 million, respectively. 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 $ 103.2 million and $ 72.1 million as of March 31, 2025 and December 31, 2024, respectively. Included in non-accrual loans were $ 58.0 million and $ 24.6 million of loans which were less than 90 days past due as of March 31, 2025 and December 31, 2024, respectively. There were no loans 90 days or greater past due and still accruing interest as of March 31, 2025 and December 31, 2024. The activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2025 and 2024 was as follows (in thousands): Three months ended March 31, Mortgage loans Commercial loans Consumer loans Total 2025 Balance at beginning of period $ 144,587 43,642 5,203 193,432 Provision (benefit) charge to operations ( 3,820 ) 4,175 ( 30 ) 325 Recoveries of loans previously charged-off 806 279 191 1,276 Loans charged-off ( 890 ) ( 2,195 ) ( 178 ) ( 3,263 ) Balance at end of period $ 140,683 45,901 5,186 191,770 2024 Balance at beginning of period $ 73,407 31,475 2,318 107,200 Provision (benefit) charge to operations ( 7,580 ) 7,924 ( 144 ) 200 Recoveries of loans previously charged-off 63 687 145 895 Loans charged-off — ( 1,794 ) ( 72 ) ( 1,866 ) Balance at end of period $ 65,890 38,292 2,247 106,429 For the three months ended March 31, 2025, the Company recorded a $ 325,000 provision for credit losses on loans, compared to a $ 200,000 provision on loans for the same period in 2024. The increase in the provision for credit losses on loans was due to an increase in specific reserves on impaired credits. For the three months ended March 31, 2025, net charge-offs totaled $ 2.0 million. The following table summarizes the Company's gross charge-offs recorded during the three months ended March 31, 2025 by year of origination (in thousands): 16 2025 2024 2023 2022 2021 Prior to 2021 Total Loans Mortgage loans: Commercial $ — — — 358 — 532 890 Total mortgage loans — — — 358 — 532 890 Commercial loans — — — 2,130 65 — 2,195 Consumer loans (1) 12 10 12 3 — 26 63 Total gross loans $ 12 10 12 2,491 65 558 3,148 (1) During the three months ended March 31, 2025, charge-offs on consumer overdraft accounts totaled $ 115,000 , which are 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 March 31, 2025, there were 31 loans totaling $ 86.1 million, compared to 26 loans totaling $ 55.4 million as of December 31, 2024, 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. For all classes of loans deemed collateral-dependent, the Company estimates expected credit losses based on the collateral’s fair value less any selling costs. A specific allocation of the allowance for credit losses is established for each collateral-dependent loan with a carrying balance greater than the collateral’s fair value, less estimated selling costs. In most cases, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less estimated selling costs. The Company uses third-party appraisals to determine the fair value of the underlying collateral in its analysis of collateral-dependent loans. A third-party appraisal is generally ordered as soon as a loan is designated as a collateral-dependent loan and updated annually, or more frequently if required. At each fiscal quarter end, if a loan is designated as collateral-dependent and the third-party appraisal has not yet been received, an evaluation of all available collateral is made using the best information available at the time, including rent rolls, borrower financial statements and tax returns, prior appraisals, management’s knowledge of the market and collateral, and internally prepared collateral valuations based upon market assumptions regarding vacancy and capitalization rates, each as and where applicable. Once the appraisal is received and reviewed, the specific reserves are adjusted to reflect the appraised value and evaluated for charge offs. The Company believes there have been no significant time lapses resulting from this process. As of March 31, 2025 and December 31, 2024, the Company had collateral-dependent loans with fair values of $ 12.8 million and $ 11.0 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. In addition, management attempts to obtain additional collateral or guarantor support when modifying such loans. If the borrower has demonstrated performance under the previous terms and our underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. 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 illustrates the most common loan modifications by loan classes offered by the Company that are required to be disclosed pursuant to the requirements of ASU 2022-02: 17 Loan Classes Modification types Commercial Term extension, interest rate reductions, payment delay, or combination thereof. These modifications extend the term of the loan, lower the payment amount, or otherwise delay payments during a defined period for the purpose of providing borrowers additional time to return to compliance with the original loan term. Residential Mortgage/ Home Equity Forbearance period greater than six months. These modifications require reduced or no payments during the forbearance period for the purpose of providing borrowers additional time to return to compliance with the original loan term, as well as term extension and rate adjustment. These modifications extend the term of the loan and provides for an adjustment to the interest rate, which reduces the monthly payment requirement. Direct Installment Term extension greater than three months. These modifications extend the term of the loan, which reduces the monthly payment requirement. The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025 (in thousands): For the three months ended March 31, 2025 Term Extension Interest Rate Increase Interest Rate Reduction and Term Extension Total of loan modifications % of Total Class of Loans and Leases Mortgage loans: Commercial $ 2,984 — 1,027 4,011 0.05 % Total mortgage loans 2,984 — 1,027 4,011 0.03 % Commercial loans 1,144 — 603 1,747 0.04 % Total gross loans $ 4,128 — 1,630 5,758 0.03 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025 (in thousands): Weighted-Average Months of Term Extension Weighted-Average Rate Increase (Decrease) Mortgage loans: Commercial 3 0.75 % Total mortgage loans 3 0.75 % Commercial loans 20 ( 0.25 ) % Total gross loans 14 0.08 % There were no loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025, that subsequently defaulted. The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the twelve months ended March 31, 2025 (in thousands): 18 Current 30-59 Days Past Due 60-89 Days Past Due 90 days or more Past Due Non- Accrual Total Mortgage loans: Commercial $ 9,847 — — — — 9,847 Multi-family 747 — — 89 402 1,238 Total mortgage loans 10,594 — — 89 402 11,085 Commercial loans 1,747 313 — — 1,153 3,213 Total gross loans $ 12,341 313 — 89 1,555 14,298 Loans acquired by the Company that experienced more-than-insignificant deterioration in credit quality after origination, are classified as PCD loans. As of March 31, 2025, the balance of PCD loans totaled $ 585.8 million with a related allowance for credit losses of $ 15.0 million. The balance of PCD loans as of December 31, 2024 was $ 620.4 million with a related allowance for credit losses of $ 15.2 million. In connection with the Lakeland merger, the Company evaluated acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) non-accrual status; (2) modifications for borrowers experiencing financial difficulty; (3) risk ratings of watch, special mention, substandard or doubtful; and (4) loans greater than 59 days past due. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. Additionally for PCD loans, an allowance for credit losses was calculated using management's best estimate of projected losses over the remaining life of the loans. This represents the portion of the loan balances that has been deemed uncollectible based on the Company’s expectations of future cash flows for each respective PCD loan pool, given the outlook and forecasts inclusive of related fiscal and regulatory interventions. The expected lifetime losses were calculated using historical losses observed at the Bank, Lakeland and peer banks. A $ 17.2 million allowance for credit losses was recorded on PCD loans acquired from Lakeland. The interest rate fair value adjustment related to PCD loans will be substantially recognized as interest income on a level yield or straight line method over the expected life of the loans. The table below is a summary of the PCD loans that were acquired from Lakeland as of the closing date (in thousands): Gross amortized cost basis as of May 16, 2024 $ 564,147 Charge-offs on PCD Loans at acquisition ( 4,364 ) Interest component of expected cash flows (accretable difference) ( 33,365 ) Allowance for credit losses on PCD loans ( 17,188 ) Net PCD loans $ 509,230 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 that are deemed to be of “questionable quality” are rated 5 (watch) or 6 (special mention). Loans with adverse classifications (substandard, doubtful or loss) are rated 7, 8 or 9, respectively. Commercial mortgage, commercial, multi-family and construction loans are rated individually, and each lending officer is responsible for risk rating loans in their portfolio. These risk ratings are then reviewed by the department manager and/or the Chief Lending Officer and by the Credit Department. The risk ratings are also reviewed periodically through loan review examinations which are currently performed by independent third-parties. Reports by the independent third-parties are presented to the Audit Committee of the Board of Directors. 19 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, 2025 and December 31, 2024 (in thousands): Gross Loans Held for Investment by Year of Origination as of March 31, 2025 2025 2024 2023 2022 2021 Prior to 2021 Revolving Loans Revolving loans to term loans Total Loans Commercial Mortgage Special mention $ — — 3,185 20,698 48,125 56,524 4,436 — 132,968 Substandard 2,984 — 67 7,844 8,620 84,408 — — 103,923 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 2,984 — 3,252 28,542 56,745 140,932 4,436 — 236,891 Pass/Watch 202,526 349,529 918,995 1,596,950 948,395 2,905,300 126,351 10,714 7,058,760 Total Commercial Mortgage $ 205,510 349,529 922,247 1,625,492 1,005,140 3,046,232 130,787 10,714 7,295,651 Multi-family Special mention $ — — 1,425 — — 16,022 — — 17,447 Substandard — — 1,520 — 1,043 6,631 — — 9,194 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — — 2,945 — 1,043 22,653 — — 26,641 Pass/Watch 78,299 329,224 489,380 752,254 415,477 1,354,589 10,778 1,548 3,431,549 Total Multi-Family $ 78,299 329,224 492,325 752,254 416,520 1,377,242 10,778 1,548 3,458,190 Construction Special mention $ — — 1,154 6,639 — — — — 7,793 Substandard — — 12,158 — 6,772 — — — 18,930 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — — 13,312 6,639 6,772 — — — 26,723 Pass/Watch 10,446 136,029 296,508 193,387 91,561 1,702 — — 729,633 Total Construction $ 10,446 136,029 309,820 200,026 98,333 1,702 — — 756,356 Residential (1) Special mention $ — 553 1,196 722 — 2,690 — — 5,161 Substandard — — 1,234 686 1,115 2,059 — — 5,094 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — 553 2,430 1,408 1,115 4,749 — — 10,255 Pass/Watch 23,199 132,180 342,672 421,182 328,738 736,178 — — 1,984,149 Total Residential $ 23,199 132,733 345,102 422,590 329,853 740,927 — — 1,994,404 Total Mortgage Special mention $ — 553 6,960 28,059 48,125 75,236 4,436 — 163,369 Substandard 2,984 — 14,979 8,530 17,550 93,098 — — 137,141 Doubtful — — — — — — — — — Loss — — — — — — — — — 20 Gross Loans Held for Investment by Year of Origination as of March 31, 2025 2025 2024 2023 2022 2021 Prior to 2021 Revolving Loans Revolving loans to term loans Total Loans Total criticized and classified 2,984 553 21,939 36,589 65,675 168,334 4,436 — 300,510 Pass/Watch 314,470 946,962 2,047,555 2,963,773 1,784,171 4,997,769 137,129 12,262 13,204,091 Total Mortgage $ 317,454 947,515 2,069,494 3,000,362 1,849,846 5,166,103 141,565 12,262 13,504,601 Commercial Special mention $ 179 2,298 7,096 11,296 20,247 44,172 16,016 3,385 104,689 Substandard — 5,141 2,163 71,960 30,118 54,072 28,062 2,943 194,459 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 179 7,439 9,259 83,256 50,365 98,244 44,078 6,328 299,148 Pass/Watch 216,232 668,944 442,195 674,072 378,063 916,130 1,023,122 64,996 4,383,754 Total Commercial $ 216,411 676,383 451,454 757,328 428,428 1,014,374 1,067,200 71,324 4,682,902 Consumer (1) Special mention $ — — — — — 204 600 146 950 Substandard — — — — 9 245 854 1 1,109 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — — — — 9 449 1,454 147 2,059 Pass/Watch 11,171 35,468 42,655 56,512 39,132 84,960 326,954 14,542 611,394 Total Consumer $ 11,171 35,468 42,655 56,512 39,141 85,409 328,408 14,689 613,453 Total Loans Special mention $ 179 2,851 14,056 39,355 68,372 119,612 21,052 3,531 269,008 Substandard 2,984 5,141 17,142 80,490 47,677 147,415 28,916 2,944 332,709 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 3,163 7,992 31,198 119,845 116,049 267,027 49,968 6,475 601,717 Pass/Watch 541,873 1,651,374 2,532,405 3,694,357 2,201,366 5,998,859 1,487,205 91,800 18,199,239 Total Gross Loans $ 545,036 1,659,366 2,563,603 3,814,202 2,317,415 6,265,886 1,537,173 98,275 18,800,956 (1) For residential and 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 as of December 31, 2024 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Revolving loans to term loans Total Loans Commercial Mortgage Special mention $ 262 4,377 10,150 9,127 14,569 69,525 4,461 — 112,471 Substandard 3,044 73 10,952 — 21,051 50,870 — — 85,990 Doubtful — — — — — — — — — Loss — — — — — — — — — 21 Gross Loans Held for Investment by Year of Origination as of December 31, 2024 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Revolving loans to term loans Total Loans Total criticized and classified 3,306 4,450 21,102 9,127 35,620 120,395 4,461 — 198,461 Pass/Watch 417,991 904,924 1,623,911 997,658 884,295 2,063,646 126,297 10,895 7,029,617 Total Commercial Mortgage $ 421,297 909,374 1,645,013 1,006,785 919,915 2,184,041 130,758 10,895 7,228,078 Multi-family Special mention $ — — — — — 16,472 — — 16,472 Substandard — 1,560 — 1,043 — 5,439 — — 8,042 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — 1,560 — 1,043 — 21,911 — — 24,514 Pass/Watch 363,254 478,184 701,811 460,979 460,161 882,291 10,181 1,558 3,358,419 Total Multi-Family $ 363,254 479,744 701,811 462,022 460,161 904,202 10,181 1,558 3,382,933 Construction Special mention $ — 1,064 — — — — — — 1,064 Substandard — — — 12,346 — — — — 12,346 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — 1,064 — 12,346 — — — — 13,410 Pass/Watch 104,009 309,034 260,190 110,100 24,017 2,743 — — 810,093 Total Construction $ 104,009 310,098 260,190 122,446 24,017 2,743 — — 823,503 Residential (1) Special mention $ 403 1,356 344 — — 2,836 — — 4,939 Substandard — 764 689 1,119 — 1,963 — — 4,535 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 403 2,120 1,033 1,119 — 4,799 — — 9,474 Pass/Watch 140,382 348,493 428,269 333,150 276,703 474,166 — — 2,001,163 Total Residential $ 140,785 350,613 429,302 334,269 276,703 478,965 — — 2,010,637 Total Mortgage Special mention $ 665 6,797 10,494 9,127 14,569 88,833 4,461 — 134,946 Substandard 3,044 2,397 11,641 14,508 21,051 58,272 — — 110,913 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 3,709 9,194 22,135 23,635 35,620 147,105 4,461 — 245,859 Pass/Watch 1,025,636 2,040,635 3,014,181 1,901,887 1,645,176 3,422,846 136,478 12,453 13,199,292 Total Mortgage $ 1,029,345 2,049,829 3,036,316 1,925,522 1,680,796 3,569,951 140,939 12,453 13,445,151 22 Gross Loans Held for Investment by Year of Origination as of December 31, 2024 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Revolving loans to term loans Total Loans Commercial Special mention $ 298 2,612 3,084 5,804 9,493 26,924 20,030 4,761 73,006 Substandard 6,887 5,023 62,028 28,208 23,130 21,170 31,787 1,746 179,979 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 7,185 7,635 65,112 34,012 32,623 48,094 51,817 6,507 252,985 Pass/Watch 747,299 427,445 697,899 390,770 256,421 678,154 1,089,408 68,219 4,355,615 Total Commercial $ 754,484 435,080 763,011 424,782 289,044 726,248 1,141,225 74,726 4,608,600 Consumer (1) Special mention $ — — 3 — 124 109 725 — 961 Substandard — 95 — 9 — 321 950 — 1,375 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — 95 3 9 124 430 1,675 — 2,336 Pass/Watch 31,975 45,605 59,669 40,080 9,433 83,728 327,107 13,886 611,483 Total Consumer $ 31,975 45,700 59,672 40,089 9,557 84,158 328,782 13,886 613,819 Total Loans Special mention $ 963 9,409 13,581 14,931 24,186 115,866 25,216 4,761 208,913 Substandard 9,931 7,515 73,669 42,725 44,181 79,763 32,737 1,746 292,267 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 10,894 16,924 87,250 57,656 68,367 195,629 57,953 6,507 501,180 Pass/Watch 1,804,910 2,513,685 3,771,749 2,332,737 1,911,030 4,184,728 1,552,993 94,558 18,166,390 Total Gross Loans $ 1,815,804 2,530,609 3,858,999 2,390,393 1,979,397 4,380,357 1,610,946 101,065 18,667,570 (1) For residential and consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan. 23 Note 5. Deposits Deposits as of March 31, 2025 and December 31, 2024 are summarized as follows (in thousands): March 31, 2025 December 31, 2024 Savings $ 1,670,920 1,679,667 Money market 3,342,546 3,364,564 NOW (1) 6,479,797 6,622,642 Non-interest bearing 3,789,846 3,788,785 Certificates of deposit (2) 3,165,754 3,168,155 Total deposits $ 18,448,863 18,623,813 (1) Our insured cash sweep product totaled $ 1.14 billion and $ 1.16 billion as of March 31, 2025 and December 31, 2024, respectively, and are located within NOW accounts. (2) Time deposits equal to or in excess of $250,000, were $ 767.6 million and $ 789.0 million as of March 31, 2025 and December 31, 2024, respectively. Additionally, our reciprocal Certificate of Deposit Account Registry Service product as of March 31, 2025 and December 31, 2024 totaled $ 3.5 million. Within total deposits, brokered deposits totaled $ 327.7 million and $ 251.5 million as of March 31, 2025 and December 31, 2024, respectively. Note 6. Borrowed Funds Borrowed funds as of March 31, 2025 and December 31, 2024 are summarized as follows (in thousands): March 31, 2025 December 31, 2024 Securities sold under repurchase agreements $ 114,132 113,224 FHLBNY line of credit 555,000 385,000 FHLBNY advances 1,663,897 1,518,497 Purchase accounting adjustment ("PAA") on borrowed funds 3,162 3,714 Total Borrowed Funds $ 2,336,191 2,020,435 Total long-term borrowings totaled $ 510.6 million and $ 513.9 million as of March 31, 2025 and December 31, 2024, respectively, while total short-term borrowings totaled $ 1.83 billion and $ 1.51 billion for the same periods. As of March 31, 2025, FHLBNY advances were at fixed rates and mature between April 2025 and September 2027, and as of December 31, 2024, FHLBNY advances were at fixed rates with maturities between January 2025 and September 2027. These advances are secured by loans receivable under a blanket collateral agreement. Scheduled maturities of FHLBNY advances and lines of credit, including purchase accounting adjustments resulting from the Lakeland merger as of March 31, 2025 are as follows (in thousands): 2025 Due in one year or less $ 1,708,290 Due after one year through two years 157,445 Due after two years through three years 353,162 Due after three years through four years — Thereafter — Purchase accounting adjustment on borrowed funds 3,162 Total FHLBNY advances and overnight borrowings $ 2,222,059 Scheduled maturities of securities sold under repurchase agreements as of March 31, 2025 are as follows (in thousands): 24 2025 Due in one year or less $ 114,132 Thereafter — Total securities sold under repurchase agreements $ 114,132 The following tables set forth certain information as to borrowed funds for the periods ended March 31, 2025 and December 31, 2024 (in thousands): Maximum balance Average balance Weighted average interest rate March 31, 2025 Securities sold under repurchase agreements $ 117,946 113,407 2.06 % FHLBNY overnight borrowings 555,000 319,278 4.53 FHLBNY advances 1,732,427 1,481,860 3.88 December 31, 2024 Securities sold under repurchase agreements $ 117,323 102,043 2.03 % FHLBNY overnight borrowings 567,000 115,902 5.45 FHLBNY advances 1,518,497 1,290,836 3.41 FRBNY BTFP Borrowing 550,000 472,077 4.78 Securities sold under repurchase agreements include arrangements with deposit customers of the Bank to sweep funds into short-term borrowings. The Bank uses available for sale debt securities to pledge as collateral for the repurchase agreements. As of March 31, 2025 and December 31, 2024, the fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit and FHLB advances, totaled $ 1.19 billion and $ 1.12 billion, respectively. Interest expense on borrowings for the three months ended March 31, 2025 and 2024, was $ 18.3 million and $ 17.4 million, respectively, while amortization expense related to purchase accounting adjustments for the three months ended March 31, 2025 and 2024 amounted to a benefit of $ 552,000 and $ 15,000 , respectively. Note 7. Components of Net Periodic Benefit Cost The Bank has a noncontributory defined benefit pension plan covering its full-time employees who had attained age 21 with at least one year of service as of April 1, 2003. The pension plan was frozen on April 1, 2003. All participants in the Plan are 100 % vested. The pension plan’s assets are invested in investment funds and group annuity contracts currently managed by the Principal Financial Group and Allmerica Financial. In addition to pension benefits, certain health care and life insurance benefits are currently made available to certain of the Bank’s retired employees. The costs of such benefits are accrued based on actuarial assumptions from the date of hire to the date the employee is fully eligible to receive the benefits. Effective January 1, 2003, eligibility for retiree health care benefits was frozen as to new entrants, and benefits were eliminated for employees with less than ten years of service as of December 31, 2002. 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, 2025 and 2024, includes the following components (in thousands): 25 Three months ended March 31, Pension benefits Other post-retirement benefits 2025 2024 2025 2024 Service cost $ — — 1 3 Interest cost 299 289 148 135 Expected return on plan assets ( 825 ) ( 778 ) — — Amortization of prior service cost — — — — Amortization of the net loss (gain) — 14 ( 459 ) ( 530 ) Net periodic (decrease) increase in benefit cost $ ( 526 ) ( 475 ) ( 310 ) ( 392 ) In its consolidated financial statements for the year ended December 31, 2024, the Company previously disclosed that it does not expect to contribute to the pension plan in 2025. As of March 31, 2025, 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, 2025 were calculated using the January 1, 2025 pension and other post-retirement benefits actuarial valuations. Note 8. Impact of Recent Accounting Pronouncements Accounting Pronouncements Adopted in 2025 In December 2023, FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this ASU require improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2024, with early adoption in the interim period permitted. The adoption of ASU No. 2023-09 did not have a significant impact on the Company's consolidated financial statements, other than enhanced annual disclosures. Accounting Pronouncements Not Yet Adopted In November 2024, FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures". This ASU requires disaggregated information about certain income statement line items in a tabular format in the notes to the financial statements. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, with early adoption in the interim period permitted. The Company is currently evaluating the impact and does not expect the adoption of this guidance to have a significant impact on the Company’s consolidated financial statements. Note 9. Contingencies The Company is involved in various legal actions and claims arising in the normal course of its business. Liabilities for loss contingencies arising from such litigation and claims are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. As of March 31, 2025, $ 2.1 million was recorded in total contingent litigation reserves. Note 10. Allowance for Credit Losses on Off-Balance Sheet Credit Exposures Management analyzes the Company's exposure to credit losses for both on-balance sheet and off-balance sheet activity using a consistent methodology for the quantitative framework as well as the qualitative framework. 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, 2025, the Company recorded a $ 310,000 provision for credit losses on off-balance sheet credit exposures. For the three months ended March 31, 2024, the Company recorded a $ 506,000 benefit to the provision for credit losses for off-balance sheet credit exposures. 26 The allowance for credit losses for off-balance sheet credit exposures was $ 7.7 million as of March 31, 2025 and $ 7.4 million as of December 31, 2024, and is included in other liabilities on the Consolidated Statements of Financial Condition. Note 11. Fair Value Measurements The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. Where quoted market values in an active market are not readily available, management utilizes various valuation techniques to estimate fair value. Fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. However, in many instances fair value estimates may not be substantiated by comparison to independent markets and may not be realized in an immediate sale of the financial instrument. 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 three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted market prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The valuation techniques are based upon the unpaid principal balance only, and exclude any accrued interest or dividends at the measurement date. Interest income and expense and dividend income are recorded within the Consolidated Statements of Income depending on the nature of the instrument using the effective interest method based on acquired discount or premium. 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, 2025 and December 31, 2024. Available for Sale Debt Securities, at Fair Value For available for sale debt securities, fair value was estimated using a market approach. The majority of the Company’s securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third-party data service providers or dealer market participants with whom the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to benchmark to comparable securities. The Company evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. As management is responsible for the determination of fair value, it performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, management compares the prices received from the pricing service to a secondary pricing source. Additionally, management compares changes in the reported market values and returns to relevant market indices to test the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has generally not resulted in an adjustment in the prices obtained from the pricing service. The Company also holds debt instruments issued by the U.S. government that are traded in active markets with readily accessible quoted market prices that are considered Level 1 within the fair value hierarchy. 27 Equity Securities at Fair Value The Company holds equity securities that are traded in active markets with readily accessible quoted market prices that are considered Level 1 inputs. Derivatives The Company records all derivatives on the statements of financial condition at fair value. 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 loan-related transactions 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 these derivatives are recognized directly in earnings. The Company also uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges, and which satisfy hedge accounting requirements, involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. 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 income (loss), and is subsequently reclassified into earnings in the period that the forecasted transactions affect 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, 2025 and December 31, 2024. Collateral-Dependent Impaired Loans For loans measured for impairment based on the fair value of the underlying collateral, fair value was estimated using a market approach. The Company measures the fair value of collateral underlying impaired loans primarily through obtaining independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments, on an individual case-by-case basis, to comparable assets based on the appraisers’ market knowledge and experience, as well as adjustments for estimated costs to sell between 5 % and 10 %. Management classifies these loans as Level 3 within the fair value hierarchy. Foreclosed Assets Assets acquired through foreclosure or deed in lieu of foreclosure are carried at fair value, less estimated selling costs, which range between 5 % and 10 %. Fair value is generally based on independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments, on an individual case basis, to comparable assets based on the appraisers’ market knowledge and experience, and are classified as Level 3. When an asset is acquired, the excess of the loan balance over fair value less estimated selling costs is charged to the allowance for credit losses. A reserve for foreclosed assets may be established to provide for possible write-downs and selling costs that occur subsequent to foreclosure. Foreclosed assets are carried net of the related reserve. 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, 2025 or December 31, 2024. 28 The following tables present the assets and liabilities reported on the Consolidated Statements of Financial Condition at their fair values as of March 31, 2025 and December 31, 2024, by level within the fair value hierarchy (in thousands): Fair Value Measurements at Reporting Date Using: March 31, 2025 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: Available for sale debt securities: U.S. Treasury obligations $ 316,312 316,312 — — Government-agency obligations 49,329 — 49,329 — Mortgage-backed securities 2,255,838 — 2,255,838 — Asset-backed securities 46,386 — 46,386 — State and municipal obligations 115,397 — 115,397 — Corporate obligations 95,523 — 95,523 — Total available for sale debt securities 2,878,785 316,312 2,562,473 — Equity securities 19,219 19,219 — — Derivative assets 143,377 — 143,377 — $ 3,041,381 335,531 2,705,850 — Derivative liabilities $ 141,383 — 141,383 — Measured on a non-recurring basis: Loans measured for impairment based on the fair value of the underlying collateral $ 12,757 — — 12,757 Foreclosed assets 6,755 — — 6,755 $ 19,512 — — 19,512 Fair Value Measurements at Reporting Date Using: December 31, 2024 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: Available for sale debt securities: U.S. Treasury obligations $ 330,598 330,598 — — Government-agency obligations 107,235 — 107,235 — Mortgage-backed securities 2,062,159 — 2,062,159 — Asset-backed securities 47,563 — 47,563 — State and municipal obligations 116,917 — 116,917 — Corporate obligations 104,443 — 104,443 — Total available for sale debt securities 2,768,915 330,598 2,438,317 — Equity Securities 19,110 19,110 — — Derivative assets 188,940 — 188,940 — $ 2,976,965 349,708 2,627,257 — Derivative liabilities $ 172,601 — 172,601 — Measured on a non-recurring basis: Loans measured for impairment based on the fair value of the underlying collateral $ 11,023 — — 11,023 Foreclosed assets 9,473 — — 9,473 $ 20,496 — — 20,496 29 There were no transfers into or out of Level 3 during the three months ended March 31, 2025. Other Fair Value Disclosures The Company is required to disclose the estimated fair value of financial instruments, both assets and liabilities on- and off- the balance sheet, for which it is practicable to estimate fair value. The following is a description of valuation methodologies used for those assets and liabilities. Cash and Cash Equivalents For cash and due from banks, federal funds sold and short-term investments, the carrying amount approximates fair value. As of December 31, 2024 $ 70,000 was included in cash and cash equivalents, representing cash collateral pledged to secure loan level swaps and risk participation agreements. Held to Maturity Debt Securities For held to maturity debt securities, fair value was estimated using a market approach. The majority of the Company’s securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third party data service providers or dealer market participants with whom the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to benchmark to comparable securities. Management evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. As management is responsible for the determination of fair value, it performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, management compares the prices received from the pricing service to a secondary pricing source. Additionally, management compares changes in the reported market values and returns to relevant market indices to test the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has generally not resulted in adjustment in the prices obtained from the pricing service. The Company also holds debt instruments issued by the U.S. government and U.S. government-sponsored agencies that are traded in active markets with readily accessible quoted market prices that are considered Level 1 within the fair value hierarchy. FHLBNY Stock The carrying value of FHLBNY stock is its cost. The fair value of FHLBNY stock is based on redemption at par value. The Company classifies the estimated fair value as Level 1 within the fair value hierarchy. Loans Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial mortgage, residential mortgage, commercial, construction and consumer. Each loan category is further segmented into fixed and adjustable-rate interest terms and into performing and non-performing categories. The fair value of performing loans was estimated using a combination of techniques, including a discounted cash flow model that utilizes a discount rate that reflects the Company’s current pricing for loans with similar characteristics and remaining maturity, adjusted by an amount for estimated credit losses inherent in the portfolio at the balance sheet date (i.e. exit pricing). The rates take into account the expected yield curve, as well as an adjustment for prepayment risk, when applicable. The Company classifies the estimated fair value of its loan portfolio as Level 3. The fair value for significant non-performing loans was based on recent external appraisals of collateral securing such loans, adjusted for the timing of anticipated cash flows. The Company classifies the estimated fair value of its non-performing loan portfolio as Level 3. Deposits The fair value of deposits with no stated maturity, such as non-interest bearing demand deposits and savings deposits, was equal to the amount payable on demand and classified as Level 1. The estimated fair value of certificates of deposit was based on the discounted value of contractual cash flows. The discount rate was estimated using the Company’s current rates offered for deposits with similar remaining maturities. The Company classifies the estimated fair value of its certificates of deposit portfolio as Level 2. 30 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. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial assets or liabilities include goodwill and other intangibles, deferred tax assets and premises and equipment. 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, 2025 and December 31, 2024. Fair values are presented by level within the fair value hierarchy. 31 Fair Value Measurements as of March 31, 2025 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) Financial assets: Cash and cash equivalents $ 234,076 234,076 234,076 — — Available for sale debt securities: U.S. Treasury obligations 316,312 316,312 316,312 — — Government-agency obligations 49,329 49,329 — 49,329 — Mortgage-backed securities 2,255,838 2,255,838 — 2,255,838 — Asset-backed securities 46,386 46,386 — 46,386 — State and municipal obligations 115,397 115,397 — 115,397 — Corporate obligations 95,523 95,523 — 95,523 — Total available for sale debt securities $ 2,878,785 2,878,785 316,312 2,562,473 — Held to maturity debt securities, net of allowance for credit losses: Government-agency obligations 9,999 9,801 — 9,801 — State and municipal obligations 297,950 285,440 — 285,440 — Corporate obligations 6,056 5,949 — 5,949 — Total held to maturity debt securities, net of allowance for credit losses $ 314,005 301,190 — 301,190 — FHLBNY and other stock 126,923 126,923 126,923 — — Equity Securities 19,219 19,219 19,219 — — Loans, net of allowance for credit losses 18,749,562 18,709,144 — — 18,709,144 Derivative assets 143,377 143,377 — 143,377 — Financial liabilities: Deposits other than certificates of deposits $ 15,283,109 15,283,109 15,283,109 — — Certificates of deposit 3,165,754 3,163,545 — 3,163,545 — Total deposits $ 18,448,863 18,446,654 15,283,109 3,163,545 — Borrowings 2,336,191 2,339,287 — 2,339,287 — Subordinated debentures 402,853 423,451 — 423,451 — Derivative liabilities 141,383 141,383 — 141,383 — 32 Fair Value Measurements as of December 31, 2024 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) Financial assets: Cash and cash equivalents $ 205,939 205,939 205,939 — — Available for sale debt securities: U.S. Treasury obligations 330,598 330,598 330,598 — — Government-agency obligations 107,235 107,235 — 107,235 — Mortgage-backed securities 2,062,159 2,062,159 — 2,062,159 — Asset-backed securities 47,563 47,563 — 47,563 — State and municipal obligations 116,917 116,917 — 116,917 — Corporate obligations 104,443 104,443 — 104,443 — Total available for sale debt securities $ 2,768,915 2,768,915 330,598 2,438,317 — Held to maturity debt securities: Government-agency obligations $ 9,999 9,707 — 9,707 — State and municipal obligations 311,106 297,674 — 297,674 — Corporate obligations 6,518 6,352 — 6,352 — Total held to maturity debt securities $ 327,623 313,733 — 313,733 — FHLBNY stock 112,767 112,767 112,767 — — Equity Securities 19,110 19,110 19,110 — — Loans, net of allowance for credit losses 18,628,391 18,442,167 — — 18,442,167 Derivative assets 188,940 188,940 — 188,940 — Financial liabilities: Deposits other than certificates of deposits $ 15,455,658 15,455,658 15,455,658 — — Certificates of deposit 3,168,155 3,168,216 — 3,168,216 — Total deposits $ 18,623,813 18,623,874 15,455,658 3,168,216 — Borrowings 2,020,435 2,017,013 — 2,017,013 — Subordinated debentures 401,608 423,675 — 423,675 — Derivative liabilities 172,601 172,601 — 172,601 — 33 Note 12. Other Comprehensive (Loss) Income The following table presents the components of other comprehensive (loss), both gross and net of tax, for the three months ended March 31, 2025 and 2024 (in thousands): Three months ended March 31, 2025 2024 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Components of Other Comprehensive Income: Unrealized gains and losses on available for sale debt securities: Net unrealized gains (losses) arising during the period $ 42,388 ( 15,602 ) 26,786 ( 13,547 ) 3,590 ( 9,957 ) Reclassification adjustment for gains included in net income ( 87 ) 25 ( 62 ) — — — Total 42,301 ( 15,577 ) 26,724 ( 13,547 ) 3,590 ( 9,957 ) Unrealized gains and losses on derivatives (cash flow hedges): Net unrealized gains arising during the period 147 ( 42 ) 105 4,605 ( 1,220 ) 3,385 Reclassification adjustment for (gains) included in net income ( 1,940 ) 550 ( 1,390 ) ( 4,175 ) 1,106 ( 3,069 ) Total ( 1,793 ) 508 ( 1,285 ) 430 ( 114 ) 316 Amortization related to post-retirement obligations ( 460 ) 130 ( 330 ) ( 1,128 ) 299 ( 829 ) Total other comprehensive gain (loss) $ 40,048 ( 14,939 ) 25,109 ( 14,245 ) 3,775 ( 10,470 ) The following tables present the changes in the components of accumulated other comprehensive (loss), net of tax, for the three months ended March 31, 2025 and 2024 (in thousands): Changes in Accumulated Other Comprehensive (Loss) by Component, net of tax for the three months ended March 31, 2025 2024 Unrealized Losses on Available for Sale Debt Securities Post- Retirement Obligations Unrealized Gains on Derivatives (cash flow hedges) Accumulated Other Comprehensive (Loss) Unrealized Losses on Available for Sale Debt Securities Post- Retirement Obligations Unrealized Gains on Derivatives (cash flow hedges) Accumulated Other Comprehensive (Loss) Balance as of December 31, $ ( 144,561 ) 6,147 3,059 ( 135,355 ) ( 154,489 ) 3,937 9,437 ( 141,115 ) Current - period other comprehensive income (loss) 26,724 ( 330 ) ( 1,285 ) 25,109 ( 9,957 ) ( 829 ) 316 ( 10,470 ) Balance as of March 31, $ ( 117,837 ) 5,817 1,774 ( 110,246 ) ( 164,446 ) 3,108 9,753 ( 151,585 ) 34 The following tables summarize the reclassifications from accumulated other comprehensive (loss) to the Consolidated Statements of Income for the three months ended March 31, 2025 and 2024 (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 Statement of Income 2025 2024 Details of AOCI: Available for sale debt securities: Realized net gains on the sale of securities available for sale $ 87 — Net gain on securities transactions ( 25 ) — Income tax expense $ 62 — Net of tax Cash flow hedges: Realized net gains (losses) on derivatives $ 1,940 ( 4,175 ) Interest expense ( 550 ) 1,106 Income tax expense $ 1,390 ( 3,069 ) Post-retirement obligations: Amortization of actuarial gains $ ( 460 ) ( 516 ) Compensation and employee benefits (1) 130 137 Income tax expense Total reclassification $ ( 330 ) ( 379 ) Net of tax Total reclassifications $ 1,122 ( 3,448 ) Net of tax (1) This item is included in the computation of net periodic benefit cost. See Note 7. Components of Net Periodic Benefit Cost. 35 Note 13. Derivative and Hedging Activities The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through the management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. Non-designated Hedges. Derivatives not designated in qualifying hedging relationships are not speculative and result from a service the Company provides to certain qualified commercial borrowers in loan-related transactions which, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company may execute interest rate swaps with qualified commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. The interest rate swap agreement which the Company executes with the commercial borrower is collateralized by the borrower's commercial real estate financed by the Company. 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. As of March 31, 2025 and December 31, 2024, the Company had 478 and 482 loan-related interest rate swaps with aggregate notional amounts of $ 4.58 billion and $ 4.54 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. These RPAs are entered into to manage the credit exposure on interest rate contracts associated with these loan participation agreements. Under the RPAs, the Company will either receive or make a payment in the event the borrower defaults on the related interest rate contract. The Company has minimum collateral posting thresholds with certain of its risk participation counterparties but as of March 31, 2025, it was not required to post collateral against the potential risk of default by the borrower under these agreements. For March 31, 2025 and December 31, 2024, the Company had 9 credit derivatives with aggregate notional amounts of $ 78.6 million and $ 79.2 million, respectively, from participations in interest rate swaps as part of these loan participation arrangements. As of March 31, 2025 and December 31, 2024, the asset and liability positions of these fair value credit derivatives were insignificant, respectively. Cash Flow Hedges of Interest Rate Risk. The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. 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, 2025 and 2024, such derivatives were used to hedge the variable cash outflows associated with FHLBNY borrowings. 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 $ 2.6 million will be reclassified as a reduction to interest expense. As of March 31, 2025 and December 31, 2024, the Company had 6 outstanding interest rate derivatives with an aggregate notional amount of $ 300.0 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 Condition as of March 31, 2025 and December 31, 2024 (in thousands). 36 Fair Values of Derivative Instruments as of March 31, 2025 Asset Derivatives Liability Derivatives Notional Amount Consolidated Statements of Financial Condition Fair value (1) Notional Amount Consolidated Statements of Financial Condition Fair value (1) Derivatives not designated as a hedging instrument: Interest rate products $ 2,289,257 Other assets $ 141,399 2,289,257 Other liabilities 141,633 Credit contracts 11,593 Other assets — 66,968 Other liabilities — Total derivatives not designated as a hedging instrument 141,399 141,633 Derivatives designated as a hedging instrument: Interest rate products 175,000 Other assets 3,355 125,000 Other liabilities 881 Total gross derivative amounts recognized on the balance sheet 144,754 142,514 Gross amounts offset on the balance sheet — — Net derivative amounts presented on the balance sheet $ 144,754 142,514 Gross amounts not offset on the balance sheet: Financial instruments - institutional counterparties $ 6,118 6,118 Cash collateral - institutional counterparties 133,514 — Net derivatives not offset $ 5,122 136,396 37 Fair Values of Derivative Instruments as of December 31, 2024 Asset Derivatives Liability Derivatives Notional Amount Consolidated Statements of Financial Condition Fair value (1) Notional Amount Consolidated Statements of Financial Condition Fair value (1) Derivatives not designated as a hedging instrument: Interest rate products $ 2,272,162 Other assets $ 174,196 $ 2,272,162 Other liabilities 174,344 Credit contracts 11,662 Other assets — 67,560 Other liabilities — Total derivatives not designated as a hedging instrument 174,196 174,344 Derivatives designated as a hedging instrument: Interest rate products 225,000 Other assets 5,136 75,000 Other liabilities 204 Total gross derivative amounts recognized on the balance sheet 179,332 174,548 Gross amounts offset on the balance sheet — — Net derivative amounts presented on the balance sheet $ 179,332 174,548 Gross amounts not offset on the balance sheet: Financial instruments - institutional counterparties $ 2,255 2,255 Cash collateral - institutional counterparties 174,904 — Net derivatives not offset $ 2,173 172,293 (1) 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, 2025 and December 31, 2024. 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, 2025 and 2024 (in thousands). Gain (loss) recognized in income on derivatives for the three months ended Consolidated Statements of Income March 31, 2025 March 31, 2024 Derivatives not designated as a hedging instrument: Interest rate products Other income $ ( 86 ) 96 Credit contracts Other income ( 1 ) ( 3 ) Total $ ( 87 ) 93 Derivatives designated as a hedging instrument: Interest rate products Interest (benefit) expense $ ( 1,940 ) ( 4,175 ) Total $ ( 1,940 ) ( 4,175 ) 38 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. As of March 31, 2025, the Company had five dealer counterparties and the Company was in a net asset position with respect to all of its counterparties. Note 14. Revenue Recognition The Company generates revenue from several business channels. 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, 2025, the out-of-scope revenue related to financial instruments was 91.9 % of the Company's total revenue, compared to 88.7 % for the three months ended March 31, 2024, respectively. Revenue-generating activities that are within the scope of Topic 606, are components of non-interest income. These revenue streams are generally classified into three categories: 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, 2025 and 2024 (in thousands): Three months ended March 31, 2025 2024 Non-interest income In-scope of Topic 606: Wealth management fees $ 7,328 7,488 Insurance agency income 5,651 4,793 Banking service charges and other fees: Service charges on deposit accounts 4,743 3,316 Debit card and ATM fees 1,148 688 Total banking service charges and other fees 5,891 4,004 Total in-scope non-interest income 18,870 16,285 Total out-of-scope non-interest income 8,160 4,522 Total non-interest income $ 27,030 20,807 Wealth management fee income represents fees earned from customers as consideration for asset management, investment advisory and trust services. The Company’s performance obligation is generally satisfied monthly and the resulting fees are recognized monthly. The fee is generally based upon the average market value of the assets under management for the month and the applicable fee rate. The monthly accrual of wealth management fees is recorded in other assets on the Company's Consolidated Statements of Financial Condition. Fees are received from the customer on a monthly basis. The Company does not earn performance-based incentives. To a lesser extent, optional services such as tax return preparation and estate settlement are also available to existing customers. The Company’s performance obligation for these transaction-based services is generally satisfied, and related revenue recognized, at either a point in time when the service is completed, or in the case of estate settlement, over a relatively short period of time, as each service component is completed. Insurance agency income, consisting of commissions and fees, is generally recognized as of the effective date of the insurance policy. Commission revenues related to installment billings are recognized on the invoice date. Subsequent commission adjustments are recognized upon the receipt of notification from insurance companies concerning matters necessitating such adjustments. Profit-sharing contingent commissions are recognized when determinable, which is generally when such commissions are received from insurance companies, or when the Company receives formal notification of the amount of such payments. Service charges on deposit accounts include account analysis fees and other deposit-related fees. These fees are generally transaction-based, or time-based services. The Company's performance obligation for these services is 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. Debit card and ATM fees are generally transaction- 39 based. Debit card revenue is primarily comprised of interchange fees earned when a customer's Company card is processed through a card payment network. ATM fees are largely generated when a Company cardholder uses a non-Company ATM, or a non-Company cardholder uses a Company ATM. The Company's performance obligation for these services is satisfied when the service is rendered. Payment is generally received at the time of transaction or monthly. Out-of-scope non-interest income primarily consists of Bank-owned life insurance and net fees on loan level interest rate swaps, along with gains and losses on the sale of loans and foreclosed real estate, loan prepayment fees and loan servicing fees. None of these revenue streams are subject to the requirements of Topic 606. 40 Note 15. Leases The following table represents the Consolidated Statements of Financial Condition classification of the Company’s right-of use-assets and lease liabilities as of March 31, 2025 and December 31, 2024 (in thousands): Classification March 31, 2025 December 31, 2024 Lease Right-of-Use Assets: Operating lease right-of-use assets Other assets $ 59,955 62,258 Lease Liabilities: Operating lease liabilities Other liabilities $ 62,883 65,226 The calculated amount of the right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. 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. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception based upon the term of the lease. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was applied. 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 2046. As of March 31, 2025, the weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases were 7.2 years and 3.23 %, 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): Three months ended March 31, 2025 Three months ended March 31, 2024 Lease Costs Operating lease cost $ 3,544 2,627 Variable lease cost 1,107 785 Total lease cost $ 4,651 3,412 Cash paid for amounts included in the measurement of lease liabilities: Three months ended March 31, 2025 Three months ended March 31, 2024 Operating cash flows from operating leases $ 3,493 2,557 41 Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2025, were as follows (in thousands): Operating leases Twelve months ended: Remainder of 2025 $ 9,870 2026 11,892 2027 10,359 2028 8,830 2029 7,519 Thereafter 22,246 Total future minimum lease payments 70,716 Amounts representing interest 7,833 Present value of net future minimum lease payments $ 62,883 Note 16. Segment Reporting We conduct our operations through a single business segment. Substantially all of our interest and fees on loans and long-lived assets relate to our operations. Pursuant to FASB ASC 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The chief operating decision maker uses a variety of measures to assess the performance of the business as a whole, depending on the nature of the activity. The Company generates revenue from several business channels. Those streams are organized by the types of partners we work with to reach our customers, with success principally measured based on interest and fees on loans, loan receivables, active accounts and other sales metrics. Detailed profitability information of the nature that could be used to allocate resources and assess the performance and operations for each sales platform individually, however, is not used by our chief operating decision maker. Expense activities, including funding costs, credit losses and operating expenses, are not measured for each platform but instead are managed for the Company as a whole. The following table represents segment information for the three months ended March 31, 2025 and 2024 (in thousands): Three months ended March 31, 2025 2024 Interest income on loans $ 273,031 148,079 Interest income on cash and debt securities 32,315 15,780 Total interest income 305,346 163,859 Total interest expense 123,618 70,189 Net interest income 181,728 93,670 Provision for credit losses 638 ( 320 ) Net interest income after provision 181,090 93,990 Non-interest income: Wealth management income 7,328 7,488 Insurance Agency Income 5,651 4,793 Other non-interest income (1) 14,051 8,526 Total non-interest income 27,030 20,807 Non-interest expense: Compensation and employee benefits 62,366 40,048 Net occupancy expense 13,927 8,520 Data processing expense 9,605 6,783 Other non-interest expense (2) 30,369 16,476 Total non-interest expense 116,267 71,827 Income tax expense 27,825 10,888 Net income $ 64,028 $ 32,082 42 (1) Other non-interest income items include fees and commissions, BOLI and other miscellaneous income. (2) Other non-interest expense items include merger-related expenses in the prior year, amortization of intangibles and other miscellaneous expenses. Our segment assets represent our total assets as presented on the Consolidated Statements of Financial Position. Note 17. Subsequent Events The Company has evaluated subsequent events from the date of the Consolidated Financial Statements, and accompanying Notes thereto, through the date of issuance, and determined that there were no other significant events identified requiring recognition or disclosure.