PROVIDENT FINANCIAL SERVICES INC 10-Q

Item 1. FINANCIAL STATEMENTS. PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Financial Condition September 30, 2025 (Unaudited) and December 31, 2024 (Dollars in Thousands) September 30, 2025 December 31, 2024 ASSETS Cash and due from banks $ 301,614 $ 205,939 Available for sale debt securities, at fair value 3,141,320 2,768,915 Held to maturity debt securities, (net of $ 19,000 allowance as of September 30, 2025 (unaudited) and $ 14,000 allowance as of December 31, 2024) 292,120 327,623 Equity securities, at fair value 19,682 19,110 Federal Home Loan Bank stock 119,551 112,767 Loans held for sale 14,329 162,453 Loans held for investment 19,286,067 18,659,370 Less allowance for credit losses 186,969 193,432 Net loans 19,113,427 18,628,391 Foreclosed assets, net 2,015 9,473 Banking premises and equipment, net 113,098 119,622 Accrued interest receivable 94,647 91,160 Intangible assets 790,729 819,230 Bank-owned life insurance 412,253 405,893 Other assets 432,307 543,702 Total assets $ 24,832,763 $ 24,051,825 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Deposits: Demand deposits $ 14,153,908 $ 13,775,991 Savings deposits 1,577,946 1,679,667 Certificates of deposit of $250,000 or more 886,137 789,342 Other time deposits 2,478,253 2,378,813 Total deposits 19,096,244 18,623,813 Mortgage escrow deposits 46,255 42,247 Borrowed funds 2,209,310 2,020,435 Subordinated debentures 405,340 401,608 Other liabilities 308,579 362,515 Total liabilities 22,065,728 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 130,621,757 shares outstanding as of September 30, 2025 and 130,489,493 outstanding as of December 31, 2024 1,376 1,376 Additional paid-in capital 1,841,920 1,834,495 Retained earnings 1,102,269 989,111 Accumulated other comprehensive (loss) income ( 87,243 ) ( 135,355 ) Treasury stock ( 91,287 ) ( 88,420 ) Total stockholders’ equity 2,767,035 2,601,207 Total liabilities and stockholders’ equity $ 24,832,763 $ 24,051,825 See accompanying notes to unaudited consolidated financial statements. 3 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Income Three and nine months ended September 30, 2025 and 2024 (Unaudited) (Dollars in Thousands, except per share data) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Interest and dividend income: Real estate secured loans $ 197,252 $ 197,857 $ 577,097 $ 461,632 Commercial loans 81,943 81,183 236,616 175,815 Consumer loans 10,847 12,947 31,470 25,820 Available for sale debt securities, equity securities and Federal Home Loan Bank stock 33,578 25,974 94,666 58,698 Held to maturity debt securities 1,897 2,136 5,859 6,761 Due from banks, Federal funds sold and other short-term investments 764 2,425 2,227 5,466 Total interest income 326,281 322,522 947,935 734,192 Interest expense: Deposits 102,094 110,009 295,771 243,602 Borrowed funds 21,307 19,923 63,555 57,871 Subordinated debt 8,548 8,889 25,455 13,842 Total interest expense 131,949 138,821 384,781 315,315 Net interest income 194,332 183,701 563,154 418,877 Provision charge for credit losses 7,044 9,299 4,794 78,684 Net interest income after provision for credit losses 187,288 174,402 558,360 340,193 Non-interest income: Fees 11,336 9,816 31,727 24,426 Wealth management income 7,349 7,620 21,625 22,878 Insurance agency income 3,852 3,631 14,445 12,912 Bank-owned life insurance 2,662 4,308 7,340 9,448 Net gain (loss) on securities transactions 67 2 153 ( 2,972 ) Other income 2,153 1,478 6,234 3,245 Total non-interest income 27,419 26,855 81,524 69,937 Non-interest expense: Compensation and employee benefits 63,202 63,468 188,817 158,404 Net occupancy expense 12,773 12,790 39,711 32,452 Data processing expense 9,102 10,481 28,305 25,698 FDIC insurance 3,418 4,180 10,144 9,553 Amortization of intangibles 9,497 12,231 28,496 19,420 Advertising and promotion expense 1,640 1,524 4,124 3,661 Merger-related expenses — 15,567 — 36,684 Other operating expenses 13,460 15,761 44,376 37,352 Total non-interest expense 113,092 136,002 343,973 323,224 Income before income tax expense 101,615 65,255 295,911 86,906 Income tax expense 29,895 18,850 88,182 19,905 Net income $ 71,720 $ 46,405 $ 207,729 $ 67,001 Basic earnings per share $ 0.55 $ 0.36 $ 1.59 $ 0.65 Weighted average basic shares outstanding 130,506,517 129,941,845 130,439,534 102,819,042 Diluted earnings per share $ 0.55 $ 0.36 $ 1.59 $ 0.65 Weighted average diluted shares outstanding 130,553,819 130,004,870 130,479,443 102,845,261 See accompanying notes to unaudited consolidated financial statements. 4 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Comprehensive Income Three and nine months ended September 30, 2025 and 2024 (Unaudited) (Dollars in Thousands) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net income $ 71,720 $ 46,405 $ 207,729 $ 67,001 Other comprehensive income, net of tax: Unrealized gains and losses on available for sale debt securities: Net unrealized gains arising during the period 19,948 53,122 55,880 54,726 Reclassification adjustment for (gains) losses on securities sales included in net income — — ( 63 ) 2,056 Total 19,948 53,122 55,817 56,782 Unrealized gains and losses on derivatives: Net unrealized gains (losses) arising during the period 441 ( 3,395 ) ( 153 ) 810 Reclassification adjustment for gains included in net income ( 1,474 ) ( 2,450 ) ( 4,505 ) ( 7,980 ) Total ( 1,033 ) ( 5,845 ) ( 4,658 ) ( 7,170 ) Amortization related to post-retirement obligations ( 2,388 ) ( 362 ) ( 3,047 ) ( 1,546 ) Total other comprehensive income 16,527 46,915 48,112 48,066 Total comprehensive income $ 88,247 $ 93,320 $ 255,841 $ 115,067 See accompanying notes to unaudited consolidated financial statements. 5 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Changes in Stockholders’ Equity For the three and nine months ended September 30, 2025 (Unaudited) (Dollars in Thousands) For the three months ended September 30, 2025 COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE LOSS TREASURY STOCK TOTAL STOCKHOLDERS’ EQUITY Balance as of June 30, 2025 $ 1,376 $ 1,839,314 $ 1,061,897 $ ( 103,770 ) $ ( 91,262 ) $ 2,707,555 Net income — — 71,720 — — 71,720 Other comprehensive income, net of tax — — — 16,527 — 16,527 Cash dividends paid — — ( 31,348 ) — — ( 31,348 ) Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 25 ) ( 25 ) Allocation of Stock Award Plan ("SAP") shares — 2,606 — — — 2,606 Balance as of September 30, 2025 $ 1,376 $ 1,841,920 $ 1,102,269 $ ( 87,243 ) $ ( 91,287 ) $ 2,767,035 For the nine months ended September 30, 2025 COMMONSTOCK 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 — — 207,729 — — 207,729 Other comprehensive income, net of tax — — — 48,112 — 48,112 Cash dividends paid — — ( 94,571 ) — — ( 94,571 ) Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 2,867 ) ( 2,867 ) Allocation of SAP shares — 7,408 — — — 7,408 Allocation of stock options — 17 — — — 17 Balance as of September 30, 2025 $ 1,376 $ 1,841,920 $ 1,102,269 $ ( 87,243 ) $ ( 91,287 ) $ 2,767,035 See accompanying notes to unaudited consolidated financial statements. 6 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Changes in Stockholders’ Equity For the three and nine months ended September 30, 2024 (Unaudited) (Dollars in Thousands) For the three months ended September 30, 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 June 30, 2024 $ 1,376 $ 1,868,643 $ 957,979 $ ( 139,964 ) $ ( 129,115 ) $ ( 3,273 ) $ ( 2,398 ) $ 2,398 $ 2,555,646 Net loss — — 46,405 — — — — — 46,405 Other comprehensive income, net of tax — — — 46,915 — — — — 46,915 Cash dividends paid — — ( 31,387 ) — — — — — ( 31,387 ) Distributions from deferred comp plans — 39 — — — — 151 ( 151 ) 39 Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 33 ) — — — ( 33 ) Allocation of ESOP shares — 30 — — — 812 — — 842 Allocation of SAP shares — 2,614 — — — — — — 2,614 Allocation of stock options — 17 — — — — — — 17 Balance as of September 30, 2024 $ 1,376 $ 1,871,343 $ 972,997 $ ( 93,049 ) $ ( 129,148 ) $ ( 2,461 ) $ ( 2,247 ) $ 2,247 $ 2,621,058 For the nine months ended September 30, 2024 COMMONSTOCK ADDITIONAL PAID-IN CAPITAL RETAINEDEARNINGS ACCUMULATED OTHER COMPREHENSIVE (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 — — 67,001 — — — — — 67,001 Other comprehensive income, net of tax — — — 48,066 — — — — 48,066 Cash dividends paid — — ( 68,546 ) — — — — — ( 68,546 ) Distributions from deferred comp plans — 102 — — — — 447 ( 447 ) 102 Purchase of employee restricted shares to fund statutory tax withholding — — — — ( 1,323 ) — — — ( 1,323 ) Allocation of ESOP shares — ( 151 ) — — — 2,435 — — 2,284 Allocation of SAP shares — 6,039 — — — — — — 6,039 Shares issued due to acquisition 544 876,234 — — — — — — 876,778 Allocation of stock options — 61 — — — — — — 61 Balance as of September 30, 2024 $ 1,376 $ 1,871,343 $ 972,997 $ ( 93,049 ) $ ( 129,148 ) $ ( 2,461 ) $ ( 2,247 ) $ 2,247 $ 2,621,058 See accompanying notes to unaudited consolidated financial statements. 7 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows Nine months ended September 30, 2025 and 2024 (Unaudited) (Dollars in Thousands) Nine months ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 207,729 $ 67,001 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangibles 39,379 28,225 Provision charge for credit losses on loans and securities 2,180 75,838 Provision charge for credit losses on off-balance sheet credit exposures 2,614 2,846 Deferred tax expense (benefit) 13,892 ( 1,020 ) Amortization of operating lease right-of-use assets 10,367 9,539 Income on Bank-owned life insurance ( 7,340 ) ( 9,448 ) Net amortization of premiums and discounts on securities 12,435 4,939 Accretion of net deferred loan fees ( 4,844 ) ( 5,219 ) Amortization of premiums on purchased loans, net 187 204 Originations of loans held for sale ( 62,331 ) ( 34,343 ) Proceeds from sales of loans held for sale 186,079 31,222 ESOP expense — 2,284 Allocation of stock award expense 7,408 6,039 Allocation of stock option expense 17 61 Net gain on sale of loans ( 2,725 ) ( 852 ) Net (gain) loss on securities transactions ( 153 ) 2,972 Net gain on sale of premises and equipment ( 681 ) — Net loss (gain) on sale of foreclosed assets 11 ( 204 ) Increase in accrued interest receivable ( 3,487 ) ( 3,658 ) Decrease (increase) in other assets 26,515 ( 10,591 ) (Decrease) increase in other liabilities ( 53,936 ) 21,258 Net cash provided by operating activities 373,316 187,093 Cash flows from investing activities: Net increase in loans ( 601,121 ) ( 28,540 ) Purchases of loans ( 321 ) — Proceeds from sales of foreclosed assets 5,779 426 Proceeds from maturities, calls and paydowns of held to maturity debt securities 48,386 43,083 Purchases of investment securities held to maturity ( 13,494 ) ( 16,338 ) Proceeds from sales of available for sale debt securities 1,670 568,360 Proceeds from maturities, calls and paydowns of available for sale debt securities 346,553 238,642 Purchases of available for sale debt securities ( 622,765 ) ( 182,960 ) Proceeds from redemption of Federal Home Loan Bank stock 269,086 162,480 Purchases of Federal Home Loan Bank stock ( 275,870 ) ( 179,482 ) Cash received, net of cash consideration paid for acquisition — 194,548 BOLI claim benefits received 906 3,076 Proceeds from sales of premises and equipment 2,348 — Purchases of premises and equipment ( 6,674 ) ( 2,803 ) Net cash (used in) provided by investing activities ( 845,517 ) 800,492 Cash flows from financing activities: 8 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows Nine months ended September 30, 2025 and 2024 (Unaudited) (Dollars in Thousands) Nine months ended September 30, 2025 2024 Net increase (decrease) in deposits 472,431 ( 539,253 ) Increase in mortgage escrow deposits 4,008 5,638 Cash dividends paid to stockholders ( 94,571 ) ( 68,546 ) Purchase of employee restricted shares to fund statutory tax withholding ( 2,867 ) ( 1,323 ) Proceeds from subordinated debentures — 221,181 Proceeds from long-term borrowings 554,500 302,790 Payments on long-term borrowings ( 352,402 ) ( 278,425 ) Net decrease in short-term borrowings ( 13,223 ) ( 565,813 ) Net cash provided by (used in) financing activities 567,876 ( 923,751 ) Net increase in cash and cash equivalents 95,675 63,834 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 299,193 244,019 Restricted cash at end of period 2,421 70 Total cash, cash equivalents and restricted cash at end of period $ 301,614 $ 244,089 Cash paid during the period for: Interest on deposits and borrowings $ 368,845 $ 253,171 Income taxes $ 65,881 $ 35,444 Non-cash investing activities: Initial recognition of operating lease right-of-use assets $ — $ 14,742 Initial recognition of operating lease liabilities $ — $ 14,742 Transfer of loans receivable to foreclosed assets $ 1,053 $ — Acquisitions: Non-cash assets acquired at fair value: Investment securities $ — $ 1,632,106 Loans held for sale — 1,494 Loans held for investment — 7,889,138 Bank-owned life insurance — 160,646 Goodwill and other intangible assets — 400,773 Bank premises and equipment — 60,578 Other assets — 269,252 Total non-cash assets acquired at fair value $ — $ 10,413,987 Liabilities assumed Deposits $ — $ 8,622,924 Borrowings — 785,927 Subordinated debentures — 180,198 Other Liabilities — 142,708 Total liabilities assumed $ — $ 9,731,757 Common stock issued for acquisitions $ — $ 876,778 See accompanying notes to unaudited consolidated financial statements. 9 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 and nine months ended September 30, 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 and nine months ended September 30, 2025 and 2024 (dollars in thousands, except per share amounts): Three months ended September 30, 2025 2024 Net Income Weighted Average Common Shares Outstanding Per Share Amount Net Income Weighted Average Common Shares Outstanding Per Share Amount Net income $ 71,720 $ 46,405 Basic earnings per share: Income available to common stockholders $ 71,720 130,506,517 $ 0.55 $ 46,405 129,941,845 $ 0.36 Dilutive shares 47,302 63,025 Diluted earnings per share: Income available to common stockholders $ 71,720 130,553,819 $ 0.55 $ 46,405 130,004,870 $ 0.36 10 Nine months ended September 30, 2025 2024 Net Income Weighted Average Common Shares Outstanding Per Share Amount Net Income Weighted Average Common Shares Outstanding Per Share Amount Net income $ 207,729 $ 67,001 Basic earnings per share: Income available to common stockholders $ 207,729 130,439,534 $ 1.59 $ 67,001 102,819,042 $ 0.65 Dilutive shares 39,909 26,219 Diluted earnings per share: Income available to common stockholders $ 207,729 130,479,443 $ 1.59 $ 67,001 102,845,261 $ 0.65 Anti-dilutive stock options and awards as of September 30, 2025 and 2024, totaling 1.0 million shares and 1.7 million shares, respectively, 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. The provision for credit losses on loans for the three and nine months ended September 30, 2025 was primarily attributable to overall growth in the loan portfolio, combined with a weakened economic forecast compared to the prior periods. 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. 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. 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, 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 $ 15.6 million and $ 36.7 million for the three and nine months ended September 30, 2024. Merger-related expense is a separate line in non-interest expense on the Consolidated Statements of Income. Additionally, an initial CECL provision for credit losses of 11 $ 60.1 million was recorded as part of the Lakeland merger, for the three and nine months ended September 30, 2024, respectively. 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): 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 $ 876,778 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 September 30, 2025. Note 3. Investment Securities As of September 30, 2025, the Company had $ 3.14 billion and $ 292.1 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. 12 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 September 30, 2025 and December 31, 2024 (in thousands): September 30, 2025 Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury obligations $ 317,978 236 ( 9,945 ) 308,269 Government-agency obligations 36,095 899 ( 89 ) 36,905 Mortgage-backed securities 2,653,196 20,731 ( 127,083 ) 2,546,844 Asset-backed securities 43,673 497 ( 261 ) 43,909 State and municipal obligations 119,277 984 ( 8,346 ) 111,915 Corporate obligations 89,837 5,591 ( 1,950 ) 93,478 $ 3,260,056 28,938 ( 147,674 ) 3,141,320 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 $ 10.8 million and $ 9.7 million as of September 30, 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 September 30, 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. September 30, 2025 Amortized cost Fair value Due in one year or less $ 102,502 101,645 Due after one year through five years 251,448 243,212 Due after five years through ten years 106,243 107,707 Due after ten years 66,899 61,098 $ 527,092 513,662 Investments which pay principal on a periodic basis totaling $ 2.73 billion at amortized cost and $ 2.63 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 September 30, 2025 and September 30, 2024, no securities were sold from the available for sale debt securities portfolio, respectively. For the nine months ended September 30, 2025, proceeds from sales on securities in the available for sale debt securities portfolio totaled $ 1.7 million, with gross gains of $ 87,000 and no losses recognized. For the three and nine months ended September 30, 2025, proceeds from calls on securities from the available for sale debt portfolio totaled $ 4.0 million with gross gains of $ 67,000 and no losses recognized. For the nine months ended September 30, 2024, proceeds from sales on available for sale debt securities portfolio totaled $ 568.4 million, with no gains and $ 3.0 million of 13 losses recognized. For the three and nine months ended September 30, 2024, proceeds from calls on securities in the available for sale debt securities portfolio totaled $ 780,000 with no gains and no losses recognized. The number of available for sale debt securities in an unrealized loss position as of September 30, 2025 totaled 422 , compared with 646 as of December 31, 2024. The decrease in the number of securities in an unrealized loss position as of September 30, 2025, was mainly 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 September 30, 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, excluding allowances for credit losses of $ 19,000 and $ 14,000 , as of September 30, 2025 and December 31, 2024, respectively (in thousands): September 30, 2025 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Government-agency obligations $ 4,400 — ( 54 ) 4,346 State and municipal obligations 284,895 186 ( 7,663 ) 277,418 Corporate obligations 2,844 — ( 34 ) 2,810 $ 292,139 186 ( 7,751 ) 284,574 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 September 30, 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 and nine months ended September 30, 2025 and 2024. For the three and nine months ended September 30, 2025, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 910,000 and $ 11.0 million, respectively. For the three and nine months ended September 30, 2025, there were no gross gains or gross losses related to these calls on securities. For the three and nine months ended September 30, 2024, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $ 2.1 million and $ 4.6 million, respectively. As to these calls on securities, for the three months ended September 30, 2024, there were no gross gains or gross losses, while for the nine months ended September 30, 2024, there were no gross gains, while gross losses totaled $ 1,200 . The amortized cost and fair value of investment securities in the held to maturity debt securities portfolio as of September 30, 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. September 30, 2025 Amortized cost Fair value Due in one year or less $ 46,369 46,266 Due after one year through five years 155,363 154,478 Due after five years through ten years 78,199 74,039 Due after ten years 12,208 9,791 $ 292,139 284,574 14 The allowance for credit losses on held to maturity debt securities as of September 30, 2025 and December 31, 2024 was $ 19,000 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 September 30, 2025 totaled 241 , compared with 512 as of December 31, 2024. The decrease in the number of securities in an unrealized loss position as of September 30, 2025, was due to lower current market interest rates compared to rates as of December 31, 2024. 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 September 30, 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 September 30, 2025 and December 31, 2024 (in thousands): September 30, 2025 Total Portfolio AAA AA A BBB Not Rated Total Government-agency obligations $ 4,400 — — — — 4,400 State and municipal obligations 44,117 209,228 20,231 — 11,319 284,895 Corporate obligations — 574 2,270 — — 2,844 $ 48,517 209,802 22,501 — 11,319 292,139 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 September 30, 2025, the held to maturity debt securities portfolio was comprised of 17 % rated AAA, 72 % rated AA, 8 % rated A, and less than 3 % 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 issued mortgage-backed securities, were grouped where possible under the credit rating of the issuer of the security. 15 Note 4. Loans Receivable and Allowance for Credit Losses Loans held for investment as of September 30, 2025 and December 31, 2024 are summarized as follows (in thousands): September 30, 2025 December 31, 2024 Mortgage loans: Commercial $ 7,318,725 7,228,078 Multi-family 3,534,751 3,382,933 Construction 719,961 823,503 Residential 1,977,483 2,010,637 Total mortgage loans 13,550,920 13,445,151 Commercial loans 5,130,067 4,608,600 Consumer loans 614,983 613,819 Total gross loans 19,295,970 18,667,570 Premiums on purchased loans 1,362 1,338 Net deferred fees ( 11,265 ) ( 9,538 ) Total loans $ 19,286,067 18,659,370 Accrued interest on loans totaled $ 81.4 million and $ 78.5 million as of September 30, 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 held for investment by portfolio segment and class of loans (in thousands): September 30, 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 $ 956 4,314 39,036 — 44,306 7,274,419 7,318,725 33,285 Multi-family — 879 424 — 1,303 3,533,448 3,534,751 424 Construction — — 19,220 — 19,220 700,741 719,961 19,220 Residential 8,085 6,180 7,858 — 22,123 1,955,360 1,977,483 7,858 Total mortgage loans 9,041 11,373 66,538 — 86,952 13,463,968 13,550,920 60,787 Commercial loans 729 1,390 32,483 — 34,602 5,095,465 5,130,067 28,351 Consumer loans 2,739 299 1,388 — 4,426 610,557 614,983 1,388 Total gross loans $ 12,509 13,062 100,409 — 125,980 19,169,990 19,295,970 90,526 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 3,026 1,117 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 $ 21,104 10,976 72,061 — 106,623 18,560,947 18,667,570 55,674 There were no non-accrual or past due loans held for sale as of September 30, 2025. As of December 31, 2024, total non-accrual loans held for sale, which are not in the tables above, totaled $ 2.4 million. Additionally, as of December 31, 2024, total past due loans held for sale, including non-accrual loans held for sale, totaled $ 4.8 million. Included in loans held for investment are loans for which the accrual of interest income has been discontinued due to deterioration in the financial 16 condition of the borrowers. The principal amounts of these non-accrual loans were $ 100.4 million and $ 72.1 million as of September 30, 2025 and December 31, 2024, respectively. Included in non-accrual loans were $ 41.8 million and $ 24.6 million of loans which were less than 90 days past due as of September 30, 2025 and December 31, 2024, respectively. There were no loans 90 days or greater past due and still accruing interest as of September 30, 2025 and December 31, 2024. The activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands): Three months ended September 30, Mortgage loans Commercial loans Consumer loans Total 2025 Balance at beginning of period $ 131,447 51,228 5,196 187,871 Provision charge (benefit) to operations 3,251 1,257 ( 8 ) 4,500 Recoveries of loans previously charged-off 77 60 181 318 Loans charged-off ( 1,199 ) ( 4,368 ) ( 153 ) ( 5,720 ) Balance at end of period $ 133,576 48,177 5,216 186,969 2024 Balance at beginning of period $ 135,312 48,003 5,016 188,331 Provision charge (benefit) to operations 855 8,973 ( 228 ) 9,600 Recoveries of loans previously charged-off 16 513 139 668 Loans charged-off ( 808 ) ( 6,495 ) ( 121 ) ( 7,424 ) Balance at end of period $ 135,375 50,994 4,806 191,175 Nine months ended September 30, 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 ( 8,803 ) 11,015 ( 37 ) 2,175 Recoveries of loans previously charged-off 924 414 485 1,823 Loans charged-off ( 3,132 ) ( 6,894 ) ( 435 ) ( 10,461 ) Balance at end of period $ 133,576 48,177 5,216 186,969 2024 Balance at beginning of period $ 73,407 31,475 2,318 107,200 Provision charge to operations 52,066 21,935 1,853 75,854 Initial allowance on credit loans related to PCD loans 10,628 6,070 490 17,188 Recoveries of loans previously charged-off 82 2,025 419 2,526 Loans charged-off ( 808 ) ( 10,511 ) ( 274 ) ( 11,593 ) Balance at end of period $ 135,375 50,994 4,806 191,175 For the three and nine months ended September 30, 2025, the Company recorded a $ 4.5 million and a $ 2.2 million provision for credit losses on loans, respectively. The provision for credit losses on loans for the three and nine months ended September 30, 2025 was primarily attributable to overall growth in the loan portfolio, combined with a weakened economic forecast compared to the prior periods. The provision for credit losses on loans for the nine months ended September 30, 2024 was primarily attributable to an initial CECL provision for credit losses of $ 60.1 million, recorded as part of the Lakeland merger. For the three and nine months ended September 30, 2025, net charge-offs totaled $ 5.4 million and $ 8.6 million, respectively. 17 The following table summarizes the Company's gross charge-offs recorded during the three months ended September 30, 2025 by year of origination (in thousands): 2025 2024 2023 2022 2021 Prior to 2021 Total Loans Mortgage loans: Commercial $ — — — — — 540 540 Multi-family — — 520 — — 139 659 Total mortgage loans — — 520 — — 679 1,199 Commercial loans — — — — — 4,368 4,368 Consumer loans (1) 2 25 8 — — 2 37 Total gross loans $ 2 25 529 — — 5,049 5,604 (1) During the three months ended September 30, 2025, charge-offs on consumer overdraft accounts totaled $ 116,000 , which are not included in the table above. The following table summarizes the Company's gross charge-offs recorded during the nine months ended September 30, 2025 by year of origination (in thousands): 2025 2024 2023 2022 2021 Prior to 2021 Total Loans Mortgage loans: Commercial $ — — — 358 — 2,047 2,406 Multi-family — — 520 — — 206 726 Total mortgage loans — — 520 358 — 2,253 3,132 Commercial loans — — 39 2,362 126 4,368 6,894 Consumer loans (1) 20 38 20 3 — 39 120 Total gross loans $ 20 38 580 2,723 126 6,660 10,146 (1) During the nine months ended September 30, 2025, charge-offs on consumer overdraft accounts totaled $ 315,000 , which are not included in the table above. The following table summarizes the Company's gross charge-offs recorded during the three months ended September 30, 2024 by year of origination (in thousands): 2024 2023 2022 2021 2020 Prior to 2020 Total Loans Mortgage loans: Commercial $ — — — — — 801 801 Residential — — 7 — — — 7 Total mortgage loans — — 7 — — 801 808 Commercial loans — 42 — 6,453 — — 6,495 Consumer loans (1) 7 — — 4 — 7 19 Total gross loans $ 7 42 7 6,457 — 808 7,321 (1) During the three months ended September 30, 2024, charge-offs on consumer overdraft accounts totaled $ 103,000 , which are not included in the table above. 18 The following table summarizes the Company's gross charge-offs recorded during the nine months ended September 30, 2024 by year of origination (in thousands): 2024 2023 2022 2021 2020 Prior to 2020 Total Loans Mortgage loans: Commercial $ — — — — — 801 801 Residential — — 7 — — — 7 Total mortgage loans — — 7 — — 801 808 Commercial loans — 42 157 8,500 1,606 206 10,511 Consumer loans (1) 20 — — 5 — 9 34 Total gross loans $ 20 42 164 8,505 1,606 1,016 11,353 (1) During the nine months ended September 30, 2024, charge-offs on consumer overdraft accounts totaled $ 240,000 , which are not included in the table above. The 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 September 30, 2025, there were 28 loans totaling $ 85.4 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 not been any significant time lapses since the receipt of the most recent appraisals. For loans deemed collateral-dependent as defined above, the fair value is based on the underlying collateral. As of September 30, 2025 and December 31, 2024, the Company had collateral-dependent loans with fair values of $ 76.3 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: 19 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 tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 (in thousands): For the three months ended September 30, 2025 Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans Commercial loans $ — — 7,000 0.14 % Total gross loans $ — — 7,000 0.04 % For the nine months ended September 30, 2025 Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans Mortgage loans: Commercial $ 2,984 — 11,945 0.20 % Total mortgage loans 2,984 — 11,945 0.11 % Commercial loans 1,302 — 7,603 0.17 % Total gross loans $ 4,286 — 19,548 0.12 % The following tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 (in thousands): For the three months ended September 30, 2024 Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans Mortgage loans: Commercial $ — 1,045 — 0.01 % Multi-family — 1,297 — 0.04 % Total mortgage loans — 2,342 — 0.02 % Commercial loans — 5,743 962 0.14 % Total gross loans $ — 8,085 962 0.05 % 20 For the nine months ended September 30, 2024 Term Extension Interest Rate Reduction Interest Rate Reduction and Term Extension % of Total Class of Loans Mortgage loans: Commercial $ — 1,045 — 0.01 % Multi-family — 1,297 — 0.04 % Total mortgage loans — 2,342 — 0.02 % Commercial loans — 5,743 9,759 0.33 % Total gross loans $ — 8,085 9,759 0.09 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended September 30, 2025 (in thousands): Weighted Average Months of Term Extension Weighted Average Rate Change Mortgage loans: Commercial 0 — % Total mortgage loans 0 — % Commercial loans 11 0.25 % Total gross loans 11 0.25 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2025 (in thousands): Weighted Average Months of Term Extension Weighted Average Rate Change Mortgage loans: Commercial 18 0.44 % Total mortgage loans 18 0.44 % Commercial loans 12 ( 0.21 ) % Total gross loans 14 0.05 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended September 30, 2024 (in thousands): Weighted Average Months of Term Extension Weighted Average Rate Change Mortgage loans: Commercial 2 4.41 % Multi-family 0 5.00 % Total mortgage loans 2 4.41 % Commercial loans 3 — % Total gross loans 3 1.23 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2024 (in thousands): 21 Weighted Average Months of Term Extension Weighted Average Rate Change Mortgage loans: Commercial 2 4.41 % Multi-family 0 5.00 % Total mortgage loans 2 4.41 % Commercial loans 0 0.81 % Total gross loans 0 1.05 % There were no loan modifications made to borrowers experiencing financial difficulty that subsequently defaulted during the three and nine months ended September 30, 2025 and September 30, 2024, respectively. The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the twelve months ended September 30, 2025 (in thousands): Current 30-59 Days Past Due 60-89 Days Past Due 90 days or more Past Due Non- Accrual Total Mortgage loans: Commercial $ 11,907 — 2,642 — — 14,549 Multi-family 281 — — 450 — 731 Total mortgage loans 12,188 — 2,642 450 — 15,280 Commercial loans 8,169 — — — 243 8,412 Total gross loans $ 20,357 — 2,642 450 243 23,692 The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the twelve months ended September 30, 2024 (in thousands): Current 30-59 Days Past Due 60-89 Days Past Due 90 days or more Past Due Non- Accrual Total Mortgage loans: Commercial $ 1,045 — — — — 1,045 Multi-family 481 94 402 320 — 1,297 Total mortgage loans 1,526 94 402 320 — 2,342 Commercial loans 9,562 — — 88 5,852 15,502 Total gross loans $ 11,088 94 402 408 5,852 17,844 Loans acquired by the Company that experienced more-than-insignificant deterioration in credit quality after origination, are classified as Purchase Credit Deteriorated ("PCD") loans. As of September 30, 2025, the balance of PCD loans totaled $ 522.4 million with a related allowance for credit losses of $ 12.9 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 22 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. The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades as of September 30, 2025 and December 31, 2024 (in thousands): Gross Loans Held for Investment by Year of Origination as of September 30, 2025 2025 2024 2023 2022 2021 Prior to 2021 Revolving Loans Revolving loans to term loans Total Loans Commercial Mortgage Special mention $ 6,013 — 3,738 24,365 48,765 33,722 223 — 116,826 Substandard 8,904 — 64 658 11,104 75,723 4,238 — 100,691 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 14,917 — 3,802 25,023 59,869 109,445 4,461 — 217,517 Pass/Watch 549,332 334,137 839,354 1,493,261 895,948 2,791,614 188,596 8,966 7,101,208 Total Commercial Mortgage $ 564,249 334,137 843,156 1,518,284 955,817 2,901,059 193,057 8,966 7,318,725 Multi-family Special mention $ — — — — — 33,081 — — 33,081 Substandard — — — — — 7,838 — — 7,838 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — — — — — 40,919 — — 40,919 Pass/Watch 399,639 325,794 470,071 701,835 354,732 1,226,743 13,493 1,525 3,493,832 Total Multi-Family $ 399,639 325,794 470,071 701,835 354,732 1,267,662 13,493 1,525 3,534,751 Construction Special mention $ — — — 6,639 — — — — 6,639 23 Gross Loans Held for Investment by Year of Origination as of September 30, 2025 2025 2024 2023 2022 2021 Prior to 2021 Revolving Loans Revolving loans to term loans Total Loans Substandard — — 11,539 — 7,701 — — — 19,240 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — — 11,539 6,639 7,701 — — — 25,879 Pass/Watch 70,305 205,912 272,041 124,251 16,046 5,527 — — 694,082 Total Construction $ 70,305 205,912 283,580 130,890 23,747 5,527 — — 719,961 Residential (1) Special mention $ — — 2,162 559 104 2,797 — — 5,622 Substandard — 1,086 1,471 1,383 930 2,076 — — 6,946 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — 1,086 3,633 1,942 1,034 4,873 — — 12,568 Pass/Watch 95,389 129,026 311,292 372,383 294,415 762,410 — — 1,964,915 Total Residential $ 95,389 130,112 314,925 374,325 295,449 767,283 — — 1,977,483 Total Mortgage Special mention $ 6,013 — 5,900 31,563 48,869 69,600 223 — 162,168 Substandard 8,904 1,086 13,074 2,041 19,735 85,637 4,238 — 134,715 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 14,917 1,086 18,974 33,604 68,604 155,237 4,461 — 296,883 Pass/Watch 1,114,665 994,869 1,892,758 2,691,730 1,561,141 4,786,294 202,089 10,491 13,254,037 Total Mortgage $ 1,129,582 995,955 1,911,732 2,725,334 1,629,745 4,941,531 206,550 10,491 13,550,920 Commercial Special mention $ 179 9,941 7,306 13,508 9,593 36,879 13,977 2,958 94,341 Substandard 1,095 1,721 6,146 67,922 34,082 42,591 36,028 1,782 191,367 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 1,274 11,662 13,452 81,430 43,675 79,470 50,005 4,740 285,708 Pass/Watch 621,214 656,059 350,881 626,200 346,162 1,027,706 1,156,893 59,244 4,844,359 Total Commercial $ 622,488 667,721 364,333 707,630 389,837 1,107,176 1,206,898 63,984 5,130,067 Consumer (1) Special mention $ — — — — — 9 266 92 367 Substandard — — — — — 375 549 179 1,103 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified — — — — — 384 815 271 1,470 Pass/Watch 31,142 27,962 34,524 49,029 33,486 90,937 330,512 15,921 613,513 Total Consumer $ 31,142 27,962 34,524 49,029 33,486 91,321 331,327 16,192 614,983 Total Loans 24 Gross Loans Held for Investment by Year of Origination as of September 30, 2025 2025 2024 2023 2022 2021 Prior to 2021 Revolving Loans Revolving loans to term loans Total Loans Special mention $ 6,192 9,941 13,206 45,071 58,462 106,488 14,466 3,050 256,876 Substandard 9,999 2,807 19,220 69,963 53,817 128,603 40,815 1,961 327,185 Doubtful — — — — — — — — — Loss — — — — — — — — — Total criticized and classified 16,191 12,748 32,426 115,034 112,279 235,091 55,281 5,011 584,061 Pass/Watch 1,767,021 1,678,890 2,278,163 3,366,959 1,940,789 5,904,937 1,689,494 85,656 18,711,909 Total Gross Loans $ 1,783,212 1,691,638 2,310,589 3,481,993 2,053,068 6,140,028 1,744,775 90,667 19,295,970 (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 — — — — — — — — — 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 25 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 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 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 — — — — — — — — — 26 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 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. Note 5. Deposits Deposits as of September 30, 2025 and December 31, 2024 are summarized as follows (in thousands): September 30, 2025 December 31, 2024 Savings $ 1,577,946 1,679,667 Money market 3,509,094 3,364,564 Negotiable Order of Withdrawal ("NOW") (1) 6,893,267 6,622,642 Non-interest bearing 3,751,547 3,788,785 Certificates of deposit (2) 3,364,390 3,168,155 Total deposits $ 19,096,244 18,623,813 (1) Our insured cash sweep product totaled $ 1.10 billion and $ 1.16 billion as of September 30, 2025 and December 31, 2024, respectively, and are reported within NOW accounts. (2) Time deposits equal to or in excess of $250,000, were $ 886.1 million and $ 789.0 million as of September 30, 2025 and December 31, 2024, respectively. Additionally, reciprocal Certificate of Deposit Account Registry Service product totaled $ 2.4 million and $ 3.5 million as of September 30, 2025 and December 31, 2024, respectively. Within total deposits, brokered deposits totaled $ 805.9 million and $ 255.0 million as of September 30, 2025 and December 31, 2024, respectively. Note 6. Borrowed Funds Borrowed funds as of September 30, 2025 and December 31, 2024 are summarized as follows (in thousands): September 30, 2025 December 31, 2024 Securities sold under repurchase agreements $ 102,146 113,224 FHLBNY line of credit 634,000 385,000 FHLBNY advances 1,470,635 1,518,497 Purchase accounting adjustment on borrowed funds 2,529 3,714 Total borrowed funds $ 2,209,310 2,020,435 Total long-term borrowings totaled $ 604.5 million and $ 513.9 million as of September 30, 2025 and December 31, 2024, respectively, while total short-term borrowings totaled $ 1.60 billion and $ 1.51 billion for the same periods. As of September 30, 2025, FHLBNY advances were at fixed rates and mature between October 2025 and August 2030, 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 September 30, 2025 are as follows (in thousands): 27 2025 Due in one year or less $ 1,500,135 Due after one year through two years 454,500 Due after two years through three years — Due after three years through four years — Due after four years through five years 150,000 Thereafter — Purchase accounting adjustment on borrowed funds 2,529 Total FHLBNY advances and overnight borrowings $ 2,107,164 Scheduled maturities of securities sold under repurchase agreements as of September 30, 2025 are as follows (in thousands): 2025 Due in one year or less $ 102,146 Thereafter — Total securities sold under repurchase agreements $ 102,146 The following tables set forth certain information as to borrowed funds for the nine and twelve month periods ended September 30, 2025 and December 31, 2024 (in thousands): Maximum balance Average balance Weighted average interest rate September 30, 2025 Securities sold under repurchase agreements $ 117,946 103,125 2.44 % FHLBNY overnight borrowings 704,000 314,620 4.96 FHLBNY advances 2,368,897 1,715,636 3.99 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 September 30, 2025 and December 31, 2024, the fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit and FHLB advances, totaled $ 2.41 billion and $ 1.12 billion, respectively. Interest expense on borrowings for the three and nine months ended September 30, 2025 amounted to $ 21.6 million and $ 64.7 million, respectively, while amortization expense related to purchase accounting adjustments for the three and nine months ended September 30, 2025 amounted to a benefit of $ 316,000 and $ 1.2 million, respectively. Interest expense on borrowings for the three and nine months ended September 30, 2024 amounted to $ 20.5 million and $ 58.7 million, respectively, while amortization expense related to purchase accounting for the three and nine months ended September 30, 2024 amounted to a benefit of $ 558,000 and $ 865,000 , 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 28 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 costs for pension benefits and other post-retirement benefits for the three and nine months ended September 30, 2025 and 2024 includes the following components (in thousands): Three months ended September 30, Nine months ended September 30, Pension benefits Other post-retirement benefits Pension benefits Other post-retirement benefits 2025 2024 2025 2024 2025 2024 2025 2024 Service cost $ — — 1 2 $ — — 3 8 Interest cost 299 288 148 135 897 866 444 405 Expected return on plan assets ( 825 ) ( 778 ) — — ( 2,475 ) ( 2,334 ) — — Amortization of the net loss (gain) — 15 ( 459 ) ( 529 ) — 43 ( 1,377 ) ( 1,589 ) Net periodic (decrease) in benefit cost $ ( 526 ) ( 475 ) ( 310 ) ( 392 ) $ ( 1,578 ) ( 1,425 ) ( 930 ) ( 1,176 ) 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 September 30, 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 and nine months ended September 30, 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 September 30, 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 that may default includes an estimated drawdown of unused credit based on historical credit utilization factors and current loss factors. 29 For the three and nine months ended September 30, 2025, the Company recorded a $ 2.5 million and a $ 2.6 million provision charge for credit losses for off-balance sheet credit exposures, respectively. For the three and nine months ended September 30, 2024, the Company recorded a $ 300,000 provision benefit and a $ 2.8 million provision charge for credit losses for off-balance sheet credit exposures, respectively. The allowance for credit losses for off-balance sheet credit exposures was $ 10.0 million as of September 30, 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 September 30, 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 by benchmarking 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 have generally not resulted in an 30 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. 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 a loan related transaction which, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. As such, all changes in fair value of 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 by 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 September 30, 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 September 30, 2025 or December 31, 2024. The following tables present the assets and liabilities reported on the consolidated statements of financial condition at their fair values as of September 30, 2025 and December 31, 2024, by level within the fair value hierarchy (in thousands): 31 Fair Value Measurements at Reporting Date Using: September 30, 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 $ 308,269 308,269 — — Government-agency obligations 36,905 — 36,905 — Mortgage-backed securities 2,546,844 — 2,546,844 — Asset-backed securities 43,909 — 43,909 — State and municipal obligations 111,915 — 111,915 — Corporate obligations 93,478 — 93,478 — Total available for sale debt securities 3,141,320 308,269 2,833,051 — Equity securities 19,682 19,682 — — Derivative assets 111,618 — 111,618 — $ 3,272,620 327,951 2,944,669 — Derivative liabilities $ 114,239 — 114,239 — Measured on a non-recurring basis: Loans measured for impairment based on the fair value of the underlying collateral $ 76,259 — — 76,259 Foreclosed assets 2,015 — — 2,015 $ 78,274 — — 78,274 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 32 There were no transfers into or out of Level 3 during the three and nine months ended September 30, 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 September 30, 2025 and December 31, 2024, $ 2.4 million and $ 70,000 , respectively, were 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 by benchmarking 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 have 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 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. Federal Home Loan Bank of New York 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, net of cost to sell. 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. 33 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. Subordinated Debentures The fair value of borrowed funds was estimated based on bid/ask prices from brokers for similar types of instruments 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 September 30, 2025 and December 31, 2024. Fair values are presented by level within the fair value hierarchy. 34 Fair Value Measurements as of September 30, 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 $ 301,614 301,614 301,614 — — Available for sale debt securities: U.S. Treasury obligations $ 308,269 308,269 308,269 — — Government-agency obligations 36,905 36,905 — 36,905 — Mortgage-backed securities 2,546,844 2,546,844 — 2,546,844 — Asset-backed securities 43,909 43,909 — 43,909 — State and municipal obligations 111,915 111,915 — 111,915 — Corporate obligations 93,478 93,478 — 93,478 — Total available for sale debt securities $ 3,141,320 3,141,320 308,269 2,833,051 — Held to maturity debt securities, net of allowance for credit losses: Government-agency obligations 4,400 4,346 — 4,346 — State and municipal obligations 284,877 277,418 — 277,418 — Corporate obligations 2,843 2,810 — 2,810 — Total held to maturity debt securities, net of allowance for credit losses $ 292,120 284,574 — 284,574 — FHLBNY stock 119,551 119,551 119,551 — — Equity securities 19,682 19,682 19,682 — — Loans, net of allowance for credit losses 19,113,427 19,168,498 — — 19,168,498 Derivative assets 111,618 111,618 — 111,618 — Financial liabilities: Deposits other than certificates of deposits $ 15,731,854 15,731,854 15,731,854 — — Certificates of deposit 3,364,390 3,363,873 — 3,363,873 — Total deposits $ 19,096,244 19,095,727 15,731,854 3,363,873 — Borrowings 2,209,310 2,210,904 — 2,210,904 — Subordinated debentures 405,340 429,310 — 429,310 — Derivative liabilities 114,239 114,239 — 114,239 — 35 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 — 36 Note 12. Other Comprehensive Income (Loss) The following table presents the components of other comprehensive income (loss), both gross and net of tax, for the three and nine months ended September 30, 2025 and 2024 (in thousands): Three months ended September 30, 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 $ 27,957 ( 8,009 ) 19,948 75,987 ( 22,865 ) 53,122 Total 27,957 ( 8,009 ) 19,948 75,987 ( 22,865 ) 53,122 Unrealized gains and losses on derivatives (cash flow hedges): Net unrealized gains (losses) arising during the period 615 ( 174 ) 441 ( 4,856 ) 1,461 ( 3,395 ) Reclassification adjustment for (gains) included in net income ( 2,056 ) 582 ( 1,474 ) ( 3,504 ) 1,054 ( 2,450 ) Total ( 1,441 ) 408 ( 1,033 ) ( 8,360 ) 2,515 ( 5,845 ) Amortization related to post-retirement obligations ( 3,332 ) 944 ( 2,388 ) ( 518 ) 156 ( 362 ) Total other comprehensive income (loss) $ 23,184 ( 6,657 ) 16,527 67,109 ( 20,194 ) 46,915 Nine months ended September 30, 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 $ 88,132 ( 32,252 ) 55,880 79,141 ( 24,415 ) 54,726 Reclassification adjustment for (gains) losses on securities sales included in net income ( 87 ) 24 ( 63 ) 2,973 ( 917 ) 2,056 Total 88,045 ( 32,228 ) 55,817 82,114 ( 25,332 ) 56,782 Unrealized gains and losses on derivatives (cash flow hedges): Net unrealized (losses) gains arising during the period ( 214 ) 61 ( 153 ) 1,159 ( 349 ) 810 Reclassification adjustment for (gains) included in net income ( 6,285 ) 1,780 ( 4,505 ) ( 11,414 ) 3,434 ( 7,980 ) Total ( 6,499 ) 1,841 ( 4,658 ) ( 10,255 ) 3,085 ( 7,170 ) Amortization related to post-retirement obligations ( 4,251 ) 1,204 ( 3,047 ) ( 2,212 ) 666 ( 1,546 ) Total other comprehensive income (loss) $ 77,295 ( 29,183 ) 48,112 69,647 ( 21,581 ) 48,066 37 The following tables present the changes in the components of accumulated other comprehensive income (loss), net of tax, for the three and nine months ended September 30, 2025 and 2024 (in thousands): Changes in Accumulated Other Comprehensive Income (Loss) by Component, net of tax for the three months ended September 30, 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 June 30, $ ( 108,692 ) 5,488 ( 566 ) ( 103,770 ) ( 150,829 ) 2,753 8,112 ( 139,964 ) Current - period other comprehensive income (loss) 19,948 ( 2,388 ) ( 1,033 ) 16,527 53,122 ( 362 ) ( 5,845 ) 46,915 Balance as of September 30, $ ( 88,744 ) 3,100 ( 1,599 ) ( 87,243 ) ( 97,707 ) 2,391 2,267 ( 93,049 ) Changes in Accumulated Other Comprehensive Income (Loss) by Component, net of tax for the nine months ended September 30, 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) 55,817 ( 3,047 ) ( 4,658 ) 48,112 56,782 ( 1,546 ) ( 7,170 ) 48,066 Balance as of September 30, $ ( 88,744 ) 3,100 ( 1,599 ) ( 87,243 ) ( 97,707 ) 2,391 2,267 ( 93,049 ) 38 The following tables summarize the reclassifications from accumulated other comprehensive (loss) to the consolidated statements of income for the three and nine months ended September 30, 2025 and 2024 (in thousands): Reclassifications From Accumulated Other Comprehensive Income ("AOCI") Amount reclassified from AOCI for the three months ended September 30, 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 $ — — Net gain (loss) on securities transactions — — Income tax expense $ — — Net of tax Cash flow hedges: Realized net gains (losses) on derivatives $ 2,056 ( 3,504 ) Interest expense ( 582 ) 1,054 Income tax expense $ 1,474 ( 2,450 ) Post-retirement obligations: Amortization of actuarial gains $ ( 459 ) ( 518 ) Compensation and employee benefits (1) 130 156 Income tax expense $ ( 329 ) ( 362 ) Net of tax Total reclassifications $ 1,145 ( 2,812 ) Net of tax Reclassifications From Accumulated Other Comprehensive Income Amount reclassified from AOCI for the nine months ended September 30, Affected line item in the Consolidated Statement of Income 2025 2024 Details of AOCI: Available for sale debt securities: Realized net gains (losses) on the sale of securities available for sale $ 87 ( 2,973 ) Net gain (loss) on securities transactions ( 24 ) 917 Income tax expense $ 63 ( 2,056 ) Net of tax Cash flow hedges: Realized net gains (losses) on derivatives $ 6,285 ( 11,414 ) Interest expense ( 1,780 ) 3,434 Income tax expense $ 4,505 ( 7,980 ) Post-retirement obligations: Amortization of actuarial gains $ ( 1,377 ) ( 2,212 ) Compensation and employee benefits (1) 390 666 Income tax expense $ ( 987 ) ( 1,546 ) Net of tax Total reclassifications $ 3,581 ( 11,582 ) 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. 39 40 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 September 30, 2025 and December 31, 2024, the Company had 454 and 482 loan related interest rate swaps with aggregate notional amounts of $ 4.27 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 September 30, 2025, it was not required to post collateral against the potential risk of default by the borrower under these agreements. For September 30, 2025 and December 31, 2024, the Company had 10 and 9 credit derivatives, respectively, with aggregate notional amounts of $ 132.7 million and $ 79.2 million, respectively, from participations in interest rate swaps as part of these loan participation arrangements. As of September 30, 2025 and December 31, 2024, the asset and liability positions of these fair value credit derivatives were insignificant. 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 its 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 and nine months ended September 30, 2025 and 2024, such derivatives were used to hedge the variable cash outflows associated with FHLBNY borrowings and brokered demand deposits. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s borrowings or demand deposits. During the next twelve months, the Company estimates that $ 147,000 will be reclassified as an increase to interest expense. As of September 30, 2025, the Company had 8 outstanding interest rate derivatives with an aggregate notional amount of $ 600.0 million that were each designated as a cash flow hedge of interest rate risk, compared to six outstanding interest rate derivatives with an aggregate notional amount of $ 300.0 million, as of December 31, 2024. The Company is a party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by or received from the counterparty with net liability or asset positions, respectively, in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the swap or repurchase agreement should the Company be in default. The total amount of collateral held or pledged cannot exceed the net derivative fair values with the counterparty. 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 September 30, 2025 and December 31, 2024 (in thousands). 41 Fair Values of Derivative Instruments as of September 30, 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 $ 2,133,707 Other assets $ 111,850 $ 2,133,707 Other liabilities $ 112,076 Credit contracts 33,456 Other assets 11 99,228 Other liabilities — Total derivatives not designated as a hedging instrument 111,861 112,076 Derivatives designated as a hedging instrument: Interest rate products 175,000 Other assets 354 425,000 Other liabilities 2,225 Total gross derivative amounts recognized on the balance sheet 112,215 114,301 Netting Adjustments 103 2,525 Gross amounts offset on the balance sheet — — Net derivative amounts presented on the balance sheet $ 112,112 $ 111,776 Gross amounts not offset on the balance sheet: Financial instruments - institutional counterparties $ 8,342 $ 8,342 Cash collateral - institutional counterparties 96,563 — Net derivatives not offset $ 7,207 $ 103,434 42 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 September 30, 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 and nine months ended September 30, 2025 and 2024 (in thousands). Gain (loss) recognized in income on derivatives for the three months ended Consolidated Statements of Income September 30, 2025 September 30, 2024 Derivatives not designated as a hedging instrument: Interest rate products Other income $ 32 115 Credit contracts Other (loss) income ( 3 ) 50 Total $ 29 165 Derivatives designated as a hedging instrument: Interest rate products Interest benefit $ ( 2,056 ) ( 3,504 ) Total $ ( 2,056 ) ( 3,504 ) 43 Gain (loss) recognized in income on derivatives for the nine months ended Consolidated Statements of Income September 30, 2025 September 30, 2024 Derivatives not designated as a hedging instrument: Interest rate products Other (loss) income $ ( 78 ) 232 Credit contracts Other (loss) income ( 122 ) 41 Total $ ( 200 ) 273 Derivatives designated as a hedging instrument: Interest rate products Interest benefit $ ( 6,285 ) ( 11,414 ) Total $ ( 6,285 ) ( 11,414 ) 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 September 30, 2025, the Company had six dealer counterparties, of which, the Company was in a net asset position with respect to five of its counterparties . 44 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 both the three and nine months ended September 30, 2025, the out-of-scope revenue related to financial instruments was 92.2 % and 92.1 % of the Company's total revenue, compared to 92.3 % and 91.3 % for the three and nine months ended September 30, 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 and nine months ended September 30, 2025 and 2024 (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Non-interest income In-scope of Topic 606: Wealth management fees $ 7,349 7,620 21,625 22,878 Insurance agency income 3,852 3,631 14,445 12,912 Banking service charges and other fees: Service charges on deposit accounts 5,366 5,089 15,325 12,612 Debit card and ATM fees 1,159 1,510 3,719 3,371 Total banking service charges and other fees 6,525 6,599 19,044 15,983 Total in-scope non-interest income 17,726 17,850 55,114 51,773 Total out-of-scope non-interest income 9,693 9,005 26,410 18,164 Total non-interest income $ 27,419 26,855 81,524 69,937 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-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 45 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. 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 September 30, 2025 and December 31, 2024 (in thousands): Classification September 30, 2025 December 31, 2024 Lease Right-of-Use Assets: Operating lease right-of-use assets Other assets $ 54,976 62,258 Lease Liabilities: Operating lease liabilities Other liabilities $ 57,849 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 September 30, 2025, the weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases were 6.9 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 September 30, 2025 Three months ended September 30, 2024 Lease Costs Operating lease cost $ 3,353 3,141 Variable lease cost 1,117 778 Total lease cost $ 4,470 3,919 Nine months ended September 30, 2025 Nine months ended September 30, 2024 Lease Costs Operating lease cost $ 10,367 9,539 Variable lease cost 3,158 2,269 Total lease cost $ 13,525 11,808 Cash paid for amounts included in the measurement of lease liabilities: Nine months ended September 30, 2025 Nine months ended September 30, 2024 Operating cash flows from operating leases $ 10,175 9,341 46 Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2025, were as follows (in thousands): Operating leases Twelve months ended: Remainder of 2025 $ 3,297 2026 12,046 2027 10,514 2028 8,985 2029 7,673 Thereafter 22,279 Total future minimum lease payments 64,794 Amounts representing interest 6,945 Present value of net future minimum lease payments $ 57,849 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 Company's Chief Operating Decision Maker ("CODM") is the President and Chief Executive Officer. The CODM 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 and nine months ended September 30, 2025 and 2024 (in thousands): 47 Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Interest income on loans $ 290,042 291,987 $ 845,183 663,267 Interest income on cash and debt securities 36,239 30,535 102,752 70,925 Total interest income 326,281 322,522 947,935 734,192 Total interest expense 131,949 138,821 384,781 315,315 Net interest income 194,332 183,701 563,154 418,877 Provision for credit losses 7,044 9,299 4,794 78,684 Net interest income after provision 187,288 174,402 558,360 340,193 Non-interest income: Wealth management income 7,349 7,620 21,625 22,878 Insurance Agency Income 3,852 3,631 14,445 12,912 Other non-interest income (1) 16,218 15,604 45,454 34,147 Total non-interest income 27,419 26,855 81,524 69,937 Non-interest expense: Compensation and employee benefits 63,202 63,468 188,817 158,404 Net occupancy expense 12,773 12,790 39,711 32,452 Data processing expense 9,102 10,481 28,305 25,698 Other non-interest expense (2) 28,015 49,263 87,140 106,670 Total non-interest expense 113,092 136,002 343,973 323,224 Income tax expense 29,895 18,850 88,182 19,905 Net income $ 71,720 46,405 $ 207,729 67,001 (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 any additional 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.