What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-02-28 · 140 added, 163 removed, 1148 unchanged (21% of the section changed)

17 unchanged sentences

Measurement-period adjustments are calculated as if they were known at the acquisition date, but are recognized in the reporting period in which they are determined.

Prior period information is not revised, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date.

Prior period information is not revised, including the effect on earnings of

any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date.

In accordance with ASC 805, the Company recorded a measurement period adjustment and decreased goodwill by $10.5 million to $180.4 million, related to finalizing the valuation.

1 unchanged sentence

During 2025, the Company paid cash dividends totaling $125.9 million and repurchased 158,293 shares of its common stock at an average cost of $18.07 per share, which totaled $2.9 million, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation.

As of December 31, 2024, 3.1 million shares remained eligible for repurchase under the board-approved stock repurchase program.

As of December 31, 2025, approximately 814,000 shares remained eligible for repurchase under the board-approved stock repurchase program.

On January 26, 2026, the Company’s Board of Directors authorized the Company’s tenth stock repurchase program to commence upon completion of the existing authorization.

Under the new authorization, the Company may repurchase an additional 2.0 million shares of common stock currently outstanding.

The Company and the Bank were “well capitalized” as of December 31, 2025 under current regulatory standards.

17 unchanged sentences

As of December 31, 2025, non-performing assets were $80.4 million or 0.32% of total assets, compared to $81.5 million or 0.34% of total assets as of December 31, 2024.

The Bank continues to focus on conservative underwriting criteria and on active and timely collection efforts.

The Bank continues to focus on conservative underwriting criteria, pro-active monitoring and on active and timely collection efforts.

Emphasis on Relationship Banking and Core Deposits.

4 unchanged sentences

The Bank’s focus on transaction accounts and expanded products and services has enabled it to generate significant non-interest income.

In addition to traditional depository and lending fees, the Bank generates non-interest

income from investment, insurance, wealth and asset management services it offers to generate non-interest income.

In addition to traditional depository and lending fees, the Bank generates non-interest income from investment, insurance, wealth and asset management services it offers.

Total non-interest income was $109.8 million for the year ended December 31, 2025, compared with $94.1 million for the year ended December 31, 2024, of which wealth management income, fee income and insurance agency income were $29.3 million, $42.8 million and $18.3 million, respectively, for the year ended December 31, 2025, compared with $30.5 million, $34.1 million and $16.2 million, respectively, for the year ended December 31, 2024.

17 unchanged sentences

According to the U.S.

Bureau of Labor Statistics, the preliminary unemployment rate in New Jersey was 4.6% as of December 31, 2024, a decrease from 4.8% as of December 31, 2023.

Bureau of Labor Statistics, the preliminary unemployment rate in New Jersey was 5.4% as of December 31, 2025, an increase from 4.6% as of December 31, 2024.

The preliminary unemployment rate in Pennsylvania was 4.2% as of December 31, 2025, an increase from 3.6% as of December 31, 2024.

The preliminary unemployment rate in New York was 4.4% as of December 31, 2024, a decrease from 4.6% as of December 31, 2023.

The preliminary unemployment rate in New York was 4.6% as of December 31, 2025, an increase from 4.4% as of December 31, 2024.

Within its primary market areas in New Jersey, Pennsylvania and New York, the Bank had an approximate 4.70%, 0.71% and 0.28% share of bank deposits as of June 30, 2025, respectively, the latest date for which statistics are available.

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The Bank originates commercial real estate loans that are secured by income-producing properties such as multi-family apartment buildings, industrial and retail properties and office buildings.

Generally, these loans have maturities of either 5 or 10 years.

Generally, these loans have maturities ranging from 5 t 10 years.

The Bank has historically provided construction loans for commercial projects, including residential rental and industrial projects, that will be retained as investments by the borrowers and to a lesser extent single family and condominium projects intended for sale.

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Most commercial lines of credit are made on a floating interest rate basis and most term loans are made on a fixed interest rate basis, usually with terms of five years or less.

Provident also has an asset-based lending department which specializes in utilizing particular assets to fund the working capital needs of borrowers.

Additionally, the Bank provides warehouse lines of credit used by mortgage bankers to originate one-to-four family residential mortgage loans that are pre-sold into the secondary mortgage market, which includes state and national banks, national mortgage banking firms, insurance companies and government-sponsored enterprises, including the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and others.

Residential mortgage loans are primarily underwritten to standards that allow the sale of the loans to the secondary markets, primarily to the Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”).

The Bank also has an asset-based lending department which specializes in utilizing particular assets to fund the working capital needs of borrowers.

Residential mortgage loans are primarily underwritten to standards that allow the sale of the loans to the secondary markets, primarily to Freddie Mac.

To manage interest rate risk, the Bank has the option to sell fixed-rate residential mortgages that it originates with terms greater than 15 years.

27 unchanged sentences

Greater than Fifteen Years

Purchase Accounting Adjustments ("PAA") Total

Purchase Accounting Adjustments Total

(In thousands)

21 unchanged sentences

Commercial Real Estate Loans.

The Bank originates loans secured by mortgages on various commercial income producing properties, including industrial and retail properties and office buildings.

The Bank originates loans secured by mortgages on various commercial income producing properties, including industrial, multi-family and retail properties.

Commercial real estate loans were 38.3% of the total loan portfolio as of December 31, 2025.

A substantial majority of the Bank’s commercial real estate loans are secured by properties located in New Jersey, New York and Pennsylvania.

The Bank originates commercial real estate loans with adjustable rates and with fixed interest rates for a period that is generally five to ten years or less, which may adjust after the initial period.

The Bank originates commercial real estate loans with adjustable rates and with fixed interest rates for a period ranging from five to ten years or less, which may adjust after the initial period.

Typically these loans are written for maturities of ten years or less and generally have an amortization schedule of 25 or 30 years.

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The Bank also employs an independent review appraiser to ensure that the appraisal meets the Bank’s standards.

Financial statements are also required annually for review.

Financial statements and tenant rental rolls are also required annually for review.

The Bank’s policy also requires that a property inspection of commercial mortgages over $2.5 million be completed at least every 18 months, or more frequently when warranted.

The Bank’s largest commercial mortgage loan as of December 31, 2024 was a $42.2 million loan secured by a first leasehold mortgage lien on a retail property totaling 96 thousand square feet located in New York, New York.

The property is 100% leased to four retail tenants, two of which are considered investment grade and occupy 61% of the leasable space.

The LTV is 58% and is personally guaranteed by three very strong owners.

The loan has a risk rating of “3” or of “average quality” and was performing in accordance with its terms and conditions as of December 31, 2024.

(For the Bank’s largest group borrower exposure —see discussion on “Loans to One Borrower”).

The Bank’s largest commercial mortgage loan as of December 31, 2025 was a $72.5 million real estate secured Line of Credit with a balance of $70.7 million at 12/31/25 and availability of $1.8 million, which is available to add additional properties to the portfolio.

The Line of Credit is secured by a portfolio of 29 single tenant properties totaling 593,351 square feet, comprised of Medical Office, Retail, and Industrial properties throughout 16 states.

The LTV is 65.07% and the portfolio produces amortizing and interest only DSCRs of 1.43x and 1.77x respectively and Debt Yield of 11.80%.

The sponsors have 35

years’ experience in various components of commercial real estate.

The loan has a risk rating of “3” or of “average quality” and was performing in accordance with the loan’s terms and conditions as of December 31, 2025.

Multi-family Loans.

3 unchanged sentences

The underwriting standards and procedures that are used to underwrite commercial real estate loans are used to underwrite multi-family loans, except the loan-to-value ratio generally should not exceed 80% of the appraised value of the property, the debt-service coverage should be a minimum of 1.15 times and an amortization period of up to 30 years may be used.

The Bank’s largest multi-family loan as of December 31, 2024 was a $56.2 million loan secured by a first mortgage lien on a five-story apartment building totaling 275 units plus parking and amenity space, located in Willow Grove, Pennsylvania.

The Bank’s largest multi-family loan as of December 31, 2025 was a $55.2 million loan secured by a first lien mortgage on a five-story apartment building totaling 275 units plus parking and amenity space, located in Willow Grove, Pennsylvania.

The project sponsor has over 35 years of investment and management experience in multi-family real estate in the Northeastern USA.

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The total loan amount is $90.0 million, 50% of which is co-led with another bank.

This loan closed in 2024 with construction completion expected in mid-2026 and lease-up through 2027.

This loan closed in 2024, and the project is 67.2% complete as of December 31, 2025, with a projected completion date of August 2026 and stabilization by the end of 2027.

The project sponsor has over 35 years of multi-family development, investment and management experience in New Jersey and Pennsylvania and is located in New Jersey.

4 unchanged sentences

The Bank originates both fixed-rate and adjustable-rate mortgages.

As of December 31, 2024, $2.01 billion or 10.9% of the total loan portfolio consisted of

residential real estate loans.

As of December 31, 2025, $1.97 billion or 10.2% of the total loan portfolio consisted of residential real estate loans.

Of the one- to four-family loans at that date, 77.8% were fixed-rate and 22.2% were adjustable-rate loans.

34 unchanged sentences

As a result, the availability of funds for the repayment of commercial loans may be substantially dependent on the success of the business itself and the general economic environment.

The Bank’s largest commercial loan commitment as of December 31, 2024 was a $67.5 million fully amortizing term loan to a large New Jersey-based specialty pharmaceutical company.

The loan to this long-standing client, which was originated in late 2024, has a seven-year term and is secured by substantially all the assets of the company.

This loan in conjunction with new subordinated debt and cash-on-hand was used to refinance higher cost 3rd party debt and is classified as a

highly leveraged transaction (HLT) per Bank Policy.

It is expected that this borrower will de-leverage rapidly over the next 2 years.

The loan has a risk rating of “4” or of “acceptable quality”.

(For the Bank’s largest group borrower exposure —see discussion on “Loans to One Borrower”).

The Bank also has a dedicated asset-based lending group (ABL Group) as part of the Lakeland merger which is staffed by highly experienced ABL lenders.

The Bank’s largest commercial loan commitment as of December 31, 2025 was $100 million “Draw Period” to fully amortizing term loan to a large New Jersey-based retail automotive leasing company, to finance new consumer automotive leases originated by the Borrower.

The client company's President and CEO has 46 years of experience in consumer automotive leasing.

The loan originated in mid-2025, has up to a 54-month term and is collateralized by an undivided special unit of beneficial interest (“SUBI” or auto lease securitization) in a Titling Trust established by Borrower and assigned to the Bank that holds all leases funded under the Facility.

The loan had an outstanding balance of $94.5 million as of December 31, 2025.

The loan has a risk rating of “4” or of “acceptable quality” and was performing in accordance with its terms and conditions as of December 31, 2025.

The Bank also has a dedicated asset-based lending group (ABL Group) added as part of the Lakeland merger which is staffed by highly experienced ABL lenders.

The ABL Group had loan commitments totaling $261.7 million with loans outstanding of $177.1 million as of December 31, 2025.

47 unchanged sentences

Net increase (decrease) $ 696,948 $ 7,948,122 $ 624,818

(1) Other items include loans transferred to held for sale, accretion of purchase accounting marks, charge-offs, deferred fees and expenses, discounts and premiums.

(1) Other items include loans sold from the loans held for sale portfolio, accretion of purchase accounting marks, charge-offs, deferred fees and expenses, discounts and premiums.

Loan Approval Procedures and Authority.

1 unchanged sentence

The Lending Policy sets the Bank’s lending authority for each type of loan.

The Bank’s lending officers are assigned dollar authority limits based upon their experience and expertise.

All commercial loan approvals require dual signature authority.

Approval authorities are assigned to managers, senior officers, and executives in lending and credit based on title/position, commensurate with requisite experience and expertise.

Commercial loan approvals (excluding small business loans less than $1 million) require both lending and credit signing under dual authority, or Credit Committee approval if exposure is above individual signing authority.

The largest individual lending authority is $20.0 million for commercial business loans and $30.0 million for commercial real estate loans, which is only available to the Chief Lending Officer and the Chief Credit Officer.

Loans in excess of these limits, or which when combined with existing credits of the borrower or related borrowers exceed these limits, are presented to the management Credit Committee for approval.

The Credit Committee currently consists of ten senior officers including the Chief Executive Officer, the Chief Lending Officer, the Chief Financial Officer, the Chief Credit Officer (Chair), the Senior Credit Officer, the Director of Credit Risk Management and the Director of Commercial Underwriting.

The Credit Committee currently consists of ten senior officers including the Chief Executive Officer, the Chief Lending Officer, the Chief Financial Officer, the Chief Credit Officer (Chair) and the Group Credit and Lending Heads of Commercial Real Estate, Commercial Lending, and Middle Market and Specialty Lending.

While the Bank discourages loan policy exceptions, based upon reasonable business considerations, exceptions to the policy may be warranted.

2 unchanged sentences

All other policy exceptions must be approved by the Credit Committee.

The Credit Administration Department reports the type and frequency of loan policy exceptions to the Risk Committee of the board of directors on a quarterly basis, or more frequently if necessary.

The Credit Administration Department reports the type and frequency of loan policy exceptions to the board of directors on a quarterly basis, or more frequently if warranted.

The Bank has adopted a risk rating system as part of the credit risk assessment of its loan portfolio.

The Bank’s commercial real estate and commercial lending officers are required to maintain an appropriate risk rating for each loan in their portfolio.

The Bank’s commercial real estate and commercial lending officers are required to maintain an appropriate risk rating for each loan in their

When the lender learns of important financial developments, the risk rating is reviewed accordingly.

Risk ratings are

subject to review by the Credit Department during the underwriting, lending review and loan review processes.

Loan review examinations are performed by an independent third party which validates the risk ratings on a sample basis.

Risk ratings are subject to review by the Credit Department during the underwriting, lending review and loan review processes.

Loan review examinations are performed by a third party which validates the risk ratings on a sample basis.

In addition, a risk rating can be adjusted at the weekly Credit Committee meeting and quarterly at management’s Credit Risk Management Committee, which meets to review loans rated a “Pass/Watch” ("5") or worse.

The Bank requires an annual review be performed for commercial and commercial real estate loans above certain dollar thresholds, depending on loan type, to help determine the appropriate risk ratings.

The risk ratings play an important role in the establishment of the loan loss provision and to confirm the adequacy of the allowance for credit losses.

Loans to One Borrower.

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As of December 31, 2025, the Bank’s largest group exposure with an individual borrower and its related entities was $193.2 million.

This group exposure consisted of three multi-family commercial real estate loans totaling $107.0 million, secured by three properties in New Jersey and Pennsylvania, three industrial construction loans totaling $71.7 million, secured by three properties in Pennsylvania and Delaware, an office secured commercial real estate loan totaling $3.8 million located in Pennsylvania, two industrial secured commercial real estate loans totaling $3.0 million located in Pennsylvania, an unsecured line of credit totaling $10.4 million, swap exposure totaling $7.9 million on two multi-family loans, letter of credit exposure totaling $2.1 million, and ACH exposure totaling $0.2 million.

This group exposure consisted of three multi-family commercial real estate loans totaling $105.6 million, secured by three properties in New Jersey and Pennsylvania, two industrial construction loans totaling $58.1 million, secured by two properties in Pennsylvania and Delaware, an office secured commercial real estate loan totaling $3.3 million located in Pennsylvania, an industrial secured commercial real estate loan totaling $2.5 million located in Pennsylvania, a medical office secured commercial real estate loan totaling $3.9 million located in Pennsylvania, an unsecured line of credit totaling $10.4 million, swap exposure totaling $7.9 million on two multi-family loans, letter of credit exposure totaling $1.3 million, and Automated Clearing House exposure totaling $0.25 million.

The loans have an average risk rating of “4 – Acceptable Quality”.

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“Substandard” assets include those characterized by the “distinct possibility” that the Bank will sustain “some loss” if the deficiencies are not corrected.

Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

Assets which do not

currently expose the Bank to sufficient risk to warrant classification in one of the aforementioned categories, but possess potential weaknesses, are designated “special mention.” When the Bank classifies one or more assets, or portions thereof, as “loss,” the Bank is required either to establish a specific allowance for losses equal to 100% of the amount of the asset so classified or to charge-off such amount.

Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that

the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

Assets which do not currently expose the Bank to sufficient risk to warrant classification in one of the aforementioned categories, but possess potential weaknesses, are designated “special mention.” When the Bank classifies one or more assets, or portions thereof, as “loss,” the Bank is required either to establish a specific allowance for losses equal to 100% of the amount of the asset so classified or to charge-off such amount.

Management performs a quarterly evaluation of the adequacy of the allowance for credit losses.

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Management estimates the quantitative component by segmenting the loan portfolio and employing a discounted cash flow ("DCF") model framework to estimate the allowance for credit losses on the loan portfolio.

The CECL estimate incorporates life-of-loan aspects through this DCF approach.

The current expected credit loss ("CECL") estimate incorporates life-of-loan aspects through this DCF approach.

For each segment, this approach compares each loan’s amortized cost to the present value of its contractual cash flows adjusted for projected credit losses, prepayments and curtailments to determine the appropriate reserve for that loan.

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The reserves resulting from the application of both of these sets of loss factors are combined to arrive at the allowance for credit losses on loans collectively evaluated for impairment.

Management's determination as to the classification of assets and the amount of the valuation allowances is subject to review by the Federal Deposit Insurance Corporation ("FDIC") and the New Jersey Department of Banking and Insurance, each of which can require the establishment of additional general or specific loss allowances.

Management's determination as to the classification of assets and the amount of the valuation allowances is subject to review by the Federal Deposit Insurance Corporation ("FDIC") and the New Jersey Department of Banking and Insurance ("NJDOBI"), each of which can require the establishment of additional general or specific loss allowances.

The FDIC, in conjunction with the other federal banking agencies, issued an interagency policy statement on the allowance for credit losses.

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The following table sets forth delinquencies in the loan portfolio as of the dates indicated.

As of December 31, 2024

As of December 31, 2023

As of December 31, 2025 As of December 31, 2024

As of December 31, 2023

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Non-performing commercial mortgage loans consisted of 11 loans as of December 31, 2025.

Of these 17 loans, nine loans totaling $5.9 million were PCD loans.

The largest non-performing commercial mortgage loan was a $7.3 million loan secured by a first mortgage on a retail shopping center located in Atlantic City, New Jersey.

Non-performing commercial loans decreased $17.2 million, to $24.2 million as of December 31, 2024, from $41.5 million as of December 31, 2023.

Of these 11 loans, 5 loans totaling $1.2 million were PCD loans.

The largest non-performing commercial mortgage loan was a $20.3 million loan secured by a first mortgage on a retail/office property in Manhattan, New York.

Non-performing commercial loans increased $9.0 million, to $33.2 million as of December 31, 2025, from $24.2 million as of December 31, 2024.

Non-performing commercial loans as of December 31, 2025 consisted of 41 loans, of which 14 loans were under 90 days past-due.

Of these non-performing commercial loans, 6 were PCD loans totaling $8.1 million.

The largest non-performing commercial loan relationship consisted of three loans with aggregate outstanding balances of $4.1 million as of December 31, 2024.

These loans are secured by all business assets.

Non-performing construction loans increased $12.5 million to $13.2 million as of December 31, 2024, from $771,000 as of December 31, 2023.

Non-performing construction loans as of December 31, 2024 consisted of two loans, of which one was

There were two non-performing construction loans in 2023.

The largest non-performing construction loan was a $12.3 million loan residential development project in Jackson, New Jersey secured by a first mortgage on the land and completed and to-be completed housing units.

Non-performing multi-family mortgage loans consisted of six loans totaling $7.5 million as of December 31, 2024, compared to one non-performing multi-family mortgage loan totaling $744,000 as of December 31, 2023.

Of these six loans, four loans totaling $2.1 million were PCD loans.

The largest non-performing multi-family mortgage loan was a $3.7 million loan secured by a first mortgage on residential condominium units in Brooklyn, New York.

The largest non-performing commercial loan relationship consisted of five loans with aggregate outstanding balances of $10.4 million as of December 31, 2025.

These loans are secured by commercial real estate.

Non-performing construction loans decreased $8.1 million to $5.2 million as of December 31, 2025, from $13.2 million as of December 31, 2024.

Non-performing construction loans as of December 31, 2025 consisted of one loan, of which was a

This non-performing construction loan was a $5.2 million loan on a residential development project in Jackson, New Jersey secured by a first mortgage on the land and completed and to-be-completed housing units.

Non-performing multi-family mortgage loans consisted of three loans totaling $2.3 million as of December 31, 2025, compared to six non-performing multi-family mortgage loan totaling $7.5 million as of December 31, 2024.

Of these three loans, one loan totaling $424,000 was a PCD loan.

The largest non-performing multi-family mortgage loan was a $1.0 million loan secured by a first mortgage on a 6-unit apartment building in Queens, New York.

As of December 31, 2025, the Company held $2.0 million of foreclosed assets, compared with $9.5 million as of December 31, 2024.

Foreclosed assets as of December 31, 2025 are carried at fair value based on recent appraisals and valuation estimates, less estimated selling costs.

During the year ended December 31, 2024, there were four properties sold with an aggregate carrying value of $861,000 and one write-down of a foreclosed commercial property of $1.3 million.

Foreclosed assets at December 31, 2024 consisted primarily of commercial real estate.

During the year ended December 31, 2025, there was a write-down of one foreclosed commercial property of $2.7 million based on a contracted sales price.

The sale of this property closed in the second quarter of 2025, which reduced foreclosed assets by an additional $5.8 million.

During 2025, there was one addition to foreclosed assets with an aggregate carrying value of $1.0 million.

Foreclosed assets at December 31, 2025 consisted of commercial real estate.

Non-performing assets totaled $80.4 million, or 0.32% of total assets as of December 31, 2025, compared to $81.5 million, or 0.34% of total assets as of December 31, 2024.

2 unchanged sentences

Allowance for Credit Losses.

On January 1, 2020, the Company adopted ASU 2016-13, "Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with the CECL methodology.

It also applies to off-balance sheet credit exposures, including loan commitments and lines of credit.

The adoption of the new standard resulted in the Company recording a $7.9 million increase to the allowance for credit losses and a $3.2 million liability for off-balance sheet credit exposures.

The adoption of the standard did not result in a change to the Company's results of operations upon adoption as it was recorded as an $8.3 million cumulative effect adjustment, net of income taxes, to retained earnings.

The allowance for credit losses is a valuation account that reflects management’s evaluation of the current expected credit losses in the loan portfolio.

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Historical credit loss experience for both the Company and peers provides the basis for the estimation of expected credit losses, where observed credit losses are converted to probability of default rate (“PDR”) curves through the use of segment-specific loss given default (“LGD”) risk factors that convert default rates to loss severity based on industry-level, observed relationships between the two variables for each segment, primarily due to the nature of the underlying collateral.

These risk factors were assessed for reasonableness against the Company’s own loss experience and adjusted in certain cases when the relationship between the Company’s historical default and loss severity deviate from that of the wider industry.

The historical PDR curves, together with corresponding economic conditions, establish a quantitative relationship between economic conditions and loan performance through an economic cycle.

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management has a reasonable expectation that a modification will be executed with an individual borrower;

or when an extension or renewal option is included in the original contract and is not unconditionally cancellable by

or when an extension or renewal option is included in the original contract and is not unconditionally cancellable by the Company.

Management will assess the likelihood of the option being exercised by the borrower and appropriately extend the maturity for modeling purposes.

The Company considers qualitative adjustments to credit loss estimates for information not already captured in the quantitative component of the loss estimation process.

Qualitative factors are based on portfolio concentration levels, model imprecision, changes in industry conditions, changes in the Company’s loan review process, changes in the Company’s loan policies and procedures, and economic forecast uncertainty.

Qualitative factors are based on portfolio concentration levels, model

imprecision, changes in industry conditions, changes in the Company’s loan review process, changes in the Company’s loan policies and procedures, and economic forecast uncertainty.

One of the most significant judgments involved in estimating the Company’s allowance for credit losses on loans relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period.

As of December 31, 2025, the model incorporated Moody’s baseline economic forecast, as adjusted for qualitative factors, as well as an extensive review of classified loans and loans that were classified as impaired with a specific reserve assigned to those loans.

The allowance estimation process resulted in a total provision of $83.6 million for the year ended December 31, 2024, and an overall coverage ratio of 104 basis points.

Of the $83.6 million provision for the year, $60.1 million was recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations.

The allowance estimation process resulted in a total provision on loans of $4.1 million for the year ended December 31, 2025, and an overall coverage ratio of 95 basis points.

Management believes the allowance for credit losses accurately represents the estimated inherent losses, factoring in the qualitative adjustment and other assumptions, including the selection of the baseline forecast within the model.

If the Company used a more severe outlook, the provision would have risen by approximately $16.0 million, leading to an overall coverage ratio of approximately 112 basis points.

Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses.

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• Mortgage Loans – Residential, Commercial Real Estate, Multi-Family and Construction

• Commercial Loans – Commercial Owner Occupied and Commercial Non-Owner Occupied

• Commercial Loans – Commercial Owner-Occupied and Commercial Non-Real Estate Secured

• Consumer Loans – First Lien Home Equity and Other Consumer

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The CECL 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.

Although management believes that the Company has established and maintained the allowance for credit losses at appropriate

levels, additions may be necessary if future economic and other conditions differ substantially from the current operating environment and economic forecast.

Although management believes that the Company has established and maintained the allowance for credit losses at appropriate levels, additions may be necessary if future economic and other conditions differ substantially from the current operating environment and economic forecast.

Management evaluates its estimates and assumptions on an ongoing basis giving consideration to forecasted economic factors, historical loss experience and other factors.

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Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods, and to the extent actual losses are higher than management estimates, additional provision for credit losses on loans could be required and could adversely affect our earnings or financial position in future periods.

In addition, various regulatory agencies periodically review the adequacy of the Company’s allowance for credit losses as an integral part of their examination process.

addition, various regulatory agencies periodically review the adequacy of the Company’s allowance for credit losses as an integral part of their examination process.

Such agencies may require the Company to recognize additions to the allowance or additional write-downs based on their judgments about information available to them at the time of their examination.

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Allowance for credit losses to non-performing loans 235.61 % 268.43 % 215.96 % 150.44 % 168.11 %

(1) On January 1, 2020, the Company adopted ASU 2016-13, "Measurement of Credit Losses on Financial Instruments,” which replaced the incurred loss methodology with the CECL methodology.

The adoption of the new standard resulted in the Company recording a $7.9 million increase to the allowance for credit losses.

Additionally, in 2020, 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 in accordance with Accounting Standards Codification (“ASC”) 326-20.

This represents the portion of the loan balances that has been deemed uncollectible based on the Company’s expectations of future cash flows for each respective PCD loan pool, given the outlook and forecasts inclusive of the impact of the COVID-19 pandemic and related fiscal and regulatory interventions.

A $13.6 million allowance for credit losses was recorded on PCD loans.

(1) On January 1, 2023, the Company adopted ASU 2022-02, "Financial Instruments-Credit Losses (Topic 326):

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At the present time, there are no securities that are classified as held for trading.

On January 1, 2020, the Company adopted CECL which replaces the incurred loss methodology with an expected loss methodology.

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

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Held to Maturity Debt Securities:

U.S Treasury obligations $ — $ — $ — $ — $ 5,146 $ 5,147

FHLB-sponsored obligations 1,400 1,380 2,399 2,307 2,399 2,225

36 unchanged sentences

Available for Sale Debt Securities:

Treasury obligations $ 107,328 1.69 % $ 159,416 1.61 % $ — — % $ — — % $ 266,744 1.64 %

Asset-backed securities — — — — 1,445 5.16 40,316 4.97 41,761 4.98

Agency obligations — — 1,512 6.31 12,645 6.51 19,382 4.40 33,539 5.28

Corporate obligations — — 22,820 6.84 74,546 6.47 — — 97,366 6.65

State and municipal obligations 529 3.28 7,986 3.96 42,556 3.17 61,928 3.22 112,999 3.25

Mortgage-backed securities 5,540 3.00 104,439 2.49 109,480 2.36 2,392,888 3.92 2,612,347 3.80

Agency guaranteed obligations 59,614 5.34 898 7.15 22,296 7.34 24426 5.06 107,234 5.71

Corporate obligations — — 25,734 6.84 78,711 8.30 — — 104,445 7.94

Total available for sale debt securities (3)

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FHLBNY advances are available pursuant to several credit programs, each of which has its own interest rate and range of maturities.

The following table sets forth the maximum month-end balance and average balance of FHLBNY advances, FED BTFP borrowings and securities sold under agreements to repurchase for the periods indicated.

The following table sets forth the maximum month-end balance and average balance of FHLBNY advances, FRBNY Bank Term Funding Program ("BTFP") borrowings and securities sold under agreements to repurchase for the periods indicated.

Years Ended December 31,

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Securities sold under agreements to repurchase 117,946 117,323 99,669

FED BTFP Borrowing 550,000 450,000 —

FRBNY BTFP Borrowing — 550,000 450,000

Average Balance:

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Securities sold under agreements to repurchase 105,343 102,043 87,227

FED BTFP Borrowing 472,077 4,932 —

FRBNY BTFP Borrowing — 472,077 4,932

Weighted Average Interest Rate:

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Securities sold under agreements to repurchase 2.37 2.03 1.69

FED BTFP Borrowing 4.78 4.83 N/A

FRBNY BTFP Borrowing — 4.78 4.83

The following table sets forth certain information as to borrowings, excluding purchase accounting adjustments, at the dates indicated.

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Securities sold under repurchase agreements 95,007 113,224 72,161

FED BTFP Borrowing — 450,000 —

FRBNY BTFP Borrowing — — 450,000

Purchase accounting adjustment on borrowed funds — 3,714 36

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Weighted average interest rate of securities sold under agreements to repurchase 2.45 % 2.11 % 2.01 %

Weighted average interest rate of FED BTFP Borrowing N/A 4.83 % N/A

Weighted average interest rate of FRBNY BTFP Borrowing N/A N/A 4.83 %

Subordinated Debentures.

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On May 16, 2024, the Company assumed Lakeland’s obligations with respect to $150.0 million aggregate principal amount of fixed-to-floating rate subordinated notes due September 15, 2031.

The Notes bear interest at a rate of 2.875% until September

15, 2026, and will then reset quarterly to the then-current Benchmark rate, which is expected to be the three-month term SOFR plus a spread of 220 basis points.

The Notes bear interest at a rate of 2.875% until

September 15, 2026, and will then reset quarterly to the then-current Benchmark rate, which is expected to be the three-month term SOFR plus a spread of 220 basis points.

The debt is included in Tier 2 capital for the Company.

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WEALTH MANAGEMENT SERVICES

As part of the Company’s strategy to increase fee related income, the Bank’s wholly owned subsidiary, Beacon Trust Company, and its registered investment advisor subsidiary, Beacon Investment Advisory Services, Inc., (“Beacon”) are engaged in providing wealth management services.

As part of the Company’s strategy to increase fee related income, the Bank’s wholly owned subsidiary, Beacon Trust Company ("Beacon Trust"), and its registered investment advisor subsidiary, Beacon Investment Advisory Services, Inc.(“Beacon”), are engaged in providing wealth management services.

These services include investment management, trust and estate administration, financial planning and tax compliance and planning.

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INSURANCE AGENCY OPERATIONS

Provident Protection Plus, Inc., formerly SB One Insurance Agency, Inc., is a retail insurance broker operating in the State of New Jersey.

Provident Protection Plus, Inc.

is a retail insurance broker operating in the State of New Jersey.

The insurance agency’s primary source of revenue is commission income, which is earned by placing insurance coverage for its customers with various insurance underwriters.

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is a wholly owned subsidiary of Beacon Trust Company, incorporated under Delaware law and is a registered investment advisor.

Provident Protection Plus, Inc.

(formerly SB One Insurance Company, Inc.), a full service insurance agency offering both commercial and personal lines of insurance, is a wholly owned subsidiary of the Bank.

Provident Protection Plus, Inc., a full service insurance agency offering both commercial and personal lines of insurance, is a wholly owned subsidiary of the Bank.

Sussex Capital Trust II is a Delaware statutory business trust and a non-consolidated subsidiary of the Company.

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The Company provides several programs and benefits designed to enhance the employee experience.

In addition to our robust health and wellness benefits that include annual employer contributions to health savings accounts, we promote physical and emotional well-being through our Discover Wellness program.

Discover Wellness focuses on engagement and awareness-based programs, combining both educational seminars and physical activities to promote healthy behaviors.

In recognition of our on-going commitment to creating a healthier workplace for our employees, our Discover Wellness program was again recognized as a gold award winner in Aetna’s Workplace Well-being program.

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One way we accomplish this is through Company support of retirement preparation.

All employees are eligible for a cash 401(k) profit-sharing contribution, while employees hired prior to December 31, 2023 were eligible to participate in the Employee Stock Ownership Plan, which enables employees to accumulate PFS, Inc.

The profit-sharing and ESOP contributions are 100% funded by the Company.

In addition, to further assist employees with retirement planning, in 2025, we increased our 401(k) plan company match to 50% on the first 8% of eligible compensation deferred from 25% on the first 6% for 2024.

The Company also provides full-time employees with life insurance coverage at one times salary to provide financial security for their families.

We are committed to the on-going training and development of our employees, including multi-tiered leadership development, cultural competency, industry knowledge and skills enhancement and professional certification programs.

We believe pursuit of secondary education is a means for employees to build their financial futures.

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We offer our employees paid time off to assist in their chosen charitable and community-based endeavors.

Our employees also wear "Jeans for a Cause" contributing over $80,000 to local charities.

Our Company is committed to fostering an inspiring working environment that is free from harassment or discrimination of any kind.

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As a bank holding company controlling the Bank, the Company is subject to the Bank Holding Company Act of 1956 (“BHCA”), as amended, and the rules and regulations of the Federal Reserve Board under the BHCA.

The Company is also subject to the provisions of the New Jersey Banking Act of 1948 (the “New Jersey Banking Act”) and the accompanying regulations of the Commissioner of the New Jersey Department of Banking and Insurance (“Commissioner”) applicable to bank holding companies.

The Company is also subject to the provisions of the New Jersey Banking Act of 1948 (the “New Jersey Banking Act”) and the accompanying regulations of the Commissioner of the NJDOBI (“Commissioner”) applicable to bank holding companies.

The Company and the Bank are required to file reports with, and otherwise comply with, the rules and regulations of the Federal Reserve Board and the Commissioner.

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and (3) generally is subject to higher FDIC assessment rates.

Certain enhanced prudential standards are also now applicable such as additional risk management requirements, both from a framework and corporate governance perspective.

Certain enhanced prudential standards are also applicable such as additional risk management requirements, both from a framework and corporate governance perspective.

These and other supervisory and regulatory implications of crossing the $10 billion threshold have and will likely continue to result in increased regulatory costs.

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A savings bank may also exercise trust powers upon the approval of the Commissioner.

New Jersey savings banks may exercise those powers, rights, benefits or

privileges authorized for national banks or out-of-state banks or for federal or out-of-state savings banks or savings associations, provided that before exercising any such power, right, benefit or privilege, prior approval by the Commissioner by regulation or by specific authorization is required.

New Jersey savings banks may exercise those powers, rights, benefits or privileges authorized for national banks or out-of-state banks or for federal or out-of-state savings banks or savings

associations, provided that before exercising any such power, right, benefit or privilege, prior approval by the Commissioner by regulation or by specific authorization is required.

The exercise of these lending, investment and activity powers is limited by federal law and related regulations.

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Examination and Enforcement.

The New Jersey Department of Banking and Insurance may examine the Company and the Bank whenever it deems an examination advisable and it examines the Bank at least every two years.

NJDOBI may examine the Company and the Bank whenever it deems an examination advisable and it examines the Bank at least every two years.

The Commissioner may order any savings bank to discontinue any violation of law or unsafe or unsound business practice and may direct any director, officer, attorney or employee of a savings bank engaged in an objectionable activity, after the Commissioner has ordered the activity to be terminated, to show cause at a hearing before the Commissioner why such person should not be removed.

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In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors, but qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where deemed necessary.

consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

In addition to establishing the minimum regulatory capital requirements, federal regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

Through subsequent rulemaking, the federal banking agencies provided certain forms of relief to banking organizations that are not subject to the advanced approaches capital rule (i.e., banks with $250 billion or more in total assets or $10 billion or more in total foreign exposures).

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Notwithstanding these amendments, the federal banking agencies indicated through interagency guidance that the capital planning and risk management practices of institutions with total assets less than $100 billion would continue to be reviewed through the regular supervisory process.

As part of its risk management processes, the Bank routinely stress tests the

Bank’s capital under a variety of economic stress scenarios and manages its capital position accordingly.

As part of its risk management processes, the Bank routinely stress tests the Bank’s capital under a variety of economic stress scenarios and manages its capital position accordingly.

As a result of these amendments, the Bank and the Company currently are not subject to company-run stress testing requirements.

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Federal Home Loan Bank ("FHLB") System.

The Bank is a member of the FHLB system which consists of eleven regional FHLBs, each subject to supervision and regulation by the Federal Housing Finance Agency ("FHFA").

The Bank is a member of the FHLB system which consists of eleven regional FHLBs, each subject to supervision and regulation by the Federal Housing Finance Agency.

The FHLB provides a central credit facility primarily for member institutions.

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Under current FDIC rules, effective January 1, 2023, the assessment range (inclusive of possible adjustments) for institutions with greater than $10.0 billion of total assets is established at 2.5 to 42 basis points.

In addition, the FDIC approved

a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

In addition, the FDIC approved a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

As a result of this rule, the FDIC issued a special assessment of $775,000 for the year ended December 31, 2023.

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In March 2024, the FDIC issued an update to the special assessment estimate, increasing the estimated loss assessment by approximately 25%.

As a result of this update, the Bank accrued an additional $195,000 for the special assessment for the year ended December 31, 2024.

The FDIC has been collecting the special assessment at an annual rate of 13.4 basis points since the first quarterly assessment period of 2024, and the FDIC is anticipated to collect the special assessment for eight quarterly assessment periods.

The FDIC may end the collection early, extend the special assessment period beyond the anticipated eight-quarter collection period or impose a one-time final shortfall special assessment.

Any significant increases in insurance premiums could have an adverse effect on the Company’s operating expenses and results of operations.

The FDIC has been collecting the special assessment at an annual rate of 13.4 basis points since the first quarterly assessment period of 2024, and the FDIC is expected to collect the special assessment for eight quarterly assessment periods.

In December 2025, the FDIC issued an interim final rule reducing the eighth collection quarterly rate from 3.36 basis points to 2.97 basis points.

As the impact was deemed immaterial, the Bank did not adjust the special assessment for the year ended December 31, 2025.

Upon final resolution of the litigation between the FDIC and the entities managing the failed banks' liquidations, the FDIC would provide an offset to the regular quarterly deposit insurance assessments if the total amount collected exceeds the loss estimates at that time, in proportion to the amount each bank paid toward the special assessment.

Upon termination of the receiverships, the FDIC will either (i) provide an offset to the regular quarterly deposit insurance assessments if the amount collected exceeds losses, or (ii) collect a one-time final shortfall special assessment if losses exceed the amount collected.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or condition imposed by the FDIC or written agreement entered into with the FDIC.

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The term “covered transaction” includes the making of loans, purchase of assets, issuance of guarantees and other similar types of transactions.

Further, most loans by a bank to any of its affiliates must be secured by collateral in amounts ranging from 100 to 130 percent of the loan amounts.

Further, most loans by a bank to any of its affiliates must be secured by collateral in amounts ranging

from 100 to 130 percent of the loan amounts.

In addition, a transaction between a bank and an affiliate, including covered transactions, the sale of assets and the furnishing of services by a bank to an affiliate must be on terms and under circumstances that are substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with or involving a non-affiliate.

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These guidelines, as well as guidance provided by the FDIC, increasingly focus on risk management and processes related to information technology and the use of third parties in the provision of financial services.

In November 2021, the federal financial regulatory agencies published a final rule that will impose upon banking organizations and their service providers new notification requirements for significant cybersecurity incidents.

In November 2021, the federal financial regulatory agencies published a final rule that imposes upon banking organizations and their service providers notification requirements for significant cybersecurity incidents.

The final rule took effect on April 1, 2022 and full compliance was required as of May 1, 2022.

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Banks’ service providers are required under the final rule to notify any affected bank to or on behalf of which the service provider provides services “as soon as possible” after determining that it has experienced an incident that materially disrupts or degrades, or is reasonably likely to materially disrupt or degrade, covered services provided to such bank for as much as four hours.

On March 9, 2022, the SEC proposed amendments, which took effect on September 5, 2023, to enhance and standardize disclosures regarding cybersecurity incidents, risk management, and response strategies from public companies subject to reporting requirements under the Exchange Act.

The SEC also adopted a final rule that took effect in December 2023, requiring public companies to disclose material cybersecurity incidents within four business days of occurrence and to disclose material information regarding cybersecurity risk management, strategy and governance on an annual basis.

Community Reinvestment Act ("CRA") and Fair Lending Laws.

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An institution’s failure to comply with the provisions of the CRA could, at a minimum, result in regulatory restrictions on its activities, including, but not limited to, engaging in acquisitions and mergers.

The Bank received a “Satisfactory” CRA rating in its last completed federal examination, dated June 21, 2021.

On October 24, 2023, the FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency (“OCC”) issued a final rule to strengthen and modernize the CRA regulations.

Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be considered a "large bank." The agencies will evaluate large banks under four performance tests:

the Retail Lending Test;

the Retail Services and Products Test;

the Community Development Financing Test;

and the Community Development Services Test.

Under the regulations, the applicability date for the majority of the provisions is January 1, 2026, and additional requirements will be applicable under the regulations on January 1, 2027.

On March 29, 2024, a federal court in the Northern District of Texas issued a preliminary injunction against the new CRA regulations, enjoining the federal banking agencies from enforcing the regulations against the plaintiff bank industry trade groups, and extending the regulations’ implementation dates day-for-day for each day the injunction is in place.

The Bank received a “Satisfactory” CRA rating in its last completed federal examination, dated October 7, 2024.

On October 24, 2023, the FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency (“OCC”) issued a final rule (the “2023 CRA Rule”) to replace the CRA regulations adopted by the agencies in 1995 (the “1995 CRA Regulations”).

The final rule was scheduled to take effect on April 1, 2024, and the applicability date for the majority of the provisions was January 1, 2026, with additional requirements applicable on January 1, 2027, but ongoing legal challenges pushed back the implementation date and compliance deadlines.

During the transition period, the 1995 CRA Regulations remain applicable.

On July 16, 2025, the agencies issued a joint notice of proposed rulemaking to rescind the 2023 CRA Rule

and replace it with the 1995 CRA Regulations, with certain conforming and technical amendments.

In 2025, both houses of the New Jersey legislature introduced state-level community reinvestment bills, although they have not yet been signed into law.

In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of the borrower’s characteristics as specified in those statutes.

An institution’s failure to comply with the Equal Credit Opportunity Act and/or the Fair Housing Act could result in enforcement actions by the FDIC, or the CFPB, as well as other federal or state regulatory agencies and the Department of Justice.

In December 2025, the New Jersey Division on Civil Rights adopted regulations that implement the state’s civil rights law and that will prohibit certain discriminatory practices by lenders in the state.

Safety and Soundness Standards.

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In 2016, the federal regulatory agencies approved a proposed joint rulemaking to implement this provision of the Dodd-Frank Act, and in May 2024, several federal banking agencies reproposed the incentive compensation regulation, although not all agencies required by Dodd-Frank to participate in the rulemaking signed on to the proposal in 2024.

In March 2025, the FDIC withdrew its authorization for the reproposed incentive compensation regulation.

In October 2022, the SEC adopted final rules implementing the incentive-based compensation recovery (“clawback”) provisions of the Dodd-Frank Act.

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The Dodd-Frank Act also permits states to adopt stricter consumer protection laws and state attorneys general to enforce consumer protection regulations issued by the CFPB.

As a result of these aspects of the Dodd-Frank Act, the Bank is operating in a stringent consumer compliance environment and is incurring additional costs related to consumer protection compliance, including but not limited to potential costs associated with CFPB examinations.

The CFPB, other financial regulatory agencies, as well as the Department of Justice have recently pursued a number of enforcement actions against depository institutions with respect to compliance with consumer protection and fair lending laws.

As a result of these aspects of the Dodd-Frank Act, the Bank is operating in a stringent consumer compliance environment and incurs additional costs related to consumer protection compliance, including but not limited to potential costs associated with CFPB examinations.

The CFPB, other financial regulatory agencies, the Department of Justice, and state attorneys general have pursued a number of enforcement actions against depository institutions with respect to compliance with consumer protection and fair lending laws.

Anti-Money Laundering .

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The USA PATRIOT Act gives the federal government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened AML/CFT requirements.

The bank regulatory agencies have increased the regulatory scrutiny of the AML/CFT programs maintained by financial institutions.

The bank regulatory agencies generally engage in heightened scrutiny of the AML/CFT programs maintained by financial institutions.

Significant penalties and fines, as well as other supervisory orders may be imposed on a financial institution for non-compliance with these requirements.

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On January 1, 2021, Congress passed the Anti-Money Laundering Act of 2020 ("AML Act"), part of the National Defense Authorization Act, which enacted the most significant overhaul of the BSA since the USA PATRIOT Act.

On September 29, 2022, FinCEN issued a final rule implementing the amendments with respect to the reporting of beneficial ownership, the first rule required under the AML Act.

On December 22, 2023, FINCEN issued a final rule governing access to its newly-created beneficial ownership database, which will require banks to implement certain safeguards related to accessing information stored in the database, among other things.

In June 2024, FinCEN issued a proposed rule under the AML Act to amend its existing regulations to expressly require that banks’ AML/CFT compliance programs (a) be effective, risk-based, and reasonably designed, (b) include a formal risk assessment process, and (c) incorporate national priorities for anti-money laundering and countering the financing of terrorism policy into its risk assessment, among other things.

The federal banking agencies, including the FDIC, concurrently proposed rules to amend their own AML/CFT-related regulations to align with the changes proposed by FinCEN and incorporate other longstanding supervisory expectations.

Loans to Bank Insiders.

A bank’s loans to its and its affiliates’ executive officers, directors, any owner of 10% or more of its stock (each, an insider) and any entities controlled by any such person (each, an insider’s related interest) are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act, applied to state nonmember banks by the Federal Deposit Insurance Act, and the Federal Reserve Board’s Regulation O.

Under these restrictions, the aggregate amount of the loans to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable to national banks, which is comparable to the loans-to-one-borrower limit applicable to loans by the Bank.

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In addition, federal law prohibits extensions of credit to a bank’s insiders and their related interests by any other institution that has a correspondent banking relationship with the bank, unless such extension of credit is on substantially the same terms as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.

As of December 31, 2024, the Bank had aggregate loans and loan commitments of $98.8 million to its directors, or to its immediate family members and related interests.

As of December 31, 2025, the Bank had aggregate loans and loan commitments of $66.1 million to its directors and their related interests.

These loans and loan commitments were made on substantially the same terms, including interest rates and collateral, as those prevailing for comparable transactions with the general public and do not involve more than the normal risk of repayment or present other unfavorable features.

As of December 31, 2024, the Bank had aggregate loans and loan commitments totaling $3.5 million to its executive officers or their related entities.

These loans and loan commitments were made on substantially the same terms, including

interest rates and collateral, as those prevailing for comparable transactions with the general public and do not involve more than the normal risk of repayment or present other unfavorable features.

As of December 31, 2025, the Bank had aggregate loans and loan commitments totaling $3.1 million to its executive officers and their related interests.

Climate-Related Risk Management and Regulation.

In recent years, the federal banking agencies have increased their focus on climate-related risks impacting the operations of banks, the communities they serve, and the broader financial system.

In October 2023, the federal banking agencies finalized principles for climate-related financial risk management, intended for financial institutions with over $100 billion in total consolidated assets.

The agencies did note, however, that all financial institutions, regardless of size, may have material exposures to climate-related financial risks.

As the agencies continue to develop climate-related regulatory guidance, and emphasize management of climate-related risks and controls, we may be required to expend significant capital and incur compliance, operating, maintenance and remediation costs in order to conform to such requirements.

On December 21, 2023, the New York State Department of Financial Services ("NYDFS") published final guidance regarding the assessment and management of material climate-related financial and operational risks for financial institutions including those with New York State-licensed branches, regardless of size.

On December 21, 2023, the New York State Department of Financial Services ("NYDFS") published final guidance regarding the assessment and management of material climate-related

financial and operational risks for financial institutions including those with New York State-licensed branches, regardless of size.

NYDFS recommends and expects institutions such as the Bank to, among other things, incorporate climate-related risks management as part of its corporate governance, internal controls, risk management process, data aggregation and reporting, and climate scenario analysis.

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Historically, the Bank had been exempt from the interchange fee cap under the “small issuer” exemption, which applies to any debit card issuer with total worldwide assets (together with those of its affiliates) of less than $10 billion as of the end of the previous calendar year.

Pursuant to Federal Reserve Board regulations mandated by the Dodd-Frank Act, interchange fees on debit card transactions are limited to a maximum of $0.21 per transaction plus 5 basis points of the transaction amount.

Pursuant to Federal Reserve Board regulations mandated by the Dodd-Frank Act, interchange fees on debit card transactions are currently limited to a maximum of $0.21 per transaction plus 5 basis points of the transaction amount.

A debit card issuer may recover an additional one cent per transaction for fraud prevention purposes if the issuer complies with certain fraud-related requirements prescribed by the Federal Reserve Board.

In 2023, the Federal Reserve Board proposed amendments to its regulations to reduce the maximum to 14.4 cents per transaction plus 4 basis points of the transaction amount, with the fraud-prevention adjustment of 1.3 cents per transaction.

The proposed amendments have not yet been finalized.

Digital Asset Regulation.

The federal banking agencies have issued interpretive guidance and statements regarding the engagement by banking organizations in certain digital asset activities.

On April 7, 2022, the FDIC issued a financial institution letter also requiring its supervised institutions to provide notice and obtain supervisory feedback prior to engaging in any crypto-related activities.

On January 3, 2023, the federal banking agencies issued additional guidance in the form of a joint statement addressing digital asset-related risks to banking organizations.

That statement noted the recent volatility and exposure of vulnerabilities in the digital asset sector and indicated that the agencies are continuing to assess whether or how the digital asset-related activities of banking organizations can be conducted in a safe and sound manner and in compliance with all applicable laws and regulations.

The statement stressed that each agency has developed, and expects banking organizations to follow, supervisory processes for evaluating proposed and existing digital asset activities.

Under the new presidential administration the federal banking agencies are expected to take a different approach that allows banks to engage in more activities related to digital assets.

Currently the extent of any expansion in this sector and its potential impact is difficult to determine.

Although the federal banking agencies have not developed formal regulations governing the digital asset activities of banking organizations, the supervisory framework summarized above dictates that, in order to effectively identify and manage digital asset-related risks and obtain supervisory non-objection to the proposed engagement in digital asset activities, banking organizations must implement appropriate risk management practices, including with respect to board and management oversight, policies and procedures, risk assessments, internal controls and monitoring.

In 2025, the federal banking agencies revised or withdrew previously-issued interpretive guidance and statements regarding the engagement by banking organizations in digital asset activities.

On March 28, 2025, the FDIC rescinded a 2022 financial institution letter that required its supervised institutions to provide notice prior to engaging in any crypto-related activities, providing new guidance that its institutions can engage in permissible crypto-related activities without receiving prior FDIC approval.

On April 24, 2025, the FDIC withdrew two joint statements from 2023 regarding crypto-asset-related activities, clarifying that banking organizations may engage in permissible crypto-asset activities and provide products and services to persons and firms engaged in crypto-asset related activities, consistent with safety and soundness and applicable laws and regulations.

Guidance issued by the federal banking agencies continue to note that banks should employ appropriate risk management and governance practices in relation to engaging in digital asset activities.

Holding Company Regulation

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Consolidated regulatory capital requirements identical to those applicable to the subsidiary banks applied to bank holding companies (with greater than $1 billion of assets) as of January 1, 2015.

The rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking

organization does not hold a “capital conservation buffer” of 2.5% in addition to the amount necessary to meet its minimum risk-based capital requirements.

The rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” of 2.5% in addition to the amount necessary to meet its minimum risk-based capital requirements.

In the first quarter of 2020, U.S.

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The Federal Reserve Board may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe and unsound practice, or would violate any law, regulation, Federal Reserve Board order or directive, or any condition imposed by, or written agreement with, the Federal Reserve Board.

The regulations provide that such notice and approval is not required for a bank holding company that would be treated as “well capitalized” under applicable regulations of the Federal Reserve Board, is well-managed, and that is not the

subject of any unresolved supervisory issues.

Notwithstanding the aforementioned regulations, Federal Reserve Board guidance indicates that bank holding companies should inform Federal Reserve staff of certain proposed repurchases of common stock sufficiently in advance to allow for supervisory review and possible objection.

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Based on its analysis of the provisions, the Company does not expect the provisions of the Inflation Reduction Act to have a material impact on its consolidated financial statements.

On July 4, 2025, One Big Beautiful Bill Act ("OBBBA") was signed into law.

The OBBBA includes significant changes to U.S.

tax law, including making permanent certain provisions originally enacted under the Tax Cuts and Jobs Act, such as 100% bonus depreciation, the immediate expensing of domestic research and development costs, and the limitation on the deductibility of business interest expense.

There were no material effects of the Act impacting the consolidated financial statements.

Method of Accounting.

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The corporate franchise tax is based on the combined entire net income of the Company and its affiliates allocable and apportionable to New York State and taxed at a rate of 7.25%.

The amount of revenues that are sourced to New York State

under the new legislation can be expected to fluctuate over time.

The amount of revenues that are sourced to New York State under the new legislation can be expected to fluctuate over time.

In addition, the Company and its affiliates are subject to the Metropolitan Transportation Authority (“MTA”) Surcharge allocable to business activities carried on in the Metropolitan Commuter Transportation District.

The MTA surcharge for 2025 is 30.0% of a recomputed New York State franchise tax, calculated using a 7.25% tax rate on allocated and apportioned net income.

Connecticut Taxation.

The Company and its affiliates will be subject to Connecticut Corporate income tax based upon allocable and apportionable net income taxed at a rate of 7.5%, as a result of the Lakeland acquisition.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business