What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 206 added, 120 removed, 228 unchanged (59% of the section changed)

4 unchanged sentences

Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K, as supplemented by its Quarterly Reports on Form 10-Q, and those related to the economic environment, particularly in the market areas in which the Company operates, inflation and unemployment, competitive products and pricing, real estate values, fiscal and monetary policies of the U.S.

Government, tariffs, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

government, tariffs, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in legislation and regulations affecting financial institutions, including regulatory fees, capital requirements and tax laws, higher than expected tax and other liabilities, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses,

credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date they are made.

The Company advises readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not assume any duty, and does not undertake, to update any forward-looking statements to reflect events or circumstances after the date of this statement.

The Company advises readers that the factors listed above and other risks and uncertainties could affect the Company's financial performance and could cause the Company's actual results to differ materially from any forward-looking statements.

The Company does not assume any duty, and does not undertake, to update any forward-looking statements to reflect events or circumstances after the date of such statement.

Critical Accounting Policies

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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

deviates 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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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 March 31, 2026, 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 recapture of previous provisions on loans of $4.7 million for the three months ended March 31, 2026, and an overall coverage ratio of 90 basis points.

As of June 30, 2026, 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 provision of $9.6 million and $4.9 million for the three and six months ended June 30, 2026, and an overall coverage ratio of 92 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.

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The segments have been combined or sub-segmented as needed to ensure loans of similar risk profiles are appropriately pooled.

As of March 31, 2026, the portfolio and class segments for the Company’s loan portfolio were:

As of June 30, 2026, the portfolio and class segments for the Company’s loan portfolio were:

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

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(2) modification designation;

(3) risk ratings of special mention, substandard or

(3) risk ratings of special mention, substandard or doubtful;

(4) watchlist credits;

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The Company evaluated the potential impact of the OBBB on its financial statements and, based on its assessment, the legislation has not had a material impact on its financial statements.

COMPARISON OF FINANCIAL CONDITION AS OF MARCH 31, 2026 AND DECEMBER 31, 2025

Total assets as of March 31, 2026 were $25.20 billion, a $221.0 million increase from December 31, 2025.

The increase in total assets was primarily due to a $143.6 million increase in total loans and a $60.9 million increase in total investments.

The Company’s loans held for investment portfolio increased $143.6 million to $19.65 billion as of March 31, 2026, from $19.50 billion as of December 31, 2025.

The loan portfolio consists of the following (in thousands):

March 31, 2026 December 31, 2025

On June 30, 2026, New Jersey enacted tax legislation containing several corporate tax provisions, including a temporary limitation on the utilization of Corporation Business Tax net operating loss deductions.

Pursuant to ASC 740, Income Taxes, the Company recorded the effects of the enacted legislation in the second quarter of 2026.

The impact on the Company's consolidated financial statements was immaterial.

COMPARISON OF FINANCIAL CONDITION AS OF JUNE 30, 2026 AND DECEMBER 31, 2025

Total assets as of June 30, 2026 were $25.66 billion, a $682.6 million increase from December 31, 2025.

The increase in total assets was primarily due to a $541.7 million increase in loans held for investment and a $106.0 million increase in total investments.

The Company’s loans held for investment portfolio totaled $20.05 billion as of June 30, 2026 and $19.50 billion as of December 31, 2025.

The loan portfolio consisted of the following:

June 30, 2026 December 31, 2025

Mortgage loans:

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5,251,096 4,843,466

Mortgage warehouse lines 313,934 357,051

Consumer loans 607,373 612,431

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Premiums on purchased loans 1,663 1,524

Net deferred fees (12,805) (12,976)

Total loans $ 19,647,702 19,504,061

(1) Commercial loans consist of owner-occupied real estate, commercial & industrial loans and mortgage warehouse lines.

During the three months ended March 31, 2026, the loans held for investment portfolio had net increases of $123.1 million of commercial loans, $56.9 million of multi-family loans and $24.9 million of commercial mortgage loans, partially offset by net decreases of $22.5 million of mortgage warehouse lines, $21.2 million of construction loans and $13.5 million of residential mortgage loans.

Total commercial loans, consisting of commercial real estate, multi-family, commercial and construction loans, as well as mortgage warehouse lines, represented 86.9% of the loan portfolio as of March 31, 2026, compared to 86.7% as of December 31, 2025.

Net deferred fees and unearned discounts (15,353) (12,976)

Total loans held for investment $ 20,045,752 19,504,061

(1) Commercial loans consist of owner-occupied real estate and commercial and industrial loans.

During the six months ended June 30, 2026, the loans held for investment portfolio had net increases of $407.6 million of commercial loans, $139.5 million of multi-family loans and $103.8 million of commercial mortgage loans, partially offset by net decreases of $43.1 million of mortgage warehouse lines, $35.6 million of residential mortgage loans, $23.2 million of construction loans and $5.1 million of consumer loans.

Total commercial loans, including mortgage warehouse lines, commercial mortgage, multi-family and construction loans, represented 87.3% of the loan portfolio as of June 30, 2026, compared to 86.7% as of December 31, 2025.

The Bank’s lending activities, though concentrated in the communities surrounding its offices, extend predominantly throughout New Jersey, eastern Pennsylvania and Queens, Nassau and Orange County, New York.

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These loans are particularly sensitive to economic conditions.

As of March 31, 2026, our portfolio of commercial real estate loans, including multi-family and construction loans, totaled $11.79 billion, or 59.97% of total loans.

As of June 30, 2026, our portfolio of commercial real estate loans, including multi-family and construction loans, totaled $11.95 billion, or 59.6% of total loans.

The Company believes the CRE loans it originates are appropriately collateralized under its credit standards.

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As a result, the performance of these loans is generally impacted by fluctuations in collateral values, the ability of the borrower to obtain permanent financing, and, in the case of loans to residential builders/developers, volatility in consumer demand.

The table below summarizes the concentrations of CRE loans on a gross basis, not including any purchase accounting adjustments ("PAA"), based on the collateral securing the loans, as of March 31, 2026 (in thousands):

The table below summarizes the concentrations of CRE loans on a gross basis, not including any PAA, based on the collateral securing the loans, as of June 30, 2026 (in millions):

Amount Percentage of Total

Multi-family (1)

$ 4,170 34.3 %

Retail 2,766 22.8

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Special use property 534 4.4

Hotel 291 2.5

Residential 305 2.5

Hotel 137 1.1

Total CRE, multi-family and construction loans $ 12,144 100.0 %

(1) Within the multi-family portfolio above, rent-stabilized loans totaled less than 1% of the portfolio as of June 30, 2026.

The determination of collateral value is critically important when financing real estate.

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Both the appraisal process and the appraisal review process can be less reliable in establishing accurate collateral values during and following periods of economic weakness due to the lack of comparable sales and the limited availability of financing to support an active market of potential purchasers.

The table below summarizes the Company’s commercial real estate portfolio, including multi-family and construction loans as of March 31, 2026, as segregated by the geographic region in which the property is located (dollars in thousands):

The table below summarizes the Company’s commercial real estate portfolio, including multi-family and construction loans on a gross basis, not including any purchase accounting adjustments as of June 30, 2026, as segregated by the geographic region in which the property is located (dollars in millions):

Amount Percentage of Total

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Other states 1,353 11.1

Total commercial real estate loans $ 11,810 100.0 %

Total CRE, multi-family and construction loans $ 12,144 100.0 %

The Company participates in loans originated by other banks, including participations designated as Shared National Credits (“SNCs”).

The Company’s gross commitments and outstanding balances as a participant in SNCs were $196.9 million and $81.2 million, respectively, as of March 31, 2026, compared to $197.5 million and $65.7 million, respectively, as of December 31, 2025.

The following table sets forth information regarding the Company’s non-performing assets as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

The Company’s gross commitments and outstanding balances as a participant in SNCs were $187.5 million and $90.9 million, respectively, as of June 30, 2026, compared to $174.8 million and $65.7 million, respectively, as of December 31, 2025.

The following table sets forth information regarding the Company’s non-performing assets as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

Mortgage loans:

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Residential 7,834 9,062

Total non-accruing loans 34,199 43,345

Total mortgage loans 32,292 43,345

Commercial loans 103,383 33,219

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Total non-performing assets $ 137,848 80,435

The following table sets forth information regarding the Company’s 60-89 day delinquent loans as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

The following table sets forth information regarding the Company’s 60-89 day delinquent loans as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

Mortgage loans:

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Total 60-89 day delinquent loans $ 8,334 6,523

As of March 31, 2026, the Company’s allowance for credit losses related to the loan portfolio was 0.90% of total loans, compared to 0.95% as of December 31, 2025 and 1.02% as of March 31, 2025, respectively.

The Company recorded a $4.7 million recapture of provision on loans for the three months ended March 31, 2026, compared with a provision on loans of $325,000 for the three months ended March 31, 2025, respectively.

For the three months ended March 31, 2026, the Company had net charge-offs of $3.1 million, compared to net charge-offs of $2.0 million for the same period in 2025.

The allowance for credit losses decreased $7.8 million to $177.0 million as of March 31, 2026, from $184.8 million as of December 31, 2025.

Total non-performing loans were $142.9 million, or 0.73% of total loans as of March 31, 2026, compared to $78.4 million, or 0.40% of total loans as of December 31, 2025.

The $64.5 million increase in non-performing loans as of March 31, 2026, compared to the trailing quarter, was primarily driven by the addition of four commercial loans on senior housing properties totaling $82.1 million that are the subject of related bankruptcy filings, partially offset by payoffs.

These loans have no prior charge-off history and require no specific reserve allocations due to strong collateral values.

Appraisals received in 2026 reflect loan-to-value ratios for the collateral properties of 32.9%, 51.7%, 61.3%, and 81.9%.

For both March 31, 2026 and December 31, 2025, the Company held foreclosed assets of $2.0 million.

Foreclosed assets as of March 31, 2026 were comprised of commercial real estate.

Total non-performing assets as of March 31, 2026 increased $64.5 million to $144.9 million, or 0.58% of total assets, from $80.4 million, or 0.32% of total assets as of December 31, 2025.

Total investment securities were $3.53 billion as of March 31, 2026, a $60.9 million increase from December 31, 2025.

This increase was primarily due to purchases of mortgage-backed securities and a decrease in unrealized losses on available for sale debt securities.

Total deposits decreased $178.4 million during the three months ended March 31, 2026, to $19.10 billion.

Total savings and demand deposit accounts decreased $80.7 million to $15.91 billion as of March 31, 2026, while total time deposits decreased $97.7 million to $3.19 billion as of March 31, 2026.

The decrease in savings and demand deposits consisted of a $147.2 decrease in municipal deposits and a $42.8 million decrease in interest-bearing brokered deposits, partially offset a $53.4 million increase in money market deposits, a $12.4 million increase in savings deposits and a $2.3 million increase in non-interest-bearing demand deposits.

The decrease in municipal deposits was mainly due to seasonal outflows.

The decrease in

time deposits consisted of an $82.5 million decrease in brokered time deposits, combined with a $15.2 million decrease in retail time deposits.

Borrowed funds increased $371.0 million during the three months ended March 31, 2026, to $2.48 billion.

The increase in borrowings was largely done to fund seasonal outflows in municipal deposits and replace maturing brokered deposits.

Borrowed funds represented 9.9% of total assets as of March 31, 2026, an increase from 8.5% as of December 31, 2025.

Stockholders’ equity increased $29.7 million during the three months ended March 31, 2026, to $2.86 billion, primarily due to net income earned for the period and a decrease in unrealized losses on available for sale debt securities, partially offset by cash dividends paid to stockholders and common stock repurchases.

For the three months ended March 31, 2026, common stock repurchases totaled 588,923 shares at an average cost of $21.04 per share, of which 100,381 shares at an average cost of $21.29 were made in connection with withholding to cover income taxes on the vesting of stock-based compensation.

As of March 31, 2026, approximately 2.2 million shares remained eligible for repurchase under the current authorization.

As of June 30, 2026, the Company’s allowance for credit losses related to the loan portfolio was 0.92% of total loans, compared to 0.95% and 0.98% as of December 31, 2025 and June 30, 2025, respectively.

The Company recorded a provision for credit losses on loans of $9.6 million and $4.9 million for the three and six months ended June 30, 2026, respectively, compared with a recapture of provisions totaling $2.7 million and $2.3 million for the three and six months ended June 30, 2025, respectively.

For the three and six months ended June 30, 2026, the Company had net charge-offs of $1.9 million and $5.0 million, respectively, compared to net charge-offs of $1.2 million and $3.2 million, respectively, for the same periods in 2025.

The allowance for credit losses decreased $0.1 million to $184.7 million as of June 30, 2026 from $184.8 million as of December 31, 2025.

The decrease in the allowance for credit losses on loans as of June 30, 2026 compared to December 31, 2025 was due to net charge-offs of $5.0 million, partially offset by a $4.9 million provision for credit losses on loans.

Total non-performing loans were $136.9 million, or 0.68% of total loans as of June 30, 2026, compared to $78.4 million, or 0.40% of total loans as of December 31, 2025.

Included in non-performing loans are four commercial loans on senior housing properties totaling $81.8 million that are the subject of related bankruptcy filings.

These loans have no prior charge-off history and require no specific reserve allocations due to strong collateral values, which are supported by appraisals received in 2026 and, more recently, initial bids submitted through the ongoing bankruptcy sale process.

As of June 30, 2026 and December 31, 2025, the Company held foreclosed assets of $1.0 million and $2.0 million, respectively.

Foreclosed assets as of June 30, 2026 was comprised of one commercial real estate property.

Total non-performing assets as of June 30, 2026 increased $57.4 million to $137.9 million, or 0.54% of total assets, from $80.4 million, or 0.32% of total assets as of December 31, 2025.

Total investment securities were $3.57 billion as of June 30, 2026, a $106.0 million increase from December 31, 2025.

This increase was primarily due to purchases of mortgage-backed securities, partially offset by an increase in unrealized losses on available for sale debt securities.

Total deposits increased $266.5 million during the six months ended June 30, 2026, to $19.55 billion.

Total savings and demand deposit accounts increased $110.3 million to $16.10 billion as of June 30, 2026, while total time deposits increased $156.2 million to $3.44 billion as of June 30, 2026.

The increase in savings and demand deposits was largely attributable to a $351.4 million increase in money market deposits and a $94.1 million increase in non-interest bearing demand deposits, partially offset by a $328.7 million decrease in interest bearing demand deposits.

Within interest bearing demand deposits, municipal deposits decreased $443.4 million primarily due to seasonal outflows.

The increase in time deposits was primarily attributable to a $149.3 million increase in brokered time deposits.

Borrowed funds increased $295.6 million during the six months ended June 30, 2026, to $2.41 billion.

The increase in borrowed funds was largely used to fund seasonal outflows in municipal deposits and to replace maturing brokered deposits.

Borrowed funds represented 9.4% of total assets as of June 30, 2026, an increase from 8.5% as of December 31, 2025.

Stockholders’ equity increased $73.8 million during the six months ended June 30, 2026, to $2.91 billion, primarily due to net income earned for the period, partially offset by cash dividends paid to stockholders and an increase in unrealized losses on available for sale debt securities.

For the three and six months ended June 30, 2026, common stock repurchases totaled 25,799 shares at an average cost of $22.15 per share and 614,722 shares at an average cost of $21.09 per share, respectively, of which 126,180 shares at an average cost of $21.47 were made in connection with withholding to cover income taxes on the vesting of stock-based compensation.

As of June 30, 2026, approximately 2,199,471 shares remained eligible for repurchase under the current stock repurchase authorization.

Liquidity and Capital Resources.

Liquidity refers to the Company’s ability to generate adequate amounts of cash to meet financial obligations to its depositors, to fund loans and securities purchases and operating expenses.

Sources of funds include scheduled amortization of loans, loan prepayments, scheduled maturities of unpledged investments, cash flows from mortgage-backed securities and the ability to borrow funds from the FHLBNY, FRBNY and approved broker-dealers.

Cash flows from loan payments and maturing investment securities are fairly predictable sources of funds.

Changes in interest rates, local economic conditions and the competitive marketplace can influence loan prepayments, prepayments on mortgage-backed securities and deposit flows.

For the three months ended March 31, 2026 and 2025, loan repayments totaled $2.27 billion and $1.72 billion, respectively.

The Company has continued to monitor and focus on depositor behavior and borrowing capacity with the FHLBNY and FRBNY, with current borrowing capacity of $4.17 billion and $2.94 billion, respectively as of March 31, 2026.

Our estimated uninsured and uncollateralized deposits as of March 31, 2026 totaled $4.90 billion, or 25.6% of deposits.

Our total estimated uninsured deposits, including collateralized deposits as of March 31, 2026, was $10.61 billion.

Within time deposits, approximately $752.2 million, or 23.6% was uninsured as of March 31, 2026.

For the six months ended June 30, 2026 and 2025, loan repayments totaled $4.72 billion and $3.79 billion, respectively.

The Company continues to monitor and focus on depositor behavior and borrowing capacity with FHLBNY and FRBNY, with current borrowing capacity of $4.38 billion and $2.96 billion, respectively, as of June 30, 2026.

Our estimated uninsured and uncollateralized deposits as of June 30, 2026 totaled $5.00 billion, or 25.6% of deposits.

Our total estimated uninsured deposits, including collateralized deposits as of June 30, 2026, were $10.62 billion.

Within time deposits, approximately $760.5 million, or 22.1% was uninsured as of June 30, 2026.

Commercial real estate loans, multi-family loans, commercial loans, one- to four-family residential loans and consumer loans are the primary investments of the Company.

Purchasing securities for the investment portfolio is a secondary use of funds and the investment portfolio is structured to complement and facilitate the Company’s lending activities and ensure adequate liquidity.

Loan originations and purchases totaled $2.42 billion for the three months ended March 31, 2026, compared to $1.93 billion for the same period in 2025.

Purchases for the investment portfolio totaled $191.3 million for the three months ended March 31, 2026, compared to $802.3 million for the year ended December 31, 2025.

As of March 31, 2026, the Bank had outstanding loan commitments to borrowers of $3.96 billion, including undisbursed home equity lines and personal credit lines of $657.8 million.

Total deposits decreased $178.4 million for the three months ended March 31, 2026.

Loan originations and purchases totaled $5.28 billion for the six months ended June 30, 2026, compared to $4.30 billion for the same period in 2025.

Purchases for the investment portfolio totaled $447.6 million for the six months ended June 30, 2026, compared to $802.3 million for the year ended December 31, 2025.

As of June 30, 2026, the Bank had outstanding loan commitments to borrowers of $4.07 billion, including undisbursed home equity lines and personal credit lines of $660.3 million.

Total deposits increased $266.5 million during the six months ended June 30, 2026, to $19.55 billion.

Deposit activity is affected by changes in interest rates, competitive pricing and product offerings in the marketplace, local economic conditions, customer confidence and other factors such as stock market volatility.

Certificate of deposit accounts that are scheduled to mature within one year totaled $3.06 billion as of March 31, 2026.

Certificate of deposit accounts that are scheduled to mature within one year totaled $3.35 billion as of June 30, 2026.

Based on its current pricing strategy and customer retention experience, the Bank expects to retain a significant share of these accounts.

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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.

As of March 31, 2026, the Bank and the Company exceeded all current minimum regulatory capital requirements as follows:

March 31, 2026

As of June 30, 2026, the Bank and the Company exceeded all current minimum regulatory capital requirements as follows:

June 30, 2026

Required Required with Capital Conservation Buffer Actual

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and a total risk-based capital ratio of at least 10.00%.

(2) For a period of three years following completion of the merger, the Bank will be required to maintain a Tier 1 capital to total assets leverage ratio of at least 8.5% and a total capital to risk-based assets ratio of at least 11.25%.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

The Company reported net income of $79.4 million, or $0.61 per basic and diluted share for the three months ended March 31, 2026, compared to net income of $64.0 million, or $0.49 per basic and diluted share, for the three months ended March 31, 2025.

Net income for the three months ended March 31, 2026 was positively impacted by pre-provision, net revenue growth of 13.5%, or $12.9 million, when compared to the three months ended March 31, 2025, driven primarily by expanding net interest income and higher insurance agency income.

Net income in the current quarter also benefited from a $2.1 million recapture of previous provisions for credit losses.

The following table sets forth certain information for the three months ended March 31, 2026 and 2025.

(2) For a period of three years following completion of the merger with Lakeland, the Bank will be required to maintain a Tier 1 capital to total assets leverage ratio of at least 8.5% and a total capital to risk-based assets ratio of at least 11.25%.

COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

The Company reported net income of $78.1 million, or $0.60 per basic and diluted share for the three months ended June 30, 2026, compared to net income of $72.0 million, or $0.55 per basic and diluted share, for the three months ended June 30, 2025.

For the six months ended June 30, 2026, net income totaled $157.6 million, or $1.21 per basic and diluted share, compared to $136.0 million, or $1.04 per basic and diluted share, for the six months ended June 30, 2025.

The following tables sets forth certain information for the three and six months ended June 30, 2026.

For the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities is expressed both in dollars and rates.

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For the three months ended

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

Average Balance Interest Average

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(3) Annualized net interest income divided by average interest-earning assets.

For the six months ended

June 30, 2026 June 30, 2025

Average Balance Interest Average

Yield/Cost Average Balance Interest Average

(Dollars in Thousands) (Unaudited)

Interest Earning Assets:

Deposits $ 74,866 $ 1,437 3.87 % 77,882 1,463 4.21 %

Available for sale debt securities 3,245,371 65,095 4.01 2,893,373 56,505 3.91

Held to maturity debt securities, net (1)

270,266 3,572 2.64 317,607 3,962 2.50

Equity securities, at fair value 19,987 244 2.44 19,212 422 3.01

Federal Home Loan Bank stock 126,378 3,919 12.41 120,883 4,161 6.92

Total mortgage loans 13,615,283 386,884 5.72 13,351,451 379,845 5.73

Total commercial loans 5,241,339 160,658 6.18 4,747,564 154,673 6.57

Total consumer loans 605,872 19,852 6.61 610,728 20,623 6.81

Total net loans 19,462,494 567,394 5.87 18,709,743 555,141 5.98

Total interest earning assets $ 23,199,362 641,661 5.60 % 22,138,700 621,654 5.65 %

Non-Interest Earning Assets:

Cash and due from banks 166,896 142,380

Other assets 1,796,506 1,919,313

Total assets $ 25,162,764 24,200,393

Interest Bearing Liabilities:

Demand deposits $ 10,716,751 $ 127,095 2.39 % 9,984,248 130,235 2.63 %

Savings deposits 1,603,069 1653 0.21 1,665,075 1,824 0.22

Time deposits 3,233,756 54,991 3.43 3,198,491 61,618 3.88

Total deposits 15,553,576 183,739 2.38 14,847,814 193,677 2.63

Borrowed funds 2,310,754 44,741 3.90 2,205,805 42,247 3.86

Subordinated debentures 407,643 16,758 8.29 402,665 16,907 8.47

Total interest bearing liabilities $ 18,271,973 245,238 2.71 % 17,456,284 252,831 2.92 %

Non-Interest Bearing Liabilities:

Non-interest bearing deposits $ 3,680,552 3,709,602

Other non-interest bearing liabilities 324,834 373,029

Total non-interest bearing liabilities 4,005,386 4,082,631

Total liabilities 22,277,359 21,538,915

Stockholders' equity 2,885,405 2,661,478

Total liabilities and stockholders' equity $ 25,162,764 24,200,393

Net interest income $ 396,423 368,823

Net interest income increased $12.0 million to $193.7 million for the three months ended March 31, 2026, from $181.7 million for same period in 2025.

The increase in net interest income was primarily due to originations of new loans, combined with favorable repricing of deposits, partially offset by a decrease in lower-costing deposits.

The net interest margin increased six basis points to 3.40% for the quarter ended March 31, 2026, compared to 3.34% for the quarter ended March 31, 2025.

The weighted average yield on interest-earning assets decreased 10 basis points to 5.53% for the quarter ended March 31, 2026, compared to 5.63% for the quarter ended March 31, 2025, while the weighted average cost of interest-bearing liabilities decreased 19 basis points for the quarter ended March 31, 2026, to 2.71%, compared to 2.90% for the quarter ended March 31, 2025.

The average cost of interest-bearing deposits for the quarter ended March 31, 2026, was 2.39%, compared to 2.64% for the same period last year.

Average non-interest-bearing demand deposits totaled $3.64 billion for the quarter ended March 31, 2026, compared to $3.72 billion for the quarter ended March 31, 2025.

The average cost of total deposits, including non-interest-bearing deposits, was 1.94% for the quarter ended March 31, 2026, compared with 2.11% for the quarter ended March 31, 2025.

The average cost of borrowed funds for the quarter ended March 31, 2026, was 3.90%, compared to 3.76% for the same period last year.

Interest income on loans secured by real estate increased $4.4 million to $191.5 million for the three months ended March 31, 2026, from $187.1 million for the three months ended March 31, 2025.

Commercial loan interest income increased $2.1 million to $77.9 million for the three months ended March 31, 2026, from $75.8 million for the three months ended March 31, 2025.

Consumer loan interest income decreased $258,000 to $9.9 million for the three months ended March 31, 2026, from $10.2 million for the three months ended March 31, 2025.

For the three months ended March 31, 2026, the average balance of total loans increased $763.7 million to $19.35 billion, compared to the same period in 2025.

The average yield on total loans for the three months ended March 31, 2026, decreased 10 basis points to 5.85%, from 5.95% for the same period in 2025.

Interest income on held to maturity debt securities decreased $202,000 to $1.8 million for the three months ended March 31, 2026, compared to the same period last year.

Average held to maturity debt securities decreased $46.2 million to $273.8 million for the three months ended March 31, 2026, from $320.0 million for the same period in 2025.

Interest income on available for sale debt securities decreased $4.0 million to $31.5 million for the three months ended March 31, 2026, from $27.5 million for the three months ended March 31, 2025.

The average balance of available for sale debt securities increased $389.9 million to $3.22 billion for the three months ended March 31, 2026, compared to the same period in 2025.

Dividend income on FHLBNY stock decreased $319,000 to $1.7 million for the three months ended March 31, 2026, from $2.0 million for the three months ended March 31, 2025.

The average balance of FHLBNY stock increased $12.8 million to $120.3 million for the three months ended March 31, 2026, compared to the same period in 2025.

The average yield on total securities increased to 3.80% for the three months ended March 31, 2026, compared with 3.74% for the same period in 2025.

Interest expense on deposit accounts decreased $5.5 million to $91.9 million for the three months ended March 31, 2026, from $97.4 million for the three months ended March 31, 2025.

The average cost of interest-bearing deposits decreased to 2.39% for the three months ended March 31, 2026, from 2.64% for the three months ended March 31, 2025.

The average balance of interest-bearing core deposits, which consist of total savings and demand deposits, for the three months ended March 31, 2026, increased $587.4 million to $12.37 billion.

Average time deposit account balances increased $31.3 million to $3.23 billion for the three months ended March 31, 2026, from $3.20 billion for the three months ended March 31, 2025.

Interest expense on borrowed funds increased $3.2 million to $21.0 million for the three months ended March 31, 2026, from $17.8 million for the three months ended March 31, 2025.

The average cost of borrowings increased to 3.90% for the three months ended March 31, 2026, from 3.76% for the three months ended March 31, 2025.

Average borrowings increased $266.7 million to $2.18 billion for the three months ended March 31, 2026, from $1.92 billion for the three months ended March 31, 2025.

Net interest rate spread 2.89 % 2.73 %

Net interest-earning assets $ 4,927,389 4,682,416

Net interest margin (3)

3.47 % 3.35 %

Ratio of interest-earning assets to total interest-bearing liabilities 1.27x 1.27x

(1) Average outstanding balance amounts shown are amortized cost, net of allowance for credit losses.

(2) Average outstanding balances are net of the allowance for loan losses, deferred loan fees and expenses, loan premiums and discounts and include loans held for sale and non-accrual loans.

(3) Annualized net interest income divided by average interest-earning assets.

Net Interest Income .

Net interest income increased $15.6 million to $202.7 million for the three months ended June 30, 2026, from $187.1 million for the same period in 2025.

Net interest income increased $27.6 million to $396.4 million for the six months ended June 30, 2026, from $368.8 million for the same period in 2025.

The increase was primarily due to originations of new loans at current market rates, combined with favorable repricing of deposits.

The net interest margin increased 12 basis points to 3.48% for the quarter ended June 30, 2026, compared to 3.36% for the quarter ended June 30, 2025.

The weighted average yield on interest-earning assets decreased 7 basis points to 5.61% for the quarter ended June 30, 2026, compared to 5.68% for the quarter ended June 30, 2025, while the weighted average cost of interest-bearing liabilities decreased 23 basis points for the quarter ended June 30, 2026, to 2.71%, compared to 2.94% for the quarter ended June 30, 2025.

The average cost of interest-bearing deposits for the quarter ended June 30, 2026, was 2.37%, compared to 2.62% for the same period last year.

Average non-interest-bearing demand deposits totaled $3.72 billion for the quarter ended June 30, 2026, compared to $3.70 billion for the quarter ended June 30, 2025.

The average cost of total deposits, including non-interest-bearing deposits, was 1.92% for the quarter ended June 30, 2026, compared with 2.10% for the quarter ended June 30, 2025.

The average cost of borrowed funds for the quarter ended June 30, 2026, was 3.91%, compared to 3.94% for the same period last year.

For the six months ended June 30, 2026, the net interest margin increased 12 basis points to 3.47%, compared to 3.35% for the six months ended June 30, 2025.

The weighted average yield on interest-earning assets declined 5 basis points to 5.60% for the six months ended June 30, 2026, compared to 5.65% for the six months ended June 30, 2025, while the weighted average cost of interest-bearing liabilities decreased 21 basis points to 2.71% for the six months ended June 30, 2026, compared to 2.92% for the same period last year.

The average cost of interest-bearing deposits decreased 25 basis points to 2.38% for the six months ended June 30, 2026, compared to 2.63% for the same period last year.

Average non-interest-bearing demand deposits totaled $3.68 billion for the six months ended June 30, 2026, compared with $3.71 billion for the six months ended June 30, 2025.

The average cost of total deposits, including non-interest-bearing deposits, was 1.93% for the six months ended June 30, 2026, compared with 2.10% for the six months ended June 30, 2025.

The average cost of borrowings for the six months ended June 30, 2026, was 3.90%, compared to 3.86% for the same period last year.

Interest income on loans secured by real estate increased $2.6 million to $195.4 million for the three months ended June 30, 2026, from $192.8 million for the three months ended June 30, 2025.

Commercial loan interest income increased $3.9 million to $82.8 million for the three months ended June 30, 2026, from $78.9 million for the three months ended June 30, 2025.

Consumer loan interest income decreased $0.5 million to $10.0 million for the three months ended June 30, 2026, from $10.5 million for the three months ended June 30, 2025.

For the three months ended June 30, 2026, the average balance of total loans increased $742.0 million to $19.57 billion, compared to the same period in 2025.

The average yield on total loans for the three months ended June 30, 2026, decreased 11 basis points to 5.90%, from 6.01% for the same period in 2025.

Interest income on loans secured by real estate increased $7.0 million to $386.9 million for the six months ended June 30, 2026, from $379.8 million for the six months ended June 30, 2025.

Commercial loan interest income increased $6.0 million to $160.7 million for the six months ended June 30, 2026, from $154.7 million for the six months ended June 30, 2025.

Consumer loan interest income decreased $0.8 million to $19.9 million for the six months ended June 30, 2026, from $20.6 million for the six months ended June 30, 2025.

For the six months ended June 30, 2026, the average balance of total loans increased $752.8 million to $19.46 billion, compared with $18.71 billion for the same period in 2025.

The average yield on total loans for the six months ended June 30, 2026, decreased 11 basis points to 5.87%, from 5.98% for the same period in 2025.

Interest income on held to maturity debt securities totaled $1.8 million for the three months ended June 30, 2026, compared to $2.0 million for the same period last year.

Average held to maturity debt securities decreased $48.5 million to $266.7 million for the three months ended June 30, 2026, from $315.2 million for the same period last year.

Interest income on held to maturity debt securities decreased $390,000 to $3.6 million for the six months ended June 30, 2026, compared to the same period in 2025.

Average held to maturity debt securities decreased $47.3 million to $270.3 million for the six months ended June 30, 2026, from $317.6 million for the same period last year.

Interest income on available for sale debt securities increased $4.3 million to $33.6 million for the three months ended June 30, 2026, from $29.3 million for the three months ended June 30, 2025.

The average balance of available for sale debt securities increased $314.5 million to $3.27 billion for the three months ended June 30, 2026, compared to the same period in 2025.

Interest income on available for sale debt securities increased $8.6 million to $65.1 million for the six months ended June 30, 2026, from $56.5 million for the same period last year.

The average balance of available for sale debt securities increased $352.0 million to $3.25 billion for the six months ended June 30, 2026.

Dividend income on FHLBNY stock increased $0.1 million to $2.2 million for the three months ended June 30, 2026, from $2.1 million for the three months ended June 30, 2025.

The average balance of FHLBNY stock decreased $1.1 million to $132.4 million for the three months ended June 30, 2026, compared to the same period in 2025.

Dividend income on FHLBNY

stock increased $8.2 million to $69.3 million for the six months ended June 30, 2026, from $61.1 million for the same period last year.

The average balance of FHLBNY stock increased $5.5 million to $126.4 million for the six months ended June 30, 2026.

The average yield on total securities increased to 3.99% for the three months ended June 30, 2026, compared with 3.81% for the same period in 2025.

For the six months ended June 30, 2026, the average yield on total securities increased to 3.90%, compared with 3.75% for the same period in 2025.

Interest expense on deposit accounts decreased $4.5 million to $91.8 million for the three months ended June 30, 2026, compared with $96.3 million for the three months ended June 30, 2025.

For the six months ended June 30, 2026, interest expense on deposit accounts decreased $9.9 million to $183.7 million, from $193.7 million for the same period last year.

The average cost of interest-bearing deposits improved to 2.37% and 2.38% for the three and six months ended June 30, 2026, respectively, from 2.62% and 2.63% for the three and six months ended June 30, 2025, respectively.

The average balance of interest-bearing core deposits, which consist of total savings and demand deposits, for the three months ended June 30, 2026, increased $752.6 million to $12.27 billion.

For the six months ended June 30, 2026, average interest-bearing core deposits increased $670.5 million, to $12.32 billion, from $11.65 billion for the same period in 2025.

Average time deposit account balances increased $39.1 million to $3.24 billion for the three months ended June 30, 2026, from $3.20 billion for the three months ended June 30, 2025.

For the six months ended June 30, 2026, average time deposit account balances increased $35.3 million to $3.23 billion, from $3.20 billion for the same period in 2025.

Interest expense on borrowed funds decreased $0.7 million to $23.7 million for the three months ended June 30, 2026, from $24.5 million for the three months ended June 30, 2025.

For the six months ended June 30, 2026, interest expense on borrowed funds increased $2.5 million to $44.7 million, from $42.2 million for the six months ended June 30, 2025.

The average cost of borrowings decreased to 3.91% for the three months ended June 30, 2026, from 3.94% for the three months ended June 30, 2025.

The average cost of borrowings increased to 3.90% for the six months ended June 30, 2026, from 3.86% for the same period last year.

Average borrowings decreased $55.0 million to $2.44 billion for the three months ended June 30, 2026, from $2.49 billion for the three months ended June 30, 2025.

For the six months ended June 30, 2026, average borrowings increased $104.9 million to $2.31 billion, compared to $2.21 billion for the six months ended June 30, 2025.

Provision for Credit Losses.

3 unchanged sentences

Management assesses the adequacy of the allowance for credit losses on a quarterly basis and makes provisions for credit losses, if necessary, in order to maintain the valuation of the allowance.

For the quarter ended March 31, 2026, the Company recorded a $2.1 million recapture of previous provisions for credit losses compared to a $635,000 provision for credit losses for the first quarter of 2025.

The recapture of provision consisted of a $4.7 million recapture of provision related to loans, partially offset by a $2.5 million provision related to off-balance sheet credit exposures, compared with provisions for credit losses on loans and off-balance sheet credit exposures of $325,000 and $310,000, respectively, for the quarter ended March 31, 2025.

The recapture of the provision for credit losses on loans in the current quarter was primarily due to a reduction in specific reserves on individually evaluated loans.

The Company recorded provisions for credit losses on loans of $9.6 million and $4.9 million for the three and six months ended June 30, 2026, respectively, compared with recaptures of provisions of $2.7 million and $2.3 million for the three and six months ended June 30, 2025, respectively.

The provision for credit losses on loans for the three and six months ended June 30, 2026 was primarily due to overall growth in the loan portfolio, combined with an increase in specific reserves on individually evaluated loans.

Non-Interest Income.

Non-interest income totaled $31.5 million for the quarter ended March 31, 2026, an increase of $4.4 million, compared to the same period in 2025.

BOLI income increased $1.9 million to $4.0 million for the three months ended March 31, 2026, compared to the prior year quarter, primarily due to an increase in benefit claims.

Insurance agency income increased $1.2 million to $6.9 million for the three months ended March 31, 2026, compared to the quarter ended March 31, 2025, largely due to an increase in contingency income and business activity.

Fee income increased $809,000 to $10.5 million for the three months ended March 31, 2026, compared to the prior year quarter, primarily due to increases in deposit fee income and commercial loan prepayment fees.

Additionally, other income increased $486,000 to $2.7 million for the three months ended March 31, 2026, compared to the quarter ended March 31, 2025, primarily due to an increase in net gains on the sale of SBA loans, combined with an increase in gain on fixed asset sales, partially offset by a decrease in net fees on loan-level interest rate swap transactions.

Non-interest income totaled $32.0 million for the quarter ended June 30, 2026, an increase of $4.9 million, compared to the same period in 2025.

The increase was primarily driven by a $1.5 million increase in fee income, a $1.2 million increase in BOLI income and a $1.1 million increase in other non-interest income.

The increase in fee income was primarily related to an increase in loan related fee income.

The increase in BOLI income was primarily related to an increase in benefit claims, while the increase in other non-interest income was mainly due to an increase in swap fee income.

For the six months ended June 30, 2026, non-interest income totaled $63.4 million, an increase of $9.3 million compared to the same period in 2025.

BOLI income increased $3.2 million to $7.8 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase in benefit claims recognized.

Fee income increased $2.3 million to $22.7 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to increases in loan related and deposit fee income.

Additionally, insurance agency income increased $1.7 million to $12.3 million for the six months ended June 30, 2026, compared to $10.6 million for the same period in 2025, largely due to increases in contingent commissions, retention revenue and new business activity.

Other income increased $1.5 million to $4.3 million for the six months ended June 30, 2026, compared to $2.8 million for the same period in 2025, primarily due to an increase in profit on fixed asset sales and gains on sales of Small Business Administration ("SBA") loans.

Within other non-interest income, gains on the sale of SBA loans totaled $1.7 million for the six months ended June 30, 2026.

Wealth management income increased

$0.6 million to $14.9 million for the six months ended June 30, 2026, compared to the same period in 2025, mainly due to an increase in the average market value of assets under management during the period.

Partially offsetting these increases in non-interest income, net gains on securities transactions decreased $0.4 million for the six months ended June 30, 2026.

Non-Interest Expense .

For the three months ended March 31, 2026, non-interest expense totaled $117.1 million, an increase of $874,000, compared to the three months ended March 31, 2025.

Compensation and benefits expense increased $3.8 million to $66.2 million for three months ended March 31, 2026, compared to $62.4 million for the same period in 2025.

The increase was primarily due to an increase in salary expense associated with Company-wide annual merit increases, combined with increases in employee medical benefits and stock-based compensation expenses.

Net occupancy expense increased $1.1 million to $15.0 million for the three months ended March 31, 2026, compared to the same period in 2025, largely due to increases in snow removal, utilities and other maintenance costs.

Partially offsetting these increases to non-interest expense, other operating expense decreased $2.5 million to $14.0 million for the three months ended March 31, 2026, compared to $16.4 million for the three months ended March 31, 2025, largely due to a $2.7 million write-down on a foreclosed property in the prior year.

Additionally, amortization of intangibles decreased $938,000 to $8.6 million for the three months ended March 31, 2026, compared to $9.5 million for 2025, primarily due to a scheduled reduction in the rate of core deposit intangible amortization related to Lakeland, while FDIC insurance expense decreased $544,000 to $2.8 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a decrease in the assessment rate.

For the three months ended June 30, 2026, non-interest expense totaled $119.3 million, an increase of $4.6 million, compared to the three months ended June 30, 2025.

Merger-related expenses increased $1.5 million for the three months ended June 30, 2026, compared to the same period in 2025.

The increase was primarily driven by a $4.0 million increase in compensation and benefits expense, partially due to an increase in severance expense, and $1.5 million related to costs associated with our ongoing core system conversion, partially offset by a $0.9 million decrease in amortization of intangibles primarily due to a scheduled reduction in the rate of core deposit intangible amortization related to the merger with Lakeland.

Non-interest expense totaled $236.4 million for the six months ended June 30, 2026, an increase of $5.5 million, compared to $230.9 million for the six months ended June 30, 2025.

Compensation and benefits expense increased $7.9 million to $133.5 million for the six months ended June 30, 2026, compared to $125.6 million for the six months ended June 30, 2025, primarily attributable to increases in salary expense, employee medical benefits and stock-based compensation expenses.

Additionally, costs associated with our ongoing core system conversion totaled $1.5 million.

Partially offsetting these increases to non-interest expense, amortization of intangibles decreased $1.9 million to $17.1 million for the six months ended June 30, 2026, compared to $19.0 million for the six months ended June 30, 2025, largely due to a scheduled reduction in the rate of core deposit intangible amortization related to the merger with Lakeland.

Other operating expenses decreased $1.6 million to $29.4 million for the three months ended June 30, 2026, compared to $30.9 million for the same period in 2025, primarily due to a $2.7 million write-down on a foreclosed property in the prior year, partially offset by an increase in professional service expenses.

Income Tax Expense .

For the three months ended March 31, 2026, the Company's income tax expense was $30.8 million with an effective tax rate of 27.9%, compared with $27.8 million with an effective tax rate of 30.3% for the three months ended March 31, 2025.

The increase in tax expense for the three months ended March 31, 2026, compared with the same period last year, was largely due to an increase in pre-tax income, partially offset by a discrete item related to stock-based compensation.

The decrease in the effective tax rate was primarily related to ongoing benefits from tax credits recognized in the current quarter, combined with the aforementioned discrete item related to stock-based compensation.

For the three months ended June 30, 2026, the Company's income tax expense was $27.9 million with an effective tax rate of 26.3%, compared with $30.5 million with an effective tax rate of 29.7% for the three months ended June 30, 2025.

The decrease in income tax expense and the effective tax rate was primarily related to discrete items related to benefits associated with carry-back tax credits and purchases of current year tax credits, partially offset by the effects of recently adopted New Jersey legislation regarding net operating loss usage.

For the six months ended June 30, 2026, the Company's income tax expense was $58.7 million with an effective tax rate of 27.1%, compared with income tax expense of $58.3 million with an effective tax rate of 30.0% for the six months ended June 30, 2025.

The increase in tax expense for the six months ended June 30, 2026 compared with the same period last year was largely due to an increase in taxable income, combined with the effects of recent legislation adopted by New Jersey with regard to net operating loss usage, partially offset by discrete items related to benefits associated with carry-back tax credits and purchases of current year tax credits.

The decrease in the effective tax rate was primarily related to discrete items related to benefits associated with carry-back tax credits and purchases of current year tax credits, partially offset by the effects of recently adopted New Jersey legislation regarding net operating loss usage.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis