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What changed in PROVIDENT FINANCIAL SERVICES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PROVIDENT FINANCIAL SERVICES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+427 added−437 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in PROVIDENT FINANCIAL SERVICES INC's 2025 10-K

427 paragraphs added · 437 removed · 358 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

187 edited+28 added−37 removed306 unchanged
Biggest changeYears Ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Balance at beginning of period $ 107,200 $ 88,023 $ 80,740 $ 101,466 $ 55,525 Adjustments as a result of adopted ASUs (1) — (594) — — 7,920 Charge offs: Commercial mortgage loans 801 1,700 5,471 3,234 2,647 Multi-family mortgage loans — — 66 34 — Construction loans — — — — — Residential mortgage loans 7 24 21 74 69 Commercial loans 16,535 8,363 633 1,597 4,763 Consumer loans 480 334 357 517 434 Total 17,823 10,421 6,548 5,456 7,913 Recoveries: Commercial mortgage loans 69 412 198 378 177 Multi-family mortgage loans — — — 4 — Construction loans — — — 20 110 Residential mortgage loans 17 134 386 457 109 Commercial loans 2,621 1,309 4,193 7,169 1,776 Consumer loans 556 437 654 1,002 465 Total 3,263 2,292 5,431 9,030 2,637 Net charge-offs (recoveries) 14,560 8,129 1,117 (3,574) 5,276 Provision charge (benefit) to operations (2) 83,604 27,900 8,400 (24,300) 29,711 Initial allowance related to PCD loans 17,188 — — — 13,586 Balance at end of period $ 193,432 $ 107,200 $ 88,023 $ 80,740 $ 101,466 Ratio of net charge-offs (recoveries) to average loans outstanding during the period 0.09 % 0.08 % 0.01 % (0.04) % 0.06 % Allowance for credit losses to total loans 1.04 % 0.99 % 0.86 % 0.84 % 1.03 % Allowance for credit losses to non-performing loans 268.43 % 215.96 % 150.44 % 168.11 % 116.51 % (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.
Biggest changeYears Ended December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Balance at beginning of period $ 193,432 $ 107,200 $ 88,023 $ 80,740 $ 101,466 Adjustments as a result of adopted ASUs (1) — — (594) — — Charge offs: Commercial mortgage loans 4,385 801 1,700 5,471 3,234 Multi-family mortgage loans 783 — — 66 34 Construction loans 534 — — — — Residential mortgage loans 20 7 24 21 74 Commercial loans 8,488 16,535 8,363 633 1,597 Consumer loans 616 480 334 357 517 Total 14,826 17,823 10,421 6,548 5,456 Recoveries: Commercial mortgage loans 819 69 412 198 378 Multi-family mortgage loans — — — — 4 Construction loans — — — — 20 Residential mortgage loans 113 17 134 386 457 Commercial loans 527 2,621 1,309 4,193 7,169 Consumer loans 577 556 437 654 1,002 Total 2,036 3,263 2,292 5,431 9,030 Net charge-offs (recoveries) 12,790 14,560 8,129 1,117 (3,574) Provision charge (benefit) to operations (2) 4,125 83,604 27,900 8,400 (24,300) Initial allowance related to PCD loans — 17,188 — — — Balance at end of period $ 184,767 $ 193,432 $ 107,200 $ 88,023 $ 80,740 Ratio of net charge-offs (recoveries) to average loans outstanding during the period 0.07 % 0.09 % 0.08 % 0.01 % (0.04) % Allowance for credit losses to total loans 0.95 % 1.04 % 0.99 % 0.86 % 0.84 % Allowance for credit losses to non-performing loans 235.61 % 268.43 % 215.96 % 150.44 % 168.11 % (1) On January 1, 2023, the Company adopted ASU 2022-02, "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures," which addresses areas identified by the Financial Accounting Standards Board ("FASB") as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model.
The Bank’s commercial real estate and commercial lending officers are required to maintain an appropriate risk rating for each loan in their portfolio. When the lender learns of important financial developments, the risk rating is reviewed accordingly. Risk ratings are 10 subject to review by the Credit Department during the underwriting, lending review and loan review processes.
The Bank’s commercial real estate and commercial lending officers are required to maintain an appropriate risk rating for each loan in their 10 portfolio. 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.
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. These services include investment management, trust and estate administration, financial planning and tax compliance and planning.
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.
Holding Company Regulation Federal Regulation. The Company is regulated as a bank holding company, and as such, is subject to examination, regulation and periodic reporting under the BHCA, as administered by the Federal Reserve Board. The Federal Reserve Board has adopted capital adequacy guidelines for bank holding companies on a consolidated basis.
The Company is regulated as a bank holding company, and as such, is subject to examination, regulation and periodic reporting under the BHCA, as administered by the Federal Reserve Board. The Federal Reserve Board has adopted capital adequacy guidelines for bank holding companies on a consolidated basis.
For federal income tax purposes, the Company currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its consolidated federal income tax returns. Bad Debt Reserves.
Method of Accounting. For federal income tax purposes, the Company currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its consolidated federal income tax returns. Bad Debt Reserves.
Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking as to be permissible are: • Making or servicing loans; • Performing certain data processing services; • Providing discount brokerage services, or acting as fiduciary, investment or financial advisor; • Leasing personal or real property; • Making investments in corporations or projects designed primarily to promote community welfare; and • Acquiring a savings and loan association.
Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking as to be permissible are: • Making or servicing loans; 36 • Performing certain data processing services; • Providing discount brokerage services, or acting as fiduciary, investment or financial advisor; • Leasing personal or real property; • Making investments in corporations or projects designed primarily to promote community welfare; and • Acquiring a savings and loan association.
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 classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that 12 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 12 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 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.
The Inflation Reduction Act, which was signed into law on August 16, 2022, among other things, implements a new alternative minimum tax of 15% on corporations with profits in excess of $1 billion, a 1% excise tax on stock repurchases, and several tax incentives to promote clean energy and climate initiatives. These provisions were effective beginning January 1, 2023.
The Inflation Reduction Act, which was signed into law on August 16, 2022, among other things, implements a new alternative minimum tax of 15% on corporations with profits in excess of $1 billion, a 1% excise tax on stock repurchases, and several tax incentives to promote clean energy and climate initiatives. These provisions were effective beginning January 1, 37 2023.
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.
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, applied to state nonmember banks by FDIC regulation.
The remaining 25.7% of the consumer loan portfolio includes personal loans and unsecured lines of credit, direct auto loans and recreational and marine vehicle loans. Interest rates on home equity loans are fixed for a term not to exceed 20 years, with the maximum loan amount being $1.0 million, which is dependent on lien position and credit score.
The remaining 0.7% of the consumer loan portfolio includes personal loans and unsecured lines of credit, direct auto loans and recreational and marine vehicle loans. Interest rates on home equity loans are fixed for a term not to exceed 20 years, with the maximum loan amount being $1.0 million, which is dependent on lien position and credit score.
The contractual term excludes expected extensions, renewals and modifications unless either of the following applies at the reporting date: 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 15 the Company.
The contractual term excludes expected extensions, renewals and modifications unless either of the following applies at the reporting date: 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 the Company.
These loans and loan commitments were made on substantially the same terms, including 35 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. Climate-Related Risk Management and Regulation.
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. Climate-Related Risk Management and Regulation.
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. 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.
In 16 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.
In connection with the acquisition, Lakeland Bank, a wholly owned subsidiary of Lakeland, was merged with and into the Bank. 1 The acquisition was accounted for under the acquisition method of accounting. Under this method of accounting, the purchase price has been allocated to the respective assets acquired and liabilities assumed based upon their estimated fair values, net of tax.
In connection with the acquisition, Lakeland Bank, a wholly owned subsidiary of Lakeland, was merged with and into the Bank. The acquisition was accounted for under the acquisition method of accounting. Under this method of accounting, the purchase price has been allocated to the respective assets acquired and liabilities assumed based upon their estimated fair values, net of tax.
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.
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 1 any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date.
Certain enhanced prudential standards are also now 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.
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.
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 39 under the new legislation can be expected to fluctuate over time.
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.
Because the Bank has exceeded $10 billion in assets, it is subject to the supervisory and enforcement authority of the CFPB related to federal consumer financial laws and regulations. 34 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.
Because the Bank has exceeded $10 billion in assets, it is subject to the supervisory and enforcement authority of the CFPB related to federal consumer financial laws and regulations. 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.
The Bank currently meets all conditions necessary to establish and engage in permitted activities through financial subsidiaries. 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 currently meets all conditions necessary to establish and engage in permitted activities through financial subsidiaries. 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.
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 rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking 36 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.
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 37 subject of any unresolved supervisory issues.
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.
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 2 income from investment, insurance, wealth and asset management services it offers to generate non-interest income.
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.
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 34 financial and operational risks for financial institutions including those with New York State-licensed branches, regardless of size.
LENDING ACTIVITIES 3 The Bank originates commercial real estate loans, commercial business loans, fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate and other consumer loans, for borrowers generally located within its primary market area.
LENDING ACTIVITIES The Bank originates commercial real estate loans, commercial business loans, fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate and other consumer loans, for borrowers generally located within its primary market area.
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.
Managing Interest Rate Risk. The Bank manages its exposure to interest rate risk through the origination and retention of adjustable rate and shorter-term loans, and its investments in securities. In addition, the Bank uses interest rate swaps as part of its interest rate risk management strategy.
The Bank manages its exposure to interest rate risk through the origination and retention of adjustable rate and shorter-term loans, and its investments in securities. In addition, the Bank uses interest rate swaps as part of its interest rate risk management strategy.
The Company is incorporated under the laws of the State of Delaware. As a result, the rights of its stockholders are governed by the Delaware General Corporate Law and the Company’s Certificate of Incorporation and Bylaws. 38 TAXATION Federal Taxation General.
The Company is incorporated under the laws of the State of Delaware. As a result, the rights of its stockholders are governed by the Delaware General Corporate Law and the Company’s Certificate of Incorporation and Bylaws. TAXATION Federal Taxation General.
Prior to the 1996 Act, bad debt reserves created prior to January 1, 1988 were subject to recapture into taxable income should the Bank fail to meet certain asset and definitional tests. Federal legislation has eliminated these recapture rules. Retained earnings as of December 31, 2024 included approximately $51.8 million for which no provisions for income tax had been made.
Prior to the 1996 Act, bad debt reserves created prior to January 1, 1988 were subject to recapture into taxable income should the Bank fail to meet certain asset and definitional tests. Federal legislation has eliminated these recapture rules. Retained earnings as of December 31, 2025 included approximately $51.8 million for which no provisions for income tax had been made.
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 15 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.
See Note 5 to the Consolidated Financial Statements for more information on the allowance for credit losses on loans. 17 Analysis of the Allowance for Credit Losses on Loans. The following table sets forth the analysis of the allowance for credit losses for the periods indicated.
See Note 5 to the Consolidated Financial Statements for more information on the allowance for credit losses on loans. Analysis of the Allowance for Credit Losses on Loans. The following table sets forth the analysis of the allowance for credit losses for the periods indicated.
While management believes that on the basis of information currently available to it, the allowance for credit losses is adequate as of December 31, 2024, actual losses are dependent upon future events and, as such, further additions to the level of allowances for credit losses may become necessary. Loans are classified in accordance with the risk rating system described previously.
While management believes that on the basis of information currently available to it, the allowance for credit losses is adequate as of December 31, 2025, actual losses are dependent upon future events and, as such, further additions to the level of allowances for credit losses may become necessary. Loans are classified in accordance with the risk rating system described previously.
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.
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 ("Freddie Mac") and others.
As of December 31, 2024, the Bank had an unrecognized tax liability of $14.0 million with respect to this item. Net Operating Loss Carryovers. Under the general rule, for tax periods ending December 31, 2017 and prior, a financial institution may carry back net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years.
As of December 31, 2025, the Bank had an unrecognized tax liability of $14.0 million with respect to this item. Net Operating Loss Carryovers. Under the general rule, for tax periods ending December 31, 2017 and prior, a financial institution may carry back net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years.
The loans have an average risk rating of “4 – Acceptable Quality”. The borrower, headquartered in New Jersey, is an experienced Northeast focused real estate owner and developer primarily of multi-family and industrial properties. As of December 31, 2024, all loans in this lending relationship were performing in accordance with their respective terms and conditions.
The loans have an average risk rating of “4 – Acceptable Quality”. The borrower, headquartered in New Jersey, is an experienced Northeast-focused real estate owner and developer primarily of multi-family and industrial properties. As of December 31, 2025, all loans in this lending relationship were performing in accordance with their respective terms and conditions.
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.
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. The Bank also has an asset-based lending department which specializes in utilizing particular assets to fund the working capital needs of borrowers.
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.
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.
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, 2024. (For the Bank’s largest group borrower exposure —see discussion on “Loans to One Borrower”). Construction Loans. The Bank originates commercial construction loans.
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. (For the Bank’s largest group borrower exposure —see discussion on “Loans to One Borrower”). Construction Loans. The Bank originates commercial construction loans.
Loan review examinations are performed by an independent 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.
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.
As a result, the Company recorded a $594,000 reduction to the allowance for credit losses. (2) An initial CECL provision for credit losses on loans of $60.1 million was recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations. 18 Allowance for Credit Losses on Loans by Loan Category.
As a result, the Company recorded a $594,000 reduction to the allowance for credit losses. (2) An initial CECL provision for credit losses on loans of $60.1 million was recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations. 17 Allowance for Credit Losses on Loans by Loan Category.
The Bank and the Company do not invest in collateralized debt obligations, mortgage-related securities secured by sub-prime loans, or any preferred equity securities. 20 Amortized Cost and Fair Value of Securities. The following table sets forth certain information regarding the amortized cost and fair values of the Company’s securities as of the dates indicated.
The Bank and the Company do not invest in collateralized debt obligations, mortgage-related securities secured by sub-prime loans, or any preferred equity securities. 19 Amortized Cost and Fair Value of Securities. The following table sets forth certain information regarding the amortized cost and fair values of the Company’s securities as of the dates indicated.
New Jersey savings banks may exercise those powers, rights, benefits or 27 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 26 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.
Regulations of the Commissioner impose on New Jersey chartered depository institutions, including the Bank, minimum capital requirements similar to those imposed by the FDIC on insured state banks. As of December 31, 2024, the Bank was considered “well capitalized” under FDIC guidelines. Loans to a Bank’s Insiders .
Regulations of the Commissioner impose on New Jersey chartered depository institutions, including the Bank, minimum capital requirements similar to those imposed by the FDIC on insured state banks. As of December 31, 2025, the Bank was considered “well capitalized” under FDIC guidelines. Loans to a Bank’s Insiders .
As part of its risk management processes, the Bank routinely stress tests the 29 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. The Volcker Rule.
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. 28 The Volcker Rule.
The Notes bear interest at a rate of 2.875% until September 24 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 23 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 table sets forth certain information as of December 31, 2024, regarding the maturities of loans in the loans held for investment portfolio. Demand loans having no stated schedule of repayment and no stated maturity, and overdrafts are reported as due within one year.
The table sets forth certain information as of December 31, 2025, regarding the maturities of loans in the loans held for investment portfolio. Demand loans having no stated schedule of repayment and no stated maturity, and overdrafts are reported as due within one year.
The majority of the state and municipal and corporate obligations carry credit ratings from the rating agencies as of December 31, 2024 that were no lower than an A rating and the Company had no securities rated BBB or worse by Moody’s Ratings ("Moody's").
The majority of the state and municipal and corporate obligations carry credit ratings from the rating agencies as of December 31, 2025 that were no lower than an A rating and the Company had no securities rated BBB or worse by Moody’s Ratings ("Moody's").
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 45 basis points.
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.
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.
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.
As of December 31, 2024, the portfolio and class segments for the Company’s loan portfolio were: • Mortgage Loans – Residential, Commercial Real Estate, Multi-Family and Construction • Commercial Loans – Commercial Owner Occupied and Commercial Non-Owner Occupied • Consumer Loans – First Lien Home Equity and Other Consumer The allowance for credit losses on loans individually evaluated for impairment is based upon loans that have been identified through the Company’s normal loan monitoring process.
As of December 31, 2025, the portfolio and class segments for the Company’s loan portfolio were: • Mortgage Loans – Residential, Commercial Real Estate, Multi-Family and Construction • Commercial Loans – Commercial Owner-Occupied and Commercial Non-Real Estate Secured • Consumer Loans – First Lien Home Equity and Other Consumer The allowance for credit losses on loans individually evaluated for impairment is based upon loans that have been identified through the Company’s normal loan monitoring process.
As of December 31, 2024, 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.
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 Bank continues to focus on conservative underwriting criteria and on active and timely collection efforts. Emphasis on Relationship Banking and Core Deposits. The Bank emphasizes the acquisition and retention of core deposit accounts, consisting of savings and demand deposit accounts, and expanding customer relationships.
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. The Bank emphasizes the acquisition and retention of core deposit accounts, consisting of savings and demand deposit accounts, and expanding customer relationships.
In calculating common equity Tier 1 risk-based capital, Tier 1 risk-based capital and total risk-based capital, assets are based on total risk-weighted assets. As of December 31, 2024, the Bank was considered “well capitalized” under FDIC guidelines. Stress Testing.
In calculating common equity Tier 1 risk-based capital, Tier 1 risk-based capital and total risk-based capital, assets are based on total risk-weighted assets. As of December 31, 2025, the Bank was considered “well capitalized” under FDIC guidelines. Stress Testing.
Census Bureau’s most recent population data, the Bank’s New Jersey market area has a population of approximately 7.4 million, which was 79.6% of the state’s total population. The Bank’s Pennsylvania market area has a population of approximately 1.3 million, which was 10.4% of that state’s total population.
Census Bureau’s most recent population data, the Bank’s New Jersey market area has a population of approximately 7.6 million, which was 79.8% of the state’s total population. The Bank’s Pennsylvania market area has a population of approximately 1.4 million, which was 10.4% of that state’s total population.
In calculating common equity Tier 1 capital, Tier 1 risk-based capital and total risk-based capital, assets are based on total risk-weighted assets. As of December 31, 2024, the Company was “well capitalized” under Federal Reserve Board guidelines.
In calculating common equity Tier 1 capital, Tier 1 risk-based capital and total risk-based capital, assets are based on total risk-weighted assets. As of December 31, 2025, the Company was “well capitalized” under Federal Reserve Board guidelines.
As of December 31, 2024, the Bank's construction and land development portfolio balance to total risk-based capital ratio was approximately 36%. Given the current economic environment, this ratio is being closely managed and has been reducing moderately over time. Funding requirements and loan structure for residential rental projects vary depending on whether such projects are vertical or horizontal construction.
As of December 31, 2025, the Bank's construction and land development portfolio balance to total risk-based capital ratio was approximately 28%. Given the current economic environment, this ratio is being closely managed and has been reducing moderately over time. Funding requirements and loan structure for residential rental projects vary depending on whether such projects are vertical or horizontal construction.
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 project sponsor has over 35 years of investment and management experience in multi-family real estate in the Northeastern USA.
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.
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 Bank has adopted a risk rating system as part of the credit risk assessment of its loan portfolio.
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.
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.
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 current expected credit loss ("CECL") estimate incorporates life-of-loan aspects through this DCF approach.
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. Safety and Soundness Standards.
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.
These interest rate swaps are used to hedge the variable cash outflows associated with Federal Home Loan Bank of New York ("FHLBNY") borrowings and brokered demand deposits. As of December 31, 2024, 57.73% of the Bank’s loan portfolio had a term to maturity of one year or less, or had adjustable interest rates.
These interest rate swaps are used to hedge the variable cash outflows associated with Federal Home Loan Bank of New York ("FHLBNY") borrowings and brokered demand deposits. As of December 31, 2025, 59.73% of the Bank’s loan portfolio had a term to maturity of one year or less, or had adjustable interest rates.
The Bank's New York market area has a population of approximately 4.0 million, which was 20.6% of the state's total population. Because of the diversity of industries within the Bank’s market area and, to a lesser extent, its proximity to the New York City financial markets, the area’s economy can be significantly affected by changes in national and international economies.
The Bank's New York market area has a population of approximately 4.1 million, which was 20.7% of the state's total population. Because of the diversity of industries within the Bank’s market area and, to a lesser extent, its proximity to the New York City financial markets, the area’s economy can be significantly affected by changes in national and international economies.
The appraiser must be selected from the Bank’s approved list, or otherwise approved by the Chief Credit Officer in instances such as an out-of-state or special use property. 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.
The appraiser must be selected from the Bank’s approved list, or otherwise approved by the Chief Credit Officer in instances such as an out-of-state or special use property. The Bank also employs an independent review appraiser to ensure that the appraisal meets the Bank’s standards. Financial statements and tenant rental rolls are also required annually for review.
This framework also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement authority, including the ability to set policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes. As of December 31, 2024, the Bank had consolidated assets of $24.05 billion.
This framework also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement authority, including the ability to set policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes. As of December 31, 2025, the Bank had consolidated assets of $24.98 billion.
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. Typically these loans are written for maturities of ten years or less and generally have an amortization schedule of 25 or 30 years.
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.
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. The final rule took effect on April 1, 2022 and full compliance was required as of May 1, 2022.
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.
The following table sets forth as of December 31, 2024 the amount of all fixed-rate and adjustable-rate loans due after December 31, 2025.
The following table sets forth as of December 31, 2025 the amount of all fixed-rate and adjustable-rate loans due after December 31, 2026.
As of December 31, 2024, the Bank had $2.02 billion of borrowed funds. Borrowed funds consist primarily of FHLBNY advances and repurchase agreements. Repurchase agreements are contracts for the sale of securities owned or borrowed by the Bank, with an agreement to repurchase those securities at an agreed-upon price and date.
As of December 31, 2025, the Bank had $2.11 billion of borrowed funds. Borrowed funds consist primarily of FHLBNY advances and repurchase agreements. Repurchase agreements are contracts for the sale of securities owned or borrowed by the Bank, with an agreement to repurchase those securities at an agreed-upon price and date.
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 2024 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.
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. 38
The debt is included in Tier 2 capital for the Company. Debt issuance costs totaled $3.8 million and are being amortized to maturity. Amortization expense on these costs for the year ended December 31, 2024 amounted to $490,000, respectively.
The debt is included in Tier 2 capital for the Company. Debt issuance costs totaled $3.8 million and are being amortized to maturity. Amortization expense on these costs for the year ended December 31, 2025 amounted to $783,000, respectively.
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 Bank has received dividends on its FHLBNY stock, although no assurance can be given that these dividends will continue to be paid. For the year ended December 31, 2024, dividends paid by the FHLBNY to the Bank totaled $8.3 million. Deposit Insurance.
The Bank has received dividends on its FHLBNY stock, although no assurance can be given that these dividends will continue to be paid. For the year ended December 31, 2025, dividends paid by the FHLBNY to the Bank totaled $8.9 million. Deposit Insurance.
Additionally, the fair value of such securities may be adversely affected by changes in market interest rates. Management believes these securities may represent attractive alternatives relative to other investments due to the wide variety of maturity, repayment and interest rate options available. As of December 31, 2024, the Bank held $88.0 million in privately issued securities in the investment portfolio.
Additionally, the fair value of such securities may be adversely affected by changes in market interest rates. Management believes these securities may represent attractive alternatives relative to other investments due to the wide variety of maturity, repayment and interest rate options available. As of December 31, 2025, the Bank held $102.3 million in privately issued securities in the investment portfolio.
(2) As of December 31, 2024 and 2023, excludes allowance for credit losses on held to maturity debt securities of $14,000 and $31,000, respectively. 21 The following table sets forth certain information regarding the carrying value, weighted average yields and contractual maturities of the Company’s debt securities portfolio as of December 31, 2024.
(2) As of December 31, 2025 and 2024, excludes allowance for credit losses on held to maturity debt securities of $16,000 and $14,000, respectively. 20 The following table sets forth certain information regarding the carrying value, weighted average yields and contractual maturities of the Company’s debt securities portfolio as of December 31, 2025.
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 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 generally engage in heightened scrutiny of the AML/CFT programs maintained by financial institutions.
Consumer Loans . The Bank offers a variety of consumer loans on a direct basis to individuals. Consumer loans represented 3.3% of the total loan portfolio as of December 31, 2024.
Consumer Loans . The Bank offers a variety of consumer loans on a direct basis to individuals. Consumer loans represented 3.2% of the total loan portfolio as of December 31, 2025.
The Bank’s largest construction loan as of December 31, 2024 was a $45.0 million commitment secured by a first mortgage lien on property and improvements related to the construction of a 334-unit, multi-family apartment complex in Linden, New Jersey. The loan had an outstanding balance of $2.5 million as of December 31, 2024.
The Bank’s largest construction loan as of December 31, 2025 was a $45.0 million commitment secured by a first mortgage lien on property and improvements related to the construction of a 334-unit, multi-family apartment complex in Linden, New Jersey. The loan had an outstanding balance of $29.9 million as of December 31, 2025.
As of December 31, 2018, the Company had approximately $1.1 million of Federal Net Operating Losses ("NOLs"). These NOLs were generated by entities the Company acquired in previous years and are subject to an annual Code Section 382 limitation.
As of December 31, 2025, the Company had approximately $74.9 million of Federal Net Operating Losses ("NOLs"). These NOLs were generated by entities the Company acquired in previous years and are subject to an annual Code Section 382 limitation.
Home equity loans and home equity lines of credit constituted 74.2% of the consumer loan portfolio and secured personal lines of credit originated through Beacon Trust Company constitute 0.1% of the consumer loan portfolio as of December 31, 2024.
Home equity loans and home equity lines of credit constituted 99.2% of the consumer loan portfolio and secured personal lines of credit originated through Beacon Trust Company constitute 0.1% of the consumer loan portfolio as of December 31, 2025.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
Biggest changeRisks associated with another potential U.S. government shutdown include delays in regulatory reviews, approvals, or rulemaking from federal agencies, reduced access to government economic data and reports which could affect our ability to assess risk and make informed investment or risk management decisions, heightened volatility or reduced liquidity in financial markets, credit and counterparty risk exposure in connection with clients or counterparties that rely on government funding or contracts, and diminished investor and consumer confidence which could reduce demand for financial products If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease. 40 We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
Any of these matters could result in our loss of customers and business opportunities, significant disruption to our operations and business, misappropriation or destruction of our confidential information and/or that of our customers, or damage to our customers’ computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs.
Any of these matters could result in our loss of customers and business opportunities, significant disruption to our operations and business, misappropriation or destruction of our confidential information and/or that of our 47 customers, or damage to our customers’ computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs.
This type of collateral typically does not yield substantial recovery in the event we need to foreclose on it and may rapidly deteriorate, disappear, or be misdirected in advance of foreclosure. This adds to the potential that our charge-offs will be volatile, which could significantly 42 negatively affect our earnings in any quarter.
This type of collateral typically does not yield substantial recovery in the event we need to foreclose on it and may rapidly deteriorate, disappear, or be misdirected in advance of foreclosure. This adds to the potential that our charge-offs will be volatile, which could significantly negatively affect our earnings in any quarter.
Regulatory approvals could be delayed, impeded, restrictively conditioned or denied due to existing or new issues the Company has, or may have, with regulatory agencies, including, without limitation, issues related to BSA/AML compliance, CRA compliance, fair lending laws, fair housing laws, 44 consumer protection laws, unfair, deceptive, or abusive acts or practices regulations, and other similar laws and regulations.
Regulatory approvals could be delayed, impeded, restrictively conditioned or denied due to existing or new issues the Company has, or may have, with regulatory agencies, including, without limitation, issues related to BSA/AML compliance, CRA compliance, fair lending laws, fair housing laws, consumer protection laws, unfair, deceptive, or abusive acts or practices regulations, and other similar laws and regulations.
Our profitability depends upon our continued ability to successfully compete in our market area. We compete with commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, investment advisers, wealth managers, mutual funds, insurance companies, online lenders, large non-bank participants, and brokerage and investment banking firms operating both locally and elsewhere.
Our profitability depends upon our continued ability to successfully compete in our market area. We compete with commercial banks, savings institutions, mortgage banking firms, credit unions, 45 finance companies, investment advisers, wealth managers, mutual funds, insurance companies, online lenders, large non-bank participants, and brokerage and investment banking firms operating both locally and elsewhere.
Such regulation and supervision governs the activities in which a bank and its holding company may engage and is intended primarily for the protection of the insurance fund and depositors. Following the bank failures in early 2023, regulators have increasingly focused on banks’ sources of liquidity, deposit mixes and concentration within certain sectors.
Such regulation and supervision governs the activities in which a bank and its holding company may engage and is intended primarily for the protection of the insurance fund and depositors. Following the bank failures in early 2023, regulators have increasingly focused on banks’ sources of liquidity, deposit mixes 41 and concentration within certain sectors.
Additionally, there could be sudden increases in customer transaction volume, electrical, telecommunications or other major physical infrastructure outages, natural disasters, events arising from local or larger scale geopolitical, political or social matters, including terrorist acts, and cyber-attacks from both private and state actors.
Additionally, there could be sudden increases 44 in customer transaction volume, electrical, telecommunications or other major physical infrastructure outages, natural disasters, events arising from local or larger scale geopolitical, political or social matters, including terrorist acts, and cyber-attacks from both private and state actors.
While we emphasize the generation of low-cost core deposits as a source of funding, there is strong competition for such deposits in our market area. Additionally, deposit balances can 46 decrease if customers perceive alternative investments as providing a better risk/return tradeoff.
While we emphasize the generation of low-cost core deposits as a source of funding, there is strong competition for such deposits in our market area. Additionally, deposit balances can decrease if customers perceive alternative investments as providing a better risk/return tradeoff.
We may need to raise additional capital in the future and such capital may not be available when needed or at all. Federal regulatory agencies have the authority to change the Company’s and Bank’s capital requirements and new accounting rules could have a negative impact on our regulatory capital ratios.
We may need to raise additional capital in the future and such capital may not be available when needed or at all. 46 Federal regulatory agencies have the authority to change the Company’s and Bank’s capital requirements and new accounting rules could have a negative impact on our regulatory capital ratios.
In preparing the valuation models, we consider a number of factors, including operating results, business plans, economic conditions, future cash flows, and transactions and market data. There are inherent uncertainties related to these factors and our judgment in applying them to the impairment analyses.
In preparing the valuation models, we consider a number of factors, including operating results, business plans, economic conditions, future cash flows, 43 and transactions and market data. There are inherent uncertainties related to these factors and our judgment in applying them to the impairment analyses.
We rely on historical data to help build models. We seek to incorporate appropriate historical data in our models, but the range of market values and behaviors reflected in any period of historical data we incorporate into our models may turn out to be inappropriate 47 for the future period being modeled.
We rely on historical data to help build models. We seek to incorporate appropriate historical data in our models, but the range of market values and behaviors reflected in any period of historical data we incorporate into our models may turn out to be inappropriate for the future period being modeled.
There are many processes, policies, procedures, operations, technologies, and systems that may need to be integrated, including purchasing, accounting and finance, payroll, compliance, treasury management, branch operations, vendor management, risk management, lines of 45 business, pricing, and benefits.
There are many processes, policies, procedures, operations, technologies, and systems that may need to be integrated, including purchasing, accounting and finance, payroll, compliance, treasury management, branch operations, vendor management, risk management, lines of business, pricing, and benefits.
As we continue to grow in size, we can expect greater regulatory scrutiny and expectations requiring us to invest significant management attention and make additional investments in staff and other resources to comply with applicable regulatory expectations.
As we continue to grow in size and complexity, we can expect greater regulatory scrutiny and expectations requiring us to invest significant management attention and make additional investments in staff and other resources to comply with applicable regulatory expectations.
Persistent elevated short-term rates continue to require us to increase the rates we pay on our deposits and borrowed funds more quickly than we can increase the interest rates we earn on our loans and investments, resulting in a negative effect on interest spreads and net interest income.
Persistent elevated short-term rates could require us to increase the rates we pay on our deposits and borrowed funds more quickly than we can increase the interest rates we earn on our loans and investments, resulting in a negative effect on interest spreads and net interest income.
Although the Bank is committed to full compliance with the DOJ Consent Order, achieving such compliance has required and will require significant management attention from the Bank and has caused and may continue to cause the Bank to incur significant costs and expenses.
While the Bank is committed to full compliance with the DOJ Consent Order, achieving such compliance has required and will require significant management attention from the Bank and has caused and may continue to cause the Bank to incur significant costs and expenses.
As a result of uncertain political, credit and financial market conditions, including the potential consequences of the federal government defaulting on its obligations for a period of time due to federal debt ceiling limitations or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose credit default and liquidity risks.
As a result of uncertain political, credit and financial market conditions, including the potential consequences of the federal government defaulting on its obligations for a period of time due to federal debt ceiling limitations, failing to pass a federal budget through Congress, or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose credit default and liquidity risks.
As of December 31, 2024, various economic indicators suggested that real gross domestic product had expanded throughout 2024. The unemployment rate had increased, on net, but remained low relative to historic levels. Consumer price inflation, as measured by the 12-month change in the price index for personal consumption expenditures, had moved lower compared to its peak level in 2023.
As of December 31, 2025, various economic indicators suggested that real gross domestic product had expanded throughout 2025. The unemployment rate had increased, on net, but remained low relative to historic levels. Consumer price inflation, as measured by the 12-month change in the price index for personal consumption expenditures, remained below its peak level in 2023.
On September 29, 2022, the U.S. District Court for the District of New Jersey approved a consent order entered into by Lakeland Bank with the DOJ to resolve allegations of violations of the Fair Housing Act and Equal Credit Opportunity Act within the Newark, New Jersey-Pennsylvania Metro Division, as constituted in 2015 (the “DOJ Consent Order”).
District Court for the District of New Jersey approved a consent order entered into by Lakeland Bank with the DOJ to resolve allegations of violations of the Fair Housing Act and Equal Credit Opportunity Act within the Newark, New Jersey-Pennsylvania Metro Division, as constituted in 2015 (the “DOJ Consent Order”).
We are subject to extensive regulation, supervision and examination by various regulatory authorities, but primarily by the New Jersey Department of Banking and Insurance, our chartering authority, and by the FDIC, as insurer of our deposits. As a bank holding company, we are subject to regulation and oversight by the Federal Reserve Board.
We are subject to extensive regulation, supervision and examination by various regulatory authorities, but primarily by the NJDOBI, our chartering authority, and by the FDIC, as insurer of our deposits. As a bank holding company, we are subject to regulation and oversight by the Federal Reserve Board.
Generally, the value of securities fluctuates inversely with changes in interest rates. As of December 31, 2024, our available for sale debt securities portfolio totaled $2.77 billion. Unrealized gains and losses on securities available for sale are reported as a 41 separate component of stockholders’ equity.
Generally, the value of securities fluctuates inversely with changes in interest rates. As of December 31, 2025, our available for sale debt securities portfolio totaled $3.16 billion. Unrealized gains and losses on securities available for sale are reported as a separate component of stockholders’ equity.
We may experience impairments of goodwill or other intangible assets in the future. As of December 31, 2024, our consolidated balance sheet included goodwill of $624.1 million and other intangible assets of $195.2 million.
We may experience impairments of goodwill or other intangible assets in the future. As of December 31, 2025, our consolidated balance sheet included goodwill of $624.1 million and other intangible assets of $158.1 million.
A general economic slowdown or uncertainty that produces either reduced returns or excessive market volatility could adversely impact our overall profitability, including our wealth management fee income and our access to capital and liquidity. A general economic slowdown could affect our core banking business.
A general economic slowdown or uncertainty that produces either reduced returns or excessive market volatility could adversely impact our overall profitability, including our wealth management fee income and our access to capital and liquidity. Changes in economic conditions in the broader market, in our market area, or in our local market, could affect our core banking business.
The failure to continue to comply with the regulatory conditions could result in supervisory and enforcement actions against the Company and the Bank, including the issuance of a cease and desist order or the imposition of civil money penalties, and could constrain the Company’s business operations, which could materially and adversely affect our business, financial condition, results of operations and prospects. 40 As a result of the merger, the Bank has become subject to additional requirements imposed by the DOJ.
The failure to continue to comply with the regulatory conditions may result in supervisory and enforcement actions against the Company and the Bank, including the issuance of a cease and desist order or the imposition of civil money penalties, and could constrain the Company’s business operations, which could materially and adversely affect our business, financial condition, results of operations and prospects.
We have incurred and expect to incur certain non-recurring costs associated with mergers. These costs include financial advisory, legal, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, printing costs, and other related costs. We may incur substantial costs in connection with the integration of acquired companies.
These costs include financial advisory, legal, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, printing costs, and other related costs. We may incur substantial costs in connection with the integration of acquired companies.
The FDIC, the OCC and the FRB (collectively, the “Agencies”) have issued joint guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “CRE Guidance”).
We face regulatory scrutiny based on our commercial real estate lending. The FDIC, the OCC and the FRB (collectively, the “Agencies”) have issued joint guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “CRE Guidance”).
While we maintain a risk management program that is designed to minimize risk, we could suffer losses, face regulatory action, and suffer damage to our reputation because of our failure to properly anticipate and manage these risks. Failure to keep pace with technological changes could adversely affect our business.
While we maintain a risk management program that is designed to minimize risk, we could suffer losses, face regulatory action, and suffer damage to our reputation because of our failure to properly anticipate and manage these risks. Artificial Intelligence presents risks and challenges that may adversely affect our business.
Government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.
Changes resulting from updated regulations and laws could include increased regulatory oversight, higher capital requirements or changes in the way regulatory capital is calculated, and the impositions of additional restrictions through regulatory changes or supervisory or enforcement activities, each of which could have a material impact on our business. 43 The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations.
Changes resulting from updated regulations and laws could include increased regulatory oversight, higher capital requirements or changes in the way regulatory capital is calculated, and the impositions of additional restrictions through regulatory changes or supervisory or enforcement activities, each of which could have a material impact on our business.
The adoption of these Fintech solutions within our market area may cause greater and faster disruption to our business model if we are unable to keep pace with, or invest wisely in, these enabling technologies. The Company’s models used for business planning purposes could perform poorly or provide inadequate information.
The adoption of these Fintech solutions within our market area may cause greater and faster disruption to our business model if we are unable to keep pace with, or invest wisely in, these enabling technologies.
Additionally, financial markets may be adversely affected by any current or anticipated impact of military conflict, including continuing war between Russia and Ukraine, conflicts and military tension in the Middle East, Africa, and Asia, terrorism, cyber-attacks from nation states and non-state actors on financial institutions or other geopolitical events.
Additionally, financial markets may be adversely affected by any current or anticipated impact of military conflict, including continuing wars and military tensions, terrorism, cyber-attacks from nation states and non-state actors on financial institutions or other geopolitical events.
Specifically, unpredictable and more frequent weather disasters may adversely impact the value of real property securing certain loans in our portfolios. Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact our ability to raise and invest capital in potentially impacted communities.
Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact our ability to raise and invest capital in potentially impacted communities.
An inability to raise additional capital on acceptable terms when needed could have a material adverse effect on our business, financial condition and results of operations.
An inability to raise additional capital on acceptable terms when needed could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Our Pending Core Conversion We expect to incur significant costs related to our core system integration.
In addition, although the DOJ Consent Order resolved all claims by the DOJ against Lakeland Bank, the Company and the Bank could be subject to other enforcement actions relating to the alleged violations resolved by the DOJ Consent Order as well as relating to any failure or delay to comply with one or more of the terms of the DOJ Consent Order.
In addition, although the DOJ Consent Order resolved all claims by the DOJ against Lakeland Bank, the Company and the Bank could be subject to other enforcement actions relating to the alleged violations resolved by the DOJ Consent Order as well as relating to any failure or delay to comply with one or more of the terms of the DOJ Consent Order. 39 Risks Related to the Economy, Financial Markets, and Interest Rates Changes to the underlying drivers of our net interest income could adversely affect our results of operations and financial condition.
Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable costs.
Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable costs.
The DOJ Consent Order also required Lakeland Bank to establish two new full-service branches in majority-Black and Hispanic census tracts: one in Newark, New Jersey and one in the Newark Lending Area. In addition, Lakeland Bank was required to continue to maintain its full-time Community Development Officer position to oversee these efforts throughout the term of the consent order.
The DOJ Consent Order also required Lakeland Bank to establish two new full-service branches in majority-Black and Hispanic census tracts: one in Newark, New Jersey and one in the Newark Lending Area.
Employee errors or misconduct could subject us to civil claims for negligence or regulatory enforcement actions, including fines and restrictions on our business. 48 As cyber threats and other fraudulent activity continues to evolve, we may be required to expend significant additional resources to continue to modify and enhance our protective measures, or to investigate and remediate any information security vulnerabilities or incidents.
As cyber threats and other fraudulent activity continues to evolve, we may be required to expend significant additional resources to continue to modify and enhance our protective measures, or to investigate and remediate any information security vulnerabilities or incidents.
As of December 31, 2024, our portfolio of commercial real estate loans, including multi-family loans, totaled $10.61 billion, or 57.5% of total loans, our commercial and industrial loans totaled $4.61 billion, or 25.0% of portfolio loans, and our construction loans totaled $823.5 million, or 4.5% of total loans.
As of December 31, 2025, our portfolio of commercial real estate loans, including multi-family loans, totaled $11.07 billion, or 57.3% of total loans, our commercial and industrial loans totaled $5.20 billion, or 26.9% of portfolio loans, and our construction loans totaled $662.1 million, or 3.4% of total loans.
Despite improved projections, unforeseen adverse changes in the economy and a possible recession could negatively affect the ability of our borrowers to repay their loans or force us to offer lower interest rates to encourage new borrowing activity.
Nevertheless, unforeseen changes in the economy or in foreign or domestic policy such as tariffs or international conflicts could negatively affect the ability of our borrowers to repay their loans or force us to offer lower interest rates to encourage new borrowing activity.
Adaptation to the current cybersecurity landscape requires resilience, flexibility, and collaboration in the face of increased threats enabled by technological advances. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations.
Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements.
Furthermore, these loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy, declining rents, tenant defaults, or changes in government regulation. As of December 31, 2024, our CRE office portfolio totaled $884.1 million dollars, with approximately 13% being loans in New York.
Furthermore, these loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy, declining rents, tenant defaults, or changes in government regulation.
Changes in FRB and other governmental policies, fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations. We face regulatory scrutiny based on our commercial real estate lending.
Depending on industries and markets involved, changes to tax law and increased or reduced public expenditures could affect us directly or the business operations of our customers. 42 Changes in FRB and other governmental policies (including trade policies and tariffs), fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations.
The lack of empirical data surrounding the credit and other financial risks posed by climate change render it impossible to predict specifically how climate change may impact the financial condition and operations of the Company; however, the physical effects of climate change may also directly impact the Company.
This could include potentially increasing supervisory expectations with respect to banks’ risk management practices. The lack of empirical data surrounding the credit and other financial risks as well as potential physical effects posed by climate change render it impossible to predict specifically how climate change may impact the financial condition, assets, and operations of the Company.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers, reduce costs and create capacity.
The effective use of technology increases efficiency and enables financial institutions to better serve customers, reduce costs and create capacity.
In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the FRB. An important function of the FRB is to regulate the money supply and credit environment. Among the instruments used by the FRB to implement these objectives are open market purchases and sales of U.S.
An important function of the FRB is to regulate the money supply and credit environment. Among the instruments used by the FRB to implement these objectives are open market purchases and sales of U.S. Government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits.
The effects of changing strategies, policies, and investments as the global community transitions to a lower-carbon economy will impose additional operational and compliance burdens, and may result in market trends that alter business opportunities. Compliance with any additional disclosure rules will require additional resources.
The effects of changing strategies, policies, and investments as parts of the global economy transition to a lower-carbon economy, as well as changes in insurance practices as insurers avoid insuring properties at risk from climate change, will impose additional operational and compliance burdens, and may result in market trends that alter business opportunities.
New laws, regulations, and other regulatory changes, may also significantly affect the markets in which we do business, the markets for and value of our loans and investments, and our ongoing operations, costs and profitability. As a larger financial institution, we are subject to additional regulation and increased supervision.
New laws, regulations, and other regulatory changes, may also significantly affect the markets in which we do business, the markets for and value of our loans and investments, and our ongoing operations, costs and profitability. Financial institutions are facing increased scrutiny and potential enforcement actions from federal agencies, leading to the need to update internal risk-scoring and compliance procedures.
We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers, or attract sufficient human capital to engage in rapid implementation and marketing. 49 Failure to successfully keep pace with technological change affecting the financial services industry and sustain a robust information security program through talent and human capital could have a material adverse impact on our business and, in turn, our financial condition and results of operations.
Failure to successfully keep pace with technological change affecting the financial services industry and sustain a robust information security program through talent and human capital could have a material adverse impact on our business and, in turn, our financial condition and results of operations. Risks Related to Our Common Stock Anti-takeover provisions could negatively impact our shareholders.
Overall, climate change, its effects, and the resulting unknown impact could have a material adverse impact on our financial condition and results of operations. Risks Related to Business Environment, Operations and Strategy. We have incurred, and may incur in the future, significant costs related to acquisitions by merger and subsequent integration activities.
Compliance with any additional disclosure rules will require additional resources. Overall, climate change, its effects, and the resulting unknown impact could have a material adverse impact on our financial condition and results of operations. Risks Related to Business Environment, Operations and Strategy.
Accordingly, as a part of our liquidity management, we must use several funding sources in addition to deposits and repayments and maturities of loans and investments.
Accordingly, as a part of our liquidity management, we must use several funding sources in addition to deposits and repayments and maturities of loans and investments. As we continue to grow, we may become more dependent on these sources, which may include FHLBNY and FRB advances, federal funds purchased and brokered certificates of deposit.
Based on the size of our CRE Loan portfolio as a percentage of capital, regulatory oversight of our management of this CRE concentration is elevated. In December 2015, the Agencies released a statement on prudent risk management for commercial real estate lending (the “2015 Statement”).
In December 2015, the Agencies released a statement on prudent risk management for commercial real estate lending (the “2015 Statement”).
The Company's risk factors are categorized as follows: • Risks Related to the Recent Merger with Lakeland • Risks Related to the Economy, Financial Markets, and Interest Rates • Risks Related to Regulatory, Compliance, Environmental and Legal Matters • Risks Related to the Business Environment and Operations. • Risks Related to Technology and Security • Risks Related to Our Common Stock Risks Related to the Recent Merger with Lakeland The ongoing integration of Lakeland with the Company may be more difficult, costly or time-consuming than expected, and the Company may fail to realize the anticipated benefits of the merger.
The Company's risk factors are categorized as follows: • Risks Related to the Merger with Lakeland • Risks Related to the Economy, Financial Markets, and Interest Rates • Risks Related to Regulatory, Compliance, Environmental and Legal Matters • Risks Related to the Business Environment and Operations. • Risks Related to Our Pending Core Conversion • Risks Related to Technology and Security • Risks Related to Our Common Stock Risks Related to the Recent Merger with Lakeland The regulatory approvals received for the merger of the Company and Lakeland include conditions and commitments that could in the future have adverse effects on the Company.
In our CRE multi-family portfolio,loans that are collateralized by rent stabilized apartments comprise less than 0.80% of the total loan portfolio and are all performing.
Included in our commercial real estate portfolio, our CRE office portfolio totaled $775.5 million, which includes but is not limited to markets such as New York (approximately 15% of such loans). In our CRE multi-family portfolio, loans that are collateralized by rent stabilized apartments comprise less than one percent of the total loan portfolio and are all performing.
Risks Related to the Economy, Financial Markets, and Interest Rates Changes to the underlying drivers of our net interest income could adversely affect our results of operations and financial condition.
Another shutdown of the federal government could adversely affect our results of operations and financial condition.
The Company's total assets were $24.05 billion as of December 31, 2024.
As a larger financial institution, we are subject to additional regulation and increased supervision. The Company's total assets were $24.98 billion as of December 31, 2025.
Our level of CRE Loans equaled 460.2% of total risk-based capital as of December 31, 2024, while our CRE Loan portfolio has increased by 72.2% during the preceding 36 months, primarily as a result of the addition of Lakeland.
Our level of CRE Loans equaled 432.1% of total risk-based capital as of December 31, 2025. Based on the size of our CRE Loan portfolio as a percentage of capital, regulatory oversight of our management of this CRE concentration is elevated.
Removed
The Company completed its acquisition of Lakeland on May 16, 2024. To realize the anticipated benefits and cost savings from the merger, the Company must successfully integrate and combine the Company’s and Lakeland’s businesses in a manner that permits those cost savings to be realized without adversely affecting current revenues and future growth.
Added
As a result of the merger, the Bank has become subject to additional requirements imposed by the DOJ. On September 29, 2022, the U.S.
Removed
If the Company is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize than expected.
Added
In addition, Lakeland Bank was required to continue to maintain its full-time Community Development Officer position (or similar officer designated with the community lending function) to oversee these efforts throughout the term of the consent order.
Removed
It is possible that the integration process could result in the loss of key employees, the disruption of the Company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the Company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger.
Added
Any event that disrupts the U.S. federal government’s continuity or undermines perceptions of fiscal stability could reduce investor confidence and adversely affect the value of U.S. government securities, thereby increasing market volatility and our future borrowing costs.
Removed
If the Company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the Company, the Company could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. The Company’s integration efforts may also divert management attention and resources.
Added
In August 2025, the President of the United States issued an Executive Order entitled “Guaranteeing Fair Banking for All Americans” that addressed access to financial services and directed several actions by certain federal agencies, to include a review and revision of their internal policies and manuals, which they in turn communicated to regulated entities such as the Company.
Removed
In addition, the actual cost savings of the merger could be less than anticipated, and integration may result in additional and unforeseen expenses, including costs related to requirements of regulatory agencies.
Added
The Company has provided initial responses to requests from government authorities regarding, among other things, the Company’s past and existing policies and processes and the provision. Federal agencies may return with additional inquiries, requirements, or enforcement actions that require us to use additional resources to respond to and comply with.
Removed
An inability to realize the full extent of the anticipated benefits of the merger, as well as any delays encountered in the integration process, could have an adverse effect upon the business, financial condition and results of operations of the Company.
Added
The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations. In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Bank ("FRB").
Removed
The regulatory approvals received for the merger of the Company and Lakeland include conditions and commitments that could in the future have adverse effects on the Company.
Added
We have incurred, and may incur in the future, significant costs related to acquisitions by merger and subsequent integration activities. We have incurred and expect to incur certain non-recurring costs associated with mergers.
Removed
The combined company's human capital may be affected by inability to retain personnel successfully. The success of the merger will depend in part on the combined company’s ability to manage its human capital and retain the talent and dedication of key employees. It is possible that these employees may decide not to remain with the Company going forward.
Added
Increasingly, many customers can complete certain transactions such as bill payments or fund transfers using alternatives to traditional banking, as the financial services industry undergoes rapid technological changes.
Removed
If the Company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the Company, the Company could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.
Added
Digital payments, cryptocurrencies, blockchain, and other “fintech” technologies offer new ways of making payments while not being subject to the same regulatory restrictions as domestic banks, which increases competition in the sector and reduces the need for banks as financial deposit-keepers and intermediaries.
Removed
In addition, if key employees terminate their employment, the Company’s human capital and business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the Company’s business to suffer. The Company also may not be able to locate or retain suitable replacements for any key employees who leave.
Added
Digital currencies known as “stablecoins” are pegged to the U.S. dollar or other currencies and provide users with the ability to conduct transactions without risk of losing value.
Removed
The failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.
Added
These competing services could result in the loss of fee income in traditional banking, as well as the loss of customer deposits and the related income generated from those deposits, which could negatively impact the Company’s deposit base and related revenue. The Company’s models used for business planning purposes could perform poorly or provide inadequate information.
Removed
Depending on industries and markets involved, changes to tax law and increased or reduced public expenditures could affect us directly or the business operations of our customers.
Added
In 2026 we expect to execute a core conversion from our existing platform to FIS’s IBS. We expect this transition could incur substantial costs due to the need to optimize a large number of processes, procedures, operations, and technologies related to a new single core banking system.
Removed
Similar and even more expansive initiatives are expected, including potentially increasing supervisory expectations with respect to banks’ risk management practices, accounting for the effects of climate change in stress testing scenarios and systemic risk assessments, revising expectations for credit portfolio concentrations based on climate-related factors, and encouraging investment by banks in climate-related initiatives and lending to communities disproportionately impacted by the effects of climate change.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Chief Information Security Officer reports summaries of key issues, including significant cybersecurity and/or privacy incidents, discussed at committee meetings and the actions taken to the Technology Steering Committee of the board on a monthly basis (or more frequently as may be required by the CIRP). Notwithstanding our defensive measures and processes, the threat posed by cyber-attacks remains elevated.
Biggest changeThe Chief Information Security Officer reports summaries of key issues, including significant cybersecurity and/or privacy incidents, discussed at committee meetings and the actions taken to the Technology Steering Committee of the board on a monthly basis (or more frequently as may be required by the CIRP).
The structure of our information security program is designed to address applicable laws, regulatory guidance, and industry best practices, including Section 501 (b) of the Gramm-Leach-Bliley Act and its implementing regulations, the Federal Financial Institutions Examination Council (“FFIEC”) Information Technology Examination Handbook, FFIEC Business Continuity Planning Handbook, FFIEC Cybersecurity Assessment Tool, and the Center for Internet Security Critical Security Controls.
The structure of our 49 information security program is designed to address applicable laws, regulatory guidance, and industry best practices, including Section 501 (b) of the Gramm-Leach-Bliley Act and its implementing regulations, the Federal Financial Institutions Examination Council (“FFIEC”) Information Technology Examination Handbook, FFIEC Business Continuity Planning Handbook, FFIEC Cybersecurity Assessment Tool, and the Center for Internet Security Critical Security Controls.
The management committees are chaired by managers within the information technology and information security departments and include the Chief Risk Officer, Chief Information Security 51 Officer, and Chief Digital & Innovation Officer as well as their direct reports and other key departmental managers from throughout the entire company.
The management committees are chaired by managers within the information technology and information security departments and include the Chief Risk Officer, Chief Information Security Officer, and Chief Digital & Innovation Officer as well as their direct reports and other key departmental managers from throughout the entire company.
The Risk Committee reviews our technology and cybersecurity risk profile on a regular basis. The Company has also formed management committees including the Management Risk Committee, which focuses on multiple aspects of risk management including information technology, and the Technology Steering Committee, which focuses on technology and cybersecurity policy within the Bank.
The Risk Committee reviews our technology and cybersecurity risk profile on a regular basis. 50 The Company has also formed management committees including the Management Risk Committee, which focuses on multiple aspects of risk management including information technology, and the Technology Steering Committee, which focuses on technology and cybersecurity policy within the Bank.
In addition, we leverage certain industry and government associations, vendors, third-party benchmarking, audits, and threat intelligence 50 feeds to facilitate and promote program effectiveness.
In addition, we leverage certain industry and government associations, vendors, third-party benchmarking, audits, and threat intelligence feeds to facilitate and promote program effectiveness.
Added
Notwithstanding our defensive measures and processes, the threat posed by cyber-attacks, targeted fraud, and the inability of internal controls to defend customers against certain circumstances remains elevated.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Properties Property As of December 31, 2024, the Bank conducted business through 140 full-service branch offices located throughout New Jersey, as well as Bucks, Lehigh and Northampton counties in Pennsylvania and Orange, Nassau and Queens counties in New York.
Biggest changeItem 2. Properties Property As of December 31, 2025, the Bank conducted business through 141 full-service branch offices located throughout New Jersey, as well as Bucks, Lehigh and Northampton counties in Pennsylvania and Orange, Nassau and Queens counties in New York.
Additionally, the Bank maintains satellite loan production offices throughout New Jersey, as well as in Bethlehem, Philadelphia and Plymouth Meeting, Pennsylvania and Nassau and Orange County, New York. The aggregate net book value of premises and equipment was $119.6 million as of December 31, 2024.
Additionally, the Bank maintains satellite loan production offices throughout New Jersey, as well as in Bethlehem, Philadelphia and Plymouth Meeting, Pennsylvania and Nassau and Orange County, New York. The aggregate net book value of premises and equipment was $113.3 million as of December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeAs a result of a pending claim, a $1.4 million charge was recorded in the fourth quarter of 2024 for estimated contingent litigation reserves, which increased our total contingent litigation reserves to $2.0 million as of December 31, 2024.
Biggest changeAs of December 31, 2025, $2.1 million was recorded in total contingent litigation reserves.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−1 removed1 unchanged
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs (1) (2) Maximum Number of Shares that May Yet Be Purchased Under the Programs (1) (2) October 1, 2024 through October 31, 2024 644 $ 17.83 644 3,072,955 November 1, 2024 through November 30, 2024 104 21.40 104 3,072,851 December 1, 2024 through December 31, 2024 — — — 3,072,851 Total 748 $ 18.33 748 (1) On December 28, 2020, the Company’s board of directors approved the purchase of up to 3,900,000 shares of its common stock under a ninth general repurchase program to commence upon completion of the eighth repurchase program.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs (1) (2) Maximum Number of Shares that May Yet Be Purchased Under the Programs (1) (2) October 1, 2025 through October 31, 2025 388 $ 18.29 388 814,246 November 1, 2025 through November 30, 2025 — — — 814,246 December 1, 2025 through December 31, 2025 — — — 814,246 Total 388 $ 18.29 388 (1) On December 28, 2020, the Company’s board of directors approved the purchase of up to 3,900,000 shares of its common stock under a ninth general repurchase program to commence upon completion of the eighth repurchase program.
SmallCap Banks Index over such period. This Index, produced by S&P Global, contains all thrift institutions traded on the NYSE and NASDAQ stock exchange. Cumulative return assumes the reinvestment of dividends and is expressed in dollars based on an assumed investment of $100 on December 31, 2019.
SmallCap Banks Index over such period. This Index, produced by S&P Global, contains all thrift institutions traded on the NYSE and NASDAQ stock exchange. Cumulative return assumes the reinvestment of dividends and is expressed in dollars based on an assumed investment of $100 on December 31, 2020.
The Company’s board of directors intends to review the payment of dividends quarterly and plans to continue to maintain a regular quarterly cash dividend in the future, subject to financial condition, results of operations, tax considerations, industry standards, economic conditions, regulatory restrictions, including those that affect the payment of dividends by the Bank to the Company; and other relevant factors. 52 Stock Performance Graph Set forth below is a stock performance graph comparing (a) the cumulative total return on the Company’s common stock for the period December 31, 2019 through December 31, 2024, (b) the cumulative total return on stocks included in the Russell 2000 Index over such period, and (c) the cumulative total return of the S&P U.S.
The Company’s board of directors intends to review the payment of dividends quarterly and plans to continue to maintain a regular quarterly cash dividend in the future, subject to financial condition, results of operations, tax considerations, industry standards, economic 51 conditions, regulatory restrictions, including those that affect the payment of dividends by the Bank to the Company; and other relevant factors. 52 Stock Performance Graph Set forth below is a stock performance graph comparing (a) the cumulative total return on the Company’s common stock for the period December 31, 2020 through December 31, 2025, (b) the cumulative total return on stocks included in the Russell 2000 Index over such period, and (c) the cumulative total return of the S&P U.S.
On January 28, 2025, the board of directors declared a quarterly cash dividend of $0.24 per common share which was paid on February 28, 2025, to stockholders of record as of the close of business on February 14, 2025.
On January 28, 2026, the board of directors declared a quarterly cash dividend of $0.24 per common share which was paid on February 27, 2025, to stockholders of record as of the close of business on February 13, 2025.
As of February 3, 2025, there were 137,565,966 shares of the Company’s common stock issued and 130,489,493 shares outstanding, and approximately 6,178 stockholders of record.
As of February 2, 2026, there were 137,565,966 shares of the Company’s common stock issued and 130,696,286 shares outstanding, and approximately 6,032 stockholders of record.
The Company repurchased 89,569 shares of its common stock at a cost of $1.3 million in 2024. As of December 31, 2024, 3.1 million shares were eligible for repurchase under the board approved stock repurchase program.
The Company repurchased 158,293 shares of its common stock at a cost of $2.9 million in 2025. As of December 31, 2025, $814,000 shares were eligible for repurchase under the board approved stock repurchase program.
SmallCap Banks Index 100.00 90.82 126.43 111.47 112.03 132.44 53 The following table reports information regarding purchases of the Company’s common stock during the fourth quarter of 2024 under the stock repurchase plan approved by the Company’s board of directors: ISSUER PURCHASES OF EQUITY SECURITIES The Company repurchased 748 shares of its common stock at a cost of $14,000 during the fourth quarter of 2024 under the stock repurchase program approved by the Company’s board of directors.
SmallCap Banks Index 100.00 139.21 122.74 123.35 145.82 160.37 53 The following table reports information regarding purchases of the Company’s common stock during the fourth quarter of 2025 under the stock repurchase plan approved by the Company’s board of directors: ISSUER PURCHASES OF EQUITY SECURITIES The Company repurchased 388 shares of its common stock at a cost of $18.29 during the fourth quarter of 2025 under the stock repurchase program approved by the Company’s board of directors.
Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Provident Financial Services, Inc. 100.00 77.47 108.82 100.08 89.28 98.86 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 S&P U.S.
Period Ending Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Provident Financial Services, Inc. 100.00 140.47 129.19 115.25 127.61 140.64 Russell 2000 Index 100.00 114.82 91.35 106.82 119.14 134.40 S&P U.S.
Removed
The repurchase program has no expiration date. (2) On April 25, 2024, shares available for stock awards and stock options under the Amended and Restated Long-Term Incentive Plan were reserved for issuance under the new 2024 Equity Plan. The new plan authorized the issuance of up to 2,100,000 shares of Company common stock to be issued as stock awards.
Added
The repurchase program has no expiration date. (2) 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 up to 2.15% of the number of shares of common stock currently outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

91 edited+19 added−25 removed78 unchanged
Biggest changeAverage balances are daily averages. 57 For the Years Ended December 31, 2024 2023 2022 Average Outstanding Balance Interest Earned/ Paid Average Yield/ Cost Average Outstanding Balance Interest Earned/ Paid Average Yield/ Cost Average Outstanding Balance Interest Earned/ Paid Average Yield/ Cost (Dollars in thousands) Interest-earning assets: Deposits $ 36,932 $ 7,062 5.23 % $ 65,991 $ 3,421 5.18 % $ 102,505 $ 809 0.79 % Federal funds sold and short-term investments — — — 255 12 4.55 84,969 1,208 1.42 Held to maturity debt securities, net 344,903 8,885 2.58 375,436 9,362 2.49 407,236 9,894 2.43 Available for sale debt securities 2,323,158 77,617 3.32 1,745,105 40,678 2.33 1,975,641 34,612 1.75 Equity securities, at fair value 12,367 — — 1,020 — — 999 — — Federal Home Loan Bank NY stock 85,358 8,278 9.70 81,797 6,112 7.47 42,658 2,008 4.71 Net loans (2) 15,600,431 944,296 6.05 10,367,620 556,235 5.37 9,798,822 417,650 4.26 Total interest-earning assets 18,403,149 1,046,138 5.68 12,637,224 615,820 4.87 12,412,830 466,181 3.76 Non-interest earning assets 1,978,999 1,278,243 1,230,019 Total assets $ 20,382,148 $ 13,915,467 $ 13,642,849 Interest-bearing liabilities: Savings deposits $ 1,502,852 $ 3,443 0.23 % $ 1,282,062 $ 2,184 0.17 % $ 1,492,046 $ 1,276 0.09 % Demand deposits 8,480,380 245,874 2.90 5,747,671 125,471 2.18 6,076,653 32,047 0.53 Time deposits 2,367,144 100,206 4.23 994,901 31,804 3.20 690,140 5,381 0.78 Borrowed funds 1,983,674 73,523 3.71 1,636,572 55,856 3.41 756,275 9,310 1.23 Subordinated debentures 262,275 22,478 8.57 10,588 1,051 9.92 10,381 615 5.92 Total interest-bearing liabilities 14,596,325 445,524 3.05 9,671,794 216,366 2.24 9,025,495 48,629 0.54 Non-interest bearing liabilities: Non-interest bearing deposits 3,120,571 2,328,557 2,749,562 Other non-interest bearing liabilities 385,727 270,587 249,702 Total non-interest bearing liabilities 3,506,298 2,599,144 2,999,264 Total liabilities 18,102,623 12,270,938 12,024,759 Stockholders’ equity 2,279,525 1,644,529 1,618,090 Total liabilities and equity $ 20,382,148 $ 13,915,467 $ 13,642,849 Net interest income $ 600,614 $ 399,454 $ 417,552 Net interest rate spread 2.63 % 2.63 % 3.22 % Net interest earning assets $ 3,806,824 $ 2,965,430 $ 3,387,335 Net interest margin (3) 3.26 % 3.16 % 3.37 % Ratio of interest-earning assets to total interest-bearing liabilities 1.26x 1.31x 1.38x (1) Average outstanding balance amounts are at amortized cost.
Biggest changeAverage balances are daily averages. 57 For the Years Ended December 31, 2025 2024 2023 Average Outstanding Balance Interest Earned/ Paid Average Yield/ Cost Average Outstanding Balance Interest Earned/ Paid Average Yield/ Cost Average Outstanding Balance Interest Earned/ Paid Average Yield/ Cost (Dollars in thousands) Interest-earning assets: Deposits and other short term investments $ 82,383 $ 3,012 3.66 % $ 36,932 $ 7,062 5.23 % $ 66,246 $ 3421 5.18 % Held to maturity debt securities, net 305,490 7,694 2.52 344,903 8,885 2.58 375,436 9,362 2.49 Available for sale debt securities 3,005,560 119,152 3.96 2,323,158 77,105 3.32 1,745,105 40,678 2.33 Equity securities, at fair value 19,417 612 3.16 12,367 512 4.14 1,020 12 1.18 Federal Home Loan Bank NY stock 112,072 8,883 7.93 85,358 8,278 9.70 81,797 6,112 7.47 Net loans (2) 18,870,134 1,133,421 6.01 15,600,431 944,296 6.05 10,367,620 556,235 5.37 Total interest-earning assets 22,395,056 1,272,774 5.68 18,403,149 1,046,138 5.68 12,637,224 615,820 4.87 Non-interest earning assets 2,034,065 1,978,999 1,278,243 Total assets $ 24,429,121 $ 20,382,148 $ 13,915,467 Interest-bearing liabilities: Savings deposits $ 1,627,710 $ 3,609 0.22 % $ 1,502,852 $ 3,443 0.23 % $ 1,282,062 $ 2,184 0.17 % Demand deposits 10,304,843 273,101 2.65 8,480,380 245,874 2.90 5,747,671 125,471 2.18 Time deposits 3,267,755 123,293 3.77 2,367,144 100,206 4.23 994,901 31,804 3.20 Borrowed funds 2,018,256 78,754 3.90 1,983,674 73,523 3.71 1,636,572 55,856 3.41 Subordinated debentures 403,924 33,452 8.28 262,275 22,478 8.57 10,588 1,051 9.92 Total interest-bearing liabilities 17,622,488 512,209 2.91 14,596,325 445,524 3.05 9,671,794 216,366 2.24 Non-interest bearing liabilities: Non-interest bearing deposits 3,722,633 3,120,571 2,328,557 Other non-interest bearing liabilities 365,669 385,727 270,587 Total non-interest bearing liabilities 4,088,302 3,506,298 2,599,144 Total liabilities 21,710,790 18,102,623 12,270,938 Stockholders’ equity 2,718,331 2,279,525 1,644,529 Total liabilities and equity $ 24,429,121 $ 20,382,148 $ 13,915,467 Net interest income $ 760,565 $ 600,614 $ 399,454 Net interest rate spread 2.77 % 2.63 % 2.63 % Net interest earning assets $ 4,772,568 $ 3,806,824 $ 2,965,430 Net interest margin (3) 3.39 % 3.26 % 3.16 % Ratio of interest-earning assets to total interest-bearing liabilities 1.27x 1.26x 1.31x (1) Average outstanding balance amounts are at amortized cost.
Collateral properties include multi-family apartment buildings, warehouse/distribution buildings, shopping centers, office buildings, mixed-use buildings, hotels/motels, senior living, apartment buildings, residential and commercial tract developments, and raw land or lots to be developed into single-family homes.
Collateral properties include multi-family apartment buildings, warehouse/distribution buildings, shopping centers, office buildings, mixed-use buildings, hotels/motels, senior living, residential and commercial tract developments, and raw land or lots to be developed into single-family homes.
Provisions for credit losses are charged to operations in order to maintain the allowance for credit losses at a level management considers necessary to absorb projected credit losses that may arise over the expected term of each loan in the portfolio.
Provisions for credit losses are charged to operations in order to maintain the allowance for credit losses at a level management considers necessary to absorb projected credit losses that may arise over the expected term of each loan in the portfolio.
In determining the level of the allowance for credit losses, management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and a reasonable and supportable forecast.
In determining the level of the allowance for credit losses, management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and a reasonable and supportable forecast.
The Company evaluates acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) non-accrual status; (2) modification designation; (3) risk ratings of special mention, substandard or 56 doubtful; (4) watchlist credits; and (5) delinquency status, including loans that are current on acquisition date, but had been previously delinquent.
The Company evaluates acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) non-accrual status; (2) modification designation; (3) risk ratings of special mention, substandard or doubtful; (4) watchlist credits; and (5) delinquency status, including loans that are current on acquisition date, but had been previously delinquent.
Additionally, other income decreased $2.8 million to $4.5 million for the year ended December 31, 2024, compared to $7.3 million for 2023, primarily due to a $2.0 million gain from the sale of a foreclosed commercial property recorded in the prior year, combined with a decrease in gains on sales of SBA loans in the current year. Non-Interest Expense.
Additionally, other income decreased $2.8 million to $4.5 million for the year ended December 31, 2024, compared to $7.3 million for 2023, primarily due to a $2.0 million gain from the sale of a foreclosed commercial property recorded in the prior year, combined with a decrease in gains on sales of SBA loans in the current year. 65 Non-Interest Expense.
Net interest income for the year ended December 31, 2024 was favorably impacted by the net assets acquired from Lakeland, combined with the favorable repricing of adjustable rate loans and higher market rates on new loan originations, partially offset by the unfavorable repricing of both deposits and borrowings.
Net interest income 64 for the year ended December 31, 2024 was favorably impacted by the net assets acquired from Lakeland, combined with the favorable repricing of adjustable rate loans and higher market rates on new loan originations, partially offset by the unfavorable repricing of both deposits and borrowings.
Any one or a combination of these events may adversely affect borrowers’ ability to repay the loans, resulting in increased delinquencies, credit losses and higher levels of provisions.
Any one or a combination of these events may adversely affect borrowers’ ability to repay the loans, resulting in increased delinquencies, 56 credit losses and higher levels of provisions.
Net interest income depends on the relative amounts of interest-earning assets and interest-bearing liabilities and the rates of interest earned on such assets and paid on such liabilities. Average Balance Sheet. The following table sets forth certain information for the years ended December 31, 2024, 2023 and 2022.
Net interest income depends on the relative amounts of interest-earning assets and interest-bearing liabilities and the rates of interest earned on such assets and paid on such liabilities. Average Balance Sheet. The following table sets forth certain information for the years ended December 31, 2025, 2024 and 2023.
As of December 31, 2024, the portfolio and class segments for the Company’s loan portfolio were: • Mortgage Loans – Residential, Commercial Real Estate, Multi-Family and Construction • Commercial Loans – Commercial Owner-Occupied and Commercial Non-Owner Occupied • Consumer Loans – First Lien Home Equity and Other Consumer The allowance for credit losses on loans individually evaluated for impairment is based upon loans that have been identified through the Company’s normal loan monitoring process.
As of December 31, 2025, the portfolio and class segments for the Company’s loan portfolio were: • Mortgage Loans – Residential, Commercial Real Estate, Multi-Family and Construction • Commercial Loans – Commercial Owner-Occupied and Commercial Non-Real Estate Secured • Consumer Loans – First Lien Home Equity and Other Consumer The allowance for credit losses on loans individually evaluated for impairment is based upon loans that have been identified through the Company’s normal loan monitoring process.
As of December 31, 2024, 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.
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.
Further review may be conducted by credit or lending teams, including the Bank’s commercial workout team as conditions warrant. These additional steps of review are undertaken to confirm that the underlying appraisal and the third-party analysis can be relied upon. If differences arise, management addresses those with the reviewer and determines an appropriate resolution in accordance with its lending policy.
Further review may be conducted by credit or the Bank’s commercial workout team as conditions warrant. These additional steps of review are undertaken to confirm that the underlying appraisal and the third-party analysis can be relied upon. If differences arise, the Company addresses those with the reviewer and determines an appropriate resolution in accordance with its lending policy.
If the non-accrual loans had performed in accordance with their original terms, interest income would have increased by $2.8 million during the year ended December 31, 2024. The amount of cash basis interest income that was recognized on impaired loans during the year ended December 31, 2024 was not material.
If the non-accrual loans had performed in accordance with their original terms, interest income would have increased by $2.1 million during the year ended December 31, 2025. The amount of cash basis interest income that was recognized on impaired loans during the year ended December 31, 2025 was not material.
Certificate of deposit accounts that are scheduled to mature within one year totaled $3.05 billion as of December 31, 2024. Based on its current pricing strategy and customer retention experience, the Bank expects to retain a significant share of these accounts.
Certificate of deposit accounts that are scheduled to mature within one year totaled $3.16 billion as of December 31, 2025. Based on its current pricing strategy and customer retention experience, the Bank expects to retain a significant share of these accounts.
Within total impaired loans, there were $39.0 million of loans for which the present value of expected future cash flows or current collateral valuations exceeded the carrying amounts of the loans and for which no specific reserves were required in accordance with GAAP.
Within total impaired loans, there were $52.4 million of loans for which the present value of expected future cash flows or current collateral valuations exceeded the carrying amounts of the loans and for which no specific reserves were required in accordance with GAAP.
Retail loans, which consist of one- to four-family residential mortgage and consumer loans, such as fixed-rate home equity loans and lines of credit, totaled $2.62 billion and accounted for 14.1% of the loan portfolio as of December 31, 2024, compared to $1.46 billion, or 13.5%, of the loan portfolio as of December 31, 2023.
Retail loans, which consist of one- to four-family residential mortgage and consumer loans, such as fixed-rate home equity loans and lines of credit, totaled $2.59 billion and accounted for 13.3% of the loan portfolio as of December 31, 2025, compared to $2.62 billion, or 14.1%, of the loan portfolio as of December 31, 2024.
For the year ended December 31, 2024, loan fundings, including advances on lines of credit, totaled $4.82 billion, compared with $3.34 billion for 2023. The Bank’s lending activities, though concentrated in the communities surrounding its offices, extend predominantly throughout New Jersey, eastern Pennsylvania and Nassau and Orange County, New York.
For the year ended December 31, 2025, loan fundings, including advances on lines of credit, totaled $10.11 billion, compared with $4.82 billion for 2024. The Bank’s lending activities, though concentrated in the communities surrounding its offices, extend predominantly throughout New Jersey, eastern Pennsylvania and Nassau, Queens and Orange County, New York.
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 $4.82 billion for the year ended December 31, 2024, compared to $3.34 billion for the year ended December 31, 2023.
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 $10.11 billion for the year ended December 31, 2025, compared to $4.82 billion for the year ended December 31, 2024.
Changes in interest rates, local economic conditions and the competitive marketplace can influence loan prepayments, prepayments on mortgage-backed securities and deposit flows. For each of the years ended December 31, 2024 and 2023, loan repayments totaled $4.88 billion and $2.68 billion, respectively.
Changes in interest rates, local economic conditions and the competitive marketplace can influence loan prepayments, prepayments on mortgage-backed securities and deposit flows. For each of the years ended December 31, 2025 and 2024, loan repayments totaled $9.14 billion and $4.88 billion, respectively.
The Bank manages liquidity on a daily basis and expects to have sufficient cash to meet all of its funding requirements. As of December 31, 2024, the Bank exceeded all minimum regulatory capital requirements. As of December 31, 2024, the Bank’s leverage (Tier 1) capital ratio was 9.72%.
The Bank manages liquidity on a daily basis and expects to have sufficient cash to meet all of its funding requirements. As of December 31, 2025, the Bank exceeded all minimum regulatory capital requirements. As of December 31, 2025, the Bank’s leverage (Tier 1) capital ratio was 10.38%.
As of December 31, 2024, savings and demand deposits were 83.0% of total deposits. 54 The Company’s results of operations are primarily dependent upon net interest income, the difference between interest earned on interest-earning assets and the interest paid on interest-bearing liabilities.
As of December 31, 2025, savings and demand deposits were 82.9% of total deposits. 54 The Company’s results of operations are primarily dependent upon net interest income, the difference between interest earned on interest-earning assets and the interest paid on interest-bearing liabilities.
Our total estimated uninsured deposits, including collateralized deposits as of December 31, 2024 was $9.87 billion. 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.
Our total estimated uninsured deposits, including collateralized deposits as of December 31, 2025 was $10.59 billion. 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.
These loans are particularly sensitive to economic conditions. As of December 31, 2024, our portfolio of commercial real estate loans, including multi-family and construction loans, totaled $11.43 billion, or 61.92% of total loans. The Company believes the CRE loans it originates are appropriately collateralized under its credit standards.
These loans are particularly sensitive to economic conditions. As of December 31, 2025, our portfolio of commercial real estate loans, including multi-family and construction loans, totaled $11.73 billion, or 60.71% of total loans. The Company believes the CRE loans it originates are appropriately collateralized under its credit standards.
Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023 General. Net income for the year ended December 31, 2024 totaled $115.5 million, or $1.05 per basic and diluted share, compared to $128.4 million, or $1.72 per basic and $1.71 per diluted share, for the year ended December 31, 2023.
Net income for the year ended December 31, 2024 totaled $115.5 million, or $1.05 per basic and diluted share, compared to $128.4 million, or $1.72 per basic and $1.71 per diluted share, for the year ended December 31, 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.
This non-performing construction loan was a $5.2 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.
Total deposits increased $8.33 billion for the year ended December 31, 2024. 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.
Total deposits increased $654.9 million for the year ended December 31, 2025. 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.
FDIC regulations require banks to maintain a minimum leverage ratio of Tier 1 capital to adjusted total assets of 4.00%. As of December 31, 2024, the Bank’s total risk-based capital ratio was 12.40%.
FDIC regulations require banks to maintain a minimum leverage ratio of Tier 1 capital to adjusted total assets of 4.00%. As of December 31, 2025, the Bank’s total risk-based capital ratio was 13.08%.
As of December 31, 2024, impaired loans totaled $55.4 million with related specific reserves of $7.5 million, compared with impaired loans totaling $42.3 million with related specific reserves of $2.9 million as of December 31, 2023.
As of December 31, 2025, impaired loans totaled $63.3 million with related specific reserves of $5.9 million, compared with impaired loans totaling $55.4 million with related specific reserves of $7.5 million as of December 31, 2024.
Borrowed funds represented 8.4% of total assets at December 31, 2024, a decrease from 13.9% at December 31, 2023.
Borrowed funds represented 8.5% of total assets at December 31, 2025, a decrease from 13.9% at December 31, 2024.
Commercial loans, consisting of commercial real estate, multi-family, commercial and construction loans, represented 85.9% of the loan portfolio at December 31, 2024, compared to 86.5% at December 31, 2023.
Commercial loans, consisting of commercial real estate, multi-family, commercial, mortgage warehouse and construction loans, represented 86.7% of the loan portfolio at December 31, 2025, compared to 85.9% at December 31, 2024.
For the year ended December 31, 2024, the Company recorded a provision of $83.6 million for credit losses related to loans, compared to $28.2 million for the year ended December 61 31, 2023. The Company had net charge-offs of $14.6 million for the year ended December 31, 2024, compared to net charge-offs of $8.1 million in 2023.
For the year ended December 31, 2024, the Company recorded an $83.6 million provision for credit losses on loans, compared to a $28.2 million provision for 2023. The Company, f or the year ended December 31, 2024, had net loan charge-offs of $14.6 million, compared to net charge-offs of $8.1 million for 2023.
The Company maintains the allowance for credit losses through provisions for credit losses that are charged to income. Charge-offs against the allowance for credit losses are taken on loans where management determines that the collection of loan principal and interest is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for credit losses.
Charge-offs against the allowance for credit losses are taken on loans where management determines that the collection of loan principal and interest is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for credit losses. The calculation of the allowance for credit losses is a critical accounting policy of the Company.
The Bank’s lending policy focuses on quality underwriting standards and close monitoring of the loan portfolio. As of December 31, 2024, these commercial loan types accounted for 85.9% of the loan portfolio and retail loans accounted for 14.1%. The Company intends to continue to focus on commercial mortgage, multi-family, construction, and commercial lending relationships.
The Bank’s lending policy focuses on quality underwriting standards and close monitoring of the loan portfolio. As of December 31, 2025, these commercial loan types accounted for 86.7% of the loan portfolio and retail loans accounted for 13.3%. The Company intends to continue to focus on commercial mortgage, multi-family, construction, and commercial lending relationships.
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. 63 For the year ended December 31, 2024, the Company recorded an $83.6 million provision for credit losses on loans, compared to a $28.2 million provision for 2023.
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. 63 For the year ended December 31, 2025, the Company recorded a $3.6 million provision for credit losses, compared with a provision for credit losses of $87.6 million for 2024.
Total charge-offs for the year ended December 31, 2023 were $10.4 million, compared to $6.5 million for the year ended December 31, 2022. Recoveries for the year ended December 31, 2023 , were $2.3 million, compared to $5.4 million for the year ended December 31, 2022.
Total charge-offs for the year ended December 31, 2024 were $17.8 million, compared to $10.4 million for the year ended December 31, 2023. Recoveries for the year ended December 31, 2024, were $3.3 million, compared to $2.3 million for the year ended December 31, 2023.
Purchases for the investment portfolio totaled $422.4 million for the year ended December 31, 2024, compared to $57.2 million for the year ended December 31, 2023. As of December 31, 2024, the Bank had outstanding loan commitments to borrowers of $2.73 billion, including undisbursed home equity lines and personal credit lines of $382.1 million.
Purchases for the investment portfolio totaled $802.3 million for the year ended December 31, 2025, compared to $422.4 million for the year ended December 31, 2024. As of December 31, 2025, the Bank had outstanding loan commitments to borrowers of $3.71 billion, including undisbursed home equity lines and personal credit lines of $644.9 million.
As a result, obtaining current and objectively prepared appraisals is a major part of the underwriting process. The Company engages a variety of professional firms to supply appraisals, market studies and feasibility reports, environmental assessments and project site inspections to complement its internal resources to underwrite and monitor these credit exposures.
The Company engages a variety of professional firms to supply appraisals, market studies and feasibility reports, environmental assessments and project site inspections to complement its internal resources to underwrite and monitor these credit exposures.
The Company’s gross commitments and outstanding balances as a participant in SNCs were $168.4 million and $86.8 million, respectively, as of December 31, 2024. As of December 31, 2024, the Company’s allowance for credit losses related to the loan portfolio was 1.04% of total loans, compared to 0.99% of total loans as of December 31, 2023.
The Company’s gross commitments and outstanding balances as a participant in SNCs were $197.5 million and $65.7 million, respectively, as of December 31, 2025. 61 As of December 31, 2025, the Company’s allowance for credit losses related to the loan portfolio was 0.95% of total loans, compared to 1.04% of total loans as of December 31, 2024.
For the year ended December 31, 2024, common stock repurchases totaled 89,569 shares at an average cost of $14.90 per share, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation. At December 31, 2024, approximately 3.1 million shares remained eligible for repurchase under the current stock repurchase authorization.
For the year ended December 31, 2025, common stock repurchases totaled 158,293 shares at an average cost of $18.07 per share, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation. As of December 31, 2025, approximately 814,000 shares remained eligible for repurchase under the current stock repurchase authorization.
The Company's current forecast period is six quarters, with a four-quarter reversion period to historical average macroeconomic factors. The Company's economic forecast is approved by the Company's ACL Committee. The allowance for credit losses is measured on a collective (pool) basis, with both a quantitative and qualitative analysis that is applied on a quarterly basis, when similar risk characteristics exist.
The Company's economic forecast is approved by the Company's ACL Committee. 55 The allowance for credit losses is measured on a collective (pool) basis, with both a quantitative and qualitative analysis that is applied on a quarterly basis, when similar risk characteristics exist.
The Company has continued to monitor and focus on depositor behavior and borrowing capacity with the FHLBNY and FRBNY, with current borrowing capacity of $2.57 billion and $3.79 billion, respectively at December 31, 2024. Our estimated uninsured and uncollateralized deposits at December 31, 2024 totaled $4.42 billion, or 23.7% of deposits.
The Company has continued to monitor and focus on depositor behavior and borrowing capacity with the FHLBNY and FRBNY, with current borrowing capacity of $4.61 billion and $2.87 billion, respectively at December 31, 2025. Our estimated uninsured and uncollateralized deposits at December 31, 2025 totaled $4.82 billion, or 25.0% of deposits.
The calculation of the allowance for credit losses is a critical accounting policy of the Company. Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and a reasonable and supportable forecast.
Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and a reasonable and supportable forecast.
A bank is considered to be well-capitalized if it has a leverage (Tier 1) capital ratio of at least 5.00% and a total risk-based capital ratio of at least 10.00%.
A bank is considered to be well-capitalized if it has a leverage (Tier 1) capital ratio of at least 5.00% and a total risk-based 66 capital ratio of at least 10.00%. The total capital to risk-weighted assets requirement, taking into account the capital conservation buffer, is 10.50%.
Non-performing commercial loans as of December 31, 2024 consisted of 65 loans, of which 16 loans were under 90 days past-due. Of these non-performing commercial loans, 37 were PCD loans totaling $4.9 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.
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 five loans with aggregate outstanding balances of $10.4 million as of December 31, 2025.
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.
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.
Comparison of Financial Condition as of December 31, 2024 and December 31, 2023 Total assets as of December 31, 2024 were $24.05 billion, a $9.84 billion increase from December 31, 2023.
Comparison of Financial Condition as of December 31, 2025 and December 31, 2024 Total assets at December 31, 2025 were $24.98 billion, a $928.9 million increase from December 31, 2024.
Total non-performing loans as of December 31, 2024 were $72.1 million, or 0.39% of total loans, compared with $49.6 million, or 0.46% of total loans as of December 31, 2023.
Total non-performing loans as of December 31, 2025 were $78.4 million, or 0.40% of total loans, compared with $72.1 million, or 0.39% of total loans as of December 31, 2024.
Stockholders’ equity increased $910.6 million during the year ended December 31, 2024 to $2.60 billion, primarily due to common stock issued for the purchase of Lakeland, net income earned for the period and a slight improvement in unrealized losses on available for sale debt securities, partially offset by cash dividends paid to stockholders.
Stockholders’ equity increased $232.0 million during the year ended December 31, 2025, to $2.83 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.
Annual appraisals are generally obtained for loans graded substandard or worse where real estate is a material portion of the collateral value and/or the income from the real estate or sale of the real estate is the primary source of debt service. Appraisals are, in substantially all cases, reviewed by a third-party to determine the reasonableness of the appraised value.
Appraisals are generally obtained more frequently for loans graded substandard or worse where real estate is a material portion of the collateral value and/or the income from the real estate or sale of the real estate is the primary source of debt service.
This forecast is applied over a period that management has determined to be reasonable and supportable. Beyond the period over which management can develop or source a reasonable and supportable forecast, the model will revert to long-term average economic conditions using a straight-line, time-based methodology.
Beyond the period over which management can develop or source a reasonable and supportable forecast, the model will revert to long-term average economic conditions using a straight-line, time-based methodology. The Company's current forecast period is six quarters, with a four-quarter reversion period to historical average macroeconomic factors.
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.
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.
Non-performing commercial mortgage loans increased $15.7 million to $20.9 million as of December 31, 2024, from $5.2 million as of December 31, 2023. As of December 31, 2024, non-performing commercial mortgage loans consisted of 17 loans. Of these 17 loans, nine loans totaling $5.9 million were PCD loans.
Non-performing (i.e., non-accruing) commercial mortgage loans increased $6.0 million to $26.9 million as of December 31, 2025, from $20.9 million as of December 31, 2024. Non-performing commercial mortgage loans consisted of 11 loans as of December 31, 2025. Of these 11 loans, 5 loans totaling $1.2 million were PCD loans.
The table below summarizes the Company’s commercial real estate portfolio as of December 31, 2024, as segregated by the geographic region in which the property is located (dollars in thousands): Amount Percentage of Total New Jersey $ 7,087,027 61.1 % New York 1,797,415 15.5 Pennsylvania 1,586,518 13.7 Other states 1,130,168 9.7 Total commercial real estate loans $ 11,601,128 100.0 % The Company participates in loans originated by other banks, including participations designated as Shared National Credits (“SNCs”).
The table below summarizes the Company’s commercial real estate portfolio as of December 31, 2025, as segregated by the geographic region in which the property is located (dollars in thousands): Amount Percentage of Total New Jersey $ 7,189,401 60.7 % New York 1,916,004 16.2 Pennsylvania 1,444,943 12.2 Other states 1,299,457 11.0 Total commercial real estate loans $ 11,849,805 100.0 % The Company participates in loans originated by other banks, including participations designated as Shared National Credits (“SNCs”).
For the year ended December 31, 2024, the Company experienced net increases of $1.57 billion in multi-family loans, $2.17 billion in commercial loans and $2.72 billion in commercial mortgage loans, partially offset by net decreases of $170.3 million in construction loans and net decreases in residential mortgage and consumer loans of $845.7 million and $314.7 million, respectively.
For the year ended December 31, 2025, the Company had net increases of $395.8 million in commercial loans, $284.4 million in multi-family loans and $170.7 million in commercial mortgage loans, partially offset by net decreases of $161.4 million in construction loans, $36.3 million in residential mortgage loans and $1.4 million in consumer 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. As of December 31, 2024, the Company held $9.5 million of foreclosed assets, compared with $11.7 million as of December 31, 2023.
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 and December 31, 2024, the Company held foreclosed assets of $2.0 million and $9.5 million, respectively.
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 a PCD loan. There were two non-performing construction loans in 2023.
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 PCD loan.
The largest non-performing commercial mortgage loan was a $7.3 million loan secured by a first mortgage on a retail building 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.
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.
Within total deposits, brokered deposits totaled $1.40 billion as of December 31, 2024, compared to $689.3 million as of December 31, 2023. Our brokered deposits are made up primarily of ICS deposits and CDARS. Both of these services are provided by the bank to increase the level of customers' deposit insurance.
Our brokered deposits are made up primarily of ICS deposits and CDARS. Both of these services are provided by the Bank to increase the level of customers' deposit insurance. Our estimated uninsured and uncollateralized deposits at December 31, 2025 totaled $4.82 billion, or 25.0% of deposits.
The loan portfolio consists of the following (dollars in thousands): 2024 2023 Mortgage loans: Commercial $ 7,228,078 4,512,411 Multi-family 3,382,933 1,812,500 Construction 823,503 653,246 Residential 2,010,637 1,177,698 Total mortgage loans 13,445,151 8,143,113 Commercial loans (1) 4,608,600 2,440,621 Consumer loans 613,819 299,164 Total gross loans 18,667,570 10,882,898 Premiums on purchased loans 1,338 1,474 Net deferred fees and unearned discounts (9,538) (12,456) Total loans $ 18,659,370 10,871,916 (1) Commercial loans consist of owner-occupied real estate and commercial & industrial loans.
The loan portfolio consists of the following (dollars in thousands): 2025 2024 Mortgage loans: Commercial $ 7,398,792 7,228,078 Multi-family 3,667,337 3,382,933 Construction 662,112 823,503 Residential 1,974,324 1,177,698 Total mortgage loans 13,702,565 13,445,151 Commercial loans (1) 5,200,517 4,608,600 Consumer loans 612,431 613,819 Total gross loans 19,515,513 18,667,570 Premiums on purchased loans 1,524 1,338 Net deferred fees and unearned discounts (12,976) (9,538) Total loans $ 19,504,061 18,659,370 (1) Commercial loans consist of owner-occupied real estate, commercial & industrial loans and mortgage warehouse lines.
Foreclosed assets at December 31, 2024 consisted primarily of commercial real estate. Non-performing assets totaled $81.5 million, or 0.34% of total assets as of December 31, 2024, compared to $61.3 million, or 0.43% of total assets as of December 31, 2023.
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.
For the year ended December 31, 2023, the Company's income tax expense was $47.4 million with an effective tax rate of 27.0%, compared with $64.5 million with an effective tax rate of 26.8% for the year ended December 31, 2022.
For the year ended December 31, 2025, the Company's income tax expense was $117.0 million with an effective tax rate of 28.7%, compared with $34.1 million with an effective tax rate of 22.8% for the year ended December 31, 2024.
Years Ended December 31, 2024 vs. 2023 2023 vs. 2022 Increase/(Decrease) Due to Total Increase/ (Decrease) Increase/(Decrease) Due to Total Increase/ (Decrease) Volume Rate Volume Rate (In thousands) Interest-earning assets: Deposits, Federal funds sold and short-term investments $ (9,867) $ 13,497 $ 3,630 $ (8,646) $ 10,061 $ 1,415 Investment securities (780) 303 (477) (787) 254 (533) Securities available for sale 16,177 20,762 36,939 (4,387) 10,454 6,067 Federal Home Loan Bank Stock 276 1,890 2,166 2,501 1,604 4,105 Loans 309,447 78,614 388,061 25,394 113,191 138,585 Total interest-earning assets 315,253 115,066 430,319 14,075 135,564 149,639 Interest-bearing liabilities: Savings deposits 419 840 1,259 (202) 1,110 908 Demand deposits 71,237 49,167 120,404 (1,827) 95,250 93,423 Time deposits 55,383 13,019 68,402 3,294 23,130 26,424 Borrowed funds 12,571 5,096 17,667 18,450 28,096 46,546 Subordinated debentures 21,590 (163) 21,427 13 423 436 Total interest-bearing liabilities 161,200 67,959 229,159 19,728 148,009 167,737 Net interest income $ 154,053 $ 47,107 $ 201,160 $ (5,653) $ (12,445) $ (18,098) There were no out-of-period items and/or adjustments that had a material impact on the rate/volume analysis for the periods aforementioned in the table above.
Years Ended December 31, 2025 vs. 2024 2024 vs. 2023 Increase/(Decrease) Due to Total Increase/ (Decrease) Increase/(Decrease) Due to Total Increase/ (Decrease) Volume Rate Volume Rate (In thousands) Interest-earning assets: Deposits and other short term investments $ 24,905 $ (28,955) $ (4,050) $ (9,867) $ 13,497 $ 3,630 Investment securities (986) (205) (1191) (780) 303 (477) Securities available for sale 25,318 16,729 42,047 15,773 20,666 36,439 Equity securities 243 (143) 100 404 96 500 Federal Home Loan Bank Stock 2,293 (1,688) 605 276 1,890 2,166 Loans 195,985 (6,860) 189,125 309,447 78,614 388,061 Total interest-earning assets 247,758 (21,122) 226,636 315,253 115,066 430,319 Interest-bearing liabilities: Savings deposits 289 (123) 166 419 840 1,259 Demand deposits 49,696 (22,469) 27,227 71,237 49,167 120,404 Time deposits 34,831 (11,744) 23,087 55,383 13,019 68,402 Borrowed funds 1,318 3,913 5,231 12,571 5,096 17,667 Subordinated debentures 11,754 (780) 10,974 21,590 (163) 21,427 Total interest-bearing liabilities 97,888 (31,203) 66,685 161,200 67,959 229,159 Net interest income $ 149,870 $ 10,081 $ 159,951 $ 154,053 $ 47,107 $ 201,160 There were no out-of-period items and/or adjustments that had a material impact on the rate/volume analysis for the periods aforementioned in the table above.
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.
The allowance estimation process resulted in a total provision 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.
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 builder/developers, volatility in consumer demand. 60 The table below summarizes the collateral concentrations of CRE loans on a gross basis, not including any purchase accounting adjustments ("PAA") as of December 31, 2024 (dollars in thousands): Amount Percentage of Total Multi-family $ 3,901,860 33.5 % Retail 2,563,414 22.1 Industrial 2,202,543 19.0 Office 892,842 7.7 Mixed 831,853 7.2 Special use property 616,149 5.3 Residential 400,607 3.5 Hotel 125,956 1.1 Land 65,904 0.6 Total CRE, multi-family and construction loans $ 11,601,128 100.0 % The determination of collateral value is critically important when financing real estate.
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 builder/developers, volatility in consumer demand. 60 The table below summarizes the collateral concentrations of CRE loans on a gross basis, not including any purchase accounting adjustments as of December 31, 2025 (dollars in thousands): Amount Percentage of Total Multi-family $ 4,033,497 34.0 % Retail 2,735,702 23.1 Industrial 2,271,692 19.2 Mixed 923,768 7.8 Office 783,196 6.6 Special use property 581,967 4.9 Residential 305,835 2.6 Hotel 133,086 1.1 Land 81,062 0.7 Total CRE, multi-family and construction loans (1) $ 11,849,805 100.0 % (1) As of December 31, 2025, purchase accounting adjustments related to CRE, multi-family and construction loans totaled $121.6 million.
The increase in savings and demand deposits was largely attributable to a $3.13 billion increase in interest-bearing demand deposits, a $1.59 billion increase in non-interest-bearing demand deposits, a $1.04 billion increase in money market deposits and a $504.0 million increase in savings deposits.
The increase in savings and demand deposits was largely attributable to a $372.0 million increase in interest-bearing demand deposits and a $328.7 million increase in money market deposits, partially offset by a $90.4 million decrease in savings deposits and a $74.5 million decrease in non-interest-bearing demand deposits.
For the year ended December 31, 2023, the Company recorded a $27.9 million provision for credit losses on loans, compared to a $8.4 million provision for 2022. The Company, f or the year ended December 31, 2023, had net loan charge-offs of $8.1 million, compared to net charge-offs of $1.1 million for 2022.
For the year ended December 31, 2025, the Company recorded a provision of $4.1 million for credit losses related to loans, compared to $83.6 million for the year ended December 31, 2024.
Transaction costs related to our merger with Lakeland totaled $20.2 million and $56.9 million, for the three months and year ended December 31, 2024, respectively, compared with transaction costs of $2.5 million and $7.8 million for the respective 2023 periods.
The merger with Lakeland significantly impacted provisions for credit losses in 2024 due to the initial CECL provisions recorded on acquired loans in the second quarter. Transaction costs related to our merger with Lakeland totaled $56.9 million for the year ended December 31, 2024, compared with transaction costs of $7.8 million for the respective 2023 period.
The increase in total assets was primarily due to the addition of Lakeland. 59 The Company’s loan held for investment portfolio totaled $18.66 billion as of December 31, 2024 and $10.87 billion as of December 31, 2023.
The increase in total assets was primarily due to a $844.7 million increase in loans held for investment and a $354.0 million increase in total investments, partially offset by a $147.7 million decrease in loans held for sale, and decreases in intangibles and other assets. 59 The Company’s loan held for investment portfolio totaled $19.50 billion as of December 31, 2025 and $18.66 billion as of December 31, 2024.
The increase in time deposits consisted of a $1.98 billion increase in retail time deposits and a $91.1 million increase in brokered time deposits. During the year ended December 31, 2024, our Certificate of Deposit Account Registry Services ("CDARS") product increased $51.7 million to $215.6 million as of December 31, 2024, from $163.9 million as of December 31, 2023.
During the year ended December 31, 2025, our Certificate of Deposit Account Registry Services ("CDARS") product increased $105.4 million to $321.0 million as of December 31, 2025, from $215.6 million as of December 31, 2024. 62 Within total deposits, brokered deposits totaled $1.85 billion as of December 31, 2025, compared to $1.40 billion as of December 31, 2024.
For the year ended December 31, 2024, the increase in provision was primarily attributable to an initial CECL provision for credit losses on loans of $60.1 million, recorded as part of the Lakeland merger.
The increase in tax expense for the year ended December 31, 2025, compared with last year was primarily due to an increase in taxable income, partially resulting from the prior year initial CECL provision for credit losses on loans of $60.1 million recorded in accordance with GAAP requirements for accounting for business combinations and additional expenses from the Lakeland merger.
Partially offsetting these decreases in non-interest income, insurance agency income increased $2.5 million to $13.9 million for the year ended December 31, 2023, compared to $11.4 million for the same period in 2022, largely due to increases in retention revenue and new business activity.
Additionally, insurance agency income increased $2.1 million to $18.3 million for the year ended December 31, 2025, compared to $16.2 million for 2024, largely due to increases in contingent commissions, retention revenue and new business activity.
Total off-balance sheet obligations were $2.73 billion as of December 31, 2024, an increase of $644.7 million, from $2.09 billion as of December 31, 2023. Contractual obligations consist of certificate of deposit liabilities. Total certificate of deposits as of December 31, 2024 were $3.17 billion, an increase of $2.07 billion, compared to $1.10 billion as of December 31, 2023.
Off-balance sheet commitments consist of unused commitments to borrowers for term loans, unused lines of credit and outstanding letters of credit. Total off-balance sheet obligations were $3.71 billion as of December 31, 2025, an increase of $976.6 million, from $2.73 billion as of December 31, 2024. Contractual obligations consist of certificate of deposit liabilities.
The historical PDR curves, together with corresponding economic conditions, establish a quantitative relationship between economic conditions and loan performance through an economic cycle. 55 Using the historical relationship between economic conditions and loan performance, management’s expectation of future loan performance is incorporated using an externally developed economic forecast.
Using the historical relationship between economic conditions and loan performance, management’s expectation of future loan performance is incorporated using an externally developed economic forecast. This forecast is applied over a period that management has determined to be reasonable and supportable.
FDIC insurance expense increased $3.4 million to $8.6 million for the year ended December 31, 2023, compared to $5.2 million for the trailing year, primarily due to an increase in the assessment rate and the FDIC special assessment.
Other income increased $3.9 million to $8.5 million for the year ended December 31, 2025, compared to $4.5 million for 2024, primarily due to an increase in gains on sales of SBA and mortgage loans and other miscellaneous income.
The increase in other operating expenses was largely due to a $3.0 million charge for contingent litigation reserves, combined with a $2.0 million write-down of a foreclosed property and an increase in professional fees. Merger-related expense increased $3.7 million to $7.8 million for the year ended December 31, 2023, compared to 2022.
Other operating expenses increased $5.1 million to $59.8 million for the year ended December 31, 2025, compared to $54.7 million for 2024, primarily due to a $1.4 million increase in write-downs on foreclosed property, combined with additional expenses due to the addition of Lakeland.
Within time deposits, $637.2 million or 20.1% was uninsured as of December 31, 2024. 62 Borrowed funds increased $50.4 million during the year ended December 31, 2024, to $2.02 billion. The increase in borrowings was largely due to the addition of Lakeland.
Our total estimated uninsured deposits, including collateralized deposits as of December 31, 2025 was $10.59 billion. Within time deposits, $738.2 million or 22.5% was uninsured as of December 31, 2025. Borrowed funds increased $91.5 million during the year ended December 31, 2025, to $2.11 billion.
Non-interest expense totaled $275.6 million for the year ended December 31, 2023, an increase of $18.8 million, compared to $256.8 million for the year ended December 31, 2022. Other operating expense increased $8.5 65 million to $47.4 million for the year ended December 31, 2023, compared to $38.9 million for the year ended December 31, 2022.
Non-Interest Expense. Non-intere st expense totaled $458.7 million for the year ended December 31, 2025, an increase of $1.1 million, compared to $457.5 million for the year ended December 31, 2024.
There were no security purchases in 2024 and 2023 which settled in January 2025 or January 2024, respectively.
Total certificate of deposits as of December 31, 2025 were $3.28 billion, an increase of $0.12 billion, compared to $3.17 billion as of December 31, 2024. There were no security purchases in 2025 and 2024 which settled in January 2026 or January 2025, respectively.
Partially offsetting these increases, net occupancy expense decreased $2.3 million to $32.3 million for the year ended December 31, 2023, compared to the same period in 2022, mainly due to decreases in depreciation and maintenance expenses. Income Tax Expense .
Net occupancy expense increased $7.8 million to $52.8 million for the year ended December 31, 2025, compared to 2024, primarily due to increases in depreciation and maintenance expense related to the addition of Lakeland.
Comparison of Operating Results for the Years Ended December 31, 2023 and December 31, 2022 General. Net income for the year ended December 31, 2023 was $128.4 million, compared to $175.6 million for the year ended December 31, 2022.
Additionally, the increase in tax expense and the effective tax rate was due to a prior year $10.0 million tax benefit related to the revaluation of deferred tax assets. Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023 General.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeChange in Interest Rates in Basis Points Present Value of Equity Present Value of Equity as Percent of Present Value of Assets Amount Change Percent Change Present Value Ratio Percent Change (Dollars in thousands) -300 $ 2,948,544 $ (373,412) (11.2) % (11.2) % 11.5 % -200 3,108,374 (213,582) (6.4) (6.4) 12.3 -100 3,230,258 (91,698) (2.8) (2.8) 13.0 Flat 3,321,956 — — — 13.5 +100 3,357,980 36,024 1.1 1.1 13.9 The preceding table indicates that as of December 31, 2024, in the event of an immediate and sustained 100 basis point increase in interest rates, the Company would experience a 1.1%, or $36.0 million increase in the present value of equity.
Biggest changeChange in Interest Rates in Basis Points Present Value of Equity Present Value of Equity as Percent of Present Value of Assets Amount Change Percent Change Present Value Ratio Percent Change (Dollars in thousands) -200 3,680,559 (201,638) (5.2) 14.2 (8.6) -100 3,807,798 (74,399) (1.9) 14.9 (3.7) Flat 3,882,197 — — 15.5 — +100 3,895,937 13,740 0.4 15.9 2.3 +200 3,894,659 12,462 0.3 16.2 4.2 The preceding table indicates that as of December 31, 2025, in the event of an immediate and sustained 200 basis point increase in interest rates, the Company would experience a 0.3%, or $12.5 million increase in the present value of equity.
Specific assumptions used in the simulation model include: • Parallel yield curve shifts for market rates; • Current asset and liability spreads to market interest rates are fixed; • Traditional savings and interest-bearing demand accounts move at 10% of the rate ramp in either direction; • Retail Money Market and Business Money Market accounts move at 25% and 75% of the rate ramp in either direction, respectively; and • Higher-balance demand deposit tiers and promotional demand accounts move at 50% to 75% of the rate ramp in either direction. 67 The following table sets forth the results of the twelve month projected net interest income model as of December 31, 2024.
Specific assumptions used in the simulation model include: • Parallel yield curve shifts for market rates; • Current asset and liability spreads to market interest rates are fixed; • Traditional savings and interest-bearing demand accounts move at 10% of the rate ramp in either direction; • Retail Money Market and Business Money Market accounts move at 25% and 75% of the rate ramp in either direction, respectively; and • Higher-balance demand deposit tiers and promotional demand accounts move at 50% to 75% of the rate ramp in either direction. 67 The following table sets forth the results of the twelve month projected net interest income model as of December 31, 2025.
Another measure of interest rate sensitivity is to model changes in economic value of equity through the use of immediate and sustained interest rate shocks. The following table illustrates the economic value of equity model results as of December 31, 2024.
Another measure of interest rate sensitivity is to model changes in economic value of equity through the use of immediate and sustained interest rate shocks. The following table illustrates the economic value of equity model results as of December 31, 2025.
The Company’s strategy for liabilities has been to maintain a stable core-funding base by focusing on core deposit account acquisition and increasing products and services per household. Certificate of deposit accounts as a percentage of total deposits were 17.0% as of December 31, 2024, compared to 10.6% as of December 31, 2023. Certificate of deposit accounts are generally short-term.
The Company’s strategy for liabilities has been to maintain a stable core-funding base by focusing on core deposit account acquisition and increasing products and services per household. Certificate of deposit accounts as a percentage of total deposits were 17.1% as of December 31, 2025, compared to 17.0% as of December 31, 2024. Certificate of deposit accounts are generally short-term.
As of December 31, 2024, 96.1% of all certificates of deposit had maturities of one year or less compared to 93.1% as of December 31, 2023. The Company’s ability to retain maturing time deposit accounts is the result of its strategy to remain competitively priced within its marketplace.
As of December 31, 2025, 96.2% of all certificates of deposit had maturities of one year or less compared to 96.1% as of December 31, 2024. The Company’s ability to retain maturing time deposit accounts is the result of its strategy to remain competitively priced within its marketplace.
The preceding table indicates that, as of December 31, 2024, in the event of a 100 basis point increase in interest rates, whereby rates ramp up evenly over a twelve-month period, there would be a 0.3% or $2.3 million decrease to net interest income.
The preceding table indicates that, as of December 31, 2025, in the event of a 200 basis point increase in interest rates, whereby rates ramp up evenly over a twelve-month period, there would be a 1.8% or $14.2 million decrease to net interest income.
In the event of a 300 basis point decrease in interest rates, whereby rates ramp down evenly over a twelve-month period, the Company would experience a 0.1%, or $710,000 decrease in net interest income. In this downward rate scenario, rates on deposits have a repricing floor of zero.
In the event of a 200 basis point decrease in interest rates, whereby rates ramp down evenly over a twelve-month period, the Company would experience a 1.5%, or $11.8 million increase in net interest income. In this downward rate scenario, rates on deposits have a repricing floor of zero.
If rates were to decrease 300 basis points, the present value of equity would decrease 11.2% or $373.4 million. Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
If rates were to decrease 200 basis points, the present value of equity would decrease 5.2% or $201.6 million. Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
Change in Interest Rates in Basis Points - (Rate Ramp) Net Interest Income Amount Change Percent Change (Dollars in thousands) -300 $ 769,050 $ (710) (0.1) % -200 767,087 (2,673) (0.3) -100 767,848 (1,912) (0.2) Static 769,760 — — +100 767,494 (2,266) (0.3) The interest rate risk position of the Company remains slightly asset sensitive.
Change in Interest Rates in Basis Points - (Rate Ramp) Net Interest Income Amount Change Percent Change (Dollars in thousands) -200 821,694 11,812 1.5 -100 815,429 5,547 0.7 Static 809,882 — — +100 802,851 (7,031) (0.9) +200 795,694 (14,188) (1.8) The interest rate risk position of the Company is relatively neutral.

Other PFS 10-K year-over-year comparisons