PFS 10-K & 10-Q changes, risk factors and insider trading

•Risks Related to the Recent Merger with Lakeland

The approvals received by the Company and the Bank from the bank regulatory authorities to consummate the merger with Lakeland were subject to certain regulatory conditions which continue to apply following the closing of the merger. The regulatory conditions include, but are not limited to: for three years following consummation of the merger, the Bank must maintain regulatory capital ratios at or above 8.50% for Tier 1 Leverage Capital and 11.25% for Total Risk Based Capital; and the Bank must maintain its commercial real estate concentrations (as a percent of capital and reserves) at levels at or below those forecasted in the pro forma financial projections that the Bank submitted to the FDIC. The failure to continue to comply with the regulatory conditions couldmay 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.

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”). The DOJ Consent Order required Lakeland Bank to, among other things, invest $12 million over five years in a loan subsidy fund to increase credit opportunities to residents of majority-Black and Hispanic census tracts in Essex, Morris, Somerset, Sussex and Union Counties, New Jersey (the “Newark Lending Area”), and devote a minimum of $400,000 over five years toward community development partnership contributions in the Newark Lending Area, and $150,000 per year over five years toward advertising, community outreach, and credit repair and education in the Newark Lending Area. 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 (or similar officer designated with the community lending function) to oversee these efforts throughout the term of the consent order.

As required by the terms of the DOJ Consent Order, the Bank, as the resulting institution in the bank merger, assumed all obligations of Lakeland Bank under the DOJ Consent Order. AlthoughWhile 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. Actions taken to achieve compliance with the DOJ Consent Order may affect the Bank’s business or financial performance and may require the Bank to reallocate resources away from existing businesses or to undertake significant changes to its business, operations, products and services and risk management practices. 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.

As the Federal Reserve has maintained higher interest rates, our interest-bearing liabilities may continue to be subject to repricing or maturing more quickly than our interest-earning assets. Persistent elevated short-term rates continue tocould 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. In addition, the effect of high rates continue to be compounded as deposit customers move funds into higher yielding accounts or are lost to competitors offering higher rates on their deposit products. We are unable to predict whether current rates will persist or if the Federal Reserve will cut interest rates going forward. Should market interest rates fall below current levels, our net interest income could also be negatively affected if competitive pressures prevent us from reducing rates on our deposits, while the yields on our assets decrease through loan prepayments and interest rate adjustments.

AChanges generalin economic slowdownconditions in the broader market, in our market area, or in our local market, could affect our core banking business. As of December 31, 2024,2025, various economic indicators suggested that real gross domestic product had expanded throughout 2024.2025. 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, hadremained moved lower compared tobelow its peak level in 2023. Despite improved projections,Nevertheless, unforeseen adverse changes in the economy andor ain possibleforeign recessionor 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.

Commercial real estate loans generally involve a higher degree of credit risk because they typically have larger balances and are more affected by adverse conditions in the economy, such as vacancy rates and changes in rental rates. Payments on loans secured by commercial real estate also often depend on the successful operation and management of the businesses that occupy these properties or the financial stability of tenants occupying the properties. 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. AsIncluded ofin Decemberour 31,commercial 2024,real estate portfolio, our CRE office portfolio totaled $884.1$775.5 millionmillion, dollars,which withincludes approximatelybut 13%is beingnot loanslimited into markets such as New York.York (approximately 15% of such loans). In our CRE multi-family portfolio,loansportfolio, loans that are collateralized by rent stabilized apartments comprise less than 0.80%one percent of the total loan portfolio and are all performing. In the case of commercial and industrial loans, although we strive to maintain high credit standards and limit exposure to any one borrower, the collateral for these loans often consists of accounts receivable, inventory and equipment. 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. In addition, some of our construction loans may pose higher risk than the levels expected at origination, as projects may stall, interest reserves may be inadequate, absorption may be slower than projected or sales prices or rents may be lower than forecasted. In addition, many of our borrowers have more than one commercial real estate or construction loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship may expose the Company to significantly greater risk of loss.

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 limitationslimitations, 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. Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. Downgrades to the U.S. credit rating could affect the stability of securities issued or guaranteed by the federal government and the valuation or liquidity of our portfolio of such investment securities and could result in our counterparties requiring additional collateral for our borrowings. Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs.

We are subject to extensive regulation, supervision and examination by various regulatory authorities, but primarily by the New Jersey Department of Banking and Insurance,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. 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. These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to require that we hold additional capital, restrict our operations, modify the classification of our assets, increase our allowance for credit losses, and strengthen the management of risks posed by our reliance on third party vendors. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, or legislation, could have a material impact on the Company’s operations.

As we continue to grow in size,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. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations may have on us, these changes could be material.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the FRB.Federal Reserve Bank ("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. 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. The FRB’s policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin. Its policies can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans. The monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.

Changes in FRB and other governmental policies,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 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”). Although the CRE Guidance does not establish specific lending limits, it provides that a bank’s commercial real estate lending exposure may receive increased supervisory scrutiny where total non-owner occupied commercial real estate loans, including loans secured by multi-family buildings, investor commercial real estate and construction and land loans (“CRE Loans”), represent 300% or more of an institution’s total risk-based capital and the outstanding balance of the CRE Loan portfolio has increased by 50% or more during the preceding 36 months. Our level of CRE Loans equaled 460.2%432.1% 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.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.

The effects of climate change continue to create a level of concern for the state of the global environment. State legislatures and federal and state regulatory agencies have proposed, and may propose in the future, initiatives, legislation, and regulations to supplement the global effort to combat climate change. SimilarThis andcould even more expansive initiatives are expected, includinginclude 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.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 conditioncondition, assets, and operations of the Company; however, the physical effects of climate change may also directly impact the Company. 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. The effects of changing strategies, policies, and investments as parts of the global communityeconomy transitionstransition to a lower-carbon economyeconomy, 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. 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.

Our business is subject to risk from external events that could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue, disrupt business operations and/or cause us to incur additional expenses. For example, financial institutions have been, and continue to be, targets of terrorist threats aimed at compromising their operating and communication systems. The metropolitan New York and Philadelphia areas remain central targets for potential acts of terrorism, including cyber terrorism, which could affect not only our operations but those of our customers. 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. The emergence of widespread health emergencies or pandemics, similar to the spread of COVID-19, could lead to regional quarantines, business shutdowns, labor shortages, disruptions to supply chains, and overall economic instability. Events such as these may become more common in the future and could cause significant damage such as disruption of power and communication services, impact the stability of our facilities and result in additional expenses, impair the ability of our borrowers to repay their loans, reduce the value of collateral securing the repayment of our loans, which could result in the loss of revenue. While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition. Additionally, financial markets may be adversely affected by any current or anticipated impact of military conflict, including continuing war between Russia and Ukraine, conflictswars and military tension in the Middle East, Africa, and Asia,tensions, terrorism, cyber-attacks from nation states and non-state actors on financial institutions or other geopolitical events.

We must maintain sufficient funds to respond to the needs of depositors and borrowers. Deposits have traditionally been our primary source of funding for our lending and investment activities. We also receive funds from loan repayments, investment maturities and income on other interest-earning assets. 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. Further, the demand for deposits may be reduced due to a variety of factors such as negative trends in the banking sector, the level of and/or composition of our uninsured deposits, demographic patterns, changes in customer preferences, reductions in consumers' disposable income, the monetary policy of the FRB or regulatory actions that decrease customer access to particular products. 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 Federal Home Loan Bank of New YorkFHLBNY and Federal Reserve BankFRB advances, federal funds purchased and brokered certificates of deposit. Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources.

Furthermore, key components of the financial services value chain have been replicated by digital innovation. As customer preferences and expectations continue to evolve, technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. In addition, some of the largest technology firms are engaging in joint ventures with the largest banks to provide and /or expand financial service offerings with a technological sophistication and breadth of marketing that smaller institutions do not have. Many of our competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than we can. 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 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. For instance, as private and state-sponsored hackers and malicious actors increasingly leverage the power of artificial intelligence to conduct cyber-attacks and other fraudulent activity, financial institutions can adopt and learn to use the same technology in order to detect attempts and defend themselves. 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. Many of our competitors have substantially greater resources to invest in technological improvements. 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. 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.

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. Historical credit loss experience for both the Company and peers provides the basis for the estimation of expected credit losses, where observed credit losses are converted to probability of default rate (“PDR”) curves through the use of segment-specific loss given default (“LGD”) risk factors that convert default rates to loss severity based on industry-level, observed relationships between the two variables for each segment, primarily due to the nature of the underlying collateral. These risk factors were assessed for reasonableness against the Company’s own loss experience and adjusted in certain cases when the relationship between the Company’s historical default and loss severity deviatedeviates 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.

One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period. As of December 31, 2024,2025, the model incorporated Moody’s baseline economic forecast, as adjusted for qualitative factors, as well as an extensive review of classified loans and loans that were classified as impaired with a specific reserve assigned to those loans. The allowance estimation process resulted in a total provision of $83.6$4.1 million for the year ended December 31, 2024,2025, and an overall coverage ratio of 10495 basis points. Of the $83.6 million provision for the year, $60.1 million was recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations. 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.

•Commercial Loans – Commercial Owner-Occupied and Commercial Non-OwnerNon-Real OccupiedEstate Secured

Material changes to these and other relevant factors create greater volatility to the allowance for credit losses, and therefore, greater volatility to the Company’s reported earnings. ForThe decrease in the year ended December 31, 2024, the increase inyear-over-year provision for credit losses was primarily attributable to anthe prior year initial CECL provision for credit losses on loans of $60.1 million,million recorded as part of the Lakeland merger.merger in accordance with GAAP requirements for accounting for business combinations, combined with some economic forecast strengthening over the current twelve-month period within our CECL model, compared to last year.

Total assets as ofat December 31, 20242025 were $24.05$24.98 billion, a $9.84$928.9 billionmillion increase from December 31, 2023.2024. The increase in total assets was primarily due to thea addition$844.7 ofmillion Lakeland.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.

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

As part of the merger with Lakeland, we acquired $7.91 billion in loans, net of purchase accounting adjustments. For the year ended December 31, 2024,2025, the Company experiencedhad net increases of $1.57$395.8 billionmillion in commercial loans, $284.4 million in multi-family loans, $2.17 billion in commercial loans and $2.72$170.7 billionmillion in commercial mortgage loans, partially offset by net decreases of $170.3$161.4 million in construction loansloans, and$36.3 net decreasesmillion in residential mortgage loans and $1.4 million in consumer loans of $845.7 million and $314.7 million, respectively.loans. Commercial loans, consisting of commercial real estate, multi-family, commercialcommercial, mortgage warehouse and construction loans, represented 85.9%86.7% of the loan portfolio at December 31, 2024,2025, compared to 86.5%85.9% at December 31, 2023.2024. 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$2.59 billion and accounted for 14.1%13.3% of the loan portfolio as of December 31, 2024,2025, compared to $1.46$2.62 billion, or 13.5%,14.1%, of the loan portfolio as of December 31, 2023.2024. For the year ended December 31, 2024,2025, loan fundings, including advances on lines of credit, totaled $4.82$10.11 billion, compared with $3.34$4.82 billion for 2023.2024.

The Bank’s lending activities, though concentrated in the communities surrounding its offices, extend predominantly throughout New Jersey, eastern Pennsylvania and NassauNassau, Queens and Orange County, New York. This geographic concentration subjects the Company’s loan portfolio to the general economic conditions within these states. The risks created by this concentration have been considered by management in the determination of the appropriateness of the allowance for credit losses.

The Company believes the CRE loans it originates are appropriately collateralized under its credit standards. 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. The primary source of repayment on the permanent loan portion of these loans is generally expected to come from the cash flow stream of the underlying leases which are dependent on the successful operations of the respective tenants. The primary source of the repayment on the construction portfolio is dependent on the successful completion of the project and the related sale, permanent financing or lease of the real property collateral. 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.

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, 20242025 (dollars in thousands):

However, in periods of economic uncertainty where real estate market conditions may change rapidly, more current appraisals are obtained when warranted by conditions such as a borrower’s deteriorating financial condition, their possible inability to perform on the loan or other indicators of increasing risk of reliance on collateral value as the sole source of repayment of the loan. Annual appraisalsAppraisals 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.

Appraisals are, in substantially all cases, reviewed by a third-party to determine the reasonableness of the appraised value. The third-party reviewer will challenge whether or not the data used is appropriate and relevant, form an opinion as to the appropriateness of the appraisal methods and techniques used, and determine if overall the analysis and conclusions of the appraiser can be relied upon. Additionally, the third-party reviewer provides a detailed report of that analysis. 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, managementthe Company addresses those with the reviewer and determines an appropriate resolution in accordance with its lending policy. Both the appraisal process and the appraisal review process can be less reliable in establishing accurate collateral values during and following periods of economic weakness due to the lack of comparable sales and the limited availability of financing to support an active market of potential purchasers.

As of December 31, 2024,2025, the Company’s allowance for credit losses related to the loan portfolio was 1.04%0.95% of total loans, compared to 0.99%1.04% of total loans as of December 31, 2023.2024. For the year ended December 31, 2024,2025, the Company recorded a provision of $83.6$4.1 million for credit losses related to loans, compared to $28.2$83.6 million for the year ended December 31, 2023.2024. 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. The increasedecrease in the allowanceyear-over-year provision for credit losses was primarily attributable to the prior year initial CECL provision for credit losses on loans was due to an $83.6 million provision for credit losses on loans, which included an initial CECL provision of $60.1 million on loans acquired from Lakeland, and a $17.2 million allowance recorded throughas goodwillpart relatedof the Lakeland merger in accordance with GAAP requirements for accounting for business combinations, combined with some economic forecast strengthening over the current twelve-month period within our CECL model, compared to PCDlast loans acquired from Lakeland, partially offset by net charge-offs of $14.6 million.year.

Non-performing (i.e., non-accruing) commercial mortgage loans increased $15.7$6.0 million to $26.9 million as of December 31, 2025, from $20.9 million as of December 31, 2024,2024. from $5.2 million as of December 31, 2023. As of December 31, 2024, non-performingNon-performing commercial mortgage loans consisted of 1711 loans.loans as of December 31, 2025. Of these 1711 loans, nine5 loans totaling $5.9$1.2 million were PCD loans. The largest non-performing commercial mortgage loan was a $7.3$20.3 million loan secured by a first mortgage on a retail/office building locatedproperty in Atlantic City,Manhattan, New Jersey.York.

Non-performing commercial loans decreasedincreased $17.2$9.0 million, to $33.2 million as of December 31, 2025, from $24.2 million as of December 31, 2024, from $41.5 million as of December 31, 2023.2024. Non-performing commercial loans as of December 31, 20242025 consisted of 6541 loans, of which 1614 loans were under 90 days past-due. Of these non-performing commercial loans, 376 were PCD loans totaling $4.9$8.1 million. The largest non-performing commercial loan relationship consisted of threefive loans with aggregate outstanding balances of $4.1$10.4 million as of December 31, 2024.2025. These loans are secured by allcommercial businessreal assets.estate.

Non-performing construction loans increaseddecreased $12.5$8.1 million to $5.2 million as of December 31, 2025, from $13.2 million as of December 31, 2024, from $771,000 as of December 31, 2023.2024. Non-performing construction loans as of December 31, 20242025 consisted of twoone loans,loan, of which one was a PCD loan. There were two non-performing construction loans in 2023. The largestThis non-performing construction loan was a $12.3$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.

Non-performing multi-family mortgage loans consisted of three loans totaling $2.3 million as of December 31, 2025, compared to six loansnon-performing multi-family mortgage loan totaling $7.5 million as of December 31, 2024,2024. comparedOf tothese three loans, one non-performing multi-family mortgage loan totaling $744,000$424,000 aswas of December 31, 2023. Of these six loans, four loans totaling $2.1 million werea PCD loans.loan. The largest non-performing multi-family mortgage loan was a $3.7$1.0 million loan secured by a first mortgage on residentiala condominium6-unit unitsapartment building in Brooklyn,Queens, New York.

Total deposits increased $8.33$654.9 billionmillion during the year ended December 31, 2024,2025, to $18.62$19.28 billion. As part of the merger with Lakeland, we acquired $8.62 billion in total deposits. Total savings and demand deposit accounts increased $6.26$535.7 million to $15.99 billion to $15.46 billion as ofat December 31, 2024,2025, while total time deposits increased $2.07$119.1 million to $3.29 billion to $3.17 billion as ofat December 31, 2024.2025. The increase in savings and demand deposits was largely attributable to a $3.13$372.0 billionmillion increase in interest-bearing demand deposits,deposits and a $1.59$328.7 billion increase in non-interest-bearing demand deposits, a $1.04 billionmillion increase in money market deposits, partially offset by a $90.4 million decrease in savings deposits and a $504.0$74.5 million increasedecrease in savingsnon-interest-bearing demand deposits. The increase in time deposits consisted of a $1.98 billion increase in retail time deposits and a $91.1$253.6 million increase in brokered time deposits, partially offset by a $134.5 million decrease in retail time deposits. During the year ended December 31, 2024,2025, our Certificate of Deposit Account Registry Services ("CDARS") product increased $51.7$105.4 million to $321.0 million as of December 31, 2025, from $215.6 million as of December 31, 2024, from $163.9 million as of December 31, 2023.2024.

Within total deposits, brokered deposits totaled $1.85 billion as of December 31, 2025, compared to $1.40 billion as of December 31, 2024, compared to $689.3 million as of December 31, 2023.2024. Our brokered deposits are made up primarily of ICS deposits and CDARS. Both of these services are provided by the bankBank to increase the level of customers' deposit insurance. Our estimated uninsured and uncollateralized deposits at December 31, 20242025 totaled $4.42$4.82 billion, or 23.7%.25.0% of deposits. Our total estimated uninsured deposits, including collateralized deposits as of December 31, 20242025 was $9.87$10.59 billion. Within time deposits, $637.2$738.2 million or 20.1%22.5% was uninsured as of December 31, 2024.2025.

Borrowed funds increased $50.4$91.5 million during the year ended December 31, 2024,2025, to $2.02$2.11 billion. The increase in borrowings was largely due to the addition of Lakeland. Borrowed funds represented 8.4%8.5% of total assets at December 31, 2024,2025, a decrease from 13.9% at December 31, 2023.2024.

Stockholders’ equity increased $910.6$232.0 million during the year ended December 31, 20242025, to $2.60$2.83 billion, primarily due to common stock issued for the purchase of Lakeland, net income earned for the period and a slight improvementdecrease in unrealized losses on available for sale debt securities, partially offset by cash dividends paid to stockholders. For the year ended December 31, 2024,2025, common stock repurchases totaled 89,569158,293 shares at an average cost of $14.90$18.07 per share, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation. AtAs of December 31, 2024,2025, approximately 3.1 million814,000 shares remained eligible for repurchase under the current stock repurchase authorization. Book value per share and tangible book value per share at December 31, 2025 were $21.69 and $15.70, respectively, compared with $19.93 and $13.66, respectively, at December 31, 2024.

Earnings for the year ended December 31, 2024 reflect the impact of the May 16, 2024 merger with Lakeland, which added $10.59 billion to total assets, $7.91 billion to loans, and $8.62 billion to deposits, net of purchase accounting adjustments. The merger with Lakeland significantly impacted provisions for credit losses in 2024 due to the initial Current Expected Credit Loss ("CECL") provisions recorded on acquired loans in the second quarter. Transaction costs related to our merger with Lakeland totaled $20.2$56.9 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.period. Additionally, the Company realized a $2.8 million loss related to the sale of subordinated debt issued by Lakeland from the Provident investment portfolio, during the second quarter of 2024.

Total deposits increased $8.33$654.9 billionmillion for the year ended December 31, 2024.2025. 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. Certificate of deposit accounts that are scheduled to mature within one year totaled $3.05$3.16 billion as of December 31, 2024.2025. Based on its current pricing strategy and customer retention experience, the Bank expects to retain a significant share of these accounts. The Bank manages liquidity on a daily basis and expects to have sufficient cash to meet all of its funding requirements.

There were no material changes to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Certain statements contained herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” "project," "intend," “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K, as supplemented by its Quarterly Reports on Form 10-Q, and those related to the economic environment, particularly in the market areas in which the Company operates, inflation and unemployment, competitive products and pricing, real estate values, fiscal and monetary policies of the U.S. Government,government, tariffs, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in governmentlegislation and regulations affecting financial institutions, including regulatory feesfees, capital requirements and capitaltax requirements,laws, higher than expected tax and other liabilities, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date they are made. The Company advises readers that the factors listed above and other risks and uncertainties could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any currentforward-looking statements. The Company does not assume any duty, and does not undertake, to update any forward-looking statements to reflect events or circumstances after the date of thissuch statement.

One of the most significant judgments involved in estimating the Company’s allowance for credit losses on loans relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period. As of MarchJune 31,30, 2026, the model incorporated Moody’s baseline economic forecast, as adjusted for qualitative factors, as well as an extensive review of classified loans and loans that were classified as impaired with a specific reserve assigned to those loans. The allowance estimation process resulted in a total recaptureprovision of previous$9.6 provisionsmillion onand loans of $4.7$4.9 million for the three and six months ended MarchJune 31,30, 2026, and an overall coverage ratio of 9092 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.

Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Management developed segments for estimating loss based on type of borrower and collateral which is generally based upon federal call report segmentation. The segments have been combined or sub-segmented as needed to ensure loans of similar risk profiles are appropriately pooled. As of MarchJune 31,30, 2026, the portfolio and class segments for the Company’s loan portfolio were:

The CECL approach to calculate the allowance for credit losses on loans is significantly influenced by the composition, characteristics and quality of the Company’s loan portfolio, as well as the prevailing economic conditions and forecast utilized. Although management believes that the Company has established and maintained the allowance for credit losses at appropriate levels, additions may be necessary if future economic and other conditions differ substantially from the current operating environment and economic forecast. Management evaluates its estimates and assumptions on an ongoing basis giving consideration to forecasted economic factors, historical loss experience and other factors. The model includes both quantitative and qualitative components. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods, and to the extent actual losses are higher than management estimates, additional provision for credit losses on loans could be required and could adversely affect our earnings or financial position in future periods. In addition, various regulatory agencies periodically review the adequacy of the Company’s allowance for credit losses as an integral part of their examination process. 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. Although management uses the best information available, the level of the allowance for credit losses remains an estimate that is subject to significant judgment and short-term volatility.

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

Total assets as of MarchJune 31,30, 2026 were $25.20$25.66 billion, a $221.0$682.6 million increase from December 31, 2025. The increase in total assets was primarily due to a $143.6$541.7 million increase in totalloans loansheld for investment and a $60.9$106.0 million increase in total investments.

The Company’s loans held for investment portfolio increasedtotaled $143.6 million to $19.65$20.05 billion as of MarchJune 31,30, 2026,2026 fromand $19.50 billion as of December 31, 2025. The loan portfolio consistsconsisted of the following (in thousands):

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

During the threesix months ended MarchJune 31,30, 2026, the loans held for investment portfolio had net increases of $123.1$407.6 million of commercial loans, $56.9$139.5 million of multi-family loans and $24.9$103.8 million of commercial mortgage loans, partially offset by net decreases of $22.5$43.1 million of mortgage warehouse lines, $21.2$35.6 million of residential mortgage loans, $23.2 million of construction loans and $13.5$5.1 million of residential mortgageconsumer loans. Total commercial loans, consistingincluding ofmortgage warehouse lines, commercial realmortgage, estate, multi-family, commercialmulti-family and construction loans, as well as mortgage warehouse lines, represented 86.9%87.3% of the loan portfolio as of MarchJune 31,30, 2026, compared to 86.7% as of December 31, 2025.

We consider our commercial real estate loans to be higher risk categories in our loan portfolio. These loans are particularly sensitive to economic conditions. As of MarchJune 31,30, 2026, our portfolio of commercial real estate loans, including multi-family and construction loans, totaled $11.79$11.95 billion, or 59.97%59.6% of total loans.

The table below summarizes the concentrations of CRE loans on a gross basis, not including any purchase accounting adjustments ("PAA"),PAA, based on the collateral securing the loans, as of MarchJune 31,30, 2026 (in thousandsmillions):

The table below summarizes the Company’s commercial real estate portfolio, including multi-family and construction loans on a gross basis, not including any purchase accounting adjustments as of MarchJune 31,30, 2026, as segregated by the geographic region in which the property is located (dollars in thousandsmillions):

The Company participates in loans originated by other banks, including participations designated as Shared National Credits (“SNCs”). The Company’s gross commitments and outstanding balances as a participant in SNCs were $196.9$187.5 million and $81.2$90.9 million, respectively, as of MarchJune 31,30, 2026, compared to $197.5$174.8 million and $65.7 million, respectively, as of December 31, 2025.

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

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

As of MarchJune 31,30, 2026, the Company’s allowance for credit losses related to the loan portfolio was 0.90%0.92% of total loans, compared to 0.95% and 0.98% as of December 31, 2025 and 1.02%June as of March 31,30, 2025, respectively. The Company recorded a $4.7provision millionfor recapturecredit of provisionlosses on loans of $9.6 million and $4.9 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared with a provision on loansrecapture of $325,000provisions totaling $2.7 million and $2.3 million for the three and six months ended MarchJune 31,30, 2025, respectively. For the three and six months ended MarchJune 31,30, 2026, the Company had net charge-offs of $3.1$1.9 million and $5.0 million, respectively, compared to net charge-offs of $2.0$1.2 million and $3.2 million, respectively, for the same periodperiods in 2025. The allowance for credit losses decreased $7.8$0.1 million to $177.0$184.7 million as of MarchJune 31,30, 2026,2026 from $184.8 million as of December 31, 2025. The decrease in the allowance for credit losses on loans as of June 30, 2026 compared to December 31, 2025 was due to net charge-offs of $5.0 million, partially offset by a $4.9 million provision for credit losses on loans.

Total non-performing loans were $142.9$136.9 million, or 0.73%0.68% of total loans as of MarchJune 31,30, 2026, compared to $78.4 million, or 0.40% of total loans as of December 31, 2025. The $64.5 million increaseIncluded in non-performing loans as of March 31, 2026, compared to the trailing quarter, was primarily driven by the addition ofare four commercial loans on senior housing properties totaling $82.1$81.8 million that are the subject of related bankruptcy filings, partially offset by payoffs.filings. These loans have no prior charge-off history and require no specific reserve allocations due to strong collateral values.values, Appraisalswhich are supported by appraisals received in 2026 reflectand, loan-to-valuemore ratiosrecently, forinitial bids submitted through the collateralongoing propertiesbankruptcy ofsale 32.9%, 51.7%, 61.3%, and 81.9%.process.

ForAs bothof MarchJune 31,30, 2026 and December 31, 2025, the Company held foreclosed assets of $1.0 million and $2.0 million.million, respectively. Foreclosed assets as of MarchJune 31,30, 2026 werewas comprised of one commercial real estate.estate property. Total non-performing assets as of MarchJune 31,30, 2026 increased $64.5$57.4 million to $144.9$137.9 million, or 0.58%0.54% of total assets, from $80.4 million, or 0.32% of total assets as of December 31, 2025.

Total investment securities were $3.53$3.57 billion as of MarchJune 31,30, 2026, a $60.9$106.0 million increase from December 31, 2025. This increase was primarily due to purchases of mortgage-backed securitiessecurities, andpartially aoffset decreaseby an increase in unrealized losses on available for sale debt securities.

Total deposits decreasedincreased $178.4$266.5 million during the threesix months ended MarchJune 31,30, 2026, to $19.10$19.55 billion. Total savings and demand deposit accounts decreasedincreased $80.7$110.3 million to $15.91$16.10 billion as of MarchJune 31,30, 2026, while total time deposits decreasedincreased $97.7$156.2 million to $3.19$3.44 billion as of MarchJune 31,30, 2026. The decreaseincrease in savings and demand deposits consistedwas oflargely attributable to a $147.2 decrease in municipal deposits and a $42.8 million decrease in interest-bearing brokered deposits, partially offset a $53.4$351.4 million increase in money market deposits,deposits and a $12.4$94.1 million increase in savingsnon-interest depositsbearing anddemand deposits, partially offset by a $2.3$328.7 million increasedecrease in non-interest-bearinginterest bearing demand deposits. TheWithin decreaseinterest inbearing demand deposits, municipal deposits wasdecreased mainly$443.4 million primarily due to seasonal outflows. The decreaseincrease in time deposits consistedwas ofprimarily anattributable $82.5to a $149.3 million decreaseincrease in brokered time deposits, combined with a $15.2 million decrease in retail time deposits.

Borrowed funds increased $371.0$295.6 million during the threesix months ended MarchJune 31,30, 2026, to $2.48$2.41 billion. The increase in borrowingsborrowed funds was largely doneused to fund seasonal outflows in municipal deposits and to replace maturing brokered deposits. Borrowed funds represented 9.9%9.4% of total assets as of MarchJune 31,30, 2026, an increase from 8.5% as of December 31, 2025.

Stockholders’ equity increased $29.7$73.8 million during the threesix months ended MarchJune 31,30, 2026, to $2.86$2.91 billion, primarily due to net income earned for the period and a decrease in unrealized losses on available for sale debt securities,period, partially offset by cash dividends paid to stockholders and commonan stockincrease repurchases.in unrealized losses on available for sale debt securities. For the three and six months ended MarchJune 31,30, 2026, common stock repurchases totaled 588,92325,799 shares at an average cost of $21.04$22.15 per share,share ofand which 100,381614,722 shares at an average cost of $21.29$21.09 per share, respectively, of which 126,180 shares at an average cost of $21.47 were made in connection with withholding to cover income taxes on the vesting of stock-based compensation. As of MarchJune 31,30, 2026, approximately 2.2 million2,199,471 shares remained eligible for repurchase under the current stock repurchase authorization.

Liquidity and Capital Resources. Liquidity refers to the Company’s ability to generate adequate amounts of cash to meet financial obligations to its depositors, to fund loans and securities purchases and operating expenses. Sources of funds include scheduled amortization of loans, loan prepayments, scheduled maturities of unpledged investments, cash flows from mortgage-backed securities and the ability to borrow funds from the FHLBNY, the Federal Reserve Bank of New York ("FRBNY") and approved broker-dealers.

Cash flows from loan payments and maturing investment securities are fairly predictable sources of funds. Changes in interest rates, local economic conditions and the competitive marketplace can influence loan prepayments, prepayments on mortgage-backed securities and deposit flows. For the threesix months ended MarchJune 31,30, 2026 and 2025, loan repayments totaled $2.27$4.72 billion and $1.72$3.79 billion, respectively.

The Company has continuedcontinues to monitor and focus on depositor behavior and borrowing capacity with the FHLBNY and FRBNY, with current borrowing capacity of $4.17$4.38 billion and $2.94$2.96 billion, respectivelyrespectively, as of MarchJune 31,30, 2026. Our estimated uninsured and uncollateralized deposits as of MarchJune 31,30, 2026 totaled $4.90$5.00 billion, or 25.6% of deposits. Our total estimated uninsured deposits, including collateralized deposits as of MarchJune 31,30, 2026, waswere $10.61$10.62 billion. Within time deposits, approximately $752.2$760.5 million, or 23.6%22.1% was uninsured as of MarchJune 31,30, 2026.

Commercial real estate loans, multi-family loans, commercial loans, one- to four-family residential loans and consumer loans are the primary investments of the Company. Purchasing securities for the investment portfolio is a secondary use of funds and the investment portfolio is structured to complement and facilitate the Company’s lending activities and ensure adequate liquidity. Loan originations and purchases totaled $2.42$5.28 billion for the threesix months ended MarchJune 31,30, 2026, compared to $1.93$4.30 billion for the same period in 2025. Purchases for the investment portfolio totaled $191.3$447.6 million for the threesix months ended MarchJune 31,30, 2026, compared to $802.3 million for the year ended December 31, 2025. As of MarchJune 31,30, 2026, the Bank had outstanding loan commitments to borrowers of $3.96$4.07 billion, including undisbursed home equity lines and personal credit lines of $657.8$660.3 million.

Total deposits decreasedincreased $178.4$266.5 million forduring the threesix months ended MarchJune 31,30, 2026.2026, to $19.55 billion. Deposit activity is affected by changes in interest rates, competitive pricing and product offerings in the marketplace, local economic conditions, customer confidence and other factors such as stock market volatility. Certificate of deposit accounts that are scheduled to mature within one year totaled $3.06$3.35 billion as of MarchJune 31,30, 2026. Based on its current pricing strategy and customer retention experience, the Bank expects to retain a significant share of these accounts. The Bank manages liquidity on a daily basis and expects to have sufficient cash to meet all of its funding requirements.

The Federal Deposit Insurance Corporation ("FDIC") and the other federal bank regulatory agencies issued a final rule that revised the leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act, that were effective January 1, 2015. Among other things, the rule established a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), adopted a uniform minimum leverage capital ratio at 4%, increased the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets) and assigned a higher risk weight (150%) to exposures that are more than 90 days past due or are on non-accrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The rule also required unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital unless a one-time opt-out was exercised. The Company exercised the option to exclude unrealized gains and losses from the calculation of regulatory capital. Additional constraints were also imposed on the inclusion in regulatory capital of mortgage-servicing assets, deferred tax assets and minority interests. 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,buffer” of 2.5% in addition to the amount necessary to meet its minimum risk-based capital requirements.

As of MarchJune 31,30, 2026, the Bank and the Company exceeded all current minimum regulatory capital requirements as follows:

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

COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED MARCHJUNE 31,30, 2026 AND 2025

General. The Company reported net income of $79.4$78.1 million, or $0.61$0.60 per basic and diluted share for the three months ended MarchJune 31,30, 2026, compared to net income of $64.0$72.0 million, or $0.49$0.55 per basic and diluted share, for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, net income totaled $157.6 million, or $1.21 per basic and diluted share, compared to $136.0 million, or $1.04 per basic and diluted share, for the six months ended June 30, 2025.

The following tabletables sets forth certain information for the three and six months ended MarchJune 31,30, 2026 and 2025.2026. For the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities is expressed both in dollars and rates. No tax equivalent adjustments were made. Average balances are daily averages.

Net Interest Income. Net interest income increased $12.0$15.6 million to $193.7$202.7 million for the three months ended MarchJune 31,30, 2026, from $181.7$187.1 million for the same period in 2025. Net interest income increased $27.6 million to $396.4 million for the six months ended June 30, 2026, from $368.8 million for the same period in 2025. The increase in net interest income was primarily due to originations of new loans,loans at current market rates, combined with favorable repricing of deposits, partially offset by a decrease in lower-costing deposits.

The net interest margin increased six12 basis points to 3.40%3.48% for the quarter ended MarchJune 31,30, 2026, compared to 3.34%3.36% for the quarter ended MarchJune 31,30, 2025. The weighted average yield on interest-earning assets decreased 107 basis points to 5.53%5.61% for the quarter ended MarchJune 31,30, 2026, compared to 5.63%5.68% for the quarter ended MarchJune 31,30, 2025, while the weighted average cost of interest-bearing liabilities decreased 1923 basis points for the quarter ended MarchJune 31,30, 2026, to 2.71%, compared to 2.90%2.94% for the quarter ended MarchJune 31,30, 2025. The average cost of interest-bearing deposits for the quarter ended MarchJune 31,30, 2026, was 2.39%,2.37%, compared to 2.64%2.62% for the same period last year. Average non-interest-bearing demand deposits totaled $3.64 billion for the quarter ended March 31, 2026, compared to $3.72 billion for the quarter ended MarchJune 31,30, 2026, compared to $3.70 billion for the quarter ended June 30, 2025. The average cost of total deposits, including non-interest-bearing deposits, was 1.94%1.92% for the quarter ended MarchJune 31,30, 2026, compared with 2.11%2.10% for the quarter ended MarchJune 31,30, 2025. The average cost of borrowed funds for the quarter ended MarchJune 31,30, 2026, was 3.90%,3.91%, compared to 3.76%3.94% for the same period last year.

Interest income on loans secured by real estate increased $4.4$2.6 million to $191.5$195.4 million for the three months ended MarchJune 31,30, 2026, from $187.1$192.8 million for the three months ended MarchJune 31,30, 2025. Commercial loan interest income increased $2.1$3.9 million to $77.9$82.8 million for the three months ended MarchJune 31,30, 2026, from $75.8$78.9 million for the three months ended MarchJune 31,30, 2025. Consumer loan interest income decreased $258,000$0.5 million to $9.9$10.0 million for the three months ended MarchJune 31,30, 2026, from $10.2$10.5 million for the three months ended MarchJune 31,30, 2025. For the three months ended MarchJune 31,30, 2026, the average balance of total loans increased $763.7$742.0 million to $19.35$19.57 billion, compared to the same period in 2025. The average yield on total loans for the three months ended MarchJune 31,30, 2026, decreased 1011 basis points to 5.85%,5.90%, from 5.95%6.01% for the same period in 2025.

Interest income on held to maturity debt securities decreased $202,000 tototaled $1.8 million for the three months ended MarchJune 31,30, 2026, compared to $2.0 million for the same period last year. Average held to maturity debt securities decreased $46.2$48.5 million to $273.8$266.7 million for the three months ended MarchJune 31,30, 2026, from $320.0$315.2 million for the same period last year. Interest income on held to maturity debt securities decreased $390,000 to $3.6 million for the six months ended June 30, 2026, compared to the same period in 2025. Average held to maturity debt securities decreased $47.3 million to $270.3 million for the six months ended June 30, 2026, from $317.6 million for the same period last year.

Interest income on available for sale debt securities decreasedincreased $4.0$4.3 million to $31.5$33.6 million for the three months ended MarchJune 31,30, 2026, from $27.5$29.3 million for the three months ended MarchJune 31,30, 2025. The average balance of available for sale debt securities increased $389.9$314.5 million to $3.22$3.27 billion for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. Interest income on available for sale debt securities increased $8.6 million to $65.1 million for the six months ended June 30, 2026, from $56.5 million for the same period last year. The average balance of available for sale debt securities increased $352.0 million to $3.25 billion for the six months ended June 30, 2026.

Dividend income on FHLBNY stock decreasedincreased $319,000$0.1 million to $1.7$2.2 million for the three months ended MarchJune 31,30, 2026, from $2.0$2.1 million for the three months ended MarchJune 31,30, 2025. The average balance of FHLBNY stock increaseddecreased $12.8$1.1 million to $120.3$132.4 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. Dividend income on FHLBNY stock increased $8.2 million to $69.3 million for the six months ended June 30, 2026, from $61.1 million for the same period last year. The average balance of FHLBNY stock increased $5.5 million to $126.4 million for the six months ended June 30, 2026.

The average yield on total securities increased to 3.80%3.99% for the three months ended MarchJune 31,30, 2026, compared with 3.74%3.81% for the same period in 2025. For the six months ended June 30, 2026, the average yield on total securities increased to 3.90%, compared with 3.75% for the same period in 2025.

Interest expense on deposit accounts decreased $5.5$4.5 million to $91.9$91.8 million for the three months ended MarchJune 31,30, 2026, fromcompared $97.4with $96.3 million for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, interest expense on deposit accounts decreased $9.9 million to $183.7 million, from $193.7 million for the same period last year. The average cost of interest-bearing deposits decreasedimproved to 2.39%2.37% and 2.38% for the three and six months ended MarchJune 31,30, 2026, respectively, from 2.64%2.62% and 2.63% for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The average balance of interest-bearing core deposits, which consist of total savings and demand deposits, for the three months ended MarchJune 31,30, 2026, increased $587.4$752.6 million to $12.37$12.27 billion. For the six months ended June 30, 2026, average interest-bearing core deposits increased $670.5 million, to $12.32 billion, from $11.65 billion for the same period in 2025. Average time deposit account balances increased $31.3$39.1 million to $3.23$3.24 billion for the three months ended MarchJune 31,30, 2026, from $3.20 billion for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, average time deposit account balances increased $35.3 million to $3.23 billion, from $3.20 billion for the same period in 2025.

Interest expense on borrowed funds increaseddecreased $3.2$0.7 million to $21.0$23.7 million for the three months ended MarchJune 31,30, 2026, from $17.8$24.5 million for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, interest expense on borrowed funds increased $2.5 million to $44.7 million, from $42.2 million for the six months ended June 30, 2025. The average cost of borrowings decreased to 3.91% for the three months ended June 30, 2026, from 3.94% for the three months ended June 30, 2025. The average cost of borrowings increased to 3.90% for the threesix months ended MarchJune 31,30, 2026, from 3.76%3.86% for the threesame monthsperiod endedlast March 31, 2025.year. Average borrowings increaseddecreased $266.7$55.0 million to $2.18$2.44 billion for the three months ended MarchJune 31,30, 2026, from $1.92$2.49 billion for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, average borrowings increased $104.9 million to $2.31 billion, compared to $2.21 billion for the six months ended June 30, 2025.

Non-InterestFor Income.the Non-interestsix months ended June 30, 2026, non-interest income totaled $31.5$63.4 million for the quarter ended March 31, 2026,million, an increase of $4.4$9.3 million,million compared to the same period in 2025. BOLI income increased $1.9$3.2 million to $4.0$7.8 million for the threesix months ended MarchJune 31,30, 2026, compared to the priorsame yearperiod quarter,in 2025, primarily due to an increase in benefit claims.claims Insurancerecognized. agencyFee income increased $1.2$2.3 million to $6.9$22.7 million for the threesix months ended MarchJune 31,30, 2026, compared to the quartersame ended March 31, 2025, largely due to an increaseperiod in contingency income and business activity. Fee income increased $809,000 to $10.5 million for the three months ended March 31, 2026, compared to the prior year quarter,2025, primarily due to increases in loan related and deposit fee income and commercial loan prepayment fees.income. Additionally, otherinsurance agency income increased $486,000$1.7 million to $2.7$12.3 million for the threesix months ended MarchJune 31,30, 2026, compared to $10.6 million for the quartersame period in 2025, largely due to increases in contingent commissions, retention revenue and new business activity. Other income increased $1.5 million to $4.3 million for the six months ended MarchJune 31,30, 2026, compared to $2.8 million for the same period in 2025, primarily due to an increase in netprofit on fixed asset sales and gains on sales of Small Business Administration ("SBA") loans. Within other non-interest income, gains on the sale of SBA loans,loans combinedtotaled with$1.7 million for the six months ended June 30, 2026. Wealth management income increased $0.6 million to $14.9 million for the six months ended June 30, 2026, compared to the same period in 2025, mainly due to an increase in gainthe average market value of assets under management during the period. Partially offsetting these increases in non-interest income, net gains on fixedsecurities assettransactions sales,decreased partially$0.4 offsetmillion byfor athe decreasesix inmonths netended feesJune on30, loan-level interest rate swap transactions.2026.

Non-InterestNon-interest Expense.expense Fortotaled $236.4 million for the threesix months ended MarchJune 31,30, 2026, non-interest expense totaled $117.1 million, an increase of $874,000,$5.5 million, compared to $230.9 million for the threesix months ended MarchJune 31,30, 2025. Compensation and benefits expense increased $3.8$7.9 million to $66.2$133.5 million for threethe six months ended MarchJune 31,30, 2026, compared to $62.4$125.6 million for the samesix periodmonths inended 2025.June The30, increase was2025, primarily dueattributable to an increaseincreases in salary expense associated with Company-wide annual merit increases, combined with increases inexpense, employee medical benefits and stock-based compensation expenses. NetAdditionally, occupancycosts expenseassociated increasedwith $1.1our millionongoing tocore $15.0system millionconversion fortotaled the$1.5 three months ended March 31, 2026, compared to the same period in 2025, largely due to increases in snow removal, utilities and other maintenance costs.million. Partially offsetting these increases to non-interest expense, other operating expense decreased $2.5 million to $14.0 million for the three months ended March 31, 2026, compared to $16.4 million for the three months ended March 31, 2025, largely due to a $2.7 million write-down on a foreclosed property in the prior year. Additionally, amortization of intangibles decreased $938,000$1.9 million to $8.6$17.1 million for the threesix months ended MarchJune 31,30, 2026, compared to $9.5$19.0 million for the six months ended June 30, 2025, primarilylargely due to a scheduled reduction in the rate of core deposit intangible amortization related to Lakeland,the whilemerger FDICwith insuranceLakeland. expenseOther operating expenses decreased $544,000$1.6 million to $2.8$29.4 million for the three months ended MarchJune 31,30, 2026, compared to $30.9 million for the same period in 2025, primarily due to a decrease$2.7 million write-down on a foreclosed property in the assessmentprior rate.year, partially offset by an increase in professional service expenses.

Income Tax Expense. For the three months ended MarchJune 31,30, 2026, the Company's income tax expense was $30.8$27.9 million with an effective tax rate of 27.9%,26.3%, compared with $27.8$30.5 million with an effective tax rate of 30.3%29.7% for the three months ended MarchJune 31,30, 2025. The increase in tax expense for the three months ended March 31, 2026, compared with the same period last year, was largely due to an increase in pre-tax income, partially offset by a discrete item related to stock-based compensation. The decrease in income tax expense and the effective tax rate was primarily related to ongoingdiscrete items related to benefits fromassociated with carry-back tax credits recognizedand inpurchases of current year tax credits, partially offset by the currenteffects quarter,of combinedrecently withadopted theNew aforementionedJersey discretelegislation itemregarding relatednet tooperating stock-basedloss compensation.usage.