PROVIDENT FINANCIAL SERVICES INC (PFS)
SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6035 Savings Institution, Federally Chartered
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1178970. Latest filing source: 0001628280-26-012814.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,272,774,000 | USD | 2025 | 2026-02-27 |
| Net income | 291,160,000 | USD | 2025 | 2026-02-27 |
| Assets | 24,980,710,000 | USD | 2025 | 2026-02-27 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001178970.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 302,315,000 | 323,846,000 | 359,829,000 | 371,470,000 | 363,309,000 | 402,339,000 | 466,181,000 | 615,820,000 | 1,046,138,000 | 1,272,774,000 |
| Net income | 87,802,000 | 93,949,000 | 118,387,000 | 112,633,000 | 96,951,000 | 167,921,000 | 175,648,000 | 128,398,000 | 115,525,000 | 291,160,000 |
| Diluted EPS | 1.38 | 1.45 | 1.82 | 1.74 | 1.39 | 2.19 | 2.35 | 1.71 | 1.05 | 2.23 |
| Assets | 9,500,465,000 | 9,845,274,000 | 9,725,769,000 | 9,808,578,000 | 12,919,741,000 | 13,781,202,000 | 13,783,436,000 | 14,210,810,000 | 24,051,825,000 | 24,980,710,000 |
| Liabilities | 8,248,684,000 | 8,546,613,000 | 8,366,789,000 | 8,394,738,000 | 11,299,944,000 | 12,084,106,000 | 12,185,733,000 | 12,520,214,000 | 21,450,618,000 | 22,147,498,000 |
| Stockholders' equity | 1,251,781,000 | 1,298,661,000 | 1,358,980,000 | 1,413,840,000 | 1,619,797,000 | 1,697,096,000 | 1,597,703,000 | 1,690,596,000 | 2,601,207,000 | 2,833,212,000 |
| Cash and cash equivalents | 144,297,000 | 190,834,000 | 104,681,000 | 145,748,000 | 418,053,000 | 685,163,000 | 186,438,000 | 180,185,000 | 205,869,000 | 209,057,000 |
| Net margin | 29.04% | 29.01% | 32.90% | 30.32% | 26.69% | 41.74% | 37.68% | 20.85% | 11.04% | 22.88% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001178970.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 0.53 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.58 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.54 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 149,896,000 | 32,003,000 | 0.43 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 158,197,000 | 28,547,000 | 0.38 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 164,171,000 | 27,312,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 163,859,000 | 32,082,000 | 0.43 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 247,811,000 | -11,485,000 | -0.11 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 322,522,000 | 46,405,000 | 0.36 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 311,946,000 | 48,524,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 305,346,000 | 64,028,000 | 0.49 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 316,308,000 | 71,981,000 | 0.55 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 326,281,000 | 71,720,000 | 0.55 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 324,839,000 | 83,431,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 315,066,000 | 79,417,000 | 0.61 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001628280-26-032754.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Forward-Looking Statements 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, tariffs, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity. The Company cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date they are made. The Company advises readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not assume any duty, and does not undertake, to update any forward-looking statements to reflect events or circumstances after the date of this statement. Critical Accounting Policies The Company considers certain accounting policies to be critically important to the fair presentation of its financial condition and results of operations. These policies require management to make complex judgments on matters which by their nature have elements of uncertainty. The sensitivity of the Company’s consolidated financial statements to these critical accounting policies, and the assumptions and estimates applied, could have a significant impact on its financial condition and results of operations. These assumptions, estimates and judgments made by management can be influenced by a number of factors, including the general economic environment. The Company has identified the allowance for credit losses on loans and the acquisition method of accounting as critical accounting policies. The allowance for credit losses is a valuation account that reflects management’s evaluation of the current expected credit losses in the loan portfolio. 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. 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 43 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. 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. 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. 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 respective quantitative allowance for each loan segment is measured using an econometric, discounted PDR/LGD modeling methodology in which distinct, segment-specific multi-variate regression models are applied to an external economic forecast. Under the discounted cash flows methodology, expected credit losses are estimated over the effective life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. Contractual cash flows over the contractual life of the loans are the basis for modeled cash flows, adjusted for modeled defaults and expected prepayments and discounted at the loan-level effective interest rate. 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. Management will assess the likelihood of the option being exercised by the borrower and appropriately extend the maturity for modeling purposes. The Company considers qualitative adjustments to credit loss estimates for information not already captured in the quantitative component of the loss estimation process. Qualitative factors are based on portfolio concentration levels, model imprecision, changes in industry conditions, changes in the Company’s loan review process, changes in the Company’s loan policies and procedures, and economic forecast uncertainty. One of the most significant judgments involved in estimating the Company’s allowance for credit losses on loans relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period. As of March 31, 2026, the model incorporated Moody’s baseline economic forecast, as adjusted for qualitative factors, as well as an extensive review of classified loans and loans that were classified as impaired with a specific reserve assigned to those loans. The allowance estimation process resulted in a total recapture of previous provisions on loans of $4.7 million for the three months ended March 31, 2026, and an overall coverage ratio of 90 basis points. 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 March 31, 2026, 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. This process includes the review of delinquent and problem loans at the Company’s Credit, Credit Risk Management and Allowance Committees; or which may be identified through the Company’s loan review process. Generally, the Company only evaluates loans individually for impairment if the loan is non-accrual, non-homogeneous and the balance is greater than $1.0 million. For all classes of loans deemed collateral-dependent, the Company estimates expected credit losses based on the fair value of the collateral less any selling costs. If the loan is not collateral dependent, the allowance for credit losses related to individually assessed loans is based on discounted expected cash flows using the loan’s initial effective interest rate. Loans acquired that have experienced more-than-insignificant deterioration in credit quality since their origination are considered PCD loans. 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 44 doubtful; (4) watchlist credits; and (5) delinquency status, including loans that are current on acquisition date, but had been previously delinquent. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. Subsequent to the acquisition date, the initial allowance for credit losses on PCD loans will increase or decrease based on future evaluations, with changes recognized in the provision for credit losses on loans. Management believes the primary risks inherent in the portfolio are a general decline in the economy, a decline in real estate market values, rising unemployment or a protracted period of elevated unemployment, increasing vacancy rates in commercial investment properties and possible increases in interest rates in the absence of economic improvement. 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. Management considers it important to maintain the ratio of the allowance for credit losses to total loans at an acceptable level given current and forecasted economic conditions, interest rates and the composition of the portfolio. 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 [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
The Company conducts business through its subsidiary, the Bank, a community- and customer-oriented bank currently operating full-service branches and loan production offices throughout New Jersey, as well as in Bethlehem, Philadelphia and Plymouth Meeting, Pennsylvania and Nassau and Orange County, New York. The Bank also provides fiduciary and wealth management services through its wholly owned subsidiary, Beacon Trust Company and insurance services through its wholly owned subsidiary, Provident Protection Plus, Inc.
Strategy
Established in 1839, the Bank is the oldest New Jersey-chartered bank in the state. The Bank offers a full range of commercial and retail loan and deposit products and emphasizes personal service and convenience.
The Bank’s strategy is to grow profitably through a commitment to credit quality and expanding market share by acquiring, retaining, and expanding customer relationships, while carefully managing interest rate risk.
The Bank continues to maintain a diversified loan portfolio with an emphasis on commercial mortgage, multi-family, construction, and commercial loans in its efforts to reduce interest rate risk. These types of loans generally have adjustable rates that initially are higher than residential mortgage loans and generally have a higher rate of credit risk. 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.
The Company’s relationship banking strategy focuses on increasing core accounts and expanding relationships through its branch network, mobile banking, online banking and other digital services. The Company continues to evaluate opportunities to increase market share by expanding within existing and contiguous markets. Savings and demand deposit accounts are generally a stable, relatively inexpensive source of funds. As of December 31, 2025, savings and demand deposits were 82.9% of total deposits.
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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. In a rapidly rising interest rate environment, changes in interest rates have an adverse effect on net interest income as the Company’s interest-bearing assets and interest-bearing liabilities reprice or mature at different times or relative interest rates. The Company generates non-interest income such as income from retail and business account fees, loan servicing fees, loan origination fees, loan level swap fees, appreciation in the cash surrender value of Bank-owned life insurance, income from loan or securities sales, fees from wealth management services, investment product sales, insurance brokerage fees and other fees. The Company’s operating expenses consist primarily of compensation and benefits expense, occupancy and equipment expense, data processing expense, the amortization of intangible assets, marketing and advertising expense and other general and administrative expenses. The Company’s results of operations are also affected by general economic conditions, changes in market interest rates, changes in asset quality, changes in asset values, actions of regulatory agencies and government policies.
Acquisitions
Lakeland Bancorp
On May 16, 2024, the Company completed its merger with Lakeland Bancorp, Inc. ("Lakeland"), which added $10.59 billion to total assets, $7.91 billion to total loans, $8.62 billion to total deposits and 68 full-service banking offices in New Jersey and New York. The Company closed 13 of the acquired Lakeland banking offices and 9 legacy Bank branches in the third quarter of 2024 due to geographic overlap.
Under the merger agreement, each share of Lakeland common stock was converted into the right to receive 0.8319 shares of the Company's common stock, a total of 54,356,954 shares converted, plus cash in lieu of fractional shares. The total consideration paid for the acquisition of Lakeland was $876.8 million. In connection with the acquisition, Lakeland Bank, a wholly owned subsidiary of Lakeland, was merged with and into the Bank.
Critical Accounting Policies
The Company considers certain accounting policies to be critically important to the fair presentation of its financial condition and results of operations. These policies require management to make complex judgments on matters which by their nature have elements of uncertainty. The sensitivity of the Company’s consolidated financial statements to these critical accounting policies, and the assumptions and estimates applied, could have a significant impact on its financial condition and results of operations. These assumptions, estimates and judgments made by management can be influenced by a number of factors, including the general economic environment. The Company has identified the allowance for credit losses on loans and the acquisition method of accounting as critical accounting policies.
Allowance for Credit Losses on Loans
The allowance for credit losses is a valuation account that reflects management’s evaluation of the current expected credit losses in the loan portfolio. 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.
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 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.
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. 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. The Company's economic forecast is approved by the Company's ACL Committee.
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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 respective quantitative allowance for each loan segment is measured using an econometric, discounted PDR/LGD modeling methodology in which distinct, segment-specific multi-variate regression models are applied to an external economic forecast. Under the discounted cash flows methodology, expected credit losses are estimated over the effective life of the loans by measuring the difference between the net present value of modeled cash flows and amortized cost basis. Contractual cash flows over the contractual life of the loans are the basis for modeled cash flows, adjusted for modeled defaults and expected prepayments and discounted at the loan-level effective interest rate. 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. Management will assess the likelihood of the option being exercised by the borrower and appropriately extend the maturity for modeling purposes.
The Company considers qualitative adjustments to credit loss estimates for information not already captured in the quantitative component of the loss estimation process. Qualitative factors are based on portfolio concentration levels, model imprecision, changes in industry conditions, changes in the Company’s loan review process, changes in the Company’s loan policies and procedures, and economic forecast uncertainty.
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, 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 $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.
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 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. This process includes the review of delinquent and problem loans at the Company’s Credit, Credit Risk Management and Allowance Committees; or which may be identified through the Company’s loan review process. Generally, the Company only evaluates loans individually for impairment if the loan is non-accrual, non-homogeneous and the balance is greater than $1.0 million.
For all classes of loans deemed collateral-dependent, the Company estimates expected credit losses based on the fair value of the collateral less any selling costs. If the loan is not collateral dependent, the allowance for credit losses related to individually assessed loans is based on discounted expected cash flows using the loan’s initial effective interest rate.
Loans acquired that have experienced more-than-insignificant deterioration in credit quality since their origination are considered PCD loans. 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. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. Subsequent to the acquisition date, the initial allowance for credit losses on PCD loans will increase or decrease based on future evaluations, with changes recognized in the provision for credit losses.
Management believes the primary risks inherent in the portfolio are a general decline in the economy, a decline in real estate market values, rising unemployment or a protracted period of elevated unemployment, increasing vacancy rates in commercial investment properties and possible increases in interest rates in the absence of economic improvement. Any one or a combination of these events may adversely affect borrowers’ ability to repay the loans, resulting in increased delinquencies,
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credit losses and higher levels of provisions. Management considers it important to maintain the ratio of the allowance for credit losses to total loans at an acceptable level given current and forecasted economic conditions, interest rates and the composition of the portfolio.
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.
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. The decrease in the year-over-year provision for credit losses was primarily attributable to the prior year initial CECL provision for credit losses on loans of $60.1 million recorded as part of 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 last year.
Recent Legislation
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The legislation includes a number of significant tax-related provisions, including changes affecting corporate tax incentives, international tax provisions, and various business credits and deductions.
Pursuant to ASC 740, Income Taxes, the Company recognized the effects of the OBBBA in the third fiscal quarter of 2025, the period in which the legislation was enacted. The Company evaluated the potential impact of the OBBBA on its financial statements and, based on its assessment, the legislation did not have a material impact on its financial statements.
Acquisition Method of Accounting
The acquisition method of accounting requires that acquired assets and liabilities in a business combination be recorded at their fair values as of the acquisition date. This method often involves estimates, all of which are inherently subjective. ASC 805 provides for a period of time during which the acquirer may adjust provisional amounts recognized at the acquisition date to their subsequently determined acquisition-date fair values, referred to as the "measurement period." Adjustments during the measurement period are not limited to just those relating to assets acquired and liabilities assumed but apply to all aspects of business combination accounting (e.g., the consideration transferred). 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. For further information, see Note 2 on business combinations.
Analysis of Net Interest Income
Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. 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. 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 are expressed both in dollars and rates. No tax equivalent adjustments were made. Average 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.
(2) Average outstanding balances are net of the allowance for credit losses, deferred loan fees and expenses, and loan premiums and discounts and include non-accrual loans.
(3) Net interest income divided by average interest-earning assets.
58
Rate/Volume Analysis. The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.
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.
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. 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.
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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 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.
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. 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. 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, 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. 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.
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 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. 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. 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.
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 determination of collateral value is critically important when financing real estate. 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.
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. 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.
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 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. Both the appraisal process and the appraisal review process can be less reliable in establishing accurate collateral values during and following periods of economic weakness due to the lack of comparable sales and the limited availability of financing to support an active market of potential purchasers.
The table below summarizes the Company’s commercial real estate portfolio 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”). 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.
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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, 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. The decrease in the year-over-year provision for credit losses was primarily attributable to the prior year initial CECL provision for credit losses on loans of $60.1 million recorded as part of 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 last year.
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. 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. 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.
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 largest non-performing commercial mortgage loan was a $20.3 million loan secured by a first mortgage on a retail/office property in Manhattan, New York.
Non-performing commercial loans increased $9.0 million, to $33.2 million as of December 31, 2025, from $24.2 million as of December 31, 2024. Non-performing commercial loans as of December 31, 2025 consisted of 41 loans, of which 14 loans were under 90 days past-due. Of these non-performing commercial loans, 6 were PCD loans totaling $8.1 million. The largest non-performing commercial loan relationship consisted of five loans with aggregate outstanding balances of $10.4 million as of December 31, 2025. These loans are secured by commercial real estate.
Non-performing construction loans decreased $8.1 million to $5.2 million as of December 31, 2025, from $13.2 million as of December 31, 2024. Non-performing construction loans as of December 31, 2025 consisted of one loan, of which was a PCD loan. 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.
Non-performing multi-family mortgage loans consisted of three loans totaling $2.3 million as of December 31, 2025, compared to six non-performing multi-family mortgage loan totaling $7.5 million as of December 31, 2024. Of these three loans, one loan totaling $424,000 was a PCD loan. The largest non-performing multi-family mortgage loan was a $1.0 million loan secured by a first mortgage on a 6-unit apartment building in Queens, New York.
As of December 31, 2025 and December 31, 2024, the Company held foreclosed assets of $2.0 million and $9.5 million, respectively. During the year ended December 31, 2025, there was a write-down of one foreclosed commercial property of $2.7 million based on a contracted sales price. The sale of this property closed in the second quarter of 2025, which reduced foreclosed assets by an additional $5.8 million. 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. 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.
Total deposits increased $654.9 million during the year ended December 31, 2025, to $19.28 billion. Total savings and demand deposit accounts increased $535.7 million to $15.99 billion at December 31, 2025, while total time deposits increased $119.1 million to $3.29 billion at December 31, 2025. 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. The increase in time deposits consisted of a $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, 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.
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Within total deposits, brokered deposits totaled $1.85 billion as of December 31, 2025, compared to $1.40 billion as of December 31, 2024. 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. 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. Borrowed funds represented 8.5% of total assets at December 31, 2025, a decrease from 13.9% at December 31, 2024.
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. 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. 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.
Comparison of Operating Results for the Years Ended December 31, 2025 and December 31, 2024
General. Net income for the year ended December 31, 2025 totaled $291.2 million, or $2.23 per basic and diluted share, compared to $115.5 million, or $1.05 per basic and diluted share, for the year ended December 31, 2024.
Prior year earnings include six and a half months of combined operations with Lakeland, compared to a full year in 2025. Additionally, while there were no transaction costs related to our merger with Lakeland during 2025, for the year ended December 31, 2024, these costs totaled $20.2 million and $117.0 million, respectively. The 2024 full year results included an initial Current Expected Credit Loss ("CECL") provision for credit losses on loans of $60.1 million recorded as part of the Lakeland merger.
Net Interest Income. Net interest income increased $160.0 million to $760.6 million for 2025, from $600.6 million for 2024. The net interest margin increased 13 basis points to 3.39% for 2025, compared to 3.26% for 2024. The increase in net interest income was largely driven by growth in average earning assets including net assets added in the May 16, 2024 acquisition of Lakeland and related accretion of purchase accounting adjustments, further aided by lower rates on funding.
Interest income increased $226.6 million to $1.27 billion for 2025, compared to $1.05 billion for 2024. Average interest-earning assets increased $3.98 billion to $22.40 billion for 2025, compared to $18.40 billion for 2024. The yield on interest-earning assets remained flat at 5.68% for 2025, compared to 2024. The weighted average yield on total loans decreased four basis points to 6.01% for 2025 and the weighted average yield on available for sale debt securities increased 64 basis points to 3.96% for 2025, from 3.32% for 2024. The weighted average yield on FHLBNY stock decreased to 7.93% for 2025, compared to 9.70% for 2024.
Interest expense increased $66.7 million to $512.2 million for 2025, from $445.5 million for 2024. The average rate paid on interest-bearing liabilities increased 14 basis points to 2.91% for 2025, compared to 2024. The average rate paid on interest-bearing deposits decreased 20 basis points to 2.63% for 2025, from 2.83% for 2024. The average rate paid on borrowings increased 19 basis points to 3.90% for 2025, from 3.71% for 2024. The average balance of interest-bearing liabilities increased $3.03 billion to $17.62 billion for 2025, compared to $14.60 billion for 2024. Average outstanding borrowings increased $34.6 million to $2.02 billion for 2025, compared to 2024. Average non-interest bearing demand deposits increased $602.1 million to $3.72 billion for 2025, from $3.12 billion for 2024. Average interest-bearing deposits increased $2.85 billion to $15.20 billion for 2025, from $12.35 billion for 2024. Within average interest-bearing deposits, average interest-bearing core deposits increased $1.95 billion to $11.93 billion for 2025, while average time deposits increased $900.6 million to $3.27 billion for 2025.
Provision for Credit Losses. 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. The amount of the allowance is based on estimates, and the ultimate losses may vary from such estimates as more information becomes available or later events change. 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. The provision consisted of a $4.1 million provision charge for credit losses related to loans and a $545,000 provision benefit for credit losses related to off-balance sheet credit exposures, compared with provision charges for credit losses on loans and off-balance sheet credit exposures of $83.6 million and $4.0 million, respectively, for 2024. The provision for credit losses on loans for the year ended December 31, 2025 was primarily attributable to overall growth in the loan portfolio. For the year ended December 31, 2025, net charge-offs totaled $12.8 million or an annualized seven basis points of average loans, compared with net charge-offs of $14.6 million, or an annualized nine basis points of average loans, for the year ended December 31, 2024.
Non-Interest Income. For the year ended December 31, 2025, non-interest income totaled $109.8 million, an increase of $15.7 million, compared to 2024. Fee income increased $8.7 million to $42.8 million for the year ended December 31, 2025, compared to 2024, primarily due to increases in deposit fee income, loan prepayment fee income and debit and credit card related fee income. 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. Net gains on securities transactions increased $3.8 million for the year ended December 31, 2025, primarily due to a prior year $2.8 million loss on the sale of subordinated debt issued by Lakeland from the Provident investment portfolio prior to the merger. 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. Partially offsetting these increases in non-interest income, BOLI income decreased $1.6 million to $10.1 million for the year ended December 31, 2025, compared to 2024, primarily due to a decrease in benefit claims, partially offset by an increase in income related to the addition of Lakeland's BOLI, while wealth management income decreased $1.3 million to $29.3 million for the year ended December 31, 2025, compared to 2024, mainly due to a decrease in the average market value of assets under management during the period.
Non-Interest Expense. Non-interest 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. Compensation and benefits expense increased $34.8 million to $253.1 million for the year ended December 31, 2025, compared to $218.3 million for 2024 primarily attributable to the addition of Lakeland personnel. Amortization of intangibles increased $8.1 million to $37.1 million for the year ended December 31, 2025, compared to $28.9 million for 2024, largely due to core deposit intangible amortization related to the addition of Lakeland. 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. 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. Data processing expense increased $1.8 million to $37.4 million for the year ended December 31, 2025, compared to $35.6 million for 2024, primarily due to the addition of Lakeland. Partially offsetting these increases to non-interest expense, merger-related expenses decreased $56.9 million for the year ended December 31, 2025.
Income Tax Expense. 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. 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. 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. 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.
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 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. 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.
Net Interest Income. Net interest income increased $201.2 million to $600.6 million for 2024, from $399.5 million for 2023. The net interest margin increased 10 basis points to 3.26% for 2024, compared to 3.16% for 2023. Net interest income
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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.
Interest income increased $430.3 million to $1.05 billion for 2024, compared to $615.8 million for 2023. The increase in interest income was primarily driven by assets acquired from Lakeland, combined with favorable repricing of adjustable-rate loans and an increase in rates on new loan originations. Average interest-earning assets increased $5.75 billion to $18.40 billion for 2024, compared to $12.64 billion for 2023. The increase in average earning assets was primarily due to a $5.23 billion increase in average outstanding loan balances to $15.60 billion for 2024, combined with a $578.1 million increase in average available for sale debt securities. The yield on interest-earning assets increased 81 basis points to 5.68% for 2024, from 4.87% for 2023. The weighted average yield on total loans increased 68 basis points to 6.05% for 2024 and the weighted average yield on available for sale debt securities increased 99 basis points to 3.32% for 2024, from 2.33% for 2023. The weighted average yield on FHLBNY stock increased to 9.70% for 2024, compared to 7.47% for 2023.
Interest expense increased $229.2 million to $445.5 million for 2024, from $216.4 million for 2023. The increase in interest expense was primarily attributable to liabilities acquired from Lakeland, combined with an increase in the cost of interest-bearing liabilities. The average rate paid on interest-bearing liabilities increased 81 basis points to 3.05% for 2024, compared to 2023. The average rate paid on interest-bearing deposits increased 84 basis points to 2.83% for 2024, from 1.99% for 2023. The average rate paid on borrowings increased 30 basis points to 3.71% for 2024, from 3.41% for 2023. The average balance of interest-bearing liabilities increased $4.92 billion to $14.60 billion for 2024, compared to $9.67 billion for 2023. Average outstanding borrowings increased $347.1 million to $1.98 billion for 2024, compared to 2023. Average non-interest bearing demand deposits increased $792.0 million to $3.12 billion for 2024, from $2.33 billion for 2023. Average interest-bearing deposits increased $4.33 billion to $12.35 billion for 2024, from $8.02 billion for 2023. Within average interest-bearing deposits, average interest-bearing core deposits increased $2.95 billion to $9.98 billion for 2024, while average time deposits increased $1.37 billion to $2.37 billion for 2024.
Provision for Credit Losses. 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. The amount of the allowance is based on estimates, and the ultimate losses may vary from such estimates as more information becomes available or later events change. Management assesses the adequacy of the allowance for credit losses on a quarterly basis and makes provisions for credit losses, if necessary, in order to maintain the valuation of the allowance.
For the 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, for 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. 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. The increased provision for credit losses on loans for the year ended December 31, 2024 was primarily attributable to an initial CECL provision for credit losses on loans of $60.1 million recorded as part of the Lakeland merger in accordance with GAAP requirements for accounting for business combinations, combined with some economic forecast deterioration over the current twelve-month period within our CECL model, compared to last year.
Non-Interest Income. For the year ended December 31, 2024, non-interest income totaled $94.1 million, an increase of $14.3 million, compared to 2023. Fee income increased $9.7 million to $34.1 million for the year ended December 31, 2024, compared to 2023, primarily due to the addition of Lakeland. BOLI income increased $5.2 million to $11.7 million for the year ended December 31, 2024, compared to 2023, primarily due to an increase in benefit claims, combined with an increase in income related to the addition of Lakeland's BOLI, while wealth management income increased $2.9 million to $30.5 million for the year ended December 31, 2024, compared to 2023, mainly due to an increase in the average market value of assets under management during the period. Additionally, insurance agency income increased $2.3 million to $16.2 million for the year ended December 31, 2024, compared to $13.9 million for 2023, largely due to increases in contingent commissions, retention revenue and new business activity. Partially offsetting these increases in non-interest income, net gains on securities transactions decreased $3.0 million for the year ended December 31, 2024, primarily due to a $2.8 million loss related to the sale from the Provident investment portfolio of subordinated debt issued by Lakeland. 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.
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Non-Interest Expense. Non-interest expense totaled $457.5 million for the year ended December 31, 2024, an increase of $182.2 million, compared to $275.3 million for the year ended December 31, 2023. Compensation and benefits expense increased $69.8 million to $218.3 million for the year ended December 31, 2024, compared to $148.5 million for 2023. The increase in compensation and benefits expense was primarily attributable to the addition of Lakeland. Merger-related expenses increased $49.0 million to $56.9 million for the year ended December 31, 2024, compared to $7.8 million for 2023. Amortization of intangibles increased $26.0 million to $28.9 million for the year ended December 31, 2024, compared to $3.0 million for 2023, largely due to core deposit intangible amortization related to the addition of Lakeland. Net occupancy expense increased $12.7 million to $45.0 million for the year ended December 31, 2024, compared to 2023, primarily due to increases in depreciation and maintenance expense related to the addition of Lakeland, while data processing expense increased $12.6 million to $35.6 million for the year ended December 31, 2024, compared to $23.0 million for 2023, primarily due to additional software and hardware expenses related to the addition of Lakeland. Other operating expenses increased $7.3 million to $54.7 million for the year ended December 31, 2024, compared to $47.4 million for 2023, primarily due to increases in consulting and other professional service expenses, while FDIC insurance increased $4.4 million to $13.0 million for the year ended December 31, 2024, primarily due to the addition of Lakeland.
Income Tax Expense. For the year ended December 31, 2024, the Company's income tax expense was $34.1 million with an effective tax rate of 22.8%, compared with $47.4 million with an effective tax rate of 27.0% for the year ended December 31, 2023. The decrease in tax expense for the year ended December 31, 2024, compared with last year was largely due to a $10.0 million tax benefit related to the revaluation of deferred tax assets to reflect the imposition by the State of New Jersey of a 2.5% Corporate Transit Fee, effective January 1, 2024, combined with a decrease in taxable income as a result of the 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.
Liquidity and Capital Resources
Liquidity refers to the Company’s ability to generate adequate amounts of cash to meet financial obligations to its depositors, to fund loans and securities purchases and operating expenses. Sources of funds include scheduled amortization of loans, loan prepayments, scheduled maturities of unpledged investments, cash flows from mortgage-backed securities and the ability to borrow funds from the FHLBNY, FRBNY and approved broker-dealers.
Cash flows from loan payments and maturing investment securities are fairly predictable sources of funds. Changes in interest rates, local economic conditions and the competitive marketplace can influence loan prepayments, prepayments on mortgage-backed securities and deposit flows. For each of the years ended December 31, 2025 and 2024, loan repayments totaled $9.14 billion and $4.88 billion, respectively.
The Company has continued to monitor and focus on depositor behavior and borrowing capacity with the FHLBNY and FRBNY, with current borrowing capacity of $4.61 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. 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. 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. 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.
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. 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. 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%. 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%. 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
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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%.
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. 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.