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Statement of Changes in Beneficial Ownership (Form 4)

Dime Commercial Bancshares Inc.

07/31/2026 | Press release | Distributed by Public on 07/31/2026 15:06

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Dime Commercial Bancshares, Inc., formerly known as Dime Community Bancshares, Inc., is a New York corporation and bank holding company formed in 1988. Dime Commercial Bank, formerly known as Dime Community Bank, is the Company's wholly-owned subsidiary. The name change became effective during the quarter ended June 30, 2026 and did not affect the Company's organizational structure, operations, or financial results. On a parent-only basis, the Company has minimal operations, other than as owner of Dime Commercial Bank. The Company is dependent on dividends from its wholly-owned subsidiary, Dime Commercial Bank, its own earnings, additional capital raised, and borrowings as sources of funds.

The information in this report reflects principally the financial condition and results of operations of the Bank. The Bank's results of operations are primarily dependent on its net interest income, which is the difference between interest income on loans and investments and interest expense on deposits and borrowings. The Bank also generates non-interest income, such as fee income on deposit and loan accounts, merchant credit and debit card processing programs, loan swap fees, investment services, income from its title insurance subsidiary, and net gains on sales of securities and loans. The level of non-interest expenses, such as salaries and benefits, occupancy and equipment costs, other general and administrative expenses, expenses from the Bank's title insurance subsidiary, and income tax expense, further affects our net income. Certain reclassifications have been made to prior year amounts and the related discussion and analysis to conform to the current year presentation. These reclassifications did not have an impact on net income or total stockholders' equity.

Selected Financial Highlights and Other Data

(Dollars in Thousands Except Per Share Amounts)


		At or for the						At or for the
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2026			2025			2026			2025
Per Share Data:
Reported EPS (Diluted)		$	0.75		$	0.64		$	1.49		$	1.09
Cash dividends paid per common share			0.25			0.25			0.50			0.50
Book value per common share			31.79			29.95			31.79			29.95
Dividend payout ratio			33.33	%		39.06	%		33.56	%		45.87	%
Performance and Other Selected Ratios:
Return on average assets			0.94	%		0.85	%		0.93	%		0.74	%
Return on average equity			9.15			8.28			9.17			7.16
Net interest spread			2.40			1.99			2.38			1.97
Net interest margin			3.28			2.98			3.24			2.96
Average interest-earning assets to average interest-bearing liabilities			151.33			146.96			150.04			146.97
Non-interest expense to average assets			1.74			1.72			1.71			1.81
Efficiency ratio			51.2			55.0			51.0			58.9
Loan-to-deposit ratio at end of period			84.4			92.6			84.4			92.6
Effective tax rate			27.28			26.08			28.02			25.73
Asset Quality Summary:
Non-performing loans ⁽¹⁾		$	68,569		$	53,214		$	68,569		$	53,214
Non-performing assets ⁽²⁾			69,019			53,214			69,019			53,214
Net charge-offs			9,662			5,405			18,236			12,463
Non-performing assets/Total assets			0.46	%		0.37	%		0.46	%		0.37	%
Non-performing loans held for investment/Total loans held for investment			0.62			0.49			0.62			0.49
Allowance for credit losses/Total loans			0.98			0.86			0.98			0.86
Allowance for credit losses/Non-performing loans held for investment			157.09			175.12			157.09			175.12

(1)	Non-performing loans are defined as all loans on non-accrual status.

(2)	June 30, 2026 balance includes one non-performing available for sale security in the amount of $450 thousand.

Critical Accounting Policies

Note 1. Summary of Significant Accounting Policies, to the Company's Audited Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2025 contains a summary of significant accounting policies. These critical accounting estimates involve a significant degree of complexity and require management to make difficult subjective judgments which often necessitate assumptions or estimates about highly uncertain matters. Policies with respect to the methodology used to determine the allowance for credit losses on loans held for investment are important to the presentation of the Company's consolidated financial condition and results of operations. The use of different judgments, assumptions or estimates could result in material variations in the Company's consolidated results of operations or financial condition.

Management has reviewed the following critical accounting estimates and related disclosures with its Audit Committee.

Allowance for Credit Losses on Loans Held for Investment

Methods and Assumptions Underlying the Estimate

The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis, and additions to the allowance are charged to expense and realized losses, net of recoveries, are charged against the allowance.

Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In determining the allowance for credit losses for loans that share similar risk characteristics, the Company utilizes a model which compares the amortized cost basis of the loan to the net present value of expected cash flows to be collected. Expected credit losses are determined by aggregating the individual cash flows and calculating a loss percentage by loan segment, or pool, for loans that share similar risk characteristics. For a loan that does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. Within the model, assumptions are made in the determination of probability of default, loss given default, reasonable and supportable economic forecasts, prepayment rate, curtailment rate, and recovery lag periods.

Statistical regression is utilized to relate historical macro-economic variables to historical credit loss experience of a peer group of banks that operate in and around Dime's footprint. These models are then utilized to forecast future expected loan losses based on expected future behavior of the same macro-economic variables. Adjustments to the quantitative results are made using qualitative factors, which are subjective and require significant management judgment. These factors include: (1) lending policies and procedures and the experience, ability, and depth of the lending management and other relevant staff; (2) international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio, including the condition of various markets; (3) the nature and volume of the loan portfolio; (4) the volume and severity of past due loans; (5) the quality of our loan review system; (6) the value of underlying collateral for collateralized loans; (7) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (8) the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Although management believes that it uses the best information available to establish the Allowance for Credit Loss, management assesses the sensitivity of key quantitative assumptions including macroeconomic forecasts and prepayment rate assumptions. Changes in quantitative inputs may not occur in the same direction or magnitude across all segments of our loan portfolio and deterioration in some quantitative inputs may offset improvement in others.

Uncertainties Regarding the Estimate

Estimating the timing and amounts of future losses is subject to significant management judgment as these projected cash flows rely upon the estimates discussed above and factors that are reflective of current or future expected conditions. These estimates depend on the duration of current overall economic conditions, industry, borrower, or portfolio specific conditions. Volatility in certain credit metrics and differences between expected and actual outcomes are to be expected.

Customers may not repay their loans according to the original terms, and the collateral securing the payment of those loans may be insufficient to pay any remaining loan balance. Bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or loan charge-offs.

Impact on Financial Condition and Results of Operations

If our assumptions prove to be incorrect, the allowance for credit losses may not be sufficient to cover expected losses in the loan portfolio, resulting in additions to the allowance. Future additions or reductions to the allowance may be necessary based on changes in economic, market or other conditions. Changes in estimates could result in a material change in the allowance through charges to earnings which would materially decrease our net income.

We may experience significant credit losses if borrowers experience financial difficulties, which could have a material adverse effect on our operating results.

In addition, various regulatory agencies, as an integral part of the examination process, periodically review the allowance for credit losses. Such agencies may require the Bank to recognize adjustments to the allowance based on their judgments of the information available to them at the time of their examination.

Liquidity and Capital Resources

The Board of Directors has approved a liquidity policy that it reviews and updates at least annually. Senior management is responsible for implementing the policy. The Bank's Asset Liability Committee ("ALCO") is responsible for general oversight and strategic implementation of the policy and management of the appropriate departments are designated responsibility for implementing any strategies established by ALCO. On a daily basis, appropriate senior management receives a current cash position report and 30-day forecast to ensure that all short-term obligations are timely satisfied, and that adequate liquidity exists to fund future activities. Reports detailing the Bank's liquidity reserves are presented to appropriate senior management on at least a monthly basis, and the Board of Directors at each of its meetings. In addition, a twelve-month liquidity forecast is presented to ALCO to assess potential future liquidity concerns. A forecast of cash flow data for the upcoming 12 months is presented to the Board of Directors no less than annually. Given recent banking industry events, management monitors the level of uninsured deposits on a regular basis.

Liquidity is primarily needed to meet customer borrowing commitments and deposit withdrawals, either on demand or on contractual maturity, to repay borrowings as they mature, to fund current and planned expenditures and to make new loans and investments as opportunities arise. The Bank's primary sources of funding for its lending and investment activities include deposits, loan payments, investment security principal and interest payments and advances from the FHLBNY. The Bank may also sell or securitize selected multifamily residential, mixed-use or one-to-four family residential real estate loans to private sector secondary market purchasers and has in the past sold such loans to Federal National Mortgage Association and Federal Home Loan Mortgage Corporation ("FHLMC"). The Company may additionally issue debt or equity under appropriate circumstances. Although maturities and scheduled amortization of loans and investments are predictable sources of funds, deposit flows and prepayments on real estate loans and MBS are influenced by interest rates, economic conditions and competition.

The Bank is a member of American Financial Exchange ("AFX"), through which it may either borrow or lend funds on an overnight or short-term basis with other member institutions. The availability of funds changes daily. At June 30, 2026 and December 31, 2025, the Bank did not have any such borrowings outstanding through the AFX.

The Bank utilizes repurchase agreements as part of its borrowing policy to add liquidity. Repurchase agreements represent funds received from customers, generally on an overnight basis, which are collateralized by investment securities. As of June 30, 2026 and December 31, 2025, the Bank did not have any repurchase agreements.

The Bank gathers deposits in direct competition with commercial banks, savings banks and brokerage firms, many among the largest in the nation. It must additionally compete for deposit monies against the stock and bond markets, especially during periods of strong performance in those arenas. The Bank's deposit flows are affected primarily by the pricing and marketing of its deposit products compared to its competitors, as well as the market performance of depositor investment alternatives such as the U.S. bond or equity markets. To the extent that the Bank is responsive to general market increases or declines in interest rates, its deposit flows should not be materially impacted. However, favorable performance of equity or bond markets could adversely impact the Bank's deposit flows.

Total deposits (including mortgage escrow deposits) decreased $164.1 million during the six months ended June 30, 2026, compared to an increase of $54.0 million during the six months ended June 30, 2025. The decrease in deposits during the current period was primarily due to decreases in savings accounts, CDs and interest-bearing checking accounts, partially offset by an increase in money market accounts and non-interest-bearing checking deposits.

In the event that the Bank should require funds beyond its ability or desire to generate them internally, additional sources of funds are available through a borrowing line at the FHLBNY, borrowing capacity at the AFX, lines of credit with unaffiliated correspondent banks, and various brokered deposit sources. At June 30, 2026, the Bank had remaining borrowing capacity of $1.61 billion through the FHLBNY, subject to customary minimum FHLBNY common stock ownership requirements (i.e., 4.5% of the Bank's outstanding FHLBNY borrowings). The Bank also had access to the Federal Reserve Bank ("FRB") Discount Window. At June 30, 2026, an available line of credit totaling $335.4 million was in place at the FRB backed by investment securities with no advances drawn. Additionally, at June 30, 2026, a line of credit totaling $3.88 billion was in place at the FRB secured by certain qualifying one-to-four family residential mortgage loans, construction loans and commercial real estate loans with no amounts drawn.

The Bank reduced its outstanding FHLBNY advances by $123.0 million during the six months ended June 30, 2026, compared to a reduction of $100.0 million during the six months ended June 30, 2025. See Note 12. "FHLBNY Advances" for further information.

Subordinated debentures totaled $231.2 million at June 30, 2026 compared to $272.5 million at December 31, 2025. See Note 13. "Subordinated Debentures" to our Consolidated Financial Statements for further information.

During the six months ended June 30, 2026 and 2025, business loan originations excluding new lines were $318.4 million and $173.7 million, respectively. During the six months ended June 30, 2026 and 2025, real estate loan originations excluding new lines (excluding owner-occupied commercial real estate) totaled $157.3 million and $125.1 million, respectively.

The Company and the Bank are subject to minimum regulatory capital requirements imposed by their primary federal regulators. As a general matter, these capital requirements are based on the amount and composition of an institution's assets. At June 30, 2026, both the Company and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was considered "well capitalized" for all regulatory purposes.

The following table summarizes Company and Bank capital ratios calculated under the Basel III Capital Rules framework as of the period indicated:


	Actual Ratios at June 30, 2026
							Basel III
				Consolidated			Minimum			To Be Categorized as
	Bank			Company			Requirement			"Well Capitalized" ⁽¹⁾
Tier 1 common equity ratio		14.8	%		12.0	%		4.5	%	6.5	%
Tier 1 risk-based capital ratio		14.8			13.1			6.0		8.0
Total risk-based capital ratio		15.8			16.3			8.0		10.0
Tier 1 leverage ratio		10.7			9.5			4.0		5.0

(1)	Only the Bank is subject to these requirements.

During the six months ended June 30, 2026 and 2025, the Company did not repurchase any shares of its common stock. As of June 30, 2026, 1,566,947 shares remained available for purchase under the authorized share repurchase programs. See "Part II - Item 2. Other Information - Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities" for additional information about repurchases of common stock.

The Company paid $3.6 million in cash dividends on its preferred stock during the six months ended June 30, 2026 and 2025, respectively.

The Company paid $21.6 million and $21.4 million in cash dividends on its common stock during the six months ended June 30, 2026 and 2025, respectively.

Contractual Obligations

The Bank generally has outstanding borrowings in the form of FHLBNY advances, short-term or overnight borrowings, subordinated debt, as well as customer CDs with fixed contractual interest rates. In addition, the Bank is obligated to make rental payments under leases on certain branches and equipment.

Off-Balance Sheet Arrangements

As part of its loan origination business, the Bank generally has outstanding commitments to extend credit to borrowers, which are originated pursuant to its regular underwriting standards. Available lines of credit may not be drawn on or may expire prior to funding, in whole or in part, and amounts are not estimates of future cash flows. As of June 30, 2026, the Bank had $199.9 million of firm loan commitments that were accepted by the borrowers.

Additionally, in connection with a loan securitization completed in December 2017, the Bank executed a reimbursement agreement with FHLMC that obligates the Company to reimburse FHLMC for any contractual principal and interest payments on defaulted loans, not to exceed 10% of the original principal amount of the loans comprising the aggregate balance of the loan pool at securitization. The maximum exposure under this reimbursement obligation is $28.0 million. The Bank has pledged $27.9 million of pass-through MBS issued by U.S. GSEs as collateral.

Concentrations of Lending Activities

Non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans have collectively represented the largest percentage of the Company's loan portfolio, accounting for 55% and 59% of total loans held for investment as of June 30, 2026 and December 31, 2025, respectively. Non-owner occupied commercial real estate loans represented 26% and 27% of total loans held for investment as of June 30, 2026 and December 31, 2025, respectively. Multifamily residential and residential mixed-use loans represented 29% and 32% of total loans held for investment as of June 30, 2026 and December 31, 2025, respectively. The Company expects that non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans will continue to be a significant portion of the Company's total loan portfolio.

Non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans are subject to a varying degree of risk associated with changing general economic conditions. The Company employs heightened risk management practices that address key elements, including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of appropriate capital levels as needed to support lending activities.

Despite the Company's concentration in non-owner occupied commercial real estate and multifamily residential and residential mixed-use loans, the properties securing these portfolios are diversified in terms of type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry. As a matter of policy, the non-owner occupied commercial real estate loan and the multifamily residential and residential mixed-use loan portfolios are subject to risk exposure limits by individual asset classes as well as geographic collateral locations outside of our market areas.

We regularly identify and assess concentration levels through ongoing reporting to our Board of Directors as well as committees at both the Board and Management levels. The management team has extensive knowledge and experience in underwriting non-owner occupied commercial real estate loans and multifamily residential and residential mixed-use loans. Management has established the Credit Risk Management Committee which meets quarterly to review all policies and procedures, large lending exposures, and emerging trends including trends related to delinquency, debt service coverage ratios, loan-to-value, and loan ratings to aid in early detection and escalation of potential issues. The Company has a dedicated team responsible for conducting comprehensive annual reviews of the portfolios, ensuring consistent oversight. Credit underwriting standards are periodically reviewed and adjusted based upon observations from our ongoing monitoring of economic conditions in major real estate markets in which we lend. In response to the current dynamic interest rate environment and changes in the benchmark rates that determine loan pricing, the Company has enhanced its stress testing and loan review activities to mitigate interest rate reset risk with a specific emphasis on borrowers' abilities to absorb the impact of higher interest loan rates and measure the resiliency of the portfolios. As a general rule, Management takes a selective approach to originating non-owner occupied commercial real estate and multifamily residential and residential mixed-use loans, prioritizing quality and strategic alignment.

The following tables present the composition by property type and weighted average loan-to-value ("LTV") of the Company's non-owner occupied commercial real estate loans:

June 30, 2026

Weighted

Average

(Dollars in thousands)

Other

Balance

LTV

 

Investor commercial real estate:

Retail

883,140

64,539

3,394

951,073

Investor office

377,549

123,001

3,018

503,568

Warehouse/ Industrial

284,978

12,187

44,017

341,182

Hotels

314,052

415

11,591

326,058

Supportive housing

161,930

Educational facility or library

111,365

Medical office

72,270

27,533

99,803

Other ⁽¹⁾

246,804

27,487

1,772

276,063

Total investor commercial real estate

2,452,088

227,629

91,325

2,771,042

(1)	Includes various property types such as gas stations, restaurants, storage facilities, medical facilities, and other special use properties.


	December 31, 2025
									Weighted
									Average
(Dollars in thousands)		NY		NJ		Other	Balance		LTV
Investor commercial real estate:
Retail	$	956,123	$	65,449	$	3,463	$	1,025,035	51	%
Investor office		386,265		141,502		3,055		530,822	59
Warehouse/Industrial		301,698		14,510		68,057		384,265	54
Hotels		329,424		419		11,709		341,552	56
Supportive housing		168,858		-		-		168,858	57
Educational facility or library		112,360		-		-		112,360	57
Medical office		73,319		-		27,852		101,171	60
Other ⁽¹⁾		263,651		2,663		2,634		268,948	58
Total investor commercial real estate	$	2,591,698		224,543		116,770	$	2,933,011	55	%

(1)	Includes various property types such as gas stations, restaurants, storage facilities, medical facilities, and other special use properties.

The following table presents the composition by property type and weighted average LTV of the Company's multifamily residential and residential mixed-use loans:


	June 30, 2026
			Weighted
	Total		Average
(Dollars in thousands)	Balance		LTV
Multifamily residential and residential mixed-use:
New York City ⁽¹⁾
100% rent regulated ⁽²⁾	$	483,611	61	%
Majority rent regulated ⁽²⁾		550,379	59
Majority free market ⁽²⁾		1,442,740	54
Total New York City		2,476,730	56

Outside New York City		637,096	56
Total multifamily residential and residential mixed-use	$	3,113,826	57	%

(1)	New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(2)	Composition based on revenue.


	December 31, 2025
			Weighted
	Total		Average
(Dollars in thousands)	Balance		LTV
Multifamily residential and residential mixed-use:
New York City ⁽¹⁾
100% rent regulated ⁽²⁾	$	514,403	59	%
Majority rent regulated ⁽²⁾		585,325	59
Majority free market ⁽²⁾		1,644,100	54
Total New York City		2,743,828	56

Outside New York City		680,694	57
Total multifamily residential and residential mixed-use	$	3,424,522	56	%

(1)	New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(2)	Composition based on revenue.

Additional information related to the non-owner occupied commercial real estate and multifamily residential and residential mixed-use portfolios is presented in the table below as of June 30, 2026 and December 31, 2025:


	June 30, 2026			December 31, 2025
			Number of			Number of
	Average		loans	Average		loans
(Dollars in thousands)	Loan Size		> $20 million	Loan Size		> $20 million
Investor commercial real estate:
Retail	$	2,557	3	$	2,582	3
Investor Office		5,855	8		5,964	8
Warehouse/ Industrial		3,630	3		3,805	4
Hotels		8,580	8		8,758	8
Supportive housing		23,133	3		21,107	3
Educational facility or library		10,124	-		10,215	-
Medical office		5,545	1		5,621	1
Other ⁽¹⁾		2,422	2		2,359	1

Multifamily residential and residential mixed-use:
New York City ⁽²⁾
100% rent regulated ⁽³⁾		2,493	-		2,485	-
Majority rent regulated ⁽³⁾		3,719	2		3,728	2
Majority free market ⁽³⁾		3,747	6		3,850	6
Outside New York City		4,977	7		4,760	7

(1)	Includes various property types such as gas stations, restaurants, storage facilities, medical facilities, and other special use properties.

(2)	New York City includes the Bronx, Brooklyn, Queens, Staten Island and Manhattan.

(3)	Composition based on revenue.

Asset Quality

General

We do not originate or purchase loans, either whole loans or loans underlying MBS, which would have been considered subprime loans at origination, i.e., real estate loans advanced to borrowers who did not qualify for market interest rates because of problems with their income or credit history. See Note 6 to our unaudited condensed Consolidated Financial Statements for a discussion of evaluation for impaired securities.

Monitoring and Collection of Delinquent Loans

All past due loans are reported beginning on the first day a payment is past due through a Past Due Loan Report, which is distributed to lenders and management for follow-up and awareness. Consistent with customary grace periods, collection follow-up activities generally commence on or about the tenth day past due. Thereafter, past due follow-up calls are conducted on a weekly basis, as appropriate. Management reviews delinquent loans monthly and reports to the Board of Directors or appropriate Committees of the Board at each regularly scheduled meeting regarding the status of all non-performing and otherwise delinquent loans in the loan portfolio.

Our loan servicing policies and procedures require that a past due notice be sent to a delinquent borrower in accordance with the terms of the loan. Loan documents generally provide that a payment is deemed late between one and fifteen days after the due date. As a standard practice, notices are sent as soon as reasonably possible after a payment is deemed late, including ten days in the case of business loans, multifamily residential and mixed use loans, non-owner occupied commercial real estate loans, and acquisition, development, and construction (ADC) loans, and fifteen days in connection with one-to-four family residential and consumer loans. Thereafter, periodic letters are sent, and telephone calls are placed to the borrower until payment is received or a formal demand is made and the loan is transferred to Workout. When contact is made with the borrower prior to default or foreclosure, servicing will seek to obtain the full payment due. Once

transferred, Workout will attempt to negotiate a repayment plan or other resolution with the borrower to avoid foreclosure, where appropriate.

Accrual of interest is generally discontinued on a loan that meets any of the following three criteria: (i) full payment of principal or interest is no longer expected; (ii) principal or interest has been in default for a period of 90 days or more (unless the loan is both deemed to be well secured and in the process of collection); or (iii) an election has otherwise been made to maintain the loan on a cash basis due to deterioration in the financial condition of the borrower. Such non-accrual determination practices are applied consistently to all loans regardless of their internal classification or designation. Upon entering non-accrual status, the system will reverse all outstanding accrued interest receivable.

We generally initiate foreclosure proceedings on real estate loans when a loan enters non-accrual status based upon non-payment, unless the borrower is paying in accordance with an agreed upon modified payment agreement. We obtain an updated appraisal upon the commencement of legal action to calculate a potential collateral shortfall and to reserve appropriately for the potential loss. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure action is completed, the property securing the loan is transferred to Other Real Estate Owned ("OREO") status. We generally attempt to utilize all available remedies, such as note sales in lieu of foreclosure, in an effort to resolve non-accrual loans and OREO properties as quickly and prudently as possible in consideration of market conditions, the physical condition of the property and any other mitigating circumstances. We have not initiated any expected or imminent foreclosure proceedings that are likely to have a material adverse impact on our consolidated financial statements for the three and six months ended June 30, 2026. In the event that a non-accrual loan is subsequently brought current, it is returned to accrual status once the doubt concerning collectability has been removed and the borrower has demonstrated performance in accordance with the loan terms and has made at least six months of payments.

The C&I portfolio, which is within our business loans, is actively managed by our lenders. Most credit facilities typically require an annual review of the exposure and borrowers are required to submit annual financial reporting and loans are structured with financial covenants to indicate expected performance levels. Smaller C&I loans are monitored based on performance and the ability to draw against a credit line is curtailed if there are any indications of credit deterioration. Guarantors are also required to update their financial reporting on an annual basis or alternative schedule as provided in their loan documents. All exposures are credit risk rated and those entering adverse ratings due to financial performance concerns of the borrower or material delinquency of any payments or financial reporting are subjected to added management scrutiny and monitoring. Measures taken typically include amendments to the amount of the available credit facility, requirements for increased collateral, additional guarantor support or a material enhancement to the frequency and quality of financial reporting. Loans determined to reach adverse risk rating standards are monitored closely by Credit Administration to identify any potential credit losses. When warranted, loans reaching a Substandard rating could be reassigned to the Workout Group for direct handling.

Non-accrual Loans

The following is a reconciliation of non-accrual loans as of the dates indicated:


	June 30,			December 31,			June 30,
(Dollars in thousands)	2026			2025			2025
Non-accrual loans held for investment:
Business loans	$	23,898		$	22,606		$	18,007
One-to-four family residential and coop/condo apartment		4,465			3,623			1,642
Multifamily residential and residential mixed-use		26,893			-			-
Non-owner-occupied commercial real estate		11,151			25,671			32,908
ADC		412			412			657
Other loans		-			-			-
Total non-accrual loans held for investment	$	66,819		$	52,312		$	53,214

Non-accrual loans held for investment / total loans held for investment		0.62	%		0.49	%		0.49	%

Total non-accrual loans held for sale	$	1,750		$	-		$	-

Loan Restructurings

The Company applies the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results in a new loan or a continuation of an existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include conditions where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and/or a combination of these modifications. The disclosures related to loan restructuring are only for modifications that directly affect cash flows.

Within the allowance for credit losses, losses are estimated for restructured loans on accrual status as well as restructured loans on non-accrual status that are one-to-four family loans or consumer loans, on a pooled basis with loans that share similar risk characteristics. Restructured loans on non-accrual status excluding one-to-four family and consumer loans are individually evaluated to determine expected credit losses. For restructured loans that are collateral-dependent where the Bank has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the loan to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of collateral, less the estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. For non-collateral-dependent loans, the allowance for credit losses is measured based on the difference between the present value of expected cash flows and the amortized cost basis of the loan as of the measurement date.

OREO

Property acquired by the Bank, or a subsidiary, as a result of foreclosure on a mortgage loan or a deed in lieu of foreclosure is classified as OREO. Upon entering OREO status, we obtain a current appraisal on the property and reassess the likely realizable value (a/k/a fair value) of the property quarterly thereafter. OREO is carried at the lower of the fair value or book balance, with any write downs recognized through a provision recorded in non-interest expense. Only the appraised value, or either a contractual or formal marketed value that falls below the appraised value, is used when determining the likely realizable value of OREO at each reporting period. We typically seek to dispose of OREO properties in a timely manner. As a result, OREO properties have generally not warranted subsequent independent appraisals.

There was no carrying value of OREO properties on our Consolidated Statement of Financial Condition at June 30, 2026 or December 31, 2025. We did not recognize any provision for losses on OREO properties during the six months ended June 30, 2026 or 2025.

Past Due Loans

Loans Delinquent 30 to 59 Days

At June 30, 2026, there were $86.2 million of loans that were past due between 30 and 59 days, compared to $28.8 million at December 31, 2025. The 30 to 59-day delinquency levels fluctuate monthly and are generally considered a less accurate indicator of near-term credit quality trends than non-accrual loans.

Loans Delinquent 60 to 89 Days

At June 30, 2026, there were $24.1 million of loans that were past due between 60 and 89 days, compared to $30.1 million at December 31, 2025. The 60 to 89-day delinquency levels fluctuate monthly and are generally considered a less accurate indicator of near-term credit quality trends than non-accrual loans.

Accruing Loans 90 Days or More Past Due

There were no accruing loans 90 days or more past due at June 30, 2026 or at December 31, 2025.

Reserve for Unfunded Loan Commitments

The Bank maintains a reserve, recorded in other liabilities, associated with unfunded loan commitments accepted by the borrower. The amount of our reserve was $2.6 million and $2.2 million at June 30, 2026 and December 31, 2025, respectively. This reserve is determined based upon the outstanding volume of unfunded loan commitments at each period end. Any increases or reductions in this reserve are recognized in provision for credit losses.

Allowance for Credit Losses

Provision for credit losses for the six months ended June 30, 2026 and 2025 was $26.2 million and $18.8 million, respectively. The $26.2 million credit loss provision for the six months ended June 30, 2026 was attributable to charge-offs, provisioning for individually analyzed loans and growth in the business loan portfolio. Included in the provision for credit losses for the six months ended June 30, 2025 was $1.8 million of provision related to one available-for-sale corporate security. The remainder of the credit loss provision for the six months ended June 30, 2025 was attributable to updates in the macroeconomic forecast and to the loss driver models.

For a further discussion of the allowance for credit losses and related activity during the six months ended June 30, 2026 and 2025, please see Note 6 "Securities" and Note 7 "Loans Held for Investment, Net" to the condensed Consolidated Financial Statements.

The following table presents our allowance for credit losses allocated by loan type and the percent of loans in each category to total loans as of the dates indicated.

June 30, 2026

December 31, 2025

Percent

of Loans

in Each

Category

Allocated

to Total

Allocated

to Total

(Dollars in thousands)

Amount

 

Loans

 

Amount

 

Loans

 

Business loans

56,266

34.05

49,770

30.12

One-to-four family residential and coop/condo apartment

9,526

10.05

10,034

9.63

Multifamily residential and residential mixed-use

17,489

29.09

14,053

31.84

Non-owner-occupied commercial real estate

19,747

25.88

21,130

27.26

ADC

1,491

0.85

2,070

1.09

Other loans

444

0.08

315

0.06

Total

104,963

100.00

97,372

100.00

The following table sets forth information about our allowance for credit losses at or for the dates indicated:


	At or for the Six Months Ended June 30,
(Dollars in thousands)	2026			2025
Total loans outstanding at end of period ⁽¹⁾	$	10,705,934		$	10,870,030
Average total loans outstanding during the period ⁽²⁾		10,685,050			10,852,525
Allowance for credit losses balance at end of period		104,963			93,189
Allowance for credit losses to total loans at end of period		0.98	%		0.86	%
Non-performing loans held for investment to total loans held for investment at end of period		0.62			0.49
Allowance for credit losses to total non-performing loans at end of period		157.09			175.12

Ratio of net charge-offs to average loans outstanding during the period:
Business loans		0.05	%		0.35	%
One-to-four family residential and coop/condo apartment		-			0.01
Multifamily residential and residential mixed-use		0.74			-
Non-owner-occupied commercial real estate		0.36			0.47
Other loans		2.39			0.75
Total		0.34			0.23

(1)	Total loans represent gross loans (excluding loans held for sale), inclusive of deferred fees/costs and premiums/discounts.

(2)	Total average loans represent gross loans (including loans held for sale), inclusive of deferred loan fees/costs and premiums/discounts.

Comparison of Financial Condition at June 30, 2026 and December 31, 2025

Assets. Assets totaled $15.04 billion at June 30, 2026, $298.7 million below their level at December 31, 2025, primarily due to decreases of $419.4 million in cash and due from banks, and $61.4 million in the loan portfolio, partially offset by increases of $185.0 million in total securities and $16.3 million in BOLI.

Loan originations, excluding new lines, totaled $475.7 million for the six-month period ended June 30, 2026.

Total investment securities increased $185.0 million during the six months ended June 30, 2026, to $1.60 billion at period end, primarily due to purchases of $285.2 million, offset by proceeds from principal payments, calls and maturities of $89.8 million, an increase in unrealized losses of $6.4 million and proceeds from the sale of available for sale securities of $4.0 million. There were no transfers to or from securities held-to-maturity during the six months ended June 30, 2026.

BOLI increased $16.3 million during the six months ended June 30, 2026, to $417.5 million.

Liabilities. Total liabilities decreased $343.4 million during the six months ended June 30, 2026, to $13.52 billion at period end, primarily due to decreases of $164.1 million in deposits (including mortgage escrow accounts), $123.0 million in FHLBNY advances and $41.3 million in subordinated debt.

Stockholders' Equity. Stockholders' equity increased $44.7 million during the six months ended June 30, 2026, to $1.52 billion at period end, primarily due to net income of $69.4 million, partially offset by common stock dividends of $21.8 million, and preferred stock dividends of $3.6 million.

Comparison of Operating Results for the Three Months Ended June 30, 2026 and 2025

General. Net income was $34.8 million during the three months ended June 30, 2026, compared to net income of $29.7 million for the three months ended June 30, 2025. During the three months ended June 30, 2026, net interest income increased by $17.1 million, the credit loss provision increased by $4.7 million, non-interest expense increased by $4.4 million, income tax expense increased by $2.6 million, and non-interest income decreased by $329 thousand, compared to the three months ended June 30, 2025.

The discussion of net interest income for the three months ended June 30, 2026 and 2025 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated. The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented. Average balances were derived from average daily balances. No tax-equivalent adjustments have been made for interest income exempt from federal, state, and local taxation. The yields include loan fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs, prepayment fees, and late charges that are considered adjustments to yields. Net loan fees included in interest income were $1.7 million during the three months ended June 30, 2026, compared to $1.1 million during the three months ended June 30, 2025. The increase in net loan fees was primarily due to increases in deferred fees and prepayment penalties on loans in 2026.

Analysis of Net Interest Income


		Three Months Ended June 30,
		2026							2025
							Average							Average
		Average					Yield/		Average					Yield/
		Balance			Interest		Cost		Balance			Interest		Cost

Assets:		(Dollars in thousands)
Interest-earning assets:
Business loans ^{(1) (3) (6)}		$	3,489,614		$	56,520	6.50	%	$	2,798,899		$	46,593	6.68	%
One-to-four family residential and coop/condo apartment ^{(3) (6)}			1,064,043			12,588	4.75			981,138			11,532	4.71
Multifamily residential and residential mixed-use ^{(3) (6)}			3,195,372			35,930	4.51			3,740,939			42,462	4.55
Non-owner-occupied commercial real estate ^{(3) (6)}			2,815,624			37,117	5.29			3,175,062			41,822	5.28
ADC ⁽³⁾			90,738			1,711	7.56			136,154			3,009	8.86
Other loans ⁽³⁾			8,580			26	1.22			7,135			30	1.69
Total loans			10,663,971			143,892	5.41			10,839,327			145,448	5.38
Securities			1,582,300			14,518	3.68			1,361,383			11,353	3.34
Other short-term investments			1,840,193			16,840	3.67			994,406			10,749	4.34
Total interest-earning assets			14,086,464			175,250	4.99	%		13,195,116			167,550	5.09	%
Non-interest earning assets			775,882							818,476
Total assets		$	14,862,346						$	14,013,592

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking ⁽²⁾		$	1,040,981		$	4,058	1.56	%	$	943,716		$	4,141	1.76	%
Money market			4,796,008			30,049	2.51			4,174,694			32,818	3.15
Savings ⁽²⁾			1,684,130			9,826	2.34			1,925,224			14,048	2.93
CDs			1,075,789			8,238	3.07			1,075,729			9,174	3.42
Total interest-bearing deposits			8,596,908			52,171	2.43			8,119,363			60,181	2.97
FHLBNY advances			418,517			3,541	3.39			508,000			4,053	3.20
Subordinated debt, net			231,102			3,810	6.61			272,385			4,301	6.33
Other short-term borrowings			-			-	-			-			-	-
Total borrowings			649,619			7,351	4.54			780,385			8,354	4.29
Derivative cash collateral			62,134			542	3.50			79,188			918	4.65
Total interest-bearing liabilities			9,308,661			60,064	2.59	%		8,978,936			69,453	3.10	%
Non-interest-bearing checking ⁽²⁾			3,864,575							3,412,215
Other non-interest-bearing liabilities			166,688							187,774
Total liabilities			13,339,924							12,578,925
Stockholders' equity			1,522,422							1,434,667
Total liabilities and stockholders' equity		$	14,862,346						$	14,013,592
Net interest income					$	115,186						$	98,097
Net interest rate spread ⁽⁴⁾							2.40	%						1.99	%
Net interest-earning assets		$	4,777,803						$	4,216,180
Net interest margin ⁽⁵⁾							3.28	%						2.98	%
Ratio of interest-earning assets to interest-bearing liabilities							151.33	%						146.96	%
Deposits (including non-interest-bearing checking accounts) ⁽²⁾		$	12,461,483		$	52,171	1.68	%	$	11,531,578		$	60,181	2.09	%

(1)	Business loans include C&I loans and owner-occupied commercial real estate loans. At June 30, 2025, business loans included balances related to Paycheck Protection Program ("PPP") loans; no PPP loans were outstanding at June 30, 2026.

(2)	Includes mortgage escrow deposits.

(3)	Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale.

(4)	Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(5)	Net interest margin represents net interest income divided by average-interest earning assets.

(6)	At June 30, 2026 and 2025, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

Rate/Volume Analysis


		Three Months Ended June 30, 2026
		Compared to Three Months Ended June 30, 2025
		Increase / (Decrease) Due to:
		Volume			Rate			Total

		(Dollars in thousands)
Interest-earning assets:
Business loans		$	11,343		$	(1,416)		$	9,927
One-to-four family residential and coop/condo apartment			966			90			1,056
Multifamily residential and residential mixed-use			(6,174)			(358)			(6,532)
Non-owner-occupied commercial real estate			(4,758)			53			(4,705)
ADC			(930)			(368)			(1,298)
Other loans			5			(9)			(4)
Securities			1,925			1,240			3,165
Other short-term investments			8,452			(2,361)			6,091
Total interest-earning assets		$	10,829		$	(3,129)		$	7,700
Interest-bearing liabilities:
Interest-bearing checking		$	408		$	(491)		$	(83)
Money market			4,386			(7,155)			(2,769)
Savings			(1,575)			(2,647)			(4,222)
CDs			2			(938)			(936)
FHLBNY advances			(734)			222			(512)
Subordinated debt, net			(667)			176			(491)
Other short-term borrowings			-			-			-
Derivative cash collateral			(173)			(203)			(376)
Total interest-bearing liabilities		$	1,647		$	(11,036)		$	(9,389)
Net change in net interest income		$	9,182		$	7,907		$	17,089

Net interest income. Net interest income was $115.2 million during the three months ended June 30, 2026, an increase of $17.1 million from the three months ended June 30, 2025. Average interest-earning assets were $14.09 billion for the three months ended June 30, 2026, an increase of $891.3 million from $13.20 billion for the three months ended June 30, 2025. The net interest margin was 3.28% during the three months ended June 30, 2026, up from 2.98% during the three months ended June 30, 2025.

Interest Income. Interest income was $175.3 million during the three months ended June 30, 2026, compared to $167.5 million during the three months ended June 30, 2025. During the three months ended June 30, 2026, interest income increased $7.7 million from the three months ended June 30, 2025, primarily reflecting increases in interest income of $9.9 million on business loans, $6.1 million on other short-term investments, $3.2 million on securities and $1.1 million on one-to-four family residential and coop/condo apartment loans, partially offset by a decrease in interest income of $6.5 million on multifamily residential and residential mixed-use loans, $4.7 million on non-owner-occupied commercial real estate loans and $1.3 million of ADC loans.

The increased interest income on business loans was due to a $690.7 million increase in the average balances, partially offset by an 18-basis point decrease in the yield of such loans in the period. The increased interest income on other short-term investments, which is comprised of cash and due from banks and restricted stock, was related to a $845.8 million increase in the average balances, partially offset by a 67-basis point decrease in the yield of such investments in the period. The increased interest income on securities was related to a $220.9 million increase in average balances and a 34-basis point increase in the yield of such securities in the period. The increased interest income on one-to-four family residential and coop/condo apartment loans was related to a $82.9 million increase in the average balance and a 4-basis point increase in the yield of such loans in the period. The decreased interest income on multifamily residential and residential mixed-use loans was related to a $545.6 million decrease in the average balance and a 4-basis point decrease in the yield of such loans in the period. The decreased interest income on non-owner-occupied commercial real estate loans reflected a $359.4 million decrease in the average balance, partially offset by a 1-basis point increase in the yield of such loans in the period. The decreased interest income on ADC loans reflected a $45.4 million decrease in the average balance and a 130-basis point decrease in the yield of such loans in the period.

Interest Expense. Interest expense was $60.1 million during the three months ended June 30, 2026, compared to $69.5 million during the three months ended June 30, 2025. During the three months ended June 30, 2026, interest expense decreased $9.4 million, primarily reflecting a decrease in interest expense of $8.0 million on deposits.

The decreased interest expense on deposits was primarily due to a 59-basis point decrease in rates paid on savings accounts and a $241.1 million decrease in average balances of such deposits in the period, a 64-basis point decrease in rates paid on money market accounts, partially offset by a $621.3 million increase in average balances of such deposits, and a 20-basis point decrease in rates paid on interest-bearing checking accounts, partially offset by a $97.3 million increase in the average balance of such deposits.

Provision for Credit Losses. We recorded a credit loss provision of $13.9 million and $9.2 million during the three months ended June 30, 2026 and 2025, respectively. The $13.9 million credit loss provision for the three months ended June 30, 2026, was attributable to charge-offs, provisioning for individually analyzed loans and growth in the business loan portfolio. The $9.2 million credit loss provision for the three months ended June 30, 2025, was primarily attributable to updates in the macroeconomic forecast and to the loss driver models.

Non-Interest Income. Non-interest income totaled $11.3 million for the three months ended June 30, 2026, compared to $11.6 million for the same period in 2025. The decrease was primarily driven by a $2.0 million loss on sale of loans and other assets during the three months ended June 30, 2026, partially offset by an increase of $1.8 million in service charges and other fees and an $852 thousand increase in BOLI income.

Non-Interest Expense. Non-interest expense totaled $64.7 million for the three months ended June 30, 2026, compared to $60.3 million for the same period in 2025. The increase was primarily driven by $3.6 million of salaries and employee benefits.

Non-interest expense was 1.74% and 1.72% of average assets during the three months ended June 30, 2026 and 2025, respectively.

Income Tax Expense. Income tax expense was $13.1 million during the three months ended June 30, 2026, compared to income tax expense of $10.5 million during the three months ended June 30, 2025. The reported effective tax rate for the three months ended June 30, 2026 and 2025 was 27.3%, and 26.1%, respectively.

Comparison of Operating Results for the Six Months Ended June 30, 2026 and 2025

General. Net income was $69.4 million during the six months ended June 30, 2026, compared to net income of $51.2 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, net interest income increased by $35.1 million, credit loss provision increased by $7.3 million, non-interest income increased by $1.4 million, non-interest expense increased by $1.6 million and income tax expense increased by $9.3 million, compared to the six months ended June 30, 2025.

The discussion of net interest income for the six months ended June 30, 2026 and 2025 should be read in conjunction with the following tables, which set forth certain information related to the Consolidated Statements of Operations for those periods, and which also present the average yield on assets and average cost of liabilities for the periods indicated. The average yields and costs were derived by dividing income or expense by the average balance of their related assets or liabilities during the periods represented. Average balances were derived from average daily balances. No tax-equivalent adjustments have been made for interest income exempt from federal, state, and local taxation. The yields include loan fees consisting of amortization of loan origination and commitment fees and certain direct and indirect origination costs, prepayment fees, and late charges that are considered adjustments to yields. Net loan fees included in interest income were $3.2 million during the six months ended June 30, 2026, compared to $2.3 million during the six months ended June 30, 2025. The increase in net loan fees was primarily due to increases in deferred fees and prepayment penalty fees on loans in 2026.

Analysis of Net Interest Income


		Six Months Ended June 30,
		2026							2025
							Average							Average
		Average					Yield/		Average					Yield/
		Balance			Interest		Cost		Balance			Interest		Cost

Assets:		(Dollars in thousands)
Interest-earning assets:
Business loans ^{(1) (3) (6)}		$	3,382,729		$	108,926	6.49	%	$	2,773,661		$	91,640		6.66	%
One-to-four family residential and coop/condo apartment ^{(3) (6)}			1,052,984			24,971	4.78			971,645			22,601		4.69
Multifamily residential and residential mixed-use ^{(3) (6)}			3,279,118			73,628	4.53			3,768,693			84,791		4.54
Non-owner-occupied commercial real estate ^{(3) (6)}			2,863,035			74,614	5.26			3,194,800			83,148		5.25
ADC ⁽³⁾			98,729			3,790	7.74			137,285			5,915		8.69
Other loans ⁽³⁾			8,455			53	1.26			6,441			58		1.82
Total loans			10,685,050			285,982	5.40			10,852,525			288,153		5.35
Securities			1,517,224			27,306	3.63			1,366,942			22,676		3.35
Other short-term investments			1,941,781			35,362	3.67			860,392			18,586		4.36
Total interest-earning assets			14,144,055			348,650	4.97	%		13,079,859			329,415		5.08	%
Non-interest earning assets			777,538							816,422
Total assets		$	14,921,593						$	13,896,281

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking ⁽²⁾		$	1,087,095		$	8,851	1.64	%	$	928,369		$	8,305		1.80	%
Money market			4,778,904			58,850	2.48			4,125,924			64,112		3.13
Savings ⁽²⁾			1,713,071			19,868	2.34			1,947,657			28,233		2.92
CDs			1,090,434			16,966	3.14			1,024,702			17,605		3.46
Total interest-bearing deposits			8,669,504			104,535	2.43			8,026,652			118,255		2.97
FHLBNY advances			448,856			7,391	3.32			508,552			8,119		3.22
Subordinated debt, net			251,237			8,259	6.63			272,363			8,603		6.37
Other short-term borrowings			61			1	3.31			315			13		8.32
Total borrowings			700,154			15,651	4.51			781,230			16,735		4.32
Derivative cash collateral			57,448			1,027	3.61			91,588			2,115		4.66
Total interest-bearing liabilities			9,427,106			121,213	2.59	%		8,899,470			137,105		3.11	%
Non-interest-bearing checking ⁽²⁾			3,806,471							3,367,647
Other non-interest-bearing liabilities			175,136							200,753
Total liabilities			13,408,713							12,467,870
Stockholders' equity			1,512,880							1,428,411
Total liabilities and stockholders' equity		$	14,921,593						$	13,896,281
Net interest income					$	227,437						$	192,310
Net interest rate spread ⁽⁴⁾							2.38	%							1.97	%
Net interest-earning assets		$	4,716,949						$	4,180,389
Net interest margin ⁽⁵⁾							3.24	%							2.96	%
Ratio of interest-earning assets to interest-bearing liabilities							150.04	%							146.97	%
Deposits (including non-interest-bearing checking accounts) ⁽²⁾		$	12,475,975		$	104,535	1.69	%	$	11,394,299		$	118,255		2.09	%

(1)	Business loans include C&I loans and owner-occupied commercial real estate loans. At June 30, 2025, business loans included balances related to Paycheck Protection Program ("PPP") loans; no PPP loans were outstanding at June 30, 2026.

(2)	Includes mortgage escrow deposits.

(3)	Amounts are net of deferred origination costs/(fees) and allowance for credit losses, and include loans held for sale.

(4)	Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(5)	Net interest margin represents net interest income divided by average-interest earning assets.

(6)	At June 30, 2026 and 2025, the loan portfolio included a fair value hedge basis point adjustment to the carrying amount of hedged business loans, one-to-four family residential mortgage loans, multifamily residential mortgage loans and non-owner occupied commercial real estate loans.

Rate/Volume Analysis


		Six Months Ended June 30, 2026
		Compared to Six Months Ended June 30, 2025
		Increase / (Decrease) Due to:
		Volume			Rate			Total
Interest-earning assets:
Business loans		$	19,870		$	(2,584)		$	17,286
One-to-four family residential and coop/condo apartment			1,914			456			2,370
Multifamily residential and residential mixed-use			(10,999)			(164)			(11,163)
Non-owner-occupied commercial real estate			(8,665)			131			(8,534)
ADC			(1,569)			(556)			(2,125)
Other loans			16			(21)			(5)
Securities			2,614			2,016			4,630
Other short-term investments			21,551			(4,775)			16,776
Total interest-earning assets		$	24,732		$	(5,497)		$	19,235
Interest-bearing liabilities:
Interest-bearing checking		$	1,350		$	(804)		$	546
Money market			9,086			(14,348)			(5,262)
Savings			(3,080)			(5,285)			(8,365)
CDs			1,058			(1,697)			(639)
FHLBNY advances			(967)			239			(728)
Subordinated debt, net			(681)			337			(344)
Other short-term borrowings			(7)			(5)			(12)
Derivative cash collateral			(700)			(388)			(1,088)
Total interest-bearing liabilities		$	6,059		$	(21,951)		$	(15,892)
Net change in net interest income		$	18,673		$	16,454		$	35,127

Net interest income. Net interest income was $227.4 million during the six months ended June 30, 2026, an increase of $35.1 million from the six months ended June 30, 2025. Average interest-earning assets were $14.14 billion for the six months ended June 30, 2026, an increase of $1.06 billion from $13.08 billion for the six months ended June 30, 2025. Net interest margin was 3.24% during the six months ended June 30, 2026, up from 2.96% during the six months ended June 30, 2025.

Interest Income. Interest income was $348.7 million during the six months ended June 30, 2026, compared to $329.4 million during the six months ended June 30, 2025. During the six months ended June 30, 2026, interest income increased $19.2 million from the six months ended June 30, 2025, primarily reflecting increases in interest income of $17.3 million on business loans, $16.8 million on other short-term investments, $4.6 million on securities, and $2.4 million on one-to-four family loans, partially offset by decreases in interest income of $11.2 million on multifamily loans, $8.5 million on non-owner-occupied loans, and $2.1 million on acquisition, development and construction loans.

The increased interest income on business loans was due to a $609.1 million increase in the average balances, partially offset by a 17-basis point decrease in the yield of such loans in the period. The increased interest income on other short-term investments was related to a $1.08 billion increase in the average balances, partially offset by a 69-basis point decrease in the yield of such investments in the period. The increased interest income on securities was related to a $150.3 million increase in the average balances and a 28-basis point increase in the yield of such securities in the period. The increased interest income on one-to-four family loans was related to a $81.3 million increase in the average balances and a 9-basis point increase in the yield of such loans in the period. The decreased interest income on multifamily residential and residential mixed-use loans was related to a $489.6 million decrease in the average balance and a 1-basis point decrease in the yield of such loans in the period. The decreased interest income on non-owner-occupied commercial real estate loans reflected a $331.8 million decrease in the average balance, partially offset by a 1-basis point increase in the yield of such loans in the period. The decreased interest income on acquisition, development and construction loan income reflected a $38.6 million decrease in the average balance and a 95-basis point decrease in the yield of such loans in the period.

Interest Expense. Interest expense was $121.2 million during the six months ended June 30, 2026, compared to $137.1 million during the six months ended June 30, 2025. During the six months ended June 30, 2026, interest expense decreased $15.9 million, primarily reflecting decreases in interest expense of $13.7 million on deposits and $1.1 million in interest expense on derivative cash collateral.

The decrease in interest expense on deposits was primarily due to a 65-basis point decrease in rates paid on money market accounts, partially offset by a $653.0 million increase in average balances of such deposits, a 58-basis point decrease in rates paid on savings accounts and a $234.6 million decrease in average balances of such deposits, and a 32-basis point decrease in rates paid on CDs, partially offset by a $65.7 million increase in the average balance of such deposits in the period. The decreased interest expense on FHLBNY advances was due to a $59.7 million decrease in the average balance, partially offset by a 10-basis point increase in the cost of FHLBNY advances in the period. The decreased interest expense on derivative cash collateral was due to a $34.1 million decrease in the average balance and a 105-basis point decrease in the cost of such derivatives in the period. The decreased interest expense on subordinated debt was due to a $21.1 million decrease in the average balance, partially offset by a 26-basis point increase in the cost of such debt in the period.

Provision for Credit Losses. We recorded a credit loss provision of $26.2 million during the six months ended June 30, 2026, compared to a credit loss provision of $18.8 million for the six months ended June 30, 2025. The $26.2 million credit loss provision for the six months ended June 30, 2026, was attributable to charge-offs, provisioning for individually analyzed loans and growth in the business loan portfolio. The $18.8 million credit loss provision for the six months ended June 30, 2025 was primarily attributable to updates in the macroeconomic forecast and to the loss driver models.

Non-Interest Income. Non-interest income was $22.6 million during the six months ended June 30, 2026, compared to $21.2 million during the six months ended June 30, 2025. The increase is primarily driven by a $2.9 million increase in service charges and other fees and a $1.4 million increase in BOLI income, partially offset by a $2.3 million increase in loss (gain) on the sale of securities, loans and other assets.

Non-Interest Expense. Non-interest expense was $127.5 million during the six months ended June 30, 2026, compared to $125.8 million during the six months ended June 30, 2025. The increase in non-interest expense is primarily due to a $7.5 million increase in salaries and employee benefits and a $7.2 million increase due to the pension settlement loss recorded during the first quarter of 2025.

Non-interest expense was 1.71% and 1.81% of average assets during the six months ended June 30, 2026 and 2025, respectively.

Income Tax Expense. Income tax expense was $27.0 million during the six months ended June 30, 2026, compared to $17.7 million during the six months ended June 30, 2025. The reported effective tax rate for the six months ended June 30, 2026 and 2025 was 28.0%, and 25.7%, respectively.

Dime Commercial Bancshares Inc. published this content on July 31, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 31, 2026 at 21:06 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]

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