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LOANS AND ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Jun. 30, 2025

LOANS AND ALLOWANCE FOR CREDIT LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES

NOTE 5 — LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans, net of deferred costs and fees, consist of the following (in thousands):


		At			At
		June 30,			December 31,
		2025			2024
Real estate
Commercial		$	4,849,152		$	4,317,361
Construction			251,693			206,960
Multi-family			414,248			376,737
One-to four-family			88,876			90,880
Total real estate loans			5,603,969			4,991,938
Commercial and industrial			1,016,056			1,046,146
Consumer			11,269			12,961
Total loans			6,631,294			6,051,045
Deferred fees, net of origination costs			(18,505)			(16,969)
Loans, net of deferred fees and costs			6,612,789			6,034,076
Allowance for credit losses			(74,071)			(63,273)
Net loans		$	6,538,718		$	5,970,803

At June 30, 2025, $3.5 billion of loans were pledged to support wholesale funding, of which $521.0 million were encumbered. At December 31, 2024, $3.3 billion of loans were pledged to support wholesale funding, of which $348.8 million were encumbered.

The following tables present the activity in the ACL for funded loans by segment. The portfolio segments represent the categories that the Company uses to determine its ACL (in thousands):


											Multi-			One-to four-
Three months ended June 30, 2025		CRE			C&I			Construction			family			family			Consumer			Total
Allowance for credit losses:
Beginning balance		$	44,647		$	12,433		$	2,518		$	7,259		$	602		$	344		$	67,803
Provision/(credit) for credit losses			5,808			166			(178)			412			(24)			70			6,254
Loans charged-off			—			—			—			—			—			(112)			(112)
Recoveries			—			125			—			—			—			1			126
Total ending allowance balance		$	50,455		$	12,724		$	2,340		$	7,671		$	578		$	303		$	74,071


											Multi-			One-to four-
Three months ended June 30, 2024		CRE			C&I			Construction			family			family			Consumer			Total
Allowance for credit losses:
Beginning balance		$	36,704		$	10,937		$	1,712		$	8,171		$	521		$	493		$	58,538
Provision/(credit) for credit losses			1,780			345			47			(344)			(390)			48			1,486
Loans charged-off			—			—			—			—			—			(16)			(16)
Recoveries			—			—			—			—			—			—			—
Total ending allowance balance		$	38,484		$	11,282		$	1,759		$	7,827		$	131		$	525		$	60,008


											Multi-			One-to four-
Six months ended June 30, 2025		CRE			C&I			Construction			family			family			Consumer			Total
Allowance for credit losses:
Beginning balance		$	42,070		$	10,991		$	1,962		$	7,290		$	577		$	383		$	63,273
Provision/(credit) for credit losses			8,385			1,428			378			381			1			150			10,723
Loans charged-off			—			—			—			—			—			(231)			(231)
Recoveries			—			305			—			—			—			1			306
Total ending allowance balance		$	50,455		$	12,724		$	2,340		$	7,671		$	578		$	303		$	74,071


											Multi-			One-to four-
Six months ended June 30, 2024		CRE			C&I			Construction			family			family			Consumer			Total
Allowance for credit losses:
Beginning balance		$	35,635		$	11,207		$	1,765		$	8,215		$	663		$	480		$	57,965
Provision/(credit) for credit losses			2,848			75			(6)			(388)			(532)			62			2,060
Loans charged-off			—			—			—			—			—			(18)			(18)
Recoveries			1			—			—			—			—			1			2
Total ending allowance balance		$	38,484		$	11,282		$	1,759		$	7,827		$	131		$	525		$	60,008

Net recoveries for the three and six months ended June 30, 2025 were $14,000 and $76,000, respectively. Net charge-offs for the three and six months ended June 30, 2024 were $16,000.

The following tables present the activity in the ACL for unfunded loan commitments (in thousands):


		Three months ended June 30,							Six months ended June 30,
		2025			2024				2025			2024
Balance at the beginning of period		$	2,046		$	1,136			$	2,008		$	1,181
Provision/(credit) for credit losses			124			52				162			7
Total ending allowance balance		$	2,170		$	1,188			$	2,170		$	1,188

The following tables present the recorded investment in non-accrual loans and loans past due 90 days and greater and still accruing, by class of loans (in thousands):


								Loans Past Due
					Non-accrual			90 Days and
					Without an			Greater and
At June 30, 2025		Non-accrual			ACL			Still Accruing
Commercial real estate		$	25,926		$	1,926		$	—
Commercial & industrial			8,989			6,989			—
Multi-family			2,554			2,554			—
One-to-four family			2,469			2,469			—
Consumer			—			—			—
Total		$	39,938		$	13,938		$	—


								Loans Past Due
					Non-accrual			90 Days and
					Without an			Greater and
At December 31, 2024		Non-accrual			ACL			Still Accruing
Commercial real estate		$	25,087		$	25,087		$	—
Commercial & industrial			6,989			6,989			—
One-to-four family			452			452			—
Consumer			—			—			72
Total		$	32,528		$	32,528		$	72

Interest income on non-accrual loans recognized on a cash basis for the three and six months ended June 30, 2025 and 2024 was immaterial.

The following tables present the aging of the recorded investment in past due loans by class of loans (in thousands):


								Non-accrual or			Total Past
		30-59			60-89			90 Days and			Due or			Current
At June 30, 2025		Days			Days			Greater			Non-accrual			Loans			Total
Commercial real estate		$	—		$	15,448		$	25,926		$	41,374		$	4,807,778		$	4,849,152
Commercial & industrial			—			—			8,989			8,989			1,007,067			1,016,056
Construction			—			—			—			—			251,693			251,693
Multi-family			—			—			2,554			2,554			411,694			414,248
One-to four-family			—			—			2,469			2,469			86,407			88,876
Consumer			38			32			—			70			11,199			11,269
Total		$	38		$	15,480		$	39,938		$	55,456		$	6,575,838		$	6,631,294


								Non-accrual or			Total Past
		30-59			60-89			90 Days and			Due or			Current
At December 31, 2024		Days			Days			Greater			Non-accrual			Loans			Total
Commercial real estate		$	7,115		$	—		$	25,087		$	32,202		$	4,285,159		$	4,317,361
Commercial & industrial			—			—			6,989			6,989			1,039,157			1,046,146
Construction			—			—			—			—			206,960			206,960
Multi-family			—			—			—			—			376,737			376,737
One-to four-family			2,049			—			452			2,501			88,379			90,880
Consumer			124			22			72			218			12,743			12,961
Total		$	9,288		$	22		$	32,600		$	41,910		$	6,009,135		$	6,051,045

Credit Quality Indicators

The Company aggregates loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. Except for one-to four-family loans and consumer loans, the Company analyzes loans individually by classifying the loans as to credit risk ratings at least annually. For one-to four-family loans and consumer loans, the Company evaluates credit quality based on the aging status of the loan. An analysis is performed on a quarterly basis for loans classified as special mention, substandard or doubtful. The Company uses the following definitions for risk ratings. Loans not meeting these definitions are considered to be pass-rated loans.

Special Mention - Loans classified as special mention have a potential weakness that deserves management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values highly questionable and improbable.

The following table presents loan balances by credit quality indicator and year of origination at June 30, 2025 and charge-offs for the six months ended June 30, 2025 (in thousands):


																	2020
		2025			2024			2023			2022			2021			& Prior			Revolving			Total
CRE
Pass		$	1,373,024		$	1,283,281		$	944,522		$	727,284		$	210,968		$	178,070		$	50,220		$	4,767,369
Special Mention			18,400			33,953			—			—			—			—			—			52,353
Substandard			1,800			1,087			—			24,000			839			1,704			—			29,430
Total		$	1,393,224		$	1,318,321		$	944,522		$	751,284		$	211,807		$	179,774		$	50,220		$	4,849,152

Construction
Pass		$	76,160		$	49,283		$	86,910		$	9,419		$	—		$	—		$	29,921		$	251,693
Total		$	76,160		$	49,283		$	86,910		$	9,419		$	—		$	—		$	29,921		$	251,693

Multi-family
Pass		$	127,155		$	39,155		$	37,723		$	69,073		$	61,356		$	23,239		$	2,754		$	360,455
Substandard			—			2,554			—			30,300			20,939			—			—			53,793
Total		$	127,155		$	41,709		$	37,723		$	99,373		$	82,295		$	23,239		$	2,754		$	414,248

One-to four-family
Current		$	—		$	—		$	45,000		$	3,246		$	—		$	38,161		$	—		$	86,407
Past Due			—			—			—			—			—			2,469			—			2,469
Total		$	—		$	—		$	45,000		$	3,246		$	—		$	40,630		$	—		$	88,876

C&I
Pass		$	84,596		$	180,934		$	80,630		$	93,630		$	57,497		$	11,597		$	447,935		$	956,819
Substandard			—			—			9,095			30,760			4,197			—			15,185			59,237
Total		$	84,596		$	180,934		$	89,725		$	124,390		$	61,694		$	11,597		$	463,120		$	1,016,056

Consumer
Current		$	—		$	—		$	—		$	—		$	—		$	11,199		$	—		$	11,199
Past due			—			—			—			—			—			70			—			70
Total		$	—		$	—		$	—		$	—		$	—		$	11,269		$	—		$	11,269

Total
Pass/Current		$	1,660,935		$	1,552,653		$	1,194,785		$	902,652		$	329,821		$	262,266		$	530,830		$	6,433,942
Special Mention			18,400			33,953			—			—			—			—			—			52,353
Substandard/Past due			1,800			3,641			9,095			85,060			25,975			4,243			15,185			144,999
Total		$	1,681,135		$	1,590,247		$	1,203,880		$	987,712		$	355,796		$	266,509		$	546,015		$	6,631,294

Charge-offs
Consumer		$	—		$	—		$	—		$	—		$	—		$	230		$	—		$	230

At June 30, 2025, there were $29.4 million, $53.8 million and $2.5 million of CRE, Multi-family and one-to four-family substandard classified collateral dependent loans, respectively.

The following table presents loan balances by credit quality indicator and year of origination at December 31, 2024 and charge-offs for the year ended December 31, 2024 (in thousands):


																	2019
		2024			2023			2022			2021			2020			& Prior			Revolving			Total
CRE
Pass		$	1,613,785		$	1,114,212		$	927,851		$	241,340		$	125,676		$	149,727		$	26,569		$	4,199,160
Special Mention			73,859			—			5,000			14,255			—			—			—			93,114
Substandard			1,087			—			24,000			—			—			—			—			25,087
Total		$	1,688,731		$	1,114,212		$	956,851		$	255,595		$	125,676		$	149,727		$	26,569		$	4,317,361

Construction
Pass		$	104,503		$	65,231		$	8,693		$	—		$	—		$	—		$	28,533		$	206,960
Total		$	104,503		$	65,231		$	8,693		$	—		$	—		$	—		$	28,533		$	206,960

Multi-family
Pass		$	110,440		$	38,143		$	74,120		$	63,086		$	23,005		$	13,480		$	3,224		$	325,498
Substandard			—			—			30,300			20,939			—			—			—			51,239
Total		$	110,440		$	38,143		$	104,420		$	84,025		$	23,005		$	13,480		$	3,224		$	376,737

One-to four-family
Current		$	—		$	45,000		$	3,469		$	—		$	9,531		$	30,379		$	—		$	88,379
Past Due			—			—			—			—			—			2,501			—			2,501
Total		$	—		$	45,000		$	3,469		$	—		$	9,531		$	32,880		$	—		$	90,880

C&I
Pass		$	238,850		$	96,201		$	119,601		$	62,865		$	14,987		$	1,929		$	452,477		$	986,910
Special Mention			—			1,497			10,246			—			—			—			1,000			12,743
Substandard			—			7,643			20,968			4,697			—			—			13,185			46,493
Total		$	238,850		$	105,341		$	150,815		$	67,562		$	14,987		$	1,929		$	466,662		$	1,046,146

Consumer
Current		$	—		$	—		$	—		$	—		$	—		$	12,743		$	—		$	12,743
Past due			—			—			—			—			—			218			—			218
Total		$	—		$	—		$	—		$	—		$	—		$	12,961		$	—		$	12,961

Total
Pass/Current		$	2,067,578		$	1,358,787		$	1,133,734		$	367,291		$	173,199		$	208,258		$	510,803		$	5,819,650
Special Mention			73,859			1,497			15,246			14,255			—			—			1,000			105,857
Substandard/Past due			1,087			7,643			75,268			25,636			—			2,719			13,185			125,538
Total		$	2,142,524		$	1,367,927		$	1,224,248		$	407,182		$	173,199		$	210,977		$	524,988		$	6,051,045

Charge-offs
Consumer		$	—		$	—		$	—		$	—		$	—		$	247		$	—		$	247

At December 31, 2024, there were $24.0 million and $51.2 million of CRE and Multi-family substandard classified collateral dependent loans, respectively.

The following tables show the amortized cost basis of modified loans to borrowers experiencing financial difficulty during the periods indicated (in thousands):



												Modifications
						Interest Rate						as a % of
Three months ended June 30, 2025		Extension				Reduction			Total			Loan Class
Multi-family		$	—			$	—		$	—		0.0	%
Total		$	—			$	—		$	—



												Modifications
						Interest Rate						as a % of
Six months ended June 30, 2025		Extension				Reduction			Total			Loan Class
Multi-family		$	51,239			$	—		$	51,239		12.4	%
Total		$	51,239			$	—		$	51,239



												Modifications
							Interest Rate					as a % of
Three months ended June 30, 2024		Extension					Reduction		Total			Loan Class
Commercial & industrial		$	4,747			$	—		$	4,747		0.4	%
Multi-family			48,224				3,015			51,239		11.6	%
Total		$	52,971			$	3,015		$	55,986



												Modifications
							Interest Rate					as a % of
Six months ended June 30, 2024		Extension					Reduction		Total			Loan Class
Commercial & industrial		$	11,736			$	—		$	11,736		1.1	%
Multi-family			48,224				3,015			51,239		11.6	%
Total		$	59,960			$	3,015		$	62,975

The following tables describe the types of modifications made to borrowers experiencing financial difficulty:


		Types of Modifications
				Weighted
				Average
				Interest
		Term		Rate
		Extension		Reduction
Three months ended June 30, 2025
Multi-family		—		0.0%

		Types of Modifications
				Weighted
				Average
				Interest
		Term		Rate
		Extension		Reduction
Six months ended June 30, 2025
Multi-family		6-12 months		0.0%


		Types of Modifications
				Weighted
				Average
				Interest
		Term		Rate
		Extension		Reduction
Three months ended June 30, 2024
Commercial & industrial		11-12 months		3.8%
Multi-family		6-12 months		—

		Types of Modifications
				Weighted
				Average
				Interest
		Term		Rate
		Extension		Reduction
Six months ended June 30, 2024
Commercial & industrial		11-12 months		2.9%
Multi-family		6-12 months		4.1%

There were $7.0 million of loans that had a payment default during the three and six months ended June 30, 2025 that were modified in the prior 12 months before default to borrowers experiencing financial difficulty. At June 30, 2025, there were no additional commitments to lend to borrowers experiencing financial difficulty whose loans have been modified. All loans to borrowers experiencing financial difficulty that have been modified during the three and six months ended June 30, 2024, were in compliance with their modified terms.