Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

The purpose of this analysis is to provide the reader with information relevant to understanding and assessing the Company's results of operations for the periods presented herein and financial condition as of September 30, 2025 and December 31, 2024. In order to fully understand this analysis, the reader is encouraged to review the consolidated financial statements and accompanying notes thereto appearing elsewhere in this report.

Cautionary Statement Concerning Forward-Looking Statements

This report includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that involve inherent risks and uncertainties. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of ConnectOne Bancorp Inc. and its subsidiaries, including statements preceded by, followed by, or that include words or phrases such as "believes," "expects," "anticipates," "plans," "trend," "objective," "continue," "remain," "pattern" or similar expressions or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions may increase significantly; (2) changes in the interest rate environment may reduce interest margins; (3) prepayment speeds, loan origination and sale volumes, charge-offs and credit loss provisions may vary substantially from period to period; (4) general economic conditions may be less favorable than expected or may be adversely effected by policy uncertainties, including regarding the impact of tariffs; (5) political developments, sovereign debt problems, wars or other hostilities such as the ongoing conflict between Ukraine and Russia and instability in the Middle East, may disrupt or increase volatility in securities markets or other economic conditions; (6) legislative or regulatory changes or actions may adversely affect the businesses in which ConnectOne Bancorp is engaged; (7) changes and trends in the securities markets may adversely impact ConnectOne Bancorp; (8) a delayed or incomplete resolution of regulatory issues could adversely impact planning by ConnectOne Bancorp; (9) the impact on reputation risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity could be significant; (10) the outcome of regulatory and legal investigations and proceedings may not be anticipated, and (11) the impact of health emergencies or natural disasters on our employees and operations, and those of our customers. Further information on other factors that could affect the financial results of ConnectOne Bancorp is included in Item 1a. of ConnectOne Bancorp's Annual Report on Form 10-K as amended and updated in ConnectOne Bancorp's other filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission's website at http://www.sec.gov and/or from ConnectOne Bancorp, Inc.

Critical Accounting Policies and Estimates

Our accounting policies are integral to understanding the results reported. We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. As of September 30, 2025, there have been no material changes to our critical accounting policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K. Reference is made to Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Operating Results Overview

Net income available to common stockholders for the three months ended September 30, 2025 was $39.5 million, as compared to $15.7 million for the comparable three-month period ended September 30, 2024. The Company's diluted earnings per share were $0.78 for the three months ended September 30, 2025, as compared with diluted earnings per share of $0.41 for the comparable three-month period ended September 30, 2024. The $23.8 million increase in net income available to common stockholders and the $0.37 increase in diluted earnings per share were due to a $41.1 million increase in net interest income and a $14.7 million increase in noninterest income, which were partially offset by a $20.0 million increase in noninterest expenses, a $10.3 million increase in income tax expense and a $1.7 million increase in the provision for credit losses on loans.

Net income available to common stockholders for the nine months ended September 30, 2025 was $36.4 million compared to $48.9 million for the comparable nine-month period ended September 30, 2024. The Company's diluted earnings per share were $0.83 for the nine months ended September 30, 2025 as compared with diluted earnings per share of $1.27 for the comparable nine-month period ended September 30, 2024. The $12.5 million decrease in net income available to common stockholders and the $0.44 decrease in diluted earnings per share versus the comparable nine-month period ended September 30, 2024 were due to a $58.3 million increase in noninterest expenses and a $34.4 million increase in provision for credit losses, partially offset by a $64.0 million increase in net interest income and a $16.1 million increase in noninterest income.

Net Interest Income and Margin

Net interest income is the difference between the interest earned on the portfolio of earning assets (principally loans and investments) and the interest paid on deposits and borrowings, which support these assets. Net interest income is presented on a tax-equivalent basis by adjusting tax-exempt income (including interest earned on tax-free loans and on obligations of state and local political subdivisions) by the amount of income tax which would have been paid had the assets been invested in taxable assets. Net interest margin is defined as net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

Fully taxable equivalent net interest income for the third quarter of 2025 increased $41.4 million, or 67.2%, from the third quarter of 2024, due to a 44 basis-point widening of the net interest margin to 3.11% from 2.67%, and a 43.1% increase in average interest earning assets. The increase in average interest-earning assets was primarily due to the merger with FLIC. The margin also benefited from a 70 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by an increase in cost of subordinated debt.

Fully taxable equivalent net interest income for the nine months ended September 30, 2025 was $249.5 million, an increase of $64.5 million, or 34.8%, from the nine months ended September 30, 2024. The increase primarily resulted from a 37 basis-point increase in the net interest margin to 3.04% from 2.67%. During the nine months ended September 30, 2025, average interest-earning assets increased $1.7 billion, primarily due to the merger with FLIC. The widening of the net interest margin during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024 was primarily due to a 57 basis-point decrease in the average cost of total deposits, including noninterest-bearing deposits, partially offset by the impact of a $200 million long-term subordinated debt issuance during the third quarter of 2025.

The following tables present for the three and nine months ended September 30, 2025 and 2024, the Company's average assets, liabilities and stockholders' equity. The Company's net interest income, net interest spread and net interest margin are also reflected.

Average Statements of Condition with Interest and Average Rates

		Three Months Ended September 30,
		2025												2024
						Interest												Interest
		Average				Income/				Average				Average				Income/				Average
		Balance				Expense				Rate (7)				Balance				Expense				Rate (7)
		(dollars in thousands)
Interest-earning assets:
Investment securities (1) (2)		$	1,355,775			$	14,581				4.27	%		$	736,946			$	6,157				3.32	%
Total loans (2) (3) (4)			11,162,060				166,541				5.92				8,123,416				119,805				5.87
Federal funds sold and interest-bearing deposits with banks			605,344				6,644				4.35				304,009				4,056				5.31
Restricted investment in bank stocks			49,264				1,081				8.71				41,667				1,048				10.01
Total interest-earning assets			13,172,443				188,847				5.69				9,206,038				131,066				5.66
Noninterest-earning assets:
Allowance for credit losses			(159,157	)											(83,355	)
Other noninterest-earning assets			1,037,299												620,170
Total assets		$	14,050,585											$	9,742,853
Interest-bearing liabilities:
Interest-bearing deposits:
Time deposits		$	3,019,848				30,072				3.95			$	2,625,329				30,245				4.58
Other interest-bearing deposits			5,889,230				45,137				3.04				3,747,427				33,540				3.56
Total interest-bearing deposits			8,909,078				75,209				3.35				6,372,756				63,785				3.98
Borrowings			783,994				4,550				2.30				717,586				4,239				2.35
Subordinated debentures, net			263,511				5,917				8.91				79,735				1,312				6.55
Finance lease			1,068				16				5.94				1,349				20				5.90
Total interest-bearing liabilities			9,957,651				85,692				3.41				7,171,426				69,356				3.85
Noninterest-bearing demand deposits			2,486,993												1,259,912
Other liabilities			92,049												76,791
Total noninterest-bearing liabilities			2,579,042												1,336,703
Stockholders' equity			1,513,892												1,234,724
Total liabilities and stockholders' equity		$	14,050,585											$	9,742,853
Net interest income (tax-equivalent basis)							103,155												61,710
Net interest spread (5)											2.28	%											1.82	%
Net interest margin (6)											3.11	%											2.67	%
Tax-equivalent adjustment							(1,138	)											(823	)
Net interest income						$	102,017											$	60,887

(1)	Average balances are based on amortized cost and include equity securities.
(2)	Interest income is presented on a tax-equivalent basis using a 21% assumed tax rate.
(3)	Includes loan fee income and accretion of purchase accounting adjustments.
(4)	Total loans include loans held-for-sale and nonaccrual loans.
(5)	Represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities and is presented on a tax- equivalent basis.
(6)	Represents net interest income on a tax-equivalent basis divided by average total interest-earning assets.
(7)	Rates are annualized.

		Nine Months Ended September 30,
		2025												2024
						Interest												Interest
		Average				Income/				Average				Average				Income/				Average
		Balance				Expense				Rate (7)				Balance				Expense				Rate (7)
		(dollars in thousands)
Interest-earning assets:
Securities (1) (2)		$	1,014,782			$	30,191				3.98	%		$	732,297			$	18,053				3.29	%
Total loans (2) (3) (4)			9,508,440				415,289				5.84				8,222,660				361,061				5.87
Federal funds sold and interest-bearing with banks			402,091				13,179				4.38				245,226				9,802				5.34
Restricted investment in bank stocks			44,396				2,758				8.31				46,130				3,390				9.82
Total interest-earning assets			10,969,709				461,417				5.62				9,246,313				392,306				5.67
Noninterest-earning assets:
Allowance for credit losses			(114,013	)											(84,012	)
Other noninterest-earning assets			795,936												620,705
Total assets		$	11,651,632											$	9,783,006
Interest-bearing liabilities:
Interest-bearing deposits:
Time deposits		$	2,723,057				81,862				4.02			$	2,593,716				87,181				4.49
Other interest-bearing deposits			4,754,333				107,578				3.03				3,721,751				99,097				3.56
Total interest-bearing deposits			7,477,390				189,440				3.39				6,315,467				186,278				3.94
Borrowings			731,587				11,806				2.16				816,918				16,956				2.77
Subordinated debentures			172,106				10,576				8.22				79,609				3,934				6.60
Finance lease			1,139				50				5.87				1,416				62				5.85
Total interest-bearing liabilities			8,382,222				211,872				3.38				7,213,410				207,230				3.84
Demand deposits			1,828,783												1,256,799
Other liabilities			68,837												87,375
Total noninterest-bearing liabilities			1,897,620												1,344,174
Stockholders' equity			1,371,790												1,225,422
Total liabilities and stockholders' equity		$	11,651,632											$	9,783,006
Net interest income (tax-equivalent basis)							249,545												185,076
Net interest spread (5)											2.24	%											1.83	%
Net interest margin (6)											3.04	%											2.67	%
Tax-equivalent adjustment							(2,889	)											(2,450	)
Net interest income						$	246,656											$	182,626

(1)	Average balances are based on amortized cost and include equity securities.
(2)	Interest income is presented on a tax-equivalent basis using a 21% assumed tax rate.
(3)	Includes loan fee income and accretion of purchase accounting adjustments.
(4)	Total loans include loans held-for-sale and nonaccrual loans.
(5)	Represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities and is presented on a tax- equivalent basis.
(6)	Represents net interest income on a tax-equivalent basis divided by average total interest-earning assets.
(7)	Rates are annualized.

Noninterest Income

Noninterest income totaled $19.4 million for the three months ended September 30, 2025, compared with $4.7 million for the three months ended September 30, 2024. During the third quarter of 2025, the Company realized a $6.6 million one-time benefit related to the employee retention tax credit ("ERTC"), a federal program under the CARES Act intended to encourage employee retention during the COVID-19 pandemic. Additionally, the Company also recognized a $3.5 million defined benefit pension plan curtailment gain. The gain resulted from freezing the FLIC defined benefit pension plan during the quarter. Excluding the ERTC and defined pension plan curtailment gain, noninterest income increased by $4.6 million during the third quarter compared to the third quarter of 2024. The increase was due to a $2.0 million increase in deposit, loan and other income, a $1.2 million increase in net gains on equity securities, a $0.8 million increase in bank owned life insurance ("BOLI") income and a $0.5 million increase in net gains on sale of loans held-for-sale (primarily SBA loans). The increases in deposit, loan and other income and BOLI income were primarily due to the merger with FLIC.

Noninterest income totaled $29.0 million for the nine months ended September 30, 2025, compared with $13.0 million for the nine months ended September 30, 2024. Excluding the aforementioned ERTC and defined pension plan curtailment gain, noninterest income increased by $6.0 million during the nine months ended compared to the comparable period of 2024. The $6.0 million increase in noninterest income during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024 was primarily due to a $3.3 million increase in deposit, loan and other income, a $2.2 million increase in net gains on equity securities and a $1.1 million increase in BOLI income, partially offset by a $0.8 million decrease in net gains on sale of loans held-for-sale.

Noninterest Expenses

Noninterest expenses totaled $58.7 million for the three months ended September 30, 2025, compared with $38.6 million for the three months ended September 30, 2024. The $20.0 million increase in noninterest expenses for the third quarter of 2025 when compared to the third quarter of 2024 was primarily due to a $9.4 million increase in salaries and employee benefits, a $2.9 million increase in amortization of core deposit intangibles, a $2.2 million increase in occupancy and equipment expenses and a $1.2 million increase in merger expenses. The variances from the third quarter of 2025 to the third quarter of 2024 were primarily due to the merger with FLIC.

Noninterest expenses totaled $171.6 million for the nine months ended September 30, 2025, compared with $113.3 million for the nine months ended September 30, 2024. The $58.3 million increase in noninterest expenses during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024 was primarily due to a $33.2 million increase in merger expenses, a $12.4 million increase in salaries and employee benefits, a $3.8 million increase in amortization of core deposit intangibles. a $2.5 million increase in occupancy and equipment expenses, a $1.9 million increase in professional and consulting expenses, a $1.6 million increase in information technology and communications expenses, a $1.0 million in restructuring and exit charges, a $0.8 million increase in FDIC expense, a $0.3 million BOLI restructuring charge, a $0.5 million increase in other expenses and a $0.3 million increase in marketing and advertising. The increases when compared to the nine months ended September 30, 2024 were primarily due to the merger with FLIC.

Income Taxes

Income tax expense was $16.3 million for the third quarter of 2025, resulting in an effective tax rate of 28.2%. This compares to an income tax expense of $6.0 million and an effective tax rate of 26.0% in the third quarter of 2024. The increase in income tax expense when compared to the third quarter of 2024 was primarily due to higher taxable income, resulting from the merger with FLIC.

Income tax expense was $18.5 million for the nine months ended September 30, 2025, resulting in an effective tax rate of 31.0%. This compares to an income tax expense of $18.6 million and an effective tax rate of 25.8% in the nine months ended September 30, 2024. Income tax expense for the nine months ended September 30, 2025 includes a $3.0 million estimated state tax liability resulting from intercompany dividends. Excluding that charge, the effective tax rate for the nine months ended September 30, 2025 was 26.0%.

Financial Condition

Loan Portfolio

The following table sets forth the composition of our loan portfolio, excluding loans held-for-sale and net deferred loan fees, by loan segment at the periods indicated.

		September 30, 2025								December 31, 2024								Amount Increase/
		Amount				Percent of Total				Amount				Percent of Total				(Decrease)
		(dollars in thousands)
Commercial		$	1,622,975				14.3	%		$	1,532,730				18.5	%		$	90,245
Commercial real estate			7,721,070				68.3				5,880,679				71.0				1,840,391
Commercial construction			728,615				6.4				616,246				7.4				112,369
Residential real estate			1,233,305				10.9				249,691				3.0				983,614
Consumer			2,166				0.1				1,136				0.1				1,030
Gross loans		$	11,308,131				100.0	%		$	8,280,482				100.0	%		$	3,027,649

As of September 30, 2025, gross loans totaled $11.3 billion, an increase of $3.0 billion or 36.6% compared to December 31, 2024. The increases in the loan segments were primarily due to the merger with FLIC.

While the previous table reflects the classification of our loans by loan portfolio segment, the following tables present further disaggregation of our commercial real estate portfolio along with applicable weighted average loan-to-value ratios, typically determined at loan origination.

		September 30, 2025								December 31, 2024
		Balance				Loan-to-Value				Balance				Loan-to-Value
(dollars in thousands)
Commercial real estate loans
Multifamily		$	3,461,256				57	%		$	2,496,508				61	%
Nonowner-occupied			2,662,386				52				1,965,044				53
Owner-occupied			1,414,862				51				1,101,034				52
Land loans			295,276				48				317,524				45
Total commercial real estate loans (before fair value adjustment)		$	7,833,780				54	%		$	5,880,110				56	%
Fair value adjustment (discount)/premium			(112,710	)							569
Total commercial real estate loans		$	7,721,070							$	5,880,679

The tables above are further broken down in the following tables by geography:

		September 30, 2025								December 31, 2024
		Balance				Percent of Total				Balance				Percent of Total
(dollars in thousands)
Multifamily loans
New Jersey		$	1,644,974				47.5	%		$	1,588,891				63.6	%
New York			1,510,209				43.6				713,651				28.6
Florida			41,020				1.2				7,732				0.3
Connecticut			36,257				1.1				36,486				1.5
All Other States			228,796				6.6				149,748				6.0
Total multifamily loans (before fair value adjustment)		$	3,461,256				100.0	%		$	2,496,508				100.0	%

		September 30, 2025								December 31, 2024
		Balance				Percent of Total				Balance				Percent of Total
(dollars in thousands)
Nonowner-occupied
New Jersey		$	770,921				29.0	%		$	796,785				40.5	%
New York			1,470,130				55.2				730,145				37.2
Florida			206,110				7.7				162,184				8.3
Connecticut			69,848				2.6				47,083				2.4
All Other States			145,377				5.5				228,847				11.6
Total nonowner occupied (before fair value adjustment)		$	2,662,386				100.0	%		$	1,965,044				100.0	%

		September 30, 2025								December 31, 2024
		Balance				Percent of Total				Balance				Percent of Total
(dollars in thousands)
Owner-occupied
New Jersey		$	505,106				35.7	%		$	509,151				46.3	%
New York			610,080				43.1				312,514				28.4
Florida			72,345				5.1				46,540				4.2
Connecticut			29,343				2.1				36,636				3.3
All Other States			197,988				14.0				196,193				17.8
Total owner-occupied (before fair value adjustment)		$	1,414,862				100.0	%		$	1,101,034				100.0	%

		September 30, 2025								December 31, 2024
		Balance				Percent of Total				Balance				Percent of Total
(dollars in thousands)
Land loans
New Jersey		$	102,451				34.7	%		$	78,429				24.7	%
New York			63,179				21.4				110,967				35.0
Florida			122,867				41.6				125,523				39.5
Connecticut			-				0.0				-				-
All Other States			6,779				2.3				2,605				0.8
Total land (before fair value adjustment)		$	295,276				100.0	%		$	317,524				100.0	%

In addition, the following tables present further details with respect to our nonowner-occupied and owner-occupied borrower concentrations included in the commercial real estate segment.

		September 30, 2025								December 31, 2024
		Balance				Percent of Total				Balance				Percent of Total
(dollars in thousands)
Nonowner-occupied
Retail		$	811,322				30.5	%		$	612,431				31.1	%
Office			584,033				21.9				420,059				21.4
Warehouse/Industrial			293,069				11.0				213,842				10.9
Mixed Use			222,345				8.4				127,604				6.5
Other			751,617				28.2				591,108				30.1
Total nonowner-occupied (before fair value adjustment)		$	2,662,386				100.0	%		$	1,965,044				100.0	%

		September 30, 2025								December 31, 2024
		Balance				Percent of Total				Balance				Percent of Total
(dollars in thousands)
Owner-occupied
Retail		$	221,098				15.6	%		$	203,119				18.4	%
Office			132,489				9.4				94,821				8.6
Warehouse/Industrial			378,032				26.7				247,413				22.5
Mixed Use			128,332				9.1				126,783				11.5
Other			554,911				39.2				428,898				39.0
Total owner-occupied (before fair value adjustment)		$	1,414,862				100.0	%		$	1,101,034				100.0	%

Allowance for Credit Losses and Related Provision

The ACL is an estimate of current expected credit losses considering available information relevant to assessing collectability of cash flows over the contractual term of the financial assets necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The methodology for determining the ACL is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded ACL. The loan portfolio also represents the largest asset type on the Company's Consolidated Statement of Financial Condition.

As of September 30, 2025, the Company's ACL was $156.5 million, an increase of $73.8 million from $82.7 million as of December 31, 2024. The increase was primarily due to the FLIC merger with $43.3 million of allowance being recorded through goodwill related to the purchased credit-deteriorated loans and $27.4 million reflecting the initial provision for credit losses.

The provision for credit losses, which includes a provision for unfunded commitments, for the three and nine months ended September 30, 2025 was $5.5 million and $44.7 million, respectively, compared to $3.8 million and $10.3 million, for the three and nine months ended September 30, 2025 and September 30, 2024, respectively. Included in the provision for credit losses for the nine months ended September 30, 2025 was $27.4 million in initial provision for credit losses related to the FLIC merger. In each of the periods presented, the provision for credit losses also reflected net, organic loan growth, charges related to individually evaluated loans and changing macroeconomic forecasts and conditions.

There were $5.1 million and $13.5 million in net charge-offs for the three and nine months ended September 30, 2025 compared with $3.5 million and $9.9 million in net charge-offs for the three and nine months ended September 30, 2024 respectively.

The level of the allowance for the respective periods of 2025 and 2024 reflects the credit quality within the loan portfolio, expected loan maturity dates, the changing composition of the commercial and residential real estate loan portfolios and other related factors. In management's view, the level of the ACL as of September 30, 2025 is adequate to cover credit losses inherent in the loan portfolio. Management's judgment regarding the adequacy of the allowance constitutes a "Forward-Looking Statement" under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from management's analysis, based principally upon the factors considered by management in establishing the allowance.

Changes in the ACL on loans are presented in the following table for the periods indicated.

		Three Months Ended
		September 30,
		2025				2024
		(dollars in thousands)
Average loans receivable		$	11,161,742			$	8,123,334
Analysis of the ACL:
Balance - beginning of period		$	156,190			$	82,077
Charge-offs:
Commercial			(473	)			(1,923	)
Commercial real estate			(4,700	)			(1,636	)
Total charge-offs			(5,173	)			(3,559	)
Recoveries:
Commercial			22				22
Commercial real estate			-				31
Residential real estate			15				-
Total recoveries			37				53
Net charge-offs			(5,136	)			(3,506	)
Provision for credit losses - loans:
Operating provision for credit losses			5,445				3,923
Balance - end of period		$	156,499			$	82,494
Ratio of annualized net charge-offs during the period to average loans receivable during the period			0.18	%			0.17	%
Loans receivable		$	11,303,636			$	8,111,976
ACL as a percentage of loans receivable			1.38	%			1.02	%
ACL excluding nonaccretable credit mark as a percentage of loans receivable			1.00	%			1.02	%

		Nine Months Ended
		September 30,
		2025				2024
		(dollars in thousands)
Average loans receivable		$	9,508,130			$	8,222,543
Analysis of the ACL:
Balance - beginning of period		$	82,685			$	81,974
Charge-offs:
Commercial			(3,484	)			(2,223	)
Commercial real estate			(10,282	)			(8,116	)
Consumer			(1	)			-
Total charge-offs			(13,767	)			(10,339	)
Recoveries:
Commercial			200				369
Commercial real estate			90				31
Residential real estate			20				-
Total recoveries			310				400
Net charge-offs			(13,457	)			(9,939	)
Provision for credit losses - loans:
Initial provision related to acquisition			27,307				-
Operating provision for credit losses			16,628				10,459
Nonaccretable credit marks on PCD loans			43,336				-
Balance - end of period		$	156,499			$	82,494
Ratio of annualized net charge-offs during the period to average loans receivable during the period			0.19	%			0.16	%
Loans receivable		$	11,303,636			$	8,111,976
ACL as a percentage of loans receivable			1.38	%			1.02	%
ACL excluding nonaccretable credit mark as a percentage of loans receivable			1.00	%			1.02	%

Asset Quality

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include analysis of credit requests and ongoing examination of outstanding loans, delinquencies, and potential problem loans, with particular attention to portfolio dynamics and mix. The Company strives to identify loans experiencing difficulty early on, to record charge-offs promptly based on realistic assessments of current collateral values and cash flows, and to maintain an adequate ACL at all times.

It is generally the Company's policy to discontinue interest accruals once a loan is past due as to interest or principal payments for a period of ninety days. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Payments received on nonaccrual loans are generally applied against principal. A loan may be restored to an accruing basis when all past due amounts have been collected. Loans past due 90 days or more, which are both well-secured and in the process of collection, may remain on an accrual basis.

Nonperforming assets include nonaccrual loans and other real estate owned ("OREO"). Nonaccrual loans represent loans on which interest accruals have been suspended. In general, it is the policy of management to consider the charge-off of uncollectible amounts of loans at the point they become past due 90 days.

The following table sets forth, as of the dates indicated, the amount of the Company's nonperforming assets:

		September 30, 2025				December 31, 2024
		(dollars in thousands)
Nonaccrual loans		$	39,671			$	57,310
OREO			-				-
Total nonperforming assets (1)		$	39,671			$	57,310

(1)	Nonperforming assets are defined as nonaccrual loans and OREO.

Nonaccrual loans to total loans receivable			0.35	%			0.69	%
Nonperforming assets to total assets			0.28				0.58

Purchased Credit-Deteriorated Loans

As of September 30, 2025, the Company's recorded investment in PCD loans totaled $269.7 million. PCD loans, or purchased credit deteriorated loans, are defined by the CECL standard as acquired financial loans that, at the time of acquisition, have experienced a more-than-insignificant deterioration in credit quality since their origination. The Company, with the assistance of independent third-party loan review experts, identified such deterioration by considering various factors. These factors included, but were not limited to, nonperforming status, payment history and delinquency, risk rating, debt service coverage ability, and rate repricing risk. The resulting PCD designated loans include multifamily loans, commercial real estate, commercial loans, and residential real estate.

Within the PCD loan portfolio as of September 30, 2025, there is a pool of rent-regulated loans amounting to $200.5 million. These loans are associated with multifamily properties located in the five boroughs of New York City, most of which are entirely or predominantly rent-regulated. This specific pool is subject to unique stressors, primarily due to the 2019 New York rent laws, which restricted rent increases while operating in an environment of escalating expenses.

A $43.3 million nonaccretable mark and a $34.4 million accretable fair value mark were recorded as of the Acquisition Date. The accretion associated with the fair value mark added approximately 4 basis points to the net interest margin for the current quarter.

Our determination of PCD classification and initial allowance involved significant judgment. Key assumptions included expected remaining life, default rates, recoveries, and economic scenarios. We continue to monitor roll-off and performance of the PCD portfolio in our quarterly review process.

Investment Securities

As of September 30, 2025, the principal components of the securities portfolio were federal agency obligations, mortgage-backed securities, obligations of U.S. states and political subdivisions, corporate bonds and notes, asset-backed securities and equity securities. For the three months ended September 30, 2025, average securities, on an amortized cost basis, increased by $735.5 million to $1.4 billion, or 10.3% of average total interest-earning assets, from $736.9 million, or 8.0% of average interest-earning assets, for the three months ended September 30, 2024. For the nine months ended September 30, 2025, average securities, on an amortized cost basis increased by $731.3 million to approximately $1.0 billion, or 9.3% of average total interest-earning assets, from approximately $732.3 million, or 7.9% of average interest-earning assets, for the nine months ended September 30, 2024.

As of September 30, 2025, net unrealized losses on securities available-for-sale, which are carried as a component of accumulated other comprehensive loss and included in stockholders' equity, net of tax, amounted to $47.2 million as compared with net unrealized losses of $69.6 million as of December 31, 2024. The decrease in unrealized losses is predominantly attributable to changes in market conditions and interest rates. Unrealized losses have not been recognized into income because the issuers are of high credit quality, we do not intend to sell, and it is likely that we will not be required to sell the securities prior to their anticipated recovery. The issuers continue to make timely principal and interest payments on the securities. Any impairment that has not been recorded through an ACL is recognized in OCI, net of applicable taxes. The Company did not record an ACL for available-for-sale securities as of September 30, 2025.

Interest Rate Sensitivity Analysis

The principal objective of our asset and liability management function is to evaluate the interest-rate risk included in certain balance sheet accounts; determine the level of risk appropriate given our business focus, operating environment, and capital and liquidity requirements; establish prudent asset concentration guidelines; and manage the risk consistent with Board approved guidelines. We seek to reduce the vulnerability of our operations to changes in interest rates, and actions in this regard are taken under the guidance of the Bank's Asset Liability Committee (the "ALCO"). The ALCO generally reviews our liquidity, cash flow needs, maturities of investments, deposits and borrowings, and current market conditions and interest rates.

The Company utilizes a number of strategies to manage interest rate risk including, but not limited to: (i) balancing the types and structures of interest-earning assets and interest-bearing liabilities by diversifying mix, coupons, maturities and/or repricing characteristics, (ii) reducing the overall interest rate sensitivity of liabilities by emphasizing core and/or longer-term deposits and utilizing FHLB advances and wholesale deposits for our interest rate risk profile, (iii) managing the investment portfolio for liquidity and interest rate risk profile, and (iv) entering into interest rate swap and cap agreements.

We currently utilize net interest income simulation and economic value of equity ("EVE") models to measure the potential impact to the Bank of future changes in interest rates. As of September 30, 2025 and December 31, 2024, the results of the models were within guidelines prescribed by our Board of Directors. If model results were to fall outside prescribed ranges, action, including additional monitoring and reporting to the Board, would be required by the ALCO and the Bank's management.

The net interest income simulation model attempts to measure the change in net interest income over the next one-year period, and over the next three-year period on a cumulative basis, assuming certain changes in the general level of interest rates. The model also utilizes immediate and parallel shifts in market interest rates as of September 30, 2025.

Based on our model, which was run as of September 30, 2025, we estimated that over the next one-year period a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 4.05%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 1.81%. As of December 31, 2024, we estimated that over the next one-year period a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 8.02% while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 3.56%.

Based on our model, which was run as of September 30, 2025, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 1.46%, while a 100 basis-point instantaneous and parallel decrease in interest rates would decrease net interest income by 2.00%. As of December 31, 2024, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 2.08%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 0.37%.

An EVE analysis is also used to dynamically model the present value of asset and liability cash flows with instantaneous and parallel rate shocks of up 200 basis points and down 100 basis points. The EVE is likely to be different as interest rates change. Our EVE as of September 30, 2025, would decrease by 4.99% with an instantaneous and parallel rate shock of up 200 basis points, and decrease by 0.89% with an instantaneous and parallel rate shock of down 100 basis points. Our EVE as of December 31, 2024, would decrease by 7.87% with an instantaneous and parallel rate shock of up 200 basis points, and increase by 1.67% with an instantaneous and parallel rate shock of down 100 basis-points.

The change in interest rate sensitivity was impacted by changes in overall market interest rates, updates to certain model assumptions, changes in short and intermediate-term fixed rate funding and by the deposit mix shift into certificates of deposit, from both noninterest-bearing and interest-bearing non-maturity deposits.

The following table illustrates the most recent results for EVE and one-year net interest income ("NII") sensitivity as of September 30, 2025.

Interest Rates			Estimated				Estimated Change in EVE								Interest Rates				Estimated				Estimated Change in NII
(basis points)			EVE				Amount				%				(basis points)				NII				Amount				%
+300			$	1,644,204			$	(166,923	)			(9.22	)			300			$	406,105			$	(29,181	)			(6.70	)
+200				1,720,753				(90,374	)			(4.99	)			200				417,665				(17,621	)			(4.05	)
+100				1,796,311				(14,816	)			(0.82	)			100				428,966				(6,320	)			(1.45	)
0				1,811,127				-				-				0				435,286				-				-
-100				1,794,922				(16,205	)			(0.89	)			-100				443,182				7,896				1.81
-200				1,731,424				(79,703	)			(4.40	)			-200				452,655				17,369				3.99
-300				1,618,634				(192,493	)			(10.63	)			-300				459,125				23,839				5.48

Certain model limitations are inherent in the methodology used in the EVE and net interest income measurements. The models require the making of certain assumptions which may tend to oversimplify the way actual yields and costs respond to changes in market interest rates. The models assume that the composition of the Company's interest sensitive assets and liabilities existing at the beginning of a period remain constant over the period being measured, thus they do not consider the Company's strategic plans, or any other steps it may take to respond to changes in rates over the forecasted period of time. Additionally, the models assume immediate changes in interest rates, based on yield curves as of a point-in-time, which are reflected in a parallel, instantaneous and uniform manner across all yield curves, when in reality changes may rarely be of this nature. The models also utilize data derived from historical performance and as interest rates change the actual performance of loan prepayments, rate sensitivities, and average life assumptions may deviate from assumptions utilized in the models and can impact the results. Accordingly, although the above measurements provide an indication of the Company's interest rate risk exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates. Given the nature and speed with which interest rates change, the projections noted above on the Company's EVE and net interest income can be expected to differ from actual results.

Estimates of Fair Value

The estimation of fair value is significant to a number of the Company's assets, including loans held-for-sale and securities available-for-sale. These are all recorded at either fair value or the lower of cost or fair value. Fair values are volatile and may be influenced by a number of factors. Circumstances that could cause estimates of the fair value of certain assets and liabilities to change include a change in prepayment speeds, discount rates, or market interest rates. Fair values for most available-for-sale securities are based on quoted market prices. If quoted market prices are not available, fair values are based on judgments regarding future expected loss experience, current economic condition risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Impact of Inflation and Changing Prices

The consolidated financial statements and notes thereto presented elsewhere herein have been prepared in accordance with GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations; unlike most industrial companies, nearly all of the Company's assets and liabilities are monetary. As a result, interest rates have a greater impact on performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Liquidity

Management actively monitors and manages its liquidity position to determine any current or potential future liquidity needs. Liquidity is a measure of a bank's ability to fund loans, withdrawals or maturities of deposits, and other cash outflows in a cost-effective manner. Our principal sources of funds are deposits, scheduled amortization and prepayments of loan principal, maturities of investment securities, and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit flow and loan prepayments are greatly influenced by general interest rates, economic conditions and competition.

Liquidity and funding needs are managed through the Bank's Treasury functions and the Asset Liability Committee. An internal policy addresses liquidity and funds management and management monitors the adherence to policy limits to satisfy current and potential future cash flow needs. The policy includes internal limits, deposit concentrations, liquidity sources and availability, stress testing, collateral management, contingency funding plan and other qualitative and quantitative metrics.

As of September 30, 2025, the amount of liquid assets remained at a level management deemed adequate to ensure that, on a short and long-term basis, contractual liabilities, depositors' withdrawal requirements, and other operational and client credit needs could be satisfied. As of September 30, 2025, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $974.2 billion, which represented 7.0% of total assets and 8.0% of total deposits and borrowings, compared to $799.7 million as of December 31, 2024, which represented 8.1% of total assets and 9.4% of total deposits and borrowings. As of September 30, 2025, not included in the above liquid assets were securities with a market value of $99.1 million which were pledged to the FHLB and securities with a market value of $139.8 million which were pledged to the Federal Reserve Bank of New York, which supported aggregate unutilized borrowing capacity of $227.0 million and $95.2 million, respectively as of September 30, 2025 and December 31, 2024.

The Bank is a member of the FHLB of New York and, based on available qualified collateral as of September 30, 2025, had the ability to borrow $3.9 billion. The Bank also has a credit facility established with the Federal Reserve Bank of New York for direct discount window borrowings based on pledged collateral and had the ability to borrow $2.1 billion as of September 30, 2025. In addition, as of September 30, 2025, the Bank had in place borrowing capacity of $280 million through correspondent banks and other unsecured borrowing lines. As of September 30, 2025, the Bank had aggregate available and unused credit of approximately $4.4 billion, which represents the aforementioned facilities totaling $6.2 billion net of $1.8 billion in outstanding borrowings and letters of credit. As of September 30, 2025, outstanding commitments for the Bank to extend credit were approximately $1.5 billion.

Cash and cash equivalents totaled $542.7 million as of September 30, 2025, increasing by $186.2 million from $356.5 million as of December 31, 2024. Operating activities provided $58.7 million in net cash. Investing activities used $46.2 million in net cash, a net increase in loans $102.0 million and a net increase in cash acquired related to FLIC of $54.9 million. Financing activities provided $173.7 million in net cash, primarily reflecting a net increase in deposits of $297.2 million and proceeds from issuance of subordinated debt of $200.0 million, partially offset by net repayments of FHLB borrowings of $215.0 million.

Deposits

Deposits are our primary source of funds. Noninterest bearing demand deposit products include "Totally Free Checking" and "Simply Better Checking" for consumer clients and "Small Business Checking" and "Analysis Checking" for commercial clients. Interest-bearing checking accounts require minimum balances for both consumer and commercial clients and include "Consumer Interest Checking" and "Business Interest Checking". Money market accounts consist of products that provide a market rate of interest to depositors. Our savings accounts offer paper and/or electronic statements. Time deposits constitute non-retirement and IRA accounts, generally with initial maturities ranging from 31 days to 60 months, and brokered certificate of deposits, which we use for asset liability management purposes and to supplement other sources of funding. Many of our deposit products can be accessed through both our branches and online to provide ease of access to our clients and communities.

Certificate of Deposit Account Registry Service ("CDARS")/Insured Cash Sweep Accounts ("ICS") reciprocal deposits are offered based on the Bank's participation in the IntraFi Network LLC ("the Network"). Clients, who are FDIC insurance sensitive, are able to place large dollar deposits with the Company and the Company utilizes CDARS to place those funds into certificates of deposit issued by other banks in the Network. This occurs in increments of less than the FDIC insurance limits so that both the principal and interest are eligible for FDIC insurance coverage in amounts larger than the insured dollar amount. Unless certain conditions are satisfied, the FDIC considers these funds as brokered deposits for certain reporting requirements. The Bank also utilizes internet listing services deposits which are obtained through the use of websites such as Rateline or QwickRate.

The following table sets forth the average balances and weighted average rates of our deposits for the periods indicated.

		Quarter-to-Date Average September 30, 2025								Quarter-to-Date Average September 30, 2024
		Balance				Rate				Balance				Rate
(dollars in thousands)
Demand, noninterest-bearing		$	2,486,993				-	%		$	1,259,912				-	%
Demand, interest-bearing & NOW			4,939,455				3.05				3,239,244				3.59
Savings			949,775				3.01				508,183				3.39
Time			3,019,848				3.95				2,625,329				4.58
Total average deposits		$	11,396,071				2.62	%		$	7,632,668				3.32	%

Average total deposits increased by $3.8 billion, or 49.3%, during the three months ended September 30, 2025 when compared to the three months ended September 30, 2024. The increase in total average deposits was due to a $1.7 billion increase in interest-bearing demand deposits, a $1.3 billion increase in noninterest-bearing deposits, a $0.4 billion increase in savings deposits and a $0.4 billion increase in time deposits. The increase in all quarter-to-date average deposit categories was primarily due to the merger with FLIC.

The increase in average time deposits of $0.4 billion during the three months ended September 30, 2025 was primarily due to a $0.3 billion increase in retail time deposits and a $0.1 billion dollar increase in nonreciprocal brokered certificates of deposit. Average nonreciprocal brokered certificates of deposit included in total time deposits were $1.0 billion and $0.9 billion during the three months ended September 30, 2025 and September 30, 2024, respectively.

Average aggregate demand deposits included $1.1 billion and $1.2 billion in ICS reciprocal deposits during the three months ended September 30, 2025 and September 30, 2024, respectively.

The following table sets forth the average balances and weighted average rates of our deposits for the periods indicated.

		Year-to-Date Average September 30, 2025								Year-to-Date Average September 30, 2024
		Balance				Rate				Balance				Rate
(dollars in thousands)
Demand, noninterest-bearing		$	1,828,783				-	%		$	1,256,799				-	%
Demand, interest-bearing & NOW			3,958,422				3.01				3,244,714				3.60
Savings			795,911				3.12				477,037				3.25
Time			2,723,057				4.02				2,593,716				4.49
Total average deposits		$	9,306,173				2.72	%		$	7,572,266				3.29	%

Average total deposits increased by $1.7 billion, or 22.9%, during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024. The increase in total average deposits was attributed to a $0.7 billion increase in interest-bearing demand deposits, a $0.6 billion increase in noninterest-bearing deposits, a $0.3 billion increase in savings deposits and a $0.1 billion increase in time deposits. The increase in all the year-to-date average deposit categories was primarily due to the merger with FLIC.

The increase in average time deposits of $0.1 billion during the nine months ended September 30, 2025 was primarily due to a $0.1 billion increase in retail time deposits. Average nonreciprocal brokered certificates of deposit included in total time deposits were $0.9 billion for both the nine months ended September 30, 2025 and September 30, 2024.

Average aggregate demand deposits included $1.1 billion and $1.2 billion in ICS reciprocal deposits during the nine months ended September 30, 2025 and September 30, 2024, respectively.

The beta, which is the measurement of deposit rate sensitivity in response to market rate changes, on nonreciprocal brokered certificates of deposit tends to be higher than that of ICS and CDARS reciprocal deposits, as nonreciprocal brokered certificates of deposit are more directly correlated to prevailing market rates of interest, while ICS and CDARs reciprocal deposits reflect the Bank's relationship with reciprocal deposit clients and are more driven by a desire for FDIC insurance coverage than market leading rates.

The following table sets forth information related to the uninsured deposit balances of the Bank.

		September 30, 2025				December 31, 2024
		Balance				Balance
(dollars in thousands)
As stated in FFIEC 041-Consolidated Report of Condition, schedule RC-O:
Total Bank unconsolidated deposits (including affiliate and subsidiary accounts)		$	11,492,119			$	11,996,115
Estimated uninsured deposits			4,982,896				6,883,241
The Company, on a consolidated basis:
Total deposits		$	11,369,295			$	7,820,114
Estimated uninsured deposits (excluding affiliate and subsidiary accounts)			4,774,086				2,713,019

The following table sets forth the distribution of total actual deposit accounts, by account types for the periods indicated.

		September 30, 2025								December 31, 2024
		Amount				Percent of total				Amount				Percent of total
(dollars in thousands)
Demand, noninterest-bearing		$	2,513,102				22.1	%		$	1,422,044				18.2	%
Demand, interest-bearing & NOW			4,892,367				43.0				3,248,731				41.5
Savings			985,874				8.7				592,139				7.6
Time			2,977,952				26.2				2,557,200				32.7
Total deposits		$	11,369,295				100.0	%		$	7,820,114				100.0	%

Total deposits increased by $3.5 billion, or 45.4%, when compared to December 31, 2024. The increase in total deposits was primarily due to a $1.6 billion increase in interest-bearing demand deposits, a $1.1 billion increase in noninterest-bearing demand deposits, a $0.4 billion increase in time deposits and a $0.4 billion increase in savings deposits. The increase in all deposit categories was primarily due to the merger with FLIC.

Aggregate demand deposits included $1.1 billion in ICS reciprocal deposits as of both September 30, 2025 and December 31, 2024.

Included in time deposits were nonreciprocal brokered certificates of deposit of $0.9 billion as of both September 30, 2025 and December 31, 2024.

As of September 30, 2025, we held $888.8 million of time deposits with balances greater than $250,000. The following table provides information on the maturity distribution of the time deposits with balances greater than $250,000 as of September 30, 2025:

		September 30, 2025
		(dollars in thousands)
3 months or less		$	335,859
Over 3 to 6 months			215,438
Over 6 to 12 months			234,895
Over 12 months			102,642
Total		$	888,834

Subordinated Debentures

During December 2003, Center Bancorp Statutory Trust II, a statutory business trust and wholly owned subsidiary of the Parent Corporation issued $5.0 million of MMCapS capital securities to investors due on January 23, 2034. The trust loaned the proceeds of this offering to the Parent Corporation and received in exchange $5.2 million of the Parent Corporation's subordinated debentures. The subordinated debentures are redeemable in whole or part prior to maturity. Upon the cessation of publication of LIBOR rates and pursuant to the Federal LIBOR Act and Federal Reserve regulations implementing the Act, the MMCapS capital securities converted as of June 30, 2023 to a new index based on CME Term SOFR, as defined in the LIBOR Act, plus a tenor spread adjustment, which is referred to as the Benchmark Replacement. Effective for quarterly interest rate resets after July 3, 2023 the subordinated debentures' floating rate will be three-month CME Term SOFR plus 2.85% plus a tenor spread adjustment of 0.26161%. The rate as of September 30, 2025 was 7.42%.

During June 2020, the Parent Corporation issued $75 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2020 Notes"). The 2020 Notes, which were redeemed in full on September 15, 2025, bore interest, since June 15, 2025, at a variable rate equal to the then benchmark rate, which is Three-Month Term SOFR (as defined in the Second Supplemental Indenture), plus 560.5 basis points.

During May 2025, the Parent Corporation issued $200 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2025 Notes"). The 2025 Notes bear interest at 8.125% annually from, and including, the date of initial issuance up to but excluding June 1, 2030 or the date of earlier redemption, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2025. From and including June 1, 2030 through maturity or earlier redemption, the interest rate shall reset quarterly to an interest rate per annum equal to a benchmark rate, which is Three-Month Term SOFR, plus 441.5 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2030. Notwithstanding the foregoing, if the benchmark rate is less than zero, then the benchmark rate shall be deemed to be zero.

Stockholders' Equity

The Company's stockholders' equity increased by $296.6 million when compared to December 31, 2024. The increase in total stockholders' equity was primarily due to an increase in common stock of $270.8 million, which represented the fair value stock consideration issued for the FLIC merger, an increase in retained earnings of $13.5 million, and a decrease in the accumulated other comprehensive loss of $10.7 million. As of September 30, 2025, the Company's tangible common equity ratio and tangible book value per share were 8.36% and $22.85, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $278.7 million as of September 30, 2025, and $213.0 million as of December 31, 2024.

The following table reconciles common equity to tangible common equity and the tangible common equity ratio.

		September 30, 2025				December 31, 2024
		(dollars in thousands, except for per share data)
Stockholders equity		$	1,538,344			$	1,241,704
Less: preferred stock			(110,927	)			(110,927	)
Common equity		$	1,427,417			$	1,130,777
Less: intangible assets			(278,730	)			(213,011	)
Tangible common stockholders' equity		$	1,148,687			$	917,766
Total assets		$	14,023,585			$	9,879,600
Less: intangible assets			(278,730	)			(213,011	)
Tangible assets		$	13,744,855			$	9,666,589
Common stock outstanding at period end			50,273,089				38,370,317
Tangible common equity ratio (1)			8.36	%			9.49	%
Book value per common share		$	28.39			$	29.47
Less: intangible assets			5.54				5.55
Tangible book value per common share		$	22.85			$	23.92

(1)	Tangible common equity ratio is tangible common equity divided by tangible assets and is a non-GAAP measure.

Regulatory Capital and Capital Adequacy

The maintenance of a solid capital foundation is a primary goal for the Company. Accordingly, capital plans, stock repurchases and dividend policies are monitored on an ongoing basis. The Company's objective with respect to the capital planning process is to effectively balance the retention of capital to support future growth with the goal of providing stockholders with an attractive long-term return on their investment.

The Company and the Bank are subject to regulatory guidelines establishing minimum capital standards that involve quantitative measures of assets, and certain off-balance sheet items, as risk-adjusted assets under regulatory accounting practices.

The following is a summary of regulatory capital amounts and ratios as of September 30, 2025 for the Company and the Bank, compared with minimum capital adequacy requirements and the regulatory requirements for classification as a well-capitalized depository institution (for the Bank).

										For Capital Adequacy Purposes								To Be Well-Capitalized Under Prompt Corrective Action Provisions
The Company		Amount				Ratio				Amount				Ratio				Amount				Ratio
As of September 30, 2025		(dollars in thousands)
Tier 1 leverage capital		$1,293,585				9.35%				$553,291				4.00%				N/A				N/A
CET I risk-based ratio		1,177,503				10.17				520,944				4.50				N/A				N/A
Tier 1 risk-based capital		1,293,585				11.17				694,592				6.00				N/A				N/A
Total risk-based capital		1,606,662				13.88				926,122				8.00				N/A				N/A

N/A - not applicable

										For Capital Adequacy Purposes								To Be Well-Capitalized Under Prompt Corrective Action Provisions
The Bank		Amount				Ratio				Amount				Ratio				Amount				Ratio
As of September 30, 2025										(dollars in thousands)
Tier 1 leverage capital		$1,430,511				10.35%				$552,814				4.00%				$691,018				5.00%
CET I risk-based ratio		1,430,511				12.37				520,495				4.50				751,826				6.50
Tier 1 risk-based capital		1,430,511				12.37				693,993				6.00				925,324				8.00
Total risk-based capital		1,547,066				13.38				925,324				8.00				1,156,656				10.00

As of September 30, 2025, both the Company and Bank satisfy the capital conservation buffer requirements applicable to them. The lowest ratio at the Company is the Tier 1 Risk Based Capital Ratio which was 2.67% above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.88% above the minimum buffer ratio.