Summary
Full summaryExecutive Assessment
Net income increased 6.6% to $71.1M, driven by net interest income growth and margin expansion, partially offset by a decline in non-interest income and higher provision for credit losses.
- Net income of $71.1M, up from $66.7M in 2024, with diluted EPS of $6.62 vs. $5.93.
- Net interest margin expanded 35 bps to 3.88%, driven by lower cost of funds and loan spread discipline.
- Total assets grew 13.1% to $8.3B, with loans up 12.9% to $6.8B and deposits up 23.3% to $7.4B.
- Non-performing loans increased to $86.9M (1.28% of total loans) from $32.6M, primarily due to a single out-of-market CRE multi-family loan relationship.
- Provision for credit losses rose to $37.6M from $6.3M, reflecting loan growth and the aforementioned non-performing loan.
Financial Highlights
| Metric | Current Period | Prior Period | Change | Investor Takeaway |
|---|---|---|---|---|
Revenue (Total Interest Income + Non-Interest Income) | $527.1M | $492.2M | +7.1% | Interest income increased $46.9M to $515.3M, while non-interest income decreased $12.0M to $11.9M. |
Net Income | $71.1M | $66.7M | +6.6% | Increase primarily reflects $18.7M increase in net interest income, partially offset by $12.0M decrease in non-interest income and $2.4M increase in non-interest expense. |
Diluted EPS | $6.6 | $5.9 | +11.6% | Growth driven by higher net income and share repurchases. |
Net Interest Margin | 3.9% | 3.5% | +0.4 ppts | Driven by decrease in cost of funds and loan spread discipline. |
Total Assets | $8.3B | $7.3B | +13.7% | Growth driven by loan and deposit increases. |
Loans, net | $6.8B | $6.0B | +13.3% | Increase due primarily to $884.1M increase in CRE loans, partially offset by $174.5M decrease in C&I loans. |
Total Deposits | $7.4B | $6.0B | +23.3% | Increase broadly spread across most deposit verticals. |
Operating Cash Flow | $88.7M | $148.5M | −40.3% | Decrease primarily due to changes in other assets/liabilities and lower net income adjustments. |
Profitability
- Return on average assets was 0.90% vs. 0.91% in 2024.
- Return on average equity was 9.70% vs. 9.61% in 2024.
- Efficiency ratio improved to 55.86% from 62.68%.
Cash flow
- Operating cash flow decreased to $88.7M from $148.5M.
- Investing cash flow used $763.0M, primarily for net loan originations of $765.8M.
- Financing cash flow provided $867.6M, driven by $1.4B increase in deposits, partially offset by $450.0M repayment of wholesale funding and $73.5M in treasury stock purchases.
Balance sheet
- Cash and cash equivalents increased 96.5% to $393.6M.
- Total securities increased 2.8% to $941.2M.
- Stockholders' equity increased 1.8% to $743.1M, with tangible book value per share impacted by $73.5M in share repurchases.
Investment Risks & Concerns
Risk Factor
High concentration in CRE and C&I loans (98.6% of total loans) exposes the bank to real estate market downturns and regulatory scrutiny.
Risk Factor
Significant exposure to New York City economy and real estate market, including rent-regulated multi-family loans ($172.6M).
Risk Factor
Allowance for credit losses may be insufficient if economic conditions deteriorate, particularly given reliance on external models and forecasts.
Risk Factor
Interest rate risk could reduce net interest income and economic value of equity; a 200 bps upward shock would decrease EVE by 7.8%.
Risk Factor
Operational and cybersecurity risks, including reliance on third-party systems and potential for data breaches.
Management Strategy & Execution
Themes
- Net interest margin expansion driven by lower deposit costs and disciplined loan pricing.
- Strong deposit growth across verticals, reducing reliance on wholesale funding.
- Credit quality deterioration centered on a single out-of-market CRE multi-family loan.
- Exit from Banking-as-a-Service (BaaS) business resulted in $13.4M decline in non-interest income.
- Increased investment in technology and digital transformation initiatives.
Capital allocation
- Repurchased 1,211,574 shares of common stock for $73.5M.
- Paid cash dividends of $0.30 per share, totaling $3.1M.
- No outstanding FHLB advances or federal funds purchased at year-end; available borrowing capacity of $3.3B.
- Loan originations of $1.9B, up from $1.3B in 2024.
“Net interest margin was 3.88% for 2025, as compared to 3.53% for 2024, the 35 basis point increase was primarily driven by the decrease in the cost of funds and loan spread discipline.”
— Management
“The increase in the ACL was primarily due to loan growth and a single out-of-market CRE multi-family loan relationship that was classified as non-performing in the third quarter of 2025.”
— Management
Business Segment Analysis
| Segment | Revenue | Change | Commentary |
|---|---|---|---|
| Commercial Real Estate (CRE) | Not disclosed | +17.8% in loan balances | CRE loans increased $884.1M to $5.86B, representing 85.9% of total loans. Largest concentration in skilled nursing facilities ($2.5B, 37.0% of total loans). |
| Commercial & Industrial (C&I) | Not disclosed | -16.7% in loan balances | C&I loans decreased $174.5M to $871.7M, representing 12.8% of total loans. Largest sub-segments: finance & insurance ($218.9M) and skilled nursing facilities ($212.3M). |
| Deposits | Not disclosed | +23.3% in total deposits | Money market deposits increased $1.18B to $5.70B (77.2% of total). Non-interest-bearing demand deposits were 20.1% of total, down from 22.3%. |
Liquidity & Capital Structure
Leverage: Tier 1 leverage ratio: 9.5% (Company), 9.1% (Bank). Total risk-based capital ratio: 12.3% (Company), 11.7% (Bank). Both exceed 'well capitalized' thresholds.
Liquidity: Cash and cash equivalents of $393.6M; available secured wholesale funding borrowing capacity of $3.3B; no outstanding FHLB advances or federal funds purchased.
Shareholder returns
- Repurchased $73.5M of common stock (1,211,574 shares).
- Paid quarterly dividends totaling $0.30 per share.
Forward Outlook & Investment Implications
Not disclosed—management did not provide specific forward-looking guidance in the 10-K.
Drivers
- Not disclosed—no explicit drivers of future performance provided.
Watch items
- CRE concentration and regulatory scrutiny.
- Credit quality of the single out-of-market CRE multi-family loan and potential for further deterioration.
- Impact of interest rate changes on net interest margin and EVE.
- Success of digital transformation initiatives and technology investments.
Notable Footnotes
| Item | Impact |
|---|---|
| Allowance for Credit Losses – Sensitivity Analysis | A hypothetical decrease in the weight on the baseline economic scenario by 33% would increase the total ACL by approximately $9.7M, or 9.9%. |
| Adoption of ASC 326 (CECL) | Adopted January 1, 2023; resulted in a cumulative effect adjustment that increased ACL by $3.0M, increased deferred tax assets by $777K, and decreased retained earnings by $2.1M. |
| Goodwill Impairment Assessment | No impairment of the $9.7M goodwill associated with the prepaid third-party debit card business as of December 31, 2025. |
3-Year Investment Perspective
Net income declined from $77.3M in 2023 to $66.7M in 2024, then recovered to $71.1M in 2025. Net interest margin expanded from 3.49% in 2023 to 3.53% in 2024 and 3.88% in 2025. Total assets grew from $6.5B in 2023 to $7.3B in 2024 and $8.3B in 2025.
Inflections
- Net income in 2024 was impacted by a $9.5M regulatory settlement reserve and higher non-interest expenses.
- Non-interest income declined sharply in 2025 due to the exit from the BaaS business ($13.4M decrease).
- Provision for credit losses spiked to $37.6M in 2025 from $6.3M in 2024 and $12.3M in 2023, driven by a single non-performing loan and loan growth.
Prior-period comparison
- 2024 net income of $66.7M compared to $77.3M in 2023, primarily due to higher non-interest expense and a $9.5M regulatory settlement reserve.
- Net interest margin improved to 3.53% in 2024 from 3.49% in 2023, driven by higher yields on interest-earning assets.
- Total assets grew 12.2% in 2024, with loans up 17.2% and deposits up 9.6%.
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