
☒
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended September 30, ~~2017~~2023



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from to

Commission File Number: 001-31566

PROVIDENT FINANCIAL SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

42-1547151

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

239 Washington Street

Jersey City

New Jersey

07302

(Address of Principal Executive Offices)

(City)

(State)

(Zip Code)

(732) 590-9200

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Symbol(s)

Name of each exchange on which registered

Common

PFS

New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~YES~~ Yes ý NO ¨

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the Registrant was required to submit and post such files). ~~YES~~ Yes ý NO ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated Filer

☐

~~Accelerated Filer~~

Non-Accelerated Filer

¨☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨☐ NO ý

As of November 1, ~~2017~~2023 there were ~~83,209,293~~83,209,012 shares issued and ~~66,773,464~~75,606,533 shares outstanding of the Registrant’s Common Stock, par value $0.01 per share, including ~~296,049~~65,745 shares held by the First Savings Bank Directors’ Deferred Fee Plan not otherwise considered outstanding under U.S. generally accepted accounting principles.

PROVIDENT FINANCIAL SERVICES, INC.

INDEX TO FORM 10-Q


Item Number		Page Number

PART I—FINANCIAL INFORMATION

1	Financial Statements:

	Consolidated Statements of Financial Condition as of September 30, 2023 (unaudited) and December 31, 2022	3

	Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022 (unaudited)	6

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)	8

	Notes to Unaudited Consolidated Financial Statements	10

2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45

3	Quantitative and Qualitative Disclosures About Market Risk	57

4	Controls and Procedures	58

PART II—OTHER INFORMATION

1	Legal Proceedings	59

1A.	Risk Factors	59

2	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	59

3	Defaults Upon Senior Securities	59

4	Mine Safety Disclosures	59

5	Other Information	59

6	Exhibits	60

Signatures		61

Item Number Page Number

PART I—FINANCIAL INFORMATION

1.
Financial Statements:

Consolidated Statements of Financial Condition as of September 30, 2017 (unaudited) and December 31, 2016
3

Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016 (unaudited)
4

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016 (unaudited)
5

Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2017 and 2016 (unaudited)
6

Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 (unaudited)
8

Notes to Unaudited Consolidated Financial Statements
10

2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
36

3.
Quantitative and Qualitative Disclosures About Market Risk
44

4.
Controls and Procedures
45

PART II—OTHER INFORMATION

1.
Legal Proceedings
46

1A.
Risk Factors
46

2.
Unregistered Sales of Equity Securities and Use of Proceeds
46

3. Defaults Upon Senior Securities
47

4.
Mine Safety Disclosures
47

5.
Other Information
47

6.
Exhibits
47

Signatures
48

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

September 30, ~~2017~~2023 (Unaudited) and December 31, ~~2016~~2022

(Dollars in Thousands)

September 30, 2017 December 31, 2016
ASSETS
Cash and due from banks $ 97,298
$ 92,508
Short-term investments 51,485
51,789
Total cash and cash equivalents 148,783
144,297
Securities available for sale, at fair value 1,028,305
1,040,386
Investment securities held to maturity (fair value of $490,425 at September 30, 2017 (unaudited) and $489,287 at December 31, 2016) 481,845
488,183
Federal Home Loan Bank stock 70,896
75,726
Loans 7,028,052
7,003,486
Less allowance for loan losses 60,276
61,883
Net loans 6,967,776
6,941,603
Foreclosed assets, net 5,703
7,991
Banking premises and equipment, net 78,567
84,092
Accrued interest receivable 27,398
27,082
Intangible assets 420,877
422,937
Bank-owned life insurance 188,123
188,527
Other assets 76,873
79,641
Total assets $ 9,495,146
$ 9,500,465

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits $ 4,880,133
$ 4,803,426
Savings deposits 1,083,215
1,099,020
Certificates of deposit of $100,000 or more 296,172
290,295
Other time deposits 331,696
360,888
Total deposits 6,591,216
6,553,629
Mortgage escrow deposits 25,186
24,452
Borrowed funds 1,525,560
1,612,745
Other liabilities 53,012
57,858
Total liabilities 8,194,974
8,248,684
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued —
—
Common stock, $0.01 par value, 200,000,000 shares authorized, 83,209,293 shares issued and 66,467,819 shares outstanding at September 30, 2017 and 66,082,283 outstanding at December 31, 2016 832
832
Additional paid-in capital 1,010,247
1,005,777
Retained earnings 586,575
550,768
Accumulated other comprehensive loss (708 ) (3,397 )
Treasury stock (260,910 ) (264,221 )
Unallocated common stock held by the Employee Stock Ownership Plan (35,864 ) (37,978 )
Common stock acquired by the Directors’ Deferred Fee Plan (5,343 ) (5,846 )
Deferred compensation – Directors’ Deferred Fee Plan 5,343
5,846
Total stockholders’ equity 1,300,172
1,251,781
Total liabilities and stockholders’ equity $ 9,495,146
$ 9,500,465


	September 30, 2023		December 31, 2022
ASSETS
Cash and due from banks	$	188,573	$	186,490
Short-term investments	696		18
Total cash and cash equivalents	189,269		186,508
Available for sale debt securities, at fair value	1,656,305		1,803,548
Held to maturity debt securities, net (fair value of $343,082 at September 30, 2023 (unaudited) and $373,468 at December 31, 2022)	370,416		387,923
Equity securities, at fair value	1,210		1,147
Federal Home Loan Bank stock	101,250		68,554
Loans	10,667,612		10,248,883
Less allowance for credit losses	107,563		88,023
Net loans	10,560,049		10,160,860
Foreclosed assets, net	16,487		2,124
Banking premises and equipment, net	71,453		79,794
Accrued interest receivable	55,741		51,903
Intangible assets	458,663		460,892
Bank-owned life insurance	241,406		239,040
Other assets	364,576		341,143
Total assets	$	14,086,825	$	13,783,436

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits	$	7,872,901	$	8,373,005
Savings deposits	1,200,377		1,438,583
Certificates of deposit of $100,000 or more	699,880		504,627
Other time deposits	368,241		246,809
Total deposits	10,141,399		10,563,024
Mortgage escrow deposits	41,319		35,705
Borrowed funds	2,022,249		1,337,370
Subordinated debentures	10,646		10,493
Other liabilities	248,242		239,141
Total liabilities	12,463,855		12,185,733
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued	—		—
Common stock, $0.01 par value, 200,000,000 shares authorized, 83,209,012 shares issued and 75,531,884 shares outstanding at September 30, 2023 and 76,169,196 outstanding at December 31, 2022	832		832
Additional paid-in capital	988,001		981,138
Retained earnings	964,802		918,158
Accumulated other comprehensive (loss) income	(195,056)		(165,045)
Treasury stock	(127,818)		(127,154)
Unallocated common stock held by the Employee Stock Ownership Plan	(7,791)		(10,226)
Common stock acquired by deferred compensation plans	(3,013)		(3,427)
Deferred compensation plans	3,013		3,427
Total stockholders’ equity	1,622,970		1,597,703
Total liabilities and stockholders’ equity	$	14,086,825	$	13,783,436

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Income

Three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (Unaudited)

(Dollars in Thousands, except per share data)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Interest income:
Real estate secured loans	$	104,540	$	80,273	$	299,830	$	213,181
Commercial loans	33,806		25,201		93,915		70,385
Consumer loans	4,746		3,785		13,419		10,268
Available for sale debt securities, equity securities and Federal Home Loan Bank stock	11,886		9,560		34,748		25,966
Held to maturity debt securities	2,334		2,416		7,059		7,501
Deposits, Federal funds sold and other short-term investments	885		496		2,678		1,705
Total interest income	158,197		121,731		451,649		329,006
Interest expense:
Deposits	44,923		9,560		108,880		20,322
Borrowed funds	16,765		2,518		38,329		4,790
Subordinated debt	273		164		774		403
Total interest expense	61,961		12,242		147,983		25,515
Net interest income	96,236		109,489		303,666		303,491
Provision charge for credit losses	11,009		8,413		27,407		5,004
Net interest income after provision charge for credit losses	85,227		101,076		276,259		298,487
Non-interest income:
Fees	6,132		7,203		18,294		21,516
Wealth management income	6,992		6,785		20,826		21,274
Insurance agency income	3,224		2,865		11,175		9,135
Bank-owned life insurance	1,820		1,237		4,838		3,978
Net gains on securities transactions	13		(3)		37		154
Other income	1,139		10,358		5,691		13,466
Total non-interest income	19,320		28,445		60,861		69,523
Non-interest expense:
Compensation and employee benefits	35,702		38,079		109,724		112,582
Net occupancy expense	8,113		8,452		24,474		26,262
Data processing expense	5,312		5,575		16,536		16,551
FDIC insurance	1,628		1,400		5,688		3,955
Amortization of intangibles	720		779		2,231		2,511
Advertising and promotion expense	1,133		1,366		3,722		3,692
Provision charge (benefit) for credit losses on off-balance sheet credit exposures	1,532		1,575		1,624		(1,788)
Merger-related expenses	2,289		2,886		5,349		2,886
Other operating expenses	10,728		9,331		31,761		28,522
Total non-interest expense	67,157		69,443		201,109		195,173
Income before income tax expense	37,390		60,078		136,011		172,837
Income tax expense	8,843		16,657		34,925		46,224
Net income	$	28,547	$	43,421	$	101,086	$	126,613
Basic earnings per share	$	0.38	$	0.58	$	1.35	$	1.69
Weighted average basic shares outstanding	74,909,083		74,297,237		74,793,530		74,808,358
Diluted earnings per share	$	0.38	$	0.58	$	1.35	$	1.69
Weighted average diluted shares outstanding	74,914,205		74,393,380		74,816,606		74,896,493

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Interest income:
Real estate secured loans $ 47,692
$ 45,262
$ 140,712
$ 134,411
Commercial loans 18,964
16,093
53,884
46,419
Consumer loans 5,083
5,627
15,293
16,657
Securities available for sale and Federal Home Loan Bank Stock 6,540
5,576
19,651
17,074
Investment securities held to maturity 3,272
3,349
9,812
10,011
Deposits, Federal funds sold and other short-term investments 343
138
898
252
Total interest income 81,894
76,045
240,250
224,824
Interest expense:
Deposits 4,988
4,441
14,093
12,397
Borrowed funds 6,694
6,633
19,855
20,477
Total interest expense 11,682
11,074
33,948
32,874
Net interest income 70,212
64,971
206,302
191,950
Provision for loan losses 500
1,000
3,700
4,200
Net interest income after provision for loan losses 69,712
63,971
202,602
187,750
Non-interest income:
Fees 7,680
6,137
20,940
19,309
Wealth management income 4,592
4,262
13,314
13,084
Bank-owned life insurance 1,353
1,382
5,291
4,083
Net gain (loss) on securities transactions 36
(43 ) 47
54
Other income 1,451
2,328
2,804
4,378
Total non-interest income 15,112
14,066
42,396
40,908
Non-interest expense:
Compensation and employee benefits 27,328
26,725
81,086
78,496
Net occupancy expense 6,105
6,227
19,255
18,729
Data processing expense 3,314
3,328
10,302
9,845
FDIC insurance 967
1,117
3,065
3,732
Amortization of intangibles 632
767
2,079
2,628
Advertising and promotion expense 907
787
2,709
2,567
Other operating expenses 7,027
6,899
21,248
20,628
Total non-interest expense 46,280
45,850
139,744
136,625
Income before income tax expense 38,544
32,187
105,254
92,033
Income tax expense 11,969
9,281
30,788
26,798
Net income $ 26,575
$ 22,906
$ 74,466
$ 65,235
Basic earnings per share $ 0.41
$ 0.36
$ 1.16
$ 1.03
Weighted average basic shares outstanding 64,454,684
63,728,393
64,327,640
63,545,065
Diluted earnings per share $ 0.41
$ 0.36
$ 1.15
$ 1.02
Weighted average diluted shares outstanding 64,645,278
63,934,886
64,519,710
63,727,723

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

Three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (Unaudited)

(Dollars in Thousands)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net income	$	28,547	$	43,421	$	101,086	$	126,613
Other comprehensive (loss) income, net of tax:
Unrealized gains and losses on available for sale debt securities:
Net unrealized (losses) arising during the period	(31,224)		(67,293)		(25,086)		(197,997)
Reclassification adjustment for gains included in net income	—		—		—		(42)
Total	(31,224)		(67,293)		(25,086)		(198,039)
Unrealized gains and losses on derivatives:
Net unrealized gains arising during the period	2,352		5,998		5,385		18,225
Reclassification adjustment for (gains) included in net income	(3,430)		(1,157)		(9,519)		(788)
Total	(1,078)		4,841		(4,134)		17,437
Amortization related to post-retirement obligations	(261)		(236)		(791)		(748)
Total other comprehensive (loss)	(32,563)		(62,688)		(30,011)		(181,350)
Total comprehensive (loss) income	$	(4,016)	$	(19,267)	$	71,075	$	(54,737)

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Net income $ 26,575
$ 22,906
$ 74,466
$ 65,235
Other comprehensive income, net of tax:
Unrealized gains and losses on securities available for sale:
Net unrealized gains (losses) arising during the period 479
(1,541 ) 2,478
8,533
Reclassification adjustment for gains included in net income —
26
—
(32 )
Total 479
(1,515 ) 2,478
8,501
Unrealized gains (losses) on derivatives 54
230
106
(361 )
Amortization related to post-retirement obligations 36
141
105
380
Total other comprehensive income (loss) 569
(1,144 ) 2,689
8,520
Total comprehensive income $ 27,144
$ 21,762
$ 77,155
$ 73,755

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

~~Nine~~For the three and nine months ended September 30, ~~2017 and 2016~~2022 (Unaudited)

(Dollars in Thousands)


For the three months ended September 30, 2022	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME		TREASURYSTOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at June 30, 2022	$	832	$	976,067	$	860,977	$	(111,799)	$	(127,091)	$	(13,721)	$	(3,705)	$	3,705	$	1,585,265
Net income	—		—		43,421		—		—		—		—		—		43,421
Other comprehensive loss, net of tax	—		—		—		(62,688)		—		—		—		—		(62,688)
Cash dividends paid	—		—		(18,066)		—		—		—		—		—		(18,066)


Distributions from deferred comp plans	—		47		—		—		—		—		168		(168)		47
Purchases of treasury stock	—		—		—		—		—		—		—		—		—
Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		(54)		—		—		—		(54)


Allocation of ESOP shares	—		296		—		—		—		811		—		—		1,107
Allocation of Stock Award Plan ("SAP") shares	—		1,904		—		—		—		—		—		—		1,904

Allocation of stock options	—		49		—		—		—		—		—		—		49
Balance at September 30, 2022	$	832	$	978,363	$	886,332	$	(174,487)	$	(127,145)	$	(12,910)	$	(3,537)	$	3,537	$	1,550,985


For the nine months ended September 30, 2022	COMMONSTOCK		ADDITIONAL PAID-IN CAPITAL		RETAINEDEARNINGS		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		TREASURYSTOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at December 31, 2021	$	832	$	969,815	$	814,533	$	6,863	$	(79,603)	$	(15,344)	$	(3,984)	$	3,984	$	1,697,096
Net income	—		—		126,613		—		—		—		—		—		126,613
Other comprehensive loss, net of tax	—		—		—		(181,350)		—		—		—		—		(181,350)
Cash dividends paid	—		—		(54,814)		—		—		—		—		—		(54,814)


Distributions from deferred comp plans	—		133		—		—		—		—		447		(447)		133
Purchases of treasury stock	—		—		—		—		(46,529)		—		—		—		(46,529)
Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		(1,013)		—		—		—		(1,013)

Stock option exercises	—		—		—		—		—		—		—		—		—
Allocation of ESOP shares	—		878		—		—		—		2,434		—		—		3,312
Allocation of SAP shares	—		7,389		—		—		—		—		—		—		7,389

Allocation of stock options	—		148		—		—		—		—		—		—		148
Balance at September 30, 2022	$	832	$	978,363	$	886,332	$	(174,487)	$	(127,145)	$	(12,910)	$	(3,537)	$	3,537	$	1,550,985

COMMON
STOCK

ADDITIONAL
PAID-IN
CAPITAL

RETAINED
EARNINGS

ACCUMULATED
OTHER
COMPREHENSIVE
INCOME (LOSS)

TREASURY
STOCK

UNALLOCATED
ESOP
SHARES

COMMON
STOCK
ACQUIRED
BY DDFP

DEFERRED
COMPENSATION
DDFP

TOTAL
STOCKHOLDERS’
EQUITY
Balance at December 31, 2015 $ 832
$ 1,000,810
$ 507,713
$ (2,546 ) $ (269,014 ) $ (41,730 ) $ (6,517 ) $ 6,517
$ 1,196,065
Net income —
—
65,235
—
—
—
—
—
65,235
Other comprehensive income, net of tax —
—
—
8,520
—
—
—
—
8,520
Cash dividends declared —
—
(35,141 ) —
—
—
—
—
(35,141 )
Effect of adopting Accounting Standards Update ("ASU") No. 2016-09 —
(622 ) 622
—
—
—
—
—
—
Distributions from DDFP —
91
—
—
—
—
503
(503 ) 91
Purchases of treasury stock —
—
—
—
(1,557 ) —
—
—
(1,557 )
Purchase of employee restricted shares to fund statutory tax withholding —
—
—
—
(1,161 ) —
—
—
(1,161 )
Shares issued dividend reinvestment plan —
180
—
—
996
—
—
—
1,176
Stock option exercises —
(60 ) —
—
5,658
—
—
—
5,598
Allocation of ESOP shares —
325
—
—
—
2,016
—
—
2,341
Allocation of SAP shares —
2,982
—
—
—
—
—
—
2,982
Allocation of stock options —
131
—
—
—
—
—
—
131
Balance at September 30, 2016 $ 832
$ 1,003,837
$ 538,429
$ 5,974
$ (265,078 ) $ (39,714 ) $ (6,014 ) $ 6,014
$ 1,244,280

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

~~Nine~~For the three and nine months ended September 30, ~~2017 and 2016~~2023 (Unaudited) ~~(Continued)~~

(Dollars in Thousands)


For the three months ended September 30, 2023	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE LOSS		TREASURY STOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at June 30, 2023	832		986,150		954,403		(162,493)		(127,818)		(8,603)		(3,150)		3,150		1,642,471
Net income	—		—		28,547		—		—		—		—		—		28,547
Other comprehensive loss, net of tax	—		—		—		(32,563)		—		—		—		—		(32,563)
Cash dividends paid	—		—		(18,148)		—		—		—		—		—		(18,148)


Distributions from deferred comp plans	—		36		—		—		—		—		137		(137)		36
Purchases of treasury stock	—		—		—		—		—		—		—		—		—
Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		—		—		—		—		—

Stock option exercises	—		—		—		—		—		—		—		—		—
Allocation of ESOP shares	—		(24)		—		—		—		812		—		—		788
Allocation of SAP shares	—		1,805		—		—		—		—		—		—		1,805

Allocation of stock options	—		34		—		—		—		—		—		—		34
Balance at September 30, 2023	$	832	$	988,001	$	964,802	$	(195,056)	$	(127,818)	$	(7,791)	$	(3,013)	$	3,013	$	1,622,970


For the nine months ended September 30, 2023	COMMONSTOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE LOSS		TREASURY STOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at December 31, 2022	$	832	$	981,138	$	918,158	$	(165,045)	$	(127,154)	$	(10,226)	$	(3,427)	$	3,427	$	1,597,703
Net income	—		—		101,086		—		—		—		—		—		101,086
Other comprehensive loss, net of tax	—		—		—		(30,011)		—		—		—		—		(30,011)
Cash dividends paid	—		—		(54,875)		—		—		—		—		—		(54,875)
Cumulative effect of adopting Accounting Standards Update ("ASU") No. 2022-02, net of tax	—		—		433		—		—		—		—		—		433

Distributions from deferred comp plans	—		115		—		—		—		—		414		(414)		115

Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		(1,671)		—		—		—		(1,671)

Stock option exercises	—		(217)		—		—		1,007		—		—		—		790
Allocation of ESOP shares	—		219		—		—		—		2,435		—		—		2,654
Allocation of SAP shares	—		6,635		—		—		—		—		—		—		6,635

Allocation of stock options	—		111		—		—		—		—		—		—		111
Balance at September 30, 2023	$	832	$	988,001	$	964,802	$	(195,056)	$	(127,818)	$	(7,791)	$	(3,013)	$	3,013	$	1,622,970

COMMON
STOCK

ADDITIONAL
PAID-IN
CAPITAL

RETAINED
EARNINGS

ACCUMULATED
OTHER
COMPREHENSIVE
(LOSS) INCOME

TREASURY
STOCK

UNALLOCATED
ESOP
SHARES

COMMON
STOCK
ACQUIRED
BY DDFP

DEFERRED
COMPENSATION
DDFP

TOTAL
STOCKHOLDERS’
EQUITY
Balance at December 31, 2016 $ 832
$ 1,005,777
$ 550,768
$ (3,397 ) $ (264,221 ) $ (37,978 ) $ (5,846 ) $ 5,846
$ 1,251,781
Net income —
—
74,466
—
—
—
—
—
74,466
Other comprehensive income, net of tax —
—
—
2,689
—
—
—
—
2,689
Cash dividends declared —
—
(38,659 ) —
—
—
—
—
(38,659 )
Distributions from DDFP —
172
—
—
—
—
503
(503 ) 172
Purchases of treasury stock —
—
—
—
(443 ) —
—
—
(443 )
Purchase of employee restricted shares to fund statutory tax withholding —

—
—
(726 ) —
—
—
(726 )
Shares issued dividend reinvestment plan —
417
—
—
922
—
—
—
1,339
Stock option exercises —
(1,024 ) —
—
3,558
—
—
—
2,534
Allocation of ESOP shares —
1,053
—
—
—
2,114
—
—
3,167
Allocation of SAP shares —
3,702
—
—
—
—
—
—
3,702
Allocation of stock options —
150
—
—
—
—
—
—
150
Balance at September 30, 2017 $ 832
$ 1,010,247
$ 586,575
$ (708 ) $ (260,910 ) $ (35,864 ) $ (5,343 ) $ 5,343
�� $ 1,300,172

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (Unaudited)

(Dollars in Thousands)


	Nine months ended September 30,
	2023		2022
Cash flows from operating activities:
Net income	$	101,086	$	126,613
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles	8,835		9,845
Provision charge for credit losses on loans and securities	27,407		5,004
Provision charge (benefit) for credit losses on off-balance sheet credit exposures	1,624		(1,788)
Deferred tax benefit	(2,332)		(222)
Amortization of operating lease right-of-use assets	7,890		8,006

Income on Bank-owned life insurance	(4,838)		(3,978)
Net amortization of premiums and discounts on securities	6,088		10,465
Accretion of net deferred loan fees	(6,653)		(7,095)
Amortization of premiums on purchased loans, net	170		234
Originations of loans held for sale	(12,227)		(18,467)
Proceeds from sales of loans originated for sale	13,056		16,978
ESOP expense	2,654		3,312
Allocation of stock award expense	6,635		7,389
Allocation of stock option expense	111		148

Net gain on sale of loans	(1,071)		(1,306)
Net gain on securities transactions	(37)		(154)
Net gain on sale of premises and equipment	(197)		(22)
Net gain on sale of foreclosed assets	(2,789)		(8,590)
Increase in accrued interest receivable	(3,838)		(3,130)
Increase in other assets	(23,596)		(60,364)
Increase in other liabilities	9,101		74,992
Net cash provided by operating activities	127,079		157,870
Cash flows from investing activities:
Net increase in loans	(420,331)		(449,803)
Purchases of loans	(7,876)		(4,326)
Proceeds from sales of foreclosed assets	3,485		16,188
Proceeds from maturities, calls and paydowns of held to maturity debt securities	28,576		62,597
Purchases of investment securities held to maturity	(11,978)		(20,665)

Proceeds from maturities, calls and paydowns of available for sale debt securities	146,965		227,975
Purchases of available for sale debt securities	(40,089)		(279,395)
Proceeds from redemption of Federal Home Loan Bank stock	151,472		89,244
Purchases of Federal Home Loan Bank stock	(184,168)		(110,671)

BOLI claim benefits received	2,347		—


Proceeds from sales of premises and equipment	62		22
Purchases of premises and equipment	(5,895)		(7,879)
Net cash used in investing activities	(337,430)		(476,713)
Cash flows from financing activities:
Net decrease in deposits	(421,625)		(548,407)
Increase in mortgage escrow deposits	5,614		5,183
Cash dividends paid to stockholders	(54,875)		(54,814)

Nine months ended September 30,
2017 2016
Cash flows from operating activities:
Net income $ 74,466
$ 65,235
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles 8,864
9,711
Provision for loan losses 3,700
4,200
Deferred tax expense 640
323
Income on Bank-owned life insurance (5,291 ) (4,083 )
Net amortization of premiums and discounts on securities 7,504
7,908
Accretion of net deferred loan fees (3,673 ) (2,500 )
Amortization of premiums on purchased loans, net 800
936
Net increase in loans originated for sale (18,386 ) (32,734 )
Proceeds from sales of loans originated for sale 19,149
34,709
Proceeds from sales and paydowns of foreclosed assets 4,883
3,717
ESOP expense 3,167
2,341
Allocation of stock award shares 3,702
2,982
Allocation of stock options 150
131
Net gain on sale of loans (763 ) (1,975 )
Net gain on securities transactions (47 ) (54 )
Net gain on sale of premises and equipment (8 ) (14 )
Net gain on sale of foreclosed assets (768 ) (652 )
(Increase) decrease in accrued interest receivable (316 ) 461
Increase in other assets (2,407 ) (17,108 )
(Decrease) increase in other liabilities (4,846 ) 10,942
Net cash provided by operating activities 90,520
84,476
Cash flows from investing activities:
Proceeds from maturities, calls and paydowns of investment securities held to maturity 42,382
49,245
Purchases of investment securities held to maturity (38,074 ) (54,059 )
Proceeds from sales of securities —
3,401
Proceeds from maturities, calls and paydowns of securities available for sale 160,436
146,958
Purchases of securities available for sale (149,647 ) (209,666 )
Proceeds from redemption of Federal Home Loan Bank stock 96,040
46,757
Purchases of Federal Home Loan Bank stock (91,210 ) (39,595 )
Death benefit proceeds from bank-owned life insurance 4,428
—
Purchases of loans —
(28,590 )
Net increase in loans (23,888 ) (325,838 )
Proceeds from sales of premises and equipment 8
14
Purchases of premises and equipment (1,690 ) (3,757 )
Net cash used in investing activities (1,215 ) (415,130 )
Cash flows from financing activities:
Net increase in deposits 37,587
603,511
Increase in mortgage escrow deposits 734
940
Cash dividends paid to stockholders (38,659 ) (35,141 )
Shares issued through the dividend reinvestment plan 1,339
1,176


								Nine months ended September 30,
	Nine months ended September 30,							2023		2022
	2017			2016
Purchases of treasury stock	(443		)	(1,557		)
Purchase of treasury stock							Purchase of treasury stock	—		(46,529)
Purchase of employee restricted shares to fund statutory tax withholding	(726		)	(1,161		)	Purchase of employee restricted shares to fund statutory tax withholding	(1,671)		(1,013)
Stock options exercised	2,534			5,598			Stock options exercised	790		—
Proceeds from long-term borrowings	248,220			291,653			Proceeds from long-term borrowings	508,805		2,274,000
Payments on long-term borrowings	(345,387		)	(395,405		)	Payments on long-term borrowings	(58,443)		(1,826,556)
Net increase (decrease) in short-term borrowings	9,982			(81,512		)	Net increase (decrease) in short-term borrowings	234,517		(10,616)
Net cash (used in) provided by financing activities	(84,819		)	388,102
Net increase in cash and cash equivalents	4,486			57,448
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	213,112		(208,752)
Net increase (decrease) in cash and cash equivalents							Net increase (decrease) in cash and cash equivalents	2,761		(527,595)
Cash and cash equivalents at beginning of period	144,297			102,226			Cash and cash equivalents at beginning of period	186,438		685,163
Restricted cash at beginning of period							Restricted cash at beginning of period	70		27,300
Total cash, cash equivalents and restricted cash at beginning of period							Total cash, cash equivalents and restricted cash at beginning of period	186,508		712,463
Cash and cash equivalents at end of period	$	148,783		$	159,674		Cash and cash equivalents at end of period	189,199		183,068
Restricted cash at end of period							Restricted cash at end of period	70		1,800
Total cash, cash equivalents and restricted cash at end of period							Total cash, cash equivalents and restricted cash at end of period	$	189,269	$	184,868

Cash paid during the period for:							Cash paid during the period for:
Interest on deposits and borrowings	$	34,127		$	33,088		Interest on deposits and borrowings	$	143,223	$	26,130
Income taxes	$	27,411		$	25,546		Income taxes	$	38,861	$	25,650
Non-cash investing activities:							Non-cash investing activities:

Transfer of loans receivable to foreclosed assets	$	2,195		$	3,081		Transfer of loans receivable to foreclosed assets	$	15,131	$	1,120

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

A. Basis of Financial Statement Presentation

The accompanying unaudited consolidated financial statements include the accounts of Provident Financial Services, Inc. (the "Company") and its wholly owned subsidiary, Provident Bank (the ~~“Bank,” together with Provident Financial Services, Inc., the “Company”~~“Bank"). and its wholly owned subsidiaries.

In preparing the interim unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and the consolidated statements of income for the periods presented. Actual results could differ from these estimates. The allowance for ~~loan~~credit losses ~~the valuation of securities available for sale and the valuation of deferred tax assets are~~is a material ~~estimates~~estimate that ~~are~~is particularly susceptible to near-term change.

The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three and nine months ended September 30, ~~2017~~2023 are not necessarily indicative of the results of operations that may be expected for all of ~~2017.~~2023.

Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. ~~Certain reclassifications have been made in~~Additionally, certain comparative balances on the interim unaudited consolidated financial statements have been reclassified to conform ~~with~~to the current ~~year classifications.~~year’s presentation.

These unaudited consolidated financial statements should be read in conjunction with the December 31, ~~2016~~2022 Annual Report to Stockholders on Form 10-K.

B. Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (dollars in thousands, except per share amounts):


	Three months ended September 30,
	2023					2022
	Net Income		Weighted Average Common Shares Outstanding	Per Share Amount		Net Income		Weighted Average Common Shares Outstanding	Per Share Amount
Net income	$	28,547				$	43,421
Basic earnings per share:
Income available to common stockholders	$	28,547	74,909,083	$	0.38	$	43,421	74,297,237	$	0.58
Dilutive shares			5,122					96,143
Diluted earnings per share:
Income available to common stockholders	$	28,547	74,914,205	$	0.38	$	43,421	74,393,380	$	0.58

Three months ended September 30,
2017 2016

Net
Income

Weighted
Average
Common
Shares
Outstanding

Per
Share
Amount

Net
Income

Weighted
Average
Common
Shares
Outstanding

Per
Share
Amount

Net income $ 26,575
$ 22,906

Basic earnings per share:
Income available to common stockholders $ 26,575
64,454,684
$ 0.41
$ 22,906
63,728,393
$ 0.36

Dilutive shares 190,594
206,493

Diluted earnings per share:
Income available to common stockholders $ 26,575
64,645,278
$ 0.41
$ 22,906
63,934,886
$ 0.36


	Nine months ended September 30,											Nine months ended September 30,
	2017					2016						2023					2022
	Net Income		Weighted Average Common Shares Outstanding	Per Share Amount		Net Income		Weighted Average Common Shares Outstanding	Per Share Amount			Net Income		Weighted Average Common Shares Outstanding	Per Share Amount		Net Income		Weighted Average Common Shares Outstanding	Per Share Amount
Net income	$	74,466				$	65,235				Net income	$	101,086				$	126,613
Basic earnings per share:											Basic earnings per share:
Income available to common stockholders	$	74,466	64,327,640	$	1.16	$	65,235	63,545,065	$	1.03	Income available to common stockholders	$	101,086	74,793,530	$	1.35	$	126,613	74,808,358	$	1.69
Dilutive shares			192,070					182,658			Dilutive shares			23,076					88,135
Diluted earnings per share:											Diluted earnings per share:
Income available to common stockholders	$	74,466	64,519,710	$	1.15	$	65,235	63,727,723	$	1.02	Income available to common stockholders	$	101,086	74,816,606	$	1.35	$	126,613	74,896,493	$	1.69

Anti-dilutive stock options and awards at September 30, ~~2017~~2023 and ~~2016,~~2022, totaling ~~405,958~~1.2 million shares and ~~528,205~~921,834 shares, respectively, were excluded from the earnings per share calculations.

C. Loans Receivable and Allowance for Credit Losses

The impact of utilizing the current expected credit loss ("CECL") methodology approach to calculate the allowance for credit losses on loans is significantly influenced by the composition, characteristics and quality of the Company’s loan portfolio, as well as the prevailing economic conditions and forecast utilized. Material changes to these and other relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to the Company’s reported earnings. For the three and nine months ended September 30, 2023, a worsened economic forecast and related deterioration in the projected commercial property price indices over the expected life of the loan portfolio within our CECL model led to increases to the provisions for credit losses and off-balance sheet credit exposures. See Notes 4 and 10 to the Consolidated Financial Statements for more information on the allowance for credit losses on loans and off-balance sheet credit exposures.

D. Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through purchase acquisitions. In accordance with GAAP, goodwill with an indefinite useful life is not amortized, but is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances indicate potential impairment between annual measurement dates. Goodwill is analyzed for impairment at least once a year. As permitted by GAAP, the Company prepares a qualitative assessment in determining whether goodwill may be impaired. The factors considered in the assessment include macroeconomic conditions, industry and market conditions and overall financial performance of the Company, among others. The Company completed its most recent annual goodwill impairment test as of July 1, 2023. At September 30, 2023, the Company performed an analysis and concluded that no triggering events were identified and therefore a test for impairment between annual tests was not required.

Note 2. Business Combinations

Lakeland Bancorp, Inc. - Merger Agreement

On September 26, 2022, the Company entered into a definitive merger agreement pursuant to which it will merge (the “merger”) with Lakeland Bancorp, Inc. ("Lakeland"), and Lakeland Bank, a wholly owned subsidiary of Lakeland, will merge with and into Provident Bank, a wholly owned subsidiary of the Company. The merger agreement has been unanimously approved by the boards of both companies and shareholder approval has also been received for both companies. The actual value of the Company’s common stock to be recorded as consideration in the merger will be based on the closing price of Company’s common stock at the time of the merger completion date. Under the merger agreement, each share of Lakeland common stock will be exchanged for 0.8319 shares of the Company's common stock plus cash in lieu of fractional shares. Upon completion of the transaction, which remains subject to regulatory approvals and other closing conditions, Provident shareholders will own approximately 58% and Lakeland shareholders will own approximately 42% of the combined company. The combined company is expected to have more than $25 billion in total assets, $18 billion in total loans and $20 billion in total deposits.

Note 2.3. Investment Securities

At September 30, ~~2017,~~2023, the Company had ~~$1.03~~$1.66 billion and ~~$481.8~~$370.4 million in available for sale debt securities and held to maturity ~~investment~~debt securities, respectively. Many factors, including lack of liquidity in the secondary market for certain securities, variations in pricing information, changes in interest rates, regulatory actions, changes in the business environment or any changes in the competitive marketplace, could have an adverse effect on the Company’s investment ~~portfolio which could result in other-than-temporary impairment ("OTTI") in future periods.~~portfolio. The total number of available for sale and held to maturity ~~and available for sale~~debt securities in an unrealized loss position ~~as of~~at September 30, ~~2017~~2023 totaled ~~253,~~1,065, compared with ~~419~~914 at December 31, ~~2016. All~~2022. The increase in the number of securities ~~with~~in an unrealized ~~losses~~loss position at September 30, 2017 were analyzed for other-than-temporary impairment. Based upon this analysis, the Company believes that as of September 30, 2017, such securities with unrealized losses do not represent impairments that are other-than-temporary.2023 was due to higher current market interest rates compared to rates at December 31, 2022.

~~Securities~~ Available for Sale Debt Securities

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for ~~securities~~ available for sale debt securities at September 30, ~~2017~~ ~~and~~ ~~December 31, 2016~~ ~~(in thousands):~~

September 30, 2017

Amortized
cost
Gross
unrealized
gains
Gross
unrealized
losses Fair
value
U.S. Treasury obligations $ 5,995
—
(1 ) 5,994
Agency obligations
28,031

15

(11 ) 28,035
Mortgage-backed securities
965,863

7,477

(4,928 ) 968,412
State and municipal obligations
3,695

112

—
3,807
Corporate obligations 21,049
420
(10 ) 21,459
Equity securities
397

201

—
598

$ 1,025,030

8,225

(4,950 ) 1,028,305

December 31, 2016
Amortized
cost Gross
unrealized
gains Gross
unrealized
losses Fair
value
U.S. Treasury obligations $ 7,995
13
—
8,008
Agency obligations 57,123
90
(25 ) 57,188
Mortgage-backed securities 952,992
7,249
(8,380 ) 951,861
State and municipal obligations 3,727
19
(3 ) 3,743
Corporate obligations 19,013
35
(11 ) 19,037
Equity securities 397
152
—
549
$ 1,041,247
7,558
(8,419 ) 1,040,386

~~The amortized cost and fair value of securities available for sale at~~ ~~September 30, 2017, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.~~

September 30, 2017

Amortized
cost

Fair
value
Due in one year or less $ 35,452
35,445
Due after one year through five years 2,423
2,471
Due after five years through ten years 20,895
21,379
Due after ten years —
—
$ 58,770
59,295

Mortgage-backed securities totaling $965.9 million at amortized cost and $968.4 million at fair value are excluded from the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments. Also excluded from the table above are equity securities of $397,000 at amortized cost and $598,000 at fair value.

For the three and nine months ended September 30, 2017, no securities were sold or called from the securities available for sale portfolio. For the three months ended September 30, 2016, proceeds from sales on securities available for sale totaled $1.2 million resulting in no gross gains and $45,000 of gross losses. Proceeds from the sale of securities available for sale, for the nine months ended September 30, 2016, totaled $3.4 million, resulting in gross gains of $95,000 and gross losses of $45,000. There were no calls of available for sale securities for the three and nine months ended September 30, 2016.

~~The Company did not incur an OTTI charge on securities in the available for sale portfolio for the three and nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~.

~~The following tables present the fair value and gross unrealized losses for securities available for sale with temporary impairment at~~ ~~September 30, 2017~~2023 and December 31, ~~2016~~2022 (in thousands):


	September 30, 2023
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value

U.S. Treasury obligations	$	276,364	—	(31,037)	245,327
Agency obligations	28,208		62	(22)	28,248
Mortgage-backed securities	1,503,545		8	(240,409)	1,263,144
Asset-backed securities	33,100		625	(211)	33,514
State and municipal obligations	64,697		—	(12,657)	52,040
Corporate obligations	40,472		—	(6,440)	34,032

	$	1,946,386	695	(290,776)	1,656,305

September 30, 2017 Unrealized Losses

Less than 12 months 12 months or longer Total

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses
U.S. Treasury obligations $ 5,994
(1 ) —
—
5,994
(1 )
Agency obligations
16,008
(11 ) —
—
16,008
(11 )
Mortgage-backed securities
424,627
(3,956 ) 50,881
(972 ) 475,508
(4,928 )
Corporate obligations —
—
991
(10 ) 991
(10 )

$ 446,629
(3,968 ) 51,872
(982 ) 498,501
(4,950 )

December 31, 2016 Unrealized Losses

Less than 12 months 12 months or longer Total

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses
Agency obligations $ 14,000
(25 ) —
—
14,000
(25 )
Mortgage-backed securities 553,629
(8,377 ) 65
(3 ) 553,694
(8,380 )
State and municipal obligations 661
(3 ) —
—
661
(3 )
Corporate obligations —
—
990
(11 ) 990
(11 )

$ 568,290
(8,405 ) 1,055
(14 ) 569,345
(8,419 )

The temporary loss position associated with securities available for sale was the result of changes in market interest rates relative to the coupon of the individual security and changes in credit spreads. The Company does not have the intent to sell securities in a temporary loss position at ~~September 30, 2017, nor is it more likely than not that the Company will be required to sell the securities before their prices recover.~~

~~The number of available for sale securities in an unrealized loss position at~~ ~~September 30, 2017~~ ~~totaled~~ 82~~, compared with~~ 87 ~~at December 31, 2016. At~~ ~~September 30, 2017, there were two private label mortgage-backed securities in an unrealized loss position,~~

~~with an amortized cost of $50,000 and an unrealized loss of~~ ~~$2,000. Neither of these private label mortgage-backed securities were below investment grade at September 30, 2017.~~

The Company estimates the loss projections for each security by stressing the individual loans collateralizing the security and applying a range of expected default rates, loss severities, and prepayment speeds in conjunction with the underlying credit enhancement for each security. Based on specific assumptions about collateral and vintage, a range of possible cash flows was identified to determine whether OTTI existed during the nine months ended ~~September 30, 2017. The Company believes that~~ no ~~OTTI of the securities available for sale portfolio existed for the three and nine months ended September 30, 2017.~~

~~Investment Securities Held to Maturity~~

~~The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for investment securities held to maturity at~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~ ~~(in thousands):~~

September 30, 2017

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Fair
value
Agency obligations
$ 4,307
—
(55 ) 4,252
Mortgage-backed securities
475
17
—
492
State and municipal obligations
467,113
10,407
(1,761 ) 475,759
Corporate obligations
9,950
6
(34 ) 9,922

$ 481,845
10,430
(1,850 ) 490,425

December 31, 2016

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Fair
value
Agency obligations $ 4,306
2
(83 ) 4,225
Mortgage-backed securities 893
31
—
924
State and municipal obligations 473,653
6,635
(5,436 ) 474,852
Corporate obligations 9,331
7
(52 ) 9,286
$ 488,183
6,675
(5,571 ) 489,287

The Company generally purchases securities for long-term investment purposes, and differences between amortized cost and fair values may fluctuate during the investment period. There were no sales of securities from the held to maturity portfolio for the three and nine months ended September 30, 2017 and 2016. For the three and nine months ended September 30, 2017, proceeds from calls on securities in the held to maturity portfolio totaled $8.1 million and $28.7 million, respectively, with gross gains totaling $39,000 and $50,000, respectively and gross losses of $3,000 in both the three and nine month periods. For the three and nine months ended September 30, 2016, proceeds from calls of securities in the held to maturity portfolio totaled $20.3 million and $35.2 million, respectively, with gross gains totaling $2,000 and $4,000, respectively and no gross losses recognized in either period.


	December 31, 2022
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value

U.S. Treasury obligations	$	275,620	—	(29,804)	245,816

Mortgage-backed securities	1,636,913		209	(209,983)	1,427,139
Asset-backed securities	37,706		278	(363)	37,621
State and municipal obligations	67,706		—	(10,842)	56,864
Corporate obligations	40,540		50	(4,482)	36,108

	$	2,058,485	537	(255,474)	1,803,548

The amortized cost and fair value of ~~investment~~available for sale debt securities ~~in the held to maturity portfolio~~ at September 30, ~~2017~~2023, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.


	September 30, 2023
	Amortized cost		Fair value
Due in one year or less	$	243,150	217,543
Due after one year through five years	83,964		70,558
Due after five years through ten years	54,419		43,298
Due after ten years	—		—
	$	381,533	331,399

September 30, 2017

Amortized
cost

Fair
value
Due in one year or less
$ 14,723
14,755
Due after one year through five years
65,170
66,276
Due after five years through ten years
254,191
259,908
Due after ten years
147,286
148,994

$ 481,370
489,933

~~Mortgage-backed securities~~Investments which pay principal on a periodic basis totaling ~~$475,000~~$1.56 billion at amortized cost and ~~$492,000~~$1.32 billion at fair value are excluded from the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

~~The following tables present~~There were no sales of securities from the ~~fair value~~available for sale debt securities portfolio for the three and ~~gross unrealized losses for investment securities held to maturity with temporary impairment at~~ nine months ended September 30, ~~2017~~2023 and ~~December 31, 2016~~ ~~(in thousands):~~2022. For the three and nine months ended September 30, 2023, there were no proceeds from calls on

September 30, 2017 Unrealized Losses
Less than 12 months 12 months or longer Total

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses
Agency obligations
$ 3,853
(55 ) —
—
3,853
(55 )
State and municipal obligations
62,881
(938 ) 22,251
(823 ) 85,132
(1,761 )
Corporate obligations
6,646
(34 ) —
—
6,646
(34 )

$ 73,380
(1,027 ) 22,251
(823 ) 95,631
(1,850 )

December 31, 2016 Unrealized Losses
Less than 12 months 12 months or longer Total
Fair
value Gross
unrealized
losses Fair
value Gross
unrealized
losses Fair
value Gross
unrealized
losses
Agency obligations $ 3,525
(83 ) —
—
3,525
(83 )
State and municipal obligations 172,152
(5,132 ) 6,617
(304 ) 178,769
(5,436 )
Corporate obligations 4,697
(52 ) —
—
4,697
(52 )
$ 180,374
(5,267 ) 6,617
(304 ) 186,991
(5,571 )

~~Based upon~~securities in the ~~review of~~available for sale debt securities portfolio. For the ~~held to maturity~~three and nine months ended September 30, 2022, proceeds from calls on securities in the available for sale debt securities portfolio ~~the Company believes that as~~totaled $5.4 million with gains of ~~September 30, 2017, securities with unrealized loss positions shown above do not represent impairments that are other-than-temporary. The review~~$84,000 and $26,000 of the portfolio for OTTI considers the percentage and length of time the fair value of an investment is below book value, as well as general market conditions, changes in interest rates, credit risks, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company would be required to sell the securities before their prices recover.losses recognized, respectively.

The number of ~~held to maturity~~available for sale debt securities in an unrealized loss position at September 30, ~~2017~~2023 totaled ~~171,~~474, compared with ~~332~~475 at December 31, ~~2016.~~2022. The ~~decrease~~decline in the number of securities in an unrealized loss position at September 30, ~~2017,~~2023 was due to ~~a slight decrease in market interest rates from December 31, 2016~~maturities and ~~a tightening~~calls of ~~spreads~~securities in the ~~municipal bond sector.~~quarter. All ~~temporarily impaired investment~~ securities in an unrealized loss position were investment grade at September 30, ~~2017~~.

2023.

Held to Maturity Debt Securities

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for held to maturity debt securities at September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value
Treasury Obligations	$	1,135	—	—	1,135
Agency obligations	12,098		—	(897)	11,201

State and municipal obligations	348,493		2	(25,905)	322,590
Corporate obligations	8,724		—	(568)	8,156
	$	370,450	2	(27,370)	343,082


	December 31, 2022
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value
Agency obligations	$	9,997	—	(1,033)	8,964

State and municipal obligations	366,164		268	(13,015)	353,417
Corporate obligations	11,789		1	(703)	11,087
	$	387,950	269	(14,751)	373,468

The Company generally purchases securities for long-term investment purposes, and differences between amortized cost and fair value may fluctuate during the investment period. There were no sales of securities from the held to maturity debt securities portfolio for the three and nine months ended September 30, 2023 and 2022. For the three and nine months ended September 30, 2023, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $3.2 million and $9.8 million, respectively. As to these calls on securities, for the three months ended September 30, 2023, there were gross gains of $16,000 and gross losses of $3,000, while for the nine months ended September 30, 2023, gross gains totaled $45,000, with gross losses of $8,000. For the three and nine months ended September 30, 2022, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $10.3 million and $36.4 million, respectively. As to these calls on securities, for the three months ended September 30, 2022, gross gains totaled $26,000, with gross losses of $29,000, while for the nine months ended September 30, 2022, gross gains totaled $129,000, with $33,000 of gross losses.

The amortized cost and fair value of investment securities in the held to maturity debt securities portfolio at September 30, 2023 by contractual maturity are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.


	September 30, 2023
	Amortized cost		Fair value
Due in one year or less	$	30,561	30,363
Due after one year through five years	169,008		162,284
Due after five years through ten years	143,478		130,086
Due after ten years	27,403		20,349
	$	370,450	343,082

The allowance for credit losses on held to maturity debt securities at September 30, 2023 and December 31, 2022 was $34,000 and $27,000, respectively, and are excluded from amortized cost in the tables above.

The number of held to maturity debt securities in an unrealized loss position at September 30, 2023 totaled 591, compared with 439 at December 31, 2022. The increase in the number of securities in an unrealized loss position at September 30, 2023, was due to higher current market interest rates compared to rates at December 31, 2022.

Management measures expected credit losses on held to maturity debt securities on a collective basis by security type. Management classifies the held to maturity debt securities portfolio into the following security types:

•Agency obligations;

•Mortgage-backed securities;

•State and municipal obligations; and

•Corporate obligations.

All of the agency obligations held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The majority of the state and municipal and corporate obligations carry credit ratings from the rating agencies at September 30, 2023 no lower than A and the Company had no securities rated BBB or worse by Moody’s Investors Service.

Credit Quality Indicators. The following table provides the amortized cost of held to maturity debt securities by credit rating at September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023
Total Portfolio	AAA		AA	A	BBB	Not Rated	Total
Treasury obligations	$	1,135	—	—	—	—	1,135
Agency obligations	12,098		—	—	—	—	12,098

State and municipal obligations	44,978		162,676	139,146	—	1,693	348,493
Corporate obligations	505		2,062	6,132	—	25	8,724
	$	58,716	164,738	145,278	—	1,718	370,450

	December 31, 2022
Total Portfolio	AAA		AA	A	BBB	Not Rated	Total
Agency obligations	$	9,997	—	—	—	—	9,997

State and municipal obligations	48,453		171,934	143,829	770	1,178	366,164
Corporate obligations	507		3,592	7,415	—	275	11,789
	$	58,957	175,526	151,244	770	1,453	387,950

Credit quality indicators are metrics that provide information regarding the relative credit risk of debt securities. At September 30, 2023, the held to maturity debt securities portfolio was comprised of 16% rated AAA, 44% rated AA, 39% rated A, and less than 1% either below an A rating or not rated by Moody’s Investors Service or Standard and Poor’s. Securities not explicitly rated, such as U.S. Government mortgage-backed securities, were grouped where possible under the credit rating of the issuer of the security.

Note 3.4. Loans Receivable and Allowance for ~~Loan~~Credit Losses

Loans receivable at September 30, ~~2017~~2023 and December 31, ~~2016~~2022 are summarized as follows (in thousands):

September 30, 2017 December 31, 2016
Mortgage loans:
Residential $ 1,157,311
1,211,672
Commercial 2,022,576
1,978,569
Multi-family 1,334,984
1,402,054
Construction 324,692
264,814
Total mortgage loans 4,839,563
4,857,109
Commercial loans 1,708,842
1,630,444
Consumer loans 481,262
516,755
Total gross loans 7,029,667
7,004,308
Purchased credit-impaired ("PCI") loans 991
1,272
Premiums on purchased loans 4,229
4,968
Unearned discounts (36 ) (39 )
Net deferred fees (6,799 ) (7,023 )
Total loans $ 7,028,052
7,003,486


	September 30, 2023		December 31, 2022
Mortgage loans:
Commercial	$	4,411,099	4,316,185
Multi-family	1,790,039		1,513,818
Construction	667,462		715,494
Residential	1,167,570		1,177,698
Total mortgage loans	8,036,170		7,723,195




Commercial loans	2,340,080		2,233,670
Consumer loans	302,769		304,780

Total gross loans	10,679,019		10,261,645
Premiums on purchased loans	1,413		1,380

Net deferred fees	(12,820)		(14,142)
Total loans	$	10,667,612	10,248,883

The following tables summarize the aging of loans receivable by portfolio segment and class of loans ~~excluding PCI loans~~ (in thousands):


	September 30, 2023
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable	Non-accrual loans with no related allowance
Mortgage loans:
Commercial	$	—	587	11,667	—	12,254	4,398,845	4,411,099	8,676
Multi-family	5,473		—	2,258	—	7,731	1,782,308	1,790,039	2,258
Construction	—		—	1,868	—	1,868	665,594	667,462	1,868
Residential	1,588		936	1,329	—	3,853	1,163,717	1,167,570	1,329
Total mortgage loans	7,061		1,523	17,122	—	25,706	8,010,464	8,036,170	14,131
Commercial loans	1,959		228	21,912	—	24,099	2,315,981	2,340,080	14,504
Consumer loans	1,207		168	495	—	1,870	300,899	302,769	495
Total gross loans	$	10,227	1,919	39,529	—	51,675	10,627,344	10,679,019	29,130


	December 31, 2022
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable	Non-accrual loans with no related allowance
Mortgage loans:
Commercial	$	2,300	412	28,212	—	30,924	4,285,261	4,316,185	22,961
Multi-family	790		—	1,565	—	2,355	1,511,463	1,513,818	1,565
Construction	905		1,097	1,878	—	3,880	711,614	715,494	1,878
Residential	1,411		1,114	1,928	—	4,453	1,173,245	1,177,698	1,928
Total mortgage loans	5,406		2,623	33,583	—	41,612	7,681,583	7,723,195	28,332
Commercial loans	964		1,014	24,188	—	26,166	2,207,504	2,233,670	21,156
Consumer loans	885		147	738	—	1,770	303,010	304,780	739
Total gross loans	$	7,255	3,784	58,509	—	69,548	10,192,097	10,261,645	50,227

September 30, 2017

30-59
Days

60-89
Days
Non-accrual Recorded
Investment
> 90 days
accruing
Total Past
Due
Current
Total Loans
Receivable
Mortgage loans:
Residential $ 5,973
3,525
8,820
—
18,318
1,138,993
1,157,311
Commercial 608
292
8,070
—
8,970
2,013,606
2,022,576
Multi-family —
—
—
—
—
1,334,984
1,334,984
Construction —
—
—
—
—
324,692
324,692
Total mortgage loans 6,581
3,817
16,890
—
27,288
4,812,275
4,839,563
Commercial loans 1,870
244
17,523
—
19,637
1,689,205
1,708,842
Consumer loans 2,307
1,080
2,035
—
5,422
475,840
481,262
Total gross loans $ 10,758
5,141
36,448
—
52,347
6,977,320
7,029,667

December 31, 2016

30-59
Days

60-89
Days
Non-accrual Recorded
Investment
> 90 days
accruing Total Past
Due Current
Total Loans
Receivable
Mortgage loans:
Residential $ 5,891
6,563
12,021
—
24,475
1,187,197
1,211,672
Commercial —
80
7,493
—
7,573
1,970,996
1,978,569
Multi-family —
—
553
—
553
1,401,501
1,402,054
Construction —
—
2,517
—
2,517
262,297
264,814
Total mortgage loans 5,891
6,643
22,584
—
35,118
4,821,991
4,857,109
Commercial loans 1,656
357
16,787
—
18,800
1,611,644
1,630,444
Consumer loans 2,561
1,199
3,030
—
6,790
509,965
516,755
Total gross loans $ 10,108
8,199
42,401
—
60,708
6,943,600
7,004,308

Included in loans receivable are loans for which the accrual of interest income has been discontinued due to deterioration in the financial condition of the borrowers. The principal amounts of these non-accrual loans were ~~$36.4~~$39.5 million and ~~$42.4~~$58.5 million at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. Included in non-accrual loans were ~~$9.1~~$6.4 million and ~~$7.3~~$42.9 million of loans which were less than 90 days past due at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. There were no loans 90 days or greater past due and still accruing interest at September 30, ~~2017 or~~2023 and December 31, ~~2016.~~2022.

The activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):


Three months ended September 30,	Mortgage loans		Commercial loans	Consumer loans	Total
2023
Balance at beginning of period	$	69,940	29,707	2,426	102,073

Provision charge (benefit) to operations	4,619		6,436	(55)	11,000

Recoveries of loans previously charged-off	101		405	88	594
Loans charged-off	(3)		(6,019)	(82)	(6,104)
Balance at end of period	$	74,657	30,529	2,377	107,563

2022
Balance at beginning of period	$	55,064	21,387	2,566	79,017
Provision charge to operations	4,991		3,381	28	8,400

Recoveries of loans previously charged-off	167		1,421	129	1,717
Loans charged-off	—		(410)	(91)	(501)
Balance at end of period	$	60,222	25,779	2,632	88,633


Nine months ended September 30,	Mortgage loans		Commercial loans	Consumer loans	Total
2023
Balance at beginning of period	$	58,218	27,413	2,392	88,023
Cumulative effect of adopting Accounting Standards Update ("ASU") No. 2022-02	(510)		(43)	(41)	(594)

Provision charge (benefit) to operations	17,573		9,898	(71)	27,400
Recoveries of loans previously charged-off	107		706	347	1,160
Loans charged-off	(731)		(7,445)	(250)	(8,426)
Balance at end of period	$	74,657	30,529	2,377	107,563

2022
Balance at beginning of period	$	52,104	26,343	2,293	80,740
Provision charge (benefit) charge to operations	8,589		(3,734)	145	5,000

Recoveries of loans previously charged-off	539		3,725	404	4,668

Loans charged-off	(1,010)		(555)	(210)	(1,775)
Balance at end of period	$	60,222	25,779	2,632	88,633

For the three and nine months ended September 30, 2023, the Company recorded an $11.0 million and a $27.4 million provision for credit losses on loans, respectively. The increase in provision was attributable to a worsened economic forecast and related deterioration in the projected commercial property price indices used in our CECL model. For the three months ended September 30, 2023, net charge-offs totaled $5.5 million, which was primarily attributable to one commercial loan. For the nine months ended September 30, 2023, net charge-offs totaled $7.3 million, which was primarily attributable to two commercial loans.

The following table summarizes the Company's gross charge-offs recorded during the three months ended September 30, 2023 by year of origination (in thousands):


	2023		2022	2021	2020	2019	Prior to 2019	Total Loans

Mortgage loans:



Residential	$	—	—	—	—	—	3	3
Total mortgage loans	—		—	—	—	—	3	3
Commercial loans	$	—	—	—	5,000	—	1,019	6,019
Consumer loans (1)	7		—	—	—	—	—	7
Total gross loans	$	7	—	—	5,000	—	1,022	6,029

(1) Duringthe three months ended September 30, 2023, charge-offs on consumer overdraft accounts totaled $75,000, which are not included in the table above.

The following table summarizes the Company's gross charge-offs recorded during the nine months ended September 30, 2023 by year of origination (in thousands):


	2023		2022	2021	2020	2019	Prior to 2019	Total Loans

Mortgage loans:
Commercial	$	—	—	—	—	—	707	707


Residential	—		—	—	—	—	24	24
Total mortgage loans	—		—	—	—	—	731	731
Commercial loans	$	—	—	—	5,000	—	2,445	7,445
Consumer loans (1)	16		—	—	—	—	13	29
Total gross loans	$	16	—	—	5,000	—	3,189	8,205

(1) Duringthe nine months ended September 30, 2023, charge-offs on consumer overdraft accounts totaled $221,000, which are not included in the table above.

The Company defines ~~an impaired~~a loan individually evaluated for impairment as a non-homogeneous loan greater than $1.0 million, for which, ~~it is probable,~~ based on current information, it is not expected to collect all amounts due under the contractual terms of the loan ~~agreement will not be collected. Impaired~~agreement. At September 30, 2023, there were 18 loans ~~also include all~~totaling $30.4 million, compared to 10 loans ~~modified as troubled debt restructurings (“TDRs”).~~ totaling $42.8 million at December 31, 2022, that were individually evaluated for impairment.

A ~~loan~~financial asset is ~~deemed~~considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be ~~a TDR when a loan modification resulting in a concession is made in an effort to mitigate potential loss arising from a borrower’s financial difficulty. Smaller balance homogeneous~~provided substantially through the sale or operation of the collateral. For all classes of loans ~~including residential mortgages and other consumer loans, are evaluated collectively for impairment and are excluded from~~deemed collateral-dependent, the ~~definition of impaired loans, unless modified as TDRs. The~~ Company ~~separately calculates~~estimates expected credit losses based on the reserve for loan losses on impaired loans. The Company may recognize impairment of a loan based upon: (1) the present value of expected cash flows discounted at the effective interest rate; (2) if a loan is collateral dependent, thecollateral’s fair value less any selling costs. A specific allocation of ~~collateral; or (3)~~ the allowance for credit losses is established for each collateral-dependent loan with a carrying balance greater than the collateral’s fair value, ofless estimated selling costs. In most cases, the ~~loan. Additionally, if impaired loans have risk characteristics in common, those loans may be aggregated and historical statistics may be used as~~Company records a ~~means of measuring those impaired loans.~~

partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less estimated selling costs. The Company uses third-party appraisals to determine the fair value of the underlying collateral in its analysis of ~~collateral dependent impaired~~collateral-dependent loans. A third-party appraisal is generally ordered as soon as a loan is designated as a ~~collateral dependent impaired~~collateral-dependent loan and is updated annually, or more frequently if required.

~~A specific allocation of the allowance for loan losses is established for~~ At each collateral dependent impaired loan with a carrying balance greater than the collateral’s fair value, less estimated costs to sell. Charge-offs are generally taken for the amount of the specific allocation when operations associated with the respective property cease and it is determined that collection of amounts due will be derived primarily from the disposition of the collateral. At eachfiscal quarter end, if a loan is designated as ~~a collateral dependent impaired loan~~collateral-dependent and the third-party appraisal has not yet been received, an evaluation of all available collateral is made using the best information available at the time, including rent rolls, borrower financial statements and tax returns, prior appraisals, management’s knowledge of the market and collateral, and internally prepared collateral valuations based upon market assumptions regarding vacancy and capitalization rates, each as and where applicable. Once the appraisal is received and reviewed, the specific reserves are adjusted to reflect the appraised ~~value.~~value and evaluated for charge offs. The Company believes there have been no significant time lapses ~~in the recognition of changes in collateral values as a result of~~resulting from this process.

At September 30, ~~2017, there were 145 impaired~~2023, the Company had collateral-dependent loans ~~totaling $50.2 million. Included in this total were 126 TDRs related to 122 borrowers totaling $31.7~~with a fair value of $5.0 million ~~that were performing in accordance with their restructured terms~~secured by business assets and ~~which continued to accrue interest at~~ ~~September 30, 2017~~.$2.0 million secured by commercial real estate. At December 31, ~~2016, there were~~ ~~141~~ ~~impaired~~2022, the Company had collateral-dependent loans ~~totaling~~ ~~$52.0~~with a fair value of $21.3 million~~. Included in this total were~~ ~~114~~ ~~TDRs to~~ ~~110~~ ~~borrowers totaling~~ ~~$29.9~~ secured by commercial real estate, $1.9 million ~~that were performing in accordance with their restructured terms~~ secured by business assets and ~~which continued to accrue interest at December 31, 2016.~~

~~The following table summarizes loans receivable~~$800,000 secured by ~~portfolio segment and impairment method, excluding PCI loans (in thousands):~~residential real estate.

September 30, 2017

Mortgage
loans

Commercial
loans

Consumer
loans

Total Portfolio
Segments
Individually evaluated for impairment
$ 28,578
19,393
2,210
50,181
Collectively evaluated for impairment
4,810,985
1,689,449
479,052
6,979,486
Total gross loans
$ 4,839,563
1,708,842
481,262
7,029,667

December 31, 2016

Mortgage
loans

Commercial
loans

Consumer
loans

Total Portfolio
Segments
Individually evaluated for impairment
$ 29,551
20,255
2,213
52,019
Collectively evaluated for impairment
4,827,558
1,610,189
514,542
6,952,289
Total gross loans
$ 4,857,109
1,630,444
516,755
7,004,308

~~The allowance for loan losses is summarized by portfolio segment and impairment classification as follows (in thousands):~~

September 30, 2017

Mortgage
loans

Commercial
loans

Consumer
loans

Total
Individually evaluated for impairment
$ 1,773
1,028
71
2,872
Collectively evaluated for impairment
24,724
30,423
2,257
57,404
Total gross loans
$ 26,497
31,451
2,328
60,276

December 31, 2016

Mortgage
loans

Commercial
loans

Consumer
loans

Total
Individually evaluated for impairment
$ 1,986
268
80
2,334
Collectively evaluated for impairment
27,640
28,875
3,034
59,549
Total gross loans
$ 29,626
29,143
3,114
61,883

Loan modifications to borrowers experiencing financial ~~difficulties that are considered TDRs primarily involve lowering the monthly payments on such loans through either a reduction in~~difficulty may include interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. These modifications generally do not result in the forgiveness ofreductions, principal or ~~accrued interest.~~interest forgiveness, forbearance, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. In addition, ~~the Company~~management attempts to obtain additional collateral or guarantor support when modifying such loans. If the borrower has demonstrated performance under the previous terms and our underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

The following illustrates the most common loan modifications by loan classes offered by the Company that are required to be disclosed pursuant to the requirements of ASU 2022-02:


Loan Classes						Modification types
Commercial						Term extension, interest rate reductions, payment delay, or combination thereof. These modifications extend the term of the loan, lower the payment amount, or otherwise delay payments during a defined period for the purpose of providing borrowers additional time to return to compliance with the original loan term.

Residential Mortgage/ Home Equity						Forbearance period greater than six months. These modifications require reduced or no payments during the forbearance period for the purpose of providing borrowers additional time to return to compliance with the original loan term. As well as, term extension and rate adjustment. These modifications extend the term of the loan and provides for an adjustment to the interest rate, which reduces the monthly payment requirement.

Automobile/ Direct Installment						Term extension greater than three months. These modifications extend the term of the loan, which reduces the monthly payment requirement.

Effective January 1, 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a modified retrospective basis. Upon adoption of this guidance, the Company no longer establishes a specific reserve for loan modifications to borrowers experiencing financial difficulty. Instead, these loan modifications are included in their respective pool and a historical loss rate is applied to the current loan balance to arrive at the quantitative and qualitative baseline portion of the allowance for credit losses. As a result, The Company recorded a $594,000 reduction to the allowance for credit losses, which resulted in a $433,000 cumulative effect adjustment increase, net of tax to retained earnings.

The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023 (in thousands):


	For the three months ended September 30, 2023
	Term Extension		Interest Rate Reduction	Interest Rate Reduction and Term Extension	% of Total Class of Loans and Leases

Mortgage loans:

Multi-family	$	—	—	1,508	0.08	%


Total mortgage loans	—		—	1,508	0.02	%


Total gross loans	$	—	—	1,508	0.01	%


	For the nine months ended September 30, 2023
	Term Extension		Interest Rate Reduction	Interest Rate Reduction and Term Extension	% of Total Class of Loans and Leases

Mortgage loans:

Multi-family	$	—	—	1,508	0.08	%


Total mortgage loans	—		—	1,508	0.02	%
Commercial loans	3,771		—	1,250	0.21	%

Total gross loans	$	3,771	—	2,758	0.06	%

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended September 30, 2023 (in thousands):


	Weighted-Average Months of Term Extension	Weighted-Average Rate Increase
Mortgage loans:

Multi-family	2	2.23	%


Total mortgage loans	2	2.23	%


Total gross loans	2	2.23	%

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023 (in thousands):


	Weighted-Average Months of Term Extension	Weighted-Average Rate Increase
Mortgage loans:

Multi-family	2	2.23	%


Total mortgage loans	2	2.23	%
Commercial loans	10	0.20	%

Total gross loans	9	0.61	%

There were no loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023, that subsequently defaulted.

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the three months ended September 30, 2023 (in thousands):


	Current		30-59 Days Past Due	60-89 Days Past Due	90 days or more Past Due	Non- Accrual	Total

Mortgage loans:

Multi-family	$	1,508	—	—	—	—	1,508


Total mortgage loans	1,508		—	—	—	—	1,508


Total gross loans	$	1,508	—	—	—	—	1,508

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023 (in thousands):


	Current		30-59 Days Past Due	60-89 Days Past Due	90 days or more Past Due	Non- Accrual	Total

Mortgage loans:

Multi-family	$	1,508	—	—	—	—	1,508


Total mortgage loans	1,508		—	—	—	—	1,508
Commercial loans	5,021		—	—	—	—	5,021

Total gross loans	$	6,529	—	—	—	—	6,529

Prior to our adoption of ASU 2022-02, we accounted for a modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a TDR. However, our TDR accounting described herein was suspended for most of our loss mitigation activities through our election to account for certain eligible loss mitigation activities occurring between March 2020 and January 1, 2022 under the COVID-19 relief granted pursuant to the CARES Act and the Consolidated Appropriations Act of 2021. Effective January 1, 2023, we adopted ASU 2022-02, which eliminated TDR accounting prospectively for all restructurings occurring on or after January 1, 2023.

The following tables present the number of loans modified as TDRs during the three and nine months ended September 30, ~~2017~~ ~~and~~ ~~2016~~,2022, along with their balances immediately prior to the modification date and post-modification as of September 30, ~~2017~~ ~~and~~ ~~2016. There were no loans modified as TDRs during~~2022 (in thousands):


	For the three months ended
	September 30, 2022
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment







Consumer loans	1	108		88
Total restructured loans	1	$	108	88


	For the nine months ended
	September 30, 2022
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

Mortgage loans:
Residential	2	$	265	$	204

Multi-family	1	1,618		1,583
Total mortgage loans	3	1,883		1,787
Commercial loans	2	378		273
Consumer loans	1	108		88
Total restructured loans	6	$	2,369	$	2,148

During the ~~three and~~ nine months ended September 30, ~~2016.~~

For the three months ended

September 30, 2017
September 30, 2016
Troubled Debt Restructurings
Number of
Loans

Pre-Modification
Outstanding
Recorded
Investment

Post-Modification
Outstanding
Recorded Investment

Number of
Loans

Pre-Modification
Outstanding
Recorded Investment

Post-Modification
Outstanding
Recorded Investment

($ in thousands)
Mortgage loans:

Residential
2
$ 632
$ 470
—
$ —
$ —
Total mortgage loans
2
632
470
—
—
—
Total restructured loans
2
$ 632
$ 470
—
$ —
$ —

For the nine months ended
September 30, 2017 September 30, 2016
Troubled Debt Restructurings Number of
Loans Pre-Modification
Outstanding
Recorded
Investment Post-Modification
Outstanding
Recorded Investment Number of
Loans Pre-Modification
Outstanding
Recorded Investment Post-Modification
Outstanding
Recorded Investment
($ in thousands)
Mortgage loans:
Residential 7
$ 3,436
$ 3,202
—
$ —
$ —
Total mortgage loans 7
3,436
3,202
—
—
—
Commercial loans 1
1,300
1,210
—
—
—
Consumer loans 1
70
68
—
—
—
Total restructured loans 9
$ 4,806
$ 4,480
—
$ —
$ —

~~All TDRs are impaired loans, which are individually evaluated for impairment, as previously discussed. During the three and nine months ended September 30, 2017, $3.2 million and $4.4 million~~2022, $921,000 of charge-offs were recorded on ~~collateral dependent~~collateral-dependent impaired loans. There ~~were no charge-offs recorded on collateral dependent impaired loans for the same periods last year. For the three and nine months ended September 30, 2017, the allowance for~~was one loan losses associated with the TDRs presented in the preceding tables totaled $0 and $120,000, respectively, and were included in the allowance for loan losses for loans individually evaluated for impairment.

~~For the three and nine months ended September 30, 2017, the TDRs presented in the preceding tables~~totaling $209,000 which had a ~~weighted average modified interest rate of approximately 4.36% and 4.02%, respectively, compared to a weighted average rate of 4.33% and 3.93% prior to modification, respectively.~~

~~There were no~~ payment ~~defaults~~default (90 days or more past due) for ~~loans~~a loan modified as ~~TDRs~~a TDR within the 12 month ~~periods~~period ending September 30, ~~2017and 2016.~~2023. For TDRs that subsequently ~~default are considered collateral dependent impaired loans and are evaluated for impairment based on~~defaulted, the ~~estimated fair value~~Company determined the amount of ~~the underlying collateral less expected selling costs.~~

PCI loans are loans acquired at a discount primarily due to deteriorated credit quality. As part of the May 30, 2014 acquisition of Team Capital, $5.2 million of the loans acquired were determined to be PCI loans. At the date of acquisition, PCI loans were accounted for at fair value, based upon the then present value of expected future cash flows, with no related allowance for loan losses. PCI loans totaled $1.0 million at September 30, 2017 and $1.3 million at December 31, 2016.

~~The following table summarizes the changes in the accretable yield for PCI loans during the three and nine months ended September 30, 2017 and 2016 (in thousands):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Beginning balance $ 158
328
200
676
Accretion (154 ) (225 ) (299 ) (1,065 )
Reclassification from non-accretable discount 99
209
202
701
Ending balance $ 103
312
103
312

~~The activity in~~ the allowance for ~~loan losses by portfolio segment~~the respective loans in accordance with the accounting policy for the ~~three and nine months ended September 30, 2017 and~~ ~~2016~~ ~~was as follows (in thousands):~~

Three months ended September 30,
Mortgage
loans

Commercial
loans

Consumer
loans

Total Portfolio
Segments

Unallocated
Total
2017

Balance at beginning of period
$ 28,826
31,085
2,951
62,862
—
62,862
Provision charged (credited) to operations
(2,301 ) 3,446
(645 ) 500
—
500
Recoveries of loans previously charged-off
4
140
291
435
—
435
Loans charged-off
(32 ) (3,220 ) (269 ) (3,521 ) —
(3,521 )
Balance at end of period
$ 26,497
31,451
2,328
60,276
—
60,276

2016

Balance at beginning of period
$ 31,634
26,299
3,000
60,933
—
60,933
Provision charged (credited) to operations
(1,599 ) 2,378
221
1,000
—
1,000
Recoveries of loans previously charged-off
2
68
160
230
—
230
Loans charged-off
(383 ) (506 ) (186 ) (1,075 ) —
(1,075 )
Balance at end of period
$ 29,654
28,239
3,195
61,088
—
61,088

Nine months ended September 30, Mortgage
loans Commercial
loans Consumer
loans Total Portfolio
Segments Unallocated Total
2017
Balance at beginning of period $ 29,626
29,143
3,114
61,883
—
61,883
Provision charged (credited) to operations (2,724 ) 6,840
(416 ) 3,700
—
3,700
Recoveries of loans previously charged-off 65
671
692
1,428
—
1,428
Loans charged-off (470 ) (5,203 ) (1,062 ) (6,735 ) —
(6,735 )
Balance at end of period $ 26,497
31,451
2,328
60,276
—
60,276

2016
Balance at beginning of period $ 32,094
25,829
3,501
61,424
—
61,424
Provision charged (credited) to operations (2,294 ) 6,647
(153 ) 4,200
—
4,200
Recoveries of loans previously charged-off 575
351
697
1,623
—
1,623
Loans charged-off (721 ) (4,588 ) (850 ) (6,159 ) —
(6,159 )
Balance at end of period $ 29,654
28,239
3,195
61,088
—
61,088

~~The following table presents~~allowance for credit losses on loans individually evaluated for ~~impairment~~impairment.

As allowed by ~~class and loan category, excluding PCI~~CECL, loans ~~(in thousands):~~

September 30, 2017 December 31, 2016

Unpaid
Principal
Balance

Recorded
Investment

Related
Allowance

Average
Recorded
Investment

Interest
Income
Recognized

Unpaid
Principal
Balance

Recorded
Investment

Related
Allowance

Average
Recorded
Investment

Interest
Income
Recognized
Loans with no related allowance
Mortgage loans:
Residential $ 13,035
10,277
—
10,391
340
10,691
7,881
—
8,027
484
Commercial 4,600
4,472
—
4,496
—
1,556
1,556
—
1,586
40
Construction —
—
—
—
—
2,553
2,517
—
2,514
—
Total 17,635
14,749
—
14,887
340
14,800
11,954
—
12,127
524
Commercial loans 17,505
13,884
—
13,954
280
21,830
18,874
—
13,818
259
Consumer loans 1,606
1,067
—
1,186
51
1,493
981
—
1,026
59
Total impaired loans $ 36,746
29,700
—
30,027
671
38,123
31,809
—
26,971
842

Loans with an allowance recorded
Mortgage loans:
Residential $ 13,803
12,759
1,633
12,873
374
14,169
13,520
1,716
13,705
519
Commercial 1,071
1,070
140
1,083
40
4,138
4,077
270
4,111
55
Construction —
—
—
—
—
—
—
—
—
—
Total 14,874
13,829
1,773
13,956
414
18,307
17,597
1,986
17,816
574
Commercial loans 6,158
5,509
1,028
6,045
52
1,381
1,381
268
5,956
4
Consumer loans 1,154
1,143
71
1,170
47
1,242
1,232
80
1,259
66
Total impaired loans $ 22,186
20,481
2,872
21,171
513
20,930
20,210
2,334
25,031
644

Total impaired loans
Mortgage loans:
Residential $ 26,838
23,036
1,633
23,264
714
24,860
21,401
1,716
21,732
1,003
Commercial 5,671
5,542
140
5,579
40
5,694
5,633
270
5,697
95
Construction —
—
—
—
—
2,553
2,517
—
2,514
—
Total 32,509
28,578
1,773
28,843
754
33,107
29,551
1,986
29,943
1,098
Commercial loans 23,663
19,393
1,028
19,999
332
23,211
20,255
268
19,774
263
Consumer loans 2,760
2,210
71
2,356
98
2,735
2,213
80
2,285
125
Total impaired loans $ 58,932
50,181
2,872
51,198
1,184
59,053
52,019
2,334
52,002
1,486

~~Specific allocations~~acquired by the Company that experience more-than-insignificant deterioration in credit quality after origination, are classified as Purchased Credit Deteriorated ("PCD") loans. At September 30, 2023, the balance of ~~the~~PCD loans totaled $166.9 million with a related allowance for ~~loan~~credit losses ~~attributable to impaired~~of $1.5 million. The balance of PCD loans ~~totaled $2.9 million at~~ ~~September 30, 2017~~ ~~and $2.3 million~~ at December 31, ~~2016. At September 30, 2017 and December 31, 2016, impaired loans for which there~~2022 was no$193.0 million with a related allowance for ~~loan~~credit losses ~~totaled $29.7 million and $31.8 million, respectively. The average balance~~ of ~~impaired loans for the nine months ended September 30, 2017 was $51.2~~$1.7 million.

~~The Company~~Management utilizes an internal nine-point risk rating system to summarize its loan portfolio into categories with similar risk characteristics. Loans deemed to be “acceptable quality” are rated 1 through 4, with a rating of 1 established for loans with minimal risk. Loans that are deemed to be of “questionable quality” are rated 5 (watch) or 6 (special mention). Loans with adverse classifications (substandard, doubtful or loss) are rated 7, 8 or 9, respectively. Commercial mortgage, commercial, multi-family and construction loans are rated individually, and each lending officer is responsible for risk rating loans in their portfolio. These

risk ratings are then reviewed by the department manager and/or the Chief Lending Officer and by the Credit Department. The risk ratings are also ~~confirmed~~reviewed periodically through ~~periodic~~ loan review examinations which are currently performed by an independent third-party. Reports by the independent third-party are presented ~~directly~~ to the Audit Committee of the Board of Directors.

~~Loans~~The Company participated in the Paycheck Protection Program (“PPP”) through the United States Department of the Treasury and Small Business Administration. PPP loans were fully guaranteed by the SBA and were eligible for forgiveness by the SBA to the extent that the proceeds were used to cover eligible payroll costs, interest costs, rent, and utility costs over a period of up to 24 weeks after the loan was made as long as certain conditions were met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA are to be repaid by the SBA to the Company. Eligibility ended for this program in May of 2021. PPP loans are included in our commercial loan portfolio. Under the PPP, the Company secured 2,067 PPP loans for its customers totaling $682.0 million. As of September 30, 2023, 2,054 PPP loans totaling $679.4 million were forgiven and repaid by the SBA. The balance of PPP loans at September 30, 2023 was $2.6 million.

The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades as of September 30, 2023 and December 31, 2022 (in thousands):


	Gross Loans Held for Investment by Year of Origination at September 30, 2023
	2023		2022	2021	2020	2019	Prior to 2019	Revolving Loans	Revolving loans to term loans	Total Loans
Commercial Mortgage
Special mention	$	—	—	—	2,693	7,829	30,424	4,985	—	45,931
Substandard	—		—	—	804	—	7,663	1,086	—	9,553
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	3,497	7,829	38,087	6,071	—	55,484
Pass/Watch	375,191		902,228	673,880	508,090	504,498	1,273,374	86,243	32,111	4,355,615

Total commercial mortgage	$	375,191	902,228	673,880	511,587	512,327	1,311,461	92,314	32,111	4,411,099

Multi-family
Special mention	$	—	—	—	—	—	9,555	—	—	9,555
Substandard	—		—	—	—	—	3,153	—	—	3,153
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	—	—	12,708	—	—	12,708
Pass/Watch	244,713		170,119	219,988	293,764	231,678	609,460	5,992	1,617	1,777,331
Total multi-family	$	244,713	170,119	219,988	293,764	231,678	622,168	5,992	1,617	1,790,039

Construction
Special mention	$	—	—	—	—	5,084	—	—	—	5,084
Substandard	—		—	—	—	1,097	771	—	—	1,868
Doubtful	—		—	—	—	—	—	—	—	—


	Gross Loans Held for Investment by Year of Origination at September 30, 2023
	2023		2022	2021	2020	2019	Prior to 2019	Revolving Loans	Revolving loans to term loans	Total Loans
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	—	6,181	771	—	—	6,952
Pass/Watch	16,828		303,723	250,777	70,086	3,652	13,434		2,010	660,510
Total construction	$	16,828	303,723	250,777	70,086	9,833	14,205	—	2,010	667,462

Residential (1)
Special mention	$	—	—	—	—	—	936	—	—	936
Substandard	—		—	—	—	—	1,768	—	—	1,768
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	—	—	2,704	—	—	2,704
Pass/Watch	74,488		143,683	203,069	200,617	90,630	452,379	—	—	1,164,866
Total residential	$	74,488	143,683	203,069	200,617	90,630	455,083	—	—	1,167,570

Total Mortgage
Special mention	$	—	—	—	2,693	12,913	40,915	4,985	—	61,506
Substandard	—		—	—	804	1,097	13,355	1,086	—	16,342
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	3,497	14,010	54,270	6,071	—	77,848
Pass/Watch	711,220		1,519,753	1,347,714	1,072,557	830,458	2,348,647	92,235	35,738	7,958,322
Total Mortgage	$	711,220	1,519,753	1,347,714	1,076,054	844,468	2,402,917	98,306	35,738	8,036,170

Commercial
Special mention	$	—	—	—	2,973	50	17,034	7,640	—	27,697
Substandard	—		—	28,166	9,504	1,783	9,797	23,178	524	72,952
Doubtful	—		—	—	1,903	—	—	—	—	1,903
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	28,166	14,380	1,833	26,831	30,818	524	102,552
Pass/Watch	183,378		370,615	294,012	142,654	149,952	525,453	495,841	75,623	2,237,528
Total commercial	$	183,378	370,615	322,178	157,034	151,785	552,284	526,659	76,147	2,340,080

Consumer (1)
Special mention	$	—	—	2	—	—	102	63	—	167
Substandard	—		—	—	—	—	4	400	90	494
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—

Total criticized and classified	—		—	2	—	—	106	463	90	661
Pass/Watch	23,096		27,445	19,110	3,464	14,940	89,132	111,567	13,354	302,108
Total consumer	$	23,096	27,445	19,112	3,464	14,940	89,238	112,030	13,444	302,769

Total Loans
Special mention	$	—	—	2	5,666	12,963	58,051	12,688	—	89,370
Substandard	—		—	28,166	10,308	2,880	23,156	24,664	614	89,788
Doubtful	—		—	—	1,903	—	—	—	—	1,903


	Gross Loans Held for Investment by Year of Origination at September 30, 2023
	2023		2022	2021	2020	2019	Prior to 2019	Revolving Loans	Revolving loans to term loans	Total Loans

Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	28,168	17,877	15,843	81,207	37,352	614	181,061
Pass/Watch	917,694		1,917,813	1,660,836	1,218,675	995,350	2,963,232	699,643	124,715	10,497,958
Total gross loans	$	917,694	1,917,813	1,689,004	1,236,552	1,011,193	3,044,439	736,995	125,329	10,679,019

(1) For residential and consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.


	Gross Loans Held for Investment by Year of Origination at December 31, 2022
	2022		2021	2020	2019	2018	Prior to 2018	Revolving Loans	Revolving loans to term loans	Total Loans
Commercial Mortgage
Special mention	$	—	—	3,071	26,809	52,509	14,740	—	—	97,129
Substandard	—		—	—	—	18,020	11,774	434	—	30,228
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	3,071	26,809	70,529	26,514	434	—	127,357
Pass/Watch	951,367		630,584	567,448	546,474	218,620	1,164,854	94,716	14,765	4,188,828
Total commercial mortgage	$	951,367	630,584	570,519	573,283	289,149	1,191,368	95,150	14,765	4,316,185

Multi-family
Special mention	$	—	—	—	—	—	9,730	—	—	9,730
Substandard	—		—	—	—	—	2,356	—	—	2,356
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	—	—	12,086	—	—	12,086
Pass/Watch	142,550		150,293	282,228	234,953	187,499	502,177	887	1,145	1,501,732
Total multi-family	$	142,550	150,293	282,228	234,953	187,499	514,263	887	1,145	1,513,818

Construction
Special mention	$	—	—	—	—	19,728	905	—	—	20,633
Substandard	—		—	—	2,197	777	—	—	—	2,974
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	2,197	20,505	905	—	—	23,607
Pass/Watch	168,674		362,542	103,067	38,639	16,917	62	—	1,986	691,887
Total construction	$	168,674	362,542	103,067	40,836	37,422	967	—	1,986	715,494

Residential (1)
Special mention	$	—	—	—	—	—	1,114	—	—	1,114


	Gross Loans Held for Investment by Year of Origination at December 31, 2022
	2022		2021	2020	2019	2018	Prior to 2018	Revolving Loans	Revolving loans to term loans	Total Loans
Substandard	—		—	—	—	264	4,417	—	—	4,681
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	—	264	5,531	—	—	5,795
Pass/Watch	151,077		212,697	211,445	95,872	58,226	442,586	—	—	1,171,903
Total residential	$	151,077	212,697	211,445	95,872	58,490	448,117	—	—	1,177,698

Total Mortgage
Special mention	$	—	—	3,071	26,809	72,237	26,489	—	—	128,606
Substandard	—		—	—	2,197	19,061	18,547	434	—	40,239
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	3,071	29,006	91,298	45,036	434	—	168,845
Pass/Watch	1,413,668		1,356,116	1,164,188	915,938	481,262	2,109,679	95,603	17,896	7,554,350
Total Mortgage	$	1,413,668	1,356,116	1,167,259	944,944	572,560	2,154,715	96,037	17,896	7,723,195

Commercial
Special mention	$	75	1,148	444	201	10,156	4,379	14,530	140	31,073
Substandard	—		7,605	10,230	4,391	3,561	13,734	7,604	364	47,489
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	75		8,753	10,674	4,592	13,717	18,113	22,134	504	78,562
Pass/Watch	377,662		320,334	162,175	161,150	87,396	522,798	492,717	30,876	2,155,108
Total commercial	$	377,737	329,087	172,849	165,742	101,113	540,911	514,851	31,380	2,233,670

Consumer (1)
Special mention	$	—	—	—	—	—	146	—	—	146
Substandard	—		—	8	—	109	332	209	—	658
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	8	—	109	478	209	—	804
Pass/Watch	30,132		20,671	2,909	16,682	16,156	88,173	115,777	13,476	303,976
Total consumer	$	30,132	20,671	2,917	16,682	16,265	88,651	115,986	13,476	304,780

Total Loans
Special mention	$	75	1,148	3,515	27,010	82,393	31,014	14,530	140	159,825
Substandard	—		7,605	10,238	6,588	22,731	32,613	8,247	364	88,386
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	75		8,753	13,753	33,598	105,124	63,627	22,777	504	248,211
Pass/Watch	1,821,462		1,697,121	1,329,272	1,093,770	584,814	2,720,650	704,097	62,248	10,013,434


	Gross Loans Held for Investment by Year of Origination at December 31, 2022
	2022		2021	2020	2019	2018	Prior to 2018	Revolving Loans	Revolving loans to term loans	Total Loans
Total gross loans	$	1,821,537	1,705,874	1,343,025	1,127,368	689,938	2,784,277	726,874	62,752	10,261,645

(1) For residential and consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.

Note 5. Deposits

Deposits at September 30, 2023 and December 31, 2022 are summarized as follows (in thousands):


	September 30, 2023		December 31, 2022
Savings	$	1,200,377	1,438,583
Money market	2,217,493		2,542,160
NOW	3,467,712		3,186,926
Non-interest bearing	2,187,696		2,643,919
Certificates of deposit	1,068,121		751,436
Total deposits	$	10,141,399	10,563,024

Note 6. Borrowed Funds

Borrowed funds at September 30, 2023 and December 31, 2022 are summarized as follows (in thousands):


	September 30, 2023		December 31, 2022
Securities sold under repurchase agreements	$	79,967	98,000
FHLB line of credit	400,000		486,000
FHLB advances	1,542,282		753,370

Total borrowed funds	$	2,022,249	1,337,370

At September 30, 2023, FHLB advances were at fixed rates and mature between October 2023 and September 2027, and at December 31, 2022, FHLB advances were at fixed rates with maturities between January 2023 and July 2025. These advances are secured by loans receivable ~~by credit quality risk rating indicator, excluding PCI loans,~~under a blanket collateral agreement.

Scheduled maturities of FHLB advances and overnight borrowings at September 30, 2023 are as follows (in thousands):


	2023
Due in one year or less	$	1,133,477
Due after one year through two years	501,360
Due after two years through three years	82,445
Due after three years through four years	225,000

Thereafter	—
Total FHLB advances and overnight borrowings	$	1,942,282

At September 30, 2017

Residential
Commercial
mortgage

Multi-
family

Construction
Total
mortgages

Commercial
Consumer
Total loans
Special mention
$ 3,525
19,437
16
—
22,978
26,156
1,080
50,214
Substandard
8,820
25,633
—
—
34,453
30,361
2,034
66,848
Doubtful
—
—
—
—
—
771
—
771
Loss
—
—
—
—
—
—
—
—
Total classified and criticized
12,345
45,070
16
—
57,431
57,288
3,114
117,833
Pass/Watch
1,144,966
1,977,506
1,334,968
324,692
4,782,132
1,651,554
478,148
6,911,834
Total
$ 1,157,311
2,022,576
1,334,984
324,692
4,839,563
1,708,842
481,262
7,029,667

At December 31, 2016

Residential
Commercial
mortgage

Multi-
family

Construction
Total
mortgages

Commercial
Consumer
Total loans
Special mention
$ 6,563
25,329
563
—
32,455
14,840
1,242
48,537
Substandard
12,021
23,011
553
2,517
38,102
47,255
2,940
88,297
Doubtful
—
—
—
—
—
—
—
—
Loss
—
—
—
—
—
—
—
—
Total classified and criticized
18,584
48,340
1,116
2,517
70,557
62,095
4,182
136,834
Pass/Watch
1,193,088
1,930,229
1,400,938
262,297
4,786,552
1,568,349
512,573
6,867,474
Total
$ 1,211,672
1,978,569
1,402,054
264,814
4,857,109
1,630,444
516,755
7,004,308

~~Note 4. Deposits~~

~~Deposits~~Scheduled maturities of securities sold under repurchase agreements at September 30, ~~2017~~ ~~and December 31, 2016~~2023 are ~~summarized~~ as follows (in thousands):


	2023
Due in one year or less	$	79,967




Thereafter	—
Total securities sold under repurchase agreements	$	79,967

The following tables set forth certain information as to borrowed funds for the periods ended September 30, 2023 and December 31, 2022 (in thousands):


	Maximum balance		Average balance	Weighted average interest rate
September 30, 2023
Securities sold under repurchase agreements	$	99,669	89,437	1.60	%
FHLB overnight borrowings	500,000		243,943	5.16
FHLB advances	1,588,245		1,223,239	3.04

December 31, 2022
Securities sold under repurchase agreements	$	125,506	113,550	0.38	%
FHLB overnight borrowings	486,000		139,012	3.32
FHLB advances	753,370		503,713	0.85

Securities sold under repurchase agreements include arrangements with deposit customers of the Bank to sweep funds into short-term borrowings. The Bank uses available for sale debt securities to pledge as collateral for the repurchase agreements.

At September 30, 2023 and December 31, 2022, available for sale debt securities pledged as collateral for repurchase agreements totaled $89.5 million and $116.5 million, respectively.

Interest expense on borrowings for the three and nine months ended September 30, 2023 amounted to $16.8 million and $38.3 million, respectively. Interest expense on borrowings for the three and nine months ended September 30, 2022 amounted to $2.5 million and $4.8 million, respectively.

September 30, 2017 December 31, 2016
Savings $ 1,083,215
1,099,020
Money market 1,539,064
1,582,750
NOW 1,972,220
1,871,298
Non-interest bearing 1,368,849
1,349,378
Certificates of deposit 627,868
651,183
Total deposits $ 6,591,216
6,553,629

Note 5.7. Components of Net Periodic Benefit Cost

The Bank has a noncontributory defined benefit pension plan covering its full-time employees who had attained age 21 with at least one year of service as of April 1, 2003. The pension plan was frozen on April 1, 2003. All participants in the Plan are 100% vested. The pension plan’s assets are invested in investment funds and group annuity contracts currently managed by the Principal Financial Group and Allmerica Financial.

In addition to pension benefits, certain health care and life insurance benefits are currently made available to certain of the Bank’s retired employees. The costs of such benefits are accrued based on actuarial assumptions from the date of hire to the date the employee is fully eligible to receive the benefits. Effective January 1, 2003, eligibility for retiree health care benefits was frozen as to new entrants, and benefits were eliminated for employees with less than ten years of service as of December 31, 2002. Effective January 1, 2007, eligibility for retiree life insurance benefits was frozen as to new entrants and retiree life insurance benefits were eliminated for employees with less than ten years of service as of December 31, 2006.

Net periodic ~~(increase)~~(benefit) increase cost for pension benefits and other post-retirement benefits for the three and nine months ended September 30, 2023 and 2022 includes the following components (in thousands):


	Three months ended September 30,					Nine months ended September 30,
	Pension benefits			Other post-retirement benefits		Pension benefits			Other post-retirement benefits
	2023		2022	2023	2022	2023		2022	2023	2022
Service cost	$	—	—	3	7	$	—	—	9	21
Interest cost	302		214	150	111	906		642	450	333
Expected return on plan assets	(706)		(864)	—	—	(2,118)		(2,592)	—	—
Amortization of prior service cost	—		—	—	—	—		—	—	—
Amortization of the net loss (gain)	177		—	(532)	(326)	531		—	(1,598)	(978)
Net periodic (decrease) increase in benefit cost	$	(227)	(650)	(379)	(208)	$	(681)	(1,950)	(1,139)	(624)

In its consolidated financial statements for the year ended December 31, 2022, the Company previously disclosed that it does not expect to contribute to the pension plan in 2023. As of September 30, 2023, no contributions have been made to the pension plan.

The changes in net periodic benefit cost for pension benefits and other post-retirement benefits for the three and nine months ended September 30, ~~2017 and 2016 includes the following components (in thousands):~~

Three months ended September 30,
Nine months ended September 30,

Pension
benefits

Other post-
retirement
benefits

Pension
benefits

Other post-
retirement
benefits

2017
2016
2017
2016
2017
2016
2017
2016
Service cost
$ —
—
26
37
$ —
—
78
112
Interest cost
306
312
218
285
920
936
654
854
Expected return on plan assets
(637 ) (612 ) —
—
(1,913 ) (1,836 ) —
—
Amortization of prior service cost
—
—
—
—
—
—
—
—
Amortization of the net loss
230
236
(169 ) —
690
708
(507 ) —
Net periodic (increase) benefit cost
$ (101 ) (64 ) 75
322
$ (303 ) (192 ) 225
966

In its consolidated financial statements for the year ended December 31, 2016, the Company previously disclosed that it does not expect to contribute to the pension plan in 2017. As of September 30, 2017, no contributions have been made to the pension plan.

~~The net periodic (increase) benefit cost for pension benefits and other post-retirement benefits for the three and nine months ended September 30, 2017~~2023 were calculated using the ~~actual~~ January 1, ~~2017~~2023 pension and other post-retirement benefits actuarial valuations.

Note 6.8. Impact of Recent Accounting Pronouncements

Accounting Pronouncements Adopted This Year

In ~~August 2017,~~March 2022, the Financial Accounting Standards Board ~~(“FASB”~~("FASB") issued Accounting Standards Update ("ASU") ~~2017-12,~~2022-02, "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures," whichaddresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancing and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, ASU 2022-02 was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption was permitted if an entity had adopted ASU 2016-13. The Company adopted this ASU on January 1, 2023 using the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be recorded with previously applicable GAAP. The Company recorded a $594,000 reduction to the allowance for credit losses, which resulted in a $433,000 cumulative effect adjustment increase, net of tax, to retained earnings.

In March 2022, the FASB issued Accounting Standards Update (ASU) 2022-01, Derivatives and ~~Hedging: Targeted Improvements to Accounting for~~ Hedging ~~Activities (ASU 2017-12)~~(Topic 815): Fair Value Hedging – Portfolio Layer Method. The purpose of this updated guidance is to ~~better~~further align ~~a company’s financial reporting~~risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for ~~hedging activities with the economic objectives of those activities.~~Hedging Activities. ASU ~~2017-12~~2022-01 is effective for public business entities for fiscal years beginning after December 15, ~~2018,~~2022, with early adoption ~~including adoption~~ in anthe interim period permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company ~~is currently assessing~~adopted this standard on January 1, 2023 on a prospective basis, with no impact to the ~~impact that the guidance will have on the Company’s~~ consolidated financial statements.

In ~~May 2017,~~March 2020, the FASB issued ASU ~~2017-09, “Compensation-Stock Compensation~~2020-04, "Reference Rate Reform (Topic ~~718): Scope~~848)," which provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of ~~Modification Accounting”. This update~~reference rate reform and that meet certain scope guidance: (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered "minor" so that any existing unamortized origination fees/costs would carry forward and continue to be amortized; and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or re-measurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides ~~guidance about changes to terms or conditions of a share-based payment award which would require modification~~numerous optional expedients for derivative accounting. In particular, an entity is required to account for the effects of a modification if the fair value, vesting condition or the equity/liability classification of the modified award is not the same immediately before and after a change to the terms and conditions of the award. ASU 2017-09 is effective on a prospective basis for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company does not expect ASU 2017-09 to have a significant impact on the Company's consolidated financial statements.

~~In March 2017,~~addition, in January 2021, the FASB issued ASU ~~2017-08, “Receivables - Nonrefundable Fees~~No. 2021-01 “Reference Rate Reform — Scope,” which clarified the scope of ASC 848 relating to contract modifications. The Company has reviewed all of its LIBOR-based products and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This ASU shortens the amortization period for premiums on callable debt securities by requiring that premiumsall products have been adjusted to another index or are scheduled to be ~~amortized~~adjusted at their next repricing, as LIBOR ceased to be published after June 30,

2023. The Company adjusted its processes and procedures related to the ~~first (or earliest) call date instead of as an adjustment~~amendments and it did not have a material impact to the ~~yield over the contractual life. This change more closely aligns the accounting with the economics of a callable debt security~~Company’s financial position and the amortization period with expectations that already are included in market pricing on callable debt securities. This ASU does not change the accounting for discounts on callable debt securities, which will continue to be amortized to the maturity date. This guidance includes only instruments that are held at a premiumresults and have explicit call features. It does not include instruments that contain prepayment features, such as mortgage backed securities; nor does it include call options that are contingent upon future events or in which the timing or amount to be paid is not fixed. The effective date for this ASU is fiscal years beginning after December 15, 2018, including interim periods within the reporting period, with early adoption permitted. Transition is on aoperations.

modified retrospective basis with an adjustment to retained earnings as of the beginning of the period of adoption. If early adopted in an interim period, adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Note 9. Contingencies

The Company is ~~currently assessing~~involved in various litigation and claims arising in the ~~impact~~normal course of business. Liabilities for loss contingencies arising from such litigation and claims are recorded when it is probable that ~~the guidance will have on the Company’s consolidated financial statements.~~

~~In March 2017, the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost~~a liability has been incurred and Net Periodic Post-retirement Benefit Cost", which requires that companies disaggregate the service cost component from other components of net benefit cost. This update calls for companies that offer post-retirement benefits to present the service cost, which is the amount ~~an employer has to set aside each quarter or fiscal year to cover the benefits,~~can be reasonably estimated.

On May 2, 2022, a purported class action complaint was filed against Provident Bank in the ~~same line item with~~Superior Court of New Jersey, which alleges that Provident wrongfully assessed overdraft fees related to debit card transactions. The complaint asserts claims for breach of contract and breach of the covenant of good faith and fair dealing as well as an alleged violation of the New Jersey Consumer Fraud Act. Plaintiff seeks to represent a proposed class of all Provident Bank checking account customers who were charged overdraft fees on transactions that were authorized into a positive available balance. Plaintiff seeks unspecified damages, costs, attorneys’ fees, pre-judgment interest, an injunction, and other ~~current employee compensation costs. Other components of net benefit cost will be presented in~~relief as the ~~income statement separately from~~Court deems proper for the ~~service cost component~~plaintiff and ~~outside~~ the ~~subtotal of income from operations, if one~~proposed class. Provident Bank denies the allegations and is ~~presented. ASU 2017-07 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.~~vigorously defending the matter. The ~~Company does not expect ASU 2017-07 to have a significant impact~~parties had an initial mediation meeting on October 20, 2023, and the ~~Company's consolidated financial statements.~~matter remains pending.

~~In January 2017,~~Although we are vigorously defending the ~~FASB issued ASU 2017-04, “Simplifying~~litigation, the ~~Test for Goodwill Impairment.” The main objective~~ultimate outcome of this ~~ASU~~litigation described in this section, such as whether the likelihood of loss is ~~to simplify~~remote, reasonably possible, or probable, or if and when the ~~accounting~~reasonably possible range of loss is estimable, is inherently uncertain. Therefore, if this matter was resolved against us, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be adversely affected.

Note 10. Allowance for goodwill impairment by requiring that impairment charges be based upon the first step in the current two-step impairment test under Accounting Standards Codification (ASC) 350. Currently, if the fair value of a reporting unit is lower than its carrying amount (Step 1), an entity calculates any impairment charge by comparing the implied fair value of goodwill with its carrying amount (Step 2). The implied fair value of goodwill is calculated by deducting the fair value of all assets and liabilities of the reporting unit from the reporting unit’s fair value as determined in Step 1. To determine the implied fair value of goodwill, entities estimate the fair value of any unrecognized intangible assets and any corporate-level assets or liabilities that were included in the determination of the carrying amount and fair value of the reporting unit in Step 1. Under ASU 2017-04, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. This standard eliminates the requirement to calculate a goodwill impairment charge using Step 2. ASU 2017-04 does not change the guidance on completing Step 1 of the goodwill impairment test. Under ASU 2017-04, an entity will still be able to perform the current optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company does not expect ASU 2017-04 to have a significant impact on the Company's consolidated financial statements.

~~In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash~~ ~~Receipts and Cash Payments," a new standard which addresses diversity in practice related to eight specific cash flow issues:~~ debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies), distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities will apply the standard’s provisions using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

~~In June 2016, the FASB issued ASU 2016-13, “Measurement of~~ Credit Losses on ~~Financial Instruments.” The main objective of this ASU is~~Off-Balance Sheet Credit Exposures

Management analyzes the Company's exposure to ~~provide financial statement users with more decision-useful information about the expected~~ credit losses for both on-balance sheet and off-balance sheet activity using a consistent methodology for the quantitative framework as well as the qualitative framework. For purposes of estimating the allowance for credit losses for off-balance sheet credit exposures, the exposure that may default includes an estimated drawdown of unused credit based on ~~financial instruments by~~historical credit utilization factors and current loss factors.

For the three and nine months ended September 30, 2023, the Company recorded a ~~reporting entity at each reporting date.~~$1.5 million and a $1.6 million provision for credit losses for off-balance sheet credit exposures, respectively. For the three and nine months ended September 30, 2022, the Company recorded a $1.6 million provision for credit losses for off-balance sheet credit exposures and a $1.8 million provision benefit for credit losses for off-balance sheet credit exposures, respectively. The ~~amendments~~$43,000 decrease in ~~this ASU require financial assets measured at amortized cost~~the provision for the three months ended September 30, 2023, compared to ~~be presented at~~ the ~~net amount expected~~same period in 2022, was primarily the result of the period-over-period relative change in line of credit utilization. The $3.4 million increase in the provision for the nine months ended September 30, 2023, compared to ~~be collected.~~ the nine months ended September 30, 2022, was primarily the result of the period-over-period relative change in line of credit utilization and an increase in loans approved and awaiting closing.

The allowance for credit losses ~~would represent a valuation account that would be deducted from the amortized cost basis of the financial asset(s) to present the net carrying value~~for off-balance sheet credit exposures was $4.8 million at ~~the amount expected to be collected~~September 30, 2023 and $3.2 million at December 31, 2022, and are included in other liabilities on the financial asset. The income statement would reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses would be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity will be required to use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The amendments in ASU 2016-13 are effective for fiscal years, including interim periods, beginning after December 15, 2019. Early adoption of this ASU is permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the potential impact of ASU 2016-13 on the consolidated financial statements. In that regard, the Company has formed a cross-functional working group, under the direction of the Chief Credit Officer, Chief Financial Officer and Chief Risk Officer. The working group is comprised of individuals from various functional areas including credit, risk management, finance and information technology, among others. The Company is currently developing an implementation plan

to include assessment of processes, portfolio segmentation, model development, system requirements and the identification of data and resource needs, among other things. Also, the Company is currently evaluating third-party vendor solutions to assist us in the application of the ASU 2016-13. The adoption of the ASU 2016-13 may result in an increase in the allowance for loan losses as a result of changing from an "incurred loss" model, which encompasses allowances for current known and inherent losses within the portfolio, to an "expected loss" model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13 will necessitate establishing an allowance for expected credit losses on debt securities. The Company is currently unable to reasonably estimate the impact of adopting ASU 2016-13, it is expected that the impact of adoption will be significantly influenced by the composition, characteristics and quality of our loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842).” This ASU requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact that the guidance will have on the Company's consolidated financial statements.

~~In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement~~Consolidated Statements of Financial Assets and Liabilities." This ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This amendment supersedes the guidance to classify equity securities with readily determinable fair values into different categories, requires equity securities, except equity method investments, to be measured at fair value with changes in the fair value recognized through net income, and simplifies the impairment assessment of equity investments without readily determinable fair values. The amendment requires public business entities that are required to disclose the fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion. The amendment requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option. The amendment requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendment reduces diversity in current practice by clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which should be applied prospectively to equity investments that exist as of the date of adoption. The Company is currently evaluating the impact that the guidance will have on the Company's consolidated financial statements.Condition.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The objective of this amendment is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. This update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are in the scope of other standards. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2017, and early adoption is permitted. Subsequently, the FASB issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations;” ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing;” ASU 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting;” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.” These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Company's revenue is comprised of net interest income on interest earning assets and liabilities and non-interest income. The scope of guidance explicitly excludes net interest income as well as other revenues associated with financial assets and liabilities, including loans, leases, securities and derivatives. Accordingly, the majority of the Company's revenues will not be affected. The Company has formed a working group to guide implementation efforts including the identification of revenue within the scope of the guidance, as well as the evaluation of revenue contracts and the respective performance obligations within those contracts. While the Company has not identified any material changes related to the timing or amount of revenue recognition, the Company will continue to evaluate disaggregation for significant categories of revenue in the scope of the guidance and the need for additional disclosures. The Company will adopt the standard in the first quarter of 2018 with a cumulative effect adjustment to opening retained earnings, if such adjustment is deemed to be significant.

Note 7.11. Fair Value Measurements

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. Where quoted market values in an active market are not readily available, ~~the Company~~management utilizes various valuation techniques to estimate fair value.

Fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. However, in many instances fair value estimates may not be substantiated by comparison to independent markets and may not be realized in an immediate sale of the financial instrument.

GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:



Level 1:						Unadjusted quoted market prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2:						Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3:						Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The valuation techniques are based upon the unpaid principal balance only, and exclude any accrued interest or dividends at the measurement date. Interest income and expense and dividend income are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The valuation techniques described below were used to measure fair value of financial instruments in the table below on a recurring basis as of September 30, ~~2017~~2023 and December 31, ~~2016.~~2022.

~~Securities~~ Available for Sale Debt Securities, at Fair Value

For ~~securities~~ available for sale debt securities, fair value was estimated using a market approach. The majority of the Company’s securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third-party data service providers or dealer market participants with ~~which~~whom the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to benchmark or to comparable securities. The Company evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. As ~~the Company~~management is responsible for the determination of fair value, it performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, ~~the Company~~management compares the prices received from the pricing service to a secondary pricing source. Additionally, ~~the Company~~management compares changes in the reported market values and returns to relevant market indices to test the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has generally not ~~historically~~ resulted in an adjustment in the prices obtained from the pricing service.

Equity Securities, at Fair Value

The Company ~~also may hold~~holds equity securities ~~and debt instruments issued by the U.S. government and U.S. government-sponsored agencies~~ that are traded in active markets with readily accessible quoted market prices that are considered Level 1 inputs.

Derivatives

The Company records all derivatives on the ~~statement~~statements of financial condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. The Company has interest rate derivatives resulting from a service provided to certain qualified borrowers in a loan related transaction ~~and,~~which, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. As such, all changes in fair value of the Company’s derivatives are recognized directly in earnings.

The Company also uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges, and which satisfy hedge accounting requirements, involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. These derivatives were used to hedge the variable cash outflows associated with FHLBNY ~~borrowings.~~borrowings and brokered demand deposits. The ~~effective portion of changes~~change in the fair value of these derivatives ~~are~~is recorded in accumulated other comprehensive income (loss), and ~~are~~is subsequently reclassified into earnings in the period that the ~~hedged~~ forecasted ~~transaction affects earnings. The ineffective portion of the change in fair value of these derivatives are recognized directly in~~transactions affect earnings.

The fair value of the Company's derivatives ~~are~~is determined using discounted cash flow analysis using observable market-based inputs, which are considered Level 2 inputs.

Assets Measured at Fair Value on a Non-Recurring Basis

The valuation techniques described below were used to estimate fair value of financial instruments measured on a non-recurring basis as of September 30, ~~2017~~2023 and December 31, ~~2016.~~2022.

~~Collateral Dependent~~Collateral-Dependent Impaired Loans

For loans measured for impairment based on the fair value of the underlying collateral, fair value was estimated using a market approach. The Company measures the fair value of collateral underlying impaired loans primarily through obtaining independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments, on an individual case-by-case basis, to comparable assets based on the appraisers’ market knowledge and experience, as well as adjustments for estimated costs to sell between 5% and 10%. ~~The Company~~Management classifies these loans as Level 3 within the fair value hierarchy.

Foreclosed Assets

Assets acquired through foreclosure or deed in lieu of foreclosure are carried at fair value, less estimated selling costs, which range between 5% and 10%. Fair value is generally based on independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments, on an individual case basis, to comparable assets based on the appraisers’ market knowledge and experience, and are classified as Level 3. When an asset is acquired, the excess of the loan balance over fair value less estimated selling costs is charged to the allowance for ~~loan~~credit losses. A reserve for foreclosed assets may be established to provide for possible write-downs and selling costs that occur subsequent to foreclosure. Foreclosed assets are carried net of the related reserve. Operating results from real estate owned, including rental income, operating expenses, and gains and losses realized from the sales of real estate owned, are recorded as incurred.

There were no changes to the valuation techniques for fair value measurements as of September 30, ~~2017 and~~2023 or December 31, ~~2016.~~2022.

The following tables present the assets and liabilities reported on the consolidated statements of financial condition at their fair values as of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, by level within the fair value ~~hierarchy:~~hierarchy (in thousands):


	Fair Value Measurements at Reporting Date Using:
	September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Available for sale debt securities:
U.S. Treasury obligations	$	245,327	245,327	—	—
Agency obligations	28,248		—	28,248	—
Mortgage-backed securities	1,263,144		—	1,263,144	—
Asset-backed securities	33,514		—	33,514	—
State and municipal obligations	52,040		—	52,040	—
Corporate obligations	34,032		—	34,032	—
Total available for sale debt securities	1,656,305		245,327	1,410,978	—
Equity securities	1,210		1,210	—	—
Derivative assets	151,103		—	151,103	—
	$	1,808,618	246,537	1,562,081	—

Derivative liabilities	$	129,271	—	129,271	—

Measured on a non-recurring basis:
Loans measured for impairment based on the fair value of the underlying collateral	$	7,017	—	—	7,017
Foreclosed assets	16,487		—	—	16,487
	$	23,504	—	—	23,504

Fair Value Measurements at Reporting Date Using:
(In thousands)
September 30, 2017
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs (Level 3)
Measured on a recurring basis:

Securities available for sale:

U.S. Treasury obligations $ 5,994
5,994
—
—
Agency obligations
28,035
28,035
—
—
Mortgage-backed securities
968,412
—
968,412
—
State and municipal obligations
3,807
—
3,807
—
Corporate obligations 21,459
—
21,459
—
Equity securities
598
598
—
—
Total securities available for sale
1,028,305
34,627
993,678
—
Derivative assets 8,035
—
8,035
—
$ 1,036,340
34,627
1,001,713
—

Derivative liabilities $ 7,595
—
7,595
—

Measured on a non-recurring basis:

Loans measured for impairment based on the fair value of the underlying collateral
$ 5,525
—
—
5,525
Foreclosed assets
5,703
—
—
5,703

$ 11,228
—
—
11,228


							Fair Value Measurements at Reporting Date Using:
	Fair Value Measurements at Reporting Date Using:						December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
(In thousands)	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:						Measured on a recurring basis:
Securities available for sale:
Available for sale debt securities:						Available for sale debt securities:
U.S. Treasury obligations	$	8,008	8,008	—	—	U.S. Treasury obligations	$	245,816	245,816	—	—
Agency obligations	57,188		57,188	—	—

Mortgage-backed securities	951,861		—	951,861	—	Mortgage-backed securities	1,427,139		—	1,427,139	—
Asset-backed securities						Asset-backed securities	37,621		—	37,621	—
State and municipal obligations	3,743		—	3,743	—	State and municipal obligations	56,864		—	56,864	—
Corporate obligations	19,037		—	19,037	—	Corporate obligations	36,108		—	36,108	—
Equity securities	549		549	—	—
Total securities available for sale	$	1,040,386	65,745	974,641	—
Total available for sale debt securities						Total available for sale debt securities	1,803,548		245,816	1,557,732	—
Equity Securities						Equity Securities	1,147		1,147	—	—
Derivative assets	7,441		—	7,441	—	Derivative assets	148,151		—	148,151	—
	$	1,047,827	65,745	982,082	—		$	1,952,846	246,963	1,705,883	—

Derivative liabilities	$	6,750	—	6,750	—	Derivative liabilities	$	120,896	—	120,896	—

Measured on a non-recurring basis:						Measured on a non-recurring basis:
Loans measured for impairment based on the fair value of the underlying collateral	$	11,001	—	—	11,001	Loans measured for impairment based on the fair value of the underlying collateral	$	23,988	—	—	23,988
Foreclosed assets	7,991		—	—	7,991	Foreclosed assets	2,124		—	—	2,124
	$	18,992	—	—	18,992		$	26,112	—	—	26,112

There were no transfers ~~between Level 1, Level 2 and~~into or out of Level 3 during the three and nine months ended September 30, ~~2017.~~2023.

Other Fair Value Disclosures

The Company is required to disclose estimated fair value of financial instruments, both assets and liabilities onon- and ~~off~~off- the balance sheet, for which it is practicable to estimate fair value. The following is a description of valuation methodologies used for those assets and liabilities.

Cash and Cash Equivalents

For cash and due from banks, federal funds sold and short-term investments, the carrying amount approximates fair value. At September 30, 2023 and December 31, 2022, $70,000 was included in cash and cash equivalents, representing cash collateral pledged to secure loan level swaps, risk participation agreements and reserves required by banking regulations.

~~Investment Securities~~ Held to Maturity Debt Securities

For ~~investment securities~~ held to maturity debt securities, fair value was estimated using a market approach. The majority of the Company’s securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third party data service providers or dealer market participants with ~~which~~whom the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input, is a mathematical technique used principally to value certain securities to benchmark orto comparable securities. ~~The Company~~Management evaluates the quality of Level 2 matrix pricing through comparison to similar assets with greater liquidity and evaluation of projected cash flows. As ~~the Company~~management is responsible for the determination of fair value, it performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, ~~the Company~~management compares the prices received from the pricing service to a secondary pricing source. Additionally, ~~the Company~~management compares changes in the reported market values and returns to relevant market indices to test the reasonableness of the reported prices. The Company’s internal price verification procedures and review of fair value methodology documentation provided by independent pricing services has generally not ~~historically~~ resulted in adjustment in the prices obtained from the pricing service. The Company also holds debt instruments issued by the U.S. government and U.S. government agencies that are traded in active markets with readily accessible quoted market prices that are considered Level 1 within the fair value hierarchy.

Federal Home Loan Bank of New York ("FHLBNY") Stock

The carrying value of FHLBNY stock ~~was~~is its cost. The fair value of FHLBNY stock is based on redemption at par value. The Company classifies the estimated fair value as Level 1 within the fair value hierarchy.

Loans

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial mortgage, residential mortgage, commercial, construction and consumer. Each loan category is further segmented into fixed and ~~adjustable rate~~adjustable-rate interest terms and into performing and non-performing categories. The fair value of performing loans was estimated using a combination of techniques, including a discounted cash flow model that utilizes a discount rate that reflects the Company’s current pricing for loans with similar characteristics and remaining maturity, adjusted by an amount for estimated credit losses inherent in the portfolio at the balance sheet ~~date.~~date (i.e. exit pricing). The rates take into account the expected yield curve, as well as an adjustment for prepayment risk, when applicable. The Company classifies the estimated fair value of its loan portfolio as Level 3.

The fair value for significant non-performing loans was based on recent external appraisals of collateral securing such loans, adjusted for the timing of anticipated cash flows. The Company classifies the estimated fair value of its non-performing loan portfolio as Level 3.

Deposits

The fair value of deposits with no stated maturity, such as non-interest bearing demand deposits and savings deposits, was equal to the amount payable on demand and classified as Level 1. The estimated fair value of certificates of deposit was based on the discounted value of contractual cash flows. The discount rate was estimated using the Company’s current rates offered for deposits with similar remaining maturities. The Company classifies the estimated fair value of its certificates of deposit portfolio as Level 2.

Borrowed Funds

The fair value of borrowed funds was estimated by discounting future cash flows using rates available for debt with similar terms and maturities and is classified by the Company as Level 2 within the fair value hierarchy.

Commitments to Extend Credit and Letters of Credit

The fair value of commitments to extend credit and letters of credit was estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The Company classifies these commitments as Level 3 within the fair value ~~estimates of commitments to extend credit and letters of credit are deemed immaterial.~~hierarchy.

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.

Significant assets and liabilities that are not considered financial assets or liabilities include goodwill and other intangibles, deferred tax assets and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The following tables present the Company’s financial instruments at their carrying and fair values as of September 30, ~~2017~~2023 and December 31, ~~2016.~~2022. Fair values are presented by level within the fair value hierarchy.


			Fair Value Measurements at September 30, 2017 Using:							Fair Value Measurements at September 30, 2023 Using:
(Dollars in thousands)	Carrying value		Fair value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	(Dollars in thousands)	Carrying value		Fair value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets:							Financial assets:
Cash and cash equivalents	$	148,783	148,783	148,783	—	—	Cash and cash equivalents	$	189,269	189,269	189,269	—	—
Securities available for sale:
Available for sale debt securities:							Available for sale debt securities:
U.S. Treasury obligations	5,994		5,994	5,994	—	—	U.S. Treasury obligations	245,327		245,327	245,327	—	—
Agency obligations	28,035		28,035	28,035	—	—	Agency obligations	28,248		28,248	—	28,248	—
Mortgage-backed securities	968,412		968,412	—	968,412	—	Mortgage-backed securities	1,263,144		1,263,144	—	1,263,144	—
Asset-backed securities							Asset-backed securities	33,514		33,514	—	33,514	—
State and municipal obligations	3,807		3,807	—	3,807	—	State and municipal obligations	52,040		52,040	—	52,040	—
Corporate obligations	21,459		21,459	—	21,459	—	Corporate obligations	34,032		34,032	—	34,032	—
Equity securities	598		598	598	—	—
Total securities available for sale	$	1,028,305	1,028,305	34,627	993,678	—
Investment securities held to maturity:
Total available for sale debt securities							Total available for sale debt securities	$	1,656,305	1,656,305	245,327	1,410,978	—
Held to maturity debt securities, net of allowance for credit losses:							Held to maturity debt securities, net of allowance for credit losses:
U.S. Treasury obligations							U.S. Treasury obligations	1,135		1,135	1,135	—	—
Agency obligations	4,307		4,252	4,252	—	—	Agency obligations	12,098		11,201	11,201	—	—
Mortgage-backed securities	475		492	—	492	—

State and municipal obligations	467,113		475,759	—	475,759	—	State and municipal obligations	348,466		322,590	—	322,590	—
Corporate obligations	9,950		9,922	—	9,922	—	Corporate obligations	8,717		8,156	—	8,156	—
Total securities held to maturity	$	481,845	490,425	4,252	486,173	—
Total held to maturity debt securities, net of allowance for credit losses							Total held to maturity debt securities, net of allowance for credit losses	$	370,416	343,082	12,336	330,746	—
FHLBNY stock	70,896		70,896	70,896	—	—	FHLBNY stock	101,250		101,250	101,250	—	—
Loans, net of allowance for loan losses	6,967,776		6,955,183	—	—	6,955,183
Equity Securities							Equity Securities	1,210		1,210	1,210	—	—
Loans, net of allowance for credit losses							Loans, net of allowance for credit losses	10,560,049		10,025,286	—	—	10,025,286
Derivative assets	8,035		8,035	—	8,035	—	Derivative assets	151,103		151,103	—	151,103	—

Financial liabilities:							Financial liabilities:
Deposits other than certificates of deposits	$	5,963,348	5,963,348	5,963,348	—	—	Deposits other than certificates of deposits	$	9,073,278	9,073,278	9,073,278	—	—
Certificates of deposit	627,868		628,523	—	628,523	—	Certificates of deposit	1,068,121		1,065,195	—	1,065,195	—
Total deposits	$	6,591,216	6,591,871	5,963,348	628,523	—	Total deposits	$	10,141,399	10,138,473	9,073,278	1,065,195	—
Borrowings	1,525,560		1,530,444	—	1,530,444	—	Borrowings	2,022,249		2,003,575	—	2,003,575	—
Subordinated debentures							Subordinated debentures	10,646		9,166	—	9,166	—
Derivative liabilities	7,595		7,595	—	7,595	—	Derivative liabilities	129,271		129,271	—	129,271	—


			Fair Value Measurements at December 31, 2016 Using:							Fair Value Measurements at December 31, 2022 Using:
(Dollars in thousands)	Carrying value		Fair value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	(Dollars in thousands)	Carrying value		Fair value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets:							Financial assets:
Cash and cash equivalents	$	144,297	144,297	144,297	—	—	Cash and cash equivalents	$	186,508	186,508	186,508	—	—
Securities available for sale:
Available for sale debt securities:							Available for sale debt securities:
U.S. Treasury obligations	8,008		8,008	8,008	—	—	U.S. Treasury obligations	245,816		245,816	245,816	—	—
Agency obligations	57,188		57,188	57,188	—	—

Mortgage-backed securities	951,861		951,861	—	951,861	—	Mortgage-backed securities	1,427,139		1,427,139	—	1,427,139	—
Asset-backed securities							Asset-backed securities	37,621		37,621	—	37,621	—
State and municipal obligations	3,743		3,743	—	3,743	—	State and municipal obligations	56,864		56,864	—	56,864	—
Corporate obligations	19,037		19,037	—	19,037	—	Corporate obligations	36,108		36,108	—	36,108	—
Equity securities	549		549	549	—	—
Total securities available for sale	$	1,040,386	1,040,386	65,745	974,641	—
Investment securities held to maturity:
Total available for sale debt securities							Total available for sale debt securities	$	1,803,548	1,803,548	245,816	1,557,732	—
Held to maturity debt securities:							Held to maturity debt securities:

Agency obligations	$	4,306	4,225	4,225	—	—	Agency obligations	$	9,997	8,964	8,964	—	—
Mortgage-backed securities	893		924	—	924	—

State and municipal obligations	473,653		474,852	—	474,852	—	State and municipal obligations	366,146		353,417	—	353,417	—
Corporate obligations	9,331		9,286	—	9,286	—	Corporate obligations	11,780		11,087	—	11,087	—
Total securities held to maturity	$	488,183	489,287	4,225	485,062	—
Total held to maturity debt securities							Total held to maturity debt securities	$	387,923	373,468	8,964	364,504	—
FHLBNY stock	75,726		75,726	75,726	—	—	FHLBNY stock	68,554		68,554	68,554	—	—
Loans, net of allowance for loan losses	6,941,603		6,924,440	—	—	6,924,440
Equity Securities							Equity Securities	1,147		1,147	1,147	—	—
Loans, net of allowance for credit losses							Loans, net of allowance for credit losses	10,160,860		9,768,460	—	—	9,768,460
Derivative assets	7,441		7,441	—	7,441	—	Derivative assets	148,151		148,151	—	148,151	—

Financial liabilities:							Financial liabilities:
Deposits other than certificates of deposits	$	5,902,446	5,902,446	5,902,446	—	—	Deposits other than certificates of deposits	$	9,811,588	9,811,588	9,811,588	—	—
Certificates of deposit	651,183		653,772	—	653,772	—	Certificates of deposit	751,436		745,155	—	745,155	—
Total deposits	$	6,553,629	6,556,218	5,902,446	653,772	—	Total deposits	$	10,563,024	10,556,743	9,811,588	745,155	—
Borrowings	1,612,745		1,617,023	—	1,617,023	—	Borrowings	1,337,370		1,324,578	—	1,324,578	—
Subordinated debentures							Subordinated debentures	10,493		9,422	—	9,422	—
Derivative liabilities	6,750		6,750	—	6,750	—	Derivative liabilities	120,896		120,896	—	120,896	—

Note 8.12. Other Comprehensive (Loss) Income ~~(Loss)~~

The following table presents the components of other comprehensive ~~income~~ (loss), both gross and net of tax, for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (in thousands):


	Three months ended September 30,
	2023				2022
	Before Tax		Tax Effect	After Tax	Before Tax	Tax Effect	After Tax
Components of Other Comprehensive Income:
Unrealized gains and losses on available for sale debt securities:
Net unrealized (losses) arising during the period	$	(42,784)	11,560	(31,224)	(91,930)	24,637	(67,293)
Reclassification adjustment for gains included in net income	—		—	—	—	—	—
Total	(42,784)		11,560	(31,224)	(91,930)	24,637	(67,293)
Unrealized gains and losses on derivatives (cash flow hedges):
Net unrealized gains arising during the period	3,223		(871)	2,352	8,194	(2,196)	5,998
Reclassification adjustment for (gains) included in net income	(4,700)		1,270	(3,430)	(1,580)	423	(1,157)
Total	(1,477)		399	(1,078)	6,614	(1,773)	4,841
Amortization related to post-retirement obligations	(355)		94	(261)	(326)	90	(236)
Total other comprehensive (loss)	$	(44,616)	12,053	(32,563)	(85,642)	22,954	(62,688)


	Nine months ended September 30,
	2023				2022
	Before Tax		Tax Effect	After Tax	Before Tax	Tax Effect	After Tax
Components of Other Comprehensive Income:
Unrealized gains and losses on available for sale debt securities:
Net unrealized (losses) arising during the period	$	(34,271)	9,185	(25,086)	(270,488)	72,491	(197,997)
Reclassification adjustment for gains included in net income	—		—	—	(58)	16	(42)
Total	(34,271)		9,185	(25,086)	(270,546)	72,507	(198,039)
Unrealized gains and losses on derivatives (cash flow hedges):
Net unrealized gains arising during the period	7,380		(1,995)	5,385	24,898	(6,673)	18,225
Reclassification adjustment for (gains) included in net income	(13,043)		3,524	(9,519)	(1,077)	289	(788)
Total	(5,663)		1,529	(4,134)	23,821	(6,384)	17,437
Amortization related to post-retirement obligations	(1,067)		276	(791)	(978)	230	(748)
Total other comprehensive (loss)	$	(41,001)	10,990	(30,011)	(247,703)	66,353	(181,350)

Three months ended September 30,
2017 2016

Before
Tax

Tax
Effect

After
Tax

Before
Tax

Tax
Effect

After
Tax
Components of Other Comprehensive Income:
Unrealized gains and losses on securities available for sale:
Net gains (losses) arising during the period $ 799
(320 ) 479
(2,575 ) 1,034
(1,541 )
Reclassification adjustment for gains included in net income —
—
—
43
(17 ) 26
Total 799
(320 ) 479
(2,532 ) 1,017
(1,515 )
Unrealized gains on derivatives (cash flow hedges) 90
(36 ) 54
384
(154 ) 230
Amortization related to post-retirement obligations 61
(25 ) 36
236
(95 ) 141
Total other comprehensive income (loss) $ 950
(381 ) 569
(1,912 ) 768
(1,144 )

Nine months ended September 30,
2017 2016
Before
Tax Tax
Effect After
Tax Before
Tax Tax
Effect After
Tax
Components of Other Comprehensive Income:
Unrealized gains and losses on securities available for sale:
Net gains arising during the period $ 4,136
(1,658 ) 2,478
14,260
(5,727 ) 8,533
Reclassification adjustment for gains included in net income —
—
—
(54 ) 22
(32 )
Total 4,136
(1,658 ) 2,478
14,206
(5,705 ) 8,501
Unrealized gains (losses) on derivatives (cash flow hedges) 177
(71 ) 106
(603 ) 242
(361 )
Amortization related to post-retirement obligations 183
(78 ) 105
635
(255 ) 380
Total other comprehensive income $ 4,496
(1,807 ) 2,689
14,238
(5,718 ) 8,520

The following tables present the changes in the components of accumulated other comprehensive ~~income~~ (loss), net of tax, for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (in thousands):


	Changes in Accumulated Other Comprehensive (Loss) by Component, net of tax for the three months ended September 30,
	2023					2022
	Unrealized Losses on Available for Sale Debt Securities		Post- Retirement Obligations	Unrealized Gains on Derivatives (cash flow hedges)	Accumulated Other Comprehensive (Loss)	Unrealized Losses on Available for Sale Debt Securities	Post- Retirement Obligations	Unrealized Gains on Derivatives (cash flow hedges)	Accumulated Other Comprehensive (Loss)
Balance at June 30,	$	(180,476)	1,042	16,941	(162,493)	(130,957)	2,469	16,689	(111,799)
Current - period other comprehensive (loss)	(31,224)		(261)	(1,078)	(32,563)	(67,293)	(236)	4,841	(62,688)
Balance at September 30,	$	(211,700)	781	15,863	(195,056)	(198,250)	2,233	21,530	(174,487)


	Changes in Accumulated Other Comprehensive (Loss) by Component, net of tax for the nine months ended September 30,
	2023					2022
	Unrealized Losses on Available for Sale Debt Securities		Post- Retirement Obligations	Unrealized Gains on Derivatives (cash flow hedges)	Accumulated Other Comprehensive Income (Loss)	Unrealized Losses on Available for Sale Debt Securities	Post- Retirement Obligations	Unrealized Gains on Derivatives (cash flow hedges)	Accumulated Other Comprehensive Income (Loss)
Balance at December 31,	$	(186,614)	1,572	19,997	(165,045)	(211)	2,981	4,093	6,863
Current - period other comprehensive income (loss)	(25,086)		(791)	(4,134)	(30,011)	(198,039)	(748)	17,437	(181,350)

Balance at September 30,	$	(211,700)	781	15,863	(195,056)	(198,250)	2,233	21,530	(174,487)

Changes in Accumulated Other Comprehensive Income (Loss) by Component, net of tax
for the three months ended September 30,
2017 2016

Unrealized
Gains on Securities
Available for
Sale
Post- Retirement
Obligations Unrealized gains on Derivatives (cash flow hedges) Accumulated
Other
Comprehensive
Income (Loss)
Unrealized
Gains on Securities
Available
for
Sale
Post- Retirement
Obligations Unrealized (losses) on Derivatives (cash flow hedges) Accumulated
Other
Comprehensive
Income (Loss)
Balance at
June 30, $ 1,489
(2,987 ) 221
(1,277 ) 13,967
(6,185 ) (664 ) 7,118
Current period other comprehensive income (loss) 479
36
54
569
(1,515 ) 141
230
(1,144 )
Balance at September 30, $ 1,968
(2,951 ) 275
(708 ) 12,452
(6,044 ) (434 ) 5,974

Changes in Accumulated Other Comprehensive Income (Loss) by Component, net of tax
for the nine months ended September 30,
2017 2016

Unrealized
Gains on Securities
Available for
Sale
Post- Retirement
Obligations Unrealized gains on Derivatives (cash flow hedges) Accumulated
Other
Comprehensive
Income (Loss)
Unrealized
Gains on Securities
Available
for
Sale
Post- Retirement
Obligations Unrealized (losses) on Derivatives (cash flow hedges) Accumulated
Other
Comprehensive
Income (Loss)
Balance at December 31, $ (510 ) (3,056 ) 169
(3,397 ) 3,951
(6,424 ) (73 ) (2,546 )
Current period other comprehensive income (loss) 2,478
105
106
2,689
8,501
380
(361 ) 8,520
Balance at September 30, $ 1,968
(2,951 ) 275
(708 ) 12,452
(6,044 ) (434 ) 5,974

The following tables summarize the reclassifications ~~out of~~from accumulated other comprehensive ~~income~~(loss) to the consolidated statements of income for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (in thousands):


	Reclassifications From Accumulated Other Comprehensive Income ("AOCI")
	Amount reclassified from AOCI for the three months ended September 30,			Affected line item in the Consolidated Statement of Income
	2023		2022
Details of AOCI:
Available for sale debt securities:
Realized net gains on the sale of securities available for sale	$	—	—	Net gain on securities transactions
	—		—	Income tax expense
	$	—	—	Net of tax

Cash flow hedges:
Realized net gains on derivatives	$	(4,700)	(1,581)	Interest expense
	1,270		424	Income tax expense
	$	(3,430)	(1,157)

Post-retirement obligations:
Amortization of actuarial gains	$	(355)	(326)	Compensation and employee benefits (1)
	94		90	Income tax expense
Total reclassification	$	(261)	(236)	Net of tax




Total reclassifications	$	(3,691)	(1,393)	Net of tax


	Reclassifications From Accumulated Other Comprehensive Income ("AOCI")
	Amount reclassified from AOCI for the nine months ended September 30,			Affected line item in the Consolidated Statement of Income
	2023		2022
Details of AOCI:
Available for sale debt securities:
Realized net gains on the sale of securities available for sale	$	—	(58)	Net gain on securities transactions
	—		16	Income tax expense
	$	—	(42)	Net of tax

Cash flow hedges:
Realized net gains on derivatives	$	(13,043)	(1,077)	Interest expense
	3,524		289	Income tax expense
	$	(9,519)	(788)

Post-retirement obligations:
Amortization of actuarial gains	$	(1,067)	(978)	Compensation and employee benefits (1)
	276		230	Income tax expense
Total reclassification	$	(791)	(748)	Net of tax




Total reclassifications	$	(10,310)	(1,578)	Net of tax

(1) This item is included in the computation of net periodic benefit cost. See Note 7. Components of Net Periodic Benefit Cost.

Reclassifications From Accumulated Other Comprehensive
Income ("AOCI")
Amount reclassified from AOCI for the three months ended September 30, Affected line item in the Consolidated
Statement of Income
2017 2016
Details of AOCI:
Securities available for sale:
Realized net losses on the sale of securities available for sale $ —
(43 ) Net gain on securities transactions
—
17
Income tax expense
—
(26 ) Net of tax

Post-retirement obligations:
Amortization of actuarial losses 61
236

Compensation and employee benefits ⁽¹⁾
(25 ) (95 ) Income tax expense
36
141
Net of tax
Total reclassifications $ 36
115
Net of tax

Reclassifications From Accumulated Other Comprehensive
Income ("AOCI")
Amount reclassified from AOCI for the nine months ended September 30, Affected line item in the Consolidated
Statement of Income
2017 2016
Details of AOCI:
Securities available for sale:
Realized net gains on the sale of securities available for sale $ —
54
Net gain on securities transactions
—
(22 ) Income tax expense
—
32
Net of tax

Post-retirement obligations:
Amortization of actuarial losses 183
708

Compensation and employee benefits ⁽¹⁾
(78 ) (284 ) Income tax expense
105
424
Net of tax
Total reclassifications $ 105
456
Net of tax


⁽¹⁾	~~This item is included in the computation of net periodic benefit cost. See Note 5. Components of Net Periodic Benefit Cost.~~

Note 9.13. Derivative and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through the management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities.

Non-designated Hedges. Derivatives not designated in qualifying hedging relationships are not speculative and result from a service the Company provides to certain qualified commercial borrowers in loan related transactions ~~and,~~which, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company ~~executes~~may execute interest rate swaps with qualified commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. The interest rate swap agreement which the Company executes with the commercial borrower is collateralized by the borrower's commercial real estate financed by the Company. ~~The collateral exceeds~~As the ~~maximum potential amount of future payments under the credit derivative. As the~~Company has not elected to apply hedge accounting and these interest rate swaps ~~associated with this program~~ do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had 46152 loan related interest rate swaps with an aggregate notional ~~amount~~amounts of ~~$698.5 million~~$2.22 billion and 36$2.40 billion, respectively.

The Company periodically enters into risk participation agreements ("RPAs"), with the Company functioning as either the lead institution, or as a participant when another company is the lead institution on a commercial loan. These RPAs are entered into to manage the credit exposure on interest rate ~~swaps~~contracts associated with ~~an aggregate notional amount of $582.2 million, respectively,~~these loan participation agreements. Under the RPAs, the Company will either receive or make a payment in the event the borrower defaults on the related ~~to this program.~~interest rate contract. The Company has minimum collateral posting thresholds with certain of its risk participation counterparties, and has posted collateral of $70,000 against the potential risk of default by the borrower under these agreements. For September 30, 2023 and December 31, 2022, the Company had 12 and 14 credit derivatives, ~~resulting~~respectively, with aggregate notional amounts of $143.3 million and $157.9 million, respectively, from participations in interest rate swaps ~~provided to external lenders~~ as part of these loan participation ~~arrangements; therefore, they are not used~~arrangements. At September 30, 2023, the asset and liability positions of these fair value credit derivatives totaled $9,000 and $4,000, respectively, compared to ~~manage interest rate risk in the Company's assets or liabilities.~~$26,000 and $12,000, respectively, at December 31, 2022.

Cash Flow Hedges of Interest Rate Risk.The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable payment amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

~~The effective portion of changes~~Changes in the fair value of derivatives designated and that qualify as cash flow hedges of interest rate risk are recorded in accumulated other comprehensive (loss) income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, such derivatives were used to hedge the variable cash outflows associated with ~~Federal Home Loan Bank borrowings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three~~FHLBNY borrowings and ~~nine months ended September 30, 2017 and 2016, the Company did not record any hedge ineffectiveness.~~brokered demand deposits.

Amounts reported in accumulated other comprehensive income ~~(loss)~~ related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s ~~debt.~~borrowings or demand deposits. During the next twelve months, the Company estimates that ~~$52,400~~$15.5 million will be reclassified as ~~an increase~~a reduction to interest expense. ~~As of~~At September 30, ~~2017,~~2023, the Company had ~~two~~9 outstanding interest rate derivatives with an aggregate notional amount of ~~$60.0~~$455.0 million that ~~was~~were each designated as a cash flow hedge of interest rate ~~risk.~~risk, compared to 11 outstanding interest rate derivatives with an aggregate notional amount of $460.0 million, at December 31, 2022.

~~The table below presents the fair value of the Company’s derivative~~Assets and liabilities relating to certain financial instruments, ~~as well as their classification on~~including derivatives, may be eligible for offset in the Consolidated Statements of Financial Condition and/or subject to enforceable master netting arrangements or similar agreements. The Company does not offset asset and liabilities under such arrangements in the Consolidated Statements of Financial Condition.

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s financial instruments that are eligible for offset in the Consolidated Statements of Condition at September 30, ~~2017~~2023 and December 31, ~~2016~~2022 (in thousands):.


	At September 30, 2017							Fair Values of Derivative Instruments as of September 30, 2023
	Asset Derivatives			Liability Derivatives				Asset Derivatives					Liability Derivatives
	Consolidated Statements of Financial Condition	Fair Value		Consolidated Statements of Financial Condition	Fair Value			Notional Amount		Consolidated Statements of Financial Condition	Fair value (2)		Notional Amount	Consolidated Statements of Financial Condition	Fair value (2)
Derivatives not designated as a hedging instrument:							Derivatives not designated as a hedging instrument:
Interest rate products	Other assets	$	7,575	Other liabilities	$	7,595	Interest rate products	$	1,108,504	Other assets	$	131,113	1,108,504	Other liabilities	131,203
Credit contracts	Other assets	2		Other liabilities	—		Credit contracts	46,565		Other assets	9		96,708	Other liabilities	4
Total derivatives not designated as a hedging instrument		$	7,577		$	7,595	Total derivatives not designated as a hedging instrument				131,122				131,207

Derivatives designated as a a hedging instrument:
Derivatives designated as a hedging instrument:							Derivatives designated as a hedging instrument:
Interest rate products	Other assets	$	458	Other liabilities	$	—	Interest rate products	455,000		Other assets	23,375		—	Other liabilities	—
Total derivatives designated as a hedging instrument		$	458		$	—

Total gross derivative amounts recognized on the balance sheet							Total gross derivative amounts recognized on the balance sheet				154,497				131,207

Gross amounts offset on the balance sheet							Gross amounts offset on the balance sheet				—				—
Net derivative amounts presented on the balance sheet							Net derivative amounts presented on the balance sheet				$	154,497			131,207

Gross amounts not offset on the balance sheet:							Gross amounts not offset on the balance sheet:
Financial instruments - institutional counterparties							Financial instruments - institutional counterparties				$	—			—
Cash collateral - institutional counterparties (1)							Cash collateral - institutional counterparties (1)				154,311				—
Net derivatives not offset							Net derivatives not offset				$	186			131,207


	At December 31, 2016							Fair Values of Derivative Instruments as of December 31, 2022
	Asset Derivatives			Liability Derivatives				Asset Derivatives					Liability Derivatives
	Consolidated Statements of Financial Condition	Fair Value		Consolidated Statements of Financial Condition	Fair Value			Notional Amount		Consolidated Statements of Financial Condition	Fair value (2)		Notional Amount		Consolidated Statements of Financial Condition	Fair value (2)
Derivatives not designated as a hedging instrument:							Derivatives not designated as a hedging instrument:
Interest rate products	Other assets	$	7,156	Other liabilities	$	6,750	Interest rate products	$	1,198,191	Other assets	$	122,047	$	1,198,191	Other liabilities	122,378
Credit contracts	Other assets	3		Other liabilities	—		Credit contracts	47,143		Other assets	26		110,714		Other liabilities	12
Total derivatives not designated as a hedging instrument		$	7,159		$	6,750	Total derivatives not designated as a hedging instrument				122,073					122,390

Derivatives designated as a a hedging instrument:
Derivatives designated as a hedging instrument:							Derivatives designated as a hedging instrument:
Interest rate products	Other assets	$	282	Other liabilities	$	—	Interest rate products	460,000		Other assets	29,119		—		Other liabilities	—
Total derivatives designated as a hedging instrument		$	282		$	—

Total gross derivative amounts recognized on the balance sheet							Total gross derivative amounts recognized on the balance sheet				151,192					122,390

Gross amounts offset on the balance sheet							Gross amounts offset on the balance sheet				—					—
Net derivative amounts presented on the balance sheet							Net derivative amounts presented on the balance sheet				$	151,192				122,390

Gross amounts not offset on the balance sheet:							Gross amounts not offset on the balance sheet:
Financial instruments - institutional counterparties							Financial instruments - institutional counterparties				$	—				—
Cash collateral - institutional counterparties (1)							Cash collateral - institutional counterparties (1)				149,800					—
Net derivatives not offset							Net derivatives not offset				$	1,392				122,390



	September 30, 2017			December 31, 2016
ASSETS
Cash and due from banks	$	97,298		$	92,508
Short-term investments	51,485			51,789
Total cash and cash equivalents	148,783			144,297
Securities available for sale, at fair value	1,028,305			1,040,386
Investment securities held to maturity (fair value of $490,425 at September 30, 2017 (unaudited) and $489,287 at December 31, 2016)	481,845			488,183
Federal Home Loan Bank stock	70,896			75,726
Loans	7,028,052			7,003,486
Less allowance for loan losses	60,276			61,883
Net loans	6,967,776			6,941,603
Foreclosed assets, net	5,703			7,991
Banking premises and equipment, net	78,567			84,092
Accrued interest receivable	27,398			27,082
Intangible assets	420,877			422,937
Bank-owned life insurance	188,123			188,527
Other assets	76,873			79,641
Total assets	$	9,495,146		$	9,500,465

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits	$	4,880,133		$	4,803,426
Savings deposits	1,083,215			1,099,020
Certificates of deposit of $100,000 or more	296,172			290,295
Other time deposits	331,696			360,888
Total deposits	6,591,216			6,553,629
Mortgage escrow deposits	25,186			24,452
Borrowed funds	1,525,560			1,612,745
Other liabilities	53,012			57,858
Total liabilities	8,194,974			8,248,684
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued	—			—
Common stock, $0.01 par value, 200,000,000 shares authorized, 83,209,293 shares issued and 66,467,819 shares outstanding at September 30, 2017 and 66,082,283 outstanding at December 31, 2016	832			832
Additional paid-in capital	1,010,247			1,005,777
Retained earnings	586,575			550,768
Accumulated other comprehensive loss	(708		)	(3,397		)
Treasury stock	(260,910		)	(264,221		)
Unallocated common stock held by the Employee Stock Ownership Plan	(35,864		)	(37,978		)
Common stock acquired by the Directors’ Deferred Fee Plan	(5,343		)	(5,846		)
Deferred compensation – Directors’ Deferred Fee Plan	5,343			5,846
Total stockholders’ equity	1,300,172			1,251,781
Total liabilities and stockholders’ equity	$	9,495,146		$	9,500,465



	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL			RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)			TREASURY STOCK			UNALLOCATED ESOP SHARES			COMMON STOCK ACQUIRED BY DDFP			DEFERRED COMPENSATION DDFP			TOTAL STOCKHOLDERS’ EQUITY
Balance at December 31, 2015	$	832	$	1,000,810		$	507,713		$	(2,546	)	$	(269,014	)	$	(41,730	)	$	(6,517	)	$	6,517		$	1,196,065
Net income	—		—			65,235			—			—			—			—			—			65,235
Other comprehensive income, net of tax	—		—			—			8,520			—			—			—			—			8,520
Cash dividends declared	—		—			(35,141		)	—			—			—			—			—			(35,141		)
Effect of adopting Accounting Standards Update ("ASU") No. 2016-09	—		(622		)	622			—			—			—			—			—			—
Distributions from DDFP	—		91			—			—			—			—			503			(503		)	91
Purchases of treasury stock	—		—			—			—			(1,557		)	—			—			—			(1,557		)
Purchase of employee restricted shares to fund statutory tax withholding	—		—			—			—			(1,161		)	—			—			—			(1,161		)
Shares issued dividend reinvestment plan	—		180			—			—			996			—			—			—			1,176
Stock option exercises	—		(60		)	—			—			5,658			—			—			—			5,598
Allocation of ESOP shares	—		325			—			—			—			2,016			—			—			2,341
Allocation of SAP shares	—		2,982			—			—			—			—			—			—			2,982
Allocation of stock options	—		131			—			—			—			—			—			—			131
Balance at September 30, 2016	$	832	$	1,003,837		$	538,429		$	5,974		$	(265,078	)	$	(39,714	)	$	(6,014	)	$	6,014		$	1,244,280



	September 30, 2017 Unrealized Losses
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses		Fair value	Gross unrealized losses		Fair value	Gross unrealized losses
U.S. Treasury obligations	$	5,994	(1	)	—	—		5,994	(1	)
Agency obligations	16,008		(11	)	—	—		16,008	(11	)
Mortgage-backed securities	424,627		(3,956	)	50,881	(972	)	475,508	(4,928	)
Corporate obligations	—		—		991	(10	)	991	(10	)
	$	446,629	(3,968	)	51,872	(982	)	498,501	(4,950	)



	December 31, 2016 Unrealized Losses
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses		Fair value	Gross unrealized losses		Fair value	Gross unrealized losses
Agency obligations	$	14,000	(25	)	—	—		14,000	(25	)
Mortgage-backed securities	553,629		(8,377	)	65	(3	)	553,694	(8,380	)
State and municipal obligations	661		(3	)	—	—		661	(3	)
Corporate obligations	—		—		990	(11	)	990	(11	)
	$	568,290	(8,405	)	1,055	(14	)	569,345	(8,419	)



	September 30, 2017
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable
Mortgage loans:
Residential	$	5,973	3,525	8,820	—	18,318	1,138,993	1,157,311
Commercial	608		292	8,070	—	8,970	2,013,606	2,022,576
Multi-family	—		—	—	—	—	1,334,984	1,334,984
Construction	—		—	—	—	—	324,692	324,692
Total mortgage loans	6,581		3,817	16,890	—	27,288	4,812,275	4,839,563
Commercial loans	1,870		244	17,523	—	19,637	1,689,205	1,708,842
Consumer loans	2,307		1,080	2,035	—	5,422	475,840	481,262
Total gross loans	$	10,758	5,141	36,448	—	52,347	6,977,320	7,029,667



	September 30, 2017
	Mortgage loans		Commercial loans	Consumer loans	Total Portfolio Segments
Individually evaluated for impairment	$	28,578	19,393	2,210	50,181
Collectively evaluated for impairment	4,810,985		1,689,449	479,052	6,979,486
Total gross loans	$	4,839,563	1,708,842	481,262	7,029,667



	For the three months ended
	September 30, 2017					September 30, 2016
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Mortgage loans:
Residential	2	$	632	$	470	—	$	—	$	—
Total mortgage loans	2	632		470		—	—		—
Total restructured loans	2	$	632	$	470	—	$	—	$	—



	September 30, 2017						December 31, 2016
	Unpaid Principal Balance		Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized	Unpaid Principal Balance	Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized
Loans with no related allowance
Mortgage loans:
Residential	$	13,035	10,277	—	10,391	340	10,691	7,881	—	8,027	484
Commercial	4,600		4,472	—	4,496	—	1,556	1,556	—	1,586	40
Construction	—		—	—	—	—	2,553	2,517	—	2,514	—
Total	17,635		14,749	—	14,887	340	14,800	11,954	—	12,127	524
Commercial loans	17,505		13,884	—	13,954	280	21,830	18,874	—	13,818	259
Consumer loans	1,606		1,067	—	1,186	51	1,493	981	—	1,026	59
Total impaired loans	$	36,746	29,700	—	30,027	671	38,123	31,809	—	26,971	842

Loans with an allowance recorded
Mortgage loans:
Residential	$	13,803	12,759	1,633	12,873	374	14,169	13,520	1,716	13,705	519
Commercial	1,071		1,070	140	1,083	40	4,138	4,077	270	4,111	55
Construction	—		—	—	—	—	—	—	—	—	—
Total	14,874		13,829	1,773	13,956	414	18,307	17,597	1,986	17,816	574
Commercial loans	6,158		5,509	1,028	6,045	52	1,381	1,381	268	5,956	4
Consumer loans	1,154		1,143	71	1,170	47	1,242	1,232	80	1,259	66
Total impaired loans	$	22,186	20,481	2,872	21,171	513	20,930	20,210	2,334	25,031	644

Total impaired loans
Mortgage loans:
Residential	$	26,838	23,036	1,633	23,264	714	24,860	21,401	1,716	21,732	1,003
Commercial	5,671		5,542	140	5,579	40	5,694	5,633	270	5,697	95
Construction	—		—	—	—	—	2,553	2,517	—	2,514	—
Total	32,509		28,578	1,773	28,843	754	33,107	29,551	1,986	29,943	1,098
Commercial loans	23,663		19,393	1,028	19,999	332	23,211	20,255	268	19,774	263
Consumer loans	2,760		2,210	71	2,356	98	2,735	2,213	80	2,285	125
Total impaired loans	$	58,932	50,181	2,872	51,198	1,184	59,053	52,019	2,334	52,002	1,486



	At September 30, 2017
	Residential		Commercial mortgage	Multi- family	Construction	Total mortgages	Commercial	Consumer	Total loans
Special mention	$	3,525	19,437	16	—	22,978	26,156	1,080	50,214
Substandard	8,820		25,633	—	—	34,453	30,361	2,034	66,848
Doubtful	—		—	—	—	—	771	—	771
Loss	—		—	—	—	—	—	—	—
Total classified and criticized	12,345		45,070	16	—	57,431	57,288	3,114	117,833
Pass/Watch	1,144,966		1,977,506	1,334,968	324,692	4,782,132	1,651,554	478,148	6,911,834
Total	$	1,157,311	2,022,576	1,334,984	324,692	4,839,563	1,708,842	481,262	7,029,667


	At December 31, 2016
	Residential		Commercial mortgage	Multi- family	Construction	Total mortgages	Commercial	Consumer	Total loans
Special mention	$	6,563	25,329	563	—	32,455	14,840	1,242	48,537
Substandard	12,021		23,011	553	2,517	38,102	47,255	2,940	88,297
Doubtful	—		—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—
Total classified and criticized	18,584		48,340	1,116	2,517	70,557	62,095	4,182	136,834
Pass/Watch	1,193,088		1,930,229	1,400,938	262,297	4,786,552	1,568,349	512,573	6,867,474
Total	$	1,211,672	1,978,569	1,402,054	264,814	4,857,109	1,630,444	516,755	7,004,308



	Three months ended September 30,								Nine months ended September 30,
	Pension benefits					Other post- retirement benefits			Pension benefits					Other post- retirement benefits
	2017			2016		2017		2016	2017			2016		2017		2016
Service cost	$	—		—		26		37	$	—		—		78		112
Interest cost	306			312		218		285	920			936		654		854
Expected return on plan assets	(637		)	(612	)	—		—	(1,913		)	(1,836	)	—		—
Amortization of prior service cost	—			—		—		—	—			—		—		—
Amortization of the net loss	230			236		(169	)	—	690			708		(507	)	—
Net periodic (increase) benefit cost	$	(101	)	(64	)	75		322	$	(303	)	(192	)	225		966



~~FORM 10-Q~~


		Gain (loss) recognized in income on derivatives for the three months ended
	Consolidated Statements of Income	September 30, 2023		September 30, 2022
Derivatives not designated as a hedging instrument:
Interest rate products	Other income	$	192	259
Credit contracts	Other income	(8)		(12)
Total		$	184	247

Derivatives designated as a hedging instrument:
Interest rate products	Interest (benefit) expense	$	(4,670)	(1,581)
Total		$	(4,670)	(1,581)


	Classification	September 30, 2023		December 31, 2022
Lease Right-of-Use Assets:
Operating lease right-of-use assets	Other assets	$	59,031	60,577
Lease Liabilities:
Operating lease liabilities	Other liabilities	$	62,184	63,372


	Three months ended September 30, 2023		Three months ended September 30, 2022
Lease Costs
Operating lease cost	$	2,633	2,613

Variable lease cost	778		667

Total lease cost	$	3,411	3,280


	Nine months ended September 30, 2023		Nine months ended September 30, 2022
Lease Costs
Operating lease cost	$	7,890	8,006

Variable lease cost	2,500		2,103

Total lease cost	$	10,390	10,109


Cash paid for amounts included in the measurement of lease liabilities:	Nine months ended September 30, 2023		Nine months ended September 30, 2022

Operating cash flows from operating leases	$	7,346	6,328


	Operating leases
Twelve months ended:
Remainder of 2023	$	2,558
2024	10,020
2025	9,540
2026	8,647
2027	7,813
Thereafter	30,775
Total future minimum lease payments	69,353
Amounts representing interest	7,169
Present value of net future minimum lease payments	$	62,184



Item 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



	September 30, 2017		December 31, 2016
Total stockholders' equity	$	1,300,172	$	1,251,781
Less: Total intangible assets	420,877		422,937
Total tangible stockholders' equity	$	879,295	$	828,844

Shares outstanding at September 30, 2017 and December 31, 2016	66,467,819		66,082,283

Book value per share (total stockholders' equity/shares outstanding)		$19.56		$18.94
Tangible book value per share (total tangible stockholders' equity/shares outstanding)		$13.23		$12.54



	September 30, 2017
	Required				Required with Capital Conservation Buffer				Actual
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
Bank:⁽¹⁾
Tier 1 leverage capital	$	363,062	4.00	%	$	363,062	4.00	%	$	828,349	9.13	%
Common equity Tier 1 risk-based capital	326,026		4.50		416,588		5.75		828,349		11.43
Tier 1 risk-based capital	434,701		6.00		525,264		7.25		828,349		11.43
Total risk-based capital	579,601		8.00		670,164		9.25		888,777		12.27

Company:
Tier 1 leverage capital	$	363,072	4.00	%	$	363,072	4.00	%	$	880,995	9.71	%
Common equity Tier 1 risk-based capital	326,037		4.50		416,603		5.75		880,995		12.16
Tier 1 risk-based capital	434,716		6.00		525,282		7.25		880,995		12.16
Total risk-based capital	579,622		8.00		670,187		9.25		941,271		12.99



(1)			Average outstanding balance amounts shown are amortized cost, net of allowance for credit losses.
(2)			Average outstanding balances are net of the allowance for loan losses, deferred loan fees and expenses, loan premiums and discounts and include non-accrual loans.
(3)			Annualized net interest income divided by average interest-earning assets.



Item 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.



Change in Interest Rates in Basis Points (Rate Ramp)	Net Interest Income
Change in Interest Rates in Basis Points (Rate Ramp)	Dollar Amount		Dollar Change			Percent Change
-100	$	267,114	$	(13,416	)	(4.8	)%
Static	280,530		—			—
+100	279,080		(1,450		)	(0.5	)
+200	277,373		(3,157		)	(1.1	)
+300	276,840		(3,690		)	(1.3	)


Change in interest rates (basis points) - Rate Ramp	Net Interest Income
	Dollar Amount		Dollar Change		Percent Change
-300	$	389,217	$	(5,550)	(1.4)	%
-200	391,237		(3,530)		(0.9)	%
-100	393,149		(1,618)		(0.4)
Static	394,767		—		—
+100	396,106		1,339		0.3
+200	397,067		2,300		0.6



	Present Value of Equity							Present Value of Equity as Percent of Present Value of Assets
Change in Interest Rates (Basis Points)	Dollar Amount		Dollar Change			Percent Change		Present Value Ratio		Percent Change
-100	$	1,488,974	$	74,351		5.3	%	15.3	%	4.2	%
Flat	1,414,623		—			—		14.7		—
+100	1,379,158		(35,465		)	(2.5	)	14.4		(1.9	)
+200	1,332,652		(81,971		)	(5.8	)	14.0		(4.5	)
+300	1,293,224		(121,399		)	(8.6	)	13.7		(6.7	)


	Present Value of Equity						Present Value of Equity as Percent of Present Value of Assets
Change in interest rates (basis points)	Dollar Amount		Dollar Change		Percent Change		Present Value Ratio		Percent Change
-300	$	1,679,045	$	(125,353)	(6.9)	%	11.6	%	(13.2)	%
-200	1,740,891		(63,507)		(3.5)		12.3		(7.9)
-100	1,781,147		(23,251)		(1.3)		12.8		(3.6)
Flat	1,804,398		—		—		13.3		—
+100	1,817,890		13,492		0.7		13.7		3.1
+200	1,828,234		23,836		1.3		14.1		6.0



Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (1)(2)
July 1, 2017 through July 31, 2017	—	—		—	3,149,237
August 1, 2017 through August 31, 2017	711	$	24.54	711	3,148,526
September 1, 2017 through September 30, 2017	—	—		—	3,148,526
Total	711	—		711


2.1			Agreement and Plan of Merger by and between Provident Financial Services, Inc. and Lakeland Bancorp, Inc. (Filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 27, 2022/File No. 001-31566)

3.1			Certificate of Incorporation of Provident Financial Services, Inc. (Filed as an exhibit to the Company’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission/Registration No. 333-98241.)

3.2			Amended and Restated Bylaws of Provident Financial Services, Inc. (Filed as an exhibit to the Company’s December 31, 2011 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission on February 29, 2012/File No. 001-31566.)

4.1			Form of Common Stock Certificate of Provident Financial Services, Inc. (Filed as an exhibit to the Company’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission/Registration No. 333-98241.)


~~31.1~~






















31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			The following ~~materials~~financial statements from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended September 30, ~~2017,~~2023, formatted in ~~XBRL~~iXBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.


101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

~~101.INS~~		~~XBRL Instance Document~~
101.SCH
~~101.SCH~~	XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, has been formatted in iXBRL.



~~3.1~~	Certificate of Incorporation of Provident Financial Services, Inc. (Filed as an exhibit to the Company’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission/Registration No. 333-98241.)

~~3.2~~	Amended and Restated Bylaws of Provident Financial Services, Inc. (Filed as an exhibit to the Company’s December 31, 2011 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission on February 29, 2012/File No. 001-31566.)

~~4.1~~	Form of Common Stock Certificate of Provident Financial Services, Inc. (Filed as an exhibit to the Company’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission/Registration No. 333-98241.)


~~31.1~~	~~Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~31.2~~	~~Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

32	~~Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
~~101~~	The following materials from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.