Commitments, Contingencies, and Concentrations of Credit Risk
The Company, in the normal course of business, is party to financial instruments and commitments which involve, to varying degrees, elements of risk in excess of the amounts recognized in the consolidated financial statements. These financial instruments and commitments include unused consumer lines of credit, construction loan lines of credit, commercial lines of credit, and commitments to extend credit.
At December 31, 2025, the following commitments and contingent liabilities existed which are not reflected in the accompanying consolidated financial statements (in thousands):
| | | | | |
| December 31, 2025 |
| Unused consumer and residential construction loan lines of credit (primarily floating-rate) | $ | 278,830 | |
| Unused commercial and commercial construction loan lines of credit (primarily floating-rate) | 1,602,901 | |
Other commitments to extend credit (1): | |
| Fixed-rate | 133,617 | |
| Adjustable-rate | 1,100 | |
| Floating-rate | 339,342 | |
(1)As of December 31, 2025, the Company has outsourced its residential and consumer originations, and the pipeline for residential loans represents the remaining commitments expected to close in 2026.
The Company’s fixed-rate loan commitments generally expire within 90 days of issuance and carried interest rates ranging from 5.56% to 8.00% at December 31, 2025.
At December 31, 2025, the Company had $6.4 million of unfunded capital commitments related to investment funds.
The Company’s maximum exposure to credit losses in the event of nonperformance by the other party to these financial instruments and commitments is represented by the contractual amounts. The Company uses the same credit policies in granting commitments and conditional obligations as it does for financial instruments recorded in the Consolidated Statements of Financial Condition.
These commitments and obligations do not necessarily represent future cash flow requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s assessment of risk. Substantially all of the unused consumer and construction loan lines of credit are collateralized by mortgages on real estate.
At December 31, 2025, the Company is obligated under noncancelable operating leases and rental agreements for premises and equipment. Rental and lease expense under these leases were $6.8 million, $5.8 million, and $5.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Refer to Note 17. Leases for the projected minimum lease commitments as of December 31, 2025.
The Company granted residential real estate and first mortgage commercial real estate loans to borrowers primarily located throughout New Jersey and in the major metropolitan areas from Massachusetts through Virginia. The ability of borrowers to
repay their obligations is dependent upon various factors including the borrowers’ income, net worth, cash flows generated by the underlying collateral, value of the underlying collateral, and priority of the Company’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the Company’s control. The Company is, therefore, subject to risk of loss. A decline in real estate values could cause some residential and commercial real estate loans to become inadequately collateralized, which would expose the Company to a greater risk of loss.
The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and collateral and/or guarantees are required for most loans.
The Company is a defendant in certain claims and legal actions arising in the ordinary course of business. Management and its legal counsel are of the opinion that the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial condition, results of operations, or liquidity.