The following table presents the loan categories for the period ended as indicated:

As a result of the Merger, the Company recorded $4.53 billion of loans held for investment on the Merger Date.

Included in C&I loans was Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans totaling $66.0 million and $313.4 million at December 31, 2021 and 2020, respectively. SBA PPP loans carry a 100% guarantee from the SBA. The Company may hold an allowance for credit losses as a result of individual loan analysis. In June 2021, the Company sold $596.2 million of SBA PPP loans and recorded a gain of $20.7 million in Gain on sale of SBA loans in the consolidated statements of income.

The following tables present data regarding the allowance for credit losses activity for the periods indicated:

The following table presents the amortized cost basis of loans on non-accrual status as of the period indicated:

The Company did not recognize interest income on non-accrual loans during the year ended December 31, 2021.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method of ASC 326 as of the dates indicated:

A loan is considered impaired when, based on then current information and events, it is probable that all contractual amounts due will not be collected in accordance with the terms of the loan. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays or shortfalls generally are not classified as impaired. Management determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

The Bank considers TDRs and all non-accrual loans, except non-accrual one-to-four family loans in less than the Federal National Mortgage Association (“FNMA”) Limits, to be impaired. Non-accrual one-to-four family loans equal to or less than the FNMA Limits, as well as all consumer loans, are considered homogeneous loan pools and are not required to be evaluated individually for impairment unless considered a TDR.

Impairment is typically measured using the difference between the outstanding loan principal balance and either: 1) the likely realizable value of a note sale; 2) the fair value of the underlying collateral, net of likely disposal costs, if repayment is expected to come from liquidation of the collateral; or 3) the present value of estimated future cash flows (using the loan’s pre-modification rate for certain performing TDRs). If a TDR is substantially performing in accordance with its restructured terms, management will look to either the potential net liquidation proceeds of the underlying collateral or the present value of the expected cash flows from the debt service in measuring impairment (whichever is deemed most appropriate under the circumstances). If a TDR has re-defaulted, generally the likely realizable net proceeds from either a note sale or the liquidation of the collateral is considered when measuring impairment. Measured impairment is either charged off immediately or, in limited instances, recognized as an allocated reserve within the allowance for loan losses.

The following tables summarize impaired loans with no related allowance recorded and with related allowance recorded as of the periods indicated (by collateral type within the real estate loan segment):

(1)	The recorded investment excludes net deferred costs, due to immateriality.

The following table presents information for impaired loans for the periods indicated:


	Year Ended				Year Ended
	December 31, 2020				December 31, 2019
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(In thousands)	Investment⁽¹⁾		Recognized⁽²⁾		Investment⁽¹⁾		Recognized⁽²⁾
With no related allowance recorded:
One-to-four family residential, including condominium and cooperative apartment	$	1,179	$	—	$	9	$	9
Multifamily residential and residential mixed-use		1,188		6		415		29
CRE		1,195		1		3,765		244
Total with no related allowance recorded		3,562		7		4,189		282

With an allowance recorded:
C&I		10,605		1		5,125		13
Total	$	14,167	$	8	$	9,314	$	295

(1)	The recorded investment excludes net deferred costs, due to immateriality.

(2)	Cash basis interest and interest income recognized on accrual basis approximate each other.

The following tables summarize the past due status of the Company’s investment in loans as of the dates indicated:

December 31, 2021

Loans 90

Days or

30 to 59

60 to 89

More Past Due

Days

and Still

Total

(In thousands)

Past Due

Accruing Interest

Non-accrual

Past Due

Current

Loans

Real estate:

One-to-four family residential, including condominium and cooperative apartment

3,294

877

1,945

7,623

13,739

655,543

669,282

Multifamily residential and residential mixed-use

30,983

3,339

—

34,322

3,322,024

3,356,346

CRE

23,108

887

—

5,053

29,048

3,916,900

3,945,948

ADC

—

322,628

Total real estate

57,385

5,103

1,945

12,676

77,109

8,217,095

8,294,204

C&I

3,753

7,040

1,056

27,266

39,115

894,444

933,559

Other

104

—

365

472

16,426

16,898

Total

61,242

12,146

3,001

40,307

116,696

9,127,965

9,244,661


	December 31, 2020
					Loans 90
					Days or
	30 to 59		60 to 89		More Past Due
	Days		Days		and Still				Total				Total
(In thousands)	Past Due		Past Due		Accruing Interest		Non-accrual		Past Due		Current		Loans
Real estate:
One-to-four family residential, including condominium and cooperative apartment	$	—	$	—	$	44	$	858	$	902	$	184,087	$	184,989
Multifamily residential and residential mixed-use		—		—		437		1,863		2,300		2,756,443		2,758,743
CRE		15,351		—		—		2,704		18,055		1,860,112		1,878,167
ADC		—		—		—		—		—		156,296		156,296
Total real estate		15,351		—		481		5,425		21,257		4,956,938		4,978,195
C&I		—		917		2,848		12,502		16,267		625,266		641,533
Other		8		1		—		1		10		2,306		2,316
Total	$	15,359	$	918	$	3,329	$	17,928	$	37,534	$	5,584,510	$	5,622,044

Accruing Loans 90 Days or More Past Due:

The Company continued accruing interest on loans with an outstanding balance of $3.0 million at December 31, 2021, and loans with an outstanding balance of $3.3 million at December 31, 2020, all of which were 90 days or more past due. These loans were either well secured, awaiting a forbearance extension or formal payment deferral, or will likely be forgiven through the PPP or repurchased by the SBA, and, therefore, remained on accrual status and were deemed performing assets at the dates indicated above.

Collateral Dependent Loans:

At December 31, 2021, the Company had collateral dependent loans which were individually evaluated to determine expected credit losses.



	December 31, 2021
	Real Estate		Associated Allowance
(In thousands)	Collateral Dependent		for Credit Losses
CRE	$	3,837	$	600
C&I		348		-
Total	$	4,185	$	600

Related Party Loans

Certain directors, executive officers, and their related parties, including their immediate families and companies in which they are principal owners, were loan customers of the Bank during 2021.

The following table sets forth selected information about related party loans for the year ended December 31, 2021:


	Year Ended
	December 31,
(In thousands)	2021
Beginning balance	$	1,700
Acquired in Merger		4,217
New loans		1,243
Effect of changes in composition of related parties		(239)
Repayments		(692)
Balance at end of period	$	6,229

TDRs

As of December 31, 2021, the Company had TDRs totaling $942 thousand. The Company has allocated $483 thousand of allowance for those loans at December 31, 2021, with no commitments to lend additional amounts. There were no outstanding TDRs at December 31, 2020.

During the year ended December 31, 2021, TDR modifications included reduction of outstanding principal, extensions of maturity dates, or favorable interest rates and loan terms than the prevailing market interest rates and loan terms.

During the year ended December 31, 2021, the Company modified one CRE loan as a TDR, which subsequently paid off during the year.

The following table presents the loans by category modified as TDRs that occurred during the year ended December 31, 2021:


	Modifications During the Year Ended December 31, 2021
			Pre-		Post-
			Modification		Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
(Dollars in thousands)	Loans		Investment		Investment
One-to-four family residential and cooperative/condominium apartment	2	$	467	$	467
CRE	1		10,000		-
C&I	1		456		456
Total	4	$	10,923	$	923

There were no loans modified in a manner that met the criteria of a TDR during the year ended December 31, 2020 or 2019.

As of December 31, 2020 and 2019, the Bank had no loan commitments to borrowers with outstanding TDRs.

There were no TDR charge-offs during the year ended December 31, 2021. TDRs did not have a material impact to the allowance for credit losses. There were no TDRs that subsequently defaulted.

Loan payment deferrals due to COVID-19

Consistent with regulatory guidance to work with borrowers during the unprecedented situation caused by the COVID-19 pandemic and as outlined in the CARES Act, the Company established a formal payment deferral program in April 2020 for borrowers that had been adversely affected by the pandemic.

As of December 31, 2021, the Company had seven loans, representing outstanding loan balances of $5.7 million, that were deferring full principal and interest (“P&I” deferrals).

The table below presents the full P&I deferrals as of December 31, 2021:


	December 31, 2021
	Number
	of Loans	Balance		% of Portfolio
(Dollars in thousands)
One-to-four family residential and cooperative/condominium apartment	5	$	1,922	0.3	%
CRE	1		3,487	0.1
C&I	1		251	-
Total	7	$	5,660	0.1	%

Pursuant to guidance under Section 4013 of the CARES Act, a qualified loan modification, such as a payment deferral, is exempt from classification as a TDR as defined by GAAP. This applies if the loan was current as of December 31, 2019 and the modifications are related to arrangements that defer or delay the payment of principal or interest, or change the interest rate of the loan. This guidance was expected to expire on December 31, 2020. The 2021 Consolidated Appropriations Act, which was signed into law December of 2020, extended the exemption for TDR classification. This provision expired on January 1, 2022 and, therefore, the Company will not have additional loans modified under this exemption going forward.

Risk-ratings on COVID-19 loan deferrals are evaluated on an ongoing basis.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit structure, loan documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying them as to credit risk. The Company uses the following definitions for risk ratings:

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

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

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

The following is a summary of the credit risk profile of loans by internally assigned grade as of the periods indicated, the years represent the year of origination for non-revolving loans:


	December 31, 2021
(In thousands)	2021		2020		2019		2018		2017		2016 and Prior		Revolving		Revolving-Term		Total
One-to-four family residential, and condominium/cooperative apartment:
Pass	$	129,679	$	86,028	$	80,195	$	75,354	$	77,829	$	129,276	$	49,878	$	12,537	$	640,776
Special mention		—		1,124		335		752		334		2,158		846		747		6,296
Substandard		—		1,944		2,038		597		2,202		14,512		—		894		22,187
Doubtful		—		—		—		23		—		—		—		—		23
Total one-to-four family residential, and condominium/cooperative apartment		129,679		89,096		82,568		76,726		80,365		145,946		50,724		14,178		669,282

Multifamily residential and residential mixed-use:
Pass		590,462		341,206		455,277		151,226		332,749		1,145,609		12,277		825		3,029,631
Special mention		—		11,040		14,486		—		11,817		26,252		—		—		63,595
Substandard		—		1,501		35,326		32,390		54,238		137,387		2,278		—		263,120
Doubtful		—		—		—		—		—		—		—		—		—
Total multifamily residential and residential mixed-use		590,462		353,747		505,089		183,616		398,804		1,309,248		14,555		825		3,356,346

CRE:
Pass		872,049		848,694		529,182		306,360		298,904		815,238		43,183		6,188		3,719,798
Special mention		6,003		1,024		39,305		18,983		11,039		17,438		—		—		93,792
Substandard		4,431		1,732		7,082		45,496		31,747		41,763		—		—		132,251
Doubtful		—		—		106		—		—		—		—		—		106
Total CRE		882,483		851,450		575,675		370,839		341,690		874,439		43,183		6,188		3,945,947

ADC:
Pass		142,123		76,259		56,885		23,456		6,809		774		1,066		588		307,960
Special mention		—		1,078		—		—		—		—		—		—		1,078
Substandard		—		90		—		13,500		—		—		—		—		13,590
Doubtful		—		—		—		—		—		—		—		—		—
Total ADC		142,123		77,427		56,885		36,956		6,809		774		1,066		588		322,628

C&I:
Pass		93,802		121,291		53,116		49,634		36,238		23,615		446,134		9,764		833,594
Special mention		—		1,625		239		2,191		585		52		3,225		1,286		9,203
Substandard		402		5,744		5,789		6,011		2,832		2,844		28,545		13,597		65,764
Doubtful		550		1,621		9,968		752		11,107		—		1,000		—		24,998
Total C&I		94,754		130,281		69,112		58,588		50,762		26,511		478,904		24,647		933,559

Total:
Pass		1,828,115		1,473,478		1,174,655		606,030		752,529		2,114,512		552,538		29,902		8,531,759
Special mention		6,003		15,891		54,365		21,926		23,775		45,900		4,071		2,033		173,964
Substandard		4,833		11,011		50,235		97,994		91,019		196,506		30,823		14,491		496,912
Doubtful		550		1,621		10,074		775		11,107		—		1,000		—		25,127
Total Loans	$	1,839,501	$	1,502,001	$	1,289,329	$	726,725	$	878,430	$	2,356,918	$	588,432	$	46,426	$	9,227,762


	December 31, 2020
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
One-to-four family residential and condominium/cooperative apartment	$	183,293	$	—	$	1,696	$	—	$	184,989
Multifamily residential and residential mixed-use		2,523,258		56,400		179,085		—		2,758,743
CRE		1,831,712		13,861		32,594		—		1,878,167
ADC		142,796		13,500		—		—		156,296
Total real estate		4,681,059		83,761		213,375		—		4,978,195
C&I		613,691		2,131		13,315		12,396		641,533
Total Real Estate and C&I	$	5,294,750	$	85,892	$	226,690	$	12,396	$	5,619,728

For other loans, the Company evaluates credit quality based on payment activity. Other loans that are 90 days or more past due are placed on non-accrual status, while all remaining other loans are classified and evaluated as performing. The following is a summary of the credit risk profile of other loans by internally assigned grade:


(In thousands)	December 31, 2021		December 31, 2020
Performing	$	16,533	$	2,315
Non-accrual		365		1
Total	$	16,898	$	2,316