Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Loans and Allowance for Credit Losses

3. Loans and Allowance for Credit Losses

The composition of loans is as follows at December 31:

	2023		2022
	(In thousands)
Multi-family residential	$	2,658,205	$	2,601,384
Commercial real estate		1,958,252		1,913,040
One-to-four family ― mixed-use property		530,243		554,314
One-to-four family ― residential		220,213		241,246
Construction		58,673		70,951
Small Business Administration		20,205		23,275
Commercial business and other		1,452,518		1,521,548
Net unamortized premiums and unearned loan fees		9,590		9,011
Total loans, net of fees and costs excluding portfolio layer basis adjustments		6,907,899		6,934,769
Unallocated portfolio layer basis adjustments (1)		(949)		—
Total loans, net of fees and costs	$	6,906,950	$	6,934,769

(1) This amount represents portfolio layer method basis adjustments related to loans hedged in a closed portfolio. Under GAAP portfolio layer method basis adjustments are not allocated to individual loans, however, the amounts impact the net loan balance. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was de-designated. See Note 20 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

The majority of our loan portfolio is invested in multi-family residential, commercial real estate and commercial business and other loans, which totaled 88.3% and 87.2% of our gross loans at December 31, 2023 and 2022, respectively. Our concentration in these types of loans increases the overall level of credit risk inherent in our loan portfolio. The greater risk associated with these types of loans could require us to increase our allowance and provision for credit losses and to maintain an ACL as a percentage of total loans in excess of the allowance currently maintained. In addition to our loan portfolio, at December 31, 2023, we were servicing $46.7 million of loans for others.

Loans secured by multi-family residential property and commercial real estate generally involve a greater degree of risk than residential mortgage loans and generally carry larger loan balances. The increased credit risk is the result of several factors, including the concentration of principal in a smaller number of loans and borrowers, the effects of general economic conditions on income producing properties and the increased difficulty in evaluating and monitoring these types of loans. Furthermore, the repayments of loans secured by these types of properties are typically dependent upon the successful operation of the related property, which is usually owned by a legal entity with the property being the entity’s only asset. If the cash flow from the property is reduced, the borrower’s ability to repay the loan may be impaired. If the borrower defaults, our only remedy may be to foreclose on the property, for which the market value may be less than the balance due on the related mortgage loan.

Loans secured by commercial business and other loans involve a greater degree of risk for the same reasons as for multi-family residential and commercial real estate loans with the added risk that many of the loans are not secured by improved properties.

To minimize the risks involved in the origination of multi-family residential, commercial real estate and commercial business and other loans, the Company adheres to defined underwriting standards, which include reviewing the expected net operating income generated by the real estate collateral securing the loan, the age and condition of the collateral, the financial resources and income level of the borrower and the borrower’s experience in owning or managing similar properties. We typically require debt service coverage of at least 125% of the monthly loan payment. We generally originate these loans up to a maximum of 75% of the appraised value or the purchase price of the property, whichever is less. Any loan with a final loan-to-value ratio in excess of 75% must be approved by the Bank’s Board of Directors or the Loan Committee as an exception to policy. We generally rely on the income generated by the property as the primary means by which the loan is repaid. However, personal guarantees may be obtained for additional security from these

borrowers. Additionally, for commercial business and other loans which are not secured by improved properties, the Bank will secure these loans with business assets, including accounts receivables, inventory and real estate and generally require personal guarantees.

The Company may modify loans to enable a borrower experiencing financial difficulties to continue making payments when it is deemed to be in the Company’s best long-term interest. When modifying a loan, an assessment of whether a borrower is experiencing financial difficulty is made on the date of modification. This modification may include reducing the loan interest rate, extending the loan term, any other-than-insignificant payment delay, principal forgiveness or any combination of these types of modifications. When such modifications are performed, a change to the allowance for credit losses is generally not required as the methodologies used to estimate the allowance already capture the effect of borrowers experiencing financial difficulty. On December 31, 2023, there were no commitments to lend additional funds to borrowers who have received a loan modification as a result of financial difficulty.

The following tables show loan modifications made to borrowers experiencing financial difficulty during the periods indicated:

	For the year ended December 31, 2023
(Dollars in thousands)	Term Extension
Loan Modifications Made to Borrowers Experiencing Financial Difficulty	Number		Amortized Cost Basis	% of Total Class of Financing Receivable		Financial Effect
Commercial business and other	3	$	1,734	0.1	%	Two loans extended Maturity to June 2025 (20 months). One loan extended Maturity to August 2024 (10 months).
Total	3	$	1,734

	For the year ended December 31, 2023
(Dollars in thousands)	Other-than-insignificant Payment Delay
Loan Modifications Made to Borrowers Experiencing Financial Difficulty	Number		Amortized Cost Basis	% of Total Class of Financing Receivable		Financial Effect
Small Business Administration	1	$	1,488	7.3	%	Provided twelve months payment deferral to be collected at maturity.
Total	1	$	1,488

The following table shows the payment status of borrowers experiencing financial difficulty and for which a modification has occurred at December 31, 2023:

		Payment Status of Borrowers Experiencing Financial Difficulty (Amortized Cost Basis)
(In thousands)		Current		30-89 Days Past Due		90+ Days Past Due		Total Modified
Small Business Administration	$	—	$	—	$	1,488	$	1,488
Commercial business and other		1,734		—		—		1,734
Total	$	1,734	$	—	$	1,488	$	3,222

The following tables show loans modified and classified as TDR under legacy GAAP during the periods indicated:

	For the year ended December 31, 2022
(Dollars in thousands)	Number		Balance	Modification description
Small Business Administration	1	$	271	Loan amortization extension.
Commercial business and other	5		8,204	One loan received a below market interest rate and four loans had an amortization extension
Total	6	$	8,475

	For the year ended December 31, 2021
(Dollars in thousands)	Number		Balance	Modification description
Commercial business and other	3	$	702	Loan amortization extension.
Total	3	$	702

The recorded investment of the loans modified and classified as TDR, presented in the tables above, were unchanged as there was no principal forgiven in these modifications.

The following table shows our recorded investment for loans classified as TDR under legacy GAAP at amortized cost that are performing according to their restructured terms at the periods indicated:

	December 31, 2022
	Number	Amortized
(Dollars in thousands)	of contracts	Cost
Multi-family residential	6	$	1,673
Commercial real estate	1		7,572
One-to-four family - mixed-use property	4		1,222
One-to-four family - residential	1		253
Small Business Administration	1		242
Commercial business and other	3		855
Total performing	16	$	11,817

The following tables show our recorded investment for loans classified as TDR under legacy GAAP at amortized cost that are not performing according to their restructured terms at the periods indicated.

	December 31, 2022
	Number	Amortized
(Dollars in thousands)	of contracts	Cost
Commercial business and other	2	$	3,263
Total troubled debt restructurings that subsequently defaulted	2	$	3,263

The Company did not have any loans classified as TDR at amortized cost that were not performing according to their restructured terms at December 31, 2021.

During the years ended December 31, 2022 and 2021 there were no defaults of TDR loans within 12 months of their modification date.

The following tables show our non-accrual loans at amortized cost with no related allowance and interest income recognized for loans ninety days or more past due and still accruing for periods shown below:

	At or for the year ended December 31, 2023
(In thousands)		Non-accrual amortized cost beginning of the reporting period		Non-accrual amortized cost end of the reporting period		Non-accrual with no related allowance		Interest income (loss) recognized		Loans ninety days or more past due and still accruing
Multi-family residential	$	3,547	$	3,640	$	3,640	$	2	$	1,463
Commercial real estate		254		—		—		—		—
One-to-four family - mixed-use property		1,045		1,005		1,005		3		—
One-to-four family - residential		3,953		4,670		4,670		3		—
Small Business Administration		950		2,576		2,576		—		—
Commercial business and other		20,193		11,768		3,242		17		—
Total	$	29,942	$	23,659	$	15,133	$	25	$	1,463

	At or for the year ended December 31, 2022
(In thousands)		Non-accrual amortized cost beginning of the reporting period		Non-accrual amortized cost end of the reporting period		Non-accrual with no related allowance		Interest income (loss) recognized		Loans ninety days or more past due and still accruing
Multi-family residential	$	2,652	$	3,547	$	3,547	$	—	$	—
Commercial real estate		640		254		254		—		—
One-to-four family - mixed-use property (1)		1,582		1,045		1,045		—		—
One-to-four family - residential		7,483		3,953		3,953		—		—
Small Business Administration		952		950		950		—		—
Construction		—		—		—		—		2,600
Commercial business and other (1)		1,945		20,193		3,291		171		—
Total	$	15,254	$	29,942	$	13,040	$	171	$	2,600

(1) Included in the above analysis are non-accrual performing TDR under legacy GAAP one-to-four family – mixed-use property totaling $0.3 million at December 31, 2022. Commercial business and other contains a non-accrual performing TDR totaling less than $0.1 million at December 31, 2022.

The following is a summary of interest foregone on non-accrual loans for the years ended December 31:

	2023		2022		2021
(In thousands)
Interest income (loss) that would have been recognized had the loans performed in accordance with their original terms	$	1,995	$	2,309	$	1,691
Less: Interest income (loss) included in the results of operations		25		746		620
Total foregone interest	$	1,970	$	1,563	$	1,071

The following tables show the aging of the amortized cost basis in past-due loans at the period indicated by class of loan at:

	At December 31, 2023
(In thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans (1)
Multi-family residential	$	2,722	$	539	$	5,103	$	8,364	$	2,653,862	$	2,662,226
Commercial real estate		8,090		1,099		—		9,189		1,950,435		1,959,624
One-to-four family - mixed-use property		1,708		124		1,005		2,837		530,247		533,084
One-to-four family - residential		1,715		—		4,670		6,385		215,134		221,519
Construction		—		—		—		—		58,261		58,261
Small Business Administration		—		—		2,576		2,576		17,769		20,345
Commercial business and other		420		1,061		7,585		9,066		1,443,774		1,452,840
Total	$	14,655	$	2,823	$	20,939	$	38,417	$	6,869,482	$	6,907,899

(1) The table above excludes the unallocated portfolio layer basis adjustments totaling $0.9 million related to loans hedged in a closed pool at December 31, 2023. See Note 20 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

	At December 31, 2022
(In thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans
Multi-family residential	$	1,475	$	1,787	$	3,547	$	6,809	$	2,598,363	$	2,605,172
Commercial real estate		2,561		—		254		2,815		1,912,083		1,914,898
One-to-four family - mixed-use property		3,721		—		797		4,518		552,777		557,295
One-to-four family - residential		2,734		—		3,953		6,687		235,793		242,480
Construction		—		—		2,600		2,600		68,224		70,824
Small Business Administration		329		—		950		1,279		21,914		23,193
Commercial business and other		7,636		16		10,324		17,976		1,502,931		1,520,907
Total	$	18,456	$	1,803	$	22,425	$	42,684	$	6,892,085	$	6,934,769

The following tables show the activity in the allowance for credit losses for the periods indicated:

	For the year ended December 31, 2023
					One-to-four		One-to-four						Commercial
	Multi-family		Commercial		family - mixed-		family -		Construction		Small Business		business and
(In thousands)	residential		real estate		use property		residential		loans		Administration		other		Total
Beginning balance	$	9,552	$	8,184	$	1,875	$	901	$	261	$	2,198	$	17,471	$	40,442
Charge-offs		—		(8)		—		(23)		—		(7)		(11,119)		(11,157)
Recoveries		2		—		1		52		—		248		42		345
Provision (benefit)		819		489		(266)		(262)		(103)		(813)		10,667		10,531
Ending balance	$	10,373	$	8,665	$	1,610	$	668	$	158	$	1,626	$	17,061	$	40,161

	For the year ended December 31, 2022
					One-to-four		One-to-four								Commercial
	Multi-family		Commercial		family - mixed-		family -		Construction		Small Business		Taxi		business and
(In thousands)	residential		real estate		use property		residential		loans		Administration		medallion		other		Total
Beginning balance	$	8,185	$	7,158	$	1,755	$	784	$	186	$	1,209	$	—	$	17,858	$	37,135
Charge-offs		(208)		—		—		(20)		—		(1,053)		—		(2,067)		(3,348)
Recoveries		77		—		—		5		—		47		447		1,237		1,813
Provision (benefit)		1,498		1,026		120		132		75		1,995		(447)		443		4,842
Ending balance	$	9,552	$	8,184	$	1,875	$	901	$	261	$	2,198	$	—	$	17,471	$	40,442

	For the year ended December 31, 2021
					One-to-four		One-to-four								Commercial
	Multi-family		Commercial		family - mixed-		family -		Construction		Small Business		Taxi		business and
(In thousands)	residential		real estate		use property		residential		loans		Administration		medallion		other		Total
Beginning balance	$	6,557	$	8,327	$	1,986	$	869	$	497	$	2,251	$	—	$	24,666	$	45,153
Charge-offs		(43)		(64)		(33)		—		—		—		(2,758)		(2,236)		(5,134)
Recoveries		10		—		133		157		—		34		1,457		224		2,015
Provision (benefit)		1,661		(1,105)		(331)		(242)		(311)		(1,076)		1,301		(4,796)		(4,899)
Ending balance	$	8,185	$	7,158	$	1,755	$	784	$	186	$	1,209	$	—	$	17,858	$	37,135

In accordance with our policy and the current regulatory guidelines, we designate loans as “Special Mention,” which are considered “Criticized Loans,” and “Substandard,” “Doubtful,” or “Loss,” which are considered “Classified Loans”. If a loan does not fall within one of the previous mentioned categories and management believes weakness is evident then we designate the loan as “Watch”, all other loans would be considered “Pass.” Loans that are non-accrual are designated as Substandard, Doubtful, or Loss. These loan designations are updated quarterly. We designate a loan as Substandard when a well-defined weakness is identified that may jeopardize the orderly liquidation of the debt. We designate a loan Doubtful when it displays the inherent weakness of a Substandard loan with the added provision that collection of the debt in full, on the basis of existing facts, is highly improbable. We designate a loan as Loss if it is deemed the debtor is incapable of repayment. The Company does not hold any loans designated as Loss, as loans that are designated as Loss are charged to the Allowance for Credit Losses. We designate a loan as Special Mention if the asset does not warrant classification within one of the other classifications, but contains a potential weakness that deserves closer attention.

The provision recorded in 2023 was primarily driven by fully reserving for two non-accrual business and increasing reserves for the elevated risk presented by the current rate environment to adjustable-rate loan’s debt coverage ratios. The provision recorded in 2022 was primarily due to loan growth, increased reserves on specific credits, coupled with the ongoing economic uncertainty resulting from high and rising inflation including increasing interest rates. The benefit recorded in 2021 was primarily due to improving economic conditions. The Company specifies both the reasonable and supportable forecast and reversion periods in three economic conditions (expansion, transition, contraction). During 2023 and 2022, the Company’s reasonable and supportable forecast and reversion period was two quarters and four quarters, respectively.

The following tables summarize the risk category of mortgage and commercial business loans by loan portfolio segments and class of loans by year of origination for the periods indicated:

	December 31, 2023
														Revolving Loans		Revolving Loans
														Amortized Cost		converted to
(In thousands)		2023		2022		2021		2020		2019		Prior		Basis		term loans		Total
Multi-family Residential
Pass	$	254,340	$	465,069	$	276,483	$	215,561	$	300,822	$	1,099,271	$	5,209	$	—	$	2,616,755
Watch		—		870		720		1,935		—		34,899		—		—		38,424
Special Mention		—		—		—		—		—		1,193		—		—		1,193
Substandard		—		—		—		—		—		5,854		—		—		5,854
Total Multi-family Residential	$	254,340	$	465,939	$	277,203	$	217,496	$	300,822	$	1,141,217	$	5,209	$	—	$	2,662,226
Commercial Real Estate
Pass	$	199,420	$	322,446	$	175,045	$	147,871	$	216,964	$	862,641	$	—	$	—	$	1,924,387
Watch		—		—		1,415		—		9,239		23,484		—		—		34,138
Special Mention		—		—		—		—		—		1,099		—		—		1,099
Total Commercial Real Estate	$	199,420	$	322,446	$	176,460	$	147,871	$	226,203	$	887,224	$	—	$	—	$	1,959,624
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	8	$	—	$	—	$	8
1-4 Family Mixed-Use Property
Pass	$	22,852	$	43,579	$	41,604	$	30,984	$	60,308	$	326,246	$	—	$	—	$	525,573
Watch		—		—		—		—		233		4,777		—		—		5,010
Special Mention		—		—		—		—		720		564		—		—		1,284
Substandard		—		—		—		—		—		1,217		—		—		1,217
Total 1-4 Family Mixed-Use Property	$	22,852	$	43,579	$	41,604	$	30,984	$	61,261	$	332,804	$	—	$	—	$	533,084
1-4 Family Residential
Pass	$	6,289	$	23,197	$	8,451	$	16,482	$	36,779	$	102,293	$	7,424	$	10,067	$	210,982
Watch		—		507		270		—		1,561		695		—		1,130		4,163
Special Mention		—		—		—		—		—		—		—		169		169
Substandard		—		—		—		—		—		5,737		—		468		6,205
Total 1-4 Family Residential	$	6,289	$	23,704	$	8,721	$	16,482	$	38,340	$	108,725	$	7,424	$	11,834	$	221,519
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	23	$	—	$	—	$	23
Construction
Pass	$	5,809	$	3	$	5,793	$	—	$	—		—	$	46,656	$	—	$	58,261
Total Construction	$	5,809	$	3	$	5,793	$	—	$	—	$	—	$	46,656	$	—	$	58,261
Small Business Administration
Pass	$	1,984	$	3,283	$	2,883	$	3,443	$	606	$	2,121	$	—	$	—	$	14,320
Watch		—		—		—		—		47		2,847		—		—		2,894
Special Mention		—		—		—		—		—		348		—		—		348
Substandard		—		—		1,627		—		—		1,156		—		—		2,783
Total Small Business Administration	$	1,984	$	3,283	$	4,510	$	3,443	$	653	$	6,472	$	—	$	—	$	20,345
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	7	$	—	$	—	$	7
Commercial Business
Pass	$	115,740	$	116,452	$	53,315	$	31,637	$	30,913	$	53,289	$	244,143	$	—	$	645,489
Watch		342		9,792		3,822		2,426		14,483		18,495		8,582		—		57,942
Special Mention		—		—		—		—		25		—		495		—		520
Substandard		14,642		2,399		4,158		—		93		12,906		2,982		—		37,180
Doubtful		462		—		—		—		—		—		3,903		—		4,365
Total Commercial Business	$	131,186	$	128,643	$	61,295	$	34,063	$	45,514	$	84,690	$	260,105	$	—	$	745,496
Gross charge-offs	$	40	$	—	$	1,675	$	—	$	28	$	10	$	9,267	$	—	$	11,020
Commercial Business - Secured by RE
Pass	$	36,993	$	176,825	$	130,608	$	106,545	$	38,846	$	139,025	$	—	$	—	$	628,842
Watch		9,730		311		—		—		586		51,759		—		—		62,386
Special Mention		—		—		—		—		14,892		1,002		—		—		15,894
Total Commercial Business - Secured by RE	$	46,723	$	177,136	$	130,608	$	106,545	$	54,324	$	191,786	$	—	$	—	$	707,122
Other
Pass	$	—	$	—	$	—	$	—	$	—	$	133	$	89	$	—	$	222
Total Other	$	—	$	—	$	—	$	—	$	—	$	133	$	89	$	—	$	222
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	99	$	—	$	—	$	99
Total by Loan Type
Total Pass	$	643,427	$	1,150,854	$	694,182	$	552,523	$	685,238	$	2,585,019	$	303,521	$	10,067	$	6,624,831
Total Watch		10,072		11,480		6,227		4,361		26,149		136,956		8,582		1,130		204,957
Total Special Mention		—		—		—		—		15,637		4,206		495		169		20,507
Total Substandard		14,642		2,399		5,785		—		93		26,870		2,982		468		53,239
Total Doubtful		462		—		—		—		—		—		3,903		—		4,365
Total Loans (1)	$	668,603	$	1,164,733	$	706,194	$	556,884	$	727,117	$	2,753,051	$	319,483	$	11,834	$	6,907,899
Total Gross charge-offs	$	40	$	—	$	1,675	$	—	$	28	$	147	$	9,267	$	—	$	11,157

(1) The table above excludes the unallocated portfolio layer basis adjustments totaling $0.9 million related to loans hedged in a closed pool at December 31, 2023. See Note 20 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

	December 31, 2022
														Revolving Loans		Revolving Loans
														Amortized Cost		converted to
(In thousands)		2022		2021		2020		2019		2018		Prior		Basis		term loans		Total
1-4 Family Residential
Pass	$	24,207	$	8,697	$	18,657	$	41,820	$	24,962	$	94,270	$	8,007	$	13,190	$	233,810
Watch		—		286		—		734		—		2,419		63		863		4,365
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		3,861		—		444		4,305
Total 1-4 Family Residential	$	24,207	$	8,983	$	18,657	$	42,554	$	24,962	$	100,550	$	8,070	$	14,497	$	242,480
1-4 Family Mixed-Use
Pass	$	44,988	$	43,157	$	32,663	$	63,973	$	64,904	$	297,053	$	—	$	—	$	546,738
Watch		—		—		885		733		—		7,246		—		—		8,864
Special Mention		—		—		—		—		—		719		—		—		719
Substandard		—		—		—		—		—		974		—		—		974
Total 1-4 Family Mixed-Use	$	44,988	$	43,157	$	33,548	$	64,706	$	64,904	$	305,992	$	—	$	—	$	557,295
Commercial Real Estate
Pass	$	328,284	$	181,881	$	152,526	$	230,995	$	240,622	$	744,503	$	—	$	—	$	1,878,811
Watch		1,971		1,579		—		10,597		6,801		10,836		—		—		31,784
Special Mention		—		—		—		—		—		4,041		—		—		4,041
Substandard		—		—		—		—		—		262		—		—		262
Total Commercial Real Estate	$	330,255	$	183,460	$	152,526	$	241,592	$	247,423	$	759,642	$	—	$	—	$	1,914,898
Construction
Pass	$	1,984	$	17,555	$	14,385	$	—		—	$	—	$	27,850	$	—	$	61,774
Watch		—		—		—		—		6,450		—		—		—		6,450
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		2,600		—		—		2,600
Total Construction	$	1,984	$	17,555	$	14,385	$	—	$	6,450	$	2,600	$	27,850	$	—	$	70,824
Multi-family
Pass	$	482,600	$	287,889	$	225,106	$	312,681	$	393,590	$	869,566	$	6,115	$	—	$	2,577,547
Watch		913		—		1,454		—		3,770		14,439		—		—		20,576
Special Mention		—		—		—		—		446		2,286		—		—		2,732
Substandard		—		—		—		—		2,898		1,419		—		—		4,317
Total Multi-family	$	483,513	$	287,889	$	226,560	$	312,681	$	400,704	$	887,710	$	6,115	$	—	$	2,605,172
Commercial Business - Secured by RE
Pass	$	182,805	$	139,748	$	109,292	$	40,175	$	66,436	$	89,663	$	—	$	—	$	628,119
Watch		—		—		629		28,217		421		55,500		—		—		84,767
Special Mention		—		—		—		15,208		—		—		—		—		15,208
Substandard		2,853		—		—		—		—		—		—		—		2,853
Total Commercial Business - Secured by RE	$	185,658	$	139,748	$	109,921	$	83,600	$	66,857	$	145,163	$	—	$	—	$	730,947
Commercial Business
Pass	$	172,011	$	88,081	$	41,998	$	41,125	$	35,555	$	56,281	$	265,624	$	—	$	700,675
Watch		2,708		2,918		—		20,926		14,420		17,823		1,690		—		60,485
Special Mention		—		2,445		4,743		35		1,773		416		—		—		9,412
Substandard		91		—		—		31		284		1,782		7,030		—		9,218
Doubtful		—		—		—		—		—		—		10,042		—		10,042
Total Commercial Business	$	174,810	$	93,444	$	46,741	$	62,117	$	52,032	$	76,302	$	284,386	$	—	$	789,832
Small Business Administration
Pass	$	3,352	$	5,646	$	4,304	$	654	$	1,292	$	1,766	$	—	$	—	$	17,014
Watch		—		—		—		51		2,025		2,872		—		—		4,948
Special Mention		—		—		—		—		—		39		—		—		39
Substandard		—		—		—		—		—		1,192		—		—		1,192
Total Small Business Administration	$	3,352	$	5,646	$	4,304	$	705	$	3,317	$	5,869	$	—	$	—	$	23,193
Other
Pass	$	—	$	—	$	—	$	—	$	—	$	43	$	85	$	—	$	128
Total Other	$	—	$	—	$	—	$	—	$	—	$	43	$	85	$	—	$	128
Total by Loan Type
Total Pass	$	1,240,231	$	772,654	$	598,931	$	731,423	$	827,361	$	2,153,145	$	307,681	$	13,190	$	6,644,616
Total Watch		5,592		4,783		2,968		61,258		33,887		111,135		1,753		863		222,239
Total Special Mention		—		2,445		4,743		15,243		2,219		7,501		—		—		32,151
Total Substandard		2,944		—		—		31		3,182		12,090		7,030		444		25,721
Total Doubtful		—		—		—		—		—		—		10,042		—		10,042
Total Loans	$	1,248,767	$	779,882	$	606,642	$	807,955	$	866,649	$	2,283,871	$	326,506	$	14,497	$	6,934,769

Included within net loans as of December 31, 2023 and 2022, was $4.8 million and $5.2 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction.

The following table presents types of collateral-dependent loans by class of loan which were individually evaluated for impairment:

	Collateral Type
	December 31, 2023				December 31, 2022
(In thousands)		Real Estate		Business Assets		Real Estate		Business Assets
Multi-family residential	$	3,640	$	—	$	3,547	$	—
Commercial real estate		—		—		254		—
One-to-four family - mixed-use property		1,005		—		1,045		—
One-to-four family - residential		4,670		—		3,953		—
Small Business Administration		—		2,576		—		950
Commercial business and other		—		11,768		2,853		17,340
Total	$	9,315	$	14,344	$	11,652	$	18,290

For collateral dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

Off-Balance Sheet Credit Losses

Also included within scope of the current expected credit losses (“CECL”) standard are off-balance sheet loan commitments, which includes the unfunded portion of committed lines of credit and commitments “in-process”. Commitments “in‐process” reflect loans not on the Company’s books but rather negotiated loan / line of credit terms and rates that the Company has offered to customers and is committed to honoring. In reference to “in‐process” credits, the Company defines an unfunded commitment as a credit that has been offered to and accepted by a borrower, which has not closed and by which the obligation is not unconditionally cancellable.

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk through a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet exposures is adjusted as a provision for credit loss expense. The Company uses similar assumptions and risk factors that are developed for collectively evaluated financing receivables. This estimates includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments to be funded over its estimated life.

At December 31, 2023 and 2022, allowance for off-balance-sheet credit losses was $1.1 million and $1.0 million, respectively, which is included in the “Other liabilities” on the Consolidated Statements of Financial Condition. During the year ended December 31, 2023, 2022 and 2021 the Company has $0.1 million, ($0.2) million and ($0.6) million, respectively, in credit loss (benefit) provision for off-balance-sheet items, which are included in “Other operating expenses” on the Consolidated Statements of Income.

The following table presents the activity in the allowance for off balance sheet credit losses:

	For the year ended December 31,
	2023		2022		2021
	(In thousands)
Balance at beginning of period	$	970	$	1,209	$	1,815
Provision (benefit)		132		(239)		(606)
Allowance for Off-Balance Sheet - Credit losses	$	1,102	$	970	$	1,209