Loans

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Loans and Allowance for Credit Losses

5.     Loans

The following represents the composition of loans as of the dates indicated:

	March 31,		December 31,
	2024		2023
	(In thousands)
Multi-family residential	$	2,622,737	$	2,658,205
Commercial real estate		1,925,312		1,958,252
One-to-four family ― mixed-use property		516,198		530,243
One-to-four family ― residential		267,156		220,213
Construction		60,568		58,673
Small Business Administration		16,244		20,205
Commercial business and other		1,411,725		1,452,518
Net unamortized premiums and unearned loan fees		8,337		9,590
Total loans, net of fees and costs excluding portfolio layer basis adjustments		6,828,277		6,907,899
Unallocated portfolio layer basis adjustments (1)		(6,334)		(949)
Total loans, net of fees and costs	$	6,821,943	$	6,906,950

(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 11 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

Loans are reported at their outstanding principal balance net of any unearned income, charge-offs, deferred loan fees and costs on originated loans, certain market value adjustments related to hedging and unamortized premiums or discounts on purchased loans. Loan fees and certain loan origination costs are deferred. Net loan origination costs and premiums or discounts on loans purchased are amortized into interest income over the contractual life of the loans using the level-yield method. Prepayment penalties received on loans which pay in full prior to their scheduled maturity are included in interest income in the period they are collected.

Interest on loans is recognized on an accrual basis. Accrued interest receivable totaled $44.7 million and $45.0 million at March 31, 2024 and December 31, 2023, respectively, and was reported in “Interest and dividends receivable” on the Consolidated Statements of Financial Condition. The accrual of income on loans is generally discontinued when certain factors, such as contractual delinquency of 90 days or more, indicate reasonable doubt as to the timely collectability of such income. Uncollected interest previously recognized on non-accrual loans is reversed from interest income at the time the loan is placed on non-accrual status. A non-accrual loan can be returned to accrual status when contractual delinquency returns to less than 90 days delinquent. Payments received on non-accrual loans that do not bring the loan to less than 90 days delinquent are recorded on a cash basis. Payments can also be applied first as a reduction of principal until all principal is recovered and then subsequently to interest, if in management’s opinion, it is evident that recovery of all principal due is likely to occur.

Allowance for credit losses

The allowance for credit losses (“ACL”) is an estimate that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial assets. Loans are charged off against that ACL when management believes that a loan balance is uncollectable based on quarterly analysis of credit risk.

The amount of the ACL is based upon a loss rate model that considers multiple factors which reflects management’s assessment of the credit quality of the loan portfolio. Management estimates the allowance balance using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The factors are both quantitative and qualitative in nature including, but not limited to, historical losses,

economic conditions, trends in delinquencies, value and adequacy of underlying collateral, volume and portfolio mix, and internal loan processes. The Company has made a policy election to exclude accrued interest from the amortized cost basis of loans.

The Company recorded a provision for credit losses on loans totaling $0.6 million and $7.5 million for the three months ended March 31, 2024 and 2023, respectively. The provision recorded during the three months ended March 31, 2024, was primarily driven by an increased reserve on one non-accrual business loan. The ACL - loans totaled $40.8 million on March 31, 2024 compared to $40.2 million on December 31, 2023. On March 31, 2024, the ACL - loans represented 0.60% of gross loans and 164.1% of non-performing loans. On December 31, 2023, the ACL - loans represented 0.58% of gross loans and 159.6% of non-performing loans.

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 March 31, 2024, 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 three months ended March 31, 2024
(Dollars in thousands)	Term Extension and Reduced Interest Rate
Loan Modifications Made to Borrowers Experiencing Financial Difficulty	Number		Amortized Cost Basis	% of Total Class of Financing Receivable		Financial Effect
Commercial business and other	1	$	378	—	%	Extended maturity to August 2026 (3 months) and reduced interest rate to zero percent.
Total	1	$	378

There were no loans modified during the three months ended March 31, 2023.  

The following table shows the payment status at March 31, 2024 of borrowers experiencing financial difficulty and for which a modification has occurred:

		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	$	—	$	—	$	1,555	$	1,555
Commercial business and other		1,690		—		378		2,068
Total	$	1,690	$	—	$	1,933	$	3,623

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 the periods shown below:

	At or for the three months March 31, 2024
(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	$	3,640	$	5,103	$	5,103	$	—	$	—
One-to-four family - mixed-use property		1,005		933		933		1		—
One-to-four family - residential		4,670		3,341		3,341		1		—
Small Business Administration		2,576		2,641		2,641		—		—
Commercial business and other		11,768		12,965		4,291		1		—
Total	$	23,659	$	24,983	$	16,309	$	3	$	—

	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

The following is a summary of interest foregone on non-accrual loans for the periods indicated.

	For the three months ended
	March 31,
	2024		2023
(In thousands)
Interest income that would have been recognized had the loans performed in accordance with their original terms	$	604	$	506
Less: Interest income included in the results of operations		(3)		(4)
Total foregone interest	$	601	$	502

The following tables show the aging analysis of the amortized cost basis of loans at the period indicated by class of loans:
​

	At March 31, 2024
(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	$	5,796	$	5,037	$	5,103	$	15,936	$	2,610,331	$	2,626,267
Commercial real estate		—		—		—		—		1,926,549		1,926,549
One-to-four family - mixed-use property		2,870		234		933		4,037		514,818		518,855
One-to-four family - residential		1,521		631		3,341		5,493		261,582		267,075
Construction		—		—		—		—		60,141		60,141
Small Business Administration		—		—		2,641		2,641		13,801		16,442
Commercial business and other		164		496		8,617		9,277		1,403,671		1,412,948
Total	$	10,351	$	6,398	$	20,635	$	37,384	$	6,790,893	$	6,828,277

(1) The table above excludes the unallocated portfolio layer basis adjustments totaling $6.3 million related to loans hedged in a closed pool at March 31, 2024. See Note 11 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

	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 11 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

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 previously 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 as 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 does contain a potential weakness that deserves closer attention.

The following tables summarize the various risk categories of mortgage and non-mortgage loans by loan portfolio segments and by class of loans by year of origination at the periods indicated below:

	March 31, 2024
														Revolving Loans		Revolving Loans
														Amortized Cost		converted to
(In thousands)		2024		2023		2022		2021		2020		Prior		Basis		term loans		Total
Multi-family Residential
Pass	$	11,694	$	253,688	$	458,919	$	274,074	$	206,697	$	1,364,119	$	4,711	$	—	$	2,573,902
Watch		—		—		—		716		1,914		35,077		445		—		38,152
Special Mention		—		—		5,005		—		2,714		644		—		—		8,363
Substandard		—		—		—		—		—		5,850		—		—		5,850
Total Multi-family Residential	$	11,694	$	253,688	$	463,924	$	274,790	$	211,325	$	1,405,690	$	5,156	$	—	$	2,626,267
Commercial Real Estate
Pass	$	10,059	$	198,620	$	320,578	$	174,072	$	130,344	$	1,006,197	$	—	$	—	$	1,839,870
Watch		—		—		437		1,359		6,880		77,855		—		—		86,531
Special Mention		—		—		—		—		—		148		—		—		148
Total Commercial Real Estate	$	10,059	$	198,620	$	321,015	$	175,431	$	137,224	$	1,084,200	$	—	$	—	$	1,926,549
1-4 Family Mixed-Use Property
Pass	$	763	$	22,750	$	42,836	$	41,201	$	29,456	$	374,421	$	—	$	—	$	511,427
Watch		—		—		—		—		—		5,033		—		—		5,033
Special Mention		—		—		—		—		—		1,248		—		—		1,248
Substandard		—		—		—		—		—		1,147		—		—		1,147
Total 1-4 Family Mixed-Use Property	$	763	$	22,750	$	42,836	$	41,201	$	29,456	$	381,849	$	—	$	—	$	518,855
1-4 Family Residential
Pass	$	—	$	56,782	$	23,380	$	8,396	$	16,367	$	135,207	$	7,550	$	9,441	$	257,123
Watch		—		—		—		266		—		2,321		—		1,027		3,614
Special Mention		—		—		511		—		—		—		—		209		720
Substandard		—		—		—		—		—		5,175		—		443		5,618
Total 1-4 Family Residential	$	—	$	56,782	$	23,891	$	8,662	$	16,367	$	142,703	$	7,550	$	11,120	$	267,075
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	14	$	—	$	—	$	14
Construction
Pass	$	—	$	6,083	$	3	$	—	$	—	$	—	$	48,262	$	—	$	54,348
Watchlist		—		—		—		5,793		—		—		—		—		5,793
Total Construction	$	—	$	6,083	$	3	$	5,793	$	—	$	—	$	48,262	$	—	$	60,141
Small Business Administration
Pass	$	—	$	1,966	$	3,265	$	1,333	$	2,031	$	1,792	$	—	$	—	$	10,387
Watch		—		—		—		—		—		2,864		—		—		2,864
Special Mention		—		—		—		—		—		343		—		—		343
Substandard		—		—		—		1,693		—		1,155		—		—		2,848
Total Small Business Administration	$	—	$	1,966	$	3,265	$	3,026	$	2,031	$	6,154	$	—	$	—	$	16,442
Commercial Business
Pass	$	15,773	$	123,793	$	93,740	$	52,370	$	29,623	$	90,356	$	233,208	$	—	$	638,863
Watch		—		270		7,884		1,474		2,425		32,656		4,953		—		49,662
Special Mention		—		—		—		—		—		23		—		—		23
Substandard		—		378		2,427		4,323		—		3,418		3,380		—		13,926
Doubtful		—		462		—		—		—		—		3,658		—		4,120
Total Commercial Business	$	15,773	$	124,903	$	104,051	$	58,167	$	32,048	$	126,453	$	245,199	$	—	$	706,594
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	33	$	—	$	—	$	33
Commercial Business - Secured by RE
Pass	$	5,656	$	36,864	$	175,592	$	129,512	$	101,758	$	185,781	$	—	$	—	$	635,163
Watch		—		9,695		303		—		3,811		40,999		—		—		54,808
Special Mention		—		—		—		—		—		15,165		—		—		15,165
Substandard		—		—		—		—		—		1,002		—		—		1,002
Total Commercial Business - Secured by RE	$	5,656	$	46,559	$	175,895	$	129,512	$	105,569	$	242,947	$	—	$	—	$	706,138
Other
Pass	$	—	$	—	$	—	$	—	$	—	$	101	$	115	$	—	$	216
Total Other	$	—	$	—	$	—	$	—	$	—	$	101	$	115	$	—	$	216
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	11	$	—	$	—	$	11
Total by Loan Type
Total Pass	$	43,945	$	700,546	$	1,118,313	$	680,958	$	516,276	$	3,157,974	$	293,846	$	9,441	$	6,521,299
Total Watch		—		9,965		8,624		9,608		15,030		196,805		5,398		1,027		246,457
Total Special Mention		—		—		5,516		—		2,714		17,571		—		209		26,010
Total Substandard		—		378		2,427		6,016		—		17,747		3,380		443		30,391
Total Doubtful		—		462		—		—		—		—		3,658		—		4,120
Total Loans (1)	$	43,945	$	711,351	$	1,134,880	$	696,582	$	534,020	$	3,390,097	$	306,282	$	11,120	$	6,828,277
Total Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	58	$	—	$	—	$	58

⁽¹⁾ The table above excludes the unallocated portfolio layer basis adjustments totaling $6.3 million related to loans hedged in a closed pool at March 31, 2024. See Note 11 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

	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 11 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

Included within net loans were $4.6 million and $4.8 million at March 31, 2024 and December 31, 2023, 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.

A loan is considered collateral dependent when the borrower is experiencing financial difficulties and repayment is expected to be substantially provided by the operation or sale of the collateral. The following table presents types of collateral-dependent loans by class of loans as of the periods indicated:

	Collateral Type
	March 31, 2024				December 31, 2023
(In thousands)		Real Estate		Business Assets		Real Estate		Business Assets
Multi-family residential	$	5,103	$	—	$	3,640	$	—
One-to-four family - mixed-use property		933		—		1,005		—
One-to-four family - residential		3,341		—		4,670		—
Small Business Administration		—		2,641		—		2,576
Commercial business and other		1,002		11,963		—		11,768
Total	$	10,379	$	14,604	$	9,315	$	14,344

Off-Balance Sheet Credit Losses

Also included within scope of the 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 in 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.

Commitments to extend credit (principally real estate mortgage loans) and lines of credit (principally home equity lines of credit and business lines of credit) totaled $47.0 million and $413.9 million, respectively, on March 31, 2024.

The following table presents the activity in the allowance for off-balance sheet credit losses for the three months ended March 31, 2024, and 2023.

	For the three months ended
	March 31,
	2024		2023
	(In thousands)
Balance at beginning of period	$	1,102	$	970
Provision (benefit) (1)		(106)		(85)
Allowance for Off-Balance Sheet - Credit losses (2)	$	996	$	885

(1) Included in “Other operating expenses” on the Consolidated Statements of Income.

(2) Included in “Other liabilities” on the Consolidated Statements of Financial Condition.