	December 31, 2011		December 31, 2010
One- to four-family and cooperative units loans	$	100,712	$	116,886
Multifamily residential and residential mixed use		2,599,456		2,497,727
Mixed use commercial real estate		338,270		365,065
Commercial real estate		413,316		467,715
Construction and land acquisition		3,199		15,238
		3,454,953		3,462,631
Net unearned costs		3,463		5,013
TOTAL	$	3,458,416	$	3,467,644

The Bank originates both adjustable and fixed interest rate real estate loans (excluding loans held for sale). The adjustable-rate loans are generally indexed to the FHLBNY five-year or seven-year borrowing rate. The contractual terms of adjustable rate multifamily residential and commercial real estate loans provide that their interest rate, upon repricing, cannot fall below their rate at the time of origination. The Bank's one- to four-family residential adjustable-rate loans are subject to periodic and lifetime caps and floors on interest rate changes that typically range between 200 and 650 basis points.

The primary areas of concentration of credit risk within Bank's loan portfolio at December 31, 2011 were geographical (as the majority of real estate loans on that date were collateralized by properties located in the New York City metropolitan area) and the proportion of the portfolio comprised of multifamily residential and commercial real estate loans. The Bank had no individual borrowers with aggregate outstanding balances equal to or exceeding regulatory limits for loans to one borrower at either December 31, 2011 or 2010.

At December 31, 2011, the Bank had $357,058 of loans in its portfolio that featured interest only payments. These loans subject the Bank to additional risk since their principal balance will not be reduced prior to contractual maturity. In addition at December 31, 2011, the Bank serviced $24,832 of interest only loans sold to FNMA. The Bank's entire $16,356 FNMA loss exposure applied to these interest only loans (See subsequent discussion in this Note and Note 6 for a discussion of the Bank's FNMA loss exposure).

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 documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying them as to credit risk. This analysis includes all non-homogeneous loans, such as multifamily residential, mixed use residential (i.e., loans in which the aggregate rental income of the underlying collateral property is generated from both residential and commercial units, but the majority of such income is generated from the residential units), mixed use commercial (i.e., loans in which the aggregate rental income of the underlying collateral property is generated from both residential and commercial units, but the majority of such income is generated from the commercial units), commercial real estate and construction and land acquisition loans, as well as one-to four family residential and cooperative apartment loans with balances greater than the FNMA Limits. This analysis is performed on a quarterly basis. 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.

	Balance at December 31, 2011
Grade	One- to Four-Family Residential and Cooperative Unit		Multifamily Residential and Residential Mixed Use		Mixed Use Commercial Real Estate		Commercial Real Estate		Construction		Total
Pass	$	66,949	$	2,587,573	$	320,556	$	364,462	$	-	$	3,339,540
Special Mention		1,133		7,101		10,562		9,244		2,576		30,616
Substandard		2,635		8,245		7,152		39,610		623		58,265
Total real estate loans individually assigned a credit grade	$	70,717	$	2,602,919	$	338,270	$	413,316	$	3,199	$	3,428,421
Real estate loans not individually assigned a credit grade(1)	$	29,995		-		-		-		-	$	29,995

	Balance at December 31, 2010
Grade	One- to Four-Family Residential and Cooperative Unit		Multifamily Residential and Residential Mixed Use		Mixed Use Commercial Real Estate		Commercial Real Estate		Construction		Total
Pass	$	70,449	$	2,483,695	$	357,463	$	426,518	$	9,465	$	3,347,590
Special Mention		127		10,367		5,989		23,150		5,773		45,406
Substandard		257		8,678		1,613		18,047		-		28,595
Total real estate loans individually assigned a credit grade	$	70,833	$	2,502,740	$	365,065	$	467,715	$	15,238	$	3,421,591
Real estate loans not individually assigned a credit grade(1)	$	46,053		-		-		-		-	$	46,053

At December 31, 2011
	30 to 59 Days Past Due	60 to 89 Days Past Due	Loans 90 Days or More Past Due and Still Accruing Interest	Non-accrual (1)	Total Past Due	Current	Total Loans
Real Estate:
One- to four-family residential and cooperative unit	$1,221	$-	-	$2,205	$3,426	$97,286	$100,712
Multifamily residential and residential mixed use	2,589	-	$946	7,069	10,604	2,592,315	2,602,919
Mixed use commercial real estate	4,976	-	-	5,591	10,567	327,703	338,270
Commercial real estate	478	-	2,874	11,083	14,435	398,881	413,316
Construction	-	-	-	-	-	3,199	3,199
Total real estate	$9,264	-	$3,820	$25,948	$39,032	$3,419,384	$3,458,416
Consumer	$12	$5	-	$4	$21	$2,428	$2,449

At December 31, 2010
	30 to 59 Days Past Due	60 to 89 Days Past Due	Loans 90 Days or More Past Due and Still Accruing Interest	Non-accrual	Total Past Due	Current	Total Loans
Real Estate:
One- to four-family residential and cooperative unit	$130	$141	-	$223	$494	$116,392	$116,886
Multifamily residential and residential mixed use	4,435	2,631	$3,510	5,010	15,586	2,487,154	2,502,740
Mixed use commercial real estate	190	3,051	-	1,217	4,458	360,607	365,065
Commercial real estate	3,059	7,592	331	10,775	21,757	445,958	467,715
Construction	-	-	4,500	-	4,500	10,738	15,238
Total real estate	$7,814	$13,415	$8,341	$17,225	$46,795	$3,420,849	$3,467,644
Consumer	$6	$1	-	$17	$24	$2,516	$2,540

At December 31, 2011, the Bank owned real estate loans totaling $3,820 that were 90 days or more past due on their contractual balloon principal payment that continued to make monthly payments consistent with their initial contractual amortization schedule exclusive of the balloon payment. The loan-to-value ratio on each of these loans was estimated to be below 60% as of December 31, 2011, and management expects that each of these loans will either be satisfied or formally re-financed in the future. As a result, these loans remained on accrual status at December 31, 2011 and were deemed performing assets. At December 31, 2010, the Bank owned $8,341 of real estate loans that were 90 days or more past due on their contractual balloon principal payment that continued to make monthly payments consistent with their initial contractual amortization schedule exclusive of the balloon payment. All of these loans have either subsequently been re-financed or satisfied.

At December 31, 2011, the Bank had twenty-two loans totaling $48,753 with terms that were modified in a manner that met the criteria for a TDR. Twelve of these TDRs totaling $44,458 were commercial real estate loans, three loans totaling $1,657 were mixed-use commercial real estate loans, five loans totaling $2,013 were multifamily residential and residential mixed-use real estate loans and the remaining two loans totaling $625 were mixed use loans with four units or less. At December 31, 2010, the Bank had nineteen loans totaling $22,558 with terms that were modified in a manner that met the criteria for a TDR. Eight of these TDRs were commercial real estate loans, eight were multifamily residential and residential mixed-use real estate loans and the remainder were mixed-use commercial real estate loans. The following table summarizes outstanding TDRs as of the dates indicated:

	As of December 31, 2011		As of December 31, 2010
	No. of Loans	Balance	No. of Loans	Balance
Outstanding principal balance at period end	22	$48,753	19	$22,558
TDRs that re-defaulted subsequent to being modified (at period end):	4	7,853	7	10,136
TDRs on accrual status at period end	17	40,688	12	12,422
TDRs on non-accrual status at period end	5	8,065	7	10,136

The Company has not restructured troubled consumer loans, as its consumer loan portfolio has not had any problem issues warranting restructuring. Therefore, all TDRs have been made on real estate loans. The following table summarizes activity related to TDRs for the period indicated:

For the Year Ended December 31, 2011
	Number of Loans	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Loans modifications identified during the period that met the definition of a TDR:
Multifamily residential and residential mixed use	2	$573	$573
Commercial real estate	6	30,095	30,095
Concessions granted:
Temporary deferral of principal payments	5	20,523	20,523
Temporary deferral of interest payments	1	212	212
Reduction in interest rate for the remainder of the term of the loan	2	9,933	9,933
Extension of maturity	-	-	-
TOTAL	8	$30,668	$30,668

The Bank's allowance for loan losses at December 31, 2011 reflected $1,851 of allocated reserves associated with modifications identified as TDRs during the year ended December 31, 2011. In addition, during the year ended December 31, 2010, the Bank charged-off approximately $24 of principal on one loan that was modified in a manner that met the definition of a TDR during the year ended December 31, 2011. Otherwise, there was no impact on the Bank's allowance for loan losses related to TDRs during the years ended December 31, 2011 and 2010.

A TDR is considered to be in payment default once it is 90 days contractually past due under the modified terms. The following table presents, as of December 31, 2011, TDRs by collateral type for which there was a payment default within twelve months following their respective modification date:

	At or for the Year Ended December 31, 2011
TDRs that Subsequently Defaulted Within 12 Months of Modification:	No. of Loans	Recorded Investment
Mixed use commercial real estate	1	$508
Commercial real estate	2	6,310
Total real estate (including loans held for sale)	3	$6,818

All TDRs are considered impaired loans and are evaluated individually for measurable impairment, if any. Aggregate principal charge-offs of $1,100 were recognized against the allowance for loan losses on loans described in the above table during the year ended December 31, 2011. In addition, at December 31, 2011, allocated reserves totaling $132 were recognized on TDRs that re-defaulted for future losses deemed probable to occur on these loans, that were not specifically measured from the likely realizable net proceeds from either a note sale or liquidation of the collateral property. No such allocated reserves were maintained as of December 31, 2010.

At December 31, 2011, the Bank had fifty loans totaling $70,384 deemed impaired (as defined in Note 1), compared to fifty-seven loans totaling $44,097 as of December 31, 2010. During the year ended December 31, 2011, forty-one loans totaling $70,450 were added to impaired status, nineteen loans totaling $8,836 improved in such a manner that they were removed from impaired status, principal repayments on twenty-two impaired loans totaled $3,010, two impaired loans totaling $3,021 were transferred to held for sale and principal charge-offs totaling $5,100 were recognized on twenty impaired loans. The Bank disposed of twenty-seven impaired loans with a recorded balance totaling $24,196 during the year ended December 31, 2011, receiving an aggregate amount at or below their recorded balance. During the year ended December 31, 2010, forty-six loans totaling $37,208 were added to impaired status, while seven loans totaling $5,130 that were impaired at December 31, 2009 were sold, and one $320 loan was transferred to OREO. In addition, on eight loans deemed impaired at both December 31, 2010 and 2009, $2,708 of principal was charged-off during the year ended December 31, 2010.

At December 31, 2011 and December 31, 2010, loans totaling $44,508 and $24,269, respectively, while on accrual status, were deemed impaired. These loans were comprised of one of the following as of the respective dates: I) accruing TDRs; 2) loans past due 90 days or more but still accruing; or 3) loans with sufficient weakness to warrant impaired designation but possessing payment history and collateralization sufficient to maintain accrual status.

At December 31, 2011 and December 31, 2010, approximately $75 and $340, respectively, of one- to four-family residential and cooperative apartment loans with a balance equal to or less than the FNMA Limits, and consumer loans were on non-accrual status, but were not included in the category of impaired loans, as these loans are considered homogeneous loan pools not individually analyzed for impairment.

Under the terms of its seller/servicer agreement with FNMA, the Bank is obligated to fund FNMA all monthly principal and interest payments under the original terms of the sold loans until the earlier of the following events: (1) the loans have been fully satisfied or enter OREO status; or (2) the First Loss Position is fully exhausted.

At December 31, 2011, within the pool of multifamily loans sold to FNMA, one $1,342 loan was delinquent between 30 and 89 days, and one $757 loan was 90 days or more delinquent. At December 31, 2010, within the pool of multifamily loans sold to FNMA, three loans totaling $3,699 were 30 to 89 days delinquent, and no loans were 90 days or more delinquent.