

	December 31,
	2019		2018
	(In thousands)
Real estate loans:
One-to-four family	$	2,077,079	$	1,830,186
Multifamily and commercial	2,919,985		2,142,154
Construction	298,942		261,473
Commercial business loans	483,215		333,876
Consumer loans:
Home equity loans and advances	388,127		393,492
Other consumer loans	1,960		1,108
Total gross loans	6,169,308		4,962,289
Purchased credit-impaired loans	7,021		—
Net deferred loan costs, fees and purchased premiums and discounts	21,237		16,893
Loans receivable	$	6,197,566	$	4,979,182

There were no loans held for sale at December 31, 2019, and $8.1 million of one-to-four family real estate loans were held-for-sale at December 31, 2018. During the year ended December 31, 2019, the Company sold $97.4 million, $4.3 million, and $164,000 of one-to-four family and fixed rate home equity loans, commercial real estate and commercial business loans, respectively, to third parties. Gross gains of $718,000 and no gross losses were recognized from the sales of loans. During the year ended December 31, 2018, the Company sold $3.6 million of one-to-four family and fixed rate home equity loans resulting in no gross gains or losses. During the year ended September 30, 2017 and the three months ended December 31, 2017 no loans held-for-sale were sold by the Company.

During the year ended December 31, 2019, the Company sold $5.3 million, $5.5 million, and $901,000 of one-to-four family and fixed rate home equity loans, commercial real estate and commercial business loans, respectively, included in loans receivable. Gross gains of $67,000 and no gross losses were recognized from the sales of loans. During the year ended December 31, 2018, the Company sold $32.0 million of one-to-four family and fixed rate home equity loans to third parties, resulting in gross gains of $618,000 and no gross losses. For the year ended September 30, 2017, the Company sold $62.4 million of one-to-four family and fixed rate home equity, and multifamily loans to third parties resulting in no gross gains and $380,000 of gross losses.

During the years ended December 31, 2019 and 2018, and September 30, 2017, the Company purchased $89.8 million, $32.3 million and $20.5 million, respectively, of one-to-four family, multifamily and commercial real estate loans. During the three months ended December 31, 2017, the Company purchased $56.1 million of multifamily and commercial real estate loans.

At December 31, 2019 and 2018, the carrying value of loans serviced by the Company for investors was $526.3 million and $462.7 million, respectively. These loans are not included in the Consolidated Statements of Financial Condition. Servicing income totaled $1.2 million, $1.1 million, and $1.2 million for the year ended December 31, 2019 and 2018, September 30, 2017. For the three months ended December 31, 2017 servicing income totaled $298,000.

The Company has entered into Guarantor Swaps with Freddie Mac which results in improved liquidity. During the year ended December 31, 2019, the Company exchanged $21.6 million of loans for a Freddie Mac Mortgage Participation Certificate. The Company retained the servicing of these loans. No loans were sold to Freddie Mac in exchange for Freddie Mac Mortgage Participation Certificates during the years ended December 31, 2018 and September 30, 2017, or during the three months ended December 31, 2017.

The Company has granted loans to certain officers and directors of the Company and its subsidiaries and to their associates. As of December 31, 2019 and 2018 such loans totaled approximately $1.1 million and $1.4 million, respectively. During the years ended December 31, 2019 and 2018 and the three months ended December 31, 2017, the Bank granted no new loans to related parties. During the year ended September 30, 2017, new loans totaling $390,000 were granted to related parties. These loans are performing in accordance with their original terms.



	December 31, 2019
	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current		Total
	(In thousands)
Real estate loans:
One-to-four family	$	6,249	$	2,132	$	1,638	$	10,019	$	2,067,060	$	2,077,079
Multifamily and commercial	626		1,210		716		2,552		2,917,433		2,919,985
Construction	—		—		—		—		298,942		298,942
Commercial business loans	1,056		—		2,489		3,545		479,670		483,215
Consumer loans:
Home equity loans and advances	1,708		246		405		2,359		385,768		388,127
Other consumer loans	3		—		—		3		1,957		1,960
Total loans	$	9,642	$	3,588	$	5,248	$	18,478	$	6,150,830	$	6,169,308



	December 31, 2018
	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current		Total
	(In thousands)
Real estate loans:
One-to-four family	$	8,384	$	1,518	$	819	$	10,721	$	1,819,465	$	1,830,186
Multifamily and commercial	1,870		1,425		154		3,449		2,138,705		2,142,154
Construction	—		—		—		—		261,473		261,473
Commercial business loans	208		279		911		1,398		332,478		333,876
Consumer loans:
Home equity loans and advances	1,550		173		905		2,628		390,864		393,492
Other consumer loans	—		—		—		—		1,108		1,108
Total loans	$	12,012	$	3,395	$	2,789	$	18,196	$	4,944,093	$	4,962,289

The Company considers a loan to be delinquent when we have not received a payment within 30 days of its contractual due date. Generally, a loan is designated as a non-accrual loan when the payment of interest is 90 days or more in arrears of its contractual due date, or repayment is unlikely. Non-accruing loans are returned to an accrual status after there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible. The Company identifies loans that may need to be charged-off as a loss, by reviewing all delinquent loans, classified loans and other loans that management may have concerns about collectability. At December 31, 2019 and 2018, non-accrual loans totaled $6.7 million and $2.8 million, respectively. Included in non-accrual loans at December 31, 2019, are 8 loans totaling $1.5 million which are less than 90 days in arrears. At December 31, 2018, no loans less than 90 days in arrears were included in non-accrual loans.

PCI loans are accounted for in accordance with ASC Subtopic 310-30 and are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance (i.e., the allowance for loan losses), and aggregated and accounted for as pools of loans based on common risk characteristics. The difference between the undiscounted cash flows expected at acquisition and the initial carrying amount (fair value) of the PCI loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each pool. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or a valuation allowance. Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loan pools. See Note 2 for additional information.

The following table presents information regarding the estimates of the contractually required payments, the cash flows expected to be collected, and the estimated fair value of the PCI loans acquired in the Stewardship acquisition as of November 1, 2019 (See Note 3 for more details):



	November 1, 2019
	(In thousands)

Contractually required principal and interest	$	9,286
Contractual cash flows not expected to be collected (non-accretable difference)	(1,823		)
Expected cash flows to be collected	7,463
Interest component of expected cash flows (accretable yield)	(556		)
Fair value of acquired loans	$	6,907



	December 31,
	2019		2018
	(In thousands)
Non-accrual loans:
Real estate loans:
One-to-four family	$	1,732	$	819
Multifamily and commercial	716		154
Commercial business loans	3,686		911
Consumer loans:
Home equity loans and advances	553		905
Total non-accrual loans	$	6,687	$	2,789

If the non-accrual loans had performed in accordance with their original terms, interest income would have increased by $509,000, $126,000, $295,000, and $61,000 for the years ended December 31, 2019 and 2018, September 30, 2017, and the three months ended December 31, 2017, respectively. The amount of cash basis interest income that was recognized on these loans during the years ended

We may obtain physical possession of real estate collateralizing a residential mortgage loan via foreclosure or through an in-substance repossession. At December 31, 2019, the Company had no real estate owned. At December 31, 2018, we held one single-family property in real estate owned with a carrying value of $92,000 that was acquired through foreclosure on a residential mortgage loan. At of December 31, 2019 and 2018, we had 4 and 14 residential mortgage loans with carrying values of $522,000 and $1.6 million, respectively, collateralized by residential real estate which are in the process of foreclosure.

The Company maintains the allowance for loan losses through provisions for loan losses which are charged to income. Charge-offs against the allowance for loan losses are taken on loans where management determines that the collection of loan principal is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for loan losses.

As part of the evaluation of the adequacy of the allowance for loan losses, management prepares an analysis each quarter that categorizes the entire loan portfolio by certain risk characteristics such as loan type (residential mortgage, commercial mortgage, construction, commercial, etc.) and loan risk rating.

The Company utilizes an eight-point risk rating system to summarize its loan portfolio into categories with similar risk characteristics. Loans deemed to be “acceptable quality” are rated 1 through 4 (Pass), with a rating of 1 established for loans with minimal risk. Loans that are deemed to be of “questionable quality” are rated 5 (Special Mention) or 6 (Substandard). Loans with adverse classifications are rated 7 (Doubtful) or 8 (Loss). The risk ratings are also confirmed through periodic loan review examinations, which are currently performed by both an independent third-party and the Company's internal loan review department. The Company requires an annual review be performed above certain dollar thresholds, depending on loan type, to help determine the appropriate risk ratings. Results from examinations are presented to the Audit Committee of the Board of Directors.

Management estimates the quantitative component of the allowance for loan losses for loans collectively evaluated for impairment by applying loss factors based upon the loan type categorization, risk rating level, and applying qualitative adjustments at the portfolio level. Quantitative loss factors give consideration to historical loss experience and migration experience by loan type over a look-back period, adjusted for a loss emergence period. Qualitative factor adjustments give consideration to other qualitative or environmental factors such as trends and levels of delinquencies, impaired loans, charge-offs, recoveries and loan volumes, as well as national and local economic trends and conditions.

Qualitative factor adjustments to such loss factors are made to reflect risks in the loan portfolio not captured by the quantitative loss factors and, as such, are evaluated from a risk level perspective relative to the risk levels present over the look-back period. The reserves resulting from the application of both the quantitative experience and qualitative factors are combined to arrive at the allowance for loan losses for loans collectively evaluated for impairment.

Management believes the primary risks inherent in the portfolio are a general decline in the economy, a decline in real estate market values, rising unemployment, increasing vacancy rates, and increases in interest rates in the absence of economic improvement. Any one or a combination of these events may adversely affect a borrowers’ ability to repay its loan, resulting in increased delinquencies and loan losses. Accordingly, the Company has recorded loan losses at a level which is estimated to represent the current risk in its loan portfolio. Management considers it important to maintain the ratio of the allowance for loan losses to total loans at an acceptable level considering the current composition of the loan portfolio.

Although management believes that the Company has established and maintains the allowance for loan losses at appropriate levels, additional reserves may be necessary if future economic and other conditions differ substantially from the current operating environment. Management evaluates its estimates and assumptions on an ongoing basis and the estimates and assumptions are adjusted when facts and circumstances necessitate a re-valuation of the estimate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. In addition, regulatory agencies periodically review the adequacy of the Company’s allowance for loan losses as an integral part of their examination process. Such agencies may require the Company to recognize additions to the allowance or additional write-downs based on their judgments about information available to them at the time of their examination. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant uncertainties.

The Bank defines a loan as impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due under the contractual terms of the loan agreement. All multifamily and commercial real estate, construction, and commercial business loans with an outstanding balance of greater than $500,000 and not accruing, loans modified in a troubled debt restructuring (TDR), and other loans if there is specific information of a collateral shortfall are individually evaluated for impairment. Impairment is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral less estimated selling costs.



	December 31, 2019
	One-to-Four Family		Multifamily and Commercial		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Unallocated		Total
	(In thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	484	$	2	$	—	$	1,121	$	14	$	—	$	—	$	1,621
Collectively evaluated for impairment	13,296		22,978		7,435		14,715		1,655		9		—		60,088
Loans acquired with deteriorated credit quality	—		—		—		—		—		—		—		—
Total	$	13,780	$	22,980	$	7,435	$	15,836	$	1,669	$	9	$	—	$	61,709

Total loans:
Individually evaluated for impairment	$	8,891	$	2,599	$	—	$	5,178	$	2,143	$	—	$	—	$	18,811
Collectively evaluated for impairment	2,068,188		2,917,386		298,942		478,037		385,984		1,960		—		6,150,497
Loans acquired with deteriorated credit quality	429		4,866		—		1,726		—		—		—		7,021
Total gross loans	$	2,077,508	$	2,924,851	$	298,942	$	484,941	$	388,127	$	1,960	$	—	$	6,176,329



	December 31, 2018
	One-to-Four Family		Multifamily and Commercial		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Unallocated		Total
	(In thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	537	$	—	$	—	$	366	$	12	$	—	$	—	$	915
Collectively evaluated for impairment	14,695		23,251		7,217		13,810		2,446		8		—		61,427
Total	$	15,232	$	23,251	$	7,217	$	14,176	$	2,458	$	8	$	—	$	62,342

Total loans:
Individually evaluated for impairment	$	9,048	$	2,695	$	—	$	2,944	$	3,100	$	—	$	—	$	17,787
Collectively evaluated for impairment	1,821,138		2,139,459		261,473		330,932		390,392		1,108		—		4,944,502
Total gross loans	$	1,830,186	$	2,142,154	$	261,473	$	333,876	$	393,492	$	1,108	$	—	$	4,962,289

Loan modifications to borrowers experiencing financial difficulties that are considered troubled debt restructurings ("TDRs") primarily involve the lowering of the monthly payments on such loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. These modifications generally do not result in the forgiveness of principal or accrued interest. In addition, the Company attempts to obtain additional collateral or guarantor support when modifying such loans. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

The following table presents the number of loans modified as TDRs for the years ended December 31, 2019 and 2018, and September 30, 2017, along with their balances immediately prior to the modification date and post-modification. Post-modification recorded investment represents the net book balance immediately following modification. There we no loans modified during the three months ended December 31, 2017,



	For the Years Ended December 31,
	2019					2018
	No. of Loans	Pre-modification Recorded Investment		Post-modification Recorded Investment		No. of Loans	Pre-modification Recorded Investment		Post-modification Recorded Investment
	(In thousands)
Troubled Debt Restructurings
Real estate loans:
One-to-four family	—	$	—	$	—	5	$	801	$	801
Multifamily and commercial	—	—		—		1	65		65
Commercial business loans	1	4,095		4,095		—	—		—
Consumer loans:
Home equity loans and advances	—	—		—		1	588		588
Total restructured loans	1	$	4,095	$	4,095	7	$	1,454	$	1,454



	For the Year Ended September 30,
	2017
	No. of Loans	Pre-modification Recorded Investment		Post-modification Recorded Investment
		(Dollars in thousands)
Troubled Debt Restructurings
Real estate loans:
One-to-four family	3	$	548	$	548
Multifamily and commercial	1	3,964		3,964
Commercial business loans	1	18		18
Consumer loans:
Home equity loans and advances	2	248		248
Total restructured loans	7	$	4,778	$	4,778



	Years Ended December 31,						Three Months Ended December 31,			Year Ended September 30,
	2019			2018			2017			2017
	(In thousands)

Balance at beginning of period	$	62,342		$	58,178		$	54,633		$	51,867
Provision charged	4,224			6,677			3,400			6,426
Recoveries	496			707			188			584
Charge-offs	(5,353		)	(3,220		)	(43		)	(4,244		)
Balance at end of period	$	61,709		$	62,342		$	58,178		$	54,633



	For the Year Ended December 31, 2019
	One-to-Four Family			Multifamily and Commercial			Construction		Commercial Business			Home Equity Loans and Advances			Other Consumer Loans			Unallocated		Total
	(In thousands)

Balance at beginning of period	$	15,232		$	23,251		$	7,217	$	14,176		$	2,458		$	8		$	—	$	62,342
Provision charged (credited)	(429		)	(178		)	216		5,250			(638		)	3			—		4,224
Recoveries	30			10			2		404			50			—			—		496
Charge-offs	(1,053		)	(103		)	—		(3,994		)	(201		)	(2		)	—		(5,353		)
Balance at end of period	$	13,780		$	22,980		$	7,435	$	15,836		$	1,669		$	9		$	—	$	61,709



	For the Year Ended December 31, 2018
	One-to-Four Family			Multifamily and Commercial			Construction		Commercial Business			Home Equity Loans and Advances			Other Consumer Loans			Unallocated			Total
	(In thousands)

Balance at beginning of period	$	19,991		$	19,933		$	5,217	$	8,275		$	4,576		$	8		$	178		$	58,178
Provision charged (credited)	(4,503		)	3,445			1,997		7,860			(1,949		)	5			(178		)	6,677
Recoveries	334			2			3		240			122			6			—			707
Charge-offs	(590		)	(129		)	—		(2,199		)	(291		)	(11		)	—			(3,220		)
Balance at end of period	$	15,232		$	23,251		$	7,217	$	14,176		$	2,458		$	8		$	—		$	62,342



	For the Three Months Ended December 31, 2017
	One-to-Four Family			Multifamily and Commercial			Construction			Commercial Business			Home Equity Loans and Advances			Other Consumer Loans			Unallocated		Total
	(In thousands)

Balance at beginning of period	$	18,533		$	18,029		$	5,299		$	8,480		$	4,190		$	8		$	94	$	54,633
Provision charged (credited)	1,473			1,906			(82		)	(373		)	389			3			84		3,400
Recoveries	9			—			—			171			6			2			—		188
Charge-offs	(24		)	(2		)	—			(3		)	(9		)	(5		)	—		(43		)
Balance at end of period	$	19,991		$	19,933		$	5,217		$	8,275		$	4,576		$	8		$	178	$	58,178



	For the Year Ended September 30, 2017
	One-to-Four Family			Multifamily and Commercial			Construction			Commercial Business			Home Equity Loans and Advances			Other Consumer Loans			Unallocated			Total
	(In thousands)

Balance at beginning of period	$	18,638		$	17,390		$	5,960		$	5,721		$	4,052		$	11		$	95		$	51,867
Provision charged (credited)	1,029			1,644			(661		)	3,183			1,219			13			(1		)	6,426
Recoveries	268			75			—			182			59			—			—			584
Charge-offs	(1,402		)	(1,080		)	—			(606		)	(1,140		)	(16		)	—			(4,244		)
Balance at end of period	$	18,533		$	18,029		$	5,299		$	8,480		$	4,190		$	8		$	94		$	54,633



	At December 31, 2019
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	4,314	$	5,473	$	—
Multifamily and commercial	1,494		2,191		—
Commercial business loans	3,859		4,048		—
Consumer loans:
Home equity loans and advances	1,080		1,217		—
	10,747		12,929		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	4,577		4,613		484
Multifamily and commercial	1,105		1,105		2
Commercial business loans	1,319		4,307		1,121
Consumer loans:
Home equity loans and advances	1,063		1,063		14
	8,064		11,088		1,621
Total:
Real estate loans:
One-to-four family	8,891		10,086		484
Multifamily and commercial	2,599		3,296		2
Commercial business loans	5,178		8,355		1,121
Consumer loans:
Home equity loans and advances	2,143		2,280		14
Total loans	$	18,811	$	24,017	$	1,621



	At December 31, 2018
	Recorded Investment		Unpaid Principal Balance		Specific Allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One-to-four family	$	4,156	$	5,307	$	—
Multifamily and commercial	2,695		3,482		—
Commercial business loans	2,285		2,374		—
Consumer loans:
Home equity loans and advances	2,511		2,866		—
	11,647		14,029		—
With a specific allowance recorded:
Real estate loans:
One-to-four family	4,892		4,939		537
Commercial business loans	659		768		366
Consumer loans:
Home equity loans and advances	589		589		12
	6,140		6,296		915
Total:
Real estate loans:
One-to-four family	9,048		10,246		537
Multifamily and commercial	2,695		3,482		—
Commercial business loans	2,944		3,142		366
Consumer loans:
Home equity loans and advances	3,100		3,455		12
Total loans	$	17,787	$	20,325	$	915

Specific allocations of the allowance for loan losses attributable to impaired loans totaled $1.6 million and $915,000 at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, impaired loans for which there was no related allowance for loan losses totaled $10.7 million and $11.6 million, respectively.



	For the Years Ended December 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Real estate loans:
One-to-four family	$	8,811	$	434	$	10,224	$	445
Multifamily and commercial	2,639		147		2,712		155
Construction	850		—		—		—
Commercial business loans	6,378		479		3,060		118
Consumer loans:
Home equity loans and advances	2,562		143		3,361		173
Totals	$	21,240	$	1,203	$	19,357	$	891



	For the Three Months Ended December 31,				For the Year Ended September 30,
	2017				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Real estate loans:
One-to-four family	$	14,015	$	110	$	15,027	$	469
Multifamily and commercial	4,087		39		4,328		279
Commercial business loans	3,870		46		3,796		195
Consumer loans:
Home equity loans and advances	3,618		35		3,903		136
Totals	$	25,590	$	230	$	27,054	$	1,079

The recorded investment in TDRs totaled $20.0 million at December 31, 2019, of which no loans were over 90 days past due, and three loans totaling $660,000 were 30-59 days past due. The remaining loans modified were current at the time of restructuring and have complied with the terms of their restructure agreement at December 31, 2019. The recorded investment in TDRs totaled $16.0 million at December 31, 2018, of which one loan totaling $101,000 was over 90 days past due, and seven loans totaling $1.0 million were 30-59 days past due. The remaining loans modified were current at the time of restructuring and have complied with the terms of their restructure agreement at December 31, 2018. The recorded investment in TDRs totaled $17.6 million at December 31, 2017, of which two loans totaling $425,000 were over 90 days past due. The remaining loans modified were current at the time of restructuring and have complied with the terms of their restructure agreement at December 31, 2017. The recorded investment in TDRs totaled $21.1 million at September 30, 2017, of which seven loans totaling $1.0 million were over 90 days past due. The remaining loans modified were current at the time of restructuring and have complied with the terms of their restructure agreement at September 30, 2017.



	December 31, 2019
	One-to-Four Family		Multifamily and Commercial		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total
	(In thousands)

Pass	$	2,072,878	$	2,900,286	$	298,942	$	454,183	$	387,251	$	1,960	$	6,115,500
Special mention	419		4,724		—		20,170		—		—		25,313
Substandard	3,782		14,975		—		8,862		876		—		28,495
Doubtful	—		—		—		—		—		—		—
Total	$	2,077,079	$	2,919,985	$	298,942	$	483,215	$	388,127	$	1,960	$	6,169,308



	December 31, 2018
	One-to-Four Family		Multifamily and Commercial		Construction		Commercial Business		Home Equity Loans and Advances		Other Consumer Loans		Total
	(In thousands)

Pass	$	1,826,066	$	2,128,680	$	261,473	$	320,451	$	392,092	$	1,108	$	4,929,870
Special mention	—		—		—		9,074		—		—		9,074
Substandard	4,120		13,474		—		4,351		1,400		—		23,345
Doubtful	—		—		—		—		—		—		—
Total	$	1,830,186	$	2,142,154	$	261,473	$	333,876	$	393,492	$	1,108	$	4,962,289