The Company classifies loans that we have the intent and ability to hold for the foreseeable future or until maturity as LHFI. We report LHFI loans at their amortized cost, which includes the outstanding principal balance adjusted for any unamortized premiums, discounts, deferred fees and unamortized fair value adjustments for acquired loans:


	December 31, 2023				December 31, 2022
(dollars in millions)	Amount		Percent of Loans Held for Investment		Amount		Percent of Loans Held for Investment
Loans and Leases Held for Investment:
Mortgage Loans:
Multi-family	$	37,265	44.0	%	$	38,130	55.3	%
Commercial real estate	10,470		12.4	%	8,526		12.4	%
One-to-four family first mortgage	6,061		7.2	%	5,821		8.4	%
Acquisition, development, and construction	2,912		3.4	%	1,996		2.8	%
Total mortgage loans held for investment (1)	$	56,708	67.0	%	$	54,473	78.9	%
Other Loans:
Commercial and industrial	22,065		26.1	%	10,597		15.4	%
Lease financing, net of unearned income of $258 and $85, respectively	3,189		3.8	%	1,679		2.4	%
Total commercial and industrial loans (2)	25,254		29.9	%	12,276		17.8	%
Other	2,657		3.1	%	2,252		3.3	%
Total other loans held for investment	27,911		33.0	%	14,528		21.1	%
Total loans and leases held for investment (1)	$	84,619	100.0	%	$	69,001	100.0	%
Allowance for credit losses on loans and leases	(992)				(393)
Total loans and leases held for investment, net	83,627				68,608
Loans held for sale	1,182				1,115
Total loans and leases, net	$	84,809			$	69,723

Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to HUD (if foreclosure timelines are met), which is not paid by the FHA until claimed. The Bank has a unilateral option to repurchase loans sold to GNMA if the loan is due, but unpaid, for three consecutive months (typically referred to as 90 days past due) and can recover losses through a claims process from the guarantor. These loans are recorded in loans held for investment and the liability to repurchase the loans is recorded in other liabilities on the Consolidated Statements of Condition. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. As of December 31, 2023, LGG loans totaled $541 million and the repurchase liability was $456 million.

Loans held-for-sale at December 31, 2023 totaled $1.2 billion, up from $1.1 billion at December 31, 2022. The Signature Transaction contributed $360 million in Small Business Administration ("SBA") loans to this increase. We classify loans as held for sale when we originate or purchase loans that we intend to sell. We have elected the fair value option for nearly all of this portfolio, except the SBA loans. We estimate the fair value of mortgage loans based on quoted market prices for securities backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral.

A loan generally is classified as a non-accrual loan when it is 90 days or more past due or when it is deemed to be impaired because the Company no longer expects to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed on non-accrual status, management ceases the accrual of interest owed, and previously accrued interest is charged against interest income. A loan is generally returned to accrual status when the loan is current and management has reasonable assurance that the loan will be fully collectible. Interest income on non-accrual loans is recorded when received in cash. At December 31, 2023 and December 31, 2022 we had no loans that were nonperforming and still accruing.


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Total Past Due Loans		Current Loans (2)		Total Loans Receivable
Multi-family	$	121	$	138	$	259	$	37,006	$	37,265
Commercial real estate	28		128		156		10,314		10,470
One-to-four family first mortgage	40		95		135		5,926		6,061
Acquisition, development, and construction	2		2		4		2,908		2,912
Commercial and industrial(1)	37		43		80		25,174		25,254
Other	22		22		44		2,613		2,657
Total	$	250	$	428	$	678	$	83,941	$	84,619


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	34	$	13	$	47	$	38,083	$	38,130
Commercial real estate	2		20		22		8,504		8,526
One-to-four family first mortgage	21		92		113		5,708		5,821
Acquisition, development, and construction	—		—		—		1,996		1,996
Commercial and industrial(1)	2		3		5		12,271		12,276
Other	11		13		24		2,228		2,252
Total	$	70	$	141	$	211	$	68,790	$	69,001


	Mortgage Loans										Other Loans
(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	34,170	$	8,734	$	5,328	$	2,825	$	51,057	$	24,683	$	2,634	$	27,317
Special mention	768		367		—		57		1,192		335		—		335
Substandard	2,327		1,369		733		30		4,459		236		23		259
Doubtful	—		—		—		—		—		—		—		—
Total	$	37,265	$	10,470	$	6,061	$	2,912	$	56,708	$	25,254	$	2,657	$	27,911


	Mortgage Loans										Other Loans
(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	36,622	$	7,871	$	5,710	$	1,992	$	52,195	$	12,208	$	2,238	$	14,446
Special mention	864		230		8		4		1,106		18		—		18
Substandard	644		425		103		—		1,172		50		14		64

Total	$	38,130	$	8,526	$	5,821	$	1,996	$	54,473	$	12,276	$	2,252	$	14,528

The preceding classifications are the most current ones available and generally have been updated within the last twelve months. In addition, they follow regulatory guidelines and can generally be described as follows: pass loans are of satisfactory quality; special mention loans have potential weaknesses that deserve management’s close attention; substandard loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged (these loans have a well-defined weakness and there is a possibility that the Company will sustain some loss); and doubtful loans, based on existing circumstances, have weaknesses that make collection or liquidation in full highly questionable and improbable. In addition, one-to-four family loans are classified based on the duration of the delinquency.


	Vintage Year
(in millions)	2023		2022				2021		2020		2019		Prior To 2019		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Pass	$	2,532	$	13,295			$	10,308	$	8,438	$	4,725	$	9,670	$	1,981	$	108	$	51,057
Special Mention	—		217				69		407		144		341		14		—		1,192
Substandard	45		98				258		336		809		2,910		—		3		4,459
Doubtful	—		—				—		—		—		—		—		—		—
Total mortgage loans	$	2,577	$	13,610			$	10,635	$	9,181	$	5,678	$	12,921	$	1,995	$	111	$	56,708

Current-period gross write-offs	—		(112)				—		—		(2)		(64)		—		—		(178)

Pass(1)	$	9,709	$	3,598			$	1,936	$	1,141	$	911	$	941	$	8,757	$	324	$	27,317
Special Mention	1		182				17		9		6		18		102		—		335
Substandard	10		39				45		28		40		40		46		11		259
Doubtful	—		—				—		—		—		—		—		—		—
Total other loans	$	9,720	$	3,819			$	1,998	$	1,178	$	957	$	999	$	8,905	$	335	$	27,911

Current-period gross write-offs	$	(2)	$	(10)			$	(5)	$	(8)	$	(2)	$	(18)	$	—	$	—	$	(45)

Total	$	12,297	$	17,429	$	—	$	12,633	$	10,359	$	6,635	$	13,920	$	10,900	$	446	$	84,619

When management determines that foreclosure is probable, for loans that are individually evaluated the expected credit losses are based on the fair value of the collateral adjusted for selling costs. When the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, the collateral-dependent practical expedient has been elected and expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. For CRE loans, collateral properties include office buildings, warehouse/distribution buildings, shopping centers, apartment buildings, residential and commercial tract development. The primary source of repayment on these loans is expected to come from the sale, permanent financing or lease of the real property collateral. CRE loans are impacted by fluctuations in collateral values, as well as the ability of the borrower to obtain permanent financing.


	Collateral Type
(in millions)	Real Property		Other
Multi-family	$	253	$	—
Commercial real estate	256		—
One-to-four family first mortgage	105		—

Commercial and industrial	—		120

Total collateral-dependent loans held for investment	$	614	$	120

Included in loans held for investment at December 31, 2023 and December 31, 2022, were loans of $9 million and $101 million, respectively, to officers, directors, and their related interests and parties. There were no loans to principal shareholders at that date.

Effective January 1, 2023, the Company adopted ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information on the adoption, refer to Note 1 - Description of Business, Organization and Basis of Presentation.

When borrowers are experiencing financial difficulty, the Company may make certain loan modifications as part of loss mitigation strategies to maximize expected payment. Modifications in the form of principal forgiveness, an interest rate reduction, or an other-than-insignificant payment delay or a term extension that have occurred in the current reporting period to a borrower experiencing financial difficulty are disclosed along with the financial impact of the modifications.

The following table summarizes the amortized cost basis of loans modified during the reporting period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification:


	Amortized Cost
(dollars in millions)	Interest Rate Reduction		Term Extension		Combination - Interest Rate Reduction & Term Extension		Total		Percent of Total Loan class
Year Ended December 31, 2023
Multi-family	$	122	$	—	$	—	$	122	1.17	%
Commercial real estate	102		1		—		103		0.98	%
One-to-four family first mortgage	3		5		6		14		0.23	%
Commercial and Industrial	—		19		2		21		0.08	%
Other Consumer	$	—	$	—	$	2	2		0.08	%
Total	$	227	$	25	$	10	$	262


	Interest Rate Reduction				Term Extension
	Weighted-average contractual interest rate
	From		To		Weighted-average Term (in years)
Year Ended December 31, 2023
Multi-family	7.45	%	6.02	%
Commercial real estate	8.83	%	4.56	%
One-to-four family first mortgage	6.08	%	4.79	%
Commercial and industrial	8.44	%	8.08	%	0.58
Other Consumer	9.09	%	4.82	%

As of December 31, 2023, there were $4 million one-to-four family first mortgages that were modified for borrowers experiencing financial difficulty that received term extension and subsequently defaulted during the period and $4 million one-to-four family first mortgages that were combination modifications and subsequently defaulted during the period.

The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. Loans are considered to be in payment default at 90 or more days past due. The following table depicts the performance of loans that have been modified during the reporting period:


	December 31, 2023
(dollars in millions)	Current		30 - 89 Past Due		90+ Past Due		Total

Commercial real estate	1		—		—		1
One-to-four family first mortgage	3		—		8		11
Commercial and industrial	3		9		1		13
Other Consumer	1		1		—		2
Total	$	8	$	10	$	9	$	27

Prior to the adoption of ASU 2022-02, the Company accounted for certain loan modifications and restructurings as TDRs. In general, a modification or restructuring of a loan constituted a TDR if the Company granted a concession to a borrower experiencing financial difficulty. A loan modified as a TDR was generally placed on non-accrual status until the Company determined that future collection of principal and interest is reasonably assured, which requires, among other things, that the borrower demonstrate performance according to the restructured terms for a period of at least six consecutive months. In determining the Company’s allowance for credit losses on loans and leases, reasonably expected TDRs were individually evaluated and consist of criticized, classified, or maturing loans that will have a modification processed within the next three months.

In an effort to proactively manage delinquent loans, the Company has selectively extended to certain borrowers concessions such as rate reductions, extension of maturity dates, and forbearance agreements. As of December 31, 2022, loans on which concessions were made with respect to rate reductions and/or extension of maturity dates amounted to $44 million.


						Weighted Average Interest Rate
(dollars in millions)	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification		Post- Modification		Charge- off Amount		Capitalized Interest
Loan Category:
Commercial real estate	2	$	22	$	19	6.00	%	4.02	%	$	3	$	—