Loans and Leases

12 Months Ended

Dec. 31, 2024

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


	December 31,
	2024				2023
(dollars in millions)	Amount		Percent of Loans Held for Investment		Amount		Percent of Loans Held for Investment
Loans and Leases Held for Investment:
Multi-family	$	34,093	49.9	%	$	37,265	44.0	%
Commercial real estate	8,685		12.7	%	10,470		12.4	%
One-to-four family first mortgage	5,201		7.6	%	6,061		7.2	%
Acquisition, development, and construction	3,151		4.6	%	2,912		3.4	%
Commercial and industrial (1)	13,260		19.4	%	22,065		26.1	%
Lease financing, net of unearned income of $169 and $258, respectively	2,116		3.1	%	3,189		3.8	%
Other	1,766		2.6	%	2,657		3.1	%
Total loans and leases held for investment (2)	$	68,272	100.0	%	$	84,619	100.0	%
Allowance for credit losses on loans and leases	(1,201)				(992)
Total loans and leases held for investment, net	67,071				83,627
Loans held for sale, at fair value	899				1,182
Total loans and leases, net	$	67,970			$	84,809

(1)Includes specialty finance loans and leases of $3.9 billion and $5.2 billion at December 31, 2024 and December 31, 2023, respectively and warehouse loans of $5.1 billion at December 31, 2023.

(2)Excludes accrued interest receivable of $277 million and $423 million at December 31, 2024 and December 31, 2023, respectively, which is included in other assets in the Consolidated Statements of Condition.

Loans with Government Guarantees

Substantially all loans with government guarantees are insured or guaranteed by the Federal Housing Administration 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 Federal Housing Administration until claimed. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. The Bank also has a unilateral option to repurchase loans sold and serviced for the Government National Mortgage Association 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. As of December 31, 2024 and December 31, 2023, loans with government guarantees totaled $360 million and $541 million. The repurchase liability was $0 million as of December 31, 2024 due to the October 31, 2024 sale of substantially all of our mortgage servicing rights and $456 million as of December 31, 2023.

Repossessed assets and the associated net claims related to government guaranteed loans are recorded in other assets and was $14 million at December 31, 2024 and December 31, 2023.

Loans Held for Sale

Loans held for sale at December 31, 2024 totaled $0.9 billion, down from $1.2 billion at December 31, 2023.

We classify loans as held for sale when we originate or purchase loans that we intend to sell or when we change our intent about holding for investment. Mortgage loans held for sale for which we have elected the fair value option are carried at fair value. Loans originally classified as held for investment for which we had changed our intent and are now classified as held for sale are carried at the lower of amortized cost or market. 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.

The following table is a summary of non-accrual loans held for sale:


	December 31,
(in millions)	2024		2023
Non-accrual loans held for sale:
Multi-family	$	51	$	—
Commercial real estate	215		163
One-to-four family first mortgage	57		—
Acquisition, development, and construction	—		1
Total non-accrual loans held for sale	$	323	$	164

Asset Quality

All asset quality information excludes loans with government guarantees that are insured by U.S government agencies. As of December 31, 2024, such loans totaled $360 million.

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 (principal and interest) according to the contractual terms of the loan agreement. When a loan is placed on non-accrual status, management ceases recording interest income, and any previously accrued and uncollected interest is reversed against interest income. Interest received on non-accrual loans is recorded as a reduction to the principal outstanding. A loan is only returned to accrual status when the loan is current (typically a minimum of six months of payment performance) and management has reasonable assurance that the loan will be fully collectible. When management has reasonable assurance that the loan will be fully collectible, then interest payments may be recognized in interest income on a cash basis. During the years ended December 31, 2024, 2023 and 2022 there was no interest income recognized on non-accrual loans. At December 31, 2024 and December 31, 2023 we had no loans that were 90 days or more past due and still accruing.

The following table presents information regarding the delinquency status of the Company’s loans held for investment at December 31, 2024:


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Remaining		Total Loans Receivable
Multi-family	$	749	$	1,755	$	31,589	$	34,093
Commercial real estate	65		546		8,074		8,685
One-to-four family first mortgage	25		70		5,106		5,201
Acquisition, development, and construction	5		18		3,128		3,151
Commercial and industrial (1)	110		202		15,064		15,376
Other	11		24		1,731		1,766
Total	$	965	$	2,615	$	64,692	$	68,272

(1)Includes lease financing receivables.

The following table presents information regarding the delinquency status of the Company’s loans held for investment at December 31, 2023:


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

(1)Includes lease financing receivables.

The following table presents the credit rating by vintage for our loans held for investment as December 31, 2024:


	Term Loans												Revolving Loans		Revolving Loans Converted to Term Loans
	Amortized Cost Basis by Closing Year
(in millions)	2024		2023		2022		2021		2020		Prior To 2020						Total
Multi-family
Pass	$	17	$	700	$	6,599	$	6,070	$	5,203	$	3,997	$	27	$	—	$	22,613
Special Mention	—		14		688		694		646		795		1		—		2,838
Substandard	2		123		529		868		1,526		3,834		5		—		6,887
Non-accrual	—		—		113		144		274		1,224		—		—		1,755
Total Multi-family	19		837		7,929		7,776		7,649		9,850		33		—		34,093
Year to date gross charge-offs	—		—		(28)		(34)		(42)		(204)		—		—		(308)
Commercial Real Estate
Pass	$	245	$	751	$	1,614	$	987	$	575	$	2,011	$	89	$	365	$	6,637
Special Mention	—		47		49		30		106		138		—		—		370
Substandard	1		12		168		63		162		720		—		6		1,132
Non-accrual	—		36		29		35		1		445		—		—		546
Total Commercial Real Estate	246		846		1,860		1,115		844		3,314		89		371		8,685
Year to date gross charge-offs	—		(8)		(81)		(1)		(27)		(345)		—		—		(462)
One-to-Four Family
Pass	$	250	$	521	$	2,431	$	859	$	178	$	609	$	80	$	2	$	4,930

Substandard	1		2		8		2		16		172		—		—		201
Non-accrual	—		4		16		10		7		28		5		—		70
Total One-to-Four Family	251		527		2,455		871		201		809		85		2		5,201
Year to date gross charge-offs	—		—		(1)		—		—		(7)		—		—		(8)
Acquisition, Development and Construction
Pass	$	297	$	547	$	139	$	119	$	1	$	57	$	1,508	$	2	$	2,670
Special Mention	—		25		81		39		—		—		120		—		265
Substandard	1		19		11		47		—		3		117		—		198
Non-accrual	—		1		5		1		3		2		6		—		18
Total Acquisition, Development and Construction	$	298	$	592	$	236	$	206	$	4	$	62	$	1,751	$	2	$	3,151
Year to date gross charge-offs	—		—		—		—		—		(4)		—		—		(4)
Commercial and Industrial
Pass	$	1,267	$	2,609	$	2,014	$	651	$	450	$	759	$	5,554	$	1,164	$	14,468
Special Mention	17		29		18		4		2		11		119		6		206
Substandard	13		50		72		72		7		13		265		8		500
Non-accrual	3		5		160		9		8		15		2		—		202
Total Commercial and Industrial	$	1,300	$	2,693	$	2,264	$	736	$	467	$	798	$	5,940	$	1,178	$	15,376
Year to date gross charge-offs	(3)		(20)		(40)		(20)		(19)		(34)		—		—		(136)
Other Loans
Pass	$	100	$	29	$	12	$	4	$	2	$	32	$	1,441	$	121	$	1,741
Special Mention	—		—		—		—		—		—		1		—		1

Non-accrual	—		—		—		—		—		5		19		—		24
Total Other Loans	100		29		12		4		2		37		1,461		121		1,766
Year to date gross charge-offs	(2)		(4)		(4)		(1)		(1)		(8)		—		—		(20)

The following table presents the credit rating by vintage for out loans held for investment as of December 31, 2023:


	Term Loans												Revolving Loans		Revolving Loans Converted to Term Loans
	Amortized Cost Basis by Closing Year
(in millions)	2023		2022		2021		2020		2019		Prior To 2019						Total
Multi-family
Pass	$	840	$	7,945	$	7,967	$	7,310	$	3,525	$	6,537	$	46	$	—	$	34,170
Special Mention	—		95		33		377		36		227		—		—		768
Substandard	—		21		176		237		451		1,304		—		—		2,189
Non-accrual	—		5		6		—		28		99		—		—		138
Total Multi-family	840		8,066		8,182		7,924		4,040		8,167		46		—		37,265
Year to date gross charge-offs	—		(112)		—		—		—		(7)		—		—		(119)
Commercial Real Estate
Pass	$	880	$	2,110	$	1,182	$	939	$	1,011	$	2,439	$	172	$	1	$	8,734
Special Mention	—		122		12		—		116		106		11		—		367
Substandard	44		49		47		72		239		790		—		—		1,241
Non-accrual	—		—		1		—		4		123		—		—		128
Total Commercial Real Estate	924		2,281		1,242		1,011		1,370		3,458		183		1		10,470
Year to date gross charge-offs	—		—		—		—		—		(56)		—		—		(56)
One-to-Four Family
Pass	$	526	$	2,627	$	920	$	210	$	239	$	721	$	78	$	7	$	5,328
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		5		2		20		69		542		—		—		638
Non-accrual	1		11		17		8		18		37		—		3		95
Total One-to-Four Family	527		2,643		939		238		326		1,300		78		10		6,061
Year to date gross charge-offs	—		—		(1)		—		(1)		(2)		—		—		(4)
Acquisition, Development and Construction
Pass	$	406	$	322	$	298	$	4	$	4	$	6	$	1,685	$	100	$	2,825
Special Mention	—		—		24		30		—		—		3		—		57
Substandard	—		6		7		—		—		15		—		—		28
Non-accrual	—		1		1		—		—		—		—		—		2
Total Acquisition, Development and Construction	406		329		330		34		4		21		1,688		100		2,912
Year to date gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial and Industrial
Pass	$	9,418	$	3,547	$	1,633	$	984	$	719	$	791	$	7,535	$	56	$	24,683
Special Mention	1		182		17		8		6		20		101		—		335
Substandard	7		24		43		16		38		33		32		—		193
Non-accrual	2		14		2		11		1		2		11		—		43
Total Commercial and Industrial	9,428		3,767		1,695		1,019		764		846		7,679		56		25,254
Year to date gross charge-offs	(2)		(7)		(1)		(7)		—		(14)		—		—		(31)
Other Loans
Pass	$	171	$	346	$	244	$	133	$	133	$	117	$	1,223	$	268	$	2,635


Non-accrual	—		2		1		1		1		2		4		11		22
Total Other Loans	171		348		245		134		134		119		1,227		279		2,657
Year to date gross charge-offs	—		(3)		(4)		(1)		(2)		(4)		—		—		(14)

The classifications in the preceding tables are the most currently 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 non-accrual loans, which based on existing circumstances, have weaknesses that make collection or liquidation in full highly questionable and improbable. One-to-four family loans are classified based on the duration of the delinquency.

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 commercial real estate 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. Commercial real estate loans are impacted by fluctuations in collateral values, as well as the ability of the borrower to obtain permanent financing.

The following table summarizes the recorded investment of the Company’s collateral-dependent loans held for investment by collateral type:


	December 31,
	2024				2023
	Collateral Type
(in millions)	Real Property		Other		Real Property		Other
Multi-family	$	1,817	$	—	$	253	$	—
Commercial real estate	537		—		256		—
One-to-four family first mortgage	48		—		105		—
Acquisition, development, and construction	17		—		—		—
Commercial and industrial	—		—		—		120

Total collateral-dependent loans held for investment	$	2,419	$	—	$	614	$	120

At December 31, 2024 and December 31, 2023, the Company had $41 million and $81 million of residential mortgage loans in the process of foreclosure, respectively.

Included in loans held for investment at December 31, 2024 and December 31, 2023, were loans of $1 million and $9 million, respectively, to officers, directors, and their related interests and parties. There were no loans to principal shareholders.

Modifications to Borrowers Experiencing Financial Difficulty

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		Principal Forgiveness		Total		Percent of Total Loan class
Year Ended December 31, 2024
Multi-family	$	2	$	—	$	—	$	—	$	2	0.01	%
Commercial real estate	8		4		—		—		12		0.14	%
One-to-four family first mortgage	—		7		8		1		16		0.29	%
Commercial and industrial	—		4		—		—		4		0.03	%

Total	$	10	$	15	$	8	$	1	$	34
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

The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty:


	Interest Rate Reduction				Term Extension	Principal Forgiveness
	Weighted-average contractual interest rate
	From		To		Weighted-average Term (in years)	Reduced Amortized Cost Basis
Year Ended December 31, 2024
Multi-family	8.08	%	6.00	%
Commercial real estate	8.13	%	6.95	%	0.25
One-to-four family first mortgage	4.73	%	3.80	%	11.27	$	1
Commercial and industrial	7.73	%	6.10	%	0.7
Other Consumer	10.69	%	3.71	%	2.1
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	%

The following table presents the amortized cost basis of the modifications for borrowers experiencing financial difficulty that subsequently defaulted during the periods presented and were within twelve months of the modification date:


(dollars in millions)
Year Ended December 31, 2024	Term Extension		Principal Forgiveness		Combination - Interest Rate Reduction and Term/Payment Extension/Delay

Commercial real estate	$	4	$	—	$	—
One-to-four family first mortgage	2		1		1
Commercial and industrial	1		—		—
Total	$	7	$	1	$	1
Year Ended December 31, 2023

One-to-four family first mortgage	$	4	$	—	$	4

Total	$	4	$	—	$	4

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.

The following table provides a summary of loan balances at December 31, 2024, which were modified during the prior twelve months, by class of financing receivable and delinquency status:


	December 31, 2024
(dollars in millions)	Current		30 - 89 Past Due		90+ Past Due		Total
Multi-family	$	2	$	—	$	—	$	2
Commercial real estate	8		—		4		12
One-to-four family first mortgage	8		—		8		16
Commercial and industrial	—		—		4		4

Total	$	18	$	—	$	16	$	34

The following table provides a summary of loan balances at December 31, 2023, which were modified on or after January 1, 2023, the date the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt modifications, by class of financing receivable and delinquency status:


	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