Loans and Leases

6 Months Ended

Jun. 30, 2025

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.

We classify loans as held for sale when we originate or purchase loans that we intend to sell or when we change our intent for loans previously classified as held for investment. 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 fair value. The fair value is estimated 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 composition of our loan portfolio for the periods indicated was as follows:


	June 30, 2025				December 31, 2024
	Amount		Percent of Loans Held for Investment		Amount		Percent of Loans Held for Investment
Loans and leases held for investment:
Multi-family	$	31,932	49.8	%	$	34,093	49.9	%
Commercial real estate(1)	10,636		16.6	%	11,836		17.4	%
One-to-four family first mortgage	5,445		8.5	%	5,201		7.6	%

Commercial and industrial(2)	14,426		22.5	%	15,376		22.5	%
Other	1,682		2.6	%	1,766		2.6	%
Total loans and leases held for investment (3)(4)	$	64,121	100.0	%	$	68,272	100.0	%
Allowance for credit losses on loans and leases	(1,106)				(1,201)
Total loans and leases held for investment, net	$	63,015			$	67,071
Loans held for sale, at fair value	319				899
Total loans and leases, net	$	63,334			$	67,970

(1)Includes ADC loans.

(2)Includes lease financing receivables (net of unearned income of $150 million and $169 million) of $1.9 billion and $2.1 billion, respectively.

(3)Excludes accrued interest receivable of $261 million and $277 million at June 30, 2025 and December 31, 2024, respectively, which is included in Other assets in the Condensed Consolidated Statements of Condition.

(4)We pledged loans of $34.4 billion and $44.6 billion between the FHLB and FRB-NY to serve as collateral for our wholesale borrowings at June 30, 2025 and December 31, 2024, respectively.

Non-Accrual Loans

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 principal and interest in accordance with the contractual terms of the loan agreement. When a loan is classified as non-accrual, we cease recording interest income, and any previously accrued and uncollected interest is reversed against Interest income - Loans and leases on the Condensed Consolidated Statement of (Loss) 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 we have reasonable assurance that the loan will be fully collectible. When we have reasonable assurance that the loan will be fully collectible, then interest payments may be recognized in interest income on a cash basis. As of June 30, 2025 and December 31, 2024 there was no interest income recognized on non-accrual loans classified as held for investment. At June 30, 2025 and December 31, 2024 we had no loans that were 90 days or more past due and still accruing interest.

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, and residential and commercial tract developments. 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.

The following table summarizes the recorded investment of the Company’s collateral-dependent loans held for investment by collateral type as of June 30, 2025:


	Real Property
Multi-family	$	2,422
Commercial real estate(1)	514
One-to-four family first mortgage	76

Commercial and industrial	13

Total collateral-dependent loans held for investment	$	3,025

(1)Includes ADC loans.

At June 30, 2025 and December 31, 2024, the Company had $26 million and $41 million, respectively, of residential mortgage loans in the process of foreclosure.

Delinquencies

The following table presents information regarding the delinquency status of the Company’s loans held for investment at June 30, 2025:


	Current		Loans 30-89 Days Past Due		Non-Accrual Loans		Total Loans Receivable(3)
Multi-family	$	29,152	$	392	$	2,388	$	31,932
Commercial real estate(1)	9,958		115		563		10,636
One-to-four family first mortgage	5,334		30		81		5,445

Commercial and industrial(2)	14,265		38		123		14,426
Other	1,628		29		25		1,682
Total	$	60,337	$	604	$	3,180	$	64,121

(1)Includes ADC loans.

(2)Includes lease financing receivables.

(3)Excludes loans with repurchased government guarantees that are insured by U.S. government agencies

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


	Current		Loans 30-89 Days Past Due		Non-Accrual Loans		Total Loans Receivable(3)
Multi-family	$	31,589	$	749	$	1,755	$	34,093
Commercial real estate(1)	11,202		70		564		11,836
One-to-four family first mortgage	5,106		25		70		5,201

Commercial and industrial(2)	15,064		110		202		15,376
Other	1,731		11		24		1,766
Total	$	64,692	$	965	$	2,615	$	68,272

(1)Includes ADC loans.

(2)Includes lease financing receivables.

(3)Excludes loans with repurchased government guarantees that are insured by U.S. government agencies.

The following table presents the credit rating by vintage for our loans held for investment as of June 30, 2025:


	Term Loans												Revolving Loans		Revolving Loans Converted to Term Loans
	Amortized Cost Basis by Closing Year
	2025		2024		2023		2022		2021		Prior To 2021						Total
Multi-family:
Pass	$	—	$	16	$	680	$	6,702	$	5,773	$	9,138	$	6	$	115	$	22,430
Special Mention	—		—		24		382		581		568		—		—		1,555
Substandard	—		2		148		460		960		3,969		4		16		5,559
Non-accrual	—		—		—		271		325		1,792		—		—		2,388
Total Multi-family	—		18		852		7,815		7,639		15,467		10		131		31,932
Year to date gross charge-offs	—		—		—		(39)		(56)		(90)		—		—		(185)
Commercial Real Estate:(1)
Pass	$	558	$	423	$	1,101	$	1,531	$	1,011	$	2,394	$	1,115	$	171	$	8,304
Special Mention	—		3		82		113		11		96		47		58		410
Substandard	—		4		68		207		85		688		137		170		1,359
Non-accrual	—		—		39		31		25		464		2		2		563
Total Commercial Real Estate	558		430		1,290		1,882		1,132		3,642		1,301		401		10,636
Year to date gross charge-offs	—		—		—		(1)		—		(21)		—		—		(22)
One-to-Four Family
Pass	$	315	$	335	$	478	$	2,326	$	826	$	787	$	81	$	3	$	5,151

Substandard	—		1		3		12		2		195		—		—		213
Non-accrual	—		4		7		20		13		35		2		—		81
Total One-to-Four Family	315		340		488		2,358		841		1,017		83		3		5,445
Year to date gross charge-offs	—		—		—		(1)		—		(1)		—		—		(2)







Commercial and Industrial(2)
Pass	$	972	$	1,133	$	2,363	$	1,974	$	695	$	1,055	$	5,030	$	322	$	13,544
Special Mention	—		14		23		118		8		4		122		—		289
Substandard	—		20		66		47		42		41		241		13		470
Non-accrual	—		4		28		49		9		13		19		1		123
Total Commercial and Industrial	972		1,171		2,480		2,188		754		1,113		5,412		336		14,426
Year to date gross charge-offs	(9)		(1)		(12)		(15)		(3)		(1)		—		—		(41)
Other Loans
Pass	$	36	$	27	$	26	$	12	$	4	$	34	$	1,413	$	101	$	1,653
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		2		—		—		—		2		—		4
Non-accrual	—		—		—		—		—		1		24		—		25
Total Other Loans	36		27		28		12		4		35		1,439		101		1,682
Year to date gross charge-offs	(3)		(1)		(2)		(4)		—		(4)		—		—		(14)

(1)Includes ADC loans.

(2)Includes lease financing receivables.

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


	Term Loans												Revolving Loans		Revolving Loans Converted to Term Loans
	Amortized Cost Basis by Closing Year
	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:(1)
Pass	$	542	$	1,298	$	1,753	$	1,106	$	576	$	2,068	$	1,597	$	367	$	9,307
Special Mention	—		72		130		69		106		138		120		—		635
Substandard	2		31		179		110		162		723		117		6		1,330
Non-accrual	—		37		34		36		4		447		6		—		564
Total Commercial Real Estate	544		1,438		2,096		1,321		848		3,376		1,840		373		11,836
Year to date gross charge-offs	—		(8)		(81)		(1)		(27)		(349)		—		—		(466)
One-to-Four Family
Pass	$	250	$	521	$	2,431	$	859	$	178	$	609	$	80	$	2	$	4,930
Special Mention	—		—		—		—		—		—		—		—		—
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)







Commercial and Industrial(2)
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
Substandard	—		—		—		—		—		—		—		—		—
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)

(1)Includes ADC loans.

(2)Includes lease financing receivables.

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.

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 provided to borrowers who are experiencing financial difficulties are in the form of principal forgiveness, an interest rate reduction or a term extension.

During the three months ended June 30, 2025 and 2024, loans totaling $19 million and $5 million, respectively, were modified to borrowers experiencing financial difficulty. During the six months ended June 30, 2025 and 2024 there were $19 million and $29 million, respectively.

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


	Interest Rate Reduction				Term Extension
	Weighted-average contractual interest rate
	From		To		Weighted-average Term (in years)
Three Months Ended June 30, 2025

Commercial real estate(1)	—	%	—	%	0.5
One-to-four family first mortgage	6.24	%	4.62	%	7.4

Other	10.56	%	6.75	%	12.2
Three Months Ended June 30, 2024


One-to-four family first mortgage	4.76	%	3.65	%	10.6
Commercial and industrial	8.51	%	6.00	%	1.0


Six months ended June 30, 2025

Commercial real estate(1)	—	%	—	%	0.5
One-to-four family first mortgage	6.33	%	4.73	%	12.2

Other Consumer	10.58	%	4.79	%	7.2
Six months ended June 30, 2024
Multi-family	8.08	%	6.00	%	0.0
Commercial real estate(1)	8.13	%	6.95	%	0.0
One-to-four family first mortgage	4.69	%	3.70	%	12.2
Commercial and industrial	7.44	%	6.31	%	0.4
Other Consumer	10.72	%	4.34	%	1.8

(1)Includes ADC loans.

The following table presents the amortized cost basis of the modifications for borrowers experiencing financial difficulty that subsequently defaulted in the first six months of 2025 and were within twelve months of the modification date:


	Term Extension		Principal Forgiveness		Combination - Interest Rate Reduction and Term/Payment Extension/Delay		Total
Three Months Ended June 30, 2025


One-to-four family first mortgage	$	6	$	1	$	4	$	11



Six months ended June 30, 2025


One-to-four family first mortgage	$	6	$	1	$	4	$	11




Three Months Ended June 30, 2024


One-to-four family first mortgage	$	1	$	—	$	2	$	3



Six Months Ended June 30, 2024

Commercial real estate(1)	$	4	$	—	$	—	$	4
One-to-four family first mortgage	1		—		2		3


Total	$	5	$	—	$	2	$	7

(1)Includes ADC loans.

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 June 30, 2025, which were modified during the prior twelve months, by class of financing receivable and delinquency status:


	June 30, 2025
	Current		30 - 89 Past Due		90+ Past Due		Total

Commercial real estate(1)	$	6	$	—	$	—	$	6
One-to-four family first mortgage	5		—		16		21
Commercial and industrial	—		—		1		1

Total	$	11	$	—	$	17	$	28

(1)Includes ADC loans.

The following table provides a summary of loan balances at June 30, 2024, which were modified during the prior twelve months, by class of financing receivable and delinquency status:


	June 30, 2024
	Current		30 - 89 Past Due		90+ Past Due		Total
Multi-family	$	26	$	97	$	—	$	123
Commercial real estate(1)	21		3		78		102
One-to-four family first mortgage	8		—		9		17
Commercial and industrial	3		2		8		13
Other	—		—		1		1
Total	$	58	$	102	$	96	$	256

(1)Includes ADC loans.

Loans with Government Guarantees

Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. 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. 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 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 Condensed Consolidated Statements of Condition. Both the asset and liability were immaterial at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, LGG totaled $369 million and $360 million respectively.