Allowance for Credit Losses on Loans and Leases

6 Months Ended

Jun. 30, 2025

Allowance for Credit Losses on Loans and Leases

The following table summarizes activity in the ACL on loans and leases for the periods indicated:


	Multi- Family		Commercial Real Estate(1)		One-to-Four Family First Mortgage		Commercial and Industrial		Other		Total
Three Months Ended June 30, 2025
Balance, beginning of period	$	609	$	289	$	37	$	167	$	66	$	1,168
Charge-offs	(105)		(20)		(1)		(7)		(7)		(140)
Recoveries	9		7		—		4		3		23
Provision for (recovery of) credit losses on loans and leases	25		42		(3)		(4)		(5)		55
Balance, end of period	$	538	$	318	$	33	$	160	$	57	$	1,106
Three Months Ended June 30, 2024
Balance, beginning of period	$	469	$	482	$	42	$	157	$	65	$	1,215

Charge-offs	(76)		(237)		(1)		(35)		(5)		(354)
Recoveries	—		—		—		4		1		5
Provision for (recovery of) credit losses on loans and leases	225		126		(1)		47		5		402
Balance, end of period	$	618	$	371	$	40	$	173	$	66	$	1,268

Six Months Ended June 30, 2025
Balance, beginning of period	$	639	$	304	$	39	$	151	$	68	$	1,201

Charge-offs	(185)		(22)		(2)		(41)		(14)		(264)
Recoveries	9		7		—		10		6		32
Provision for (recovery of) credit losses on loans and leases	75		29		(4)		40		(3)		137
Balance, end of period	$	538	$	318	$	33	$	160	$	57	$	1,106
Six Months Ended June 30, 2024
Balance, beginning of period	$	307	$	402	$	47	$	134	$	102	$	992

Charge-offs	(87)		(301)		(1)		(46)		(10)		(445)
Recoveries	1		—		—		11		2		14
Provision for (recovery of) credit losses on loans and leases	397		270		(6)		74		(28)		707
Balance, end of period	$	618	$	371	$	40	$	173	$	66	$	1,268

(1)Includes ADC loans.

Interest rates remain high as compared to the interest rates in our existing portfolio, which continues to put pressure on the ability of certain borrowers with interest rates resetting to cover debt service. When combined with inflationary pressure on operating costs and limits on the ability to increase rental rates, debt service levels may approach or exceed some properties' net operating income, which increases the risk of loss.

The ACL to total loans and leases held for investment ratio at June 30, 2025 and December 31, 2024 was 1.72 percent and 1.76 percent, respectively. We believe that higher interest rates for a longer period of time will have a more significant impact on our loans that will reprice during the reasonable and supportable forecast period. Therefore, we have continued to incorporate a higher probability of default for those loans approaching their scheduled repricing date in the measurement of our ACL.

Our ACL is determined based on quantitative modeling that incorporates and weighs economic forecast scenarios. The key inputs to our quantitative ACL models include borrowers' projected debt service based on the most recent financial information available and underlying collateral property values. Property values are particularly meaningful for our multi-family and CRE portfolios. Our models consider the entire life of the loan, including both the interest-only period of the loan, if applicable, and the amortization period, to assess the probability of default and the loss-given default. For our multi-family portfolio, we obtain and utilize current and projected geography-specific market information in our forecasts. In estimating the qualitative component of our ACL, we have adjusted key inputs used by the model on an average basis for certain loans, most notably net operating income and property values, to reflect weaknesses in the underlying data, including the recency of appraisal values, and the lack of significant loss history in available data, particularly for office and multi-family loans and,

most notably, rent-regulated multi-family loans.

We charge off loans, or portions of loans, when they are deemed uncollectible. The collectability of individual loans is determined through an assessment of the financial condition and repayment capacity of the borrower and/or through an estimate of the fair value of any underlying collateral. For non-real estate-related consumer credits, the following past-due time periods determine when charge-offs are typically recorded: (1) closed-end credits are charged off in the quarter that the loan becomes 120 days past due; (2) open-end credits are charged off in the quarter that the loan becomes 180 days past due; and (3) both closed-end and open-end credits are typically charged off in the quarter that the credit is 60 days past the date the Company received notification that the borrower has filed for bankruptcy.

The following table presents additional information about the Company’s non-accrual loans at June 30, 2025:


	Non-accrual loans with no related allowance:		Non-accrual loans with an allowance recorded:		Total Non-accrual loans		Related Allowance
Multi-family	$	1,781	$	607	$	2,388	$	91
Commercial real estate(1)	377		186		563		64
One-to-four family first mortgage	58		23		81		2
Commercial and Industrial	72		51		123		37
Other	—		25		25		21
Total	$	2,288	$	892	$	3,180	$	215

(1)Includes ADC loans.

The following table presents additional information about the Company’s non-accrual loans at December 31, 2024:


	Non-accrual loans with no related allowance:		Non-accrual loans with an allowance recorded:		Total Non-accrual loans		Related Allowance
Multi-family	$	1,092	$	663	$	1,755	$	77
Commercial real estate(1)	429		135		564		31
One-to-four family first mortgage	61		9		70		1
Commercial and Industrial	51		151		202		—
Other	3		21		24		55
Total	$	1,636	$	979	$	2,615	$	164

(1)Includes ADC loans.