The following table sets forth the composition of the loan and lease portfolio at the dates indicated:


	December 31, 2021						December 31, 2020
(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	$	34,603			75.75	%	$	32,236			75.28	%
Commercial real estate		6,698			14.66			6,836			15.96
One-to-four family		160			0.35			236			0.55
Acquisition, development, and construction		209			0.46			90			0.21
Total mortgage loans held for investment (1)		41,670			91.22			39,398			92.00
Other Loans:
Commercial and industrial		2,236			4.89			1,682			3.93
Lease financing, net of unearned income of $95 and $116 respectively		1,770			3.88			1,735			4.05
Total commercial and industrial loans (2)		4,006			8.77			3,417			7.98
Other		5			0.01			7			0.02
Total other loans held for investment		4,011			8.78			3,424			8.00
Total loans and leases held for investment (1)	$	45,681			100.00	%	$	42,822			100.00	%
Net deferred loan origination costs		57						62
Allowance for loan and lease losses		(199	)					(194	)
Total loans and leases held for investment, net	$	45,539					$	42,690
Loans held for sale (3)		—						117
Total loans and leases, net	$	45,539					$	42,807

(1)

Excludes accrued interest receivable of $199 million and $219 million at December 31, 2021 and December 31, 2020, respectively, which is included in other assets in the Consolidated Statements of Condition.

(2)

Includes specialty finance loans and leases of $3.5 billion and $3.0 billion, respectively, at December 31, 2021 and December 31, 2020, and other C&I loans of $527 million and $393 million, respectively, at December 31, 2021 and December 31, 2020.

(3)

Includes deferred loan origination fees of $2 million.

The majority of the loans the Company originates for investment are multi-family loans, most of which are collateralized by non-luxury apartment buildings in New York City with rent-regulated units and below-market rents. In addition, the Company originates CRE loans, most of which are collateralized by income-producing properties such as office buildings, retail centers, mixed-use buildings, and multi-tenanted light industrial properties that are located in New York City and on Long Island.

To a lesser extent, the Company also originates ADC loans for investment. One-to-four family loans held for investment were originated through the Company’s former mortgage banking operation and primarily consisted of jumbo prime adjustable rate mortgages made to borrowers with a solid credit history.

ADC loans are primarily originated for multi-family and residential tract projects in New York City and on Long Island. C&I loans consist of asset-based loans, equipment loans and leases, and dealer floor-plan loans (together, specialty finance loans and leases) that generally are made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide; and other C&I loans that primarily are made to small and mid-size businesses in Metro New York. Other C&I loans are typically made for working capital, business expansion, and the purchase of machinery and equipment.

The repayment of multi-family and CRE loans generally depends on the income produced by the underlying properties which, in turn, depends on their successful operation and management. To mitigate the potential for credit losses, the Company underwrites its loans in accordance with credit standards it considers to be prudent, looking first at the consistency of the cash flows being produced by the underlying property. In addition, multi-family buildings, CRE properties, and ADC projects are inspected as a prerequisite to approval, and independent appraisers, whose appraisals are carefully reviewed by the Company’s in-house appraisers, perform appraisals on the collateral properties. In many cases, a second independent appraisal review is performed.

To further manage its credit risk, the Company’s lending policies limit the amount of credit granted to any one borrower and typically require conservative debt service coverage ratios and loan-to-value ratios. Nonetheless, the ability of the Company’s borrowers to repay these loans may be impacted by adverse conditions in the local real estate market, the local economy and changes in applicable laws and regulations. Accordingly, there can be no assurance that its underwriting policies will protect the Company from credit-related losses or delinquencies.

ADC loans typically involve a higher degree of credit risk than loans secured by improved or owner-occupied real estate. Accordingly, borrowers are required to provide a guarantee of repayment and completion, and loan proceeds are disbursed as construction progresses, as certified by in-house inspectors or third-party engineers. The Company seeks to minimize the credit risk on ADC loans by maintaining conservative lending policies and rigorous underwriting standards. However, if the estimate of value proves to be inaccurate, the cost of completion is greater than expected, or the length of time to complete and/or sell or lease the collateral property is greater than anticipated, the property could have a value upon completion that is insufficient to assure full repayment of the loan. This could have a material adverse effect on the quality of the ADC loan portfolio, and could result in losses or delinquencies. In addition, the Company utilizes the same stringent appraisal process for ADC loans as it does for its multi-family and CRE loans.

To minimize the risk involved in specialty finance lending and leasing, the Company participates in syndicated loans that are brought to it, and equipment loans and leases that are assigned to it, by a select group of nationally recognized sources who have had long-term relationships with its experienced lending officers. Each of these credits is secured with a perfected first security interest or outright ownership in the underlying collateral, and structured as senior debt or as a non-cancelable lease. To further minimize the risk involved in specialty finance lending and leasing, each transaction is re-underwritten. In addition, outside counsel is retained to conduct a further review of the underlying documentation.

To minimize the risks involved in other C&I lending, the Company underwrites such loans on the basis of the cash flows produced by the business; requires that such loans be collateralized by various business assets, including inventory, equipment, and accounts receivable, among others; and typically requires personal guarantees. However, the capacity of a borrower to repay such a C&I loan is substantially dependent on the degree to which the business is successful. In addition, the collateral underlying such loans may depreciate over time, may not be conducive to appraisal, or may fluctuate in value, based upon the results of operations of the business.

Included in loans held for investment at December 31, 2021 and December 31, 2020, were loans of $6 million and $38 million, respectively, to officers, directors, and their related interests and parties. There were no loans to principal shareholders at that date.

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, 2021 and December 31, 2020, all of our non-performing loans were non-accrual loans.

The following table presents information regarding the quality of the Company’s loans held for investment at December 31, 2021:


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	57	$	10	$	—	$	67	$	34,536	$	34,603
Commercial real estate		2		16		—		18		6,680		6,698
One-to-four family		8		1		—		9		151		160
Acquisition, development, and construction		—		—		—		—		209		209
Commercial and industrial(1) (2)		—		6		—		6		4,000		4,006
Other		—		—		—		—		5		5
Total	$	67	$	33	$	—	$	100	$	45,581	$	45,681

(1)

Includes $6 million of taxi medallion-related loans that were 90 days or more past due. There were no taxi medallion-related loans that were 30 to 89 days past due.

(2)

Includes lease financing receivables, all of which were current.

The following table presents information regarding the quality of the Company’s loans held for investment at December 31, 2020:


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	4	$	4	$	—	$	8	$	32,228	$	32,236
Commercial real estate		10		12		—		22		6,814		6,836
One-to-four family		2		2		—		4		232		236
Acquisition, development, and construction		—		—		—		—		90		90
Commercial and industrial(1) (2)		—		20		—		20		3,397		3,417
Other		—		—		—		—		7		7
Total	$	16	$	38	$	—	$	54	$	42,768	$	42,822

(1)

Includes $19 million of taxi medallion-related loans that were 90 days or more past due. There were no taxi medallion-related loans that were 30 to 89 days past due.

(2)

Includes lease financing receivables, all of which were current.

The following table summarizes the Company’s portfolio of loans held for investment by credit quality indicator at December 31, 2021:


	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(1)		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	33,011	$	5,874	$	137	$	204	$	39,226	$	3,959	$	5	$	3,964
Special mention		981		643		14		5		1,643		2		—		2
Substandard		611		181		9		—		801		45		—		45
Doubtful		—		—		—		—		—		—		—		—
Total	$	34,603	$	6,698	$	160	$	209	$	41,670	$	4,006	$	5	$	4,011

(1)

Includes lease financing receivables, all of which were classified as Pass.

The following table summarizes the Company’s portfolio of loans held for investment by credit quality indicator at December 31, 2020:


	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(1)		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	31,220	$	5,884	$	222	$	68	$	37,394	$	3,388	$	7	$	3,395
Special mention		567		637		12		22		1,238		3		—		3
Substandard		449		315		2		—		766		26		—		26
Doubtful		—		—		—		—		—		—		—		—
Total	$	32,236	$	6,836	$	236	$	90	$	39,398	$	3,417	$	7	$	3,424

(1)

Includes lease financing receivables, all of which were classified as Pass.

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.

The following table presents, by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of December 31, 2021.


	Vintage Year
(in millions) Risk Rating Group	2021		2020		2019		2018		2017		Prior To 2017		Revolving Loans		Total
Pass	$	9,363	$	9,223	$	5,623	$	4,700	$	3,320	$	7,006	$	17	$	39,252
Special Mention		—		128		221		346		123		825		1		1,644
Substandard		—		23		108		145		93		432		—		801
Total mortgage loans	$	9,363	$	9,374	$	5,952	$	5,191	$	3,536	$	8,263	$	18	$	41,697
Pass		916		670		533		87		152		167		1,469		3,994
Special Mention		—		—		—		—		—		—		2		2
Substandard		—		2		2		1		1		13		26		45
Total other loans		916		672		535		88		153		180		1,497		4,041
Total	$	10,279	$	10,046	$	6,487	$	5,279	$	3,689	$	8,443	$	1,515	$	45,738

When management determines that foreclosure is probable, 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.

Other collateral type consists of taxi medallions, cash, accounts receivable and inventory.

There were no significant changes in the extent to which collateral secures the Company’s collateral-dependent financial assets during the twelve months ended December 31, 2021.

At December 31, 2021 and December 31, 2020, the Company had no residential mortgage loans in the process of foreclosure.

The Company is required to account for certain loan modifications and restructurings as TDRs. In general, a modification or restructuring of a loan constitutes a TDR if the Company grants a concession to a borrower experiencing financial difficulty. A loan modified as a TDR generally is placed on non-accrual status until the Company determines 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 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, 2021, loans on which concessions were made with respect to rate reductions and/or extension of maturity dates amounted to $29 million.

The CARES Act was enacted on March 27, 2020. Under the CARES Act, the Company made the election to deem that loan modifications do not result in TDRs if they are (1) related to the novel coronavirus disease (“COVID-19”); (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020. This includes short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented.

The following table presents information regarding the Company’s TDRs as of December 31, 2021 and 2020:


		December 31, 2021									December 31, 2020
(in millions)		Accruing			Non- Accrual			Total			Accruing			Non- Accrual			Total
Loan Category:
Multi-family	$		—	$		7	$		7	$		—	$		—	$		—
Commercial real estate			16			—			16			15			—			15
One-to-four family			—			—			—			—			—			—
Acquisition, development, and construction			—			—			—			—			—			—
Commercial and industrial (1)			—			6			6			—			19			19
Total	$		16	$		13	$		29	$		15	$		19	$		34

(1)

Includes $6 million and $18 million of taxi medallion-related loans at December 31, 2021 and 2020, respectively.

The eligibility of a borrower for work-out concessions of any nature depends upon the facts and circumstances of each loan, which may change from period to period, and involves judgment by Company personnel regarding the likelihood that the concession will result in the maximum recovery for the Company.

The financial effects of the Company’s TDRs for the twelve months ended December 31, 2021, 2020 and 2019 are summarized as follows:


	For the Twelve Months Ended December 31, 2021
							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	$	4	$	4		6.00	%	3.55	%	$	—	$	—
Multi-family		1		8		8	3.13			3.25			—		—
Total		3	$	12	$	12						$	—	$	—


	For the Twelve Months Ended December 31, 2020
							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		1	$	15	$	15	8.00	%	3.50	%	$	—	$	—
Commercial and industrial		42		9		8	2.36		2.23			1		—
Total		43	$	24	$	23					$	1	$	—


	For the Twelve Months Ended December 31, 2019
							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:
One-to-four family		1	$	—	$	—		5.50	%		5.50	%	$	—	$	—
Commercial and industrial		72		35		31	4.31			4.37				4		—
Total		73	$	35	$	31							$	4	$	—

At December 31, 2021, no loans have been modified as TDR's that were in payment default during the twelve months ended at that date. December 31, 2020, C&I loans totaling $3 million that had been modified as a TDR during the twelve months ended at that date were in payment default. At December 31, 2019, C&I loans in the amount of $1 million that had been modified as a TDR during the twelve months ended at that date was in prepayment default.

The Company does not consider a payment to be in default when the loan is in forbearance, or otherwise granted a delay of payment, when the agreement to forebear or allow a delay of payment is part of a modification.

Subsequent to the modification, the loan is not considered to be in default until payment is contractually past due in accordance with the modified terms. However, the Company does consider a loan with multiple modifications or forbearance periods to be in default, and would also consider a loan to be in default if the borrower were in bankruptcy or if the loan were partially charged off subsequent to modification.