Loans Receivable and Allowance for Loan Losses

The following tables set forth the composition of our loans receivable portfolio, and an aging analysis by accruing and non-accrual loans, by segment and class at the dates indicated.



	At December 31, 2014
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	13,943	$	7,332	$	—	$	21,275	$	804,880	$	826,155
Full documentation amortizing	25,878		7,611		144		33,633		4,948,391		4,982,024
Reduced documentation interest-only	18,490		2,584		—		21,074		547,350		568,424
Reduced documentation amortizing	11,024		1,648		—		12,672		384,250		396,922
Total residential	69,335		19,175		144		88,654		6,684,871		6,773,525
Multi-family	3,646		2,222		1,790		7,658		3,893,539		3,901,197
Commercial real estate	1,686		493		2,159		4,338		863,615		867,953
Total mortgage loans	74,667		21,890		4,093		100,650		11,442,025		11,542,675
Consumer and other loans (gross):
Home equity and other consumer	2,430		962		—		3,392		175,121		178,513
Commercial and industrial	—		—		—		—		64,815		64,815
Total consumer and other loans	2,430		962		—		3,392		239,936		243,328
Total accruing loans	$	77,097	$	22,852	$	4,093	$	104,042	$	11,681,961	$	11,786,003
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,371	$	358	$	11,502	$	14,231	$	13,796	$	28,027
Full documentation amortizing	204		238		14,211		14,653		7,016		21,669
Reduced documentation interest-only	820		453		16,289		17,562		25,022		42,584
Reduced documentation amortizing	596		1,066		2,843		4,505		3,226		7,731
Total residential	3,991		2,115		44,845		50,951		49,060		100,011
Multi-family	648		346		7,127		8,121		3,735		11,856
Commercial real estate	790		—		729		1,519		4,293		5,812
Total mortgage loans	5,429		2,461		52,701		60,591		57,088		117,679
Consumer and other loans (gross):
Home equity and other consumer	—		—		6,040		6,040		—		6,040
Commercial and industrial	—		—		—		—		—		—
Total consumer and other loans	—		—		6,040		6,040		—		6,040
Total non-accrual loans	$	5,429	$	2,461	$	58,741	$	66,631	$	57,088	$	123,719
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	16,314	$	7,690	$	11,502	$	35,506	$	818,676	$	854,182
Full documentation amortizing	26,082		7,849		14,355		48,286		4,955,407		5,003,693
Reduced documentation interest-only	19,310		3,037		16,289		38,636		572,372		611,008
Reduced documentation amortizing	11,620		2,714		2,843		17,177		387,476		404,653
Total residential	73,326		21,290		44,989		139,605		6,733,931		6,873,536
Multi-family	4,294		2,568		8,917		15,779		3,897,274		3,913,053
Commercial real estate	2,476		493		2,888		5,857		867,908		873,765
Total mortgage loans	80,096		24,351		56,794		161,241		11,499,113		11,660,354
Consumer and other loans (gross):
Home equity and other consumer	2,430		962		6,040		9,432		175,121		184,553
Commercial and industrial	—		—		—		—		64,815		64,815
Total consumer and other loans	2,430		962		6,040		9,432		239,936		249,368
Total loans	$	82,526	$	25,313	$	62,834	$	170,673	$	11,739,049	$	11,909,722
Net unamortized premiums and
deferred loan origination costs											47,726
Loans receivable											11,957,448
Allowance for loan losses											(111,600		)
Loans receivable, net											$	11,845,848



	At December 31, 2013
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	27,291	$	5,220	$	—	$	32,511	$	1,249,462	$	1,281,973
Full documentation amortizing	31,189		7,415		151		38,755		5,325,944		5,364,699
Reduced documentation interest-only	22,635		5,208		—		27,843		693,660		721,503
Reduced documentation amortizing	8,993		2,311		—		11,304		352,322		363,626
Total residential	90,108		20,154		151		110,413		7,621,388		7,731,801
Multi-family	12,740		970		—		13,710		3,270,206		3,283,916
Commercial real estate	1,729		1,690		233		3,652		801,690		805,342
Total mortgage loans	104,577		22,814		384		127,775		11,693,284		11,821,059
Consumer and other loans (gross):
Home equity and other consumer	3,177		1,340		—		4,517		198,426		202,943
Commercial and industrial	—		—		—		—		30,758		30,758
Total consumer and other loans	3,177		1,340		—		4,517		229,184		233,701
Total accruing loans	$	107,754	$	24,154	$	384	$	132,292	$	11,922,468	$	12,054,760
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,185	$	582	$	78,271	$	81,038	$	19,190	$	100,228
Full documentation amortizing	1,327		653		41,934		43,914		10,844		54,758
Reduced documentation interest-only	2,065		579		87,910		90,554		27,604		118,158
Reduced documentation amortizing	617		425		26,112		27,154		5,177		32,331
Total residential	6,194		2,239		234,227		242,660		62,815		305,475
Multi-family	1,104		357		9,054		10,515		2,024		12,539
Commercial real estate	930		—		921		1,851		5,773		7,624
Total mortgage loans	8,228		2,596		244,202		255,026		70,612		325,638
Consumer and other loans (gross):
Home equity and other consumer	—		—		5,948		5,948		32		5,980
Commercial and industrial	—		—		—		—		—		—
Total consumer and other loans	—		—		5,948		5,948		32		5,980
Total non-accrual loans	$	8,228	$	2,596	$	250,150	$	260,974	$	70,644	$	331,618
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	29,476	$	5,802	$	78,271	$	113,549	$	1,268,652	$	1,382,201
Full documentation amortizing	32,516		8,068		42,085		82,669		5,336,788		5,419,457
Reduced documentation interest-only	24,700		5,787		87,910		118,397		721,264		839,661
Reduced documentation amortizing	9,610		2,736		26,112		38,458		357,499		395,957
Total residential	96,302		22,393		234,378		353,073		7,684,203		8,037,276
Multi-family	13,844		1,327		9,054		24,225		3,272,230		3,296,455
Commercial real estate	2,659		1,690		1,154		5,503		807,463		812,966
Total mortgage loans	112,805		25,410		244,586		382,801		11,763,896		12,146,697
Consumer and other loans (gross):
Home equity and other consumer	3,177		1,340		5,948		10,465		198,458		208,923
Commercial and industrial	—		—		—		—		30,758		30,758
Total consumer and other loans	3,177		1,340		5,948		10,465		229,216		239,681
Total loans	$	115,982	$	26,750	$	250,534	$	393,266	$	11,993,112	$	12,386,378
Net unamortized premiums and
deferred loan origination costs											55,688
Loans receivable											12,442,066
Allowance for loan losses											(139,000		)
Loans receivable, net											$	12,303,066

At June 30, 2014, we designated a pool of non-performing residential mortgage loans, substantially all of which were 90 days or more past due, as held-for-sale. In connection with the designation of the pool of loans as held-for-sale, we recorded a loan charge-off of $8.7 million against the allowance for loan losses during the 2014 second quarter to write down the pool of loans from its immediately previous aggregate recorded investment of $195.0 million to its estimated fair value at the time of $186.3 million. As a result of our quarterly review of the adequacy of the allowance for loan losses as of June 30, 2014, $5.7 million of reserves previously attributable to this pool of loans was deemed no longer required and was credited to the provision for loan losses as a reserve release in the 2014 second quarter. On July 31, 2014, we completed a bulk sale transaction of substantially all of the non-performing residential mortgage loans held-for-sale at terms approximating their carrying value at June 30, 2014. Total loans sold in that transaction had a carrying value of $173.7 million, reflecting the previous write down to the estimated fair value through June 30, 2014. The majority of the remaining loans from the pool designated as held-for-sale as of June 30, 2014 were either foreclosed upon and transferred to REO or were satisfied via short sales or payoffs during the 2014 third quarter with no material impact on our financial condition or results of operations. On September 12, 2014, we completed a second sale transaction, with the same counterparty as the bulk sale transaction, in which we sold all of the remaining non-performing residential mortgage loans held-for-sale with a carrying value of $4.0 million, reflecting the previous write down to the estimated fair value through June 30, 2014, and recorded a loss on the sale of such loans in the 2014 third quarter of $920,000.

Our residential mortgage loans consist primarily of interest-only and amortizing hybrid ARM loans. We offer amortizing hybrid ARM loans which initially have a fixed rate for five, seven or ten years and convert into one year ARM loans at the end of the initial fixed rate period and require the borrower to make principal and interest payments during the entire loan term. Prior to 2014, we also offered amortizing hybrid ARM loans with an initial fixed rate period of three years. Prior to the 2010 fourth quarter, we offered interest-only hybrid ARM loans, which have an initial fixed rate for five or seven years and convert into one year interest-only ARM loans at the end of the initial fixed rate period. Our interest-only hybrid ARM loans require the borrower to pay interest only during the first ten years of the loan term. After the tenth anniversary of the loan, principal and interest payments are required to amortize the loan over the remaining loan term. We do not originate one year ARM loans. The ARM loans in our portfolio which currently reprice annually represent hybrid ARM loans (interest-only and amortizing) which have passed their initial fixed rate period. Our hybrid ARM loans may be offered with an initial interest rate which is less than the fully indexed rate for the loan at the time of origination, referred to as a discounted rate. We determine the initial interest rate in accordance with market and competitive factors giving consideration to the spread over our funding sources in conjunction with our overall interest rate risk management strategies. Residential interest-only hybrid ARM loans originated prior to 2007 were underwritten at the initial note rate which may have been a discounted rate. Such loans totaled $1.06 billion at December 31, 2014 and $1.66 billion at December 31, 2013. We do not originate negative amortization loans, payment option loans or other loans with short-term interest-only periods.

Within our residential mortgage loan portfolio we have reduced documentation loan products, which totaled $1.02 billion at December 31, 2014 and $1.24 billion at December 31, 2013. Reduced documentation loans are comprised primarily of SIFA (stated income, full asset) loans. To a lesser extent, reduced documentation loans in our portfolio also include SISA (stated income, stated asset) loans, which totaled $148.9 million at December 31, 2014 and $193.0 million at December 31, 2013. SIFA and SISA loans require a prospective borrower to complete a standard mortgage loan application. Reduced documentation loans require the receipt of an appraisal of the real estate used as collateral for the mortgage loan and a credit report on the prospective borrower. In addition, SIFA loans require the verification of a potential borrower’s asset information on the loan application, but not the income information provided. During the 2007 fourth quarter, we stopped offering reduced documentation loans.

Included in loans receivable at December 31, 2014 are loans in the process of foreclosure collateralized by residential real estate property with a recorded investment of $24.7 million.

Accrued interest receivable on all loans totaled $29.9 million at December 31, 2014 and $31.7 million at December 31, 2013. If all non-accrual loans at December 31, 2014, 2013 and 2012 had been performing in accordance with their original terms, we would have recorded interest income, with respect to such loans, of $5.6 million for the year ended December 31, 2014, $15.6 million for the year ended December 31, 2013 and $16.8 million for the year ended December 31, 2012. This compares to actual payments recorded as interest income, with respect to such loans, of $3.6 million for the year ended December 31, 2014, $6.2 million for the year ended December 31, 2013 and $4.3 million for the year ended December 31, 2012.

The following table sets forth the changes in our allowance for loan losses by loan receivable segment for the years indicated.



		Mortgage Loans										Consumer and Other Loans
(In Thousands)	Residential				Multi- Family			Commercial Real Estate				Consumer and Other Loans				Total
Balance at December 31, 2011		$	105,991		$	35,422			$	11,972			$	3,800		$	157,185
Provision charged to operations		24,663			6,161				5,038				4,538			40,400
Charge-offs		(49,794		)	(6,275		)		(2,607		)		(2,541		)	(61,217		)
Recoveries		8,407			206				1				519			9,133
Balance at December 31, 2012		89,267			35,514				14,404				6,316			145,501
Provision charged to operations		9,368			4,684				1,945				3,604			19,601
Charge-offs		(26,644		)	(4,732		)		(3,748		)		(1,916		)	(37,040		)
Recoveries		8,346			1,237				535				820			10,938
Balance at December 31, 2013		80,337			36,703				13,136				8,824			139,000
Provision (credited) charged to operations		(23,464		)	5,337				6,949				1,709			(9,469		)
Charge-offs		(19,868		)	(4,365		)		(3,283		)		(2,073		)	(29,589		)
Recoveries		9,278			1,575				440				365			11,658
Balance at December 31, 2014		$	46,283		$	39,250			$	17,242			$	8,825		$	111,600

The following table sets forth the balances of our residential interest-only mortgage loans at December 31, 2014 by the year in which such loans are scheduled to enter their amortization period.



(In Thousands)	Recorded Investment
Amortization scheduled to begin in:
2015	$	573,633
2016	415,608
2017	390,439
2018 and thereafter	85,510
Total	$	1,465,190

The following tables set forth the balances of our residential mortgage and consumer and other loan receivable segments by class and credit quality indicator at the dates indicated.



		At December 31, 2014
		Residential Mortgage Loans										Consumer and Other Loans
		Full Documentation					Reduced Documentation					Home Equity and Other Consumer			Commercial and Industrial
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing			Home Equity and Other Consumer			Commercial and Industrial
Performing		$	826,155	$	4,981,880		$	568,424		$	396,922		$	178,513		$	64,815
Non-performing:
Current or past due less than 90 days		16,525		7,458			26,295			4,888			—			—
Past due 90 days or more		11,502		14,355			16,289			2,843			6,040			—
Total		$	854,182	$	5,003,693		$	611,008		$	404,653		$	184,553		$	64,815



		At December 31, 2013
		Residential Mortgage Loans										Consumer and Other Loans
		Full Documentation					Reduced Documentation					Home Equity and Other Consumer			Commercial and Industrial
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing			Home Equity and Other Consumer			Commercial and Industrial
Performing		$	1,281,973	$	5,364,548		$	721,503		$	363,626		$	202,943		$	30,758
Non-performing:
Current or past due less than 90 days		21,957		12,824			30,248			6,219			32			—
Past due 90 days or more		78,271		42,085			87,910			26,112			5,948			—
Total		$	1,382,201	$	5,419,457		$	839,661		$	395,957		$	208,923		$	30,758

The following table sets forth the balances of our multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator at the dates indicated.



		At December 31,
		2014						2013
(In Thousands)	Multi-Family			Commercial Real Estate			Multi-Family			Commercial Real Estate
Not criticized		$	3,850,068		$	817,404		$	3,209,786		$	759,114
Criticized:
Special mention		30,975			22,584			14,063			9,760
Substandard		31,264			32,664			72,606			44,092
Doubtful		746			1,113			—			—
Total		$	3,913,053		$	873,765		$	3,296,455		$	812,966

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.



	At December 31, 2014
	Mortgage Loans								Consumer and Other Loans
(In Thousands)	Residential		Multi-Family			Commercial Real Estate			Consumer and Other Loans			Total
Loans:
Individually evaluated for impairment	$	181,402		$	42,611		$	19,270		$	5,153	$	248,436
Collectively evaluated for impairment	6,692,134			3,870,442			854,495			244,215		11,661,286
Total loans	$	6,873,536		$	3,913,053		$	873,765		$	249,368	$	11,909,722
Allowance for loan losses:
Individually evaluated for impairment	$	10,304		$	3,172		$	2,446		$	3,810	$	19,732
Collectively evaluated for impairment	35,979			36,078			14,796			5,015		91,868
Total allowance for loan losses	$	46,283		$	39,250		$	17,242		$	8,825	$	111,600



	At December 31, 2013
	Mortgage Loans								Consumer and Other Loans
(In Thousands)	Residential		Multi-Family			Commercial Real Estate			Consumer and Other Loans			Total
Loans:
Individually evaluated for impairment	$	311,930		$	52,538		$	20,054		$	—	$	384,522
Collectively evaluated for impairment	7,725,346			3,243,917			792,912			239,681		12,001,856
Total loans	$	8,037,276		$	3,296,455		$	812,966		$	239,681	$	12,386,378
Allowance for loan losses:
Individually evaluated for impairment	$	18,352		$	2,877		$	302		$	—	$	21,531
Collectively evaluated for impairment	61,985			33,826			12,834			8,824		117,469
Total allowance for loan losses	$	80,337		$	36,703		$	13,136		$	8,824	$	139,000

The following table summarizes information related to our impaired loans by segment and class at the dates indicated.



	At December 31,
	2014											2013
(In Thousands)	Unpaid Principal Balance		Recorded Investment			Related Allowance			Net Investment			Unpaid Principal Balance		Recorded Investment			Related Allowance			Net Investment
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	55,352		$	46,331	$	(3,391	)		$	42,940	$	142,659		$	109,877	$	(6,019	)		$	103,858
Full documentation amortizing	43,044			39,994		(1,425		)		38,569		41,136			36,091		(2,458		)		33,633
Reduced documentation interest-only	90,171			76,960		(4,661		)		72,299		183,280			140,357		(7,673		)		132,684
Reduced documentation amortizing	19,463			18,117		(827		)		17,290		30,660			25,605		(2,202		)		23,403
Multi-family	34,972			28,109		(3,172		)		24,937		19,748			19,748		(2,877		)		16,871
Commercial real estate	24,991			19,270		(2,446		)		16,824		5,790			5,790		(302		)		5,488
Consumer and other loans:
Home equity lines of credit	5,436			5,153		(3,810		)		1,343		—			—		—				—
Without an allowance recorded:
Mortgage loans:
Multi-family	16,308			14,502		—				14,502		39,871			32,790		—				32,790
Commercial real estate	—			—		—				—		19,988			14,264		—				14,264
Total impaired loans	$	289,737		$	248,436	$	(19,732	)		$	228,704	$	483,132		$	384,522	$	(21,531	)		$	362,991

The following table sets forth the average recorded investment, interest income recognized and cash basis interest income related to our impaired loans by segment and class for the years indicated.



		For the Year Ended December 31,
		2014									2013									2012
(In Thousands)	Average Recorded Investment			Interest Income Recognized			Cash Basis Interest Income			Average Recorded Investment			Interest Income Recognized			Cash Basis Interest Income			Average Recorded Investment			Interest Income Recognized			Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only		$	84,264		$	1,860		$	1,920		$	106,720		$	2,938		$	3,068		$	10,436		$	348		$	350
Full documentation amortizing		38,340			1,491			1,498			30,790			948			974			4,482			193			200
Reduced documentation interest-only		112,172			3,646			3,671			145,490			4,179			4,371			11,352			542			543
Reduced documentation amortizing		22,137			655			653			25,460			696			729			2,445			114			119
Multi-family		30,291			1,320			1,339			19,130			737			789			48,196			663			715
Commercial real estate		17,341			1,065			1,154			8,112			367			377			12,724			495			540
Consumer and other loans:
Home equity lines of credit		5,202			45			54			—			—			—			—			—			—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only		—			—			—			11,547			—			—			82,631			1,633			1,739
Full documentation amortizing		365			—			—			3,517			—			—			17,554			299			332
Reduced documentation interest-only		—			—			—			1,669			—			—			115,593			2,555			2,655
Reduced documentation amortizing		—			—			—			—			—			—			17,319			367			384
Multi-family		17,225			632			633			33,193			1,606			1,671			14,617			2,053			2,088
Commercial real estate		2,853			—			—			10,947			745			698			5,411			519			547
Total impaired loans		$	330,190		$	10,714		$	10,922		$	396,575		$	12,216		$	12,677		$	342,760		$	9,781		$	10,212

The following table sets forth information about our mortgage loans receivable by segment and class at December 31, 2014, 2013 and 2012 which were modified in a TDR during the years indicated.



		Modifications During the Year Ended December 31,
		2014								2013								2012
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at December 31, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at December 31, 2013			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at December 31, 2012
Residential:
Full documentation interest-only		21		$	9,244		$	8,726		26		$	6,760		$	6,730		20		$	4,390		$	4,355
Full documentation amortizing		4		889			812			11		3,753			3,734			11		3,319			3,291
Reduced documentation interest-only		19		6,819			6,774			37		12,199			12,227			29		11,141			11,125
Reduced documentation amortizing		5		809			745			11		3,404			3,325			14		3,984			3,860
Multi-family		4		2,501			1,981			8		6,751			5,888			16		36,262			32,005
Commercial real estate		3		2,482			2,433			7		10,232			9,104			3		3,898			2,305
Total		56		$	22,744		$	21,471		100		$	43,099		$	41,008		93		$	62,994		$	56,941

The following table sets forth information about our mortgage loans receivable by segment and class at December 31, 2014, 2013 and 2012 which were modified in a TDR during the years ended December 31, 2014, 2013 and 2012 and had a payment default subsequent to the modification during the years indicated.



		During the Year Ended December 31,
		2014					2013					2012
(Dollars In Thousands)	Number of Loans		Recorded Investment at December 31, 2014			Number of Loans		Recorded Investment at December 31, 2013			Number of Loans		Recorded Investment at December 31, 2012
Residential:
Full documentation interest-only		1		$	621		11		$	2,191		1		$	165
Full documentation amortizing		2		319			4		1,334			2		643
Reduced documentation interest-only		3		1,123			17		4,190			5		1,829
Reduced documentation amortizing		—		—			3		788			4		1,628
Multi-family		3		1,400			2		1,018			2		3,589
Total		9		$	3,463		37		$	9,521		14		$	7,854

The following table details the percentage of our total residential mortgage loans at December 31, 2014 by state where we have a concentration of greater than 5% of our total residential mortgage loans or total non-performing residential mortgage loans.



State	Percent of Total Residential Loans			Percent of Total Non-Performing Residential Loans
New York		29.6	%		11.4	%
Connecticut		9.9			4.5
Illinois		8.8			14.3
Massachusetts		8.6			4.4
Virginia		7.5			10.3
New Jersey		6.9			14.0
Maryland		6.4			14.9
California		5.7			11.9

At December 31, 2014, substantially all of our multi-family and commercial real estate mortgage loans were secured by properties located in the New York metropolitan area, which includes New York, New Jersey and Connecticut. At December 31, 2014, 85% of the non-performing multi-family and commercial real estate mortgage loans were secured by properties located in the New York metropolitan area with the remainder in Pennsylvania.