(5) Loans Receivable and Allowance for Loan Losses

The following tables set forth the composition of our loans receivable portfolio in dollar amounts and percentages of the portfolio and an aging analysis by segment and class at the dates indicated.


	At December 31, 2012
	30-59 Days			60-89 Days		90 Days or More Past Due				Total Past Due						Percent
(Dollars in Thousands)	Past Due			Past Due		Accruing		Non-Accrual		or Non-Accrual	Current		Total			of Total
Mortgage loans (gross):
Residential:
Full documentation:
Interest-only	$		30,520	$	8,973	$	-	$	99,521	$ 139,014	$	1,862,382	$	2,001,396		15.21	%
Amortizing	35,918			6,564		-		44,326		86,808	6,218,064		6,304,872			47.93
Reduced documentation:
Interest-only	28,212			7,694		-		113,482		149,388	855,907		1,005,295			7.64
Amortizing	11,780			3,893		-		33,722		49,395	350,268		399,663			3.04
Total residential	106,430			27,124		-		291,051		424,605	9,286,621		9,711,226			73.82
Multi-family	21,743			5,382		-		10,658		37,783	2,368,895		2,406,678			18.29
Commercial real estate	13,536			3,126		328		6,541		23,531	750,385		773,916			5.88
Total mortgage loans	141,709			35,632		328		308,250		485,919	12,405,901		12,891,820			97.99
Consumer and other loans (gross):
Home equity lines of credit	3,103			1,092		-		6,459		10,654	221,266		231,920			1.77
Other	120			223		-		49		392	31,782		32,174			0.24
Total consumer and other loans	3,223			1,315		-		6,508		11,046	253,048		264,094			2.01
Total loans	$		144,932	$	36,947	$	328	$	314,758	$ 496,965	$	12,658,949	$	13,155,914		100.00	%
Net unamortized premiums and deferred loan origination costs													68,058
Loans receivable													13,223,972
Allowance for loan losses													(145,501		)
Loans receivable, net													$	13,078,471

	At December 31, 2011
	30-59 Days			60-89 Days		90 Days or More Past Due				Total Past Due						Percent
(Dollars in Thousands)	Past Due			Past Due		Accruing		Non-Accrual		or Non-Accrual	Current		Total			of Total
Mortgage loans (gross):
Residential:
Full documentation:
Interest-only	$	40,582		$	9,047	$	-	$	107,503	$ 157,132	$	2,538,808	$	2,695,940		20.43	%
Amortizing	33,376			7,056		14		43,923		84,369	6,223,678		6,308,047			47.79
Reduced documentation:
Interest-only	38,570			9,695		-		131,301		179,566	965,774		1,145,340			8.68
Amortizing	16,034			5,455		-		35,126		56,615	355,597		412,212			3.12
Total residential	128,562			31,253		14		317,853		477,682	10,083,857		10,561,539			80.02
Multi-family	29,109			14,915		148		7,874		52,046	1,641,825		1,693,871			12.84
Commercial real estate	4,882			1,060		-		900		6,842	652,864		659,706			5.00
Total mortgage loans	162,553			47,228		162		326,627		536,570	12,378,546		12,915,116			97.86
Consumer and other loans (gross):
Home equity lines of credit	3,975			1,391		-		5,995		11,361	247,675		259,036			1.96
Other	212			196		-		73		481	22,927		23,408			0.18
Total consumer and other loans	4,187			1,587		-		6,068		11,842	270,602		282,444			2.14
Total loans	$	166,740		$	48,815	$	162	$	332,695	$ 548,412	$	12,649,148	$	13,197,560		100.00	%
Net unamortized premiums and deferred loan origination costs													77,044
Loans receivable													13,274,604
Allowance for loan losses													(157,185		)
Loans receivable, net													$	13,117,419

Included in 90 days or more past due non-accrual loans in the tables above are loans modified in a troubled debt restructuring which are less than 90 days past due totaling $13.7 million at December 31, 2012 and $10.9 million at December 31, 2011.

Accrued interest receivable on all loans totaled $36.0 million at December 31, 2012 and $39.0 million at December 31, 2011.

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 three, 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 the 2010 fourth quarter, we offered interest-only hybrid ARM loans, which have an initial fixed rate for three, 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 $2.18 billion at December 31, 2012 and $2.50 billion at December 31, 2011. 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 $1.40 billion at December 31, 2012 and $1.56 billion at December 31, 2011. 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 $222.7 million at December 31, 2012 and $240.7 million at December 31, 2011. 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.

If all non-accrual loans at December 31, 2012, 2011 and 2010 had been performing in accordance with their original terms, we would have recorded interest income, with respect to such loans, of $16.8 million for the year ended December 31, 2012, $19.3 million for the year ended December 31, 2011 and $24.0 million for the year ended December 31, 2010. This compares to actual payments recorded as interest income, with respect to such loans, of $4.3 million for the year ended December 31, 2012, $5.2 million for the year ended December 31, 2011 and $8.8 million for the year ended December 31, 2010.

The following table sets forth the changes in our allowance for loan losses by loan receivable segment for the years ended December 31, 2012, 2011 and 2010.

	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at December 31, 2009	$	113,288		$	63,145		$	10,638		$	6,978		$	194,049
Provision charged to operations	83,816			20,412			11,170			(398		)	115,000
Charge-offs	(84,537		)	(29,158		)	(6,970		)	(2,583		)	(123,248		)
Recoveries	12,957			1,867			725			149			15,698
Balance at December 31, 2010	125,524			56,266			15,563			4,146			201,499
Provision charged to operations	34,457			814			547			1,182			37,000
Charge-offs	(64,834		)	(22,160		)	(4,138		)	(1,665		)	(92,797		)
Recoveries	10,844			502			-			137			11,483
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

During 2012, we refined our historical loss analyses on all of our loan portfolios, including further segmenting residential non-performing loans and segmenting the multi-family and commercial real estate portfolios by property type and geographic location, and re-assessed the application of the qualitative factors described in Note 1 for purposes of allocating the allowance for loan losses by portfolio.

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, 2012
	Mortgage Loans						Consumer
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		and Other Loans		Total
Loans:
Individually evaluated for impairment	$	272,146	$	56,116	$	18,644	$	-	$	346,906
Collectively evaluated for impairment	9,439,080		2,350,562		755,272		264,094		12,809,008
Total loans	$	9,711,226	$	2,406,678	$	773,916	$	264,094	$	13,155,914
Allowance for loan losses:
Individually evaluated for impairment	$	1,001	$	2,576	$	1,469	$	-	$	5,046
Collectively evaluated for impairment	88,266		32,938		12,935		6,316		140,455
Total allowance for loan losses	$	89,267	$	35,514	$	14,404	$	6,316	$	145,501

	At December 31, 2011
	Mortgage Loans						Consumer
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		and Other Loans		Total
Loans:
Individually evaluated for impairment	$	245,671	$	38,769	$	17,095	$	-	$	301,535
Collectively evaluated for impairment	10,315,868		1,655,102		642,611		282,444		12,896,025
Total loans	$	10,561,539	$	1,693,871	$	659,706	$	282,444	$	13,197,560
Allowance for loan losses:
Individually evaluated for impairment	$	3,305	$	8,650	$	3,193	$	-	$	15,148
Collectively evaluated for impairment	102,686		26,772		8,779		3,800		142,037
Total allowance for loan losses	$	105,991	$	35,422	$	11,972	$	3,800	$	157,185

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

	At December 31,
	2012									2011
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
Mortgage loans:
With an allowance recorded:
Residential:
Full documentation:
Interest-only	$	10,740	$	10,740	$	(241	)	$	10,499	$	10,588	$	10,588	$	(1,240	)	$	9,348
Amortizing	6,122		6,122		(347		)	5,775		3,885		3,885		(439		)	3,446
Reduced documentation:
Interest-only	12,893		12,893		(277		)	12,616		11,713		11,713		(1,409		)	10,304
Amortizing	3,889		3,889		(136		)	3,753		1,779		1,779		(217		)	1,562
Multi-family	19,704		19,704		(2,576		)	17,128		39,399		36,273		(8,650		)	27,623
Commercial real estate	10,835		10,835		(1,469		)	9,366		19,946		17,095		(3,193		)	13,902
Without an allowance recorded:
Residential:
Full documentation:
Interest-only	122,275		86,607		-			86,607		107,332		75,791		-			75,791
Amortizing	23,489		17,962		-			17,962		22,184		17,074		-			17,074
Reduced documentation:
Interest-only	166,477		116,514		-			116,514		156,083		109,582		-			109,582
Amortizing	23,419		17,419		-			17,419		20,021		15,259		-			15,259
Multi-family	44,341		36,412		-			36,412		2,496		2,496		-			2,496
Commercial real estate	13,256		7,809		-			7,809		-		-		-			-
Total impaired loans	$	457,440	$	346,906	$	(5,046	)	$	341,860	$	395,426	$	301,535	$	(15,148	)	$	286,387

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 periods indicated.

	For the Year Ended December 31,
	2012						2011
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
Mortgage loans:
With an allowance recorded:
Residential:
Full documentation:
Interest-only	$	10,436	$	348	$	350	$	10,688	$	420	$	425
Amortizing	4,482		193		200		5,428		158		156
Reduced documentation:
Interest-only	11,352		542		543		11,239		544		539
Amortizing	2,445		114		119		1,248		88		86
Multi-family	48,196		663		715		55,284		2,168		2,096
Commercial real estate	12,724		495		540		19,964		1,237		1,204
Without an allowance recorded:
Residential:
Full documentation:
Interest-only	82,631		1,633		1,739		68,320		1,402		1,626
Amortizing	17,554		299		332		13,858		214		252
Reduced documentation:
Interest-only	115,593		2,555		2,655		108,857		2,131		2,317
Amortizing	17,319		367		384		14,130		333		341
Multi-family	14,617		2,053		2,088		882		215		215
Commercial real estate	5,411		519		547		-		-		-
Total impaired loans	$	342,760	$	9,781	$	10,212	$	309,898	$	8,910	$	9,257

Our average recorded investment in impaired loans was $270.6 million for the year ended December 31, 2010. Interest income recognized on impaired loans amounted to $8.6 million for the year ended December 31, 2010. This compares to cash basis interest income, with respect to such loans, of $9.4 million for the year ended December 31, 2010.

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, 2012
	Residential Mortgage Loans								Consumer and Other Loans
	Full Documentation				Reduced Documentation				Home Equity
(In Thousands)	Interest-only		Amortizing		Interest-only		Amortizing		Lines of Credit		Other
Performing	$	1,901,875	$	6,260,546	$	891,813	$	365,941	$	225,461	$	32,125
Non-performing	99,521		44,326		113,482		33,722		6,459		49
Total	$	2,001,396	$	6,304,872	$	1,005,295	$	399,663	$	231,920	$	32,174

	At December 31, 2011
	Residential Mortgage Loans								Consumer and Other Loans
	Full Documentation				Reduced Documentation				Home Equity
(In Thousands)	Interest-only		Amortizing		Interest-only		Amortizing		Lines of Credit		Other
Performing	$	2,588,437	$	6,264,110	$	1,014,039	$	377,086	$	253,041	$	23,335
Non-performing	107,503		43,937		131,301		35,126		5,995		73
Total	$	2,695,940	$	6,308,047	$	1,145,340	$	412,212	$	259,036	$	23,408

The following table sets forth the balances of our residential interest-only mortgage loans at December 31, 2012 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin:
Within one year	$	194,654
More than one year to three years	1,268,856
More than three years to five years	1,274,755
Over five years	268,426
Total	$	3,006,691

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. Criticized loans in the table below include loans adversely classified as substandard, doubtful or loss, as well as loans rated as special mention which represent loans having potential weaknesses that, if uncorrected, may result in the deterioration of the repayment prospects or in our credit position at some future date.

	At December 31,
	2012				2011
(In Thousands)	Multi-Family		Commercial Real Estate		Multi-Family		Commercial Real Estate
Not criticized	$	2,271,006	$	706,334	$	1,557,315	$	596,799
Criticized	135,672		67,582		136,556		62,907
Total	$	2,406,678	$	773,916	$	1,693,871	$	659,706

Loans modified in a troubled debt restructuring which are included in non-accrual loans totaled $32.8 million at December 31, 2012 and $18.8 million at December 31, 2011. Such loans include $12.5 million of Chapter 7 bankruptcy loans at December 31, 2012 which have been classified as troubled debt restructurings to comply with regulatory guidance issued in 2012. Excluded from non-performing loans are restructured loans that have complied with the terms of their restructure agreement for a satisfactory period of time and have, therefore, been returned to accrual status. Restructured accruing loans totaled $98.7 million at December 31, 2012 and $73.7 million at December 31, 2011.

	Modifications During the Year Ended December 31,
	2012					2011
(Dollars In Thousands)	Number of Loans	Pre- Modification Recorded Investment		Recorded Investment at December 31, 2012		Number of Loans	Pre- Modification Recorded Investment		Recorded Investment at December 31, 2011
Mortgage loans:
Residential:
Full documentation:
Interest-only	20	$	4,390	$	4,355	14	$	5,750	$	5,698
Amortizing	11	3,319		3,291		2	438		389
Reduced documentation:
Interest-only	29	11,141		11,125		28	12,116		11,941
Amortizing	14	3,984		3,860		6	1,204		1,176
Multi-family	16	36,262		32,005		11	7,666		7,140
Commercial real estate	3	3,898		2,305		4	7,176		6,621
Total	93	$	62,994	$	56,941	65	$	34,350	$	32,965

The following table sets forth information about our loans receivable by segment and class at December 31, 2012 and 2011 which were modified in a troubled debt restructuring during the years ended December 31, 2012 and 2011 and had a payment default subsequent to the modification during the periods indicated.

	For the Year Ended December 31,
	2012			2011
(Dollars In Thousands)	Number of Loans	Recorded Investment at December 31, 2012		Number of Loans	Recorded Investment at December 31, 2011
Mortgage loans:
Residential:
Full documentation:
Interest-only	1	$	165	5	$	1,797
Amortizing	2	643		1	83
Reduced documentation:
Interest-only	5	1,829		12	5,482
Amortizing	4	1,628		2	358
Multi-family	2	3,589		1	322
Total	14	$	7,854	21	$	8,042

The following table details the percentage of our total residential mortgage loans at December 31, 2012 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	28.7%	14.8%
Illinois	10.7	14.0
Connecticut	10.6	10.4
Massachusetts	8.2	2.7
New Jersey	7.4	20.0
Virginia	6.1	4.0
California	6.0	9.0
Maryland	5.8	11.2
Florida	1.8	6.2

At December 31, 2012, the geographic composition of our multi-family and commercial real estate mortgage loan portfolio was 97% in the New York metropolitan area, which includes New York, New Jersey and Connecticut, and 3% in various other states and the geographic composition of non-performing multi-family and commercial real estate mortgage loans was 97% in the New York metropolitan area and 3% in Florida.