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Note 3 - Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3. Loans and Allowance for Loan Losses

The composition of loans is as follows at December 31:

		2015				2014
		(In thousands)
Multi-family residential		$	2,055,228			$	1,923,460
Commercial real estate			1,001,236				621,569
One-to-four family ― mixed-use property			573,043				573,779
One-to-four family ― residential			187,838				187,572
Co-operative apartments			8,285				9,835
Construction			7,284				5,286
Small Business Administration			12,194				7,134
Taxi medallion			20,881				22,519
Commercial business and other			506,622				447,500
Gross loans			4,372,611				3,798,654
Net unamortized premiums and unearned loan fees			15,368				11,719
Total loans		$	4,387,979			$	3,810,373

The majority of our loan portfolio is invested in multi-family residential, commercial real estate and commercial business and other loans, which totaled 81.5% of our gross loans at December 31, 2015. Our concentration in these types of loans increases the overall level of credit risk inherent in our loan portfolio. The greater risk associated with these types of loans could require us to increase our provisions for loan losses and to maintain an allowance for loan losses as a percentage of total loans in excess of the allowance currently maintained.

Loans secured by multi-family residential property and commercial real estate generally involve a greater degree of risk than residential mortgage loans and generally carry larger loan balances. The increased credit risk is the result of several factors, including the concentration of principal in a smaller number of loans and borrowers, the effects of general economic conditions on income producing properties and the increased difficulty in evaluating and monitoring these types of loans. Furthermore, the repayments of loans secured by these types of properties are typically dependent upon the successful operation of the related property, which is usually owned by a legal entity with the property being the entity’s only asset. If the cash flow from the property is reduced, the borrower’s ability to repay the loan may be impaired. If the borrower defaults, our only remedy may be to foreclose on the property, for which the market value may be less than the balance due on the related mortgage loan.

Loans secured by commercial business and other loans involve a greater degree of risk for the same reasons as for multi-family residential and commercial real estate loans with the added risk that many of the loans are not secured by improved properties.

To minimize the risks involved in the origination of multi-family residential, commercial real estate and commercial business and other loans, the Bank adheres to strict underwriting standards, which include reviewing the expected net operating income generated by the real estate collateral securing the loan, the age and condition of the collateral, the financial resources and income level of the borrower and the borrower’s experience in owning or managing similar properties. We typically require debt service coverage of at least 125% of the monthly loan payment. We generally originate these loans up to only 75% of the appraised value or the purchase price of the property, whichever is less. Any loan with a final loan-to-value ratio in excess of 75% must be approved by the Bank Board of Directors or the Loan Committee as an exception to policy. We generally rely on the income generated by the property as the primary means by which the loan is repaid. However, personal guarantees may be obtained for additional security from these borrowers. Additionally, for commercial business and other loans which are not secured by improved properties, the Bank will secure these loans with business assets, including accounts receivables, inventory and real estate and generally require personal guarantees.

The following table shows loans modified and classified as TDR during the year ended December 31, 2015:

		For the year ended December 31, 2015
(Dollars in thousands)		Number				Balance				Modification description

Small Business Administration			1			$	41			Received a below market interest rate and the loan amortization was extended
Total			1			$	41

The recorded investment of the loan modified and classified to a TDR, presented in the table above, was unchanged as there was no principal forgiven in this modification. During the year ended December 31, 2015, one commercial existing TDR was re-modified by extending the term and advancing an additional $28,000.

There were no loans modified and classified as TDR during the year ended December 31, 2014.

The following table shows loans modified and classified as TDR during the year ended December 31, 2013:

		For the year ended December 31, 2013
(Dollars in thousands)		Number				Balance				Modification description

Multi-family residential			2			$	698			Received a below market interest rate and the loan amortization was extended
Commercial real estate			1				273			Received a below market interest rate and the loan amortization was extended
One-to-four family - mixed-use property			1				390			Received a below market interest rate and the loan amortization was extended
Commercial business and other			2				687			Received a below market interest rate and the loan amortization was extended
Total			6			$	2,048

The following table shows our recorded investment for loans classified as TDR that are performing according to their restructured terms at the periods indicated:

		December 31, 2015								December 31, 2014
(Dollars in thousands)		Number of contracts				Recorded investment				Number of contracts				Recorded investment

Multi-family residential			9			$	2,626				10			$	3,034
Commercial real estate			3				2,371				3				2,373
One-to-four family - mixed-use property			6				2,052				7				2,381
One-to-four family - residential			1				343				1				354
Small business administration			1				34				-				-
Commercial business and other			4				2,083				4				2,249

Total performing troubled debt restructured			24			$	9,509				25			$	10,391

During the year ended December 31, 2015, one TDR loan totaling $0.4 million was transferred to non-performing status, resulting in this loan being included in non-performing loans. During the year ended December 31, 2014, three TDR loans totaling $2.7 million were transferred to non-performing status, resulting in these loans being included in non-performing loans. Subsequent to being transferred to non-performing loans, two of these loans were paid in full during the year ended December 31, 2014. During the year ended December 31, 2013, no TDR loans were transferred to non-performing status.

The following table shows our recorded investment for loans classified as TDR that are not performing according to their restructured terms at the periods indicated:

		December 31, 2015								December 31, 2014
(Dollars in thousands)		Number of contracts				Recorded investment				Number of contracts				Recorded investment

Multi-family residential			1			$	391				-			$	-
Commercial real estate			-				-				1				2,252
One-to-four family - mixed-use property			-				-				1				187

Total troubled debt restructurings that subsequently defaulted			1			$	391				2			$	2,439

The following table shows our non-performing loans at the periods indicated:

		At December 31,
(In thousands)		2015				2014

Loans ninety days or more past due and still accruing:
Multi-family residential		$	233			$	676
Commercial real estate			1,183				820
One-to-four family mixed-use property			611				405
One-to-four family residential			13				14
Construction			1,000				-
Commercial business and other			220				386
Total			3,260				2,301

Non-accrual mortgage loans:
Multi-family residential			3,561				6,878
Commercial real estate			2,398				5,689
One-to-four family mixed-use property			5,952				6,936
One-to-four family residential			10,120				11,244
Total			22,031				30,747

Non-accrual non-mortgage loans:
Small business administration			218				-
Commercial business and other			568				1,143
Total			786				1,143

Total non-accrual loans			22,817				31,890


Total non-accrual loans and ninety days or more past due and still accruing		$	26,077			$	34,191

The following is a summary of interest foregone on non-accrual loans and loans classified as TDR for the years ended December 31:

		2015				2014				2013
		(In thousands)
Interest income that would have been recognized had the loans performed in accordance with their original terms		$	2,387			$	2,919			$	4,656
Less: Interest income included in the results of operations			702				796				1,213
Total foregone interest		$	1,685			$	2,123			$	3,443

The following table shows an age analysis of our recorded investment in loans at December 31, 2015:

(in thousands)		30 - 59 Days Past Due				60 - 89 Days Past Due				Greater than 90 Days				Total Past Due				Current				Total Loans


Multi-family residential		$	9,421			$	804			$	3,794			$	14,019			$	2,041,209			$	2,055,228
Commercial real estate			2,820				153				3,580				6,553				994,683				1,001,236
One-to-four family - mixed-use property			8,630				1,258				6,563				16,451				556,592				573,043
One-to-four family - residential			4,261				154				10,134				14,549				173,289				187,838
Co-operative apartments			-				-				-				-				8,285				8,285
Construction loans			-				-				1,000				1,000				6,284				7,284
Small Business Administration			42				-				218				260				11,934				12,194
Taxi medallion			-				-				-				-				20,881				20,881
Commercial business and other			-				2				228				230				506,392				506,622
Total		$	25,174			$	2,371			$	25,517			$	53,062			$	4,319,549			$	4,372,611

The following table shows an age analysis of our recorded investment in loans at December 31, 2014:

(in thousands)		30 - 59 Days Past Due				60 - 89 Days Past Due				Greater than 90 Days				Total Past Due				Current				Total Loans


Multi-family residential		$	7,721			$	1,729			$	7,554			$	17,004			$	1,906,456			$	1,923,460
Commercial real estate			1,612				1,903				6,510				10,025				611,544				621,569
One-to-four family - mixed-use property			10,408				1,154				7,341				18,903				554,876				573,779
One-to-four family - residential			1,751				2,244				11,051				15,046				172,526				187,572
Co-operative apartments			-				-				-				-				9,835				9,835
Construction loans			3,000				-				-				3,000				2,286				5,286
Small Business Administration			90				-				-				90				7,044				7,134
Taxi medallion			-				-				-				-				22,519				22,519
Commercial business and other			6				1,585				740				2,331				445,169				447,500
Total		$	24,588			$	8,615			$	33,196			$	66,399			$	3,732,255			$	3,798,654

The following table shows the activity in the allowance for loan losses for the year ended December 31, 2015:

(in thousands)		Multi-family residential				Commercial real estate				One-to-four family - mixed-use property				One-to-four family - residential				Co-operative apartments				Construction loans				Small Business Administration				Taxi medallion				Commercial business and other				Total

Allowance for credit losses:
Beginning balance		$	8,827			$	4,202			$	5,840			$	1,690			$	-			$	42			$	279			$	11			$	4,205			$	25,096
Charge-off's			(474	)			(32	)			(592	)			(342	)			-				-				(34	)			-				(2,371	)			(3,845	)
Recoveries			269				168				76				375				-				-				40				-				312				1,240
Provision (benefit)			(1,904	)			(99	)			(1,097	)			(496	)			-				8				(23	)			332				2,323				(956	)
Ending balance		$	6,718			$	4,239			$	4,227			$	1,227			$	-			$	50			$	262			$	343			$	4,469			$	21,535
Ending balance: individually evaluated for impairment		$	252			$	180			$	502			$	51			$	-			$	-			$	-			$	333			$	112			$	1,430
Ending balance: collectively evaluated for impairment		$	6,466			$	4,059			$	3,725			$	1,176			$	-			$	50			$	262			$	10			$	4,357			$	20,105

The following table shows the activity in the allowance for loan losses for the year ended December 31, 2014:

(in thousands)		Multi-family residential				Commercial real estate				One-to-four family - mixed-use property				One-to-four family - residential				Co-operative apartments				Construction loans				Small Business Administration				Taxi medallion				Commercial business and other				Total

Allowance for credit losses:
Beginning balance		$	12,084			$	4,959			$	6,328			$	2,079			$	104			$	444			$	458			$	-			$	5,320			$	31,776
Charge-off's			(1,161	)			(325	)			(423	)			(103	)			-				-				(49	)			-				(381	)			(2,442	)
Recoveries			150				481				608				269				7				-				92				-				176				1,783
Provision (benefit)			(2,246	)			(913	)			(673	)			(555	)			(111	)			(402	)			(222	)			11				(910	)			(6,021	)
Ending balance		$	8,827			$	4,202			$	5,840			$	1,690			$	-			$	42			$	279			$	11			$	4,205			$	25,096
Ending balance: individually evaluated for impairment		$	286			$	21			$	579			$	54			$	-			$	-			$	-			$	-			$	154			$	1,094
Ending balance: collectively evaluated for impairment		$	8,541			$	4,181			$	5,261			$	1,636			$	-			$	42			$	279			$	11			$	4,051			$	24,002

The following table shows the activity in the allowance for loan losses for the year ended December 31, 2013:

(in thousands)		Multi-family residential				Commercial real estate				One-to-four family - mixed-use property				One-to-four family - residential				Co-operative apartments				Construction loans				Small Business Administration				Taxi medallion				Commercial business and other				Total

Allowance for credit losses:
Beginning balance		$	13,001			$	5,705			$	5,960			$	1,999			$	46			$	66			$	505			$	7			$	3,815			$	31,104
Charge-off's			(3,585	)			(1,051	)			(4,206	)			(701	)			(108	)			(2,678	)			(457	)			-				(2,057	)			(14,843	)
Recoveries			541				324				266				272				4				-				87				-				86				1,580
Provision (benefit)			2,127				(19	)			4,308				509				162				3,056				323				(7	)			3,476				13,935
Ending balance		$	12,084			$	4,959			$	6,328			$	2,079			$	104			$	444			$	458			$	-			$	5,320			$	31,776
Ending balance: individually evaluated for impairment		$	312			$	164			$	875			$	58			$	-			$	17			$	-			$	-			$	222			$	1,648
Ending balance: collectively evaluated for impairment		$	11,772			$	4,795			$	5,453			$	2,021			$	104			$	427			$	458			$	-			$	5,098			$	30,128

The following table shows the manner in which loans were evaluated for impairment at the periods indicated:

At December 31, 2015
(in thousands)		Multi-family residential				Commercial real estate				One-to-four family - mixed-use property				One-to-four family- residential				Co-operative apartments				Construction loans				Small Business Administration				Taxi Medallion				Commercial business and other				Total

Financing Receivables:
Ending Balance		$	2,055,228			$	1,001,236			$	573,043			$	187,838			$	8,285			$	7,284			$	12,194			$	20,881			$	506,622			$	4,372,611
Ending balance: individually evaluated for impairment		$	8,047			$	6,183			$	12,828			$	12,598			$	-			$	1,000			$	310			$	2,118			$	4,716			$	47,800
Ending balance: collectively evaluated for impairment		$	2,047,181			$	995,053			$	560,215			$	175,240			$	8,285			$	6,284			$	11,884			$	18,763			$	501,906			$	4,324,811

At December 31, 2014
(in thousands)		Multi-family residential				Commercial real estate				One-to-four family - mixed-use property				One-to-four family- residential				Co-operative apartments				Construction loans				Small Business Administration				Taxi Medallion				Commercial business and other				Total

Financing Receivables:
Ending Balance		$	1,923,460			$	621,569			$	573,779			$	187,572			$	9,835			$	5,286			$	7,134			$	22,519			$	447,500			$	3,798,654
Ending balance: individually evaluated for impairment		$	13,260			$	9,473			$	15,120			$	13,170			$	-			$	-			$	-			$	-			$	5,492			$	56,515
Ending balance: collectively evaluated for impairment		$	1,910,200			$	612,096			$	558,659			$	174,402			$	9,835			$	5,286			$	7,134			$	22,519			$	442,008			$	3,742,139

The following table shows our recorded investment, unpaid principal balance and allocated allowance for loan losses for loans that were considered impaired at December 31, 2015 and 2014:

		December 31, 2015												December 31, 2014
		Recorded Investment				Unpaid Principal Balance				Related Allowance				Recorded Investment				Unpaid Principal Balance				Related Allowance

		(In thousands)
With no related allowance recorded:
Mortgage loans:
Multi-family residential		$	5,742			$	6,410			$	-			$	10,481			$	11,551			$	-
Commercial real estate			3,812				3,869				-				7,100				7,221				-
One-to-four family mixed-use property			10,082				11,335				-				12,027				13,381				-
One-to-four family residential			12,255				14,345				-				12,816				15,709				-
Co-operative apartments			-				-				-				-				-				-
Construction			1,000				1,000				-				-				-				-
Non-mortgage loans:
Small Business Administration			276				276				-				-				-				-
Taxi Medallion			-				-				-				-				-				-
Commercial Business and other			2,682				5,347				-				2,779				3,149				-

Total loans with no related allowance recorded			35,849				42,582				-				45,203				51,011				-

With an allowance recorded:
Mortgage loans:
Multi-family residential			2,305				2,305				252				2,779				2,779				286
Commercial real estate			2,371				2,371				180				2,373				2,373				21
One-to-four family mixed-use property			2,746				2,746				502				3,093				3,093				579
One-to-four family residential			343				343				51				354				354				54
Co-operative apartments			-				-				-				-				-				-
Construction			-				-				-				-				-				-
Non-mortgage loans:
Small Business Administration			34				34				-				-				-				-
Taxi Medallion			2,118				2,118				333				-				-				-
Commercial Business and other			2,034				2,034				112				2,713				2,713				154

Total loans with an allowance recorded			11,951				11,951				1,430				11,312				11,312				1,094

Total Impaired Loans:
Total mortgage loans		$	40,656			$	44,724			$	985			$	51,023			$	56,461			$	940

Total non-mortgage loans		$	7,144			$	9,809			$	445			$	5,492			$	5,862			$	154

The following table shows our average recorded investment and interest income recognized for loans that were considered impaired for the three years ended December 31, 2015:

		December 31, 2015								December 31, 2014								December 31, 2013
		Average Recorded Investment				Interest Income Recognized				Average Recorded Investment				Interest Income Recognized				Average Recorded Investment				Interest Income Recognized

		(In thousands)
With no related allowance recorded:
Mortgage loans:
Multi-family residential		$	8,285			$	92			$	14,168			$	194			$	22,091			$	402
Commercial real estate			4,926				7				11,329				51				19,846				266
One-to-four family mixed-use property			10,295				244				12,852				321				13,916				319
One-to-four family residential			12,985				138				13,015				103				14,529				125
Co-operative apartments			153				-				-				-				189				-
Construction			250				-				285				-				4,014				-
Non-mortgage loans:
Small Business Administration			299				1				-				-				247				-
Taxi Medallion			-				-				-				-				-				-
Commercial Business and other			3,912				253				3,428				137				5,309				268

Total loans with no related allowance recorded			41,105				735				55,077				806				80,141				1,380

With an allowance recorded:
Mortgage loans:
Multi-family residential			2,343				117				2,936				149				2,892				170
Commercial real estate			997				167				3,242				167				6,388				194
One-to-four family mixed-use property			2,983				151				3,249				170				4,041				228
One-to-four family residential			347				14				358				14				368				15
Co-operative apartments			-				-				-				-				-				-
Construction			-				-				187				-				1,929				18
Non-mortgage loans:
Small Business Administration			38				2				-				-				-				-
Taxi Medallion			1,062				66				-				-				-				-
Commercial Business and other			2,692				102				3,149				115				4,354				239

Total loans with an allowance recorded			10,462				619				13,121				615				19,972				864

Total Impaired Loans:
Total mortgage loans		$	43,564			$	930			$	61,621			$	1,169			$	90,203			$	1,737

Total non-mortgage loans		$	8,003			$	424			$	6,577			$	252			$	9,910			$	507

In accordance with our policy and the current regulatory guidelines, we designate loans as “Special Mention,” which are considered “Criticized Loans,” and “Substandard,” “Doubtful,” or “Loss,” which are considered “Classified Loans”. If a loan does not fall within one of the previous mentioned categories then the loan would be considered “Pass.” These loan designations are updated quarterly. We designate a loan as Substandard when a well-defined weakness is identified that jeopardizes the orderly liquidation of the debt. We designate a loan Doubtful when it displays the inherent weakness of a Substandard loan with the added provision that collection of the debt in full, on the basis of existing facts, is highly improbable. We designate a loan as Loss if it is deemed the debtor is incapable of repayment. The Company does not hold any loans designated as loss, as loans that are designated as Loss are charged to the Allowance for Loan Losses. Loans that are non-accrual are designated as Substandard, Doubtful or Loss. We designate a loan as Special Mention if the asset does not warrant classification within one of the other classifications, but does contain a potential weakness that deserves closer attention.

The following table sets forth the recorded investment in loans designated as Criticized or Classified at December 31, 2015:

(In thousands)		Special Mention				Substandard				Doubtful				Loss				Total

Multi-family residential		$	4,361			$	5,421			$	-			$	-			$	9,782
Commercial real estate			1,821				3,812				-				-				5,633
One-to-four family - mixed-use property			3,087				10,990				-				-				14,077
One-to-four family - residential			1,437				12,255				-				-				13,692
Co-operative apartments			-				-				-				-				-
Construction loans			-				1,000				-				-				1,000
Small Business Administration			229				224				-				-				453
Taxi Medallion			-				2,118				-				-				2,118
Commercial business and other			-				3,123				-				-				3,123
Total loans		$	10,935			$	38,943			$	-			$	-			$	49,878

The following table sets forth the recorded investment in loans designated as Criticized or Classified at December 31, 2014:

(In thousands)		Special Mention				Substandard				Doubtful				Loss				Total

Multi-family residential		$	6,494			$	10,226			$	-			$	-			$	16,720
Commercial real estate			5,453				7,100				-				-				12,553
One-to-four family - mixed-use property			5,254				12,499				-				-				17,753
One-to-four family - residential			2,352				13,056				-				-				15,408
Co-operative apartments			623				-				-				-				623
Construction loans			-				-				-				-				-
Small Business Administration			479				-				-				-				479
Commercial business and other			2,841				3,779				-				-				6,620
Total loans		$	23,496			$	46,660			$	-			$	-			$	70,156