Loans are reported at their outstanding principal balance net of any unearned income, charge-offs, deferred loan fees and costs on originated loans and unamortized premiums or discounts on purchased loans. Loan fees and certain loan origination costs are deferred. Net loan origination costs and premiums or discounts on loans purchased are amortized into interest income over the contractual life of the loans using the level-yield method. Prepayment penalties received on loans which pay in full prior to their scheduled maturity are included in interest income in the period they are collected.

Interest on loans is recognized on the accrual basis. Accrued interest receivable totaled $41.9 million at March 31, 2021 and was reported in “Interest and dividends receivable” on the Consolidated Statements of Financial Condition. The accrual of income on loans is generally discontinued when certain factors, such as contractual delinquency of 90 days or more, indicate reasonable doubt as to the timely collectability of such income. Uncollected interest previously recognized on non-accrual loans is reversed from interest income at the time the loan is placed on non-accrual status. A non-accrual loan can be returned to accrual status when contractual delinquency returns to less than 90 days delinquent. Payments received on non-accrual loans that do not bring the loan to less than 90 days delinquent are recorded on a cash basis. Payments can also be applied first as a reduction of principal until all principal is recovered and then subsequently to interest, if in management’s opinion, it is evident that recovery of all principal due is likely to occur.

The Allowance for credit losses (“ACL”) is an estimate that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial assets. Loans are charged off against that ACL when management believes that a loan balance is uncollectable based on quarterly analysis of credit risk.

The amount of the ACL is based upon a loss rate model that considers multiple factors which reflects management’s assessment of the credit quality of the loan portfolio. Management estimates the allowance balance using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The factors are both quantitative and qualitative in nature including, but not limited to, historical losses, economic conditions, trends in delinquencies, value and adequacy of underlying collateral, volume and portfolio mix, and internal loan processes.

The Company recorded a provision for loans losses totaling $2.8 million and $7.1 million for the three months ending March 31, 2021 and 2020, respectively. The provision recorded during the three months ended March 31, 2021 was driven by the write-off of the remaining taxi medallion portfolio totaling $2.8 million. There were no material changes to the methodology used to calculate the ACL from December 31, 2020 to March 31, 2021. For the three months ended March 31, 2021, the qualitative factors were adjusted to reflect additional risk due to the lag recovery of NYC unemployment. This resulted in the allowance for loan losses totaling $45.1 million at March 31, 2021 representing 0.67% of gross loans and 212.9% of non-performing loans compared to $45.2 million at December 31, 2020.

Pursuant to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) Act and later modified by Consolidated Appropriations Act, certain loan modifications are not classified as “troubled debt restructuring” (“TDR”)s, if the related loans were not more than 30 days past due as of December 31, 2019. The Company has elected that loans temporarily modified for borrowers directly impacted by COVID-19 are not considered TDR, assuming the above criteria is met and as such, these loans are considered current and continue to accrue interest at its original contractual terms until the completion of the deferred period. Once the deferred period is over, the borrower will resume making payment and normal delinquency-based non-accrual policies will apply.

The Company may restructure loans that are not directly impacted by COVID-19 to enable a borrower experiencing financial difficulties to continue making payments when it is deemed to be in the Company’s best long-term interest. This restructure may include reducing the interest rate or amount of the monthly payment for a specified period of time, after which the interest rate and repayment terms revert to the original terms of the loan. We classify these loans as TDR.

The Company believes that restructuring these loans in this manner will allow certain borrowers to become and remain current on their loans. All loans classified as TDR are individually evaluated, however TDR loans which have been current for six consecutive months at the time they are restructured as TDR remain on accrual status and are not included as part of non-performing loans. Loans which were delinquent at the time they are restructured as a TDR are placed on non-accrual status and reported as non-accrual performing TDR loans until they have made timely payments for six consecutive months. These restructurings have not included a reduction of principal balance.

The allocation of a portion of the allowance for loan losses for a performing TDR loan is based upon the present value of the future expected cash flows discounted at the loan’s original effective rate, or for a non-performing TDR loan which is collateral dependent, the fair value of the collateral. At March 31, 2021, there were no commitments to lend additional funds to borrowers whose loans were modified to a TDR. The modification of loans to a TDR did not have a significant effect on our operating results, nor did it require a significant allocation of the allowance for loan losses. There were no TDR loan modifications during the three months ended March 31, 2021 and 2020.

The following table shows loans classified as TDR at amortized cost that are performing according to their restructured terms at the periods indicated:

(1)

These loans in the table above continue to pay as agreed, however the Company records interest received on a cash basis.

(2)

These loans were completely charged off during the three months ended March 31, 2021.

During the three months ended March 31, 2021 and 2020, there were no defaults of TDR loans within 12 months of their modification date.

The following table shows loans classified as TDR at amortized cost that are not performing according to their restructured terms at the periods indicated:


	March 31, 2021			December 31, 2020
	Number	Amortized		Number	Amortized
(Dollars in thousands)	of contracts	Cost		of contracts	Cost
Taxi medallion ⁽¹⁾	—	$	—	11	$	1,922
Commercial business and other	1		279	1		279
Total troubled debt restructurings that subsequently defaulted	1	$	279	12	$	2,201

(1)

These loans were completely charged off during the three months ended March 31, 2021.

The following table shows our non-accrual loans at amortized cost with no related allowance and interest income recognized for loans ninety days or more past due and still accruing for period shown below:


	At or for the three months ended March 31, 2021
(In thousands)		Non-Accrual Amortized Cost Beginning of Reporting Period		Non-Accrual Amortized Cost Ending of Reporting Period		Non-Accrual with no related Allowance		Interest Income Recognized		Loans ninety days or more past due and still accruing:
Multi-family residential	$	2,576	$	4,435	$	4,435	$	—	$	201
Commercial real estate		1,766		35		35		—		—
One-to-four family - mixed-use property		1,706		2,753		2,753		—		—
One-to-four family - residential		5,313		6,789		6,789		—		—
Construction		—		—		—		—		2,381
Small Business Administration		1,168		1,168		1,168		—		—
Taxi medallion⁽²⁾		2,758		—		—		—		—
Commercial business and other⁽¹⁾		5,660		5,643		1,626		48		—
Total	$	20,947	$	20,823	$	16,806	$	48	$	2,582

(1) Included in the above analysis are non-accrual performing one-to-four family – mixed-use property totaling $0.3 million, and non-accrual performing TDR commercial business loans totaling $2.2 million at March 31, 2021.

(2) These loans were completely charged-off during the three months ended March 31, 2021.


	At or for the twelve months ended December 31, 2020
(In thousands)		Non-Accrual Amortized Cost Beginning of Reporting Period		Non-Accrual Amortized Cost Ending of Reporting Period		Non-Accrual with no related Allowance		Interest Income Recognized		Loans ninety days or more past due and still accruing:
Multi-family residential	$	2,723	$	2,576	$	2,576	$	—	$	201
Commercial real estate		2,714		1,766		1,766		—		2,547
One-to-four family - mixed-use property		1,704		1,706		1,706		—		—
One-to-four family - residential		9,992		5,313		5,313		—		—
Small Business Administration		1,169		1,168		1,168		—		—
Taxi medallion⁽¹⁾		2,318		2,758		2,758		—		—
Commercial business and other⁽¹⁾		7,406		5,660		1,593		58		—
Total	$	28,026	$	20,947	$	16,880	$	58	$	2,748

(1)

Included in the above analysis are non-accrual performing TDR one-to-four family – mixed-use property totaling $0.3 million, non-accrual performing TDR taxi medallion loans totaling $0.4 million at December 31, 2020 and non-accrual performing TDR commercial business loans totaling $2.2 million at December 31, 2020.

The following is a summary of interest foregone on non-accrual loans and loans classified as TDR for the periods indicated:


	For the three months ended
	March 31,
	2021		2020

Interest income that would have been recognized had the loans performed in accordance with their original terms	$	462	$	375
Less: Interest income included in the results of operations		160		89
Total foregone interest	$	302	$	286

The following tables show the aging of the amortized cost basis in past-due loans at the period indicated by class of loans:


	March 31, 2021
					Greater
	30 - 59 Days		60 - 89 Days		than		Total Past
(In thousands)	Past Due		Past Due		90 Days		Due		Current		Total Loans
Multi-family residential	$	11,887	$	—	$	4,636	$	16,523	$	2,510,593	$	2,527,116
Commercial real estate		419		800		35		1,254		1,722,223		1,723,477
One-to-four family - mixed-use property		4,759		1,210		2,480		8,449		590,570		599,019
One-to-four family - residential		1,101		375		6,789		8,265		238,740		247,005
Construction		—		—		2,381		2,381		59,052		61,433
Small Business Administration		642		—		1,168		1,810		259,829		261,639
Taxi medallion		—		—		—		—		—		—
Commercial business and other		2,604		320		1,626		4,550		1,321,077		1,325,627
Total	$	21,412	$	2,705	$	19,115	$	43,232	$	6,702,084	$	6,745,316


	December 31, 2020
					Greater
	30 - 59 Days		60 - 89 Days		than		Total Past
(In thousands)	Past Due		Past Due		90 Days		Due		Current		Total Loans
Multi-family residential	$	7,582	$	3,186	$	2,777	$	13,545	$	2,522,432	$	2,535,977
Commercial real estate		17,903		5,123		4,313		27,339		1,731,045		1,758,384
One-to-four family - mixed-use property		5,673		1,132		1,433		8,238		598,647		606,885
One-to-four family - residential		3,087		805		5,313		9,205		243,486		252,691
Construction loans		750		—		—		750		82,411		83,161
Small Business Administration		1,823		—		1,168		2,991		162,579		165,570
Taxi medallion		—		—		2,318		2,318		279		2,597
Commercial business and other		129		1,273		1,593		2,995		1,296,414		1,299,409
Total	$	36,947	$	11,519	$	18,915	$	67,381	$	6,637,293	$	6,704,674

The following tables show the activity in the allowance for loan losses for the three month periods indicated:


	March 31, 2021
					One-to-four
					family -		One-to-four				Small				Commercial
	Multi-family		Commercial		mixed-use		family -		Construction		Business		Taxi		business and
(In thousands)	residential		real estate		property		residential		loans		Administration		medallion		other		Total

Allowance for credit losses:
Beginning balance	$	6,557	$	8,327	$	1,986	$	869	$	497	$	2,251	$	—	$	24,666	$	45,153
Charge-off's		(43)		(64)		(29)		—		—		—		(2,758)		(28)		(2,922)
Recoveries		10		—		10		5		—		10		—		22		57
Provision (benefit)		620		93		(94)		(164)		253		(134)		2,758		(521)		2,811
Ending balance	$	7,144	$	8,356	$	1,873	$	710	$	750	$	2,127	$	—	$	24,139	$	45,099


	March 31, 2020
					One-to-four
					family -		One-to-four				Small				Commercial
	Multi-family		Commercial		mixed-use		family -		Construction		Business		Taxi		business and
(In thousands)	residential		real estate		property		residential		loans		Administration		medallion		other		Total

Allowance for credit losses:
Beginning balance	$	5,391	$	4,429	$	1,817	$	756	$	441	$	363	$	—	$	8,554	$	21,751
Impact of CECL Adoption		(651)		1,170		(55)		(159)		(279)		1,180		—		(827)		379
Charge-off's		—		—		—		—		—		—		—		(1,259)		(1,259)
Recoveries		7		—		78		4		—		7		—		14		110
Provision (benefit)		1,148		1,192		330		291		23		(22)		—		4,155		7,117
Ending balance	$	5,895	$	6,791	$	2,170	$	892	$	185	$	1,528	$	—	$	10,637	$	28,098

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 and management believes weakness is evident then we designate the loan as “Watch”, all other loans would be considered “Pass.” Loans that are non-accrual are designated as Substandard, Doubtful or Loss. These loan designations are updated quarterly. We designate a loan as Substandard when a well-defined weakness is identified that may jeopardize 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 Credit Losses. 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. Loans that are in forbearance pursuant to the CARES Act generally continued to be reported in the same category as they were reported immediately prior to modification.

The following table summarizes the risk category of mortgage and non-mortgage loans by loan portfolio segments and class of loans by year of origination at March 31, 2021:



														Revolving Loans,		Lines of Credit
														Amortized Cost		converted to
(In thousands)		2021		2020		2019		2018		2017		Prior		Basis		term loans		Total
1-4 Family Residential
Pass	$	841	$	32,075	$	36,958	$	33,729	$	20,948	$	77,700	$	10,421	$	15,298	$	227,970
Watch		—		483		722		—		3,569		1,575		1,249		2,369		9,967
Special Mention		—		—		—		—		—		989		—		371		1,360
Substandard		—		—		—		1,831		—		4,285		175		1,417		7,708
Total 1-4 Family Residential	$	841	$	32,558	$	37,680	$	35,560	$	24,517	$	84,549	$	11,845	$	19,455	$	247,005
1-4 Family Mixed-Use
Pass	$	9,680	$	36,229	$	72,302	$	75,961	$	55,411	$	322,422	$	—	$	—	$	572,005
Watch		—		—		—		3,689		7,237		10,262		—		—		21,188
Special Mention		—		—		—		528		—		2,284		—		—		2,812
Substandard		—		—		—		—		—		3,014		—		—		3,014
Total 1-4 Family Mixed Use	$	9,680	$	36,229	$	72,302	$	80,178	$	62,648	$	337,982	$	—	$	—	$	599,019
Commercial Real Estate
Pass	$	19,502	$	172,318	$	259,301	$	274,998	$	191,249	$	694,789	$	—	$	—	$	1,612,157
Watch		1,837		936		1,439		5,729		5,048		87,590		—		—		102,579
Special Mention		—		—		—		—		—		1,122		—		—		1,122
Substandard		—		—		7,584		—		—		35		—		—		7,619
Total Commercial Real Estate	$	21,339	$	173,254	$	268,324	$	280,727	$	196,297	$	783,536	$	—	$	—	$	1,723,477
Construction
Pass	$	2,354	$	20,510	$	15,552	$	2,823	$	—	$	—	$	—	$	—	$	41,239
Watch		—		—		1,115		7,299		5,956		—		—		—		14,370
Special Mention		—		—		—		859		2,584		—		—		—		3,443
Substandard		—		—		—		2,381		—		—		—		—		2,381
Total Construction	$	2,354	$	20,510	$	16,667	$	13,362	$	8,540	$	—	$	—	$	—	$	61,433
Multifamily
Pass	$	91,859	$	243,458	$	341,802	$	467,841	$	364,625	$	973,720	$	5,105	$	—	$	2,488,410
Watch		—		1,923		4,203		9,121		1,152		16,054		398		—		32,851
Special Mention		—		—		—		—		806		230		183		—		1,219
Substandard		—		—		701		1,997		1,002		735		201		—		4,636
Total Multifamily	$	91,859	$	245,381	$	346,706	$	478,959	$	367,585	$	990,739	$	5,887	$	—	$	2,527,116
Commercial Business - Secured by RE
Pass	$	71,965	$	108,227	$	38,984	$	52,512	$	34,540	$	103,314	$	—	$	—	$	409,542
Watch		—		23,655		51,079		18,563		13,129		47,474		—		—		153,900
Special Mention		—		—		607		—		—		—		—		—		607
Substandard		—		—		—		—		—		4,226		—		—		4,226
Total Commercial Business - Secured by RE	$	71,965	$	131,882	$	90,670	$	71,075	$	47,669	$	155,014	$	—	$	—	$	568,275
Commercial Business
Pass	$	15,647	$	91,117	$	111,749	$	93,011	$	48,402	$	75,988	$	201,571	$	—	$	637,485
Watch		—		500		22,509		25,308		20,383		4,171		25,733		—		98,604
Special Mention		—		—		285		2,742		74		2		236		—		3,339
Substandard		—		4,893		686		8		6,193		3,794		1,008		—		16,582
Doubtful		—		—		—		—		—		—		1,236		—		1,236
Total Commercial Business	$	15,647	$	96,510	$	135,229	$	121,069	$	75,052	$	83,955	$	229,784	$	—	$	757,246
Small Business Administration
Pass	$	120,132	$	127,810	$	1,376	$	1,574	$	806	$	2,649	$	—	$	—	$	254,347
Watch		—		288		—		2,592		1,947		1,242		—		—		6,069
Special Mention		—		—		—		—		—		49		—		—		49
Substandard		—		—		—		—		1,168		6		—		—		1,174
Total Small Business Administration	$	120,132	$	128,098	$	1,376	$	4,166	$	3,921	$	3,946	$	—	$	—	$	261,639
Other
Pass	$	—	$	—	$	—	$	—	$	—	$	23	$	83	$	—	$	106
Total Other	$	—	$	—	$	—	$	—	$	—	$	23	$	83	$	—	$	106

Total Loans	$	333,817	$	864,422	$	968,954	$	1,085,096	$	786,229	$	2,439,744	$	247,599	$	19,455	$	6,745,316

A loan is considered collateral dependent when the borrower is experiencing financial difficulties and repayment is expected to be substantially provided by the operation or sale of the collateral. The following table presents types of collateral-dependent loans by class of loans as of the periods indicated:


	Collateral Type
	March 31, 2021				December 31, 2020
(In thousands)		Real Estate		Business Assets		Real Estate		Business Assets
Multi-family residential	$	4,435	$	—	$	2,576	$	—
Commercial real estate		1,254		—		2,994		—
One-to-four family - mixed-use property		2,753		—		1,706		—
One-to-four family - residential		6,789		—		5,313		—
Small Business Administration		—		1,168		—		1,168
Commercial business and other		—		3,477		—		3,482
Taxi Medallion		—		—		—		2,758
Total	$	15,231	$	4,645	$	12,589	$	7,408

Off-Balance Sheet Credit Losses

Also included within scope of the CECL standard are off-balance sheet loan commitments, which includes the unfunded portion of committed lines of credit and commitments “in-process”. Commitments “in‐process” reflect loans not in the Company’s books but rather negotiated loan / line of credit terms and rates that the Company has offered to customers and is committed to honoring. In reference to “in‐process” credits, the Company defines an unfunded commitment as a credit that has been offered to and accepted by a borrower, which has not closed and by which the obligation is not unconditionally cancellable.

Commitments to extend credit (principally real estate mortgage loans) and lines of credit (principally home equity lines of credit and business lines of credit) totaled $418.6 million at March 31, 2021.

The following table presents the activity in the allowance for off balance sheet credit losses for the three months ended March 31, 2021 and 2020.


	For the three months ended
	March 31,
	2021		2020

Balance at beginning of period	$	1,815	$	—
Off-Balance Sheet - CECL Adoption		—		553
Off-Balance Sheet- Provision (benefit)		(511)		244
Allowance for Off-Balance Sheet - Credit losses ⁽¹⁾	$	1,304	$	797

(1)

Included the “Other liabilities” on the Consolidated Statements of Financial Condition.