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 $34.0 million and $35.8 million at March 31, 2022 and December 31, 2021, respectively, 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.

In response to COVID-19, the Company actively assists customers by providing modifications in the form of deferrals of interest, principal and/or escrow for terms ranging from one to thirty months. At March 31, 2022, we had 12 active forbearances for loans with an aggregate outstanding loan balance of approximately $41.8 million resulting in total deferment of $3.2 million in principal, interest and escrow, down from 20 active forbearances for loans with an aggregate outstanding loan balance of $71.9 million at December 31, 2021. Pursuant to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and later modified by Consolidated Appropriations Act, certain loan modifications are not classified as “troubled debt restructuring” (“TDR”), if the related loans were not more than 30 days past due as of December 31, 2019. The Company has elected not to consider as TDR loans temporarily modified for borrowers directly impacted by COVID-19 where the above criteria was met. As such, these loans are considered current and continue to accrue interest at their original contractual terms until the completion of the applicable deferred periods, following which the borrowers will resume making payments and normal delinquency-based non-accrual policies will apply. Approximately 79% of the active forbearances are expected to be resolved by year end 2022. The Company actively participated in the Paycheck Protection Program (“PPP”), under the CARES Act, closing $310.3 million of these loans since the beginning of the program, with $267.0 million of those PPP loans forgiven by the SBA as of March 31, 2022, of which $34.1 million were forgiven during the recent quarter.

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 credit losses on loans totaling $1.2 million and $2.8 million for the three months ended March 31, 2022 and 2021, respectively. The provision recorded during the three months ended March 31, 2022 was driven by ongoing environmental uncertainty as a result of high and rising inflation, increasing interest rates and higher risk related to potential personnel turnover. During the three months ended March 31, 2022, the Company made no changes to the reasonable and supportable forecast period or the reversion period from what was used for the December 31, 2021 ACL. The ACL - loans totaled $37.4 million at March 31, 2022 compared to $37.1 million at December 31, 2021. At March 31, 2022, the ACL - loans represented 0.57% of gross loans and 266.1% of non-performing loans. At December 31, 2021, the ACL - loans represented 0.56% of gross loans and 248.7% of non-performing loans.

The Company may restructure loans 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 ACL 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, 2022, 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 ACL.

During the three months ended March 31, 2022 and 2021 there were no TDRs that defaulted within 12 months of its modification date. There were no loans modified as TDRs for the three months ended March 31, 2021.

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 continue to pay as agreed, however the Company records interest received on a cash basis.

There were no loans classified as TDR that are not performing according to their modified agreement as of March 31, 2022 and December 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, 2022
(In thousands)		Non-accrual amortized cost beginning of the reporting period		Non-accrual amortized cost ending of the reporting period		Non-accrual with no related allowance		Interest income recognized		Loans ninety days or more past due and still accruing:
Multi-family residential	$	2,652	$	3,654	$	3,654	$	—	$	—
Commercial real estate		640		32		32		—		—
One-to-four family - mixed-use property ⁽¹⁾		1,582		1,052		1,052		—		—
One-to-four family - residential		7,482		7,052		7,052		—		—
Small Business Administration		952		952		952		—		—
Commercial business and other ⁽¹⁾		1,945		4,328		326		4		—
Total	$	15,253	$	17,070	$	13,068	$	4	$	—

(1)

Included in the above analysis are non-accrual performing TDR commercial business totaling $2.8 million. One-to-four family – mixed-use property contains a non-accrual performing TDR totaling $0.3 million.


	At or for the year ended December 31, 2021
(In thousands)		Non-accrual amortized cost beginning of the reporting period		Non-accrual amortized cost ending of the 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	$	2,652	$	2,652	$	19	$	—
Commercial real estate		1,766		640		640		—		—
One-to-four family - mixed-use property ⁽¹⁾		1,706		1,582		1,582		6		—
One-to-four family - residential		5,313		7,482		7,482		1		—
Small Business Administration		1,168		952		952		—		—
Taxi medallion⁽²⁾		2,758		—		—		—		—
Commercial business and other⁽¹⁾		5,660		1,945		305		78		—
Total	$	20,947	$	15,253	$	13,613	$	104	$	—

(1)

Included in the above analysis are non-accrual performing TDR one-to-four family – mixed-use property totaling $0.3 million. Commercial business and other contains a non-accrual performing TDR totaling less than $0.1 million.

(2)

Taxi medallions were completely charged off during the year ended December 31, 2021.

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,
	2022		2021
(In thousands)
Interest income that would have been recognized had the loans performed in accordance with their original terms	$	371	$	462
Less: Interest income included in the results of operations		155		160
Total foregone interest	$	216	$	302

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, 2022
					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	$	3,650	$	362	$	3,654	$	7,666	$	2,495,390	$	2,503,056
Commercial real estate		237		3,620		32		3,889		1,762,119		1,766,008
One-to-four family ― mixed-use property		2,387		591		794		3,772		562,899		566,671
One-to-four family ― residential		302		78		7,052		7,432		250,357		257,789
Construction		856		—		—		856		67,406		68,262
Small Business Administration		—		—		952		952		57,293		58,245
Commercial business and other		333		434		1,008		1,775		1,385,458		1,387,233
Total	$	7,765	$	5,085	$	13,492	$	26,342	$	6,580,922	$	6,607,264


	December 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	$	3,652	$	4,193	$	2,652	$	10,497	$	2,508,730	$	2,519,227
Commercial real estate		5,743		—		640		6,383		1,770,992		1,777,375
One-to-four family ― mixed-use property		2,319		—		1,321		3,640		571,296		574,936
One-to-four family ― residential		163		224		7,482		7,870		269,942		277,812
Construction		—		—		—		—		59,473		59,473
Small Business Administration		—		—		952		952		90,884		91,836
Commercial business and other		101		40		1,386		1,527		1,335,919		1,337,446
Total	$	11,978	$	4,457	$	14,433	$	30,869	$	6,607,236	$	6,638,105

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 previously 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 as 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.

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, 2022:



														Revolving Loans		Revolving Loans
														Amortized Cost		converted to
(In thousands)		2022		2021		2020		2019		2018		Prior		Basis		term loans		Total
1-4 Family Residential
Pass	$	7,346	$	8,877	$	20,514	$	44,416	$	30,178	$	111,474	$	8,894	$	14,283	$	245,982
Watch		—		297		—		728		—		2,350		—		1,026		4,401
Special Mention		—		—		—		—		—		—		—		219		219
Substandard		—		—		—		—		1,841		4,895		—		451		7,187
Total 1-4 Family Residential	$	7,346	$	9,174	$	20,514	$	45,144	$	32,019	$	118,719	$	8,894	$	15,979	$	257,789
1-4 Family Mixed-Use
Pass	$	10,794	$	45,419	$	35,105	$	66,830	$	69,997	$	328,183	$	—	$	—	$	556,328
Watch		—		—		—		758		—		7,063		—		—		7,821
Special Mention		—		—		—		—		—		1,219		—		—		1,219
Substandard		—		—		—		—		—		1,303		—		—		1,303
Total 1-4 Family Mixed Use	$	10,794	$	45,419	$	35,105	$	67,588	$	69,997	$	337,768	$	—	$	—	$	566,671
Commercial Real Estate
Pass	$	46,810	$	187,400	$	160,648	$	239,636	$	259,107	$	775,268	$	—	$	—	$	1,668,869
Watch		—		1,684		—		9,647		7,853		73,438		—		—		92,622
Special Mention		—		—		3,620		—		—		—		—		—		3,620
Substandard		—		—		—		—		—		897		—		—		897
Total Commercial Real Estate	$	46,810	$	189,084	$	164,268	$	249,283	$	266,960	$	849,603	$	—	$	—	$	1,766,008
Construction
Pass	$	1,996	$	12,906	$	12,223	$	14,801	$	1,974	$	—	$	12,533	$	—	$	56,433
Watch		—		—		—		—		5,704		4,522		—		—		10,226
Special Mention		—		—		—		—		1,603		—		—		—		1,603
Total Construction	$	1,996	$	12,906	$	12,223	$	14,801	$	9,281	$	4,522	$	12,533	$	—	$	68,262
Multifamily
Pass	$	107,272	$	304,922	$	232,977	$	327,630	$	409,630	$	1,084,307	$	5,855	$	—	$	2,472,593
Watch		—		1,118		1,652		(31)		12,115		9,486		151		—		24,491
Special Mention		—		—		965		—		770		221		—		—		1,956
Substandard		—		—		—		—		2,125		1,891		—		—		4,016
Total Multifamily	$	107,272	$	306,040	$	235,594	$	327,599	$	424,640	$	1,095,905	$	6,006	$	—	$	2,503,056
Commercial Business - Secured by RE
Pass	$	50,856	$	174,564	$	91,713	$	36,144	$	42,371	$	106,014	$	—	$	—	$	501,662
Watch		—		—		21,653		49,206		18,673		58,213		—		—		147,745
Special Mention		—		—		—		2,381		—		—		—		—		2,381
Substandard		—		—		—		—		—		3,577		—		—		3,577
Total Commercial Business - Secured by RE	$	50,856	$	174,564	$	113,366	$	87,731	$	61,044	$	167,804	$	—	$	—	$	655,365
Commercial Business
Pass	$	60,925	$	123,178	$	47,915	$	58,204	$	66,342	$	57,583	$	209,367	$	—	$	623,514
Watch		—		1,579		1,661		22,404		16,739		31,446		4,424		—		78,253
Special Mention		—		—		1,381		35		2,205		34		13,156		—		16,811
Substandard		—		—		4,782		31		2,771		4,488		69		—		12,141
Doubtful		—		—		—		—		—		—		1,009		—		1,009
Total Commercial Business	$	60,925	$	124,757	$	55,739	$	80,674	$	88,057	$	93,551	$	228,025	$	—	$	731,728
Small Business Administration
Pass	$	—	$	39,326	$	8,112	$	723	$	1,333	$	2,267	$	—	$	—	$	51,761
Watch		—		—		—		55		2,557		2,597		—		—		5,209
Special Mention		—		—		—		—		—		47		—		—		47
Substandard		—		—		—		—		—		1,228		—		—		1,228
Total Small Business Administration	$	—	$	39,326	$	8,112	$	778	$	3,890	$	6,139	$	—	$	—	$	58,245
Other
Pass	$	—	$	—	$	—	$	—	$	—	$	58	$	82	$	—	$	140
Total Other	$	—	$	—	$	—	$	—	$	—	$	58	$	82	$	—	$	140
Total by Loan Type
Total Pass	$	285,999	$	896,592	$	609,207	$	788,384	$	880,932	$	2,465,154	$	236,731	$	14,283	$	6,177,282
Total Watch		—		4,678		24,966		82,767		63,641		189,115		4,575		1,026		370,768
Total Special Mention		—		—		5,966		2,416		4,578		1,521		13,156		219		27,856
Total Substandard		—		—		4,782		31		6,737		18,279		69		451		30,349
Total Doubtful		—		—		—		—		—		—		1,009		—		1,009
Total Loans	$	285,999	$	901,270	$	644,921	$	873,598	$	955,888	$	2,674,069	$	255,540	$	15,979	$	6,607,264

Included within net loans as of March 31, 2022 and December 31, 2021 were $8.1 million and $8.7 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction.

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, 2022				December 31, 2021
(In thousands)		Real Estate		Business Assets		Real Estate		Business Assets
Multi-family residential	$	3,654	$	—	$	2,652	$	—
Commercial real estate		542		—		1,158		—
One-to-four family - mixed-use property		1,052		—		1,582		—
One-to-four family - residential		7,052		—		7,482		—
Small Business Administration		—		952		—		952
Commercial business and other		—		3,818		—		1,427
Total	$	12,300	$	4,770	$	12,874	$	2,379

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 $481.3 million and $472.9 million at March 31, 2022 and December 31, 2021, respectively.

The following table presents the activity in the allowance for off balance sheet credit losses for the three months ended March 31, 2022 and 2021.


	For the three months ended
	March 31,
	2022		2021

	(In thousands)
Balance at beginning of period	$	1,209	$	1,815
Off-Balance Sheet- Provision (Benefit)		380		(511)
Allowance for Off-Balance Sheet - Credit losses ⁽¹⁾	$	1,589	$	1,304

(1)

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