Allowance for Credit Losses on Loans and Leases

3 Months Ended

Mar. 31, 2022

Allowance For Credit Losses On Loans And Leases [Abstract]

Allowance for Credit Losses on Loans and Leases

Note 6. Allowance for Credit Losses on Loans and Leases

Allowance for Credit Losses on Loans and Leases

The following table summarizes activity in the allowance for credit losses on loans and leases for the periods indicated:


	For the Three Months Ended March 31,
	2022									2021
(in millions)	Mortgage			Other			Total			Mortgage			Other			Total
Balance, beginning of period	$	178		$	21		$	199		$	176		$	18		$	194
Charge-offs		(3	)		—			(3	)		(1	)		(3	)		(4	)
Recoveries		—			2			2			—			5			5
Provision for (recovery of) credit losses on loans and leases		1			(2	)		(1	)		1			2			3
Balance, end of period	$	176		$	21		$	197		$	176		$	22		$	198

Separately, at March 31, 2022, the Company had an allowance for unfunded commitments of $11 million, as compared to $12 million at December 31, 2021.

For the three months ended March 31, 2022, the allowance for credit losses on loan and leases decreased primarily as a result of improvements in macroeconomic and environmental factors surrounding the COVID-19 pandemic, specifically those affecting commercial real estate in the New York City area. The macroeconomic forecast includes Gross Domestic Product (“GDP”) which is expected to rise at an annualized rate of 3.7% and 3.0% respectively for 2022 and 2023. Unemployment continues to subside from the historic shock of 2020, as peak unemployment rates are forecasted to be approximately 3.6% in 2022 and 3.4% in 2023. The 10-year U.S. Treasury yield is expected to steadily increase over the course of 2022-23. In addition to these quantitative inputs, several qualitative factors were considered in decreasing our allowance for loan and lease credit losses, including changes in borrower payment behavior and other attributes related to the commercial real estate portfolio.

The Company charges off loans, or portions of loans, in the period that such loans, or portions thereof, are deemed uncollectible. The collectability of individual loans is determined through an assessment of the financial condition and repayment capacity of the borrower and/or through an estimate of the fair value of any underlying collateral. For non-real estate-related consumer credits, the following past-due time periods determine when charge-offs are typically recorded: (1) closed-end credits are charged off in the quarter that the loan becomes 120 days past due; (2) open-end credits are charged off in the quarter that the loan becomes 180 days past due; and (3) both closed-end and open-end credits are typically charged off in the quarter that the credit is 60 days past the date the Company received notification that the borrower has filed for bankruptcy.

The following table presents additional information about the Company’s nonaccrual loans at March 31, 2022:


(in millions)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	19	$	—	$	—
Commercial real estate		33		—		—
One-to-four family		—		—		—
Acquisition, development, and construction		—		—		—
Other		6		—		—
Total nonaccrual loans with no related allowance	$	58	$	—	$	—
Nonaccrual loans with an allowance recorded:
Multi-family	$	3	$	1	$	—
Commercial real estate		2		—		—
One-to-four family		—		—		—
Acquisition, development, and construction		—		—		—
Other		—		—		—
Total nonaccrual loans with an allowance recorded	$	5	$	1	$	—
Total nonaccrual loans:
Multi-family	$	22	$	1	$	—
Commercial real estate		35		—		—
One-to-four family		—		—		—
Acquisition, development, and construction		—		—		—
Other		6		—		—
Total nonaccrual loans	$	63	$	1	$	—

The following table presents additional information about the Company’s nonaccrual loans at December 31, 2021:


(in millions)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	9	$	—	$	1
Commercial real estate		14		—		—
One-to-four family		—		—		—
Acquisition, development, and construction		—		—		—
Other		6		—		—
Total nonaccrual loans with no related allowance	$	29	$	—	$	1
Nonaccrual loans with an allowance recorded:
Multi-family	$	1	$	—	$	—
Commercial real estate		2		—		—
One-to-four family		1		—		—
Acquisition, development, and construction		—		—		—
Other		—		—		—
Total nonaccrual loans with an allowance recorded	$	4	$	—	$	—
Total nonaccrual loans:
Multi-family	$	10	$	—	$	1
Commercial real estate		16		—		—
One-to-four family		1		—		—
Acquisition, development, and construction		—		—		—
Other		6		—		—
Total nonaccrual loans	$	33	$	—	$	1