The Company classifies loans that we have the intent and ability to hold for the foreseeable future or until maturity as LHFI. We report LHFI loans at their amortized cost, which includes the outstanding principal balance adjusted for any unamortized premiums, discounts, deferred fees and unamortized fair value adjustments for acquired loans:


	March 31, 2024				December 31, 2023
(dollars in millions)	Amount		Percent of Loans Held for Investment		Amount		Percent of Loans Held for Investment
Loans and Leases Held for Investment:
Mortgage Loans:
Multi-family	$	36,859	44.8	%	$	37,265	44.0	%
Commercial real estate	10,323		12.5	%	10,470		12.4	%
One-to-four family first mortgage	5,807		7.1	%	6,061		7.2	%
Acquisition, development, and construction	3,207		3.9	%	2,912		3.4	%
Total mortgage loans held for investment (1)	$	56,196	68.3	%	$	56,708	67.0	%
Other Loans:
Commercial and industrial	21,428		26.0	%	22,065		26.1	%
Lease financing, net of unearned income of $243 and $258, respectively	2,990		3.6	%	3,189		3.8	%
Total commercial and industrial loans (2)	24,418		29.6	%	25,254		29.8	%
Other	1,713		2.1	%	2,657		3.1	%
Total other loans held for investment	26,131		31.7	%	27,911		33.0	%
Total loans and leases held for investment (1)	$	82,327	100.0	%	$	84,619	100.0	%
Allowance for credit losses on loans and leases	(1,215)				(992)
Total loans and leases held for investment, net	81,112				83,627
Loans held for sale, at fair value	981				1,182
Total loans and leases, net	$	82,093			$	84,809

Loans held-for-sale at March 31, 2024 totaled $981 million, down from $1.2 billion at December 31, 2023. We classify loans as held for sale when we originate or purchase loans that we intend to sell. We have elected the fair value option for nearly all of this portfolio, except the SBA loans. We estimate the fair value of mortgage loans based on quoted market prices for securities backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral.

A loan generally is classified as a non-accrual loan when it is 90 days or more past due or when it is deemed to be impaired because the Company no longer expects to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed on non-accrual status, management ceases the accrual of interest owed, and previously accrued interest is charged against interest income. A loan is generally returned to accrual status when the loan is current and management has reasonable assurance that the loan will be fully collectible. Interest income on non-accrual loans is recorded when received in cash. At March 31, 2024 and December 31, 2023 we had no loans that were nonperforming and still accruing.


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	103	$	339	$	442	$	36,417	$	36,859
Commercial real estate	9		264		273		10,050		10,323
One-to-four family first mortgage	26		98		124		5,683		5,807
Acquisition, development, and construction	6		3		9		3,198		3,207
Commercial and industrial(1)	60		73		133		24,285		24,418
Other	8		21		29		1,684		1,713
Total	$	212	$	798	$	1,010	$	81,317	$	82,327


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Total Past Due Loans		Current Loans(2)		Total Loans Receivable
Multi-family	$	121	$	138	$	259	$	37,006	$	37,265
Commercial real estate	28		128		156		10,314		10,470
One-to-four family first mortgage	40		95		135		5,926		6,061
Acquisition, development, and construction	2		2		4		2,908		2,912
Commercial and industrial(1)	37		43		80		25,174		25,254
Other	22		22		44		2,613		2,657
Total	$	250	$	428	$	678	$	83,941	$	84,619

The Company conducted a thorough review of its largest 350 real estate loans at the end of the first quarter of 2024. This review included both internal collateral valuation analysis, and obtaining third-party estimates of collateral values, given the potential reliance on the underlying assets as part of the Borrower’s ability to repay debt. The review also included analysis of the most currently available borrower financial information to evaluate the ability of the underlying collateral to generate sufficient cash flow as the primary source of repayment. The Company downgraded certain loans in the first quarter of 2024 as a result of this review. The downgrades were principally related to loans with upcoming maturities or repricing where the estimated property net operating income would not be sufficient to fully cover pro-forma debt service when applying current market rates and terms, and the underlying collateral values are estimated to have declined to at or below the loan carrying amount. These downgrades increased loans classified as substandard or worse by $2.3 billion. Downgrades to substandard or


(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Commercial and Industrial		Other		Total Loans(1)
Credit Quality Indicator:
Pass	$	32,209	$	8,417	$	4,985	$	3,081	$	23,816	$	1,682	$	74,190
Special mention	702		237		—		72		148		—		1,159
Substandard	3,948		1,669		822		54		454		31		6,978

Total	$	36,859	$	10,323	$	5,807	$	3,207	$	24,418	$	1,713	$	82,327


(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Commercial and Industrial(2)		Other		Total Loans
Credit Quality Indicator:
Pass	$	34,170	$	8,734	$	5,328	$	2,825	$	24,683	$	2,634	$	78,374
Special mention	768		367		—		57		335		—		1,527
Substandard	2,327		1,369		733		30		236		23		4,718

Total	$	37,265	$	10,470	$	6,061	$	2,912	$	25,254	$	2,657	$	84,619

The preceding classifications are the most current ones available and generally have been updated within the last twelve months. In addition, they follow regulatory guidelines and can generally be described as follows: pass loans are of satisfactory quality; special mention loans have potential weaknesses that deserve management’s close attention; substandard loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged (these loans have a well-defined weakness and there is a possibility that the Company will sustain some loss); and doubtful loans, based on existing circumstances, have weaknesses that make collection or liquidation in full highly questionable and improbable. In addition, one-to-four family loans are classified based on the duration of the delinquency.


	Vintage Year
(in millions)	2024		2023		2022		2021		2020		Prior To 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Pass	$	281	$	3,425	$	12,524	$	9,987	$	8,571	$	11,760	$	2,128	$	15	$	48,691
Special Mention	4		—		139		85		74		631		78		—		1,011
Substandard	—		65		401		351		436		5,235		6		—		6,494

Total mortgage loans	$	285	$	3,490	$	13,064	$	10,423	$	9,081	$	17,626	$	2,212	$	15	$	56,196

Current-period gross write-offs	—		—		—		(6)		(3)		(66)		—		—		(75)

Pass	$	5,662	$	3,548	$	3,326	$	1,401	$	896	$	1,599	$	8,901	$	166	$	25,499
Special Mention	18		4		48		17		13		5		43		—		148
Substandard	10		13		189		42		40		79		110		1		484

Total other loans	$	5,690	$	3,565	$	3,563	$	1,460	$	949	$	1,683	$	9,054	$	167	$	26,131

Current-period gross write-offs	$	—	$	(1)	$	(8)	$	(5)	$	—	$	(2)	$	—	$	—	$	(16)

Total	$	5,975	$	7,055	$	16,627	$	11,883	$	10,030	$	19,309	$	11,266	$	182	$	82,327

When management determines that foreclosure is probable, for loans that are individually evaluated the expected credit losses are based on the fair value of the collateral adjusted for selling costs. When the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, the collateral-dependent practical expedient has been elected and expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. For CRE loans, collateral properties include office buildings, warehouse/distribution buildings, shopping centers, apartment buildings, residential and commercial tract development. The primary source of repayment on these loans is expected to come from the sale, permanent financing or lease of the real property collateral. CRE loans are impacted by fluctuations in collateral values, as well as the ability of the borrower to obtain permanent financing.


	Collateral Type
(in millions)	Real Property		Other
Multi-family	$	457	$	—
Commercial real estate	412		—
One-to-four family first mortgage	107		—
Acquisition, development, and construction	5		—
Commercial and industrial	—		78
Other	—		—
Total collateral-dependent loans held for investment	$	981	$	78

When borrowers are experiencing financial difficulty, the Company may make certain loan modifications as part of loss mitigation strategies to maximize expected payment. Modifications in the form of principal forgiveness, an interest rate reduction, or an other-than-insignificant payment delay or a term extension that have occurred in the current reporting period to a borrower experiencing financial difficulty are disclosed along with the financial impact of the modifications.


	Amortized Cost
(dollars in millions)	Interest Rate Reduction		Term Extension		Combination - Interest Rate Reduction & Term Extension		Total		Percent of Total Loan class
Three months ended March 31, 2024
Multi-family	$	8	$	—	$	—	$	8	0.08	%
Commercial real estate	2		—		—		2		0.02	%
One-to-four family first mortgage	—		1		1		2		0.03	%
Commercial and Industrial	—		13		—		13		0.06	%
Other Consumer	—		—		1		1		0.06	%
Total	$	10	$	14	$	2	$	26
Three Months Ended March 31, 2023
Multi-family	$	—	$	—	$	—	$	—	—	%
Commercial real estate	44		—		—		44		0.42	%
One-to-four family first mortgage	—		1		1		2		0.03	%
Commercial and Industrial	—		—		—		—		—	%
Other Consumer	$	—	$	—	$	—	—		—	%
Total	$	44	$	1	$	1	$	46


	Interest Rate Reduction				Term Extension
	Weighted-average contractual interest rate
	From		To		Weighted-average Term (in years)
Three months ended March 31, 2024
Multi-family	8.13	%	6.95	%
Commercial real estate	8.08	%	6.00	%
One-to-four family first mortgage	4.66	%	3.76	%	15.3
Commercial and industrial	6.78	%	6.50	%	0.3
Other Consumer	11.01	%	4.76	%	1.8
Three Months Ended March 31, 2023
Multi-family	—	%	—	%
Commercial real estate	10.50	%	4.00	%
One-to-four family first mortgage	4.84	%	3.97	%	12.7
Commercial and industrial	—	%	—	%
Other Consumer	—	%	—	%

As of March 31, 2024, there were $3 million one-to-four family first mortgages that were modified for borrowers experiencing financial difficulty that received term extension and subsequently defaulted during the period and $3 million one-to-four family first mortgages that were combination modifications and subsequently defaulted during the period.

The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. The following tables depict the performance of loans that have been modified during the twelve-month period ended March 31, 2024:


	March 31, 2024
(dollars in millions)	Current		30 - 89 Past Due		90+ Past Due		Total
Multi-family	$	8	$	—	$	—	8
Commercial real estate	2		—		—		2
One-to-four family first mortgage	$	2	$	—	$	8	$	10
Commercial and industrial	12		2		—		14
Other Consumer	1		—		—		1
Total	$	25	$	2	$	8	$	35