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Loans and Leases
 9 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
Loans and Leases Loans and Leases
The Company classifies loans that we have the intent and ability to hold for the foreseeable future or until maturity as loans held for investment. We report loans held for investment 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:

September 30, 2024December 31, 2023
(dollars in millions)AmountPercent of
Loans
Held for
Investment		AmountPercent of
Loans
Held for
Investment
Loans and Leases Held for Investment:
Multi-family$35,140 49.4 %$37,265 44.0 %
Commercial real estate9,217 13.0 %10,470 12.4 %
One-to-four family first mortgage5,247 7.4 %6,061 7.2 %
Acquisition, development, and construction3,265 4.6 %2,912 3.4 %
Commercial and industrial(1)
14,045 19.7 %22,065 26.1 %
Lease financing, net of unearned income of $193 and $258, respectively
2,429 3.4 %3,189 3.8 %
Other1,773 2.5 %2,657 3.1 %
Total loans and leases held for investment (2)
$71,116 100.0 %$84,619 100.0 %
Allowance for credit losses on loans and leases(1,264)(992)
Total loans and leases held for investment, net69,852 83,627 
Loans held for sale, at fair value1,851 1,182 
Total loans and leases, net$71,703 $84,809 
(1)Includes specialty finance loans and leases of $4.6 billion and $5.2 billion at September 30, 2024 and December 31, 2023, respectively.
(2)Excludes accrued interest receivable of $304 million and $423 million at September 30, 2024 and December 31, 2023, respectively, which is included in other assets in the Consolidated Statements of Condition.
Loans Held for Sale

Loans held for sale at September 30, 2024 totaled $1.9 billion, up 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 and when we change our intent about holding for investment. Mortgage loans held for sale for which, we have elected the fair value option are carried at fair value. Loans originally held for investment that we have changed our intent and plan to sell are carried at the lower of amortized cost or market. 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.
The following table is a summary of non-accrual loans held for sale:

(in millions)
September 30, 2024
December 30, 2023
Non-accrual loans held for sale:
Commercial real estate$112 $163 
One-to-four family first mortgage64 — 
Acquisition, development, and construction13 1 
Total non-accrual loans held for sale
$189 $164 
Asset Quality

All asset quality information excludes loans with government guarantees that are insured by U.S. government agencies. As of September 30, 2024, these loans totaled $386 million.

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 (principal and interest) according to the contractual terms of the loan agreement. When a loan is placed on non-accrual status, management ceases recording interest income, and previously accrued interest is reversed against interest income. A loan is only returned to accrual status when the loan is current (typically a minimum of six months of payment performance) and management has reasonable assurance that the loan will be fully collectible. Interest received on non-accrual loans is recorded as a reduction in the carrying amount. At September 30, 2024 and December 31, 2023 we had no loans that were 90 days or more past due and still accruing.
The following table presents information regarding the quality of the Company’s loans held for investment at September 30, 2024:

(in millions)Loans 30-89 Days Past Due
Non-Accrual Loans
Remaining
Total Loans Receivable
Multi-family$124 $1,504 $33,512 $35,140 
Commercial real estate43 692 $8,482 9,217 
One-to-four family first mortgage21 39 $5,187 5,247 
Acquisition, development, and construction16 21 $3,228 3,265 
Commercial and industrial(1)
47 235 $16,192 16,474 
Other10 23 $1,740 1,773 
Total$261 $2,514 $68,341 $71,116 
(1)Includes lease financing receivables.
The following table presents information regarding the quality of the Company’s loans held for investment at December 31, 2023:

(in millions)Loans 30-89 Days Past Due
Non-Accrual Loans
Remaining
Total Loans Receivable
Multi-family$121 $138 $37,006 $37,265 
Commercial real estate28 128 $10,314 10,470 
One-to-four family first mortgage40 95 $5,926 6,061 
Acquisition, development, and construction2 2 $2,908 2,912 
Commercial and industrial(1)
37 43 $25,174 25,254 
Other22 22 $2,613 2,657 
Total$250 $428 $83,941 $84,619 
(1)Includes lease financing receivables.
The following table presents, by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of September 30, 2024:

Term Loans
Revolving
Loans		Revolving
Loans Converted to Term Loans
Amortized Cost Basis by Closing Year
(in millions)
2024
2023
2022
2021
2020Prior To
2020		Total
Multi-family:
Pass$17 $743 $6,631 $6,870 $5,719 $4,381 $— $— $24,361 
Special Mention— 11 817 294 466 829 18 — 2,435 
Substandard2 84 441 643 1,282 4,388 — — 6,840 
Non-accrual
— — 100 96 240 1,068 — — 1,504 
Total Multi-family
19 838 7,989 7,903 7,707 10,666 18 — 35,140 
Year to date gross charge-offs
— — (18)(24)(34)(112)— — (188)
Commercial Real Estate:
Pass$130 $705 $1,667 $1,061 $673 $2,336 $97 $409 $7,078 
Special Mention— 35 3 12 69 139 9 — 267 
Substandard1 12 201 62 110 793 — 1 1,180 
Non-accrual
— 36 138 1 33 484 — — 692 
Total Commercial Real Estate131 788 2,009 1,136 885 3,752 106 410 9,217 
Year to date gross charge-offs
— (8)(81)— (19)(303)— — (411)
One-to-Four Family
Pass$123 $551 $2,503 $875 $183 $652 $84 $1 $4,972 
Special Mention— — — — — 2 — — 2 
Substandard— 1 7 2 20 204 — — 234 
Non-accrual— 1 5 5 4 21 3 — 39 
Total One-to-Four Family123 553 2,515 882 207 879 87 1 5,247 
Year to date gross charge-offs
— — (1)(1)— (6)— — (8)
Acquisition, Development and Construction
Pass$314 $542 $169 $186 $1 $10 $1,640 $2 $2,864 
Special Mention— 20 61 42 3 — 133 — 259 
Substandard1 11 10 2 — — 97 — 121 
Non-accrual— — 18 1 — 2 — — 21 
Total Acquisition, Development and Construction315 573 258 231 4 12 1,870 2 3,265 
Year to date gross charge-offs
— — — — — (4)— — (4)
Commercial and Industrial
Pass$892 $3,099 $2,269 $786 $537 $966 $5,696 $1,319 $15,564 
Special Mention151924984696 154 
Substandard323811083643209— 521 
Non-accrual014187814120— 235 
Total Commercial and Industrial$939 $3,170 $2,590 $886 $565 $1,025 $5,974 $1,325 $16,474 
Year to date gross charge-offs
(3)(12)(17)(5)(11)(31)— — (79)
Other Loans
Pass$97 $31 $13 $5 $2 $37 $1,434 $130 $1,749 
Special Mention— — — 1 — — — — 1 
Substandard— — — — — — — — — 
Non-accrual— — — — — 5 18 — 23 
Total Other Loans97 31 13 6 2 42 1,452 130 1,773 
Year to date gross charge-offs
(2)(3)(3)(1)(1)(5)— — (15)
The following table presents, by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of December 31, 2023:

Term Loans
Revolving
Loans		Revolving
Loans Converted to Term Loans
Amortized Cost Basis by Closing Year
(in millions)
2023
2022
2021
2020
2019
Prior To
2019
Total
Multi-family:
Pass$840 $7,945 $7,967 $7,310 $3,525 $6,537 $46 $— $34,170 
Special Mention—953337736227——768
Substandard—211762374511,304——2,189
Non-accrual
—56—2899——138
Total Multi-family
8408,0668,1827,9244,0408,16746—37,265
Year to date gross charge-offs
—(112)———(7)——(119)
Commercial Real Estate:
Pass$880 $2,110 $1,182 $939 $1,011 $2,439 $172 $1 $8,734 
Special Mention—12212—11610611—367
Substandard44494772239790——1,241
Non-accrual
——1—4123——128
Total Commercial Real Estate9242,2811,2421,0111,3703,458183110,470
Year to date gross charge-offs
—————(56)——(56)
One-to-Four Family
Pass$526 $2,627 $920 $210 $239 $721 $78 $7 $5,328 
Special Mention—————————
Substandard—522069542——638
Non-accrual
1111781837—395
Total One-to-Four Family5272,6439392383261,30078106,061
Year to date gross charge-offs
————(1)(2)——(3)
Acquisition, Development and Construction
Pass$406 $322 $298 $4 $4 $6 $1,685 $100 $2,825 
Special Mention——2430——3—57
Substandard—67——15——28
Non-accrual
—11—————2
Total Acquisition, Development and Construction406329330344211,6881002,912
Year to date gross charge-offs
—————————
Commercial and Industrial
Pass$9,418 $3,547 $1,633 $984 $719 $791 $7,535 $56 $24,683 
Special Mention1182178620101—335
Substandard7244316383332—193
Non-accrual
2142111211—43
Total Commercial and Industrial9,4283,7671,6951,0197648467,6795625,254
Year to date gross charge-offs
(2)(7)(1)(7)—(14)——(31)
Other Loans
Pass$171 $346 $244 $133 $133 $117 $1,223 $268 $2,635 
Non-accrual
—2111241122
Total Other Loans1713482451341341191,2272792,657
Year to date gross charge-offs
—(3)(4)(1)(2)(4)——(14)
The classifications in the preceding tables are the most currently 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 non-accrual loans, which based on existing circumstances, have weaknesses that make collection or liquidation in full highly questionable and improbable. One-to-four family loans are classified based on the duration of the delinquency.

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 commercial real estate 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. Commercial real estate loans are impacted by fluctuations in collateral values, as well as the ability of the borrower to obtain permanent financing.

The following table summarizes the recorded investment of the Company’s collateral-dependent loans held for investment by collateral type as of September 30, 2024:

Collateral Type
(in millions)Real PropertyOther
Multi-family$1,582 $— 
Commercial real estate708 — 
One-to-four family first mortgage37 — 
Acquisition, development, and construction20 — 
Commercial and industrial— 207 
Total collateral-dependent loans held for investment$2,347 $207 
At September 30, 2024 and December 31, 2023, the Company had $57 million and $81 million of residential mortgage loans in the process of foreclosure, respectively.

Modifications to Borrowers Experiencing Financial Difficulty

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.
The following table summarizes the amortized cost basis of loans modified during the reporting period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification:

Amortized Cost
(dollars in millions)Interest Rate ReductionTerm ExtensionCombination - Interest Rate Reduction & Term Extension
Principal Forgiveness
TotalPercent of Total Loan class
Three Months Ended September 30, 2024
One-to-four family first mortgage— $1 — $1 $2 0.04 %
Commercial and industrial
— 1 — — 1 0.01 %
Total$— $2 $— $1 $3 
Three Months Ended September 30, 2023
Multi-family
$100 $— $— $— $100 0.95 %
Commercial real estate67 — — — 67 0.64 %
One-to-four family first mortgage3 1 2 — 6 0.10 %
Commercial and industrial
1 11 2 — 14 0.07 %
Other Consumer$— $— $1 — 1 0.04 %
Total$171 $12 $5 $— $188 
Nine Months Ended September 30, 2024
Multi-family$2 $— $— $— $2 0.01 %
Commercial real estate8 4 — — 12 0.13 %
One-to-four family first mortgage— 6 2 1 9 0.15 %
Commercial and industrial
— 8 1 — 9 0.05 %
Total$10 $18 $3 $1 $32 
Nine Months Ended September 30, 2023
Multi-family$100 $— $— $— $100 0.95 %
Commercial real estate119 — — — 119 1.13 %
One-to-four family first mortgage3 4 5 — 12 0.20 %
Commercial and industrial
1 18 2 — 21 0.10 %
Other Consumer— — 1 — 1 0.04 %
Total$223 $22 $8 $— $253 
The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty:

Interest Rate ReductionTerm Extension
Weighted-average contractual interest rate
FromToWeighted-average Term (in years)
Three months ended September 30, 2024
One-to-four family first mortgage— %— %10.73
Commercial and industrial— — 1.9
Three Months Ended September 30, 2023
Multi-family
7.73 %6.17 %
Commercial real estate10.77 %4.32 %
One-to-four family first mortgage— — 9.9
Commercial and industrial8.02 %7.74 %0.36
Other Consumer9.28 %4.75 %4.8
Nine Months ended September 30, 2024
Multi-family
8.08 %6.0 %
Commercial real estate8.13 7.0 
One-to-four family first mortgage4.69 3.7 12.1
Commercial and industrial7.81 6.1 0.6
Other Consumer10.73 4.3 1.8
Nine Months ended September 30, 2023
Multi-family
7.73 %6.17 %
Commercial real estate10.48 %4.18 %
One-to-four family first mortgage— — 12.0
Commercial and industrial8.02 %7.74 0.46
Other Consumer14.49 %8.00 %4.8

The following table presents the amortized cost basis of the modifications for borrowers experiencing financial difficulty that subsequently defaulted during the first nine months of 2024 and were within twelve months of the modification date:

(dollars in millions)
Term ExtensionCombination - Interest Rate Reduction and Term/Payment Extension/Delay
Commercial real estate$4 $— 
One-to-four family first mortgage
—1
Commercial and industrial
4—
Total$8 $1 

As of September 30, 2023, 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 first nine months of 2023 and $5 million one-to-four family first mortgages that were combination modifications and subsequently defaulted during the first nine months of 2023.
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 table provides a summary of loan balances at September 30, 2024, which were modified during the prior twelve months, by class of financing receivable and delinquency status:

September 30, 2024
(dollars in millions)Current30 - 89 Past Due90+ Past DueTotal
Multi-family
$24 $— $— $24 
Commercial real estate8 — 4 12 
One-to-four family first mortgage7 — 5 12 
Commercial and industrial2259
Other Consumer1——1
Total$42 $2 $14 $58 

The following table provides a summary of loan balances at September 30, 2023, which were modified on or after January 1, 2023, the date the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings, through June 30, 2023, by class of financing receivable and delinquency status:

September 30, 2023
(dollars in millions)Current30 - 89 Past Due90+ Past DueTotal
One-to-four family first mortgage$1 $— $9 $10 
Commercial and industrial21——21
Other Consumer1——1
Total$23 $— $9 $32