Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

~~Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K~~ (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form~~10-K~~ ~~or any amendment to this Form10-K. ☐~~

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“accelerated~~“large accelerated filer,” ~~“large accelerated~~“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Act). Yes ☐ No ☒

As of June 30, ~~2017,~~2022, the aggregate market value of the shares of common stock outstanding of the registrant was ~~$6.2~~$4.2 billion, excluding ~~13,307,950~~6,801,356 shares held by all directors and executive officers of the registrant. This figure is based on the closing price of the registrant’s common stock on June 30, ~~2017, $13.13~~2022, $9.13 per share, as reported by the New York Stock Exchange.

The number of shares of the registrant’s common stock outstanding as of February ~~21, 2018~~22, 2023 was ~~490,214,307~~682,901,266 shares.

For the purpose of this Annual Report on Form10-K, the words “we,” “us,” “our,” and the “Company” are used to refer to New York Community Bancorp, Inc. and our consolidated ~~subsidiaries, including New York Community~~subsidiary, Flagstar Bank, ~~and New York Commercial Bank~~N.A. (the ~~“Community Bank” and the “Commercial Bank,” respectively, and collectively, the “Banks”~~“Bank”).

This report, like many written and oral communications presented by New York Community Bancorp, Inc. and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions.

Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. Although we believe that our plans, intentions, and expectations as reflected in these forward-looking statements are reasonable, we can give no assurance that they will be achieved or realized.

Our ability to predict results or the actual effects of our plans and strategies is inherently uncertain. Accordingly, actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained in this report.

There are a number of factors, many of which are beyond our control, that could cause actual conditions, events, or results to differ significantly from those described in our forward-looking statements. These factors include, but are not limited to:

In addition, the timing and occurrence ornon-occurrence of events may be subject to circumstances beyond our control.

Furthermore, on an ongoing basis, we ~~routinely~~ evaluate opportunities to expand through mergers and acquisitions and ~~conduct~~opportunities for strategic combinations with other banking organizations. Our evaluation of such opportunities involves discussions with other parties, due diligence, ~~activities in connection with such opportunities.~~and negotiations. As a result, ~~acquisition discussions and, in some cases, negotiations,~~we may ~~take place~~decide to enter into definitive arrangements regarding such opportunities at any ~~time,~~time.

In addition to the risks and ~~acquisitions involving cash~~challenges described above, these types of transactions involve a number of other risks and challenges, including:

See Part I, Item 1A, “Risk Factors” in this annual report and in our other SEC filings for a further discussion of important risk factors that could cause actual results to differ materially from our forward-looking statements.

Readers should not place undue reliance on these forward-looking statements, which reflect our expectations only as of the date of this report. We do not assume any obligation to revise or update these forward-looking statements except as may be required by law.

The amount by which the fair value of assets purchased exceeds the fair value of liabilities assumed and consideration given.

Throughout this filing, the year-over-year changes that occur in certain financial measures are reported in terms of basis points. Each basis point is equal to one hundredth of a percentage point, or ~~0.01%.~~0.01 percent.

Book value per common share refers to the amount of common stockholders’ equity attributable to each outstanding share of common stock, and is calculated by dividing total stockholders’ equity less preferred stock at the end of a period, by the number of shares outstanding at the same date.

Refers to funds obtained, directly or indirectly, by or through deposit brokers that are then deposited into one or more deposit accounts at a bank.

Refers to the amount of a loan balance that has been written off against the allowance for ~~losses onnon-covered~~ ~~loans.~~credit losses.

A mortgage loan secured by either an income-producing property owned by an investor and leased primarily for commercial purposes or, to a lesser extent, an owner-occupied building used for business purposes. The CRE loans in our portfolio are typically secured by either office buildings, retail shopping centers, light industrial centers with multiple tenants, ormixed-use properties.

The interest expense associated with interest-bearing liabilities, typically expressed as a ratio of interest expense to the average balance of interest-bearing liabilities for a given period.

Refers to the loans and OREO we acquired in our AmTrust Bank (“AmTrust”) and Desert Hills Bank (“Desert Hills”) acquisitions, which are “covered” by loss sharing agreements with the FDIC. See the definition of “Loss Sharing Agreements” that appears later in this glossary.

Refers to the sum of multi-family,non-owner occupied CRE, and acquisition, development, and construction (“ADC”) loans divided by total risk-based capital.

An indication of a borrower’s ability to repay a loan, the DSCR generally measures the cash flows available to a borrower over the course of a year as a percentage of the annual interest and principal payments owed during that time.

A term used to define a broad base of financial instruments, including swaps, options, and futures contracts, whose value is based upon, or derived from, an underlying rate, price, or index (such as interest rates, foreign currency, commodities, or prices of other financial instruments such as stocks or bonds).

The percentage of our earnings that is paid out to shareholders in the form of dividends. It is determined by dividing the dividend paid per share during a period by our diluted earnings per share during the same period of time.

Measures total operating expenses as a percentage of the sum of net interest income andnon-interest income.

Refers to the difference between the purchase price and the fair value of an acquired company’s assets, net of the liabilities assumed. Goodwill is reflected as an asset on the balance sheet and is tested at least annually for impairment.

Refers to a group of financial services corporations that were created by the United States Congress to enhance the availability, and reduce the cost of, credit to certain targeted borrowing sectors, including home finance. The GSEs include, but are not limited to, the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), and the Federal Home Loan Banks (the “FHLBs”).

Refers to GSE mortgage-related securities (both certificates and collateralized mortgage obligations) and GSE debentures.

~~Refers to commitments we had made to originate newone-to-four~~ ~~family loans at specific (i.e.,locked-in)~~ ~~interest rates.~~

Refers to the likelihood that the interest earned on assets and the interest paid on liabilities will change as a result of fluctuations in market interest rates.

The difference between the yield earned on average interest-earning assets and the cost of average interest-bearing liabilities.

Measures the balance of a loan as a percentage of the appraised value of the underlying property.

Refers to the agreements we entered into with the FDIC in connection with the loans and OREO we acquired in our AmTrust and Desert Hills acquisitions. The agreements called for the FDIC to reimburse us for 80% of any losses (and share in 80% of any recoveries) up to specified thresholds and to reimburse us for 95% of any losses (and share in 95% of any recoveries) beyond those thresholds with respect to the acquired assets for specified periods of time. The loss sharing agreements with respect to the~~one-to-four~~ family loans and home equity loans we acquired in these transactions extended for a period of ten years from the respective dates of acquisition. Such loans are referred to as “covered loans.” As of September 30, 2017, the loss sharing agreements are no longer in effect.

~~Refers to the income generated through our mortgage banking business, which is recorded innon-interest~~ ~~income. Mortgage banking income has two components: income generated from the origination ofone-to-four~~ ~~family loans for sale (“income from originations”) and income generated by servicing such loans (“servicing income”).~~

~~The right to service mortgage loans for others is recognized as an asset, and recorded at fair value, when our loans are sold or securitized, servicing retained.~~

A mortgage loan secured by a rental or cooperative apartment building with more than four units.

The difference between the interest income generated by loans and securities and the interest expense produced by deposits and borrowed funds.

Measures net interest income as a percentage of average interest-earning assets.

A loan generally is classified as a~~“non-accrual”~~ “non-accrual” loan when it is 90 days or more past due or when it is deemed to be impaired because we no longer expect to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed onnon-accrual status, we cease the accrual of interest owed, and previously accrued interest is reversed and charged against interest income. A loan generally is returned to accrual status when the loan is current and we have reasonable assurance that the loan will be fully collectible.

~~Refers to all of the loans and OREO in our portfolio that are not covered by our loss sharing agreements with the FDIC.~~

Non-performing loans consist ofnon-accrual loans and loans that are 90 days or more past due and still accruing interest.Non-performing assets consist ofnon-performing loans, OREO and ~~OREO.~~other repossessed assets.

Includes real estate owned by the Company which was acquired either through foreclosure or default. Repossessed assets are similar, except they are not real estate-related assets.

In New York City, where the vast majority of the properties securing our multi-family loans are located, the amount of rent that tenants may be charged on the apartments in certain buildings is restricted under ~~certain “rent-control” and “rent-stabilization”~~rent-stabilization laws. Rent-control laws apply to apartments in buildings that were constructed prior to February 1947. An apartment is said to be “rent-controlled” if the tenant has been living continuously in the apartment for a period of time beginning prior to July 1971. When a rent-controlled apartment is vacated, it typically becomes “rent-stabilized.” Rent-stabilized apartments are generally located in buildings with six or more units that were built between February 1947 and January 1974. ~~Rent-controlled and -stabilized (together, “rent-regulated”)~~Rent-regulated apartments tend to be more affordable to live in because of the applicable regulations, and buildings with a preponderance of such rent-regulated apartments are therefore less likely to experience vacancies in times of economic adversity.

~~Repurchase agreements are contracts~~A loan for which the ~~sale of securities owned or borrowed by~~terms have been modified resulting in a concession, and for which the Banks with an agreement to repurchase those securities at an agreed-upon price and date. The Banks’ repurchase agreements are primarily collateralized by GSE obligations and other mortgage-related securities, and are entered into with either the FHLBs or various brokerage firms.borrower is experiencing financial difficulties.

A bank holding company with total consolidated assets that average more than $50 billion over the four most recent quarters is designated a “Systemically Important Financial Institution” under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) of 2010.

Refers to advances drawn by the ~~Banks~~Bank against ~~their respective lines~~its line(s) of credit with the FHLBs, their repurchase agreements with the FHLBs and various brokerage firms, and federal funds purchased.

The interest income associated with interest-earning assets, typically expressed as a ratio of interest income to the average balance of interest-earning assets for a given period.

New York Community Bancorp, Inc., (on a stand-alone basis, the “Parent Company” or, collectively with its subsidiaries, the “Company”) is the bank holding company for Flagstar Bank, N.A. (hereinafter referred to as the “Bank”). The Company went public in 1993 and has grown organically and through a series of accretive mergers and acquisitions, culminating in its recent acquisition of Flagstar Bancorp, Inc. (“Flagstar” or “Flagstar Bancorp”), which closed on December 1, 2022. Effective as of December 1, 2022, in connection with the Parent Company’s acquisition of Flagstar Bancorp, (i) Flagstar Bank, FSB converted to a national bank to be known as “Flagstar Bank, N.A.” and (ii) New York Community Bank was merged with and into Flagstar Bank N.A., with Flagstar Bank N.A. continuing as the surviving entity.

New York Community Bancorp, Inc. has market-leading positions in several national businesses, including multi-family lending, mortgage originations and servicing, and warehouse lending. The Company is ~~organized under Delaware Law as a multi-bank holding company with two primary subsidiaries: New York Community Bank and New York Commercial Bank (hereinafter referred to as~~ the ~~“Community Bank”~~second-largest multi-family portfolio lender in the country and the “Commercial Bank,” respectively, and collectively as the “Banks”). The Community Bank currently has 225 branches in Metro New York, New Jersey, Ohio, Florida, and Arizona, and the Commercial Bank currently has 30 branches in Metro New York.

Customers of the Commercial Bank may transact their business at any of our Community Bank branches, and Community Bank customers may transact their business at any of the branches of the Commercial Bank. In addition, customers of the Banks have access to their accounts through our ATMs in all five states.

On September 17, 2015, the Company submitted an application to the Federal Deposit Insurance Corporation (the “FDIC”) and the New York State Department of Financial Services (the “NYSDFS”) requesting approval to merge the Commercial Bank with and into the Community Bank. The merger was approved by the NYSDFS on September 16, 2016 and, as of the date of this filing, was pending the approval of the FDIC. Upon completion of the pending merger, the 30 Commercial Bank branches will continue operations as branches of the Community Bank.

On March 17, 2017, we issued 515,000 shares of preferred stock. The offering generated capital of $502.8 million, net of underwriting and other issuance costs, for general corporate purposes, with the bulk of the proceeds being distributed to the Community Bank.

~~On July 28, 2017, the Company completed the previously announced sale of itsone-to-four~~ family residential mortgage-backed assets covered under its Loss Share Agreements (“LSA”) with the FDIC, to FirstKey Mortgage, LLC, an affiliate of Cerberus Capital Management, L.P. Additionally, on September 29, 2017, the Company completed the previously announced sale of its mortgage banking business, which was acquired as part of its 2009 FDIC assisted acquisition of AmTrust Bank (“AmTrust”) to Freedom Mortgage Corporation. The sale of the mortgage banking business effectively takes us out of the~~one-to-four~~ ~~family residential wholesale lending business.~~

Established in 1859, the Community Bank is a New York State-chartered savings bank with 225 branches that currently operate through seven local divisions. We compete for depositors in these diverse markets by emphasizing service and convenience, with a comprehensive menu of traditional and~~non-traditional~~ ~~products and services, and access to multiple service channels, including online banking, mobile banking, and banking by phone.~~

In New York, we currently serve our Community Bank customers through Roslyn Savings Bank, with 44 branches on Long Island, a suburban market east of New York City comprised of Nassau and Suffolk counties; Queens County Savings Bank, with 38 branchesleading multi-family portfolio lender in the New York City ~~borough~~market area, where it specializes in rent-regulated, non-luxury apartment buildings. Flagstar Mortgage is the 8th largest bank originator of ~~Queens; Richmond County Savings Bank,~~residential mortgages for the 12-months ended December 31, 2022, while we are the industry’s 6th largest sub-servicer of mortgage loans nationwide, servicing 1.4 million accounts with ~~20 branches~~$346 billion in unpaid principal balances as of December 31, 2022. Additionally, the ~~borough of Staten Island; and Roosevelt Savings Bank, with seven branches in~~Company is the ~~borough of Brooklyn. In the Bronx, we currently have two branches that operate directly under the name “New York Community Bank.”~~2nd largest mortgage warehouse lender nationally based on total commitments.

In New Jersey, we serve our Community Bank customers through 45 branches that operate under the name Garden State Community Bank. In Florida and Arizona, where we have 27 and 14 branches, respectively, we serve our customers through the AmTrust Bank division of the Community Bank. In Ohio, we serve our Community Bank customers through 28 branches of Ohio Savings Bank.

~~We also are a leading producer of multi-family loans in New York City, with an emphasis onnon-luxury~~ residential apartment buildings with rent-regulated units that feature below-market rents. In addition to multi-family loans, which are our principal asset, we originate commercial real estate (“CRE”) loans (primarily in New York City, as well as on Long Island) and, to a much lesser extent, acquisition, development, and construction (“ADC”) loans, and commercial and industrial (“C&I”) loans. C&I loans consist of specialty finance loans and leases, and other C&I loans that are typically made to small and~~mid-size~~ ~~business in Metro New York.~~

The Commercial Bank is a New York State-chartered commercial bank with 30 branches in Manhattan, Queens, Brooklyn, Westchester County, and Long Island, including 18 that operate under the name “Atlantic Bank.”

~~Established in December 2005, the Commercial Bank competes for customers by emphasizing personal service and by addressing the needs of small andmid-size~~ businesses, professional associations, and government agencies, with a comprehensive menu of business solutions, including installment loans, revolving lines of credit, and cash management services. In addition, the Commercial Bank offers online banking, mobile banking, and banking by phone.

We ~~also~~ serve our customers through ~~three connected websites: www.myNYCB.com, www.NewYorkCommercialBank.com, and www.NYCBfamily.com.~~our website: www.myNYCB.com. In addition to providing our customers with24-hour access to their accounts, and information regarding our products and services, hours of service, and locations, ~~these websites provide~~the website provides extensive information about the Company for the investment community. Earnings releases, dividend announcements, and other press releases are posted upon issuance to the Investor Relations portion of ~~these websites.~~the website, which can be found at www.ir.myNYCB.com.

In addition, our filings with the ~~U.S. Securities and Exchange Commission (the “SEC”)~~SEC (including our annual report on Form10-K; our quarterly reports on Form10-Q; and our current reports on Form8-K), and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available without charge, and are posted to the Investor Relations portion of our ~~websites.~~website. The ~~websites~~website also ~~provide~~provides information regarding our Board of Directors and management team, as well as certain Board Committee charters and our corporate governance policies. The content of our ~~websites~~website shall not be deemed to be incorporated by reference into this Annual Report.

~~Our current market for deposits consists of the 26 counties~~Flagstar Bank, N.A. operates 395 branches across nine states, including strong footholds in the ~~five states that are served by our branch~~Northeast and Midwest and has exposure to high growth markets in the Southeast and on the West Coast. Flagstar Mortgage operates nationally through a wholesale network ~~including all five boroughs~~ of New York City, Nassau and Suffolk Counties on Long Island, and Westchester County in New York; Essex, Hudson, Mercer, Middlesex, Monmouth, Ocean, and Union Counties in New Jersey; Maricopa and Yavapai Counties in Arizona; Cuyahoga, Lake, and Summit Counties in Ohio; and Broward, Collier, Lee, Miami-Dade, Palm Beach, and St. Lucie Counties in Florida.approximately 3,000 third-party mortgage originators.

The market for the loans we produce varies, depending on the type of loan. For example, the vast majority of our multi-family loans are collateralized by rental apartment buildings in New York City, ~~which is also home to~~while the majority of the properties collateralizing our CRE and ADC ~~loans. In contrast, our~~loans are located in the Northeast and Midwest. Our specialty finance loans and leases are generally made to large corporate obligors that participate in stable industries ~~nationwide.~~nationwide and our warehouse loans are made to mortgage lenders across the country.

~~The combined population of the 26 counties where~~We compete for deposits and customers by placing an emphasis on convenience and service and, from time to time, by offering specific products at competitive rates. In addition to our 395 branches, ~~are located is approximately 31.5 million, and the number of banks and thrifts~~ we ~~compete with currently exceeds 300. With total deposits of $29.1 billion at December 31, 2017, we ranked fourteenth among all bank and thrift depositories serving these 26 counties.~~have 524 ATM locations that operate 24 hours a day. Our customers also have 24-hour access to their accounts through our mobile banking app, online through our website, www.myNYCB.com, or through our bank-by-phone service. We also ~~ranked third among all banks~~offer certain money market accounts, certificates of deposit and ~~thrifts in Union County, New Jersey,~~checking accounts through a dedicated website: www.myBankingDirect.com.

In addition to checking and ~~third among all banks~~savings accounts, retirement accounts, and ~~thrifts in Richmond, Queens,~~CDs for both businesses and ~~Nassau Counties in New York. (Market share information was provided by S&P Global Market Intelligence.)~~consumers, we offer a suite of cash management products to address the needs of small and mid-size businesses and professional associations. We also compete ~~for deposits~~by complementing our broad selection of traditional banking products with ~~other financial institutions, including credit unions, Internet banks,~~an extensive menu of non-deposit investment products and ~~brokerage firms.~~insurance through a relationship with a third-party broker dealer and insurance agency.

Our ability to attract and retain deposits is not only a function of short-term interest rates and industry consolidation, but also the competitiveness of the rates being offered by other financial institutions within our ~~marketplace.~~marketplace, including credit unions, on-line banks, and brokerage firms. Additionally, financial technology companies, also referred to as FinTechs, are providing nontraditional, but increasingly strong competition for deposits and customers.

Competition for deposits is also influenced by several internal factors, including the opportunity to assume or acquire deposits through business combinations; the cash flows produced through loan and securities repayments and sales; and the availability of attractively priced wholesale funds. In addition, the degree to which we seek to compete for deposits is influenced by the liquidity needed to fund our loan production and other outstanding commitments.

We compete for deposits and customers by placing an emphasis on convenience and service and, from time to time, by offering specific products at highly competitive rates. In addition to our 225 Community Bank branches and 30 Commercial Bank branches, we have 271 ATM locations, including 247 that operate 24 hours a day. Our customers also have~~24-hour~~ ~~access to their accounts through ourbank-by-phone~~ service, through mobile banking, and online through our three websites, www.myNYCB.com, www.NewYorkCommercialBank.com, and www.NYCBfamily.com. We also offer certain money market accounts, certificates of deposit (“CDs”), and checking accounts through a dedicated website: www.myBankingDirect.com.

We also compete by complementing our broad selection of traditional banking products with an extensive menu of alternative financial services, including annuities, life and long-term care insurance, and mutual funds of various third-party service providers.

~~In addition to checking and savings accounts, Individual Retirement Accounts, and CDs for both businesses and consumers, we offer a suite of cash management products to address the needs of small andmid-size~~ ~~businesses and professional associations.~~

Another competitive advantage is our strong community presence, with April 14, 2017 having marked the 158th year of service of our forebear, Queens County Savings Bank. We have found that our longevity, as well as our strong capital position, are especially appealing to customers seeking a strong, stable, and service-oriented bank.

Our success as a lender is substantially tied to the economic health of the markets where we lend. Local economic conditions have a significant impact on loan demand, the value of the collateral securing our credits, and the ability of our borrowers to repay their loans.

The competition we face for loans also varies with the type of loan we are originating. In New York City, where the majority of the buildings collateralizing our multi-family loans are located, we compete for such loans on the basis of timely service and the expertise that stems from being a specialist in this lending niche. In addition to the money center, regional, and local banks we compete with in this market, we compete with insurance companies and other types of lenders. Certain of the banks we compete with sell the loans they produce to Fannie Mae and Freddie Mac.

Our ability to compete for CRE loans depends on the same factors that impact our ability to compete for multi-family credits, and the degree to which other CRE lenders choose to offer loan products similar to ours.

Competition for our specialty finance loans, which consist primarily of asset-based, equipment financing, and dealer floor plan loans, is driven by a variety of factors, including prevailing economic conditions and the level of interest rates. Moreover, since a majority of our customers in this category are mid-to-large size publicly traded companies, we also face competition for financing from the capital markets. In addition, the majority of specialty finance loans that we originate are sourced from larger financial institutions who have many customers for these loans. Some of these customers are larger and have more capital and liquidity than the Company.

While we continue to originate ADC and C&I loans for investment, such loans represent a small portion of our loan portfolio as compared to multi-family, CRE loans, and ~~CRE~~specialty finance loans.

From a lending perspective, we compete with many institutions including commercial banks, national mortgage lenders, local savings banks, financial technology companies, credit unions and commercial lenders offering mortgage loans and other consumer loans.

We encounter certain environmental risks in our lending activities and other operations. The existence of hazardous materials may make it unattractive for a lender to foreclose on the properties securing its loans. In addition, under certain conditions, lenders may become liable for the costs of cleaning up hazardous materials found on such properties. We attempt to mitigate such environmental risks by requiring either that a borrower purchase environmental insurance or that an appropriate environmental site assessment be completed as part of our underwriting review on the initial granting of CRE and ADC loans, regardless of location, and of anyout-of-state multi-family loans we may produce. Depending on the results of an assessment, appropriate measures are taken to address the identified risks. In addition, we order an updated environmental analysis prior to foreclosing on such properties, and typically hold foreclosed multi-family, CRE, and ADC properties in subsidiaries.

Our attention to environmental risks also applies to the properties and facilities that house our bank operations. Prior to acquiring a large-scale property, a Phase 1 Environmental Property Assessment is typically performed by a licensed professional engineer to determine the integrity of, and/or the potential risk associated with, the facility and the property on which it is built. Properties and facilities of a smaller scale are evaluated by qualifiedin-house assessors, as well as by industry experts in environmental testing and remediation. Thistwo-pronged approach identifies potential risks associated with asbestos-containing material, above and underground storage tanks, radon, electrical transformers (which may contain PCBs), ground water flow, storm and sanitary discharge, and mold, among other environmental risks. These processes assist us in mitigating environmental risk by enabling us to identify and address potential issues, including by avoiding taking ownership or control of contaminated properties.

We conduct business primarily through our wholly-owned bank subsidiary, Flagstar Bank, N.A. The ~~Community~~ Bank has formed, or acquired through merger transactions, 2533 active subsidiary corporations. Of these, 1821 are direct subsidiaries of the ~~Community~~ Bank and 712 are subsidiaries of ~~Community~~ Bank-owned entities.

~~There are 34 additional entities that are subsidiaries of a Community Bank-owned entity organized to own interests in real estate.~~

~~The Commercial Bank has three active subsidiary corporations, two of which are subsidiaries of Commercial Bank-owned entities.~~

NYB Realty Holding Company, LLC owns interests in 10 additional active entities ~~that are~~organized as indirect wholly-owned subsidiaries ~~of the Commercial Bank that are organized~~ to own interests in various real ~~estate.~~estate properties.

The Parent Company owns special business trusts that were formed for the purpose of issuing capital and common securities and investing the proceeds thereof in the junior subordinated debentures issued by the Company.

See Note 8,12, “Borrowed Funds,” in Item 8, “Financial Statements and Supplementary Data,” for a further discussion of the Company’s special business trusts.

The Parent Company also has onenon-banking subsidiary that was established in connection with the acquisition of Atlantic Bank of New ~~York.~~York and two non-banking subsidiaries that were acquired in connection with the Flagstar acquisition.

At December 31, ~~2017, the number~~2022, our workforce included 7,497 employees. None of ~~full-time equivalent~~our employees ~~(“FTEs”) was 3,096, including 1,556 branch-related FTEs. Our employees~~ are ~~not~~ represented by a collective bargaining ~~unit,~~agreement and we ~~consider~~believe our ~~relationship~~employee relations to be in good standing.

We believe our employees are among our most significant resources and that our employees are critical to our continued success. We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations. We pay our employees competitively and offer a broad range of benefits, both of which we believe are competitive with our industry peers and with other firms in the locations in which we do business. Our employees receive salaries that are subject to ~~be good.~~

We are proud to strive to maintain a diverse and inclusive workforce that reflects the demographics of the communities in which we do business. Our company recognizes that the talents of a diverse workforce are a key competitive advantage. To increase diversity within our talent pool, we work with key stakeholders in our business locations to deepen our understanding of the local labor market and better position the organization to recruit and retain talent within under-represented communities.

We strive to create and foster a supportive environment for all of our employees, and we are proud to share our business success with individuals whose cultural and personal differences support an innovative and productive workplace. Approximately two-thirds of our workforce is female and nearly half of our workforce have diverse ethnic backgrounds. Our policies and practices reflect our commitment to diversity and inclusion in the workplace.

A diverse workforce is critical to our long-term success. We strive to build and leverage a diverse, inclusive and engaged workforce that inspires all individuals to work together towards a common goal of superior business results by embracing the unique needs and objectives of our customers and community. We strive to achieve this by hiring great people who represent the talents, experiences, background and diversity of the communities we serve. Our commitment is reflected in the policies that govern our workforce, such as our Diversity Pledge and our Diversity, Equity and Inclusion Policy, and is evidenced in our recruiting strategies, diversity and inclusion training and Employee resource groups, which are key to our efforts. Our Employee resource groups provide our associates access to coaching, mentoring and professional development. As of December 31, 2022, our efforts have been focused on the following eleven employee resource groups which we intend to expand across our recently combined Company: African American, Asian-Indian, Environmental, Hispanic/Latino, Interfaith, LGBTQ, Military Veterans, Native American, People with Disabilities, Women and Young Professionals.

Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a code of conduct that sets standards for appropriate behavior and all employees are required to complete annual training that focuses on preventing, identifying, reporting and stopping any type of unlawful discrimination.

The Company is subject to federal, state, and local income taxes. See the discussion of ~~“Income Taxes”~~"Income Taxes" in ~~“Critical~~Note 2, "Summary of Significant Accounting ~~Policies” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” later in this annual report.~~Policies."

~~General~~The following is a brief summary of certain statutes and regulations that significantly affect the Company and its subsidiaries. A number of other statutes and regulations may affect the Company and the Bank but are not discussed in the following paragraphs.

The ~~Community~~ Bank is a ~~New York State-chartered savings bank~~national banking association, subject to federal regulation and ~~its deposit accounts~~oversight by the OCC. The activities of the Bank are ~~insured~~limited to those specifically authorized under the ~~Deposit Insurance Fund (the “DIF”)~~National Bank Act and related interpretations of the ~~FDIC up~~OCC. The OCC has authority to ~~applicable legal limits. The Commercial~~bring an enforcement action against the Bank ~~is a New York State-chartered commercial bank and its deposit accounts~~for unsafe or unsound banking practices, which could include limiting the Bank’s ability to conduct otherwise permissible activities, or imposing corrective capital or managerial requirements on the bank. We are also are insured by the DIF up to applicable legal limits. On September 17, 2015, the Company submitted an application to the FDIC and the NYSDFS requesting approval to merge the Commercial Bank with and into the Community Bank. The merger was approved by the NYSDFS on September 16, 2016 and is currently pending the approval of the FDIC.

~~For the fiscal year ended December 31, 2017, the Community Bank and the Commercial Bank were~~ subject to regulation and ~~supervision by the NYSDFS, as their chartering agency;~~examination by the FDIC, ~~as their insurer~~which insures the deposits of ~~deposits;~~the Bank to the extent permitted by law and the requirements established by the ~~Consumer Financial Protection Bureau (the “CFPB”).~~

Federal Reserve. The ~~Banks are required~~Bank is also subject to ~~file reports with~~ the ~~NYSDFS,~~supervision of the CFPB, which regulates the offering and provision of consumer financial products or services under federal consumer financial laws. The OCC, FDIC and the CFPB ~~concerning their~~may take regulatory enforcement actions if we do not operate in accordance with applicable regulations, policies and directives. Proceedings may be instituted against us, or any "institution-affiliated party", such as a director, officer, employee, agent or controlling person, who engages in unsafe and unsound practices, including violations of applicable laws and regulations. The FDIC has additional authority to terminate insurance of accounts, if after notice and hearing, we are found to have engaged in unsafe and unsound practices, including violations of applicable laws and regulations. The federal system of regulation and supervision establishes a comprehensive framework of activities in which to operate and ~~financial condition, and are periodically examined by~~is primarily intended for the ~~NYSDFS, the FDIC,~~protection of depositors and the CFPB to assess compliance with various regulatory requirements, including with respect to safety and soundness and consumer financial protection regulations. The regulatory structure gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss allowances for regulatory purposes. Changes in such regulations or in banking legislation could haveFDIC's DIF rather than our shareholders.

As a ~~material impact on the Company, the Banks, and their operations, as well as the Company’s shareholders.~~

The Company is subject to examination, regulation, and periodic reporting under the Bank Holding Company Act of 1956, as amended (the “BHCA”), as administered by the Board of Governors of the Federal Reserve System (the “FRB”). Furthermore, the Company would bebank holding company, we are required to ~~obtain the prior approval of the FRB to acquire all, or substantially all, of the assets of any bank or bank holding company.~~

~~In addition, the Company is periodically examined by the Federal Reserve Bank of New York (the“FRB-NY”),~~ ~~and is required to file certain reports under, and otherwise~~ comply with the rules and regulations of the ~~SEC under~~Federal Reserve. We are required to file certain reports, and we are subject to examination by, and the enforcement authority of, the Federal Reserve. Under the federal securities ~~laws. Certain~~laws, we are also subject to the rules and regulations of the ~~regulatory requirements applicable~~SEC.

Any change to ~~the Community Bank, the Commercial Bank, and the Company are referred to below or elsewhere herein. However, such discussion is not meant to be a complete explanation of all~~ laws and regulations, ~~and is qualified in its entirety~~whether by ~~reference to~~ the ~~actual laws and regulations.~~Regulatory Agencies or Congress, could have a materially adverse impact on our operations.

~~Enacted in July 2010, the~~ Dodd-Frank Wall Street Reform and Consumer Protection Act ~~(the “Dodd-Frank Act”)~~

Enacted in July 2010, the DFA significantly changed the bank regulatory structure and will continue to affect, into the immediate future, the lending and investment activities and general operations of depository institutions and their holding companies. The ~~Dodd-Frank Act~~DFA is complex and comprehensive legislation that impacts practically all aspects of a banking organization, and represents a significant overhaul of many aspects of the regulation of the financial services industry.

In 2019, the New York State Legislature passed the Housing Stability and Tenant Protection Act of 2019 impacting about one million rent-regulated apartment units. Among other things, the new legislation: (i) curtails rent increases from material capital improvements and Individual Apartment Improvements; (ii) all but eliminates the ability for apartments to exit rent regulation; (iii) does away with vacancy decontrol and high income deregulation; and (iv) repealed the 20 percent vacancy bonus. While it will take several years for its full impact to be known, the legislation generally limits a landlord’s ability to increase rents on rent-regulated apartments and makes it more difficult to convert rent regulated apartments to market rent apartments.

In ~~early July~~ 2013, the ~~Federal Reserve Board~~FRB and the FDIC approved revisions to their capital adequacy guidelines and prompt corrective action rules to implement the revised standards of the Basel Committee on Banking Supervision, commonly called Basel III, and to address relevant provisions of the ~~Dodd-Frank Act. “Basel III”~~DFA. Basel III generally refers to two consultative documents released by the Basel Committee on Banking Supervision in December 2009. The ~~“Basel~~Basel III ~~Rules”~~rules generally refer to the rules adopted by U.S. banking regulators in December 2010 to align U.S. bank capital requirements with Basel III and with the related loss absorbency rules they issued in January 2011, which include significant changes to bank capital, leverage, and liquidity requirements.

The Basel III ~~Rules~~rules include new risk-based capital and leverage ratios, which became effective January 1, 2015, and revised the definition of what constitutes “capital” for the purposes of calculating those ratios. Under ~~the~~

Basel III, ~~Rules,~~ the Company and the ~~Banks~~Bank are required to maintain minimum capital in accordance with the following ratios: (i) a common equity tier 1 capital ratio of ~~4.5%;~~4.5 percent; (ii) a tier 1 capital ratio of 6%6 percent (increased from ~~4%)~~4 percent); (iii) a total capital ratio of 8%8 percent (unchanged from the prior rules); and (iv) a tier 1 leverage ratio of ~~4%.~~4 percent.

In addition, the Basel III ~~Rules~~rules assign higher risk weights to certain assets, such as the ~~150%~~150 percent risk weighting assigned to exposures that are more than 90 days past due or are onnon-accrual status, and to certain ~~commercial real estate~~CRE facilities that finance the acquisition, development, or construction of real property. ~~The~~ Basel III ~~Rules~~ also eliminate the inclusion of certain instruments, such as trust preferred securities, from tier 1 capital. In addition, tier 2 capital is no longer limited to the amount of tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets, and investments in unconsolidated subsidiaries over designated percentages of common stock ~~will be~~are required, subject to limitation, to be deducted from capital. Finally, tier 1 capital ~~will include~~includes accumulated other comprehensive income, which includes all unrealized gains and losses onavailable-for-sale ~~debt and equity~~ securities.

~~The~~ Basel III ~~Rules~~ also ~~establish~~established a “capital conservation buffer” (consisting entirely of common equity tier 1 capital) that ~~will be 2.5%~~is 2.5 percent above the new regulatory minimum capital ~~requirements when it is fully phased in. The result will be~~requirements. This resulted in an increase in the minimum common equity tier 1, tier 1, and total capital ratios to ~~7.0%, 8.5%,~~7.0 percent, 8.5 percent, and ~~10.5%,~~10.5 percent, respectively. The~~phase-in~~ ~~of the new~~ capital conservation buffer ~~requirement began in January 2016~~is now at ~~0.625%~~its fully phased-in level of ~~risk-weighted assets and will increase by that amount each year until fully implemented in January 2019.~~2.5 percent. An institution can be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital levels fall below these amounts. ~~The~~ Basel III ~~Rules~~ also establish a maximum percentage of eligible retained income that can be utilized for such capital distributions.

InOn September ~~2017,~~17, 2019, the ~~Federal Reserve Board,~~FRB, the FDIC, and the ~~Office of the Comptroller of the Currency (“OCC”) proposed~~OCC issued a final rule ~~intended~~designed to reduce regulatory burden by simplifying several requirements in the agencies’ regulatory capital rule. Most aspects of the ~~proposed~~ rule ~~would~~ apply only to banking organizations that are not subject to the “advanced approaches” in the capital rule, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure. The ~~proposal would simplify~~rule simplifies and ~~clarify~~clarifies a number of the more complex aspects of the existing capital rule. Specifically, the ~~proposed~~ rule simplifies the capital treatment for certain ~~ADC loans,~~ mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions, and minority ~~interest. A final rule has not yet been issued.~~interests.

The Federal ~~law~~Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with respect to institutions that do not meet minimum capital requirements. For such purposes, the law establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. The five capital tiers are described in more detail below. Under the prompt corrective action regulations, an institution that fails to remain “well capitalized” becomes subject to a series of restrictions that increase in severity as its capital condition weakens. Such restrictions may include a prohibition on capital distributions, restrictions on asset growth, or restrictions on the ability to receive regulatory approval of applications. The FDICIA also provides for enhanced supervision authority over undercapitalized institutions, including authority for the appointment of a conservator or receiver for the institution.

As a result of the Basel III ~~Rules,~~rules, new definitions of the relevant measures for the five capital categories took effect on January 1, 2015. An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of ~~10%~~10 percent or greater, a tier 1 risk-based capital ratio of 8%8 percent or greater, a common equity tier 1 risk-based capital ratio of ~~6.5%~~6.5 percent or greater, and a tier 1 leverage ratio of 5%5 percent or greater, and is not subject to a regulatory order, agreement, or directive to meet and maintain a specific capital level for any capital measure.

An institution is deemed to be “adequately capitalized” if it has a total risk-based capital ratio of 8%8 percent or greater, a tier 1 risk-based capital ratio of 6%6 percent or greater, a common equity tier 1 risk-based capital ratio of ~~4.5%~~4.5 percent or greater, and a tier 1 leverage ratio of 4%4 percent or greater.

An institution is deemed to be “undercapitalized” if it has a total risk-based capital ratio of less than ~~8%,~~8 percent, a tier 1 risk-based capital ratio of less than ~~6%,~~6 percent, a common equity tier 1 risk-based capital ratio of less than ~~4.5%,~~4.5 percent, or a tier 1 leverage ratio of less than ~~4%.~~4 percent. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than ~~6%,~~6 percent, a tier 1 risk-based capital ratio of less than ~~4%,~~4 percent, a common equity tier 1 risk-based capital ratio of less than ~~3%,~~3 percent, or a tier 1 leverage ratio of less than ~~3%.~~3 percent. An institution is deemed to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than ~~2%.~~2 percent.

“Undercapitalized” institutions are subject to growth, capital distribution (including dividend), and other limitations, and are required to submit a capital restoration plan. An institution’s compliance with such a plan is required to be guaranteed by any company that controls the undercapitalized institution in an amount equal to the

lesser of 5%5 percent of the bank’s total assets when deemed undercapitalized or the amount necessary to achieve the status of adequately capitalized. If an undercapitalized institution fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” Significantly undercapitalized institutions are subject to one or more additional restrictions including, but not limited to, an order by the FDIC to sell sufficient voting stock to become adequately capitalized; requirements to reduce total assets, cease receipt of deposits from correspondent banks, or dismiss directors or officers; and restrictions on interest rates paid on deposits, compensation of executive officers, and capital distributions by the parent holding company.

Beginning 60 days after becoming “critically undercapitalized,” critically undercapitalized institutions also may not make any payment of principal or interest on certain subordinated debt, extend credit for a highly leveraged transaction, or enter into any material transaction outside the ordinary course of business. In addition, subject to a narrow exception, the appointment of a receiver is required for a critically undercapitalized institution within 270 days after it obtains such status.

Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that could have a material effect on the Consolidated Financial Statements. For additional information, see the Capital section of the MD&A and Note 21 - Capital. As of December 31, 2022, each of the Bank’s capital ratios exceeded those required for an institution to be considered “well capitalized” under these regulations.

In 2019, the Board of Governors of the Federal Reserve System (the “Board”) finalized a framework that sorts large banking organizations into one of four categories of prudential standards based on their risk profiles (the “tailoring rule”). The most stringent prudential standards apply under Category I (defined as U.S. Global Systemically Important Banks and their depository institution subsidiaries), and the least stringent prudential standards apply under Category IV (defined as U.S. banking organizations with ~~Assets of $10 Billion to $50 Billion~~

~~FDIC and FRB regulations require certain large insured depository institutions and bank holding companies to conduct annual capital-adequacy stress tests. The rules apply to statenon-member~~ ~~banks and bank holding companies with total consolidated assets of~~$100 billion or more but less than ~~$10 billion (“covered institutions”).~~

~~Under the rules, each covered institution with between $10 billion and $50~~$250 billion in total assets isand have less than $75 billion in cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets, or off-balance sheet exposure).

In January 2021, the Board finalized a rule to update capital planning requirements for large banks to be consistent with the tailoring rule. The Board's capital planning requirements for large banks help ensure they plan for and determine their capital needs under a range of different scenarios. The rule removes the company-run stress test requirement for banking organizations subject to Category IV standards. Therefore, banking organizations subject to Category IV standards are not required to ~~conduct annual stress tests, using~~calculate forward-looking projections of capital under scenarios provided by the ~~institution’s financial data as of December 31st~~Board.

The rule also aligns the frequency of the preceding year, to assess the potential impact of different scenarios on the consolidated earnings and capital and certain related items over a nine-quarter, forward-looking planning horizon, taking into account all relevant exposures and activities. The Community Bank and the Company are required to report the resultscalculation of the stress ~~tests to~~capital buffer requirement with the ~~FDIC and the FRB, respectively, on or before July 31st of each year, and to subsequently publish a summary~~frequency of the results between October 15th and October 31st. The rules prescribe the manner and form for such reports and, based on the information reported as well as other relevant information, the FDIC and FRB are expected to conduct an analysis of the quality of the respective covered institution’ssupervisory stress test ~~processes and the related results.~~(that is, both would occur every other year for banking organizations subject to Category IV standards). The ~~FDIC and FRB envision that feedback concerning such analysis would be provided~~rule allows a banking organization subject to ~~each covered institution through~~Category IV standards to elect to participate in the supervisory ~~process.~~

~~As discussed below, under~~stress test in a year in which the FRB’s Comprehensive Capital Analysis and Review (“CCAR”) regime, additional capital stress testing requirements apply to financial institutions whose total consolidated assets average in excess of $50 billion over four consecutive quarters. At December 31, 2017, the four-quarter average of our total consolidated assets was $48.7 billion.

~~Should the four-quarter average of our total consolidated assets exceed $50 billion (the current threshold for a Systemically Important Financial Institution, or “SIFI”), we~~banking organization would ~~become~~not otherwise be subject to the ~~FRB’s~~supervisory stress ~~testing regulations administered under its CCAR~~test, and to receive an updated stress capital ~~planning and supervisory process. Under this regime,~~buffer requirement in addition to reporting the results of a SIFI’s own capital stress testing, the FRB uses its own models to evaluate whether each SIFI has the capital, on a total consolidated basis, necessary to continue operating under the economic and financial market conditions of stressed macroeconomic scenarios identified by the FRB. The FRB’s analysis includes an assessment of the projected losses, net income, and pro forma capital levels, and the regulatory capital ratio, tier 1 common ratio, and other capital ratios, for the SIFI, and uses such analytical techniques that ~~the FRB determines to be appropriate to identify, measure, and monitor any risks of the SIFI that may affect the financial stability of the United States.~~year.

~~Boards of directors of SIFIs are required to review and approve capital plans before they are submitted to the FRB.~~

Federal law requires each federal banking agency to prescribe, for the depository institutions under its jurisdiction, standards that relate to, among other things, internal controls; information and audit systems; loan documentation; credit underwriting; the monitoring of interest rate risk; asset growth; compensation; fees and benefits; and such other operational and managerial standards as the agency deems appropriate. The federal banking agencies adopted final regulations and Interagency Guidelines Establishing Standards for Safety and Soundness

~~(the~~ (the “Guidelines”) to implement these safety and soundness standards. The Guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the Guidelines, the agency may require the institution to provide it with an acceptable plan to achieve compliance with the standard, as required by the Federal Deposit Insurance Act, as amended, (the “FDI Act”).

The discussion that follows pertains to FDIC, OCC, and FRB regulations other than those already discussed on the preceding pages.

The following pertains to regulations other than those already discussed on the preceding pages.

The FDIC and the other federal banking agencies have adopted regulations that prescribe standards for extensions of credit that (i) are secured by real estate, or (ii) are made for the purpose of financing construction or improvements on real estate. The FDIC regulations require each institution to establish and maintain written internal real estate lending standards that are consistent with safe and sound banking practices, and appropriate to the size of the institution and the nature and scope of its real estate lending activities. The standards also must be consistent with accompanying FDIC Guidelines, which includeloan-to-value limitations for the different types of real estate loans. Institutions are also permitted to make a limited amount of loans that do not conform to the proposedloan-to-value limitations as long as such exceptions are reviewed and justified appropriately. The FDIC Guidelines also list a number of lending situations in which exceptions to theloan-to-value standards are justified.

The FDIC, the OCC, and the FRB (collectively, the ~~“Agencies”~~“Federal Banking Agencies”) also have issued joint guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “CRE Guidance”). The CRE Guidance, which addresses land development, construction, and certain multi-family loans, as well as CRE loans, does not establish specific lending limits but, rather, reinforces and enhances the Federal Banking Agencies’ existing regulations and guidelines for such lending and portfolio management. Specifically, the CRE Guidance provides that a bank has a concentration in CRE lending if (1) total reported loans for construction, land development, and other land represent ~~100%~~100 percent or more of total risk-based capital; or (2) total reported loans secured by multi-family properties,~~non-farmnon-residential~~ non-farm non-residential properties (excluding those that are owner-occupied), and loans for construction, land development, and other land represent ~~300%~~300 percent or more of total risk-based ~~capital and the bank’s CRE loan portfolio has increased 50% or more during the prior 36 months.~~capital. If a concentration is present, management must employ heightened risk management practices that address key

elements, including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of CRE lending.

~~Throughout this report and others filed~~On December 13, 2019, the Federal Banking Agencies issued a final rule, which became effective on April 1, 2020, to modify the agencies’ capital rules for high volatility CRE (“HVCRE”) exposures, as required by the ~~Company~~EGRRCPA. The final rule revises the definition of HVCRE exposure to ~~disclose its consolidated financial condition~~make it consistent with the statutory definition of the term included in Section 214 of the EGRRCPA, which excludes any loan made before January 1, 2015. The revised HVCRE exposure definition differs from the previous definition primarily in two ways. First, the previous definition applied to loans that financed ADC activities, whereas the new definition only applies to loans that “primarily” finance ADC activities and ~~results of operations, the Company refers to its loans~~that are secured by~~non-farmnon-residential~~ ~~properties as “commercial~~ land or improved real ~~estate”~~estate. This change excludes multipurpose credit facilities that primarily finance the purchase of equipment or ~~“CRE” loans.~~other non-ADC activities. Second, the new definition permits the full appraised value of borrower-contributed land (less the total amount of any liens on the real property securing the HVCRE exposure) to count toward the 15 percent capital contribution of the real property’s appraised “as completed” value, which is one of the criteria for an exemption from the heightened risk weight. The final rule includes a grandfathering provision, which will provide banking organizations with the option to maintain their current capital treatment for ADC loans originated on or after January 1, 2015, and before April 1, 2020. Banking organizations also will have the option to reevaluate any or all of their ADC loans originated on or after January 1, 2015, using the revised HVCRE exposure definition.

The Parent Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to operating expenses and any share repurchases, the Parent Company is responsible for paying any dividends declared to the Company’s shareholders. As a Delaware corporation, the Parent Company is able to pay dividends either from surplus or, in case there is no surplus, from net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

Various legal restrictions limit the extent to which the Company’s subsidiary bank can supply funds to the Parent Company and its non-bank subsidiaries. The Bank would require the approval of the OCC if the dividends it ~~refers~~declares in any calendar year were to exceed the total of its ~~loans~~respective net profits for ~~construction, land development, and other land~~that year combined with its respective retained net profits for the preceding two calendar years, less any required transfer to paid-in capital. The term “net profits” is defined as ~~“acquisition, development, and construction” or “ADC” loans.~~

~~The FDIC has authority~~net income for a given period less any dividends paid during that period. As a result of our acquisition of Flagstar, we are also required to ~~use its enforcement powers to prohibit a savings bank or commercial bank~~seek regulatory approval from ~~paying dividends if, in its opinion,~~the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024. In 2022, dividends ~~would constitute an unsafe or unsound practice. Federal law prohibits~~of $335 million were paid by the ~~payment~~Bank to the Parent Company. At December 31, 2022, the Bank could have paid additional dividends of ~~dividends~~$615 million to the Parent Company without regulatory approval.

National bank investment activities are governed by the National Bank Act and OCC regulations which, consistent with safe and sound banking practices, prescribe standards under which national banks may purchase, sell, deal in, underwrite, and hold securities. The types of investment activities that ~~will result~~are permissible for national banks, and the calculation of limits for investments in such covered securities, are set forth in regulations promulgated by the OCC (12 CFR Part 1), as further described in the ~~institution failing~~OCC’s Investment Securities Policy Statement (OCC Bulletin 1998-20). A national bank must adhere to ~~meet applicable capital requirements on a pro forma basis. The Community Bank~~safe and sound banking practices and the ~~Commercial Bank are also subject to dividend declaration restrictions imposed by, and as later discussed under, “New York State Law.”~~

~~Since the enactment~~specific requirements of the ~~Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), all state-chartered financial institutions, including savings banks, commercial banks,~~OCC's regulations in conducting such investment activities. A bank must consider, as appropriate, the interest rate, credit, liquidity, price, foreign exchange, transaction, compliance, strategic, and ~~their subsidiaries, have generally been limited~~reputation risks presented by a proposed activity, and the particular activities undertaken by the bank must be appropriate for that bank. If the OCC determines for safety and soundness reasons that a bank should calculate its investment limits more frequently than required by the OCC's Investment Securities regulations, the OCC may provide written notice to ~~such activities as principal~~the bank directing the bank to calculate its investment limitations at a more frequent interval, and ~~equity investments of~~ the ~~type, and in~~bank must thereafter calculate its investment limits at that interval until further notice from the ~~amount, authorized for national banks.~~ OCC.

The ~~Gramm-Leach-Bliley Act of 1999~~GLBA and FDIC regulations also impose certain quantitative and qualitative restrictions on such activities and on a bank’s dealings with a subsidiary that engages in specified activities.

In 1993, the Community Bank received grandfathering authority from the FDIC, which it continues to use, to invest in listed stocks and/or registered shares subject to the maximum permissible investments of 100% of tier 1 capital, as specified by the FDIC’s regulations, or the maximum amount permitted by New York State Banking Law, whichever is less. Such grandfathering authority is subject to termination upon the FDIC’s determination that such investments pose a safety and soundness risk to the Community Bank, or in the event that the Community Bank converts its charter or undergoes a change in control.

The FDIC has extensive enforcement authority over insured banks, including the ~~Community Bank and the Commercial~~ Bank. This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease and desist orders, and to remove directors and officers. In general, these enforcement actions may be initiated in response to violations of laws and regulations and unsafe or unsound practices.

The deposits of the ~~Community Bank and the Commercial~~ Bank are insured up to applicable limits by the DIF. The maximum deposit insurance provided by the FDIC per account owner is $250,000 for all types of accounts.

Under the FDIC’s risk-based assessment system, insured institutions are assigned to one of four risk categories based upon supervisory evaluations, regulatory capital level, and certain other factors, with less risky institutions paying lower assessments based on the assigned risk levels. An institution’s assessment rate depends upon the category to which it is assigned and certain other factors. Assessment rates range from 1.5 to 40 basis points of the institution’s assessment base, which is calculated as average total assets minus average tangible equity.

~~In March 2016,~~ No institution may pay a dividend if in default of the ~~FDIC adopted final rules to impose a surcharge on the quarterly~~federal deposit insurance assessment. Deposit insurance assessments ~~of insured depository institutions with~~are based on total ~~consolidated~~average assets, ~~of $10 billion or more, in order~~excluding PPP loans, less average tangible common equity. The FDIC has authority to ~~fund the Dodd-FrankAct-mandated~~increase insurance assessments. Management cannot predict what insurance assessments rates will be in the DIF’s designated reserve ratio from 1.15% to 1.35%. The final rules became effective on July 1, 2016. The surcharge, which equals 4.5 basis points of the institution’s deposit insurance assessment base, is in effect for assessments billed after the designated reserve ratio reaches 1.15%, and will continue until the reserve ratio reaches or exceeds 1.35%, but no later than December 31, 2018.future.

Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC. Management does not know of any practice, condition, or violation that would lead to termination of the deposit insurance ~~of either of~~for the ~~Banks.~~Bank.

Regulation. The Company is currently subject to examination, regulation, and periodic reporting under the BHCA, as administered by the FRB.

Acquisition, Activities and Change in Control. The Company ismay only conduct, or acquire control of companies engaged in activities permissible for a bank holding company pursuant to the BHCA. Further, we generally are required to obtain ~~the prior~~Federal Reserve approval ~~of the FRB to acquire all, or substantially all, of the assets of any bank or bank holding company. Prior FRB approval would be required for the Company to acquire~~before acquiring direct or indirect ownership or control of any voting ~~securities~~shares of ~~any~~another bank, or bank holding company, savings associations or savings and loan holding company if ~~after giving effect to such acquisition, it~~we would ~~directly or indirectly,~~ own or control more than 5%5 percent of the outstanding shares of any class of voting ~~shares~~securities of ~~such bank~~that entity. Additionally, we are prohibited from acquiring control of a depository institution that is not federally insured or ~~bank holding company.~~retaining control for more than one year after the date that institution becomes uninsured.

We may not be acquired unless the transaction is approved by the Federal Reserve. In addition, ~~before any bank acquisition can be completed, prior approval thereof may also be required to be obtained~~the GLBA generally restricts a company from ~~other agencies having supervisory jurisdiction over the bank to be acquired, including the NYSDFS.~~

~~FRB regulations generally prohibit~~acquiring us if that company is engaged directly or indirectly in activities that are not permissible for a bank holding company ~~from engaging~~or financial holding company.

Capital Requirements. The Company and the Bank are currently subject to the regulatory capital framework and guidelines reached by Basel III as adopted by the OCC and Federal Reserve. The OCC and Federal Reserve have risk-based capital adequacy guidelines intended to measure capital adequacy with regard to a banking organization’s balance sheet, including off-balance sheet exposures such as unused portions of loan commitments, letters of credit and recourse arrangements. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that could have a material effect on the Consolidated Financial Statements. For additional information, see the Capital section of the MD&A and Note 21 -Capital.

Holding Company Limitations on Capital Distributions. Our ability to make any capital distributions to our stockholders, including dividends and share repurchases, is subject to the oversight of the Federal Reserve and contingent upon their non-objection to such planned distributions which typically considers our capital adequacy, comprehensiveness and effectiveness of capital planning and the prudence of the proposed capital action.

Under the Federal Change in Bank Control Act (“CIBCA”), a notice must be submitted to the FRB if any person (including a company), or ~~acquiring, direct~~group acting in concert, seeks to acquire 10 percent or ~~indirect~~more of the Company’s shares of outstanding common stock, unless the FRB has found that the acquisition will not result in a change in control of ~~more than 5%~~the Company. Under the CIBCA, the FRB generally has 60 days within which to act on such notices, taking into consideration certain factors, including the financial and managerial resources of the acquirer; the convenience and needs of the communities served by the Company, the Bank; and the anti-trust effects of the acquisition. Under the BHCA, any company would be required to obtain approval from the FRB before it may obtain “control” of the Company within the meaning of the BHCA. Control generally is defined to mean the ownership or power to vote 25 percent or more of any class of voting securities of the Company, the ability to control in any ~~company engaged innon-banking~~ ~~activities. One~~manner the election of a majority of the ~~principal exceptions~~Company’s directors, or the power to ~~this prohibition is for activities found by~~exercise a controlling influence over the ~~FRB to be so closely related to banking~~management or ~~managing or controlling banks as to be a proper incident thereto. Some~~policies of the ~~principal activities that~~Company. Under the FRB has determined by regulation to be so closely related to banking are: (i) making or servicing loans; (ii) performing certain data processing services; (iii) providing discount brokerage services; (iv) acting as fiduciary, investment, or financial advisor; (v) leasing personal or real property; (vi) making investments in corporations or projects designed primarily to promote community welfare; and (vii) acquiring a savings and loan association.

The FRB has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the FRB’s policies provide that dividends should be paid only out of current earnings, and only if the prospective rate of earnings retention by theBHCA, an existing bank holding company ~~appears consistent with~~would be required to obtain the ~~organization’s~~FRB’s approval before acquiring more than 5 percent of the Company’s voting stock. See “Holding Company Regulation” earlier in this report.

Limitation on Capital Distributions. The OCC and FRB regulate all capital ~~needs, asset quality, and overall financial condition. The FRB’s policies also require that a bank~~distributions made by the Bank, directly or indirectly, to the holding company, ~~serve as a source of financial strength~~including dividend payments. An application to ~~its subsidiary banks~~the OCC by ~~standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity, and by maintaining~~ the ~~financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary.~~

The Dodd-Frank Act codified the source of financial strength policy and required regulations to facilitate its application. Under the prompt corrective action laws, the ability of a bank holding company to pay dividendsBank may be ~~restricted if~~required based on a ~~subsidiary bank becomes undercapitalized. These regulatory policies could affect~~number of factors including whether the ~~ability of the Company to pay dividends or otherwise engage in capital distributions.~~

~~The status of the Company as a registered bank holding company under the BHCA does~~Bank would not ~~exempt it from certain federal and state laws and regulations applicable to corporations generally, including, without limitation, certain provisions of the federal securities laws.~~

On January 30, 2017, the FRB issued a final rule that modified the CCAR capital plan and stress testing rules applicable to bank holding companies with $50 billion or more in total consolidated assets. The new rule excludes the capital plans of large and noncomplex CCAR firms from CCAR’s qualitative review and provides that the capital plans of large and noncomplex CCAR firms will no longer be ~~subject to potential objection on qualitative grounds.~~

The new rule also expands the transition period for new CCAR bank holding companies by (i) moving from December 31 to September 30 the cutoff date after which a new CCAR bank holding company must submit a capital plan by April 5 of the second year after it crosses the asset threshold (i.e., April 5, 2020 if it crosses the asset threshold after September 30, 2018) and (ii) providing that a new CCAR bank holding company will become subject to the CCAR stress testing rules in the yearat least adequately capitalized following the ~~first~~distribution or if the total amount of all capital distributions (including each proposed capital distribution) for the applicable calendar year ~~in which it submits a capital plan (i.e., 2021 if it crosses~~exceeds net income for that year to date plus the ~~asset threshold after September 30, 2018).~~retained net income for the preceding two years. As a result of ~~the new rule, the Company may be~~our acquisition of Flagstar, we are required to ~~expand its current capital planning beginning in 2020 and will be required to expand its current stress testing in 2021.~~

~~The Company is subject to regulation as a “multi-bank holding company” under New York State law since it controls two banking institutions. Among other requirements, this means that~~seek regulatory approval from the ~~Company must receive~~OCC for the ~~approval~~payment of ~~the Superintendent prior~~any dividend to the ~~acquisition of 10% or more of~~Parent Company through at least the ~~voting~~period ending November 1, 2024, which could restrict our ability to pay the common stock ~~of another banking institution, or to otherwise acquire a banking institution by merger or purchase.~~dividend.

Under current federal law, transactions between depository institutions and their affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W promulgated thereunder. Generally, Section 23A limits the extent to which the institution or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to ~~10%~~10 percent of the institution’s capital stock and surplus, and contains an aggregate limit on all such transactions with all affiliates to an amount equal to ~~20%~~20 percent of such capital stock and surplus. Section 23A also establishes specific collateral requirements for loans or extensions of credit to, or guarantees or acceptances on letters of credit issued on behalf of, an affiliate. Section 23B requires that covered transactions and a broad list of other specified transactions be on terms substantially the same as, or at least as favorable to, the institution or its subsidiaries as similar transactions withnon-affiliates.

The Sarbanes-Oxley Act of 2002 generally prohibits loans by the Company to its executive officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption for loans made by an institution to its executive officers and directors in compliance with other federal banking laws. Section 22(h) of the Federal Reserve Act, and FRB Regulation O adopted thereunder, govern loans by a ~~savings bank or commercial~~ bank to directors, executive officers, and principal ~~shareholders.~~

Under the ~~Community Reinvestment Act (“CRA”),~~CRA, as implemented by ~~FDIC~~OCC regulations, an institution has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA generally does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. InHowever, institutions are rated on their performance in meeting the needs of their communities. Performance is tested in three areas: (1) lending, to

evaluate the institution’s record of making loans in its ~~most recent FDIC~~assessment areas; (2) investment, to evaluate the institution’s record of investing in community development projects, affordable housing, and programs benefiting low- or moderate-income individuals and businesses; and (3) service, to evaluate the institution’s delivery of services through its branches, ATMs and other offices. The CRA ~~performance evaluation,~~requires each federal banking agency, in connection with its examination of a financial institution, to assess and assign one of four ratings to the ~~Community Bank received overall state ratings~~institution’s record of “Satisfactory” for Ohio, Florida, Arizona, and New Jersey, as well as for the New York/New Jersey multi-state region. Furthermore, the most recent overall FDIC CRA ratings for the Community Bank and the Commercial Bank were “Satisfactory.”

The Community Bank and the Commercial Bank also are subject to provisions of the New York State Banking Law that impose continuing and affirmative obligations upon a banking institution organized in New York State to servemeeting the credit needs of the community and to take such record into account in its ~~local community. Such obligations are substantially similar to those imposed~~evaluation of certain applications by the ~~CRA.~~institution, including applications for charters, branches and other deposit facilities, relocations, mergers, consolidations, acquisitions of assets or assumptions of liabilities, and bank holding company and savings and loan holding company acquisitions. The ~~latest New York State~~ CRA ~~ratings received by~~also requires that all institutions make public disclosure of their CRA ratings.

Community Pledge Agreement with the National Community ~~Bank~~Reinvestment Coalition

On January 24, 2022, the Company and the ~~Commercial Bank were “Outstanding”~~National Community Reinvestment Coalition ("NCRC") announced the Company's commitment to provide $28 billion in loans, investments, and ~~“Satisfactory,” respectively.~~other financial support to communities and people of color, low- and moderate-income ("LMI") families and communities, and small businesses. The Company's Community Pledge Agreement was developed with NCRC and its members in conjunction with the Company's merger with Flagstar Bancorp, Inc. The agreement includes $22 billion in community lending and affordable housing commitments and $6 billion of residential mortgage originations to underserved and LMI borrowers, and in LMI and majority-minority neighborhoods over a five-year period. NYCB will also provide $542 million in loans to small businesses with less than $1 million in revenues and in LMI and majority-minority communities; $16.5 million in philanthropic support to nonprofit organizations that meet the needs of LMI and majority-minority communities and individuals; greater access to banking products and services; and the continuation of NYCB's responsible multi-family lending practices.

~~Federal~~The Bank is subject to the Bank Secrecy Act (“BSA”) and other anti-money laundering laws and regulations, ~~impose obligations on U.S.~~including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, commonly referred to as the “USA PATRIOT Act” or the “Patriot Act”. The BSA requires all financial institutions ~~including banks and broker/dealer subsidiaries,~~ to, ~~implement and maintain appropriate policies, procedures, and~~among other things, establish a risk-based system of internal controls ~~that are~~ reasonably designed to prevent ~~detect, and report instances of~~ money laundering and the financing of ~~terrorism,~~terrorism. The BSA includes various record keeping and reporting requirements such as cash transaction and suspicious activity reporting as well as due diligence requirements. The Bank is also required to ~~verify~~comply with the ~~identity~~U.S. Treasury’s Office of ~~their customers. In addition, these provisions require~~Foreign Assets Control imposed economic sanctions that affect transactions with designated foreign countries, nationals, individuals, entities and others. The USA PATRIOT Act contains prohibitions against specified financial transactions and account relationships, as well as enhanced due diligence standards intended to prevent the ~~federal~~use of the United States financial institution regulatory agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing bank mergers and bank holding company acquisitions. Failure of a financial institution to maintain and implement adequate programs to combatsystem for money laundering and terrorist financing ~~could~~activities. The Patriot Act requires banks and other depository institutions, brokers, dealers and certain other businesses involved in the transfer of money to establish anti-money laundering programs, including employee training and independent audit requirements meeting minimum standards specified by the Patriot Act, to follow standards for customer identification and maintenance of customer identification records, and to compare customer lists against lists of suspected terrorists, terrorist organizations and money launderers. The Patriot Act also requires federal bank regulators to evaluate the effectiveness of an applicant in combating money laundering in determining whether to approve a proposed bank acquisition.

We have ~~serious~~developed and operate an enterprise-wide anti-money laundering program designed to enable us to comply with all applicable anti-money laundering and anti-terrorism financing laws and regulations. Our anti-money laundering program is also designed to prevent our products from being used to facilitate business in certain countries or territories, or with certain individuals or entities, including those on designated lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Controls and other U.S. and non-U.S. sanctions authorities. Our anti-money laundering and sanctions compliance programs include policies, procedures, reporting protocols, and internal controls designed to identify, monitor, manage, and mitigate the risk of money laundering and terrorist financing. These controls include procedures and processes to detect and report potentially suspicious transactions, perform consumer due diligence, respond to requests from law enforcement, and meet all recordkeeping and reporting requirements related to particular transactions involving currency or monetary instruments. Our programs are designed to address these legal and ~~reputational consequences for the institution.~~regulatory requirements and to assist in managing risk associated with money laundering and terrorist financing.

The United States has imposed economic sanctions that affect transactions with designated foreign countries, foreign nationals, and others. These are typically known as the “OFAC” rules, based on their administration by the U.S. Treasury Department Office of Foreign Assets ~~Control (“OFAC”).~~Control. The OFAC-administered sanctions targeting countries take many different forms. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with, or investment in, a sanctioned country, including prohibitions against direct or indirect imports from, and exports to, a sanctioned country and prohibitions on “U.S. persons” engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons). Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off, or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences.

~~Under FRB regulations,~~and state law contains extensive consumer privacy protection provisions. The GLBA requires financial institutions to periodically disclose their privacy practices and policies relating to sharing such information and enable retail customers to opt out of the ~~Community Bank~~Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers. The GLBA also requires financial institutions to implement a comprehensive information security program that includes administrative, technical, and physical safeguards to ensure the security and confidentiality of customer records and information, and imposes certain limitations on the ability to share consumers’ nonpublic personal information with non-affiliated third-parties. Privacy requirements, including notice and opt out requirements, under the GLBA and the ~~Commercial Bank~~FCRA are enforced by the FTC and by the CFPB through UDAAP laws and regulations, and are a standard component of CFPB examinations. State entities also may initiate actions for alleged violations of privacy or security requirements under state law.

Furthermore, an increasing number of state, federal, and international jurisdictions have enacted, or are considering enacting, privacy laws, such as the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020, and the EU General Data Protection Regulation (“GDPR”), which regulates the collection, control, sharing, disclosure and use and other processing of personal information of data subjects in the EU and the European Economic Area. The CCPA gives residents of California expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used, and also provides for civil penalties for violations and private rights of action for data breaches. Meanwhile, the GDPR provides data subjects with greater control over the collection and use of their personal information (such as the “right to be forgotten”) and has specific requirements relating to cross-border transfers of personal information to certain jurisdictions, including to the United States, with fines for noncompliance of up to the greater of 20 million euros or up to 4 percent of the annual global revenue of the noncompliant company. In addition, California approved a new privacy law in 2020, the California Privacy Rights Act (“CPRA”), which significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain personal information and creating a new state agency to oversee implementation and enforcement efforts.

The Cybersecurity Information Sharing Act (the “CISA”) is intended to improve cybersecurity in the U.S. through sharing of information about security threats between the U.S. government and private sector organizations, including financial institutions such as the Company. The CISA also authorizes companies to monitor their own systems, notwithstanding any other provision of law, and allows companies to carry out defensive measures on their own systems from potential cyber-attacks.

The Sarbanes-Oxley Act of 2002 was enacted to address, among other things, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. As directed by the Sarbanes-Oxley Act, our Chief Executive Officer and Chief Financial Officer are required to ~~maintain reserves against their transaction accounts (primarily NOW~~certify that our quarterly and ~~regular checking accounts). Beginning January 2018,~~annual reports do not contain any untrue statement of a material fact. The rules adopted by the ~~Banks~~SEC

under the Sarbanes-Oxley Act have several requirements, including having those Officers certify that they are ~~required~~responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal controls over financial reporting; that they have made certain disclosures to ~~maintain average daily reserves equal to 3% on aggregate transaction accounts of up to $122.3 million, plus 10% on the remainder,~~our auditors and the ~~first $16.0 million~~Audit Committee of ~~otherwise reservable balances, will both be exempt. These reserve requirements are subject to adjustment by~~ the ~~FRB. The Community Bank~~Board of Directors about our internal control over financial reporting; and ~~the Commercial Bank currently are~~they have included information in ~~compliance with the foregoing requirements.~~our quarterly and annual reports about their evaluation and whether there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over financial reporting.

The ~~Community~~ Bank ~~and the Commercial Bank are members~~is a member of the ~~Federal Home Loan~~FHLB-NY. As a member of the FHLB-NY, the Bank ~~of New York (the“FHLB-NY”).~~ ~~As members of theFHLB-NY,~~ ~~the Community Bank and the Commercial Bank are~~is required to acquire and hold shares ofFHLB-NY capital stock. At December 31, ~~2017,~~2022 the ~~Community~~ Bank held ~~$588.7~~$762 million ofFHLB-NY stock and, as a result of the ~~Commercial Bank held $15.1~~Flagstar acquisition, $329 million of~~FHLB-NY~~ ~~stock.~~

The Community Bank and the Commercial Bank derive their lending, investment, and other authority primarily from the applicable provisions of New York State Banking Law and the regulations of the NYSDFS, as limited by FDIC regulations. Under these laws and regulations, banks, including the Community Bank and the Commercial Bank, may invest in real estate mortgages, consumer and commercial loans, certain types of debt securities (including certain corporate debt securities, and obligations of federal, state, and local governments and agencies), certain types of corporate equity securities, and certain other assets.

Under New York State Banking Law, New York State-chartered stock-form savings banks and commercial banks may declare and pay dividends out of their net profits, unless there is an impairment of capital. Approval of the Superintendent is required if the total of all dividends declared by the bank in a calendar year would exceed the total of its net profits for that year combined with its retained net profits for the preceding two years, less prior dividends paid.

New York State Banking Law gives the Superintendent authority to issue an order to a New York State-chartered banking institution to appear and explain an apparent violation of law, to discontinue unauthorized or unsafe practices, and to keep prescribed books and accounts. Upon a finding by the NYSDFS that any director, trustee, or officer of any banking organization has violated any law, or has continued unauthorized or unsafe practices in conducting the business of the banking organization after having been notified by the Superintendent to discontinue such practices, such director, trustee, or officer may be removed from office after notice and an opportunity to be heard. The Superintendent also has authority to appoint a conservator or a receiver for a savings or commercial bank under certain circumstances.

Federal law allows the FDIC, and New York State Banking Law allows the Superintendent, to approve an application by a state banking institution to acquire interstate branches by merger, unless, in the case of the FDIC, the state of the target institution has opted out of interstate branching. New York State Banking Law authorizes savings banks and commercial banks to open and occupy de novo branches outside the state of New York. Pursuant to the Dodd-Frank Act, the FDIC is authorized to approve a state bank’s establishment of a de novo interstate branch if the intended host state allows de novo branching by banks chartered by that state. The Community Bank currently maintains 45 branches in New Jersey, 27 branches in Florida, 28 branches in Ohio, and 14 branches in Arizona, in addition to its 111 branches in New York State.

Under the Federal Change in Bank Control Act (“CIBCA”), a notice must be submitted to the FRB if any person (including a company), or group acting in concert, seeks to acquire 10% or more of the Company’s shares of outstanding common stock, unless the FRB has found that the acquisition will not result in a change in control of the Company. Under the CIBCA, the FRB generally has 60 days within which to act on such notices, taking into consideration certain factors, including the financial and managerial resources of the acquirer; the convenience and needs of the communities served by the Company, the Community Bank, and the Commercial Bank; and the anti-trust effects of the acquisition. Under the BHCA, any company would be required to obtain approval from the FRB before it may obtain “control” of the Company within the meaning of the BHCA. Control generally is defined to mean the ownership or power to vote 25% or more of any class of voting securities of the Company, the ability to control in any manner the election of a majority of the Company’s directors, or the power to exercise a controlling influence over the management or policies of the Company. Under the BHCA, an existing bank holding company would be required to obtain the FRB’s approval before acquiring more than 5% of the Company’s voting stock. See “Holding Company Regulation” earlier in this report.

New York State Banking Law generally requires prior approval of the New York State Banking Board before any action is taken that causes any company to acquire direct or indirect control of a banking institution which is organized in New York.

The Company’s common stock and certain other securities listed on the cover page of this report are registered with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is subject to the information and proxy solicitation requirements, insider trading restrictions, and other requirements under the Exchange Act.

The activities of the Company’s banking ~~subsidiaries,~~subsidiary, including ~~their~~its lending and deposit gathering activities, ~~are~~is subject to a variety of consumer laws and regulations designed to protect consumers. These laws and regulations mandate certain disclosure requirements, and regulate the manner in which financial institutions must deal with clients and monitor account activity when taking deposits from, making loans to, or engaging in other types of transactions with, such clients. Failure to comply with these laws and regulations could lead to substantial penalties, operating restrictions, and reputational damage to the financial institution.

Applicable consumer protection laws, and their implementing regulations, include, but may not be limited to, the ~~Dodd-Frank Act,~~DFA, Truth in Lending Act (Regulation Z), Truth in Savings Act (Regulation DD), Equal Credit Opportunity Act (Regulation B), Electronic Funds Transfer Act (Regulation E), Fair Housing Act, Home Mortgage Disclosure Act (Regulation C), Fair Debt Collection Practices Act (Regulation F), Fair Credit Reporting Act (Regulation V), as amended by the Fair and Accurate Credit Transactions Act, Expedited Funds Availability (Regulation CC), Reserve Requirements (Regulation D), Insider Transactions (Regulation O), Privacy of Consumer Information (Regulation P), Margin Stock Loans (Regulation U), Right To Financial Privacy Act, Flood Disaster Protection Act, Homeowners Protection Act, Servicemembers Civil Relief Act, Real Estate Settlement Procedures Act (Regulation X), Telephone Consumer Protection Act,CAN-SPAM Act, Children’s Online Privacy Protection Act, the Military Lending Act, and the ~~John Warner National Defense Authorization~~Homeownership Counseling Act. Additionally, we are subject to Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, and Section 1031 of the Dodd-Frank Act, which prohibits unfair, deceptive, or abusive acts or practices (“UDAAP”) in connection with any consumer financial product or service

In addition, the ~~Banks~~Bank and ~~their~~its subsidiaries are subject to certain state laws and regulations designed to protect consumers. Many states have consumer protection laws analogous to, or in addition to, the federal laws listed above, such as usury laws, state debt collection practices laws, and requirements regarding loan disclosures and terms, credit discrimination, credit reporting, money transmission, recordkeeping, and unfair or deceptive business practices.

Certain states have adopted laws regulating and requiring licensing, registration, notice filing, or other approval for parties that engage in certain activity regarding consumer finance transactions. Furthermore, certain states and localities have adopted laws requiring licensing, registration, notice filing, or other approval for consumer debt collection or servicing, and/or purchasing or selling consumer loans. The licensing statutes vary from state to state and prescribe different requirements, including but not limited to: restrictions on loan origination and servicing practices (including limits on the type, amount, and manner of our fees), interest rate limits, disclosure requirements, periodic examination requirements, surety bond and minimum specified net worth requirements, periodic financial reporting requirements, notification requirements for changes in principal officers, stock ownership or corporate control, restrictions on advertising, and requirements that loan forms be submitted for review. We may also be subject

The ~~Banks are~~Bank is subject to oversight by the CFPB within the Federal Reserve System. The CFPB was established under the ~~Dodd-Frank Act~~DFA to implement and enforce rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The CFPB has broad rulemaking authority for a wide range of consumer financial laws that apply to all banks, including, among other things, the authority to prohibit acts and practices that are deemed to be unfair, deceptive, or abusive. Abusive acts or practices are defined as those that (1) materially interfere with a consumer’s ability to understand a term or condition of a consumer financial product or service, or (2) take unreasonable advantage of a consumer’s (a) lack of ~~financial savvy,~~understanding on the part of the consumer of the material risks, costs, or conditions of the product or service; (b) the inability of the consumer to protect ~~himself~~his/her own interest in ~~the selection~~selecting or ~~use of consumer~~using a financial ~~products~~product or ~~services,~~service; or (c) the reasonable reliance by the consumer on a ~~covered entity~~financial institution to act in the ~~consumer’s interests.~~interests of the consumer.

The CFPB has exclusive examination and primary enforcement authority with respect to compliance with federal consumer financial protection laws and regulations by institutions under its supervision and is authorized, individually or jointly with the federal banking agencies, to conduct investigations to determine whether any person is, or has, engaged in conduct that violates such laws or regulations. The CFPB has the authority to investigate possible violations of federal consumer financial law, hold hearings, and commence civil litigation. The CFPB can issuecease-and-desist orders against banks and other entities that violate consumer financial laws. The CFPB also may institute a civil action against an entity in violation of federal consumer financial law in order to impose a civil penalty or an injunction. The CFPB has examination and enforcement authority over all banks with more than $10 billion in assets, as well as certain of their affiliates.

The CFPB is also authorized to collect fines and provide consumer restitution in the event of violations, engage in consumer financial education, track consumer complaints, request data and promote the availability of financial services to underserved consumers and communities. The CFPB is authorized to pursue administrative proceedings or litigation for violations of federal consumer financial laws. In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties which, for 2022, range from $6,323 per day for minor violations of federal consumer financial laws (including the CFPB’s own rules) to $31,616 per day for reckless violations and $1,264,622 per day for knowing violations. The CFPB monetary penalty amounts are adjusted annually for inflation. Also, where a company has violated Title X of the Dodd-Frank Act or CFPB regulations under Title X, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions for the kind of cease and desist orders available to the CFPB (but not for civil penalties).

In May 2022, the CFPB issued an Interpretive Rule to clarify the authority of states to enforce federal consumer financial protections laws under the Consumer Financial Protection Act of 2010 (“CFPA”). Specifically, the CFPB confirmed that (1) states can enforce the CFPA, including the provision making it unlawful for covered persons or service providers to violate any provision of federal consumer financial protection law; (2) the enforcement authority of states under section 1042 of the CFPA is generally not subject to certain limits applicable to the CFPB’s enforcement authority, such that States may be able to bring actions against a broader cross-section of companies than the CFPB; and (3) state attorneys general and regulators may bring (or continue to pursue) actions under their CFPA authority even if the CFPB is pursuing a concurrent action against the same entity. See CFPB Interpretive Rule regarding Section 1042 of the Consumer Financial Protection Act of 2010 (87 FR 31940, May 26, 2022).

Our mortgage banking business is subject to the rules and regulations of the U.S. Department of Housing and Urban Development (“HUD”), the Federal Housing Administration, the Veterans’ Administration (“VA”) and Fannie Mae with respect to originating, processing, selling and servicing mortgage loans. Those rules and regulations, among other things, prohibit discrimination and establish underwriting guidelines, which include provisions for inspections and appraisals, require credit reports on prospective borrowers, and fix maximum loan amounts. Lenders are required annually to submit audited financial statements to Fannie Mae, FHA and VA. Each of these regulatory entities has its

The Company’s and the ~~Banks’~~Bank’s Boards of Directors are actively engaged in the process of overseeing the efforts made by the Enterprise Risk Management ~~(“ERM”)~~ department to identify, measure, monitor, mitigate, and report risk. The Company has established an ERM program that reinforces a strong risk culture to support sound risk management practices. The Board is responsible for the approval and oversight of the ERM program and framework. Our risk management framework is designed to conform with the principles set forth in the Internal Control-Integrated Framework (2013) established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

ERM is responsible for setting and aligning the Company’s Risk Appetite ~~Statement~~Policy with the goals and objectives set forth in the ~~Strategic~~budget, and ~~Capital Plans.~~the strategic and capital plans. Internal controls and ongoing monitoring processes capture and address heightened risks that threaten the Company’s ability to achieve our goals and objectives, including the recognition of safety and soundness concerns and consumer protection. Additionally, ERM monitors ~~and reports on~~ key risk indicators against the established risk warning levels and limits, as well as elevated risks identified by the Chief Risk Officer.

On January 24, 2023, our Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.17 per share. The dividend was payable on February 16, 2023 to common stockholders of record as of February 6, 2023.

Legacy Flagstar proactively rightsized its mortgage operation throughout 2022 to adjust for market conditions. The mortgage business is cyclical by nature and challenging conditions are expected to continue throughout 2023. To better reflect demand and align to where our brand strength and familiarity lies, the distributed retail channel will reduce coverage by 69% and shift to a branch footprint only-model.

We expect that these actions will optimize our mortgage business and improve profitability during the current mortgage down cycle, while still allowing us to participate in the upside once the interest rate cycle becomes favorable. This allows us to maintain a retail presence within our nine-state footprint, leverages our marketing and branding spend, and reduces risk. More importantly, it leaves our position within the mortgage industry intact. We remain one of the largest bank originators, the 6th largest sub-servicer in the country, and the 2nd largest warehouse lender. Moreover, it allows us to continue to lend in all six channels and maintain our commitment to the correspondent and broker business.

There are various risks and uncertainties that are inherent to our business. Primary among these are (1) interest rate risk, which arises from movements in interest rates; (2) credit risk, which arises from an obligor’s failure to

meet the terms of any contract with a bank or to otherwise perform as agreed; (3) risks related to our financial statements; (4) liquidity risk, which arises from a bank’s inability to meet its obligations when they come due without incurring unacceptable losses; ~~(4)~~(5) legal/compliance risk, which arises from violations of, ornon-conformance with, laws, rules, regulations, prescribed practices, or ethical standards; ~~(5)~~(6) market risk, which arises from changes in the value of portfolios of financial instruments; ~~(6)~~(7) strategic risk, which ~~arises~~is the risk of loss arising from ~~adverse~~the execution of our strategic initiatives and business ~~decisions~~strategies, including our acquisition and integration of other companies we acquire, as well as inadequate or ~~improper implementation of those business decisions; (7)~~failed internal processes, people, and systems; (8) operational risk, which arises from problems with service or product delivery; and ~~(8)~~(9) reputational risk, which arises from negative public ~~opinion.~~opinion resulting in a significant decline in stockholder value.

Following is a discussion of the material risks and uncertainties that could have a material adverse impact on our financial condition, results of operations, and the value of our shares. The failure to properly identify, monitor, and mitigate any of the below referenced risks, could result in increased regulatory risk and could potentially have an adverse impact on the Company. Additional risks that are not currently known to us, or that we currently believe to be immaterial, also may have a material effect on our financial condition and results of operations. This report is qualified in its entirety by those risk factors.

Changes in interest rates could reduce our net interest income and negatively impact the value of our loans, securities, and other assets. This could have a material adverse effect on our cash flows, financial condition, results of operations, and capital.

~~Our primary source of income is net interest income, which is the difference between the interest income generated byour interest-earning~~ assets (consisting primarily of loans and, to a lesser extent, securities) and the interest expense produced by our interest-bearing liabilities (consisting primarily of deposits and wholesale borrowings).

The cost of our deposits and short-term wholesale borrowings is largely based on short-term interest rates, the level of which is driven by the ~~Federal Open Market Committee~~FOMC of the FRB. However, the yields generated by our loans and securities are typically driven by intermediate-term ~~(e.g., five-year)~~ interest rates, which are set by the bond market and generally vary from day to day. The level of our net interest income is therefore influenced by movements in such interest rates, and the pace at which such movements occur. If the interest rates on our interest-bearing liabilities increase at a faster pace than the interest rates on our interest-earning assets, the result could be a reduction in net interest income and, with it, a reduction in our earnings. Our net interest income and earnings would be similarly impacted were the interest rates on our interest-earning assets to decline more quickly than the interest rates on ourinterest-bearing liabilities.

In addition, such changes in interest rates could affect our ability to originate loans and attract and retain deposits; the fair values of our securities and other financial assets; the fair values of our liabilities; and the average lives of our loan and securities portfolios.

Changes in interest rates also could have an effect on loan refinancing activity, which, in turn, would impact the amount of prepayment income we receive on our multi-family and CRE loans. Because prepayment income is recorded as interest income, the extent to which it increases or decreases during any given period could have a significant impact on the level of net interest income and net income we generate during that time.

Also, changes in interest rates could have an effect on the slope of the yield curve. If the yield curve were to invert or become flat, our net interest income and net interest margin could contract, adversely affecting our net income and cash flows, and the value of our assets.

~~A decline~~ Moreover, higher inflation could lead to fluctuations in the ~~quality~~value of our assets and liabilities and off-balance sheet exposures, and could result in ~~higher losses~~lower equity market valuations of financial services companies.

The Company has certain loans, interest rate swap agreements, investment securities, and debt obligations whose interest rate is indexed to ~~set aside higher~~LIBOR. In 2017, the FCA, which is responsible for regulating LIBOR, announced that the publication of LIBOR is not guaranteed beyond 2021. In December 2020, the administrator of LIBOR announced its intention to (i) cease the publication of the one-week and two-month U.S. dollar LIBOR after December 31, 2021, and (ii) cease the publication of all other tenors of U.S. dollar LIBOR (one, three, six, and 12-month LIBOR) after June 30, 2023, and on March 15, 2021, announced that it will permanently cease to publish most LIBOR settings beginning on January 1, 2022 and cease to publish the overnight, one-month, three-month, six-month, and 12-month U.S. dollar LIBOR settings on July 1, 2023. Accordingly, the FCA has stated that it does not intend to persuade or compel banks to submit to LIBOR after such respective dates. Until such time, however, FCA panel banks have agreed to continue to support LIBOR. In October 2021, the Federal bank regulatory agencies issued a Joint Statement on Managing the LIBOR Transition that offered their regulatory expectations and outlined potential supervisory and enforcement consequences for banks that fail to adequately plan for and implement the transition away from LIBOR. The failure to properly transition away from LIBOR may result in increased supervisory scrutiny. The implementation of a substitute index for the calculation of interest rates under the Company's loan ~~loss provisions, thus reducing our earnings and our stockholders’ equity.~~

~~The inability~~agreements may result in disputes or litigation with counterparties over the appropriateness or comparability to LIBOR of ~~our borrowers to repay their loans in accordance with their terms~~the substitute index, which would ~~likely necessitate~~have an ~~increase in our provision for loan losses, and therefore reduce our earnings.~~

The loans we originate for investment are primarily multi-family loans and, to a lesser extent, CRE loans. Such loans are generally larger, and have higher risk-adjusted returns and shorter maturities, than the other loans we produce for investment. Our credit risk would ordinarily be expected to increase with the growth of our multi-family and CRE loan portfolios.

~~Payments on multi-family and CRE loans generally depend~~adverse effect on the ~~income generated by the underlying properties which, in turn, depends on their successful operation and management. The ability~~Company's results of our borrowers to repay these loans may be impacted by adverse conditions in the local real estate market and the local economy. While we seek to minimize these risks through our underwriting policies, which generally require that such loans be qualified on the basis of the collateral property’s cash flows, appraised value, and debt service coverage ratio, among other factors,operations. Even when robust fallback language is included, there can be no ~~assurance~~assurances that the replacement rate plus any spread adjustment will be economically equivalent to LIBOR, which could result in a lower interest rate being paid to the Company on such assets.

The Alternative Reference Rates Committee (a group of private-market participants convened by the FRB and the FRB-NY) has identified SOFR as the recommended alternative to LIBOR. The use of SOFR as a substitute for LIBOR is voluntary and may not be suitable for all market participants. SOFR is calculated and observed differently than LIBOR. Given the manner in which SOFR is calculated, it is likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. Market practices related to SOFR calculation conventions continue to develop and may vary. Inconsistent calculation conventions among financial products may expose is to increased basic rate and resultant costs. Other alternatives to LIBOR also exist, but, because of the difference in how those alternatives are constructed, they may diverge significantly from LIBOR in a range of situations and market conditions.

Our allowance for credit losses might not be sufficient to cover our actual losses, which would adversely impact our financial condition and results of operations.

In addition to mitigating credit risk through our underwriting ~~policies will protect~~processes, we attempt to mitigate such risk through the establishment of an allowance for credit losses. The process of determining whether or not the allowance is sufficient to cover potential credit losses is based on the current expected credit loss model or CECL. This methodology is described in detail under “Critical Accounting Estimates” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. CECL may result in greater volatility in the level of the ACL, depending on various assumptions and factors used in this model. If the judgments and assumptions we make with regard to the allowance are incorrect, our allowance for losses on such loans might not be sufficient, and an additional provision for credit losses might need to be made. Depending on the amount of such loan loss provisions, the adverse impact on our earnings could be material. In addition, growth in our loan portfolio may require us ~~from credit-related~~to increase the allowance for credit losses on such loans by making additional provisions, which would reduce our net income. Furthermore, bank regulators have the authority to require us to make provisions for credit losses or ~~delinquencies.~~

~~We also originate ADC~~otherwise recognize loan charge-offs following their periodic review of our loan portfolio, our underwriting procedures, and ~~C&I loans~~our allowance for ~~investment, although to a far lesser degree than we originate multi-family and CRE~~losses on such loans. ADC financing typically involves a greater degree of credit risk than longer-term financing on multi-family and CRE properties. Risk of loss on an ADC loan largely depends upon the accuracy of the initial estimate of the property’s value at completion of construction or development, compared to the estimated costs (including interest) of construction. If the estimate of value proves to be inaccurate,Any increase in the loan ~~may be under-secured. While we seek to minimize these risks~~loss allowance or in loan charge-offs as required by ~~maintaining consistent lending policies and procedures, and rigorous underwriting standards, an error in~~ such ~~estimates, among other factors,~~regulatory authorities could have a material adverse effect on ~~the quality~~our financial condition and results of operations.

Our concentration in multi-family loans and CRE loans could expose us to increased lending risks and related loan losses.

At December 31, 2022, $38.1 billion or 55 percent of our ~~ADC~~total loans and leases, held for investment portfolio consisted of multi-family loans and $8.5 billion or 12 percent consisted of CRE loans. These types of loans generally expose a lender to greater risk of non-payment and loss than one-to-four family residential mortgage loans because

repayment of the loans often depends on the successful operation of the properties and the sale of such properties securing the loans. Such loans typically involve larger loan ~~portfolio, thereby resulting in losses~~balances to single borrowers or ~~delinquencies.~~

~~To minimize the risks involved in~~groups of related borrowers compared to one-to-four family residential loans. Also, many of our ~~specialty finance lending and leasing, we participate in syndicated~~borrowers have more than one of these types of loans outstanding. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to-four family residential real estate loan. In addition, if loans that are ~~brought to us,~~collateralized by real estate become troubled and equipment loans and leases that are assigned to us, by a select group of nationally recognized sources, and generally are made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide. Each of our credits is secured with a perfected first security interest in the ~~underlying collateral and structured as senior debt or as anon-cancelable~~ ~~lease.~~

~~We seek to minimize the risks involved in our other C&I lending by underwriting such loans on the basis~~value of the cash flows produced by the business; by requiring that such loans be collateralized by various business assets, including inventory, equipment, and accounts receivable, among others; and by requiring personal guarantees. However, the capacity of a borrower to repay such a C&I loan is substantially dependent on the degree to which his or her business is successful. In addition, the collateral underlying other C&I loans may depreciate over time,real estate has been significantly impaired, then we may not be ~~conducive~~able to ~~appraisal, or may fluctuate in value, based upon~~recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could cause us to increase our provision for loan losses and adversely affect our operating results ~~of operations of the business.~~and financial condition.

~~Although losses on theheld-for-investment~~ loans we produce have been comparatively limited, even during periods of economic weakness in our markets, we cannot guarantee that this will be our experience in future periods. The ability of our borrowers to repay their loansOur New York State multi-family loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a decline in real estate values and/or an increase in unemployment, which not only could result in our experiencing losses, but also could necessitate our recording a provision for losses on loans. Either of these events would have anmaterial adverse ~~impact~~effect on our financial condition and results of operations.

On June 14, 2019, the New York State legislature passed the New York Housing Stability and Tenant Protection Act of 2019. This legislation represents the most extensive reform of New York State’s rent laws in several decades and generally limits a landlord’s ability to increase rents on rent regulated apartments and makes it more difficult to convert rent regulated apartments to market rate apartments. As a result, the value of the collateral located in New York State securing the Company’s multi-family loans or the future net ~~income.~~operating income of such properties could potentially become impaired which, in turn, could have a material adverse effect on our financial condition and results of operations. To date, the Company has not experienced any material negative impacts as a result of this legislation.

Economic weakness in the New York City metropolitan region, where the majority of the properties collateralizing our multi-family, CRE, and ADC loans, and the majority of the businesses collateralizing our other C&I loans, are located could have an adverse impact on our financial condition and results of operations.

~~Unlike larger national or superregional banks that serve a broader and more diverse geographic region, our~~Our business depends significantly on general economic conditions in the New York City metropolitan region, where the majority of the buildings and properties securing the multi-family, CRE, and ADC loans we originate for investment and the businesses of the customers to whom we make our other C&I loans are located.

Accordingly, the ability of our borrowers to repay their loans, and the value of the collateral securing such loans, may be significantly affected by economic conditions in this region, including changes in the local real estate market. A significant decline in general economic conditions caused by inflation, recession, unemployment, acts of terrorism, extreme weather, or other factors beyond our control, could therefore have an adverse effect on our financial condition and results of operations. In addition, because multi-family and CRE loans represent the majority of the loans in our portfolio, a decline in tenant occupancy or rents due to such factors, or for other reasons, such as new legislation, could adversely impact the ability of our borrowers to repay their loans on a timely basis, which could have a negative impact on our net income.

Furthermore, economic or market turmoil could occur in the near or long term. This could negatively affect our business, our financial condition, and our results of operations, as well as our ability to maintain or increase the level of cash dividends we currently pay to our ~~shareholders.~~

Our accounting estimates and risk management processes rely on analytical and forecasting models.

The processes we use to estimate expected losses and to measure the fair value of financial instruments, as well as the processes used to estimate the effects of changing interest rates and other market measures on our financial condition and results of operations, depends upon the use of analytical and forecasting models. These models reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances. Even if these assumptions are adequate, the models may prove to be inadequate or inaccurate because of other flaws in their design or their implementation. If the models that we use for interest rate risk and asset-liability management are inadequate, we may incur increased or unexpected losses upon changes in market interest rates or other market measures. If the models that we use for determining our expected losses are inadequate, the allowance for loan losses ~~on loans might~~may not be sufficient to ~~cover~~support future charge-offs. If the models that we use to measure the fair value of financial instruments are inadequate, the fair value of such financial instruments may fluctuate unexpectedly or may not accurately reflect what we could realize upon sale or settlement of such financial instruments. Any such failure in our ~~actual losses, which would adversely~~analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations.

Impairment in the carrying value of goodwill and other intangible assets could negatively impact our financial condition and results of operations.

~~In addition to mitigating credit risk through~~At December 31, 2022, goodwill and other intangible assets totaled $2.7 billion. Goodwill and our ~~underwriting processes, we attempt to mitigate such risk through~~other intangible assets are reviewed for impairment at least annually or more frequently if events or changes in circumstances indicate that the ~~establishment~~carrying value may not be recoverable. A significant decline in expected future cash flows, a material change in interest rates, a significant adverse change in the business climate, slower growth rates, or a significant or sustained decline in the price of ~~an allowance for losses on loans. The process of determining whether or not this allowance is sufficient to cover potential loan losses is based on~~our common stock may necessitate taking charges in the ~~methodology described in detail under “Critical Accounting Policies” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report.~~

~~If the judgments and assumptions we make with regard~~future related to the ~~allowance are incorrect, our allowance for losses on such loans might not be sufficient,~~impairment of goodwill and ~~additional loan loss provisions might need to be made. Depending on the~~other intangible assets. The amount of ~~such loan loss provisions, the adverse impact on our earnings~~any impairment charge could be ~~material.~~

In addition, growth in our portfolio of loans held for investment may require us to increase the allowance for losses on such loans by making additional provisions, which would reduce our net income. Furthermore, bank regulators have the authority to require us to make provisions for loan losses or otherwise recognize loan charge-offs following their periodic review of our~~held-for-investment~~ ~~loan portfolio, our underwriting procedures,~~significant and ~~our allowance for losses on such loans. Any increase in the loan loss allowance or in loan charge-offs as required by such regulatory authorities~~ could have a material adverse ~~effect~~impact on our financial condition and results of operations.

Failure to maintain an adequate level of liquidity could result in an inability to fulfill our financial obligations and also could subject us to material reputational and compliance risk.

“Liquidity” refers to our ability to generate sufficient cash flows to support our operations and to fulfill our obligations, including commitments to originate loans, to repay our wholesale borrowings and other liabilities, and to satisfy the withdrawal of deposits by our customers.

Our primary sources of liquidity are the retail and institutional deposits we gather or acquire in connection with acquisitions, and the brokered deposits we accept; borrowed funds, primarily in the form of wholesale borrowings from theFHLB-NY and various Wall Street brokerage firms; cash flows generated through the repayment and sale of loans; and cash flows generated through the repayment and sale of securities. In addition, and depending on current market conditions, we have the ability to access the capital markets from time to time to generate additional liquidity.

Deposit flows, calls of investment securities and wholesale borrowings, and the prepayment of loans and mortgage-related securities are strongly influenced by such external factors as the direction of interest rates, whether actual or perceived; local and national economic conditions; and competition for deposits and loans in the markets we serve. The withdrawal of more deposits than we anticipate could have an adverse impact on our profitability as this source of funding, if not replaced by similar deposit funding, would need to be replaced with wholesale funding, the sale of interest-earning assets, or a combination of the two. The replacement of deposit funding with wholesale funding could cause our overall cost of funds to increase, which would reduce our net interest income and results of operations. A decline in interest-earning assets would also lower our net interest income and results of operations.

In addition, large-scale withdrawals of brokered or institutional deposits could require us to pay significantly higher interest rates on our retail deposits or on other wholesale funding sources, which would have an adverse impact on our net interest income and net income. Furthermore, changes to the FHLB-NY’s underwriting guidelines for wholesale borrowings or lending policies may limit or restrict our ability to borrow, and therefore could have a significant adverse impact on our liquidity. A decline in available funding could adversely impact our ability to originate loans, invest in securities, and meet our expenses, or to fulfill such obligations as repaying our borrowings or meeting deposit withdrawal demands.

A downgrade of the credit ratings of the Company and the ~~Banks~~Bank could also adversely affect our access to liquidity and capital, and could significantly increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us or to purchase our securities. This could affect our growth, profitability, and financial condition, including our liquidity.

Inability to fulfill minimum liquidity requirements could limit our ability to conduct or expand our business, pay a dividend, or result in termination of our FDIC deposit insurance, and thus impact our financial condition, our results of operations, and the market value of our stock.

On September 3, 2014, the FRB and other banking regulators adopted final rules implementing a U.S. version of the Basel Committee’s Liquidity Coverage Ratio (the “LCR”) requirement. The LCR requirement, including the modified version applicable to bank holding companies with $50 billion or more in total consolidated assets that have not opted to use the “advanced approaches” risk-based capital rule, requires a banking organization to maintain an amount of unencumbered “high-quality liquid assets” (“HQLAs”) to be at least equal to the amount of its total projected net cash outflows over a hypothetical~~30-day~~ ~~stress period. Under the rule, only specific classes of assets qualify as HQLAs (the numerator of the LCR), with riskier classes of assets subject to haircuts and caps.~~

The total net cash outflow amount (the denominator of the LCR) is determined under the rule by applying outflow and inflow rates that reflect certain standardized assumptions against the balance of the banking organization’s funding sources, obligations, transactions, and assets over the hypothetical~~30-day~~ stress period. Inflows that can be included to offset outflows are limited to 75% of outflows (which effectively means that banking organizations must hold HQLAs equal to 25% of outflows even if outflows perfectly match inflows over the stress period).

On November 20, 2015, the FRB issued a proposed rule that would provide companies that become subject to the modified LCR rule after the rule’s effective date, a full year to comply with the rule. The proposed rule was finalized on December 19, 2016.

~~The modified LCR is a minimum requirement, and the FRB can impose additional liquidity requirements as a supervisory matter.~~

If we were to defer payments on our trust preferred capital debt securities or were in default under the related indentures, we would be prohibited from paying dividends or distributions on our common stock.

The terms of our outstanding trust preferred capital debt securities prohibit us from (1) declaring or paying any dividends or distributions on our capital stock, including our common stock; or (2) purchasing, acquiring, or making a liquidation payment on such stock, under the following circumstances: (a) if an event of default has occurred and is continuing under the applicable indenture; (b) if we are in default with respect to a payment under the guarantee of the related trust preferred securities; or (c) if we have given notice of our election to defer interest payments but the related deferral period has not yet commenced, or a deferral period is continuing. In addition, without notice to, or consent from, the holders of our common stock, we may issue additional series of trust preferred capital debt securities with similar terms, or enter into other financing agreements, that limit our ability to pay dividends on our common stock.

Dividends on the Series A Preferred Stock are discretionary and noncumulative, and may not be paid if such payment will result in our failure to comply with all applicable laws and ~~regulations, or if we fail to obtain thenon-objection~~ ~~of the FRB with respect to the declaration of dividends.~~regulations.

Dividends on the Series A Preferred Stock are discretionary and noncumulative. If our Board of Directors (or any duly authorized committee of the Board) does not authorize and declare a dividend on the Series A Preferred Stock for any dividend period, holders of the depositary shares will not be entitled to receive any dividend for that dividend period, and the unpaid dividend will cease to accrue and be payable. We have no obligation to pay dividends accrued for a dividend period after the dividend payment date for that period if our Board of Directors (or any duly authorized committee thereof) has not declared a dividend before the related dividend payment date, whether or not dividends on the Series A Preferred Stock or any other series of our preferred stock or our common stock are declared for any future dividend period. Additionally, under the FRB’s capital rules, dividends on the Series A Preferred Stock may only be paid out of our net income, retained earnings, or surplus related to other additional tier 1 capital instruments.

~~In addition, throughout 2017,~~ If the ~~Company was required to receive anon-objection~~ ~~from the FRB to pay cash dividends on its outstanding common stock, and the FRB has advised the Company to continue the exchange of written documentation to obtain theirnon-objection~~ to the declaration of any dividends, including any dividends on the Series A Preferred Stock. There can be no guarantee that the FRB will approve any requested dividends on the Series A Preferred Stock. Further, if paymentnon-payment of dividends on Series A Preferred Stock for any dividend period would cause the Company to fail to comply with any applicable law or regulation, or any agreement we may enter into with our regulators from time to time, then we ~~will~~would not be able to declare or pay a dividend for such dividend period. In such a case, holders of the depositary shares will not be entitled to receive any dividend for that dividend period, and the unpaid dividend will cease to accrue and be payable.

In addition, if the Company were to become a SIFI, as defined in the current regulations, we would become subject to regulations under the Dodd-Frank Act that may limit the amount of capital that can be distributed by the Company from time to time. These would include a requirement to submit an annual capital plan to the FRB describing proposed capital distributions and obtaining a~~non-objection~~ from the FRB. At December 31, 2017, the four-quarter average of our total consolidated assets was $48.7 billion. Based on the current regulations, the Company will become a SIFI if our total consolidated assets average, meets or exceeds $50 billion over four consecutive quarters.

Inability to fulfill minimum capital requirements could limit our ability to conduct or expand our business, pay a dividend, or result in termination of our FDIC deposit insurance, and thus impact our financial condition, our results of operations, and the market value of our stock.

We are subject to the comprehensive, consolidated supervision and regulation set forth by the FRB. Such regulation includes, among other matters, the level of leverage and risk-based capital ratios we are required to maintain. Depending on general economic conditions, changes in our capital position could have a materially adverse impact on our financial condition and risk profile, and also could limit our ability to grow through acquisitions or otherwise. Compliance with regulatory capital requirements may limit our ability to engage in operations that require the intensive use of capital and therefore could adversely affect our ability to maintain our current level of business or expand.

Furthermore, it is possible that future regulatory changes could result in more stringent capital or liquidity requirements, including increases in the levels of regulatory capital we are required to maintain and changes in the way capital or liquidity is measured for regulatory purposes, either of which could adversely affect our business and our ability to expand. For example, federal banking regulations adopted under Basel III standards require bank holding companies and banks to undertake significant activities to demonstrate compliance with higher capital requirements. Any additional requirements to increase our capital ratios or liquidity could necessitate our liquidating certain assets, perhaps on terms that are unfavorable to us or that are contrary to our business plans. In addition, such requirements could also compel us to issue additional securities, thus diluting the value of our common stock.

In addition, failure to meet established capital requirements could result in the FRB placing limitations or conditions on our activities and further restricting the commencement of new activities. The failure to meet applicable capital guidelines could subject us to a variety of enforcement remedies available to the federal regulatory authorities, including limiting our ability to pay dividends; issuing a directive to increase our capital; and terminating our FDIC deposit insurance.

Should the average of our total consolidated assets over four consecutive quarters pass the current SIFI threshold of $50 billion, we would expect to be subject to stricter prudential standards required by the Dodd-Frank Act for large bank holding companies.

Pursuant to the current requirements of the Dodd-Frank Act, a bank holding company whose total consolidated assets average more than $50 billion over the four most recent quarters is determined to be a SIFI, and therefore is subject to stricter prudential standards. In addition to capital and liquidity requirements, these standards primarily include risk-management requirements, dividend limits, and early remediation regimes.

On December 18, 2017, the Senate Banking Committee passed a bipartisan regulatory reform bill, the Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155). Among many other provisions, the bill would raise the designation as a SIFI to $250 billion in assets from $50 billion, end company run stress tests for banks under $250 billion in assets, and simplify capital calculations for community banks. There is no guarantee that the bill will pass or that it will pass in its current form.

Our results of operations could be materially affected by further changes in bank regulation, or by our ability to comply with certain existing laws, rules, and regulations governing our industry.

We are subject to regulation, supervision, and examination by the following entities: (1) the ~~NYSDFS, the chartering authority for both the Community Bank and the Commercial Bank;~~OCC; (2) the ~~FDIC, as~~FDIC; (3) the ~~insurer of the Banks’ deposits; (3) theFRB-NY,~~ ~~in accordance with objectives and standards of the U.S. Federal Reserve System;~~FRB-NY; and (4) the CFPB, ~~which was established in 2011 under the Dodd-Frank Act~~as well as state licensing restrictions and ~~given broad authority to regulate financial service providers and financial~~limitations regarding certain consumer finance products.

Such regulation and supervision ~~governs~~govern the activities in which a bank holding company and its banking subsidiaries may engage, and are intended primarily for the protection of the ~~Deposit Insurance Fund (“DIF”),~~DIF, the banking system in general, and bank customers, rather than for the benefit of a company’s stockholders. These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including with respect to the imposition of restrictions on the operation of a bank or a bank holding company, the imposition of significant fines, the ability to delay or deny merger or other regulatory applications, the classification of assets by a bank, and the adequacy of a bank’s allowance for loan losses, among other matters. Failure to comply (or to ensure that our agents and third-party service providers comply) with laws, regulations, or policies, including our failure to obtain any necessary state or local licenses, could result in enforcement actions or sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial

condition, or results of operations. Penalties for such violations may also include: revocation of licenses; fines and other monetary penalties; civil and criminal liability; substantially reduced payments by borrowers; modification of the original terms of loans, permanent forgiveness of debt, or inability to, directly or indirectly, collect all or a part of the principal of or interest on loans provided by the Bank. Changes in such regulation and supervision, or changes in regulation or enforcement by such authorities, whether in the form of policy, regulations, legislation, rules, orders, enforcement actions, ratings, or decisions, could have a material impact on the Company, our subsidiary ~~banks~~bank and other affiliates, and our operations. In addition, failure of the Company or the ~~Banks~~Bank to comply with such regulations could have a material adverse effect on our earnings and capital.

See “Regulation and Supervision” in Part I, Item 1, “Business” earlier in this filing for a detailed description of the federal, state, and local regulations to which the Company and the ~~Banks~~Bank are subject.

Noncompliance with the Bank Secrecy Act and other anti-money laundering statutes and regulations could result in material financial loss.

The BSA and the USA Patriot Act contain anti-money laundering and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities. The BSA, as amended by the USA Patriot Act, requires depository institutions to undertake activities including maintaining an anti-money laundering program, verifying the identity of clients, monitoring for and reporting suspicious transactions, reporting on cash transactions above a certain threshold, and responding to requests for information by regulatory authorities and law enforcement agencies. FINCEN, a unit of the U.S. Treasury Department that administers the BSA, is authorized to impose significant civil monetary penalties for violations of these requirements. If our BSA policies, procedures and systems are deemed to be deficient, or the BSA policies, procedures and systems of the financial institutions that we acquire in the future are deficient, we would be subject to reputational risk and potential liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans, which would negatively impact our business, financial condition and results of operations.

Failure to comply with OFAC regulations could result in legal and reputational risks.

The United States has imposed economic sanctions that affect transactions with designated foreign countries, foreign nationals, and other potentially exposed persons. These are typically referred to as the "OFAC" rules, given their administration by the United States Treasury Department Office of Foreign Assets Control. Failure to comply with these sanctions could have serious legal and reputational consequences.

Our enterprise risk management framework may not be effective in mitigating the risks to which we are subject, based upon the size, scope, and complexity of the Company.

As a financial institution, we are subject to a number of risks, including interest rate, credit, liquidity, legal/compliance, market, strategic, operational, and reputational. Our ERM framework is designed to minimize the risks to which we are subject, as well as any losses stemming from such risks. Although we seek to identify, measure, monitor, report, and control our exposure to such risks, and employ a broad and diverse set of risk monitoring and mitigation techniques in the process, those techniques are inherently limited because they cannot anticipate the existence or development of risks that are currently unknown and unanticipated.

For example, economic and market conditions, heightened legislative and regulatory scrutiny of the financial services industry, and increases in the overall complexity of our operations, among other developments, have resulted in the creation of a variety of risks that were previously unknown and unanticipated, highlighting the intrinsic limitations of our risk monitoring and mitigation techniques. As a result, the further development of previously unknown or unanticipated risks may result in our incurring losses in the future that could adversely impact our financial condition and results of operations. Furthermore, an ineffective ERM framework, as well as other risk factors, could result in a material increase in our FDIC insurance premiums.

If federal, state, or local tax authorities were to determine that we did not adequately provide for our taxes, our income tax expense could be increased, adversely affecting our earnings.

A decline in economic conditions could adversely affect the value of the loans we originate and the securities in which we invest.

Although we take steps to reduce our exposure to the risks that stem from adverse changes in economic conditions, such changes nevertheless could adversely impact the value of the loans we originate, the securities we invest in, and our loan portfolios.

Declines in real estate values ~~and home sales,~~ and an increase in the financial stress on borrowers stemming from high unemployment or other adverse economic conditions, could negatively affect our borrowers and, in turn, the repayment of the loans in our portfolio. Deterioration in economic conditions also could subject us and our industry to increased regulatory scrutiny, and could result in an increase in loan delinquencies, an increase in problem assets and foreclosures, and a decline in the value of the collateral for our loans, which could reduce our customers’ borrowing power. Deterioration in local economic conditions could drive the level of loan losses beyond the level we have provided for in our loan loss ~~allowances;~~allowance; this, in turn, could necessitate an increase in our provisions for loan losses, which would reduce our earnings and capital. Furthermore, declines in the value of our investment securities could result in our having to record losses based on the other-than-temporary impairment of securities, which would reduce our earnings and also could reduce our capital. In addition, continued economic weakness could reduce the demand for our products and services, which would adversely impact our liquidity and the revenues we produce.

Higher inflation could have a negative impact on our financial results and operations.

~~The~~Inflation can negatively impact the Company by increasing our labor costs, through higher wages and higher interest rates, which may negatively affect the market ~~price~~value of securities on our balance sheet, higher interest expenses on our deposits, especially CDs, and ~~liquidity~~a higher cost of our ~~common stock~~borrowings. Additionally, higher inflation levels could ~~be adversely affected if~~lead to higher oil and gas prices, which may negatively impact the ~~economy were~~net operating income on the properties which we lend on and could impair a borrower's ability to ~~weaken or the capital markets were to experience volatility.~~repay their mortgage.

Rising mortgage rates and adverse changes in mortgage market conditions could reduce mortgage revenue.

The ~~market price of our common stock could be subject to significant fluctuations due~~residential real estate mortgage lending business is sensitive to changes in interest rates, especially long-term interest rates. Lower interest rates generally increase the volume of mortgage originations, while higher interest rates generally cause that volume to decrease. Therefore, our mortgage performance is typically correlated to fluctuations in interest rates, primarily the 10-year U.S. Treasury rate. Historically, mortgage origination volume and

sales for the Bank and for other financial institutions have risen and fallen in response to these and other factors. An increase in interest rates and/or a decrease in our mortgage production volume could have a materially adverse effect on our operating results. The 10-year U.S. Treasury rate was 3.88 percent at December 31, 2022, and averaged 2.95 percent during 2022, 151 basis points higher than average rates experienced during 2021. The sustained higher rates experienced throughout 2022 negatively impacted the mortgage market including our loan origination volume and refinancing activity. In addition to being affected by interest rates, the secondary mortgage markets are also subject to investor ~~sentiment regarding our operations~~demand for residential mortgage loans and investor yield requirements for these loans. These conditions may fluctuate or ~~business prospects. Among other factors, these risks~~worsen in the future. Adverse market conditions, including increased volatility, changes in interest rates and mortgage spreads and reduced market demand, could result in greater risk in retaining mortgage loans pending their sale to investors. A prolonged period of secondary market illiquidity may ~~be affected by:~~

~~Economic or market turmoil~~ could ~~occur in the near or long term, which could negatively affect our business,~~have a materially adverse effect on our financial condition and results of operations.

Our mortgage origination business is also subject to the cyclical and seasonal trends of the real estate market. The cyclical nature of our industry could lead to periods of growth in the mortgage and real estate markets followed by periods of declines and losses in such markets. Seasonal trends have historically reflected the general patterns of residential and commercial real estate sales, which typically peak in the spring and summer seasons. One of the primary influences on our mortgage business is the aggregate demand for mortgage loans, which is affected by prevailing interest rates, housing supply and demand, residential construction trends, and overall economic conditions. If we are unable to respond to the cyclical nature of our industry by appropriately adjusting our operations or relying on the strength of our other product offerings during cyclical downturns, our business, financial condition, and results of operations could be adversely affected. Additionally, the fair value of our MSRs is highly sensitive to changes in interest rates and changes in market implied interest rate volatility. Decreases in interest rates can trigger an increase in actual repayments and market expectation for higher levels of repayments in the future which have a negative impact on MSR fair value. Conversely, higher rates typically drive lower repayments which results in an increase in the MSR fair value. We utilize derivatives to manage the impact of changes in the fair value of the MSRs. We may have basis risk and our risk management strategies, which rely on assumptions or projections, may not adequately mitigate the impact of changes in interest rates, interest rate volatility, convexity, credit spreads, or prepayment speeds, and, as a result, the change in the fair value of MSRs may negatively impact earnings.

We are highly dependent on the Agencies to buy mortgage loans that we originate. Changes in these entities and changes in the manner or volume of loans they purchase or their current roles could adversely affect our business, financial condition and results of operations.

We generate mortgage revenues primarily from gains on the sale of single-family residential loans pursuant to programs currently offered by Fannie Mae, Freddie Mac, Ginnie Mae and other investors. These entities account for a substantial portion of the secondary market in residential mortgage loans. Any future changes in these programs, our eligibility to participate in such programs, their concentration limits with respect to loans purchased from us, the criteria for loans to be accepted or laws that significantly affect the activity of such entities could, in turn, result in a lower volume of corresponding loan originations or other administrative costs which may have a materially adverse effect on our results of operations or could cause us to take other actions that would be materially detrimental. Fannie Mae and Freddie Mac remain in conservatorship and a path forward for them to emerge from conservatorship is unclear. Their roles could be reduced, modified or eliminated as ~~well as volatility~~a result of regulatory actions and the nature of their guarantees could be limited or eliminated relative to historical measurements. The elimination or modification of the traditional roles of Fannie Mae or Freddie Mac could create additional competition in the ~~price~~market and ~~trading volume~~significantly and adversely affect our business, financial condition and results of operations.

Changes in the servicing, origination, or underwriting guidelines or criteria required by the Agencies could adversely affect our ~~common stock.~~business, financial condition and results of operations.

We are required to follow specific guidelines or criteria that impact the way we originate, underwrite or service loans. Guidelines include credit standards for mortgage loans, our staffing levels and other servicing practices, the servicing and ancillary fees that we may charge, modification standards and procedures, and the amount of non-reimbursable advances. We cannot negotiate these terms, which are subject to change at any time, with the Agencies. A significant change in these guidelines, which decreases the fees we charge or requires us to expend additional resources in providing mortgage services, could decrease our revenues or increase our costs, adversely affecting our business, financial condition, and results of operations. In addition, changes in the nature or extent of the guarantees

Extensive competition for loans and deposits could adversely affect our ability to expand our business, as well as our financial condition and results of operations.

We face significant competition for loans and deposits from other banks and financial institutions, both within and beyond our local markets. We also compete with companies that solicit loans and deposits over the Internet.

Because our profitability stems from our ability to attract deposits and originate loans, our continued ability to compete for depositors and borrowers is critical to our success. Our success as a competitor depends on a number of factors, including our ability to develop, maintain, and build long-term relationships with our customers by providing them with convenience, in the form of multiple branch locations, extended hours of service, and access through alternative delivery channels; a broad and diverse selection of products and services; interest rates and service fees that compare favorably with those of our competitors; and skilled and knowledgeable personnel to assist our customers by addressing their financial needs. External factors that may impact our ability to compete include, among others, the entry of new lenders and depository institutions in our current markets and, with regard to lending, an increased focus on multi-family and CRE lending by existing competitors.

Limitations on our ability to grow our loan portfolios ~~of multi-family and CRE loans~~ could adversely affect our ability to generate interest income, as well our financial condition and results of operations, perhaps materially.

~~Although we also originate ADC and C&I loans, and invest in securities, our~~Our portfolios of multi-family and CRE loans represent the largest portion of our asset mix ~~(92.2%~~(68 percent of total loans held for investment as of December 31, ~~2017)~~2022). Our leadership position in these markets has been instrumental to our production of solid earnings and our consistent record of exceptional asset quality. ~~In view of the heightened regulatory focus on CRE concentration, we~~We monitor the ratio of our multi-family, CRE, and ADC loans (as defined in the CRE Guidance) to our total risk-based capital to ensure that ~~it remains within the 850% limit~~ we ~~have agreed~~are in compliance with regulatory guidance. Any inability to ~~with our regulators. Were the ratio to exceed that limit, we would act to rectify it, either by reducing~~grow our multi-family and CRE ~~and ADC~~ loan ~~production and/or by raising additional capital. Either of these actions~~portfolios, could ~~have an adverse~~negatively impact on our ~~net interest income and~~ability to grow our earnings capacity, as would any further regulatory limitations on our CRE lending. (See the discussion on CRE Guidance that appears in “FDIC Regulations – Real Estate Lending Standards” under “Regulation and Supervision” earlier in this report.)per share.

The inability to engage in merger transactions, or to realize the anticipated benefits of acquisitions in which we might engage, could adversely affect our ability to compete with other financial institutions and weaken our financial performance.

Mergers and acquisitions have contributed significantly to our growth and it is possible that we will look to acquire other financial institutions, financial service providers, or branches of banks in the future.

Our ability to engage in future mergers and acquisitions would depend on our ability to identify suitable merger partners and acquisition opportunities, our ability to finance and complete negotiated transactions at acceptable prices and on acceptable terms, and our ability to obtain the necessary ~~shareholder~~stockholder and regulatory approvals.

If we are unable to engage in or complete a desired acquisition or merger transaction, our financial condition and results of operations could be adversely impacted. As acquisitions have been a significant source of deposits, the inability to complete a business combination could require that we increase the interest rates we pay on deposits in order to attract such funding through our current branch network, or that we increase our use of wholesale funds. Increasing our cost of funds could adversely impact our net interest income and our net income. Furthermore, the absence of acquisitions could impact our ability to fulfill our loan demand.

~~Mergers and acquisitions involve a number of risks and challenges, including:~~

In addition, mergers and acquisitions can lead to uncertainties about the future on the part of customers and employees. Such uncertainties could cause customers and others to consider changing their existing business relationships with the company to be acquired, and could cause its employees to accept positions with other companies before the merger occurs. As a result, the ability of a company to attract and retain customers, and to attract, retain, and motivate key personnel, prior to a merger’s completion could be impaired.

Furthermore, no assurance can be given that acquired operations would not adversely affect our existing profitability; that we would be able to achieve results in the future similar to those achieved by our existing banking business; that we would be able to compete effectively in the market areas served by acquired branches; or that we would be able to manage any growth resulting from a transaction effectively. In particular, our ability to compete effectively in new markets would be dependent on our ability to understand those markets and their competitive dynamics, and our ability to retain certain key employees from the acquired institution who know those markets better than we do.

We may not be able to ~~be impaired, it would result in a charge against earnings~~fully achieve the strategic objectives and ~~thus a reduction~~operating efficiencies that we anticipate in our ~~stockholders’ equity.~~

merger and acquisition activities. Inherent uncertainties exist in integrating the operations of an acquired business. We ~~test goodwill for impairment on an annual basis,~~may lose our customers or ~~more frequently, if necessary. If we were to determine that~~ the ~~carrying amount~~customers of ~~our goodwill exceeded its implied fair value, we would be required to write down the value~~acquired entities as a result of the ~~goodwill~~acquisition. We may also lose key personnel from the acquired entity as a result of an acquisition. We may not discover all known and unknown factors when examining a company for acquisition or merger during the due diligence period. These factors could produce unintended and unexpected consequences for us including, but not limited to, increased compliance and legal risks, including increased litigation or regulatory actions such as fines or restrictions related to the business practices or operations of the combined business. Undiscovered factors as a result of an acquisition or merger could bring civil, criminal, and financial liabilities against us, our management, and the management of those entities we acquire or merge with. In addition, if difficulties arise with respect to the integration process, we may incur higher integration expenses than anticipated and the economic benefits expected to result from the acquisition, including revenue growth and cost savings, might not occur or might not occur to the extent we expected. Failure to successfully integrate businesses that we acquire or merge with could have an adverse effect on our ~~balance sheet, adversely affecting~~profitability, return on equity, return on assets, or our ~~earnings as well as~~ability to implement our ~~capital.~~strategy, any of which in turn could have a material adverse effect on our business, financial condition and results of operations.

The inability to receive dividends from our subsidiary ~~banks~~bank could have a material adverse effect on our financial condition or results of operations, as well as our ability to maintain or increase the current level of cash dividends we pay to our ~~shareholders.~~stockholders.

The Parent Company (i.e., the company on an unconsolidated basis) is a separate and distinct legal entity from the ~~Banks,~~Bank, and a substantial portion of the revenues the Parent Company receives consists of dividends from the ~~Banks.~~Bank. These dividends are the primary funding source for the dividends we pay on our common stock and the interest and principal payments on our debt. Various federal and state laws and regulations limit the amount of

dividends that a bank may pay to its parent company. In addition, our right to participate in a distribution of assets upon the liquidation or reorganization of a subsidiary may be subject to the prior claims of the subsidiary’s creditors. As a result of our acquisition of Flagstar, we are required to seek regulatory approval from the OCC for the payment of any dividend to the Bancorp through at least the period ending November 1, 2024. If the ~~Banks are~~Bank is unable to pay dividends to the Parent Company, we might not be able to service our debt, pay our obligations, or pay dividends on our common stock.

Reduction or elimination of our quarterly cash dividend could have an adverse impact on the market price of our common stock.

Holders of our common stock are only entitled to receive such dividends as our Board of Directors may declare out of funds available for such payments under applicable law and regulatory guidance, and although we have historically declared cash dividends on our common stock, we are not required to do so. Furthermore, the payment of dividends falls under federal regulations that have grown more stringent in recent years. ~~Throughout 2017, the Company was required to receive anon-objection~~ ~~from the FRB to pay cash dividends on its outstanding common stock, and the FRB has advised the Company to continue the exchange of written documentation to obtain theirnon-objection~~ ~~to the declaration of dividends.~~ While we pay our quarterly cash dividend in compliance with current regulations, such regulations could change in the future. ~~In addition, if~~As a result of our acquisition of Flagstar, we are required to seek regulatory approval from the OCC for the payment of any dividend to the Parent Company ~~were~~through at least the period ending November 1, 2024, which could restrict our ability to ~~become a SIFI institution, as defined in~~pay the ~~current regulations, we would become subject to regulations under the Dodd-Frank Act that limit the amount of capital that can be distributed by the Company from time to time.~~common stock dividend. Any reduction or elimination of our common stock dividend in the future could adversely affect the market price of our common stock.

Our stress testing processes rely on analytical and forecasting models that may prove to be inadequate or inaccurate, which could adversely affect the effectiveness of our strategic planning and our ability to pursue certain corporate goals.

In accordance with the Dodd-Frank Act, banking organizations with $10 billion to $50 billion in assets currently are required to perform annual capital stress tests and to report the results of such tests. The results of our capital stress tests and the application of certain capital rules may result in constraints being placed on our capital distributions or require that we increase our regulatory capital under certain circumstances.

~~In addition, the~~ processes we use to estimate the effects of changing interest rates, real estate values, and economic indicators such as unemployment on our financial condition and results of operations depend upon the use of analytical and forecasting models. These models reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances. Furthermore, even if our assumptions are accurate predictors of future

performance, the models they are based on may prove to be inadequate or inaccurate because of other flaws in their design or implementation. If the models we use in the process of managing our interest rate and other risks prove to be inadequate or inaccurate, we could incur increased or unexpected losses which, in turn, could adversely affect our earnings and capital. Additionally, failure by the Company to maintain compliance with strict capital, liquidity, and other stress test requirements under banking regulations could subject us to regulatory sanctions, including limitations on our ability to pay dividends.

Any failure, breach, or interruption in service involving our systems or those of our service providers could damage our reputation, cause losses, increase our expenses, and result in a loss of customers, an increase in regulatory scrutiny, heightened cyber risk, or expose us to civil litigation and possibly financial liability, any of which could adversely impact our financial condition, results of operations, and the market price of our stock.

Communication and information systems are essential to the conduct of our business, as we use such systems, and those maintained and provided to us by ~~third party~~third-party service providers, to manage our customer relationships, our general ledger, our deposits, and our loans. In addition, our operations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks. Although we take protective measures and endeavor to modify them as circumstances warrant, the security of our computer systems, software, and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses, or other malicious code and cyber-attacks that could have an impact on information security. With the rise and permeation of online and mobile banking, the financial services industry in particular faces substantial cybersecurity risk due to the type of sensitive information provided by customers. Our systems and those of our third-party service providers and customers are under constant threat, and it is possible that we or they could experience a significant event in the future that could adversely affect our business or operations.

In addition, breaches of security may occur through intentional or unintentional acts by those having authorized or unauthorized access to our confidential or other information, or that of our customers, clients, or counterparties. If one or more of such events were to occur, the confidential and other information processed and stored in, and transmitted through, our computer systems and networks could potentially be jeopardized, or could otherwise cause interruptions or malfunctions in our operations or the operations of our customers, clients, or counterparties. This could cause us significant reputational damage or result in our experiencing significant losses.

While we diligently assess applicable regulatory and legislative developments affecting our business, laws and regulations relating to cybersecurity have been frequently changing, imposing new requirements on ~~us, such as the recently adopted New York State Department of Financial Services’ Cybersecurity Requirements for Financial Services Companies regulation.~~us. In light of these conditions, we face the potential for additional regulatory scrutiny that will lead to increasing compliance and technology expenses and, in some cases, possible limitations on the achievement of our plans for growth and other strategic objectives.

~~Furthermore, we~~ We may also be required to expend significant additional resources to modify our protective measures or investigate and remediate vulnerabilities or other exposures arising from operational and security ~~risks. Additional expenditures may be required~~risks, including expenses for third-party expert consultants or outside counsel.

We also may be subject to litigation and financial losses that either are not insured against or not fully covered through any insurance we maintain. We believe that the impact of any previously identified cyber incidents will not have a material financial impact and we have cyber insurance in place.

In addition, we routinely transmit and receive personal, confidential, and proprietary information by e-mail and other electronic means. We have discussed, and worked with our customers, clients, and counterparties to develop secure transmission capabilities, but we do not have, and may be unable to put in place, secure capabilities with all of these constituents, and we may not be able to ensure that these third parties have appropriate controls in place to protect the confidentiality of such information. We maintain disclosure controls and procedures to ensure we will timely and sufficiently notify our investors of material cybersecurity risks and incidents, including the associated financial, legal, or reputational consequence of such an event, as well as reviewing and updating any prior disclosures relating to the risk or event.

While we have established information security policies and procedures, including an Incident Response Plan, to prevent or limit the impact of systems failures and interruptions, we may not be able to anticipate all possible security breaches that could affect our systems or information and there can be no assurance that such events will not occur or will be adequately prevented or mitigated if they do.

We maintain policies and procedures to prevent directors, certain officers, and corporate insiders from trading stock after being made aware of a material cybersecurity incident and to control the distribution of information about cybersecurity events that could constitute material information to the Company; however, we cannot be certain that a corporate insider who becomes aware of a Company material cybersecurity incident does not undertake to buy or sell Company stock before information about the incident becomes publicly available.

The Company and the ~~Banks~~Bank rely on third parties to perform certain key business functions, which may expose us to further operational risk.

We outsource certain key aspects of our data processing to certain third-party providers. While we have selected these third-party providers carefully, we cannot control their actions. Our ability to deliver products and services to

our customers, to adequately process and account for our customers’ transactions, or otherwise conduct our business could be adversely impacted by any disruption in the services provided by these third parties; their failure to handle current or higher volumes of usage; or any difficulties we may encounter in communicating with them. Replacing these third-party providers also could entail significant delay and expense.

Our third-party providers may be vulnerable to unauthorized access, computer viruses, phishing schemes, and other security breaches. Threats to information security also exist in the processing of customer information through various other third-party providers and their personnel. We may be required to expend significant additional resources to protect against the threat of such security breaches and computer viruses, or to alleviate problems caused by such security breaches or viruses. To the extent that the activities of our third-party providers or the activities of our customers involve the storage and transmission of confidential information, security breaches and viruses could expose us to claims, regulatory scrutiny, litigation, and other possible liabilities.

These types of third-party relationships are subject to increasingly demanding regulatory requirements and oversight by federal bank regulators (such as the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation) and the CFPB. As a result, if our regulators conclude that we have not exercised adequate oversight and control over vendors and subcontractors or other ongoing third-party business relationships or that such third-parties have not performed appropriately, we could be subject to enforcement actions, including civil money penalties or other administrative or judicial penalties or fines, as well as requirements for consumer remediation. In addition, the Company may not be adequately insured against all types of losses resulting from third-party failures, and our insurance coverage may be inadequate to cover all losses resulting from systems failures or other disruptions to our banking services.

Failure to keep pace with technological changes could have a material adverse impact on our ability to compete for loans and deposits, and therefore on our financial condition and results of operations.

Financial products and services have become increasingly technology-driven. ~~To some degree, our~~Our ability to meet the needs of our customers competitively, and in a cost-efficient manner, is dependent on our ability to keep pace with technological advances and to invest in new technology as it becomes available. Many of our competitors have greater resources ~~to invest in technology~~ than we do and may be better equipped to invest in and market new technology-driven products and services.

~~If federal, state, or local tax authorities were to determine that we did not adequately provide for our taxes, our income tax expense could be increased, adversely affecting our earnings.~~

The amount of income taxes we are required to pay on our earnings is based on federal, state, and local legislation and regulations. We provide for current and deferred taxes in our financial statements, based on our results of operations, business activity, legal structure, interpretation of tax statutes, assessment of risk of adjustment upon audit, and application of financial accounting standards. We may take tax return filing positions for which the final determination of tax is uncertain, and our net income and earnings per share could be reduced if a federal, state, or local authority were to assess additional taxes that have not been provided for in our consolidated financial statements. In addition, there can be no assurance that we will achieve our anticipated effective tax rate. Unanticipated changes in tax laws or related regulatory or judicial guidance, or an audit assessment that denies previously recognized tax benefits, could result in our recording tax expenses that materially reduce our net income.

The inability to attract and retain key personnel could adversely impact our ~~financial condition and results of~~ operations.

To a large degree, our success depends on our ability to attract and retain key personnel whose expertise, knowledge of our markets, and years of industry experience ~~would~~ make them difficult to replace. Competition for skilled leaders in our industry can be intense, and we may not be able to hire or retain the people we would like to have working for us. The unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business, given the specialized knowledge of such personnel and the difficulty of finding qualified replacements on a timely basis. Furthermore, our ability to attract and retain personnel with the skills and knowledge to support our business may require that we offer additional compensation and benefits that would reduce our earnings.

Many aspects of our operations are dependent upon the soundness of other financial intermediaries and thus could expose us to systemic risk.

The soundness of many financial institutions may be closely interrelated as a result of relationships between them involving credit, trading, execution of transactions, and the like. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions. As such “systemic risk” may adversely affect the financial intermediaries with which we interact on a daily basis (such as clearing agencies, clearing houses, banks, and securities firms and exchanges), we could be adversely impacted as well.

We may be terminated as a servicer or subservicer or incur costs, liabilities, fines and other sanctions if we fail to satisfy our servicing obligations, including our obligations with respect to mortgage loan foreclosure actions.

At December 31, 2022, we had relationships with 12 owners of MSRs, excluding ourselves, for which we act as subservicer for the mortgage loans they own. Due to the limited number of relationships, discontinuation of existing agreements with those third parties or adverse changes in contractual terms could have a significant negative impact to our mortgage servicing revenue. The terms and conditions in which a master servicer may terminate subservicing contracts are broad and could be exercised at the discretion of the master servicer without requiring cause. Additionally, the master servicer directs the oversight of custodial deposits associated with serviced loans and, to the extent allowable, could choose to transfer the oversight of the Bank's custodial deposits to another depository

Damage to our reputation could significantly harm the businesses we engage in, as well as our competitive position and prospects for growth.

Our ability to attract and retain investors, customers, clients, and employees could be adversely affected by damage to our reputation resulting from various sources, including employee misconduct, litigation, or regulatory outcomes; failure to deliver minimum standards of service and quality; compliance failures; unintentional disproportionate assessment of fees to customers of protected classes; unethical behavior; unintended disclosure of confidential information; and the activities of our clients, customers, and/or counterparties. Actions by the financial services industry in general, or by certain entities or individuals within it, also could have a significantly adverse impact on our reputation.

Our actual or perceived failure to identify and address various issues also could give rise to reputational risk that could significantly harm us and our business prospects, including failure to properly address operational risks. These issues include legal and regulatory requirements; consumer protection, fair lending, and privacy issues; properly maintaining customer and associated personal information; record keeping; protecting against money laundering; sales and trading practices; and ethical issues.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance ("ESG") practices and disclosure. Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Increased ESG-related compliance costs could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and our stock price. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. Additionally, concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts. Investors, consumers, and businesses also may change their behavior on their own as a result of these concerns. The Company and its customers will need to respond to new laws and regulations as well as investor, consumer and business preferences resulting from climate change concerns. The Company and its customers may face cost increases, asset value reductions, and operating process changes, among other impacts. The impact on the Company’s customers will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities. In addition, the Company would face reductions in credit worthiness on the part of some customers or in the value of assets securing loans. Investors could determine not to invest in the Company’s securities due to various climate change related considerations. The Company’s efforts to take these risks into account in making lending and other decisions may not be effective in protecting the Company from the negative impact of new laws and regulations or changes in investor, consumer or business behavior.

We own certain of our branch offices, as well as our headquarters on Long Island and certain other back-office buildings in New York, Ohio, Florida and ~~Florida.~~Michigan. We also utilize other branch and back-office locations in those states, and in New Jersey, Arizona, California, Indiana, and ~~Arizona,~~Wisconsin under various lease and license agreements that expire at various times. (See Note ~~10, “Commitments and Contingencies: Lease Commitments”~~8, “Leases” in Item 8, “Financial Statements and Supplementary Data.”) We believe that our facilities are adequate to meet our present and immediately foreseeable needs.

The Company is involved in various legal actions arising in the ordinary course of its business. All such actions in the aggregate involve amounts that are believed by management to be immaterial to the financial condition and results of operations of the Company.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

The common stock of New York Community Bancorp, Inc. trades on the New York Stock Exchange (the “NYSE”) under the symbol “NYCB.”

At December 31, ~~2017,~~2022, the number of outstanding shares was ~~488,490,352~~681,217,334 and the number of registered owners was approximately ~~11,868.~~11,746. The latter figure does not include those investors whose shares were held for them by a bank or broker at that date.

~~The following table sets forth the dividends declared per common share, and theintra-day~~ ~~high/low price range and closing prices for the Company’s common stock, as reported by the NYSE, in each of the four quarters of 2017 and 2016:~~

See the discussion of “Liquidity” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for information regarding restrictions on the Company’s ability to pay dividends.

On June 16, 2017, our President and Chief Executive Officer, Joseph R. Ficalora, submitted to the NYSE his Annual CEO certification confirming our compliance with the NYSE’s corporate governance listing standards, as required by Section 303A.12(a) of the NYSE Listed Company Manual.

Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate future filings, including this Form~~10-K,~~ ~~in whole or in part, the following stock performance graph shall not be incorporated by reference into any such filings.~~

The following graph compares the cumulative total return on the Company’s stock in the five years ended December 31, ~~2017~~2022 with the cumulative total returns on a broad market index (the S&PMid-Cap 400 Index) and a peer group index (the ~~SNL~~S&P U.S. ~~Bank and Thrift~~BMI Banks Index) during the same time. The S&PMid-Cap 400 Index was chosen as the broad market index in connection with the Company’s trading activity on the NYSE; the ~~SNL~~S&P U.S. ~~Bank and Thrift~~BMI Banks Index currently is comprised of ~~395~~302 bank and thrift institutions, including the Company. S&P Global Market Intelligence provided us with the data for both indices.

The performance graph is being furnished solely to accompany this report pursuant to Item 201(e) of Regulation S-K, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

The cumulative total returns are based on the assumption that $100.00 was invested in each of the three investments on December 31, ~~2012~~2017 and that all dividends paid since that date were reinvested. Such returns are based on historical results and are not intended to suggest future performance.

S&PMid-Cap 400 Index, and ~~SNL~~S&P U.S. ~~Bank and Thrift Index~~BMI Banks Index*

Shares Repurchased Pursuant to the Company’s Stock-Based Incentive Plans

Participants in the Company’s stock-based incentive plans may have shares of common stock withheld to fulfill the income tax obligations that arise in connection with their recent event exercise of stock options and the vesting of their stock awards. Shares that are withheld for this purpose are repurchased pursuant to the terms of the applicable stock-based incentive plan, rather than pursuant to the share repurchase program authorized by the Board of Directors described below.

During the twelve months ended December 31, 2017, the Company allocated $18.5 million toward the repurchase of shares of its common stock, including $7.5 million in the fourth quarter, as indicated in the following table:

Shares Repurchased Pursuant to the Board of Directors’ Share Repurchase Authorization

On ~~April 20, 2004,~~October 23, 2018, the Board of Directors authorized the repurchase of up to ~~five~~$300 million ~~shares~~ of the Company’s common stock. ~~Of this amount, 1,659,816 shares were still available for repurchase at December 31, 2017.~~ Under said authorization, shares may be repurchased on the open market or in privately negotiated transactions. ~~No shares have been repurchased~~As of December 31, 2022, the Company has approximately $9 million remaining under this ~~authorization since August 2006.~~repurchase authorization.

Shares that are repurchased pursuant to the Board of Directors’ authorization, and those that are repurchased pursuant to the Company’s stock-based incentive plans, are held in our Treasury account and may be used for various corporate purposes, including, but not limited to, merger transactions and the vesting of restricted stock awards.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the purpose of this discussion and analysis, the words “we,” “us,” “our,” and the “Company” are used to refer to New York Community Bancorp, Inc. and our consolidated subsidiaries, including ~~New York Community~~Flagstar Bank N.A. (the ~~“Community Bank”) and New York Commercial Bank (the “Commercial Bank”) (collectively, the “Banks”).~~

New York Community Bancorp, Inc. is the holding company for New York Community Bank, with 225 branches in Metro New York, New Jersey, Ohio, Florida, and Arizona, and New York Commercial Bank, with 30 branches in Metro New York. At December 31, 2017, we had total assets of $49.1 billion, including total loans of $38.4 billion, total deposits of $29.1 billion, and total stockholders’ equity of $6.8 billion.

Chartered in the State of New York, the Community Bank and the Commercial Bank are subject to regulation by the Federal Deposit Insurance Corporation (the “FDIC”), the Consumer Financial Protection Bureau, and the New York State Department of Financial Services (the “NYSDFS”“Bank”). In addition, the holding company is subject to regulation by the Board of Governors of the Federal Reserve System (the “FRB”), the U.S. Securities and Exchange Commission (the “SEC”), and to the requirements of the New York Stock Exchange, where shares of our common stock are traded under the symbol “NYCB.”45.755.3

As a publicly traded company, our mission is to provide our shareholders with a solid return on their investment by producing a strong financial performance, maintaining a solid capital position, and engaging in corporate strategies that enhance the value of their shares.

For the twelve months ended December 31, ~~2017,~~2022, net income was $650 million, an increase of $54 million or 9 percent compared to the $596 million the Company reported for the twelve months ended December 31, 2021. Net income available to common stockholders for the twelve months ended December 31, 2022 was $617 million, also up $54 million and 10 percent compared to the twelve months ended December 31, 2021. On a per share basis, this translates into diluted earnings per share of $1.26 in full-year 2022, up 5 percent compared to the $1.20 we reported in full-year 2021. In terms of profitability, our full-year 2022 results reflect a return on average assets of 1.01 percent compared to 1.04 percent in full-year 2021 and a return on average common stockholders' equity of 9.38 percent for the full-year 2022 versus 8.75 percent for the full-year 2021.

At December 31, 2022, total loans and leases held for investment were $69.0 billion, up $23.3 billion or 51 percent compared to $45.7 billion at December 31, 2021. Of the $23.3 billion in growth this year, the Flagstar acquisition contributed $17.2 billion in loans, net of PAA. During the year, multi-family loans increased $3.5 billion or 10 percent to $38.1 billion, while the CRE portfolio increased $3.6 billion or 52 percent to $10.5 billion. The increase in the CRE portfolio was due to the Flagstar acquisition, while the increase in multi-family loans was primarily the result of organic growth.

Our specialty finance portfolio increased $912 million or 26 percent to $4.4 billion at December 31, 2022. Total commitments for the specialty finance portfolio stood at $7.4 billion at December 31, 2022. The remaining C&I portfolio, excluding specialty finance, totaled $7.9 billion at year-end 2022 compared to $526 million at year-end 2021 due primarily to the Flagstar acquisition.

One-to-four family residential loans held for investment totaled $5.8 billion at December 31, 2022. The vast majority of these loans were acquired in the Flagstar acquisition. Other loans totaled $2.3 billion at December 31, 2022 compared to only $6 million at year-end 2021. The increase was due to the Flagstar acquisition and is mostly comprised of consumer loans.

Loans held for sale were $1.1 billion at December 31, 2022, resulting from the Flagstar acquisition. These loans consisted of one-to-four family residential mortgage loans pending sale for which we have elected the fair value option.

At December 31, 2022, multi-family loans represented 55 percent of total loans, compared to 76 percent at December 31, 2021, commercial loans (including specialty finance and CRE loans) represented 33 percent compared to less than 25 percent at December 31, 2021, while residential loans represented 8 percent.

Total deposits at December 31, 2022 were $58.7 billion, up $23.7 billion or 67 percent compared to $35.1 billion at December 31, 2021. Deposit growth was driven by the addition of $16.0 billion of deposits from the Flagstar acquisition and $7.6 billion growth in loan-related deposits and BaaS deposits. Non-interest-bearing deposits were $12.1 billion at December 31, 2022 and represented 21 percent of total deposits, compared to $4.5 billion, or 13 percent as of December 31, 2021. Excluding the impact of the Flagstar acquisition, deposits increased $7.6 billion or 22 percent during 2022. Loan-related deposits totaled $4.4 billion at December 31, 2022 up $389 million or 10 percent as compared to $4.0 billion at December 31, 2021.

In addition, our BaaS deposits totaled $11.5 billion at December 31, 2022, up $10.5 billion compared to $1.0 billion at December 31, 2021. Our BaaS deposits fall into three verticals: traditional BaaS, banking as a service for government agencies and states, which includes the U.S. Treasury's prepaid debit card program, and mortgage as a service, which caters to mortgage companies and consists primarily of escrow deposit accounts for principal, interest, and tax payments. The majority of the year-over-year growth was in the government banking as a service vertical and related to certain prepaid debit card programs.

During the twelve months ended December 31, 2022, our net interest income grew driven by our higher asset base. Net interest income for full-year 2022 was $1.4 billion, up $107 million or 8 percent compared to $1.3 billion for the twelve months ended December 31, 2021. Average interest-earning assets increased $7.0 billion or 13 percent over the course of ~~$466.2~~the year to $59.3 billion primarily due to organic loan growth and the Flagstar acquisition. The average yield increased 30 basis points to 3.53 percent. Average interest-bearing liabilities totaled $51.4 billion, up $6.2 billion or 14 percent, while the average cost of funds rose 47 basis points to 1.35 percent.

For the twelve months ended December 31, 2022, the NIM declined 12 basis points to 2.35 percent compared to 2.47 percent for the twelve months ended December 31, 2021 primarily driven by the impact of higher interest rates on the liability sensitive balance sheet through November 30, 2022. With the Flagstar acquisition we remain slightly liability sensitive. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,”. Prepayment income contributed eight basis points to the full-year NIM compared to 15 basis points during full-year 2021 as prepayments slowed due to rising interest rates.

Asset quality remained strong during 2022 as increases in NPAs were substantially due to changes in asset mix related to the Flagstar acquisition and centered on non-performing one-to-four family residential and home equity loans. Total NPAs at December 31, 2022 were $153 million compared to ~~$495.4~~$41 million at December 31, 2021, primarily driven by NPLs and assets acquired in the Flagstar acquisition. At December 31, 2022, NPAs to total assets equaled 0.17 percent and NPLs to total loans were 0.20 percent, compared to 0.07 percent for both metrics at December 31, 2021.

Net interest income is our primary source of income. Its level is a function of the average balance of our interest-earning assets, the average balance of our interest-bearing liabilities, and the spread between the yield on such assets and the cost of such liabilities. These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by various external factors, including the local economy, competition for loans and deposits, the monetary policy of the FOMC, and market interest rates.

While the target federal funds rate generally impacts the cost of our short-term borrowings and deposits, the yields on our held-for-investment loans and other interest-earning assets are not as sensitive to intermediate-term market interest rates.

Another factor that impacts the yields on our interest-earning assets—and our net interest income—is the income generated by our multi-family and CRE loans and securities when they prepay. Since prepayment income is recorded as interest income, an increase or decrease in its level will also be reflected in the average yields (as applicable) on our loans, securities, and interest-earning assets, and therefore in our net interest income, our net interest rate spread, and our net interest margin.

It should be noted that the level of prepayment income on loans recorded in any given period depends on the volume of loans that refinance or prepay during that time. Such activity is largely dependent on such external factors as current market conditions, including real estate values, and the perceived or actual direction of market interest rates. In addition, while a decline in market interest rates may trigger an increase in refinancing and, therefore, prepayment income, so too may an increase in market interest rates. It is not unusual for borrowers to lock in lower interest rates when they expect, or see, that market interest rates are rising rather than risk refinancing later at a still higher interest rate.

For the twelve months ended December 31, 2022, net interest income totaled $1.4 billion, up $107 million or 8 percent compared to the twelve months ended December 31, 2021. The year-over-year improvement was driven by an increase in interest income partially offset by higher interest expense due to the rising rate environment.

The following factors contributed to the year-over-year increase in net interest income:

The Company’s net interest margin declined 12 basis points for the twelve months ended December 31, 2022, to 2.35 percent compared to 2.47 percent for the twelve months ended December 31, 2021. This decline was driven by our liability sensitive balance sheet in the rising rate environment. Prepayment income contributed eight basis points to the full-year net interest margin compared to 15 basis points during full-year 2021.

The following table sets forth certain information regarding our average balance sheet for the years indicated, including the average yields on our interest-earning assets and the average costs of our interest-bearing liabilities. Average yields are calculated by dividing the interest income produced by the average balance of interest-earning assets. Average costs are calculated by dividing the interest expense produced by the average balance of interest-bearing liabilities. The average balances for the year are derived from average balances that are calculated daily. The average yields and costs include fees, as well as premiums and discounts (including mark-to-market adjustments from acquisitions), that are considered adjustments to such average yields and costs.

The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities affected our interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) the changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) the changes attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

In connection with the Flagstar acquisition we have recorded certain assets and liabilities at fair value. The following table provides information regarding the discounts and premiums that are estimated to accrete or amortize into earnings in future periods using the estimated effective duration and methods shown below.

For the twelve months ended December 31, 2022, the provision for credit losses totaled $133 million compared to $3 million for the twelve months ended December 31, ~~2016, down 6%. Net~~2021. The fourth-quarter and full-year provision for credit losses was impacted by the provision for credit losses related to the initial ACL measurement of non-PCD Flagstar acquired loans totaling $117 million. For additional information about our methodologies for recording recoveries of, and provisions for, loan losses, see the discussion of the loan loss allowance under “Critical Accounting Policies” and the discussion of “Asset Quality” that appear earlier in this report.

We generate non-interest income ~~available~~through a variety of sources, including—among others—fee income (in the form of retail deposit fees and charges on loans); income from our investment in BOLI; net return on our MSR asset; gains on sales of securities; and “other” sources, including the revenues produced through the sale of third-party investment products and loan subservicing.

For the twelve months ended December 31, 2022, non-interest income totaled $247 million, which includes a bargain purchase gain of $159 million related to ~~common shareholders totaled $441.6~~the Flagstar acquisition. Non-interest income increased an additional $27 million ~~down 11%~~ from the ~~$495.4~~year-ended December 31, 2021, to $88 million ~~reported~~for the year-ended December 31, 2022, a 44 percent increase due primarily to fee income generated in December from the Flagstar acquisition.

For the twelve months ended December 31, 2022, total non-interest expenses were $684 million, up $143 million or 26 percent compared to the twelve months ended December 31, 2021. Excluding the impact of merger-related expenses totaling $75 million and intangible asset amortization of $5 million, total operating expenses were $604 million compared to $518 million last year, up $86 million or 17 percent. The increase was primarily due to one month of Flagstar in our results. The efficiency ratio for full-year 2022 was 40.72 percent compared to 38.36 percent for full-year 2021.

Income tax expense includes federal, New York State, and New York City income taxes, as well as non-material income taxes from other jurisdictions where we operate our branches and/or conduct our mortgage banking business.

For the twelve months ended December 31, 2022, total income tax expense was $176 million and the effective tax rate was 21.36 percent compared to income tax expense of $210 million and an effective tax rate of 26.09 percent for the twelve months ended December 31, ~~2016. Diluted earnings per common share were $0.90~~2021. The year-over-year decline in the effective tax rate primarily reflects the non-taxability of certain merger-related items including the bargain purchase gain. In addition, the effective tax rate in 2021 was negatively impacted by $2 million of income tax expense related to the revaluation of deferred taxes related to a change in the New York State tax rate.

The results of operations comparison of 2021 compared to 2020 can be found in the Company’s previously filed Annual Report on Form 10-K for the ~~twelve months ended~~year-ended December 31, ~~2017, as~~2021 under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”- Results of Operations: 2021 As Compared to 2020.”

At December 31, 2022, total assets were $90.1 billion, up $30.6 billion or 51 percent compared to ~~$1.01 per diluted common share for the twelve months ended~~ December 31, ~~2016, down 11%.~~

Additionally, we maintained our status as a well-capitalized institution with regulatory capital ratios that rose year-over-year. We also engaged in strategies that were consistent with our business model, as further described below:

~~After not growing our balance sheet over~~2021. The growth compared the ~~past three years, the Company resumed its organic balance sheet strategy in the fourth quarter of 2017. Compared~~prior period was primarily due to the ~~third quarter~~Flagstar acquisition which added $25.8 billion of ~~2017, total~~ assets, ~~grew at an annualized rate~~net of ~~5.5% to $49.1 billion. This~~PAA, while the remaining growth was ~~achieved through a combination~~driven by growth in our lending portfolios.

Total loans and leases held for investment were $69.0 billion at December 31, 2022 compared to $45.7 billion at December 31, 2021. The Flagstar acquisition added $18.0 billion of ~~securities and loan growth. Total securities increased by $500.4 million or 16.5% (not annualized) to $3.5 billion, while totalnon-covered~~ loans held for investment, ~~increased by $881.8 million, or 9.4% annualized. At the same time, we significantly curtailed the practice~~net of ~~selling~~PAA. Total loans to other financial institutions. While we recorded strong growth to end the year, we still managed to stay below the Systemically Important Financial Institution (“SIFI”) threshold of $50 billion. For the four quarters endedheld for sale were $1.3 billion at December 31, ~~2017,~~2022, all of which were the ~~Company’s~~result of the Flagstar acquisition.

~~We Maintained a Strong Presence~~deposits were $58.7 billion compared to $35.1 billion at December 31, 2021. The acquisition of Flagstar added $16.0 billion in ~~our Multi-Family Lending Niche~~

~~In 2017, we originated $8.9~~deposits, net of PAA. Wholesale borrowings at December 31, 2022 totaled $20.3 billion compared to $15.9 billion at December 31, 2021. The acquisition of Flagstar added $6.4 billion of ~~loans for investment, including $5.4~~wholesale borrowings.

Borrowed funds totaled $21.3 billion as of year-end 2022, up $4.8 billion or 29 percent compared to year-end 2021. The acquisition of Flagstar added $6.7 billion of ~~our core multi-family product, $1.0 billion~~borrowings, net of ~~commercial real estate (“CRE”) loans, and $1.8 billion of specialty finance loans.~~PAA. The ~~increase occurred in the latter half of the year, with most of it arising in the fourth quarter of 2017, as total originations of held-for-investment loans increased 52% as compared~~net decline was due to ~~the fourth quarter of 2016. This includes origination growth of 76% for our multi-family loans, 21% for our CRE loans, and 53% for our specialty finance loans.~~lower cost deposit growth.

On June 27, 2017, the Company announced that it had entered into an agreement to sell its mortgage banking business, which was acquired as part of its 2009 FDIC-assisted acquisition of AmTrust Bank (“AmTrust”), to Freedom Mortgage Corporation. This sale included both our origination and servicing platforms, as well as our mortgage servicing rights portfolio. Additionally, the Company received approval from the FDIC to sell the assets covered under our Loss Share Agreements (“LSA”) and entered into an agreement to sell the majority of our~~one-to-four~~ family residential mortgage-related assets, including those covered under the LSA, to an affiliate of Cerberus Capital Management, L.P. (“Cerberus”). Both transactions were completed during the third quarter.

~~Non-performingnon-covered~~ ~~assets represented $90.1 million, or 0.18%, of totalnon-covered~~ ~~assets at the end of this December, andnon-performingnon-covered~~ ~~loans represented $73.7 million, or 0.19%, of totalnon-covered~~ ~~loans. While our level ofnon-performing~~ ~~assets was modestly higher than the year-earlier level, the increase stemmed from the transfer tonon-accrual~~ ~~status of certain taxi medallion-related loans. The performance of our multi-family and CRE loans, which are our principal assets, continued to be exceptional over the course of the year.~~

Also reflecting the quality of our assets was the level of net charge-offs we recorded in the twelve months ended December 31, 2017. Net charge-offs represented $61.2 million, or 0.16% of average loans, and largely consisted of taxi medallion-related loans.

~~The following is a discussion of certain external factors that tend to influence our financial performance and the strategic actions we take.~~

Among the external factors that tend to influence our performance, the interest rate environment is key. Just as short-term interest rates affect the cost of our deposits and that of the funds we borrow, market interest rates affect the yields on the loans we produce for investment and the securities in which we invest.

~~As further discussed under “Loans~~Loans Held for ~~Investment” later on in this discussion, the interest rates on our multi-family loans and CRE credits generally are based on the five-year Constant Maturity Treasury Rate (the “CMT”).~~ Investment

The following table summarizes the ~~high, low, and average five- andten-year~~ ~~CMT rates in 2017 and 2016:~~

Because the multi-family and CRE loans we produce generate income when they prepay (which is recorded as interest income), the impact of repayment activity can be especially meaningful. In 2017, prepayment income from loans contributed $47.0 million to interest income; in the prior year, the contribution was $60.9 million.

~~While we attribute our asset quality to the nature of the loans we produce and our conservative underwriting standards, the quality~~composition of our assets can also be impacted by economic conditions in our local markets and throughout the United States. The information that follows consists of recent economic data that we consider to be germane to our performance and the markets we serve.loan portfolio:

The following table ~~presents the generally downward trend in unemployment rates, as reported by the U.S. Department of Labor, both nationally and in the various markets that comprise~~summarizes our ~~footprint, for the months indicated:~~

The Consumer Price Index (the “CPI”) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The following table indicates the change in the CPI for the twelve months ended at each of the indicated dates:

~~Economic activity also is indicated by the Consumer Confidence Index~~^®~~, which moved up to 122.1 in December 2017 from 113.7 in December 2016. An index level of 90 or more is considered indicative of a strong economy.~~

The residential rental vacancy rate in New York, as reported by the U.S. Department of Commerce, and the office vacancy rate in Manhattan, as reported by a leading commercial real estate broker (Jones Lang LaSalle), are important in view of the fact that 63.6% of our multi-family loans and 69.3% of our CRE loans are secured by properties in New York City, with Manhattan accounting for 26.4% and 50.7% of our multi-family and CRE loans, respectively.

As reflected in the following table, the residential rental vacancy rate in New York and the office vacancy rate in Manhattan were both lower in the three months ended December 31, 2017 than they were in the three months ended December 31, 2016:

On January 30, 2018, the Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.17 per share, payable on February 27, 2018 to common shareholders of record at the close of business on February 13, 2018.

We consider certain accounting policies to be critically important to the portrayal of our financial condition and results of operations, since they require management to make complex or subjective judgments, some of which may relate to matters that are inherently uncertain. The inherent sensitivity of our consolidated financial statements to these critical accounting policies, and the judgments, estimates, and assumptions used therein, could have a material impact on our financial condition or results of operations.

We have identified the following to be critical accounting policies: the determination of the allowances for loan losses; the determination of the amount, if any, of goodwill impairment; and the determination of the valuation allowance, if any, for deferred tax assets.

The judgments used by management in applying these critical accounting policies may be influenced by adverse changes in the economic environment, which may result in changes to future financial results.

~~The allowance for losses onnon-covered~~ ~~loans represents our estimate of probable and estimable losses inherent in thenon-covered~~ ~~loan portfolio as of the date of the balance sheet. Losses onnon-covered~~ ~~loans are charged against, and recoveries of losses onnon-covered~~ ~~loans are credited back to, the allowance for losses onnon-covered~~ ~~loans.~~

~~Althoughnon-covered~~ loans are held by either the Community Bank or the Commercial Bank, and a separate loan loss allowance is established for each, the total of the two allowances is available to cover all losses incurred. In addition, except as otherwise noted in the following discussion, the process for establishing the allowance for losses on~~non-covered~~ ~~loans is largely the same for each of the Community Bank and the Commercial Bank.~~

~~The methodology used for the allocation of the allowance fornon-covered~~ ~~loan losses at December 31, 2017 and December 31, 2016 was generally comparable, whereby the Community Bank and the Commercial Bank segregated their loss factors (used for both criticized andnon-criticized~~ loans) into a component that was primarily based on historical loss rates and a component that was primarily based on other qualitative factors that are probable to affect loan collectability. In determining the respective allowances for~~non-covered~~ loan losses, management considers the Community Bank’s and the Commercial Bank’s current business strategies and credit processes, including compliance with applicable regulatory guidelines and with guidelines approved by the respective Boards of Directors with regard to credit limitations, loan approvals, underwriting criteria, and loan workout procedures.

~~The allowance for losses onnon-covered~~ loans is established based on management’s evaluation of incurred losses in the portfolio in accordance with U.S. generally accepted accounting principles (“GAAP”), and is comprised of both specific valuation allowances and general valuation allowances.

~~Specific valuation allowances are established based on management’s analyses of individual loans that are considered impaired. If anon-covered~~ ~~loan is deemed to be impaired, management measures the extent of the impairment and establishes a specific valuation allowance for that amount. Anon-covered~~ loan is classified as “impaired” when, based on current information and/or events, it is probable that we will be unable to collect all amounts due under the contractual terms of the loan agreement. We apply this classification as necessary to~~non-covered~~ loans individually evaluated for impairment in our portfolios. Smaller-balance homogenous loans and loans carried at the lower of cost or fair value are evaluated for impairment on a collective, rather than individual, basis. Loans to certain borrowers who have experienced financial difficulty and for which the terms have been modified, resulting in a concession, are considered troubled debt restructurings (“TDRs”) and are classified as impaired.

We generally measure impairment on an individual loan and determine the extent to which a specific valuation allowance is necessary by comparing the loan’s outstanding balance to either the fair value of the collateral, less the estimated cost to sell, or the present value of expected cash flows, discounted at the loan’s effective interest rate. Generally, when the fair value of the collateral, net of the estimated cost to sell, or the present value of the expected cash flows is less than the recorded investment in the loan, any shortfall is promptly charged off.

~~We also follow a process to assign general valuation allowances tonon-covered~~ ~~loan categories. General valuation allowances are established by applying our loan loss provisioning methodology, and reflect the inherent risk in outstandingheld-for-investment~~ loans. This loan loss provisioning methodology considers various factors in determining the appropriate quantified risk factors to use to determine the general valuation allowances. The factors assessed begin with the historical loan loss experience for each major loan category. We also take into account an estimated historical loss emergence period (which is the period of time between the event that triggers a loss and the confirmation and/or~~charge-off~~ ~~of that loss) for each loan portfolio segment.~~

The allocation methodology consists of the following components: First, we determine an allowance for loan losses based on a quantitative loss factor for loans evaluated collectively for impairment. This quantitative loss factor is based primarily on historical loss rates, after considering loan type, historical loss and delinquency experience, and loss emergence periods. The quantitative loss factors applied in the methodology are periodically~~re-evaluated~~ and adjusted to reflect changes in historical loss levels, loss emergence periods, or other risks. Lastly, we allocate an allowance for loan losses based on qualitative loss factors. These qualitative loss factors are designed to account for losses that may not be provided for by the quantitative loss component due to other factors evaluated by management, which include, but are not limited to:

~~By considering the factors discussed above, we determine an allowance fornon-covered~~ ~~loan losses that is applied to each significant loan portfolio segment to determine the total allowance for losses onnon-covered~~ ~~loans.~~

~~The historical loss period we use to determine the allowance for loan losses onnon-covered~~ ~~loans is a rolling 28-quarter look-back period, as we believe this produces an appropriate reflection of our historical loss experience.~~

~~The process of establishing the allowance for losses onnon-covered~~ ~~loans also involves:~~

~~In order to determine their overall adequacy, each of the respectivenon-covered~~ ~~loan loss allowances is reviewed quarterly by management and the Board of Directors of the Community Bank or the Commercial Bank, as applicable.~~

We charge 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 followingpast-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) Bothclosed-end~~ ~~andopen-end~~ ~~credits are typically charged off in the quarter that the credit is 60 days past the date we received notification that the borrower has filed for bankruptcy.~~

~~The level of future additions to the respectivenon-covered~~ loan loss allowances is based on many factors, including certain factors that are beyond management’s control, such as changes in economic and local market conditions, including declines in real estate values, and increases in vacancy rates and unemployment. Management uses the best available information to recognize losses on loans or to make additions to the loan loss allowances; however, the Community Bank and/or the Commercial Bank may be required to take certain charge-offs and/or recognize further additions to their loan loss allowances, based on the judgment of regulatory agencies with regard to information provided to them during their examinations of the Banks.

~~An allowance for unfunded commitments is maintained separate from the allowances fornon-covered~~ ~~loan losses and is included in “Other liabilities” in the Consolidated Statements of Condition.~~

~~See Note 6, “Allowances for Loan Losses” for a further discussion of our allowance for losses on covered loans, as well as additional information about our allowance for losses onnon-covered~~ ~~loans.~~

We have significant intangible assets related to goodwill. In connection with our acquisitions, assets acquired and liabilities assumed are recorded at their estimated fair values. Goodwill represents the excess of the purchase price

~~of our acquisitions over the fair value of identifiable net assets acquired, including other identified intangible assets. Our goodwill is evaluated for impairment annually as ofyear-end~~ or more frequently if conditions exist that indicate that the value may be impaired. Our determination of whether or not goodwill is impaired requires us to make significant judgments and requires us to use significant estimates and assumptions regarding estimated future cash flows. If we change our strategy or if market conditions shift, our judgments may change, which may result in adjustments to the recorded goodwill balance.

We test our goodwill for impairment at the reporting unit level. These impairment evaluations are performed by comparing the carrying value of the goodwill of a reporting unit to its estimated fair value. We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We had previously identified two reporting units: our Banking Operations reporting unit, and our Residential Mortgage Banking reporting unit. On September 29, 2017, the Company sold the Residential Mortgage Banking reporting unit. Our reporting units are the same as our operating segments and reportable segments.

For annual goodwill impairment testing, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill and other intangible assets. If we conclude that this is the case, we must perform the~~two-step~~ test described below. If we conclude based on the qualitative assessment that it is notmore likely than not that the fair value of a reporting unit is less than its carrying amount, we have completed our goodwill impairment test and do not need to perform the~~two-step~~ ~~test.~~

Step one requires the fair value of each reporting unit is compared to its carrying value in order to identify potential impairment. If the fair value of a reporting unit exceeds the carrying value of its net assets, goodwill is not considered impaired and no further testing is required. If the carrying value of the net assets exceeds the fair value of a reporting unit, potential impairment is indicated at the reporting unit level and step two of the impairment test is performed.

Step two requires that when potential impairment is indicated in step one, we compare the implied fair value of goodwill with the carrying amount of that goodwill. Determining the implied fair value of goodwill requires a valuation of the reporting unit’s tangible and~~(non-goodwill)~~ intangible assets and liabilities in a manner similar to the allocation of the purchase price in a business combination. Any excess in the value of a reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

As of December 31, 2017, we had goodwill of $2.4 billion. During the year ended December 31, 2017, no triggering events were identified that indicated that the value of goodwill may be impaired. The Company performed its annual goodwill impairment assessment as of December 31, 2017 using step one of the quantitative test and found no indication of goodwill impairment at that date.

In estimating income taxes, management assesses the relative merits and risks of the tax treatment of transactions, taking into account statutory, judicial, and regulatory guidance in the context of our tax position. In this process, management also relies on tax opinions, recent audits, and historical experience. Although we use the best available information to record income taxes, underlying estimates and assumptions can change over time as a result of unanticipated events or circumstances such as changes in tax laws and judicial guidance influencing our overall or transaction-specific tax position.

On December 22, 2017 the federal Tax Cuts and Jobs Act, (the “Tax Reform Act”) was enacted into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering of the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Reform Act, the Company recorded a tax benefit of $42 million due to the net impact of remeasurement of tax attributes affected by the Tax Reform Act.

We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and the carryforward of certain tax attributes such as net operating losses. A valuation allowance is maintained for deferred tax assets that we estimate are more likely than not to be unrealizable, based on available evidence at the time the estimate is made. In assessing the need for a valuation allowance, we estimate future taxable income, considering the prudence and feasibility of tax planning strategies and the realizability of tax loss carryforwards.

Valuation allowances related to deferred tax assets can be affected by changes to tax laws, statutory tax rates, and future taxable income levels. In the event we were to determine that we would not be able to realize all or a portion of our net deferred tax assets in the future, we would reduce such amounts through a charge to income tax expense in the period in which that determination was made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through a decrease in income tax expense in the period in which that determination was made. Subsequently recognized tax benefits associated with valuation allowances recorded in a business combination would be recorded as an adjustment to goodwill.

At December 31, 2017, we recorded total assets of $49.1 billion, a $197.6 million increase from the balance at December 31, 2016. Loans, net, and securities represented $38.3 billion and $3.5 billion, respectively, of the December 31st balance and were down $1.0 billion and $285.6 million, respectively, from the prior~~year-end~~ balances. The main reason for the decline in loan balances was due to the sale, during the year, of our covered loan portfolio, which totaled $1.7 billion at December 31, 2016. Excluding this sale, total~~non-covered~~ ~~loans, net, were $38.3 billion at the current year-end, up $631.6 million or 1.7% from the prioryear-end.~~

~~Total deposits and borrowed funds were $29.1 billion and $12.9 billion, respectively, at December 31, 2017. Deposits increased $214.3 million, or 0.7%, as compared to the prioryear-end,~~ ~~while wholesale borrowings declined 5.7% or $760.0 million versus the balance at December 31, 2016.~~

~~Total stockholders’ equity rose $671.4 million from theyear-end~~ 2016 balance, due primarily to a $502.8 million preferred stock offering in March of 2017. Common stockholders’ equity represented 12.81% of total assets at December 31, 2017 compared to 12.52% at December 31, 2016. Book value per common share was $12.88 at December 31, 2017 compared to $12.57 at December 31, 2016.

~~Total loans declined $1.0 billion year-over-year to $38.4 billion, representing 78.2% of total assets at December 31, 2017. Included in the 2016year-end~~ ~~amount were covered loans of $1.7 billion. Given the sale of those loans during 2017, the Company did not have any covered loans as of December 31, 2017 and only $35.3 million ofnon-covered~~ ~~loans held for sale compared tonon-covered~~ ~~loans held for sale of $409.2 million at December 31, 2016.~~

As previously discussed, the Company sold its covered loan portfolio during the third quarter of 2017; therefore, the Company does not have any covered loans outstanding as of December 31, 2017. Covered loans at December 31, 2016 were $1.7 billion.

~~The majority of the loans we produce are loans held for investment and most of theheld-for-investment~~ ~~loans we produce are multi-family loans. Our~~ production of multi-family loans began several decades ago in the five boroughs of New York City, where the majority of the rental units currently consist of rent-regulated apartments featuring below-market rents.

~~In addition to multi-family loans, our portfolio~~ of loans held for ~~investment contains a large number of CRE credits, most of which are secured by income-producing properties located in New York City and on Long Island.~~investment:

~~In addition to multi-family loans and CRE loans, our portfolio includes substantially smaller balances ofone-to-four~~ family loans, ADC loans, and other loans held for investment, with commercial and industrial (“C&I”) loans comprising the bulk of the other loan portfolio. Specialty finance loans and leases account for most of our C&I credits, with the remainder consisting primarily of loans to small and~~mid-size~~ ~~businesses, referred to as other C&I loans.~~

~~At December 31, 2017, loans secured by multi-family,non-owner~~ ~~occupied CRE, and ADC properties represented 742.1% of the consolidated Banks’ total risk-based capital, within our limit of 850%.~~

~~In 2017, we originated $8.9 billion ofheld-for-investment~~ ~~loans, a $264.0 million decrease from the prior year. A major reason for this decline was related to a drop inone-to-four~~ ~~family originations, as we exited that business in the third quarter of the year. During 2017, we sold $429.4 million ofheld-for-investment~~ loans, largely through participations, as compared to $1.7 billion in 2016. The decline in loan sales is consistent with the Company’s strategy of resuming growth in the second half of 2017. In 2017, sales of such loans produced net gains of $1.2 million as compared to $15.8 million in 2016.

Multi-family loans are our principal asset. The loans we produce are primarily secured bynon-luxury residential apartment buildings in New York City that feature rent-regulated units and below-market rents—a market we refer to as our “primary lending niche.” Consistent with our emphasis on multi-family lending, multi-family loan originations represented ~~$5.4~~$8.4 billion, or ~~60.3%,~~49 percent, of the loans we produced for investment in ~~2017. The latter amount was $307.2 million, or 5%, lower than the prior year’s volume.~~2022.

At December 31, ~~2017,~~2022, multi-family loans represented ~~$28.1~~$38.1 billion, or ~~73.2%,~~55 percent, of total~~non-covered~~ loans held for investment, reflecting a year-over-year increase of ~~$1.1~~$3.5 billion, or ~~4.2%.~~10 percent.

At December 31, 2017 and 2016, respectively, the average multi-family loan had a principal balance of $5.8 million and $5.5 million; the expected weighted average life of the portfolio was 2.6 years and 2.9 years at the respective dates.

The majority of our multi-family loans ~~are made to long-term owners~~were secured by rental apartment buildings.

At December 31, 2022, $22.2 billion or 58 percent of ~~buildings with apartments that~~the Company’s total multi-family loan portfolio is secured by properties in New York State and, therefore, are subject to the new rent regulation ~~and feature below-market rents. Our borrowers typically use~~laws. The weighted average LTV of the ~~funds we provide~~NYS rent regulated multi-family portfolio was 57.15 percent as of December 31, 2022, compared to ~~make building-wide improvements and renovations to certain apartments, as~~ a ~~result~~weighted average LTV of ~~which they are able to increase~~60.48 percent for the ~~rents their tenants pay. In doing so, the borrower creates more cash flows to borrow against in future years.~~entire multi-family loan portfolio at that date.

In addition to underwriting multi-family loans on the basis of the buildings’ income and condition, we consider the borrowers’ credit history, profitability, and building management expertise. Borrowers are required to present evidence of their ability to repay the loan from the buildings’ current rent rolls, their financial statements, and related documents.

While a ~~small~~ percentage of our multi-family loans areten-year fixed rate credits, the vast majority of our multi-family loans feature a term of ten or twelve years, with a fixed rate of interest for the first five or seven years of the loan, and an alternative rate of interest in years six through ten or eight through twelve. The rate charged in the first five or seven years is generally based on intermediate-term interest rates plus a spread.

During the remaining years, the loan resets to an annually adjustable rate that is ~~tied~~indexed to ~~the prime rate of interest,~~CME Term SOFR , plus a spread. Alternately, the borrower may opt for a fixed rate that is tied to the five-year fixed advance rate of the ~~Federal Home Loan Bank of New York (the“FHLB-NY”),~~FHLB-NY, plus a spread. The fixed-rate option also requires the payment of one percentage point of the then-outstanding loan balance. In either case, the minimum rate at repricing is equivalent to the rate in the initialfive-or seven-year term. As the rent roll increases, the typical property owner seeks to refinance the mortgage, and generally does so before the loan reprices in year six or eight.

Multi-family loans that refinance within the first five or seven years are typically subject to an established prepayment penalty schedule. Depending on the remaining term of the loan at the time of prepayment, the penalties normally range from five percentage points to one percentage point of the then-current loan balance. If a loan extends past the fifth or seventh year and the borrower selects the fixed-rate option, the prepayment penalties typically reset

to a range of five points to one point over years six through ten or eight through twelve. For example, aten-year multi-family loan that prepays in year three would generally be expected to pay a prepayment penalty equal to three percentage points of the remaining principal balance. A twelve-year multi-family loan that prepays in year one or two would generally be expected to pay a penalty equal to five percentage points.

Because prepayment penalties are recorded as interest income, they are reflected in the average yields on our loans and interest-earning assets, our net interest rate spread and net interest margin, and the level of net interest income we record. No assumptions are involved in the recognition of prepayment income, as such income is ~~only~~ recorded when the cash is received.

Our success as a multi-family lender partly reflects the solid relationships we have developed with the market’s leading mortgage brokers, who are familiar with our lending practices, our underwriting standards, and our long-standing practice of basing our loans on the cash flows produced by the properties. The process of producing such loans is generally four to six weeks in duration and, because the multi-family market is largely broker-driven, the expense incurred in sourcing such loans is substantially reduced.

~~At December 31, 2017, the majority~~We believe our underwriting quality of our multi-family loans were secured by rental apartment buildings. In addition, 63.6% of our multi-family loans were secured by buildings in New York City and 5.3% were secured by buildings elsewhere in New York State. The remaining multi-family loans were secured by buildings outside these markets, including in the four other states served by our retail branch offices.

~~Our emphasis on multi-family loans is driven by several factors, including their structure, which reduces our exposure to interest rate volatility to some degree. Another factor driving our focus on~~ multi-family lending ~~has been the comparative quality of the loans we produce. Reflecting~~is distinctive. This reflects the nature of the buildings securing our loans, our underwriting process and standards, and the generally conservative~~loan-to-value~~ LTV ratios ~~(“LTVs”)~~ our multi-family loans feature at ~~origination,~~origination. Historically, a relatively small percentage of the multi-family loans that have transitioned tonon-performing status have ~~actually~~ resulted in actual losses, even when the credit cycle has taken a downward turn.

We primarily underwrite our multi-family loans based on the current cash flows produced by the collateral property, with a reliance on the “income” approach to appraising the properties, rather than the “sales” approach. ~~The sales approach is subject to fluctuations in the real estate market, as well as general economic conditions, and is therefore likely to be more risky in the event of a downward credit cycle turn.~~ We also consider a variety of other factors, including the physical condition of the underlying property; the net operating income of the mortgaged premises prior to debt service; the ~~debt service coverage ratio (“DSCR”),~~DSCR, which is the ratio of the property’s net operating income to its debt service; and the ratio of the loan amount to the appraised value (i.e., the LTV) of the property.

In addition to requiring a minimum DSCR of ~~120%~~120 percent on multi-family buildings, we obtain a security interest in the personal property located on the premises, and an assignment of rents and leases. Our multi-family loans generally represent no more than ~~75%~~75 percent of the lower of the appraised value or the sales price of the underlying property, and typically feature an amortization period of 30 years. In addition, our multi-family loans may contain an initial interest-only period which typically does not exceed two years; however, these loans are underwritten on a fully amortizing basis.

Accordingly, while our multi-family lending niche has not been immune to downturns in the credit cycle, the limited number of losses we have recorded, even in adverse credit cycles, suggests that the multi-family loans we produce involve less credit risk than certain other types of loans. In general, buildings that are subject to rent regulation have tended to be stable, with occupancy levels remaining more or less constant over time. Because the rents are typically below market and the buildings securing our loans are generally maintained in good condition, they have been more likely to retain their tenants in adverse economic times. In addition, we exclude any short-term property tax exemptions and abatement benefits the property owners receive when we underwrite our multi-family loans.

At December 31, ~~2017,~~2022, CRE loans represented ~~$7.3~~$8.5 billion, or ~~19.1%,~~12 percent, of total loans held for investment, asreflecting a year-over-year increase of $1.8 billion compared to ~~$7.7 billion, or 20.7%, at~~ December 31, ~~2016. The growth of~~2021 primarily driven by the ~~portfolio was tempered by prepayment activity during the year. The average CRE loan had a principal balance of $5.7 million at the end of this December, as compared to $5.6 million at the prioryear-end.~~ ~~In addition, the portfolio had an expected weighted average life of 3.0 years and 3.4 years at the corresponding dates.~~Flagstar acquisition.

CRE loans represented ~~$1.0~~$1.1 billion, or ~~11.7%,~~6 percent, of the loans we ~~produced~~originated in ~~2017 for investment,~~2022, as compared to ~~$1.2 billion,~~$893 million, or ~~12.9%,~~7 percent, in the prior year.

The CRE loans we produce are secured by income-producing properties such as office buildings, retail centers,mixed-use buildings, and multi-tenanted light industrial properties. At December 31, ~~2017, 69.3%~~2022, the largest concentration of ~~our~~ CRE loans were secured by properties in the metro New York City ~~while properties on Long Island accounted~~area, refer to the Geographical Analysis table included above for ~~11.8%. Other parts~~additional details.

The terms of ~~New York State accounted for 2.6% of the properties securing our CRE credits, while all other states accounted for 16.3%, combined.~~

~~The terms~~more than half of our CRE loans are similar to the terms of our multi-family ~~credits. While a small percentage of our CRE loans featureten-year~~ ~~fixed-rate terms, they~~credits which primarily feature a fixed rate of interest for the first five ~~or seven~~ years of the loan that is generally based on intermediate-term interest rates plus a spread. ~~During years six through ten~~In addition to customary fixed rate terms, we now also offer floating rates advances indexed to CME Term SOFR. These products are generally offered in combination with interest rate cap or ~~eight through twelve,~~swaps that provide borrowers with additional optionality to manage their interest rate risk. Following the initial fixed rate period, the loan resets to an ~~annually~~ adjustable interest rate that is ~~tied~~indexed to ~~the prime rate of~~

~~interest,~~CME Term SOFR, plus a ~~spread~~.spread. Alternately, the borrower may opt for a fixed rate that is tied to the five-year fixed advance rate of theFHLB-NY plus a spread. The fixed-rate option also requires the payment of an amount equal to one percentage point of the then-outstanding loan balance. In either case, the minimum rate at repricing is equivalent to the rate in the initial five- or seven-year term.

Prepayment penalties apply to certain of our CRE loans, as they do our multi-family credits. Depending on the remaining term of the loan at the time of prepayment, the penalties normally range from five percentage points to one percentage point of the then-current loan balance. If a loan extends past the fifth or seventh year and the borrower selects the fixed rate option, the prepayment penalties typically reset to a range of five points to one point over years six through ten or eight through twelve. ~~Our CRE loans tend to refinance within three to four years of origination, as reflected in the expected weighted average life of the CRE portfolio noted above.~~

The repayment of loans secured by commercial real estate is often dependent on the successful operation and management of the underlying properties. To minimize our credit risk, we originate CRE loans in adherence with conservative underwriting standards, and require that such loans qualify on the basis of the property’s current income stream and DSCR. The approval of a loan also depends on the borrower’s credit history, profitability, and expertise in property management, and generally requires a minimum DSCR of ~~130%~~130 percent and a maximum LTV of ~~65%.~~65 percent. In addition, the origination of CRE loans typically requires a security interest in the fixtures, equipment, and other personal property of the borrower and/or an assignment of the rents and/or leases. In addition, our CRE loans may contain an interest-only period which typically does not exceed three years; however, these loans are underwritten on a fully amortizing basis.

~~One-to-Four~~ ~~Family~~The following table presents a geographical analysis of the CRE loans in our held-for-investment loan portfolio:

At December 31, ~~2017,one-to-four~~ ~~family~~2022, our ADC loans represented ~~$477.2 million,~~$2.0 billion or ~~1.2%,~~3 percent, of total loans held for investment, asreflecting a year-over-year increase of $1.8 billion compared to ~~$381.1 million, or 1.0%, at the prioryear-end.~~ ~~The year-over-year increase was due to certain mixed use CRE loans with less than five residential units being classified asone-to-four~~ ~~family loans. Other than these types of loans, we do not currently expect to originateone-to-four~~ ~~family loans.~~

~~The majority of theone-to-four~~ ~~family loans we produced for investment were prime jumbo adjustable-rate mortgage loans made at conservative LTVs to borrowers with high credit ratings. Originations ofone-to-four~~ ~~family loans dropped $179.1 million year-over-year to $124.8 million, as we exited this line of business. Such loans continued to represent a small portion (1.4%) of theheld-for-investment~~ ~~loans we produced in 2017.~~

At December 31, ~~2017, ADC loans represented $435.8 million, or 1.1%, of total loans held for investment, as compared to $381.2 million, or 1.0%, at~~2021 primarily driven by the ~~prioryear-end.~~ ~~Originations of ADC loans totaled $77.2 million in 2017, down $73.0 million from the year-earlier amount.~~Flagstar acquisition.

At December 31, 2017, 43.1% of the loans in our ADC portfolio were for land acquisition and development; the remaining 56.9% consisted of loans that were provided for the construction of commercial properties and owner-occupied homes. Loan terms vary based upon the scope of the construction, and generally range from 18 months to two years. They also feature a floating rate of interest tied to prime, with a floor. At December 31, 2017, 77.4% of our ADC loans were for properties in New York City.

Because ADC loans are generally considered to have a higher degree of credit risk, especially during a downturn in the credit cycle, borrowers are required to provide a guarantee of repayment and completion. In the twelve months ended December 31, ~~2017~~2022 and ~~2016,~~2021, we ~~recovered~~did not recover any losses against ~~guarantees of $601,000 and $337,000, respectively.~~guarantees. The risk of loss on an ADC loan is largely dependent upon the accuracy of the initial appraisal of the property’s value upon completion of construction; the developer’s experience; the estimated cost of construction, including interest; and the estimated time to complete and/or sell or lease such property.

When applicable, as a condition to closing an ADC loan, it is our practice to require that properties meetpre-sale orpre-lease requirements prior to funding.

~~Our~~At December 31, 2022 C&I loans totaled $12.3 billion or 18 percent of total loans held-for-investment. Included in this portfolio is $3.5 billion in warehouse loans that allow mortgage lenders to fund the closing of residential mortgage loans.

The non-warehouse C&I loans we produce are primarily made to small and mid-size businesses and finance companies. Such loans are tailored to meet the specific needs of our borrowers, and include term loans, demand loans, revolving lines of credit, and, to a much lesser extent, loans that are partly guaranteed by the Small Business Administration.

A broad range of C&I loans, both collateralized and unsecured, are made available to businesses for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment,

and other general corporate needs. In determining the term and structure of C&I loans, several factors are considered, including the purpose, the collateral, and the anticipated sources of repayment. C&I loans are ~~divided into two categories:~~typically secured by business assets and personal guarantees of the borrower, and include financial covenants to monitor the borrower’s financial stability.

Also included in our C&I portfolio is our national warehouse lending platform with relationship managers across the country. We offer warehouse lines of credit to other mortgage lenders which allow the lender to fund the closing of residential mortgage loans. Each extension, advance, or draw-down on the line is fully collateralized by residential mortgage loans and is paid off when the lender sells the loan to an outside investor or, in some instances, to the Bank.

Underlying mortgage loans are predominantly originated using the Agencies' underwriting standards. The guideline for debt to tangible net worth is 15 to 1. We have $3.5 billion outstanding warehouse loans to other mortgage lenders and have relationships in place to lend up to $11.6 billion at our discretion.

The interest rates on our C&I loans can be fixed or floating, with floating-rate loans being tied SOFR, prime or some other market index, plus an applicable spread. Our floating-rate loans may or may not feature a floor rate of interest. The decision to require a floor on C&I loans depends on the level of competition we face for such loans from other institutions, the direction of market interest rates, and the profitability of our relationship with the borrower.

At December 31, 2022, specialty finance loans and leases ~~and other C&I loans, as further described below.~~

~~At December 31, 2017 and 2016, specialty finance loans and leases represented $1.5~~totaled $4.4 billion ~~and $1.3 billion, respectively,~~or 7 percent of total loans held for investment, ~~and $1.8 billion and $1.3 billion, respectively, of the C&I loans produced over the course of those years.~~up $912 million or 26 percent compared to December 31, 2021.

We produce our specialty finance loans and leases through a subsidiary that is staffed by a group of industry veterans with expertise in originating and underwriting senior securitized debt and equipment loans and leases. The subsidiary participates in syndicated loans that are brought to them, and equipment loans and leases that are assigned to them, by a select group of nationally recognized sources, and are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide.

The specialty finance loans and leases we fund fall into three categories: asset-based lending, dealer floor-plan lending, and equipment loan and lease financing. Each of these credits is secured with a perfected first security interest in, or outright ownership of, the underlying collateral, and structured as senior debt or as anon-cancelable lease. ~~Asset-based~~As of December 31, 2022, 78 percent of specialty finance loan commitments outstanding are structured as floating rate obligations which will benefit in a rising rate environment. All floating rate obligations are being transitioned from LIBOR to an appropriate LIBOR replacement index in accordance with the regulatory guidance provided around LIBOR cessation.

During 2022, the Company originated $6.0 billion of specialty finance loans and ~~dealer floor-plan loans are priced at floating rates predominately tied~~leases, representing 35 percent of total originations compared to ~~LIBOR, while our equipment financing credits are priced at fixed rates at a spread over Treasuries.~~$3.2 billion during 2021, representing 24 percent of total originations.

Since launching our specialty finance business in the third quarter of 2013, no losses have been recorded on any of the loans or leases in this portfolio.

~~In the twelve months ended~~At December 31, ~~2017, other C&I loans declined $132.1 million to $500.8 million, and represented $511.4 million of theheld-for-investment~~ ~~loans we produced. Included in the balance atyear-end~~ ~~2017 were taxi medallion-related loans of $99.1 million. The portfolio of taxi medallion-related~~2022, one-to-four family loans represented ~~0.26%~~$5.8 billion, including $1.1 billion of LGG or 8 percent, of total~~held-for-investment~~ loans atheld for investment. As of December 31, ~~2017.~~

~~In contrast~~2021 total one-to-four family loans totaled $160 million, with the increase being driven by the Flagstar acquisition. These loans include various types of conforming and non-conforming fixed and adjustable rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties. We typically hold certain mortgage loans in LHFI that do not qualify for sale to the Agencies and that have an acceptable yield and risk profile. The LTV requirements on our residential first mortgage loans ~~produced by our specialty finance subsidiary, the other C&I~~vary depending on occupancy, property type, loan amount, and FICO scores. Loans with LTVs exceeding 80 percent are required to obtain mortgage insurance. As of December 31, 2022, non-government guaranteed loans ~~we produce~~in this portfolio had an average current FICO score of 743 and an average LTV of 58 percent.

Substantially all LGG are ~~primarily made to small andmid-size~~ businesses in the five boroughs of New York City and on Long Island. Such loans are tailored to meet the specific needs of our borrowers, and include term loans, demand loans, revolving lines of credit, and, to a much lesser extent, loans that are partlyinsured or guaranteed by the ~~Small Business Administration.~~

~~A broad range~~FHA or the U.S. Department of ~~other C&I~~Veterans Affairs. Nonperforming repurchased loans ~~both collateralized~~in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to HUD (if foreclosure timelines are met), which is not paid by the FHA until claimed. The Bank has a unilateral option to repurchase loans sold to GNMA if the loan is due, but unpaid, for three consecutive months (typically referred to as 90 days past due) and ~~unsecured,~~can recover losses through a claims process from the guarantor. These loans are ~~made available to businesses~~recorded in loans held for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment, and other general corporate needs. In determining the term and structure of other C&I loans, several factors are considered, including the purpose, the collateral,investment and the ~~anticipated sources~~liability to repurchase the loans is recorded in other liabilities on the Consolidated Statements of ~~repayment. Other C&I~~Condition. Certain loans ~~are typically secured by business~~within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. We have reserved for these risks within other assets and ~~personal guarantees~~as a component of ~~the borrower, and include financial covenants to monitor the borrower’s financial stability.~~our ACL on residential first mortgages.

As of December 31, 2022, LGG loans can be fixed or floating, with floating-rate loans being tied to prime or some other market index, plus an applicable spread. Our floating-rate loans may or may not feature a floor rate of interest. The decision to require a floor on other C&I loans depends on the level of competition we face for such loans from other institutions, the direction of market interest rates,totaled $1.2 billion and the ~~profitability of our relationship with the borrower.~~repurchase liability was $0.3 billion.

At December 31, ~~2017,~~2022, other loans totaled ~~$8.5 million~~$2.3 billion and consisted primarily of ~~a variety~~home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans ~~most of which were~~and other consumer loans, including overdraft loans.

Our home equity portfolio includes HELOANs, second mortgage loans, and HELOCs. These loans are underwritten and priced in an effort to ~~non-profit organizations.~~ensure credit quality and loan profitability. Our debt-to-income ratio on HELOANs and HELOCs is capped at 43 percent and 45 percent, respectively. We currently ~~do not offer~~limit the maximum CLTV to 89.99 percent and FICO scores to a minimum of 700. Second mortgage loans and HELOANs are fixed rate loans and are available with terms up to 20 years. HELOC loans are primarily variable-rate loans that contain a 10-year interest only draw period followed by a 20-year amortizing period. As of December 31, 2022, loans in this portfolio had an average current FICO score of 752.

As of December 31, 2022, loans in our indirect portfolio had an average current FICO score of 750. Point of sale loans consist of unsecured consumer installment loans originated primarily for home ~~equity~~improvement purposes through a third-party financial technology company who also provides us a level of credit loss protection.

~~The~~held for sale were $1.1 billion compared to zero at December 31, 2021 with the increase driven by the Flagstar acquisition. 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. 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 sets forth the maturity or period to repricing of our portfolio of loans held for investment at December 31, 2022. Loans that have adjustable rates are shown as being due in the period during which their interest rates are next subject to ~~federal~~change.

The following table sets forth, as of December 31, 2022, the dollar amount of all loans held for investment that are due after December 31, 2023, and ~~state laws~~indicates whether such loans have fixed or adjustable rates of interest:

We maintain credit limits in compliance with regulatory requirements. Under regulatory guidance, the Bank may not make a loan or extend credit to a single or related group of borrowers in excess of 15 percent of Tier 1 plus Tier 2 capital and ~~regulations,~~any portion of the ACL not included in Tier 2 capital. We have a tracking and ~~are underwritten in accordance with loan underwriting policies~~reporting process to monitor lending concentration levels, and all new commercial real estate credit exposures to relationships that exceed $200 million and all other commercial credit exposures to relationships that exceed $100 million must be approved by the ~~Management Credit Committee, the Mortgage and Real Estate Committee of the Community Bank (the “Mortgage Committee”), the~~Board Credit Committee of the ~~Commercial Bank (the “Credit Committee”), and~~Board. Exceptions to these levels are made to strong borrowers on a case by case basis, with the ~~respective Boards of Directors~~approval of the ~~Banks.~~

~~Prior to 2017, all loans originated~~Board Credit Committee of the Board. Relationships less than the aforementioned limits are approved by the ~~Banks were presented to the Mortgage Committee or the~~joint authority of credit officers and lending officers. The Board Credit Committee as applicable. Furthermore, all loans of $20.0 million or more originated by the Community Bank, and all loans of $10.0 million or more originated by the Commercial Bank, were reported to the applicable Board of Directors.

Effective January 27, 2017, all loans other than C&I loans less than or equal to $3.0 million are required to be presented to the Management Credit Committee for approval. All multi-family, CRE, and other C&I loans in excess of $5.0 million, and specialty finance loans in excess of $15.0 million, are also required to be presented to the Mortgage Committee or the Credit Committee, as applicable, so that the Committees can review the loans’ associated risks. The Committees havehas authority to direct changes in lending practices as they deem necessary or appropriate in order to address individual or aggregate risks and credit exposures in accordance with the Bank’s strategic objectives and risk appetites.

All mortgage loans in excess of $50.0 million and all other C&I loans in excess of $5.0 million require approval by the Mortgage Committee or the Credit Committee. Credit Committee approval also is required for specialty finance loans in excess of $15.0 million.

In addition, all loans of $20.0 million or more originated by the Community Bank, and all loans of $10.0 million or more originated by the Commercial Bank, continue to be reported to the applicable Board of Directors, and all C&I loans less than or equal to $3.0 million continue to be approved by~~line-of-business~~ ~~personnel.~~

In 2017, 172 loans of $10.0 million or more were originated by the Banks, with an aggregate loan balance of $4.2 billion at origination. In 2016, by comparison, 176 loans of $10.0 million or more were originated, with an aggregate loan balance at origination of $5.1 billion.

At December 31, ~~2017~~2022 and ~~2016,~~2021, the largest mortgage loan in our portfolio was a $329 million multi-family loan, ~~originated~~which is collateralized by ~~the Community Bank on June 28, 2013 to the owner of a commercial office building~~six properties located in ~~Manhattan.~~Brooklyn, New York. As of the date of this report, the loan has been current since origination. ~~The balance of the loan was $287.5 million at both year-ends.~~

~~Geographical Analysis of the Portfolio ofNon-Covered~~ ~~Loans Held for Investment~~

~~The following table presents a geographical analysis of the multi-family and CRE loans in ourheld-for-investment~~ ~~loan portfolio at December 31, 2017:~~

At December 31, ~~2017,~~2022 and 2021, the largest ~~concentration of ADC loans held for investment~~mortgage loan in our portfolio was ~~in New York City, with~~ a ~~total of $337.4~~$329 million ~~at that date. The majority of our other C&I loans held for investment were secured~~multi-family loan, which is collateralized by six properties ~~and/or businesses~~ located in ~~Metro~~Brooklyn, New York.

~~Loan Maturity and Repricing Analysis:Non-Covered~~ ~~Loans Held for Investment~~Asset Quality

~~The following table sets forth the maturity or period to repricing of our portfolio ofnon-covered~~ ~~loans held for investment at December 31, 2017. Loans that have adjustable rates are shown as being due in the period during which their interest rates are next subject to change.~~

~~The following table sets forth, as of December 31, 2017, the dollar amount of allnon-covered~~ ~~loans held for investment~~All asset quality information excludes LGG that are ~~due after December 31, 2018,~~insured by U.S government agencies.

Delinquent and ~~indicates whether such loans have fixed or adjustable rates of interest:~~

~~At December 31, 2017,non-covered~~ loans held for sale were $35.3 million, down $373.9 million from the amounts at December 31, 2016. The decline is largely attributable to our exit from the residential mortgage banking business, earlier in the year.

~~The following table summarizes our production of~~non-performing loans held for investment and ~~loans held for sale in the years ended December 31, 2017 and 2016:~~

~~The following table summarizes the composition of our loan portfolio at eachyear-end~~ ~~for the five years ended December 31, 2017:~~

~~At December 31, 2017 and 2016, we had outstanding loan commitments of $1.9 billion and $2.1 billion, respectively. Loans held for investment represented $1.9 billion of theyear-end~~ ~~2017 amount and $1.8 billion of theyear-end~~ ~~2016 amount. We had no commitments for loans held for sale at the end of this December, as compared to $242.5 million at the prioryear-end.~~

We also had commitments to issue letters of credit totaling $339.4 million and $324.3 million at December 31, 2017 and 2016, respectively. The fees we collect in connection with the issuance of letters of credit are included in “Fee income” in the Consolidated Statements of Operations and Comprehensive Income (Loss).

~~The letters of credit we issue consist of performancestand-by,~~ ~~financialstand-by,~~ ~~and commercial letters of credit. Financialstand-by~~ letters of credit primarily are issued for the benefit of other financial institutions, municipalities, or landlords on behalf of certain of our current borrowers, and obligate us to guarantee payment of a specified financial obligation. Performance~~stand-by~~ letters of credit are primarily issued for the benefit of local municipalities on behalf of certain of our borrowers. These borrowers are mainly developers of residential subdivisions with whom we currently have a lending relationship. Performance letters of credit obligate us to make payments in the event that a specified third party fails to perform under~~non-financial~~ contractual obligations. Commercial letters of credit act as a means of ensuring payment to a seller upon shipment of goods to a buyer. Although commercial letters of credit are used to effect payment for domestic transactions, the majority are used to settle payments in international trade. Typically, such letters of credit require the presentation of documents that describe the commercial transaction, and provide evidence of shipment and the transfer of title.

For more information about our outstanding loan commitments and commitments to issue letters of credit at the end of this December, see the discussion of “Liquidity” later in this discussion and analysis of our financial condition and results of operations.

~~Non-Covered~~ ~~Loans Held for Investment andNon-Covered~~Repossessed Assets

~~Non-performingnon-covered~~ ~~assets represented $90.1 million, or 0.18%, of totalnon-covered~~ ~~assets at the end of this December, as compared to $68.1 million, representing 0.14% of totalnon-covered~~ ~~assets, at December 31, 2016. Total non-accrualnon-covered~~ ~~loans increased $17.2 million driven by a $30.0 million increase innon-accrualnon-covered~~ ~~other loans due to a $31.5 million increase innon-accrual~~ ~~taxi medallion-related loans. This was partially offset by a $12.8 million decline in non-accrualnon-covered~~ ~~mortgage loans.~~

~~Non-covered~~ ~~repossessed assets increased $4.8 million to $16.4 million atyear-end~~ ~~2017. This increase was also largely driven by an increase in taxi medallion-related loans.~~

The following table presents our~~non-performingnon-covered~~ loans, 30 to 89 days past due by loan type and the changes in the respective ~~balances from December 31, 2016 to December 31, 2017:~~balances:

~~At the end of this December, taxi medallion-related loans totaled $99.1 million, representing 0.26% of our totalheld-for-investment~~ ~~loan portfolio. Last December, taxi medallion-related loans totaled $150.7 million, representing 0.40% of our totalheld-for-investment~~ ~~loan portfolio~~

~~The following table sets forth the changes innon-performingnon-covered~~ ~~loans over the twelve months ended December 31, 2017:~~

A loan generally is classified as a~~“non-accrual”~~ “non-accrual” loan when it is 90 days or more past due or when it is deemed to be impaired because we no longer expect to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed onnon-accrual status, we cease the accrual of interest owed, and previously accrued interest is reversed and charged against interest income. At December 31, ~~2017~~2022 and ~~2016,~~2021, all of ournon-performing loans werenon-accrual loans. A loan is generally returned to accrual status when the loan is current and we have reasonable assurance that the loan will be fully collectible.

We monitornon-accrual loans both within and beyond our primary lending area in the same manner. Monitoring loans generally involves inspecting andre-appraising the collateral properties; holding discussions with the principals and managing agents of the borrowing entities ~~and/or retained~~and retain legal counsel, as applicable; requesting financial, operating, and rent roll information; confirming that hazard insurance is in place or force-placing such insurance; monitoring tax payment ~~status and~~status. advancing funds as needed; and ~~appointing~~seeking approval from the courts to appoint a receiver, ~~whenever possible,~~when necessary to protect the Bank’s interests, including to collect rents, manage ~~the~~property operations, ~~provide information,~~ and ~~maintain~~ensure maintenance of the collateral properties.

It is our policy to order updated appraisals for allnon-performing loans 90 days or more past due, irrespective of loan type, that are collateralized by multi-family buildings, CRE properties, or land, ~~in the event that such a loan is 90 days or more past due, and~~ if the most recent appraisal on file for the property is more than one year old. Appraisals are ordered annually until such time as the loan becomes performing and is returned to accrual status. It is not our policy to obtain updated appraisals for performing loans. However, appraisals may be ordered for performing loans when a borrower requests an increase in the loan amount, a modification in loan terms, or an extension of a maturing loan. ~~We do not analyze current LTVs on a portfolio-wide basis.~~

Non-performing loans are reviewed regularly by management and discussed on a monthly basis with the ~~Mortgage Committee, the~~Board Credit Committee, and the ~~Boards~~Board of Directors of the ~~respective Banks,~~Bank, as applicable. In accordance with ourcharge-off policy, collateral-dependentnon-performing loans are written down to their current appraised values, less certain transaction costs. Workout specialists from our Loan Workout Unit actively pursue borrowers who are delinquent in repaying their loans in an effort to collect payment. In addition, outside counsel with experience in foreclosure proceedings are retained to institute such action with regard to such borrowers.

Properties and other assets that are acquired through foreclosure are classified as repossessed assets, and are recorded at fair value at the date of acquisition, less the estimated cost of selling the property. Subsequent declines in

the fair value of the assets are charged to earnings and are included innon-interest expense. It is our policy to require an appraisal and an environmental assessment of properties classified as OREO before foreclosure, and tore-appraise the properties on anas-needed basis, and not less than annually, until they are sold. We dispose of such properties as quickly and prudently as possible, given current market conditions and the property’s condition.

To mitigate the potential for credit losses, we underwrite our loans in accordance with credit standards that we consider to be prudent. In the case of multi-family and CRE loans, we look first at the consistency of the cash flows being generated by the property to determine its economic value using the “income approach,” and then at the market value of the property that collateralizes the loan. The amount of the loan is then based on the lower of the two values, with the economic value more typically used.

The condition of the collateral property is another critical factor. Multi-family buildings and CRE properties are inspected from rooftop to basement as a prerequisite to ~~approval, with a member of the Mortgage or Credit~~

Committee participating in inspections on multi-family loans to be originated in excess of $7.5 million, and a member of the Mortgage or Credit Committee participating in inspections on CRE loans to be originated in excess of $4.0 million.approval. Furthermore, independent appraisers, whose appraisals are carefully reviewed by our experiencedin-house appraisal officers and staff, perform appraisals on collateral properties. ~~In many cases, a second independent appraisal review is performed.~~

In addition, we work with a select group of mortgage brokers who are familiar with our credit standards and whose track record with our lending officers is typically greater than ten years. Furthermore, in New York City, where the majority of the buildings securing our multi-family loans are located, the rents that tenants may be charged on certain apartments are typically restricted under certain rent-control or rent-stabilization laws. As a result, the rents that tenants pay for such apartments are generally lower than current market rents. Buildings with a preponderance of such rent-regulated apartments are less likely to experience vacancies in times of economic adversity.

Reflecting the strength of the underlying collateral for these loans and the collateral structure, a relatively small percentage of ournon-performing multi-family loans have resulted in losses over time.

To further manage our credit risk, our lending policies limit the amount of credit granted to any one borrower, and typically require minimum DSCRs of ~~120%~~120 percent for multi-family loans and ~~130%~~130 percent for CRE loans. Although we typically lend up to ~~75%~~75 percent of the appraised value on multi-family buildings and up to ~~65%~~65 percent on commercial properties, the average LTVs of such credits at origination were below those amounts at December 31, ~~2017.~~2022. Exceptions to these LTV limitations are minimal and are reviewed on acase-by-case basis.

The repayment of loans secured by commercial real estate is often dependent on the successful operation and management of the underlying properties. To minimize our credit risk, we originate CRE loans in adherence with conservative underwriting standards, and require that such loans qualify on the basis of the ~~property��s~~property’s current income stream and DSCR. The approval of a CRE loan also depends on the borrower’s credit history, profitability, and expertise in property management. Given that our CRE loans are underwritten in accordance with underwriting standards that are similar to those applicable to our multi-family credits, the percentage of ournon-performing CRE loans that have resulted in losses has been comparatively small over time.

Multi-family and CRE loans are generally originated at conservative LTVs and DSCRs, as previously stated. Low LTVs provide a greater likelihood of full recovery and reduce the possibility of incurring a severe loss on a credit; in many cases, they reduce the likelihood of the borrower “walking away” from the property. Although borrowers may default on loan payments, they have a greater incentive to protect their equity in the collateral property and to return their loans to performing status. Furthermore, in the case of multi-family loans, the cash flows generated by the properties are generally below-market and have significant value.

With regard to ADC loans, we typically lend up to ~~75%~~75 percent of the estimatedas-completed market value of multi-family and residential tract projects; however, in the case of home construction loans to individuals, the limit is ~~80%.~~80 percent. With respect to commercial construction loans, we typically lend up to ~~65%~~65 percent of the estimatedas-completed market value of the property. Credit risk is also managed through the loan disbursement process. Loan proceeds are disbursed periodically in increments as construction progresses, and as warranted by inspection reports provided to us by our own lending officers and/or consulting engineers.

To minimize the risk involved in specialty finance lending and leasing, each of our credits is secured with a perfected first security interest or outright ownership in the underlying collateral, and structured as senior debt or as anon-cancellable lease. To further minimize the risk involved in specialty finance lending and leasing, were-underwrite each transaction. In addition, we retain outside counsel to conduct a further review of the underlying documentation.

Other C&I loans generally represent loans to commercial businesses which meet certain desired client characteristics and credit standards. The credit standards for commercial borrowers are ~~typically underwritten~~based on ~~the basis~~numerous criteria, including historical and projected financial information, strength of ~~the cash flows produced by~~management, acceptable collateral, and market conditions and trends in the borrower’s ~~business, and~~industry. These loans are generally collateralized by various business assets, including, but not limited to, inventory, equipment, and accounts receivable. As a result, the capacity of the borrower to repay is substantially dependent on the degree tovariable rate loans in which the business is successful. Furthermore, the collateral underlying the loan may depreciate over time, may not be conducive to appraisal, and may fluctuate in value, based upon the operating results of the business. Accordingly, personal guarantees are alsointerest rate fluctuates with a ~~normal requirement for other C&I loans.~~specified index rate.

~~In addition, at December 31, 2017,one-to-four~~ ~~family loans, ADC loans, and other loans represented 1.2%, 1.1%, and 5.3%, of totalnon-covered~~ ~~loans held for investment, as compared to 1.0%, 1.0%, and 5.1%, respectively, at December 31, 2016. Furthermore, while 2.3% of our other loans werenon-performing~~ ~~at the end of this December, 1.4% of our ADC loans and 0.41% of ourone-to-four~~ ~~family loans werenon-performing~~ ~~at that date.~~

The procedures we follow with respect to delinquent loans are generally consistent across all categories, with late charges assessed, and notices mailed to the borrower, at specified dates. We attempt to reach the borrower by telephone to ascertain the reasons for delinquency and the prospects for repayment. When contact is made with a borrower at any time prior to foreclosure or recovery against collateral property, we attempt to obtain full payment, and will consider a repayment schedule to avoid taking such action. Delinquencies are addressed by our Loan Workout Unit and every effort is made to collect rather than initiate foreclosure proceedings.

~~The following table presents ournon-covered~~ ~~loans 30 to 89 days past due by loan type and the changes in the respective balances from December 31, 2016 to December 31, 2017:~~

Fair values for all multi-family buildings, CRE properties, and land are determined based on the appraised value. If an appraisal is more than one year old and the loan is classified as eithernon-performing or as an accruing TDR, then an updated appraisal is required to determine fair value. Estimated disposition costs are deducted from the fair value of the property to determine estimated net realizable value. In the instance of an outdated appraisal on an impaired loan, we adjust the original appraisal by using a third-party index value to determine the extent of impairment until an updated appraisal is received.

While we strive to originate loans that will perform fully, adverse economic and market conditions, among other factors, can negatively impact a borrower’s ability to repay. Historically, our level of charge-offs has been relatively low in downward credit cycles, even when the volume ofnon-performing loans has increased. In ~~2017,~~2022, we recorded a net ~~charge-offs~~recovery of ~~$61.2~~$4 million, as compared to net ~~charge-offs~~recovery of ~~$708,000~~$2 million in the ~~prior~~previous year. ~~Taxi medallion-related net charge-offs accounted for $59.6 million of this year’s amount and $2.5 million of last year’s amount.~~

Partially reflecting the net ~~charge-offs~~recoveries noted above, and the provision of ~~$60.9~~$133 million for the allowance for~~non-covered~~ loan losses, the allowance for credit losses on~~non-covered~~ ~~loans remained relatively unchanged,~~increased $194 million, equaling ~~$158.0 million at the end of this December from $158.3~~$393 million at December 31, ~~2016. Reflecting~~2022 from $199 million at December 31, 2021. The majority of the increase in~~non-performingnon-covered~~is related to the initial provision for credit losses of $117 million and the adjustment for PCD loans ~~cited earlier~~acquired in ~~this discussion,~~ the Flagstar acquisition. The allowance for credit losses on~~non-covered~~ loans and leases represented ~~214.50%~~278.87 percent of~~non-performingnon-covered~~ non-performing loans at December 31, ~~2017,~~2022, as compared to ~~277.19%~~611.79 percent at the prioryear-end.

Based upon all relevant and available information at the end of this December, management believes that the allowance for losses on~~non-covered~~ loans was appropriate at that date.

~~The following table presents information about our five largestnon-performing~~ ~~loans at December 31, 2017, all of which arenon-coveredheld-for-investment~~ ~~loans:~~

~~The following is a description of the five loans identified in the preceding table. It should be noted that no allocation for thenon-covered~~ ~~loan loss allowance was needed for any of these loans, as determined by using the fair value of collateral method defined in ASC310-10~~ ~~and-35.~~

In an effort to proactively manage delinquent loans, we have selectively extended such concessions as rate reductions and extensions of maturity dates, as well as forbearance agreements, to certain borrowers who have experienced financial difficulty. In accordance with GAAP, we are required to account for such loan modifications or restructurings as TDRs.

The eligibility of a borrower forwork-out concessions of any nature depends upon the facts and circumstances of each transaction, which may change from period to period, and involve management’s judgment regarding the likelihood that the concession will result in the maximum recovery for the Company.

Loans modified as TDRs are placed onnon-accrual status until we determine that future collection of principal and interest is reasonably assured. This generally requires that the borrower demonstrate performance according to the restructured terms for at least six consecutive months.

At December 31, ~~2017,~~2022, loans modified as TDRs totaled ~~$45.6~~$44 million, including accruing loans of ~~$9.7~~$16 million andnon-accrual loans of ~~$35.9~~$28 million. At the prioryear-end, loans modified as TDRs totaled ~~$19.9~~$29 million, including accruing loans of ~~$3.5~~$16 million andnon-accrual loans of ~~$16.5~~$13 million.

The following table sets forth the changes in our TDRs over the twelve months ended December 31, ~~2017:~~2022:

Loans on which concessions were made with respect to rate reductions and/or extensions of maturity dates totaled ~~$44.6~~$38 million and ~~$17.1~~$29 million, respectively, at December 31, ~~2017~~2022 and ~~2016;~~2021; loans in connection with which forbearance agreements were reached amounted to ~~$1.0~~$6 million and ~~$2.8~~$0 million at the respective dates.

~~Multi-family and CRE loans accounted for $8.9 million and $368,000 of TDRs at the end of this December, as compared to $10.7 million and $1.9 million, respectively, at the prioryear-end.~~Based on the number of loans performing in accordance with their revised terms, at December 31, 2022, our success rate for restructured ~~multi-family~~CRE loans was ~~67%;~~100 percent, our success rate for ~~CRE~~one-to-four loans was 100 percent and ~~ADC loans it was100%, and forone-to-four~~ ~~loans it was 50% at the end of this December;~~ our success rate for other loans was ~~87%, at that date.~~35 percent.

On a limited basis, we may provide additional credit to a borrower after the loan has been placed onnon-accrual status or modified as a TDR if, in management’s judgment, the value of the property after the additional loan funding is greater than the initial value of the property plus the additional loan funding amount. In ~~2017,~~2022, no such additional credit was provided. Furthermore, the terms of our restructured loans typically would not restrict us from cancelling outstanding commitments for other credit facilities to a borrower in the event ofnon-payment of a restructured loan.

For additional information about our TDRs at December 31, ~~2017~~2022 and ~~2016,~~2021, see the discussion of “Asset Quality” in Note ~~5, “Loans”~~6, “Loans and Leases” in Item 8, “Financial Statements and Supplementary Data.”

Except for thenon-accrual loans and TDRs disclosed in this filing, we did not have any potential problem loans at December 31, ~~2017~~2022 that would have caused management to have serious doubts as to the ability of a borrower to comply with present loan repayment terms and that would have resulted in such disclosure if that were the case.

Asset Quality Analysis ~~(Excluding Covered Loans, Covered OREO,Non-Covered~~ ~~Purchased Credit-Impaired Loans, andNon-Covered~~ ~~Loans Held for Sale)~~

The following table presents information regarding our ~~consolidated allowance for losses~~asset quality measures:

The following table presents information on~~non-covered~~ the Company's net charge-offs as compared to average loans ~~ournon-performingnon-covered~~ ~~assets, and ournon-covered~~ ~~loans 30 to 89 days past due at eachyear-end~~ ~~in the five years ended December 31, 2017. Covered loans andnon-covered~~ ~~purchased credit-impaired (“PCI”) loans are considered to be performing due to the application of the yield accretion method, as discussed elsewhere in this report. Therefore, covered loans andnon-covered~~ ~~PCI loans are not reflected in the amounts or ratios provided in this table.~~outstanding:

The following table sets forth the allocation of the consolidated allowance for losses on~~non-covered~~ ~~loans, excluding the allowance for losses onnon-covered~~ ~~PCI~~ loans, at each~~year-end~~ ~~for the five years ended December 31, 2017:~~ year-end:

Each of the preceding allocations was based upon an estimate of various factors, as discussed in “Critical Accounting ~~Policies” earlier in this report,~~Estimates”, and a different allocation methodology may be deemed to be more appropriate in the future. In addition, it should be noted that the portion of the allowance for losses on~~non-covered~~ loans allocated to each~~non-covered~~ loan category does not represent the total amount available to absorb losses that may occur within that category, since the total loan loss allowance is available for the entire~~non-covered~~ loan portfolio.

~~Asset Quality Analysis (Including Covered Loans, Covered OREO, andNon-Covered~~ ~~PCI Loans)~~

~~As previously discussed, we sold the covered loan portfolio during the third quarter of 2017, accordingly, the following table presents information regarding ournon-performing~~ ~~assets and loans past due at December 31, 2016 only, including covered loans and covered OREO (collectively, “covered assets”), andnon-covered~~ ~~PCI loans:~~

~~The following table presents a geographical analysis of ournon-performing~~ ~~loans at December 31, 2017:~~

~~Securities represented $3.5~~Total securities were $9.1 billion, or ~~7.2%, of total assets at the end of this December, as compared to $3.8 billion, or 7.8%,~~10 percent, of total assets at December 31, ~~2016. During the second quarter~~2022, compared to $5.8 billion, or 10 percent of ~~2017, the Company repositioned its“Held-to-Maturity”~~ ~~securities portfolio by designating the entire portfolio as“Available-for-Sale.”~~ ~~In addition, it took advantage of favorable bond market conditions and sold approximately $521.0 million of securities, resulting in apre-tax~~ ~~gain on sale of $26.9 million. We do not foresee designating securities purchases as“Held-to-Maturity”~~ ~~in the near future.~~

total assets at December 31, 2021. At December 31, ~~2017,available-for-sale~~2022 and December 31, 2021, all of our securities ~~represented $3.5~~were designated as “Available-for-Sale”. At December 31, 2022, 15 percent of our portfolio are floating rate securities.

At December 31, 2022, available-for-sale securities had an estimated weighted average life of 6 years. Included in the year-end amount were mortgage-related securities of $4.8 billion and other debt securities of $4.3 billion.

At the prior year-end, available-for-sale securities were $5.8 billion, and had an estimated weighted average life of ~~5.2 years. Included in theyear-end~~ ~~amount were mortgage-related securities of $2.6 billion and other securities of $912.7 million.~~

~~At the prioryear-end,available-for-sale~~ ~~securities represented $104.3 million, or 2.7%, of total securities, and had an estimated weighted average life of 13.1~~6.9 years. Mortgage-related securities accounted for ~~$7.3 million~~$2.8 billion of theyear-end balance, with other debt securities accounting for the remaining ~~$97.0 million.~~$3.0 billion.

The investment policies of the Company and the ~~Banks~~Bank are established by the ~~respective Boards~~Board of Directors and implemented by ~~their respective Investment Committees, in concert with~~ the ~~respective Asset and Liability Management Committees. The Investment Committees generally meet quarterly~~ALCO. ALCO meets monthly or on anas-needed basis to review the portfolios and specific capital market transactions. In addition, the securities portfolios and investment activities are reviewed monthly by the ~~Boards~~Board of ~~Directors as a whole.~~Directors. Furthermore, the ~~policies guiding~~policy governing the ~~Company’s and the Banks’ investments are~~investment portfolio activities is reviewed at least annually by the ~~respective Investment Committees, as well as~~ALCO and ratified by the ~~respective Boards. While the policies permit investment in various types~~Board of ~~liquid assets, neither the Company nor the Banks currently maintains a trading portfolio.~~Directors.

Our general investment strategy is to purchase liquid investments with various maturities to ensure that our overall interest rate risk position stays within the required limits of our investment policies. We generally limit our investments to GSE obligations ~~(defined as GSE certificates; GSE collateralized mortgage obligations, or “CMOs”; and GSE debentures)~~ and U.S. Treasury obligations. At December 31, ~~2017~~2022 and ~~2016,~~2021, GSE obligations and U.S. Treasury obligations together represented ~~94.4%~~86 percent and ~~93.0%~~83 percent of total securities, respectively. The remainder of the portfolio at those dates was comprised of asset-backed securities, corporate bonds, foreign notes, capital trust ~~preferred securities,~~notes, and municipal obligations. ~~None~~

The following table summarizes the weighted average yields of ~~our~~debt securities ~~investments~~for the maturities indicated at December 31, 2022:

~~During the second quarter of 2017, the Company designated its entire securities portfolio asavailable-for-sale.Available-for-sale~~ ~~securities are securities that management intends to hold for an indefinite period of time. In addition to generating cash flows from sales~~Federal Reserve and from repayments of principal and interest, such securities serve as a source of liquidity for future loan production, the reduction of higher-cost funding, and general operating activities. A decision to purchase or sell~~available-for-sale~~ ~~securities is based on economic conditions, including changes in interest rates, liquidity, and our asset and liability management strategy.~~

~~As members of theFHLB-NY,~~ ~~the Community Bank and the Commercial Bank are required to acquire and hold shares of its capital stock.~~ At December 31, ~~2017,~~2022, the ~~Community Bank held~~Company had $762 million and $329 million of FHLB-NY stock, ~~in the amount of $588.7 million; the Commercial Bank heldFHLB-NY~~at cost and FHLB-Indianapolis stock, ~~of $15.1 million~~ at ~~that date.~~

cost, respectively. At December 31, ~~2016,~~2021, the ~~Community Bank~~Company had $734 million of FHLB-NY stock, at cost. The Company maintains an investment in FHLB-NY stock and, as a result of the ~~Commercial Bank heldFHLB-NY~~Flagstar acquisition, FHLB-Indianapolis stock, partly in conjunction with its membership in the ~~amount of $574.5 million~~FHLB and ~~$16.4 million, respectively.~~

~~Dividends from theFHLB-NY~~partly related to its access to the ~~Community~~FHLB funding it utilizes. In addition, at December 31, 2022, the Company had $176 million of Federal Reserve Bank ~~totaled $31.4 million and $26.2 million, respectively, in 2017 and 2016; dividends from theFHLB-NY~~ ~~to the Commercial~~stock, at cost. The Company had no Federal Reserve Bank ~~totaled $933,000 and $1.4 million in the corresponding years~~.stock, at December 31, 2021.

~~Bank-owned life insurance (“BOLI”)~~BOLI is recorded at the total cash surrender value of the policies in the Consolidated Statements of Condition, and the income generated by the increase in the cash surrender value of the policies is recorded in~~“Non-interest~~ “Non-interest income” in the Consolidated Statements of ~~Operations~~Income and Comprehensive ~~Income (Loss).~~

Income. Reflecting an increase in the cash surrender value of the underlying policies, and $373 million acquired in the Flagstar acquisition our investment in BOLI rose ~~$18.1~~$377 million year-over-year to ~~$967.2 million~~$1.6 billion at December 31, ~~2017.~~2022.

We record goodwill ~~and core deposit intangibles (“CDI”)~~ in our consolidated statements of condition in connection with certain of our business combinations.

Goodwill, which is tested at least annually for impairment, refers to the difference between the purchase price and the fair value of an acquired company’s assets, net of the liabilities assumed. ~~CDI refers to the fair value of the core deposits acquired in a business combination, and is typically amortized over a period of ten years from the acquisition date.~~

~~While goodwill totaled $2.4 billion at both December 31, 2017 and 2016, the balance of CDI declined from $208,000 to zero as a result of amortization over the twelve-month period.~~

For more information about the Company’s goodwill, see the discussion of ~~“Critical~~“Summary of Significant Accounting Policies” ~~earlier~~ in ~~this report.~~the Footnote 2 of these consolidated statements.

The Parent Company ~~(i.e., the Company on an unconsolidated basis)~~ has four primary funding sources for the payment of dividends, share repurchases, and other corporate uses: dividends paid to the Parent Company by the ~~Banks;~~Bank; capital raised through the issuance of securities; funding raised through the issuance of debt instruments; and repayments of, and income from, investment securities.

On a consolidated basis, our funding primarily stems from a combination of the following sources: retail, institutional, and brokered deposits; borrowed funds, primarily in the form of wholesale borrowings; cash flows generated through the repayment and sale of loans; and cash flows generated through the repayment and sale of securities.

In ~~2017,~~2022, loan repayments and sales generated cash flows of ~~$11.7~~$10.7 billion, as compared to ~~$12.5~~$10.4 billion in 2016. Cash flows from repayments accounted for $7.8 billion and $6.4 billion of the respective totals and cash flows from sales accounted for $3.9 billion and $6.2 billion, of the respective totals.2021.

In ~~2017,~~2022, cash flows from the repayment ~~and sale~~ of securities ~~respectively~~ totaled ~~$563.1~~$732 million, ~~and $1.0 billion,~~ while the purchase of securities amounted to ~~$1.2~~$2.2 billion for the year. By comparison, cash flows from the repayment ~~and sale~~ of securities totaled ~~$2.5~~$1.7 billion, ~~and $323.3 million, respectively,~~ in ~~2016,~~2021, and were offset by the purchase of securities totaling ~~$492.6 million.~~$1.7 billion.

In ~~2017,~~2022, the cash flows from loans and securities were primarily deployed into the production of multi-family loans held for investment, as well asheld-for-investment CRE loans and specialty finance loans and leases.

~~Deposits totaled $29.1 billion~~Our ability to retain and ~~$28.9 billion,~~attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer, and ~~represented 59.2%~~the attractiveness of their terms. From time to time, we have chosen not to compete actively for deposits, depending on our access to deposits through acquisitions, the availability of lower-cost funding sources, the impact of competition on pricing, and ~~59.0% of total assets, at December 31, 2017 and 2016, respectively. On a year-over-year basis,~~ the ~~deposit mix shifted as interest-bearing checking and money market accounts declined 3.4%, savings accounts declined 1.3%, andnon-interest-bearing~~ ~~accounts dropped 12.3%. This was offset by growth in~~need to fund our ~~certificates of deposit (“CDs”), which increased 14.1% fromyear-end~~ ~~2016.~~

~~While the~~loan demand. The vast majority of our deposits are retail in nature (i.e., they are deposits we have gathered through our branches or through business combinations),.

Total deposits increased $23.7 billion or 67 percent on a year-over-year basis to $58.7 billion. Deposit growth was driven by the addition of $16.0 billion of deposits from the Flagstar acquisition and $7.6 billion growth in loan-related deposits and BaaS deposits. Loan-related deposits totaled $4.4 billion at December 31, 2022 up $389 million or 10 percent relative to $4.0 billion at December 31, 2021. Our BaaS deposits totaled $11.5 billion at December 31, 2022, as compared to $1.0 billion at December 31, 2021. In addition, the Company has institutional deposits and municipal deposits. Institutional deposits ~~are also part of our deposit mix. Retail deposits rose $383.6 million year-over-year to $21.9 billion, while institutional deposits declined $567.2 million to $2.2 billion~~remained unchanged from the prior year end at~~year-end.~~ $1.4 billion. Municipal deposits represented ~~$999.4~~$488 million of total deposits at the end of this December, a ~~$361.7~~$263 million ~~increase~~decrease from the balance at December 31, ~~2016.~~2021.

Depending on their availability and pricing relative to other funding sources, we also include brokered deposits in our deposit mix. Brokered deposits accounted for ~~$4.0~~$5.1 billion of our deposits at the end of this December, as compared to ~~$3.9~~$5.7 billion at December 31, ~~2016.~~2021. Brokered money market accounts represented ~~$2.6~~$2.8 billion of total brokered deposits at December 31, ~~2017~~2022 and ~~$2.5~~$2.9 billion at December 31, ~~2016;~~2021; brokered interest-bearing checking accounts represented ~~$793.7 million~~$1.0 billion and ~~$1.4~~$1.6 billion, respectively, at the corresponding dates. At December 31, ~~2017,~~2022, we had ~~$567.8 million~~$1.3 billion of brokered ~~CDs. We had no brokered~~ CDs, compared to $1.2 billion at December 31, ~~2016.~~2021.

The following table indicates the amount of time deposits, by account, that are in excess of the FDIC insurance limit (currently $250,000) by time remaining until maturity:

The majority of our borrowed funds are wholesale borrowings (FHLB-NY and ~~consist ofFHLB-NY~~ ~~advances, repurchase agreements, and federal funds purchased,~~FHLB-Indianapolis advances) and, to a ~~far~~ lesser extent, junior subordinated ~~debentures. Reflecting a $760.0 million decline in wholesale borrowings to $12.6 billion, the~~debentures and subordinated notes. At December 31, 2022, total ~~balance of~~ borrowed funds ~~were $12.9~~increased $4.8 billion or 29 percent to $21.3 billion compared to the balance at December 31, ~~2017.~~2021. The year-over-year increase was primarily driven by the amounts assumed in the Flagstar acquisition of $6.7 billion

Wholesale borrowings totaled ~~$12.6~~$20.3 billion and ~~$13.3~~$15.9 billion, respectively, at December 31, ~~2017~~2022 and ~~2016,~~2021, representing ~~25.6% and 27.2%~~23 percent of total assets at ~~the respective~~both dates.FHLB-NY and FHLB-Indianapolis advances accounted for ~~$12.1~~$20.3 billion of theyear-end ~~2017~~ 2022 balance, as compared to ~~$11.7~~$15.1 billion at the prioryear-end. Pursuant to blanket collateral agreements with the ~~Banks,~~Bank, ourFHLB-NY, FHLB-Indianapolis advances and overnight advances are secured by pledges of certain eligible collateral in the form of loans and securities. (For more information regarding our~~FHLB-NY~~ FHLB advances, see the discussion that appears earlier in this report regarding our membership and our ownership of stock in the~~FHLB-NY.)~~ ~~None~~ FHLB-NY). At December 31, 2022 and 2021, $6.8 billion and $7.5 billion of our wholesale borrowings had callable features, respectively.

~~Also included in wholesale borrowings~~2021, was $800 million of repurchase agreements. There were no repurchase agreements ~~of $450.0 million~~outstanding at December 31, ~~2017 compared to $1.5 billion at December 31, 2016.~~2022. Repurchase agreements are contracts for the sale of securities owned or borrowed by the ~~Banks~~Bank with an agreement to repurchase those securities at agreed-upon prices and dates.

Our repurchase agreements ~~are~~were primarily collateralized by GSE obligations, and may be entered into with theFHLB-NY or certain brokerage firms. The brokerage firms we utilize are subject to an ongoing internal financial review to ensure that we borrow funds only from those dealers whose financial strength will minimize the risk of loss due to default. In addition, a master repurchase agreement must be executed and on file for each of the brokerage firms we use.

We had no federal funds purchased at both December 31, ~~2017. Federal funds purchased represented $150.0 million of wholesale borrowings at December 31, 2016.~~2022 and 2021.

Junior subordinated debentures totaled ~~$359.2~~$575 million, including $214 million assumed from the Flagstar acquisition, net of purchase accounting adjustments at December 31, ~~2017, slightly higher than~~2022.

At December 31, 2022, the balance atof subordinated notes was $432 million, including $135 million assumed from the ~~prioryear-end.~~Flagstar acquisition, net of purchase accounting adjustments.

See Note 8,12, “Borrowed Funds,” in Item 8, “Financial Statements and Supplementary Data” for a further discussion of our wholesale borrowings, ~~and~~ our junior subordinated ~~debentures.~~

Liquidity, Contractual Obligations andOff-Balance Sheet Commitments, and Capital Position

We manage our liquidity to ensure that our cash flows are sufficient to support our operations, and to compensate for any temporary mismatches between sources and uses of funds caused by variable loan and deposit demand.

We monitor our liquidity daily to ensure that sufficient funds are available to meet our financial obligations. Our most liquid assets are cash and cash equivalents, which totaled ~~$2.5~~$2.0 billion and ~~$557.9 million,~~$2.2 billion, respectively, at December 31, ~~2017~~2022 and ~~2016.~~2021. As in the past, our loan and securities portfolios provided meaningful liquidity in ~~2017,~~2022, with cash flows from the repayment and sale of loans totaling ~~$11.7~~$10.7 billion and cash flows from the repayment and sale of securities totaling ~~$1.6 billion.~~$960 million.

Additional liquidity stems from deposits and from our use of wholesale funding sources, including brokered deposits and wholesale borrowings. In addition, we have access to the ~~Banks’~~Bank’s approved lines of credit with various counterparties, including theFHLB-NY. The availability of these wholesale funding sources is generally based on the amount of mortgage loan collateral available under a blanket lien we have pledged to the respective institutions and, to a lesser extent, the amount of available securities that may be pledged to collateralize our borrowings. At December 31, ~~2017,~~2022, our available borrowing capacity with theFHLB-NY was ~~$7.1~~$11.3 billion. In addition, the ~~Community Bank and the Commercial~~ Bank hadavailable-for-sale securities of ~~$3.5~~$9.1 billion, of which, ~~$2.3~~$8.6 billion is unpledged.

Furthermore, the ~~Banks both have~~Bank has agreements with the ~~Federal Reserve Bank of New York (the“FRB-NY”)~~FRB-NY that enable ~~them~~it to access the discount window as a further means of enhancing their liquidity. In connection with these agreements, the ~~Banks have~~Bank has pledged certain loans and securities to collateralize any funds they may borrow. ~~At December 31, 2017, the~~The maximum amount the ~~Community~~ Bank could borrow from theFRB-NY was ~~$1.3 billion; the maximum amount the Commercial Bank could borrow at that date was $79.5 million.~~$1.0 billion. There were no borrowings against ~~either line~~these lines of credit at December 31, ~~2017.~~2022.

Our primary investing activity is loan production, and the volume of loans we originated for ~~sale and for~~ investment totaled ~~$10.6~~$17.1 billion in ~~2017.~~2022. During this time, the net cash ~~provided by~~used in investing activities totaled ~~$1.1~~$6.3 billion; the net cash provided by our operating activities totaled ~~$1.3 million.~~$1.0 billion. Our financing activities ~~used~~provided net cash of ~~$418.1 million.~~$5.2 billion.

CDs due to mature or reprice in one year or less from December 31, ~~2017~~2022 totaled ~~$6.8~~$9.2 billion, representing ~~78.8%~~74 percent of total CDs at that date. Our ability to attract and retain retail deposits, including CDs, depends on numerous factors, including, among others, the convenience of our branches and our other banking channels; our customers’ satisfaction with the service they receive; the rates of interest we offer; the types of products we feature; and the attractiveness of their terms.

Our decision to compete for deposits also depends on numerous factors, including, among others, our access to deposits through acquisitions, the availability of lower-cost funding sources, the impact of competition on pricing, and the need to fund our loan demand.

The Parent Company is a separate legal entity from ~~each of~~ the ~~Banks~~Bank and must provide for its own liquidity. In addition to operating expenses and any share repurchases, the Parent Company is responsible for paying any dividends declared to our stockholders. As a Delaware corporation, the Parent Company is able to pay dividends either from surplus or, in case there is no surplus, from net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

~~In each of~~Various legal restrictions limit the ~~four quarters of 2017,~~extent to which the ~~Company was required to receive anon-objection~~ ~~from the FRB to pay all dividends;non-objections~~ ~~were received from the FRB in all four quarters of the year. The Company expects to continue the exchange of written documentation to obtain the FRB’snon-objection~~ ~~to the declaration of dividends in 2018. The Company has received all necessarynon-objections~~ ~~from the FRB for the dividends declared as of the date of this report.~~

~~The Parent~~ Company’s ability to pay dividends may also depend, in part, upon dividends it receives from the Banks. The ability of the Community Bank and the Commercial Bank to pay dividends and other capital distributionssubsidiary bank can supply funds to the Parent Company ~~is generally limited by New York State Banking Law~~ and regulations, and by certain regulations of the FDIC. In addition, the Superintendent of the New York State Department of Financial Services (the “Superintendent”), the FDIC, and the FRB, for reasons of safety and soundness, may prohibit the payment of dividends that are otherwise permissible by regulations.

~~Under New York State Banking Law, a New York State-chartered stock-form savings bank or commercial bank may declare and pay dividends out of~~ its ~~net profits, unless there is an impairment of capital. However,~~non-bank subsidiaries. The Bank would require the approval of the ~~Superintendent is required~~OCC if the ~~total of all~~ dividends ~~declared~~it declares in aany calendar year ~~would~~were to exceed the total of ~~a bank’s~~its respective net profits for that year combined with its respective retained net profits for the preceding two ~~years. In 2017,~~calendar years, less any required transfer to paid-in capital. The term “net profits” is defined as net income for a given period less any dividends paid during that period. As a result of our acquisition of Flagstar, we are also required to seek regulatory approval from the ~~Banks paid dividends totaling $336.0 million~~OCC for the payment of any dividend to the Parent Company ~~leaving $379.5~~through at least the period ending November 1, 2024. In 2022, dividends of $335 million ~~that they~~were paid by the Bank to the Parent Company. At December 31, 2022, the Bank could ~~dividend~~have paid additional dividends of $615 million to the Parent Company without regulatory ~~approval atyear-end.~~ Additional sources of liquidity available to the Parent Company at December 31, 2017 included $90.5 million in cash and cash equivalents. If either of the Banks were to apply to the Superintendent for approval to make a dividend or capital distribution in excess of the dividend amounts permitted under the regulations, there can be no assurance that such application would be approved.approval.

In the normal course of business, we enter into a variety of contractual obligations in order to manage our assets and liabilities, fund loan growth, operate our branch network, and address our capital needs.

For example, we offer CDs with contractual terms to our customers, and borrow funds under contract from theFHLB-NY and various brokerage firms. These contractual obligations are reflected in the Consolidated Statements of Condition under “Deposits” and “Borrowed funds,” respectively. At December 31, ~~2017,~~2022, we had CDs of ~~$8.6~~$12.5 billion and long-term debt (defined as borrowed funds with an original maturity ~~in excess~~one year or more) of ~~one year) of $12.9~~$13.8 billion.

We also are obligated under certainnon-cancelable operating leases on the buildings and land we use in operating our branch network and in performing our back-office responsibilities. These obligations are ~~not~~ included in the Consolidated Statements of Condition and totaled ~~$159.5~~$122 million at December 31, ~~2017.~~2022.

~~The following table sets forth the maturity profile of the aforementioned contractual obligations as of December 31, 2017:~~

At December 31, ~~2017,~~2022, we also had commitments to extend credit in the form of mortgage and other loan originations, as well as commercial, performancestand-by, and financialstand-by letters of credit, totaling ~~$2.3~~$22.4 billion. Theseoff-balance sheet commitments consist of agreements to extend credit, as long as there is no violation of any condition established in the contract under which the loan is made. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee.

The ~~following table summarizes ouroff-balance~~ ~~sheet commitments to extend credit in the form of loans and~~ letters of credit ~~at December 31, 2017:~~

Ofwe issue consist of performance stand-by, financial stand-by, and commercial letters of credit. Financial stand-by letters of credit primarily are issued for the ~~total loan commitments noted~~benefit of other financial institutions, municipalities, or landlords on behalf of certain of our current borrowers, and obligate us to guarantee payment of a specified financial obligation. Performance stand-by letters of credit are primarily issued for the benefit of local municipalities on behalf of certain of our borrowers. Performance letters of credit obligate us to make payments in the ~~preceding table, all $1.9 billion were~~event that a specified third party fails to perform under non-financial contractual obligations. Commercial letters of credit act as a means of ensuring payment to a seller upon shipment of goods to a buyer. Although commercial letters of credit are used to effect payment for ~~loans held for investment.~~domestic transactions, the majority are used to settle payments in international trade. Typically, such letters of credit require the presentation of documents that describe the commercial transaction, and provide evidence of shipment and the transfer of title. The fees we collect in connection with the issuance of letters of credit are included in “Fee income” in the Consolidated Statements of Income and Comprehensive Income.

Based upon our current liquidity position, we expect that our funding will be sufficient to fulfill these cash obligations and commitments when they are ~~due.~~due both in the short term and long term.

For the year ended December 31, 2022, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

At December 31, ~~2017,~~2022, we had no commitments to purchase ~~GNMA securities of $29.4 million.~~securities.

We used various financial instruments, including derivatives, in connection with our strategies to mitigate or reduce our exposure to losses from adverse changes in interest rates. Our derivative financial instruments consisted of financial forward and futures contracts, interest rate lock commitments (“IRLCs”), swaps, and options, and related to our mortgage banking operations, MSRs, and other related risk management activities. These activities will vary in scope based on the level and volatility of interest rates, the types of assets held, and other changing market conditions. At December 31, 2017, we held no derivative financial instruments. (See Note 15, “Derivative Financial Instruments,” in Item 8, “Financial Statements and Supplementary Data” for a further discussion of our use of such financial instruments.)

Total stockholders’ equity rose $671.4 million, or 11.0%, year-over-year to $6.8 billion; common stockholders’ equity represented 12.81% of total assets and a book value per common share of $12.88 at December 31, 2017. At the prior~~year-end,~~ ~~total stockholders’ equity totaled $6.1 billion, and common stockholders’ equity represented 12.52% of total assets and a book value per common share of $12.57.~~

~~Tangible common stockholders’ equity rose $168.8 million year-over-year to $3.9 billion, after the distribution of four quarterly cash dividends totaling $332.1 million. Theyear-end~~ ~~2017 balance represented 8.26% of tangible common assets and a tangible common book value per common share of $7.89. At the prioryear-end,~~ ~~tangible common stockholders’ equity totaled $3.7 billion, representing 7.93% of tangible common assets and a tangible common book value per common share of $7.57.~~

We calculate tangible common stockholders’ equity by subtracting the amount of goodwill, CDI, and preferred stock recorded at the end of a period from the amount of stockholders’ equity recorded at the same date. While goodwill totaled $2.4 billion at December 31, 2017 and 2016, CDI was zero and $208,000 at the corresponding dates. Preferred stock was $502.8 million at the end of 2017. The Company had no preferred stock in 2016. (See the discussion and reconciliations of stockholders’ equity and tangible common stockholders’ equity, total assets and tangible assets, and the related financial measures that appear on the last page of this discussion and analysis of our financial condition and results of operations.)

~~Stockholders’ equity and tangible common stockholders’ equity both include accumulated other comprehensive loss (“AOCL”), which is comprised of the net unrealized gain or loss onavailable-for-sale~~ ~~securities; the net unrealized loss on thenon-credit~~ portion of OTTI securities; and the Company’s pension and post-retirement obligations at the end of a period. In the twelve months ended December 31, 2017 and 2016, AOCL totaled $15.2 million and $56.7 million, respectively. The decline in AOCL was largely the net effect of a $1.6 million decrease in net pension and post-retirement obligations to $49.1 million and the $39.9 million difference between the net unrealized loss on securities available for sale recorded at the end of this December and the net unrealized gain on securities available for sale recorded at December 31, 2016.

As reflected in the following table, our capital measures continued to exceed the minimum federal requirements for a bank holding ~~company at December 31, 2017 and 2016:~~company:

At December 31, ~~2017,~~2022, the capital ratios for the Company ~~the Community Bank,~~ and the ~~Commercial~~ Bank continued to exceed the levels required for classification as “well capitalized” institutions, as defined under the Federal Deposit Insurance Corporation Improvement Act of 1991, and as further discussed in Note ~~18,~~21, “Capital,” in Item 8, “Financial Statements and Supplementary Data.”

For the twelve months ended December 31, 2017, the Company reported diluted earnings per common share of $0.90, as compared to diluted earnings per common share of $1.01 for the twelve months ended December 31, 2016, a decrease of 11%. Net income available to common shareholders totaled $441.6 million in 2017 as compared to $495.4 million in 2016, also down 11%. Net income for 2017 was $466.2 million, down 6% from 2016.

The cost of our deposits and borrowed funds is largely based on short-term rates of interest, the level of which is partially impacted by the actions of the FOMC. The FOMC reduces, maintains, or increases the target federal funds rate (the rate at which banks borrow funds overnight from one another) as it deems necessary. In 2017, the FOMC increased the target federal funds rate three times for a total of 75 basis points, to a target range of 1.25% to 1.50%.

~~While the target federal funds rate generally impacts the cost of our short-term borrowings and deposits, the yields on ourheld-for-investment~~ loans and other interest-earning assets are typically impacted by intermediate-term market interest rates. In 2017, the five-year CMT ranged from a low of 1.63% to a high of 2.26% with an average rate of 1.91% for the year. In 2016, the five-year CMT ranged from a low of 0.94% to a high of 2.40% with an average rate of 1.33% for the year.

In 2017, net interest income decreased 12% to $1.1 billion as compared to $1.3 billion in 2016. Similar to the fourth quarter 2017 trends, the decline in the full-year 2017 net interest income was driven by a 17% increase in interest expense due to higher funding costs.

~~The following factors contributed to the year-over-year reduction in net interest income:~~

The direction of the Company’s net interest margin was consistent with that of its net interest income, and generally was driven by the same factors as those described above. At 2.59%, the margin was 34-basis points narrower than the margin recorded for full-year 2016. The reduction was due, in part, to a decline in prepayment income from the levels recorded in the prior year, as reflected in the table below. Adjusted net interest margin is a~~non-GAAP~~ ~~financial measure, as more fully discussed below.~~

While our net interest margin, including the contribution of prepayment income, is recorded in accordance with GAAP, adjusted net interest margin, which excludes the contribution of prepayment income, is not. Nevertheless, management uses this~~non-GAAP~~ ~~measure in its analysis of our performance, and believes that thisnon-GAAP~~ ~~measure should be disclosed in this report and other investor communications for the following reasons:~~

refinance or prepay, or securities that prepay, during that period. Such activity is largely dependent on external factors such as current market conditions, including real estate values, and the perceived or actual direction of market interest rates.

Adjusted net interest margin should not be considered in isolation or as a substitute for net interest margin, which is calculated in accordance with GAAP. Moreover, the manner in which we calculate this~~non-GAAP~~ ~~measure may differ from that of other companies reporting anon-GAAP~~ ~~measure with a similar name.~~

The following table sets forth certain information regarding our average balance sheet for the years indicated, including the average yields on our interest-earning assets and the average costs of our interest-bearing liabilities. Average yields are calculated by dividing the interest income produced by the average balance of interest-earning assets. Average costs are calculated by dividing the interest expense produced by the average balance of interest-bearing liabilities. The average balances for the year are derived from average balances that are calculated daily. The average yields and costs include fees, as well as premiums and discounts (including~~mark-to-market~~ ~~adjustments from acquisitions), that are considered adjustments to such average yields and costs.~~

~~The provision for losses onnon-covered~~ ~~loans, like the recovery ofnon-covered~~ loan losses, is based on the methodology used by management in calculating the allowance for losses on such loans. Reflecting this methodology, which is discussed in detail under “Critical Accounting Policies” earlier in this report. For the twelve months ended December 31, 2017, the Company reported a $60.9 million provision for losses on~~non-covered~~ loans as compared to $11.9 million for the twelve months ended December 31, 2016. The year-over-year increase was related to the aforementioned taxi medallion-related charge-offs during the third quarter of 2017.

~~Reflecting the 2017 provision and twelve-month net charge-offs of $61.2 million, the allowance for losses onnon-covered~~ ~~loans of $158.0 million was relatively unchanged at the end of this December compared to $158.3 million at the prioryear-end.~~

For full-year 2017, the Company recovered $23.7 million on certain pools of acquired loans covered by FDIC loss-sharing agreements, as compared to $7.7 million for full-year 2016. The recoveries recorded in the respective years were largely offset by FDIC indemnification expense of $19.0 million and $6.2 million recorded in~~“Non-interest~~ ~~income.”~~

On July 28, 2017, the Company completed the sale of its covered loans to an affiliate of Cerberus. Accordingly, at December 31, 2017, the Company no longer had any covered loans and related FDIC loss share receivable on its balance sheet.

For additional information about our methodologies for recording recoveries of, and provisions for, loan losses, see the discussion of the respective loan loss allowances under “Critical Accounting Policies” and the discussion of “Asset Quality” that appear earlier in this report.

~~We generatenon-interest~~ income through a variety of sources, including—among others—fee income (in the form of retail deposit fees and charges on loans); income from our investment in BOLI; gains on sales of securities; and “other” sources, including the revenues produced through the sale of third-party investment products and those produced through our subsidiary, Peter B. Cannell & Co., Inc. (“PBC”), an investment advisory firm.

~~Non-interest~~ ~~income increased $71.3 million year-over-year to $216.9 million in the twelve months ended December 31, 2017. The increase was primarily attributable to the following factors:~~

~~The following table summarizes our sources ofnon-interest~~ ~~income in the twelve months ended December 31, 2017, 2016, and 2015:~~

~~Non-interest~~ expense has two primary components: operating expenses, which include compensation and benefits, occupancy and equipment, and general and administrative (“G&A”) expenses; and the amortization of the CDI stemming from certain of our business combinations.

~~Non-interest~~ ~~expense totaled $641.4 million in the twelve months ended December 31, 2017, as compared to $651.6 million in the year-earlier twelve-month period. Whilenon-interest~~ ~~expense declined year-over-year, operating expenses increased modestly to $641.2 million from $638.1 million in 2016.~~

Compensation and benefits expense accounted for $9.5 million of the year-over-year increase, having grown to $361.0 million in 2017. The increase was driven by a combination of factors, including an increase in stock-based compensation expense, normal salary increases, and the addition of senior level staff in various departments. This was offset by a $6.9 million decline in G&A expense to $181.3 million, primarily reflecting a $3.8 million decrease in FDIC deposit insurance premiums to $57.3 million.

~~Income tax expense includes federal, New York State, and New York City income taxes, as well asnon-material~~ ~~income taxes from other jurisdictions where we operate our branches and/or conduct our mortgage banking business.~~

~~In the twelve months ended December 31, 2017, we recorded income tax expense of $202.0 million, reflectingpre-tax~~ income of $668.2 million and an effective tax rate of 30.2%. The decrease in both the effective tax rate and income tax expense was due to the recently enacted Tax Cuts and Jobs Act. This resulted in the Company recording a~~one-time~~ ~~net benefit during the fourth quarter of the year, to income tax expense of $42 million, including that portion related to there-measurement~~ ~~of our net deferred tax liabilities. Our effective income tax rate in 2018 is expected to be approximately 26.5%.~~

In the twelve months ended December 31, 2016, we generated earnings of $495.4 million, or $1.01 per diluted share, representing a 1.00% return on average assets and an 8.19% return on average stockholders’ equity.

In the twelve months ended December 31, 2015, we recorded a net loss of $47.2 million, or $0.11 per diluted share. The net loss was attributable to a debt repositioning charge incurred in the fourth quarter in connection with the prepayment of $10.4 billion of wholesale borrowings. On a~~pre-tax~~ ~~basis, the charge was $915.0 million; on anafter-tax~~ ~~basis, the charge was $546.8 million, or $1.17 per diluted share. In accordance with ASC470-50,~~ ~~$773.8 million of thepre-tax~~ ~~charge was recorded as interest expense and $141.2 million was recorded asnon-interest~~ ~~expense.~~

The benefit of the debt repositioning is reflected in our 2016 Consolidated Results of Operations, including the interest expense on, and average cost of, borrowed funds; the interest expense on, and average cost of, interest-bearing liabilities; our net interest income; our net interest rate spread; and our net interest margin.

Our 2016 and 2015 results also reflect certain expenses incurred in connection with the Astoria Financial merger agreement, which was announced on October 29, 2015 and terminated effective January 1, 2017 by mutual agreement of the companies’ Boards. In 2016, merger-related expenses totaled $11.1 million, as compared to $3.7 million in the prior year.

As the debt repositioning charge had no impact on our interest income or the interest expense stemming from our interest-bearing deposits in 2015, a comparison of the 2016 and 2015 amounts and measures is provided below:

~~The provision for losses onnon-covered~~ ~~loans, like the recovery ofnon-covered~~ loan losses, is based on the methodology used by management in calculating the allowance for losses on such loans. Reflecting this methodology, which is discussed in detail under “Critical Accounting Policies” earlier in this report, we recorded an $11.9 million provision for~~non-covered~~ ~~loan losses in the twelve months ended December 31, 2016 as compared to a $3.3 million recovery ofnon-covered~~ ~~loan losses in the twelve months ended December 31, 2015.~~

~~Reflecting the 2016 provision and twelve-month net charge-offs of $708,000, the allowance for losses onnon-covered~~ ~~loans rose to $158.3 million at the end of this December from $147.1 million at the prioryear-end.~~

When an improvement in the credit quality of certain loan portfolios acquired in our FDIC-assisted transactions leads us to believe that the cash flows from those portfolios will exceed our expectations, we reverse the previously established covered loan loss allowance by recording a recovery. In accordance with this methodology, we recovered $7.7 million and $11.7 million, respectively, from the covered loan loss allowance in the twelve months ended December 31, 2016 and 2015.

~~Reflecting the recoveries recorded in 2016, the allowance for losses on covered loans fell to $23.7 million from $31.4 million in the twelve months ended December 31, 2015.~~

~~Non-interest~~ ~~income fell $65.2 million year-over-year to $145.6 million in the twelve months ended December 31, 2016. The reduction was primarily attributable to the following factors:~~

~~Non-interest~~ expense totaled $651.6 million in the twelve months ended December 31, 2016, as compared to $765.9 million in the year-earlier twelve-month period. Included in the 2015 amount was $141.2 million of the debt repositioning charge recorded in the fourth quarter; no comparable charge was recorded in 2016.

~~In addition, merger-related charges accounted for $11.1 million ofnon-interest~~ ~~expense in 2016, as compared to $3.7 million in the prior year.~~

~~Whilenon-interest~~ expense declined year-over-year, operating expenses rose $22.5 million to $638.1 million from the level recorded in 2015. Compensation and benefits expense accounted for $8.8 million of the year-over-year increase, having grown to $351.4 million in 2016. The increase was driven by a combination of factors, including an increase in medical benefits expense, back-office staff expansion, normal salary increases, and the granting of stock awards. In addition, G&A expense rose $17.6 million year-over-year to $188.1 million, primarily reflecting a $14.8 million increase in FDIC deposit insurance premiums to $61.1 million, as well as an increase in legal and professional fees. These increases, which included fees incurred in connection with our preparations for SIFI status, were only partly offset by a $3.9 million decrease in occupancy and equipment expense to $98.5 million, primarily representing an increase in rental income.

~~In the twelve months ended December 31, 2016, we recorded income tax expense of $281.7 million, reflectingpre-tax~~ ~~income of $777.1 million and an effective tax rate of 36.25%. In the prior year, we recorded an income tax benefit of $84.9 million as a result of having recorded a $132.0 millionpre-tax~~ ~~loss.~~

~~The following table sets forth selected unaudited quarterly financial data for the years ended December 31, 2017 and 2016:~~

The consolidated financial statements and notes thereto presented in this report have been prepared in accordance with GAAP, which requires that we measure our financial condition and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. ~~Unlike industrial companies, nearly all of a bank’s assets and liabilities are monetary in nature.~~ As a result, the impact of interest rates on our performance is greater than the impact of general levels of inflation. Interest rates do not necessarily move in the same direction, or to the same extent, as the prices of goods and services.

In March 2022, the FASB issued ASU No. 2022-02 - Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this ASU eliminate TDR accounting for entities that have adopted ASU No. 2016-13, while enhancing disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty. The ASU also requires disclosure of current period gross write-offs by year of origination for financing receivables and net investment in leases. The adoption of this ASU is not expected to ~~Note 2, “Summary~~have a material impact on the Company’s Consolidated Statements of ~~Significant Accounting Policies,” in Item 8, “Financial Statements and Supplementary Data,” for a discussion of the impact of recent accounting pronouncements on our financial condition and~~Condition, results of ~~operations.~~

RECONCILIATIONS OF ~~STOCKHOLDERS’~~SHAREHOLDERS’ EQUITY, COMMON STOCKHOLDERS’ EQUITY, AND TANGIBLE COMMON ~~STOCKHOLDERS’~~SHAREHOLDERS’ EQUITY; TOTAL ASSETS AND TANGIBLE ASSETS; AND THE RELATED MEASURES

While stockholders’ equity, common stockholders’ equity, total assets, and book value per common share are financial measures that are recorded in accordance with U.S. ~~generally accepted accounting principles (“GAAP”),~~GAAP, tangible common stockholders’ equity, tangible

assets, and tangible book value per common share are not. It is management’s belief that thesenon-GAAP measures should be disclosed in this report and others we issue for the following reasons:

Tangible common stockholders’ equity, tangible assets, and the relatednon-GAAP measures should not be considered in isolation or as a substitute for stockholders’ equity, common stockholders’ equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate thesenon-GAAP measures may differ from that of other companies reportingnon-GAAP measures with similar names.

Reconciliations of our stockholders’ equity, common stockholders’ equity, and tangible common stockholders’ equity; our total assets and tangible assets; and the related financial measures for the respective periods follow:

We manage our assets and liabilities to reduce our exposure to changes in market interest rates. The asset and liability management process has three primary objectives: to evaluate the interest rate risk inherent in certain balance sheet accounts; to determine the appropriate level of risk, given our business strategy, operating environment, capital and liquidity requirements, and performance objectives; and to manage that risk in a manner consistent with guidelines approved by the Boards of Directors of the Company ~~the Community Bank,~~ and the ~~Commercial~~ Bank.

As a financial institution, we are focused on reducing our exposure to interest rate volatility, which represents our primary market risk. Changes in market interest rates represent the greatest challenge to our financial performance, as such changes can have a significant impact on the level of income and expense recorded on a large portion of our interest-earning assets and interest-bearing liabilities, and on the market value of all interest-earning assets, other than those possessing a short term to maturity. To reduce our exposure to changing rates, the ~~Boards~~Board of Directors and management monitor interest rate sensitivity on a regular or as needed basis so that adjustments to the asset and liability mix can be made when deemed appropriate.

The actual duration ofheld-for-investment mortgage loans and mortgage-related securities can be significantly impacted by changes in prepayment levels and market interest rates. The level of prepayments may, in turn, be impacted by a variety of factors, including the economy in the region where the underlying mortgages were originated; seasonal factors; demographic variables; and the assumability of the underlying mortgages. However, the factors with the most significant impact on prepayments are market interest rates and the availability of refinancing opportunities.

~~In 2017, we~~We managed our interest rate risk by taking the following actions: (1) We have continued to emphasize the origination and retention of intermediate-term assets, primarily in the form of multi-family and CRE loans; (2) We ~~increased our portfolio~~have continued the origination of certain C&I loans ~~which~~that feature floating interest rates; (3) Increased the focus on retaining low costs deposits; and ~~(3) We extended~~(4) Obtained new low cost deposits as part of the ~~maturities~~banking-as-a-service initiative (5) The use of ~~certain short-term wholesale borrowings.~~

~~The matching of assets and liabilities may be analyzed by examining the extent~~derivatives to ~~which such assets and liabilities are “interest rate sensitive” and by monitoring a bank’s~~manage our interest rate ~~sensitivity “gap.” An asset or liability is said to be~~position.

The Company has certain loans, interest rate ~~sensitive within a specific time frame if~~swap agreements, investment securities, and debt obligations whose interest rate is indexed to LIBOR. In 2017, the FCA, which is responsible for regulating LIBOR, announced that the publication of LIBOR is not guaranteed beyond 2021. In December 2020, the administrator of LIBOR announced its intention to (i) cease the publication of the one-week and two-month U.S. dollar LIBOR after December 31, 2021, and (ii) cease the publication of all other tenors of U.S. dollar LIBOR (one, three, six, and 12-month LIBOR) after June 30, 2023, and on March 15, 2021, announced that it will ~~mature~~permanently cease to publish most LIBOR settings beginning on January 1, 2022 and cease to publish the overnight, one-month, three-month, six-month, and 12-month U.S. dollar LIBOR settings on July 1, 2023. Accordingly, the FCA has stated that it does not intend to persuade or ~~reprice within~~compel banks to submit to LIBOR after such respective dates. Until such time, however, FCA panel banks have agreed to continue to support LIBOR. In October 2021, the Federal bank regulatory agencies issued a Joint Statement on Managing the LIBOR Transition that ~~period~~offered their regulatory expectations and outlined potential supervisory and enforcement consequences for banks that fail to adequately plan for and implement the transition away from LIBOR. The failure to properly transition away from LIBOR may result in increased supervisory scrutiny. The implementation of ~~time. The~~a substitute index for the calculation of interest ~~rate sensitivity gap is defined as~~rates under the ~~difference between~~Company's loan agreements may result in disputes or litigation with counterparties over the ~~amount of interest-earning assets maturing~~appropriateness or ~~repricing within a specific time frame and the amount of interest-bearing liabilities maturing or repricing within that same period of time.~~

~~In a rising interest rate environment, an institution with a negative gap would generally be expected, absent the effects of other factors,~~comparability to experience a greater increase in the cost of its interest-bearing liabilities than it would in the yield on its interest-earning assets, thus producing a decline in its net interest income. Conversely, in a declining rate environment, an institution with a negative gap would generally be expected to experience a lesser reduction in the yield on its interest-earning assets than it would in the cost of its interest-bearing liabilities, thus producing an increase in its net interest income.

In a rising interest rate environment, an institution with a positive gap would generally be expected to experience a greater increase in the yield on its interest-earning assets than it would in the cost of its interest-bearing liabilities, thus producing an increase in its net interest income. Conversely, in a declining rate environment, an institution with a positive gap would generally be expected to experience a lesser reduction in the cost of its interest-bearing liabilities than it would in the yield on its interest-earning assets, thus producing a decline in its net interest income.

~~At December 31, 2017, ourone-year~~ ~~gap was a negative 19.57%, as compared to a negative 21.37% at December 31, 2016. The 180-basis point change was primarily due to an increase in cash balances as a result~~LIBOR of the ~~sale of the mortgage banking operations,~~substitute index, which ~~was partially offset by a decrease in loans maturing or repricing in one year and~~would have an ~~increase in borrowings maturing in one year.~~

~~The table~~adverse effect on the following page sets forth the amounts of interest-earning assets and interest-bearing liabilities outstanding at December 31, 2017 which, based on certain assumptions stemming from our historical experience,

are expected to reprice or mature in each of the future time periods shown. Except as stated below, the amounts of assets and liabilities shown as repricing or maturing during a particular time period were determined in accordance with the earlier of (1) the term to repricing, or (2) the contractual terms of the asset or liability.

The table provides an approximation of the projected repricing of assets and liabilities at December 31, 2017 on the basis of contractual maturities, anticipated prepayments, and scheduled rate adjustments within a three-month period and subsequent selected time intervals. For residential mortgage-related securities, prepayment rates are forecasted at a weighted average constant prepayment rate (“CPR”) of 5% per annum; for multi-family and CRE loans, prepayment rates are forecasted at weighted average CPRs of 15% and 8% per annum, respectively. Borrowed funds were not assumed to prepay. Savings, NOW, and money market accounts were assumed to decay based on a comprehensive statistical analysis that incorporated our historical deposit experience.

~~Based on the~~Company's results of this analysis, savings accounts were assumed to decay at a rate of 48% for the first five years and 52% for years six through ten. Interest-bearing checking accounts were assumed to decay at a rate of 70% for the first five years and 30% for years six through ten. The decay assumptions reflect the prolonged low interest rate environment and the uncertainty regarding future depositor behavior. Including those accounts having specified repricing dates, money market accounts were assumed to decay at a rate of 89% for the first five years and 11% for years six through ten.

~~Prepayment and deposit decay rates can have a significant impact on our estimated gap. While we believe our assumptions to be reasonable,~~operations. Even when robust fallback language is included, there can be no ~~assurance~~assurances that the ~~assumed prepayment~~replacement rate plus any spread adjustment will be economically equivalent to LIBOR, which could result in a lower interest rate being paid to the Company on such assets.

The Alternative Reference Rates Committee (a group of private-market participants convened by the FRB and ~~decay rates noted above will approximate actual future~~the FRB-NY) has identified SOFR as the recommended alternative to LIBOR. The use of SOFR as a substitute for LIBOR is voluntary and may not be suitable for all market participants. SOFR is calculated and observed differently than LIBOR. Given the manner in which SOFR is calculated, it is likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. Market practices related to SOFR calculation conventions

continue to develop and may vary. Inconsistent calculation conventions among financial products may expose is to increased basic rate and resultant costs.

Other alternatives to LIBOR also exist, but, because of the difference in how those alternatives are constructed, they may diverge significantly from LIBOR in a range of situations and market conditions.

The Bank established a sub-committee of ALCO to address issues related to the phase out and transition from LIBOR. This sub-committee consists of personnel from various departments through the Bank including lending, loan administration, credit risk management, finance/treasury, including interest rate risk and ~~securities prepayments~~liquidity management, information technology, and ~~deposit withdrawal activity.~~operations. The Company has LIBOR-based contracts that extend beyond June 30, 2023. The sub-committee has monitored the Bank’s LIBOR transition progress and substantially all contracts have been updated. In complying with industry requirements, the Bank has not offered new LIBOR-based products since December 31, 2021.

To validate our prepayment assumptions for our multi-family and CRE loan portfolios, we perform a monthly analysis, during which we review our historical prepayment rates and compare them to our projected prepayment rates. We continually review the actual prepayment rates to ensure that our projections are as accurate as possible, since prepayments on these types of loans are not as closely correlated to changes in interest rates as prepayments on~~one-to-four~~ family loans tend to be. In addition, we review the call provisions in our borrowings and investment portfolios and, on a monthly basis, compare the actual calls to our projected calls to ensure that our projections are reasonable.

~~As of December 31, 2017, the impact of a100-basis~~ ~~point decline in market interest rates would have increased our projected prepayment rates for multi-family and CRE loans by a constant prepayment rate of 14.39% per annum. Conversely, the impact of a100-basis~~ ~~point increase in market interest rates would have decreased our projected prepayment rates for multi-family and CRE loans by a constant prepayment rate of 6.03% per annum.~~

Certain shortcomings are inherent in the method of analysis presented in the preceding Interest Rate Sensitivity Analysis. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of the market, while interest rates on other types may lag behind changes in market interest rates. Additionally, certain assets, such as adjustable-rate loans, have features that restrict changes in interest rates both on a short-term basis and over the life of the asset. Furthermore, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate from those assumed in calculating the table. Also, the ability of some borrowers to repay their adjustable-rate loans may be adversely impacted by an increase in market interest rates.

Interest rate sensitivity is ~~also~~ monitored through the use of a model that generates estimates of the change in our ~~net portfolio value (“NPV”)~~Economic Value of Equity over a range of interest rate scenarios. ~~NPV~~EVE is defined as the net present value of expected cash flows from assets, liabilities, andoff-balance sheet contracts. The ~~NPV~~EVE ratio, under any interest rate scenario, is defined as the ~~NPV~~EVE in that scenario divided by the market value of assets in the same scenario. The model assumes estimated loan prepayment rates, reinvestment rates, and deposit decay ~~rates similar to those utilized in formulating the preceding Interest Rate Sensitivity Analysis.~~rates.

~~The following table sets forth our NPV at December 31, 2017, based~~Based on the information and assumptions in effect at ~~that date, and~~December 31, 2022, the following table sets forth our EVE, assuming the changes in interest rates noted:

The net changes in ~~NPV~~EVE presented in the preceding table are within the ~~limits~~parameters approved by the Boards of Directors of the Company and the ~~Banks.~~Bank.

~~As with the Interest Rate Sensitivity Analysis, certain shortcomings are inherent in the methodology used in the preceding interest rate risk measurements.~~ Modeling changes in ~~NPV~~EVE requires that certain assumptions be made which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the ~~NPV Analysis~~EVE analysis presented above assumes that the composition of our interest rate sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration to maturity or repricing of specific assets and liabilities. Furthermore, the model does not take into account the benefit of any strategic actions we may take to further reduce our exposure to interest rate risk. Accordingly, while the ~~NPV Analysis~~EVE analysis provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net interest income, and may very well differ from actual results.

We also utilize an internal net interest income simulation to manage our sensitivity to interest rate risk. The
simulation incorporates various market-based assumptions regarding the impact of changing interest rates on future levels of our financial assets and liabilities. The assumptions used in the net interest income simulation are inherently uncertain. Actual results may differ significantly from those presented in the following table, due to the frequency,

timing, and magnitude of changes in interest rates; changes in spreads between maturity and repricing categories; and prepayments, among other factors, coupled with any actions taken to counter the effects of any such ~~changes.~~ changes

Based on the information and assumptions in effect at December 31, ~~2017,~~2022, the following table reflects the estimated percentage change in future net interest income for the next twelve months, assuming the changes in interest rates noted:

Future changes in our mix of assets and liabilities may result in ~~other~~greater changes to our gap, NPV, and/or net interest income simulation.

In the event that our EVE and net interest income ~~and NPV~~ sensitivities were to breach our internal policy limits, we would undertake the following actions to ensure that appropriate remedial measures were put in place:

Where temporary changes in market conditions or volume levels result in significant increases in ~~interest rate~~ risk, strategies may involve reducing open positions or employing ~~synthetic hedging techniques~~other balance sheet management activities including the potential use of derivatives to ~~more immediately~~ reduce the risk exposure. Where variance from policy tolerances is triggered by more fundamental imbalances in the risk profiles of core loan and deposit products, a remedial strategy may involve restoring balance through natural hedges to the extent possible before employing synthetic hedging techniques. Other strategies might include:

In connection with our net interest income simulation modeling, we also evaluate the impact of changes in the slope of the yield curve. At December 31, ~~2017,~~2022, our analysis indicated that ~~an immediate~~a further inversion of the yield curve would be expected to result in a ~~2.54%~~4.80% decrease in net interest income; conversely, an immediate steepening of the yield curve would be expected to result in a ~~2.99% increase.~~1.21% increase in net interest income.

The preparation of these financial statements requires management to make estimates that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods. Actual results may differ from these estimates under varying conditions. On a quarterly basis, management evaluate its

estimates, particularly those that involve the most difficult, subjective or complex judgments and are often about matters that are inherently uncertain.

The judgments used by management in applying these critical accounting estimates may be influenced by adverse changes in the economic environment, which may result in changes to future financial results.

The Company’s January 1, 2020, adoption of ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments,” resulted in a significant change to our methodology for estimating the allowance since December 31, 2019. ASU No. 2016-13 replaced the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet exposures not accounted for as insurance and net investments in leases accounted for under ASC Topic 842. At December 31, 2019, the allowance for credit losses on loans and leases totaled $148 million. On January 1, 2020, the Company adopted the CECL methodology under ASU Topic 326 and recognized an increase in the allowance for credit losses on loans and leases of $2 million as a “Day 1” transition adjustment from changes in methodology, with a corresponding decrease in retained earnings. Separately, at December 31, 2019, the Company had an allowance for unfunded commitments of $1 million. Upon adoption, the Company recognized an increase in the allowance for unfunded commitments of $13 million as a “Day 1” transition adjustment with a corresponding decrease in retained earnings.

The allowance for credit losses on loans and leases is deducted from the amortized cost basis of a financial asset or a group of financial assets so that the balance sheet reflects the net amount the Company expects to collect. Amortized cost is the unpaid loan balance, net of deferred fees and expenses, and includes negative escrow. Subsequent changes (favorable and unfavorable) in expected credit losses are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense. Management estimates the allowance by projecting and multiplying together the probability-of-default, loss-given-default and exposure-at-default depending on economic parameters for each month of the remaining contractual term. Economic parameters are developed using available information relating to past events, current conditions, and economic forecasts. The Company’s economic forecast period is 24 months, and afterwards reverts to a historical average loss rate on a straight line basis over a 12 month period. Historical credit experience provides the basis for the estimation of expected credit losses, with qualitative adjustments made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency levels and terms, as well as for changes in environmental conditions, such as changes in legislation, regulation, policies, administrative practices or other relevant factors. Expected credit losses are estimated over the contractual term of the loans, adjusted for forecasted prepayments when appropriate. The contractual term excludes potential extensions or renewals. The methodology used in the estimation of the allowance for loan and lease losses, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Each quarter the Company reassesses the appropriateness of the economic forecasting period, the reversion period and historical mean at the portfolio segment level, considering any required adjustments for differences in underwriting standards, portfolio mix, and other relevant data shifts over time.

The allowance for credit losses on loans and leases is measured on a collective (pool) basis when similar risk characteristics exist. The portfolio segment represents the level at which a systematic methodology is applied to estimate credit losses. Management believes the products within each of the entity’s portfolio segments exhibit similar risk characteristics. Smaller pools of homogenous financing receivables with homogeneous risk characteristics were modeled using the methodology selected for the portfolio segment. The macroeconomic data used in the quantitative models are based on a reasonable and supportable forecast period of 24 months. The Company leverages economic projections including property market and prepayment forecasts from established independent third parties to inform its loss drivers in the forecast. Beyond this forecast period, the Company reverts to a historical average loss rate. This reversion to the historical average loss rate is performed on a straight-line basis over 12 months.

Loans that do not share risk characteristics are evaluated on an individual basis. These include loans that are in nonaccrual status with balances above management determined materiality thresholds depending on loan class and also loans that are designated as TDR or “reasonably expected TDR” (criticized, classified, or maturing loans that will have a modification processed within the next three months). If a loan is determined to be collateral dependent, or

meets the criteria to apply the collateral dependent practical expedient, expected credit losses are determined based on the fair value of the collateral at the reporting date, less costs to sell as appropriate.

The Company maintains an allowance for credit losses on off-balance sheet credit exposures. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit losses expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated life. The Company examined historical credit conversion factor (“CCF”) trends to estimate utilization rates, and chose an appropriate mean CCF based on both management judgment and quantitative analysis. Quantitative analysis involved examination of CCFs over a range of fund-up windows (between 12 and 36 months) and comparison of the mean CCF for each fund-up window with management judgment determining whether the highest mean CCF across fund-up windows made business sense. The Company applies the same standards and estimated loss rates to the credit exposures as to the related class of loans.

When applying this critical accounting estimate we incorporate several inputs and judgments that may be influenced by changes period to period. These include, but are not limited to changes in the economic environment and forecasts, changes in the credit profile and characteristics of the loan portfolio, and changes in prepayment assumptions which will result in provisions to or recoveries from the balance of the allowance for credit losses.

While changes to the economic environment forecasts, and portfolio characteristics will change from period to period, portfolio prepayments are an integral assumption in estimating the allowance for credit losses on our commercial real estate portfolio (multi -family, CRE and ADC) which comprises 70.5% of the loan portfolio at December 31, 2022. Portfolio prepayments are subject to estimation uncertainty and changes in this assumption could have a material impact to our estimation process. Prepayment assumptions are sensitive to interest rates and existing loan terms and determine the weighted average life of the commercial mortgage loan portfolio. Excluding other factors, as the weighted average life of the portfolio increases or decreases, so will the required amount of the allowance for credit losses on commercial real estate.

We purchase and originate mortgage loans for sale to the secondary market and often retain the right to service the loan at the time of sale upon which, a mortgage servicing right (MSR) is created. We have elected to report our MSR assets at fair value which is determined using an internal valuation model that utilizes an option-adjusted spread, constant prepayment rates, costs to service, and other assumptions. The assumptions used in the MSR valuation are unobservable in nature, involve a higher degree of judgment and are estimated based on our judgment regarding the value that market participants would assign to the asset. To corroborate this estimate, we obtain third-party valuations of the MSR portfolio on a quarterly basis from independent valuation services to assess the reasonableness of the fair value calculated by the internal valuation model.

For further information and sensitivity analysis regarding the valuation of the MSR asset, see Note 19, “Fair Value Measurements,” in Item 8, “Financial Statements and Supplementary Data."

The acquisition method of accounting requires that acquired assets and liabilities in a business combination be recorded at their fair values as of the acquisition date. This method often involves estimates, all of which are inherently subjective. We have elected to hold the measurement period open to allow for potential adjustments for up to one year after the acquisition date, for new information that existed at the acquisition date but may not have been known or available at that time. For further information, refer to Note 3, "Business Combination" in Item 8, "Financial Statements and Supplementary Data".

Our Consolidated Financial Statements and Notes thereto and other supplementary data begin on the following page.

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME AND COMPREHENSIVE INCOME ~~(LOSS)~~

NOTE 3:4: RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS

(in thousands)    For the Twelve Months Ended December 31, 2017
Details about
Accumulated Other Comprehensive Loss
   Amount Reclassified
from Accumulated
Other Comprehensive
Loss⁽¹⁾
Affected Line Item in the
Consolidated Statements of Operations
and Comprehensive Income (Loss)
Unrealized gains onavailable-for-sale securities
   $ 2,988
Net gain on sales of securities
   (1,245 )
Income tax expense


   $ 1,743
Net gain on sales of securities, net of tax


Amortization of defined benefit pension plan items:

Past service liability
   $ 249
Included in the computation of net periodic (credit) expense⁽²⁾
Actuarial losses
   (8,484 )
Included in the computation of net periodic (credit) expense⁽²⁾


   (8,235 )
Total before tax
   3,432
Tax benefit


   $ (4,803 )
Amortization of defined benefit pension plan items, net of tax


Total reclassifications for the period
   $ (3,060 )

(in millions)

For the Twelve Months Ended December 31, 2022

Details about
Accumulated Other Comprehensive Loss

Amount
Reclassified
out of
Accumulated
Other
Comprehensive
Loss (1)

Affected Line Item in the
Consolidated Statements of Income
and Comprehensive Income

Unrealized gains on available-for-sale
securities:

-			Net gain on securities
~~(1)~~	~~Amounts~~			-		Income tax expense
		$		-		Net gain on securities, net of tax
Unrealized gains on cash flow hedges:		$		4		Interest expense
				(1	)	Income tax benefit
		$		3		Net gain on cash flow hedges, net of tax
Amortization of defined benefit pension plan items:
Past service liability		$		-		Included in ~~parentheses indicate expense items.~~the computation of net periodic credit (2)
Actuarial losses				(2	)	Included in the computation of net periodic cost (2)
				(2	)	Total before tax
				-		Income tax benefit
		$		(2	)	Amortization of defined benefit pension plan items, net of tax
Total reclassifications for the period		$		1

~~(2)~~

~~See Note 12, “Employee Benefits,” for additional information.~~

(1)

Amounts in parentheses indicate expense items.

(2)

See Note 17, “Employee Benefits,” for additional information.

NOTE 4:5: SECURITIES

The following tables summarize the Company’s portfolio of debt securities available for sale ~~at December 31, 2017~~ and ~~2016:~~equity investments with readily determinable fair values:

   December 31, 2017
(in thousands)    Amortized
Cost    Gross
Unrealized
Gain    Gross
Unrealized
Loss    Fair Value
Mortgage-Related Securities:

GSE⁽¹⁾ certificates
   $ 2,023,677    $ 46,364    $ 1,199    $ 2,068,842
GSE CMOs⁽²⁾
   536,284    14,446    826    549,904








Total mortgage-related securities
   $ 2,559,961    $ 60,810    $ 2,025    $ 2,618,746








Other Securities:

U. S. Treasury obligations
   $ 199,960    $ —      $ 62    $ 199,898
GSE debentures
   473,879    2,044    2,665    473,258
Corporate bonds
   79,702    11,073    —      90,775
Municipal bonds
   70,381    540    801    70,120
Capital trust notes
   48,230    6,498    8,632    46,096
Preferred stock
   15,292    142    —      15,434
Mutual funds and common stock⁽³⁾
   16,874    487    261    17,100








Total other securities
   $ 904,318    $ 20,784    $ 12,421    $ 912,681








Total securities available for sale⁽⁴⁾
   $ 3,464,279    $ 81,594    $ 14,446    $ 3,531,427


		December 31, 2022
(in millions)		Amortized Cost			Gross Unrealized Gain			Gross Unrealized Loss			Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates	$		1,457	$		—	$		160	$		1,297
GSE CMOs			3,600			1			300			3,301
Private Label CMOs			185			6			—			191
Total mortgage-related debt securities	$		5,242	$		7	$		460	$		4,789
Other Debt Securities:
U. S. Treasury obligations	$		1,491	$		—	$		4	$		1,487
GSE debentures			1,749			—			351			1,398
Asset-backed securities (1)			375			—			14			361
Municipal bonds			30			—			—			30
Corporate bonds			913			2			30			885
Foreign notes			20			—			—			20
Capital trust notes			97			5			12			90
Total other debt securities	$		4,675	$		7	$		411	$		4,271
Total debt securities available for sale	$		9,917	$		14	$		871	$		9,060
Equity securities:
Mutual funds			16			—			2			14
Total equity securities	$		16	$		—	$		2	$		14
Total securities (2)	$		9,933	$		14	$		873	$		9,074

~~(1)~~

~~Government-sponsored enterprise.~~

~~(2)~~

~~Collateralized mortgage obligations.~~

~~(3)~~

~~Primarily consists of mutual funds that are Community ReinvestmentAct-qualified~~ ~~investments.~~

~~(4)~~

~~The amortized cost includes thenon-credit~~ ~~portion of OTTI recorded in AOCL. At December 31, 2017, thenon-credit~~ ~~portion of OTTI recorded in AOCL was $8.6 million (before taxes).~~

(1)

The underlying assets of the asset-backed securities are substantially guaranteed by the U.S. Government.

(2)

Excludes accrued interest receivable of $31 million included in other assets in the Consolidated Statements of Condition.

   December 31, 2016
(in thousands)    Amortized
Cost    Gross
Unrealized
Gain    Gross
Unrealized
Loss    Fair Value
Mortgage-Related Securities:

GSE certificates
   $ 7,786    $ —      $ 460    $ 7,326








Other Securities:

Municipal bonds
   $ 583    $ 48    $ —      $ 631
Capital trust notes
   9,458    2    2,217    7,243
Preferred stock
   70,866    1,446    328    71,984
Mutual funds and common stock
   16,874    484    261    17,097








Total other securities
   $ 97,781    $ 1,980    $ 2,806    $ 96,955








Total securities available for sale
   $ 105,567    $ 1,980    $ 3,266    $ 104,281


	December 31, 2021
(in millions)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates		1,102		20		15	$	1,107
GSE CMOs		1,717		11		45		1,683
Total mortgage-related debt securities	$	2,819	$	31	$	60	$	2,790
Other Debt Securities:
U. S. Treasury obligations		45	$	—	$	—	$	45
GSE debentures		1,524		1		45		1,480
Asset-backed securities (1)		479		3		3		479
Municipal bonds		25		—		—		25
Corporate bonds		821		18		1		838
Foreign Notes		25		1		—		26
Capital trust notes		96		8		7		97
Total other debt securities	$	3,015	$	31	$	56	$	2,990
Total other securities available for sale	$	5,834	$	62	$	116	$	5,780
Equity securities:
Mutual funds		16		—		—		16
Total equity securities	$	16	$	—	$	—	$	16
Total securities (2)	$	5,850	$	62	$	116	$	5,796

(1)

The ~~following table summarizes~~underlying assets of the ~~Company’s portfolio~~asset-backed securities are substantially guaranteed by the U.S. Government.

(2)

Excludes accrued interest receivable of ~~securities held to maturity at December 31, 2016:~~

$15 million included in other assets in the Consolidated Statements of Condition.

(in thousands)    Amortized
Cost    Carrying
Amount    Gross
Unrealized
Gain    Gross
Unrealized
Loss    Fair Value
Mortgage-Related Securities:

GSEcertificates
   $ 2,193,489    $ 2,193,489    $ 64,431    $ 2,399    $ 2,255,521
GSE CMOs
   1,019,074    1,019,074    36,895    57    1,055,912










Total mortgage-related securities
   $ 3,212,563    $ 3,212,563    $ 101,326    $ 2,456    $ 3,311,433










Other Securities:

U. S. Treasury obligations
   $ 200,293    $ 200,293    $ —      $ 73    $ 200,220
GSE debentures
   88,457    88,457    3,836    —      92,293
Corporate bonds
   74,217    74,217    9,549    —      83,766
Municipal bonds
   71,554    71,554    —      1,789    69,765
Capital trust notes
   74,284    65,692    2,662    11,872    56,482










Total other securities
   $ 508,805    $ 500,213    $ 16,047    $ 13,734    $ 502,526










Total securities held to maturity⁽¹⁾
   $ 3,721,368    $ 3,712,776    $ 117,373    $ 16,190    $ 3,813,959

~~(1)~~

~~Held-to-maturity~~ ~~securities are reported at a carrying amount equal to amortized cost less thenon-credit~~ ~~portion of OTTI recorded in AOCL. At December 31, 2016, thenon-credit~~ ~~portion of OTTI recorded in AOCL was $8.6 million (before taxes).~~

At December 31, ~~2017 and 2016, respectively,~~2022, the Company had ~~$603.8~~$762 million and ~~$590.9~~$329 million ofFHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2021, the Company had $734 million of FHLB-NY stock, at cost. The Company ~~is required to maintain~~maintains an investment inFHLB-NY stock partly in ~~order~~conjunction with its membership in the FHLB and partly related to ~~have~~its access to the FHLB funding it ~~provides.~~utilizes. In addition, at December 31, 2022, the Company had $176 million of Federal Reserve Bank stock, at cost. The Company had no Federal Reserve Bank stock, at December 31, 2021.

The following table summarizes the gross proceeds, gross realized gains, and gross realized losses from the sale ofavailable-for-sale securities during the years-ended:


	December 31,
(in millions)	2022		2021		2020
Gross proceeds	$	228	$	—	$	484
Gross realized gains		—		—		2
Gross realized losses		—		—		1

Net unrealized (loss) gains on equity securities recognized in earnings for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015:~~2020 were $(2) million, $0 million and $1 million, respectively.

   December 31,
(in thousands)    2017    2016    2015
Gross proceeds
   $ 453,878    $ 322,038    $ 278,689
Gross realized gains
   3,848    3,128    1,159
Gross realized losses
   860    —      4

~~In addition, during the twelve months ended December 31, 2017, the Company sought to take advantage of favorable bond market conditions and soldheld-to-maturity~~ securities with an amortized cost of $521.0 million resulting in gross proceeds of $547.9 million including a gross realized gain of $26.9 million. Accordingly, the Company transferred the remaining $3.0 billion of~~held-to-maturity~~ ~~securities toavailable-for-sale~~ ~~with a net unrealized gain of $82.8 million classified in other comprehensive loss in the Consolidated Statements of Condition. Having the securities portfolio classified asavailable-for-sale~~ improves the Company’s interest rate risk sensitivity and liquidity measures and provides the Company with more options in meeting the expected future Liquidity Coverage Ratio (“LCR”) requirements.

In the following table, the beginning balance represents the credit loss component for debt securities on which OTTI occurred prior to January 1, 2017. For credit-impaired debt securities, OTTI recognized in earnings after that date is presented as an addition in two components, based upon whether the current period is the first time a debt security was credit-impaired (initial credit impairment) or is not the first time a debt security was credit-impaired (subsequent credit impairment).97


~~(in thousands)~~	~~For the~~ ~~Twelve Months Ended~~ ~~December 31, 2017~~
~~Beginning credit loss amount as of December 31, 2016~~		~~$197,552~~
~~Add: Initial other-than-temporary credit losses~~		—
~~Subsequent other-than-temporary credit losses~~		—
~~Amount previously recognized in AOCL~~		—
~~Less: Realized losses for securities sold~~		—
~~Securities intended or required to be sold~~		—
~~Increase in cash flows on debt securities~~		~~1,219~~

~~Ending credit loss amount as of December 31, 2017~~		~~$196,333~~

The following table summarizes, by contractual maturity, the amortized cost of~~available-for-sale~~ securities at December 31, ~~2017:~~2022:


	Mortgage- Related Securities		Average Yield			U.S. Treasury and GSE Obligations		Average Yield			State, County, and Municipal		Average Yield⁽¹⁾			Other Debt Securities ⁽²⁾		Average Yield			Fair Value			Mortgage- Related Securities			U.S. Government and GSE Obligations			State, County, and Municipal			Other Debt Securities (1)			Fair Value
(dollars in thousands)
Available-for-Sale Securities: ⁽³⁾
(dollars in millions)
Available-for-Sale Debt Securities:
Due within one year	$	—		—	%	$	259,256		1.82	%	$	148		6.51	%	$	—		—	%	$	259,617	$		52	$		1,588	$		2	$		20	$		1,657
Due from one to five years		883,138		3.32			6,950		3.84			291		6.63			48,449		3.57			963,589			195			150			—			472			804
Due from five to ten years		1,002,205		3.44			283,883		3.08			—		—			31,253		8.37			1,361,457			277			1,177			18			509			1,656
Due after ten years		674,618		3.09			123,750		3.23			69,942		2.88			48,230		3.77			914,230			4,718			325			10			404			4,943

Total securities available for sale	$	2,559,961		3.30	%	$	673,839		3.22	%	$	70,381		2.90	%	$	127,932		4.82	%	$	3,498,893

Total debt securities available for sale																							$		5,242	$		3,240	$		30	$		1,405	$		9,060

~~(1)~~

~~Not presented on atax-equivalent~~ ~~basis.~~

~~(2)~~

~~Includes corporate bonds and capital trust notes.~~

~~(3)~~

~~As equity securities have no contractual maturity, they have been excluded from this table.~~

(1)

Includes corporate bonds, capital trust notes, foreign notes, and asset-backed securities.

The following table presents~~available-for-sale~~ securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of December 31, ~~2017:~~2022:


	Less than Twelve Months				Twelve Months or Longer				Total					Less than Twelve Months						Twelve Months or Longer						Total
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily ImpairedAvailable-for-Sale Securities:
(in millions)														Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations													$		1,487	$		4	$		—	$		—	$		1,487	$		4
U.S. Government agency and GSE obligations															243			5			1,156			346			1,399			351
GSE certificates	$	232,546	$	535	$	20,440	$	664	$	252,986	$	1,199			871			46			420			114			1,291			160
GSE debentures		333,045		2,665		—		—		333,045		2,665
GSE CMOs		118,694		826		—		—		118,694		826			2,219			36			925			264			3,144			300
U. S. Treasury obligations		199,898		62		—		—		199,898		62
Asset-backed securities															61			2			262			12			323			14
Municipal bonds		11,169		259		41,054		542		52,223		801			9			—			7			—			16			—
Corporate bonds															698			27			97			4			795			30
Foreign notes															20			—			—			—			20			—
Capital trust notes		—		—		35,105		8,632		35,105		8,632			46			2			34			10			80			12
Equity securities		—		—		11,545		261		11,545		261			4			—			10			2			14			2

Total temporarily impairedavailable-for-sale securities	$	895,352	$	4,347	$	108,144	$	10,099	$	1,003,496	$	14,446

Total temporarily impaired securities													$		5,658	$		122	$		2,911	$		752	$		8,569	$		873

The following table presents~~held-to-maturity~~ ~~andavailable-for-sale~~ securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of December 31, ~~2016:~~2021:

   Less than Twelve Months    Twelve Months or Longer    Total
(in thousands)    Fair Value    Unrealized Loss    Fair Value    Unrealized Loss    Fair Value    Unrealized Loss
Temporarily ImpairedHeld-to-Maturity Securities:

GSE certificates
   $ 268,891    $ 2,399    $ —      $ —      $ 268,891    $ 2,399
GSE CMOs
   42,980    57    —      —      42,980    57
U. S. Treasury obligations
   200,220    73    —      —      200,220    73
Municipal bonds
   69,765    1,789    —      —      69,765    1,789
Capital trust notes
   —      —      24,364    11,872    24,364    11,872












Total temporarily impairedheld-to-maturity securities
   $ 581,856    $ 4,318    $ 24,364    $ 11,872    $ 606,220    $ 16,190












Temporarily ImpairedAvailable-for-Sale Securities:

GSE certificates
   $ 7,326    $ 460    $ —      $ —      $ 7,326    $ 460
Capital trust notes
   —      —      5,241    2,217    5,241    2,217
Equity securities
   29,059    589    —      —      29,059    589












Total temporarily impairedavailable-for-sale securities
   $ 36,385    $ 1,049    $ 5,241    $ 2,217    $ 41,626    $ 3,266


	Less than Twelve Months				Twelve Months or Longer				Total
(in millions)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations	$	45	$	—	$	—	$	—	$	45	$	—
U.S. Government agency and GSE obligations		317		7		185		8		502		15
GSE certificates		846		28		293		17		1,139		45
GSE CMOs		491		8		926		37		1,417		45
Asset-backed securities		130		1		135		2		265		3
Municipal bonds		—		—		8		—		8		—
Corporate bonds		—		—		99		1		99		1
Foreign notes		5		—		—		—		5		—
Capital trust notes		—		—		37		7		37		7
Equity securities		12		—		—		—		12		—
Total temporarily impaired securities	$	1,846	$	44	$	1,683	$	72	$	3,529	$	116

An OTTI loss on impaired debt securities must be fully recognized in earnings if an investor has the intent to sell the debt security, or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost. However, even if an investor does not expect to sell a debt security, it must evaluate the expected cash flows to be received and determine if a credit loss has occurred. In the event that a credit loss occurs, only the amount of impairment associated with the credit loss is recognized in earnings. Amounts of impairment relating to factors other than credit losses are recorded in AOCL.

At December 31, 2017, the Company had unrealized losses on certain GSE mortgage-related securities, U.S. Treasury obligations, municipal bonds, capital trust notes, and equity securities. The unrealized losses on the Company’s GSE mortgage-related securities, U.S. Treasury obligations, municipal bonds, and capital trust notes at December 31, 2017 were primarily caused by movements in market interest rates and spread volatility, rather than credit risk. These securities are not expected to be settled at a price that is less than the amortized cost of the Company’s investment.

The Company reviews quarterly financial information related to its investments in capital trust notes, as well as other information that is released by each of the issuers of such notes, to determine their continued creditworthiness. The Company continues to monitor these investments and currently estimates that the present value of expected cash flows is not less than the amortized cost of the securities. It is possible that these securities will perform worse than is currently expected, which could lead to adverse changes in cash flows from these securities and potential OTTI losses in the future. Future events that could trigger material unrecoverable declines in the fair values of the Company’s investments, and thus result in potential OTTI losses, include, but are not limited to, government intervention; deteriorating asset quality and credit metrics; significantly higher levels of default and loan loss provisions; losses in value on the underlying collateral; net operating losses; and illiquidity in the financial markets.

The Company considers a decline in the fair value of equity securities to be other than temporary if the Company does not expect to recover the entire amortized cost basis of the security. The unrealized losses on the Company’s equity securities at December 31, 2017 were caused by market volatility. The Company evaluated the near-term prospects of recovering the fair value of these securities, together with the severity and duration of impairment to date, and determined that they were not other-than-temporarily impaired. Nonetheless, it is possible that these equity securities will perform worse than is currently expected, which could lead to adverse changes in their fair value, or to the failure of the securities to fully recover in value as currently anticipated by management. Either event could cause the Company to record an OTTI loss in a future period. Events that could trigger a material decline in the fair value of these securities include, but are not limited to, deterioration in the equity markets; a decline in the quality of the loan portfolio of the issuer in which the Company has invested; and the recording of higher loan loss provisions and net operating losses by such issuer.

The investment securities designated as having a continuous loss position for twelve months or more at December 31, ~~2017~~2022 consisted of ~~six~~twenty three agency ~~mortgage-related~~collateralized mortgage obligations, five capital trusts notes, seven asset-backed securities, ~~five capital trust notes,~~ two corporate bonds, thirty three US government agency bonds, one hundred thirty three mortgage-backed securities, one mutual fund, and one municipal ~~bonds, and one mutual fund. At December 31, 2016~~bond. The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2021 consisted of four agency collateralized mortgage obligations, five capital ~~trust notes. At December 31, 2017,~~trusts notes, four asset-backed securities, two corporate bonds, twenty US government agency bonds, twenty one mortgage-backed securities and one municipal bond.

The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. Based on an evaluation of available information about past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability, the Company has concluded that it expects to receive all contractual cash flows from each security held in its available-for-sale securities portfolio.

We first assess whether (i) we intend to sell, or (ii) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, any previously recognized allowances are charged off and the security’s amortized cost basis is written down to fair value through income. If neither of the aforementioned criteria are met, we evaluate whether the decline in fair value has resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

None of the unrealized losses identified as of December 31, 2022 or December 31, 2021 relates to the marketability of the securities ~~having~~or the issuers’ ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the investment securities were purchased, and do not indicate credit-related impairment. Management based this conclusion on an analysis of each issuer including a ~~continuous loss position~~detailed credit assessment of each issuer. The Company does not intend to sell, and it is not more likely than not that the Company will be required to sell the positions before the recovery of their amortized cost basis, which may be at maturity. As such, no allowance for credit losses was recorded with respect to debt securities as of or during the twelve months ~~or more was 8.5% below the collective amortized cost of $118.2 million. At~~ended December 31, 2016, the fair value of such securities was 32.2% below the collective amortized cost of $43.7 million. At December 31, 2017 and 2016, the combined market value of the respective securities represented unrealized losses of $10.1 million and $14.1 million, respectively.2022.

NOTE 5:6: LOANS AND LEASES

The following table sets forth, at the dates indicated, the composition of the loan and lease portfolio held for investment, at their amortized cost, which includes the outstanding principal balance adjusted for any unamortized premiums, discounts, deferred fees and costs:


	December 31, 2022						December 31, 2021
(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	$	38,130			55.3	%	$	34,628			75.7	%
Commercial real estate		8,526			12.4			6,701			14.7
One-to-four family first mortgage		5,821			8.4			160			0.3
Acquisition, development, and construction		1,996			2.8			209			0.5
Total mortgage loans held for investment (1)		54,473			78.9			41,698			91.2
Other Loans:
Commercial and industrial		10,597			15.4			2,238			3.2
Lease financing, net of unearned income of $85 and $95 respectively		1,679			2.4			1,796			3.9
Total commercial and industrial loans (2)		12,276			17.8			4,034			7.2
Other		2,252			3.3			6			0.0
Total other loans held for investment		14,528			21.1			4,040			7.2
Total loans and leases held for investment (1)	$	69,001			100.0	%	$	45,738			100.0	%
Allowance for credit losses on loans and leases		(393	)					(199	)
Total loans and leases held for investment, net	$	68,608					$	45,539
Loans held for sale, at fair value		1,115						—
Total loans and leases, net	$	69,723					$	45,539

(1)

Excludes accrued interest receivable of $292 million and $199 million at December 31, ~~2017~~2022 and ~~2016:~~December 31, 2021, respectively, which is included in other assets in the Consolidated Statements of Condition.

(2)

Includes specialty finance loans and leases of $4.4 billion and $3.5 billion, respectively, at December 31, 2022 and December 31, 2021.

Loans and Leases

   December 31,
   2017 2016
(dollars in thousands)    Amount Percent of
Non-Covered
Loans Held for
Investment Amount Percent of
Non-Covered
Loans Held for
Investment
Non-Covered Loans Held for Investment:

Mortgage Loans:

Multi-family
   $ 28,074,709 73.19 % $ 26,945,052 72.13 %
Commercial real estate
   7,322,226 �� 19.09 7,724,362 20.68
One-to-four family
   477,228 1.24 381,081 1.02
Acquisition, development, and construction
   435,825 1.14 381,194 1.02


Total mortgage loans held for investment
   $ 36,309,988 94.66 $ 35,431,689 94.85


Other Loans:

Commercial and industrial
   1,377,964 3.59 1,341,216 3.59
Lease financing, net of unearned income of $65,041 and $60,278, respectively
   662,610 1.73 559,229 1.50


Total commercial and industrial loans⁽¹⁾
   2,040,574 5.32 1,900,445 5.09
Purchased credit-impaired loans
   —   —   5,762 0.01
Other
   8,460 0.02 18,305 0.05


Total other loans held for investment
   2,049,034 5.34 1,924,512 5.15


Totalnon-covered loans held for investment
   $ 38,359,022 100.00 % $ 37,356,201 100.00 %


Net deferred loan origination costs
   28,949 26,521
Allowance for losses onnon-covered loans
   (158,046 ) (158,290 )


Non-covered loans held for investment, net
   $ 38,229,925 $ 37,224,432


Covered loans
   —   1,698,133
Allowance for losses on covered loans
   —   (23,701 )


Covered loans, net
   $ —   $ 1,674,432
Loans held for sale
   35,258 409,152


Total loans, net
   $ 38,265,183 $ 39,308,016

~~(1)~~

~~Includes specialty finance loans of $1.5 billion and $1.3 billion, and other C&I loans of $500.8 million and $632.9 million, respectively, at December 31, 2017 and 2016.~~

~~Non-Covered~~Loans

~~Non-Covered~~ ~~Loans~~ and Leases Held for Investment

The majority of the loans the Company originates for investment are multi-family loans, most of which are collateralized bynon-luxury apartment buildings in New York City with rent-regulated units and below-market rents. In addition, the Company originates ~~commercial real estate (“CRE”)~~CRE loans, most of which are collateralized by income-producing properties such as office buildings, retail centers,mixed-use buildings, and multi-tenanted light industrial properties that are located in New York City and on Long Island.

To a lesser extent, the Company also originates~~one-to-four~~ ~~family loans, acquisition, development, and construction (“ADC”) loans, and C&I~~ ADC loans for investment.One-to-four family loans held for investment were originated through the Company’s former mortgage banking operation and primarily consisted of jumbo prime adjustable rate mortgages made to borrowers with a solid credit history.

ADC loans are primarily originated for multi-family and residential tract projects in New York City and on Long Island. C&I loans consist of asset-based loans, equipment loans and leases, and dealer floor-plan loans (together, ~~“specialty~~specialty finance loans and ~~leases”)~~leases) that generally are made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide; and ~~“other”~~other C&I loans that primarily are made to small andmid-size businesses in Metro New York. ~~“Other”~~Other C&I loans are typically made for working capital, business expansion, and the purchase of machinery and equipment.

100

The repayment of multi-family and CRE loans generally depends on the income produced by the underlying properties which, in turn, depends on their successful operation and management. To mitigate the potential for credit losses, the Company underwrites its loans in accordance with credit standards it considers to be prudent, looking first at the consistency of the cash flows being produced by the underlying property. In addition, multi-family buildings, CRE properties, and ADC projects are inspected as a prerequisite to approval, and independent appraisers, whose appraisals are carefully reviewed by the Company’sin-house appraisers, perform appraisals on the collateral properties. In many cases, a second independent appraisal review is performed.

To further manage its credit risk, the Company’s lending policies limit the amount of credit granted to any one borrower and typically require conservative debt service coverage ratios andloan-to-value ratios. Nonetheless, the ability of the Company’s borrowers to repay these loans may be impacted by adverse conditions in the local real estate market, ~~and~~ the local ~~economy.~~economy and changes in applicable laws and regulations. Accordingly, there can be no assurance that its underwriting policies will protect the Company from credit-related losses or delinquencies.

ADC loans typically involve a higher degree of credit risk than loans secured by improved or owner-occupied real estate. Accordingly, borrowers are required to provide a guarantee of repayment and completion, and loan proceeds are disbursed as construction progresses, as certified byin-house inspectors or third-party engineers. The Company seeks to minimize the credit risk on ADC loans by maintaining conservative lending policies and rigorous underwriting standards. However, if the estimate of value proves to be inaccurate, the cost of completion is greater than expected, or the length of time to complete and/or sell or lease the collateral property is greater than anticipated, the property could have a value upon completion that is insufficient to assure full repayment of the loan. This could have a material adverse effect on the quality of the ADC loan portfolio, and could result in losses or delinquencies. In addition, the Company utilizes the same stringent appraisal process for ADC loans as it does for its multi-family and CRE loans.

To minimize the risk involved in specialty finance lending and leasing, the Company participates in syndicated loans that are brought to it, and equipment loans and leases that are assigned to it, by a select group of nationally recognized sources who have had long-term relationships with its experienced lending officers. Each of these credits is secured with a perfected first security interest or outright ownership in the underlying collateral, and structured as senior debt or as anon-cancelable lease. To further minimize the risk involved in specialty finance lending and leasing, each transaction isre-underwritten. In addition, outside counsel is retained to conduct a further review of the underlying documentation.

To minimize the risks involved in other C&I lending, the Company underwrites such loans on the basis of the cash flows produced by the business; requires that such loans be collateralized by various business assets, including inventory, equipment, and accounts receivable, among others; and typically requires personal guarantees. However, the capacity of a borrower to repay such a C&I loan is substantially dependent on the degree to which the business is successful. In addition, the collateral underlying such loans may depreciate over time, may not be conducive to appraisal, or may fluctuate in value, based upon the results of operations of the business.

At December 31, 2022, one-to-four family loans represented $5.8 billion and as of December 31, 2021 one-to-four family loans totaled $160 million, with the increase being driven by the Flagstar acquisition. These loans include various types of conforming and non-conforming fixed and adjustable rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties.

At December 31, 2022, other loans totaled $2.3 billion and consisted primarily of home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans and other consumer loans, including overdraft loans acquired in the Flagstar acquisition.

Included in~~non-covered~~ loans held for investment at December 31, ~~2017,~~2022 and December 31, 2021, were loans of ~~$59.5~~$101 million and $6 million, respectively, to officers, directors, and their related interests and parties. There were no loans to principal shareholders at that date.

Loans with Government Guarantees

Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to HUD (if foreclosure timelines are met), which is not paid by the FHA until claimed. The Bank has a unilateral option to repurchase loans sold to GNMA if the loan is due, but unpaid, for three consecutive months (typically referred to as 90 days past due) and can recover losses through a claims process from the guarantor. These loans are recorded in loans held for investment and the liability to repurchase the loans is recorded in other liabilities on the Consolidated Statements of Condition. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. As of December 31, 2022, LGG loans totaled $1.2 billion and the repurchase liability was $0.3 billion.

101

Repossessed assets and the associated net claims related to government guaranteed loans are recorded in other assets and was $14 million at December 31, 2022.

Loans Held-for-Sale

At December 31, ~~2016, the Company hadnon-covered~~ purchased credit-impaired (“PCI”) loans, with a carrying value of $5.8 million and an unpaid principal balance of $7.0 million at that date. PCI loans had been covered under the LSA with the FDIC that expired in March 2015 and had been included in~~non-covered~~ ~~loans. Such loans were accounted for under ASC310-30~~ ~~and were initially measured at fair value, which included estimated future credit losses expected to be incurred over the lives of the loans. Under ASC310-30,~~ purchasers are permitted to aggregate acquired loans into one or more pools, provided that the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. There were no such loans accounted for under ASC~~310-30~~ ~~at December 31, 2017.~~

~~Loans Held for Sale~~

~~At December 31, 2017 the Company had~~2022, loans held for sale ~~of $35.3 million as~~were $1.1 billion compared to ~~$409.2 million~~zero at December 31, ~~2016.~~2021, with the increase driven by the Flagstar acquisition. The ~~decline reflects~~Company classifies loans as held for sale when we originate or purchase loans that we intend to sell. The Company has elected the ~~sale~~fair value option for nearly all of ~~its~~this portfolio. The Company estimates the fair value of mortgage ~~banking business, which was acquired~~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 majority of our mortgage loans originated as ~~part~~LHFS are ultimately sold into the secondary market on a whole loan basis or by securitizing the loans into agency, government, or private label MBS.

Asset Quality

All asset quality information excludes LGG that are insured by U.S government agencies.

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 ~~its 2009 FDIC-assisted acquisition~~the loan agreement. When a loan is placed on non-accrual status, management ceases the accrual of ~~AmTrust~~interest owed, and ~~was reported under~~previously accrued interest is charged against interest income. A loan is generally returned to accrual status when the ~~Company’s Residential Mortgage Banking segment, to Freedom. Accordingly,~~loan is current and management has reasonable assurance that the loan will be fully collectible. Interest income on ~~September 29, 2017, the sale was completed with proceeds~~non-accrual loans is recorded when received in ~~the amount~~cash. At December 31, 2022 and December 31, 2021, all of $226.6 million, resulting in a gain of $7.4 million, which is included in “Non-Interest Income” in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). Freedom acquired both the Company’s origination and servicing platforms, as well as its mortgage servicing loan portfolio of $20.5 billion and related MSR asset of $208.8 million.

~~The Community Bank’s mortgage banking operations originated, aggregated, sold, and servicedone-to-four~~ ~~family loans. Community banks, credit unions, mortgage companies, and mortgage brokers used its proprietaryweb-accessible~~ ~~mortgage banking platform to originate and closeone-to-four~~ ~~family loans nationwide. These~~our non-performing loans were ~~generally sold to GSEs, servicing retained. To a much lesser extent, the Community Bank used its mortgage banking platform to originate jumbo~~non-accrual loans.

~~Asset Quality~~

The following table presents information regarding the quality of the Company’s~~non-covered~~ loans held for investment at December 31, ~~2017:~~2022:


(in thousands)	Loans 30-89 Days Past Due⁽¹⁾		Non- Accrual Loans⁽¹⁾		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
(in millions)													Loans 30-89 Days Past Due		Non- Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	1,258	$	11,078	$	—	$	12,336	$	28,062,373	$	28,074,709	$	34	$	13	$	—	$	47	$	38,083	$	38,130
Commercial real estate		13,227		6,659		—		19,886		7,302,340		7,322,226		2		20		—		22		8,504		8,526
One-to-four family		585		1,966		—		2,551		474,677		477,228
One-to-four family first mortgage														21		92		—		113		5,708		5,821
Acquisition, development, and construction		—		6,200		—		6,200		429,625		435,825		—		—		—		—		1,996		1,996
Commercial and industrial⁽¹⁾⁽²⁾		2,711		47,768		—		50,479		1,990,095		2,040,574
Commercial and industrial(1)														—		7		—		7		12,269		12,276
Other		8		11		—		19		8,441		8,460		13		9		—		22		2,230		2,252

Total	$	17,789	$	73,682	$	—	$	91,471	$	38,267,551	$	38,359,022	$	70	$	141	$	—	$	211	$	68,790	$	69,001

~~(1)~~

~~Includes $2.7 million and $46.7 million of taxi medallion-related loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

~~(2)~~

~~Includes lease financing receivables, all of which were current.~~

(1)

Includes lease financing receivables, all of which were current.

102

The following table presents information regarding the quality of the Company’s~~non-covered~~ loans held for investment ~~(excludingnon-covered~~ ~~PCI loans)~~ at December 31, ~~2016:~~2021:


(in thousands)	Loans 30-89 Days Past Due⁽¹⁾		Non-Accrual Loans⁽¹⁾		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
(in millions)													Loans 30-89 Days Past Due		Non- Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	28	$	13,558	$	—	$	13,586	$	26,931,466	$	26,945,052	$	57	$	10	$	—	$	67	$	34,561	$	34,628
Commercial real estate		—		9,297		—		9,297		7,715,065		7,724,362		2		16		—		18		6,683		6,701
One-to-four family		2,844		9,679		—		12,523		368,558		381,081
One-to-four family first mortgage														8		1		—		9		151		160
Acquisition, development, and construction		—		6,200		—		6,200		374,994		381,194		—		—		—		—		209		209
Commercial and industrial⁽¹⁾⁽²⁾		7,263		16,422		—		23,685		1,876,760		1,900,445
Commercial and industrial(1)														—		6		—		6		4,029		4,035
Other⁽³⁾		248		1,313		—		1,561		16,744		18,305		—		—		—		—		5		5

Total	$	10,383	$	56,469	$	—	$	66,852	$	37,283,587	$	37,350,439	$	67	$	33	$	—	$	100	$	45,638	$	45,738

~~(1)~~

~~Excludes $6 thousand and $869 thousand ofnon-covered~~ ~~PCI loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

~~(2)~~

~~Includes lease financing receivables, all of which were current.~~

~~(3)~~

~~Includes $6.8 million and $15.2 million of taxi medallion loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

(1)

Includes lease financing receivables, all of which were current.

The following table summarizes the Company’s portfolio of~~non-covered~~ loans held for investment by credit quality indicator at December 31, ~~2017:~~2022:


	Mortgage Loans										Other Loans						Mortgage Loans										Other Loans
(in thousands)	Multi-Family		Commercial Real Estate		One-to-Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial⁽¹⁾		Other		Total Other Loans
(in millions)																	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial(1)		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	27,874,330	$	7,255,100	$	471,571	$	344,040	$	35,945,041	$	1,925,527	$	8,449	$	1,933,976	$	36,622	$	7,871	$	5,710	$	1,992	$	52,195	$	12,208	$	2,238	$	14,446
Special mention		125,752		47,123		3,691		76,033		252,599		20,883		—		20,883		864		230		8		4		1,106		18		—		18
Substandard		74,627		20,003		1,966		15,752		112,348		94,164		11		94,175		644		425		103		—		1,172		50		14		64
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—

Total	$	28,074,709	$	7,322,226	$	477,228	$	435,825	$	36,309,988	$	2,040,574	$	8,460	$	2,049,034	$	38,130	$	8,526	$	5,821	$	1,996	$	54,473	$	12,276	$	2,252	$	14,528

~~(1)~~

~~Includes lease financing receivables, all of which were classified as “pass.”~~

(1)

Includes lease financing receivables, all of which were classified as Pass.

The following table summarizes the Company’s portfolio of~~non-covered~~ loans held for investment ~~(excludingnon-covered~~ ~~PCI loans)~~ by credit quality indicator at December 31, ~~2016:~~2021:


	Mortgage Loans										Other Loans						Mortgage Loans										Other Loans
(in thousands)	Multi-Family		Commercial Real Estate		One-to-Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial⁽¹⁾		Other		Total Other Loans
(in millions)																	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial(1)		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	26,754,622	$	7,701,773	$	371,179	$	341,784	$	35,169,358	$	1,771,975	$	16,992	$	1,788,967	$	33,035	$	5,876	$	137	$	204	$	39,252	$	3,987	$	6	$	3,993
Special mention		164,325		12,604		—		33,210		210,139		54,979		—		54,979		982		644		14		5		1,645		2		—		2
Substandard		26,105		9,985		9,902		6,200		52,192		73,491		1,313		74,804		611		181		9		—		801		45		—		45
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—

Total	$	26,945,052	$	7,724,362	$	381,081	$	381,194	$	35,431,689	$	1,900,445	$	18,305	$	1,918,750	$	34,628	$	6,701	$	160	$	209	$	41,698	$	4,034	$	6	$	4,040

~~(1)~~

~~Includes lease financing receivables, all of which were classified as “pass.”~~

(1)

Includes lease financing receivables, all of which were classified as Pass.

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

103

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.

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, 2022:


	Vintage Year
(in millions) Risk Rating Group	2022		2021		2020		2019		2018		Prior To 2018		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Pass	$	12,817	$	10,925	$	9,121	$	5,519	$	4,301	$	8,055	$	1,452	$	5	$	52,195
Special Mention		—		15		103		244		293		451		—		—		1,106
Substandard		1		6		48		224		137		753		—		3		1,172
Total mortgage loans	$	12,818	$	10,946	$	9,272	$	5,987	$	4,731	$	9,259	$	1,452	$	8	$	54,473
Pass		5,415		964		637		727		180		266		6,209		46		14,444
Special Mention		12		—		—		7		—		—		—		—		19
Substandard		1		1		22		2		9		7		19		4		65
Total other loans		5,428		965		659		736		189		273		6,228		50		14,528
Total	$	18,246	$	11,911	$	9,931	$	6,723	$	4,920	$	9,532	$	7,680	$	58	$	69,001

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.

The following table summarizes the extent to which collateral secures the Company’s collateral-dependent loans held for investment by collateral type as of December 31, 2022:


	Collateral Type
(in millions)	Real Property		Other
Multi-family	$	13	$	—
Commercial real estate		35		—
One-to-four family first mortgage		136		—
Acquisition, development, and construction		—		—
Commercial and industrial		—		3
Other		14		—
Total collateral-dependent loans held for investment		198		3

Other collateral type consists of taxi medallions, cash, accounts receivable and inventory.

There were no significant changes in the extent to which collateral secures the Company’s collateral-dependent financial assets during the twelve months ended December 31, 2022.

At December 31, 2022 and December 31, 2021, the Company had $121 million residential mortgage loans in the process of foreclosure and no residential mortgage loans in the process of foreclosure, respectively.

104

The interest income that would have been recorded under the original terms ofnon-accrual loans at the respective year-ends, and the interest income actually recorded on these loans in the respective years, is summarized below:


	December 31,									December 31,
(in thousands)	2017			2016			2015
(in millions)										2022			2021			2020
Interest income that would have been recorded	$	4,974		$	3,128		$	2,288		$	3		$	3		$	5
Interest income actually recorded		(2,904	)		(1,708	)		(1,574	)		(1	)		(1	)		(1	)

Interest income foregone	$	2,070		$	1,420		$	714		$	2		$	2		$	4

Troubled Debt Restructurings

The Company is required to account for certain~~held-for-investment~~ loan modifications and restructurings as TDRs. In general, a modification or restructuring of a loan constitutes a TDR if the Company grants a concession to a borrower experiencing financial difficulty. A loan modified as a TDR generally is placed onnon-accrual status until the Company determines that future collection of principal and interest is reasonably assured, which requires, among other things, that the borrower demonstrate performance according to the restructured terms for a period of at least six consecutive months.

In an effort to proactively manage delinquent loans, the Company has selectively extended to certain borrowers concessions such as rate reductions, extension of maturity dates, and forbearance agreements. As of December 31, ~~2017,~~2022, loans on which concessions were made with respect to rate reductions and/or extension of maturity dates amounted to ~~$44.6 million; loans on which forbearance agreements were reached amounted to $1.0~~$38 million.

The following table presents information regarding the Company’s ~~TDRs as of December 31, 2017 and 2016:~~TDRs:


	December 31,													December 31, 2022									December 31, 2021
	2017						2016
(in thousands)	Accruing		Non- Accrual		Total		Accruing		Non- Accrual		Total
(in millions)														Accruing			Non- Accrual			Total			Accruing			Non- Accrual			Total
Loan Category:
Multi-family	$	824	$	8,061	$	8,885	$	1,981	$	8,755	$	10,736	$		—	$		6	$		6	$		—	$		7	$		7
Commercial real estate		—		368		368		—		1,861		1,861			16			19			35			16			—			16
One-to-four family		—		1,066		1,066		222		1,749		1,971
One-to-four family first mortgage															—			—			—			—			—			—
Acquisition, development, and construction		8,652		—		8,652		—		—		—			—			—			—			—			—			—
Commercial and industrial		177		26,408		26,585		1,263		3,887		5,150			—			3			3			—			6			6
Other		—		—		—		—		202		202

Total	$	9,653	$	35,903	$	45,556	$	3,466	$	16,454	$	19,920	$		16	$		28	$		44	$		16	$		13	$		29

The eligibility of a borrower forwork-out concessions of any nature depends upon the facts and circumstances of each loan, which may change from period to period, and involves judgment by Company personnel regarding the likelihood that the concession will result in the maximum recovery for the Company.

105

The financial effects of the Company’s TDRs ~~for~~are summarized as follows:


	For the Twelve Months Ended December 31, 2022
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification			Post- Modification		Charge- off Amount		Capitalized Interest
Loan Category:
Commercial real estate		2	$	22	$	19		6.00	%	4.02	%	$	3	$	—
Total		2	$	22	$	19						$	3	$	—


	For the Twelve Months Ended December 31, 2021
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification		Post- Modification		Charge- off Amount		Capitalized Interest
Loan Category:
Commercial real estate		2	$	4	$	4	6.00	%	3.55	%	$	—	$	—
Commercial and industrial		1		8		8	3.13		3.25			—		—
Total		3	$	12	$	12							$	—


	For the Twelve Months Ended December 31, 2020
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification			Post- Modification			Charge- off Amount		Capitalized Interest
Loan Category:
One-to-four family first mortgage		1	$	15	$	15	8.00		%	3.50		%	$	—	$	—
Commercial and industrial		42		9	$	8		2.36			2.23			1		—
Total		43	$	24	$	23							$	1	$	—

At December 31, 2022 and December 31, 2021, no loans have been modified as TDR's that were in payment default during the twelve months ended ~~December 31, 2017, 2016, and 2015 are summarized as follows:~~

   For the Twelve Months Ended December 31, 2017
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-
Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

One-to-four family
   4    $ 810    $ 986    5.93 % 2.21 % $ —      $ 12
Acquisition, development, and construction
   2    8,652    8,652    5.50 5.50 —      —
Commercial and industrial
   65    52,179    26,409    3.36 3.26 14,273    —










Total
   71    $ 61,641    $ 36,047    $ 14,273    $ 12

   For the Twelve Months Ended December 31, 2016
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-
Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

Multi-family
   1    $ 9,340    $ 8,129    4.63 % 4.00 % $ —      $ —
One-to-four family
   5    900    1,036    4.26 2.65 —      11
Commercial and industrial
   7    4,697    3,935    3.22 3.19 170    —










Total
   13    $ 14,937    $ 13,100    $ 170    $ 11

   For the Twelve Months Ended December 31, 2015
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-
Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

One-to-four family
   4    $ 568    $ 619    4.02 % 2.72 % $ —      $ 6
Commercial and industrial
   2    1,345    1,312    3.40 3.52 33    —
Other
   2    193    213    4.58 2.00 —      2










Total
   8    $ 2,106    $ 2,144    $ 33    $ 8

at that date. At December 31, ~~2017, seven~~2020, C&I loans in the amount of ~~$1.6~~$3 million that had been modified as a TDR during the twelve months ended at that date was in ~~payment~~prepayment default. At December 31, 2016, none of the loans that had been modified as a TDR during the twelve months ended at that date were in payment default. At December 31, 2015, one home equity loan in the amount of $143,000 that had been modified as a TDR during the twelve months ended at that date was in payment default. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The Company does not consider a payment to be in default when the loan is in forbearance, or otherwise granted a delay of payment, when the agreement to forebear or allow a delay of payment is part of a modification.

Subsequent to the modification, the loan is not considered to be in default until payment is contractually past due in accordance with the modified terms. However, the Company does consider a loan with multiple modifications or forbearance periods to be in default, and would also consider a loan to be in default if the borrower were in bankruptcy or if the loan were partially charged off subsequent to modification.

106

NOTE 7: ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES

~~Covered Loans~~

~~The Company sold its covered loan portfolio during the third quarter of 2017; therefore, the Company did not have any covered loans outstanding as of December 31, 2017.~~

The Company referred to certain loans acquired in the AmTrust and Desert Hills transactions as “covered loans” because the Company was being reimbursed for a substantial portion of losses on these loans under the terms of the LSA. Covered loans were accounted for under ASC~~310-30~~ ~~and were initially measured at fair value, which included estimated future credit losses expected to be incurred over the lives of the loans. Under ASC310-30,~~ purchasers are permitted to aggregate acquired loans into one or more pools, provided that the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.

~~The following table presents the carrying value of covered loans which were acquired in the acquisitions of AmTrust and Desert Hills as of December 31, 2016.~~

(dollars in thousands)    Amount    Percent of
Covered Loans
Loan Category:

One-to-four family
   $ 1,609,635    94.8 %
Other loans
   88,498    5.2




Total covered loans
   $ 1,698,133    100.0 %

~~At December 31, 2016, the unpaid principal balance of covered loans was $2.1 billion and the carrying value of such loans was $1.7 billion.~~

At December 31, 2016, the Company estimated the fair values of the AmTrust and Desert Hills loan portfolios, which represented the expected cash flows from the portfolios, discounted at market-based rates. In estimating such fair values, the Company: (a) calculated the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”); and (b) estimated the expected amount and timing of undiscounted principal and interest payments (the “undiscounted expected cash flows”). The amount by which the undiscounted expected cash flows exceed the estimated fair value (the “accretable yield”) was accreted into interest income over the lives of the loans. The amount by which the undiscounted contractual cash flows exceed the undiscounted expected cash flows is referred to as the~~“non-accretable~~ ~~difference.” Thenon-accretable~~ ~~difference represented an estimate of the credit risk in the loan portfolios at the respective acquisition dates.~~

The accretable yield was affected by changes in interest rate indices for variable rate loans, changes in prepayment assumptions, and changes in expected principal and interest payments over the estimated lives of the loans. Changes in interest rate indices for variable rate loans increased or decreased the amount of interest income expected to be collected, depending on the direction of interest rates. Prepayments affected the estimated lives of covered loans and could have changed the amount of interest income and principal expected to be collected. Changes in expected principal and interest payments over the estimated lives of covered loans were driven by the credit outlook and by actions that may be taken with borrowers. As of the date of the sale, the accretable yield was reduced to zero.

On a quarterly basis, the Company had evaluated the estimates of the cash flows it expected to collect. Expected future cash flows from interest payments were based on variable rates at the time of the quarterly evaluation. Estimates of expected cash flows that were impacted by changes in interest rate indices for variable rate loans and prepayment assumptions were treated as prospective yield adjustments and included in interest income. In the twelve months ended December 31, 2017, changes in the accretable yield for covered loans were as follows:

(in thousands)    Accretable Yield
Balance at beginning of period
   $ 647,470
Accretion
   (72,842 )
Reclassification tonon-accretable difference for the six months ended June 30, 2017
   (11,381 )
Changes in expected cash flows due to the sale of the covered loan portfolio
   (563,247 )


Balance at end of period
   $ —

~~In the preceding table, the line item “Reclassification tonon-accretable~~ difference for the six months ended June 30, 2017” includes changes in cash flows that the Company expects to collect due to changes in prepayment assumptions, changes in interest rates on variable rate loans, and changes in loss assumptions. As of the Company’s most recent quarterly evaluation, prepayment assumptions increased, which resulted in a decrease in future expected interest cash flows and, consequently, a decrease in the accretable yield. The effect of this decrease was partially offset with an improvement in the underlying credit assumptions and the resetting of rates on variable rate loans at a slightly higher level, which resulted in an increase in future expected interest cash flows and, consequently, an increase in the accretable yield.

Reflecting the foreclosure of certain loans acquired in the AmTrust and Desert Hills acquisitions, the Company owned certain OREO that was covered under its LSA (“covered OREO”). Covered OREO was initially recorded at its estimated fair value on the respective dates of acquisition, based on independent appraisals, less the estimated selling costs. Any subsequent write-downs due to declines in fair value were charged to~~non-interest~~ ~~expense, and were partially offset by loss reimbursements under the LSA. Any recoveries of previous write-downs have been credited tonon-interest~~ ~~expense and partially offset by the portion of the recovery that was due to the FDIC. The Company’s covered OREO was sold during the third quarter of 2017.~~

The FDIC loss share receivable represented the present value of the estimated losses to be reimbursed by the FDIC. The estimated losses were based on the same cash flow estimates used in determining the fair value of the covered loans. The FDIC loss share receivable was reduced as losses on covered loans were recognized and as loss sharing payments were received from the FDIC. Realized losses in excess of acquisition-date estimates resulted in an increase in the FDIC loss share receivable. Conversely, if realized losses were lower than the acquisition-date estimates, the FDIC loss share receivable was reduced by amortization to interest income. Effective October 31, 2017, the Company and the FDIC completed termination of the LSA.

At December 31, 2017, the Company had no residential mortgage loans in the process of foreclosure. At December 31, 2016, the Company held residential mortgage loans of $78.6 million that were in the process of foreclosure. The vast majority of such loans were covered loans.

~~The following table presents information regarding the Company’s covered loans at December 31, 2016 that were 90 days or more past due:~~

(in thousands)
Covered Loans 90 Days or More Past Due:

One-to-four family
   $ 124,820
Other loans
   6,645


Total covered loans 90 days or more past due
   $ 131,465

~~The following table presents information regarding the Company’s covered loans at December 31, 2016 that were 30 to 89 days past due:~~

(in thousands)
Covered Loans30-89 Days Past Due:

One-to-four family
   $ 21,112
Other loans
   1,536


Total covered loans30-89 days past due
   $ 22,648

At December 31, 2016, the Company had $22.6 million of covered loans that were 30 to 89 days past due, and covered loans of $131.5 million that were 90 days or more past due but considered to be performing due to the application of the yield accretion method under ASC~~310-30.~~ ~~The remainder of the Company’s covered loan portfolio totaled $1.5 billion at December 31, 2016 and were considered current at that date.~~

~~Loans that may have been classified asnon-performing~~ ~~loans by AmTrust or Desert Hills were no longer classified asnon-performing~~ by the Company because, at the respective dates of acquisition, the Company believed that it would fully collect the new carrying value of these loans. The new carrying value represented the contractual balance, reduced by the portion that was expected to be uncollectible (i.e., the~~non-accretable~~ ~~difference) and by an accretable yield (discount) that was recognized as interest income. It is important to note that management’s judgment was required in reclassifying loans subject to ASC310-30~~ ~~as performing loans, and such judgment was dependent on having a reasonable expectation about the timing and amount of the cash flows to be collected, even if the loan was contractually past due.~~

The primary credit quality indicator for covered loans is the expectation of underlying cash flows. In the twelve months ended December 31, 2016, the Company recorded recoveries of losses on covered loans of $23.7 million. The recoveries were largely due to an increase in expected cash flows in the acquired portfolios of~~one-to-four~~ ~~family and home equity loans, and were partly offset by FDIC indemnification expense of $19.0 million that was recorded in“Non-interest~~ ~~income.”~~

~~NOTE 6: ALLOWANCES FOR LOAN LOSSES~~

~~The following tables provide additional information regarding the Company’s allowances for losses onnon-covered~~ ~~loans and covered loans, based upon the method of evaluating loan impairment:~~

(in thousands)    Mortgage    Other    Total
Allowances for Loan Losses at December 31, 2017:

Loans collectively evaluated for impairment
   $ 128,275    $ 29,771    $ 158,046

(in thousands)    Mortgage    Other    Total
Allowances for Loan Losses at December 31, 2016:

Loans individually evaluated for impairment
   $ —      $ 577    $ 577
Loans collectively evaluated for impairment
   123,925    32,022    155,947
Acquired loans with deteriorated credit quality
   11,984    13,483    25,467






Total
   $ 135,909    $ 46,082    $ 181,991

~~The following tables provide additional information regarding the methods used to evaluate the Company’s loan portfolio for impairment:~~

(in thousands)    Mortgage    Other    Total
Loans Receivable at December 31, 2017:

Loans individually evaluated for impairment
   $ 31,747    $ 48,810    $ 80,557
Loans collectively evaluated for impairment
   36,278,241    2,000,224    38,278,465






Total
   $ 36,309,988    $ 2,049,034    $ 38,359,022

(in thousands)    Mortgage    Other    Total
Loans Receivable at December 31, 2016:

Loans individually evaluated for impairment
   $ 29,660    $ 18,592    $ 48,252
Loans collectively evaluated for impairment
   35,402,029    1,900,158    37,302,187
Acquired loans with deteriorated credit quality
   1,614,755    89,140    1,703,895






Total
   $ 37,046,444    $ 2,007,890    $ 39,054,334

Allowance for Credit Losses on~~Non-Covered~~ Loans and Leases

The following table summarizes activity in the allowance for loan and lease losses on~~non-covered~~ ~~loans~~ for the ~~twelve months~~periods indicated:


	Twelve Months Ended December 31,
	2022									2021
(in millions)	Mortgage			Other			Total			Mortgage			Other			Total
Balance, beginning of period	$	178		$	21		$	199		$	176		$	18		$	194
Adjustment for Purchased PCD Loans		21			30			51			—			—			—
Charge-offs		(5	)		(2	)		(7	)		(6	)		(7	)		(13	)
Recoveries		4			7			11			2			13			15
Provision for (recovery of) credit losses on loans and leases		92			47			139			6			(3	)		3
Balance, end of period	$	290		$	103		$	393		$	178		$	21		$	199

At December 31, 2022, the allowance for credit losses on loans and leases totaled $393 million, up $194 million compared to December 31, 2021, driven primarily by the initial provision for credit losses and the adjustment for PCD loans acquired in the Flagstar acquisition. In addition, the increase was also driven by net recoveries of $4 million during the year 2022.

At December 31, 2022 and 2021, the allowance for unfunded commitments totaled $23 million and $12 million, respectively.

For the year ended December 31, ~~2017 and 2016:~~

   December 31,
   2017 2016
(in thousands)    Mortgage Other Total Mortgage Other Total
Balance, beginning of period
   $ 125,416 $ 32,874 $ 158,290 $ 124,478 $ 22,646 $ 147,124
Charge-offs
   (375 ) (62,975 ) (63,350 ) (170 ) (3,413 ) (3,583 )
Recoveries
   605 1,558 2,163 1,272 1,603 2,875
Provision for (recovery of)non-covered loan losses
   2,629 58,314 60,943 (164 ) 12,038 11,874


Balance, end of period
   $ 128,275 $ 29,771 $ 158,046 $ 125,416 $ 32,874 $ 158,290

~~See Note 2, “Summary of Significant Accounting Polices” for additional information regarding~~2022 the ~~Company’s~~increase in the allowance for credit losses on~~non-covered~~ ~~loans.~~ loans and leases was primarily driven by a combination of increased loan balances as a result of the Flagstar acquisition and changes in the macroeconomic environment both on a spot and forecasted basis, specifically the inflationary pressures leading to sharp increases in interest rates and a slow-down of prepayment activity leading to longer weighted average lives on the balance sheet. In addition, the impact of the forecasted macroeconomic factors had resultant decreases on market level factors in Property Prices on the Multi-Family, Commercial Real Estate and 1-4 Family loan portfolios reflecting the changing economic landscape.

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.

107

The following table presents additional information about the Company’s ~~impairednon-covered~~nonaccrual loans at December 31, ~~2017:~~2022:

(in thousands)    Recorded
Investment    Unpaid
Principal
Balance    Related
Allowance    Average
Recorded
Investment    Interest
Income
Recognized
Impaired loans with no related allowance:

Multi-family
   $ 8,892    $ 11,470    $ —      $ 9,554    $ 495
Commercial real estate
   5,137    10,252    —      3,522    92
One-to-four family
   1,966    2,072    —      2,489    50
Acquisition, development, and construction
   15,752    25,952    —      10,976    575
Other
   48,810    104,901    —      43,074    2,200










Total impaired loans with no related allowance
   $ 80,557    $ 154,647    $ —      $ 69,615    $ 3,412










Impaired loans with an allowance recorded:

Multi-family
   $ —      $ —      $ —      $ —      $ —
Commercial real estate
   —      —      —      —      —
One-to-four family
   —      —      —      —      —
Acquisition, development, and construction
   —      —      —      —      —
Other
   —      —      —      314    —










Total impaired loans with an allowance recorded
   $ —      $ —      $ —      $ 314    $ —










Total impaired loans:

Multi-family
   $ 8,892    $ 11,470    $ —      $ 9,554    $ 495
Commercial real estate
   5,137    10,252    —      3,522    92
One-to-four family
   1,966    2,072    —      2,489    50
Acquisition, development, and construction
   15,752    25,952    —      10,976    575
Other
   48,810    104,901    —      43,388    2,200










Total impaired loans
   $ 80,557    $ 154,647    $ —      $ 69,929    $ 3,412


(in millions)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	13	$	—	$	—
Commercial real estate		19		—		1
One-to-four family first mortgage		90		—		—
Acquisition, development, and construction		—		—		—
Other (includes C&I)		3		—		—
Total nonaccrual loans with no related allowance	$	125	$	—	$	1
Nonaccrual loans with an allowance recorded:
Multi-family	$	—	$	—	$	—
Commercial real estate		1		—		—
One-to-four family first mortgage		2		—		—
Acquisition, development, and construction		—		—		—
Other (includes C&I)		13		14		—
Total nonaccrual loans with an allowance recorded	$	16	$	14	$	—
Total nonaccrual loans:
Multi-family	$	13	$	—	$	—
Commercial real estate		20		—		1
One-to-four family first mortgage		92		—		—
Acquisition, development, and construction		—		—		—
Other (includes C&I)		16		14		—
Total nonaccrual loans	$	141	$	14	$	1

108

The following table presents additional information about the Company’s ~~impairednon-covered~~nonaccrual loans at December 31, ~~2016:~~2021


(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with no related allowance:
(in millions)											Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	10,742	$	13,133	$	—	$	11,431	$	627	$	9	$	—	$	1
Commercial real estate		9,117		14,868		—		10,461		143		14		—		—
One-to-four family		3,601		4,267		—		3,079		124
One-to-four family first mortgage												—		—		—
Acquisition, development, and construction		6,200		15,500		—		1,550		414		—		—		—
Other		6,739		7,955		—		8,261		92		6		—		—

Total impaired loans with no related allowance	$	36,399	$	55,723	$	—	$	34,782	$	1,400

Impaired loans with an allowance recorded:
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		—		—		—		—		—
One-to-four family first mortgage												1		—		—
Acquisition, development, and construction		—		—		—		—		—		—		—		—
Other		11,853		13,529		577		4,574		213		—		—		—

Total impaired loans with an allowance recorded	$	11,853	$	13,529	$	577	$	4,574	$	213

Total impaired loans:
Total nonaccrual loans with an allowance recorded											$	4	$	—	$	—
Total nonaccrual loans:
Multi-family	$	10,742	$	13,133	$	—	$	11,431	$	627	$	10	$	—	$	1
Commercial real estate		9,117		14,868		—		10,461		143		16		—		—
One-to-four family		3,601		4,267		—		3,079		124
One-to-four family first mortgage												1		—		—
Acquisition, development, and construction		6,200		15,500		—		1,550		414		—		—		—
Other		18,592		21,484		577		12,835		305		6		—		—

Total impaired loans	$	48,252	$	69,252	$	577	$	39,356	$	1,613

Total nonaccrual loans											$	33	$	—	$	1

~~Allowance for Losses on Covered Loans~~

NOTE 8. LEASES

~~Covered~~Lessor Arrangements

The Company is a lessor in the equipment finance business where it has executed direct financing leases (“lease finance receivables”). The Company produces lease finance receivables through a specialty finance subsidiary that participates in syndicated loans ~~were reported exclusive~~that are brought to them, and equipment loans and leases that are assigned to them, by a select group of nationally recognized sources, and are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide. Lease finance receivables are carried at the aggregate of lease payments receivable plus the estimated residual value of the ~~FDIC loss share receivable.~~ leased assets and any initial direct costs incurred to originate these leases, less unearned income, which is accreted to interest income over the lease term using the interest method.

The ~~covered loans acquired in~~standard leases are typically repayable on a level monthly basis with terms ranging from 24 to 120 months. At the ~~AmTrust and Desert Hills acquisitions were reviewed for collectability~~end of the lease term, the lessee usually has the option to return the equipment, to renew the lease or purchase the equipment at the then fair market value (“FMV”) price. For leases with a FMV renewal/purchase option, the relevant residual value assumptions are based on the ~~expectations~~estimated value of the leased asset at the end of the lease term, including evaluation of key factors, such as, the estimated remaining useful life of the leased asset, its historical secondary market value including history of the lessee executing the FMV option, overall credit evaluation and return provisions. The Company acquires the leased asset at fair market value and provides funding to the respective lessee at acquisition cost, less any volume or trade discounts, as applicable. Therefore, there is generally no selling profit or loss to recognize or defer at inception of a lease.

The residual value component of a lease financing receivable represents the estimated fair value of the leased equipment at the end of the lease term. In establishing residual value estimates, the Company may rely on industry data, historical experience, and independent appraisals and, where appropriate, information regarding product life cycle, product upgrades and competing products. Upon expiration of a lease, residual assets are remarketed, resulting in either an extension of the lease by the lessee, a lease to a new customer or purchase of the residual asset by the lessee or another party. Impairment of residual values arises if the expected fair value is less than the carrying amount. The Company assesses its net investment in lease financing receivables (including residual values) for impairment on an annual basis with any impairment losses recognized in accordance with the impairment guidance for financial instruments. As such, net investment in lease financing receivables may be reduced by an allowance for credit losses with changes

109

recognized as provision expense. On certain lease financings, the Company obtains residual value insurance from third parties to manage and reduce the risk associated with the residual value of the leased assets. At December 31, 2022 and December 31, 2021, the carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $32 million and $61 million, respectively.

The Company uses the interest rate implicit in the lease to determine the present value of its lease financing receivables.

The components of lease income were as follows:


(in millions)	For the Twelve Months Ended December 31, 2022		For the Twelve Months Ended December 31, 2021
Interest income on lease financing (1)	$	53	$	53

(1)

Included in Interest Income – Loans and leases in the Consolidated Statements of Income and Comprehensive Income.

At December 31, 2022 and December 31, 2021, the carrying value of net investment in leases was $1.7 billion and $1.9 billion, respectively. The components of net investment in direct financing leases, including the carrying amount of the lease receivables, as well as the unguaranteed residual asset were as follows:


(in millions)	December 31, 2022	December 31, 2021
Net investment in the lease - lease payments receivable	$1,685	$1,790
Net investment in the lease - unguaranteed residual assets	60	75
Total lease payments	$1,745	$1,865

The following table presents the remaining maturity analysis of the undiscounted lease receivables, as well as the reconciliation to the total amount of receivables recognized in the Consolidated Statements of Condition:


(in millions)	December 31, 2022
2022	$	-
2023		52
2024		152
2025		396
2026		342
Thereafter		803
Total lease payments		1,745
Plus: deferred origination costs		19
Less: unearned income		(85	)
Total lease finance receivables, net	$	1,679

Lessee Arrangements

The Company has operating leases for corporate offices, branch locations, and certain equipment. These leases generally have terms of 20 years or less, determined based on the contractual maturity of the lease, and include periods covered by options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. For the vast majority of the Company’s leases, we are not reasonably certain we will exercise our options to renew to the end of all renewal option periods. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets and operating lease liabilities in the Consolidated Statements of Condition.

110

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the vast majority of the leases do not provide an implicit rate, the incremental borrowing rate (FHLB borrowing rate) is used based on the information available at commencement date in determining the present value of lease payments. The implicit rate is used when readily determinable. The operating lease ROU asset is measured at cost, which includes the initial measurement of the lease liability, prepaid rent and initial direct costs incurred by the Company, less incentives received.

Variable costs such as the proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred.

The components of lease expense were as follows:


(in millions)	For the Twelve Months Ended December 31, 2022		For the Twelve Months Ended December 31, 2021
Operating lease cost	$	28	$	27
Sublease income		—		—
Total lease cost	$	28	$	27

Supplemental cash ~~flows~~flow information related to the leases for the following periods:


(in millions)	For the Twelve Months Ended December 31, 2022		For the Twelve Months Ended December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	28	$	27

Supplemental balance sheet information related to the leases for the following periods:


(in millions, except lease term and discount rate)	December 31, 2022			December 31, 2021
Operating Leases:
Operating lease right-of-use assets (1)	$	119		$	249
Operating lease liabilities (2)	$	122			249
Weighted average remaining lease term	6 years			16 years
Weighted average discount rate %		3.85	%		3.05	%

(1)

Included in Other assets in the Consolidated Statements of Condition.

(2)

Included in Other liabilities in the Consolidated Statements of Condition.

111


(in millions) Maturities of lease liabilities:	December 31, 2022
2023	$	28
2024		25
2025		24
2026		19
2027		13
Thereafter		28
Total lease payments		137
Less: imputed interest		(15	)
Total present value of lease liabilities	$	122

NOTE 9: MORTGAGE SERVICING RIGHTS

The Company has investments in MSRs that result from ~~these loans. Covered loans were aggregated into pools~~the sale of loans ~~with common characteristics. In determining~~to the ~~allowance~~secondary market for ~~losses on covered loans,~~which we retain the ~~Company periodically performed an analysis to estimate the expected cash flows for each of the pools of loans.~~servicing. The Company ~~recorded~~accounts for MSRs at their fair value. A primary risk associated with MSRs is the potential reduction in fair value as a ~~provision for (recovery of) losses on covered loans~~result of higher than anticipated prepayments due to loan refinancing prompted, in part, by declining interest rates or government intervention. Conversely, these assets generally increase in value in a rising interest rate environment to the extent that prepayments are slower than anticipated. The Company utilizes derivatives as economic hedges to offset changes in the ~~expected cash flows~~fair value of the MSRs resulting from the actual or anticipated changes in prepayments stemming from changing interest rate environments. There is also a ~~loan pool had decreased or increased since the acquisition date.~~

~~Accordingly, if there was a decrease in expected cash flows~~risk of valuation decline due to ~~an increase in estimated credit losses (as compared~~higher than expected default rates, which we do not believe can be effectively managed using derivatives. For further information regarding the derivative instruments utilized to ~~the estimates made at the respective acquisition dates), the decrease~~manage our MSR risks, see Note 14 - Derivative and Hedging Activities.

Changes in the ~~present~~fair value of ~~expected cash flows was recorded~~residential first mortgage MSRs were as ~~a provision for covered loan losses charged to earnings, and the allowance for covered loan losses was increased. A related credit tonon-interest~~ ~~income and an increase~~follows:


	For the Month Ended December 31,
	2022
(in millions)
Balance at beginning of period, December 1, 2022	$	1,012
Additions from loans sold with servicing retained		19
Reductions from sales		-
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1)		(8	)
Changes in estimates of fair value due to interest rate risk (1) (2)		10
Fair value of MSRs at end of period	$	1,033

(1)

Changes in ~~the LSA~~fair value are ~~recognized at the same time, and measured based~~included within net return on mortgage servicing rights on the ~~applicable loss sharing agreement percentage.~~

~~If there was an increase in expected cash flows due to a decrease in~~Consolidated Statements of Income and Comprehensive Income.

(2)

Represents estimated ~~credit losses (as compared to~~MSR value change resulting primarily from market-driven changes which we manage through the ~~estimates made at the respective acquisition dates), the increase in the present value~~use of ~~expected cash flows was recorded as a recovery of the prior-period impairment charged to earnings, and the allowance for covered loan losses was reduced. A related debit tonon-interest~~ ~~income and a decrease in the LSA was recognized at the same time, and measured based on the applicable LSA percentage.~~derivatives.

The following table summarizes ~~activity~~the hypothetical effect on the fair value of servicing rights using adverse changes of 10 percent and 20 percent to the weighted average of certain significant assumptions used in valuing these assets:


	December 31, 2022
				Fair value
	Actual				10% adverse change			20% adverse change
(dollars in millions)
Option adjusted spread		5.9	%	$		1,012	$		992
Constant prepayment rate		7.9	%			1,000			970
Weighted average cost to service per loan	$	68				1,023			1,013

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in

112

assumption to the change in fair value may not be linear. To isolate the effect of the specified change, the fair value shock analysis is consistent with the identified adverse change, while holding all other assumptions constant. In practice, a change in one assumption generally impacts other assumptions, which may either magnify or counteract the effect of the change. For further information on the fair value of MSRs.

Contractual servicing and subservicing fees, including late fees and other ancillary income are presented below. Contractual servicing fees are included within net return on mortgage servicing rights on the Consolidated Statements of Income and Comprehensive Income. Contractual subservicing fees including late fees and other ancillary income are included within loan administration income on the Consolidated Statements of Income and Comprehensive Income . Subservicing fee income is recorded for fees earned on subserviced loans, net of third-party subservicing costs.

The following table summarizes income and fees associated with owned MSRs:


	For the Month Ended December 31,
	2022
(in millions)
Net return on mortgage servicing rights
Servicing fees, ancillary income and late fees (1)	$	20
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes and other		(8	)
Changes in fair value due to interest rate risk		10
Loss on MSR derivatives (2)		(16	)
Net transaction costs		-
Total return (loss) included in net return on mortgage servicing rights	$	6

(1)

Servicing fees are recorded on an accrual basis. Ancillary income and late fees are recorded on a cash basis.

(2)

Changes in the ~~allowance~~derivatives utilized as economic hedges to offset changes in fair value of the MSRs.

The following table summarizes income and fees associated with our mortgage loans subserviced for ~~losses~~others:


	For the Month Ended December 31,
	2022
(in millions)
Loan administration income on mortgage loans subserviced
Servicing fees, ancillary income and late fees (1)	$	11
Charges on subserviced custodial balances (2)		(8	)
Other servicing charges		-
Total income on mortgage loans subserviced, included in loan administration	$	3

(1)

Servicing fees are recorded on ~~covered loans for the years ended~~an accrual basis. Ancillary income and late fees are recorded on a cash basis.

(2)

Charges on subserviced custodial balances represent interest due to MSR owner.

NOTE 10: VARIABLE INTEREST ENTITIES

We have no consolidated VIEs as of December 31, ~~2017~~2022 and ~~2016:~~December 31, 2021.

In connection with our non-qualified mortgage securitization activities, we have retained a five percent interest in the investment securities of certain trusts ("other MBS") and are contracted as the subservicer of the underlying loans, compensated based on market rates, which constitutes a continuing involvement in these trusts. Although we have a variable interest in these securitization trusts, we are not their primary beneficiary due to the relative size of our investment in comparison to the total amount of securities issued by the VIE and our inability to direct activities that most significantly impact the VIE’s economic performance. As a result, we have not consolidated the assets and liabilities of the VIE in our Consolidated Statements of Condition. The Bank’s maximum exposure to loss is limited to our five percent retained interest in the investment securities that had a fair value of $191 million as of December 31, 2022 as well as the standard representations and warranties made in conjunction with the loan transfers.

   December 31,
(in thousands)    2017    2016
Balance, beginning of period
   $ 23,701    $ 31,395
Recovery of losses on covered loans
   (23,701 )    (7,694 )




Balance, end of period
   $ —      $ 23,701

113

NOTE 7:11: DEPOSITS

The following table sets forth the weighted average interest rates for each type of deposit at December 31, ~~2017~~2022 and ~~2016:~~2021:


	December 31,																December 31,
	2017								2016								2022								2021
(dollars in thousands)	Amount		Percent of Total			Weighted Average Interest Rate			Amount		Percent of Total			Weighted Average Interest Rate⁽¹⁾
(dollars in millions)																	Amount		Percent of Total			Weighted Average Interest Rate			Amount		Percent of Total			Weighted Average Interest Rate
Interest-bearing checking and money market accounts	$	12,936,301		44.45	%		0.23	%	$	13,395,080		46.37	%		0.55	%	$	22,511		38.34	%		2.66	%	$	13,209		37.68	%		0.20	%
Savings accounts		5,210,001		17.90			0.52			5,280,374		18.28			0.46			11,645		19.83			1.30			8,892		25.36			0.35
Certificates of deposit		8,643,646		29.70			1.31			7,577,170		26.23			1.12			12,510		21.30			2.04			8,424		24.03			0.52
Non-interest-bearing accounts		2,312,215		7.95			—			2,635,279		9.12			—			12,055		20.53			—			4,534		12.93			—

Total deposits	$	29,102,163		100.00	%		0.58	%	$	28,887,903		100.00	%		0.63	%	$	58,721		100.00	%		1.71	%	$	35,059		100.00	%		0.29	%

At ~~both~~ December 31, ~~2017~~2022 and ~~2016,~~2021, the aggregate amount of deposits that had been reclassified as loan balances (i.e., overdrafts) was ~~$3.1 million.~~$4 million and $2 million, respectively.

The scheduled maturities of certificates of deposit ~~(“CDs”)~~ at December 31, ~~2017~~2022 were as follows:

(in thousands)


1 year or less
   $ 5,897,172
More than 1 year through 2 years
   2,461,847
More than 2 years through 3 years
   209,389
More than 3 years through 4 years
   42,485
More than 4 years through 5 years
   21,907
Over 5 years
   10,846


Total CDs
   $ 8,643,646


(in millions)
1 year or less	$	9,247
More than 1 year through 2 years		2,922
More than 2 years through 3 years		298
More than 3 years through 4 years		50
More than 4 years through 5 years		24
Over 5 years		5
Total CDs (1)	$	12,546

~~The following table presents a summary of CDs in amounts of $100,000 or more by remaining term to maturity, at December 31, 2017:~~

(1) Excludes PAA.

   CDs of $100,000 or More Maturing Within
(in thousands)    3 Months
or Less    Over 3 to
6 Months    Over 6 to
12 Months    Over
12 Months    Total
Total
   $ 1,333,531    $ 1,495,368    $ 1,064,316    $ 1,595,643    $ 5,488,858

Included in total deposits at both December 31, ~~2017~~2022 and ~~2016~~2021 were brokered deposits of ~~$4.0~~$5.1 billion and ~~$3.9~~$5.7 billion with weighted average interest rates of ~~1.37%~~.49 percent and ~~0.62%~~.07 percent at the respective year-ends. Brokered money market accounts represented ~~$2.6~~$2.8 billion and ~~$2.5~~$3.0 billion ~~respectively,~~ of the December 31, ~~2017~~2022 and ~~2016~~2021 totals, and brokered interest-bearing checking accounts represented ~~$793.7 million~~$1.0 billion and ~~$1.4~~$1.5 billion, respectively. Brokered CDs represented ~~$567.8 million~~$1.3 billion and $1.2 billion of brokered deposits at December 31, ~~2017. There were no brokered CDs at December 31, 2016.~~2022 and 2021, respectively.

NOTE 8:12: BORROWED FUNDS

The following table summarizes the Company’s borrowed funds at December 31, ~~2017~~2022 and ~~2016:~~2021:


	December 31,				December 31,
(in thousands)	2017		2016
(in millions)					2022		2021
Wholesale borrowings:
FHLB advances	$	12,104,500	$	11,664,500	$	20,325	$	15,105
Repurchase agreements		450,000		1,500,000		—		800
Federal funds purchased		—		150,000

Total wholesale borrowings	$	12,554,500	$	13,314,500	$	20,325	$	15,905
Junior subordinated debentures		359,179		358,879		575		361

Subordinated notes						432		296
Total borrowed funds	$	12,913,679	$	13,673,379	$	21,332	$	16,562

Accrued interest on borrowed funds is included in “Other liabilities” in the Consolidated Statements of Condition and amounted to ~~$19.3~~$37 million and ~~$18.1~~$18 million, respectively, at December 31, ~~2017~~2022 and ~~2016.~~

2021.

114

FHLB Advances

The ~~following table presents an analysis of the~~ contractual maturities and the next call dates of FHLB advances outstanding at December 31, 2022 were as follows:


	Contractual Maturity						Earlier of Contractual Maturity or Next Call Date
(dollars in millions) Year		Amount		Weighted Average Interest Rate (1)				Amount		Weighted Average Interest Rate (1)
2023	$		10,325		3.51	%	$		15,325		3.26	%
2024			1,600		1.36				3,100		2.42
2025			—		—				250		3.50
2026			—		—				—		—
2027			2,650		3.77				1,250		3.87
2028			400		4.11				400		4.11
2029			200		1.61				—		—
2030			—		—				—		—
2031			—		—				—		—
2032			5,150		2.80				—		—
Total FHLB advances	$		20,325		3.19		$		20,325		3.19

(1)

Does not included the ~~Company’s outstanding~~ effect interest rate swap agreements.

FHLB advances include both straight fixed-rate advances and advances under the FHLB convertible advance program, which gives the FHLB the option of either calling the advance after an initial lock-out period of up to five years and quarterly thereafter until maturity, or a one-time call at the initial call date.

At December 31, 2022 and 2021, respectively, the Bank had unused lines of available credit with the FHLB-NY of up to $11.3 billion and $8.4 billion. The Company had $2.8 billion of overnight advances at December 31, ~~2017, none of which had callable features.~~

   Contractual Maturity
(dollars in thousands)
Year of Maturity
   Amount    Weighted Average
Interest Rate
2018
   $ 3,923,500    1.51
2019
   4,431,000    1.74
2020
   3,150,000    2.09
2021
   600,000    2.21




Total FHLB advances
   $ 12,104,500    1.78 %

~~The Company had~~ 2022, and no ~~short-term FHLB~~ overnight advances at December 31, ~~2017. At~~2021. During the twelve months ended December 31, ~~2016, short-term~~2022, the average balance of overnight advances ~~totaled $300.0~~amounted to $318 million, with a weighted average interest rate of 0.81%. During the twelve months ended at December 31, 2017 and 2016, the average balances of short-term FHLB advances were $3.3 million and $929.4 billion, with weighted average interest rates of 0.82% and 0.60%, respectively. In 2017 and 2016, the interest expense generated by average short-term FHLB advances was $27,000 and $5.5 million, respectively. During 2015, the average balance of short-term advances was $2.3 billion with a weighted average interest rate of 0.42%, generating interest expense of $9.8 million.

~~At December 31, 2017 and 2016, respectively, the Banks had combined unused lines of available credit with theFHLB-NY~~ ~~of up to $7.1 billion and $7.5 billion. There were no overnightFHLB-NY~~ ~~advances at December 31, 2017. At December 31, 2016, the Banks had $10.0 million outstandingFHLB-NY~~ ~~advances with a weighted average interest rate of 0.78%.~~3.48 percent. During the twelve months ended December 31, ~~2016,~~2021, the average ~~balance~~balances of overnight advances amounted to ~~$426.5~~$6 million, with a weighted average interest ~~rate~~rates of 0.59%, generating interest expense of $2.5 million. During 2015, the average balance of overnight advances was $572.7 million with a weighted average interest rate of 0.44%. The interest expense generated by average overnight advances was $2.5 million in 2015.0.36 percent.

Total FHLB advances generated interest expense of ~~$186.0~~$251 million, ~~$172.0~~$233 million, and ~~$230.6~~$246 million, in the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015,~~2020, respectively.

Repurchase Agreements

The ~~following table presents an analysis of the contractual maturities of the Company’s~~Company had no outstanding repurchase agreements ~~accounted for~~ as ~~secured borrowings at~~of December 31, ~~2017. None~~2022. As of ~~these repurchase agreements had callable features.~~

   Contractual Maturity
(dollars in thousands)
Year of Maturity
   Amount    Weighted Average
Interest Rate
2018
   $ 250,000    3.04
2019
   200,000    1.69




Total
   $ 450,000    2.44 %

The following table provides the contractual maturity and weighted average interest rate of repurchase agreements, and the amortized cost and fair value (including accrued interest) of the securities collateralizing the repurchase agreements, at December 31, ~~2017:~~2021, the company had $800 million of outstanding repurchase agreements.

      Mortgage-Related and
Other Securities    GSE Debentures and
U.S. Treasury
Obligations
(dollars in thousands)
Contractual Maturity
   Amount    Weighted Average
Interest Rate Amortized
Cost    Fair Value    Amortized
Cost    Fair Value
Greater than 90 days
   $ 450,000    2.44 % $ 216,076    $ 217,383    $ 248,065    $ 249,489

The Company had no short-term repurchase agreements outstanding at December 31, ~~2017~~2022 or 2016. During the year ended December 31, 2015, the Company had average short-term repurchase agreements outstanding of $197.3 million with a weighted average interest rate of 0.31%, generating interest expense of $614,000.2021.

At December 31, ~~2017 and 2016,~~2021, the accrued interest on repurchase agreements amounted to ~~$760,000 and $1.2 million, respectively.~~$2 million. The interest expense on repurchase agreements was ~~$16.4~~$14 million ~~$23.3~~for the year ended December 31, 2022, and $18 million ~~and $99.9 million, in~~for each of the years ended December 31, ~~2017, 2016,~~2021 and ~~2015, respectively.~~2020.

Federal Funds Purchased

There were no federal funds purchased outstanding at December 31, ~~2017. At December 31, 2016, the balance of federal funds purchased was $150.0 million with a weighted average interest rate of 0.75%.~~2022 or 2021.

In ~~2017~~2022 and ~~2016,~~2021, respectively, the average balances of federal funds purchased were ~~to $47.9~~$466 million and ~~$525.4~~$81 million, with weighted average interest rates of ~~0.87%~~1.65 percent and ~~0.51%. In 2015, the average balance of federal funds purchased amounted to $588.8 million with a weighted average interest rate of 0.26%.~~0.09 percent. The interest expense produced by federal funds purchased was ~~$418,000, $2.7~~$8 million, $0 million and ~~$1.5~~$1 million for the years ended December 31, ~~2017, 2016,~~2022, 2021 and ~~2015,~~2020, respectively.

115

Junior Subordinated Debentures

At December 31, ~~2017~~2022 and ~~2016,~~2021, the Company had ~~$359.2~~$608 million and ~~$358.9~~$361 million, respectively, of outstanding junior subordinated deferrable interest debentures (“junior subordinated debentures”) held by statutory business trusts (the “Trusts”) that issued guaranteed capital securities.

The Trusts are accounted for as unconsolidated subsidiaries, in accordance with GAAP. The proceeds of each issuance were invested in a series of junior subordinated debentures of the Company and the underlying assets of each statutory business trust are the relevant debentures. The Company has fully and unconditionally guaranteed the obligations under each trust’s capital securities to the extent set forth in a guarantee by the Company to each trust. The Trusts’ capital securities are each subject to mandatory redemption, in whole or in part, upon repayment of the debentures at their stated maturity or earlier redemption.

The following table presents contractual terms of the junior subordinated debentures ~~were~~ outstanding at December 31, ~~2017:~~2022:


Issuer	Interest Rate of Capital Securities and Debentures			Junior Subordinated Debentures Amount Outstanding		Capital Securities Amount Outstanding		Date of Original Issue		Stated Maturity		First Optional Redemption Date			Interest Rate of Capital Securities and Debentures				Junior Subordinated Debentures Amount Outstanding			Capital Securities Amount Outstanding		Date of Original Issue	Stated Maturity
				(dollars in thousands)															(dollars in millions)
New York Community Capital Trust V (BONUSES^SMUnits)		6.000	%		$145,253	$	138,902		Nov. 4, 2002		Nov. 1, 2051		Nov. 4, 2007	⁽¹⁾
New York Community Capital Trust V (BONUSES Units) (1)																6.00	%	$		147	$		141	Nov. 4, 2002	Nov. 1, 2051
New York Community Capital Trust X(2)		3.188			123,712		120,000		Dec. 14, 2006		Dec. 15, 2036		Dec. 15, 2011	⁽²⁾	6.37					124			120	Dec. 14, 2006	Dec. 15, 2036
PennFed Capital Trust III(2)		4.838			30,928		30,000		June 2, 2003		June 15, 2033		June 15, 2008	⁽²⁾	8.02					31			30	June 2, 2003	June 15, 2033
New York Community Capital Trust XI(2)		3.345			59,286		57,500		April 16, 2007		June 30, 2037		June 30, 2012	⁽²⁾	6.38					59			58	April 16, 2007	June 30, 2037

Flagstar Statutory Trust II (2)															7.97					26			25	Dec. 26, 2002	Dec. 26, 2032
Flagstar Statutory Trust III (2)															7.33					26			25	Feb. 19, 2003	April 7, 2033
Flagstar Statutory Trust IV (2)															7.98					26			25	Mar. 19, 2003	Mar 19, 2033
Flagstar Statutory Trust V (2)															6.08					26			25	Dec 29, 2004	Jan. 7, 2035
Flagstar Statutory Trust VI (2)															6.08					26			25	Mar. 30, 2005	April 7, 2035
Flagstar Statutory Trust VII (2)															6.52					51			50	Mar. 29, 2005	June 15, 2035
Flagstar Statutory Trust VIII (2)															5.58					25			24	Sept. 22, 2005	Oct. 7, 2035
Flagstar Statutory Trust IX (2)															6.22					25			24	June 28, 2007	Sept. 15, 2037
Flagstar Statutory Trust X (2)															7.27					16			16	Aug. 31, 2007	Sept 15, 2037
Total junior subordinated debentures					$359,179	$	346,402											$		608	$		588

~~(1)~~

~~Callable subject to certain conditions as described in the prospectus filed with the SEC on November 4, 2002.~~

~~(2)~~

~~Callable from this date forward.~~

(1)

Callable subject to certain conditions as described in the prospectus filed with the SEC on November 4, 2002.

(2)

Callable at any time.

The Bifurcated Option Note Unit SecuritiESSM (“BONUSES units”) included in the preceding table were issued by the Company on November 4, 2002 at a public offering price of ~~$50.00~~$50.00 per share. Each of the 5,500,000 BONUSES units offered consisted of a capital security issued by New York Community Capital Trust V, a trust formed by the Company, and a warrant to purchase 2.4953 shares of the common stock of the Company (for a total of approximately 13.7 million common shares) at an effective exercise price of ~~$20.04~~$20.04 per share. Each capital security has a maturity of 49 years, with a coupon, or distribution rate, of ~~6.00%~~6.00 percent on the ~~$50.00~~$50.00 per share liquidation amount. The warrants and capital securities werenon-callable for five years from the date of issuance and were not called by the Company when the five-year period passed on November 4, 2007.

The gross proceeds of the BONUSES units totaled ~~$275.0~~$275 million and were allocated between the capital security and the warrant comprising such units in proportion to their relative values at the time of issuance. The value assigned to the warrants, ~~$92.4~~$92.4 million, was recorded as a component of additional~~“paid-in~~ “paid-in capital” in the Company’s Consolidated Statements of Condition. The value assigned to the capital security component was ~~$182.6~~$182.6 million. The ~~$92.4~~$92.4 million difference between the assigned value and the stated liquidation amount of the capital securities was treated as an original issue discount, and is being amortized to interest expense over the49-year life of the capital securities on a level-yield basis. At December 31, ~~2017,~~2022, this discount totaled ~~$66.4~~$64 million.

The other ~~three~~remaining trust preferred securities noted in the preceding table were formed for the purpose of issuing Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary Trusts Holding Solely Junior Subordinated Debentures (collectively, the “Capital Securities”). Dividends on the Capital Securities are payable either quarterly or semi-annually and are deferrable, at the Company’s option, for up to five years. As of December 31, ~~2017,~~2022, all dividends were current.

116

Interest expense on junior subordinated debentures was ~~$19.6~~$22 million, ~~$18.5~~$18 million, and ~~$17.6~~$19 million, respectively, for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015.~~2020.

Subordinated Notes

At December 31, 2022 and 2021, the Company had a total of $432 million and $296 million subordinated notes outstanding; respectively, of fixed-to-floating rate subordinated notes outstanding:


Date of Original Issue	Stated Maturity	Interest Rate			Original Issue Amount
	(dollars in millions)
November 6, 2018	November 6, 2028 (1)		5.900	%	$	300
October 28, 2020	November 1, 2030 (2)		4.125	%		150

(1)

From and including the date of original issuance to, but excluding November 6, 2023, the Notes will bear interest at an initial rate of 5.90 percent per annum payable semi-annually. Unless redeemed, from and including November 6, 2023 to but excluding the maturity date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR rate plus 278 basis point payable quarterly.

(2)

From and including the date of original issuance, the Notes will bear interest at a fixed rate of 4.125 percent through October 31, 2025, and a variable rate tied to SOFR thereafter until maturity. The Company has the option to redeem all or a part of the Notes beginning on November 1, 2025, and on any subsequent interest payment date.

The interest expense on subordinated notes amounted to $19 million for the year ended December 31, 2022 and $18 million for the years ended December 31, 2021, and 2020.

NOTE 9:13: FEDERAL, STATE, AND LOCAL TAXES

The following table summarizes the components of the Company’s net deferred tax asset (liability) at December 31, ~~2017~~2022 and ~~2016:~~2021:


	December 31,						December 31,
(in thousands)	2017			2016
(in millions)							2022			2021
Deferred Tax Assets:
Allowance for loan losses	$	46,239		$	75,605
Allowance for credit losses on loans and leases							$	102		$	55
Acquisition accounting and fair value adjustments on securities (including OTTI)								227			21
Acquisition accounting and fair value adjustments on loans								36			—
Capitalized loans costs								46			—
Compensation and related benefit obligations		13,010			27,877			23			17
Acquisition accounting and fair value adjustments on securities (including OTTI)		—			14,455
Acquisition accounting and fair value adjustments on loans (including the FDIC loss share receivable)		—			7,496
Non-accrual interest		818			4,791
Restructuring and retirement of borrowed funds		1,105			6,957
Capitalized research and development costs								10			—
Net operating loss carryforwards		2,967			5,664			15			1
Other		15,953			18,351			18			15

Gross deferred tax assets		80,092			161,196			477			109
Valuation allowance		—			—			(5	)		—

Deferred tax asset after valuation allowance	$	80,092		$	161,196

Net deferred tax asset after valuation allowance							$	472		$	109
Deferred Tax Liabilities:
Amortizable intangibles	$	(1,704	)	$	(1,655	)
Acquisition accounting and fair value adjustments on securities (including OTTI)		(17,090	)		—
Undistributed earnings of subsidiaries		(19,003	)		—
Leases							$	(328	)	$	(360	)
Mortgage servicing rights		(1,794	)		(65,975	)		(105	)	$	—
Premises and equipment		(12,907	)		(19,310	)		(18	)		(5	)
Prepaid pension cost		(24,324	)		(30,962	)		(29	)		(35	)
Leases		(78,682	)		(65,214	)
Fair value adjustments on loans								—			(81	)
Amortizable intangibles								(71	)		(3	)
Acquisition accounting and fair value adjustments on deposits								(9	)		—
Acquisition accounting and fair value adjustments on debt								(10	)		—
Other		(9,385	)		(10,691	)		(9	)		(9	)

Grossdeferred tax liabilities	$	(164,889	)	$	(193,807	)

Net deferred tax asset (liability)	$	(84,797	)	$	(32,611	)

Gross deferred tax liabilities							$	(579	)	$	(493	)
Net deferred tax liability							$	(107	)	$	(384	)

117

The deferred tax liability represents the anticipated federal, state, and local tax expenses or benefits that are expected to be realized in future years upon the utilization of the underlying tax attributes comprising said balances. ~~At December 31, 2017, the~~The net deferred tax liability is included in “Other liabilities” in the Consolidated Statements of ~~Condition. At~~Condition at December 31, ~~2016,~~2022 and 2021.

The Company evaluates the ~~net federal deferred tax liability is included in “Other liabilities,” and the net state and local~~need for a deferred tax asset ~~is included in “Other assets” in the Consolidated Statements of Condition.~~

~~At December 31, 2017, the Company had~~valuation allowances based on a ~~New York City net operating loss carryforward in the amount of $44.9 million available through 2035. The net operating loss carryforward is available to offset future taxable income.~~

~~The Company has determined that all deductible temporary differences and net operating loss carryforwards are~~ more likely than not ~~to provide a benefit in reducing future federal, state, and local tax liabilities, as applicable.~~standard. The ~~Company has reached this determination~~Company’s evaluation is based on its history of reporting positive taxable income in all relevant tax jurisdictions, the length of time available to utilize the net operating loss carryforwards, and the recognition of taxable income in future periods from taxable temporary differences.

At December 31, 2022, the Company had a state deferred tax asset for net operating losses (“NOL”) of $15 million, (net of federal tax impact) which includes total state net operating loss carryforwards of $303 million at December 31, 2022, that expire if unused in calendar years through 2033. In connection with our ongoing assessment of deferred taxes, we analyzed each state net operating loss separately, determined the amount of net operating loss available and estimated the amount which we expected to expire unused. Based on that assessment, we recorded a valuation allowance of $5 million to reduce the DTA to the amount which is more likely than not to be realized.

The following table summarizes the Company’s income tax expense ~~(benefit)~~ for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015:~~2020:


	December 31,								December 31,
(in thousands)	2017		2016			2015
(in millions)									2022			2021			2020
Federal – current	$	153,587	$	216,182		$	(53,273	)	$	147		$	188		$	(148	)
State and local – current		26,983		20,799			(295	)		32			35			5

Total current		180,570		236,981			(53,568	)		179			223			(143	)

Federal – deferred		3,498		18,203			468			(10	)		(28	)		190
State and local – deferred		17,946		26,543			(31,757	)		7			15			29

Total deferred		21,444		44,746			(31,289	)		(3	)		(13	)		219

Income tax expense (benefit) reported in net income		202,014		281,727		$	(84,857	)
Income tax expense (benefit) reported in stockholders’ equity related to:
Employee stock plans		—		—			(2,486	)
Income tax expense reported in net income										176			210			77
Income tax expense reported in stockholders’ equity related to:
Securitiesavailable-for-sale		28,495		(2,687	)		131			(223	)		(42	)		16
Pension liability adjustments		2,234		2,924			(1,161	)		(6	)		10			—
Non-credit portion of OTTI losses		13		49			44

Cash flow hedge										23			9			(13	)
Adoption of ASU 2016-13										—			—			(4	)
Total income taxes	$	232,756	$	282,013		$	(88,329	)	$	(30	)	$	187		$	76

The following table presents a reconciliation of statutory federal income tax expense (benefit) to combined actual income tax expense (benefit) reported in net income for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015:~~2020:


	December 31,									December 31,
(in thousands)	2017			2016			2015
Statutory federal income tax at 35%	$	233,875		$	271,995		$	(46,204	)
(in millions)										2022			2021			2020
Statutory federal income tax at 21%										$	174		$	169		$	123
State and local income taxes, net of federal income tax effect⁽¹⁾		29,204			30,772			(20,835	)		31			40			27
Effect of tax law changes		(41,943	)		—			—			—			—			(73	)
Non-taxable bargain gain											(33	)		—			—
Non-deductible FDIC deposit insurance premiums											10			9			8
Effect of tax deductibility of ESOP		(5,083	)		(6,452	)		(7,321	)		(3	)		(3	)		(3	)
Non-taxable income and expense of BOLI		(9,529	)		(10,808	)		(9,575	)		(7	)		(6	)		(7	)
Non-deductible merger expenses											3			3			—
Non-deductible compensation expense											4			—			—
Federal tax credits		(1,386	)		(1,607	)		(1,554	)		(1	)		—			(1	)
Adjustments relating to prior tax years		144			(668	)		(248	)		(1	)		(1	)		1
Merger-related expenses		—			(850	)		850
Other, net		(3,268	)		(655	)		30			(1	)		(1	)		2

Total income tax expense (benefit)	$	202,014		$	281,727		$	(84,857	)

Total income tax expense										$	176		$	210		$	77

~~(1)~~

Includes income tax (benefit) expense for the years ended December 31, 2015 of $(1.4) million for adjustments to deferred taxes necessitated by changes in tax laws of New York City that were enacted in April 2015.

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Reform Act”) was enacted. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things:

118

~~Lowering of the U.S. corporate tax rate from 35% to 21% effective January 1, 2018.~~

~~Repeal of corporate alternative minimum tax (AMT) for tax years beginning after December 31, 2017.~~

~~Reduction of the corporate dividends received deduction of 80% and 70% to 65% and 50%, respectively, for tax years beginning after December 31, 2017.~~

~~Disallowance of the deduction for FDIC premiums for banks with total consolidated assets over $50 billion effective tax years beginning after December 31, 2017.~~

~~Allows for full expensing of qualified property acquired or placed in service between September 27, 2017 and January 1, 2023.~~

Limitation of net operating loss (NOL) carryforwards to 80% of taxable income for losses arising in tax years beginning after December 31, 2017 and prohibiting NOL carrybacks for losses arising in tax years beginning after December 31, 2017 and providing an unlimited life for NOL carryforwards.

~~U.S.~~ GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. ~~As a result~~The CARES Act was enacted on March 27, 2020 to provide relief related to the COVID-19 pandemic. The CARES Act includes many measures to assist companies including the allowance of ~~the Tax Reform Act, the~~net operating losses originating in 2018, 2019 or 2020 to be carried back five years. The Company recorded a$68.4 million in tax ~~benefit of $42 million due~~benefits for the year ended December 31, 2020 relating to ~~the net impact of remeasurement of tax attributes affected by~~ the enactment of the ~~Tax Reform~~CARES Act.

In March 2014, tax legislation was enacted that changed the manner in which financial institutions and their affiliates are taxed in New York State. In April 2015, similar legislation was enacted for New York City. Most of the provisions were effective for fiscal years beginning in 2015. The most significant changes affecting the Company were as follows:

The tax rate applied to apportioned New York State taxable income was reduced from 7.1% to 6.5%, effective for fiscal years beginning in 2016. For financial institutions with total assets below $100 billion, the New York City statutory tax rate dropped from 9% to 8.85%.

~~Tax is now determined by measuring the apportioned income of the combined group of all domestic affiliates that participate in a unitary business relationship.~~

~~Taxable income is apportioned based on the location of the taxpayer’s customers, with special rules for income from certain financial transactions.~~

~~Thrift institutions that maintain a qualified residential loan portfolio are entitled to a specially computed modification that reduces taxable income.~~

~~New York City taxable income is reduced by net interest income earned on residential portfolio loans that are secured by rent-regulated units or situated inlow-income~~ ~~communities in New York City. This benefit is gradually phased out for financial institutions with total assets between $100 billion and $150 billion.~~

An alternative tax of 0.15% on apportioned capital is imposed to the extent that it exceeds the tax on apportioned income. The New York State alternative tax is capped at $5 million for a tax year and is gradually phased out over six years. The New York City alternative tax is capped at $10 million for a tax year and is not phased out.

~~A reduction to taxable income from the utilization of a net operating loss carryforward is determined without reference to, nor limitation based on, a federal tax deduction of such carryforward.~~

The Company invests in affordable housing projects through limited partnerships that generate federal Low Income Housing Tax Credits. The balances of these investments, which are included in “Other assets” in the Consolidated Statements of Condition, were ~~$46.2~~$304 million and ~~$42.4~~$76 million, respectively, at December 31, ~~2017~~2022 and ~~2016,~~2021, and included commitments of ~~$23.9~~$183 million and ~~$21.9~~$34 million that are expected to be funded over the next ~~four~~5 years. The Company elected to apply the proportional amortization method to these investments. Recognized in the determination of income tax (benefit) expense from operations for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015~~2020 were ~~$4.5~~$11 million, ~~$4.0~~$9 million, and ~~$3.2~~$8 million, respectively, of affordable housing tax credits and other tax benefits, and an offsetting ~~$3.1~~$10 million, ~~$3.0~~$9 million, and ~~$2.4~~$6 million, respectively, for the amortization of the related investments. No impairment losses were recognized in relation to these investments for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015.~~2020.

GAAP prescribes a recognition threshold and measurement attribute for use in connection with the obligation of a company to recognize, measure, present, and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31, ~~2017,~~2022, the Company had ~~$33.7~~$40 million of unrecognized gross tax benefits. Gross tax benefits do not reflect the federal tax effect associated with state tax amounts. The total amount of net unrecognized tax benefits at December 31, ~~2017~~2022 that would have affected the effective tax rate, if recognized, was ~~$26.6~~$32 million.

Interest and penalties (if any) related to the underpayment of income taxes are classified as a component of income tax expense in the Consolidated Statements of ~~Operations~~Income and Comprehensive ~~Income (Loss).~~Income. During the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015,~~2020, the Company recognized income tax expense attributed to interest and penalties of ~~$1.8~~$4 million, ~~$1.2~~$4 million, and ~~$1.1~~$3 million, respectively. Accrued interest and penalties on tax liabilities were ~~$8.9~~$26 million and ~~$6.9~~$22 million, respectively, at December 31, ~~2017~~2022 and ~~2016.~~2021.

The following table summarizes changes in the liability for unrecognized gross tax benefits for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015:~~

2020:

   December 31,
(in thousands)    2017    2016    2015
Uncertain tax positions at beginning of year
   $ 33,487    $ 30,456    $ 24,779
Additions for tax positions relating to current-year operations
   4,332    1,304    3,827
Additions for tax positions relating to prior tax years
   1,398    1,997    2,935
Subtractions for tax positions relating to prior tax years
   (5,101 )    (270 )    (963 )
Reductions in balance due to settlements
   (435 )    —      (122 )






Uncertain tax positions at end of year
   $ 33,681    $ 33,487    $ 30,456


	December 31,
(in millions)	2022		2021			2020
Uncertain tax positions at beginning of year	$	39	$	38		$	36
Additions for tax positions relating to current-year operations		1		2			1
Additions for tax positions relating to prior tax years		—		1			1
Subtractions for tax positions relating to prior tax years		—		(2	)		—
Uncertain tax positions at end of year	$	40	$	39		$	38

The Company and its subsidiaries have filed tax returns in many states. The following are the more significant tax filings that are open for examination:

•

Federal tax filings for tax years ~~2014~~2019 through the present;

•

New York State tax filings for tax years 2010 through the present;

•

New York City tax filings for tax years 2011 through the present; and

•

New Jersey tax filings for tax years ~~2013~~2015 through the present.

In addition to other state audits, the Company is currently under examination by the following taxing jurisdictions of significance to the Company:

•

Federal 2019

•

New York State for the tax years 2010 through ~~2014;~~2016; and

•

New York City for the tax years 2011 and ~~2012.~~2014.

It is reasonably possible that there will be developments within the next twelve months that would necessitate an adjustment to the balance of unrecognized tax benefits, including decreases of up to ~~$20~~$21 million due to completion of tax authorities’ exams and the expiration of statutes of limitations.

119

As a savings institution, the ~~Community~~ Bank is subject to a special federal tax provision regarding its frozen tax bad debt reserve. At December 31, ~~2017,~~2022, the ~~Community~~ Bank’s federal tax bad debt base-year reserve was ~~$61.5~~$62 million, with a related federal deferred tax liability of ~~$12.9~~$13 million, which has not been recognized since the ~~Community~~ Bank does not expect that this reserve will become taxable in the foreseeable future. Events that would result in taxation of this reserve include redemptions of the ~~Community~~ Bank’s stock or certain excess distributions by the ~~Community~~ Bank to the Company.

NOTE 14. DERIVATIVE AND HEDGING ACTIVITIES

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposure to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and duration of its assets and liabilities and, the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Derivative financial instruments are recorded at fair value in other assets and other liabilities on the Consolidated Statements of Condition. The Company's policy is to present our derivative assets and derivative liabilities on the Consolidated Statement of Condition on a gross basis, even when provisions allowing for set-off are in place. However, for derivative contracts cleared through certain central clearing parties, variation margin payments are recognized as settlements. We are exposed to non-performance risk by the counterparties to our various derivative financial instruments. A majority of our derivatives are centrally cleared through a Central Counterparty Clearing House or consist of residential mortgage interest rate lock commitments further limiting our exposure to non-performance risk. We believe that the non-performance risk inherent in our remaining derivative contracts is minimal based on credit standards and the collateral provisions of the derivative agreements.

Derivatives not designated as hedging instruments. The Company maintains a derivative portfolio of interest rate swaps, futures and forward commitments used to manage exposure to changes in interest rates and MSR asset values and to meet the needs of customers. The Company also enters into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Market risk on interest rate lock commitments and mortgage LHFS is managed using corresponding forward sale commitments and US Treasury futures. Changes in the fair value of derivatives not designated as hedging instruments are recognized on the Consolidated Statements of Income and Comprehensive Income.

Derivatives designated as hedging instruments. The Company has designated certain interest rate swaps as cash flow hedges on LIBOR and overnight SOFR-based variable interest payments on federal home loan bank advances. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income on the Consolidated Statements of Condition and reclassified into interest expense in the same period in which the hedge transaction is recognized in earnings. At December 31, 2022, the Company had $52 million (net-of-tax) of unrealized gains on derivatives classified as cash flow hedges recorded in accumulated other comprehensive loss. The Company had $9 million (net-of-tax) of unrealized losses on derivatives classified as cash flow hedges at December 31, 2021.

Derivatives that are designated in hedging relationships are assessed for effectiveness using regression analysis at inception and qualitatively thereafter, unless regression analysis is deemed necessary. All designated hedge relationships were, and are expected to be, highly effective as of December 31, 2022.

Fair Value of Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Such derivatives were used to hedge the changes in fair value of certain of its pools of prepayable fixed rate assets. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

The Company had entered into an interest rate swap with a notional amount of $2.0 billion to hedge certain real estate loans. Interest income from loans and lease receivables decreased by $6 million and $49 million for the twelve months ended December 31,

120

2022 and 2021, respectively, related to a $2.0 billion of interest swaps designated in a fair value relationship related to certain real estate loans which matured in February 2022.

As of December 31, 2022 and 2021, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges.


(in millions)		December 31, 2022						December 31, 2021
Line Item in the Consolidated Statements of Condition in which the Hedge Item is Included		Carrying Amount of the Hedged Assets			Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets			Carrying Amount of the Hedged Assets			Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets
Total loans and leases, net (1)	$		-	$		-	$		2,025	$		25

(1)

These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. Since the swap expired in February 2022, at December 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships, the cumulative basis adjustments associated with these hedging relationships, and the amount of the designated hedged items, were zero.

The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the periods indicated.


(in millions)	For the Twelve Months Ended December 31, 2022			For the Twelve Months Ended December 31, 2021
Derivative – interest rate swap:
Interest income	$	25		$	48
Hedged item – loans:
Interest income	$	(25	)	$	(48	)

121

The following table sets forth information regarding the Company’s derivative financial instruments at December 31, 2022.


	December 31, 2022
			Fair Value
(in millions)	Notional Amount		Other Assets		Other Liabilities
Derivatives designated as cash flow hedging instruments:
Interest rate swap	$	3,750	$	5	$	—
Total	$	3,750	$	5	$	—
Derivatives not designated as hedging instruments:
Assets
Futures	$	1,205	$	2	$	—
Mortgage-backed securities forwards		1,065		36		—
Rate lock commitments		1,539		9		—
Interest rate swaps and swaptions		7,594		182		—
Total	$	11,403	$	229	$	—
Liabilities
Mortgage-backed securities forwards		739		—		61
Rate lock commitments		527		—		10
Interest rate swaps and swaptions		2,445		—		65
Total derivatives not designated as hedging instruments	$	3,711	$	—	$	136

The following table presents the derivative subject to a master netting agreement, including the cash pledged as collateral:


	December 31, 2022
							Gross Amounts Not Offset in the Statements of Condition
(in millions)	Gross Amount		Gross Amounts Netted in the Statements of Condition		Net Amount Presented in the Statements of Condition		Financial Instruments		Cash Collateral Pledged (Received)
Derivatives designated hedging instruments:
Interest rate swaps on FHLB advances (1)	$	5	$	—	$	5	$	4	$	27
Derivatives not designated as hedging instruments:
Assets
Mortgage-backed securities forwards	$	36	$	—	$	36	$	—	$	(9	)
Interest rate swaptions		182		—		182		—		(36	)
Futures		2				2				1
Total derivative assets	$	220	$	—	$	220	$	—	$	(44	)
Liabilities
Mortgage-backed securities forwards	$	61	$	—	$	61	$	—	$	54
Interest rate swaps (2)		65		—		65		—		29
Total derivative liabilities	$	126	$	—	$	126	$	—	$	83

(1) Notional value of cash flow hedging instruments at December 31, 2021 $2.3 billion. Securities pledged at December 31, 2021 was $9 million.

(2) Variation margin pledged to, or received from, a Central Counterparty Clearing House to cover the prior days fair value of open positions is considered settlement of the derivative position for accounting purposes.

122

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of amounts subject to variability caused by changes in interest rates from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Changes in the fair value of derivatives designated and that qualify as cash flow hedges are initially recorded in other comprehensive income and are subsequently reclassified into earnings in the period that the hedged transaction affects income.

Interest rate swaps with notional amounts totaling $3.8 billion and $2.3 billion as of December 31, 2022 and December 31, 2021, were designated as cash flow hedges of certain FHLB borrowings.

The following table presents the effect of the Company’s cash flow derivative instruments on AOCL for the year ending December 31, 2022 and 2021:


(in millions)	For the Twelve Months Ended December 31, 2022			For the Twelve Months Ended December 31, 2021
Amount of gain recognized in AOCL	$	88		$	8
Amount of reclassified from AOCL to interest expense		(4	)		25

Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate borrowings. During the next twelve months, the Company estimates that an additional $51 million will be reclassified to interest expense.

The following table presents the net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions:


		For the Twelve Months Ended December 31, 2022			For the Twelve Months Ended December 31, 2021
(dollars in millions)
Derivatives not designated as hedging instruments	Location of Gain (Loss)
Futures	Net return on mortgage servicing rights	$	(1	)	$	—
Interest rate swaps and swaptions	Net return on mortgage servicing rights		(11	)		—
Mortgage-backed securities forwards	Net return on mortgage servicing rights		(4	)		—
Rate lock commitments and US Treasury futures	Net gain on loan sales		28			—
Forward commitments	Other noninterest income		(1	)		—
Interest rate swaps (1)	Other noninterest income		—			—
Total derivative (loss) gain		$	11		$	—

(1) Includes customer-initiated commercial interest rate swaps.

NOTE ~~10:~~15: COMMITMENTS AND CONTINGENCIES

Pledged Assets

The Company pledges securities to serve as collateral for its repurchase agreements, among other purposes. At December 31, ~~2017,~~2022, the Company had pledged available for sale mortgage-related securities and other debt securities with carrying values of ~~$917.2~~$430 million and ~~$346.0~~$4 million, respectively. At December 31, ~~2016,~~2021, the Company had pledged available for sale mortgage-related securities and other debt securities ~~held to maturity~~ with carrying values of ~~$1.6 billion~~$704 million and ~~$346.7~~$464 million, respectively. In addition, the Company had ~~$30.1~~$44.5 billion and ~~$29.4~~$33.9 billion of loans pledged to theFHLB-NY to serve as collateral for its wholesale borrowings at the respective year-ends.

123

Loan Commitments and Letters of Credit

At December 31, ~~2017~~2022 and ~~2016,~~2021, the Company had commitments to originate loans, including unused lines of credit, of ~~$1.9~~$21.8 billion and ~~$2.1~~$2.8 billion, respectively. The majority of the outstanding loan commitments at those dates were expected to close within 90 days. In addition, the Company had commitments to originate letters of credit totaling ~~$339.4~~$541 million and ~~$324.3~~$291 million at December 31, ~~2017~~2022 and ~~2016.~~2021.

The following table summarizes the Company’soff-balance sheet commitments to originate loans and letters of credit at December 31, ~~2017:~~2022:

(in thousands)
Mortgage Loan Commitments:

Multi-family and commercial real estate
   $ 377,782
One-to-four family
   3,819
Acquisition, development, and construction
   239,504


(in millions)
Multi-family and commercial real estate	$	216
One-to-four family including interest rate locks		2,066
Acquisition, development, and construction		3,539
Warehouse loan commitments		8,042
Other loan commitments		7,964
Total loan commitments	$	21,827
Commercial, performance stand-by, and financial stand-by letters of credit		541
Total commitments	$	22,368

Total mortgage loan commitments
   $ 621,105
Other loan commitments
   1,314,170


Total loan commitments
   $ 1,935,275
Commercial, performancestand-by, and financialstand-by letters of credit
   339,403


Total commitments
   $ 2,274,678

~~Lease Commitments~~

~~At December 31, 2017, the Company was obligated under variousnon-cancelable~~ operating lease and license agreements with renewal options on properties used primarily for branch operations. The Company currently expects to renew such agreements upon their expiration in the normal course of business. The agreements contain periodic escalation clauses that provide for increases in the annual rents, commencing at various times during the lives of the agreements, which are primarily based on increases in real estate taxes and~~cost-of-living~~ ~~indices. The remaining projected minimum annual rental commitments under these agreements, exclusive of taxes and other charges, are summarized as follows:~~

(in thousands)
2018
   $ 29,786
2019
   26,425
2020
   20,211
2021
   16,523
2022 and thereafter
   66,555


Total minimum future rentals
   $ 159,500

The rental expense under these leases, which is included in “Occupancy and equipment expense” in the Consolidated Statements of Operations and Comprehensive Income (Loss), amounted to $33.2 million, $32.6 million, and $32.8 million, respectively, in the years ended December 31, 2017, 2016, and 2015. Rental income on Company-owned properties, netted in occupancy and equipment expense, was approximately $9.5 million, $7.1 million, and $3.7 million in the corresponding periods. There was no minimum future rental income under~~non-cancelablesub-lease~~ ~~agreements at December 31, 2017.~~

Financial Guarantees

The Company provides guarantees and indemnifications to its customers to enable them to complete a variety of business transactions and to enhance their credit standings. These guarantees are recorded at their respective fair values in “Other liabilities” in the Consolidated Statements of Condition. The Company deems the fair value of the guarantees to equal the consideration received.

The following table summarizes the Company’s guarantees and indemnifications at December 31, ~~2017:~~2022:

(in thousands)    Expires
Within One
Year    Expires
After One
Year    Total
Outstanding
Amount    Maximum Potential
Amount of
Future Payments
Financialstand-by letters of credit
   $ 19,996    $ 55,202    $ 75,198    $ 267,174
Performancestand-by letters of credit
   5,786    —      5,786    5,775
Commercial letters of credit
   3,063    209    3,272    66,454








Total letters of credit
   $ 28,845    $ 55,411    $ 84,256    $ 339,403


(in millions)	Expires Within One Year		Expires After One Year			Total Outstanding Amount			Maximum Potential Amount of Future Payments
Financial stand-by letters of credit	$	79	$	85	$		164	$		398
Performance stand-by letters of credit		108		11			119			118
Commercial letters of credit		10		1			11			25
Total letters of credit	$	197	$	97	$		294	$		541

The maximum potential amount of future payments represents the notional amounts that could be funded under the guarantees and indemnifications if there were a total default by the guaranteed parties or if indemnification provisions were triggered, as applicable, without consideration of possible recoveries under recourse provisions or from collateral held or pledged.

The Company collects fees upon the issuance of commercial andstand-by letters of credit. ~~Fees forstand-by~~Stand-by letters of credit fees are initially recorded by the Company as a liability, and are recognized as income periodically through the respective expiration dates. Fees for commercial letters of credit are collected and recognized as income at the time that they are issued and upon payment of each set of documents presented. In addition, the Company requires adequate collateral, typically in the form of cash, real property, and/or personal guarantees upon its issuance of ~~IrrevocableStand-by~~ ~~Letters~~irrevocable stand-by letters of ~~Credit.~~credit. Commercial letters of credit are primarily secured by the goods being purchased in the underlying transaction and are also personally guaranteed by the owner(s) of the applicant company.

At December 31, ~~2017,~~2022, the Company had nocommitments to purchase ~~GNMA securities of $29.4 million.~~securities.

Legal Proceedings

124

NOTE ~~11:~~16: INTANGIBLE ASSETS

~~Goodwill~~

Goodwill is presumed to have an indefinite useful life and is tested for impairment ~~rather than amortized,~~ at the reporting unit level, at least once a year. There ~~were~~ was no ~~changes~~ change in ~~the carrying amount of~~ goodwill during ~~the years ended December 31, 2017 or 2016. Goodwill totaled $2.4 billion at each of these dates.~~

~~Core Deposit Intangibles~~

CDI is a measure of the value of checking and savings deposits acquired in a business combination. As previously noted, the Company has recognized CDI stemming from its various business combinations with other banks and thrifts. The fair value of the CDI stemming from any given business combination is based on the present value of the expected cost savings attributable to the core deposit funding acquired, relative to an alternative source of funding. CDI is amortized over the estimated useful lives of the existing deposit relationships acquired, but does not exceed 10 years. As of December 31, 2017, all CDI was fully amortized. For the year ended December 31, ~~2017,~~2022.

At December 31, 2022, other intangible assets consisted of the following:


(in millions)	Gross Carrying Amount		Accumulated Amortization				Net Carrying Value
Core deposit intangible	$	250	$	(4	)	$		246
Other intangible assets		42		(1	)			41
Total other intangible assets	$	292	$	(5	)	$		287

The estimated amortization ~~expenses related to~~expense of CDI totaled $208,000. The Company evaluates such identifiable intangibles for impairment when an indication of impairment exists. No impairment charges were required to be recorded in 2017, 2016, or 2015. If an impairment loss is determined to exist in the future, the loss will be recorded in~~“Non-interest~~ ~~expense” in the Consolidated Statements of Operations~~ and ~~Comprehensive Income (Loss)~~other intangible assets for the ~~period in which such impairment~~next five years is ~~identified.~~as follows:

~~Mortgage Servicing Rights~~


(in millions)	Amortization Expense
2023	$	59
2024		54
2025		38
2026		33
2027		29
Total	$	213

The Company records a separate servicing asset representing the right to service third-party loans. Such MSRs are initially recorded at their fair value as a component of the sale proceeds. The fair values of MSRs are based on an analysis of discounted cash flows that incorporates estimates of (1) market servicing costs, (2) market-based estimates of ancillary servicing revenue, (3) market-based prepayment rates, and (4) market profit margins.

MSRs are subsequently measured at either fair value or are amortized in proportion to, and over the period of, estimated net servicing income. The Company elects one of those methods on a class basis. A class is determined based on (1) the availability of market inputs used in determining the fair value of servicing assets, and/or (2) the Company’s method for managing the risks of servicing assets.

The Company completed the sale of its mortgage banking business in the third quarter of 2017, and consequently sold substantially all of its mortgage servicing assets. Accordingly, the value of the MSR asset declined to $6.1 million at December 31, 2017, compared to $234.0 million at December 31, 2016. These balances consisted of two classes of MSRs for which the Company separately manages the economic risk: residential MSRs and participation MSRs (i.e., MSRs on loans sold through participations).

Residential MSRs are carried at fair value, and at December 31, 2017 reflected only loans sold through the FHLB’s Mortgage Partnership Finance Program, with changes in fair value recorded as a component of~~non-interest~~ income in each period. MSRs do not trade in an active open market with readily observable prices. Accordingly, the Company utilizes a third-party valuation specialist to determine the fair value of its MSRs. This specialist determines fair value based on the present value of estimated future net servicing income cash flows, and incorporates assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The specialist and the Company evaluate, and periodically adjust, as necessary, these underlying inputs and assumptions to reflect market conditions and changes in the assumptions that a market participant would consider in valuing MSRs.

The collective amount of contractually specified servicing fees, late fees, and ancillary fees, which is recorded as “Mortgage banking income” in the Consolidated Statements of Operations and Comprehensive Income (Loss), was $1.2 million and $1.3 million, and $941,000 for the years ended December 31, 2017, 2016, and 2015, respectively.

Participation MSRs are initially carried at fair value and are subsequently amortized and carried at the lower of their fair value or amortized amount. The amortization is recorded in proportion to, and over the period of, estimated net servicing income, with impairment of those servicing assets evaluated through an assessment of their fair value via a discounted cash-flow method. The net carrying value is compared to the discounted estimated future net cash flows to determine whether adjustments should be made to carrying values or amortization schedules. Impairment of participation MSRs is recognized through a valuation allowance and a charge to current-period earnings if it is considered to be temporary, or through a direct write-down of the asset and a charge to current-period earnings if it is considered to be other than temporary. The predominant risk characteristics of the underlying loans that are used to stratify the participation MSRs for measurement purposes generally include the (1) loan origination date, (2) loan rate, (3) loan type and size, (4) loan maturity date, and (5) geographic location. Changes in the carrying value of participation MSRs due to amortization or declines in fair value (i.e., impairment), if any, are reported in “Other income” in the period during which such changes occur. In the years ended December 31, 2017 and 2016, there was no impairment related to the Company’s participation MSRs.

~~The following table presents the changes in the balances of residential MSRs and participation MSRs for the years ended December 31, 2017 and 2016:~~

   For the Years Ended December 31,
   2017    2016
(in thousands)    Residential    Participation    Residential    Participation
Carrying value, beginning of year
   $ 228,099    $ 5,862    $ 243,389    $ 4,345
Additions
   18,054    710    45,588    3,774
Sales
   (208,827 )    —      —      —
Increase (decrease) in fair value:

Due to changes in interest rates
   (2,096 )    —      3,341    —
Due to model assumption changes⁽¹⁾
   —      —      (13,088 )    —
Due to loan payoffs
   (22,610 )    —      (33,425 )    —
Due to passage of time and other changes
   (9,891 )    —      (17,706 )    —
Amortization
   —      (3,201 )    —      (2,257 )








Carrying value, end of period
   $ 2,729    $ 3,371    $ 228,099    $ 5,862

~~(1)~~

~~Represents changes in fair value driven by changes to the inputs to the valuation model related to assumed prepayment~~

~~speeds.~~

~~The following table presents the key assumptions used in calculating the fair value of the Company’s residential MSRs at the dates indicated:~~

   December 31,
   2017 2016
Expected weighted average life
   87 months 82 months
Constant prepayment speed
   9.81 % 8.70 %
Discount rate
   12.00 10.05
Primary mortgage rate to refinance
   4.02 4.11
Cost to service (per loan per year):

Current
   $     70 $     64
30-59 days or less delinquent
   220 214
60-89 days delinquent
   370 364
90-119 days delinquent
   470 464
120 days or more delinquent
   870 864

The increase in the constant prepayment speed was primarily attributable to an increase in the housing price index used by the Company’s third-party valuation specialist, suggesting that homebuyer demand has increased and newly created equity could lead to more refinancing.

Reflecting the sale of the mortgage banking business the total unpaid principal balance of loans serviced for others declined to $3.7 billion at December 31, 2017 from $25.1 billion at December 31, 2016.

NOTE ~~12:~~17: EMPLOYEE BENEFITS

Retirement Plan

On April 1, 2002, three separate pension plans for employees of the former Queens County Savings Bank, the former CFS Bank, and the former Richmond County Savings Bank were merged and renamed the “NewThe New York Community Bancorp, Inc. Retirement ~~Plan”~~Plan (the “Retirement Plan”). The pension plan for employees of the former Roslyn Savings Bank was merged into the Retirement Plan on September 30, 2004. The pension plan for employees of the former Atlantic Bank of New York was merged into the Retirement Plan on March 31, 2008.

~~The Retirement Plan~~ covers substantially all employees who had attained minimum age, service, and employment status requirements prior to the date when the individual plans were frozen by the banks of origin. Once frozen, the individual plans ceased to accrue additional benefits, service, and compensation factors, and became closed to employees who would otherwise have met eligibility requirements after the “freeze” date.

125

The following table sets forth certain information regarding the Retirement Plan as of the dates indicated:


	December 31,						December 31,
(in thousands)	2017			2016
(in millions)							2022			2021
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	146,429		$	146,618		$	158		$	172
Interest cost		5,616			5,881			4			4
Actuarial loss		8,267			611
Actuarial gain								(38	)		(9	)
Annuity payments		(6,485	)		(6,473	)		(7	)		(6	)
Settlements		(2,416	)		(208	)		(1	)		(3	)

Benefit obligation at end of year	$	151,411		$	146,429		$	116		$	158

Change in Plan Assets:
Fair value of assets at beginning of year	$	220,740		$	211,888		$	283		$	261
Actual return on plan assets		22,297			15,533
Contributions		—			—
Actual return (loss) on plan assets								(47	)		31
Annuity payments		(6,485	)		(6,473	)		(7	)		(6	)
Settlements		(2,416	)		(208	)		(1	)		(3	)

Fair value of assets at end of year	$	234,136		$	220,740		$	228		$	283

Funded status (included in “Other assets”)	$	82,725		$	74,311		$	112		$	125

Changes recognized in other comprehensive income (loss) for the year ended December 31:
Amortization of prior service cost	$	—		$	—
Changes recognized in other comprehensive income for the year ended December 31:
Amortization of actuarial loss		(8,209	)		(9,050	)		(2	)		(7	)
Net actuarial loss arising during the year		2,260			706

Total recognized in other comprehensive loss for the year(pre-tax)	$	(5,949	)	$	(8,344	)

Net actuarial (gain) loss arising during the year								26			(23	)
Total recognized in other comprehensive income for the year (pre-tax)							$	24		$	(30	)
Accumulated other comprehensive loss(pre-tax) not yet recognized in net periodic benefit cost at December 31:
Prior service cost	$	—		$	—
Actuarial loss, net		73,591			79,541			66			43

Total accumulated other comprehensive loss(pre-tax)	$	73,591		$	79,541		$	66		$	43

In ~~2018,~~2023, an estimated ~~$7.2~~$7 million of unrecognized net actuarial loss for the Retirement Plan will be amortized from AOCL into net periodic benefit cost. The comparable amount recognized as net periodic benefit cost in ~~2017~~2022 was ~~$8.2~~$2 million. No prior service cost ~~will be amortized in 2018 and none~~ was amortized in ~~2017.~~2022 or 2021. The discount rates used to determine the benefit obligation at December 31, ~~2017~~2022 and ~~2016~~2021 were ~~3.4%~~4.9 percent and ~~3.9%,~~2.6 percent, respectively.

The discount rate reflects rates at which the benefit obligation could be effectively settled. To determine this rate, the Company considers rates of return on high-quality fixed-income investments that are currently available and are expected to be available during the period until the pension benefits are paid. The expected future payments are discounted based on a portfolio of high-quality rated bonds ~~(above-median AA curve)~~(AA or better) for which the Company relies on the ~~Citigroup~~Financial Times Stock Exchange (“FTSE”) Pension Liability Index that is published as of the measurement date.

The components of net periodic pension ~~credit~~(credit) expense were as follows for the years indicated:


	Years Ended December 31,									Years Ended December 31,
(in thousands)	2017			2016			2015
Components of net periodic pension credit:
(in millions)										2022			2021			2020
Components of net periodic pension expense (credit):
Interest cost	$	5,616		$	5,881		$	6,063		$	4		$	4		$	5
Expected return on plan assets		(16,290	)		(15,627	)		(17,559	)		(16	)		(16	)		(15	)
Amortization of net actuarial loss		8,209			9,050			8,208			2			7			7

Net periodic pension credit	$	(2,465	)	$	(696	)	$	(3,288	)	$	(10	)	$	(5	)	$	(3	)

126

The following table indicates the weighted average assumptions used in determining the net periodic benefit cost for the years indicated:


	Years Ended December 31,									Years Ended December 31,
	2017			2016			2015			2022			2021			2020
Discount rate		3.9	%		4.1	%		4.0	%		2.6	%		2.2	%		3.0	%
Expected rate of return on plan assets		7.5			7.5			8.0			6.0			6.3			6.5

As of December 31, ~~2017,~~2022, Retirement Plan assets were invested in two diversified investment portfolios of the Pentegra Retirement Trust (the “Trust”) ~~(formerly known as “RSI Retirement Trust”)~~, a private placement investment fund.

The Company (in this context, the “Plan Sponsor”) chooses the specific asset allocation for the Retirement Plan within the parameters set forth in the Trust’s Investment Policy Statement. The long-term investment objectives are to maintain the Retirement Plan’s assets at a level that will sufficiently cover the Plan Sponsor’s long-term obligations, and to generate a return on those assets that will meet or exceed the rate at which the Plan Sponsor’s long-term obligations will grow.

The Retirement Plan allocates its assets in accordance with the following targets:

•

To hold ~~55%~~55 percent of its assets in equity securities via investment in the Trust’s Long-Term Growth—Equity (“LTGE”) Portfolio, a diversified portfolio that invests in a number of actively and passively managed equity mutual funds and collective trusts in order to ~~diversify within~~gain exposure to both U.S. andnon-U.S. equity markets;

•

To hold ~~44%~~44 percent of its assets in intermediate-term investment-grade bonds via investment in the ~~Trust’s~~ Long-Term Growth—Fixed Income (“LTGFI”) Portfolio, a diversified portfolio that invests in a number of fixed-income mutual funds and collective investment trusts, primarily including intermediate-term bond funds with a focus on U.S. investment grade securities and opportunistic allocations to below-investment grade andnon-U.S. investments; and

•

To hold ~~1% of its assets~~1 percent in a ~~cash-equivalent~~cash equivalents portfolio for liquidity purposes.

In addition, the Retirement Plan holds Company shares, the value of which is approximately equal to ~~11%~~11 percent of the assets that are held by the Trust.

The LTGE and LTGFI portfolios are designed to provide long-term growth of equity and fixed-income assets with the objective of achieving an investment return in excess of the cost of funding the active life, deferred vesting, and all30-year term and longer obligations of retired lives in the Trust. Risk and volatility are further managed in accordance with the distinct investment objectives of the Trust’s respective portfolios.

127

The following table presents information about the fair value measurements of the investments held by the Retirement Plan as of December 31, ~~2017:~~2022:

(in thousands)    Total    Quoted Prices in
Active Markets for
Identical Assets
(Level 1)    Significant Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)
Equity:

Large-cap value⁽¹⁾
   $  20,959    $      —      $  20,959    $—
Large-cap growth⁽²⁾
   21,825    —      21,825    —
Large-cap core⁽³⁾
   14,512    —      14,512    —
Mid-cap value⁽⁴⁾
   4,668    —      4,668    —
Mid-cap growth⁽⁵⁾
   4,422    —      4,422    —
Mid-cap core⁽⁶⁾
   4,744    —      4,744    —
Small-cap value⁽⁷⁾
   3,530    —      3,530    —
Small-cap growth⁽⁸⁾
   3,353    —      3,353    —
Small-cap core⁽⁹⁾
   6,908    —      6,908    —
International equity⁽¹⁰⁾
   28,113    —      28,113    —
Fixed Income Funds:
            —
Fixed Income – U.S. Core⁽¹¹⁾
   68,928    —      68,928    —
Intermediate duration⁽¹²⁾
   23,046    —      23,046    —
Equity Securities:
            —
Company common stock
   24,865    24,865    —      —
Cash Equivalents:
            —
Money market^*
   4,263    1,063    3,200    —








   $234,136    $25,928    $208,208    $—


(in millions)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity:
Large-cap value (1)	$	23	$	—	$	23	$	—
Large-cap growth (2)		17		—		17		—
Large-cap core (3)		13		—		13		—
Mid-cap value (4)		5		—		5		—
Mid-cap growth (5)		4		—		4		—
Mid-cap core (6)		5		—		5		—
Small-cap value (7)		3		—		3		—
Small-cap growth (8)		6		—		6		—
Small-cap core (9)		4		—		4		—
International equity (10)		30		—		30		—
Fixed Income Funds:
Fixed Income – U.S. Core (11)		65		—		65		—
Intermediate duration (12)		22		—		22		—
Equity Securities:
Company common stock		26		26		—		—
Cash Equivalents:
Money market *		5		1		4		—
	$	228	$	27	$	201	$	—

*	~~Includes cash equivalent investments in equity and fixed income strategies.~~

~~(1)~~

~~This category containslarge-cap~~ ~~stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.~~

~~(2)~~

~~This category seeks long-term capital appreciation by investing primarily in large growth companies based in the U.S.~~

~~(3)~~

~~This fund tracks the performance of the S&P 500 Index by purchasing the securities represented in the Index in approximately the same weightings as the Index.~~

~~(4)~~

~~This category employs an indexing investment approach designed to track the performance of the CRSP USMid-Cap~~ ~~Value Index.~~

~~(5)~~

~~This category employs an indexing investment approach designed to track the performance of the CRSP USMid-Cap~~ ~~Growth Index.~~

~~(6)~~

~~This category seeks to track the performance of the S&P Midcap 400 Index.~~

~~(7)~~

~~This category consists of a selection of investments based on the Russell 2000 Value Index.~~

~~(8)~~

~~This category consists of a selection of investments based on the Russell 2000 Growth Index.~~

~~(9)~~

This category consists of an index fund designed to track the Russell 2000, along with a fund investing in readily marketable securities of U.S. companies with market capitalizations within the smallest 10% of the market universe, or smaller than the 1000th largest US company.

~~(10)~~

~~This category has investments in medium to largenon-US~~ companies, including high quality, durable growth companies and companies based in countries with stable economic and political systems. A portion of this category consists of an index fund designed to track the MSC ACWI~~ex-US~~ ~~Net Dividend Return Index.~~

~~(11)~~

This category currently includes equal investments in three mutual funds, two of which usually hold at least 80% of fund assets in investment grade fixed income securities, seeking to outperform the Barclays US Aggregate Bond Index while maintaining a similar duration to that index. The third fund targets investments of 50% or more in mortgage-backed securities guaranteed by the US government and its agencies.

~~(12)~~

This category consists of a mutual fund which invest in a diversified portfolio of high-quality bonds and other fixed income securities, including U.S. Government obligations, mortgage-related and asset backed securities, corporate and municipal bonds, CMOs, and other securities mostly rated A or better.

* Includes cash equivalent investments in equity and fixed income strategies.

(1)

This category contains large-cap stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.

(2)

This category seeks long-term capital appreciation by investing primarily in large growth companies based in the U.S.

(3)

This fund tracks the performance of the S&P 500 Index by purchasing the securities represented in the Index in approximately the same weightings as the Index.

(4)

This category employs an indexing investment approach designed to track the performance of the CRSP US Mid-Cap Value Index.

(5)

This category employs an indexing investment approach designed to track the performance of the CRSP US Mid-Cap Growth Index.

(6)

This category seeks to track the performance of the S&P Midcap 400 Index.

(7)

This category consists of a selection of investments based on the Russell 2000 Value Index.

(8)

This category consists of a mutual fund invested in small cap growth companies along with a fund invested in a selection of investments based on the Russell 2000 Growth Index.

(9)

This category consists of a mutual fund investing in readily marketable securities of U.S. companies with market capitalizations within the smallest 10 percent of the market universe, or smaller than the 1000th largest US company.

(10)

This category invests primarily in medium to large non-US companies in developed and emerging markets. Under normal circumstances, at least 80 percent of total assets will be invested in equity securities, including common stocks, preferred stocks, and convertible securities.

128

(11)
This category currently includes equal investments in three mutual funds, two of which usually hold at least 80 percent of fund assets in investment grade fixed income securities, seeking to outperform the Barclays US Aggregate Bond Index while maintaining a similar duration to that index. The third fund targets investments of 50 percent or more in mortgage-backed securities guaranteed by the US government and its agencies.
(12)
This category consists of a mutual fund which invest in a diversified portfolio of high-quality bonds and other fixed income securities, including U.S. Government obligations, mortgage-related and asset backed securities, corporate and municipal bonds, CMOs, and other securities mostly rated A or better.

Current Asset Allocation

The asset allocations for the Retirement Plan ~~as of December 31, 2017 and 2016~~ were as follows:


	At December 31,						At December 31,
	2017			2016			2022			2021
Equity securities		59	%		56	%		60	%		62	%
Debt securities		39			43			38			36
Cash equivalents		2			1			2			2

Total		100	%		100	%		100	%		100	%

Determination of Long-Term Rate of Return

The long-term rate of return on Retirement Plan assets assumption was based on historical returns earned by equities and fixed income securities, and adjusted to reflect expectations of future returns as applied to the Retirement Plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn long-term rates of return in the ranges of 6%6 percent to 9%8 percent and 3%3 percent to ~~5%,~~5 percent, respectively, with an assumed long-term inflation rate of ~~2.5%~~2.5 percent reflected within these ranges. When these overall return expectations are applied to the Retirement Plan’s target allocations, the result is an expected rate of return of 5%5 percent to ~~7%.~~7 percent.

Expected Contributions

The Company does not expect to contribute to the Retirement Plan in ~~2018.~~2022.

Expected Future Annuity Payments

The following annuity payments, which reflect expected future service, as appropriate, are expected to be paid by the Retirement Plan during the years indicated:

(in thousands)
2018
   $ 7,153
2019
   7,301
2020
   7,371
2021
   7,513
2022
   7,565
2023 and thereafter
   39,930


Total
   $ 76,833


(in millions)
2023	$	8
2024		8
2025		8
2026		8
2027		8
2028 and thereafter		42
Total	$	82

Qualified Savings Plan (401(k) Plan)

The Company maintains a defined contribution qualified savings plan in the form of a 401(k) plan in which all ~~full-time~~salaried employees are able to participate after ~~three months~~one month of service and having attained age 21. NoThe Company instituted a safe harbor matching ~~contributions are made by~~contribution program during the year ended December 31, 2020, and accordingly, the Company matches a portion of employee 401(k) plan contributions. Such expense totaled $7 million and $6 million for the twelve months ended December 31, 2022 and 2021, respectively. Flagstar also maintains a defined contribution qualified savings plan in the form of a 401(k) plan in which certain employees are able to ~~this plan.~~participate.

129

Post-Retirement Health and Welfare Benefits

The Company offers certain post-retirement benefits, including medical, dental, and life insurance (the “Health & Welfare Plan”) to retired employees, depending on age and years of service at the time of retirement. The costs of such benefits are accrued during the years that an employee renders the necessary service.

The Health & Welfare Plan is an unfunded plan and is not expected to hold assets for investment at any time. Any contributions made to the Health & Welfare Plan are used to immediately pay plan premiums and claims as they come due.

The following table sets forth certain information regarding the Health & Welfare Plan as of the dates indicated:


	December 31,							December 31,
(in thousands)	2017			2016
(in millions)								2022			2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	16,294		$	17,280		$		10		$	12
Service cost		—			5
Interest cost		577			639				—			—
Actuarial loss (gain)		517			(673	)
Actuarial gain									(2	)		(2	)
Premiums and claims paid		(1,039	)		(957	)			(1	)		—

Benefit obligation at end of year	$	16,349		$	16,294		$		7			10

Change in plan assets:
Fair value of assets at beginning of year	$	—		$	—		$		—		$	—
Employer contribution		1,039			957				1			—
Premiums and claims paid		(1,039	)		(957	)			(1	)		—

Fair value of assets at end of year	$	—		$	—		$		—		$	—

Funded status (included in “Other liabilities”)	$	(16,349	)	$	(16,294	)	$		(7	)		(10	)

Changes recognized in other comprehensive (loss) income for the year ended December 31:
Changes recognized in other comprehensive income for the year ended December 31:
Amortization of prior service cost	$	249		$	249		$		—		$	—
Amortization of actuarial gain		(274	)		(326	)			—			—
Net actuarial loss (gain) arising during the year		517			(673	)

Total recognized in other comprehensive loss for the year(pre-tax)	$	492		$	(750	)

Accumulated other comprehensive loss(pre-tax) not yet recognized in net periodic benefit cost at December 31:
Net actuarial (gain) loss arising during the year									(2	)		(2	)
Total recognized in other comprehensive income for the year (pre-tax)							$		(2	)	$	(2	)
Accumulated other comprehensive (gain) loss (pre-tax) not yet recognized in net periodic benefit cost at December 31:
Prior service cost	$	(1,034	)	$	(1,283	)	$		—		$	—
Actuarial loss, net		5,380			5,137

Total accumulated other comprehensive loss(pre-tax)	$	4,346		$	3,854

Actuarial (gain) loss, net									(2	)		—
Total accumulated other comprehensive income (pre-tax)							$		(2	)		—

The discount rates used in the preceding table were ~~3.3% and 3.7%, respectively,~~4.8 percent at December 31, ~~2017~~2022 and ~~2016.~~2.3 percent at December 31, 2021.

The estimated net actuarial loss and the prior service liability that will be amortized from AOCL into net periodic benefit cost in ~~2018~~2023 are ~~$309,000~~$0 and ~~$249,000,~~$0, respectively.

The ~~following table presents the components of~~ net periodic benefit ~~cost~~costs and all components thereof for the ~~years indicated:~~years-ended December 2022, 2021 and 2020 were less than $1 million.

   Years Ended December 31,
(in thousands)    2017    2016    2015
Components of Net Periodic Benefit Cost:

Service cost
   $ —      $ 5    $ 4
Interest cost
   577    639    700
Amortization of past-service liability
   (249 )    (249 )    (249 )
Amortization of net actuarial loss
   274    326    383






Net periodic benefit cost
   $ 602    $ 721    $ 838

The following table presents the weighted average assumptions used in determining the net periodic benefit cost for the years indicated:


	Years Ended December 31,									Years Ended December 31,
	2017			2016			2015			2022			2021			2020
Discount rate		3.7	%		3.8	%		4.0	%		2.3	%		2.0	%		2.9	%
Current medical trend rate		6.5			6.5			6.5			6.5			6.5			6.5
Ultimate trend rate		5.0			5.0			5.0			5.0			5.0			5.0
Year when ultimate trend rate will be reached		2023			2022			2018		2028			2027			2026

130

Had the assumed medical trend rate at December 31, 2017 increased by 1% for each future year, the accumulated post-retirement benefit obligation at that date would have increased by $736,000, and the aggregate of the benefits earned and the interest components of 2017 net post-retirement benefit cost would each have increased by $28,000. Had the assumed medical trend rate decreased by 1% for each future year, the accumulated post-retirement benefit obligation at December 31, 2017 would have declined by $623,000, and the aggregate of the benefits earned and the interest components of 2017 net post-retirement benefit cost would each have declined by $24,000.

Expected Contributions

The Company expects to contribute ~~$1.3~~$1 million to the Health & Welfare Plan to pay premiums and claims in the fiscal year ending December 31, ~~2018.~~2022.

Expected Future Payments for Premiums and Claims

The following amounts are currently expected to be paid for premiums and claims during the years indicated under the Health & Welfare Plan:

(in thousands)
2018
   $ 1,328
2019
   1,288
2020
   1,252
2021
   1,213
2022
   1,167
2023 and thereafter
   5,171


Total
   $ 11,419


(in millions)
2023	$	1
2024		1
2025		1
2026		1
2027		1
2028 and thereafter		2
Total	$	7

NOTE ~~13:~~18: STOCK-RELATED BENEFIT PLANS

~~New York Community Bank Employee~~ Stock ~~Ownership Plan~~Based Compensation

All full-time employees who have attained 21 years of age and have completed twelve consecutive months of credited service are eligible to participate in the Employee Stock Ownership Plan (“ESOP”), with benefits vesting on a~~six-year~~ basis, starting with 20% in the second year of employment and continuing in 20% increments in each successive year. Benefits are payable upon death, retirement, disability, or separation from service, and may be paid in stock. However, in the event of a change in control, as defined in the ESOP, any unvested portion of benefits shall vest immediately.

In 2017, 2016, and 2015, the Company allocated 695,675, 617,031, and 552,829 shares, respectively, to participants in the ESOP. For the years ended December 31, 2017, 2016, and 2015, the Company recorded ESOP-related compensation expense of $9.2 million, $9.8 million, and $9.2 million, respectively.

~~Supplemental Executive Retirement Plan~~

~~In 1993, the Community Bank established a Supplemental Executive Retirement Plan (“SERP”), which provided additional unfunded,non-qualified~~ benefits to certain participants in the ESOP in the form of Company common stock. The SERP was frozen in 1999. Trust-held assets, consisting entirely of Company common stock, amounted to 1,819,985 and 1,729,319 shares, respectively, at December 31, 2017 and 2016, including shares purchased through dividend reinvestment. The cost of these shares is reflected as a reduction of~~paid-in~~ ~~capital in excess of par in the Consolidated Statements of Condition.~~

~~Stock Incentive and Stock Option Plans~~

At December 31, ~~2017,~~2022, the Company had a total of ~~7,135,071~~9,799,865 shares available for grants as ~~options,~~ restricted stock, options, or other forms of related rights under the ~~New York Community~~2020 Incentive Plan, which includes the remaining shares available, converted at the merger conversion factor from the legacy Flagstar Bancorp, Inc. ~~2012~~2016 Stock ~~Incentive Plan ( “2012 Stock Incentive Plan”), which was approved by the Company’s shareholders at its Annual Meeting on June 7, 2012.~~Plan. The Company granted ~~2,956,249~~3,710,689 shares of restricted stock, with an average fair value of ~~$15.16~~$11.23 per share on the date of grant, during the twelve months ended December 31, ~~2017.~~ 2022.

During ~~2016~~the years ended December 31, 2021 and ~~2015,~~2020, the Company granted ~~2,805,652~~3,131,949 shares and ~~2,352,641~~2,421,345 shares, respectively, of restricted stock, which had average fair values of ~~$15.21~~$11.20 and ~~$15.83~~$11.61 per share on the respective grant dates. ~~The shares of restricted stock that were granted during the years ended December 31, 2017, 2016, and 2015 vest over a period of five years.~~ Compensation and benefits expense related to the restricted stock grants is recognized on a straight-line basis over the vesting period and totaled ~~$36.0~~$25 million, ~~$32.7~~$27 million, and ~~$30.2~~$28 million, respectively, for the years ended December 31, ~~2017, 2016,~~2022, 2021, and ~~2015.~~2020.

The following table provides a summary of activity with regard to restricted stock ~~awards in the year ended December 31, 2017:~~awards:


	For the Year Ended December 31, 2017					For the Year Ended December 31, 2022
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Unvested at beginning of year		6,930,306			15.37		6,950,335		$	11.68
Granted		2,956,249			15.16		3,710,689			11.23
Assumed in business acquisition (1)							1,904,025			9.35
Vested		(3,867,828	)		15.19		(2,374,209	)		12.21
Cancelled		(444,560	)		15.55

Forfeited							(614,238	)		11.56
Unvested at end of year		5,574,167			15.38		9,576,602			10.92

(1) Weighted-average per share represents the fair value per share on the acquisition date.

As of December 31, ~~2017,~~2022, unrecognized compensation cost relating to unvested restricted stock totaled ~~$78.7~~$74 million. This amount will be recognized over a remaining weighted average period of ~~3.1~~2.5 years.

The following table provides a summary of activity with regard to Performance-Based Restricted Stock Units ("PSUs") in the twelve months ended December 31, 2022:

131


	Number of Shares			Weighted Average Grant Date Fair Value		Performance Period	Expected Vesting Date
Outstanding at beginning of year		834,612		$	11.44
Granted		473,211			10.09
Released		(176,090	)		11.42
Forfeited		(336,749	)		11.43
Outstanding at end of period		794,984			11.43	January 1, 2022 - December 31, 2024	March 31, 2023 - 2025

PSUs are subject to adjustment or forfeiture, based upon the achievement by the Company of certain performance standards. Compensation and benefits expense related to PSUs is recognized using the fair value as of the date the units were approved, on a straight-line basis over the vesting period and totaled $3 million, $5 million and $1 million for the twelve months ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, unrecognized compensation cost relating to unvested restricted stock totaled $4 million. This amount will be recognized over a remaining weighted average period of 1.6 years. As of December 31, 2022, the Company believes it is probable that the performance conditions will be met.

New York Community Bank Employee Stock Ownership Plan

On December 6, 2021, the ESOP was terminated with the assets in the ESOP merged into the employee’s 401(k) plan. After the merger of the ESOP into the 401(k) plan, the Company allocated $4 million into eligible participant’s accounts. For of the years ended December 31, 2021 and 2020, the Company recorded expense of $4 million.

Supplemental Executive Retirement Plan

The Bank had established a Supplemental Executive Retirement Plan (“SERP”), which provided additional unfunded, non-qualified benefits to certain participants in the ESOP in the form of Company common stock. The SERP was frozen in 1999 and subsequently fully distributed during the year ended December 31, 2022. Trust-held assets, consisting entirely of Company common stock, amounted to 1,006,186 at December 31, 2021, including shares purchased through dividend reinvestment. The cost of these shares was reflected as a reduction of paid-in capital in excess of par in the Consolidated Statements of Condition.

132

NOTE ~~14:~~19: FAIR VALUE MEASUREMENTS

GAAP sets forth a definition of fair value, establishes a consistent framework for measuring fair value, and requires disclosure for each major asset and liability category measured at fair value on either a recurring ornon-recurring basis. GAAP also clarifies that fair value is an “exit” price, representing the amount that would be received when selling an asset, or paid when transferring a liability, in an orderly transaction between market participants. Fair value is thus a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•

Level 3 – Inputs to the valuation methodology are significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants use in pricing an asset or liability.

A financial instrument’s categorization within this valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

133

The following tables present assets and liabilities that were measured at fair value on a recurring basis as of December 31, ~~2017~~2022 and ~~2016,~~2021, and that were included in the Company’s Consolidated Statements of Condition at those dates:

   Fair Value Measurements at December 31, 2017
(in thousands)    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)    Netting
Adjustments⁽¹⁾    Total
Fair Value
Assets:

Mortgage-Related Securities Available for Sale:

GSE certificates
   $ —      $ 2,068,842    $ —      $ —      $ 2,068,842
GES CMOs
      549,904          549,904










Total mortgage-related securities
   $ —      $ 2,618,746    $ —      $ —      $ 2,618,746










Other Securities Available for Sale:

U. S. Treasury Obligations
   $ 199,898    $ —      $ —      $ —      $ 199,898
GSE debentures
   —      473,258    —      —      473,258
Corporate bonds
   —      90,775    —      —      90,775


	Fair Value Measurements at December 31, 2022
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Netting Adjustments		Total Fair Value
Assets:
Mortgage-related Debt Securities Available for Sale:
GSE certificates	$	—	$	1,297	$	—	$	—	$	1,297
GSE CMOs		—		3,301		—		—		3,301
Private Label CMOs		—		191		—		—		191
Total mortgage-related debt securities	$	—	$	4,789	$	—	$	—	$	4,789
Other Debt Securities Available for Sale:
U. S. Treasury obligations	$	1,487	$	—	$	—	$	—	$	1,487
GSE debentures		—		1,398		—		—		1,398
Asset-backed securities		—		361		—		—		361
Municipal bonds		—		30		—		—		30
Corporate bonds		—		885		—		—		885
Foreign notes		—		20		—		—		20
Capital trust notes		—		90		—		—		90
Total other debt securities	$	1,487	$	2,784	$	—	$	—	$	4,271
Total debt securities available for sale	$	1,487	$	7,573	$	—	$	—	$	9,060
Equity securities:
Mutual funds and common stock		—		14		—		—		14
Total equity securities	$	—	$	14	$	—	$	—	$	14
Total securities	$	1,487	$	7,587	$	—	$	—	$	9,074
Loans held-for-sale
Residential first mortgage loans	$	—	$	1,115	$	—	$	—	$	1,115
Derivative assets
Interest rate swaps and swaptions		—		182		—		—		182
Futures		—		2		—		—		2
Rate lock commitments (fallout-adjusted)		—		—		9		—		9
Mortgage-backed securities forwards		—		36		—		—		36
Mortgage servicing rights		—		—		1,033		—		1,033
Total assets at fair value	$	1,487	$	8,922	$	1,042	$	—	$	11,451
Derivative liabilities
Mortgage-backed securities forwards		—		61		—		—		61
Interest rate swaps and swaptions		—		65		—		—		65
Rate lock commitments (fallout-adjusted)		—		—		10		—		10
Total liabilities at fair value	$	—	$	126	$	10	$	—	$	136

Municipal bonds
   —      70,120    —      —      70,120
Capital trust notes
   —      46,096    —      —      46,096
Preferred stock
   15,434    —      —      —      15,434
Mutual funds and common stock
   —      17,100    —      —      17,100










Total other securities
   $ 215,332    $ 697,349    $ —      $ —      $ 912,681










Total securities available for sale
   $ 215,332    $ 3,316,095    $ —      $ —      $ 3,531,427










Other Assets:

Loans held for sale
   $ —      $ 35,258    $ —      $ —      $ 35,258
Mortgage servicing rights
   —      —      2,729    —      2,729
134

~~The Company had no liabilities that were measured at fair value on a recurring basis at December 31, 2017.~~

   Fair Value Measurements at December 31, 2016
(in thousands)    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)    Netting
Adjustments⁽¹⁾ Total
Fair Value
Assets:

Mortgage-Related Securities Available for Sale:

GSE certificates
   $ —   $ 7,326 $ —      $ —   $ 7,326




Total mortgage-related securities
   $ —   $ 7,326 $ —      $ —   $ 7,326




Other Securities Available for Sale:

Municipal bonds
   $ —   $ 631 $ —      $ —   $ 631
Capital trust notes
   —   7,243 —      —   7,243
Preferred stock
   42,724 29,260 —      —   71,984
Mutual funds and common stock
   —   17,097 —      —   17,097




Total other securities
   $ 42,724 $ 54,231 $ —      $ —   $ 96,955




Total securities available for sale
   $ 42,724 $ 61,557 $ —      $ —   $ 104,281




Other Assets:

Loans held for sale
   $ —   $ 409,152 $ —      $ —   $ 409,152
Mortgage servicing rights
   —   —   228,099    —   228,099
Interest rate lock commitments
   —   —   982    —   982
Derivative assets-other⁽²⁾
   2,611 16,829 —      (17,861 ) 1,579
Liabilities:

Derivative liabilities
   $ (6,009 ) $ (17,719 ) $ —      $ 16,588 $ (7,140 )


	Fair Value Measurements at December 31, 2021
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Netting Adjustments		Total Fair Value
Assets:
Mortgage-Related Debt Securities Available for Sale:
GSE certificates	$	—	$	1,107	$	—	$	—	$	1,107
GSE CMOs		—		1,683		—		—		1,683
Total mortgage-related debt securities	$	—	$	2,790	$	—	$	—	$	2,790
Other Debt Securities Available for Sale:
U.S. Treasury obligations	$	45	$	—	$	—	$	—	$	45
GSE debentures		—		1,480		—		—		1,480
Asset-backed securities		—		479		—		—		479
Municipal bonds		—		25		—		—		25
Corporate bonds		—		838		—		—		838
Foreign notes		—		26		—		—		26
Capital trust notes		—		97		—		—		97
Total other debt securities	$	45	$	2,945	$	—	$	—	$	2,990
Total debt securities available for sale	$	45	$	5,735	$	—	$	—	$	5,780
Equity securities:						—		—
Mutual funds and common stock		—		16		—		—		16
Total equity securities	$	—	$	16	$	—	$	—	$	16
Total securities	$	45	$	5,751	$	—	$	—	$	5,796

~~(1)~~

~~Includes cash collateral received from, and paid to, counterparties.~~

~~(2)~~

~~Includes $1.9 million to purchase Treasury options.~~

The Company reviews and updates the fair value hierarchy classifications for its assets on a quarterly basis. Changes from one quarter to the next that are related to the observability of inputs for a fair value measurement may result in a reclassification from one hierarchy level to another.

A description of the methods and significant assumptions utilized in estimating the fair values of~~available-for-sale~~ securities follows:

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and exchange-traded ~~securities, and derivatives.~~securities.

If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, models incorporate transaction details such as maturity and cash flow assumptions. Securities valued in this manner would generally be classified within Level 2 of the valuation hierarchy, and primarily include such instruments as mortgage-related and corporate debt securities.

Periodically, the Company uses fair values supplied by independent pricing services to corroborate the fair values derived from the pricing models. In addition, the Company reviews the fair values supplied by independent pricing services, as well as their underlying pricing methodologies, for reasonableness. The Company challenges pricing service valuations that appear to be unusual or unexpected.

The Company carries loans held for sale at fair value. The fair value of loans held for sale is primarily based on quoted market prices for securities backed by similar types of loans. Changes in the fair value of these assets are largely driven by changes in interest rates subsequent to loan funding, and changes in the fair value of servicing associated with the mortgage loans held for sale. Loans held for sale are classified within Level 2 of the valuation hierarchy.135

MSRs do not trade in an active open market with readily observable prices. The Company bases the fair value of its MSRs on the present value of estimated future net servicing income cash flows, utilizing a third-party valuation specialist. The specialist estimates future net servicing income cash flows with assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The Company periodically adjusts the underlying inputs and assumptions to reflect market conditions and assumptions that a market participant would consider in valuing the MSR asset. MSR fair value measurements use significant unobservable inputs and, accordingly, are classified within Level 3.

Exchange-traded derivatives that are valued using quoted prices are classified within Level 1 of the valuation hierarchy. The majority of the Company’s derivative positions are valued using internally developed models that use readily observable market parameters as their basis. These are parameters that are actively quoted and can be validated by external sources, including industry pricing services. Where the types of derivative products have been in existence for some time, the Company uses models that are widely accepted in the financial services industry. These models reflect the contractual terms of the derivatives, including the period to maturity, and market-based parameters such as interest rates, volatility, and the credit quality of the counterparty. Furthermore, many of these models do not contain a high level of subjectivity, as the methodologies used in the models do not require significant judgment, and inputs to the models are readily observable from actively quoted markets, as is the case for “plain vanilla” interest rate swaps and option contracts. Such instruments are generally classified within Level 2 of the valuation hierarchy. Derivatives that are valued based on models with significant unobservable market parameters, and that are normally traded less actively, have trade activity that is~~one-way,~~ ~~and/or are traded in less-developed markets, are classified within Level 3 of the valuation hierarchy.~~

The fair values of interest rate lock commitments (“IRLCs”) for residential mortgage loans that the Company intends to sell are based on internally developed models. The key model inputs primarily include the sum of the value of the forward commitment based on the loans’ expected settlement dates and the projected values of the MSRs, loan level price adjustment factors, and historical IRLC closing ratios. The closing ratio is computed by the Company’s mortgage banking operation and is periodically reviewed by management for reasonableness. Such derivatives are classified as Level 3.

While the Company believes its valuation methods are appropriate, and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair values of certain financial instruments could result in different estimates of fair values at a reporting date.

~~Fair Value Option~~

~~Loans Held for Sale~~

~~The Company has elected the fair value option for its loans held for sale. These loans held for sale consist ofone-to-four~~ family mortgage loans, none of which was 90 days or more past due at December 31, 2017. Prior to the sale of the mortgage banking business, management believed that the mortgage banking business operated on a short-term cycle. Therefore, in order to reflect the most relevant valuations for the key components of this business, and to reduce timing differences in amounts recognized in earnings, the Company has elected to record loans held for sale at fair value to match the recognition of IRLCs, MSRs, and derivatives, all of which are recorded at fair value in earnings. Fair value was based on independent quoted market prices of mortgage-backed securities comprised of loans with similar features to those of the Company’s loans held for sale, where available, and adjusted as necessary for such items as servicing value, guaranty fee premiums, and credit spread adjustments.

~~The following table reflects the difference between the fair value carrying amount of loans held for sale, for which the Company has elected the fair value option, and the unpaid principal balance:~~

   December 31, 2017    December 31, 2016
(in thousands)    Fair Value
Carrying
Amount    Aggregate
Unpaid
Principal    Fair Value
Carrying Amount
Less Aggregate
Unpaid Principal    Fair Value
Carrying
Amount    Aggregate
Unpaid
Principal    Fair Value
Carrying Amount
Less Aggregate
Unpaid Principal
Loans held for sale
   $ 35,258    $ 34,563    $ 695    $ 409,152    $ 408,928    $ 224

~~Gains and Losses Included in Income for Assets Where the Fair Value Option Has Been Elected~~

The assets accounted for under the fair value option are initially measured at fair value. Gains and losses from the initial measurement and subsequent changes in fair value are recognized in earnings. The following table presents the changes in fair value related to initial measurement, and the subsequent changes in fair value included in earnings, for loans held for sale and MSRs for the periods indicated:

   (Loss) Gain Included in
Mortgage Banking Income
from Changes in Fair Value⁽¹⁾
   For the Twelve Months Ended December 31,
(in thousands)    2017    2016    2015
Loans held for sale
   $ 899    $ (5,616 )    $ (472 )
Mortgage servicing rights
   (20,076 )    (27,453 )    (5,610 )






Total (loss) gain
   $ (19,177 )    $ (33,069 )    $ (6,082 )

~~(1)~~

~~Does not include the effect of hedging activities, which is included in “Othernon-interest~~ ~~income.”~~

~~The Company has determined that there is no instrument-specific credit risk related to its loans held for sale, due to the short duration of such assets.~~

~~Changes in Level 3~~ Fair Value Measurements Using Significant Unobservable Inputs

The following tables ~~present, for the twelve months ended December 31, 2017 and 2016,~~include a ~~roll-forward~~roll forward of the ~~balance sheet~~Consolidated Statements of Condition amounts (including ~~changes~~the change in fair value) for financial instruments classified inby us within Level 3 of the valuation hierarchy:

(in thousands)    Fair Value
January 1,
2017

Total Realized/Unrealized
Gains/(Losses) Recorded in
   Issuances    Settlements Transfers
to/(from)
Level 3    Fair Value
at Dec. 31,
2017    Change in
Unrealized
Gains/(Losses)
Related to
Instruments Held at
December 31, 2017
      Income/
(Loss) Comprehensive
(Loss) Income
Mortgage servicing rights
   $ 228,099    $ (20,076 ) $ —      $ 18,054    $ (223,348 ) $ —      $ 2,729    $ (222 )
Interest rate lock commitments
   982    (982 ) —      —      —   —      —      —
(in thousands)    Fair Value
January 1,
2016

Total Realized/Unrealized
Gains/(Losses) Recorded in
   Issuances    Settlements Transfers
to/(from)
Level 3    Fair Value
at Dec. 31,
2016    Change in
Unrealized
Gains/(Losses)
Related to
Instruments Held at
December 31, 2016
      Income/
(Loss) Comprehensive
(Loss) Income
Mortgage servicing rights
   $ 243,389    $ (27,453 ) $ —      $ 45,588    $ (33,425 ) $ —      $ 228,099    $ (27,453 )
Interest rate lock commitments
   2,526    (1,544 ) —      —      —   —      982    982


	Balance at Beginning of Year		Total Gains / (Losses) Recorded in Earnings (1)			Purchases / Originations		Sales		Settlement		Transfers In (Out)			Balance at End of Year
(dollars in millions)
Year-Ended December 31, 2022
Assets
Mortgage servicing rights (1)	$	1,012	$	2		$	19		—	—		—			$	1,033
Rate lock commitments (net) (1)(2)		21		(12	)		5	—		—			(15	)		(1	)
Totals	$	1,033	$	(10	)	$	24	$	—	$	—	$	(15	)	$	1,032

~~The Company’s policy is~~

We utilized swaptions, futures, forward agency and loan sales and interest rate swaps to ~~recognize transfers in~~manage the risk associated with mortgage servicing rights and rate lock commitments. Gains and losses for individual lines do not reflect the effect of our risk management activities related to such Level 3 instruments.

Rate lock commitments are reported on a fallout-adjusted basis. Transfers out of ~~Levels 1, 2, and~~Level 3 asrepresent the settlement value of the ~~end of~~commitments that are transferred to LHFS, which are classified as Level 2 assets.

The following tables present the ~~reporting period. There were no transfers in or out of Levels 1, 2, or 3 during the twelve months ended December 31, 2017 or 2016.~~

~~For~~quantitative information about recurring Level 3 ~~assets and liabilities measured at~~ fair value ~~on a recurring basis~~financial instruments and the fair value measurements as of December 31, ~~2017, the significant unobservable~~2022:


	Fair Value			Valuation Technique	Unobservable Input	Range (Weighted Average)
	(dollars in millions)

Assets
					Option adjusted spread	5.3% - 21.6% (5.9%)
Mortgage servicing rights	$	1,033		Discounted cash flows	Constant prepayment rate	0% - 10.0% (7.9%)
					Weighted average cost to service per loan	$65 - $90 ($68)
Rate lock commitments (net)	$	(1	)	Consensus pricing	Origination pull-through rate	76.41%

(1)

Unobservable inputs ~~used in the~~were weighted by their relative fair value ~~measurements were as follows:~~

(dollars in thousands)    Fair Value at
Dec. 31, 2017    Valuation Technique
Significant Unobservable Inputs
   Significant
Unobservable
Input Value
Mortgage servicing rights
   $ 2,729    Discounted Cash Flow    Weighted Average Constant Prepayment Rate⁽¹⁾    9.81 %
         Weighted Average Discount Rate    12.00

~~(1)~~

~~Represents annualized loan repayment rate assumptions.~~

~~The significant unobservable inputs used in the fair value measurement~~ of the Company’s MSRs are the weighted average constant prepayment rate and the weighted average discount rate. Significant increases or decreases in either of those inputs in isolation could result in significantly lower or higher fair value measurements. Although the constant prepayment rate and the discount rate are not directly interrelated, they generally move in opposite directions.instruments.

136

Assets Measured at Fair Value on aNon-Recurring Basis

Certain assets are measured at fair value on anon-recurring basis. Such instruments are subject to fair value adjustments under certain circumstances (e.g., when there is evidence of impairment). The following tables present assets ~~and liabilities~~ that were measured at fair value on anon-recurring basis as of December 31, ~~2017~~2022 and ~~2016,~~2021, and that were included in the Company’s Consolidated Statements of Condition at those dates:


	Fair Value Measurements at December 31, 2017 Using								Fair Value Measurements at December 31, 2022 Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain impaired loans⁽¹⁾	$	—	$	—	$	45,837	$	45,837
(in millions)									Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain loans (1)									$	—	$	—	$	28	$	28
Other assets⁽²⁾		—		—		4,357		4,357		—		—		41		41

Total	$	—	$	—	$	50,194	$	50,194	$	—	$	—	$	69	$	69

~~(1)~~

~~Represents the fair value of impaired loans, based on the value of the collateral.~~

~~(2)~~

~~Represents the fair value of OREO, based on the appraised value of the collateral subsequent to its initial classification as OREO.~~

(1)

Represents the fair value of certain loans individually assessed for impairment, based on the value of the collateral.

(2)

Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity securities without readily determinable fair values. These equity securities are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.

   Fair Value Measurements at December 31, 2016 Using
(in thousands)    Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)    Significant Other
Observable Inputs
(Level 2)    Significant
Unobservable Inputs
(Level 3)    Total Fair
Value
Certain impaired loans⁽¹⁾
   $ —      $ —      $ 15,635    $ 15,635
Other assets⁽²⁾
   —      —      5,684    5,684








Total
   $ —      $ —      $ 21,319    $ 21,319

~~(1)~~

~~Represents the fair value of impaired loans, based on the value of the collateral.~~

~~(2)~~

~~Represents the fair value of OREO, based on the appraised value of the collateral subsequent to its initial classification as OREO.~~


	Fair Value Measurements at December 31, 2021 Using
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain impaired loans (1)	$	—	$	—	$	32	$	32
Other assets (2)		—		—		32		32
Total	$	—	$	—	$	64	$	64

(1)

Represents the fair value of impaired loans, based on the value of the collateral.

(2)

Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets.

The fair values of collateral-dependent impaired loans are determined using various valuation techniques, including consideration of appraised values and other pertinent real estate and other market data.

Other Fair Value Disclosures

~~GAAP requires~~For the disclosure of fair value information about the Company’son- andoff-balance sheet financial ~~instruments. When~~instruments, when available, quoted market prices are used as the measure of fair value. In cases where quoted market prices are not available, fair values are based on present-value estimates or other valuation techniques. Such fair values are significantly affected by the assumptions used, the timing of future cash flows, and the discount rate.

Because assumptions are inherently subjective in nature, estimated fair values cannot be substantiated by comparison to independent market quotes. Furthermore, in many cases, the estimated fair values provided would not necessarily be realized in an immediate sale or settlement of such instruments.

137

The following tables summarize the carrying values, estimated fair values, and fair value measurement levels of financial instruments that were not carried at fair value on the Company’s Consolidated Statements of Condition at December 31, ~~2017~~2022 and ~~2016:~~2021:


	December 31, 2017												December 31, 2022
					Fair Value Measurement Using												Fair Value Measurement Using
(in thousands)	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
(in millions)													Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents	$	2,528,169	$	2,528,169	$	2,528,169		$	—		$	—	$	2,032	$	2,032	$	2,032		$	—		$	—
FHLB stock⁽¹⁾		603,819		603,819		—			603,819			—
Loans, net		38,265,183		38,254,538		—			—			38,254,538
FHLB and FRB stock (1)														1,267		1,267		—			1,267			—
Loans and leases held for investment, net														68,608		65,673		—			—			65,673
Financial Liabilities:
Deposits	$	29,102,163	$	29,044,852	$	20,458,517	⁽²⁾	$	8,586,335	⁽³⁾	$	—	$	58,721	$	58,479	$	46,211	(2)	$	12,268	(3)	$	—
Borrowed funds		12,913,679		12,780,653		—			12,780,653			—		21,332		21,231		—			21,231			—

~~(1)~~

~~Carrying value and estimated fair value are at cost.~~

~~(2)~~

~~Interest-bearing checking and money market accounts, savings accounts, andnon-interest-bearing~~ ~~accounts.~~

~~(3)~~

~~Certificates of deposit.~~

(1)

Carrying value and estimated fair value are at cost.

(2)

Interest-bearing checking and money market accounts, savings accounts, and non-interest-bearing accounts.

(3)

Certificates of deposit.


	December 31, 2016												December 31, 2021
					Fair Value Measurement Using												Fair Value Measurement Using
(in thousands)	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
(in millions)													Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents	$	557,850	$	557,850	$	557,850		$	—		$	—	$	2,211	$	2,211	$	2,211		$	—		$	—
Securities held to maturity		3,712,776		3,813,959		200,220			3,613,739			—
FHLB stock⁽¹⁾		590,934		590,934		—			590,934			—		734		734		—			734			—
Loans, net		39,308,016		39,416,469		—			—			39,416,469
Loans and leases, net														45,539		44,748		—			—			44,748
Financial Liabilities:
Deposits	$	28,887,903	$	28,888,064	$	21,310,733	⁽²⁾	$	7,577,331	⁽³⁾	$	—	$	35,059	$	35,051	$	26,635	(2)	$	8,416	(3)	$	—
Borrowed funds		13,673,379		13,633,943		—			13,633,943			—		16,562		17,169		—			17,169			—

~~(1)~~

~~Carrying value and estimated fair value are at cost.~~

~~(2)~~

~~Interest-bearing checking and money market accounts, savings accounts, andnon-interest-bearing~~ ~~accounts.~~

~~(3)~~

~~Certificates of deposit.~~

(1)

Carrying value and estimated fair value are at cost.

(2)

Interest-bearing checking and money market accounts, savings accounts, and non-interest-bearing accounts.

(3)

Certificates of deposit.

The methods and significant assumptions used to estimate fair values for the Company’s financial instruments follow:

Cash and Cash Equivalents

Cash and cash equivalents include cash and due from banks and federal funds sold. The estimated fair values of cash and cash equivalents are assumed to equal their carrying values, as these financial instruments are either due on demand or have short-term maturities.

Securities

If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, pricing models also incorporate transaction details such as maturities and cash flow assumptions.

138

Federal Home Loan Bank Stock

Ownership in equity securities of the FHLB is generally restricted and there is no established liquid market for their resale. The carrying amount approximates the fair value.

Loans

The Company discloses the fair value of loans measured at amortized cost using an exit price notion. The Company determined the fair value on substantially all of its loans for disclosure purposes, on an individual loan portfolio is segregated into various components for valuation purposes in order to group loans based on their significant financial characteristics, such as loan type (mortgage or other) and payment status (performing or~~non-performing).~~ ~~The estimated fair values of mortgage and other loans are computed by discounting the anticipated cash flows from the respective portfolios.~~basis. The discount rates reflect current market rates for loans with similar terms to borrowers ofhaving similar credit ~~quality.~~quality on an exit price basis. The estimated fair values ofnon-performing mortgage and other loans are based on recent collateral appraisals.

~~The methods used to estimate the fair values of~~ For those loans are extremely sensitive to the assumptions and estimates used. While management has attempted to use assumptions and estimates that best reflect the Company’s loan portfolio and current market conditions,where a greater degree of subjectivity is inherent in these values than in those determined in active markets. Accordingly, readers are cautioned in using this information for purposes of evaluating the financial condition and/or value ofdiscounted cash flow technique was not considered reliable, the Company ~~in and of itself, or in comparison with that of any other company.~~used a quoted market price for each individual loan.

~~Mortgage Servicing Rights~~

MSRs ~~do not trade~~

The significant unobservable inputs used in ~~an active market with readily observable prices. Accordingly, the Company bases~~ the fair value measurement of ~~its~~the MSRs onare option adjusted spreads, prepayment rates and cost to service. Significant increases (decreases) in all three assumptions in isolation result in a ~~valuation performed by a third-party valuation specialist. This specialist determines~~significantly lower (higher) fair value ~~based on~~measurement. Weighted average life (in years) is used to determine the present value of estimated future net servicing income cash flows, and incorporates assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The specialist and the Company evaluate, and periodically adjust, as necessary, these underlying inputs and assumptions to reflect market conditions and changeschange in ~~the assumptions that a market participant would consider in valuing MSRs.~~

~~Derivative Financial Instruments~~

For exchange-traded futures and exchange-traded options, fair value is based on observable quoted market prices in an active market. For forward commitments to buy and sell loans and mortgage-backed securities, fair value is based on observable market prices for similar loans and securities in an active market. The fair value of ~~IRLCs~~MSRs. For December 31, 2022, the weighted average life (in years) for~~one-to-four~~ ~~family~~ the entire MSR portfolio was 7.3.

Rate lock commitments

The significant unobservable input used in the fair value measurement of the rate lock commitments is the pull through rate. The pull through rate is a statistical analysis of our actual rate lock fallout history to determine the sensitivity of the residential mortgage ~~loans that the Company intends~~loan pipeline compared to ~~sell is~~interest rate changes and other deterministic values. New market prices are applied based on ~~internally developed models. The key model inputs primarily include~~updated loan characteristics and new fallout ratios (i.e. the ~~sum~~inverse of the pull through rate) are applied accordingly. Significant increases (decreases) in the pull through rate in isolation result in a significantly higher (lower) fair value ~~of the forward commitment based on the loans’ expected settlement dates, the value of MSRs arrived at by an independent MSR broker, government agency price adjustment factors, and historical IRLCfall-out~~ ~~factors.~~measurement.

Deposits

The fair values of deposit liabilities with no stated maturity (i.e., interest-bearing checking and money market accounts, savings accounts, andnon-interest-bearing accounts) are equal to the carrying amounts payable on demand. The fair values of CDs represent contractual cash flows, discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities. These estimated fair values do not include the intangible value of core deposit relationships, which comprise a ~~significant~~ portion of the Company’s deposit base.

Borrowed Funds

The estimated fair value of borrowed funds is based either on bid quotations received from securities dealers or the discounted value of contractual cash flows with interest rates currently in effect for borrowed funds with similar maturities and structures.

Off-Balance Sheet Financial Instruments

The fair values of commitments to extend credit and unadvanced lines of credit are estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions, considering the remaining terms of the commitments and the creditworthiness of the potential borrowers. The estimated fair values of suchoff-balance sheet financial instruments were insignificant at December 31, ~~2017~~2022 and ~~2016.~~2021.

~~NOTE 15: DERIVATIVE FINANCIAL INSTRUMENTS~~

~~The Company had no derivative financial instruments as of December 31, 2017, due to the sale of the mortgage banking business.~~Fair Value Option

During 2016 and until December 2017, the Company’s derivative financial instruments consisted of financial forward and futures contracts, interest rate swaps, IRLCs, and options. These derivatives related to mortgage banking operations, residential MSRs, and other risk management activities, and sought to mitigate or reduce the Company’s exposure to losses from adverse changes in interest rates. These activities varied in scope based on the level and volatility of interest rates, other changing market conditions, and the types of assets held.

In accordance with the applicable accounting guidance, the Company took into account the impact of collateral and master netting agreements that allowed it to settle all derivative contracts held with a single counterparty on a net basis, and to offset the net derivative position with the related collateral when recognizing derivative assets and liabilities. As a result, the Company’s Statements of Financial Condition could reflect derivative contracts with negative fair values that were included in derivative assets, and contracts with positive fair values that were included in derivative liabilities.

~~Changes in~~We elected the fair value ~~of these derivatives were reflected~~option for certain items as discussed throughout the Notes to the Consolidated Financial Statements to more closely align the accounting method with the underlying economic exposure. Interest income on LHFS is accrued on the principal outstanding primarily using the "simple-interest" method.

139

The following table reflects the change in ~~current-period earnings. None~~fair value included in earnings of ~~these derivatives were designated as hedges for accounting purposes.~~

~~The Company used various~~ financial instruments including derivatives, in connection with its prior strategies to reduce pricing risk resulting from changes in interest rates. Derivative instruments included IRLCs entered into with borrowers or correspondents/brokers to acquire agency conforming fixed and adjustable rate residential mortgage loans that were held for ~~sale, as well as Treasury options and Eurodollar futures.~~

The Company entered into forward contracts to sell fixed rate mortgage-backed securities to protect against changes in the prices of agency conforming fixed rate loans held for sale. Forward contracts were entered into with securities dealers in an amount related to the portion of IRLCs that was expected to close. The value of these forward sales contracts moved inversely with the value of the loans in response to changes in interest rates.

~~To manage the price risk associated with fixed-ratenon-conforming~~ mortgage loans, the Company generally entered into forward contracts on mortgage-backed securities or forward commitments to sell loans to approved investors. Short positions in Eurodollar futures contracts were used to manage price risk on adjustable rate mortgage loans held for sale.

~~The Company used interest rate swaps to hedge~~which the fair value ~~of its residential MSRs. The Company also purchased put and call options to manage the risk associated with variations in the amount of IRLCs that ultimately closed.~~option has been elected:

In addition, the Company mitigated a portion of the risk associated with changes in the value of MSRs. The general strategy for mitigating this risk was to purchase derivative instruments, the value of which changed in the opposite direction of interest rates, thus partially offsetting changes in the value of our servicing assets, which tended to move in the same direction as interest rates. Accordingly, the Company purchased Eurodollar futures and call options on Treasury securities, and entered into forward contracts to purchase mortgage-backed securities.


	Year-ended December 31,
	2022
(dollars in millions)
Assets
Loans held-for-sale
Net gain on loan sales	$	8

The following table ~~sets forth~~reflects the ~~effect of derivative instruments on~~difference between the ~~Consolidated Statements of Operations~~aggregate fair value and ~~Comprehensive Income~~aggregate remaining contractual principal balance outstanding for ~~the periods indicated:~~

   (Loss) Gain Included in Mortgage Banking Income
   For the Twelve Months Ended December 31,
(in thousands)    2017    2016    2015
Treasury options
   $ (262 )    $ (2,795 )    $ (8,222 )
Treasury and Eurodollar futures
   55    165    501
Interest rate swaps
   3,068    (4,561 )    —
Forward commitments to buy/sell loans/mortgage-backed securities
   (8,815 )    (4,963 )    5,752






Total (loss) gain
   $ (5,954 )    $ (12,154 )    $ (1,969 )

The Company had in place an enforceable master netting arrangement with every counterparty. All master netting arrangements included rights to offset associated with the Company’s recognized derivative assets ~~derivative~~and liabilities ~~and cash collateral received and pledged. Accordingly, the Company, where appropriate, offset all derivative asset and liability positions with the cash collateral received and pledged.~~

~~The following table presents the effect of the master netting arrangements on the presentation of the derivative assets in the Consolidated Statements of Condition as of December 31, 2016:~~

   December 31, 2016
(in thousands)    Gross Amount
of Recognized
Assets⁽¹⁾    Gross Amount
Offset in the
Statement of
Condition    Net Amount of
Assets Presented
in the Statement
of Condition    Gross Amounts Not
Offset in the
Consolidated Statement
of Condition    Net
Amount
            Financial
Instruments    Cash
Collateral
Received
Derivatives
   $20,422    $17,861    $2,561    $ —      $ —      $ 2,561

~~(1)~~

~~Included $1.9 million to purchase Treasury options.~~

~~The following table presents the effect the master netting arrangements had on the presentation of the derivative liabilities in the Consolidated Statements of Condition as of December 31, 2016:~~

   December 31, 2016
(in thousands)    Gross Amount
of Recognized
Liabilities    Gross Amount
Offset in the
Statement of
Condition    Net Amount of
Liabilities
Presented in the
Statement of
Condition    Gross Amounts Not
Offset in the
Consolidated Statement
of Condition    Net
Amount
            Financial
Instruments    Cash
Collateral
Pledged
Derivatives
   $23,728    $16,588    $7,140    $ —      $ —      $ 7,140

~~NOTE 16: DIVIDEND RESTRICTIONS~~

~~The Parent Company is a separate legal entity from each of the Banks and must provide~~ for its own liquidity. In addition to operating expenses and any share repurchases, the Parent Company is responsible for paying any dividends declared to the Company’s shareholders. As a Delaware corporation, the Parent Company is able to pay dividends either from surplus or, in case there is no surplus, from net profits for the fiscal year in which the ~~dividend is declared and/or the preceding fiscal year.~~fair value option has been elected:


	December 31, 2022
(dollars in millions)	Unpaid Principal Balance		Fair Value		Fair Value Over / (Under) UPB
Assets:
Other performing loans
Loans held-for-sale	$	1,095	$	1,115	$	20
Total other performing loans		1,095		1,115		20
Total loans
Loans held-for-sale	$	1,095	$	1,115	$	20
Total loans	$	1,095	$	1,115	$	20

~~The Company is required to receive anon-objection~~ ~~from the FRB to pay cash dividends on its outstanding common and preferred stock. The Company receivednon-objections~~ from the FRB for each of the four quarterly cash dividends and the three preferred stock dividends it paid during the year. The FRB has advised the Company to continue the exchange of written documentation to obtain their~~non-objection~~ ~~to the declaration of dividends.~~140

~~Various legal restrictions limit the extent to which the Company’s subsidiary banks can supply funds to the Parent Company and itsnon-bank~~ subsidiaries. The Company’s subsidiary banks would require the approval of the Superintendent of the NYSDFS if the dividends they declared in any calendar year were to exceed the total of their respective net profits for that year combined with their respective retained net profits for the preceding two calendar years, less any required transfer to~~paid-in~~ capital. The term “net profits” is defined as the remainder of all earnings from current operations plus actual recoveries on loans, investments, and other assets, after deducting from the total thereof all current operating expenses, actual losses if any, and all federal, state, and local taxes. In 2017, dividends of $336.0 million were paid by the Banks to the Parent Company; at December 31, 2017, the Banks could have paid additional dividends of $379.5 million to the Parent Company without regulatory approval.

NOTE ~~17:~~20: PARENT COMPANY-ONLY FINANCIAL INFORMATION

The following tables present the condensed financial statements for New York Community Bancorp, Inc. ~~(parent company~~(Parent Company only):

Condensed Statements of Condition


	December 31,					December 31,
(in thousands)	2017		2016
(in millions)						2022		2021
ASSETS:
Cash and cash equivalents	$	90,536	$	63,727	$		121		139
Securities available for sale		—		2,002
Investments in subsidiaries		7,050,139		6,426,276			9,633		7,525
Receivables from subsidiaries		4,750		7,839
Other assets		23,980		34,102			85		48

Total assets	$	7,169,405	$	6,533,946	$		9,839		7,712

LIABILITIES AND STOCKHOLDERS’ EQUITY:
Junior subordinated debentures	$	359,179	$	358,879	$		575		361
Subordinated notes							432		296
Other liabilities		14,850		51,076			8		11

Total liabilities		374,029		409,955			1,015		668

Stockholders’ equity		6,795,376		6,123,991			8,824		7,044

Total liabilities and stockholders’ equity	$	7,169,405	$	6,533,946	$		9,839		7,712

Condensed Statements of Income ~~(Loss)~~

   Years Ended December 31,
(in thousands)    2017    2016    2015
Interest income
   $ 943    $ 527    $ 1,027
Dividends received from subsidiaries
   336,000    330,000    345,000
Other income
   1,700    679    527






Gross income
   338,643    331,206    346,554
Operating expenses
   54,333    49,157    48,255






Income before income tax benefit and equity in underdistributed (overdistributed) earnings of subsidiaries
   284,310    282,049    298,299
Income tax benefit
   19,575    19,592    20,720






Income before equity in underdistributed (overdistributed) earnings of subsidiaries
   303,885    301,641    319,019
Equity in underdistributed (overdistributed) earnings of subsidiaries
   162,316    193,760    (366,175 )






Net income (loss)
   $ 466,201    $ 495,401    $ (47,156 )


		Years Ended December 31,
(in millions)		2022		2021		2020
Dividends received from subsidiaries	$		335	$	4	$	380
Other income			160		1		1
Gross income			495		381		381
Operating expenses			55		50		52
Income before income tax benefit and equity in undistributed earnings of subsidiaries			440		331		329
Income tax benefit			14		14		14
Income before equity in undistributed earnings of subsidiaries			454		345		343
Equity in undistributed earnings of subsidiaries			196		251		168
Net income	$		650	$	596	$	511

141

Condensed Statements of Cash Flows


	Years Ended December 31,										Years Ended December 31,
(in thousands)	2017			2016			2015
(in millions)											2022				2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	466,201		$	495,401		$	(47,156	)
Net income										$		650			$	596			$	511
Change in other assets		10,122			316			(2,253	)			(3	)			(22	)			—
Change in other liabilities		(36,226	)		(2,252	)		22,236				(4	)			1				—
Other, net		36,330			33,333			32,955				(130	)			32				30
Equity in (underdistributed) overdistributed earnings of subsidiaries		(162,316	)		(193,760	)		366,175

Equity in undistributed earnings of subsidiaries												(196	)			(251	)			(168	)
Net cash provided by operating activities	$	314,110		$	333,038		$	371,957				317				356				373

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales and repayments of securities	$	2,000		$	—		$	—
Cash acquired in business acquisition												34				—				—
Change in receivable from subsidiaries, net		3,089			(204	)		224				5				(3	)			2
Investment in subsidiaries		(420,000	)		—			(560,000	)

Net cash used in investing activities		(414,911	)	$	(204	)	$	(559,776	)

Net cash provided by (used in) investing activities												39				(3	)			2
CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury stock purchases	$	(18,463	)	$	(8,677	)	$	(7,020	)
Treasury stock repurchased												(24	)			(16	)			(59	)
Cash dividends paid on common and preferred stock		(356,768	)		(330,810	)		(453,981	)			(350	)			(349	)			(348	)
Proceeds from issuance of preferred stock		502,840			—			—
Proceeds fromfollow-on common stock offering, net		—			—			629,682

Net cash provided by (used in) financing activities	$	127,609		$	(339,487	)	$	168,681

Net increase (decrease) in cash and cash equivalents		26,809			(6,653	)		(19,138	)
Net cash used in financing activities												(374	)			(365	)			(407	)
Net decrease in cash and cash equivalents												(18	)			(12	)			(32	)
Cash and cash equivalents at beginning of year		63,727			70,380			89,518				139				151				183

Cash and cash equivalents at end of year	$	90,536		$	63,727		$	70,380		$		121		$		139		$		151

142

NOTE ~~18:~~21: CAPITAL

The Company is subject to examination, regulation, and periodic reporting under the Bank Holding Company Act of 1956, as amended, which is administered by the FRB. The FRB has adopted capital adequacy guidelines for bank holding companies (on a consolidated basis) that are substantially similar to those of the FDIC for the ~~Banks.~~Bank.

The following tables present the regulatory capital ratios for the Company at December 31, ~~2017~~2022 and ~~2016,~~2021, in comparison with the minimum amounts and ratios required by the FRB for capital adequacy purposes:

   Risk-Based Capital
At December 31, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,869,129    11.36 % $ 4,371,969    12.84 % $ 4,877,208    14.32 % $ 4,371,969    9.58 %
Minimum for capital adequacy purposes
   1,532,448    4.50 2,043,265    6.00 2,724,353    8.00 1,826,141    4.00










Excess
   $ 2,336,681    6.86 % $ 2,328,704    6.84 % $ 2,152,855    6.32 % $ 2,545,828    5.58 %


	Risk-Based Capital
At December 31, 2022	Common Equity Tier 1					Tier 1					Total					Leverage Capital
(dollars in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital	$	6,335		9.06	%	$	6,838		9.78	%	$	8,154		11.66	%	$	6,838		9.70	%
Minimum for capital adequacy purposes		3,146		4.50			4,195		6.00			5,593		8.00			2,819		4.00
Excess	$	3,189		4.56	%	$	2,643		3.78	%	$	2,561		3.66	%	$	4,019		5.70	%

   Risk-Based Capital
At December 31, 2016    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,748,231    10.62 % $ 3,748,231    10.62 % $ 4,277,759    12.12 % $ 3,748,231    8.00 %
Minimum for capital adequacy purposes
   1,588,699    4.50 2,118,266    6.00 2,824,355    8.00 1,875,062    4.00










Excess
   $ 2,159,532    6.12 % $ 1,629,965    4.62 % $ 1,453,404    4.12 % $ 1,873,169    4.00 %


	Risk-Based Capital
At December 31, 2021	Common Equity Tier 1					Tier 1					Total					Leverage Capital
(dollars in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital	$	4,226		9.68	%	$	4,729		10.83	%	$	5,558		12.73	%	$	4,729		8.46	%
Minimum for capital adequacy purposes		1,966		4.50			2,621		6.00			3,494		8.00			2,237		4.00
Excess	$	2,260		5.18	%	$	2,108		4.83	%	$	2,064		4.73	%	$	2,492		4.46	%

~~In accordance with Basel III, the inclusion of trust preferred securities as tier 1 capital was phased out completely in 2016.~~

~~In addition, Basel III calls for thephase-in~~ ~~of a capital conservation buffer over a five-year period beginning with 0.625% in 2016 and reaching 2.50% in 2019, when fully phased in.~~ At December 31, ~~2017,~~2022, our total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by ~~632~~366 basis points and the fullyphased-in capital conservation buffer by ~~382~~116 basis points.

The ~~Banks are~~Bank is subject to ~~regulation, examination,~~the provisions of the National Bank Act and ~~supervision by~~other statutes governing national banks, as well as the ~~NYSDFS~~rules and regulations of the OCC, CFPB, and FDIC (the “Regulators”). The ~~Banks are~~Bank is also governed by numerous federal ~~and state~~ laws and regulations, including the FDIC Improvement Act of 1991, which established five categories of capital adequacy ranging from “well capitalized” to “critically undercapitalized.” Such classifications are used by the FDIC to determine various matters, including ~~prompt corrective action and~~ each institution’s FDIC deposit insurance premium assessments. Capital amounts and classifications are also subject to the Regulators’ qualitative judgments about the components of capital and risk weightings, among other factors.

The quantitative measures established to ensure capital adequacy require that banks maintain minimum amounts and ratios of leverage capital to average assets and of common equity tier 1 capital, tier 1 capital, and total capital to risk-weighted assets (as such measures are defined in the regulations). At December 31, ~~2017,~~2022, the ~~Banks~~Bank exceeded all the capital adequacy requirements to which they were subject.

As of December 31, ~~2017,~~2022, the Company ~~the Community Bank,~~ and the ~~Commercial~~ Bank are categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, a bank must maintain a minimum common equity tier 1 risk-based capital ratio of ~~6.50%;~~6.50 percent; a minimum tier 1 risk-based capital ratio of ~~8.00%;~~8.00 percent; a minimum total risk-based capital ratio of ~~10.00%;~~10.00 percent; and a minimum leverage capital ratio of ~~5.00%.~~5.00 percent. In the opinion of management, no conditions or events have transpired since December 31, ~~2017~~2022 to change these capital adequacy classifications.

143

The following tables present the actual capital amounts and ratios for the ~~Community~~ Bank at December 31, ~~2017~~2022 and ~~2016~~2021 in comparison to the minimum amounts and ratios required for capital adequacy purposes.

   Risk-Based Capital
At December 31, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 4,253,233    13.43 % $ 4,253,233    13.43 % $ 4,387,620    13.86 % $ 4,253,233    10.06 %
Minimum for capital adequacy purposes
   1,424,795    4.50 1,899,727    6.00 2,532,969    8.00 1,691,041    4.00










Excess
   $ 2,828,438    8.93 % $ 2,353,506    7.43 % $ 1,854,651    5.86 % $ 2,562,192    6.06 %


	Risk-Based Capital
At December 31, 2022	Common Equity Tier 1					Tier 1					Total					Leverage Capital
(dollars in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital	$	7,653		10.96	%	$	7,653		10.96	%	$	7,982		11.43	%	$	7,653		10.87	%
Minimum for capital adequacy purposes		3,142		4.50			4,189		6.00			5,585		8.00			2,817		4.00
Excess	$	4,511		6.46	%	$	3,464		4.96	%	$	2,397		3.43	%	$	4,836		6.87	%

   Risk-Based Capital
At December 31, 2016    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,686,510    11.23 % $ 3,686,510    11.23 % $ 3,843,382    11.71 % $ 3,686,510    8.45 %
Minimum for capital adequacy purposes
   1,477,056    4.50 1,969,408    6.00 2,625,877    8.00 1,744,601    4.00










Excess
   $ 2,209,454    6.73 % $ 1,717,102    5.23 % $ 1,217,505    3.71 % $ 1,941,909    4.45 %


	Risk-Based Capital
At December 31, 2021	Common Equity Tier 1					Tier 1					Total					Leverage Capital
(dollars in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital	$	5,217		11.95	%	$	5,217		11.95	%	$	5,402		12.38	%	$	5,217		9.33	%
Minimum for capital adequacy purposes		1,964		4.50			2,619		6.00			3,491		8.00			2,236		4.00
Excess	$	3,253		7.45	%	$	2,598		5.95	%	$	1,911		4.38	%	$	2,981		5.33	%

The following tables present the actual capital amounts and ratios for the Commercial Bank at December 31, 2017 and 2016 in comparison to the minimum amounts and ratios required for capital adequacy purposes:

   Risk-Based Capital
At December 31, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 380,194    15.95 % $ 380,194    15.95 % $ 404,643    16.97 % $ 380,194    11.37 %
Minimum for capital adequacy purposes
   107,285    4.50 143,047    6.00 190,729    8.00 133,801    4.00










Excess
   $ 272,909    11.45 % $ 237,147    9.95 % $ 213,914    8.97 % $ 246,393    7.37 %










Preferred Stock

   Risk-Based Capital
At December 31, 2016    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 370,707    14.14 % $ 370,707    14.14 % $ 397,259    15.15 % $ 370,707    10.53 %
Minimum for capital adequacy purposes
   117,973    4.50 157,297    6.00 209,729    8.00 140,813    4.00










Excess
   $ 252,734    9.64 % $ 213,410    8.14 % $ 187,530    7.15 % $ 229,894    6.53 %

On March 17, 2017, the Company issued 20,600,000 depositary shares, each representing a 1/40th interest in a share of the Company’sFixed-to-Floating Rate Series A Noncumulative Perpetual Preferred Stock, par value ~~$0.01~~$0.01 per share, with a liquidation preference of ~~$1,000~~$1.000 per share (equivalent to ~~$25~~$25 per depositary share). Dividends will accrue on the depositary shares at a fixed rate equal to ~~6.375%~~6.375 percent per annum until March 17, 2027, and a floating rate equal to Three-month LIBOR plus 382.1 basis points per annum beginning on March 17, 2027. Dividends will be payable in arrears on March 17, June 17, September 17, and December 17 of each year, which commenced on June 17, ~~2017.~~2017.

~~NOTE 19: SEGMENT REPORTING~~Treasury Stock Repurchases

~~Reflecting~~On October 23, 2018, the ~~sale~~Board of Directors approved the repurchase of up to $300 million of the Company’s mortgage banking business, the Residential Mortgage Banking segment will no longer be reportable. The information presented below represents activity in the Residential Mortgage Banking segment through September 30, 2017.

The Company’s operations were divided into two reportable business segments: Banking Operations and Residential Mortgage Banking. These operating segments have been identified based on the Company’s organizational structure. The segments required unique technology and marketing strategies, and offer different products and services. Whileoutstanding common stock. As of December 31, 2022, the Company ~~is managed as~~has repurchased a total of 30 million shares at an ~~integrated organization, individual executive managers were held accountable for~~average price of $8.88 or an aggregate purchase of $286 million. During the ~~operations of these business segments.~~

The Company measures and presents information for internal reporting purposes in a variety of ways. The internal reporting system presently used by management in the planning and measurement of operating activities, and to which most managers are held accountable, is based on organizational structure.

The management accounting process used various estimates and allocated methodologies to measure the performance of the operating segments. To determine financial performance for each segment, the Company allocated capital, funding charges and credits, certain~~non-interest~~ expenses, and income tax provisions to each segment, as applicable. Allocation methodologies were subject to periodic adjustment as the internal management accounting system was revised and/or as business or product lines within the segments change. In addition, because the development and application of these methodologies was a dynamic process, the financial results presented may be periodically revised.

The Company allocated expenses to the reportable segments based on various factors, including the volume and number of loans produced and the number of full-time equivalent employees. Income taxes were allocated to the various segments based on taxable income and statutory rates applicable to the segment.

~~Banking Operations Segment~~

~~The Banking Operations segment serves consumers and businesses by offering and servicing a variety of loan and deposit products and other financial services.~~

~~Residential Mortgage Banking Segment~~

~~The Residential Mortgage Banking segment originated, aggregated, sold, and servicedone-to-four~~ family mortgage loans. Mortgage loan products consisted primarily of agency-conforming, fixed and adjustable rate loans and, to a lesser extent, jumbo loans, for the purpose of purchasing or refinancing~~one-to-four~~ ~~family homes. The Residential Mortgage Banking segment earned interest on loans held in the warehouse andnon-interest~~ ~~income from the origination and servicing of loans. It also recognized gains or losses on the sale of such loans.~~

~~The following tables provide a summary of the Company’s segment results for the years~~year ended December 31, ~~2017, 2016, and 2015 on an internally managed accounting basis:~~2022, the Company repurchased 0.9 million shares, at a cost of $8 million. The Company had no repurchases during 2021.

   For the Twelve Months Ended December 31, 2017
(in thousands)    Banking
Operations    Residential
Mortgage Banking    Total Company
Net interest income
   $ 1,121,460    $ 8,543    $ 1,130,003
Provision for loan losses
   37,242    —      37,242
Non-Interest Income:

Third party⁽¹⁾
   188,564    20,957    209,521
Gain on sale of mortgage banking operation
   —      7,359    7,359
Inter-segment
   (10,222 )    10,222    —






Totalnon-interest income
   178,342    38,538    216,880






Non-interest expense⁽²⁾
   594,394    47,032    641,426






Income before income tax expense
   668,166    49    668,215
Income tax expense
   201,994    20    202,014






Net income
   $ 466,172    $ 29    $ 466,201






Identifiable segment assets(period-end)
   $ 49,124,195    $ —      $ 49,124,195






144

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

   For the Twelve Months Ended December 31, 2016
(in thousands)    Banking
Operations    Residential
Mortgage Banking    Total Company
Net interest income
   $ 1,272,423    $ 14,959    $ 1,287,382
Provision for loan losses
   4,180    —      4,180
Non-Interest Income:

Third party⁽¹⁾
   116,200    29,372    145,572
Inter-segment
   (17,645 )    17,645    —






Totalnon-interest income
   98,555    47,017    145,572






Non-interest expense⁽²⁾
   584,894    66,752    651,646






Income (loss) before income tax expense (benefit)
   781,904    (4,776 )    777,128
Income tax expense (benefit)
   283,656    (1,929 )    281,727






Net income (loss)
   $ 498,248    $ (2,847 )    $ 495,401






Identifiable segment assets(period-end)
   $ 48,195,581    $ 730,974    $ 48,926,555

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

   For the Twelve Months Ended December 31, 2015
(in thousands)    Banking
Operations    Residential
Mortgage Banking    Total Company
Net interest income
   $ 393,074    $ 15,001    $ 408,075
Recoveries of loan losses
   (15,004 )    —      (15,004 )
Non-Interest Income:

Third party⁽¹⁾
   154,847    55,916    210,763
Inter-segment
   (15,359 )    15,359    —






Totalnon-interest income
   139,488    71,275    210,763






Non-interest expense⁽²⁾
   700,469    65,386    765,855






(Loss) income before income tax expense
   (152,903 )    20,890    (132,013 )
Income tax (benefit) expense
   (93,297 )    8,440    (84,857 )






Net (loss) income
   $ (59,606 )    $ 12,450    $ (47,156 )






Identifiable segment assets(period-end)
   $ 49,619,931    $ 697,865    $ 50,317,796

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

New York Community Bancorp, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of condition of New York Community Bancorp, Inc. and subsidiaries (the Company) as of December 31, ~~2017~~2022 and ~~2016,~~2021, the related consolidated statements of ~~operations~~income and comprehensive income, ~~(loss),~~ changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2017,~~2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2022 and ~~2016,~~2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, ~~2017,~~2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, ~~2017,~~2022, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 1, ~~2018~~2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for credit losses on loans and leases evaluated on a collective basis

As discussed in Notes 6 and 7 to the consolidated financial statements, the Company’s total allowance for credit losses (ACL) on loans and leases as of December 31, 2022 was $393 million, a substantial portion of which related to the legacy New York Community Bancorp, Inc. multi-family and commercial real estate portfolio segments (legacy NYCB portfolios), and the acquired Flagstar Bancorp, Inc. one-to-four family first mortgage, commercial real estate, commercial and industrial, and acquisition, development and construction portfolio segments (acquired Flagstar portfolios). The allowance for credit losses on loans and leases for the legacy NYCB portfolios and acquired Flagstar portfolios is measured on a collective basis when similar risk characteristics exist (collective ACL). Management estimates the collective ACL by projecting and multiplying together the probability-of-default (PD), loss-given-default (LGD) and exposure-at-default depending on economic parameters for each month of the remaining contractual term. The Company estimates the exposure-at-default using prepayment methods and models which project prepayments over the life of the loans. Economic parameters are developed using available information relating to past events, current conditions, economic forecasts, and macroeconomic assumptions. Economic parameters are forecast over a reasonable and supportable period. After the reasonable and supportable period, the Company reverts to a historical average loss rate on a straight line basis. Historical credit experience over the observation period provides the basis for the estimation of expected credit losses,

145

with qualitative adjustments made for differences in current loan-specific risk characteristics as well as for changes in environmental conditions.

We identified the assessment of the collective ACL for the legacy NYCB portfolios and the acquired Flagstar portfolios as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the collective ACL methodology, including the methods and models used to estimate the PD, LGD, and prepayments and their significant assumptions. Such significant assumptions included portfolio segmentation, the selection of the economic forecasts and macroeconomic assumptions, including related weightings, the reasonable and supportable forecast period, the reversion period and the historical observation periods. The assessment also included the evaluation of the qualitative adjustments and their significant assumptions for differences in loan-specific risk characteristics and changes in environmental factors. The assessment also included an evaluation of the conceptual soundness and performance of the PD, LGD, and prepayments models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

•

development of the collective ACL methodology

•

continued use and appropriateness of changes made to PD, LGD, and prepayment models

•

identification and determination of the significant assumptions used in the PD, LGD, and prepayment models

•

development of the qualitative adjustments, including the significant assumptions used in the measurement of the qualitative factors

•

performance monitoring of the PD, LGD, and prepayment models and

•

analysis of the collective ACL results, trends, and ratios.

We evaluated the Company’s process to develop the collective ACL estimate for both the legacy NYCB portfolios and the acquired Flagstar portfolios by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:

•

evaluating the Company’s collective ACL methodology for compliance with U.S. generally accepted accounting principles

•

evaluating judgments made by the Company relative to the assessment and performance testing of the PD, LGD, and prepayment models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices

•

assessing the conceptual soundness and performance of the PD, LGD, and prepayment models by inspecting the model documentation to determine whether the models are suitable for their intended use

•

evaluating the selection of the economic forecasts, including the weighting of the scenarios, and underlying macroeconomic assumptions by comparing it to the Company’s business environment and relevant industry practices

•

evaluating the length of the reasonable and supportable period, the reversion period and the historical observation periods by comparing them to specific portfolio risk characteristics and trends

•

determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices and

•

evaluating the methodology used to develop the qualitative factors and their significant assumptions and the effect of those factors on the allowance for credit losses on loans and leases compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative models.

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate for both the legacy NYCB portfolios and the acquired Flagstar portfolios by evaluating the:

•

determination of cumulative results of the audit procedures

146

•

qualitative aspects of the Company’s accounting practices

•

potential bias in the accounting estimate.

Fair value measurements of acquired loans and mortgage servicing rights in the acquisition of Flagstar Bancorp, Inc.

As discussed in Notes 3 and 9 to the consolidated financial statements, the Company acquired Flagstar Bancorp, Inc. on December 1, 2022. The Company accounted for this transaction as a business combination with the assets acquired and liabilities assumed being measured based on their estimated fair values. As part of the acquisition, the Company acquired loans and mortgage servicing rights (MSRs) with a fair value of $18.0 billion and $1.0 billion, respectively. As of December 31, 2022, the fair value of the MSRs was $1.0 billion with any changes in fair value recognized in earnings. The fair value of acquired loans was based on a discounted cash flow methodology which incorporated discount rates, prepayment rates, probability of default and loss given default rates, and other market assumptions. The fair value of MSRs was measured using a discounted cash flow methodology which utilized option-adjusted spreads, constant prepayment speeds, costs to service, and other market assumptions.

We identified the assessment of the fair value measurements of acquired loans and MSRs at the acquisition date and the MSRs as of December 31, 2022 as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the fair value measurements due to significant measurement uncertainty. Specifically, the assessment of the fair value measurements involved an evaluation of the valuation methodologies and certain subjective assumptions, including discount rates, prepayment rates, probability of default and loss given default rates for acquired loans and option-adjusted spreads, constant prepayment rates, and cost to service for MSRs.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s fair value measurements of acquired loans and MSRs at the date of acquisition. This included controls related to the (1) determination of certain subjective assumptions used in the discounted cash flow methodology for acquired loans and MSRs, (2) assessment of the overall fair value measurement for acquired loans, and (3) assessment of the overall fair value measurement, including comparisons of the fair value to independent appraisals, for MSRs. We evaluated the Company’s process to determine the estimated fair value of acquired loans and MSRs at the acquisition date, and the fair value of MSRs as of December 31, 2022, by testing certain sources of data and subjective assumptions that the Company used and considered the relevance and reliability of such data and subjective assumptions. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

•

evaluating the Company’s valuation methodologies for compliance with U.S. generally accepted accounting principles

•

assessing the Company’s estimate of fair value of acquired loans by developing independent ranges of fair values, using market participant derived discount rates, prepayment rates, and probability of default and loss given default rates, and comparing them to the Company’s estimate of fair value and

•

assessing option-adjusted spreads, constant prepayment rates, and cost to service assumptions related to the MSRs fair value estimate by comparing to external market and industry data as well as available data from independent appraisals.

We have served as the Company’s auditor since 1993.

New York, New York

March 1, 2023

~~March 1, 2018~~147

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

New York Community Bancorp, Inc.:

Opinion on Internal Control ~~over~~Over Financial Reporting

We have audited New York Community Bancorp, Inc. and ~~subsidiaries’~~subsidiaries' (the Company) internal control over financial reporting as of December 31, ~~2017,~~2022, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2022, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of condition of the Company as of December 31, ~~2017~~2022 and ~~2016,~~2021, the related consolidated statements of ~~operations~~income and comprehensive income, ~~(loss),~~ changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2017,~~2022, and the related notes (collectively, the consolidated financial statements), and our report dated March 1, ~~2018,~~2023 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Flagstar Bancorp, Inc. during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, Flagstar Bancorp, Inc.’s internal control over financial reporting associated with total acquired assets of approximately $25.8 billion and total revenues associated with the acquired assets and liabilities assumed of approximately $132 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Flagstar Bancorp, Inc.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ~~Management’s~~Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control ~~over~~Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

New York, New York

March 1, 2023

~~New York, New York~~148

~~March 1, 2018~~

~~ITEM 9.~~

~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~

~~None.~~

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

~~ITEM 9A.~~

~~CONTROLS AND PROCEDURES~~

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision, and with the participation, of our Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule13a-15(b), as adopted by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Our system of internal control is designed under the supervision of management, including our Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles (“GAAP”).

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are made only in accordance with the authorization of management and the Boards of Directors of the Company and the ~~Banks;~~Bank; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions or that the degree of compliance with policies and procedures may deteriorate.

The Company acquired certain assets and assumed certain liabilities of Flagstar Bancorp on December 1, 2022. The scope of management’s assessment of the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2022, excludes the internal control over financial reporting associated with total acquired assets of approximately $25.8 billion and total revenues associated with the acquired assets and liabilities assumed of approximately $132 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022.

As of December 31, ~~2017,~~2022, management assessed the effectiveness of the Company’s internal control over financial reporting based upon the framework established inInternal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon its assessment, management concluded that the Company’s internal control over financial reporting as of December 31, ~~2017~~2022 was effective using this criteria.

The effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2017~~2022 has been audited by KPMG LLP, an independent registered public accounting firm that audited the Company’s consolidated financial statements as of and for the year ended December 31, ~~2017,~~2022, as stated in their report, included in Item 8 on the preceding page, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2017.~~2022.

149

(c) Changes in Internal Control over Financial Reporting

~~There~~The Company is working to integrate Flagstar into its overall internal control over financial reporting processes. Except for changes made in connection with this integration of Flagstar, there have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules13a-15(f) and15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~ITEM 9B.~~ ~~OTHER INFORMATION~~

~~None.~~ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable

150

PART III

~~ITEM 10.~~

~~DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE~~

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Information regarding our directors, executive officers, and corporate governance appears in our Proxy Statement for the Annual Meeting of Shareholders to be held on June ~~5, 2018~~1, 2023 (hereafter referred to as our ~~“2018~~“2023 Proxy Statement”) under the captions “Information with Respect to Nominees, Continuing Directors, and Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Meetings and Committees of the Board of Directors,” and “Corporate Governance,” and is incorporated herein by this reference.

A copy of our Code of Business Conduct and Ethics, which applies to our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Chief Accounting Officer as officers of the Company, and all other senior financial officers of the Company designated by the Chief Executive Officer from time to time, is available on the Investor Relations portion of our ~~websites,~~website: www.myNYCB.com ~~www.NewYorkCommercialBank.com, and www.NYCBfamily.com,~~ and will be provided, without charge, upon written request to the Chief Corporate Governance Officer and Corporate Secretary at ~~615 Merrick~~102 Duffy Avenue, ~~Westbury,~~Hicksville, NY ~~11590.~~11801.

~~ITEM 11.~~

~~EXECUTIVE COMPENSATION~~

ITEM 11. EXECUTIVE COMPENSATION

Information regarding executive compensation appears in our ~~2018~~2023 Proxy Statement under the captions “Compensation Committee Report,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Executive Compensation and Related Information,” and “Director Compensation,” and is incorporated herein by this reference.

~~ITEM 12.~~

~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS~~

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS

The following table provides information regarding the Company’s equity compensation plans at December 31, ~~2017:~~2022:


~~Plan category~~			Number of securities to be issued upon exercise of outstanding options, warrants, and rights ~~(a)~~		Weighted-average exercise price of outstanding options, warrants, and rights ~~(b)~~			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) ~~(c)~~
Plan category	(a)			(b)			(c)
Equity compensation plans approved by security holders		—		—	—	~~7,135,071~~		9,799,865
Equity compensation plans not approved by security holders		—		—		—
			—
~~Total~~		—		—		~~7,135,071~~
				—
Total		—			—			9,799,865

Information relating to the security ownership of certain beneficial owners and management appears in our ~~2018~~2023 Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners” and “Information with Respect to Nominees, Continuing Directors, and Executive Officers.”

151

~~ITEM 13.~~

~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE~~

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding certain relationships and related transactions, and director independence, appears in our ~~2018~~2023 Proxy Statement under the captions “Transactions with Certain Related Persons” and “Corporate Governance,” respectively, and is incorporated herein by this reference.

~~ITEM 14.~~

~~PRINCIPAL ACCOUNTANT FEES AND SERVICES~~

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Our independent registered public accounting firm is KPMG LLP, New York, New York, Auditor Firm ID: 185.

Information regarding principal ~~accountant~~accounting fees and services appears in our ~~2018~~2023 Proxy Statement under the caption “Audit andNon-Audit Fees,” and is incorporated herein by this reference.

152

~~PART IV~~

PART IV

~~ITEM 15.~~

~~EXHIBITS AND FINANCIAL STATEMENT SCHEDULES~~

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents Filed Asas Part of ~~This~~this Report

1. Financial Statements

The following are incorporated by reference from Item 8 hereof:

•

Reports of Independent Registered Public Accounting Firm;

•

Consolidated Statements of Condition at December 31, ~~2017~~2021 and ~~2016;~~2022;

•

Consolidated Statements of ~~Operations~~Income and Comprehensive Income ~~(Loss)~~ for each of the years in the three-year period ended December 31, ~~2017;~~2022;

•

Consolidated Statements of Changes in Stockholders’ Equity for each of the years in the three-year period ended December 31, ~~2017;~~2022;

•

Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, ~~2017;~~2022; and

•

Notes to the Consolidated Financial Statements.

The following are incorporated by reference from Item 9A hereof:

•

Management’s Report on Internal Control over Financial Reporting; and

•

Changes in Internal Control over Financial Reporting.

2. Financial Statement Schedules

Financial statement schedules have been omitted because they are not applicable or because the required information is provided in the Consolidated Financial Statements or Notes thereto.

3. Exhibits Required by Securities and Exchange Commission RegulationS-K

The following exhibits are filed as part of this Form10-K, and this list includes the Exhibit Index.


Exhibit No.

~~3.1~~ 2.1		Agreement and Plan of Merger, dated as of April 24, 2021, by and among New York Community Bancorp, Inc., 615 Corp., a wholly-owned subsidiary of New York Community Bancorp, Inc. and Flagstar Bancorp, Inc.* (1)

2.2		Amendment No. 1 to the Agreement and Plan of Merger, dated April 26, 2022, by and among New York Community Bancorp, Inc., 615 Corp., and Flagstar Bancorp, Inc.*(2)

2.3		Amendment No. 2 to the Agreement and Plan of Merger, dated October 27, 2022, by and among New York Community Bancorp, Inc., 615 Corp. and Flagstar Bancorp, Inc.* (3)

3.1		Amended and Restated Certificate of Incorporation⁽¹⁾(4)

3.2		Certificates of Amendment of Amended and Restated Certificate of Incorporation⁽²⁾(5)

3.3		Certificate of Amendment of Amended and Restated Certificate of Incorporation⁽³⁾(6)

3.4		Certificate of Designations of the Registrant with respect to the Series A Preferred Stock, dated March 16, 2017, filed with the Secretary of State of the State of Delaware and effective March 16, 2017⁽⁴⁾(7)

3.5		Amended and Restated Bylaws⁽⁵⁾(8)

4.1		Specimen Stock Certificate⁽⁶⁾(9)

4.2		Deposit Agreement, dated as of March 16, 2017, by and among the Registrant, Computershare, Inc, and Computershare Trust Company, N.A., as joint depositary, and the holders from time to time of the depositary receipts described therein⁽⁷⁾(10)

4.3		Form of certificate representing the Series A Preferred Stock⁽⁷⁾(10)

153


~~4.4~~
4.4		Form of depositary receipt representing the Depositary Shares⁽⁷⁾(10)

4.5		Description of securities registered pursuant to Section 12 of the Securities and Exchange Act of 1934 (11)

4.6		Registrant will furnish, upon request, copies of all instruments defining the rights of holders of long-term debt instruments of the registrant and its consolidated subsidiaries.

10.1		Form of Employment Agreement between New York Community Bancorp, Inc. ~~and Joseph R. Ficalora,~~ Robert Wann, Thomas R. Cangemi, ~~James J. Carpenter, and~~ John J. Pinto⁽⁸⁾Pinto, and R. Patrick Quinn* (12)

~~10.2~~		Synergy Financial Group, Inc. 2004 Stock Option Plan (as assumed by New York Community Bancorp, Inc. effective October 1, 2007)*⁽⁹⁾

*	~~Management plan or compensation plan arrangement.~~

~~(1)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-Q~~ ~~for the quarterly period ended March 31, 2001(File No. 0-22278)~~

~~(2)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-K~~ ~~for the year ended December 31, 2003(File No. 1-31565)~~

~~(3)~~

~~Incorporated by reference to Exhibits to the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on April 27, 2016 (FileNo. 1-31565)~~

~~(4)~~

~~Incorporated herein by reference to 3.4 of the Registrant’s Registration Statement on Form8-A~~ ~~(FileNo. 333-210919),~~ ~~as filed with the Securities and Exchange Commission on March 16, 2017~~

~~(5)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-K~~ ~~for the year ended December 31, 2016(File No. 1-31565)~~

~~(6)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-Q~~ ~~filed with the Securities and Exchange Commission on November 9, 2017 (FileNo. 1-31565)~~

~~(7)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on March 17, 2017~~

~~(8)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form8-k~~ ~~filed with the Securities and Exchange Commission on March 9, 2006~~

~~(9)~~ ~~Incorporated by reference to Exhibits to FormS-8,~~ ~~Registration Statement filed on October 4, 2007, RegistrationNo. 333-146512~~
~~(10)~~ ~~Incorporated by reference to Exhibits filed with the Company’s Registration Statement filed on FormS-1,~~ ~~RegistrationNo. 33-66852~~
~~(11)~~ ~~Incorporated by reference to Exhibits to FormS-8,~~ ~~Registration Statement filed on October 27, 1994, RegistrationNo. 33-85682~~
~~(12)~~ ~~Incorporated by reference to Exhibits filed with the 1995 Proxy Statement for the Annual Meeting of Shareholders held on April 19, 1995~~
~~(13)~~ ~~Incorporated by reference to Exhibits filed with the 2006 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2006~~
~~(14)~~ ~~Incorporated by reference to Exhibits filed with the 2012 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2012~~
~~(15)~~ ~~Incorporated by reference to Exhibits filed with the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on March 16, 2017 (FileNo. 1-31565)~~

~~ITEM 16.~~

~~FORM10-K~~ ~~SUMMARY~~

~~None.~~

*Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar attachments have been omitted. The

~~SIGNATURES~~registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request.

** Management plan or compensation plan arrangement.

154

(1) Incorporated by reference to Exhibits to the Company's Form 8-K filed with the Securities and Exchange Commission on April 27, 2021 (File

No. 1-31565)

(2)

Incorporated by reference to Exhibits to the Company's Form 8-K filed with the Securities and Exchange Commission on April 27, 2022 (File
No. 1-31565)

(3)

Incorporated by reference to Exhibits to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 28, 2022 (File No. 1-31565)

(4)

Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2001 (File No. 0-22278)

(5)

Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2003 (File No. 1-31565)

(6)

Incorporated by reference to Exhibits to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 27, 2016 (File No. 1-31565)

(7)

Incorporated herein by reference to Exhibit 3.4 of the Registrant’s Registration Statement on Form 8-A (File No. 333-210919), as filed with the Securities and Exchange Commission on March 16, 2017

(8)

Incorporated by reference to Exhibit 3.2 filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on December 1, 2022 (File No. 1-31565)

(9)

Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended September 30, 2017 (File No. 1-31565)

(10)

Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017 (File No. 1-31565)

(11)

Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2019 (File No. 1-31565)

(12)

Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on March 9, 2006 (File No. 1-31565)

(13)

Incorporated by reference to Exhibits filed with the Company’s Registration Statement filed on Form S-1, Registration No. 33-66852

(14)

Incorporated by reference to Exhibits filed with the 1995 Proxy Statement for the Annual Meeting of Shareholders held on April 19, 1995 (File No. 0-22278)

(15)

Incorporated by reference to Exhibits filed with the 2006 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2006 (File No. 1-31565)

(16)

Incorporated by reference to Exhibits filed with the 2012 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2012 (File No. 1-31565)

(17)

Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on November 6, 2018 (File No. 1-31565)

(18)

Incorporated by reference to Exhibits filed with the Company’s Registration Statement filed on Form S-8 filed, Registration No. 333-241023

(19)

Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2022 (File No. 001-31565)

(20)

Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on December 1, 2022 (File No. 1-31565)

(21)

Incorporated by reference to Exhibit 10.1 to Flagstar Bancorp, Inc.’s Form 10-Q filed with the Securities and Exchange Commission on November 6, 2015 (File No. 1-16577)

(22)

Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2021 (File No. 1-31565)

ITEM 16. FORM 10-K SUMMARY

None.

155

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


March 1, ~~2018~~		2023		New York Community Bancorp, Inc.
				~~(Registrant)~~

			~~/s/ Joseph R. Ficalora~~(Registrant)
				~~Joseph R. Ficalora~~
	/s/ Thomas R. Cangemi
	Thomas R. Cangemi
		President and Chief Executive Officer
				(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


~~/s/ Joseph R. Ficalora~~		~~3/1/18~~		/s/ Thomas R. Cangemi	3/1/23		/s/ John J. Pinto	3/1/1823
~~Joseph R. Ficalora~~				Thomas R. Cangemi			John J. Pinto
President, Chief Executive Officer, and Director					Senior Executive Vice President and Chief Financial Officer
(Principal Executive Officer)				(Principal Financial Officer and Principal Accounting Officer)

~~/s/ John J. Pinto~~		~~3/1/18~~
~~John J. Pinto~~
~~Executive Vice President and~~ ~~Chief Accounting Officer~~/s/ Alessandro P. DiNello
~~(Principal Accounting Officer)~~

~~/s/ Dominick Ciampa~~3/1/23		~~3/1/18~~		~~/s/ Maureen E. Clancy~~		~~3/1/18~~
~~Dominick Ciampa~~				~~Maureen E. Clancy~~
~~Chairman of the Board of Directors~~				~~Director~~

/s/ Hanif W. Dahya		3/1/1823
Alessandro P. DiNello			Hanif W. Dahya
Non-Executive Chairman			Presiding Director

/s/ James R. Carpenter	3/1/23		/s/ Leslie D. Dunn		3/1/1823
~~Hanif W. Dahya~~ James R. Carpenter				Leslie D. Dunn
~~Director~~				~~Director~~

~~/s/ Michael J. Levine~~Director		~~3/1/18~~		~~/s/ James J. O’Donovan~~	Director	~~3/1/18~~
~~Michael J. Levine~~				~~James J. O’Donovan~~
~~Director~~				~~Director~~


/s/ Toan C. Huynh	3/1/23		/s/ Marshall Lux	3/1/23
Toan C. Huynh			Marshall Lux
Director			Director

/s/ Lawrence Rosano, ~~Jr.~~Jr		3/1/18	23		/s/ Ronald A. Rosenfeld		3/1/1823
Lawrence Rosano, Jr.				Ronald A. Rosenfeld
~~Director~~				~~Director~~

Director			Director

/s/ Lawrence J. Savarese		3/1/18	23		/s/ ~~John M. Tsimbinos~~Peter Schoels		3/1/1823
Lawrence J. Savarese			Peter Schoels	~~John M. Tsimbinos~~
~~Director~~				~~Director~~

Director			Director

/s/ David L. Treadwell	3/1/23		/s/ Robert Wann		3/1/18
~~Robert Wann~~						23
~~Senior Executive Vice President,~~ ~~Chief Operating Officer, and Director~~David L. Treadwell			Robert Wann
Director			Director

/s/ Jennifer R. Whip	3/1/23
Jennifer R. Whip
Director

156

~~155~~


Title of each class		Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.01 par value per share		NYCB	New York Stock Exchange
Bifurcated Option Note Unit SecuritiESSM,~~andFixed-to-~~	~~Floating~~	NYCB PU	New York Stock Exchange
Depositary Shares each representing a 1/40th interest in a share of Fixed-to-Floating Rate Series A Noncumulative Perpetual Preferred Stock ~~$0.01 par value~~		NYCB PA	New York Stock Exchange
~~(Title of Class)~~		~~(Name of exchange on which registered)~~


			Page
				~~Page~~
Cautionary Statement Regarding Forward-Looking Language				1
Glossary and Abbreviations					3	5

PART I

Item 1.	Business	~~Business~~		6	9
Item 1A.		Risk Factors		19	26
Item 1B.		Unresolved Staff Comments		30	40
Item 2.	Properties	~~Properties~~		30	40
Item 3.3.		Legal Proceedings		30	41
Item 4.4.		Mine Safety Disclosures		30	41

PART II

Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities		31	42
Item 6.	Reserved	~~Selected Financial Data~~		34	44
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		35	45
Item 7A.		Quantitative and Qualitative Disclosures about Market Risk		77	72
Item 8.		Financial Statements and Supplementary Data		81	77
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		~~150~~	149
Item 9A.		Controls and Procedures		~~150~~	149
Item 9B.		Other Information		~~151~~	150
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		150
~~PART III~~
PART III

Item 10.		Directors, Executive Officers, and Corporate Governance		151
Item ~~11.~~11.		Executive Compensation		151
Item 12.		Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters		151
Item ~~13.~~13.		Certain Relationships and Related Transactions, and Director Independence		~~151~~	152
Item 14.		Principal ~~Accountant~~Accounting Fees and Services		~~151~~	152

PART IV

Item 15.		Exhibits and Financial Statement Schedules		~~152~~	153
Item ~~16.~~16.		Form 10-K Summary (None)		~~154~~	155

Signatures						156

Certifications


ACL—Allowance for Credit Losses		FHLB-NY—Federal Home Loan Bank of New York
ADC—Acquisition, development, and construction loan		FOAL—Fallout-Adjusted Locks
ALCO—Asset and Liability Management Committee		FOMC—Federal Open Market Committee
AMT—Alternative minimum tax		FRB—Federal Reserve Board
AOCL—Accumulated other comprehensive loss		FRB-NY—Federal Reserve Bank of New York
ASC—Accounting Standards Codification		Freddie Mac—Federal Home Loan Mortgage Corporation
ASU—Accounting Standards Update		FTEs—Full-time equivalent employees
BaaS—Banking as a Service		GAAP—U.S. generally accepted accounting principles
BOLI—Bank-owned life insurance		GLBA—The Gramm Leach Bliley Act
BP—Basis point(s)		GNMA—Government National Mortgage Association
CARES Act – Coronavirus Aid, Relief, and Economic Security Act		GSE—Government-sponsored enterprises
C&I—Commercial and industrial loan		HOLA—Home Owners Loan Act

CDs—Certificates of deposit		HPI—Housing Price Index

CECL—Current Expected Credit Loss		LGG - Loans with government guarantees

CFPB—Consumer Financial Protection Bureau		LHFS—Loans Held-for-Sale

CMOs—Collateralized mortgage obligations		LIBOR—London Interbank Offered Rate

CMT—Constant maturity treasury rate		LTV—Loan-to-value ratio

CPI—Consumer Price Index		MBS—Mortgage-backed securities

CPR—Constant prepayment rate		MSRs—Mortgage servicing rights

CRA—Community Reinvestment Act		NIM—Net interest margin

CRE—Commercial real estate loan		NOL—Net operating loss

DIF—Deposit Insurance Fund		NPAs—Non-performing assets

DFA—Dodd-Frank Wall Street Reform and Consumer Protection Act		NPLs—Non-performing loans

DSCR - Debt service coverage ratio		NPV—Net Portfolio Value

EAR—Earnings at Risk		NYSE—New York Stock Exchange

EPS—Earnings per common share		OCC—Office of the Comptroller of the Currency

ERM—Enterprise Risk Management		OFAC—Office of Foreign Assets Control

ESOP—Employee Stock Ownership Plan		OREO—Other real estate owned

EVE—Economic Value of Equity at Risk		OTTI—Other-than-temporary impairment

Fannie Mae—Federal National Mortgage Association		PAA - Purchase accounting adjustments

FASB—Financial Accounting Standards Board		PPP—Paycheck Protection Program administered by the Small Business Administration

FCA—the United Kingdom's Financial Conduct Authority		ROU—Right of use asset

FDI Act—Federal Deposit Insurance Act		SEC—U.S. Securities and Exchange Commission

FDIC—Federal Deposit Insurance Corporation		SIFI—Systemically Important Financial Institution
FHA—Federal Housing Administration		SOFR—Secured Overnight Financing Rate
FHFA—Federal Housing Finance Agency		TDR—Troubled debt restructurings
FHLB—Federal Home Loan Bank		TILA-RESPA—Truth in Lending ACT-Real Estate Settlement Procedures Act


~~Name~~		~~Jurisdiction of~~ ~~Organization~~		~~Purpose~~
~~DHB Real Estate, LLC~~		~~Arizona~~		~~Organized to own interests in real estate~~

~~Ferry Development Holding Company~~Name	Jurisdiction of Organization	~~Delaware~~		~~Formed to hold and manage investment portfolios for the Company~~
			Purpose
~~NYCB Mortgage Company, LLC~~		~~Delaware~~		~~Holding company for Walnut Realty Holding Company, LLC~~

~~NYCB Specialty Finance Company, LLC~~		~~Delaware~~		~~Originates asset-based, equipment financing, and dealer-floor plan loans~~

~~Woodhaven Investments, LLC.~~		~~Delaware~~		~~Holding company for Ironbound Investment Company, Inc.~~

~~Eagle Rock Investment Corp.~~		~~New Jersey~~		~~Formed to hold and manage investment portfolios for the Company~~

~~Pacific Urban Renewal, Inc.~~		~~New Jersey~~		~~Owns a branch building~~

~~Synergy Capital Investments, Inc.~~		~~New Jersey~~		~~Formed to hold and manage investment portfolios for the Company~~

~~BSR 1400 Corp.~~		~~New York~~		~~Organized to own interests in real estate~~

~~Bellingham Corp.~~		~~New York~~		~~Organized to own interests in real estate~~

~~NYCB Insurance Agency, Inc.~~		~~New York~~		~~Receives revenues from third parties on the sale ofnon-deposit~~ ~~insurance products~~

~~Main Omni Realty Corp.~~		~~New York~~		~~Organized to own interests in real estate~~

~~NYB Realty Holding Company, LLC~~		~~New York~~		~~Holding company for subsidiaries owning an interest in real estate~~

~~RCBK Mortgage Corp.~~		~~New York~~		~~Organized to own interests in loans~~

~~RSB Agency, Inc.~~		~~New York~~		~~Sellsnon-deposit~~ ~~investment products~~

~~Richmond Enterprises, Inc.~~		~~New York~~		~~Holding company for Peter B. Cannell & Co., Inc.~~

~~Roslyn National Mortgage Corporation~~		~~New York~~		~~Formerly operated as a mortgage loan originator and servicer and currently holds an interest in its former office space~~

100 Duffy Realty, LLC		New York		Owns a building containing back-office ~~building~~


~~Name~~	~~Jurisdiction of~~ ~~Organization~~	~~Purpose~~and a branch.
~~Peter B. Cannell & Co., Inc.~~	~~Delaware~~	~~Advises high net worth individuals and institutions on the management of their assets~~

~~Roslyn Real Estate Asset Corp.~~	~~Delaware~~	~~A REIT organized for the purpose of investing in~~ ~~mortgage-related assets~~

~~Walnut Realty Holding Company, LLC~~	~~Delaware~~	~~Owns two back-office buildings~~

~~Your New REO, LLC~~	~~Delaware~~	~~Owns a website that lists bank-owned properties for sale~~

~~Ironbound Investment Company, LLC.~~	~~Florida~~	~~Organized for the purpose of investing in mortgage-related assets~~

~~1400 Corp.~~	~~New York~~	~~Holding company for Roslyn Real Estate Asset Corp.~~

~~Prospect Realty Holding Company, LLC~~	~~New York~~	~~Owns a back-office building~~


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


~~For the fiscal year ended: December 31, 2017~~ ☐		~~Commission File Number1-31565~~ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large Accelerated Filer	☒		Accelerated Filer	☐
~~Large Accelerated filer~~		☒		~~Accelerated Filer~~	☐

Non-Accelerated Filer	☐	☐		Smaller Reporting Company	☐

				Emerging Growth Company	☐


~~Name~~NYB Realty Holding Company, LLC	New York	~~Jurisdiction of~~ ~~Organization~~	~~Purpose~~Holding company for subsidiaries owning an interest in real estate.
~~Omega~~NYCB Insurance Agency, Inc.	New York	Sells non-deposit investment products.
Pacific Urban Renewal, Inc.	New Jersey	Owns a branch building.
Synergy Capital Investments, Inc.	New Jersey	Formed to hold and manage investment portfolios for the Company.
NYCB Mortgage Company, LLC	Delaware	Holding company for Walnut Realty Holding Company, LLC.
Woodhaven Investments, LLC	Delaware	Holding company for Ironbound Investment Company, LLC. and 1400 Corp.
Flagstar REO, LLC	Delaware	Formed to hold real estate from foreclosed loans
Flagstar Mortgage Securities, LLC	Delaware	Formed to hold mortgage loans sold into private securitizations
Flagstar Real Estate Holdings, Inc.	Michigan	Holding company for REIT investment in MSRs
REIT Holding Co #1, Inc.	Michigan	Holding company for REIT investments in mortgage loans
REIT Holding Co #2, Inc.	Michigan	Holding company for REIT investment in commercial real estate loans
Propshop Mortgage, LLC	Delaware	Joint venture mortgage company developing specialized mortgage technology
Flagstar Investment, LLC	Michigan	Formed to invest in low income housing investments
Flagstar Opportunities, LLC	Michigan	Formed to invest in low income housing investments
Grass Lake Insurance Agency, Inc.	Michigan	Licensed insurance agency
FSB-Optimum Investment Fund I LLC	Michigan	Formed to invest in businesses with New Markets Tax Credits


Name	Jurisdiction of Organization	Purpose
1400 Corp.	New York	Holding company for Roslyn Real Estate Asset Corp.
Ironbound Investment Company, LLC.	Florida	Organized for the purpose of investing in mortgage-related assets.
Long Island Commercial ~~Mortgage Corp.~~Capital Corporation		~~Delaware~~	New York	A REIT organized for the purpose of investing in mortgage-related ~~assets~~assets.
~~Long Island~~Omega Commercial ~~Capital~~Mortgage Corp.		~~New York~~	Delaware	A REIT organized for the purpose of investing in mortgage-related assets.
Prospect Realty Holding Company, LLC	New York	Owns a back-office building.
Rational Real Estate II, LLC	New York	Formerly Owned a back-office building.
Roslyn Real Estate Asset Corp.	Delaware	A REIT organized for the purpose of investing in mortgage-related assets.
Walnut Realty Holding Company, LLC	Delaware	Owns two back-office buildings.
Long Lake REIT	Maryland	Formed to own excess servicing rights assets
Long Lake MSR, Inc.	Maryland	Licensed to own MSRs
REIT #1, Inc.	Michigan	A REIT organized for the purposes of investing in mortgage loans
REIT #2, Inc.	Michigan	A REIT organized for the purposes of investing in commercial real estate loans


			Market Price
	Dividends Declared per Common Share		High		Low		Close
2017
1st Quarter		$0.17	$	16.26	$	13.67	$	13.97
2nd Quarter		0.17		14.12		12.61		13.13
3rd Quarter		0.17		13.48		11.67		12.89
4th Quarter		0.17		13.76		11.94		13.02

2016
1st Quarter		$0.17	$	16.17	$	14.32	$	15.90
2nd Quarter		0.17		15.97		14.25		14.99
3rd Quarter		0.17		15.49		14.05		14.23
4th Quarter		0.17		17.67		13.74		15.91


	12/31/2017		12/31/2018		12/31/2019		12/31/2020		12/31/2021		12/31/2022
New York Community Bancorp, Inc.	$	100.00	$	76.76	$	103.92	$	97.88	$	120.07	$	90.61
S&P Mid-Cap 400 Index	$	100.00	$	88.92	$	112.21	$	127.54	$	159.12	$	138.34
S&P U.S. BMI Banks Index	$	100.00	$	83.54	$	114.74	$	100.10	$	136.10	$	112.89


	12/31/2012		12/31/2013		12/31/2014		12/31/2015		12/31/2016		12/31/2017
New York Community Bancorp, Inc.	$	100.00	$	137.85	$	139.58	$	151.05	$	154.30	$	132.87
S&PMid-Cap 400 Index	$	100.00	$	133.50	$	146.54	$	143.35	$	173.08	$	201.20
SNL U.S. Bank and Thrift Index	$	100.00	$	136.92	$	152.85	$	155.94	$	196.86	$	231.49


(dollars in thousands, except per share data)
Period	Total Shares of Common Stock Repurchased		Average Price Paid per Common Share		Total Allocation
First Quarter 2017		648,793		$15.62	$	10,132
Second Quarter 2017		37,414		13.43		502
Third Quarter 2017		26,670		12.89		344
Fourth Quarter 2017:
October		7,399		12.88		95
November		2,686		12.86		35
December		561,411		13.10		7,355

Total Fourth Quarter 2017		571,496		13.10		7,485

2017 Total		1,284,373		$14.37	$	18,463


	At or For the Years Ended December 31,
(dollars in thousands, except share data)	2017			2016			2015			2014			2013
EARNINGS SUMMARY:
Net interest income⁽¹⁾	$	1,130,003		$	1,287,382		$	408,075		$	1,140,353		$	1,166,616
Provision for (recovery of) losses onnon-covered loans		60,943			11,874			(3,334	)		—			18,000
(Recovery of) provision for losses on covered loans		(23,701	)		(7,694	)		(11,670	)		(18,587	)		12,758
Non-interest income		216,880			145,572			210,763			201,593			218,830
Non-interest expense:
Operating expenses⁽²⁾		641,218			638,109			615,600			579,170			591,778
Amortization of core deposit intangibles		208			2,391			5,344			8,297			15,784
Debt repositioning charge		—			—			141,209			—			—
Merger-related expenses		—			11,146			3,702			—			—
Totalnon-interest expense		641,426			651,646			765,855			587,467			607,562
Income tax expense (benefit)		202,014			281,727			(84,857	)		287,669			271,579
Net income (loss)⁽³⁾		466,201			495,401			(47,156	)		485,397			475,547
Preferred stock dividends		24,621			—			—			—			—
Net income available to common shareholders		441,580			495,401			(47,156	)		485,397			475,547
Basic earnings (loss) per common share⁽³⁾		$0.90			$1.01			$(0.11	)		$1.09			$1.08
Diluted earnings (loss) per common share⁽³⁾		0.90			1.01			(0.11	)		1.09			1.08
Dividends paid per common share		0.68			0.68			1.00			1.00			1.00

SELECTED RATIOS:
Return on average assets⁽³⁾		0.96	%		1.00	%		(0.10	)%		1.01	%		1.07	%
Return on average common stockholders’ equity⁽³⁾		7.12			8.19			(0.81	)		8.41			8.46
Average common stockholders’ equity to average assets		12.76			12.28			11.90			12.01			12.66
Operating expenses to average assets⁽²⁾		1.32			1.29			1.26			1.21			1.33
Efficiency ratio⁽¹⁾⁽²⁾		47.61			44.53			99.48			43.16			42.71
Net interest rate spread⁽¹⁾		2.47			2.85			0.69			2.57			2.90
Net interest margin⁽¹⁾		2.59			2.93			0.94			2.67			3.01
Common dividend payout ratio		75.56			67.33			—			91.74			92.59

BALANCE SHEET SUMMARY:
Total assets	$	49,124,195		$	48,926,555		$	50,317,796		$	48,559,217		$	46,688,287
Loans, net of allowances for loan losses		38,265,183			39,308,016			38,011,995			35,647,639			32,727,507
Allowance for losses onnon-covered loans		158,046			158,290			147,124			139,857			141,946
Allowance for losses on covered loans		—			23,701			31,395			45,481			64,069
Securities		3,531,427			3,817,057			6,173,645			7,096,450			7,951,020
Deposits		29,102,163			28,887,903			28,426,758			28,328,734			25,660,992
Borrowed funds		12,913,679			13,673,379			15,748,405			14,226,487			15,105,002
Common stockholders’ equity		6,292,536			6,123,991			5,934,696			5,781,815			5,735,662
Common shares outstanding		488,490,352			487,056,676			484,943,308			442,587,190			440,809,365
Book value per common share		$12.88			$12.57			$12.24			$13.06			$13.01
Common stockholders’ equity to total assets		12.81	%		12.52	%		11.79	%		11.91	%		12.29	%

ASSET QUALITY RATIOS (excluding covered assets andnon-covered purchased credit-impaired loans):
Non-performingnon-covered loans to totalnon-covered loans		0.19	%		0.15	%		0.13	%		0.23	%		0.35	%
Non-performingnon-covered assets to totalnon-covered assets		0.18			0.14			0.13			0.30			0.40
Allowance for losses onnon-covered loans tonon-performingnon-covered loans		214.50			277.19			310.08			181.75			137.10
Allowance for losses onnon-covered loans to totalnon-covered loans		0.41			0.42			0.41			0.42			0.48
Net charge-offs (recoveries) to average loans⁽⁴⁾		0.16			0.00			(0.02	)		0.01			0.05

ASSET QUALITY RATIOS (including covered assets andnon-covered purchased credit-impaired loans):⁽⁵⁾
Totalnon-performing loans to total loans		0.19	%		0.48	%		0.49	%		0.66	%		0.97	%
Totalnon-performing assets to total assets		0.18			0.44			0.45			0.68			0.91
Allowances for loan losses to totalnon-performing loans		214.50			96.39			96.51			78.92			65.40
Allowances for loan losses to total loans		0.41			0.47			0.47			0.52			0.63



(dollars in millions, except per share data) Period	Total Shares of Common Stock Repurchased			Average Price Paid per Common Share			Total Allocation		Total Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs
First Quarter 2022		901,934	$		12.93	$		11		—
Second Quarter 2022		809,996			8.88			7		791,101
Third Quarter 2022		107,022			9.16			1		80,609
Fourth Quarter 2022
October 1-31, 2022		236			8.54			—		—
November 1-30, 2022		2,173			9.90			—		—
December 1-31, 2022		515,574			8.72			5		—
Total Fourth Quarter 2022		517,983			8.72			5		—
2022 Total		2,336,935			10.42	$		24		871,710


		For the Years Ended December 31,
		2022								2021								2020
							Average								Average								Average
		Average					Yield/			Average					Yield/			Average					Yield/
(dollars in millions)		Balance			Interest		Cost			Balance			Interest		Cost			Balance			Interest		Cost
ASSETS:
Interest-earning assets:
Mortgage and other loans and leases, net (1)	$		49,376	$		1,848		3.74	%	$	43,200		$	1,525		3.53	%	$	42,028		$	1,542		3.67	%
Securities (2)(3)			7,448			200		2.69			6,625			156		2.35			5,965			163		2.73
Reverse repurchase agreements			460			15		3.24			430			4		1.05			20			—		0.32
Interest-earning cash and cash equivalents			1,988			29		1.47			2,016			4		0.17			1,088			3		0.27
Total interest-earning assets			59,272			2,092		3.53			52,271			1,689		3.23			49,101			1,708		3.48
Non-interest-earning assets			5,130								5,275								5,008
Total assets	$		64,402							$	57,546							$	54,109
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Interest-bearing deposits:
Interest-bearing checking and money market accounts	$		17,910	$		226		1.26	%	$	12,829		$	31		0.24	%	$	10,965		$	57		0.52	%
Savings accounts			9,336			60		0.64			7,612			28		0.36			5,520			32		0.57
Certificates of deposit			8,772			97		1.11			9,094			55		0.60			12,412			217		1.75
Total interest-bearing deposits			36,018			383		1.06			29,535			114		0.38			28,897			306		1.06
Short term borrowed funds			2,408			56		2.32			2,343			8		0.34			2,319			16		0.70
Other borrowed funds			12,982			257		1.99			13,366			278		2.08			12,514			286		2.28
Total Borrowed funds			15,390			313		2.04			15,709			286		1.82			14,833			302		2.03
Total interest-bearing liabilities			51,408			696		1.35			45,244			400		0.88			43,730			608		1.39
Non-interest-bearing deposits			5,124								4,578								2,957
Other liabilities			787								790								714
Total liabilities			57,319								50,612								47,401
Stockholders’ equity			7,083								6,934								6,708
Total liabilities and stockholders’ equity	$		64,402							$	57,546							$	54,109
Net interest income/interest rate spread				$		1,396		2.17	%			$		1,289		2.35	%			$		1,100		2.09	%
Net interest margin								2.35	%							2.47	%							2.24	%
Ratio of interest-earning assets to interest-bearing liabilities							1.15x								1.16x								1.12x


	Year Ended									Year Ended
	December 31, 2022									December 31, 2021
	Compared to Year Ended									Compared to Year Ended
	December 31, 2021									December 31, 2020
	Increase/(Decrease)									Increase/(Decrease)
	Due to									Due to
(in millions)	Volume			Rate			Net			Volume			Rate			Net
INTEREST-EARNING ASSETS:
Mortgage and other loans and leases, net	$	227		$	96		$	323		$	48		$	(65	)	$	(17	)
Securities		21			23			44			28			(35	)		(7	)
Reverse repurchase agreements		—			11			11			4			—			4
Interest Earning Cash & Cash Equivalent		—			25			25			1			—			1
Total		248			155			403			81			(100	)		(19	)
INTEREST-BEARING LIABILITIES:
Interest-bearing checking and money market accounts	$	17		$	178		$	195		$	12		$	(38	)	$	(26	)
Savings accounts		7			25			32			(148	)		144			(4	)
Certificates of deposit		(2	)		44			42			(47	)		(115	)		(162	)
Short Term Borrowed Funds		—			48			48			—			(8	)		(8	)
Other Borrowed Funds		(8	)		(13	)		(21	)		25			(33	)		(8	)
Totals		14			282			296			(158	)		(50	)		(208	)
Change in net interest income	$	234		$	(127	)	$	107		$	239		$	(50	)	$	189


(dollars in millions)	Remaining fair value adjustment at December 31, 2022			Estimated effective duration	Amortization method
One-to-four family first mortgage	$	(295	)	4 years	Interest method
Commercial real estate		(5	)	2 years	Interest method
Commercial and industrial		(25	)	2 years	Interest method
Consumer and other		(136	)	3 years	Interest method
Core deposit and other intangibles		287		9 years	Sum of years digits and straight-line
Deposits		36		2 years	Interest method
Other borrowings		40		7 years	Interest method


	Constant Maturity Treasury Rates
	Five-Year						Ten-Year
	2017			2016			2017			2016
High		2.26	%		2.10	%		2.62	%		2.60	%
Low		1.63			0.94			2.05			1.37
Average		1.91			1.33			2.33			1.84


	For the Twelve Months Ended December
	2017			2016
Change in prices:		2.1	%		2.1	%


	For the Three Months Ended December 31,
	2017			2016
Residential rental vacancy rate in New York		4.9	%		5.4	%
Manhattan office vacancy rate		10.1			10.4


	At December 31, 2022
		Multi-Family Loans
(dollars in millions)		Amount		Percent of Total
New York City:
Manhattan	$		7,330		19.23	%
Brooklyn			6,385		16.75
Bronx			3,715		9.74
Queens			2,889		7.58
Staten Island			126		0.33
Total New York City	$		20,445		53.63	%
New Jersey			5,107		13.39
Long Island			574		1.51
Total Metro New York	$		26,126		68.53	%
Other New York State			1,157		3.02
Pennsylvania			3,760		9.86
Florida			1,690		4.43
Ohio			1,006		2.64
Arizona			442		1.16
All other states			3,949		10.36
Total	$		38,130		100.00	%


	At December 31, 2022
	Commercial Real Estate Loans
(dollars in millions)	Amount		Percent of Total
New York	$	5,081		59.59	%
Michigan		1,039		12.19
New Jersey		560		6.57
Pennsylvania		328		3.85
Florida		255		2.99
Ohio		149		1.75
Arizona		73		0.86
All other states		1,041		12.20
Total	$	8,526		100.00	%


(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Other		Total Loans
Amount due:
Within one year	$	4,399	$	1,878	$	122	$	1,363	$	8,960	$	16,722
After one year:
One to five years		22,746		5,394		523		620		3,563		32,846
Over five years to fifteen years		10,961		1,254		1,639		13		1,386		15,253
Over fifteen years		24		—		3,537		—		619		4,180
Total due or repricing after one year		33,731		6,648		5,699		633		5,568		52,279
Total amounts due or repricing, gross	$	38,130	$	8,526	$	5,821	$	1,996	$	14,528	$	69,001


		Due after December 31, 2023
(in millions)		Fixed		Adjustable		Total
Mortgage Loans:
Multi-family	$		8,564	$	25,167	$	33,731
Commercial real estate			2,040		4,608		6,648
One-to-four family first mortgage			2,402		3,297		5,699
Acquisition, development, and construction			21		612		633
Total mortgage loans			13,027		33,684		46,711
Other loans			2,534		3,034		5,568
Total loans	$		15,561	$	36,718	$	52,279


	At December 31, 2017
	Multi-Family Loans					Commercial Real Estate Loans
(dollars in thousands)	Amount		Percent of Total			Amount		Percent of Total
New York City:
Manhattan	$	7,399,409		26.36	%	$	3,712,116		50.70	%
Brooklyn		4,340,472		15.46			563,867		7.70
Bronx		3,783,194		13.48			95,758		1.31
Queens		2,252,315		8.02			647,774		8.84
Staten Island		78,513		0.28			55,721		0.76

Total New York City	$	17,853,903		63.60	%	$	5,075,236		69.31	%

Long Island		517,651		1.84			862,888		11.79
Other New York State		971,697		3.46			191,797		2.62
All other states		8,731,458		31.10			1,192,305		16.28

Total	$	28,074,709		100.00	%	$	7,322,226		100.00	%


	Non-Covered Loans Held for Investment at December 31, 2017
(in thousands)	Multi-Family		Commercial Real Estate		One-to-Four Family		Acquisition, Development, and Construction		Other		Total Loans
Amount due:
Within one year	$	1,170,796	$	858,534	$	8,985	$	374,369	$	1,071,480	$	3,484,164
After one year:
One to five years		18,470,347		4,567,130		119,823		52,414		536,467		23,746,181
Over five years		8,433,566		1,896,562		348,420		9,042		441,087		11,128,677

Total due or repricing after one year		26,903,913		6,463,692		468,243		61,456		977,554		34,874,858

Total amounts due or repricing, gross	$	28,074,709	$	7,322,226	$	477,228	$	435,825	$	2,049,034	$	38,359,022


	Due after December 31, 2018
(in thousands)	Fixed		Adjustable		Total
Mortgage Loans:
Multi-family	$	2,817,144	$	24,086,769	$	26,903,913
Commercial real estate		506,207		5,957,485		6,463,692
One-to-four family		20,337		447,906		468,243
Acquisition, development, and construction		666		60,790		61,456

Total mortgage loans		3,344,354		30,552,950		33,897,304
Other loans		26,788		950,766		977,554

Total loans	$	3,371,142	$	31,503,716	$	34,874,858


					Change from December 31, 2021 to December 31, 2022
(dollars in millions)	December 31, 2022		December 31, 2021		Amount			Percent
Loans 30-89 Days Past Due:
Multi-family	$	34	$	57	$	(23	)		-40	%
Commercial real estate		2		2		—			0
One-to-four family first mortgage		21		8		13			163
Acquisition, development, and construction		—		—		—		NM
Other loans		13		—		13		NM
Total loans 30-89 days past due	$	70	$	67	$	3			4	%


	December 31,				Change from December 31, 2016 to December 31, 2017
(dollars in thousands)	2017		2016		Amount			Percent
Non-PerformingNon-Covered Loans:
Non-accrualnon-covered mortgage loans:
Multi-family	$	11,078	$	13,558	$	(2,480	)		(18.29	)%
Commercial real estate		6,659		9,297		(2,638	)		(28.37	)
One-to-four family residential		1,966		9,679		(7,713	)		(79.69	)
Acquisition, development, and construction		6,200		6,200		—			—

Totalnon-accrualnon-covered mortgage loans		25,903		38,734		(12,831	)		(33.13	)
Non-accrualnon-covered other loans⁽¹⁾		47,779		17,735		30,044			169.41

Totalnon-performingnon-covered loans	$	73,682	$	56,469	$	17,213			30.48


(in thousands)
Balance at December 31, 2016	$	56,469
Newnon-accrual		78,743
Charge-offs		(24,971	)
Transferred to other real estate owned		(8,233	)
Loan payoffs, including dispositions and principalpay-downs		(28,236	)
Restored to performing status		(90	)

Balance at December 31, 2017	$	73,682


(in millions)
Balance at December 31, 2021	$	33
New non-accrual		39
Non-accrual acquired from acquisition		104
Charge-offs		(1	)
Transferred to repossessed assets		—
Loan payoffs, including dispositions and principal pay-downs		(32	)
Restored to performing status		(2	)
Balance at December 31, 2022	$	141


	Loan No. 1⁽²⁾	Loan No. 2	Loan No. 3	Loan No. 4	Loan No. 5
Type of Loan	C&I	Multi-Family	ADC	CRE	Multi-Family
Origination date	4/29/14	1/05/06	7/07/04	1/19/07	4/24/07
Origination balance	$13,325,000	$12,640,000	$6,200,000	$3,000,000	$2,000,000
Full commitment balance⁽¹⁾	$13,325,000	$12,640,000	$6,200,000	$3,000,000	$2,000,000
Balance at December 31, 2017	$7,677,946	$7,434,196	$6,200,000	$2,513,830	$1,780,488
Associated allowance	None	None	None	None	None
Non-accrual date	June 2017	March 2014	October 2016	December 2017	July 2017
Origination LTV	N/A	79%	57%	63%	54%
Current LTV	N/A	57%	67%	50%	68%
Last appraisal	N/A	February 2017	April 2017	December 2017	September 2017


~~No. 1 –~~		The borrower is an owner of a finance company based in Delaware. The loan is collateralized by various taxi medallion-related loans, which in turn, are collateralized by taxi medallions in New York City and Chicago.

~~No. 2 –~~		~~The borrower is an owner of real estate and is based in New Jersey. The loan is collateralized by a multi-family complex with 314 residential units and four retail stores in Atlantic City, New Jersey.~~

~~No. 3 –~~		~~The borrower is an owner of real estate and is based in Maryland. The loan is collateralized by 1,031 acres of vacant land in La Plata, Maryland.~~

~~No. 4 –~~		~~The borrower is an owner of real estate and is based in New York. The loan is collateralized by a retail building containing 22,120 square feet of rental area in Nanuet, New York.~~

~~No. 5 –~~		~~The borrower is an owner of real estate and is based in Connecticut. The loan is collateralized by a multi-family building with 80 residential units in Waterbury, Connecticut.~~