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 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 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, or mixed-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 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).

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

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” 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 on non-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.

Non-performing loans consist of non-accrual loans and loans that are 90 days or more past due and still accruing interest. Non-performing assets consist of non-performing loans, OREO and 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 rent-stabilization laws. Rent-stabilized apartments are generally located in buildings with six or more units that were built between February 1947 and January 1974. 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.

A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties.

Refers to advances drawn by the Bank against 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.

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 or non-occurrence of events may be subject to circumstances beyond our control.

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

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

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.

At September 30, 2023, total assets were $111.2 billion, up $21.1 billion compared to December 31, 2022. Total deposits were $82.7 billion at September 30, 2023, up $24.0 billion from December 31, 2022. These year-to-date increases were primarily due to our March 20, 2023, assumption of a substantial amount of the deposits and certain identified liabilities and the acquisition of certain assets and lines of business of Signature Bridge Bank, from the FDIC as receiver for Signature Bridge Bank (the “Signature Transaction”). See Note 3 “Business Combinations” to the Consolidated Financial Statements for further information regarding the Signature Transaction

For the three months ended September 30, 2023, net income was $207 million as compared to $413 million for the three months ended June 30, 2023. Net income available to common stockholders for the three months ended September 30, 2023 was $199 million, compared to $405 million for the three months ended June 30, 2023. Diluted EPS totaled $0.27 for the three months ended September 30, 2023 compared to $0.55 for the three months ended June 30, 2023.

Third quarter 2023 and second quarter 2023 net income and diluted EPS were impacted by merger related expenses of $91 million and $109 million, respectively, related to both the Signature Transaction and the Flagstar acquisition.

At September 30, 2023, total C&I loans were $24.4 billion compared to $12.3 billion at December 31, 2022. The majority of the increase is attributable to the $10.0 billion of C&I loans acquired in the Signature Transaction along with growth in specialty finance and MSR lending, partially offset by seasonally lower mortgage warehouse balances.

The multi-family loan portfolio was $37.7 billion at September 30, 2023, down slightly compared to $38.1 billion at December 31, 2022. At September 30, 2023, multi-family loans represented 45 percent of total loans, compared to 55 percent at December 31, 2022, further demonstrating the reduction of our concentration in this asset class.

Commercial loans (commercial real estate and acquisition, development and construction loans) increased $2.9 billion at September 30, 2023 to $13.4 billion compared to $10.5 billion at December 31, 2022 largely attributable to the Signature Transaction and growth in our home builder finance portfolio.

One-to-four family residential loans totaled $5.9 billion at September 30, 2023, representing seven percent of total loans compared to $5.8 billion or eight percent of total loans at December 31, 2022. Other loans totaled $2.6 billion at September 30, 2023 compared to $2.3 billion at December 31, 2022. The other loan portfolio consists mostly of HELOC and other consumer loans.

Loans held-for-sale at September 30, 2023 totaled $1.9 billion, up from $1.1 billion at December 31, 2022, which reflects seasonally lower balances and the continued impact of higher mortgage rates.

Deposits at September 30, 2023 totaled $82.7 billion up $24.0 billion compared to $58.7 billion at December 31, 2022 primarily driven by the Signature Transaction.

Our deposit base includes $31.3 billion of uninsured deposits at September 30, 2023 a net increase of $14.8 billion as compared to December 31, 2022 due to the Signature Transaction. This represents 37.8 percent of our total deposits. These amounts were determined based on the same methodologies and assumptions used for regulatory reporting purposes and exclude internal accounts. We also have $31.2 billion of total ready liquidity (cash and cash equivalents, unpledged securities, and FHLB borrowing capacity). Our total ready liquidity approximately matches the balance of our uninsured deposits.

For the three months ended September 30, 2023, net interest income totaled $882 million, down $18 million or 2 percent compared to the three months ended June 30, 2023. The decrease was driven by lower average earning assets, partially offset by a six basis point increase in net interest margin and lower average interest-bearing liabilities.

At September 30, 2023, NPA to total assets equaled 0.40 percent compared to 0.21 percent at June 30, 2023 while NPL to total loans equaled 0.52 percent compared to 0.28 percent at June 30, 2023. The increase in NPLs were primarily related to two commercial real estate loans in the office sector that added $139 million in the third quarter of 2023 and multi-family increased $91 million of which the largest individual loan was $42 million. Repossessed assets of $12 million were slightly lower compared to $13 million in the prior quarter.

On October 24, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per share on the Company's common stock. The dividend is payable on November 16, 2023 to common stockholders of record as of November 6, 2023.

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.

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.

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. This impact is most prevalent in our multi-family and CRE portfolios, and to a lesser extent in our C&I and ADC portfolios.. 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. The impact of prepayments on the current quarter and year was minimal.

Net interest income for the three months ended September 30, 2023 was $882 million, down $18 million or 2.0 percent compared to the three months ended June 30, 2023 primarily due to the following:

The following table sets forth certain information regarding our average balance sheet for the periods 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

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.

The Company's net interest margin for the three months ended September 30, 2023, was 3.27 percent, up six basis points compared to the three months ended June 30, 2023. The increase was driven by both a higher level of average earnings assets due to the Signature Transaction, along with higher yields on those assets.

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

The following table summarizes our non-interest income for the respective periods:

Non-interest income increased $2.5 billion for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to the bargain purchase gain of $2.1 billion related to the Signature Transaction. Increases in non-interest income were also driven by the inclusion of the Flagstar acquisition and Signature Transaction including $116 million increase in fee income, net return on mortgage servicing rights of $70 million, gain on loan sales of $73 million and loan administration income of $65 million.

Non-interest expense increased $1.4 billion for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Total operating expenses for the nine months ended September 30, 2023 were up $1.1 billion compared to the nine months ended September 30, 2022. Both increases were primarily due the inclusion of Flagstar and Signature activity.

Total assets increased $21.1 billion to $111.2 billion as of September 30, 2023, compared to $90.1 billion at December 31, 2022 due to the Signature Transaction, which closed on March 20, 2023, and organic loan growth.

The multi-family loans we produce are primarily secured by non-luxury residential apartment buildings in New York City that feature rent-regulated units and below-market rents.

The multi-family loan portfolio was $37.7 billion at September 30, 2023, down slightly compared to $38.1 billion at December 31, 2022 due to a combination of higher interest rates and our loan diversification strategy.

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 percentage of our multi-family loans are ten-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 indexed to CME Term SOFR or Prime, plus a spread. Alternately, the borrower may opt for a fixed rate that is tied to the five-year fixed advance rate of the 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 initial five-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, a ten-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 assessed to the borrower 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 recorded when the cash is received.

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. 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 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 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 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. Exceptions to these levels are

We continue to monitor our loans held for investment portfolio and the related allowance for credit losses, particularly given the economic pressures facing the commercial real estate and multi-family markets. 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 historically 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 generally exclude any short-term property tax exemptions and abatement benefits the property owners receive when we underwrite our multi-family loans.

The following table presents a geographical analysis of the multi-family loans in our held-for-investment loan portfolio:

At September 30, 2023, CRE loans represented $10.5 billion, or 12.5 percent, of total loans held for investment, reflecting a $2.0 billion increase when compared to $8.5 billion at December 31, 2022. Approximately $1.9 billion of CRE loans were acquired in the Signature Transaction.

CRE loans represented $280 million, or 5.7 percent, of the loans we originated in the third quarter 2023 as compared to $278 million, or 5.6 percent in the second quarter 2023.

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 September 30, 2023, the largest concentration of CRE loans were secured by properties in the metro New York City area. Refer to the Geographical Analysis table included below for additional details.

The terms of more than half of our CRE loans are similar to the terms of our multi-family credits which primarily feature a fixed rate of interest for the first five years of the loan that is generally based on intermediate-term interest rates plus a spread. 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 swaps that provide borrowers with additional optionality to manage their interest rate risk. Following the initial fixed rate period, the loan resets to an adjustable interest rate that is indexed to CME Term SOFR or Prime, plus a spread. Alternately, the borrower may opt for a fixed rate that is tied to the five-year fixed advance rate of the FHLB-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.

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 percent and a maximum LTV of 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.

At September 30, 2023, our ADC loans represented $2.9 billion, or 3.5 percent, of total loans held for investment, reflecting an increase of $914 million compared to December 31, 2022.

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. 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 meet pre-sale or pre-lease requirements prior to funding.

At September 30, 2023 C&I loans totaled $24.4 billion or 29.1 percent of total loans held-for-investment. Included in this portfolio is $5.6 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 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.

The interest rates on our C&I loans can be fixed or floating, with floating-rate loans being tied to 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.

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.

In the third quarter of 2023, the Company originated $2.2 billion of specialty finance loans and leases, representing 45 percent of total originations compared to $1.6 billion for the same period in 2022, representing 41 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.

At September 30, 2023, other loans totaled $2.6 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.

We monitor non-accrual loans both within and beyond our primary lending area in the same manner. Monitoring loans generally involves inspecting and re-appraising the collateral properties; holding discussions with the principals and managing agents of the borrowing entities 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. advancing funds as needed; and seeking approval from the courts to appoint a receiver, when necessary to protect the Bank’s interests, including to collect rents, manage property operations, and ensure maintenance of the collateral properties.

It is our policy to order updated appraisals for all non-performing loans 90 days or more past due that are collateralized by multi-family buildings, CRE properties, or land, 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.

The following table presents our non-performing loans held for investment by loan type and the changes in the respective balances:

The allowance for credit losses on loans and leases increased $226 million from December 31, 2022 to September 30, 2023. The day 1 impact of the Signature Transaction that closed on March 20, 2023 added $138 million to the reserve. The remaining net increase of approximately $88 million consisted of a $111 million provision partially offset by net charge-offs of $23 million. The $111 million provision was driven by changes in the macroeconomic forecasts, 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 increase reflects unfavorable market conditions in the CRE portfolio (primarily office). The allowance for credit losses on loans and leases represented 143 percent of non-performing loans at September 30, 2023, as compared to 279 percent at the prior year-end.

At the prior year-end, available-for-sale securities were $9.1 billion, and had an estimated weighted average life of six years. Mortgage-related securities accounted for $4.8 billion of the year-end balance, with other debt securities accounting for the remaining $4.3 billion.

At September 30, 2023 the Company had $578 million and $329 million of FHLB-NY stock, at cost, and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2022, the Company had $762 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. The Company maintains an investment in FHLB-NY stock and, as a result of the Flagstar acquisition, FHLB-Indianapolis stock, partly in conjunction with its membership in the FHLB and partly related to its access to the FHLB funding it utilizes. In addition, the Company had Federal Reserve Bank stock, at cost, of $203 million and $176 million at September 30, 2023 and December 31, 2022, respectively.

We record goodwill 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. As of September 30, 2023 and December 31, 2022 goodwill was $2.4 billion.

The Parent Company has three primary funding sources for the payment of dividends, share repurchases, and other corporate uses: dividends paid to the Parent Company by the Bank; capital raised through the issuance of securities; and funding raised through the issuance of debt instruments.

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.

Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer, and 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 the need to fund our 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).

Our uninsured deposits are the portion of deposit accounts that exceed the FDIC insurance limit (currently $250,000). These amounts were estimated based on the same methodologies and assumptions used for regulatory reporting purposes and excludes internal accounts. At September 30, 2023 our deposit base includes $31.3 billion of uninsured deposits a net increase of $14.8 billion as compared to December 31, 2022 due to the Signature Transaction. This represents 38 percent of our total deposits.

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 FHLB-Indianapolis advances) and, to a lesser extent, junior subordinated debentures and subordinated notes. At September 30, 2023, total borrowed funds decreased $6.7 billion to $14.6 billion compared to the balance at December 31, 2022 primarily driven by the paydown of wholesale borrowings with cash received in the Signature Transaction.

Wholesale borrowings at September 30, 2023 were $13.6 billion compared to $20.3 billion at December 31, 2022.

We had $547 million of federal funds outstanding at September 30, 2023. At December 31, 2022, there were no federal funds outstanding.

See Note 11, “Borrowed Funds,” in Item 8, “Financial Statements and Supplementary Data” for a further discussion of our wholesale borrowings, our junior subordinated debentures and subordinated debt.

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 $6.9 billion and $2.0 billion, at September 30, 2023 and December 31, 2022, respectively. The $4.9 billion increase in cash and cash equivalents includes custodial deposits related to the Signature Transaction.

At September 30, 2023, our total ready liquidity (cash and cash equivalents, unpledged securities, and FHLB borrowing capacity),was $31.2 billion , approximately matching the balance of our uninsured deposits.

CDs due to mature or reprice in one year or less from September 30, 2023 totaled $15.7 billion, representing 90 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 the Bank and must provide for its own liquidity. At September 30, 2023 the Parent Company held cash and cash equivalents of $160 million. In addition to operating expenses and any share repurchases, the Parent Company is responsible for paying any dividends declared to our common and preferred 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.

At September 30, 2023, we believe the Company has sufficient liquidity and capital resources to meet its cash flow obligations over the next 12 months and for the foreseeable future.

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.

We also are obligated under certain non-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 included in the Consolidated Statements of Condition and totaled $456 million at September 30, 2023 an increase of $334 million compared to $122 million at December 31, 2022 driven by the Signature Transaction.

At September 30, 2023, we also had commitments to extend credit in the form of mortgage and other loan originations, as well as commercial, performance stand-by, and financial stand-by letters of credit. These 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 the Company’s commitments to originate loans and letters of credit:

The letters of credit we 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 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 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. 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, and ready liquidity of $31.2 billion, we expect that our funding will be sufficient to fulfill these cash obligations and commitments when they are due both in the short term and long term.

For the three months ended September 30, 2023, we did not engage in any off-balance sheet transactions that we expect to have a material effect on our financial condition, results of operations or cash flows.

At September 30, 2023, we had no commitments to purchase securities.

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 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 of held-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.

The net changes in ~~thousands, except share data)~~

   September 30,
2017 December 31,
2016
   (unaudited)
Assets:

Cash and cash equivalents
   $ 3,277,427 $ 557,850
Securities:

Available-for-sale ($1,162,014 pledged at September 30, 2017)
   3,031,026 104,281
Held-to-maturity ($1,930,533 pledged and fair value of $3,813,959 at December 31, 2016)
   —   3,712,776


Total securities
   3,031,026 3,817,057


Loans held for sale
   104,938 409,152
Non-covered loans held for investment, net of deferred loan fees and costs
   37,506,199 37,382,722
Less: Allowance for losses onnon-covered loans
   (158,918 ) (158,290 )


Non-covered loans held for investment, net
   37,347,281 37,224,432
Covered loans
   —   1,698,133
Less: Allowance for losses on covered loans
   —   (23,701 )


Covered loans, net
   —   1,674,432


Total loans, net
   37,452,219 39,308,016
Federal Home Loan Bank stock, at cost
   579,474 590,934
Premises and equipment, net
   375,482 373,675
FDIC loss share receivable
   —   243,686
Goodwill
   2,436,131 2,436,131
Core deposit intangibles
   —   208
Bank-owned life insurance
   961,412 949,026
Other assets (includes $16,990 of other real estate owned covered by Loss Share Agreements at December 31, 2016)
   344,720 649,972


Total assets
   $ 48,457,891 $ 48,926,555


Liabilities and Stockholders’ Equity:

Deposits:

Interest-bearing checking and money market accounts
   $ 12,338,949 $ 13,395,080
Savings accounts
   4,996,578 5,280,374
Certificates of deposit
   8,802,573 7,577,170
Non-interest-bearing accounts
   2,755,097 2,635,279


Total deposits
   28,893,197 28,887,903


Borrowed funds:

Wholesale borrowings:

Federal Home Loan Bank advances
   11,554,500 11,664,500
Repurchase agreements
   450,000 1,500,000
Federal funds purchased
   —   150,000


Total wholesale borrowings
   12,004,500 13,314,500
Junior subordinated debentures
   359,102 358,879


Total borrowed funds
   12,363,602 13,673,379
Other liabilities
   441,438 241,282


Total liabilities
   41,698,237 42,802,564


Stockholders’ equity:

Preferred stock at par $0.01 (5,000,000 shares authorized): Series A (515,000 shares issued and outstanding)
   502,840 —
Common stock at par $0.01 (900,000,000 shares authorized; 489,072,101 and 487,067,889 shares issued; and 489,061,848 and 487,056,676 shares outstanding, respectively)
   4,891 4,871
Paid-in capital in excess of par
   6,063,813 6,047,558
Retained earnings
   192,607 128,435
Treasury stock, at cost (10,253 and 11,213 shares, respectively)
   (130 ) (160 )
Accumulated other comprehensive loss, net of tax:

Net unrealized gain (loss) on securities available for sale, net of tax of $34,189 and $534, respectively
   47,917 (753 )
Net unrealized loss on thenon-credit portion of other-than-temporary impairment (“OTTI”) losses on securities, net of tax of $3,338 and $3,351, respectively
   (5,221 ) (5,241 )
Net unrealized loss on pension and post-retirement obligations, net of tax of $31,744 and $34,355, respectively
   (47,063 ) (50,719 )


Total accumulated other comprehensive loss, net of tax
   (4,367 ) (56,713 )


Total stockholders’ equity
   6,759,654 6,123,991


Total liabilities and stockholders’ equity
   $ 48,457,891 $ 48,926,555

EVE presented in the preceding table are within the parameters approved by the Boards of Directors of the Company and the Bank.

Accordingly, while the 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.

Based on the information and assumptions in effect at September 30, 2023, 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:

The net changes in NII presented in the preceding table are within the parameters approved by the Boards of Directors of the Company and the Bank.

New York Community Bancorp, Inc. (on a stand-alone basis, the “Parent Company” or, collectively with its subsidiaries, the “Company” or "we") was organized under Delaware law on July 20, 1993 and is the holding company for ~~New York Community~~Flagstar Bank ~~and New York Commercial Bank~~N.A. (hereinafter referred to as the ~~“Community Bank”~~“Bank”). The Company is headquartered in Hicksville, New York with regional headquarters in Troy, Michigan.

On November 23, 1993, ~~at which date~~ the Company issued its initial offering of common stock (par value: $0.01 per share) at a price of $25.00 per share ($0.93 per share on a split-adjusted basis, reflecting the impact of nine stock splits between 1994 and 2004). The ~~Commercial Bank was established~~Company has grown organically and through a series of accretive mergers and acquisitions, culminating in its acquisition of Flagstar Bancorp, Inc., which closed on December ~~30, 2005.~~

~~Reflecting its growth through acquisitions,~~1, 2022 and the ~~Community~~Signature Transaction which closed on March 20, 2023.

Flagstar Bank, N.A. currently operates ~~225~~436 branches ~~two~~across nine states, including strong footholds in the Northeast and Midwest and exposure to markets in the Southeast and West Coast. Flagstar Mortgage operates nationally through a wholesale network of ~~which operate directly under the Community~~approximately 3,000 third-party mortgage originators. Flagstar Bank ~~name. The remaining 223 Community Bank branches operate~~N.A. also operates through ~~seven divisional banks:~~eight local divisions, each with a history of service and strength: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, ~~and~~ Roosevelt Savings Bank, and Atlantic Bank in New York; Garden State Community Bank in New Jersey; ~~AmTrust Bank in Florida and Arizona; and~~ Ohio Savings Bank in ~~Ohio.~~

~~The Commercial~~Ohio; and AmTrust Bank ~~currently operates 30 branches~~ in ~~Manhattan, Queens, Brooklyn, Westchester County,~~Arizona and ~~Long Island (all in New York), including 18 branches that operate under the name “Atlantic Bank.”~~

Florida.

The following is a description of the significant accounting and reporting policies that the Company and its subsidiaries follow in preparing and presenting their consolidated financial statements, which conform to U.S. generally accepted accounting principles ~~(“GAAP”)~~ and to general practices within the banking industry. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates ~~that are particularly susceptible to change in the near term~~ are used in connection with the determination of the ~~allowances~~allowance for ~~loan losses;~~credit losses, mortgage servicing rights, the ~~evaluation of goodwill for impairment;~~Flagstar acquisition and the ~~evaluation of the need for a valuation allowance on the Company’s deferred tax assets.~~

Signature Transaction.

The accompanying consolidated financial statements include the accounts of the Company and other entities in which the Company has a controlling financial interest. All inter-company accounts and transactions are eliminated in consolidation. The Company currently has certain unconsolidated subsidiaries in the form of wholly-owned statutory business trusts, which were formed to issue guaranteed capital ~~securities (“capital securities”).~~securities. See Note 7,11 “Borrowed Funds,” for additional information regarding these trusts.

When necessary, certain reclassifications have been made to prior-year amounts to conform to the current-year presentation.

Basic ~~earnings per common share (“EPS”)~~EPS is computed by dividing the net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the same method as basic EPS, however, the computation reflects the potential dilution that would occur if outstandingin-the-money stock options were exercised and converted into common stock.

Unvested stock-based compensation awards containingnon-forfeitable rights to dividends paid on the Company’s common stock are considered participating securities, and therefore are included in thetwo-class method for calculating EPS. Under thetwo-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends on the common stock. The Company grants restricted stock to certain employees under its stock-based compensation plan. Recipients receive cash dividends during the vesting periods of these awards, including on the unvested portion of such awards. Since these dividends arenon-forfeitable, the unvested awards are considered participating securities and therefore have earnings allocated to them.

The following table presents the Company’s computation of basic and diluted ~~EPS~~earnings per common share:

There were no unrealized losses on equity securities recognized in~~FHLB-NY~~ ~~stock~~ earnings for the three months ended September 30, 2023. For the three months ended September 30, 2022 there were unrealized losses on equity securities of $1 million recognized in ~~order to have access to the funding it provides.~~

~~The following table summarizes the gross proceeds and gross realized gains from the sale ofavailable-for-sale~~ ~~securities during the periods indicated:~~

   For the Nine Months Ended
September 30,
(in thousands)    2017    2016
Gross proceeds
   $ 246,209    $ 264,413
Gross realized gains
   1,986    413

~~In addition, during~~earnings. For the nine months ended September 30, ~~2017, the Company sought to take advantage~~2023 and 2022 there were unrealized losses on equity securities of ~~favorable bond market conditions~~$1 million and ~~soldheld-to-maturity~~ ~~securities with an amortized cost of $521.0~~$2 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 ofheld-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 our 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).

(in thousands)    For the
Nine Months Ended
September 30, 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    126


Ending credit loss amount as of September 30, 2017
   $ 197,426

respectively.

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 September 30, ~~2017:~~

   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:

GSE certificates
   $ 197,953    $ 662    $ 18,195    $ 555    $ 216,148    $ 1,217
U. S. Treasury obligations
   —      —      —      —      —      —
Municipal bonds
   52,715    849    —      —      52,715    849
Capital trust notes
   —      —      32,787    10,939    32,787    10,939
Equity securities
   11,621    184    —      —      11,621    184












Total temporarily impairedavailable-for-sale securities
   $ 262,289    $ 1,695    $ 50,982    $ 11,494    $ 313,271    $ 13,189

2023:

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:~~

   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

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 September 30, 2017, the Company had unrealized losses on certain GSE mortgage-related securities, municipal bonds, capital trust notes, and equity securities. The unrealized losses on the Company’s GSE mortgage-related securities, municipal bonds, and capital trust notes at September 30, 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 September 30, 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.

2022:

The investment securities designated as having a continuous loss position for twelve months or more at September 30, ~~2017~~2023 consisted of ~~five~~sixty-three agency collateralized mortgage obligations, six capital ~~trust~~trusts notes, nine asset-backed securities, thirteen corporate bonds, forty-one US government agency bonds, 302 mortgage-backed securities, one mutual fund, one municipal bond, and ~~five agency mortgage-related securities. At December 31, 2016~~one foreign note. The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2022 consisted of twenty-three agency collateralized mortgage obligations, five capital ~~trust notes. At~~trusts notes, seven asset-backed securities, two corporate bonds, thirty-three US government agency bonds, 133 mortgage-backed securities, one mutual fund, 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. We also 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

In the first quarter of 2023, the company held a $20 million corporate bond in Signature Bank which was placed into receivership on March 12, 2023. We have taken a $20 million provision for credit loss and charged-off this security during the three months ended March 31, 2023.

None of the remaining unrealized losses identified as of September 30, ~~2017,~~2023 or December 31, 2022 relates to the marketability of the securities 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 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 remains with respect to debt securities as of September 30, 2023.

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

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:

Supplemental cash ~~flows~~flow information related to the leases for the following periods:

Supplemental balance sheet information related to the leases for the following periods:

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:

The following table presents the derivative subject to a master netting agreement, including the cash pledged as collateral:

The following table presents the effect of the Company’s cash flow derivative instruments on AOCL:

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, additional interest expense reduction of $124 million is expected to be reclassified out of AOCL.

As a result of the Signature Transaction, the Company recorded $464 million of core deposit intangible and other intangible assets that are amortizable.

As of September 30, 2023, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as ~~amended. We intend such forward-looking statements to be covered~~amended ("Exchange Act"), an evaluation was performed by the ~~safe harbor provisions for forward-looking statements contained in~~Company’s Management, including our principal executive and financial officers, regarding the ~~Private Securities Litigation Reform Act~~design and effectiveness of ~~1995,~~our disclosure controls and ~~are including this statement for purposes of said safe harbor provisions.~~

~~Forward-looking statements, which are based on certain assumptions~~procedures. Based upon that evaluation, the principal executive 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 believefinancial officers have concluded 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:

~~general economic conditions, either nationally or in some or all of the areas in which we and our customers conduct our respective businesses;~~

~~conditions in the securities markets and real estate markets or the banking industry;~~

~~changes in real estate values, which could impact the quality of the assets securing the loans in our portfolio;~~

changes in interest rates, which may affect our net income, prepayment income, mortgage banking income, and other future cash flows, or the market value of our assets, including our investment securities;

~~changes in the quality or composition of our loan or securities portfolios;~~

~~changes in our capital management policies, including those regarding business combinations, dividends, and share repurchases, among others;~~

potential increases in costs if the Company is designated a “Systemically Important Financial Institution” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”);

~~heightened regulatory focus on CRE concentration and related limits that have been, or may in the future be, imposed by regulators;~~

~~our use of derivatives to mitigate our interest rate exposure;~~

~~changes in competitive pressures among financial institutions or fromnon-financial~~ ~~institutions;~~

~~changes in deposit flows and wholesale borrowing facilities;~~

~~changes in the demand for deposit, loan, and investment products and other financial services in the markets we serve;~~

~~our timely development of new lines of business and competitive products or services in a changing environment, and the acceptance of such products or services by our customers;~~

~~our ability to obtain timely shareholder and regulatory approvals of any merger transactions we may propose;~~

our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations, and our ability to realize related revenue synergies and cost savings within expected time frames;

~~potential exposure to unknown or contingent liabilities of companies we have acquired, may acquire, or target for acquisition;~~

~~failure to obtain applicable regulatory approvals for the payment of future dividends;~~

~~the ability to pay future dividends at currently expected rates;~~

~~the ability to hire and retain key personnel;~~

~~the ability to attract new customers and retain existing ones in the manner anticipated;~~

~~changes in our customer base or in the financial or operating performances of our customers’ businesses;~~

~~any interruption in customer service due to circumstances beyond our control;~~

~~the outcome of pending or threatened litigation, or of matters before regulatory agencies, whether currently existing or commencing in the future;~~

~~environmental conditions that exist or may exist on properties owned by, leased by, or mortgaged to the Company;~~

~~any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems;~~

~~operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which we are highly dependent;~~

~~the ability to keep pace with, and implement on a timely basis, technological changes;~~

changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, the Dodd-Frank Act, and other changes pertaining to banking, securities, taxation, rent regulation and housing, financial accounting and reporting, environmental protection, and insurance, and the ability to comply with such changes in a timely manner;

~~changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System;~~

~~changes in accounting principles, policies, practices, or guidelines;~~

~~a material breach in performance by the Community Bank under our Loss Share Agreements with the FDIC;~~

~~changes in our estimates of future reserves based upon the periodic review thereof under relevant regulatory and accounting requirements;~~

changes in regulatory expectations relating to predictive models we use in connection with stress testing and other forecasting or in the assumptions on which such modeling and forecasting are predicated;

~~changes in our credit ratings or in our ability to access the capital markets;~~

~~natural disasters, war, or terrorist activities; and~~

~~other economic, competitive, governmental, regulatory, technological, and geopolitical factors affecting our operations, pricing, and services.~~

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

Furthermore, we routinely evaluate opportunities to expand through acquisitions and conduct due diligence activities in connection with such opportunities. As a result, acquisition discussions and, in some cases, negotiations, may take place at any time, and acquisitions involving cash or our debt or equity securities may occur.

~~See Part II, Item 1A, “Risk Factors,” in this report and Part I, Item 1A, “Risk Factors,” in our Form10-K~~ ~~for the year ended December 31, 2016 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.

~~RECONCILIATIONS OF STOCKHOLDERS’ EQUITY, COMMON STOCKHOLDERS’ EQUITY, AND TANGIBLE COMMON STOCKHOLDERS’ EQUITY;~~

~~TOTAL ASSETS AND TANGIBLE ASSETS; AND THE RELATED MEASURES~~

~~(unaudited)~~

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

1.

Tangible common stockholders’ equity is an important indication of the Company’s ability to grow organically and through business combinations, as well as its ability to pay dividends and to engage in various capital management strategies.

2.

Tangible book value per common share and the ratio of tangible common stockholders’ equity to tangible assets are among the capital measures considered by current and prospective investors, both independent of, and in comparison with, the Company’s peers.

~~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 these~~non-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:

(in thousands, except per share amounts)    September 30,
2017 December 31,
2016
Stockholders’ Equity
   $ 6,759,654 $ 6,123,991
Less: Goodwill
   (2,436,131 ) (2,436,131 )
Core deposit intangibles
   —   (208 )
Preferred stock
   (502,840 ) —


Tangible common stockholders’ equity
   $ 3,820,683 $ 3,687,652
Total Assets
   $ 48,457,891 $ 48,926,555
Less: Goodwill
   (2,436,131 ) (2,436,131 )
Core deposit intangibles
   —   (208 )


Tangible assets
   $ 46,021,760 $ 46,490,216
Common stockholders’ equity to total assets
   12.91 % 12.52 %
Tangible common stockholders’ equity to tangible assets
   8.30 7.93
Book value per common share
   $12.79 $12.57
Tangible book value per common share
   7.81 7.57

~~Executive Summary~~

New York Community Bancorp, Inc. is the holding company for New York Community Bank (the “Community Bank”), with 225 branches in Metro New York, New Jersey, Ohio, Florida, and Arizona; and New York Commercial Bank (the “Commercial Bank”), with 30 branches in Metro New York. At September 30, 2017, we had total assets of $48.5 billion, including total loans, net, of $37.5 billion, total deposits of $28.9 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. 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 the requirements of the New York Stock Exchange, where shares of our common stock are traded under the symbol “NYCB” and shares of our preferred stock trade under the symbol “NYCB PR A.”

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. In the three months ended September 30, 2017, we generated net income of $110.5 million and net income available to common shareholders of $102.3 million, or $0.21 per diluted common share.

~~Resumption of Meaningful Loan Growth~~

~~After not growing the balance sheet for nearly three years, totalnon-covered~~ ~~loans held for investment grew 2.7% over the three months on an annualized basis to $37.5 billion. Totalnon-covered~~ mortgage loans held for investment grew at an annualized rate of 3.5% to $35.5 billion, including 4.3% annualized growth in our multi-family loan portfolio. This was partially offset by a 2.4% (9.5% annualized) sequential decline in commercial and industrial (“C&I”) loans, largely the result of prepayments. Total loans originated for investment increased 24% on a sequential basis, to $2.3 billion, including 50% growth in multi-family originations and 30% growth in commercial real estate (“CRE”) loan originations.

~~We Maintained Our Solid Record of Asset Quality~~

~~Non-performingnon-covered~~ ~~assets declined 7% to $84.7 million, or 0.17%, of totalnon-covered~~ ~~assets at the end of the~~ current ~~third quarter as compared to $91.6 million, or 0.20%, of totalnon-covered~~ ~~assets at June 30, 2017.Non-performingnon-covered~~ ~~loans decreased 16% to $69.0 million, or 0.18%, of totalnon-covered~~ ~~loans at the end of the current third quarter as compared to $82.0 million, or 0.22%, of totalnon-covered~~ ~~loans at June 30, 2017.~~

~~During the quarter,non-accrualnon-covered~~ ~~mortgage loans declined 22% to $24.3 million, while othernon-accrualnon-covered~~ ~~loans, which primarily consisted of taxi medallion-related loans, decreased 12% to $44.7 million. These improvements were partially offset by a 64% increase, to $15.8 million, innon-covered~~ ~~repossessed assets.~~

Net charge-offs for the current third quarter rose to $40.4 million, or 0.11%, of average loans compared to $11.4 million, or 0.03%, of average loans in the second quarter of 2017. The increase was due to charge-offs on the taxi medallion-related loan portfolio. Taxi medallion-related loans accounted for $40.6 million of this quarter’s charge-offs compared to $11.3 million in the trailing quarter. Excluding these charge-offs, the Company would have recorded net recoveries during the quarter. At September 30, 2017, the Company’s total taxi medallion-related exposure was $105.6 million.

~~Our Net Interest Income Was Pressured by the Rise in Interest Rates~~

The FRB has raised its target federal funds rate four times since the fourth quarter of 2016, including in March and June of 2017. This increase in short-term interest rates led to an increase in our cost of funds. As a result of this factor, our net interest income fell $11.4 million, or 4% sequentially, and $42.1 million, or 13% year-over-year, to $276.3 million and our net interest margin fell 12 and 38 basis points, respectively, to 2.53% in the third quarter of this year.

~~Ongoing Expense Control~~

~~Non-interest~~ expense totaled $162.2 million in the current third quarter, down 1% from the trailing-quarter level and up modestly from the year-earlier quarter. Merger-related expenses were $2.2 million in the year-earlier period; there were no comparable expenses in the third quarter of 2017. The sequential improvement was largely due to lower operating expenses including compensation and benefits expense and general and administrative (“G&A”) expense.

~~External Factors~~

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

~~Interest Rates~~

~~Among the external factors that tend to influence our performance, the interest rate environment is key.~~

The cost of our deposits and short-term borrowed funds is largely based on short-term rates of interest, the level of which is partially impacted by the actions of the Federal Open Market Committee of the Federal Reserve Board of Governors (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. Since the fourth quarter of 2008, when the target federal funds rate was lowered to a range of 0% to 0.25%, the rate has been raised four times: on December 17, 2015, to a range of 0.25% to 0.50%; on December 14, 2016, to a range of 0.50% to 0.75%; on March 15, 2017, to a range of 0.75% to 1.00%; and most recently on June 14, 2017 to a range of 1.00% to 1.25%.

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

~~The following table summarizes the high, low, and average five- andten-year~~ ~~CMTs in the respective periods:~~

   Five-Year Constant Maturity Treasury Rate    Ten-Year Constant Maturity Treasury Rate
   Sept. 30 June 30, Sept. 30,    Sept. 30, June 30, Sept. 30,
   2017 2017 2016    2017 2017 2016
High
   1.95 % 1.94 % 1.26 % High    2.39 % 2.42 % 1.73 %
Low
   1.63 1.71 0.94 Low    2.05 2.05 1.37
Average
   1.81 1.81 1.13 Average    2.24 2.26 1.56

~~(Source: Bloomberg)~~

Changes in market interest rates generally have a lesser impact on our multi-family and CRE loan production than they do on other types of loans we produce. 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 meaningful. In the third quarter of 2017, prepayment income from loans contributed $14.1 million to interest income; in the trailing and year-earlier quarters, the contribution was $13.3 million and $13.4 million, respectively.

~~Economic Indicators~~

While we attribute our asset quality to the nature of the loans we produce and our conservative underwriting standards, the quality 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.

The following table presents the unemployment rates for the United States and our key deposit markets in the months ended September 30, 2017, June 30, 2017, and September 30, 2016. While unemployment declined year-over-year in all of these markets, the sequential comparison indicates declines in certain markets and modest increases in two states and New York City.

   For the Month Ended
   September 30,
2017 June 30,
2017 September 30,
2016
Unemployment rate:

United States
   4.1 % 4.5 % 4.8 %
New York City
   5.0 4.4 5.4
Arizona
   4.7 5.3 5.4
Florida
   3.6 4.4 5.1
New Jersey
   4.8 4.3 4.9
New York
   4.7 4.5 4.9
Ohio
   4.7 5.4 4.9

~~(Source: U.S. Department of Labor)~~

Another key economic indicator is the Consumer Price Index (the “CPI”), which 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:

   For the Twelve Months Ended
   September
2017 June
2017 September
2016
Change in prices:
   0.5 % (0.1 )% 0.3 %

Yet another pertinent economic indicator is 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. These measures are important in view of the fact that 64.7% of our multi-family loans and 70.0% of our CRE loans are secured by properties in New York, with Manhattan accounting for 26.9% and 51.3% of our multi-family and CRE loans, respectively.

As reflected in the following table, residential rental vacancy rates in New York increased year-over-year and linked-quarter, while office vacancy rates in Manhattan declined year-over-year and linked quarter.

   For the Three Months Ended
   September 30,
2017 June 30,
2017 September 30,
2016
Rental Vacancy Rates:

New York residential
   5.6 % 5.1 % 5.1 %
Manhattan office
   10.2 10.8 10.5

~~Lastly, the Consumer Confidence Index~~^® ~~increased to 120.6 in September 2017 from 117.3 in June 2017 and 104.1 in September 2016. An index level of 90 or more is considered indicative of a strong economy.~~

~~Recent Events~~

~~Strategic Exit from the Mortgage Banking Business~~

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 (“Freedom”). The sale of our mortgage banking business effectively takes the Company out of the~~one-to-four~~ family residential wholesale lending business. 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 FirstKey Mortgage, LLC, an affiliate of Cerberus Capital Management, L.P. (“Cerberus”).~~

On July 28, 2017, the Company completed the sale, resulting in the receipt of proceeds of $1.9 billion from Cerberus and the FDIC to sell the aforementioned loans and settle the related LSA, resulting in a gain of $74.6 million which is included in~~“Non-interest~~ ~~income” in the accompanying Consolidated Statement of Income and Comprehensive Income. Effective October 31, 2017, the Company and the FDIC completed termination of the LSA.~~

The sale of our mortgage banking business to Freedom, which included both our origination and servicing platforms, as well as our mortgage servicing portfolio with unpaid loan principal balances totaling $20.5 billion and related mortgage servicing rights (“MSRs”) asset of $208.8 million, closed on September 29, 2017. We received proceeds in the amount of $226.6 million, resulting in a~~pre-tax~~ ~~gain of $7.4 million.~~

The decision to sell the mortgage banking business and the assets covered under our LSA was the result of an evaluation with the Board of Directors and our outside advisors. Selling to a large, national, full-service mortgage banking company that would keep certain employees and maintain operations in the region were important considerations during the evaluation process. These actions are consistent with the Company’s strategic objectives. Such sales allow the Company to focus on its core business model, including growth through acquisitions, generate liquidity which will be redeployed into higher-earning assets, and enhance returns through improved efficiencies.

~~The Community Bank’s mortgage banking operation 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 loans were generally sold to GSEs, servicing retained. To a much lesser extent, the Community Bank used its mortgage banking platform to originate jumbo loans.~~

~~Declaration of Dividend on Common Shares~~

On October 24, 2017, the Board of Directors declared a quarterly cash dividend of $0.17 per share on our common stock, payable on November 21, 2017 to shareholders of record at the close of business on November 7, 2017.

~~Critical Accounting Policies~~

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 onnon-covered~~ ~~loans; the determination of the amount, if any, of goodwill impairment; and the determination of the valuation allowance 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.

~~Allowance for Losses onNon-Covered~~ ~~Loans~~

~~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 September 30, 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:

~~Changes in lending policies and procedures, including changes in underwriting standards and collection, andcharge-off~~ ~~and recovery practices;~~

Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

~~Changes in the nature and volume of the portfolio and in the terms of loans;~~

~~Changes in the volume and severity ofpast-due~~ ~~loans, the volume ofnon-accrual~~ ~~loans, and the volume and severity of adversely classified or graded loans;~~

~~Changes in the quality of our loan review system;~~

~~Changes in the value of the underlying collateral for collateral-dependent loans;~~

~~The existence and effect of any concentrations of credit, and changes in the level of such concentrations;~~

~~Changes in the experience, ability, and depth of lending management and other relevant staff; and~~

~~The effect of other external factors, such as competition and legal and regulatory requirements, on the level of estimated credit losses in the existing portfolio.~~

~~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 rolling27-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:~~

~~Periodic inspections of the loan collateral by qualifiedin-house~~ ~~and external property appraisers/inspectors;~~

~~Regular meetings of executive management with the pertinent Board committee, during which observable trends in the local economy and/or the real estate market are discussed;~~

Assessment of the aforementioned factors by the pertinent members of the Boards of Directors and management when making a business judgment regarding the impact of anticipated changes on the future level of loan losses; and

~~Analysis of the portfolio in the aggregate, as well as on an individual loan basis, taking into consideration payment history, underwriting analyses, and internal risk ratings.~~

~~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.~~

~~Goodwill Impairment~~

We have significant intangible assets related to goodwill. In connection with our acquisitions, assets that are acquired and liabilities that are assumed are recorded at their estimated fair values. Goodwill represents the excess of the purchase price of our acquisitions over the fair value of the identifiable net assets acquired, including other identified intangible assets. 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. Previously, we had 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; accordingly, we have identified only one reporting unit.

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.~~

~~Under step one of thetwo-step~~ test, we are required to determine the fair value of each reporting unit and compare it to the carrying value, including goodwill and other intangible assets, of such reporting unit. If the fair value exceeds the carrying value, no impairment loss is recognized and the second step, which is a calculation of the impairment, is not performed. However, if the carrying value of the reporting unit exceeds its fair value, an impairment charge is recorded equal to the extent that the carrying amount of goodwill exceeds its implied fair value.

Application of the impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and the determination of the fair value of each reporting unit. In assessing whether goodwill is impaired, we must make estimates and assumptions regarding future cash flows, long-term growth rates of our business, operating margins, discount rates, weighted average cost of capital, and other factors to determine the fair value of our assets. These estimates and assumptions require management’s judgment, and changes to these estimates and assumptions, as a result of changing economic and competitive conditions, could materially affect the determination of fair value and/or impairment. Future events could cause us to conclude that indicators of impairment exist for goodwill, and may result from, among other things, deterioration in the performance of our business, adverse market conditions, adverse changes in applicable laws and regulations, competition, or the sale or disposition of a reporting unit. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.

As of September 30, 2017, we had goodwill of $2.4 billion. Our goodwill is evaluated for impairment annually at December 31st, or more frequently if conditions exist that indicate that the value may be impaired. During the three months ended September 30, 2017, no triggering events were identified that indicated that the value of goodwill might be impaired as of such date. We performed our annual goodwill impairment test as of December 31, 2016 and, based on the results of our qualitative assessments, found no indication of goodwill impairment at that date.

~~Income Taxes~~

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.

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 carry forward 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 carry forwards. 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.

~~Balance Sheet Summary~~

At September 30, 2017, we recorded total assets of $48.5 billion, a $110.2 million increase from the balance at June 30, 2017 and a $468.7 million decline from the balance at December 31, 2016. Loans, net, and securities represented $37.5 billion and $3.0 billion, respectively, of the September 30th balance and were down $1.4 billion and $140.1 million, respectively, from the trailing~~quarter-end~~ ~~balances and $1.9 billion and $786.0 million, respectively, from theyear-end~~ ~~balances.~~

Deposits and borrowed funds totaled $28.9 billion and $12.4 billion, respectively, at the end of the current third quarter. The current third quarter deposit balance was comparable to the balances at both the second quarter of this year and year end. Borrowed funds were unchanged from the prior~~quarter-end~~ ~~balance and declined $1.3 billion from year end.~~

~~Total stockholders’ equity rose $635.7 million from theyear-end~~ 2016 balance, due primarily to a $502.8 million preferred stock offering in March, and $24.9 million from the June 30, 2017 balance, to $6.8 billion, at the current third-quarter end. Common stockholders’ equity represented 12.91% of total assets at September 30, 2017 compared to 12.89% and 12.31%, respectively, of total assets at June 30, 2017 and September 30, 2016, and a book value per common share of $12.79 at September 30, 2017 compared to $12.74 at June 30, 2017 and $12.50 at September 30, 2016.

~~Loans~~

~~Loans, net, fell $1.4 billion from the trailingquarter-end~~ ~~and $1.9 billion from year end to $37.5 billion in the three months ended September 30, 2017, representing 77.3% of total assets at that date. Included in thequarter-end~~ ~~balance werenon-covered~~ ~~loans held for investment, net, of $37.3 billion, andnon-covered~~ ~~loans held for sale of $104.9 million, as more fully discussed below.~~

~~Non-Covered~~ ~~Loans Held for Investment~~

~~Non-covered~~ loans held for investment totaled $37.5 billion at the end of the current third quarter, up $255.2 million from the June 30, 2017 balance and up $123.5 million from the balance at December 31, 2016. Loan originations increased $444.6 million, or 24%, sequentially, driven by 50% growth in multi-family originations and 30% growth in CRE originations.

Sales of participations totaled $37.8 million in the three months ended September 30, 2017, as compared to $148.2 million in the trailing three-month period. The pace of loan sale participations has declined due to the Company’s strategic decision to resume its balance sheet growth.

~~In addition to multi-family and CRE loans, theheld-for-investment~~ ~~portfolio includes substantially smaller balances ofone-to-four~~ ~~family loans, ADC loans, and other loans, with specialty finance loans and leases and other C&I loans comprising the bulk of the “Other loan” portfolio.~~

At September 30, 2017, loans secured by multi-family, CRE, and ADC properties (as defined in the FDIC’s CRE Guidance) represented 739.9% of the consolidated Banks’ total risk-based capital, within the 850% limit agreed to with our regulators.

~~The following table presents information about the loans held for investment we originated for the respective periods:~~

   For the Three Months Ended    For the Nine Months Ended
   Sept. 30,    June 30,    Sept. 30,    Sept. 30,    Sept. 30,
(in thousands)    2017    2017    2016    2017    2016
Mortgage Loans Originated for Investment:

Multi-family
   $ 1,432,424    $ 952,265    $ 1,276,358    $ 3,339,302    $ 4,529,904
Commercial real estate
   249,773    192,072    345,543    692,187    892,676
One-to-four family residential
   22,047    50,697    101,365    116,603    248,020
Acquisition, development, and construction
   21,754    20,836    17,855    55,509    123,849










Total mortgage loans originated for investment
   $ 1,725,998    $ 1,215,870    $ 1,741,121    $ 4,203,601    $ 5,794,449










Other Loans Originated for Investment:

Specialty finance
   $ 468,735    $ 498,918    $ 369,308    $ 1,236,817    $ 907,551
Other commercial and industrial
   115,569    150,787    151,279    388,511    451,340
Other
   700    785    894    2,370    3,010










Total other loans originated for investment
   $ 585,004    $ 650,490    $ 521,481    $ 1,627,698    $ 1,361,901










Total loans originated for investment
   $ 2,311,002    $ 1,866,360    $ 2,262,602    $ 5,831,299    $ 7,156,350

~~The individualheld-for-investment~~ ~~loan portfolios are discussed in detail below.~~

~~Multi-Family Loans~~

~~Multi-family loans are our principal asset. The loans we produce are primarily secured bynon-luxury~~ ~~residential apartment buildings in New York City that are rent-regulated and feature below-market rents—a market we refer to as our “primary lending niche.”~~

~~Multi-family loan originations represented $1.4 billion, or 62.0%, of theheld-for-investment~~ loans we produced in the current third quarter, reflecting a linked-quarter increase of $480.2 million and a $156.1 million increase year-over-year. At September 30, 2017, multi-family loans represented $27.1 billion, or 72.4%, of total~~non-covered~~ ~~loans held for investment, reflecting a $286.2 million increase from the balance at June 30th and a $200.3 million increase from the balance at December 31st.~~

The average multi-family loan had a principal balance of $5.6 million at the end of the current third quarter, which was modestly higher than the balances at June 30, 2017 and December 31, 2016, respectively.

The majority of our multi-family loans are made to long-term owners of residential apartment buildings with units that are subject to rent regulation and feature below-market rents. Our borrowers typically use the funds we provide for future real estate investments, or to make building-wide improvements and renovations to certain units, as a result of which they are able to increase the rents their tenants pay. In this way, the borrower creates increased cash flows to service debt and borrow against in future years.

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 to the prime rate of interest, 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”),~~ 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 initial five- 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.

Our multi-family loans tend to refinance in approximately three years of origination; at September 30, 2017, June 30, 2017, and December 31, 2016, the weighted average life of the multi-family loan portfolio was 2.7 years, 3.2 years, and 2.9 years, respectively.

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, a~~ten-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 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 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 September 30, 2017, the majority of our multi-family loans were secured by rent-regulated rental apartment buildings. In addition, 64.7% of our multi-family loans were secured by buildings in New York City and 5.5% 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 originate.

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”), 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 of the property (“LTV”).

In addition to requiring a minimum DSCR of 120% 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% 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 the cash flows of our multi-family loans.

~~Commercial Real Estate Loans~~

CRE loans represented $7.6 billion, or 20.1%, of total loans held for investment at the end of the current third quarter, a $9.8 million increase from the balance at June 30, 2017, but a $174.0 million decrease from the balance at December 31, 2016. CRE loans represented $249.8 million, or 10.8%, of loans originated for investment in the current third quarter, reflecting a linked-quarter increase of $57.7 million and a year-over-year decrease of $95.8 million.

~~At September 30, 2017, the average CRE loan had a principal balance of $5.7 million, unchanged from the average principal balance at June 30, 2017, and up modestly from December 31, 2016.~~

~~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 September 30, 2017, 70.0% of our CRE loans were secured by properties in New York City, while properties on Long Island accounted for 11.6%. Other parts of New York State accounted for 2.6% of the properties securing our CRE credits, while all other states accounted for 15.8%, combined.

The terms of our CRE loans are similar to the terms of our multi-family credits, and the same prepayment penalties also apply. Furthermore, our CRE loans also tend to refinance in approximately three years of origination; the weighted average life of the CRE portfolio was 2.9 years, 3.0 years, and 3.4 years at September 30, 2017, June 30, 2017, and December 31, 2016, respectively.

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% and a maximum LTV of 65%. Furthermore, 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, 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 Loans~~

~~Reflecting our announcement that the Company was exiting the mortgage banking business, the September 30, 2017 balance ofone-to-four~~ ~~family loans held for investment was relatively unchanged sequentially at $413.2 million, representing 1.1% of total loans held for investment at that date.~~

~~Acquisition, Development, and Construction Loans~~

~~The balance of ADC loans increased $12.8 million to $385.9 million sequentially, representing 1.0% of totalheld-for-investment~~ loans at the current third-quarter end. In the third quarter of 2017, we originated ADC loans of $21.8 million, a $918,000 increase from the trailing-quarter volume and a year-over-year increase of $3.9 million.

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 nine months ended September 30, 2017 and 2016, we recovered losses against guarantees of $321,000 and $314,000, respectively.

~~Other Loans~~

Other loans of $2.0 billion were relatively unchanged from the trailing three-month period, representing 5.3% of total loans at September 30th due to an increase in specialty finance loans and leases to $1.4 billion and a $20.8 million decline in other C&I loans to $545.5 million. Included in the latter amount were taxi medallion-related loans of $99.1 million, representing 0.3% of total loans held for investment. The remainder of the “other loan” portfolio included a nominal amount of consumer loans.

Originations of other loans totaled $585.0 million in the current third quarter, reflecting a $65.5 million decrease from the trailing-quarter volume and a $63.5 million increase from the year-earlier amount. Specialty finance loans and leases represented the bulk of the quarter’s other loan originations, at $468.7 million, reflecting a $30.2 million decrease from the trailing-quarter level and a $99.4 million increase from the year-earlier amount. Other C&I loans represented $115.6 million of the other loans produced in the current third quarter, down $35.2 million and $35.7 million, respectively, from the volumes in the earlier periods.

~~Specialty Finance Loans and Leases~~

Our specialty finance subsidiary is based in Foxboro, Massachusetts, and staffed by a group of industry veterans with expertise in originating and underwriting senior secured debt and equipment loans and leases. The subsidiary participates in syndicated loans that are brought to us, 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.

The loans and leases we fund fall into three distinct 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 or outright ownership in the underlying collateral, and structured as senior debt or as a~~non-cancelable~~ lease. The pricing of our asset-based and dealer floor-plan loans are at floating rates predominately tied to LIBOR, while our equipment financing credits are at fixed rates at a spread over Treasuries.

~~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.~~

~~Other Commercial and Industrial Loans~~

~~In contrast to the loans produced by our specialty finance subsidiary, the other C&I loans we produce 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, revolving lines of credit, and, to a lesser extent, loans that are partly guaranteed by the Small Business Administration. A broad range of other 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 other C&I loans, several factors are considered, including the purpose, the collateral, and the anticipated sources of repayment. Other C&I loans are typically secured by business assets and personal guarantees of the borrower, and include financial covenants to monitor the borrower’s financial stability.

The interest rates on our other C&I 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, and the profitability of our relationship with the borrower.

~~Lending Authority~~

The loans we originate for investment are subject to federal and state laws and regulations, and are underwritten in accordance with loan underwriting policies and procedures approved by the Mortgage and Real Estate Committee of the Community Bank (the “Mortgage Committee”), the Credit Committee of the Commercial Bank (the “Credit Committee”), and the respective Boards of Directors of the Banks.

Prior to 2017, all loans originated by the Banks were presented to the Mortgage Committee or the 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.~~One-to-four~~ ~~family mortgage loans were approved byline-of-business~~ ~~personnel having underwriting authority pursuant to a separate policy applicable to our mortgage banking segment.~~

~~Effective January 27, 2017, and in accordance with the Banks’ credit policies, all loans other thanone-to-four~~ family mortgage loans and 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 have 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 Banks’ 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~~one-to-four~~ ~~family mortgage loans and C&I loans less than or equal to $3.0 million continue to be approved byline-of-business~~ ~~personnel.~~

At September 30, 2017 and December 31, 2016, the largest loan in our portfolio was a loan originated by the Community Bank on June 28, 2013 to the owner of a commercial office building located in Manhattan. 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 period-ends.

In view of the heightened regulatory focus on CRE concentration, we monitor the ratio of our multi-family, CRE, and ADC loans (as defined in the FDIC’s CRE Guidance) to our total risk-based capital to ensure that it remains within the 850% limit we have agreed to with our regulators. At September 30, 2017, the consolidated Banks’ CRE concentration ratio was 739.9%.

~~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 September 30, 2017:~~

   Multi-Family Loans Commercial Real Estate Loans
      Percent    Percent
(dollars in thousands)    Amount    of Total Amount    of Total
New York City:

Manhattan
   $ 7,311,621    26.94 % $ 3,873,867    51.31 %
Brooklyn
   4,237,542    15.61 597,718    7.92
Bronx
   3,697,390    13.62 110,749    1.46
Queens
   2,230,371    8.22 647,450    8.57
Staten Island
   79,177    0.29 56,313    0.75






Total New York City
   $ 17,556,101    64.68 % $ 5,286,097    70.01 %






Long Island
   522,364    1.92 877,343    11.62
Other New York State
   967,434    3.56 193,000    2.56
All other states
   8,099,498    29.84 1,193,947    15.81






Total
   $ 27,145,397    100.00 % $ 7,550,387    100.00 %

~~At September 30, 2017, the largest concentration ofone-to-four~~ family loans held for investment was located in California, with a total of $202.2 million; the largest concentration of ADC loans held for investment was located in New York City, with a total of $282.5 million. The majority of our other loans held for investment were secured by properties and/or businesses located in Metro New York.

~~Non-Covered~~ ~~Loans Held for Sale~~

~~At September 30, 2017,non-covered~~ loans held for sale were $104.9 million, down $304.2 million from the level at December 31, 2016. The decline is attributable to our exit from the mortgage banking business. The Company expects a majority of the current-period balance to be sold during the fourth quarter of 2017.

~~Outstanding Loan Commitments~~

At September 30, 2017, we had outstanding loan commitments of $2.2 billion, down $248.4 million from the level at June 30, 2017. Commitments to originate loans held for investment represented $2.1 billion of the September 30th total, and commitments to originate loans held for sale represented the remaining $50.4 million. At December 31, 2016, the respective commitments were $1.8 billion and $242.5 million.

~~Multi-family, CRE, and ADC loans together represented $814.5 million ofheld-for-investment~~ loan commitments at the end of the third quarter, while other loans represented $1.3 billion, respectively. Included in the latter amount were commitments to originate specialty finance loans and leases of $901.9 million and commitments to originate other C&I loans of $403.8 million.

~~In addition to loan commitments, we had commitments to issue financialstand-by,~~ ~~performancestand-by,~~ and commercial letters of credit totaling $339.6 million at September 30, 2017, a $20.7 million decrease from the volume at June 30th. 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.

~~Asset Quality~~

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

~~Non-performingnon-covered~~ ~~assets represented $84.7 million, or 0.17%, of totalnon-covered~~ ~~assets at September 30, 2017, as compared to $91.6 million, or 0.20% at June 30, 2017 and $68.1 million, or 0.14%, of totalnon-covered~~ ~~assets, at December 31, 2016. The $6.9 million decrease was the net effect of a $13.0 million decline innon-performingnon-covered~~ ~~loans to $69.0 million, and a $6.2 million increase innon-covered~~ ~~repossessed assets to $15.8 million.Non-performingnon-covered~~ ~~loans represented 0.18% of totalnon-covered~~ ~~loans at the end of the third quarter, compared to 0.22% at June 30th and 0.15% at December 31st.~~

~~The increase in bothnon-performingnon-covered~~ ~~loans andnon-performingnon-covered~~ ~~assets in the current nine-month period was largely attributable to the transition tonon-accrual~~ ~~status of taxi medallion-related loans. As reflected in the tables featured later in this discussion, the balance ofnon-accrualnon-covered~~ ~~mortgage loans declined $14.4 million from theyear-end~~ ~~balance to $24.3 million, while the balance ofnon-accrualnon-covered~~ ~~other loans rose $26.9 million to $44.7 million. Taxi medallion-related loans accounted for $43.4 million of this total.~~

~~In addition, the Company recorded net charge-offs of $40.4 million during the current third quarter, representing 0.11% of average loans.~~

~~The following table sets forth the changes innon-performingnon-covered~~ ~~loans over the nine months ended September 30, 2017:~~

(in thousands)
Balance at December 31, 2016
   $ 56,469
Newnon-accrual
   68,616
Charge-offs
   (24,409 )
Transferred to other real estate owned
   (6,607 )
Loan payoffs, including dispositions and principalpay-downs
   (25,009 )
Restored to performing status
   (90 )


Balance at September 30, 2017
   $ 68,970

~~The following table presents ournon-performingnon-covered~~ ~~loans by loan type and the changes in the respective balances for the nine months ended September 30, 2017:~~

      Change from
December 31, 2016 to
September 30, 2017
(dollars in thousands)    September 30,
2017    December 31,
2016    Amount    Percent
Non-PerformingNon-Covered Loans:

Non-accrualnon-covered mortgage loans:

Multi-family
   $ 11,018    $ 13,558    $ (2,540 )    (18.73 )%
Commercial real estate
   4,923    9,297    (4,374 )    (47.05 )
One-to-four family residential
   2,179    9,679    (7,500 )    (77.49 )
Acquisition, development, and construction
   6,200    6,200    —      —







Totalnon-accrualnon-covered mortgage loans
   24,320    38,734    (14,414 )    (37.21 )
Non-accrualnon-covered other loans⁽¹⁾
   44,650    17,735    26,915    151.76







Totalnon-performingnon-covered loans
   $ 68,970    $ 56,469    $ 12,501    22.14 %

~~(1)~~

~~Includes $43.4 million and $15.2 million ofnon-accrualnon-covered~~ ~~taxi medallion-related loans at September 30, 2017 and at December 31, 2016, respectively.~~

~~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 we no longer expect to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed on~~non-accrual~~ ~~status, we cease the accrual of interest owed, and previously accrued interest is reversed and charged against interest income. At September 30, 2017 and December 31, 2016, 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 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 advancing funds as needed; and appointing a receiver, whenever possible, to collect rents, manage the operations, provide information, and maintain the collateral properties.

~~It is our policy to order updated appraisals for allnon-performing~~ loans, 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 Credit Committee, and the Boards of Directors of the respective Banks, as applicable. In accordance with our~~charge-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 that are acquired through foreclosure are classified as OREO, 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 OREO are charged to earnings and are included in~~non-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. Furthermore, independent appraisers, whose appraisals are carefully reviewed by our experienced~~in-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% for multi-family loans and 130% for CRE loans. Although we typically lend up to 75% of the appraised value on multi-family buildings and up to 65% on commercial properties, the average LTVs of such credits at origination were below those amounts at September 30, 2017. Exceptions to these LTV limitations are minimal and are reviewed on a~~case-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 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 our~~non-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.

~~The following tables present the number and amount ofnon-performing~~ ~~multi-family and CRE loans by originating bank at September 30, 2017 and December 31, 2016:~~

As of September 30, 2017    Non-Performing
Multi-Family
Loans    Non-Performing
Commercial
Real Estate Loans
(dollars in thousands)    Number    Amount    Number    Amount
New York Community Bank
   6    $ 11,012    10    $ 4,923
New York Commercial Bank
   1    6    —      —








Total for New York Community Bancorp
   7    $ 11,018    10    $ 4,923

As of December 31, 2016    Non-Performing
Multi-Family
Loans    Non-Performing
Commercial
Real Estate Loans
(dollars in thousands)    Number    Amount    Number    Amount
New York Community Bank
   11    $ 13,298    7    $ 4,297
New York Commercial Bank
   2    260    2    5,000








Total for New York Community Bancorp
   13    $ 13,558    9    $ 9,297

~~With regard to ADC loans, we typically lend up to 75% 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%. With respect to commercial construction loans, we typically lend up to 65% of the estimated~~as-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 a~~non-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 are typically underwritten on the basis of the cash flows produced by the borrower’s business, and 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 to 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 also a normal requirement for other C&I loans.

~~In addition,one-to-four~~ ~~family loans, ADC loans, and other loans represented 1.1%, 1.0%, and 5.3%, respectively, of totalnon-covered~~ ~~loans held for investment at September 30, 2017, comparable to, or consistent with, the levels at both June 30, 2017 and December 31, 2016. Furthermore, while 0.5% of ourone-to-four~~ ~~family loans werenon-performing~~ ~~at the end of the current third quarter, 1.6% of our ADC loans and 2.2% of our other 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 ourheld-for-investment~~ ~~loans 30 to 89 days past due by loan type and the changes in the respective balances for the nine months ended September 30, 2017:~~

      Change from
December 31, 2016
to September 30, 2017
(dollars in thousands)    September 30,
2017    December 31,
2016    Amount Percent
Non-Covered Loans30-89 Days Past Due:

Multi-family
   $ 602    $ 28    $ 574 2,050.00 %
Commercial real estate
   450    —      450 —
One-to-four family residential
   676    2,844    (2,168 ) (76.23 )
Acquisition, development, and construction
   —      —      —   —
Other loans
   3,425    7,511    (4,086 ) (54.40 )






Totalnon-covered loans30-89 days past due
   $ 5,153    $ 10,383    $ (5,230 ) (50.37 )%

~~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 adversely impact a borrower’s ability to repay. Largely reflecting the nature of our primary lending niche and our conservative underwriting standards, we recorded aggregate net recoveries on our core multi-family and CRE portfolios in the third quarter of 2017.

~~Reflecting management’s assessment of the allowance fornon-covered~~ loan losses, we recorded a $44.6 million provision for such losses in the current third quarter, as compared to $11.6 million and $1.2 million, respectively, in the trailing and year-earlier three months. Reflecting the third-quarter provision, and the aforementioned net charge-offs, the allowance for losses on~~non-covered~~ ~~loans increased to $158.9 million at September 30, 2017. This represented 0.42% of totalnon-covered~~ ~~loans and 230.42% ofnon-performingnon-covered~~ ~~loans at that date.~~

~~Based upon all relevant and available information as of the end of the current third quarter, management believes that the allowance for losses onnon-covered~~ ~~loans was appropriate at that date.~~

~~At September 30, 2017, our three largestnon-performing~~ ~~loans were a C&I loan with a balance of $7.8 million, a multi-family loan with a balance of $7.6 million, and an ADC loan with a balance of $6.2 million.~~

~~Troubled Debt Restructurings~~

In an effort to proactively manage delinquent loans, we have selectively extended to certain borrowers such concessions as rate reductions and extensions of maturity dates, as well as forbearance agreements, when such borrowers have exhibited 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 September 30, 2017,~~non-accrual~~ ~~TDRs included taxi medallion-related loans with a combined balance of $43.4 million.~~

At September 30, 2017, loans on which concessions were made with respect to rate reductions and/or extensions of maturity dates totaled $41.5 million; loans in connection with which forbearance agreements were reached totaled $1.8 million at that date.

~~Based on the number of loans performing in accordance with their revised terms, our success rates for restructured multi-family loans, CRE loans,one-to-four~~ ~~family loans, and other loans were 100%, 100%, 50%, and 84%, respectively, at September 30, 2017. There were no restructured ADC loans at that date.~~

~~Analysis of Troubled Debt Restructurings~~

~~The following table sets forth the changes in our TDRs over the nine months ended September 30, 2017:~~

(in thousands)    Accruing    Non-Accrual    Total
Balance at December 31, 2016
   $ 3,466    $ 16,454    $ 19,920
New TDRs
   8,960    35,297    44,257
Transferred to other real estate owned
   —      (877 )    (877 )
Charge-offs
   —      (11,956 )    (11,956 )
Transferred from accruing tonon-accrual
   (1,254 )    1,254    —
Loan payoffs, including dispositions and principalpay-downs
   (886 )    (7,141 )    (8,027 )






Balance at September 30, 2017
   $ 10,286    $ 33,031    $ 43,317

~~On a limited basis, we may provide additional credit to a borrower after a loan has been placed onnon-accrual~~ status or classified 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. During the nine months ended September 30, 2017, no such additions were made. 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 of~~non-payment~~ ~~of a restructured loan.~~

~~Except for thenon-accrual~~ loans and TDRs disclosed in this filing, we did not have any potential problem loans at the end of the current first quarter 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 Repossessed Assets, andNon-Covered~~ ~~PCI Loans)~~

~~The following table presents information regarding our consolidated allowance for losses onnon-covered~~ ~~loans, ournon-performingnon-covered~~ ~~assets, and ournon-covered~~ ~~loans 30 to 89 days past due at September 30, 2017 and December 31, 2016. Covered loans andnon-covered~~ ~~purchased credit-impaired (“PCI”) loans were 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.~~

(dollars in thousands)    At or For the
Nine Months Ended
September 30, 2017 At or For the
Year Ended
December 31, 2016
Allowance for Losses onNon-Covered Loans:

Balance at beginning of period
   $ 158,290 $ 147,124
Provision for losses onnon-covered loans
   58,017 11,874
Charge-offs:

Multi-family
   (279 ) —
Commercial real estate
   —   —
One-to-four family residential
   (96 ) (170 )
Acquisition, development, and construction
   —   —
Other loans
   (58,203 ) (3,413 )


Total charge-offs
   (58,578 ) (3,583 )
Recoveries:

Multi-family
   28 78
Commercial real estate
   398 799
One-to-four family residential
   169 228
Acquisition, development, and construction
   —   167
Other loans
   594 1,603


Total recoveries
   1,189 2,875


Net charge-offs
   (57,389 ) (708 )


Balance at end of period
   $ 158,918 $ 158,290


Non-PerformingNon-Covered Assets:

Non-accrualnon-covered mortgage loans:

Multi-family
   $ 11,018 $ 13,558
Commercial real estate
   4,923 9,297
One-to-four family residential
   2,179 9,679
Acquisition, development, and construction
   6,200 6,200


Totalnon-accrualnon-covered mortgage loans
   $ 24,320 $ 38,734
Othernon-accrualnon-covered loans
   44,650 17,735


Totalnon-performingnon-covered loans⁽¹⁾
   $ 68,970 $ 56,469
Non-covered repossessed assets⁽²⁾
   15,753 11,607


Totalnon-performingnon-covered assets
   $ 84,723 $ 68,076


Asset Quality Measures:

Non-performingnon-covered loans to totalnon-covered loans
   0.18 % 0.15 %
Non-performingnon-covered assets to totalnon-covered assets
   0.17 0.14
Allowance for losses onnon-covered loans tonon-performing
non-covered loans
   230.42 277.19
Allowance for losses onnon-covered loans to totalnon-covered loans
   0.42 0.42
Net charge-offs during the period to average loans outstanding during the period⁽³⁾    0.15 0.00
Non-Covered Loans30-89 Days Past Due:

Multi-family
   $ 602 $ 28
Commercial real estate
   450 —
One-to-four family residential
   676 2,844
Acquisition, development, and construction
   —   —
Other loans
   3,425 7,511


Totalnon-covered loans30-89 days past due⁽⁴⁾
   $ 5,153 $ 10,383

~~(1)~~

~~The December 31, 2016 amount excludes loans 90 days or more past due of $131.5 million that were covered by the LSA andnon-covered~~ ~~PCI loans of $869 thousand.~~

~~(2)~~

~~The September 30, 2017 amount includes $6.5 million of repossessed taxi medallions. The December 31, 2016 amount excludesnon-covered~~ ~~repossessed assets of $17.0 million that were covered by the LSA.~~

~~(3)~~

~~Average loans include covered loans.~~

~~(4)~~

~~The December 31, 2016 amount excludes loans 30 to 89 days past due of $22.6 million that were covered by the LSA and $6 thousand ofnon-covered~~ ~~PCI loans.~~

~~Covered Loans and Covered Other Real Estate Owned~~

In connection with the AmTrust and Desert Hills Bank LSA, we established FDIC loss share receivables of $740.0 million and $69.6 million, respectively, which were the acquisition-date fair values of the respective LSA (i.e., the expected reimbursements from the FDIC over the terms of the agreements). The loss share receivables increased if the losses increased, and decreased if the losses fell short of the expected amounts. Increases in estimated reimbursements were recognized in income in the same period that they were identified and that the allowance for losses on the related covered loans was recognized.

Additionally, as previously disclosed, the Company received approval from the FDIC to sell assets covered under our LSA, early terminate the LSA, and enter 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. On July 28, 2017, the Company completed the sale, resulting in the receipt of proceeds of $1.9 billion from Cerberus and the FDIC to sell the aforementioned loans and settle the related LSA, resulting in a gain of $74.6 million which is included in~~“Non-interest~~ ~~income” in the accompanying Consolidated Statement of Income and Comprehensive Income. Effective October 31, 2017, the Company and the FDIC completed termination of the LSA.~~

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

~~As previously discussed, the covered loan portfolio was sold 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:~~

(dollars in thousands)    At or For the
Year Ended
December 31, 2016
Covered Loans andNon-Covered PCI Loans 90 Days or More Past Due:

Multi-family
   $ —
Commercial real estate
   612
One-to-four family
   125,076
Acquisition, development, and construction
   —
Other loans
   6,646


Total covered loans andnon-covered PCI loans 90 days or more past due
   $ 132,334
Covered other real estate owned
   16,990


Total covered assets andnon-covered PCI loans
   $ 149,324


TotalNon-Performing Assets:

Non-performing loans:

Multi-family
   $ 13,558
Commercial real estate
   9,909
One-to-four family
   134,755
Acquisition, development, and construction
   6,200
Othernon-performing loans
   24,381


Totalnon-performing loans
   $ 188,803
Other real estate owned
   28,598


Totalnon-performing assets
   $ 217,401


Asset Quality Ratios (including the allowance for losses oncovered loans andnon-covered PCI loans):

Totalnon-performing loans to total loans
   0.48 %
Totalnon-performing assets to total assets
   0.44
Allowance for loan losses to totalnon-performing loans
   96.39
Allowance for loan losses to total loans
   0.47
Covered Loans andNon-Covered PCI Loans30-89 Days Past Due:

Multi-family
   $ —
Commercial real estate
   —
One-to-four family
   21,112
Acquisition, development, and construction
   —
Other loans
   1,542


Total covered loans andnon-covered PCI loans30-89 days past due
   $ 22,654


Total Loans30-89 Days Past Due:

Multi-family
   $ 28
Commercial real estate
   —
One-to-four family
   23,956
Acquisition, development, and construction
   —
Other loans
   9,053


Total loans30-89 days past due
   $ 33,037

~~Geographical Analysis ofNon-Performing~~ ~~Loans~~

~~The following table presents a geographical analysis of ournon-performing~~ ~~loans at September 30, 2017:~~

(in thousands)    Total
New York
   $ 49,097
New Jersey
   9,938
Maryland
   6,200
Connecticut
   1,781
Arizona
   1,204
Florida
   475
All other states
   275


Totalnon-performing loans
   $ 68,970

~~Securities~~

~~Securities declined $140.1 million from the current second quarter-end 2017 balance and $786.0 million from theyear-end~~ ~~2016 balance to $3.0 billion, representing 6.3% of total assets, at September 30, 2017. During the second quarter 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.~~

~~Federal Home Loan Bank Stock~~

~~As members of theFHLB-NY,~~ ~~the Community Bank and the Commercial Bank are required to acquire and hold shares of its capital stock. At September 30, 2017 and December 31, 2016, the Community Bank heldFHLB-NY~~ ~~stock in the amount of $564.3 million and $562.0 million, respectively, and the Commercial Bank heldFHLB-NY~~ ~~stock of $15.1 million and $16.4 million, respectively.FHLB-NY~~ ~~stock continued to be valued at par, with no impairment required at that date.~~

~~Dividends from theFHLB-NY~~ ~~to the Community Bank totaled $22.8 million and $19.2 million, respectively, in the nine months ended September 30, 2017 and 2016; dividends from theFHLB-NY~~ ~~to the Commercial Bank totaled $701,000 and $1.1 million, respectively, in the corresponding periods.~~

~~Bank-Owned Life Insurance~~

Bank-owned life insurance (“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~~ ~~income” in the Consolidated Statements of Income and Comprehensive Income.~~

~~Reflecting an increase in the cash surrender value of the underlying policies, our investment in BOLI rose $12.4 million to $961.4 million in the nine months ended September 30, 2017.~~

~~Goodwill and Core Deposit Intangibles~~

~~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 September 30, 2017 and December 31, 2016, the balance of CDI, net, declined from $208,000 to zero as a result of amortization in the first nine months of this year.

~~For more information about the Company’s goodwill, see the discussion of “Critical Accounting Policies” earlier in this report.~~

~~Sources of Funds~~

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

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

Loan repayments and sales totaled $9.3 billion in the nine months ended September 30, 2017, down from the $9.1 billion recorded in the year-earlier nine months. Cash flows from the repayment and sales of securities totaled $1.3 billion and $2.7 billion, respectively, in the corresponding periods, while purchases of securities totaled $404.0 million and $281.9 million, respectively.

~~Deposits~~

Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer, and the attractiveness of their terms. That said, there have been times that we’ve 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 the need to fund our loan demand.

In the nine months ended September 30, 2017, total deposits of $28.9 billion were comparable to the level recorded at December 31, 2016. Certificates of deposit (“CDs”) represented 30.5% of total deposits at the end of the third quarter, and total deposits represented 59.6% of total assets at that date.

Included in the September 30th balance of deposits were institutional deposits of $2.2 billion and municipal deposits of $791.5 million, as compared to $2.8 billion and $637.7 million, respectively, at December 31, 2016. Brokered deposits dropped $79.1 million during this timeframe, to $3.9 billion, the net effect of an $83.1 million increase in brokered money market accounts to $2.6 billion and a $641.1 million decline in brokered interest-bearing checking accounts to $804.9 million. At September 30, 2017, we had $478.9 million of brokered CDs. We had no brokered CDs at December 31, 2016. The extent to which we accept brokered deposits depends on various factors, including the availability and pricing of such wholesale funding sources, and the availability and pricing of other sources of funds.

~~Borrowed Funds~~

~~Borrowed funds consist primarily of wholesale borrowings (i.e.,FHLB-NY~~ advances, repurchase agreements, and federal funds purchased) and, to a far lesser extent, junior subordinated debentures. In the three months ended September 30, 2017, the balance of borrowed funds was unchanged from the trailing quarter and fell $1.3 billion from year end to $12.4 billion, representing 25.5% of total assets, at that date.

~~Wholesale Borrowings~~

~~Wholesale borrowings were unchanged from the trailing quarter but fell $1.3 billion from year end to $12.0 billion, representing 24.8% of total assets, at quarter end.~~

~~FHLB-NY~~ advances declined $110.0 million during this time, to $11.6 billion, while the balance of repurchase agreements dropped $1.1 billion to $450.0 million. In addition, while federal funds purchased amounted to $150.0 million at the end of December, there were no federal funds purchased at September 30, 2017.

~~Junior Subordinated Debentures~~

~~Junior subordinated debentures totaled $359.1 million at the end of the current third quarter, comparable to the balance at December 31st.~~

~~Risk Definitions~~

~~The following section outlines the definitions of interest rate risk, market risk, and liquidity risk, and how the Company manages market and interest rate risk:~~

~~Interest Rate Risk –~~Interest rate risk is the risk to earnings or capital arising from movements in interest rates. Interest rate risk arises from differences between the timing of rate changes and the timing of cash flows~~(re-pricing~~ risk); from changing rate relationships among different yield curves affecting Company activities (basis risk); from changing rate relationships across the spectrum of maturities (yield curve risk); and from interest-related options embedded in a bank’s products (options risk). The evaluation of interest rate risk must consider the impact of complex, illiquid hedging strategies or products, and also the potential impact on fee income (e.g. prepayment income) which is sensitive to changes in interest rates. In those situations where trading is separately managed, this refers to structural positions and not trading portfolios.

~~Market Risk –~~Market risk is the risk to earnings or capital arising from changes in the value of portfolios of financial instruments. This risk arises from market-making, dealing, and position-taking activities in interest rate, foreign exchange, equity, and commodities markets. Many banks use the term “price risk” interchangeably with market risk; this is because market risk focuses on the changes in market factors (e.g., interest rates, market liquidity, and volatilities) that affect the value of traded instruments. The primary accounts affected by market risk are those which are revalued for financial presentation (e.g., trading accounts for securities, derivatives, and foreign exchange products).

~~Liquidity Risk –~~Liquidity risk is the risk to earnings or capital arising from a bank’s inability to meet its obligations when they become due, without incurring unacceptable losses. Liquidity risk includes the inability to manage unplanned decreases or changes in funding sources. Liquidity risk also arises from a bank’s failure to recognize or address changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value.

~~Management of Market and Interest Rate Risk~~

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, risk appetite, 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.

~~Market Risk~~

As a financial institution, we are focused on reducing our exposure to interest rate volatility. Changes in interest rates pose 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 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 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 largest determinants of prepayments are interest rates and the availability of refinancing opportunities.

In the first nine months of 2017, we managed our interest rate risk by taking the following actions: (1) We continued to emphasize the origination and retention of intermediate-term assets, primarily in the form of multi-family and CRE loans; and (2) We continued the origination of certain C&I loans that feature floating interest rates.

In connection with the activities of our mortgage banking operation, we enter into contingent commitments to fund or purchase residential mortgage loans by a specified future date at a stated interest rate and corresponding price. Such commitments, which were generally known as interest rate lock commitments (“IRLCs”), were considered to be financial derivatives and, as such, were carried at fair value.

To mitigate the interest rate risk associated with our IRLCs, we entered into forward commitments to sell mortgage loans or mortgage-backed securities (“MBS”) by a specified future date and at a specified price. These forward-sale agreements were also carried at fair value. Such forward commitments to sell generally obligated us to complete the transaction as agreed, and therefore pose a risk to us if we are not able to deliver the loans or MBS pursuant to the terms of the applicable forward-sale agreement.

~~When we retained the servicing on the loans we sold, we capitalized an MSR asset. Residential MSRs are recorded at fair value, with changes in fair value recorded as a component ofnon-interest~~ income. We estimate the fair value of the MSR asset based upon a number of factors, including current and expected loan prepayment rates, economic conditions, and market forecasts, as well as relevant characteristics of the associated underlying loans. Generally, when market interest rates decline, loan prepayments increase as customers refinance their existing mortgages to take advantage of more favorable interest rate terms. When a mortgage prepays, or when loans are expected to prepay earlier than originally expected, a portion of the anticipated cash flows associated with servicing these loans is terminated or reduced, which can result in a reduction in the fair value of the capitalized MSRs and a corresponding reduction in earnings.

To mitigate the prepayment risk inherent in residential MSRs, we could have sold the servicing of the loans we produced, and thus minimized the potential for earnings volatility. Instead, we opted to mitigate such risk by investing in exchange-traded derivative financial instruments that were expected to experience opposite and partially offsetting changes in fair value as related to the value of our residential MSRs.

~~Interest Rate Sensitivity Analysis~~

The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring a bank’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time frame if it will mature or reprice within that period of time. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing 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, 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 September 30, 2017, ourone-year~~ ~~gap was a negative 17.52%, as compared to a negative 21.37% at December 31, 2016. The385-basis~~ point change was largely due to an increase in cash balances as a result of the sale of the mortgage banking operations and borrowings maturing or repricing within one year, combined with a decrease in loans and deposits maturing or repricing within that time.

The table on the following page sets forth the amounts of interest-earning assets and interest-bearing liabilities outstanding at September 30, 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 September 30, 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 15% per annum; for multi-family and CRE loans, prepayment rates are forecasted at weighted average CPRs of 15% and 13% per annum, respectively. Borrowed funds were not assumed to prepay.

Savings, interest-bearing checking and money market accounts were assumed to decay based on a comprehensive statistical analysis that incorporated our historical deposit experience. Based on the results of this analysis, savings accounts were assumed to decay at a rate of 57% for the first five years and 43% 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 71% for the first five years and 29% for years six through ten.

~~Interest Rate Sensitivity Analysis~~

At September 30, 2017
Three Four to More Than More Than More Than More
Months Twelve One Year Three Years Five Years Than
(dollars in thousands) or Less Months to Three Years to Five Years to 10 Years 10 Years Total
INTEREST-EARNING ASSETS:

Mortgage and other loans⁽¹⁾
$ 3,404,215 $ 5,395,365 $ 13,855,861 $ 10,974,797 $ 3,759,589 $ 152,340 $ 37,542,167
Mortgage-related securities⁽²⁾⁽³⁾
28,954 48,601 153,528 1,010,056 1,187,286 82,104 2,510,529
Other securities⁽²⁾
694,896 260,513 3,848 10,929 60,632 69,153 1,099,971
Interest-earning cash and cash equivalents
3,114,444 —   —   —   —   —   3,114,444

Total interest-earning assets
7,242,509 5,704,479 14,013,237 11,995,782 5,007,507 303,597 44,267,111

INTEREST-BEARING LIABILITIES:

Interest-bearing checking and money market accounts
6,442,546 436,363 1,007,765 826,948 3,625,327 —   12,338,949
Savings accounts
902,004 824,160 614,154 484,171 2,172,089 —   4,996,578
Certificates of deposit
3,193,359 4,899,393 629,427 67,239 13,155 —   8,802,573
Borrowed funds
1,463,926 3,273,500 7,381,000 100,000 —   145,176 12,363,602

Total interest-bearing liabilities
12,001,835 9,433,416 9,632,346 1,478,358 5,810,571 145,176 38,501,702

Interest rate sensitivity gap per period⁽⁴⁾
$ (4,759,326 ) $ (3,728,937 ) $ 4,380,891 $ 10,517,424 $ (803,064 ) $ 158,421 $ 5,765,409

Cumulative interest rate sensitivity gap
$ (4,759,326 ) $ (8,488,263 ) $ (4,107,372 ) $ 6,410,052 $ 5,606,988 $ 5,765,409

Cumulative interest rate sensitivity gap as a percentage of total assets
(9.82 )% (17.52 )% (8.48 )% 13.23 % 11.57 % 11.90 %
Cumulative net interest-earning assets as a percentage of net interest-bearing liabilities
60.35 % 60.40 % 86.78 % 119.70 % 114.62 % 114.97 %

~~(1)~~

~~For the purpose of the gap analysis,non-performingnon-covered~~ ~~loans and the allowance for non-covered loan losses have been excluded.~~

~~(2)~~

~~Mortgage-related and other securities, including FHLB stock, are shown at their respective carrying amounts.~~

~~(3)~~

~~Expected amount based, in part, on historical experience.~~

~~(4)~~

~~The interest rate sensitivity gap per period represents the difference between interest-earning assets and interest-bearing liabilities.~~

Prepayment and deposit decay rates can have a significant impact on our estimated gap. While we believe our assumptions to be reasonable, there can be no assurance that the assumed prepayment and decay rates will approximate actual future loan and securities prepayments and deposit withdrawal activity.

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, if any, 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 September 30, 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 11.23% per annum. Conversely, the impact of a~~100-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 4.08% 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”) over a range of interest rate scenarios. NPV is defined as the net present value of expected cash flows from assets, liabilities, and~~off-balance~~ sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV 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.

~~Based on the information and assumptions in effect at September 30, 2017, the following table reflects the estimated percentage change in our NPV, assuming the changes in interest rates noted:~~


~~Change in Interest Rates~~ ~~(in basis points)~~⁽¹⁾	~~Estimated Percentage~~ ~~Change in~~ ~~Net Portfolio Value~~
~~+100~~		~~(2.54~~	)%
~~+200~~		~~(8.93~~	)%

~~(1)~~

~~The impact of100-~~ ~~and200-basis~~ ~~point reductions in interest rates is not presented in view of the current level of the federal funds rate and other short-term interest rates.~~

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

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 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 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 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.

Based on the information and assumptions in effect at September 30, 2017, 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:


~~Change in Interest Rates~~ ~~(in basis points)~~⁽¹⁾⁽²⁾	~~Estimated Percentage~~ ~~Change in~~ ~~Future Net Interest~~ ~~Income~~
~~+100~~		~~(2.34~~	)%
~~+200~~		~~(5.72~~	)%

~~(1)~~

~~In general, short- and long-term rates are assumed to increase in parallel fashion across all four quarters and then remain unchanged.~~

~~(2)~~

~~The impact of100-~~ ~~and200-basis~~ ~~point reductions in interest rates is not presented in view of the current level of the federal funds rate and other short-term interest rates.~~

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

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

Our Management Asset and Liability Committee (the “ALCO Committee”) would inform the Board of Directors of the variance, and present recommendations to the Board regarding proposed courses of action to restore conditions to within-policy tolerances.

In formulating appropriate strategies, the ALCO Committee would ascertain the primary causes of the variance from policy tolerances, the expected term of such conditions, and the projected effect on capital and earnings.

Where temporary changes in market conditions or volume levels result in significant increases in risk, strategies may involve reducing open positions or employing synthetic hedging techniques to more immediately reduce 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:

~~Asset restructuring, involving sales of assets having higher risk profiles, or a gradual restructuring of the asset mix over time to affect the maturity or repricing schedule of assets;~~

~~Liability restructuring, whereby product offerings and pricing are altered or wholesale borrowings are employed to affect the maturity structure or repricing of liabilities;~~

~~Expansion or shrinkage of the balance sheet to correct imbalances in the repricing or maturity periods between assets and liabilities; and/or~~

~~Use or alteration ofoff-balance~~ ~~sheet positions, including interest rate swaps, caps, floors, options, and forward purchase or sales commitments.~~

In connection with our net interest income simulation modeling, we also evaluate the impact of changes in the slope of the yield curve. At September 30, 2017, our analysis indicated that an immediate inversion of the yield curve would be expected to result in a 1.83% decrease in net interest income; conversely, an immediate steepening of the yield curve would be expected to result in a 3.85% increase in net interest income.

~~Liquidity~~

We manage our liquidity to ensure that 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 $3.3 billion and $557.9 million, respectively, at September 30, 2017 and December 31, 2016. As in the past, our portfolios of loans and securities provided liquidity in the first nine months of the year, with cash flows from the repayment and sale of loans totaling $9.3 billion and cash flows from the repayment and sale of securities totaling $1.3 billion.

Additional liquidity stems from the retail, institutional, and municipal deposits we gather and from our use of wholesale funding sources, including brokered deposits and wholesale borrowings. We also have access to the Banks’ approved lines of credit with various counterparties, including the~~FHLB-NY.~~ The availability of these wholesale funding sources is generally based on the available amount of mortgage loan collateral under a blanket lien we have pledged to the respective institutions and, to a lesser extent, the available amount of securities that may be pledged to collateralize our borrowings. At September 30, 2017, our available borrowing capacity with the~~FHLB-NY~~ ~~was $7.5 billion. In addition, the Banks had $3.0 billion ofavailable-for-sale~~ ~~securities, combined, at that date.~~

~~Furthermore, both the Community Bank and the Commercial Bank have agreements with the Federal Reserve Bank of New York (the“FRB-NY”)~~ that enable them to access the discount window as a further means of enhancing their liquidity if need be. In connection with their agreements, the Banks have pledged certain loans and securities to collateralize any funds they may borrow. At September 30, 2017, the maximum amount the Community Bank could borrow from the~~FRB-NY~~ ~~was $1.3 billion; the maximum amount the Commercial Bank could borrow from theFRB-NY~~ ~~was $77.5 million. There were no borrowings against either of these lines of credit at that date.~~

Our primary investing activity is loan production. In the first nine months of 2017, the volume of loans originated for investment was $5.8 billion. During this time, the net cash provided by investing activities totaled $2.5 billion. Our operating activities provided net cash of $1.3 billion, while the net cash used in our financing activities totaled $1.1 billion.

CDs due to mature in one year or less from September 30, 2017 totaled $8.1 billion, representing 91.9% of total CDs at that date. Our ability to retain these CDs and to attract new deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay on our deposits, the types of products we offer, and the attractiveness of their terms. However, there are times when we may choose not to compete for such deposits, depending on the availability of lower-cost funding, the competitiveness of the market and its impact on pricing, and our need for such deposits to fund loan demand, as previously discussed.

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 dividends declared to our 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.

~~In each of the four quarters of 2016, the Company was required under Supervisory Letter SR09-04~~ ~~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 FRB subsequently advised the Company to continue the exchange of written documentation to obtain theirnon-objection~~ ~~to the declaration of dividends in 2017. 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 distributions 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, the approval of the Superintendent is required if the total of all dividends declared in a calendar year would exceed the total of a bank’s net profits for that year, combined with its retained net profits for the preceding two years. In the nine months ended September 30, 2017, the Banks paid dividends totaling $276.0 million to the Parent Company, leaving $302.4 million they could dividend to the Parent Company without regulatory approval at that date. Additional sources of liquidity available to the Parent Company at September 30, 2017 included $135.8 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.

~~Derivative Financial Instruments~~

We use 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 consist of financial forward and futures contracts, IRLCs, swaps, and options, and relate to our mortgage banking operation, residential MSRs, and other 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 September 30, 2017, we held derivative financial instruments with a notional value of $765.9 million. (See Note 12, “Derivative Financial Instruments,” for a further discussion of our use of such financial instruments.)

~~Capital Position~~

In March 2017, the Company raised $502.8 million, net of underwriting and other issuance expenses, through an offering of depositary shares, each representing a 1/40 interest in a share of preferred stock. Primarily reflecting the capital raised, total stockholders’ equity rose $635.7 million from the December 31st balance to $6.8 billion at September 30, 2017.

Common stockholders’ equity represented 12.91%, 12.89%, and 12.52%, respectively, of total assets at September 30, 2017, June 30, 2017, and December 31, 2016, and was equivalent to a book value per common share of $12.79, $12.74, and $12.57 at the respective dates. We calculate book value per common share by dividing the amount of common stockholders’ equity at the end of a period by the number of common shares outstanding at the same date. At September 30, 2017, June 30, 2017, and December 31, 2016, we had outstanding common shares of 489,061,848, 489,023,298, and 487,056,676, respectively.

Tangible common stockholders’ equity was relatively stable at $3.8 billion, representing 8.30% of tangible assets and a tangible book value per common share of $7.81 at September 30, 2017. At the end of the second quarter, tangible common stockholders’ equity also totaled $3.8 billion or 8.27% of tangible assets and a tangible book value per common share of $7.76. At December 31, 2016, tangible common stockholders’ equity totaled $3.7 billion, representing 7.93% of tangible assets, and a tangible book value per common share of $7.57.

We calculate tangible common stockholders’ equity by subtracting the amount of goodwill and CDI recorded at the end of a period from the amount of common stockholders’ equity recorded at the same date. At September 30, 2017, June 30, 2017, and December 31, 2016, we recorded goodwill of $2.4 billion; CDI was zero, $24,000, and $208,000, respectively, at the corresponding dates. (See the discussion and reconciliations of stockholders’ equity, common stockholders’ equity, and tangible common stockholders’ equity; total assets and tangible assets; and the related financial measures that appear earlier in this report.)

Stockholders’ equity, common stockholders’ equity, and tangible common stockholders’ equity include AOCL, which increased $3.1 million from the balance at the end of June and decreased $52.3 million from the end of December to $4.4 million at September 30, 2017. The increase was the result of a $4.3 million increase in the net unrealized gain on~~available-for-sale~~ ~~securities, net of tax, to $47.9 million and a $1.2 million decrease in pension and post-retirement obligations, net of tax, to $47.1 million.~~

At September 30, 2017, our capital measures continued to exceed the minimum federal requirements for a bank holding company. The following table sets forth our common equity tier 1, tier 1 risk-based, total risk-based, and leverage capital amounts and ratios on a consolidated basis, as well as the respective minimum regulatory capital requirements, at that date:

~~Regulatory Capital Analysis (the Company)~~

   Risk-Based Capital
At September 30, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,823,765    11.54 % $ 4,326,605    13.06 % $ 4,832,749    14.59 % $ 4,326,605    9.40 %
Minimum for capital adequacy purposes
   1,490,799    4.50 1,987,732    6.00 2,650,309    8.00 1,840,256    4.00










Excess
   $ 2,332,966    7.04 % $ 2,338,873    7.06 % $ 2,182,440    6.59 % $ 2,486,349    5.40 %

~~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 September 30, 2017, our total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by 659 basis points and the fully-phased in capital conservation buffer by 409 basis points.

~~As reflected in the following tables, the capital ratios for the Community Bank and the Commercial Bank also continued to exceed the minimum regulatory capital levels required at September 30, 2017:~~

~~Regulatory Capital Analysis (New York Community Bank)~~

   Risk-Based Capital
At September 30, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 4,176,102    13.60 % $ 4,176,102    13.60 % $ 4,304,995    14.02 % $ 4,176,102    9.80 %
Minimum for capital adequacy purposes
   1,381,593    4.50 1,842,123    6.00 2,456,165    8.00 1,703,799    4.00










Excess
   $ 2,794,509    9.10 % $ 2,333,979    7.60 % $ 1,848,830    6.02 % $ 2,472,303    5.80 %

~~Regulatory Capital Analysis (New York Commercial Bank)~~

   Risk-Based Capital
At September 30, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 372,817    15.30 % $ 372,817    15.30 % $ 403,287    16.55 % $ 372,817    11.07 %
Minimum for capital adequacy purposes
   109,671    4.50 146,227    6.00 194,970    8.00 134,716    4.00










Excess
   $ 263,146    10.80 % $ 226,590    9.30 % $ 208,317    8.55 % $ 238,101    7.07 %

As of September 30, 2017, the Community Bank and the Commercial Bank also exceeded the minimum capital requirements to be categorized as “Well Capitalized.” To be categorized as well capitalized, a bank must maintain a minimum common equity tier 1 ratio of 6.50%; a minimum tier 1 risk-based capital ratio of 8.00%; a minimum total risk-based capital ratio of 10.00%; and a minimum leverage capital ratio of 5.00%.

~~Earnings Summary for the Three Months Ended September 30, 2017~~

Net income available to common shareholders (“net income”) totaled $102.3 million in the current third quarter, equivalent to $0.21 per diluted common share. In the trailing and year-earlier quarters, net income totaled $107.0 million and $125.3 million, and was equivalent to $0.22 and $0.26 per diluted common share, respectively. The sequential and year-over-year declines in net income were primarily due to a decrease in net interest income, as further discussed below.

~~Net Interest Income~~

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.

The cost of our deposits and short-term 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. Since the fourth quarter of 2008, when the target federal funds rate was lowered to a range of 0% to 0.25%, the rate has been raised three times: on December 17, 2015, to a range of 0.25% to 0.50%; on December 14, 2016, to a range of 0.50% to 0.75%; on March 15, 2017, to a range of 0.75% to 1.00%, and, most recently on June 14, 2017 to a range of 1.00% to 1.25%.

~~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 the third quarter of 2017, the average five-year CMT was 1.81%, unchanged from the trailing quarter and as compared to 1.13% for the year-earlier quarter. The average~~ten-year~~ ~~CMT was 2.24% in the current third quarter, as compared to 2.26% and 1.56%, respectively, in the prior periods.~~

Net interest income is also influenced by the level of prepayment income primarily generated in connection with the prepayment of our multi-family and CRE loans, as well as securities. 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 interest rate spread and 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.

The Company recorded net interest income of $276.3 million in the current second quarter, an $11.4 million decrease from the trailing-quarter level and a $42.1 million decrease from the year-earlier amount.

~~Linked-Quarter Comparison~~

The sequential decline in net interest income was attributable to a variety of factors, including an increase in our cost of funds, as short-term interest rates rose in the quarter. Additionally, the sale of our covered loan portfolio, which closed at the end of July and resulted in excess liquidity being invested at lower yields, negatively impacted net interest income. This was partially offset by modest loan growth along with stable loan yields. Details of the linked-quarter decline in net interest income follow:

Interest income of $393.7 million in the current third quarter declined $5.4 million from the amount reported in the trailing quarter. Interest income from loans declined $10.3 million to $351.0 million, while interest income from securities and interest-earning cash and cash equivalents rose $4.9 million to $42.7 million.

~~The decrease in interest income from loans was driven by a $1.3 billion decrease in the average balance to $37.8 billion and aone-basis~~ point increase in the average yield to 3.71%. The decrease in the average balance was largely due to the sale of our covered loan portfolio early in the quarter. The increase in the average yield was a function of the increase in prepayment income. Prepayment income on loans contributed 15 basis points to the average yield on loans, an increase of one basis point.

The increase in the interest income from securities and interest-earning cash and cash equivalents was due to increases in both the average balances and in the average yields. The average balance rose $1.8 billion to $6.1 billion due to the aforementioned investment of the cash proceeds from the sale of our covered loan portfolio. Prepayment income on securities contributed 28 basis points to the average yield on securities, an increase of 11 basis points.

~~As a result, the average balance of interest-earning assets rose $514.9 million sequentially, to $43.9 billion and the average yield on such assets declined nine basis points to 3.59%.~~

Interest expense rose $6.0 million sequentially to $117.3 million, as a $7.1 million increase in interest expense on total interest-bearing deposits combined with a $1.1 million decrease in the interest expense on borrowed funds.

Specifically, interest expense on interest-bearing deposits rose to $62.4 million, due to a $153.2 million decline in the average balance to $26.2 billion combined with a nine-basis point increase in the average cost of such funds to 0.94%. However, interest expense on borrowed funds dropped to $55.0 million as a $798.3 million decline in the average balance to $12.4 billion was offset by a~~six-basis~~ ~~point increase in the average cost to 1.76%.~~

~~As a result, the average balance of interest-bearing liabilities fell $645.2 million sequentially, to $38.6 billion and the average cost of funds rose seven basis points to 1.21%.~~

~~Year-Over-Year Comparison~~

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

Interest income fell $22.4 million year-over-year as a $5.5 million decline in the interest income from securities and interest-earning cash and cash equivalents was coupled with a $16.9 million decline in the interest income from loans.

The decline in the interest income from loans was largely due to a $1.5 billion decline in the average balance and a three-basis point decline in the average yield. In addition, prepayment income contributed $13.4 million to the interest income from loans and 14 basis points to the average yield on such assets in the year-earlier quarter.

~~The year-over-year reduction in interest income from securities was driven by a $829.0 million increase in the average balance, offset by a53-basis~~ ~~point drop in the average yield.~~

~~As a result, the average balance of interest-earning assets rose $90.8 million from the year-earlier level and the average yield fell 21 basis points.~~

~~Interest expense rose $19.7 million year-over-year as the interest expense on deposits rose $18.6 million and the interest expense on borrowed funds rose $1.1 million.~~

~~The year-over-year rise in interest expense stemming from deposits was due to a28-basis~~ point rise in the average cost of such funds due to higher short-term interest rates, offset by an $18.0 million decrease in the average balance. The increase in the interest income from borrowed funds was driven by a~~21-basis~~ ~~point rise in the average cost of such funding and mitigated by a $1.4 billion decline in the average balance from the year-earlier amount.~~

~~As a result, the average balance of interest-bearing liabilities fell $1.4 million and the average cost of funds rose 24 basis points year-over-year.~~

~~Net Interest Margin~~

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 2.53%, the margin was 12 basis points narrower than the trailing-quarter measure and 38 basis points narrower than the margin recorded in the third quarter of last year. The respective reductions were due, in part, to a decline in prepayment income from the levels recorded in the trailing and year-earlier quarters, as reflected in the following table:

   For the Three Months Ended
(dollars in thousands)    September 30,
2017 June 30,
2017 September 30,
2016
Total interest income
   $ 393,675 $ 399,075 $ 416,096
Prepayment income:

From loans
   $ 14,076 $ 13,285 $ 13,422
From securities
   2,488 1,708 8,947


Total prepayment income
   $ 16,564 $ 14,993 $ 22,369


Net interest margin (including the contribution of prepayment income)
   2.53 % 2.65 % 2.91 %
Less:

Contribution of prepayment income to net interest margin:

From loans
   13 bps 12 bps 12 bps
From securities
   3 2 8


Total contribution of prepayment income to net interest margin
   16 bps 14 bps 20 bps


Adjusted net interest margin (i.e., excluding the contribution of prepayment income)⁽¹⁾
   2.37 % 2.51 % 2.71 %

~~(1)~~

~~“Adjusted net interest margin” is anon-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:~~

1.

Adjusted net interest margin gives investors a better understanding of the effect of prepayment income on our net interest margin. Prepayment income in any given period depends on the volume of loans that 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.

2.

~~Adjusted net interest margin is among the measures considered by current and prospective investors, both independent of, and in comparison with, our peers.~~

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 quarters 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 quarters 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.~~

~~Net Interest Income Analysis~~

   For the Three Months Ended
   September 30, 2017 June 30, 2017 September 30, 2016
(dollars in thousands)    Average
Balance    Interest    Average
Yield/
Cost Average
Balance    Interest    Average
Yield/
Cost Average
Balance    Interest    Average
Yield/
Cost
Assets:

Interest-earning assets:

Mortgage and other loans, net⁽¹⁾
   $ 37,791,476    $ 350,990    3.71 % $ 39,113,348    $ 361,330    3.70 % $ 39,337,380    $ 367,932    3.74 %
Securities⁽²⁾⁽³⁾
   3,597,699    34,359    3.81 4,226,369    37,732    3.55 4,426,703    48,160    4.34
Interest-earning cash and cash equivalents⁽²⁾
   2,474,307    8,326    1.34 8,858    13    0.59 8,629    4    0.18














Total interest-earning assets
   43,863,482    393,675    3.59 43,348,575    399,075    3.68 43,772,712    416,096    3.80
Non-interest-earning assets
   4,662,777       5,720,589       5,386,459







Total assets
   $ 48,526,259       $ 49,069,164       $ 49,159,171







Liabilities and Stockholders’ Equity:

Interest-bearing deposits:

Interest-bearing checking and money market accounts
   $ 12,672,720    $ 27,620    0.86 % $ 12,971,440    $ 24,084    0.74 % $ 13,356,174    $ 15,866    0.47 %
Savings accounts
   5,006,499    7,109    0.56 5,260,397    7,150    0.55 5,629,135    7,439    0.53
Certificates of deposit
   8,533,404    27,649    1.29 7,827,633    24,006    1.23 7,245,325    20,501    1.13














Total interest-bearing deposits
   26,212,623    62,378    0.94 26,059,470    55,240    0.85 26,230,634    43,806    0.66
Borrowed funds
   12,397,681    54,954    1.76 13,195,987    56,066    1.70 13,802,662    53,867    1.55














Total interest-bearing liabilities
   38,610,304    117,332    1.21 39,255,457    111,306    1.14 40,033,296    97,673    0.97
Non-interest-bearing deposits
   2,766,701       2,960,164       2,832,569
Other liabilities
   383,622       203,237       212,303







Total liabilities
   41,760,627       42,418,858       43,078,168
Stockholders’ equity
   6,765,632       6,650,306       6,081,003







Total liabilities and stockholders’ equity
   $ 48,526,259       $ 49,069,164       $ 49,159,171







Net interest income/interest rate spread
      $ 276,343    2.38 %    $ 287,769    2.54 %    $ 318,423    2.83 %












Net interest margin
         2.53 %       2.65 %       2.91 %






Ratio of interest-earning assets to interest-bearing liabilities
         1.14x       1.10x       1.09x

~~(1)~~

~~Amounts are net of net deferred loan origination costs/(fees) and the allowances for loan losses, and include loans held for sale andnon-performing~~ ~~loans.~~

~~(2)~~

~~Amounts are at amortized cost.~~

~~(3)~~

~~Includes FHLB stock.~~

~~Provision for Losses on Non-Covered Loans~~

~~The provision for losses onnon-covered~~ loans 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,” we recorded a $44.6 million provision for~~non-covered~~ loan losses in the current third quarter, as compared to $11.6 million and $1.2 million in the three months ended June 30, 2017 and September 30, 2016. The elevated loan loss provision for the current third quarter was due to our taxi medallion-related loans. In the third quarter of 2017, the Company recorded net charge-offs of $40.4 million, of which $40.6 million was related to taxi medallion-related loans, compared to the year-earlier quarter during which the Company recorded net recoveries of $412,000, of which $49,000 was related to taxi medallion-related loans.

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

~~Non-Interest~~ ~~Income~~

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

~~Non-interest~~ income totaled $108.9 million in the current third quarter, up $58.5 million from the trailing-quarter level and $68.3 million from the year-earlier amount. The linked-quarter improvement was primarily driven by an $82.0 million gain on sale of covered loans and mortgage banking operations. This was partially offset by a $6.7 million decline in mortgage banking income. The year-over-year increase reflects contributions from the same factors which impacted the linked-quarter results.

~~The following table summarizes our mortgage banking income for the periods indicated:~~

   For the Three Months Ended
   September 30,    June 30,    September 30,
(in thousands)    2017    2017    2016
Mortgage Banking Income:

Income from originations
   $ 2,109    $ 4,394    $ 10,884
Servicing (loss) income
   (623 )    3,802    2,041






Total mortgage banking income
   $ 1,486    $ 8,196    $ 12,925

~~The following table summarizes ournon-interest~~ ~~income for the respective periods:~~

~~Non-Interest~~ ~~Income Analysis~~

   For the Three Months Ended
   September 30,    June 30,    September 30,
(in thousands)    2017    2017    2016
Mortgage banking income
   $ 1,486    $ 8,196    $ 12,925
Fee income
   7,972    8,151    8,640
BOLI income
   8,314    6,519    7,029
Net (loss) gain on sales of loans
   (76 )    1,397    3,465
Net gain on sales of securities
   —      26,936    237
FDIC indemnification expense
   —      (14,325 )    (1,031 )
Gain on sale of covered loans and mortgage banking operations
   82,026    —      —
Other income:

Peter B. Cannell & Co., Inc.
   5,502    5,476    5,535
Third-party investment product sales
   2,888    3,205    2,467
Other
   816    4,882    1,328






Total other income
   9,206    13,563    9,330






Totalnon-interest income
   $ 108,928    $ 50,437    $ 40,595

~~Non-Interest~~ ~~Expense~~

~~Non-interest~~ expense has two primary components: operating expenses, which consist of compensation and benefits expense, occupancy and equipment expense, and G&A expense, and the amortization of the CDI stemming from certain merger transactions.

~~Non-interest~~ expense totaled $162.2 million in the current third quarter, a $1.5 million decrease from the trailing-quarter level and a $549,000 increase from the year-earlier amount. Merger-related expenses added $2.2 million to~~non-interest~~ ~~expense in the year-earlier quarter; there were no comparable expenses in the current quarter.~~

~~The majority of the Company’snon-interest~~ expense consists of operating expenses, which totaled $162.2 million in the current third quarter, as compared to $163.7 million and $158.9 million, respectively, in the trailing and year-earlier periods. The linked-quarter decrease was driven by a $1.3 million decline in compensation and benefits expense to $91.6 million and a $2.0 million decrease in G&A expense to $45.5 million, partially offset by a $1.7 million increase in occupancy and equipment expense to $25.1 million.

The year-over-year increase in operating expenses was largely due to a $5.5 million increase in compensation and benefits expense coupled with a $3.0 million decrease in G&A expense. The year-over-year rise in compensation and benefits expense was generally attributable to the addition of senior level staff in various departments, while the year-over-year decline in G&A expense was largely attributable to lower FDIC insurance premiums.

~~Income Tax Expense~~

~~Income tax expense totaled $68.0 million in the current third quarter, $2.5 million higher than the trailing-quarter level and $4.1 million lower than the year-earlier third-quarter amount.~~

~~Whilepre-tax~~ ~~income declined $2.3 million sequentially, to $178.5 million, the effective tax rate increased to 38.10% in the current third quarter from 36.22% in the trailing three-month period.~~

~~In the third quarter of 2016,pre-tax~~ ~~income was $18.9 million higher than the current third-quarter level, and the effective tax rate was 36.52%.~~

~~Earnings Summary for the Nine Months Ended September 30, 2017~~

In the first nine months of 2017, we generated net income available to common shareholders of $313.3 million or $0.64 per diluted common share as compared to net income available to common shareholders of $381.7 million, or $0.78 per diluted common share, in the first nine months of 2016.

~~Merger-related expenses totaled $4.7 million in the year-earlier nine months; there were no merger-related expenses in the current nine-month period.~~

~~Net Interest Income~~

Net interest income fell $112.8 million year-over-year to $859.0 million in the nine months ended September 30, 2017. The decrease was the net effect of a $67.7 million decrease in interest income to $1.2 billion and a $45.2 million increase in interest expense to $332.8 million. During this time, our net interest margin fell 32 basis points to 2.63%.

~~The following factors contributed to the year-over-year decrease in net interest income and margin:~~

Prepayment penalty income contributed $43.7 million to net interest income in the first nine months of 2017, a $28.7 million decrease from the amount contributed in the first nine months of 2016. In addition, the current nine-month amount contributed 13 basis points to our net interest margin, a nine basis-point decline from the year-earlier contribution.

Average interest-earning assets fell $416.0 million year-over-year to $43.5 billion, the net effect of a $226.0 million decrease in average loans to $38.7 billion and a $190.0 million reduction in average securities and interest-earning cash and cash equivalents to $4.9 billion, partly offset by a~~17-basis~~ point decline in the average yield on interest-earning assets to 3.65% in the first nine months of this year. While the average yield on loans fell a modest eight basis points year-over-year to 3.69%, the average yield on securities declined 50 basis points to 3.72%.

Average interest-bearing liabilities declined $1.1 billion year-over-year to $39.1 billion, reflecting a $1.1 billion decrease in average borrowed funds to $13.0 billion and a $20.4 million decrease in average interest-bearing deposits to $26.1 billion. During this time, the average cost of funds rose 19 basis points to 1.14%, as the average cost of borrowed funds rose 18 basis points to 1.71%, and the average cost of interest-bearing deposits increased 21 basis points to 0.85%.

~~The following table summarizes the contribution of prepayment income from loans and securities to our interest income and net interest margin in the nine months ended September 30, 2017 and 2016:~~

   For the Nine Months
Ended September 30,
(dollars in thousands)    2017 2016
Total interest income
   $ 1,191,869 $ 1,259,521
Prepayment income:

From loans
   $ 36,926 $ 42,648
From securities
   6,744 29,695


Total prepayment income
   $ 43,670 $ 72,343


Net interest margin (including the contribution of prepayment income)
   2.63 % 2.95 %
Less:

Contribution of prepayment income to net interest margin:

From loans
   11 bps 13 bps
From securities
   2 9


Total contribution of prepayment income to net interest margin
   13 bps 22 bps


Adjusted net interest margin (i.e., excluding the contribution of prepayment income)⁽¹⁾
   2.50 % 2.73 %

~~(1) “Adjusted net interest margin” is anon-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:~~

1.

Adjusted net interest margin gives investors a better understanding of the effect of prepayment income on our net interest margin. Prepayment income in any given period depends on the volume of loans that 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.

2.

~~Adjusted net interest margin is among the measures considered by current and prospective investors, both independent of, and in comparison with, our peers.~~

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 nine-month periods 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 nine-month periods 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.~~

~~Net Interest Income Analysis~~

   For the Nine Months Ended September 30,
   2017 2016
         Average       Average
   Average       Yield/ Average       Yield/
(dollars in thousands)    Balance    Interest    Cost Balance    Interest    Cost
Assets:

Interest-earning assets:

Mortgage and other loans, net⁽¹⁾
   $ 38,652,113    $ 1,070,722    3.69 % $ 38,878,111    $ 1,099,137    3.77 %
Securities⁽²⁾⁽³⁾
   4,052,154    112,800    3.72 5,065,917    160,373    4.22
Interest-earning cash and cash equivalents⁽²⁾
   832,463    8,347    1.34 8,749    11    0.17










Total interest-earning assets
   43,536,730    1,191,869    3.65 43,952,777    1,259,521    3.82
Non-interest-earning assets
   5,239,745       5,316,971





Total assets
   $ 48,776,475       $ 49,269,748





Liabilities and Stockholders’ Equity:

Interest-bearing deposits:

Interest-bearing checking and money market accounts
   $ 12,950,570    $ 71,413    0.74 % $ 13,349,201    $ 45,771    0.46 %
Savings accounts
   5,171,645    21,069    0.54 6,112,342    25,001    0.55
Certificates of deposit
   8,019,142    73,786    1.23 6,700,188    55,129    1.10










Total interest-bearing deposits
   26,141,357    166,268    0.85 26,161,731    125,901    0.64
Borrowed funds
   12,992,691    166,572    1.71 14,083,459    161,758    1.53










Total interest-bearing liabilities
   39,134,048    332,840    1.14 40,245,190    287,659    0.95
Non-interest-bearing deposits
   2,820,923       2,817,043
Other liabilities
   269,132       179,471





Total liabilities
   42,224,103       43,241,704
Stockholders’ equity
   6,552,372       6,028,044





Total liabilities and stockholders’ equity
   $ 48,776,475       $ 49,269,748





Net interest income/interest rate spread
      $ 859,029    2.51 %    $ 971,862    2.87 %








Net interest margin
         2.63 %       2.95 %




Ratio of interest-earning assets to interest-bearing liabilities
         1.11x       1.09x

~~(1)~~

~~Amounts are net of net deferred loan origination costs/(fees) and the allowances for loan losses, and include loans held for sale andnon-performing~~ ~~loans.~~

~~(2)~~

~~Amounts are at amortized cost.~~

~~(3)~~

~~Includes FHLB stock.~~

~~Provision for Loan Losses~~

~~Provision for Losses onNon-Covered~~ ~~Loans~~

~~Reflecting the methodology used by management to calculate the allowance fornon-covered~~ ~~loan losses, we recorded a provision for losses onnon-covered~~ loans of $58.0 million in the nine months ended September 30, 2017 compared to $6.7 million in the year ago nine months. The higher loan loss provision for the nine months ended September 30, 2017 was due to our taxi medallion-related loans. For the nine months ended September 30, 2017, the Company recorded net charge-offs of $57.4 million, of which $54.8 million was due to taxi medallion-related loans. For the nine months ended September 30, 2016, the Company recorded a net recovery of $882,000, with taxi medallion-related charge-offs of $265,000.

~~Provision for (Recovery of) Losses on Covered Loans~~

In the first nine months of 2017, we recovered $23.7 million from the allowance for covered loan losses, reflecting an increase in expected cash flows from certain pools of covered loans as their credit quality improved and the aforementioned sale of the covered loans. In connection with this recovery, we recorded FDIC indemnification expense of $19.0 million in~~“Non-interest~~ ~~income” during the corresponding period.~~

In the first nine months of 2016, we recovered $6.0 million from the allowance for covered loan losses, reflecting an increase in expected cash flows from certain pools of covered loans as their credit quality improved. In connection with this recovery, we recorded FDIC indemnification income of $4.8 million in~~“Non-interest~~ ~~income” during the corresponding period.~~

~~Non-Interest~~ ~~Income~~

~~In the first nine months of 2017, we recordednon-interest~~ income of $191.5 million, as compared to $113.2 million in the first nine months of 2016. The $78.3 million increase was largely driven by the $82.0 million gain on the sale of our covered loans and mortgage banking operations and a net gain on sales of securities of $28.9 million. This was partially offset by lower mortgage banking income and lower gains on sales of loans.

~~The following table summarizes our mortgage banking income for the periods indicated:~~

   For the Nine Months Ended
September 30,
(in thousands)    2017    2016
Mortgage Banking Income:

Income from originations
   $ 11,478    $ 34,691
Servicing income (loss)
   7,968    (10,671 )




Total mortgage banking income
   $ 19,446    $ 24,020

~~The following table summarizes the components ofnon-interest~~ ~~income for the respective periods:~~

~~Non-Interest~~ ~~Income Analysis~~

   For the Nine Months Ended
September 30,
(in thousands)    2017    2016
Mortgage banking income
   $ 19,446    $ 24,020
Fee income
   23,983    24,480
BOLI income
   21,170    23,208
Net gain on sales of loans
   1,055    15,118
Net gain on sales of securities
   28,915    413
FDIC indemnification expense
   (18,961 )    (4,828 )
Gain on sale of covered loans and mortgage banking operations
   82,026    —
Other income:

Peter B. Cannell & Co., Inc.
   16,512    17,100
Third-party investment product sales
   9,262    8,823
Other
   8,129    4,864




Total other income
   33,903    30,787




Totalnon-interest income
   $ 191,537    $ 113,198

~~Non-Interest~~ ~~Expense~~

~~In the first nine months of 2017, we recordednon-interest~~ expense of $492.9 million, reflecting an $11.9 million increase from the year-earlier amount. Operating expenses accounted for $492.7 million of the current nine-month total, and were up $18.4 million year-over-year.

The rise in operating expenses was largely due to an $18.8 million increase in compensation and benefits expense to $280.0 million, while most other expense categories were flat on a year-over-year basis.

~~Income Tax Expense~~

~~Income tax expense fell $28.1 million year-over-year to $193.6 million in the nine months ended September 30, 2017. During this time,pre-tax~~ ~~income declined $80.0 million to $523.3 million, while the effective tax rate rose modestly to 37.00%, as compared to 36.74%.~~

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~Quantitative and qualitative disclosures about the Company’s market risk were presented on pages83-87~~ ~~of our 2016 Annual Report on Form10-K,~~ filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 1, 2017. Subsequent changes in the Company’s market risk profile and interest rate sensitivity are detailed in the discussion entitled “Management of Market and Interest Rate Risk” earlier in this quarterly report.

~~ITEM 4. CONTROLS AND PROCEDURES~~

~~(a) Evaluation of Disclosure Controls and Procedures~~

~~Disclosure~~ controls and procedures ~~are the controls and other procedures that are designed~~were effective to ensure that information required to be disclosed by the Company in the reports that ~~the Company~~it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the ~~U.S. Securities and Exchange Commission’s (the “SEC’s”)~~Commission'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.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to~~Rule 13a-15(b),~~ as adopted by 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 effectiveforms as of ~~the end of the period.~~

September 30, 2023.

Certain assets and liabilities of Signature Bridge Bank were acquired on March 20, 2023. We have extended oversight and monitoring processes that support internal control over ~~Financial Reporting~~

financial reporting to include the acquired operations. There have ~~not~~ been ~~any~~no changes in the Company’s internal control over financial reporting (as ~~such term is~~ defined in~~Rules 13a-15(f)~~ ~~and15d-15(f)~~ ~~under~~ Rule 13a-15(d) of the Exchange Act) during the ~~fiscal quarter to which this report relates~~three months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.


~~INDEX~~			~~Page No.~~
~~Part I.~~	~~FINANCIAL INFORMATION~~

~~Item 1.~~						~~Financial Statements~~			PART I. – FINANCIAL INFORMATION

Item 1.		Financial Statements
		Consolidated Statements of Financial Condition ~~as of~~– September 30, ~~2017~~2023 (unaudited) and December 31, ~~2016~~ 2022							1	40

	Consolidated Statements of Income and Comprehensive Income ~~for~~– For the ~~Three~~three and ~~Nine Months Ended~~nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)					2	41
		Consolidated Statements of Stockholders’ Equity – For the three and nine months ended September 30, 2023 and 2022 (unaudited)			42
					~~Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2017 (unaudited)~~			3

	Consolidated Statements of Cash Flows ~~for~~– For the ~~Nine Months Ended~~nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)					4	44

	Notes to the Consolidated Financial Statements (unaudited)					5
		Note 1 - Organization Basis of Presentation			46
		Note 2 - Computation of Earnings Per Common Share			47
		Note 3 - Business Combination			48
		Note 4 - Accumulated Other Comprehensive Income			52
		Note 5 - Investment Securities			53
		Note 6 - Loans and Leases			56
		Note 7 - Allowance for Credit Losses			62
		Note 8 - Leases			63
		Note 9 - Mortgage Servicing Rights			66
		Note 10 -Variable Interest Entities			68
		Note 11 - Borrowed Funds			68
		Note 12 - Pension and Other Post-Retirement Benefits			69
		Note 13 - Stock-Related Benefit Plans			69
		Note 14 - Derivative and Hedging Activities			70
		Note 15 - Intangible Assets			74
		Note 16 - Fair Value Measures			75
Item 2.					Management’s Discussion and Analysis of Financial Condition and Results of Operations					41	10

Item 3.			Quantitative and Qualitative Disclosures about Market Risk	82
Item 4.		Controls and Procedures			83			82

~~Item 4.~~						~~Controls and Procedures~~PART II. – OTHER INFORMATION			83

~~Part II.~~			~~OTHER INFORMATION~~

Item 1.			Legal Proceedings					84	83

Item 1A.			Risk Factors					84	83

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 3.		Defaults upon Senior Securities			84
Item 4.		Mine Safety Disclosures			84
Item 5.		Other Information			84
Item 6.		Exhibits			85

~~Item 3.~~ SIGNATURES					87


	Three Months Ended,
	September 30, 2023						June 30, 2023
(dollars in millions)	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
ASSETS:
Interest-earning assets:
Mortgage and other loans and leases , net (1)	$	85,691	$	1,251	5.82	%	$	83,810	$	1,161	5.55	%
Securities (2) (3)	10,317		111		4.30	%	9,781		102		4.18	%
Reverse repurchase agreements	299		5		6.11	%	429		6		5.85	%
Interest-earning cash and cash equivalents	10,788		145		5.31	%	18,279		229		5.03	%
Total interest-earning assets	$	107,095	$	1,512	5.62	%	$	112,299	$	1,498	5.34	%
Non-interest-earning assets	7,179						8,974
Total assets	$	114,274					$	121,273
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing deposits:
Interest-bearing checking and money market accounts	$	31,321	$	268	3.40	%	$	30,647	$	232	3.05	%
Savings accounts	9,628		43		1.76	%	10,015		40		1.61	%
Certificates of deposit	17,545		180		4.06	%	18,587		169		3.61	%
Total interest-bearing deposits	$	58,494	$	491	3.33	%	$	59,249	$	441	2.98	%
Short term borrowed funds	5,632		62		4.38	%	6,807		75		4.46	%
Other borrowed funds	9,964		77		3.04	%	11,393		82		2.88	%
Total Borrowed funds	$	15,596	$	139	3.53	%	$	18,200	$	157	3.47	%
Total interest-bearing liabilities	$	74,090	$	630	3.37	%	$	77,449	$	598	3.10	%
Non-interest-bearing deposits	25,703						24,613
Other liabilities	3,286						8,321
Total liabilities	$	103,079					$	110,383
Stockholders’ equity	11,195						10,890
Total liabilities and stockholders’ equity	$	114,274					$	121,273
Net interest income/interest rate spread			$	882	2.25	%			$	900	2.24	%
Net interest margin					3.27	%					3.21	%
Ratio of interest-earning assets to interest-bearing liabilities					1.45	x					1.45	x


	Nine Months Ended,
	September 30, 2023						September 30, 2022
(dollars in millions)	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
ASSETS:
Interest-earning assets:
Mortgage and other loans and leases , net (1)	$	80,569	$	3,279	5.43	%	$	47,158	$	1,259	3.56	%
Securities (2) (3)	10,314		318		4.11	%	6,864		125		2.43	%
Reverse repurchase agreements	503		21		5.74	%	388		7		2.35	%
Interest-earning cash and cash equivalents	11,127		426		5.11	%	2,326		20		1.12	%
Total interest-earning assets	$	102,513	$	4,044	5.27	%	$	56,736	$	1,411	3.32	%
Non-interest-earning assets	7,582						4,993
Total assets	$	110,095					$	61,729
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing deposits:
Interest-bearing checking and money market accounts	$	28,385	$	657	3.09	%	$	16,915	$	104	0.82	%
Savings accounts	10,240		122		1.60	%	9,245		33		0.49	%
Certificates of deposit	16,627		436		3.50	%	8,197		46		0.75	%
Total interest-bearing deposits	$	55,252	$	1,215	2.94	%	$	34,357	$	183	0.71	%
Short term borrowed funds	7,146		241		4.50	%	1,925		17		1.16	%
Other borrowed funds	11,537		251		2.91	%	13,419		194		1.93	%
Total Borrowed funds	$	18,683	$	492	3.52	%	$	15,344	$	211	1.84	%
Total interest-bearing liabilities	$	73,935	$	1,707	3.09	%	$	49,701	$	394	1.06	%
Non-interest-bearing deposits	21,214						4,332
Other liabilities	4,518						750
Total liabilities	$	99,667					$	54,783
Stockholders’ equity	10,428						6,946
Total liabilities and stockholders’ equity	$	110,095					$	61,729
Net interest income/interest rate spread			$	2,337	2.18	%			$	1,017	2.26	%
Net interest margin					3.05	%					2.39	%
Ratio of interest-earning assets to interest-bearing liabilities					1.39	x					1.14	x


	September 30, 2023				December 31, 2022
(dollars in millions)	Amount		Percent of Loans Held for Investment		Amount		Percent of Loans Held for Investment
Mortgage Loans:
Multi-family	$	37,698	44.9	%	$	38,130	55.3	%
Commercial real estate	10,486		12.5	%	8,526		12.4	%
One-to-four family first mortgage	5,882		7.0	%	5,821		8.4	%
Acquisition, development, and construction	2,910		3.5	%	1,996		2.9	%
Total mortgage loans	$	56,976	67.8	%	$	54,473	78.9	%
Other Loans:
Commercial and industrial	$	24,423	29.1	%	$	12,276	17.8	%
Other loans	2,596		3.1	%	2,252		3.3	%
Total other loans held for investment	$	27,019	32.2	%	$	14,528	21.1	%
Total loans and leases held for investment	$	83,995	100.0	%	$	69,001	100.0	%
Allowance for credit losses on loans and leases	(619)				(393)
Total loans and leases held for investment, net	$	83,376			$	68,608
Loans held for sale	1,926				1,115
Total loans and leases, net	$	85,302			$	69,723


	Three Months Ended,				Nine Months Ended,
	September 30, 2023		June 30, 2023		September 30, 2023		September 30, 2022
(dollars in millions)	Amount		Amount		Amount		Amount
Mortgage Loan Originated for Investment:
Multi-family	$	204	$	217	$	761	$	7,065
Commercial real estate	280		278		867		737
One-to-four family first mortgage	115		98		487		157
Acquisition, development, and construction	495		593		1,273		83
Total mortgage loans originated for investment	$	1,094	$	1,186	$	3,388	$	8,042
Other Loans Originated for Investment:
Specialty finance	$	2,228	$	1,905	$	5,468	$	4,075
Commercial and industrial	1,192		1,581		3,270		433
Other	406		312		1,056		5
Total other loans originated for investment	$	3,826	$	3,797	$	9,793	$	4,513
Total loans originated for investment	$	4,920	$	4,983	$	13,181	$	12,555


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		~~489,054,449~~
		~~Number of shares of common stock~~ ~~outstanding at November 6, 2017~~


~~Item 5.~~ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


	Three Months Ended,						Nine Months Ended,
	September 30, 2023 compared to June 30, 2023 Increase/(Decrease) Due to:						September 30, 2023 compared to September 30, 2022 Increase/(Decrease) Due to:
(in millions)	Volume		Rate		Net		Volume		Rate		Net
INTEREST-EARNING ASSETS:
Mortgage and other loans and leases, net	$	27	$	63	$	90	$	1,361	$	659	$	2,020
Securities	$	6	$	3	$	9	$	106	$	87	$	193
Reverse repurchase agreements	$	(2)	$	1	$	(1)	$	5	$	9	$	14
Interest Earning Cash & Cash Equivalent	$	(99)	$	15	$	(84)	$	337	$	69	$	406
Total interest-earnings assets	$	(68)	$	82	$	14	$	1,809	$	824	$	2,633
INTEREST-BEARING LIABILITIES:
Interest-bearing checking and money market accounts	$	6	$	30	$	36	$	266	$	287	$	553
Savings accounts	$	(2)	$	5	$	3	$	12	$	77	$	89
Certificates of deposit	$	(11)	$	22	$	11	$	221	$	169	$	390
Short Term Borrowed Funds	$	(10)	$	(3)	$	(13)	$	176	$	48	$	224
Other Borrowed Funds	$	(16)	$	11	$	(5)	$	(41)	$	98	$	57
Total interest-bearing liabilities	$	(33)	$	65	$	32	$	634	$	679	$	1,313
Change in net interest income	$	(35)	$	17	$	(18)	$	1,175	$	145	$	1,320


	At September 30, 2023
	Multi-Family Loans
(dollars in millions)	Amount		Percent of Total
New York City:
Manhattan	$	6,960	19	%
Brooklyn	6,199		16	%
Bronx	3,645		10	%
Queens	2,834		8	%
Staten Island	134		—	%
Total New York City	$	19,772	53	%
New Jersey	5,092		14	%
Long Island	511		1	%
Total Metro New York	$	25,375	68	%
Other New York State	1,242		3	%
Pennsylvania	3,729		10	%
Florida	1,690		4	%
Ohio	1,015		3	%
Arizona	435		1	%
All other states	4,212		11	%
Total	$	37,698	100	%


	At September 30, 2023
	Commercial Real Estate Loans
(dollars in millions)	Amount		Percent of Total
New York	$	5,413	52	%
Michigan	990		9	%
New Jersey	589		6	%
Florida	415		4	%
Texas	103		1	%
Pennsylvania	376		3	%
Ohio	119		1	%
All other states	2,481		24	%
Total	$	10,486	100	%


	September 30, 2023		December 31, 2022
Non-performing loans to total loans held for investment	0.52	%	0.20	%
Non-performing assets to total assets	0.40		0.17
Allowance for credit losses on loans and leases to non-performing loans	142.79		278.87
Allowance for credit losses on loans and leases to total loans held for investment	0.74		0.57


					September 30, 2023
					compared to
					December 31, 2022
(dollars in millions)	September 30, 2023		December 31, 2022		Amount		Percent
Loans 30 to 89 Days Past Due:
Multi-family	$	60	$	34	$	26	76	%
Commercial real estate	26		2		24		1200	%
One-to-four family first mortgage	19		21		(2)		(10)	%
Acquisition, development, and construction	1		—		1		NM
Commercial and industrial	43		2		41		2050	%
Other loans	20		11		9		82	%
Total loans 30-89 days past due	$	169	$	70	99		141	%


					Change from
					December 31, 2022
					to
					September 30, 2023
(dollars in millions)	September 30, 2023		December 31, 2022		Amount		Percent
Non-Performing Loans(1):
Non-accrual mortgage loans:
Multi-family	$	102	$	13	$	89	685	%
Commercial real estate	157		20		137		685	%
One-to-four family first mortgage	90		92		(2)		(2)	%
Acquisition, development, and construction	$	1	$	—	1		NM
Total non-accrual mortgage loans	$	350	$	125	225		180	%
Commercial and industrial	65		3		62		2067	%
Other non-accrual loans(2)	19		13		6		46	%


Total non-performing loans	$	434	$	141	293		208	%
Repossessed assets	12		12		—		—	%
Total non-performing assets	$	446	$	153	293		192	%


ITEM 1.			FINANCIAL STATEMENTS

	~~Other Information~~		84

~~Item 6.~~(in millions)
Balance at December 31, 2022		~~Exhibits~~ $	141
New non-accrual, including acquired from acquisition		85384

~~Signatures~~ Charge-offs				86
(20)
~~Exhibits~~ Transferred to repossessed assets		(3)
Loan payoffs, including dispositions and principal pay-downs		(34)
Restored to performing status		(34)
Balance at September 30, 2023		$	434


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2023		June 30, 2023		September 30, 2023		September 30, 2022
(dollars in millions)
Charge-offs:
Multi-family	$	2	$	—	$	2	$	1
Commercial real estate	14		—		14		4
One-to-four family residential	—		1		3		—

Commercial and industrial	6		—		6		—
Other	4		2		9		—
Total charge-offs	$	26	$	3	$	34	$	5

Recoveries:

Commercial real estate	—		—		—		(4)


Commercial and industrial	(1)		(3)		(8)		(6)
Other	(1)		(1)		(3)		—
Total recoveries	$	(2)	$	(4)	$	(11)	$	(10)

Net charge-offs (recoveries)	$	24	$	(1)	$	23	$	(5)


	Mortgage- Related Securities		U.S. Government and GSE Obligations		State, County, and Municipal		Other Debt Securities (2)
Available-for-Sale Debt Securities: (1)
Due within one year	2.71	%	4.32	%	—	%	—	%
Due from one to five years	3.34		5.44		—		6.62
Due from five to ten years	2.77		1.56		3.16		5.04
Due after ten years	4.06		1.09		—		5.73
Total debt securities available for sale	3.97		2.39		3.16		5.83


	Risk-Based Capital
September 30, 2023	Common Equity Tier 1				Tier 1				Total				Leverage Capital
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital	$	8,382	9.59	%	$	8,885	10.17	%	$	10,462	11.97	%	$	8,885	7.92	%
Minimum for capital adequacy purposes	3,932		4.50		5,242		6.00		6,990		8.00		4,487		4.00
Excess	$	4,450	5.09	%	$	3,643	4.17	%	$	3,472	3.97	%	$	4,398	3.92	%
December 31, 2022
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	%


Change in Interest Rates (in basis points)						Estimated Percentage Change in Economic Value of Equity
-200 over one year						1.8%
-100 over one year						0.9%
+100 over one year						(1.4)%
+200 over one year						(3.1)%


	September 30, 2017			December 31, 2016
	(unaudited)
Assets:
Cash and cash equivalents	$	3,277,427		$	557,850
Securities:
Available-for-sale ($1,162,014 pledged at September 30, 2017)		3,031,026			104,281
Held-to-maturity ($1,930,533 pledged and fair value of $3,813,959 at December 31, 2016)		—			3,712,776

Total securities		3,031,026			3,817,057

Loans held for sale		104,938			409,152
Non-covered loans held for investment, net of deferred loan fees and costs		37,506,199			37,382,722
Less: Allowance for losses onnon-covered loans		(158,918	)		(158,290	)

Non-covered loans held for investment, net		37,347,281			37,224,432
Covered loans		—			1,698,133
Less: Allowance for losses on covered loans		—			(23,701	)

Covered loans, net		—			1,674,432

Total loans, net		37,452,219			39,308,016
Federal Home Loan Bank stock, at cost		579,474			590,934
Premises and equipment, net		375,482			373,675
FDIC loss share receivable		—			243,686
Goodwill		2,436,131			2,436,131
Core deposit intangibles		—			208
Bank-owned life insurance		961,412			949,026
Other assets (includes $16,990 of other real estate owned covered by Loss Share Agreements at December 31, 2016)		344,720			649,972

Total assets	$	48,457,891		$	48,926,555

Liabilities and Stockholders’ Equity:
Deposits:
Interest-bearing checking and money market accounts	$	12,338,949		$	13,395,080
Savings accounts		4,996,578			5,280,374
Certificates of deposit		8,802,573			7,577,170
Non-interest-bearing accounts		2,755,097			2,635,279

Total deposits		28,893,197			28,887,903

Borrowed funds:
Wholesale borrowings:
Federal Home Loan Bank advances		11,554,500			11,664,500
Repurchase agreements		450,000			1,500,000
Federal funds purchased		—			150,000

Total wholesale borrowings		12,004,500			13,314,500
Junior subordinated debentures		359,102			358,879

Total borrowed funds		12,363,602			13,673,379
Other liabilities		441,438			241,282

Total liabilities		41,698,237			42,802,564

Stockholders’ equity:
Preferred stock at par $0.01 (5,000,000 shares authorized): Series A (515,000 shares issued and outstanding)		502,840			—
Common stock at par $0.01 (900,000,000 shares authorized; 489,072,101 and 487,067,889 shares issued; and 489,061,848 and 487,056,676 shares outstanding, respectively)		4,891			4,871
Paid-in capital in excess of par		6,063,813			6,047,558
Retained earnings		192,607			128,435
Treasury stock, at cost (10,253 and 11,213 shares, respectively)		(130	)		(160	)
Accumulated other comprehensive loss, net of tax:
Net unrealized gain (loss) on securities available for sale, net of tax of $34,189 and $534, respectively		47,917			(753	)
Net unrealized loss on thenon-credit portion of other-than-temporary impairment (“OTTI”) losses on securities, net of tax of $3,338 and $3,351, respectively		(5,221	)		(5,241	)
Net unrealized loss on pension and post-retirement obligations, net of tax of $31,744 and $34,355, respectively		(47,063	)		(50,719	)

Total accumulated other comprehensive loss, net of tax		(4,367	)		(56,713	)

Total stockholders’ equity		6,759,654			6,123,991

Total liabilities and stockholders’ equity	$	48,457,891		$	48,926,555


Change in Interest Rates (in basis points) (1)						Estimated Percentage Change in Future Net Interest Income
-200 over one year						(3.0)%
-100 over one year						(2.0)%
+100 over one year						2.2%
+200 over one year						4.4%


	September 30, 2023		December 31, 2022
(in millions, except per share data)	(unaudited)
ASSETS:
Cash and cash equivalents	$	6,929	$	2,032
Securities:
Debt Securities available-for-sale ($1,380 and $434 pledged at September 30, 2023 and December 31, 2022, respectively)	8,723		9,060
Equity investments with readily determinable fair values, at fair value	13		14
Total securities	8,736		9,074
Loans held for sale ($1,325 and $1,115 measured at fair value, respectively)	1,926		1,115
Loans and leases held for investment, net of deferred loan fees and costs	83,995		69,001
Less: Allowance for credit losses on loans and leases	(619)		(393)
Total loans and leases held for investment, net	83,376		68,608
Federal Home Loan Bank stock and Federal Reserve Bank stock, at cost	1,110		1,267
Premises and equipment, net	638		491
Core deposit and other intangibles	661		287
Goodwill	2,426		2,426
Mortgage servicing rights	1,135		1,033
Bank-owned life insurance	1,576		1,561
Other assets	2,717		2,250
Total assets	$	111,230	$	90,144
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Interest-bearing checking and money market accounts	$	31,087	$	22,511
Savings accounts	9,415		11,645
Certificates of deposit	17,310		12,510
Non-interest-bearing accounts	24,863		12,055
Total deposits	82,675		58,721
Borrowed funds:
Federal Home Loan Bank advances	13,023		20,325
Fed funds purchased	547		—

Total wholesale borrowings	13,570		20,325
Junior subordinated debentures	578		575
Subordinated notes	437		432
Total borrowed funds	14,585		21,332
Other liabilities	2,977		1,267
Total liabilities	100,237		81,320
Stockholders' equity:
Preferred stock at par $0.01 (5,000,000 shares authorized): Series A (515,000 shares issued and outstanding)	503		503
Common stock at par $0.01 (900,000,000 shares authorized; 744,520,822 and 705,429,386 shares issued; and 722,485,257 and 681,217,334 shares outstanding, respectively)	7		7
Paid-in capital in excess of par	8,217		8,130
Retained earnings	3,278		1,041
Treasury stock, at cost ($22,035,565 and 24,212,052 shares, respectively)	(217)		(237)
Accumulated other comprehensive loss, net of tax:
Net unrealized loss on securities available for sale, net of tax of $324 and $240, respectively	(863)		(626)
Net unrealized loss on pension and post-retirement obligations, net of tax of $17 and $18, respectively	(42)		(46)
Net unrealized gain on cash flow hedges, net of tax of $(41) and $(20), respectively	110		52
Total accumulated other comprehensive loss, net of tax	(795)		(620)
Total stockholders’ equity	10,993		8,824
Total liabilities and stockholders’ equity	$	111,230	$	90,144


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Interest Income:
Mortgage and other loans	$	350,990		$	367,932		$	1,070,722		$	1,099,137
Securities and money market investments		42,685			48,164			121,147			160,384

Total interest income		393,675			416,096			1,191,869			1,259,521

Interest Expense:
Interest-bearing checking and money market accounts		27,620			15,866			71,413			45,771
Savings accounts		7,109			7,439			21,069			25,001
Certificates of deposit		27,649			20,501			73,786			55,129
Borrowed funds		54,954			53,867			166,572			161,758

Total interest expense		117,332			97,673			332,840			287,659

Net interest income		276,343			318,423			859,029			971,862
Provision for losses on non-covered loans		44,585			1,234			58,017			6,699
Recovery of losses on covered loans		—			(1,289	)		(23,701	)		(6,035	)

Net interest income after provision for (recovery of) loan losses		231,758			318,478			824,713			971,198

Non-Interest Income:
Mortgage banking income		1,486			12,925			19,446			24,020
Fee income		7,972			8,640			23,983			24,480
Bank-owned life insurance		8,314			7,029			21,170			23,208
Net (loss) gain on sales of loans		(76	)		3,465			1,055			15,118
Net gain on sales of securities		—			237			28,915			413
FDIC indemnification expense		—			(1,031	)		(18,961	)		(4,828	)
Gain on sale of covered loans and mortgage banking operations		82,026			—			82,026			—
Other		9,206			9,330			33,903			30,787

Total non-interest income		108,928			40,595			191,537			113,198

Non-Interest Expense:
Operating expenses:
Compensation and benefits		91,594			86,079			280,008			261,230
Occupancy and equipment		25,133			24,347			73,595			73,837
General and administrative		45,483			48,506			139,131			139,309

Total operating expenses		162,210			158,932			492,734			474,376
Amortization of core deposit intangibles		24			542			208			1,994
Merger-related expenses		—			2,211			—			4,674

Total non-interest expense		162,234			161,685			492,942			481,044

Income before income taxes		178,452			197,388			523,308			603,352
Income tax expense		67,984			72,089			193,628			221,684

Net income	$	110,468		$	125,299		$	329,680		$	381,668
Preferred stock dividends		8,207			—			16,414			—

Net income available to common shareholders	$	102,261		$	125,299		$	313,266		$	381,668

Basic earnings per common share		$0.21			$0.26			$0.64			$0.78

Diluted earnings per common share		$0.21			$0.26			$0.64			$0.78

Net income	$	110,468		$	125,299		$	329,680		$	381,668
Other comprehensive (loss) income, net of tax:
Change in net unrealized gain/loss on securities available for sale, net of tax of $3,049; $396; $35,493; and $1,186, respectively		(4,285	)		(558	)		49,748			1,684
Change in the non-credit portion of OTTI losses recognized in other comprehensive income, net of tax of $0; $12; $13; and $36, respectively		—			19			20			57
Change in pension and post-retirement obligations, net of tax of $870; $946; $2,611 and $2,837, respectively		1,219			1,336			3,656			4,007
Less: Reclassification adjustment for sales of available-for-sale securities, net of tax of $770		—			—			(1,078	)		—

Total other comprehensive (loss) income, net of tax		(3,066	)		797			52,346			5,748

Total comprehensive income, net of tax	$	107,402		$	126,096		$	382,026		$	387,416


	Three Months Ended September 30,				Nine months ended September 30,
(in millions, except per share data)	2023		2022		2023		2022
INTEREST INCOME:
Loans and leases	$	1,251	$	442	$	3,279	$	1,259
Securities and money market investments	261		67		765		152
Total interest income	1,512		509		4,044		1,411
INTEREST EXPENSE:
Interest-bearing checking and money market accounts	268		72		657		104
Savings accounts	43		15		122		33
Certificates of deposit	180		23		436		46
Borrowed funds	139		73		492		211
Total interest expense	630		183		1,707		394
Net interest income	882		326		2,337		1,017
Provision for (recovery of) credit losses	62		2		281		9
Net interest income after provision for credit loan losses	820		324		2,056		1,008
NON-INTEREST INCOME:
Fee income	58		5		133		17
Bank-owned life insurance	11		10		32		24
Net (loss) on securities	—		(1)		(1)		(2)
Net return on mortgage servicing rights	23		—		70		—
Net gain on loan sales and securitizations	28		—		73		—
Net Loan administration income	19		—		65		—
Bargain purchase gain	—		—		2,142		—
Other	21		3		46		10
Total non-interest income	160		17		2,560		49
NON-INTEREST EXPENSE:
Operating expenses:
Compensation and benefits	346		79		854		238
Occupancy and equipment	55		22		142		67
General and administrative	184		31		496		95
Total operating expense	585		132		1,492		400
Intangible asset amortization	36		—		90		—
Merger-related and restructuring expenses	91		4		267		15
Total non-interest expense	712		136		1,849		415
Income before income taxes	268		205		2,767		642
Income tax expense	61		53		141		164
Net income	$	207	$	152	$	2,626	$	478
Preferred stock dividends	8		8		25		25
Net income available to common stockholders	$	199	$	144	$	2,601	$	453
Basic earnings per common share	$	0.27	$	0.31	$	3.62	$	0.96
Diluted earnings per common share	$	0.27	$	0.30	$	3.61	$	0.96
Net income	$	207	$	152	$	2,626	$	478
Other comprehensive loss, net of tax:
Change in net unrealized loss on securities available for sale, net of tax of $69; $67; $84 and $217, respectively	(195)		(176)		(237)		(567)
Change in pension and post-retirement obligations, net of tax of $—; $—; $(1) and $—, respectively	—		—		2		(1)
Change in net unrealized gain on cash flow hedges, net of tax of $(17); $(11); $(26) and $(18), respectively	47		28		72		46

Reclassification adjustment for defined benefit pension plan, net of tax of $—; $—; $— and $—, respectively	1		1		2		2
Reclassification adjustment for net (loss) gain on cash flow hedges included in net income, net of tax $2; $1; $5 and $(1), respectively	(6)		(2)		(14)		3
Total other comprehensive loss, net of tax	(153)		(149)		(175)		(517)
Total comprehensive income (loss), net of tax	$	54	$	3	$	2,451	$	(39)


	For the Nine Months Ended September 30, 2017
Preferred Stock (Par Value: $0.01):
Balance at beginning of year	$	—
Issuance of preferred stock (515,000 shares)		502,840

Balance at end of period		502,840

Common Stock (Par Value: $0.01):
Balance at beginning of year		4,871
Shares issued for restricted stock awards (2,004,212 shares)		20

Balance at end of period		4,891

Paid-in Capital in Excess of Par:
Balance at beginning of year		6,047,558
Shares issued for restricted stock awards, net of forfeitures		(11,028	)
Compensation expense related to restricted stock awards		27,283

Balance at end of period		6,063,813

Retained Earnings:
Balance at beginning of year		128,435
Net income		329,680
Dividends paid on common stock ($0.51 per share)		(249,094	)
Dividends paid on preferred stock ($31.88 per share)		(16,414	)

Balance at end of period		192,607

Treasury Stock:
Balance at beginning of year		(160	)
Purchase of common stock (712,877 shares)		(10,978	)
Shares issued for restricted stock awards (713,837 shares)		11,008

Balance at end of period		(130	)

Accumulated Other Comprehensive Loss, Net of Tax:
Balance at beginning of year		(56,713	)
Other comprehensive income, net of tax		52,346

Balance at end of period		(4,367	)

Total stockholders’ equity	$	6,759,654


(in millions, except share data)	Shares Outstanding	Preferred Stock (Par Value: $0.01)		Common Stock (Par Value: $0.01)		Paid-in Capital in excess of Par		Retained Earnings		Treasury Stock, at Cost		Accumulated Other Comprehensive Loss, Net of Tax		Total Stockholders’ Equity
Three Months Ended September 30, 2023
Balance at June 30, 2023	722,475,755	$	503	$	7	$	8,204	$	3,205	$	(217)	$	(642)	$	11,060
Shares issued for restricted stock, net of forfeitures	43,458	—		—		—		—		—		—		—
Compensation expense related to restricted stock awards	0	—		—		13		—		—		—		13
Net income	0	—		—		—		207		—		—		207
Dividends paid on common stock ($0.17)	0	—		—		—		(125)		—		—		(125)
Dividends paid on preferred stock ($15.94)	0	—		—		—		(9)		—		—		(9)
Purchase of common stock	(33,956)	—		—		—		—		—		—		—
Other comprehensive loss, net of tax	0	—		—		—		—		—		(153)		(153)
Balance at September 30, 2023	722,485,257	$	503	$	7	$	8,217	$	3,278	$	(217)	$	(795)	$	10,993

Three Months Ended September 30, 2022
Balance at June 30, 2022	466,243,078	$	503	$	5	$	6,114	$	893	$	(238)	$	(453)	$	6,824
Shares issued for restricted stock, net of forfeitures	—	—		—		—		—		—		—		—
Compensation expense related to restricted stock awards	—	—		—		7		—		—		—		7
Net income	—	—		—		—		152		—		—		152
Dividends paid on common stock ($0.17)	—	—		—		—		(80)		—		—		(80)
Dividends paid on preferred stock ($15.94)	—	—		—		—		(8)		—		—		(8)
Purchase of common stock	(107,022)	—		—		—		—		—		—		—
Other comprehensive loss, net of tax	—	—		—		—		—		—		(149)		(149)
Balance at September 30, 2022	466,136,056	$	503	$	5	$	6,121	$	957	$	(238)	$	(602)	$	6,746


	For the Nine Months Ended September 30,
	2017			2016
Cash Flows from Operating Activities:
Net income	$	329,680		$	381,668
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		34,316			664
Depreciation and amortization		24,915			24,603
Amortization of discounts and premiums, net		(3,381	)		(25,114	)
Amortization of core deposit intangibles		208			1,994
Net gain on sales of securities		(28,915	)		(413	)
Net gain on sales of loans		(87,200	)		(49,809	)
Stock-based compensation		27,283			24,611
Deferred tax (benefit) expense		(12,324	)		37,569
Changes in operating assets and liabilities:
Decrease in other assets		536,552			353,403
Increase (decrease) in other liabilities		181,400			(11,608	)
Origination of loans held for sale		(1,623,848	)		(3,579,435	)
Proceeds from sales of loans originated for sale		1,936,162			3,237,704

Net cash provided by operating activities		1,314,848			395,837

Cash Flows from Investing Activities:
Proceeds from repayment of securities held to maturity		175,375			2,356,766
Proceeds from repayment of securities available for sale		336,429			50,010
Proceeds from sales of securities held to maturity		547,925			—
Proceeds from sales of securities available for sale		246,209			264,413
Purchases of securities held to maturity		(13,030	)		(10,086	)
Purchase of securities available for sale		(390,932	)		(271,836	)
Redemption of Federal Home Loan Bank stock		79,254			463,623
Purchase of Federal Home Loan Bank stock		(67,794	)		(386,007	)
Proceeds from sales of loans		2,260,687			1,354,796
Other changes in loans, net		(664,320	)		(2,623,161	)
Purchase of premises and equipment, net		(26,722	)		(69,665	)

Net cash provided by investing activities		2,483,081			1,128,853

Cash Flows from Financing Activities:
Net increase in deposits		5,294			712,841
Net decrease in short-term borrowed funds		(460,000	)		(1,927,800	)
(Repayments of) proceeds from long-term borrowed funds		(850,000	)		181,000
Net proceeds from issuance of preferred stock		502,840			—
Cash dividends paid on common stock		(249,094	)		(248,081	)
Cash dividends paid on preferred stock		(16,414	)		—
Payments relating to treasury shares received for restricted stock award tax payments		(10,978	)		(8,542	)

Net cash used in financing activities		(1,078,352	)		(1,290,582	)

Net increase in cash and cash equivalents		2,719,577			234,108
Cash and cash equivalents at beginning of period		557,850			537,674

Cash and cash equivalents at end of period	$	3,277,427		$	771,782

Supplemental information:
Cash paid for interest	$	330,182		$	283,418
Cash paid for income taxes		110,651			135,192
Non-cash investing and financing activities:
Transfers to other real estate owned from loans	$	9,558		$	18,691
Transfer of loans from held for investment to held for sale		1,881,532			1,339,679
Shares issued for restricted stock awards		11,028			8,985
Securities transferred from held to maturity to available for sale		3,040,305			—


	For the Nine Months Ended September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,626	$	478
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for loan losses	281		9
Amortization of intangibles	90		—
Depreciation	29		13
Amortization of discounts and premiums, net	(221)		(8)
Net (gain) loss on securities	1		2
Net (gain) loss on sales of loans	(73)		—
Net gain on sales of fixed assets	—		(2)
Gain on business acquisition	(2,142)		—
Stock-based compensation	33		22
Deferred tax expense	(32)		—
Changes in operating assets and liabilities:
Decrease (increase) in other assets	(135)		65
(Decrease) increase in other liabilities	(358)		51
Purchases of securities held for trading	(10)		(75)
Proceeds from sales of securities held for trading	10		75
Change in loans held for sale, net	(615)		—

Net cash (used in) provided by operating activities	(516)		631
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from repayment of securities available for sale	1,254		571
Proceeds from sales of securities available for sale	1,341		—
Purchase of securities available for sale	(2,346)		(2,190)
Redemption of Federal Home Loan Bank stock	1,069		311
Purchases of Federal Home Loan Bank and Federal Reserve Bank stock	(912)		(207)
Proceeds from bank-owned life insurance, net	27		5

Purchases of loans	—		(157)
Net Proceeds from sales of MSR's	50		—
Other changes in loans, net	(3,077)		(3,084)
(Purchases) dispositions of premises and equipment, net	(42)		9
Cash acquired in business acquisition	25,043		—
Net cash provided by (used in) investing activities	22,407		(4,742)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposits	(9,641)		6,646
Net decrease in short-term borrowed funds	(705)		115
Proceeds from long-term borrowed funds	3,675		6,930
Repayments of long-term borrowed funds	(9,725)		(9,810)
Net receipt of payments of loans serviced for others	(48)		—
Cash dividends paid on common stock	(364)		(237)
Cash dividends paid on preferred stock	(25)		(25)
Treasury stock repurchased	—		(7)
Payments relating to treasury shares received for restricted stock award tax payments	(11)		(12)
Net cash (used in) provided by financing activities	(16,844)		3,600
Net increase in cash, cash equivalents, and restricted cash (1)	5,047		(511)
Cash, cash equivalents, and restricted cash at beginning of year (1)	2,082		2,211
Cash, cash equivalents, and restricted cash at end of year (1)	$	7,129	$	1,700
Supplemental information:


Cash paid for interest	$	1,656	$	399
Cash paid for income taxes	32		13
Non-cash investing and financing activities:
Transfers to repossessed assets from loans	$	4	$	—
Securitization of loans to mortgage-backed securities available for sale	109		157




Shares issued for restricted stock awards	31		27
Business Combination:
Fair value of tangible assets acquired	37,526		—
Intangible assets	464		—

Liabilities assumed	35,763		—
Issuance of FDIC Equity appreciation instrument	85		—


Standard	Description	Effective Date
ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Issued March 2022	ASU 2022-02 eliminates prior accounting guidance for TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The standard also requires that an entity disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases.	The Company adopted ASU 2022-02 effective January 1, 2023 using a modified retrospective transition approach for the amendments related to the recognition and measurement of TDRs. The impact of the adoption resulted in an immaterial change to the allowance for credit losses ("ACL"), thus no adjustment to retained earnings was recorded. Disclosures have been updated to reflect information on loan modifications given to borrowers experiencing financial difficulty as presented in Note 6. TDR disclosures are presented for comparative periods only and are not required to be updated in current periods. Additionally, the current year vintage disclosure included in Note 6 has been updated to reflect gross charge-offs by year of origination for the three months ended September 30, 2023.
ASU 2023-02 Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Issued: March 2023	ASU 2023-02 permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.	The Company adopted ASU 2023-02 effective January 1, 2023 and it did not have a significant impact on the Company's consolidated financial statements.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except share and per share amounts)	2023		2022		2023		2022
Net income available to common stockholders	$	199	$	144	$	2,601	$	453
Less: Dividends paid on and earnings allocated to participating securities	(2)		(2)		(27)		(6)
Earnings applicable to common stock	$	197	$	142	$	2,574	$	447
Weighted average common shares outstanding	722,486,509		465,115,180		710,684,522		465,354,754
Basic earnings per common share	$	0.27	$	0.31	$	3.62	$	0.96
Earnings applicable to common stock	$	197	$	142	$	2,574	$	447
Weighted average common shares outstanding	722,486,509		465,115,180		710,684,522		465,354,754
Potential dilutive common shares	2,426,381		979,177		1,753,527		926,184
Total shares for diluted earnings per common share computation	724,912,890		466,094,357		712,438,049		466,280,938
Diluted earnings per common share and common share equivalents	$	0.27	$	0.30	$	3.61	$	0.96


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands, except share and per share data)	2017			2016			2017			2016
Net income available to common shareholders	$	102,261		$	125,299		$	313,266		$	381,668
Less: Dividends paid on and earnings allocated to participating securities		(823	)		(973	)		(2,512	)		(2,928	)

Earnings applicable to common stock	$	101,438		$	124,326		$	310,754		$	378,740

Weighted average common shares outstanding		487,274,303			485,352,998			487,025,614			485,087,197

Basic earnings per common share	$	0.21		$	0.26		$	0.64		$	0.78

Earnings applicable to common stock	$	101,438		$	124,326		$	310,754		$	378,740

Weighted average common shares outstanding		487,274,303			485,352,998			487,025,614			485,087,197
Potential dilutive common shares⁽¹⁾		—			—			—			—

Total shares for diluted earnings per share computation		487,274,303			485,352,998			487,025,614			485,087,197

Diluted earnings per common share and common share equivalents	$	0.21		$	0.26		$	0.64		$	0.78

~~(1)~~	~~At September 30, 2017~~
(in millions)		March 20, 2023
Net assets acquired before fair value adjustments		$	2,973
Fair value adjustments:
Loans		(727)
Core deposit and ~~2016, there were no stock options outstanding.~~other intangibles		464
Certificates of deposit		27
Other net assets and liabilities		39
FDIC Equity Appreciation Instrument		(85)
Deferred tax liability		(690)
Bargain purchase gain on Signature Transaction, as initially reported		$	2,001
Measurement period adjustments, excluding taxes		53
Change in deferred tax liability		88
Bargain purchase gain on Signature Transaction, as adjusted		$	2,142


(in millions)	As Initially Reported		Measurement Period Adjustments		As Adjusted
Purchase Price consideration	$	85	$	—	$	85

Fair value of assets acquired:
Cash & cash equivalents	25,043		—		25,043
Loans held for sale	232		—		232
Loans held for investment:
Commercial and industrial	10,102		(214)		9,888
Commercial real estate	1,942		(262)		1,680
Consumer and other	174		(1)		173
Total loans held for investment	12,218		(477)		11,741
CDI and other intangible assets	464		—		464
Other assets	679		(169)		510
Total assets acquired	38,636		(646)		37,990
Fair value of liabilities assumed:
Deposits	33,568		—		33,568
Other liabilities	2,982		(787)		2,195
Total liabilities assumed	36,550		(787)		35,763
Fair value of net identifiable assets	2,086		141		2,227
Bargain purchase gain	$	2,001	$	141	$	2,142