UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

☒QUARTERLY REPORT PURSUANT TO ~~SECTION13~~SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR~~For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ~~QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017~~SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number1-31565

NEW YORK COMMUNITY BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware

06-1377322

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

~~615 Merrick~~

102 Duffy Avenue ~~Westbury,~~ , Hicksville, New York ~~11590~~11801

(Address of principal executive offices)

(Registrant’s telephone number, including area code)~~(516)~~ (516) 683-4100

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock, $0.01 par value per share	NYCB	New York Stock Exchange
Bifurcated Option Note Unit SecuritiESSM	NYCB PU	New York Stock Exchange
Depository Shares each representing a1/40th interest in a share ofFixed-to-Floating Rate Series A Noncumulative Perpetual Preferred Stock, $0.01 par value	NYCB PA	New York Stock Exchange

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

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

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

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

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

466,148,835

Number of shares of common stock outstanding at August 1, 2022

NEW YORK COMMUNITY BANCORP, INC.

FORM 10-Q

Quarter Ended June 30, 2022


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

Page No.

~~NEW YORK COMMUNITY BANCORP, INC.~~

~~FORM10-Q~~

~~Quarter Ended September 30, 2017~~


~~INDEX~~				~~Page No.~~
~~Part I.~~		~~FINANCIAL INFORMATION~~Glossary				3

~~Item 1.~~		~~Financial Statements~~List of Abbreviations and Acronyms				6

	Part I.	FINANCIAL INFORMATION	7

Item 1.	Financial Statements	7

	Consolidated Statements of Condition as of ~~September~~June 30, ~~2017~~2022 (unaudited) and December 31, ~~2016~~2021			1	7

		Consolidated Statements of Income and Comprehensive Income for the ~~Three~~three and ~~Nine Months Ended September~~six months ended June 30, ~~2017~~2022 and ~~2016~~2021 (unaudited)			2	8

		Consolidated Statement of Changes in Stockholders’ Equity for the ~~Nine Months Ended September~~three and six months ended June 30, ~~2017~~2022 and 2021 (unaudited)			3	9

		Consolidated Statements of Cash Flows for the ~~Nine Months Ended September~~six months ended June 30, ~~2017~~2022 and ~~2016~~2021 (unaudited)			4	11

		Notes to the Consolidated Financial Statements			5	12

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			41	37

Item 3.		Quantitative and Qualitative Disclosures about Market Risk			83	70

Item 4.		Controls and Procedures			83	70

Part II.		OTHER INFORMATION				71

Item 1.		Legal Proceedings			84	71

Item 1A.		Risk Factors			84	71

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	71
		84
Item 3.	Defaults upon Senior Securities	71

Item 4.	Mine Safety Disclosures	71

Item 5.	Other Information	71

Item 6.	Exhibits	72

Signatures		74

GLOSSARY

BASIS POINT

Throughout this filing, the year-over-year and quarter over quarter 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%.

BOOK VALUE PER COMMON SHARE

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.

BROKERED DEPOSITS

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.

CHARGE-OFF

Refers to the amount of a loan balance that has been written off against the allowance for credit losses on loans and leases.

COMMERCIAL REAL ESTATE LOAN

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.

COST OF FUNDS

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.

CRE CONCENTRATION RATIO

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

DEBT SERVICE COVERAGE RATIO

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.

DERIVATIVE

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).

EFFICIENCY RATIO

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

GOODWILL

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.

GOVERNMENT-SPONSORED ENTERPRISES

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”).

GSE OBLIGATIONS

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

INTEREST RATE SENSITIVITY

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.

INTEREST RATE SPREAD

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

LOAN-TO-VALUE RATIO

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

MULTI-FAMILY LOAN

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

NET INTEREST INCOME

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

NET INTEREST MARGIN

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

NON-ACCRUAL LOAN

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 AND ASSETS

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.

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.

RENT-REGULATED APARTMENTS

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.

TROUBLED DEBT RESTRUCTURING

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

WHOLESALE BORROWINGS

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.

YIELD

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.

LIST OF ABBREVIATIONS AND ACRONYMS


~~Item 3.~~	ACL—Allowance for Credit Losses	~~Defaults upon Senior Securities~~		84

~~Item 4.~~		~~Mine Safety Disclosures~~FDIC—Federal Deposit Insurance Corporation		84

~~Item 5.~~		~~Other Information~~		84

~~Item 6.~~		~~Exhibits~~		85

~~Signatures~~			86

~~Exhibits~~ADC—Acquisition, development, and construction loan		FHLB—Federal Home Loan Bank

ALCO—Asset and Liability Management Committee		FHLB-NY—Federal Home Loan Bank of New York

AMT—Alternative minimum tax		FOMC—Federal Open Market Committee

AOCL—Accumulated other comprehensive loss		FRB—Federal Reserve Board

ASC—Accounting Standards Codification		FRB-NY—Federal Reserve Bank of New York

ASU—Accounting Standards Update		Freddie Mac—Federal Home Loan Mortgage Corporation

BaaS—Banking as a Service		FTEs—Full-time equivalent employees

BOLI—Bank-owned life insurance		GAAP—U.S. generally accepted accounting principles

BP—Basis point(s)		GLBA—The Gramm Leach Bliley Act

CARES Act—Coronavirus Aid, Relief, and Economic Security Act		GNMA—Government National Mortgage Association

C&I—Commercial and industrial loan		GSE—Government-sponsored enterprises

CDs—Certificates of deposit		LIBOR—London Interbank Offered Rate

CECL—Current Expected Credit Loss		LTV—Loan-to-value ratio

CFPB—Consumer Financial Protection Bureau		MBS—Mortgage-backed securities

CMOs—Collateralized mortgage obligations		MSRs—Mortgage servicing rights

CMT—Constant maturity treasury rate		NIM—Net interest margin

CPI—Consumer Price Index		NOL—Net operating loss

CPR—Constant prepayment rate		NPAs—Non-performing assets

CRA—Community Reinvestment Act		NPLs—Non-performing loans

CRE—Commercial real estate loan		NPV—Net Portfolio Value

DIF—Deposit Insurance Fund		NYSDFS—New York State Department of Financial Services

DFA—Dodd-Frank Wall Street Reform and Consumer Protection Act		NYSE—New York Stock Exchange

DSCR—Debt service coverage ratio		OCC—Office of the Comptroller of the Currency

EAR—Earnings at Risk		OFAC—Office of Foreign Assets Control

EPS—Earnings per common share		OREO—Other real estate owned

ERM—Enterprise Risk Management		OTTI—Other-than-temporary impairment

ESOP—Employee Stock Ownership Plan		PPP—Paycheck Protection Program

EVE—Economic Value of Equity at Risk		ROU—Right of use asset

Fannie Mae—Federal National Mortgage Association		SEC—U.S. Securities and Exchange Commission
FASB—Financial Accounting Standards Board		SIFI—Systemically Important Financial Institution
FCA—the United Kingdom's Financial Conduct Authority		SOFR—Secured Overnight Financing Rate

FDI Act—Federal Deposit Insurance Act		TDR—Troubled debt restructurings

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NEW YORK COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CONDITION

~~(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


	June 30,			December 31,
	2022			2021
(in millions, except share data)	(unaudited)
ASSETS:
Cash, cash equivalents and due from banks	$	3,277		$	2,211
Securities:
Debt securities available-for-sale ($1,101 and $1,168 pledged at June 30, 2022 and December 31, 2021, respectively)		5,664			5,780
Equity investments with readily determinable fair values, at fair value		14			16
Total securities		5,678			5,796
Loans and leases held for investment, net of deferred loan fees and costs		48,537			45,738
Less: Allowance for credit losses on loans and leases		(216	)		(199	)
Total loans and leases, net		48,321			45,539
Federal Home Loan Bank stock, at cost		635			734
Premises and equipment, net		252			270
Operating lease right-of-use assets		232			249
Goodwill		2,426			2,426
Bank-owned life insurance		1,192			1,184
Other real estate owned and other repossessed assets		6			8
Other assets		1,074			1,110
Total assets	$	63,093		$	59,527
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Deposits:
Interest-bearing checking and money market accounts	$	19,189		$	13,209
Savings accounts		9,580			8,892
Certificates of deposit		8,090			8,424
Non-interest-bearing accounts		4,385			4,534
Total deposits		41,244			35,059
Borrowed funds:
Wholesale borrowings:
Federal Home Loan Bank advances		12,850			15,105
Repurchase agreements		800			800
Total wholesale borrowings		13,650			15,905
Junior subordinated debentures		361			361
Subordinated notes		296			296
Total borrowed funds		14,307			16,562
Operating lease liabilities		232			249
Other liabilities		486			613
Total liabilities		56,269			52,483
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; 490,439,070 and 490,439,070 shares issued; and 466,243,078 and 465,015,643 shares outstanding, respectively)		5			5
Paid-in capital in excess of par		6,114			6,126
Retained earnings		893			741
Treasury stock, at cost (24,195,992 and 25,423,427 shares, respectively)		(238	)		(246	)
Accumulated other comprehensive loss, net of tax:
Net unrealized loss on securities available for sale, net of tax of $167 and $17, respectively		(436	)		(45	)
Net unrealized loss on pension and post-retirement obligations, net of tax of $12 and $12 respectively		(31	)		(31	)
Net unrealized gain (loss) on cash flow hedges, net of tax of $(6) and $3, respectively		14			(9	)
Total accumulated other comprehensive loss, net of tax		(453	)		(85	)
Total stockholders’ equity		6,824			7,044
Total liabilities and stockholders’ equity	$	63,093		$	59,527

See accompanying notes to the consolidated financial statements.

NEW YORK COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(unaudited)


	For the						For the
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except per share data)	2022			2021			2022			2021
INTEREST INCOME:
Loans and leases	$	424		$	386		$	817		$	769
Securities and money market investments		49			45			85			85
Total interest income		473			431			902			854

INTEREST EXPENSE:
Interest-bearing checking and money market accounts		24			7			32			16
Savings accounts		10			7			18			13
Certificates of deposit		12			14			23			32
Borrowed funds		68			72			138			144
Total interest expense		114			100			211			205
Net interest income		359			331			691			649
Provision for credit losses		9			(4	)		7			—
Net interest income after provision for credit loan losses		350			335			684			649

NON-INTEREST INCOME:
Fee income		6			6			12			11
Bank-owned life insurance		7			8			14			15
Net loss on securities		—			—			(1	)		—
Other		5			2			7			4
Total non-interest income		18			16			32			30

NON-INTEREST EXPENSE:
Operating expenses:
Compensation and benefits		79			74			159			152
Occupancy and equipment		22			22			45			43
General and administrative		33			33			64			66
Total operating expense		134			129			268			261
Merger-related expenses		4			10			11			10
Total non-interest expense		138			139			279			271
Income before income taxes		230			212			437			408
Income tax expense		59			60			111			111
Net income	$	171		$	152		$	326		$	297
Preferred stock dividends		8			8			16			16
Net income available to common stockholders	$	163		$	144		$	310		$	281
Basic earnings per common share	$	0.34		$	0.30		$	0.66		$	0.60
Diluted earnings per common share	$	0.34		$	0.30		$	0.66		$	0.60

Net income	$	171		$	152		$	326		$	297
Other comprehensive income (loss), net of tax:
Change in net unrealized gain (loss) on securities available-for-sale, net of tax of $68; ($16); $150 and $25, respectively		(176	)		42			(391	)		(66	)
Change in pension and post-retirement obligations, net of tax of $0; $0; $0 and ($1), respectively		(1	)		(1	)		(1	)		2
Change in net unrealized (loss) gain on cash flow hedges, net of tax of $(3); $0; $(7) and ($1), respectively		6			—			18			3
Less: Reclassification adjustment for sales of available-for-sale securities, net of tax of $0; $0; $0 and $0, respectively		—			—			—			—
Reclassification adjustment for defined benefit pension plan, net of tax of $0; ($1); $0 and ($1), respectively		1			2			1			3
Reclassification adjustment for net gain on cash flow hedges included in net income, net of tax $0; $(2); $(2) and ($3), respectively		1			4			5			8
Total other comprehensive income (loss), net of tax		(169	)		47			(368	)		(50	)
Total comprehensive income (loss), net of tax	$	2		$	199		$	(42	)	$	247

See accompanying notes to the consolidated financial statements.

NEW YORK COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)


(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 June 30, 2022
Balance at March 31, 2022		467,024,144		$	503	$	5	$	6,107	$	809		$	(231	)	$	(284	)	$	6,909
Shares issued for restricted stock, net of forfeitures		28,930			—		—		—		—			—			—			—
Compensation expense related to restricted stock awards		—			—		—		7		—			—			—			7
Net income		—			—		—		—		171			—			—			171
Dividends paid on common stock ($0.17)		—			—		—		—		(79	)		—			—			(79	)
Dividends paid on preferred stock ($15.94)		—			—		—		—		(8	)		—			—			(8	)
Purchase of common stock		(809,996	)		—		—		—		—			(7	)		—			(7	)
Other comprehensive income, net of tax		—			—		—		—		—			—			(169	)		(169	)
Balance at June 30, 2022		466,243,078		$	503	$	5	$	6,114	$	893		$	(238	)	$	(453	)	$	6,824

Three Months Ended June 30, 2021
Balance at March 31, 2021		465,074,384		$	503	$	5	$	6,103	$	552		$	(245	)	$	(122	)	$	6,796
Shares issued for restricted stock, net of forfeitures		—			—		—		—		—			—			—			—
Compensation expense related to restricted stock awards		—			—		—		8		—			—			—			8
Net income		—			—		—		—		152			—			—			152
Dividends paid on common stock ($0.17)		—			—		—		—		(79	)		—			—			(79	)
Dividends paid on preferred stock ($15.94)		—			—		—		—		(8	)		—			—			(8	)
Purchase of common stock		(17,422	)		—		—		—		—			—			—			—
Other comprehensive loss, net of tax		—			—		—		—		—			—			47			47
Balance at June 30, 2021		465,056,962		$	503	$	5	$	6,111	$	617		$	(245	)	$	(75	)	$	6,916

See accompanying notes to the consolidated financial statements.

NEW YORK COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)


(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
Six Months Ended June 30, 2022
Balance at December 31, 2021		465,015,643		$	503	$	5	$	6,126		$	741		$	(246	)	$	(85	)	$	7,044
Shares issued for restricted stock, net of forfeitures		2,939,365			—		—		(27	)		—			27			—			—
Compensation expense related to restricted stock awards		—			—		—		15			—			—			—			15
Net income		—			—		—		—			326			—			—			326
Dividends paid on common stock ($0.17)		—			—		—		—			(158	)		—			—			(158	)
Dividends paid on preferred stock ($15.94)		—			—		—		—			(16	)		—			—			(16	)
Purchase of common stock		(1,711,930	)		—		—		—			—			(19	)		—			(19	)
Other comprehensive income, net of tax		—			—		—		—			—			—			(368	)		(368	)
Balance at June 30, 2022		466,243,078		$	503	$	5	$	6,114		$	893		$	(238	)	$	(453	)	$	6,824

Six Months Ended June 30, 2021
Balance at December 31, 2020		463,901,808		$	503	$	5	$	6,123		$	494		$	(258	)	$	(25	)	$	6,842
Shares issued for restricted stock, net of forfeitures		2,515,942			—		—		(28	)		—			28			—			—
Compensation expense related to restricted stock awards		—			—		—		16			—			—			—			16
Net income		—			—		—		—			297			—			—			297
Dividends paid on common stock ($0.17)		—			—		—		—			(158	)		—			—			(158	)
Dividends paid on preferred stock ($15.94)		—			—		—		—			(16	)		—			—			(16	)
Purchase of common stock		(1,360,788	)		—		—		—			—			(15	)		—			(15	)
Other comprehensive loss, net of tax		—			—		—		—			—			—			(50	)		(50	)
Balance at June 30, 2021		465,056,962		$	503	$	5	$	6,111		$	617		$	(245	)	$	(75	)	$	6,916

See accompanying notes to the consolidated financial statements.

NEW YORK COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Six Months Ended June 30,
(in millions)	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	326		$	297
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) Provision for loan losses		7			—
Depreciation		9			11
Amortization of discounts and premiums, net		(2	)		(3	)
Net (gain) loss on securities		1			—
Gain on trading activity		—			—
Net loss (gain) on sales of loans		—			(1	)
Net gain on sales of fixed assets		(2	)		—
Stock-based compensation		15			16
Deferred tax expense		(15	)		26
Changes in operating assets and liabilities:
Decrease in other assets(1)		42			(255	)
Increase (decrease) in other liabilities(2)		18			(25	)
Purchases of securities held for trading		(35	)		(60	)
Proceeds from sales of securities held for trading		35			60
Origination of loans held for sale		—			(52	)
Net cash provided by operating activities		399			14
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from repayment of securities available for sale		397			931
Proceeds from sales of securities available for sale		—			—
Purchase of securities available for sale		(788	)		(1,252	)
Redemption of Federal Home Loan Bank stock		175			29
Purchases of Federal Home Loan Bank stock		(76	)		(1	)
Proceeds from (purchases of) bank-owned life insurance, net		5			7
Proceeds from sales of loans		—			33
Purchases of loans		(144	)		(66	)
Other changes in loans, net		(2,650	)		(481	)
Dispositions (purchases) of premises and equipment, net		11			(2	)
Net cash used in investing activities		(3,070	)		(802	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		6,185			1,740
Net decrease in short-term borrowed funds		(1,700	)		—
Proceeds from long-term borrowed funds		2,955			624
Repayments of long-term borrowed funds		(3,510	)		(1,249	)
Cash dividends paid on common stock		(158	)		(158	)
Cash dividends paid on preferred stock		(16	)		(16	)
Treasury stock repurchased		(7	)		—
Payments relating to treasury shares received for restricted stock award tax payments		(12	)		(15	)
Net cash provided by financing activities		3,737			926
Net increase in cash, cash equivalents, due from banks and restricted cash		1,066			138
Cash, cash equivalents, due from banks, and restricted cash at beginning of year		2,211			1,948
Cash, cash equivalents, due from banks, and restricted cash at end of year	$	3,277		$	2,086
Supplemental information:
Cash paid for interest	$	229		$	206
Cash paid for income taxes		8			336
Non-cash investing and financing activities:
Securitization of residential mortgage loans to mortgage-backed securities available for sale	$	144			66
Transfer of loans from held for investment to held for sale		—			48
Transfer of loans from held for sale to held for investment		—			94
Shares issued for restricted stock awards		27			28

(1)

Includes $16 million and $10 million of amortization of operating lease right-of-use assets for the six months ended June 30, 2022 and 2021, respectively.

(2)

Includes $16 million and $10 million of amortization of operating lease liability for the six months ended June 30, 2022 and 2021, respectively.

See accompanying notes to the consolidated financial statements.

NEW YORK COMMUNITY BANCORP, INC.

~~CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME~~

~~(in thousands, except per share data)~~

~~(unaudited)~~

   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

~~See accompanying notes to the consolidated financial statements.~~

~~NEW YORK COMMUNITY BANCORP, INC.~~

~~CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY~~

~~(in thousands, except share data)~~

~~(unaudited)~~

   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

~~See accompanying notes to the consolidated financial statements.~~

~~NEW YORK COMMUNITY BANCORP, INC.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(in thousands)~~

~~(unaudited)~~

   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 —

~~See accompanying notes to the consolidated financial statements.~~

~~NEW YORK COMMUNITY BANCORP, INC.~~

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization, ~~and~~ Basis of Presentation, and Impact of Recent Accounting Pronouncements

Organization

~~Organization~~

New York Community Bancorp, Inc. (on a stand-alone basis, the “Parent Company” or, collectively with its subsidiaries, the “Company”) was organized under Delaware law on July 20, 1993 and is the holding company for New York Community Bank ~~and New York Commercial Bank~~ (hereinafter referred to as the ~~“Community Bank” and the “Commercial Bank,” respectively, and collectively as the “Banks”~~“Bank”). ~~For the purpose of these Consolidated Financial Statements, the “Community Bank” and the “Commercial Bank” refer not only to the respective banks but also to their respective subsidiaries.~~

~~The Community Bank is the primary banking subsidiary of the Company, which was formerly known as Queens County Bancorp, Inc.~~ Founded on April 14, 1859 and formerly known as Queens County Savings Bank, the ~~Community~~ Bank converted from a state-chartered mutual savings bank to the capital stock form of ownership on November 23, 1993, at which date the Company issued its initial offering of common stock (par value: ~~$0.01~~$0.01 per share) at a price of ~~$25.00~~$25.00 per share ($($0.93 per share on a split-adjusted basis, reflecting the impact of nine stock splits between 1994 and ~~2004)~~2004). ~~The Commercial Bank was established on December 30, 2005.~~

~~Reflecting its growth through acquisitions, the Community~~The Bank currently operates ~~225~~237 branches, ~~two~~18 of which operate directly under the New York Community Bank name. The remaining ~~223~~219 Community Bank branches operate through ~~seven~~eight divisional banks: 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 Bank currently operates 30 branches in Manhattan, Queens, Brooklyn, Westchester County, and Long Island (all in New York), including 18 branches that operate under the name “Atlantic Bank.”

Basis of Presentation

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 and the evaluation of goodwill for ~~impairment; and the evaluation of the need for a valuation allowance on the Company’s deferred tax assets.~~impairment.

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, ~~“Borrowed~~Borrowed Funds,” for additional information regarding these trusts.

Impact of Recent Accounting Pronouncements

Recently Adopted Accounting Standards

The Company adopted ASU No. 2022-01—Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method in the first quarter of 2022 upon issuance. The amendments expand the current last-of-layer method of hedge accounting that permits only one hedged layer to allow multiple hedged layers of a single closed portfolio. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. In addition, the amendments expand the scope of the portfolio layer method to include non-prepayable assets; specify eligible hedging instruments in a single-layer hedge; provide additional guidance on the accounting for and disclosure of hedge basis adjustments; specify how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio. To date, the guidance has not had any impact on the Company’s Consolidated Statements of Condition, results of operations, or cash flows.

Note 2. Computation of Earnings per Common Share

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 for the periods indicated:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(in millions, except share and per share amounts)	2022			2021			2022			2021
Net income available to common stockholders	$	163		$	144		$	310		$	281
Less: Dividends paid on and earnings allocated to participating securities		(2	)		(3	)		(4	)		(4	)
Earnings applicable to common stock	$	161		$	141		$	306		$	277
Weighted average common shares outstanding		465,811,096			464,092,947			465,476,526			463,695,136
Basic earnings per common share	$	0.34		$	0.30		$	0.66		$	0.60
Earnings applicable to common stock	$	161		$	141		$	306		$	277
Weighted average common shares outstanding		465,811,096			464,092,947			465,476,526			463,695,136
Potential dilutive common shares		988,976			801,591			899,249			698,385
Total shares for diluted earnings per common share computation		466,800,072			464,894,538			466,375,775			464,393,521
Diluted earnings per common share and common share equivalents	$	0.34		$	0.30		$	0.66		$	0.60

   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 and 2016, there were no stock options outstanding.~~

Note 3.3: Reclassifications ~~Out~~out of Accumulated Other Comprehensive Loss

(in thousands)    For the Nine Months Ended September 30, 2017
                        Details about
Accumulated Other Comprehensive Loss
   Amount Reclassified
from Accumulated
Other Comprehensive
Loss⁽¹⁾
Affected Line Item in the
Consolidated Statement of Operations
and Comprehensive Income
Unrealized gains onavailable-for-sale securities
   $ 1,848
Net gain on sales of securities
   (770 )
Income tax expense



   $ 1,078
Net gain on sales of securities, net of tax



Amortization of defined benefit pension plan items:

Past service liability
   $ 187
Included in the computation of net periodic (credit) expense⁽²⁾
Actuarial losses
   (6,363 )
Included in the computation of net periodic (credit) expense⁽²⁾



   (6,176 )
Total before tax
   2,574
Tax benefit



   $ (3,602 )
Amortization of defined benefit pension plan items, net of tax



Total reclassifications for the period
   $ (2,524 )

~~(1)~~	~~Amounts~~
(in ~~parentheses indicate~~millions)			For the Six Months Ended June 30, 2022
Details about Accumulated Other Comprehensive Loss			Amount Reclassified out of Accumulated Other Comprehensive Loss (1)			Affected Line Item in the Consolidated Statements of Income and Comprehensive Income
Unrealized gains on available-for-sale securities:		$		0		Net gain on securities
				0		Income tax expense ~~items.~~
		$		0		Net gain on securities, net of tax
Unrealized loss on cash flow hedges:		$		(7	)	Interest expense
				2		Income tax benefit
		$		(5	)	Net loss on cash flow hedges, net of tax
Amortization of defined benefit pension plan items:
Past service liability		$		0		Included in the computation of net periodic credit (2)
Actuarial losses				(1	)	Included in the computation of net periodic cost (2)
				(1	)	Total before tax
				0		Income tax benefit
		$		(1	)	Amortization of defined benefit pension plan items, net of tax
Total reclassifications for the period		$		(6	)

~~(2)~~

~~See Note 9, “Pension and Other Post-Retirement Benefits,” for additional information.~~

(1)

Amounts in parentheses indicate expense items.

(2)

See Note 8, “Pension and Other Post-Retirement Benefits,” for additional information.

Note 4. Securities

The following tables summarize the Company’s portfolio of debt securities available for sale and equity investments with readily determinable fair values at ~~the dates indicated:~~

   September 30, 2017
(in thousands)    Amortized
Cost    Gross
Unrealized
Gain    Gross
Unrealized
Loss    Fair
Value
Mortgage-Related Securities:

GSE⁽¹⁾ certificates
   $ 1,904,431    $ 57,138    $ 1,217    $ 1,960,352
GSE CMOs⁽²⁾
   530,365    19,812    —      550,177








Total mortgage-related securities
   $ 2,434,796    $ 76,950    $ 1,217    $ 2,510,529








Other Securities:

U. S. Treasury obligations
   $ 199,838    $ 37    $ —      $ 199,875
GSE debentures
   88,242    2,592    —      90,834
Corporate bonds
   74,580    11,557    —      86,137
Municipal bonds
   71,079    137    849    70,367
Capital trust notes
   48,217    3,489    10,939    40,767
Preferred stock
   15,293    46    —      15,339
Mutual funds and common stock⁽³⁾
   16,874    488    184    17,178








Total other securities
   $ 514,123    $ 18,346    $ 11,972    $ 520,497








Total securities available for sale⁽⁴⁾
   $ 2,948,919    $ 95,296    $ 13,189    $ 3,031,026

~~(1)~~

~~Government-sponsored enterprise.~~

~~(2)~~

~~Collateralized mortgage obligations.~~

~~(3)~~

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

~~(4)~~

~~The amortized cost includes thenon-credit~~ ~~portion of other-than-temporary impairment (“OTTI”) recorded in accumulated other comprehensive loss (“AOCL”). At September 30, 2017, thenon-credit~~ ~~portion of OTTI recorded in AOCL was $8.6 million (before taxes).~~

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

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








Other Securities:

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








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








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

~~The following table summarizes the Company’s portfolio of securities held to maturity at December 31, 2016:~~

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

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










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










Other Securities:

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










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










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

~~(1)~~

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

~~At September~~June 30, ~~2017~~2022 and December 31, ~~2016, respectively,~~2021:


		June 30, 2022
(in millions)		Amortized Cost			Gross Unrealized Gain			Gross Unrealized Loss			Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates	$		1,161	$		1	$		112	$		1,050
GSE CMOs			1,611			—			195			1,416
Total mortgage-related debt securities	$		2,772	$		1	$		307	$		2,466
Other Debt Securities:
U. S. Treasury obligations	$		295	$		—	$		1	$		294
GSE debentures			1,750			—			248			1,502
Asset-backed securities (1)			422			—			15			407
Corporate bonds			881			4			26			859
Municipal bonds			19			—			1			18
Foreign notes			25			—			—			25
Capital trust notes			96			6			9			93
Total other debt securities	$		3,488	$		10	$		300	$		3,198
Total debt securities available for sale	$		6,260	$		11	$		607	$		5,664
Equity securities:
Mutual funds	$		15	$		—	$		1	$		14
Total equity securities	$		15	$		—	$		1	$		14
Total securities (2)	$		6,275	$		11	$		608	$		5,678

(1)

The underlying assets of the ~~Company had $579.5~~asset-backed securities are substantially guaranteed by the U.S. Government.

(2)

Excludes accrued interest receivable of $18 million ~~and $590.9 million ofFHLB-NY~~ ~~stock, at cost. The Company is required to maintain an investment inFHLB-NY~~ ~~stock 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 the nine months ended September 30, 2017, the Company sought to take advantage of favorable bond market conditions and soldheld-to-maturity~~ securities with an amortized cost of $521.0 million resulting in gross proceeds of $547.9 million including a gross realized gain of $26.9 million. Accordingly, the Company transferred the remaining $3.0 billion of~~held-to-maturity~~ ~~securities toavailable-for-sale~~ ~~with a net unrealized gain of $82.8 million classified~~included in other ~~comprehensive loss~~assets in the Consolidated Statements of Condition.


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

(1)

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

(2)

Excludes accrued interest receivable of $15 million included in other assets in the Consolidated Statements of Condition. ~~Having our securities portfolio classified asavailable-for-sale~~ ~~improves the Company’s interest rate risk sensitivity~~

At June 30, 2022 and ~~liquidity measures and provides~~December 31, 2021, respectively, the Company had $635 million and $734 million of FHLB-NY stock, at cost. The Company maintains an investment in FHLB-NY stock partly in conjunction with ~~more options~~its membership in ~~meeting~~ the ~~expected future Liquidity Coverage Ratio (“LCR”) requirements.~~FHLB and partly related to its access to the FHLB funding it utilizes.

~~In the following table, the beginning balance represents the credit loss component for debt~~

Net losses on equity 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~~for 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).~~six months ended June 30, 2022 and 2021 were $1 and $0, respectively.

(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

The following table summarizes, by contractual maturity, the amortized cost of~~available-for-sale~~ securities at ~~September~~June 30, ~~2017:~~2022:


(dollars in thousands)	Mortgage- Related Securities			Average Yield			U.S. Treasury and GSE Obligations		Average Yield			State, County, and Municipal		Average Yield⁽¹⁾			Other Debt Securities ⁽²⁾		Average Yield			Fair Value
Available-for-Sale Securities:⁽³⁾
																									Mortgage- Related Securities			U.S. Government and GSE Obligations			State, County, and Municipal			Other Debt Securities (1)			Fair Value
(in millions)
Available-for-Sale Debt Securities:
Due within one year	$	—	%				$	259,207		1.82	%	$	150		6.47	%	$	—		—	%	$	260,064	$		28	$		295	$		—	$		5	$		327
Due from one to five years		1,101,945			3.13			6,950		3.84			438		6.59			48,351		3.51			1,192,831			141			247			—			458			844
Due from five to ten years		1,152,156			3.33			21,923		3.52			—		—			26,228		9.06			1,251,712			241			674			19			517			1,305
Due after ten years		180,695			3.01			—		—			70,491		2.88			48,218		3.70			293,902			2,362			829			—			444			3,188

Total securities available for sale	$	2,434,796			3.21	%	$	288,080		2.00	%	$	71,079		2.91	%	$	122,797		4.77	%	$	2,998,509

Total debt securities available for sale																								$		2,772	$		2,045	$		19	$		1,424	$		5,664

~~(1)~~

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

~~(2)~~

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

~~(3)~~

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

(1)

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

The following table presents~~available-for-sale~~ securities with no related allowance having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of ~~September~~June 30, ~~2017:~~2022:


	Less than Twelve Months				Twelve Months or Longer				Total					Less than Twelve Months						Twelve Months or Longer						Total
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily ImpairedAvailable-for-Sale Securities:
(in millions)														Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations													$		197	$		1	$		—	$		—	$		197	$		1
GSE certificates	$	197,953	$	662	$	18,195	$	555	$	216,148	$	1,217			683			58			252			54			935			112
U. S. Treasury obligations		—		—		—		—		—		—
GSE CMOs															800			73			596			122			1,396			195
U.S. Government agency and GSE obligations															421			44			959			204			1,380			248
Asset-backed securities															227			7			180			8			407			15
Corporate bonds															713			21			95			5			808			26
Municipal bonds		52,715		849		—		—		52,715		849			—			—			7			1			7			1
Foreign notes															5			—			—			—			5			—
Capital trust notes		—		—		32,787		10,939		32,787		10,939			46			1			36			8			82			9
Equity securities		11,621		184		—		—		11,621		184			4			—			11			1			15			1

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

Total temporarily impaired securities													$		3,096	$		205	$		2,136	$		403	$		5,232	$		608

The following table presents~~held-to-maturity~~ ~~andavailable-for-sale~~ securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of December 31, ~~2016:~~2021:


	Less than Twelve Months				Twelve Months or Longer				Total					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:
(in millions)														Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations													$		45	$		—	$		—	$		—	$		45	$		—
U.S. Government agency and GSE obligations															317			7			185			8			502			15
GSE certificates	$	268,891	$	2,399	$	—	$	—	$	268,891	$	2,399			846			28			293			17			1,139			45
GSE CMOs		42,980		57		—		—		42,980		57			491			8			926			37			1,417			45
U. S. Treasury obligations		200,220		73		—		—		200,220		73
Asset-backed securities															130			1			135			2			265			3
Corporate bonds															—			—			99			1			99			1
Municipal bonds		69,765		1,789		—		—		69,765		1,789			—			—			8			—			8			—
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
Foreign notes															5			—			—			—			5			—
Capital trust notes		—		—		5,241		2,217		5,241		2,217			—			—			37			7			37			7
Equity securities		29,059		589		—		—		29,059		589			12			—			—			—			12			—

Total temporarily impairedavailable-for-sale securities	$	36,385	$	1,049	$	5,241	$	2,217	$	41,626	$	3,266

Total temporarily impaired securities													$		1,846	$		44	$		1,683	$		72	$		3,529	$		116

An OTTI loss on impaired debt securities must be fully recognized in earnings if an investor has the intent to sell the debt security, or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost. However, even if an investor does not expect to sell a debt security, it must evaluate the expected cash flows to be received and determine if a credit loss has occurred. In the event that a credit loss occurs, only the amount of impairment associated with the credit loss is recognized in earnings. Amounts of impairment relating to factors other than credit losses are recorded in AOCL.

At 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.

The investment securities designated as having a continuous loss position for twelve months or more at ~~September~~June 30, ~~2017~~2022 consisted of ~~five~~50 agency MBS, 11 agency CMOs, 5 capital ~~trust~~trusts notes, 5 asset-backed securities, 2 corporate bonds, 24 U.S. government agency bonds, 1 municipal bond and ~~five agency mortgage-related securities. At December 31, 2016~~1 equity security. The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2021 consisted of ~~five~~4 agency collateralized mortgage obligations, 5 capital ~~trust notes. At September 30, 2017,~~trusts notes, 4 asset-backed securities, 2 corporate bonds, 20 US government agency bonds, 21 agency mortgage-backed securities and 1 municipal bond.

The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. Based on an evaluation of available information about past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability, the Company has concluded that it expects to receive all contractual cash flows from each security held in its available-for-sale securities portfolio.

We first assess whether (i) we intend to sell, or (ii) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, any previously recognized allowances are charged off and the security’s amortized cost basis is written down to fair value through income. If neither of the aforementioned criteria is 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 is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value ~~of securities having a continuous loss position for twelve months or more was 18.4% below~~is less than the ~~collective~~ amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

None of ~~$62.5 million. At~~the unrealized losses identified as of June 30, 2022 or December 31, ~~2016,~~2021 relates to the ~~fair value~~marketability of ~~such~~the securities ~~was 32.2% below~~or the ~~collective~~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 was recorded with respect to debt securities as of ~~$43.7 million. At September~~or during the six months ended June 30, ~~2017~~2022.

Management has made the accounting policy election to exclude accrued interest receivable on available-for-sale securities from the estimate of credit losses. Available-for-sale debt securities are placed on non-accrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status.

Note 5. Loans and ~~December 31, 2016, the combined market value of the respective securities represented unrealized losses of $11.5 million and $14.1 million, respectively.~~Leases

~~Note 5: Loans~~

The following table sets forth the composition of the loan portfolio at the dates indicated:

   September 30, 2017 December 31, 2016
   Amount Percent of
Non-Covered
Loans Held
for
Investment Amount Percent of
Non-Covered
Loans Held
for
Investment
(dollars in thousands)
Non-Covered Loans Held for Investment:

Mortgage Loans:

Multi-family
   $ 27,145,397 72.43 % $ 26,945,052 72.13 %
Commercial real estate
   7,550,387 20.14 7,724,362 20.68
One-to-four family
   413,235 1.10 381,081 1.02
Acquisition, development, and construction
   385,876 1.03 381,194 1.02


Total mortgage loans held for investment
   $ 35,494,895 94.70 $ 35,431,689 94.85


Other Loans:

Commercial and industrial
   1,404,278 3.75 1,341,216 3.59
Lease financing, net of unearned income of $58,870 and $60,278, respectively
   577,865 1.54 559,229 1.50


Total commercial and industrial loans⁽¹⁾
   1,982,143 5.29 1,900,445 5.09
Purchased credit-impaired loans
   —   —   5,762 0.01
Other
   3,666 0.01 18,305 0.05


Total other loans held for investment
   1,985,809 5.30 1,924,512 5.15


Totalnon-covered loans held for investment
   $ 37,480,704 100.00 % $ 37,356,201 100.00 %


Net deferred loan origination costs
   25,495 26,521
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
Allowance for losses on covered loans
   —   (23,701 )


Covered loans, net
   $ —   $ 1,674,432
Loans held for sale
   104,938 409,152


Total loans, net
   $ 37,452,219 $ 39,308,016


	June 30, 2022						December 31, 2021
(dollars in millions)	Amount			Percent of Loans Held for Investment			Amount			Percent of Loans Held for Investment
Loans and Leases Held for Investment:
Mortgage Loans:
Multi-family	$	36,772			75.84	%	$	34,603			75.75	%
Commercial real estate		6,712			13.84			6,698			14.66
One-to-four family		129			0.27			160			0.35
Acquisition, development, and construction		195			0.40			209			0.46
Total mortgage loans held for investment (1)		43,808			90.35			41,670			91.22
Other Loans:
Commercial and industrial		2,915			6.01			2,236			4.89
Lease financing, net of unearned income of $85 and $95 respectively		1,756			3.63			1,770			3.88
Total commercial and industrial loans (2)		4,671			9.64			4,006			8.77
Other		6			0.01			5			0.01
Total other loans held for investment		4,677			9.65			4,011			8.78
Total loans and leases held for investment (1)	$	48,485			100.00	%	$	45,681			100.00	%
Net deferred loan origination costs		52						57
Allowance for loan and lease losses		(216	)					(199	)
Total loans and leases, net	$	48,321					$	45,539

~~(1)~~

Includes specialty finance loans of $1.4 billion at September 30, 2017 and $1.3 billion at December 31, 2016, and other commercial and industrial loans of $545.5 million and $632.9 million, respectively, at September 30, 2017 and December 31, 2016.

(1)

Excludes accrued interest receivable of $197 million and $199 million at June 30, 2022 and December 31, 2021, respectively, which is included in other assets in the Consolidated Statements of Condition.

(2)

Includes specialty finance loans and leases of $4.1 billion and $3.5 billion, respectively, at June 30, 2022 and December 31, 2021, and other C&I loans of $548 million and $527 million, respectively, at June 30, 2022 and December 31, 2021.

~~Non-Covered~~ ~~Loans~~

~~Non-Covered~~Loans Held for Investment

The majority of the loans the Company originates for investment are multi-family loans, most of which are collateralized bynon-luxury apartment buildings in New York City with rent-regulated units and below-market rents. In addition, the Company originates ~~commercial real estate (“CRE”)~~CRE loans, most of which are collateralized by income-producing properties such as office buildings, retail centers,mixed-use buildings, and multi-tenanted light industrial properties that are located in New York City and on Long Island.

~~To a lesser extent, the~~The Company also originates~~one-to-four~~ One-to-four family loans ~~acquisition, development, and construction (“ADC”) loans, and commercial and industrial (“C&I”) loans,~~ for investment.One-to-four family loans held for investment were primarily originated through the Company’s former mortgage banking operation and primarily consisted of jumbo ~~prime~~ adjustable rate mortgages made to borrowers with a solid credit history. These loan balances include certain mixed-use CRE loans with less than five residential units classified as one-to-four family loans.

ADC loans are primarily originated for multi-family and residential tract projects in New York City and on Long Island. C&I loans consist of asset-based loans, equipment loans and leases, and dealer floor-plan loans (together, ~~“specialty~~specialty finance loans and ~~leases”)~~leases) that generally are made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide; and ~~“other”~~other C&I loans that primarily are made to small andmid-size businesses in Metro New York. ~~“Other”~~Other C&I loans are typically made for working capital, business expansion, and the purchase of machinery and equipment.

The repayment of multi-family and CRE loans generally depends on the income produced by the underlying properties which, in turn, depends on their successful operation and management. To mitigate the potential for credit losses, the Company underwrites its loans in accordance with credit standards it considers to be prudent, looking first at the consistency of the cash flows being produced by the underlying property. In addition, multi-family buildings, CRE properties, and ADC projects are inspected as a prerequisite to approval, and independent appraisers, whose appraisals are carefully reviewed by the Company’sin-house appraisers, perform appraisals on the collateral properties. In many cases, a second independent appraisal review is performed.

To further manage its credit risk, the Company’s lending policies limit the amount of credit granted to any one borrower and typically require conservative debt service coverage ratios andloan-to-value ratios. Nonetheless, the ability of the Company’s borrowers to repay these loans may be impacted by adverse conditions in the local real estate market and the local economy. Accordingly, there can be no assurance that its underwriting policies will protect the Company from credit-related losses or delinquencies.

ADC loans typically involve a higher degree of credit risk than loans secured by improved or owner-occupied real estate. Accordingly, borrowers are required to provide a guarantee of repayment and completion, and loan proceeds are disbursed as construction progresses, as certified byin-house inspectors or third-party engineers. The Company seeks to minimize the credit risk on ADC loans by maintaining conservative lending policies and rigorous underwriting standards. However, if the estimate of value proves to be inaccurate, the cost of completion is greater than expected, or the length of time to complete and/or sell or lease the collateral property is greater than anticipated, the property could have a value upon completion that is insufficient to assure full repayment of the loan. This could have a material adverse effect on the quality of the ADC loan portfolio, and could result in losses or delinquencies. In addition, the Company utilizes the same stringent appraisal process for ADC loans as it does for its multi-family and CRE loans.

To minimize the risk involved in specialty finance lending and leasing, the Company participates in syndicated loans that are brought to it, and equipment loans and leases that are assigned to it, by a select group of nationally recognized sources who have ~~had~~ long-term relationships with its experienced lending officers. Each of these credits is secured with a perfected first security interest in or outright ownership inof the underlying collateral, and structured as senior debt or as anon-cancelable lease. To further minimize the risk involved in specialty finance lending and leasing, each transaction isre-underwritten. In addition, outside counsel is retained to conduct a further review of the underlying documentation.

To minimize the risks involved in other C&I lending, the Company underwrites such loans on the basis of the cash flows produced by the business; requires that such loans be collateralized by various business assets, including inventory, equipment, and accounts receivable, among others; and typically requires personal guarantees. However, the capacity of a borrower to repay such a C&I loan is substantially dependent on the degree to which the business is successful. In addition, the collateral underlying such loans may depreciate over time, may not be conducive to appraisal, or may fluctuate in value, based upon the results of operations of the business.

Included in~~non-covered~~ loans held for investment at ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016, respectively,~~2021 were loans of ~~$58.7~~$6 million ~~and $91.8 million~~ to certain officers, directors, and their related interests and parties. There were no loans to principal shareholders at ~~either of those dates.~~

~~At December 31, 2016, the Company hadnon-covered~~ ~~purchased credit-impaired (“PCI”) loans, with a carrying value of $5.8 million and an unpaid principal balance of $7.0 million at~~ that date. ~~PCI loans had been covered under Loss Share Agreements (“LSA”) with the FDIC that expired in March 2015 and had been included innon-covered~~ ~~loans. Such loans were accounted for under Accounting Standards Codification (“ASC”)310-30~~ ~~and were initially measured at fair value, which included estimated future credit losses expected to be incurred over the lives~~As of the ~~loans. Under ASC310-30,~~ ~~purchasers are permitted~~second quarter of 2021, the Board of Directors adopted a revised policy in which the Bank shall no longer make loans or extensions of credit to ~~aggregate acquired loans into one or more pools, provided that the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate~~executive officers and ~~an aggregate expectation~~directors of ~~cash flows. There were no such loans accounted for under ASC310-30~~ ~~at September 30, 2017.~~

~~Loans Held for Sale~~

As previously disclosed, on June 27, 2017, the Company 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”) and is reported under the Company’s Residential Mortgage Banking segment, to Freedom Mortgage Corporation (“Freedom”). Accordingly, on September 29, 2017, the sale was completed with proceeds received in the amount of $226.6 million, resulting in a gain of $7.4 million, which is included in~~“Non-interest~~ income” in the accompanying Consolidated Statement of Income and Comprehensive Income. Freedom acquired both the Company’s origination and servicing platforms, as well as its mortgage servicing loan portfolio of $20.5 billion and related mortgage servicing rights (“MSRs”) asset of $208.8 million.

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 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 and settled the related FDIC loss share receivable, 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 firms that employ directors. Any loans and extensions of credit made to an executive officer or director, or any firms that employ directors, prior to the ~~FDIC completed termination~~adoption of these revisions have been grandfathered but remain subject to oversight and review of the ~~LSA.~~

Board of Directors.

Asset Quality

~~The Community Bank’s mortgage banking operations originated, aggregated, sold,~~A loan generally is classified as a non-accrual loan when it is 90 days or more past due or when it is deemed to be impaired because the Company no longer expects to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed on non-accrual status, management ceases the accrual of interest owed, and ~~servicedone-to-four~~ ~~family loans. Community banks, credit unions, mortgage companies,~~previously accrued interest is charged against interest income. A loan is generally returned to accrual status when the loan is current and ~~mortgage brokers used its proprietaryweb-accessible~~ ~~mortgage banking platform to originate~~management has reasonable assurance that the loan will be fully collectible. Interest income on non-accrual loans is recorded when received in cash. At June 30, 2022 and ~~closeone-to-four~~ ~~family loans nationwide. These~~December 31, 2021, all of our non-performing loans were ~~generally sold to GSEs, servicing retained. To a much lesser extent, the Community Bank used its mortgage banking platform to originate jumbo~~non-accrual loans.

~~Asset Quality~~18

The following table presents information regarding the quality of the Company’s~~non-covered~~ loans held for investment at ~~September~~June 30, ~~2017:~~2022:


(in thousands)	Loans 30-89 Days Past Due		Non-Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
(in millions)													Loans 30-89 Days Past Due		Non- Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	602	$	11,018	$	—	$	11,620	$	27,133,777	$	27,145,397	$	20	$	18	$	—	$	38	$	36,734	$	36,772
Commercial real estate		450		4,923		—		5,373		7,545,014		7,550,387		1		27		—		28		6,684		6,712
One-to-four family		676		2,179		—		2,855		410,380		413,235		7		—		—		7		122		129
Acquisition, development, and construction		—		6,200		—		6,200		379,676		385,876		—		—		—		—		195		195
Commercial and industrial^{(1) (2)}		3,419		44,640		—		48,059		1,934,084		1,982,143		—		5		—		5		4,666		4,671
Other		6		10		—		16		3,650		3,666		2		—		—		2		4		6

Total	$	5,153	$	68,970	$	—	$	74,123	$	37,406,581	$	37,480,704	$	30	$	50	$	—	$	80	$	48,405	$	48,485

~~(1)~~

~~Includes $3.4 million and $43.4 million of taxi medallion-related loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

~~(2)~~

~~Includes lease financing receivables, all of which were current.~~

(1)

Includes $4 million of taxi medallion-related loans that were 90 days or more past due. There were 0 taxi medallion-related loans that were 30 to 89 days past due.

(2)

Includes lease financing receivables, all of which were current.

The following table presents information regarding the quality of the Company’s~~non-covered~~ loans held for investment ~~(excludingnon-covered~~ ~~PCI loans)~~ at December 31, ~~2016:~~2021:


(in thousands)	Loans 30-89 Days Past Due⁽¹⁾		Non-Accrual Loans⁽¹⁾		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
(in millions)													Loans 30-89 Days Past Due		Non- Accrual Loans		Loans 90 Days or More Delinquent and Still Accruing Interest		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	28	$	13,558	$	—	$	13,586	$	26,931,466	$	26,945,052	$	57	$	10	$	—	$	67	$	34,536	$	34,603
Commercial real estate		—		9,297		—		9,297		7,715,065		7,724,362		2		16		—		18		6,680		6,698
One-to-four family		2,844		9,679		—		12,523		368,558		381,081		8		1		—		9		151		160
Acquisition, development, and construction		—		6,200		—		6,200		374,994		381,194		—		—		—		—		209		209
Commercial and industrial^{(2) (3)}		7,263		16,422		—		23,685		1,876,760		1,900,445
Commercial and industrial(1) (2)														—		6		—		6		4,000		4,006
Other		248		1,313		—		1,561		16,744		18,305		—		—		—		—		5		5

Total	$	10,383	$	56,469	$	—	$	66,852	$	37,283,587	$	37,350,439	$	67	$	33	$	—	$	100	$	45,581	$	45,681

~~(1)~~

~~Excludes $6 thousand and $869 thousand ofnon-covered~~ ~~PCI loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

~~(2)~~

~~Includes lease financing receivables, all of which were current.~~

~~(3)~~

~~Includes $6.8 million and $15.2 million of taxi medallion loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

(1)

Includes $6 million of taxi medallion-related loans that were 90 days or more past due. There were 0 taxi medallion-related loans that were 30 to 89 days past due.

(2)

Includes lease financing receivables, all of which were current.

The following table summarizes the Company’s portfolio of~~non-covered~~ loans held for investment by credit quality indicator at ~~September~~June 30, ~~2017:~~2022.


	Mortgage Loans										Other Loans						Mortgage Loans										Other Loans
(in thousands)	Multi-Family		Commercial Real Estate		One-to-Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial⁽¹⁾		Other		Total Other Loans
(in millions)																	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial(1)		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	27,059,736	$	7,521,387	$	411,056	$	320,081	$	35,312,260	$	1,882,662	$	3,656	$	1,886,318	$	35,073	$	5,776	$	113	$	191	$	41,153	$	4,667	$	6	$	4,673
Special mention		27,884		10,724		—		50,043		88,651		47,628		—		47,628		1,008		695		8		4		1,715		—		—		—
Substandard		57,777		18,276		2,179		15,752		93,984		51,853		10		51,863		691		241		8		—		940		4		—		4
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—

Total	$	27,145,397	$	7,550,387	$	413,235	$	385,876	$	35,494,895	$	1,982,143	$	3,666	$	1,985,809	$	36,772	$	6,712	$	129	$	195	$	43,808	$	4,671	$	6	$	4,677

~~(1)~~

~~Includes lease financing receivables, all of which were classified as “pass.”~~

(1)

Includes lease financing receivables, all of which were classified as Pass.

The following table summarizes the Company’s portfolio of~~non-covered~~ loans held for investment ~~(excludingnon-covered~~ ~~PCI loans)~~ by credit quality indicator at December 31, ~~2016:~~2021:


	Mortgage Loans										Other Loans						Mortgage Loans										Other Loans
(in thousands)	Multi-Family		Commercial Real Estate		One-to-Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial⁽¹⁾		Other		Total Other Loans
(in millions)																	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial(1)		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	26,754,622	$	7,701,773	$	371,179	$	341,784	$	35,169,358	$	1,771,975	$	16,992	$	1,788,967	$	33,011	$	5,874	$	137	$	204	$	39,226	$	3,959	$	5	$	3,964
Special mention		164,325		12,604		—		33,210		210,139		54,979		—		54,979		981		643		14		5		1,643		2		—		2
Substandard		26,105		9,985		9,902		6,200		52,192		73,491		1,313		74,804		611		181		9		—		801		45		—		45
Doubtful		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—

Total	$	26,945,052	$	7,724,362	$	381,081	$	381,194	$	35,431,689	$	1,900,445	$	18,305	$	1,918,750	$	34,603	$	6,698	$	160	$	209	$	41,670	$	4,006	$	5	$	4,011

~~(1)~~

~~Includes lease financing receivables, all of which were classified as “pass.”~~

(1)

Includes lease financing receivables, all of which were classified as Pass.

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

The following table presents, by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of June 30, 2022.


	Vintage Year
(in millions) Risk Rating Group	2022		2021		2020		2019		2018		Prior To 2018		Revolving Loans		Total
Pass	$	5,843	$	9,291	$	8,825	$	5,060	$	3,998	$	8,145	$	18	$	41,180
Special Mention		—		—		142		346		276		952		—		1,716
Substandard		—		—		38		151		203		548		—		940
Total mortgage loans	$	5,843	$	9,291	$	9,005	$	5,557	$	4,477	$	9,645	$	18	$	43,836
Pass		474		769		531		464		75		264		2,120		4,697
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		2		1		1		—		4
Total other loans		474		769		531		466		76		265		2,120		4,701
Total	$	6,317	$	10,060	$	9,536	$	6,023	$	4,553	$	9,910	$	2,138	$	48,537

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

The following table summarizes the extent to which collateral secures the Company’s collateral-dependent loans held for investment by collateral type as of June 30, 2022:


	Collateral Type
(in millions)	Real Property		Other
Multi-family	$	17	$	—
Commercial real estate		43		—
One-to-four family		—		—
Acquisition, development, and construction		—		—
Commercial and industrial		—		4
Other		—		—
Total collateral-dependent loans held for investment		60		4

Other collateral type consists of taxi medallions, cash, accounts receivable and inventory.

There were no significant changes in the extent to which collateral secures the Company’s collateral-dependent financial assets during the six months ended June 30, 2022.

Troubled Debt Restructurings

The Company is required to account for certain~~held-for-investment~~ loan modifications and restructurings as ~~troubled debt restructurings (“TDRs”).~~TDRs. In general, a modification or restructuring of a loan constitutes a TDR if the Company grants a concession to a borrower experiencing financial difficulty. A loan modified as a TDR generally is placed onnon-accrual status until the Company determines that future collection of principal and interest is reasonably assured, which requires, among other things, that the borrower demonstrate performance according to the restructured terms for a period of at least six consecutive months. In determining the Company’s allowance for loan and lease losses, reasonably expected TDRs are individually evaluated and consist of criticized, classified, or maturing loans that will have a modification processed within the next three months.

In an effort to proactively manage delinquent loans, the Company has selectively extended to certain borrowers concessions such as rate reductions, extension of maturity dates, and forbearance agreements. As of ~~September~~June 30, ~~2017,~~2022, loans on which concessions were made with respect to rate reductions and/or extension of maturity dates amounted to ~~$41.5 million; loans~~$45 million.

The CARES Act was enacted on ~~which forbearance agreements were reached amounted~~March 27, 2020. Under the CARES Act, the Company made the election to ~~$1.8 million.~~

~~The following table presents information regarding~~deem that loan modifications do not result in TDRs if they are (1) related to the ~~Company’s TDRs~~novel coronavirus disease (“COVID-19”); (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the ~~dates indicated:~~earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020. This includes short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. In December 2020, Congress amended the CARES Act through the Consolidated Appropriation Act of 2021, which provided additional COVID-19 relief to American families and businesses, including extending TDR relief under the CARES Act until the earlier of December 31, 2021 or 60 days following the termination of the national emergency.

   September 30, 2017    December 31, 2016
(in thousands)    Accruing    Non-Accrual    Total    Accruing    Non-Accrual    Total
Loan Category:

Multi-family
   $ 1,457    $ 7,608    $ 9,065    $ 1,981    $ 8,755    $ 10,736
Commercial real estate
   —      373    373    —      1,861    1,861
One-to-four family
   —      1,076    1,076    222    1,749    1,971
Commercial and industrial
   177    23,974    24,151    1,263    3,887    5,150
Acquisition, development, and construction
   8,652    —      8,652
Other
   —      —      —      —      202    202












Total
   $ 10,286    $ 33,031    $ 43,317    $ 3,466    $ 16,454    $ 19,920

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

The following table presents information regarding the Company's TDRs as of June 30, 2022 and December 31, 2021:


		June 30, 2022									December 31, 2021
(in millions)		Accruing			Non- Accrual			Total			Accruing			Non- Accrual			Total
Loan Category:
Multi-family	$		—	$		6	$		6	$		—	$		7	$		7
Commercial real estate			16			19			35			16			—			16
One-to-four family			—			—			—			—			—			—
Acquisition, development, and construction			—			—			—			—			—			—
Commercial and industrial (1)			—			4			4			—			6			6
Total	$		16	$		29	$		45	$		16	$		13	$		29

(1) Includes $4 million and $6 million of taxi medallion-related loans at June 30, 2022 and December 31, 2021, respectively.

The financial effects of the Company’s TDRs for the ~~periods indicated~~three months ended June 30, 2022 and 2021 are summarized as follows:

   For the Three Months Ended September 30, 2017
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

Acquisition, development, and construction
   2    $ 8,652    $ 8,652    5.50 % 5.50 % $ —      $ —
Commercial and industrial
   22    18,002    7,620    3.18 2.91 6,350    —










Total
   24    $ 26,654    $ 16,272    $ 6,350    $ —










   For the Three Months Ended September 30, 2016
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

One-to-four family
   —      $ —      $ —      — % — % $ —      $ —
Commercial and industrial
   2    1,314    1,273    3.22 3.22 41    —










Total
   2    $ 1,314    $ 1,273    $ 41    $ —


	For the Three Months Ended June 30, 2022
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification		Post- Modification		Charge- off Amount		Capitalized Interest
Loan Category:
Commercial real estate		1	$	—	$	—	4.75	%	9.75	%	$	—	$	—


	For the Three Months Ended June 30, 2021
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification		Post- Modification		Charge- off Amount		Capitalized Interest
Loan Category:
Multi-family		—	$	—	$	—	0	%	0	%	$	—	$	—

The financial effects of the Company’s TDRs for the ~~periods indicated~~six months ended June 30, 2022 and 2021 are summarized as follows:

   For the Nine Months Ended September 30, 2017
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

One-to-four family
   4    $ 810    $ 990    5.93 % 2.21 % $ —      $ 12
Acquisition, development, and construction
   2    8,652    8,652    5.50 5.50 —      —
Commercial and industrial
   52    48,716    23,673    3.36 3.29 11,079    —










Total
   58    $ 58,178    $ 33,315    $ 11,079    $ 12










   For the Nine Months Ended September 30, 2016
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

Multi-family
   1    $ 9,340    $ 8,303    4.63 % 4.00 % $ —      $ —
One-to-four family
   3    477    628    3.62 3.07 —      6
Commercial and industrial
   4    2,712    2,560    3.26 3.21 89    —










Total
   8    $ 12,529    $ 11,491    $ 89    $ 6


	For the Six Months Ended June 30, 2022
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification			Post- Modification			Charge- off Amount		Capitalized Interest
Loan Category:
Commercial real estate		2	$	22	$	19		6.00	%		4.00	%	$	3	$	—


	For the Six Months Ended June 30, 2021
							Weighted Average Interest Rate
(dollars in millions)	Number of Loans		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Pre- Modification			Post- Modification			Charge- off Amount		Capitalized Interest
Loan Category:
Multi-family		1	$	7	$	7		3.13	%		3.25	%	$	—	$	—

At ~~September~~June 30, ~~2017, twonon-coveredone-to-four~~ ~~family~~2022, 0 loans ~~totaling $497,000 and six~~have been modified as TDRs that were in payment default during the twelve months ended at that date. At June 30, 2021, 18 C&I loans ~~totaling $1.4~~in the aggregate amount of $2 million that had been modified as TDRs during the twelve months ended at that date and were in payment default. ~~A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.~~

The Company does not consider a payment to be in default when the loan is in forbearance, or otherwise granted a delay of payment, or when the agreement to forebear or allow a delay of payment is part of a modification.

Subsequent to the modification, the loan is not considered to be in default until payment is contractually past due in accordance with the modified terms. However, the Company ~~does~~may consider a loan with multiple modifications or forbearance periods to be in default, and would ~~also~~ consider a loan to be in default if the borrower were in bankruptcy or if the loan were partially charged off subsequent to modification.

~~Covered Loans~~

~~As previously discussed, the Company sold its covered loan portfolio during the third quarter of 2017; therefore, the Company does not have any covered loans outstanding as of September 30, 2017.~~

The Company referred to certain loans acquired in the AmTrust and Desert Hills Bank (“Desert Hills”) transactions as “covered loans” because the Company was being reimbursed for a substantial portion of losses on these loans under the terms of the LSA. Covered loans were accounted for under ASC~~310-30~~ ~~and were initially measured at fair value, which included estimated future credit losses expected to be incurred over the lives of the loans. Under ASC310-30,~~ ~~purchasers are permitted to aggregate acquired loans~~ Management takes into one or more pools, provided that the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.

~~The following table presents the carrying value of covered loans which were acquired in the acquisitions of AmTrust and Desert Hills as of December 31, 2016.~~

(dollars in thousands)    Amount    Percent of
Covered Loans
Loan Category:

One-to-four family
   $ 1,609,635    94.8 %
Other loans
   88,498    5.2




Total covered loans
   $ 1,698,133    100.0 %

~~At December 31, 2016, the unpaid principal balance of covered loans was $2.1 billion and the carrying value of such loans was $1.7 billion.~~

At December 31, 2016, the Company estimated the fair values of the AmTrust and Desert Hills loan portfolios, which represented the expected cash flows from the portfolios, discounted at market-based rates. In estimating such fair values, the Company: (a) calculated the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”); and (b) estimated the expected amount and timing of undiscounted principal and interest payments (the “undiscounted expected cash flows”). The amount by which the undiscounted expected cash flows exceed the estimated fair value (the “accretable yield”) was accreted into interest income over the lives of the loans. The amount by which the undiscounted contractual cash flows exceed the undiscounted expected cash flows is referred to as the~~“non-accretable~~ ~~difference.” Thenon-accretable~~ ~~difference represented an estimate of the credit risk in the loan portfolios at the respective acquisition dates.~~

The accretable yield was affected by changes in interest rate indices for variable rate loans, changes in prepayment assumptions, and changes in expected principal and interest payments over the estimated lives of the loans. Changes in interest rate indices for variable rate loans increased or decreased the amount of interest income expected to be collected, depending on the direction of interest rates. Prepayments affected the estimated lives of covered loans and could have changed the amount of interest income and principal expected to be collected. Changes in expected principal and interest payments over the estimated lives of covered loans were driven by the credit outlook and by actions that may be taken with borrowers. As of September 30, 2017, the accretable yield was reduced to zero.

On a quarterly basis, the Company had evaluated the estimates of the cash flows it expected to collect. Expected future cash flows from interest payments were based on variable rates at the time of the quarterly evaluation. Estimates of expected cash flows that were impacted by changes in interest rate indices for variable rate loans and prepayment assumptions were treated as prospective yield adjustments and included in interest income.

~~In the nine months ended September 30, 2017, changes in the accretable yield for covered loans were as follows:~~

(in thousands)    Accretable Yield
Balance at beginning of period
   $ 647,470
Accretion
   (72,842 )
Reclassification tonon-accretable difference for the six months ended June 30, 2017
   (11,381 )
Changes in expected cash flows due to the sale of the covered loan portfolio
   (563,247 )


Balance at end of period
   $ —

~~In the preceding table, the line item “Reclassification tonon-accretable~~ difference for the six months ended June 30, 2017” includes changes in cash flows that the Company expects to collect due to changes in prepayment assumptions, changes in interest rates on variable rate loans, and changes in loss assumptions. As of the Company’s most recent quarterly evaluation, prepayment assumptions increased, which resulted in a decrease in future expected interest cash flows and, consequently, a decrease in the accretable yield. The effect of this decrease was partially offset with an improvement in the underlying credit assumptions and the resetting of rates on variable rate loans at a slightly higher level, which resulted in an increase in future expected interest cash flows and, consequently, an increase in the accretable yield.

Reflecting the foreclosure of certain loans acquired in the AmTrust and Desert Hills acquisitions, the Company owned certain other real estate owned (“OREO”) that was covered under its LSA (“covered OREO”). Covered OREO was initially recorded at its estimated fair value on the respective dates of acquisition, based on independent appraisals, less the estimated selling costs. Any subsequent write-downs due to declines in fair value were charged to~~non-interest~~ ~~expense, and were partially offset by loss reimbursements under the LSA. Any recoveries of previous write-downs have been credited tonon-interest~~ ~~expense and partially offset by the portion of the recovery that was due to the FDIC. As previously discussed, the Company’s covered OREO was sold during the third quarter of 2017.~~

~~The FDIC loss share receivable represented the present value of the estimated losses to be reimbursed by the FDIC. The estimated losses were based on the same cash flow estimates used~~consideration all TDR modifications in determining the ~~fair value~~appropriate level of the covered loans. The FDIC loss share receivable was reduced as losses on covered loans were recognized and as loss sharing payments were received from the FDIC. Realized losses in excess of acquisition-date estimates resulted in an increase in the FDIC loss share receivable. Conversely, if realized losses were lower than the acquisition-date estimates, the FDIC loss share receivable was reduced by amortization to interest income. Effective October 31, 2017, the Company and the FDIC completed termination of the LSA.allowance.

At December 31, 2016, the Company held residential mortgage loans of $78.6 million that were in the process of foreclosure. The vast majority of such loans were covered loans. The Company had no residential mortgage loans that were in the process of foreclosure at September 30, 2017.

~~The following table presents information regarding the Company’s covered loans at December 31, 2016 that were 90 days or more past due:~~

(in thousands)
Covered Loans 90 Days or More Past Due:

One-to-four family
   $ 124,820
Other loans
   6,645


Total covered loans 90 days or more past due
   $ 131,465

~~The following table presents information regarding the Company’s covered loans at December 31, 2016 that were 30 to 89 days past due:~~

(in thousands)
Covered Loans30-89 Days Past Due:

One-to-four family
   $ 21,112
Other loans
   1,536


Total covered loans30-89 days past due
   $ 22,648

As noted above, at December 31, 2016, the Company had $22.6 million of covered loans that were 30 to 89 days past due, and covered loans of $131.5 million that were 90 days or more past due but considered to be performing due to the application of the yield accretion method under ASC~~310-30.~~ ~~The remainder of the Company’s covered loan portfolio totaled $1.5 billion at December 31, 2016 and were considered current at that date.~~

~~Loans that may have been classified asnon-performing~~ ~~loans by AmTrust or Desert Hills were no longer classified asnon-performing~~ by the Company because, at the respective dates of acquisition, the Company believed that it would fully collect the new carrying value of these loans. The new carrying value represented the contractual balance, reduced by the portion that was expected to be uncollectible (i.e., the~~non-accretable~~ ~~difference) and by an accretable yield (discount) that was recognized as interest income. It is important to note that management’s judgment was required in reclassifying loans subject to ASC310-30~~ ~~as performing loans, and such judgment was dependent on having a reasonable expectation about the timing and amount of the cash flows to be collected, even if the loan was contractually past due.~~

The primary credit quality indicator for covered loans is the expectation of underlying cash flows. In the nine months ended September 30, 2017, the Company recorded recoveries of losses on covered loans of $23.7 million. The recoveries were largely due to an increase in expected cash flows in the acquired portfolios of~~one-to-four~~ ~~family and home equity loans, and were partly offset by FDIC indemnification expense of $19.0 million that was recorded in“Non-interest~~ ~~income.”~~

The Company recovered losses on covered loans of $6.0 million during the nine months ended September 30, 2016, which was largely offset by FDIC indemnification expense of $4.8 million. In the three months ended September 30, 2016, the Company recorded recoveries of losses on covered loans of $1.3 million and FDIC indemnification expense of $1.0 million.

Note 6. ~~Allowances for Loan Losses~~

~~The following tables provide additional information regarding the Company’s allowances for losses onnon-covered~~ ~~loans and covered loans, based upon the method of evaluating loan impairment:~~

(in thousands)    Mortgage    Other    Total
Allowances for Loan Losses at September 30, 2017:

Loans individually evaluated for impairment
   $ —      $ —      $ —
Loans collectively evaluated for impairment
   122,522    36,396    158,918






Total
   $ 122,522    $ 36,396    $ 158,918






(in thousands)    Mortgage    Other    Total
Allowances for Loan Losses at December 31, 2016:

Loans individually evaluated for impairment
   $ —      $ 577    $ 577
Loans collectively evaluated for impairment
   123,925    32,022    155,947
Acquired loans with deteriorated credit quality
   11,984    13,483    25,467






Total
   $ 135,909    $ 46,082    $ 181,991

~~The following tables provide additional information regarding the methods used to evaluate the Company’s loan portfolio for impairment:~~

(in thousands)    Mortgage    Other    Total
Loans Receivable at September 30, 2017:

Loans individually evaluated for impairment
   $ 29,431    $ 45,682    $ 75,113
Loans collectively evaluated for impairment
   35,465,464    1,940,127    37,405,591






Total
   $ 35,494,895    $ 1,985,809    $ 37,480,704






(in thousands)    Mortgage    Other    Total
Loans Receivable at December 31, 2016:

Loans individually evaluated for impairment
   $ 29,660    $ 18,592    $ 48,252
Loans collectively evaluated for impairment
   35,402,029    1,900,158    37,302,187
Acquired loans with deteriorated credit quality
   1,614,755    89,140    1,703,895






Total
   $ 37,046,444    $ 2,007,890    $ 39,054,334

Allowance for Credit Losses on~~Non-Covered~~ Loans and Leases

Allowance for Credit Losses on Loans and Leases

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


	For the Nine Months Ended September 30,																		For the Six Months Ended June 30,
	2017									2016									2022									2021
(in thousands)	Mortgage			Other			Total			Mortgage			Other			Total
(in millions)																			Mortgage			Other			Total			Mortgage			Other			Total
Balance, beginning of period	$	125,416		$	32,874		$	158,290		$	124,478		$	22,646		$	147,124		$	178		$	21		$	199		$	176		$	18		$	194
Charge-offs		(375	)		(58,203	)		(58,578	)		(170	)		(1,155	)		(1,325	)		(4	)		—			(4	)		(2	)		(3	)		(5	)
Recoveries		595			594			1,189			1,251			956			2,207			4			5			9			2			10			12
(Recovery of) provision fornon-covered loan losses		(3,114	)		61,131			58,017			675			6,024			6,699

Provision for (recovery of) credit losses on loans and leases																				30			(18	)		12			1			—			1
Balance, end of period	$	122,522			36,396		$	158,918		$	126,234		$	28,471		$	154,705		$	208		$	8		$	216		$	177		$	25		$	202

~~See “Critical Accounting Policies” for additional information regarding~~

Separately, at June 30, 2022, the ~~Company’s~~Company had an allowance for unfunded commitments of $7 million, as compared to $12 million at December 31, 2021.

For the six months ended June 30, 2022, the allowance for credit losses on~~non-covered~~ ~~loans.~~ loan and leases increased primarily as a result of loan portfolio growth combined with reduced prepayment estimates offset by improvements in environmental factors surrounding the COVID-19 pandemic, specifically those affecting commercial real estate in the New York City area.

The macroeconomic forecast factors in increasing costs of higher global energy prices and tighter financial market conditions on the U.S. economy. Gross Domestic Product (“GDP”) is now expected to rise at an annualized rate of 2.8% and 2.7% respectively for 2022 and 2023. Unemployment continues to subside from the historic shock of 2020, as peak unemployment rates are forecasted to be approximately 3.5% in 2022 and 3.4% in 2023. Federal Reserve continues to aggressively tighten monetary policy. As a result, the federal funds rate is now forecast to average 1.1% in 2022 and 2.7% in 2023, compared with 0.5% in 2022 and 1.5% in 2023 in the previous quarter Baseline scenario. The 10-year U.S. Treasury yield is expected to steadily increase over the next few years, reaching its estimated long-run equilibrium of 3.75% by mid-decade.

In addition to these quantitative inputs, several qualitative factors were considered in estimating our allowance for loan and lease credit losses, including changes in credit policies and underwriting guidelines and laws and regulations as well as other attributes related to a concentrated commercial real estate portfolio, specifically those affecting commercial real estate in the New York City area.

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

The following table presents additional information about the Company’s ~~impairednon-covered~~nonaccrual loans at ~~September~~June 30, ~~2017:~~2022:


(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with no related allowance:
(in millions)											Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	9,071	$	11,548	$	—	$	10,016	$	378	$	17	$	—	$	—
Commercial real estate		2,628		7,743		—		4,517		13		27		—		1
One-to-four family		1,980		2,086		—		2,898		38		—		—		—
Acquisition, development, and construction		15,752		25,952		—		8,588		435		1		—		—
Other		45,682		98,084		—		32,556		1,486		4		—		—

Total impaired loans with no related allowance	$	75,113	$	145,413	$	—	$	58,575	$	2,350

Impaired loans with an allowance recorded:
Total nonaccrual loans with no related allowance											$	49	$	—	$	1
Nonaccrual loans with an allowance recorded:
Multi-family	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—
Commercial real estate		—		—		—		—		—		—		—		—
One-to-four family		—		—		—		—		—		—		—		—
Acquisition, development, and construction		—		—		—		—		—		—		—		—
Other		—		—		—		3,278		—		—		—		—

Total impaired loans with an allowance recorded	$	—	$	—	$	—	$	3,278	$	—

Total impaired loans:
Total nonaccrual loans with an allowance recorded											$	1	$	—	$	—
Total nonaccrual loans:
Multi-family	$	9,071	$	11,548	$	—	$	10,016	$	378	$	18	$	—	$	—
Commercial real estate		2,628		7,743		—		4,517		13		27		—		1
One-to-four family		1,980		2,086		—		2,898		38		—		—		—
Acquisition, development, and construction		15,752		25,952		—		8,588		435		1		—		—
Other		45,682		98,084		—		35,834		1,486		4		—		—

Total impaired loans	$	75,113	$	145,413	$	—	$	61,853	$	2,350

Total nonaccrual loans											$	50	$	—	$	1

The following table presents additional information about the Company’s ~~impairednon-covered~~nonaccrual loans at December 31, ~~2016:~~2021:


(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with no related allowance:
(in millions)											Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	10,742	$	13,133	$	—	$	11,431	$	627	$	9	$	—	$	1
Commercial real estate		9,117		14,868		—		10,461		143		14		—		—
One-to-four family		3,601		4,267		—		3,079		124		—		—		—
Acquisition, development, and construction		6,200		15,500		—		1,550		414		—		—		—
Other		6,739		7,955		—		8,261		92		6		—		—

Total impaired loans with no related allowance	$	36,399	$	55,723	$	—	$	34,782	$	1,400

Impaired loans with an allowance recorded:
Total nonaccrual loans with no related allowance											$	29	$	—	$	1
Nonaccrual loans with an allowance recorded:
Multi-family	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—
Commercial real estate		—		—		—		—		—		2		—		—
One-to-four family		—		—		—		—		—		1		—		—
Acquisition, development, and construction		—		—		—		—		—		—		—		—
Other		11,853		13,529		577		4,574		213		—		—		—

Total impaired loans with an allowance recorded	$	11,853	$	13,529	$	577	$	4,574	$	213

Total impaired loans:
Total nonaccrual loans with an allowance recorded											$	4	$	—	$	—
Total nonaccrual loans:
Multi-family	$	10,742	$	13,133	$	—	$	11,431	$	627	$	10	$	—	$	1
Commercial real estate		9,117		14,868		—		10,461		143		16		—		—
One-to-four family		3,601		4,267		—		3,079		124		1		—		—
Acquisition, development, and construction		6,200		15,500		—		1,550		414		—		—		—
Other		18,592		21,484		577		12,835		305		6		—		—

Total impaired loans	$	48,252	$	69,252	$	577	$	39,356	$	1,613

Total nonaccrual loans											$	33	$	—	$	1

~~Allowance for Losses on Covered Loans~~

Covered loans were reported exclusive of the FDIC loss share receivable. The covered loans acquired in the AmTrust and Desert Hills acquisitions were reviewed for collectability based on the expectations of cash flows from these loans. Covered loans were aggregated into pools of loans with common characteristics. In determining the allowance for losses on covered loans, the Company periodically performed an analysis to estimate the expected cash flows for each of the pools of loans. The Company recorded a provision for (recovery of) losses on covered loans to the extent that the expected cash flows from a loan pool had decreased or increased since the acquisition date.

Accordingly, if there was a decrease in expected cash flows due to an increase in estimated credit losses (as compared to the estimates made at the respective acquisition dates), the decrease in the present value of expected cash flows was recorded as a provision for covered loan losses charged to earnings, and the allowance for covered loan losses was increased. A related credit to~~non-interest~~ ~~income and an increase in the LSA are recognized at the same time, and measured based on the applicable loss sharing agreement percentage.~~

If there was an increase in expected cash flows due to a decrease in estimated credit losses (as compared to the estimates made at the respective acquisition dates), the increase in the present value of expected cash flows was recorded as a recovery of the prior-period impairment charged to earnings, and the allowance for covered loan losses was reduced. A related debit to~~non-interest~~ ~~income and a decrease in the LSA was recognized at the same time, and measured based on the applicable Loss Share Agreement percentage.~~

~~The following table summarizes activity in the allowance for losses on covered loans for the periods indicated:~~

   For the Nine Months Ended
September 30,
(in thousands)    2017    2016
Balance, beginning of period
   $ 23,701    $ 31,395
Recovery of losses on covered loans⁽¹⁾
   (23,701 )    (6,035 )




Balance, end of period
   $ —      $ 25,360

~~(1)~~

~~Due to the sale of the covered loan portfolio.~~

Note 7. Borrowed Funds

The following table summarizes the Company’s borrowed funds at the dates indicated:


(in thousands)	September 30, 2017		December 31, 2016
Wholesale Borrowings:
					June 30,		December 31,
(in millions)					2022		2021
Wholesale borrowings:
FHLB advances	$	11,554,500	$	11,664,500	$	12,850	$	15,105
Repurchase agreements		450,000		1,500,000		800		800
Federal funds purchased		—		150,000

Total wholesale borrowings	$	12,004,500	$	13,314,500	$	13,650	$	15,905
Junior subordinated debentures		359,102		358,879		361		361

Subordinated notes						296		296
Total borrowed funds	$	12,363,602	$	13,673,379	$	14,307	$	16,562

The following table summarizes the Company’s repurchase agreements accounted for as secured borrowings at ~~September~~June 30, ~~2017:~~2022:

   Remaining Contractual Maturity of the Agreements
(in thousands)    Overnight and
Continuous    Up to
30 Days    30–90 Days    Greater than
90 Days
GSE debentures and mortgage-related securities
   $ —      $ —      $ —      $ 450,000


	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous		Up to 30 Days		30–90 Days		Greater than 90 Days
GSE obligations	$	—	$	—	$	—	$	800

Subordinated Notes

At ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021, the Company had ~~$359.1~~$296 million of fixed-to-floating rate subordinated notes outstanding:


Date of Original Issue	Stated Maturity	Interest Rate(1)			Original Issue Amount
(dollars in millions)
Nov. 6, 2018	Nov. 6, 2028		5.90	%	$	300

(1)

From and ~~$358.9~~including the date of original issuance to, but excluding November 6, 2023, the Notes will bear interest at an initial rate of 5.90% per annum payable semi-annually. Unless redeemed, from and including November 6, 2023 to but excluding the

maturity date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR rate plus 278 basis points payable quarterly.

Junior Subordinated Debentures

At June 30, 2022 and December 31, 2021, the Company had $361 million ~~respectively,~~ of outstanding junior subordinated deferrable interest debentures (“junior subordinated debentures”) held by statutory business trusts (the “Trusts”) that issued guaranteed capital securities.

The Trusts are accounted for as unconsolidated subsidiaries, in accordance with GAAP. The proceeds of each issuance were invested in a series of junior subordinated debentures of the Company and the underlying assets of each statutory business trust are the relevant debentures. The Company has fully and unconditionally guaranteed the obligations under each trust’s capital securities to the extent set forth in a guarantee by the Company to each trust. The Trusts’ capital securities are each subject to mandatory redemption, in whole or in part, upon repayment of the debentures at their stated maturity or earlier redemption.

The following junior subordinated debentures were outstanding at ~~September~~June 30, ~~2017:~~2022:


Issuer	Interest Rate of Capital Securities and Debentures			Junior Subordinated Debentures Amount Outstanding		Capital Securities Amount Outstanding		Date of Original Issue		Stated Maturity		First Optional Redemption Date			Interest Rate of Capital Securities and Debentures				Junior Subordinated Debentures Amount Outstanding			Capital Securities Amount Outstanding		Date of Original Issue	Stated Maturity	First Optional Redemption Date
	(dollars in thousands)																		(dollars in millions)
New York Community Capital Trust V (BONUSES^SMUnits)		6.000	%	$	145,176	$	138,825		Nov. 4, 2002		Nov. 1, 2051		Nov. 4, 2007	⁽¹⁾		6.00	%	$		147	$		140	Nov. 4, 2002	Nov. 1, 2051	Nov. 4, 2007	(1)
New York Community Capital Trust X		2.920			123,712		120,000		Dec. 14, 2006		Dec. 15, 2036		Dec. 15, 2011	⁽²⁾	3.43					124			120	Dec. 14, 2006	Dec. 15, 2036	Dec. 15, 2011	(2)
PennFed Capital Trust III		4.570			30,928		30,000		June 2, 2003		June 15, 2033		June 15, 2008	⁽²⁾	5.08					31			30	June 2, 2003	June 15, 2033	June 15, 2008	(2)
New York Community Capital Trust XI		2.985			59,286		57,500		April 16, 2007		June 30, 2037		June 30, 2012	⁽²⁾	3.90					59			58	April 16, 2007	June 30, 2037	June 30, 2012	(2)

Total junior subordinated debentures				$	359,102	$	346,325											$		361	$		348

~~(1)~~

(1)

Callable subject to certain conditions as described ~~in the prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 4, 2002.~~

~~(2)~~

~~Callable from this date forward.~~

~~Note 8. Mortgage Servicing Rights~~

The Company records a separate servicing asset representing the right to service third-party loans. Such MSRs are initially recorded at their fair value as a component of the sale proceeds. The fair values of MSRs are based on an analysis of discounted cash flows that incorporates estimates of (1) market servicing costs, (2) market-based estimates of ancillary servicing revenue, (3) market-based prepayment rates, and (4) market profit margins.

MSRs are subsequently measured at either fair value or are amortized in proportion to, and over the period of, estimated net servicing income. The Company elects one of those methods on a class basis. A class is determined based on (1) the availability of market inputs used in determining the fair value of servicing assets, and/or (2) the Company’s method for managing the risks of servicing assets.

~~As previously discussed, the Company completed the sale of its mortgage banking business~~ in the third quarter of 2017, and consequently sold substantially all of its mortgage servicing assets. Accordingly, the value of the MSR asset declined to $6.9 million at September 30, 2017, compared to $225.4 million at June 30, 2017 and $234.0 million at December 31, 2016. These balances all consisted of two classes of MSRs for which the Company separately manages the economic risk: residential MSRs and participation MSRs (i.e., MSRs on loans sold through participations).

Residential MSRs are carried at fair value, and at September 30, 2017 reflected only loans sold through the FHLB’s Mortgage Partnership Finance Program, with changes in fair value recorded as a component of~~non-interest~~ income in each period. The Company uses various derivative instruments to mitigate the income statement-effect of changes in fair value due to changes in valuation inputs and assumptions regarding its residential MSRs. The effects of changes in the fair value of the derivatives are recorded as “Mortgage banking income,” which is included in~~“Non-interest~~ income” in the Consolidated Statements of Income and Comprehensive Income. MSRs do not trade in an active open market with readily observable prices. Accordingly, the Company utilizes a third-party valuation specialist to determine the fair value of its MSRs. This specialist determines fair value based on the present value of estimated future net servicing income cash flows, and incorporates assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The specialist and the Company evaluate, and periodically adjust, as necessary, these underlying inputs and assumptions to reflect market conditions and changes in the assumptions that a market participant would consider in valuing MSRs.

The value of residential MSRs at any given time is significantly affected by the mortgage interest rates that are then available in the marketplace. These, in turn, influence mortgage loan prepayment speeds. The rate of prepayment of serviced residential loans is the most significant estimate involved in the measurement process. Actual prepayment rates may differ from those projected by management due to changes in a variety of economic factors, including prevailing interest rates and the availability of alternative financing sources to borrowers.

During periods of declining interest rates, the value of residential MSRs generally declines as an increase in mortgage refinancing activity results in an increase in prepayments and a decrease in the carrying value of residential MSRs through a charge to earnings in the current period. Conversely, during periods of rising interest rates, the value of residential MSRs generally increases as mortgage refinancing activity declines and the actual prepayments of loans being serviced occur more slowly than had been expected. This results in the carrying value of residential MSRs and servicing income being higher than previously anticipated. Accordingly, the value of residential MSRs that is actually realized could differ from the value initially recorded.

The collective amount of contractually specified servicing fees, late fees, and ancillary fees, which is recorded as “Mortgage banking income” in the Consolidated Statements of Income and Comprehensive Income, was $483,000 and $1.1 million for the three and nine months ended September 30, 2017, respectively, and $351,000 and $983,000 for the three and nine months ended September 30, 2016, respectively.

Participation MSRs are initially carried at fair value and are subsequently amortized and carried at the lower of their fair value or amortized amount. The amortization is recorded in proportion to, and over the period of, estimated net servicing income, with impairment of those servicing assets evaluated through an assessment of their fair value via a discounted cash-flow method. The net carrying value is compared to the discounted estimated future net cash flows to determine whether adjustments should be made to carrying values or amortization schedules. Impairment of participation MSRs is recognized through a valuation allowance and a charge to current-period earnings if it is considered to be temporary, or through a direct write-down of the asset and a charge to current-period earnings if it is considered to be other than temporary. The predominant risk characteristics of the underlying loans that are used to stratify the participation MSRs for measurement purposes generally include the (1) loan origination date, (2) loan rate, (3) loan type and size, (4) loan maturity date, and (5) geographic location. Changes in the carrying value of participation MSRs due to amortization or declines in fair value (i.e., impairment), if any, are reported in “Other income” in the period during which such changes occur. In the nine months ended September 30, 2017 and 2016, there was no impairment related to the Company’s participation MSRs.

~~The following tables set forth the changes in the balances of residential MSRs and participation MSRs for the periods indicated:~~

   For the Three Months Ended
   September 30, 2017    September 30, 2016
(in thousands)    Residential    Participation    Residential    Participation
Carrying value, beginning of period
   $ 220,586    $ 4,853    $ 188,331    $ 5,663
Additions
   6,072    39    12,005    731
Sales
   (208,827 )    —      —      —
Increase (decrease) in fair value:

Due to changes in interest rates
   (222 )    —      5,668    —
Due to model assumption changes⁽¹⁾
   —      —      —      —
Due to loan payoffs
   (7,855 )    —      (12,818 )    —
Due to passage of time and other changes
   (6,972 )    —      (1,767 )    —
Amortization
   —      (813 )    —      (618 )








Carrying value, end of period
   $ 2,782    $ 4,079    $ 191,419    $ 5,776

~~(1)~~

~~Represents changes in fair value driven by changes to the inputs to the valuation model related to assumed prepayment speeds.~~

   For the Nine Months Ended
   September 30, 2017    September 30, 2016
(in thousands)    Residential    Participation    Residential    Participation
Carrying value, beginning of period
   $ 228,099    $ 5,862    $ 243,389    $ 4,345
Additions
   18,054    595    31,185    2,999
Sales
   (208,827 )    —      —      —
Increase (decrease) in fair value:

Due to changes in interest rates
   (2,130 )    —      (32,139 )    —
Due to model assumption changes⁽¹⁾
   —      —      (13,088 )    —
Due to loan payoffs
   (22,524 )    —      (31,939 )    —
Due to passage of time and other changes
   (9,890 )    —      (5,989 )    —
Amortization
   —      (2,378 )    —      (1,568 )








Carrying value, end of period
   $ 2,782    $ 4,079    $ 191,419    $ 5,776

~~(1)~~

~~Represents changes in fair value driven by changes to the inputs to the valuation model related to assumed prepayment speeds.~~

~~The following table presents the key assumptions used in calculating the fair value of the Company’s residential MSRs at the dates indicated:~~

   September 30, 2017 December 31, 2016
Expected weighted average life
   87 months 82 months
Constant prepayment speed
   9.89 % 8.70 %
Discount rate
   12.00 10.05
Primary mortgage rate to refinance
   4.00 4.11
Cost to service (per loan per year):

Current
   $70 $64
30-59 days or less delinquent
   220 214
60-89 days delinquent
   370 364
90-119 days delinquent
   470 464
120 days or more delinquent
   870 864

The increase in the constant prepayment speed was primarily attributable to an increase in the housing price index used by the Company’s third-party valuation specialist, suggesting that homebuyer demand has increased and newly created equity could lead to more refinancing.

~~In connection~~prospectus filed with the aforementioned sale of the Company’s MSR portfolio, the Company will temporarily continue to service the $20.5 billion of loans and, consequently, the total unpaid principal balance of loans serviced for others remained largely unchanged at $24.5 billion and $25.1 billion at September 30, 2017 and December 31, 2016, respectively.

SEC on November 4, 2002.

(2)

Callable from this date forward.

Note 9.8. Pension and Other Post-Retirement Benefits

The following table sets forth certain disclosures for the Company’s pension and post-retirement plans for the periods indicated:


	For the Three Months Ended September 30,												For the Three Months Ended June 30,
	2017						2016						2022					2021
(in thousands)	Pension Benefits			Post- Retirement Benefits			Pension Benefits			Post- Retirement Benefits
Components of net periodic (credit) expense:
																Post					Post
													Pension			Retirement		Pension			Retirement
(in millions)													Benefits			Benefits		Benefits			Benefits
Components of net periodic pension expense (credit):
Interest cost	$	1,404		$	144		$	1,470		$	160		$	1		$	—	$	1		$	—
Service cost		—			—			—			1
Expected return on plan assets		(4,073	)		—			(3,906	)		—			(4	)		—		(4	)		—
Amortization of prior-service costs		—			(62	)		—			(62	)
Amortization of net actuarial loss		2,053			68			2,262			81			1			—		2			—

Net periodic (credit) expense	$	(616	)	$	150		$	(174	)	$	180		$	(2	)	$	—	$	(1	)	$	—


	For the Nine Months Ended September 30,												For the Six Months Ended June 30,
	2017						2016						2022					2021
(in thousands)	Pension Benefits			Post- Retirement Benefits			Pension Benefits			Post- Retirement Benefits
Components of net periodic (credit) expense:
																Post					Post
													Pension			Retirement		Pension			Retirement
(in millions)													Benefits			Benefits		Benefits			Benefits
Components of net periodic pension expense (credit):
Interest cost	$	4,211		$	433		$	4,411		$	479		$	2		$	—	$	2		$	—
Service cost		—			—			—			3
Expected return on plan assets		(12,217	)		—			(11,720	)		—			(8	)		—		(8	)		—
Amortization of prior-service costs		—			(187	)		—			(187	)
Amortization of net actuarial loss		6,157			206			6,786			245			1			—		4			—

Net periodic (credit) expense	$	(1,849	)	$	452		$	(523	)	$	540		$	(5	)	$	—	$	(2	)	$	—

(1)

Amounts are included in G&A expense on the Consolidated Statements of Income and Comprehensive Income.

(2)

Post-retirement benefits balances round to zero.

The Company expects to contribute ~~$1.3~~$1 million to its post-retirement plan to pay premiums and claims for the fiscal year ending December 31, ~~2017.~~2022. The Company does ~~not~~0t expect to make any contributions to its pension plan in ~~2017.~~2022.

Note ~~10.~~9. Stock-Based Compensation

At ~~September~~June 30, ~~2017,~~2022, the Company had a total of ~~6,912,431~~5,305,407 shares available for grants as ~~options,~~ restricted stock, options, or other forms of related rights under the New York Community Bancorp, Inc. 2012 Stock Incentive Plan (the “2012 Stock Incentive Plan”), which was approved by the Company’s shareholders at its Annual Meeting on June 7, 2012.rights. The Company granted ~~2,941,249~~3,085,194 shares of restricted stock, ~~during the nine months ended September 30, 2017. The shares had~~with an average fair value of ~~$15.18~~$11.63 per share on the date of grant, ~~and a vesting period~~during the six months ended June 30, 2022. During the six months ended June 30, 2021, the Company granted 3,045,949 shares of ~~five years. The nine-month amount includes 122,500 shares that were granted in the third quarter~~restricted stock, with an average fair value of ~~$12.95~~$11.16 per ~~share on~~share.

The shares of restricted stock that were granted during the ~~date of grant.~~six months ended June 30, 2022 and 2021, vest over a one- or five year period. Compensation and benefits expense related to the restricted stock grants is recognized on a straight-line basis over the vesting period and totaled ~~$27.3~~$14 million and ~~$24.6~~$15 million ~~respectively, in~~for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021, including ~~$9.1~~$7 million and ~~$8.2~~$7 million ~~respectively, in~~for the three months ended ~~at those dates.~~June 30, 2022 and June 30, 2021.

The following table provides a summary of activity with regard to restricted stock awards in the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2022:


						For the Six Months Ended June 30, 2022
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Unvested at beginning of year		6,930,306		$	15.37		6,950,335		$	11.68
Granted		2,941,249			15.18		3,085,194			11.63
Vested		(2,291,234	)		15.02		(2,228,902	)		12.28
Canceled		(206,920	)		15.58		(370,205	)		11.48

Unvested at end of period		7,373,401			15.40

Unvested at end of year							7,436,422			11.49

As of ~~September~~June 30, ~~2017,~~2022, unrecognized compensation cost relating to unvested restricted stock totaled ~~$90.9~~$73 million. This amount will be recognized over a remaining weighted average period of ~~3.2~~3.4 years.

The following table provides a summary of activity with regard to Performance-Based Restricted Stock Units ("PSUs") in the six months ended June 30, 2022:


	Number of Shares			Performance Period	Expected Vesting Dates
Outstanding at beginning of year		834,612
Granted		473,211
Released		(176,090	)
Canceled		(152,556	)
Outstanding at end of period		979,177		January 1, 2021 - December 31, 2023	March 31, 2023 and 2024

PSUs are subject to adjustment or forfeiture, based upon the achievement by the Company of certain performance standards. Compensation and benefits expense related to PSUs is recognized using the fair value as of the date the units were approved, on a straight-line basis over the vesting period and totaled $1 million for the three and six months ended June 30, 2022 and June 30, 2021. As of June 30, 2022, unrecognized compensation cost relating to unvested restricted stock totaled $6 million. This amount will be recognized over a remaining weighted average period of 1.9 years. As of June 30, 2022, the Company believes it is probable that the performance conditions will be met.

The Company ~~had no stock options outstanding at September~~matches a portion of employee 401(k) plan contributions. Such expense totaled $1 million and $3 million for the three and six months ended June 30, ~~2017 or December 31, 2016.~~2022 and June 30, 2021.

Note ~~11.~~10. Fair Value Measurements

GAAP sets forth a definition of fair value, establishes a consistent framework for measuring fair value, and requires disclosure for each major asset and liability category measured at fair value on either a recurring ornon-recurring basis. GAAP also clarifies that fair value is an “exit” price, representing the amount that would be received when selling an asset, or paid when transferring a liability, in an orderly transaction between market participants. Fair value is thus a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•

Level 3 – Inputs to the valuation methodology are significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants use in pricing an asset or liability.

A financial instrument’s categorization within this valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following tables present assets and liabilities that were measured at fair value on a recurring basis ~~for the periods indicated,~~as of June 30, 2022 and December 31, 2021, and that were included in the Company’s Consolidated Statements of Condition at those dates:

   Fair Value Measurements at September 30, 2017
(in thousands)    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)    Netting
Adjustments⁽¹⁾ Total
Fair Value
Assets:

Mortgage-Related Securities Available for Sale:

GSE certificates
   $ —   $ 1,960,352 $ —      $ —   $ 1,960,352
GSE CMOs
   —   550,177 —      —   550,177




Total mortgage-related securities
   $ —   $ 2,510,529 $ —      $ —   $ 2,510,529




Other Securities Available for Sale:

U.S Treasury Obligations
   $ 199,875 $ —   $ —      $ —   $ 199,875
GSE debentures
   —   90,834 —      —   90,834
Corporate bonds
   —   86,137 —      —   86,137
Municipal bonds
   —   70,367 —      —   70,367
Capital trust notes
   —   40,767 —      —   40,767
Preferred stock
   15,339 —   —      —   15,339
Mutual funds and common stock
   —   17,178 —      —   17,178




Total other securities
   $ 215,214 $ 305,283 $ —      $ —   $ 520,497




Total securities available for sale
   $ 215,214 $ 2,815,812 $ —      $ —   $ 3,031,026




Other Assets:

Loans held for sale
   $ —   $ 104,938 $ —      $ —   $ 104,938
Mortgage servicing rights
   —   —   2,782    —   2,782
Interest rate lock commitments
   —   —   269    —   269
Derivative assets-other⁽²⁾
   157 836 —      (674 ) 319
Liabilities:

Derivative liabilities
   $ (144 ) $ (1,322 ) $ —      $ 1,248 $ (218 )


	Fair Value Measurements at June 30, 2022
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets:
Mortgage-related Debt Securities Available for Sale:
GSE certificates	$	—	$	1,050	$	—	$	1,050
GSE CMOs		—		1,416		—		1,416
Total mortgage-related debt securities	$	—	$	2,466	$	—	$	2,466
Other Debt Securities Available for Sale:
U. S. Treasury obligations	$	294	$	—	$	—	$	294
GSE debentures		—		1,502		—		1,502
Asset-backed securities		—		407		—		407
Municipal bonds		—		18		—		18
Corporate bonds		—		859		—		859
Foreign notes		—		25		—		25
Capital trust notes		—		93		—		93
Total other debt securities	$	294	$	2,904	$	—	$	3,198
Total debt securities available for sale	$	294	$	5,370	$	—	$	5,664
Equity securities:
Preferred stock	$	—	$	—	$	—	$	—
Mutual funds and common stock		—		14		—		14
Total equity securities	$	—	$	14	$	—	$	14
Total securities	$	294	$	5,384	$	—	$	5,678

~~(1)~~

~~Includes cash collateral received from, and paid to, counterparties.~~

~~(2)~~

~~Includes $144 thousand to purchase Treasury options.~~

   Fair Value Measurements at December 31, 2016
(in thousands)    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)    Netting
Adjustments⁽¹⁾ Total
Fair Value
Assets:

Mortgage-Related Securities Available for Sale:

GSE certificates
   $ —   $ 7,326 $ —      $ —   $ 7,326




Total mortgage-related securities
   $ —   $ 7,326 $ —      $ —   $ 7,326




Other Securities Available for Sale:

Municipal bonds
   $ —   $ 631 $ —      $ —   $ 631
Capital trust notes
   —   7,243 —      —   7,243
Preferred stock
   42,724 29,260 —      —   71,984
Mutual funds and common stock
   —   17,097 —      —   17,097




Total other securities
   $ 42,724 $ 54,231 $ —      $ —   $ 96,955




Total securities available for sale
   $ 42,724 $ 61,557 $ —      $ —   $ 104,281




Other Assets:

Loans held for sale
   $ —   $ 409,152 $ —      $ —   $ 409,152
Mortgage servicing rights
   —   —   228,099    —   228,099
Interest rate lock commitments
   —   —   982    —   982
Derivative assets-other⁽²⁾
   2,611 16,829 —      (17,861 ) 1,579
Liabilities:

Derivative liabilities
   $ (6,009 ) $ (17,719 ) $ —      $ 16,588 $ (7,140 )
27

~~(1)~~

~~Includes cash collateral received from, and paid to, counterparties.~~

~~(2)~~

~~Includes $1.9 million to purchase Treasury options.~~


	Fair Value Measurements at December 31, 2021
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets:
Mortgage-Related Debt Securities Available for Sale:
GSE certificates	$	—	$	1,107	$	—	$	1,107
GSE CMOs		—		1,683		—		1,683
Total mortgage-related debt securities	$	—	$	2,790	$	—	$	2,790
Other Debt Securities Available for Sale:
U.S. Treasury obligations	$	45	$	—	$	—	$	45
GSE debentures		—		1,480		—		1,480
Asset-backed securities		—		479		—		479
Municipal bonds		—		25		—		25
Corporate bonds		—		838		—		838
Foreign notes		—		26		—		26
Capital trust notes		—		97		—		97
Total other debt securities	$	45	$	2,945	$	—	$	2,990
Total debt securities available for sale	$	45	$	5,735	$	—	$	5,780
Equity securities:						—
Preferred stock	$	—	$	—	$	—	$	—
Mutual funds and common stock		—		16		—		16
Total equity securities	$	—	$	16	$	—	$	16
Total securities	$	45	$	5,751	$	—	$	5,796

The Company reviews and updates the fair value hierarchy classifications for its assets on a quarterly basis. Changes from one quarter to the next that are related to the observability of inputs for a fair value measurement may result in a reclassification from one hierarchy level to another.

A description of the methods and significant assumptions utilized in estimating the fair values of~~available-for-sale~~ securities follows:

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and exchange-traded ~~securities, and derivatives.~~securities.

If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, models incorporate transaction details such as maturity and cash flow assumptions. Securities valued in this manner would generally be classified within Level 2 of the valuation hierarchy, and primarily include such instruments as mortgage-related and corporate debt securities.

Periodically, the Company uses fair values supplied by independent pricing services to corroborate the fair values derived from the pricing models. In addition, the Company reviews the fair values supplied by independent pricing services, as well as their underlying pricing methodologies, for reasonableness. The Company challenges pricing service valuations that appear to be unusual or unexpected.

The Company carries loans held for sale at fair value. The fair value of loans held for sale is primarily based on quoted market prices for securities backed by similar types of loans. Changes in the fair value of these assets are largely driven by changes in interest rates subsequent to loan funding, and changes in the fair value of servicing associated with the mortgage loans held for sale. Loans held for sale are classified within Level 2 of the valuation hierarchy.

MSRs do not trade in an active open market with readily observable prices. The Company bases the fair value of its MSRs on the present value of estimated future net servicing income cash flows, utilizing a third-party valuation specialist. The specialist estimates future net servicing income cash flows with assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The Company periodically adjusts the underlying inputs and assumptions to reflect market conditions and assumptions that a market participant would consider in valuing the MSR asset. MSR fair value measurements use significant unobservable inputs and, accordingly, are classified within Level 3.

Exchange-traded derivatives that are valued using quoted prices are classified within Level 1 of the valuation hierarchy. The majority of the Company’s derivative positions are valued using internally developed models that use readily observable market parameters as their basis. These are parameters that are actively quoted and can be validated by external sources, including industry pricing services. Where the types of derivative products have been in existence for some time, the Company uses models that are widely accepted in the financial services industry. These models reflect the contractual terms of the derivatives, including the period to maturity, and market-based parameters such as interest rates, volatility, and the credit quality of the counterparty. Furthermore, many of these models do not contain a high level of subjectivity, as the methodologies used in the models do not require significant judgment, and inputs to the models are readily observable from actively quoted markets, as is the case for “plain vanilla” interest rate swaps and option contracts. Such instruments are generally classified within Level 2 of the valuation hierarchy. Derivatives that are valued based on models with significant unobservable market parameters, and that are normally traded less actively, have trade activity that is~~one-way,~~ ~~and/or are traded in less-developed markets, are classified within Level 3 of the valuation hierarchy.~~

The fair values of interest rate lock commitments (“IRLCs”) for residential mortgage loans that the Company intends to sell are based on internally developed models. The key model inputs primarily include the sum of the value of the forward commitment based on the loans’ expected settlement dates and the projected values of the MSRs, loan level price adjustment factors, and historical IRLC closing ratios. The closing ratio is computed by the Company’s mortgage banking operation and is periodically reviewed by management for reasonableness. Such derivatives are classified as Level 3.

While the Company believes its valuation methods are appropriate, and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair values of certain financial instruments could result in different estimates of fair values at a reporting date.

~~Fair Value Option~~

~~Loans Held for Sale~~

~~The Company has elected the fair value option for its loans held for sale. These loans held for sale consist ofone-to-four~~ family mortgage loans, none of which was 90 days or more past due at September 30, 2017. Management believes that the mortgage banking business operates on a short-term cycle. Therefore, in order to reflect the most relevant valuations for the key components of this business, and to reduce timing differences in amounts recognized in earnings, the Company has elected to record loans held for sale at fair value to match the recognition of IRLCs, MSRs, and derivatives, all of which are recorded at fair value in earnings. Fair value is based on independent quoted market prices of mortgage-backed securities comprised of loans with similar features to those of the Company’s loans held for sale, where available, and adjusted as necessary for such items as servicing value, guaranty fee premiums, and credit spread adjustments.

~~The following table reflects the difference between the fair value carrying amount of loans held for sale, for which the Company has elected the fair value option, and the unpaid principal balance:~~

   September 30, 2017    December 31, 2016
(in thousands)    Fair Value
Carrying
Amount    Aggregate
Unpaid
Principal    Fair Value
Carrying Amount
Less Aggregate
Unpaid Principal    Fair Value
Carrying
Amount    Aggregate
Unpaid
Principal    Fair Value
Carrying Amount
Less Aggregate
Unpaid Principal
Loans held for sale
   $ 104,938    $ 102,236    $ 2,702    $ 409,152    $ 408,928    $ 224

~~Gains and Losses Included in Income for Assets Where the Fair Value Option Has Been Elected~~

The assets accounted for under the fair value option are initially measured at fair value. Gains and losses from the initial measurement and subsequent changes in fair value are recognized in earnings. The following table presents the changes in fair value related to initial measurement, and the subsequent changes in fair value included in earnings, for loans held for sale and MSRs for the periods indicated:

   Gain (Loss) Included in
Mortgage Banking Income
from Changes in Fair Value⁽¹⁾
   For the Three Months
Ended September 30, For the Nine Months
Ended September 30,
(in thousands)    2017 2016⁽²⁾ 2017 2016⁽²⁾
Loans held for sale
   $ 464 $ (1,020 ) $ 1,059 $ 2,782
Mortgage servicing rights
   (9,743 ) (8,917 ) (20,092 ) (76,998 )


Total loss
   $ (9,279 ) $ (9,937 ) $ (19,033 ) $ (74,216 )

~~(1)~~

~~Does not include the effect of economic hedging activities, which is included in “Othernon-interest~~ ~~income.”~~

~~(2)~~

~~The presentation of the amounts for the three and nine months ended September 30, 2016 has been modified to conform to the presentation for the three and nine months ended September 30, 2017.~~

~~The Company has determined that there is no instrument-specific credit risk related to its loans held for sale, due to the short duration of such assets.~~

~~Changes in Level 3 Fair Value Measurements~~

The following tables present, for the nine months ended September 30, 2017 and 2016, a roll-forward of the balance sheet amounts (including changes in fair value) for financial instruments classified in Level 3 of the valuation hierarchy:

(in thousands)    Fair Value
January 1,
2017    Total Realized/Unrealized
Gains/(Losses) Recorded in    Issuances    Settlements Transfers
to/(from)
Level 3    Fair Value at
September 30,
2017    Change in
Unrealized Gains/
(Losses) Related to
Instruments Held at
September 30, 2017
      Income/
(Loss) Comprehensive
(Loss) Income
Mortgage servicing rights
   $ 228,099    $ (34,544 ) $ —      $ 18,054    $ (208,827 ) $ —      $ 2,782    $ (182 )
Interest rate lock commitments
   982    (713 ) —      —      —   —      269    269
(in thousands)    Fair Value
January 1,
2016    Total Realized/Unrealized
Gains/(Losses) Recorded in    Issuances    Settlements Transfers
to/(from)
Level 3    Fair Value at
September 30,
2016    Change in
Unrealized Gains/
(Losses) Related to
Instruments Held at
September 30, 2016
      Income/
(Loss) Comprehensive
(Loss) Income
Mortgage servicing rights
   $ 243,389    $ (83,155 ) $ —      $ 31,185    $ —   $ —      $ 191,419    $ (58,546 )
Interest rate lock commitments
   2,526    4,408 —      —      —   —      6,934    6,934

The Company’s policy is to recognize transfers in and out of Levels 1, 2, and 3 as of the end of the reporting period. There were no transfers in or out of Levels 1, 2, or 3 during the nine months ended September 30, 2017 or 2016.

~~For Level 3 assets and liabilities measured at fair value on a recurring basis as of September 30, 2017, the significant unobservable inputs used in the fair value measurements were as follows:~~

(dollars in thousands)
Fair Value at
September 30, 2017

Valuation Technique

Significant Unobservable Inputs
   Significant
Unobservable
Input Value
Mortgage servicing rights
   $2,782
Discounted Cash Flow

Weighted Average Constant Prepayment Rate⁽¹⁾
   9.89 %

Weighted Average Discount Rate
   12.00
Interest rate lock commitments
   269
Discounted Cash Flow

Weighted Average Closing Ratio
   69.88

~~(1)~~

~~Represents annualized loan repayment rate assumptions.~~

The significant unobservable inputs used in the fair value measurement of the Company’s MSRs are the weighted average constant prepayment rate and the weighted average discount rate. Significant increases or decreases in either of those inputs in isolation could result in significantly lower or higher fair value measurements. Although the constant prepayment rate and the discount rate are not directly interrelated, they generally move in opposite directions.

The significant unobservable input used in the fair value measurement of the Company’s IRLCs is the closing ratio, which represents the percentage of loans currently in an interest rate lock position that management estimates will ultimately close. Generally, the fair value of an IRLC is positive if the prevailing interest rate is lower than the IRLC rate, and the fair value of an IRLC is negative if the prevailing interest rate is higher than the IRLC rate. Therefore, an increase in the closing ratio (i.e., a higher percentage of loans estimated to close) will result in the fair value of the IRLC increasing if in a gain position, or decreasing if in a loss position. The closing ratio is largely dependent on the stage of processing that a loan is currently in, and the change in prevailing interest rates from the time of the interest rate lock.

Assets Measured at Fair Value on aNon-Recurring Basis

Certain assets are measured at fair value on anon-recurring basis. Such instruments are subject to fair value adjustments under certain circumstances (e.g., when there is evidence of impairment). The following tables present assets and liabilities that were

measured at fair value on anon-recurring basis as of ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021, and that were included in the Company’s Consolidated Statements of Condition at those dates:


	Fair Value Measurements at September 30, 2017 Using								Fair Value Measurements at June 30, 2022 Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain impaired loans⁽¹⁾	$	—	$	—	$	42,581	$	42,581
(in millions)									Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain loans (1)									$	—	$	—	$	20	$	20
Other assets⁽²⁾		—		—		1,493		1,493		—		—		37		37

Total	$	—	$	—	$	44,074	$	44,074	$	—	$	—	$	57	$	57

~~(1)~~

~~Represents the fair value of impaired loans, based on the value of the collateral.~~

~~(2)~~

~~Represents the fair value of OREO, based on the appraised value of the collateral subsequent to its initial classification as OREO.~~

(1)

Represents the fair value based on the value of the collateral.

(2)

Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity investments without readily determinable fair values. These equity investments are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.

   Fair Value Measurements at December 31, 2016 Using
(in thousands)    Quoted Prices in
Active Markets for
Identical Assets
(Level 1)    Significant Other
Observable Inputs
(Level 2)    Significant
Unobservable Inputs
(Level 3)    Total Fair
Value
Certain impaired loans⁽¹⁾
   $ —      $ —      $ 15,635    $ 15,635
Other assets⁽²⁾
   —      —      5,684    5,684








Total
   $ —      $ —      $ 21,319    $ 21,319


	Fair Value Measurements at December 31, 2021 Using
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain loans (1)	$	—	$	—	$	32	$	32
Other assets (2)		—		—		32		32
Total	$	—	$	—	$	64	$	64

~~(1)~~

~~Represents the fair value of impaired loans, based on the value of the collateral, primarily taxi medallion loans.~~

~~(2)~~

~~Represents the fair value of OREO, based on the appraised value of the collateral subsequent to its initial classification as OREO.~~

(1)

Represents the fair value based on the value of the collateral.

(2)

The fair values of collateral-dependent impaired loans are determined using various valuation techniques, including consideration of appraised values and other pertinent real estate and other market data.

Other Fair Value Disclosures

~~GAAP requires~~For the disclosure of fair value information about the Company’son- andoff-balance sheet financial ~~instruments. When~~instruments, when available, quoted market prices are used as the measure of fair value. In cases where quoted market prices are not available, fair values are based on present-value estimates or other valuation techniques. Such fair values are significantly affected by the assumptions used, the timing of future cash flows, and the discount rate.

Because assumptions are inherently subjective in nature, estimated fair values cannot be substantiated by comparison to independent market quotes. Furthermore, in many cases, the estimated fair values provided would not necessarily be realized in an immediate sale or settlement of such instruments.

The following tables summarize the carrying values, estimated fair values, and fair value measurement levels of financial instruments that were not carried at fair value on the Company’s Consolidated Statements of Condition at ~~the dates indicated:~~June 30, 2022 and December 31, 2021:


	September 30, 2017													June 30, 2022
					Fair Value Measurement Using															Fair Value Measurement Using
(in thousands)	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
(in millions)														Carrying Value			Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents	$	3,277,427	$	3,277,427	$	3,277,427		$	—		$	—
Cash, cash equivalents and due from banks													$		3,277	$		3,277	$		3,277		$		—		$	—
FHLB stock⁽¹⁾		579,474		579,474		—			579,474			—			635			635			—				635			—
Loans, net		37,452,219		37,671,152		—			—			37,671,152
Loans and leases, net															48,321			45,794			—				—			45,794
Financial Liabilities:
Deposits	$	28,893,197	$	28,869,413	$	20,090,624	⁽²⁾	$	8,778,789	⁽³⁾	$	—	$		41,244	$		41,091	$		33,154	(2)	$		7,937	(3)	$	—
Borrowed funds		12,363,602		12,277,697		—			12,277,697			—			14,307			14,235			—				14,235			—

~~(1)~~

~~Carrying value and estimated fair value are at cost.~~

~~(2)~~

~~Interest-bearing checking and money market accounts, savings accounts, andnon-interest-bearing~~ ~~accounts.~~

~~(3)~~

~~Certificates of deposit.~~

(1)

Carrying value and estimated fair value are at cost.

(2)

Interest-bearing checking and money market accounts, savings accounts, and non-interest-bearing accounts.

(3)

Certificates of deposit.

   December 31, 2016
      Fair Value Measurement Using
(in thousands)    Carrying
Value    Estimated Fair
Value    Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Financial Assets:

Cash and cash equivalents
   $ 557,850    $ 557,850    $ 557,850 $ —   $ —
Securities held to maturity
   3,712,776    3,813,959    200,220 3,613,739 —
FHLB stock⁽¹⁾
   590,934    590,934    —   590,934 —
Loans, net
   39,308,016    39,416,469    —   —   39,416,469
Financial Liabilities:

Deposits
   $ 28,887,903    $ 28,888,064    $ 21,310,733 ⁽²⁾ $ 7,577,331 ⁽³⁾ $ —
Borrowed funds
   13,673,379    13,633,943    —   13,633,943 —


	December 31, 2021
					Fair Value Measurement Using
(in millions)	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash, cash equivalents and due from banks	$	2,211	$	2,211	$	2,211		$	—		$	—
FHLB stock (1)		734		734		—			734			—
Loans and leases, net		45,539		44,748		—			—			44,748
Financial Liabilities:
Deposits	$	35,059	$	35,051	$	26,635	(2)	$	8,416	(3)	$	—
Borrowed funds		16,562		17,169		—			17,169			—

~~(1)~~

~~Carrying value and estimated fair value are at cost.~~

~~(2)~~

~~Interest-bearing checking and money market accounts, savings accounts, andnon-interest-bearing~~ ~~accounts.~~

~~(3)~~

~~Certificates of deposit.~~

(1)

Carrying value and estimated fair value are at cost.

(2)

Interest-bearing checking and money market accounts, savings accounts, and non-interest-bearing accounts.

(3)

Certificates of deposit.

The methods and significant assumptions used to estimate fair values for the Company’s financial instruments follow:

Cash, ~~and~~ Cash Equivalents and Due From Banks

Cash, ~~and~~ cash equivalents and due from banks include cash and due from banks and federal funds sold. The estimated fair values of cash, ~~and~~ cash equivalents and due from banks are assumed to equal their carrying values, as these financial instruments are either due on demand or have short-term maturities.

~~Securities~~

Securities

If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, pricing models also incorporate transaction details such as maturities and cash flow assumptions.

Federal Home Loan Bank Stock

Ownership in equity securities of the ~~FHLB~~FHLB-NY is generally restricted and there is no established liquid market for their resale. The carrying amount approximates the fair value.

Loans

The Company discloses the fair value of loans measured at amortized cost using an exit price notion. The Company determined the fair value on substantially all of its loans for disclosure purposes, on an individual loan portfolio is segregated into various components for valuation purposes in order to group loans based on their significant financial characteristics, such as loan type (mortgage or other) and payment status (performing or~~non-performing).~~ ~~The estimated fair values of mortgage and other loans are computed by discounting the anticipated cash flows from the respective portfolios.~~basis. The discount rates reflect current market rates for loans with similar terms to borrowers ofhaving similar credit ~~quality.~~quality on an exit price basis. The estimated fair values ofnon-performing mortgage and other loans are based on recent collateral appraisals.

~~The methods used to estimate the fair values of~~ For those loans are extremely sensitive to the assumptions and estimates used. While management has attempted to use assumptions and estimates that best reflect the Company’s loan portfolio and current market conditions,where a greater degree of subjectivity is inherent in these values than in those determined in active markets. Accordingly, readers are cautioned in using this information for purposes of evaluating the financial condition and/or value ofdiscounted cash flow technique was not considered reliable, the Company ~~in and of itself, or in comparison with that of any other company.~~

~~Mortgage Servicing Rights~~

~~MSRs do not trade in an active market with readily observable prices. Accordingly, the Company bases the fair value of its MSRs on~~used a valuation performed by a third-party valuation specialist. This specialist determines fair value based on the present value of estimated future net servicing income cash flows, and incorporates assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The specialist and the Company evaluate, and periodically adjust, as necessary, these underlying inputs and assumptions to reflect market conditions and changes in the assumptions that a market participant would consider in valuing MSRs.

~~Derivative Financial Instruments~~

~~For exchange-traded futures and exchange-traded options, fair value is based on observable~~ quoted market ~~prices in an active market. For forward commitments to buy and sell loans and mortgage-backed securities, fair value is based on observable market prices~~price for ~~similar loans and securities in an active market. The fair value of IRLCs forone-to-four~~ family mortgage loans that the Company intends to sell is based on internally developed models. The key model inputs primarily include the sum of the value of the forward commitment based on the loans’ expected settlement dates, the value of MSRs arrived at by an independent MSR broker, government agency price adjustment factors, and historical IRLC~~fall-out~~ ~~factors.~~each individual loan.

Deposits

The fair values of deposit liabilities with no stated maturity (i.e., interest-bearing checking and money market accounts, savings accounts, andnon-interest-bearing accounts) are equal to the carrying amounts payable on demand. The fair values of CDs represent contractual cash flows, discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities. These estimated fair values do not include the intangible value of core deposit (total deposits excluding CDs) relationships, which comprise a significant portion of the Company’s deposit base.

Borrowed Funds

The estimated fair value of borrowed funds is based either on bid quotations received from securities dealers or the discounted value of contractual cash flows with interest rates currently in effect for borrowed funds with similar maturities and structures.

Off-Balance Sheet Financial Instruments

The fair values of commitments to extend credit and unadvanced lines of credit are estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions, considering the remaining terms of the commitments and the creditworthiness of the potential borrowers. The estimated fair values of suchoff-balance sheet financial instruments were insignificant at ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016.~~2021.

Note 11. Leases

Lessor Arrangements

The Company is a lessor in the equipment finance business where it has executed direct financing leases (“lease finance receivables”). The Company produces lease finance receivables through a specialty finance subsidiary that participates in syndicated loans that are brought to them, and equipment loans and leases that are assigned to them, by a select group of nationally recognized sources, and are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide. Lease finance receivables are carried at the aggregate of lease payments receivable plus the estimated residual value of the leased assets and any initial direct costs incurred to originate these leases, less unearned income, which is accreted to interest income over the lease term using the interest method.

The standard leases are typically repayable on a level monthly basis with terms ranging from 24 to 120 months. At the end of the lease term, the lessee usually has the option to return the equipment, to renew the lease or purchase the equipment at the then fair market value (“FMV”) price. For leases with a FMV renewal/purchase option, the relevant residual value assumptions are based on the estimated value of the leased asset at the end of lease term, including evaluation of key factors, such as, the estimated remaining useful life of the leased asset, its historical secondary market value including history of the lessee executing the FMV option, overall credit evaluation and return provisions. The Company acquires the leased asset at fair market value and provides funding to the respective lessee at acquisition cost, less any volume or trade discounts, as applicable. Therefore, there is generally no selling profit or loss to recognize or defer at inception of a lease.

The residual value component of a lease financing receivable represents the estimated fair value of the leased equipment at the end of the lease term. In establishing residual value estimates, the Company may rely on industry data, historical experience, and independent appraisals and, where appropriate, information regarding product life cycle, product upgrades and competing products. Upon expiration of a lease, residual assets are remarketed, resulting in an extension of the lease by the lessee, a lease to a new customer or purchase of the residual asset by the lessee or another party. Impairment of residual values arises if the expected fair value is less than the carrying amount. The Company assesses its net investment in lease financing receivables (including residual values) for impairment on an annual basis with any impairment losses recognized in accordance with the impairment guidance for financial instruments. As such, net investment in lease financing receivables may be reduced by an allowance for credit losses with changes recognized as provision expense. On certain lease financings, the Company obtains residual value insurance from third parties to manage and reduce the risk associated with the residual value of the leased assets. At June 30, 2022 and December 31, 2021, the carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $40million and $61 million, respectively.
The Company uses the interest rate implicit in the lease to determine the present value of its lease financing receivables.
The components of lease income were as follows:
(in millions)

For the
Three
Months
Ended
June 30,
2022

For the
Six
Months
Ended
June 30,
2022

For the
Three
Months
Ended
June 30,
2021

For the
Six
Months
Ended
June 30,
2021

Interest income on lease financing (1)

$
12

$
24

$
14

$
28

(1)
Included in Interest Income – Loans and leases in the Consolidated Statements of Income and Comprehensive Income.
At June 30, 2022 and December 31, 2021, the carrying value of net investment in leases was $1.8 billion and $1.9 billion, respectively. The components of net investment in direct financing leases, including the carrying amount of the lease receivables, as well as the unguaranteed residual asset were as follows:
(in millions)

June 30,
2022

December 31,
2021

Net investment in the lease - lease payments receivable

$
1,777

$
1,790

Net investment in the lease - unguaranteed residual assets

64

75

Total lease payments

$
1,841

$
1,865

The following table presents the remaining maturity analysis of the undiscounted lease receivables as of June 30, 2022, as well as the reconciliation to the total amount of receivables recognized in the Consolidated Statements of Condition:
(in millions)

June 30,
2022

2022

$

6

2023

141

2024

220

2025

418

2026

388

Thereafter

668

Total lease payments

1,841

Plus: deferred origination costs

21

Less: unearned income

(85
)
Total lease finance receivables, net

$

1,777

Lessee Arrangements
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the Consolidated Statements of Condition.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement
32
date based on the present value of lease payments over the lease term. As most leases do not provide an implicit rate, the incremental borrowing rate (FHLB borrowing rate) is used in determining the present value of lease payments. The implicit rate is used when readily determinable. The operating lease ROU asset is measured at cost, which includes the initial measurement of the lease liability, prepaid rent and initial direct costs incurred by the Company, less incentives received. The lease terms include options to extend the lease when it is reasonably certain that we will exercise that option. For the vast majority of the Company’s leases, we are reasonably certain we will exercise our options to renew to the end of all renewal option periods. As such, substantially all of our future options to extend the leases have been included in the lease liability and ROU assets.
Variable costs such as the proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Amortization of the ROU assets was $16million and $10 million for the six months ended June 30, 2022 and June 30, 2021, respectively. Included in these amounts was $11 million and $5 million for the three months ended June 30, 2022 and June 30, 2021, respectively.
The Company has operating leases for corporate offices, branch locations, and certain equipment. The Company’s leases have remaining lease terms of one year to approximately 25 years, the vast majority of which include one or more options to extend the leases for up to five years resulting in lease terms up to 40 years.
The components of lease expense were as follows:
(in millions)

For the Three
Months Ended
June 30,
2022

For the Six
Months Ended
June 30,
2022

For the Three
Months Ended
June 30,
2021

For the Six
Months Ended
June 30,
2021

Operating lease cost

$
7

$
14

$
7

$
13

Sublease income

—

—

—

—

Total lease cost

$
7

$
14

$
7

$
13

Supplemental cash flow information related to the leases for the following periods:
(in millions)

For the Three
Months Ended
June 30,
2022

For the Six
Months Ended
June 30,
2022

For the Three
Months Ended
June 30,
2021

For the Six
Months Ended
June 30,
2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$
7

$
14

$
7

$
13

Supplemental balance sheet information related to the leases for the following periods:
(in millions, except lease term and discount rate)

June 30,
2022

December 31,
2021

Operating Leases:

Operating lease right-of-use assets

$
232

$
249

Operating lease liabilities

$
232

$
249

Weighted average remaining lease term

13 years

16 years

Weighted average discount rate%

3.00
%

3.05
%
(in millions)
Maturities of lease liabilities:

June 30,
2022

2022

$

14

2023

27

2024

26

2025

25

2026

24

Thereafter

171

Total lease payments

287

Less: imputed interest

(55
)
Total present value of lease liabilities

$

232

33

Note 12. Derivative ~~Financial Instruments~~and Hedging Activities

The Company’s derivative financial instruments consist of interest rate swaps. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposure to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and duration of its assets and liabilities and, from time to time, the use of derivative financial ~~forward~~instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and ~~futures contracts,~~uncertain cash amounts, the value of which are determined by interest rates.

Title VII of the DFA requires all standardized derivatives, including most interest rate swaps, ~~IRLCs,~~to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties are the Chicago Mercantile Exchange (“CME”) and ~~options. These derivatives relate to mortgage banking operations, residential MSRs, and other risk management activities, and seek to mitigate or reduce~~the London Clearing House (“LCH”). As of June 30, 2022, all of the Company’s $1 billion notional derivative contracts were cleared on the LCH. Daily variation margin payments on derivatives cleared through the LCH are accounted for as legal settlement. For derivatives cleared through LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative, which includes accrued interest; therefore, those interest rate and derivative contracts the Company clears through the LCH are reported at a fair value of approximately zero at June 30, 2022.

The Company’s exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to ~~losses from adverse changes in interest rates. These activities will vary in scope based on~~ the ~~level and volatility of interest rates, other changing market conditions, and the types of assets held.~~

~~In accordance with the applicable accounting guidance,~~counterparty to be zero. At June 30, 2022, the Company ~~takes into account the impact of collateral and master netting agreements that allow it to settle all derivative contracts held with a single counterparty on~~had a net ~~basis, and to offset the net derivative position with the related collateral when recognizing derivative assets and liabilities. As a result, the Company’s Statements~~positive exposure.

Fair Value of Financial Condition could reflect derivative contracts with negative fair values that are included in derivative assets, and contracts with positive fair values that are included in derivative liabilities.Hedges of Interest Rate Risk

The Company ~~held derivatives with a notional amount of $765.9 million at September 30, 2017. Changes~~is exposed to changes in the fair value of ~~these derivatives are reflected in current-period earnings. None~~certain of ~~these derivatives are designated as hedges for accounting purposes.~~

~~The Company uses various financial instruments, including derivatives, in connection with~~ its strategies to reduce pricing risk resulting from changes in interest rates. Derivative instruments may include IRLCs entered into with borrowers or correspondents/brokers to acquire agency-conforming fixed and adjustable rate residential mortgage loans that will be held for sale, as well as Treasury options and Eurodollar futures.

The Company enters into forward contracts to sell fixed rate mortgage-backed securities to protect against changes in the prices of agency-conforming fixed rate loans held for sale. Forward contracts are entered into with securities dealers in an amount related to the portion of IRLCs that is expected to close. The value of these forward sales contracts moves inversely with the value of the loans in responsefixed-rate assets due to changes in benchmark interest rates.

~~To manage the price risk associated with fixed-ratenon-conforming~~ mortgage loans, the Company generally enters into forward contracts on mortgage-backed securities or forward commitments to sell loans to approved investors. Short positions in Eurodollar futures contracts are used to manage price risk on adjustable rate mortgage loans held for sale.

The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Such derivatives were used to hedge the changes in fair value of certain of its ~~residential MSRs.~~ pools of prepayable fixed rate assets. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

The Company ~~also purchases put~~entered into an interest rate swap with a notional amount of $2.0 billion to hedge certain real estate loans. This swap expired in February 2022 and ~~call options~~was not renewed. For the six months ended June 30, 2022, the floating rate received related to ~~manage~~ the ~~risk~~net settlement of this interest rate swap was less than the fixed rate payments. As such, interest income from Loans and leases in the accompanying Consolidated Statements of Income and Comprehensive Income was decreased by $6 million for the six months ended June 30, 2022. For the three and six months ended June 30, 2021, the floating rate received related to the net settlement of this interest rate swap was less than the fixed rate payments. As such, interest income from Loans and leases in the accompanying Consolidated Statements of Income and Comprehensive Income was decreased by $12 million and $24 million for the three and six months ended June 30, 2021.

As of June 30, 2022, and December 31, 2021 the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges:


(in millions)		June 30, 2022						December 31, 2021
Line Item in the Consolidated Statements of Condition in which the Hedge Item is Included		Carrying Amount of the Hedged Assets			Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets			Carrying Amount of the Hedged Assets			Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets
Total loans and leases, net (1)	$		-	$		-	$		2,025	$		25

(1)

These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. Since the swap expired in February 2022,

at June 30, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships; the cumulative basis adjustments associated with ~~variations in~~these hedging relationships; and the amount of ~~IRLCs that ultimately close.~~

~~The following table sets forth information regarding~~ the ~~Company’s derivative financial instruments at September 30, 2017:~~

designated hedged items were 0.

(in thousands)    Notional
Amount    Unrealized⁽¹⁾
      Gain    Loss
Treasury options
   $ 20,000    $ —      $ 144
Eurodollar futures
   20,000    1    —
Forward commitments to sell loans/mortgage-backed securities
   365,000    836    461
Forward commitments to buy loans/mortgage-backed securities
   305,000    —      861
Interest rate lock commitments
   55,886    269    —






Total derivatives
   $ 765,886    $ 1,106    $ 1,466

~~(1)~~

~~Derivatives in a net gain position are recorded as “Other assets” and derivatives in a net loss position are recorded as “Other liabilities” in the Consolidated Statements of Condition.~~

In addition, the Company mitigates a portion of the risk associated with changes in the value of its residential MSRs. The general strategy for mitigating this risk is to purchase derivative instruments, the value of which changes in the opposite direction of interest rates. This action partially offsets changes in the value of its servicing assets, which tends to move in the same direction as interest rates. Accordingly, the Company purchases Eurodollar futures and call options on Treasury securities, and enters into forward contracts to purchase mortgage-backed securities.

The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the periods ~~indicated:~~indicated.

   Gain (Loss) Included in
Mortgage Banking Income
   For the Three Months
Ended September 30,    For the Nine Months
Ended September 30,
(in thousands)    2017    2016    2017    2016
Treasury options
   $ (1,147 )    $ (6,245 )    $ (4,397 )    $ 3,619
Treasury and Eurodollar futures
   (90 )    17    (163 )    (38 )
Interest rate swaps
   (2,449 )    (1,751 )    (202 )    2,427
Forward commitments to buy/sell loans/mortgage-backed securities
   (442 )    1,768    (3,522 )    48








Total (loss)/gain
   $ (4,128 )    $ (6,211 )    $ (8,284 )    $ 6,056


(in millions)	For the Three Months Ended June 30, 2022		For the Six Months Ended June 30, 2022			For the Three Months Ended June 30, 2021			For the Six Months Ended June 30, 2021
Derivative – interest rate swap:
Interest income	$	0	$	25		$	(2	)	$	24
Hedged item – loans:
Interest income	$	0	$	(25	)	$	2		$	(24	)

Cash Flow Hedges of Interest Rate Risk

The ~~Company has~~Company’s objectives in ~~place an enforceable master netting arrangement with every counterparty. All master netting arrangements include rights~~using interest rate derivatives are to ~~offset associated with~~add stability to interest expense and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the ~~Company’s recognized derivative assets, derivative liabilities, and the cash collateral received and pledged. Accordingly,~~receipt of amounts subject to variability caused by changes in interest rates from a counterparty in exchange for the Company ~~where appropriate, offsets all derivative asset~~making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Changes in the fair value of derivatives designated and ~~liability positions~~that qualify as cash flow hedges are initially recorded in other comprehensive income and are subsequently reclassified into earnings in the period that the hedged transaction affects earnings.

Interest rate swaps with ~~the~~notional amounts totaling $1 billion and $2.3 billion as of June 30, 2022 and December 31, 2021, respectively, were designated as cash ~~collateral received and pledged.~~flow hedges of certain FHLB borrowings.

The following ~~tables present~~table summarizes information about the interest rate swaps designated as cash flow hedges at June 30, 2022 and December 31, 2021:


(dollars in millions)	June 30, 2022			December 31, 2021
Notional amounts	$	1,000		$	2,250
Cash collateral received (posted)		20			(12	)
Weighted average pay rates		1.05	%		1.27	%
Weighted average receive rates		1.57	%		0.18	%
Weighted average maturity	1.1 years			0.9 years

The following table presents the effect of the ~~master netting arrangements~~Company's cash flow derivative instruments on AOCL for the ~~presentation of the derivative assets~~six months ended June 30, 2022 and 2021:


(in millions)	For the Six Months Ended June 30, 2022		For the Six Months Ended June 30, 2021
Amount of (loss) gain recognized in AOCL	$	25	$	4
Amount of reclassified from AOCL to interest expense		7		11

Gains (losses) included in the Consolidated Statements of ~~Condition~~Income related to interest rate derivatives designated as ofcash flow hedges during the ~~dates indicated:~~

   September 30, 2017
(in thousands)    Gross Amount
of Recognized
Assets⁽¹⁾    Gross Amount
Offset in the
Statements of
Condition    Net Amount of
Assets Presented
in the
Statements of
Condition    Gross Amounts Not
Offset in the
Consolidated
Statements of Condition    Net
Amount
            Financial
Instruments    Cash
Collateral
Received
Derivatives
   $ 1,262    $ 674    $ 588    $ —      $ —      $ 588

~~(1)~~

~~Includes $144 thousand to purchase Treasury options.~~

   December 31, 2016
(in thousands)    Gross Amount
of Recognized
Assets⁽¹⁾    Gross Amount
Offset in the
Statements of
Condition    Net Amount of
Assets Presented
in the
Statements of
Condition    Gross Amounts Not
Offset in the
Consolidated
Statements of Condition    Net
Amount
            Financial
Instruments    Cash
Collateral
Received
Derivatives
   $ 20,422    $ 17,861    $ 2,561    $ —      $ —      $ 2,561

~~(1)~~

~~Includes $1.9 million to purchase Treasury options.~~

~~The following tables present the effect the master netting arrangements had on the presentation of the derivative liabilities~~six months ended June 30, 2022 was $7 million. Amounts reported in ~~the Consolidated Statements of Condition~~AOCL related to derivatives will be reclassified to interest expense as ~~of the dates indicated:~~

   September 30, 2017
(in thousands)    Gross Amount
of Recognized
Liabilities    Gross Amount
Offset in the
Statements of
Condition    Net Amount of
Liabilities
Presented in the
Statements of
Condition    Gross Amounts Not
Offset in the
Consolidated
Statements of Condition    Net
Amount
            Financial
Instruments    Cash
Collateral
Pledged
Derivatives
   $ 1,466    $ 1,248    $ 218    $ —      $ —      $ 218

   December 31, 2016
(in thousands)    Gross Amount
of Recognized
Liabilities    Gross Amount
Offset in the
Statements of
Condition    Net Amount of
Liabilities
Presented in the
Statements of
Condition    Gross Amounts Not
Offset in the
Consolidated
Statements of Condition    Net
Amount
            Financial
Instruments    Cash
Collateral
Pledged
Derivatives
   $ 23,728    $ 16,588    $ 7,140    $ —      $ —      $ 7,140

~~Note 13. Segment Reporting~~

~~The Company’s operations~~interest payments are ~~divided into two reportable business segments: Banking Operations and Residential Mortgage Banking. These operating segments have been identified based~~made on the Company’s ~~organizational structure. The segments require unique technology and marketing strategies, and offer different products and services. While~~variable-rate borrowings. During the next twelve months, the Company ~~is managed as~~estimates that an ~~integrated organization, individual executive managers are held accountable for~~additional $5 million will be reclassified to interest expense.

Note 13. Pending Acquisition

Extension of Merger Agreement with Flagstar Bancorp, Inc.

On April 26, 2021, the ~~operations of these business segments.~~

~~The~~ Company ~~measures and presents information for internal reporting purposes~~announced that it had entered into a definitive merger agreement (the "Merger Agreement") under which we would acquire Flagstar Bancorp, Inc. ("Flagstar") in a ~~variety of ways. The internal reporting system presently used by management in the planning and measurement of operating activities, and~~100% stock transaction initially valued at $2.6 billion (the "Merger"). On April 27, 2022, both sides agreed to ~~which most managers are held accountable, is based on organizational structure.~~

The management accounting process uses various estimates and allocation methodologies to measure the performance of the operating segments. To determine financial performance for each segment, the Company allocates capital, funding charges and credits, certain~~non-interest~~ expenses, and income tax provisions to each segment, as applicable. Allocation methodologies are subject to periodic adjustment as the internal management accounting system is revised and/or as business or product lines within the segments change. In addition, because the development and application of these methodologies is a dynamic process, the financial results presented may be periodically revised.

The Company seeks to maximize shareholder value by, among other means, optimizing the return on stockholders’ equity and managing risk. Capital is assigned to each segment, the combination of which is equivalent to the Company’s consolidated total, on an economic basis, using management’s assessment of the inherent risks associated with the respective segments.

The Company allocates expenses to the reportable segments based on various factors, including the volume and number of loans produced and the number of full-time equivalent employees. Income taxes are allocated to the various segments based on taxable income and statutory rates applicable to the segment.

~~Banking Operations Segment~~

~~The Banking Operations segment serves consumers and businesses by offering and servicing a variety of loan and deposit products and other financial services.~~

~~Residential Mortgage Banking Segment~~

~~The Residential Mortgage Banking segment originated, aggregated, sold, and servicedone-to-four~~ ~~family mortgage loans. Mortgage loan products consist primarily of agency-conforming, fixed and adjustable rate loans and, to a lesser extent, jumbo loans, for the purpose of purchasing or refinancingone-to-four~~ ~~family homes. The Residential Mortgage Banking segment earns interest on loans held in the warehouse andnon-interest~~ ~~income from the origination and servicing of loans. It also recognizes gains or losses on the sale of such loans.~~

~~The following tables provide a summary of the Company’s segment results for the periods indicated on an internally managed accounting basis:~~

   For the Three Months Ended September 30, 2017
(in thousands)    Banking
Operations    Residential
Mortgage
Banking    Total Company
Net interest income
   $ 273,265    $ 3,078    $ 276,343
Provision for loan losses
   44,585    —      44,585
Non-Interest Income:

Third party⁽¹⁾
   99,596    1,973    101,569
Gain on sale of mortgage banking operations
   —      7,359    7,359
Inter-segment
   (2,411 )    2,411    —






Totalnon-interest income
   97,185    11,743    108,928






Non-interest expense⁽²⁾
   146,869    15,365    162,234






Income (loss) before income tax expense
   178,996    (544 )    178,452
Income tax expense (benefit)
   68,200    (216 )    67,984






Net income (loss)
   $ 110,796    $ (328 )    $ 110,468






Identifiable segment assets(period-end)
   $ 48,457,891    $ —      $ 48,457,891

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

   For the Three Months Ended September 30, 2016
(in thousands)    Banking
Operations    Residential
Mortgage
Banking    Total Company
Net interest income
   $ 314,081    $ 4,342    $ 318,423
Recovery of loan losses
   (55 )    —      (55 )
Non-Interest Income:

Third party⁽¹⁾
   27,131    13,464    40,595
Inter-segment
   (4,863 )    4,863    —






Totalnon-interest income
   22,268    18,327    40,595






Non-interest expense⁽²⁾
   144,504    17,181    161,685






Income before income tax expense
   191,900    5,488    197,388
Income tax expense
   69,905    2,184    72,089






Net income
   $ 121,995    $ 3,304    $ 125,299






Identifiable segment assets(period-end)
   $ 48,478,288    $ 984,332    $ 49,462,620

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

~~The following tables provide a summary of the Company’s segment results for the periods indicated on an internally managed accounting basis:~~

   For the Nine Months Ended September 30, 2017
(in thousands)    Banking
Operations    Residential
Mortgage
Banking    Total Company
Net interest income
   $ 850,486    $ 8,543    $ 859,029
Provision for loan losses
   34,316    —      34,316
Non-Interest Income:

Third party⁽¹⁾
   163,221    20,957    184,178
Gain on sale of mortgage banking operations
   —      7,359    7,359
Inter-segment
   (10,222 )    10,222    —






Totalnon-interest income
   152,999    38,538    191,537






Non-interest expense⁽²⁾
   445,910    47,032    492,942






Income before income tax expense
   523,259    49    523,308
Income tax expense
   193,608    20    193,628






Net income
   $ 329,651    $ 29    $ 329,680






Identifiable segment assets(period-end)
   $ 48,457,891    $ —      $ 48,457,891

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

   For the Nine Months Ended September 30, 2016
(in thousands)    Banking
Operations    Residential
Mortgage
Banking    Total Company
Net interest income
   $ 960,661    $ 11,201    $ 971,862
Provision for loan losses
   664    —      664
Non-Interest Income:

Third party⁽¹⁾
   87,616    25,582    113,198
Inter-segment
   (13,292 )    13,292    —






Totalnon-interest income
   74,324    38,874    113,198






Non-interest expense⁽²⁾
   430,706    50,338    481,044






Income (loss) before income tax expense
   603,615    (263 )    603,352
Income tax expense (benefit)
   221,817    (133 )    221,684






Net income (loss)
   $ 381,798    $ (130 )    $ 381,668






Identifiable segment assets(period-end)
   $ 48,478,288    $ 984,332    $ 49,462,620

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

~~Note 14. Impact of Recent Accounting Pronouncements, Not Yet Adopted~~

~~In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2017-08,~~ ~~“Receivables~~- ~~Nonrefundable Fees and Other Costs (Subtopic310-20):~~ ~~Premium Amortization on Purchased Callable Debt Securities” (“ASUNo. 2017-08”).~~ ~~ASUNo. 2017-08~~ ~~shortens the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The Company plans to adopt ASUNo. 2017-08~~ ~~effective January 1, 2019 and the adoption is not expected to have a material effect on the Company’s Consolidated Statements of Condition, results of operations, or cash flows.~~

~~In January 2017, the FASB issued ASUNo. 2017-04,~~ ~~“Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASUNo. 2017-04~~ eliminates the second step of the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity will recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill recorded. ASU~~No. 2017-04~~ ~~does not~~ amend the ~~optional qualitative assessment of goodwill impairment. The Company plans to adopt ASUNo. 2017-04~~ ~~beginning January 1, 2020 and its adoption is not expected to have a material effect on~~agreement (the "Amendment"). Under the ~~Company’s Consolidated Statements of Condition, results of operations, or cash flows.~~

~~In August 2016, the FASB issued ASUNo. 2016-15,~~ ~~“Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASUNo. 2016-15~~ ~~addresses the following cash flow issues: debt prepayment or debt extinguishment costs; settlement ofzero-coupon~~ ~~debt instruments or other debt instruments with coupon interest rates that are~~

insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The Company plans to adopt ASU~~No. 2016-15~~ ~~beginning January 1, 2018 and its adoption is not expected to have a material effect on the Company’s Consolidated Statements of Condition or results of operations.~~

~~In June 2016, the FASB issued ASUNo. 2016-13,~~ ~~“Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASUNo. 2016-13~~ ~~amends guidance on reporting credit losses for assets held on an amortized cost basis andavailable-for-sale~~ ~~debt securities. For assets held at amortized cost, ASUNo. 2016-13~~ eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For~~available-for-sale~~ ~~debt securities, credit losses should be measured in a manner similar to current GAAP, however ASUNo. 2016-13~~ ~~will require that credit losses be presented as an allowance rather than as a write-down. The amendments affect loans, debt securities, trade receivables, net investments in leases,off-balance~~ ~~sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company plans to adopt ASUNo. 2016-13~~ effective January 1, 2020, using the required modified retrospective approach, which includes presenting the cumulative effect of initial application along with supplementary disclosures. The Company is evaluating ASU~~No. 2016-13,~~ ~~initiating implementation efforts across~~Amendment, the Company and ~~planning for loss modeling requirements consistent~~Flagstar have agreed to extend the merger agreement termination date to October 31, 2022. In connection with ~~lifetime expected loss estimates. The adoption~~the extension, both parties amended the merger agreement to provide that the combined company's ongoing banking operations will seek to operate under a national bank charter. Under the Amendment, the only bank regulatory approvals required to consummate the merger are the OCC and the FRB.

New York State Department of ~~ASUNo. 2016-13~~ ~~could have~~Financial Services Approves Flagstar Bancorp, Inc. Merger

On April 27, 2022, the NYSDFS notified the Company that it had approved its pending merger with Flagstar Bancorp, Inc. Notwithstanding this approval, both parties announced that the combined organization will seek to operate under a ~~material effect on~~national bank charter.

Note 14. Legal Proceedings

Following the ~~Company’s Consolidated Statements of Condition and results of operations. The extent~~announcement of the ~~impact upon adoption will likely depend~~Merger Agreement, the first of four lawsuits was filed on June 23, 2021 in United States Federal District Courts by alleged stockholders of NYCB against NYCB and the ~~characteristics~~members of its board of directors challenging the accuracy or completeness of the ~~Company’s loan portfolio and economic conditions at that date, as well as forecasted conditions thereafter.~~

~~In February 2016, the FASB issued ASUNo. 2016-02,~~ ~~“Leases (Topic 842).” ASUNo. 2016-02~~ ~~will require entities that lease assets to recognize as assets and liabilities on the balance sheet the respective rights and obligations created by those leases. ASUNo. 2016-02~~ ~~also will require~~ disclosures ~~that include qualitative and quantitative requirements, providing additional information about the amounts recorded~~contained in the ~~financial statements. The Company plans to adopt ASUNo. 2016-02~~ effective January 1, 2019 using the required modified retrospective approach, which includes presenting the cumulative effect of initial application along with supplementary disclosures. As a lessor and lessee, we do not anticipate the classification of our leases to change, but we expect to recognize substantially all of our leases for which we are the lessee as a lease liability and corresponding~~right-of-use~~ ~~asset~~Form S-4 filed on our Consolidated Statements of Condition. The Company has assembled a project management team and is presently evaluating all of its leases, as well as contracts that may contain embedded leases, for complianceJune 25, 2021 by NYCB with the ~~new lease accounting rules.~~

~~In January 2016, the FASB issued ASUNo. 2016-01,~~ ~~“Financial Instruments—Overall (Subtopic825-10):~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities.” ASUNo. 2016-01~~ ~~amends guidance on classification and measurement of financial instruments, including revisions in accounting related~~SEC relating to the ~~classification~~proposed Merger. Four additional lawsuits were filed by alleged Flagstar stockholders in state and ~~measurement~~federal courts against Flagstar and its board of ~~investments~~directors (and, in ~~equity securities~~one instance, NYCB and ~~presentation of certain fair value changes for financial liabilities when~~615 Corp.) challenging the ~~fair value option is elected. ASU2016-01~~ ~~also amends certain disclosure requirements associated~~proposed Merger or Flagstar’s disclosures relating to the Merger, and those four lawsuits have since been resolved and dismissed. The complaints in the actions against NYCB allege, among other things, that the defendants caused a materially incomplete and misleading Form S-4 relating to the proposed Merger to be filed with the ~~fair value~~SEC in violation of ~~financial instruments. The company will adopt ASUNo. 2016-01~~ ~~on January 1, 2018,~~Section 14(a) and ~~its adoption is not expected to~~Section 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 14a-9 promulgated thereunder. Two of the lawsuits against NYCB have ~~a material effect on~~been voluntarily dismissed, without prejudice. In the ~~Company’s Consolidated Statements~~two remaining actions, none of ~~Condition, results of operations, or cash flows.~~the NYCB defendants has been served with the complaint, and NYCB believes that these claims are without merit.

~~In May 2014, the FASB issued ASUNo. 2014-09,~~ “Revenue from Contracts with Customers,” which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company will adopt ASU~~No. 2014-09~~ ~~effective January 1, 2018 using the modified retrospective approach, which includes presenting the cumulative effect of initial application along with supplementary disclosures. ASUNo. 2014-09~~ does not apply to the vast majority of our revenue streams, (i.e. interest income) and therefore are not in scope. The remaining revenue streams that are in scope are de minimis and will not have a material impact on the Company’s Consolidated Statements of Condition, results of operations, or cash flows.

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

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

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING LANGUAGE

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:

•

general economic conditions, including higher inflation and its impacts, 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~~penalty income, and other future cash flows, or the market value of our assets, including our investment securities;

•

any uncertainty relating to the LIBOR transition process;

•

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;~~concentrations;

~~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 or corporate restructurings we may ~~propose;~~propose, including timely obtaining regulatory approvals for our pending acquisition of Flagstar Bancorp, Inc.;

•

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;~~frames, including the pending acquisition of Flagstar Bancorp, Inc.;

•

potential exposure to unknown or contingent liabilities of companies we have acquired, may acquire, or target for ~~acquisition;~~acquisition, including the pending acquisition of Flagstar Bancorp, Inc.;

~~failure~~•

the success of our previously announced investment in, and partnership with, Figure Technologies, Inc., a FinTech company focusing on payment and lending via blockchain technology;

•

the ability to ~~obtain applicable~~invest effectively in new information technology systems and platforms;

•

changes in future ACL requirements under relevant accounting and regulatory ~~approvals for the payment of future dividends;~~requirements;

•

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 (the New York Housing Stability and Tenant Protection Act of 2019), 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, orand 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 to federal, state, and local income tax laws;

•

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

•

increases in our FDIC insurance premium;

•

legislative and regulatory initiatives related to climate change;

•

the potential impact to the Company from climate change, including higher regulatory compliance, increased expenses, operational changes, and reputational risks;

•

unforeseen or catastrophic events including natural disasters, war, terrorist activities, and the emergence of a pandemic;

•

the impacts related to or ~~terrorist activities;~~resulting from Russia's military action in Ukraine, including the broader impacts to financial markets and the global macroeconomic and geopolitical environment;

•

the effects of COVID-19, which includes, but are not limited to, the length of time that the pandemic continues, the effectiveness and acceptance of the COVID-19 vaccination program, the potential imposition of further restrictions on business operations and/or travel or movement in the future, the remedial actions and stimulus measures adopted by federal, state, and local governments, the health of our employees and the inability of employees to work due to illness, quarantine, or government mandates, the business continuity plans of our customers and our vendors, the increased likelihood of cybersecurity risk, data breaches, or fraud due to employees working from home, the ability of our borrowers to continue to repay their loan obligations, the lack of property transactions and asset sales, potential impact on collateral values, and the effect of the pandemic on the general economy and businesses of our borrowers; 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, on an ongoing basis, we ~~routinely~~ evaluate opportunities to expand through mergers and acquisitions and ~~conduct~~opportunities for strategic combinations with other banking organizations. Our evaluation of such opportunities involves discussions with other parties, due diligence, ~~activities in connection with such opportunities.~~and negotiations. As a result, ~~acquisition discussions and, in some cases, negotiations,~~we may ~~take place~~decide to enter into definitive arrangements regarding such opportunities at any ~~time,~~time.

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

•

the ability to successfully integrate branches and operations and to implement appropriate internal controls and regulatory functions relating to such activities;

•

the ability to limit the outflow of deposits, and to successfully retain and manage any loans;

•

the ability to attract new deposits, and to generate new interest-earning assets, in geographic areas that have not been previously served;

•

the success in deploying any liquidity arising from a transaction into assets bearing sufficiently high yields without incurring unacceptable credit or interest rate risk;

•

the ability to obtain cost savings and control incremental non-interest expense;

•

the ability to retain and attract appropriate personnel;

•

the ability to generate acceptable levels of net interest income and non-interest income, including fee income, from acquired operations;

•

the diversion of management’s attention from existing operations;

•

the ability to address an increase in working capital requirements; and

•

limitations on the ability to successfully reposition our ~~debt or equity securities may occur.~~

post-merger balance sheet when deemed appropriate.

See ~~Part II, Item 1A, “Risk Factors,” in this report and~~ Part I, Item 1A, ~~“Risk~~Risk Factors,” in our Form10-K for the year ended December 31, ~~2016~~2021 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”),~~GAAP, tangible common stockholders’ equity, tangible assets, and tangible book value per common share are not. It is management’s belief that thesenon-GAAP measures should be disclosed in this report and others we issue for the following reasons:

Tangible common stockholders’ equity 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.

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 thesenon-GAAP measures may differ from that of other companies reportingnon-GAAP measures with similar names.

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


	At or for the									At or for the
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in millions)	2022			2022			2021			2022			2021
Total Stockholders’ Equity	$	6,824		$	6,909		$	6,916		$	6,824		$	6,916
Less: Goodwill		(2,426	)		(2,426	)		(2,426	)		(2,426	)		(2,426	)
Preferred stock		(503	)		(503	)		(503	)		(503	)		(503	)
Tangible common stockholders’ equity	$	3,895		$	3,980		$	3,987		$	3,895		$	3,987

Total Assets	$	63,093		$	61,005		$	57,469		$	63,093		$	57,469
Less: Goodwill		(2,426	)		(2,426	)		(2,426	)		(2,426	)		(2,426	)
Tangible Assets	$	60,667		$	58,579		$	55,043		$	60,667		$	55,043

Average common stockholders’ equity	$	6,398		$	6,543		$	6,368		$	6,470		$	6,369
Less: Average goodwill		(2,426	)		(2,426	)		(2,426	)		(2,426	)		(2,426	)
Average tangible common stockholders’ equity	$	3,972		$	4,117		$	3,942		$	4,044		$	3,943

Average Assets	$	61,988		$	59,894		$	58,114		$	60,946		$	57,215
Less: Average goodwill		(2,426	)		(2,426	)		(2,426	)		(2,426	)		(2,426	)
Average tangible assets	$	59,562		$	57,468		$	55,688		$	58,520		$	54,789

GAAP MEASURES:
Return on average assets (1)		1.10	%		1.04	%		1.04	%		1.07	%		1.04	%
Return on average common stockholders' equity (2)		10.18			8.98			9.00			9.58			8.81
Book value per common share	$	13.56		$	13.72		$	13.79		$	13.56		$	13.79
Common stockholders’ equity to total assets		10.02			10.50			11.16			10.02			11.16
NON-GAAP MEASURES:
Return on average tangible assets (1)		1.17	%		1.11	%		1.09	%		1.14	%		1.08	%
Return on average tangible common stockholders’ equity (2)		16.73			14.76			14.54			15.73			14.23
Tangible book value per common share	$	8.35		$	8.52		$	8.57		$	8.35		$	8.57
Tangible common stockholders’ equity to tangible assets		6.42			6.79			7.24			6.42			7.24

(1)

To calculate return on average assets for a period, we divide net income generated during that period by average assets recorded during that period. To calculate return on average tangible assets for a period, we divide net income by average tangible assets recorded during that period.

(2)

To calculate return on average common stockholders’ equity for a period, we divide net income available to common shareholders generated during that period by average common stockholders’ equity recorded during that period. To calculate return on average tangible common stockholders’ equity for a period, we divide net income available to common shareholders generated during that period by average tangible common stockholders’ equity recorded during that period.

(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~~a New York ~~New Jersey, Ohio, Florida, and Arizona; and New York Commercial Bank (the “Commercial Bank”), with 30 branches~~State-chartered savings bank, headquartered in ~~Metro~~Hicksville, 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~~The Bank ~~and the Commercial Bank are~~is subject to regulation by the ~~Federal Deposit Insurance Corporation (the “FDIC”),~~NYSDFS, the ~~Consumer Financial Protection Bureau,~~FDIC, and the ~~New York State Department of Financial Services.~~CFPB. In addition, the holding company is subject to regulation by the ~~Board of Governors of~~FRB, the ~~Federal Reserve System (the “FRB”), the U.S. Securities~~SEC, and ~~Exchange Commission (the “SEC”), and~~to the requirements of the ~~New York Stock Exchange,~~NYSE, where shares of our common stock ~~are traded~~trade under the symbol “NYCB” and shares of our preferred stock trade under the symbol “NYCB ~~PR A.”~~PA”.

AsReflecting our growth through a ~~publicly traded company, our mission is to provide our shareholders~~series of acquisitions, the Company currently operates 237 branch locations through eight local divisions, each with a ~~solid return~~history of service and strength. In New York, we operate as Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt Savings Bank, and Atlantic Bank; in New Jersey as Garden State Community Bank; in Ohio as the Ohio Savings Bank; and as AmTrust Bank in Arizona and Florida.

Second Quarter 2022 Overview

At June 30, 2022, total assets were $63.1 billion, up $3.6 billion or 12% annualized compared to December 31, 2021, and up $2.1 billion or 14% annualized compared to March 31, 2022. Both the year-to-date and linked-quarter growth was driven by significant loan and deposit growth, offset partially by a decline in wholesale borrowings.

Total loans held for investment increased $2.8 billion or 12% annualized compared to December 31, 2021 and were up $1.8 billion or 15% annualized on ~~their investment~~a linked-quarter basis to $48.5 billion. This was driven by ~~producing~~continued strong growth in the Company's core multi-family loan portfolio and a significant rebound in growth in the specialty finance loan portfolio.

On the liability side, total deposits rose $6.2 billion or 35% annualized compared to December 31, 2021 and increased $3.3 billion during the second quarter, to $41.2 billion, also up 35% annualized on a linked-quarter basis. Once again, the deposit growth was driven by our BaaS business and loan-related deposits.

Given the strong ~~financial performance, maintaining~~deposit growth during the second quarter, wholesale borrowings declined to $13.7 billion at June 30, 2022, down $2.3 billion or 28% annualized compared to December 31, 2021, and down $1.0 billion on a ~~solid capital position, and engaging in corporate strategies that enhance the value of their shares. In~~linked-quarter basis, also down 28% annualized,

For the three months ended ~~September~~June 30, ~~2017, we generated~~2022, the Company reported net income of ~~$110.5~~$171 million, ~~and net~~up 13% compared to the $152 million the Company reported for the three months ended June 30, 2021. 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~~stockholders for ~~nearly three years, totalnon-covered~~ ~~loans held for investment grew 2.7% over~~ the three months ended June 30, 2022 totaled $163 million, also up 13% compared to the $144 million the Company reported for three months ended June 30, 2021. Diluted EPS were $0.34 for the three months ended June 30, 2022, up 13% compared to the $0.30 the Company reported for the three months ended June 30, 2021.

Included for the three months ended June 30, 2022 are $4 million in merger-related expenses compared to $10 million for the three months ended June 30, 2021. Also included for the three months ended June 30, 2021 was a revaluation on ~~an annualized basis~~our deferred taxes related to ~~$37.5 billion. Totalnon-covered~~ ~~mortgage loans held for investment grew at an annualized~~a change in the New York State tax rate of ~~3.5%~~$2 million compared to ~~$35.5 billion, including 4.3% annualized growth~~no such item 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~~second quarter.

For the six months ended June 30, 2022, net income totaled $326 million compared to ~~$91.6~~$297 million ~~or 0.20%, of totalnon-covered~~ ~~assets at~~for the six months ended June 30, ~~2017.Non-performingnon-covered~~ ~~loans decreased 16%~~2021, up 10%. Net income available to ~~$69.0~~common stockholders for the six months ended June 30, 2022 was $310 million, ~~or 0.18%, of totalnon-covered~~ ~~loans at the end of the current third quarter as~~up 10% compared to ~~$82.0~~$281 million ~~or 0.22%, of totalnon-covered~~ ~~loans at~~the Company reported for the six months ended June 30, ~~2017.~~2021. Diluted EPS for the six months ended June 30, 2022 totaled $0.66, up 10% compared to diluted EPS of $0.60 the Company reported for the six months ended June 30, 2021.

~~During~~Included in 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~~six months ended June 30, 2022 are $11 million in~~non-covered~~ ~~repossessed assets.~~

~~Net charge-offs~~ merger-related expenses compared to $10 million for the ~~current third quarter rose~~six months ended June 30, 2021. Also included in the six months ended June 30, 2021 was the aforementioned $2 million related to ~~$40.4 million, or 0.11%, of average loans compared~~the revaluation on our deferred taxes related to ~~$11.4 million, or 0.03%, of average loans~~a change in the New York State tax rate.

The key trends 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~~2022 were:

Record Growth in Deposits

Total deposits at June 30, 2022 were $41.2 billion, up $3.3 billion or 35% annualized compared to ~~$11.3~~March 31, 2022 and up $6.2 billion compared to December 31, 2021, also up 35%. The two biggest contributors to this quarter's growth were our BaaS business and deposits from our borrowers.

BaaS-related deposits rose $2.3 billion or 43% on a linked-quarter basis and $5.8 billion on a year-to-date basis to $7.8 billion at June 30, 2022. Loan-related deposits totaled $4.9 billion at June 30, 2022, up $494 million ~~in the trailing quarter. Excluding these charge-offs, the Company would have recorded net recoveries~~or 44% annualized on a linked-quarter basis and $921 million or 46% annualized during the ~~quarter.~~ first six months of the year. For all of 2021, loan-related deposits increased $475 million and all in, since re-focusing on this source of deposit funding during the first quarter of last year, loan-related deposits have grown $1.4 billion, up 39%.

Another Strong Quarter of Loan Growth

At ~~September~~June 30, ~~2017,~~2022, total loans and leases held for investment increased to $48.5 billion, up $1.8 billion or 15% annualized on a linked-quarter basis and $2.8 billion or 12% annualized on a year-to-date basis. Loan growth during the ~~Company’s total taxi medallion-related exposure~~second quarter of 2022 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~~Company's second best on record, second only to the $2.2 billion of loan growth during the fourth quarter of ~~2016, including~~last year. Our loan growth during the current second quarter is attributable to continued strong growth in ~~March~~the multi-family portfolio and a significant rebound in specialty finance lending.

At June 30, 2022, the multi-family portfolio totaled $36.8 billion, representing $1.0 billion of ~~2017. This increase~~growth or 11% annualized on a linked-quarter basis and $2.2 billion of growth or 13% annualized on a year-to-date basis. The growth in ~~short-term~~this segment continues to be driven by market share gains as abates, along with heightened refinancing activity as interest rates ~~led~~increased during the quarter, forcing many borrowers to ~~an increase in our cost of funds. As a result~~refinance their properties sooner rather than later.

The other driver of this ~~factor, our net interest income fell $11.4~~quarter's loan growth was the significant rebound in growth in the specialty finance portfolio, driven primarily by higher utilization rates. At June 30, 2022, the specialty finance segment totaled $4.1 billion, up $806 million or ~~4% sequentially,~~97% annualized on a linked-quarter basis and ~~$42.1~~$638 million or ~~13% year-over-year,~~36% annualized on a year-to-date basis. As of June 30, 2022, total commitments were $6.6 billion, up 16% compared to ~~$276.3 million~~$5.7 billion at March 31, 2022. Of the June 30th amount, 75% or $5 billion are structured as floating-rate obligations, which have, and ~~our net interest margin fell 12 and 38 basis points, respectively,~~will continue to ~~2.53%~~benefit the Company in a rising rate environment.

A Record Level of Loan Originations

Loan originations set a new record during the ~~third~~second quarter of ~~this year.~~

~~Ongoing Expense Control~~

~~Non-interest~~ ~~expense~~2022. Loan originations for the three months ended June 30, 2022 totaled ~~$162.2 million in~~$5.3 billion, up $1.7 billion or 49% compared to the ~~current third quarter, down 1% from~~three months ended March 31, 2022 and $2.2 billion or 72% compared to the ~~trailing-quarter level and up modestly from~~three months June 30, 2021. Second-quarter 2022 originations exceeded 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~~prior quarter's pipeline 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~~$2.5 billion by $2.8 billion, more than double. Approximately 80% 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 fourthsecond 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~~originations represented new money to the ~~nature~~Bank. In addition, 37% of ~~the loans we produce~~originations were internal refinances from our portfolio; 39% were external refinances; 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.

24% represented property transactions.

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~~July 26, 2022, our Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.17 per ~~share on our common stock,~~share. The dividend is payable on ~~November 21, 2017~~August 18, 2022 to common shareholders of record ~~at the close~~as of ~~business on November 7, 2017.~~August 8, 2022.

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.~~credit losses on loans and leases.

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 Credit Losses

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

The allowance for credit losses on~~non-covered~~ loans ~~represents our estimate~~and leases is deducted from the amortized cost basis of ~~probable~~a financial asset or a group of financial assets so that the balance sheet reflects the net amount the Company expects to collect. Amortized cost is the unpaid loan balance, net of deferred fees and ~~estimable~~expenses, and includes negative escrow. Subsequent changes (favorable and unfavorable) in expected credit losses ~~inherent~~are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense. Management estimates the~~non-covered~~ ~~loan portfolio as~~ allowance by projecting and multiplying together the probability-of-default, loss-given-default and exposure-at-default depending on economic parameters for each month of the ~~date~~remaining contractual term. Economic parameters are developed using available information relating to past events, current conditions, and economic forecasts. The Company’s economic forecast period is 24 months, and afterwards reverts to a historical average loss rate on a straight-line basis over a 12-month period. Historical credit experience provides the basis for the estimation of expected credit losses, with qualitative adjustments made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency levels and terms, as well as for changes in environmental conditions, such as changes in legislation, regulation, policies, administrative practices or other relevant factors. Expected credit losses are estimated over the contractual term of the ~~balance sheet. Losses onnon-covered~~loans, ~~are charged against, and recoveries of losses onnon-covered~~ ~~loans are credited back to, the allowance~~adjusted for ~~losses onnon-covered~~ ~~loans.~~

~~Althoughnon-covered~~ ~~loans are held by either the Community Bank~~forecasted prepayments when appropriate. The contractual term excludes potential extensions 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.~~

renewals. The methodology used ~~for~~in the ~~allocation~~estimation of the allowance for~~non-covered~~ loan and lease losses, which is performed at ~~September 30, 2017~~least quarterly, is designed to be dynamic and ~~December 31, 2016 was generally comparable, whereby~~responsive to changes in portfolio credit quality and forecasted economic conditions. Each quarter the ~~Community Bank~~Company reassesses the appropriateness of the economic forecasting period, the reversion period and historical mean at the ~~Commercial Bank segregated their loss factors (used~~portfolio segment level, considering any required adjustments for ~~both criticized~~differences in underwriting standards, portfolio mix, and~~non-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 fornon-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.

relevant data shifts over time.

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

~~Specific valuation allowances~~

Loans that do not share risk characteristics are ~~established based~~evaluated on ~~management’s analyses of~~an individual basis. These include loans that are ~~considered impaired.~~in nonaccrual status with balances above management determined materiality thresholds depending on loan class and also loans that are designated as TDR or “reasonably expected TDR” (criticized, classified, or maturing loans that will have a modification processed within the next three months). In addition, all taxi medallion loans are individually evaluated. If a~~non-covered~~ loan is ~~deemed~~determined to be ~~impaired, management measures~~collateral dependent, or meets the ~~extent of~~criteria to apply the ~~impairment and establishes a specific valuation allowance for that amount. Anon-covered~~ ~~loan is classified as “impaired” when,~~collateral dependent practical expedient, expected credit losses are determined 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 tonon-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 at the reporting date, less ~~the estimated cost~~costs 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.as appropriate.

~~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~~Company maintains an allowance for ~~loan~~credit losses on off-balance sheet credit exposures. At June 30, 2022 and December 31, 2021, the allowance for credit losses on off-balance sheet exposures was $7 million and $12 million, respectively. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit losses expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated life. The Company examined historical credit conversion factor (“CCF”) trends to estimate utilization rates, and chose an appropriate mean CCF based on both management judgment and quantitative analysis. Quantitative analysis involved examination of CCFs over a ~~quantitative loss factor~~range of fund-up windows (between 12 and 36 months) and comparison of the mean CCF for ~~loans evaluated collectively for impairment. This quantitative loss factor is based primarily on historical~~each fund-up window with management judgment determining whether the highest mean CCF across fund-up windows made business sense. The Company applies the same standards and estimated loss rates ~~after considering loan type, historical loss~~to the credit exposures as to the related class of loans.

When applying this critical accounting policy, we incorporate several inputs and ~~delinquency experience, and loss emergence periods. The quantitative loss factors applied in the methodology are periodicallyre-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 lossesjudgments that may ~~not~~ be ~~provided for~~influenced by ~~the quantitative loss component due~~changes period to ~~other factors evaluated by management, which~~period. These include, but are not limited ~~to:~~

~~Changes in lending policies and procedures, including~~to changes in ~~underwriting standards~~the economic environment and ~~collection,~~forecasts, changes in the credit profile and~~charge-off~~ ~~and recovery practices;~~

~~Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability~~ characteristics 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,~~portfolio, and changes in prepayment assumptions which will result in provisions to or recoveries from the ~~level~~balance 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~~credit losses.

While changes to the economic environment forecasts, and portfolio characteristics will change from period ~~as we believe this produces~~to period, portfolio prepayments are an ~~appropriate reflection of our historical loss experience.~~

~~The process of establishing~~integral assumption in estimating the allowance for credit losses on~~non-covered~~ ~~loans also involves:~~

~~Periodic inspections of the~~ our mortgage loan ~~collateral by qualifiedin-house~~portfolio, are subject to estimation uncertainty 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 thetwo-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 lossassumption could have a material ~~adverse~~ impact to our estimation process. Prepayment assumptions are sensitive to interest rates and existing loan terms and determine the weighted average life of the mortgage loan portfolio. Excluding other factors, as the weighted average life of the portfolio increases or decreases, so will the required amount of the allowance for credit losses on ~~our financial condition and results of operations.~~mortgage loans.

~~As of September~~43

Balance Sheet Summary

At June 30, ~~2017, we had goodwill of $2.4 billion. Our goodwill is evaluated for impairment annually at December 31st,~~2022, total assets were $63.1 billion, up $3.6 billion 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 of12% annualized compared to December 31, ~~2016~~2021 and ~~based~~up $2.1 billion or 14% annualized compared to March 31, 2022. Both the year-over-date and linked-quarter growth were driven by significant loan and deposit growth, an increase in cash balances, offset by a decline in wholesale borrowings, while total securities remained relatively unchanged.

Total loans and leases held for investment increased $2.8 billion or 12% annualized compared to December 31, 2021 and $1.8 billion or 15% annualized 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~~a linked-quarter basis. This was due to continued strong growth 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 asmulti-family portfolio combined with 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 assetssignificant rebound 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~~specialty finance portfolio. Total multi-family loans at June 30, ~~2017~~2022 totaled $36.8 billion, representing growth of $2.2 billion compared to December 31, 2021 or 13% on an annualized basis and ~~a $468.7~~$1.0 billion of growth compared to March 31, 2022, up 11% annualized. Total specialty finance loans and leases totaled $4.1 billion at June 30, 2022, up $638 million ~~decline from~~or 36% annualized compared to December 31, 2021 and up $806 million or 97% compared to March 31, 2022. In addition, total specialty finance commitments increased 16% to $6.6 billion compared to $5.7 billion at March 31, 2022.

Cash balances increased $1.1 billion to $3.3 billion compared to the ~~balance~~level at December 31, ~~2016. Loans, net,~~2021 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~~approximately $400 million ~~respectively, from the trailingquarter-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, 2017or 52% annualized compared to ~~12.89% and 12.31%, respectively, of total assets~~March 31, 2022.

Total securities at June 30, ~~2017~~2022 were $5.7 billion, relatively unchanged compared to both $5.8 billion at December 31, 2021 and ~~September~~$5.6 billion at March 31, 2022.

At June 30, ~~2016,~~2022, deposits totaled $41.2 billion, up $6.2 billion or 35% annualized compared to December 31, 2021 and $3.3 billion during the current second quarter, also up 35% on a ~~book~~linked-quarter basis. Both the linked-quarter and year-to-date increases were driven by our BaaS business and growth in loan-related deposits. BaaS-related deposits totaled $7.8 billion at June 30, 2022, up $2.3 billion or 43% on a linked-quarter basis, while loan-related deposits totaled $4.9 billion, up $494 million on a linked-quarter basis and $921 million on a year-to-date basis.

BaaS-related deposits fall primarily under three categories: traditional BaaS, consisting primarily of fintech company deposits; government banking as a service, servicing various municipalities and the U.S. Treasury's prepaid debit card program; and mortgage as a service, which caters to mortgage banking and servicing companies and consists of escrow deposits for principal, interest, and tax payments. At June 30, 2022, traditional BaaS deposits totaled $5.5 billion; government banking as a service totaled $652 million; and mortgage as a service totaled $1.6 billion of deposits.

Wholesale borrowings at June 30, 2022 totaled $13.7 billion, down $2.3 billion or 28% annualized compared to December 31, 2021 and down $1.0 billion on a linked-quarter basis, also down 28%.

Total stockholders' equity at June 30, 2022 was $6.8 billion, down $220 million or 6% annualized compared to December 31, 2021 and down $85 million or 5% annualized compared to March 31, 2022. Excluding goodwill and preferred stock, tangible common stockholders' equity totaled $3.9 billion, relatively unchanged compared to $4.0 billion at both March 31, 2022 and December 31, 2021.

Book value per common share stood at $13.56 as of ~~$12.79 at September~~June 30, ~~2017~~2022 compared to ~~$12.74~~$13.72 at March 31, 2022 and $14.07 at December 31, 2021, while tangible book value per share as of June 30, ~~2017~~2022 was $8.35 compared to $8.52 at March 31, 2022 and ~~$12.50~~$8.85 at ~~September 30, 2016.~~

December 31, 2021.

Loans and Leases

Loans ~~net, fell $1.4 billion from~~and Leases Originated for Investment

The majority of the ~~trailingquarter-end~~loans we originate are loans and ~~$1.9 billion from year end to $37.5 billion~~leases held for investment and most of the held-for-investment loans we produce are multi-family loans. Our production of multi-family loans began over five decades ago in the ~~three months ended September 30, 2017, representing 77.3%~~five boroughs of ~~total assets at that date. Included in~~New York City, where the~~quarter-end~~ ~~balance werenon-covered~~ majority of the rental units currently consist of non-luxury, rent-regulated apartments featuring below-market rents. In addition to multi-family loans, our portfolio of loans held for investment ~~net,~~contains a number of ~~$37.3 billion,~~CRE loans, most of which are secured by income-producing properties located in New York City and~~non-covered~~ ~~loans held for sale of $104.9 million, as more fully discussed below.~~ Long Island.

~~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~~our specialty finance loans and leases have become an increasingly larger portion of our overall loan portfolio. The remainder of our portfolio includes ~~substantially~~ smaller balances of C&I loans, one-to-four family loans, ADC loans, and other loans ~~with specialty finance~~held for investment. The majority of C&I loans consist of loans to small- and mid-size businesses.

For the quarter ended June 30, 2022, total loans and leases originated for investment were $5.3 billion, up $2.2 billion or 72% compared to the quarter ended June 30, 2021 and ~~other C&I loans comprising~~exceeded the ~~bulk of~~previous quarter's pipeline by $2.8 billion or 107%. On a year-over-year basis, multi-family originations rose $861 million or 41% to $2.9 billion, while specialty finance originations increased $1.3 billion or 210% to $1.9 billion. CRE originations increased 204% or $143 million to $213 million during the ~~“Other loan” portfolio.~~quarter ended June 30, 2022.

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.44

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					For the Three Months Ended									For the Six Months Ended
	Sept. 30,		June 30,		Sept. 30,		Sept. 30,		Sept. 30,
(in thousands)	2017		2017		2016		2017		2016
Mortgage Loans Originated for Investment:
(dollars in millions)												June 30, 2022			March 31, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Mortgage Loan Originated for Investment:
Multi-family	$	1,432,424	$	952,265	$	1,276,358	$	3,339,302	$	4,529,904	$		2,939	$		2,410	$		2,078	$		5,349	$		3,544
Commercial real estate		249,773		192,072		345,543		692,187		892,676			213			281			70			494			513
One-to-four family residential		22,047		50,697		101,365		116,603		248,020			82			62			46			144			68
Acquisition, development, and construction		21,754		20,836		17,855		55,509		123,849			32			40			70			72			76

Total mortgage loans originated for investment	$	1,725,998	$	1,215,870	$	1,741,121	$	4,203,601	$	5,794,449			3,266			2,793			2,264			6,059			4,201

Other Loans Originated for Investment:
Specialty finance	$	468,735	$	498,918	$	369,308	$	1,236,817	$	907,551			1,877			638			606			2,515			1,147
Other commercial and industrial		115,569		150,787		151,279		388,511		451,340			116			102			193			218			256
Other		700		785		894		2,370		3,010			1			2			2			3			3

Total other loans originated for investment	$	585,004	$	650,490	$	521,481	$	1,627,698	$	1,361,901			1,994			742			801			2,736			1,406

Total loans originated for investment	$	2,311,002	$	1,866,360	$	2,262,602	$	5,831,299	$	7,156,350	$		5,260	$		3,535	$		3,065	$		8,795	$		5,607

Loans and Leases Held for Investment

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.~~“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~~apartments 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~~At June 30, 2022, total multi-family loans ~~on the basis~~represented $37 billion or 76% of ~~the buildings’ income~~total loans 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.leases held for investment.

~~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,~~At 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~~2022, 72% 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 the New York City metro area and ~~5.5%~~3% were secured by buildings elsewhere in New York State. The remaining multi-family loans were secured by buildings outside these markets, including in the four other states ~~served~~in which we operate.

In addition, 61% or $22.5 billion of the Company's overall multi-family portfolio is secured by ~~our retail branch offices.~~properties in New York State, of which $19.7 billion are subject to rent regulation laws. The weighted average LTV of the rent-regulated segment of the multi-family portfolio was 56.66%, as of June 30, 2022, 372 bps below the overall multi-family weighted average LTV of 60.38%.

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.~~produce. Reflecting the nature of the buildings securing our loans, our underwriting standards, and the generally conservative LTV ratios our multi-family loans feature at origination, a relatively small percentage of the multi-family loans that have transitioned to non-performing status have actually resulted in losses, even when the credit cycle has taken a downward turn.

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

In addition to requiring a minimum DSCR of ~~120%~~125% 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, some of 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,~~

Commercial Real Estate Loans

At June 30, 2022, CRE loans represented $7 billion or 14% of total loans and leases held for investment, unchanged compared to the previous quarter.

The CRE loans originated by the Company are also secured by income-producing properties, such as office buildings, mixed-use buildings (retail storefront on the ground floor and apartment units above the ground floor), retail centers, and multi-tenanted light industrial properties. At June 30, 2022, 83% of our CRE loans were secured by properties in the New York City metro area, while properties in other parts of New York State accounted for 3% of the properties securing our CRE loans and properties in all other states accounted for 15% combined.

Specialty Finance Loans and Leases

At June 30, 2022, specialty finance loans and leases totaled $4.1 billion or 9% of total loans and leases held for investment.

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

The specialty finance loans and leases we fund fall into three categories: asset-based lending, dealer floor-plan lending, and equipment loan and lease financing. Each of these credits is secured with a perfected first security interest in, or outright ownership of, the underlying collateral, and structured as senior debt or as a non-cancelable lease. Asset-based and dealer floor-plan loans are priced at floating rates predominately tied to SOFR or LIBOR-replacement rates, while our equipment financing credits are priced 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.

C&I Loans

At June 30, 2022, C&I loans totaled $549 million or 1% of total loans and leases held for investment.

The C&I loans we produce are primarily made to small and mid-size businesses in the five boroughs of New York City and on Long Island. Such loans are tailored to meet the specific needs of our borrowers, and include term loans, demand loans, revolving lines of credit, and, to a much lesser extent, loans that are 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.

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.

Acquisition, Development, and Construction Loans

ADC loans at June 30, 2022 totaled $195 million and represented 0.40% of total loans and leases held for investment. Because ADC loans are generally considered to have a higher degree of credit risk, especially during a downturn in the business cycle, borrowers are required to provide a guarantee of repayment and completion.

One-to-Four Family Loans

At June 30, 2022, one-to-four family loans totaled $129 million or 0.27% of total loans and leases held for investment. These loan balances include certain mixed-use CRE with less than five residential units classified as one-to-four family loans.

Other Loans

Other loans totaled $6 million at June 30, 2022 and consisted mainly of overdraft loans and loans to non-profit organizations. We currently do not offer home equity loans or home equity lines of credit.

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 approved by the Management Credit Committee, the Board Credit Committee, and the Board of Directors of the Bank.

C&I loans less than or equal to $3 million are approved by the joint authority of lending officers. C&I loans in excess of $3 million and all multi-family, CRE, ADC, and Specialty Finance loans regardless of amount are required to be presented to the Management Credit Committee for approval. Multi-family, CRE, and C&I loans in excess of $5 million and Specialty Finance in excess of $15 million are also required to be presented to the Commercial Credit Committee and the Mortgage and Real Estate Committee of the Board, as applicable so that the Committees can review the loan’s associated risks. The Commercial Credit and Mortgage and Real Estate 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 Bank’s strategic objectives and risk appetites.

The Board of Directors updated certain aspects of the Company's lending authority as detailed below. These changes were effective as of July 21, 2021.

Multi-family, CRE, ADC, and specialty finance loans less than or equal to $10 million and C&I loans less than or equal to $5 million are approved by the joint authority of lending officers. C&I loans in excess of $5 million and all multi-family, CRE, ADC, and specialty finance loans in excess of $10 million are required to be presented to the Management Credit Committee for approval. Multi-family, CRE, ADC, and specialty finance loans in excess of $50 million and C&I loans in excess of $10 million are also required to be presented to the Board Credit Committee of the Board, so that the Committee can review the loan’s associated risks and approve the credit. The Board Credit Committee has authority to direct changes in lending practices as they deem necessary or appropriate in order to address individual or aggregate risks and credit exposures in accordance with the Bank’s strategic objectives and risk appetites.

In addition, all loans of $50 million or more originated by the Bank continue to be reported to the Board of Directors.

At June 30, 2022, the largest mortgage loan in our portfolio was a $329 million multi-family loan collateralized by six properties located in Brooklyn, New York. As of the date of this report, the loan has been current since origination.

Geographical Analysis of the Portfolio of Loans Held for Investment

The following table presents a geographical analysis of the multi-family and CRE loans in our held-for-investment loan portfolio at June 30, 2022:


	At June 30, 2022
		Multi-Family Loans					Commercial Real Estate Loans
(dollars in millions)		Amount		Percent of Total			Amount		Percent of Total
New York City:
Manhattan	$		7,655		20.82	%	$	2,854		42.52	%
Brooklyn			6,422		17.46			351		5.23
Bronx			3,725		10.13			143		2.13
Queens			2,922		7.95			554		8.25
Staten Island			127		0.34			52		0.78
Total New York City	$		20,851		56.70	%	$	3,954		58.91	%
New Jersey			5,034		13.69			554		8.25
Long Island			537		1.46			1,033		15.39
Total Metro New York	$		26,422		71.85	%	$	5,541		82.55	%
Other New York State			1,152		3.13			169		2.52
Pennsylvania			3,722		10.12			320		4.77
Florida			1,621		4.41			207		3.08
Ohio			733		2.00			40		0.60
Arizona			417		1.13			33		0.49
All other states			2,705		7.36			402		5.99
Total	$		36,772		100.00	%	$	6,712		100.00	%

At June 30, 2022, the largest concentration of ADC loans held for investment was located in Metro New York, with a total of $167 million at that date. The majority of our other loans held for investment were secured by properties and/or businesses located in Metro New York.

Asset Quality

Non-Performing Loans and Repossessed Assets

NPAs declined $14 million or 20% to $56 million at June 30, 2022 compared to the previous quarter. This represented 0.09% of total assets compared to 0.11% of total assets at March 31, 2022. Total NPLs were $50 million, down $13 million or 21% compared to March 31, 2022, representing 0.10% of total loans compared to 0.13% at the previous quarter. Repossessed assets, consisting primarily of repossessed taxi medallions, were $6 million at June 30, 2022, down $1 million or 14% from March 31, 2022. Finally, total loans past due 30 to 89 days declined $4 million or 12% to $30 million compared to the previous quarter.

For the three months ended June 30, 2022, the Company reported a net recovery of $7 million compared to a net charge-off of $2 million for the three months ended March 31, 2022. For the six months ended June 30, 2022, the Company reported net recoveries of $5 million compared to net recoveries of $7 million for the six months ended June 30, 2021.

The following table presents our non-performing loans by loan type and the changes in the respective balances from December 31, 2021 to June 30, 2022:


								Change from December 31, 2021 to June 30, 2022
(dollars in millions)		June 30, 2022			December 31, 2021			Amount			Percent
Non-Performing Loans:
Non-accrual mortgage loans:
Multi-family	$		18	$		10	$		8			80		%
Commercial real estate			27			16			11			69
One-to-four family			—			1			(1	)		(100	)
Acquisition, development, and construction			—			—			—			—
Total non-accrual mortgage loans			45			27			18			67
Non-accrual other loans (1)			5			6			(1	)		(17	)
Total non-performing loans	$		50	$		33	$		17			52

(1)

Includes $4 million and $6 million of non-accrual taxi medallion-related loans at June 30, 2022 and December 31, 2021, respectively.

The following table sets forth the changes in non-performing loans over the six months ended June 30, 2022:


(dollars in millions)
Balance at December 31, 2021	$	33
New non-accrual		36
Charge-offs		(1	)
Transferred to repossessed assets		—
Loan payoffs, including dispositions and principal pay-downs		(18	)
Restored to performing status		—
Balance at June 30, 2022	$	50

A loan generally is classified as a non-accrual loan when it is 90 days or more past due or when it is deemed to be impaired because the Company no longer expects to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed on non-accrual status, management ceases the accrual of interest owed, and previously accrued interest is charged against interest income. A loan is generally returned to accrual status when the loan is current and management has reasonable assurance that the loan will be fully collectible. Interest income on non-accrual loans is recorded when received in cash. At June 30, 2022 and December 31, 2021, all of our non-performing loans were non-accrual loans.

We monitor non-accrual loans both within and beyond our primary lending area, which is defined as including: (a) the counties that comprise our CRA Assessment area, and (b) the entirety of the following states: Arizona; Florida; New York; New Jersey; Ohio; and Pennsylvania, 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/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 all non-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 generally 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 LTVs on a portfolio-wide basis.

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

Properties and assets that are acquired through foreclosure are classified as either OREO or repossessed assets, and are recorded at fair value at the date of acquisition, less the estimated cost of selling the property/asset. Subsequent declines in the fair value of OREO or repossessed assets are charged to earnings and are included in non-interest expense. It is our policy to require an appraisal and an environmental assessment (in accordance with our Environmental Risk Policy) of properties classified as OREO before foreclosure, and to re-appraise the properties/assets on an as-needed basis, and not less than annually, until they are sold. We dispose of such properties/assets as quickly and prudently as possible, given current market conditions and the property’s or asset’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 closing, with a member of the Board Credit Committee participating in inspections on multi-family, CRE, and ADC loans to be originated in excess of $50 million. We continue to conduct inspections as per the aforementioned policy, however, due to the COVID-19 pandemic, currently full access to some properties and buildings may be limited. 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 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.

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 new rent regulation 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 our non-performing multi-family loans have resulted in losses over time. 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~~

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 125% for multi-family loans and 130% for CRE ~~loans represented $7.6 billion, or 20.1%, of total loans held for investment at the end~~loans. Although we typically lend up to 75% of the ~~current third quarter, a $9.8 million increase from~~appraised value on multi-family buildings and up to 65% on commercial properties, the ~~balance~~average LTVs of such credits at origination were below those amounts at June 30, ~~2017, but~~2022. Exceptions to these LTV limitations are minimal and are reviewed on 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.case-by-case basis.

~~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.~~50

~~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,~~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,~~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.~~

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 estimatedas-completed market value of the property. Credit risk is also managed through the loan disbursement process. Loan proceeds are disbursed periodically in increments as construction progresses, and as warranted by inspection reports provided to us by our own lending officers and/or consulting engineers.

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

Other C&I loans 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 our~~held-for-investment~~ loans 30 to 89 days past due by loan type and the changes in the respective balances ~~for~~from December 31, 2021 to June 30, 2022:


					Change from December 31, 2021 to June 30, 2022
(dollars in millions)	June 30, 2022		December 31, 2021		Amount			Percent
Loans 30-89 Days Past Due:
Multi-family	$	20	$	57	$	(37	)		-65	%
Commercial real estate		1		2		(1	)		-50
One-to-four family		7		8		(1	)		-13
Acquisition, development, and construction		—		—		—		NM
Other loans (1)		2		—		2		NM
Total loans 30-89 days past due	$	30	$	67	$	(37	)		-55	%

(1)

Does not include any past due taxi medallion-related loans at June 30, 2022 and December 31, 2021.

During the ~~nine~~second quarter of 2022, total loans 30-89 days past due decreased to $30 million compared to $67 million at December 31, 2021, primarily due to two multi-family loans that became current during the six months ~~ended September~~ending June 30, ~~2017:~~2022.

      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~~second quarter, management believes that the allowance for losses on~~non-covered~~ loans was appropriate at that date.

At ~~September~~June 30, ~~2017, our~~2022, the Company's three largest~~non-performing~~ NPLs were two CRE loans ~~were a C&I loan~~ with ~~a balance~~balances of ~~$7.8~~$19 million aand $8 million and one multi-family loan ~~with a balance~~ of ~~$7.6 million, and an ADC loan with a balance of $6.2~~$7 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~~June 30, ~~2017,~~2022, non-accrual TDRs included taxi medallion-related loans with a combined balance of ~~$43.4~~$4 million.

At ~~September~~June 30, ~~2017,~~2022, 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.~~$45 million.

Based on the number of loans performing in accordance with their revised terms, our success rates for restructured CRE and multi-family loans, ~~CRE loans,~~was 100%. The success rates for restructured one-to-four family ~~loans,~~ and other loans were 100%~~, 100%, 50%,~~ and ~~84%~~32%, respectively, at ~~September~~June 30, ~~2017. There were no restructured ADC loans at that date.~~2022.

Analysis of Troubled Debt Restructurings

The following table sets forth the changes in our TDRs over the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2022:

(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


(dollars in millions)		Accruing			Non- Accrual				Total
Balance at December 31, 2021	$		16	$		13		$		29
New TDRs			—			19				19
Charge-offs			—			—				—
Transferred from performing			—			—				—
Loan payoffs, including dispositions and principal pay-downs			—			(3	)			(3	)
Balance at June 30, 2022	$		16	$		29		$		45

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~~six months ended ~~September~~June 30, ~~2017,~~2022, 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 ofnon-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~~Company's net charge-offs as compared to average loans ~~was recognized.~~outstanding for the six months ended June 30, 2022:

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.~~


	For the Six Months Ended,
	June 30,			June 30,
(dollars in millions)	2022			2021
Multi-family
Net charge-offs (recoveries) during the period	$	-		$	2
Average amount outstanding	$	35,332		$	32,177
Net charge-offs (recoveries) as a percentage of average loans		0.00	%		0.01	%

Commercial real estate
Net charge-offs (recoveries) during the period	$	-		$	(2	)
Average amount outstanding	$	6,669		$	6,830
Net charge-offs (recoveries) as a percentage of average loans		0.00	%		-0.03	%

One-to-Four Family
Net charge-offs (recoveries) during the period	$	-		$	-
Average amount outstanding	$	146		$	210
Net charge-offs (recoveries) as a percentage of average loans		0.00	%		0.00	%

Acquisition, Development and Construction
Net charge-offs (recoveries) during the period	$	-		$	-
Average amount outstanding	$	228		$	110
Net charge-offs (recoveries) as a percentage of average loans		0.00	%		0.00	%

Other Loans
Net charge-offs (recoveries) during the period	$	(5	)	$	(7	)
Average amount outstanding	$	4,104		$	3,450
Net charge-offs (recoveries) as a percentage of average loans		-0.12	%		-0.20	%

Total loans
Net charge-offs (recoveries) during the period	$	(5	)	$	(7	)
Average amount outstanding	$	46,479		$	42,777
Net charge-offs (recoveries) as a percentage of average loans		-0.01	%		-0.02	%

~~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~~June 30, ~~2017:~~2022:

(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


(dollars in millions)
New York	$	46
New Jersey		3
All other states		1
Total non-performing loans	$	50

Securities

~~Securities~~At June 30, 2022, total securities declined ~~$140.1~~$118 million ~~from the current second quarter-end 2017 balance~~to $5.7 billion, down 4% annualized compared to December 31, 2021 and ~~$786.0 million from theyear-end~~ ~~2016 balance~~were relatively unchanged compared to ~~$3.0 billion, representing 6.3%~~March 31, 2022. At June 30, 2022, total securities represented 9.0% of total assets compared to 9.2% and 9.7%, respectively, at ~~September~~March 31, 2022 and December 31, 2021.

The following table summarizes the weighted average yield of debt securities for the maturities indicated at June 30, ~~2017. During~~2022:


	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		2.75	%		2.12	%		—	%		1.01	%
Due from one to five years		3.28			3.22			—			2.92
Due from five to ten years		2.73			1.59			3.53			3.25
Due after ten years		1.96			1.62			—			1.76
Total debt securities available for sale		2.11			1.88			3.53			2.67

(1)

The weighted average yields are calculated by multiplying each carrying value by its yield and dividing the ~~second quarter~~sum of ~~2017,~~these results by 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~~total carrying values and ~~sold approximately $521.0 million of securities, resulting in~~are not presented on a~~pre-tax~~ ~~gain on sale of $26.9 million.~~

tax-equivalent basis.

(2)

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

Federal Home Loan Bank Stock

As ~~members~~a member of theFHLB-NY, the ~~Community~~ Bank ~~and the Commercial Bank are~~is required to acquire and hold shares of its capital stock, and to the extent FHLB borrowings are utilized, may further invest in FHLB stock. At ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021, the ~~Community~~ Bank heldFHLB-NY stock in the amount of ~~$564.3~~$635 million and ~~$562.0~~$734 million, ~~respectively, and the Commercial Bank held~~respectively. FHLB-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~~$8 million and ~~$19.2~~$8 million, respectively, in the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016; dividends from theFHLB-NY~~ ~~to the Commercial Bank totaled $701,000 and $1.1 million, respectively, in the corresponding periods.~~2021.

Bank-Owned Life Insurance

~~Bank-owned life insurance (“BOLI”)~~BOLI is recorded at the total cash surrender value of the policies in the Consolidated Statements of Condition, and the income generated by the increase in the cash surrender value of the policies is recorded in~~“Non-interest~~ ~~income”~~ 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~~increased $8 million to ~~$961.4 million in the nine months ended September~~$1.2 billion at June 30, ~~2017.~~2022 from December 31, 2021.

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~~Goodwill totaled $2.4 billion at both ~~September~~June 30, ~~2017~~2022 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.~~2021.

~~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;~~Bank; 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~~$6.0 billion in the ~~nine~~six months ended ~~September~~June 30, ~~2017, down~~2022, up $1.6 billion from the ~~$9.1~~$4.4 billion recorded in the year-earlier ~~nine~~six months. Cash flows from the repayment and sales of securities totaled ~~$1.3 billion~~$397 million and ~~$2.7 billion,~~$931 million, respectively, in the corresponding periods, while purchases of securities totaled ~~$404.0~~$788 million and ~~$281.9 million,~~$1.3 billion, respectively.

~~Deposits~~54

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~~From time to time, we 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~~At June 30, ~~2017,~~2022, total deposits were $41.2 billion, up $3.3 billion compared to total deposits at March 31, 2022, and up $6.2 billion since December 31, 2021. At June 30, 2022, total deposits represented 65.4% of ~~$28.9 billion were comparable~~total assets compared to ~~the level recorded~~62.2% at March 31, 2022 and 58.9% at December 31, ~~2016. Certificates of deposit (“CDs”)~~2021. Additionally, at June 30, 2022, CDs represented ~~30.5%~~19.6% of total deposits versus 20.8% at ~~the end of the third quarter,~~March 31, 2022 and ~~total deposits represented 59.6% of total assets~~24.0% at ~~that date.~~December 31, 2021.

Included in the ~~September 30th~~June 30, 2022 balance of deposits were business institutional deposits of ~~$2.2~~$1.9 billion and municipal deposits of ~~$791.5~~$597 million, as compared to ~~$2.8~~$1.4 billion and ~~$637.7~~$751 million, respectively, at December 31, ~~2016.~~2021. Also, included in the June 30, 2022 balance of deposits was $7.8 billion of BaaS-related deposits up $5.8 billion from December 31, 2021. Brokered deposits ~~dropped $79.1~~remained stable at $4.5 billion, including brokered interest-bearing checking accounts of $467 million ~~during this timeframe, to $3.9~~at June 30, 2022 and $1.5 billion ~~the net effect of an $83.1 million increase in~~at December 31, 2021, brokered money market accounts ~~to $2.6~~of $2.9 billion at June 30, 2022 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~~$2.9 billion at December 31, ~~2016.~~2021, and brokered CDs of $1.1 billion at June 30, 2022 and $1.2 billion at December 31, 2021. 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.

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 as of June 30, 2022:

June 30,

(dollars in millions)

2022

Portion of U.S. time deposits in excess of insurance limit

$
2,598

Time deposits otherwise uninsured with a maturity of:

3 months or less

$
693

Over 3 months through 6 months

388

Over 6 months through 12 months

509

Over 12 months

1,008

Total time deposits otherwise uninsured

$
2,598

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~~debentures and subordinated notes. As of June 30, ~~2017, the balance of~~2022, borrowed funds ~~was unchanged from the trailing quarter~~declined $2.3 billion or 27% annualized to $14.3 billion compared to December 31, 2021, and ~~fell $1.3 billion from year end to $12.4 billion, representing 25.5%~~represented 23% of total assets at that date.

~~Wholesale Borrowings~~

~~Wholesale~~ The decrease was mainly due to a decline in wholesale borrowings, ~~were~~consisting primarily of FHLB-NY advances, which declined to $13.7 billion compared to $15.9 billion at year-end 2021. Also included in wholesale borrowings are repurchase agreements of $800 million, unchanged from the ~~trailing quarter but fell $1.3 billion~~balance at December 31, 2021.

Subordinated Notes

On November 6, 2018, the Company issued $300 million aggregate principal amount of its 5.90% Fixed-to-Floating Rate Subordinated Notes due 2028. The Company has used $278 million of the net proceeds from ~~year end~~the offering to ~~$12.0 billion, representing 24.8%~~repurchase shares of ~~total assets, at quarter end.~~

~~FHLB-NY~~ ~~advances declined $110.0 million during this time,~~its common stock pursuant to ~~$11.6 billion, while~~its previously announced share repurchase program, and may use the balance of the offering towards the repurchase ~~agreements dropped $1.1 billion~~of its common stock or for other general corporate purposes. The Notes were offered to ~~$450.0 million. In addition, while federal funds purchased amounted~~the public at 100% of their face amount. At June 30, 2022, the balance of subordinated notes was $296 million, which excludes certain costs related to ~~$150.0 million at the end of December, there were no federal funds purchased at September 30, 2017.~~their issuance.

Junior Subordinated Debentures

Junior subordinated debentures totaled ~~$359.1~~$361 million at ~~the end of the current third quarter,~~June 30, 2022, comparable to the balance at December ~~31st.~~31, 2021.

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~~ (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 and Interest Rate Risk

As a financial institution, we are focused on reducing our exposure to interest rate volatility. Changes in interest rates pose one of the greatest ~~challenge~~challenges 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~~We manage our interest rate risk by taking the following actions: ~~(1) We continued~~continue 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~~continue to originate certain floating rate C&I ~~loans that feature floating interest rates.~~

~~In connection~~loans; depending on funding needs, replace maturing wholesale borrowings 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~~longer term borrowings; and as needed, execute interest rate ~~and corresponding price. Such commitments, which were generally known as interest rate lock commitments~~swaps.

LIBOR Transition Process

The discontinuation of LIBOR has been developing since 2017 when the United Kingdom’s Financial Conduct Authority (“~~IRLCs”~~FCA”)~~, were considered~~ first called for LIBOR to be ~~financial derivatives and, as such, were carried at fair value.~~

~~To mitigate~~phased out by 2021. The ICE Benchmark Administration, 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 termspublisher of LIBOR discontinued publication of the ~~applicable forward-sale agreement.~~one-week and two-month US Dollar LIBOR on December 31, 2021, and will discontinue publication of overnight, one-month, three-month, six-month, and twelve-month U.S Dollar LIBORs on June 30, 2023, although its use for new business was restricted after December 31, 2021, with limited exceptions.

~~When we retained~~56

In October 2020, 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~~International Swaps and ~~expected loan prepayment rates, economic conditions, and market forecasts,~~Derivatives Association announced fallback language for derivative contracts incorporating SOFR, as well as ~~relevant characteristics~~a process by which counterparties to such contracts could elect to apply the fallback language to existing derivatives on or after January 25, 2021. SOFR was identified by the Alternative Reference Rates Committee (ARRC), a group of private-market participants convened to help ensure a successful transition from LIBOR in the United States, as the recommended replacement to US Dollar LIBOR in the United States. The adoption of the ~~associated underlying loans. Generally, when market interest rates decline, loan prepayments increase as customers refinance their existing mortgages~~fallback protocols does not change the index for subject agreements from LIBOR to ~~take advantage of more favorable interest rate terms. When a mortgage prepays, or when loans are expected~~SOFR, but simply creates the legal framework for the appropriate mechanisms 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~~occur in the ~~fair value~~future.

The Bank established a sub-committee of ALCO to address issues related to the ~~capitalized MSRs~~phase out and ~~a corresponding reduction in earnings.~~

~~To mitigate~~transition away from LIBOR. The sub-committee is led by our Chief Financial Officer and consists of personnel from various departments throughout the ~~prepayment risk inherent in residential MSRs, we could have sold the servicing of the~~Bank. The Company has identified certain LIBOR-based contracts that extend beyond June 30, 2023, which may include loans ~~we produced,~~ and ~~thus minimized the potential for earnings volatility. Instead, we opted to mitigate such risk by investing in exchange-traded~~leases, securities, wholesale borrowings, derivative financial instruments, ~~that were expected to experience opposite~~ and ~~partially offsetting changes in fair value as related~~long-term debt. The sub-committee has reviewed the associated contracts and legal agreements for conformance to the ~~value~~ARRC aligned fallback language and noted that certain contracts will require some form of ~~our residential MSRs.~~

standardization in accordance with LIBOR transition recommended fallback provisions.

The FRB, the FDIC, and the OCC issued supervisory guidance encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021. In accordance with guidance, as of after December 31, 2021 the Bank does not offer LIBOR indexed products.

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~~June 30, ~~2017,~~2022, ourone-year gap was a negative ~~17.52%~~26.14%, as compared to a negative ~~21.37%~~7.43% at December 31, ~~2016.~~2021. The~~385-basis~~ ~~point~~ change ~~was largely due to~~in our one-year gap from December 31, 2021, primarily reflects an increase in ~~cash~~borrowings that will mature or are projected to get put back to the Company and an increase in new deposit 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.~~are indexed to short term rates.

The table on the following page sets forth the amounts of interest-earning assets and interest-bearing liabilities outstanding at ~~September~~June 30, ~~2017~~2022 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~~June 30, ~~2017~~2022 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”)~~CPR of ~~15%~~6.99% per annum; for multi-family and CRE loans, prepayment rates are forecasted at weighted average CPRs of ~~15%~~8.69% and ~~13%~~7.25% per annum, respectively. Borrowed funds were not assumed to prepay.

Savings, ~~interest-bearing~~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%~~67% for the first five years and ~~43%~~33% for years six through ten. Interest-bearing checking accounts were assumed to decay at a rate of ~~70%~~85% for the first five years and ~~30%~~15% 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%~~79% for the first five years and ~~29%~~21% for years six through ten.


		At June 30, 2022
(dollars in millions)		Three Months or Less					Four to Twelve Months					More Than One Year to Three Years					More Than Three Years to Five Years				More Than Five Years to 10 Years				More Than 10 Years				Total
INTEREST-EARNING ASSETS:
Mortgage and other loans (1)	$		7,153			$		5,636			$		14,144			$		13,698		$		7,856		$		—		$		48,487
Mortgage-related securities (2)(3)			191					171					520					329				437				819				2,467
Other securities (2)			1,754					445					361					40				403				829				3,832
Interest-earning cash, cash equivalents and due from banks			3,130					—					—					—				—				—				3,130
Total interest-earning assets			12,228					6,252					15,025					14,067				8,696				1,648				57,916
INTEREST-BEARING LIABILITIES:
Interest-bearing checking and money market accounts			11,890					506					2,865					648				3,280				—				19,189
Savings accounts			3,067					2,599					480					295				3,139				—				9,580
Certificates of deposit			3,070					3,078					1,882					60				—				—				8,090
Borrowed funds			7,989					2,775					2,900					500				—				143				14,307
Total interest-bearing liabilities			26,016					8,958					8,127					1,503				6,419				143				51,166
Interest rate sensitivity gap per period (4)	$		(13,788	)		$		(2,706	)		$		6,898			$		12,564		$		2,277		$		1,505		$		6,750
Cumulative interest rate sensitivity gap	$		(13,788	)		$		(16,494	)		$		(9,596	)		$		2,968		$		5,245		$		6,750
Cumulative interest rate sensitivity gap as a percentage of total assets			(21.85	)	%			(26.14	)	%			(15.21	)	%			4.70	%			8.31	%			10.70	%
Cumulative net interest-earning assets as a percentage of net interest-bearing liabilities			47.00		%			52.84		%			77.74		%			106.65	%			110.28	%			113.19	%

~~Interest Rate Sensitivity Analysis~~

(1)

For the purpose of the gap analysis, loans held for sale, non-performing loans and the allowances for 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.

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~~quarterly 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 onone-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~~June 30, ~~2017,~~2022, the impact of a~~100-basis~~ ~~point~~ 100 bp 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%~~2.90% per annum. ~~Conversely, the impact of a100-basis~~ ~~point increase in market interest rates would have decreased our projected prepayment rates for multi-family and CRE loans by a constant prepayment rate of 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~~Economic Value of Equity (“~~NPV”~~EVE”) over a range of interest rate scenarios. ~~NPV~~EVE is defined as the net present value of expected cash flows from assets, liabilities, andoff-balance sheet contracts. The ~~NPV~~EVE ratio, under any interest rate scenario, is defined as the ~~NPV~~EVE in that scenario divided by the market value of assets in the same scenario. The model assumes estimated loan prepayment rates, reinvestment rates, and deposit decay rates similar to those utilized in formulating the preceding Interest Rate Sensitivity Analysis.

Based on the information and assumptions in effect at ~~September~~June 30, ~~2017,~~2022, the following table reflects the estimated percentage change in our ~~NPV,~~EVE, assuming the changes in interest rates noted:


Change in Interest Rates (in basis points) (1)	Estimated Percentage Change in Economic Value of Equity
~~Change in Interest Rates~~ ~~(in basis points)~~⁽¹⁾-100 over one year	~~Estimated Percentage~~ ~~Change in~~ ~~Net Portfolio Value~~	5.78%
+100 over one year		~~(2.54~~	)% -8.17%
+200 over one year		~~(8.93~~	)% -16.66%

~~(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.~~

(1)

The impact of a 200 bp reduction 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~~EVE presented in the preceding table are within the ~~parameters~~limits approved by the Boards of Directors of the Company and the ~~Banks.~~Bank.

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

We also utilize an internal net interest income simulation to manage our sensitivity to interest rate risk. The simulation incorporates various market-based assumptions regarding the impact of changing interest rates on future levels of our financial assets and liabilities. The assumptions used in the net interest income simulation are inherently uncertain. Actual results may differ significantly from those presented in the following table, due to the frequency, timing, and magnitude of changes in interest rates; changes in spreads between maturity and repricing categories; and prepayments, among other factors, coupled with any actions taken to counter the effects of any such changes.

Based on the information and assumptions in effect at ~~September~~June 30, ~~2017,~~2022, the following table reflects the estimated percentage change in future net interest income for the next twelve months, assuming the changes in interest rates noted:


Change in Interest Rates (in basis points)⁽¹⁾⁽²⁾		Estimated Percentage Change in Future Net Interest Income
~~+100~~-100 over one year			~~(2.34~~	)% 4.41%
+~~200~~100 over one year		-3.72%
+200 over one year	~~(5.72~~	)% -8.77%

~~(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.~~

(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 of a 200 bp reduction 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~~EVE 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~~ALCO 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~~June 30, ~~2017,~~2022, our analysis indicated that an immediate inversion of the yield curve would be expected to result in a ~~1.83%~~(4.32)% decrease in net interest income; conversely, an immediate steepening of the yield curve would be expected to result in a ~~3.85%~~13.38% increase in net interest income. It should be noted that the yield curve changes in these scenarios were updated, given the changing market rate environment, which resulted in an increase in the income sensitivity in the steepening scenario.

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

Liquidity

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 $3.3 billion and ~~$557.9 million,~~$2.2 billion, respectively, at ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016.~~2021. As in the past, our ~~portfolios of loans~~loan and securities portfolios provided meaningful liquidity in ~~the first nine months of the year,~~2022, with cash flows from the repayment and sale of loans totaling ~~$9.3~~$6.0 billion and cash flows from the repayment and sale of securities totaling ~~$1.3 billion.~~

$397 million.

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~~In addition, we have access to the ~~Banks’~~Bank’s approved lines of credit with various counterparties, including theFHLB-NY. The availability of these wholesale funding sources is generally based on the ~~available~~ amount of mortgage loan collateral available under a blanket lien we have pledged to the respective institutions and, to a lesser extent, the ~~available~~ amount of available securities that may be pledged to collateralize our borrowings. At ~~September~~June 30, ~~2017,~~2022, our available borrowing capacity with theFHLB-NY was ~~$7.5~~$12.2 billion. In addition, the ~~Banks~~Bank had ~~$3.0~~available-for-sale securities of $5.7 billion, of~~available-for-sale~~ ~~securities, combined, at that date.~~ which, $4.6 billion is unpledged.

Furthermore, ~~both~~ the ~~Community~~ Bank ~~and the Commercial Bank have~~has agreements with the ~~Federal Reserve Bank of New York (the“FRB-NY”)~~FRB-NY that enable ~~them~~it to access the discount window as a further means of enhancing their ~~liquidity if need be.~~liquidity. In connection with ~~their~~these agreements, the ~~Banks have~~Bank has pledged certain loans and securities to collateralize any funds they may borrow. At ~~September~~June 30, ~~2017,~~2022, the maximum amount the ~~Community~~ Bank could borrow from theFRB-NY was ~~$1.3 billion; the maximum amount the Commercial Bank could borrow from theFRB-NY~~ ~~was $77.5 million.~~$1.1 billion. There were no borrowings against ~~either of~~ these lines of credit at ~~that date.~~June 30, 2022.

Our primary investing activity is loan ~~production. In the first nine months of 2017,~~production, and the volume of loans we originated for investment ~~was $5.8 billion.~~totaled $8.8 billion in 2022. During this time, the net cash ~~provided by~~used in investing activities totaled ~~$2.5 billion.~~$3.1 billion; the net cash provided by our operating activities totaled $399 million. Our ~~operating~~financing activities provided net cash of ~~$1.3 billion, while the net cash used in our financing activities totaled $1.1~~$3.7 billion.

CDs due to mature or reprice in one year or less from ~~September~~June 30, ~~2017~~2022 totaled ~~$8.1~~$6.1 billion, representing ~~91.9%~~76% of total CDs at that date. Our ability to attract and retain ~~these~~retail deposits, including CDs, ~~and to attract new deposits~~ depends on numerous factors, including, ~~customer~~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 ~~pay on our deposits,~~offer; the types of products we ~~offer,~~feature; and the attractiveness of their terms. ~~However, there are times when we may choose not~~

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

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

~~In each of 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.~~Bank. 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 2022, the ~~nine months ended September 30, 2017, the Banks~~Bank paid dividends totaling ~~$276.0~~$190 million to the Parent Company, leaving ~~$302.4~~$573 million ~~they~~that it could dividend to the Parent Company without regulatory approval at ~~that date.~~year-end. Additional sources of liquidity available to the Parent Company at ~~September~~June 30, ~~2017~~2022 included ~~$135.8~~$133 million in cash and cash equivalents. If ~~either of~~ the ~~Banks were~~Bank was 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~~

Contractual Obligations and Off-Balance Sheet Commitments

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

For example, we offer CDs with contractual terms to our customers, and borrow funds under contract from the FHLB-NY and various brokerage firms. These contractual obligations are reflected in the Consolidated Statements of Condition under “Deposits” and “Borrowed funds,” respectively. At June 30, 2022, we had CDs of $8.1 billion and long-term debt (defined as borrowed funds with an original maturity one year or more) of $12.6 billion.

At June 30, 2022, 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, totaling $4.9 billion. These off-balance sheet commitments consist of agreements to extend credit, as long as there is no violation of any condition established in the contract under which the loan is made. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee.

The letters of credit we issue consist of performance stand-by, financial stand-by, and commercial letters of credit. Financial ~~Instruments~~

~~We use various~~stand-by letters of credit primarily are issued for the benefit of other financial ~~instruments, including derivatives,~~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 ~~strategies~~current liquidity position, we expect that our funding will be sufficient to ~~mitigate~~fulfill these cash obligations and commitments when they are due both in the short term and long term.

For the three months ended June 30, 2022, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or ~~reduce our exposure~~cash flows.

At June 30, 2022, we had no commitments 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,purchase securities.

Capital Position

On March 17, 2017, we ~~held derivative financial instruments with a notional value~~issued 515,000 shares of ~~$765.9 million. (See Note 12, “Derivative Financial Instruments,” for a further discussion~~preferred stock. The offering generated capital of ~~our use of such financial instruments.)~~

~~Capital Position~~

~~In March 2017, the Company raised $502.8~~$503 million, net of underwriting and other issuance ~~expenses,~~costs, for general corporate purposes, with the bulk of the proceeds being distributed to the Bank.

On October 24, 2018, the Company announced that it had received regulatory approval to repurchase its common stock. Accordingly, the Board of Directors approved a $300 million common share repurchase program. The repurchase program was funded through ~~an offering~~the issuance of ~~depositary shares, each representing~~ a ~~1/40 interest in a share~~like amount 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,~~subordinated notes. As of ~~total assets at September 30, 2017,~~ June 30, ~~2017, and December 31, 2016, and was equivalent to~~2022, the Company has repurchased a ~~book value per common share~~total of ~~$12.79, $12.74, and $12.57~~29.7 million shares at an average price of $9.61 or an aggregate purchase price of $285 million, leaving $10 million remaining under 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.current authorization.

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~~includes AOCL, which ~~increased $3.1~~decreased $368 million from the balance at the end of ~~June~~last year and ~~decreased $52.3~~$379 million from the ~~end of December~~year-ago quarter to ~~$4.4~~$453 million at ~~September~~June 30, ~~2017.~~2022. The ~~increase~~year-to-date decrease was primarily the result of a ~~$4.3~~$391 million ~~increase~~change in the net unrealized gain (loss) onavailable-for-sale securities, net of tax, ~~to $47.9 million~~ and a ~~$1.2~~$23 million ~~decrease~~change in ~~pension and post-retirement obligations,~~the net unrealized loss on cash flow hedges, net of tax, to ~~$47.1~~$14 million.

Regulatory Capital

The Bank is subject to regulation, examination, and supervision by the NYSDFS and the FDIC (the “Regulators”). The Bank is also governed by numerous federal and state laws and regulations, including the FDIC Improvement Act of 1991, which established five categories of capital adequacy ranging from “well capitalized” to “critically undercapitalized.” Such classifications are used by the FDIC to determine various matters, including prompt corrective action and each institution’s FDIC deposit insurance premium assessments. Capital amounts and classifications are also subject to the Regulators’ qualitative judgments about the components of capital and risk weightings, among other factors.

The quantitative measures established to ensure capital adequacy require that banks maintain minimum amounts and ratios of leverage capital to average assets and of common equity tier 1 capital, tier 1 capital, and total capital to risk-weighted assets (as such measures are defined in the regulations). At ~~September~~June 30, ~~2017,~~2022, our capital measures continued to exceed the minimum federal requirements for a bank holding ~~company.~~company and for a bank. 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 and for the Bank on a stand-alone 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 %


	Risk-Based Capital
At June 30, 2022	Common Equity Tier 1					Tier 1					Total					Leverage Capital
(dollars in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital	$	4,368		9.16	%	$	4,871		10.22	%	$	5,719		12.00	%	$	4,871		8.13	%
Minimum for capital adequacy purposes		2,145		4.50			2,860		6.00			3,813		8.00			2,396		4.00
Excess	$	2,223		4.66	%	$	2,011		4.22	%	$	1,906		4.00	%	$	2,475		4.13	%

~~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.~~

Regulatory Capital Analysis (New York Community Bank)


	Risk-Based Capital
At June 30, 2022	Common Equity Tier 1					Tier 1					Total					Leverage Capital
(dollars in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital	$	5,365		11.26	%	$	5,365		11.26	%	$	5,569		11.69	%	$	5,365		8.96	%
Minimum for capital adequacy purposes		2,143		4.50			2,858		6.00			3,810		8.00			2,395		4.00
Excess	$	3,222		6.76	%	$	2,507		5.26	%	$	1,759		3.69	%	$	2,970		4.96	%

At ~~September~~June 30, ~~2017,~~2022, our total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by ~~659 basis points~~400 bps and the fully-phased in capital conservation buffer by ~~409 basis points.~~

150 bps.

~~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~~The 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~~June 30, ~~2017~~2022

For the three months ended June 30, 2022, net income totaled $171 million, up 13% compared to the $152 million the Company reported for the three months ended June 30, 2021. Net income available to common ~~shareholders (“net income”)~~stockholders for the three months ended June 30, 2022 totaled ~~$102.3~~$163 million, inup 13% compared to the ~~current third quarter, equivalent~~$144 million the Company reported for the three months ended June 30, 2021. On a per share basis, diluted EPS were $0.34 for the three months ended June 30, 2022, up 13% compared to ~~$0.21 per diluted common share. In~~ the ~~trailing and year-earlier quarters,~~$0.30 the Company reported for the three months ended June 30, 2021. Both 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~~available to common stockholders for the three months ended June 30, 2022 include merger-related expenses of $3 million, net of income tax, while the three months ended June 30, 2021 includes merger-related expenses of $10 million, net of income tax and a $2 million revaluation of the Company's deferred taxes due to a ~~decrease~~change in ~~net interest income, as further discussed below.~~the New York State tax rate.

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~~Year-Over-Year Comparison

Net interest income for the three months ended June 30, 2022 totaled $359 million, up $28 million or 8% on a year-over-year basis. This was driven by a $42 million or 10% increase in interest income offset by a $14 million or 14% increase in interest expense.

Details 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~~change in net interest income ~~was attributable~~are as follows:

•

Interest income on loans and leases rose $38 million or 10% to $424 million on 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~~year-over-year basis 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 andon interest-earning cash and cash equivalents rose ~~$4.9~~$7 million to ~~$42.7~~$9 million, while interest income on securities declined $3 million to $40 million.

•

The ~~decrease~~year-over-year improvement in interest income ~~from loans~~ was ~~driven by~~due to a ~~$1.3~~$4.0 billion ~~decrease~~or 8% increase in ~~the~~ average ~~balance~~assets to ~~$37.8~~$57.0 billion, ~~and~~mainly due to a~~one-basis~~ ~~point~~ significant increase in average loan balances, along with a seven basis-point improvement in the average yield to ~~3.71%~~3.32%. ~~The decrease in~~

•

Average loans increased $4.3 billion to $47.1 billion on a year-over-year basis, while the average ~~balance was largely due~~loan yield increased one basis point to ~~the sale~~3.61%.

•

Average securities balances of ~~our covered loan portfolio early in the quarter. The increase in~~$6.7 billion were relatively unchanged, however, the average securities yield ~~was a function of the increase in prepayment income. Prepayment income on loans contributed~~declined 15 basis points year-over-year to ~~the~~2.40%.

•

Interest expense on average ~~yield on loans, an increase of one basis point.~~

~~The increase in the interest income from securities~~interest-bearing checking and ~~interest-earning cash and cash equivalents was due~~MMAs increased $17 million to ~~increases in both the~~$24 million as 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~~$4.8 billion and the average cost ~~of funds rose seven~~increased 31 basis points to ~~1.21%.~~0.55% on a year-over-year basis.

~~Year-Over-Year Comparison~~

~~The following factors contributed~~

•

Interest expense on borrowed funds declined $4 million or 6% to ~~the year-over-year reduction in net interest income:~~

~~Interest income fell $22.4~~$68 million, year-over-year aswhile average borrowings declined $715 million or 5% to $15.0 billion.

•

Average non-interest-bearing deposit balances declined $920 million or 17% to $4.6 billion.

Net Interest Margin

During the three months ended June 30, 2022, the NIM was 2.52%, up two basis points on a ~~$5.5 million decline in the interest~~year-over-year basis and up nine basis points on a linked-quarter basis.

Prepayment 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~~current quarter's NIM, up two basis points ~~year-over-year.~~

compared to the second quarter of last year and up six basis points compared to the first quarter of this year. Excluding the impact from prepayment income, the NIM on a non-GAAP basis was 2.38%, up three basis points compared to the second quarter of this year.

~~Net Interest Margin~~

The ~~direction~~following table summarizes the contribution of loan and securities prepayment income on 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~~NIM for the ~~following reasons:~~respective periods:

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.


										June 30, 2022
	For the Three Months Ended									Compared to
(dollars in millions)	June 30, 2022			March 31, 2022			June 30, 2021			March 31, 2022				June 30, 2021
Total Interest Income	$	473		$	429		$	431			10		%		10		%
Prepayment Income:
Loans	$	19		$	11		$	22			73		%		(14	)	%
Securities		1			—			5		NM			%		(80	)	%
Total prepayment income	$	20		$	11		$	27			82		%		(26	)	%
GAAP Net Interest Margin	2.52		%	2.43		%	2.50		%		9		bp		2		bp
Less:
Prepayment income from loans	-13		bp	-8		bp	-17		bp		(5	)	bp	4			bp
Prepayment income from securities	-1				—		-3				(1	)	bp	2			bp
Add excess liquidity		—			—		8				—			8
Total prepayment income contribution to net interest margin	-14		bp	-8		bp	-12		bp		(6	)	bp		(2	)	bp
Adjusted Net Interest Margin (non-GAAP)	2.38		%	2.35		%	2.38		%		3		bp	0			bp

~~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,~~three-month periods, 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 (includingmark-to-market adjustments from acquisitions), that are considered adjustments to such average yields and costs.

Net Interest Income Analysis


		For the Three Months Ended
		June 30, 2022								March 31, 2022								June 30, 2021
							Average								Average							Average
		Average					Yield/			Average					Yield/			Average				Yield/
(dollars in millions)		Balance			Interest		Cost			Balance			Interest		Cost			Balance		Interest		Cost
ASSETS:
Interest-earning assets:
Mortgage and other loans and leases, net (1)	$		47,144	$		424		3.61	%	$	45,807	$		393		3.43	%	$	42,817	$	386		3.60	%
Securities (2)(3)			6,676			40		2.40			6,538			34		2.12			6,790		43		2.55
Reverse repurchase agreements			348			2		1.93			292			1		1.12			469		1		1.32
Interest-earning cash, cash equivalents, and due from banks			2,861			7		0.93			1,924			1		0.21			2,946		1		0.11
Total interest-earning assets			57,029			473		3.32			54,561			429		3.15			53,022		431		3.25
Non-interest-earning assets			4,959								5,333								5,092
Total assets	$		61,988							$	59,894							$	58,114
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Interest-bearing deposits:
Interest-bearing checking and money market accounts	$		17,456	$		24		0.55	%	$	13,784	$		8		0.24	%	$	12,699	$	7		0.24	%
Savings accounts			9,228			10		0.41			9,208			8		0.35			7,487		7		0.36
Certificates of deposit			8,102			12		0.62			8,070			11		0.53			9,154		14		0.58
Total interest-bearing deposits			34,786			46		0.53			31,062			27		0.35			29,340		28		0.38
Short term borrowed funds			1,959			5		0.96			3,212			3		0.39			2,250		2		0.35
Other borrowed funds			13,050			63		1.94			13,351			67		2.04			13,474		70		2.07
Total Borrowed funds			15,009			68		1.81			16,563			70		1.72			15,724		72		1.82
Total interest-bearing liabilities			49,795			114		0.92			47,625			97		0.82			45,064		100		0.88
Non-interest-bearing deposits			4,568								4,397								5,488
Other liabilities			724								826								691
Total liabilities			55,087								52,848								51,243
Stockholders’ equity			6,901								7,046								6,871
Total liabilities and stockholders’ equity	$		61,988							$	59,894							$	58,114
Net interest income/interest rate spread				$		359		2.40	%			$		332		2.33	%			$	331		2.37	%
Net interest margin								2.52	%							2.43	%						2.50	%
Ratio of interest-earning assets to interest-bearing liabilities							1.15x								1.15x							1.18x

   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 and non-performing loans.

(2)

Amounts are at amortized cost.

(3)

Includes FHLB stock.

~~(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.~~

(Recovery of) Provision for Credit 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~~For the three months ended June 30, ~~2017 and September 30, 2016. The elevated loan loss~~2022, the Company reported a provision for credit losses of $9 million compared to a recovery of credit losses of $4 million for the three months ended June 30, 2021. The current ~~third quarter was due to our taxi medallion-related loans. In~~quarter's provision largely reflects the ~~third quarter of 2017,~~strong loan growth the Company ~~recorded net charge-offs of $40.4 million, of which $40.6 million was related to taxi medallion-related loans, compared to~~experienced during 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.~~quarter.

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~~65

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.~~products.

~~Non-interest~~For the three months ended June 30, 2022, non-interest income totaled ~~$108.9~~$18 million, ~~in the~~up 13% on a year-over-year basis. The current ~~third~~second 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~~includes a $1.7 million gain on the sale of ~~covered loans and mortgage banking operations. This was partially offset by a $6.7 million decline~~the Company's former headquarters building in ~~mortgage banking income. The year-over-year increase reflects contributions from the same factors which impacted the linked-quarter results.~~Westbury, N.Y.

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 our~~non-interest income for the respective periods:


	For the Three Months Ended
	June 30,		March 31,			June 30,
(dollars in millions)	2022		2022			2021
Fee income	$	6	$	6		$	6
BOLI income		7		7			8
Net gain (loss) on securities		—		(1	)		—
Other income:
Third-party investment product sales		1		1			—
Other		4		1			2
Total other income		5		2			2
Total non-interest income	$	18	$	14		$	16

Non-Interest Expense

~~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~~For the three months ended June 30, 2022, non-interest expenses ~~which consist~~totaled $138 million, down $1 million or 1% compared to the second quarter 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~~last year. The current second quarter amount includes $4 million in merger-related expenses compared to $10 million in the ~~current third~~year-ago quarter. The second 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 tonon-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~~efficiency ratio was 35.57% compared to ~~$163.7 million and $158.9 million, respectively, in~~37.11% for 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.second quarter of last year.

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~~For the three months ended June 30, 2022, income tax expense totaled ~~$68.0~~$59 million, indown $1 million or 2% compared to 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~~three months ended June 30, 2021. The effective tax rate ~~increased~~for the current second quarter was 25.60% compared to ~~38.10%~~28.38% for the second quarter of last year. The year-ago second quarter income tax expense includes $2 million due to the revaluation of deferred taxes related to a change in the ~~current third quarter from 36.22% in the trailing three-month period.~~New York State tax rate.

~~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~~Six Months Ended ~~September~~June 30, ~~2017~~2022

InFor the ~~first nine~~six months ~~of 2017, we generated~~ended June 30, 2022, net income totaled $326 million up $29 million or 10% compared to $297 million for the six months ended June 30, 2021. Net income available to common stockholders for the six months ended June 30, 2022 was $310 million, up $29 million or 10% compared to $281 million for the six months ended June 30, 2021. On a per share basis, diluted EPS for the six months ended June 30, 2022 totaled $0.66, up 10% compared to $0.60 for the six months ended June 30, 2021. For the six months ended June 30, 2022, both net income and net income available to common ~~shareholders~~stockholders included merger-related expenses of ~~$313.3~~$8 million, ~~or $0.64 per diluted common share as~~net of income tax, compared to $10 million, net ~~income available~~of tax, for the six months ended June 30, 2021. The June 30, 2022 six-month period also included $2 million related to ~~common shareholders~~the revaluation of ~~$381.7 million, or $0.78 per diluted common share,~~the Company's deferred taxes due to the change in the ~~first nine months of 2016.~~New York State tax rate.

~~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~~for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2022, totaled $691 million compared to $649 million for the six months ended June 30, 2021, up $42 million or 6% on a year-over-year basis. The ~~decrease~~year-over-year improvement was ~~the net effect of~~driven by a ~~$67.7~~$48 million ~~decrease~~or 6% increase in interest income, ~~to $1.2 billion and~~offset modestly by a ~~$45.2~~$6 million or 3% increase in interest ~~expense to $332.8 million. During this time, our net interest margin fell 32 basis points to 2.63%.~~expense.

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

are as follows:

~~Prepayment penalty~~•

Interest income ~~contributed $43.7~~on average loan balances increased $48 million or 6% to ~~net~~$817 million, while interest income on securities decreased $7 million or 9% to $75 million.

•

The increase in ~~the first nine months of 2017,~~interest income on average loans was driven by 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~~$3.7 billion ~~the net effect of a $226.0 million decrease~~or 9% increase in average ~~loans~~loan balances to ~~$38.7~~$46.5 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~~an eight basis-point drop in the average yield to 3.52%.

•

Average securities balances of $6.6 billion were relatively unchanged on ~~interest-earning assets to 3.65% in the first nine months of this year. While~~a year-over-year basis, but the average yield ~~on loans fell a modest eight basis points year-over-year to 3.69%, the average yield on securities~~ declined 5020 basis points to ~~3.72%~~2.26%.

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•

Interest expense on average interest-bearing deposits rose $12 million or 20% 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~~$73 million; the average cost of interest-bearing deposits increased 21only modestly to 0.45% compared to 0.42%, however, average interest-bearing deposits increased $3.6 billion or 12% on a year-over-year basis.

•

Interest on average borrowings declined $6 million or 4% as both average balances and the average cost decreased.

•

Average non-interest-bearing deposits rose modestly to $4.5 billion, up $111 million or 3%.

Net Interest Margin

For the six months ended June 30, 2022, the NIM decreased one basis point to 2.48% compared to the six months ended June 30, 2021. Prepayment income contributed 12 basis points to ~~0.85%.~~

~~The following table summarizes~~this period's NIM compared to 14 basis points in the ~~contribution of~~prior year's six-month period. Excluding the impact from prepayment income, ~~from loans and securities~~the NIM, on a non-GAAP basis was 2.36%, up one basis point compared to ~~our interest income and net interest margin in~~ the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016:~~2021.

   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 %


	For the Six Months Ended
(dollars in millions)	June 30, 2022			June 30, 2021			% Change
Total Interest Income	$	902		$	854			6		%
Prepayment Income:
Loans	$	30		$	41			(27	)	%
Securities		1			6			(83	)	%
Total prepayment income	$	31		$	47			(34	)	%
GAAP Net Interest Margin	2.48		%	2.49		%		1		bp
Less:
Prepayment income from loans	-11		bp	-16		bp		5		bp
Prepayment income from securities	-1			-2				1		bp
Add excess liquidity	0			4				(4	)
Total prepayment income contribution to net interest margin	-12		bp	-14		bp		2		bp
Adjusted Net Interest Margin (non-GAAP)		2.36	%		2.35	%		1		bp

~~(1) “Adjusted net interest margin” is anon-GAAP~~ ~~financial measure, as more fully discussed below.~~

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

The following table sets forth certain information regarding our average balance sheet for the ~~nine-month~~six-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~~quarters are derived from average balances that are calculated daily. The average yields and costs include fees, as well as premiums and discounts (includingmark-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,															For the Six Months Ended
	2017							2016								June 30, 2022								June 30, 2021
					Average							Average									Average							Average
	Average				Yield/			Average				Yield/				Average					Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Cost			Balance		Interest		Cost
Assets:
(dollars in millions)																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	%
Mortgage and other loans and leases, net (1)															$		46,479	$		817		3.52	%	$	42,777	$	769		3.60	%
Securities⁽²⁾⁽³⁾		4,052,154		112,800		3.72			5,065,917		160,373		4.22				6,607			75		2.26			6,654		82		2.46
Interest-earning cash and cash equivalents⁽²⁾		832,463		8,347		1.34			8,749		11		0.17

Reverse repurchase agreements																	320			2		1.56			367		1		0.84
Interest-earning cash, cash equivalents, and due from banks																	2,395			8		0.64			2,263		2		0.18
Total interest-earning assets		43,536,730		1,191,869		3.65			43,952,777		1,259,521		3.82				55,801			902		3.24			52,061		854		3.28
Non-interest-earning assets		5,239,745							5,316,971								5,145								5,154

Total assets	$	48,776,475						$	49,269,748						$		60,946							$	57,215

Liabilities and Stockholders’ Equity:
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	%	$		15,629	$		32		0.42	%	$	12,663	$	16		0.26	%
Savings accounts		5,171,645		21,069		0.54			6,112,342		25,001		0.55				9,218			18		0.38			7,102		13		0.37
Certificates of deposit		8,019,142		73,786		1.23			6,700,188		55,129		1.10				8,086			23		0.58			9,566		32		0.67

Total interest-bearing deposits		26,141,357		166,268		0.85			26,161,731		125,901		0.64				32,933			73		0.45			29,331		61		0.42
Borrowed funds		12,992,691		166,572		1.71			14,083,459		161,758		1.53

Short term borrowed funds																	2,132			7		0.66			2,250		4		0.35
Other borrowed funds																	13,650			131		1.93			13,609		140		2.07
Total Borrowed funds																	15,782			138		1.76			15,859		144		1.82
Total interest-bearing liabilities		39,134,048		332,840		1.14			40,245,190		287,659		0.95				48,715			211		0.87			45,190		205		0.91
Non-interest-bearing deposits		2,820,923							2,817,043								4,483								4,372
Other liabilities		269,132							179,471								775								781

Total liabilities		42,224,103							43,241,704								53,973								50,343
Stockholders’ equity		6,552,372							6,028,044								6,973								6,872

Total liabilities and stockholders’ equity	$	48,776,475						$	49,269,748						$		60,946							$	57,215

Net interest income/interest rate spread			$	859,029		2.51	%			$	971,862		2.87	%				$		691		2.37	%			$	649		2.38	%

Net interest margin						2.63	%						2.95	%								2.48	%						2.49	%

Ratio of interest-earning assets to interest-bearing liabilities						1.11x							1.09x								1.15x							1.15x

~~(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~~Credit Losses

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

~~Reflecting~~For the ~~methodology used by management to calculate~~six months ended June 30, 2022, the ~~allowance fornon-covered~~ ~~loan losses, we recorded~~Company reported a provision for credit losses on~~non-covered~~ ~~loans~~ of ~~$58.0~~$7 million compared to zero for the six months ended June 30, 2021.

Non-Interest Income

For the six months ended June 30, 2022, non-interest income totaled $32 million, up $2 million or 7% compared to $30 million for the six months ended June 30, 2021. Included in the ~~nine months ended September 30, 2017~~current six-month period is a $1 million net loss on securities compared to ~~$6.7 million~~no such gain or loss in the ~~year ago nine months.~~year-ago six-month period. 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 recordedcurrent six-month period includes 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~~$1.7 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 Company's former headquarters building in Westbury, N.Y.

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 of~~non-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


	For the Six Months Ended
	June 30,			June 30,
(dollars in millions)	2022			2021
Fee income	$	12		$	11
BOLI income		14			15
Net gain (loss) on securities		(1	)		—
Other income:
Third-party investment product sales		2			—
Other		5			4
Total other income		7			4
Total non-interest income	$	32		$	30

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

InNon-Interest Expense

For the six months ended June 30, 2022, non-interest expenses totaled $279 million, up $8 million or 3% compared to $271 million for the six months ended June 30, 2021. Merger-related expenses for the six months ended June 30, 2022 totaled $11 million, up $1 million or 10% compared to $10 million for the six months ended June 30, 2021. The efficiency ratio for the six months ended June 30, 2022 declined to 37.04% compared to 38.46% during the first ~~nine~~six 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.2021.

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~~For the six months ended June 30, 2022, income tax expense ~~fell $28.1~~totaled $111 million, ~~year-over-year~~unchanged compared to ~~$193.6 million in~~ the ~~nine~~six months ended ~~September~~June 30, ~~2017. During this time,pre-tax~~ ~~income declined $80.0 million to $523.3 million, while the~~2021. The effective tax rate ~~rose modestly to 37.00%, as~~for the six months ended June 30, 2022 was 25.39% compared to ~~36.74%.~~27.11% for the six months ended June 30, 2021. The six months ended June 30, 2021 also included $2 million of additional income tax expense due to the revaluation of our deferred taxes related to a change in the New York state tax rate.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about the Company’s market risk were presented on pages~~83-87~~ 68 through 72 of our ~~2016~~2021 Annual Report on Form10-K, filed with the ~~U.S. Securities and Exchange Commission (the “SEC”)~~SEC on ~~March 1, 2017.~~February 25, 2022. 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 to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s (the “SEC’s”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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 toRule ~~13a-15(b)~~13a-15(e), 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 effective as of the end of the period.

(b) Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined inRules 13a-15(f) and15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

~~The Company~~Refer to “Part I, Financial Information, Item 1, Financial Statements, Note 14 Legal Proceedings”, which is ~~involved in various legal actions arising in the ordinary course of its business. All such actions in the aggregate involve amounts that are believed~~incorporated by ~~management to be immaterial to the financial condition and results of operations of the Company.~~reference into this item.

Item 1A. Risk Factors

In addition to the other information set forth in this report, readers should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form10-K for the year ended December 31, ~~2016,~~2021 as such factors could materially affect the Company’s business, financial condition, or future results of operations. There have been no material changes toin the risk factors ~~disclosed~~as discussed in the ~~Company’s 2016~~Company's Annual Report on Form~~10-K.~~ 10-K for the year ended December 31, 2021.

~~The risks described in the 2016 Annual Report on Form10-K~~ are not the only risks that the Company faces. Additional risks and uncertainties not currently known to the Company, or that the Company currently deems to be immaterial, also may have a material adverse impact on the Company’s business, financial condition, or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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

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

During the three months ended September 30, 2017, the Company allocated $344,000 toward the repurchase of shares of its common stock pursuant to the terms of its stock-based incentive plans, as indicated in the following table:

(dollars in thousands, except per share data)
Third Quarter 2017
   Total Shares of
Common
Stock Repurchased    Average Price
Paid per
Common Share    Total
Allocation
July 1 – July 31
   19,252    $13.04    $ 251
August 1 – August 31
   2,074    12.59    26
September 1 – September 30
   5,344    12.46    67




Total shares repurchased
   26,670    12.89    $ 344

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

On ~~April 20, 2004,~~October 23, 2018, the Board of Directors authorized the repurchase of up to ~~five~~$300 million ~~shares~~ of the Company’s common stock. ~~Of this amount, 1,659,816 shares were still available for repurchase at September 30, 2017.~~ Under said authorization, shares may be repurchased on the open market or in privately negotiated transactions. ~~No shares have been~~As of June 30, 2022, the Company has repurchased $278 million of its common stock under this repurchase authorization, ~~since August 2006.~~leaving $17 million available for repurchase under this repurchase authorization.

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

(amounts in millions, except share data)
Period

Total Shares
of Common
Stock
Repurchased

Average Price
Paid per
Common
Share

Total
Allocation

Second Quarter 2022

April

14,650

$

9.47

$

0

May

275,157

8.99

2

June

520,189

8.81

5

Total Second Quarter 2022

809,996

8.88

$

7

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits


Exhibit No.

2.1		Agreement and Plan of Merger, dated as of April 24, 2021, by and among New York Community Bancorp, Inc., 615 Corp., a wholly-owned subsidiary of New York Community Bancorp, Inc. and Flagstar Bancorp, Inc. * (1)

2.2		Amendment No 1, dated April 26, 2022, to the Agreement and Plan of Merger, dated April 24, 2021 by and among New York Community Bancorp, Inc., 615 Corp., and Flagstar Bancorp, Inc. (2)

3.1		Amended and Restated Certificate of ~~Incorporation~~⁽¹⁾Incorporation.(3)

3.2		Certificates of Amendment of Amended and Restated Certificate of Incorporation.(4)

3.3		Certificate of Amendment of Amended and Restated Certificate of ~~Incorporation~~⁽²⁾Incorporation.(5)
~~3.3~~		~~Certificate of Amendment of Amended and Restated Certificate of Incorporation~~⁽³⁾
3.4		Certificate of Designations of the Registrant with respect to the Series A Preferred Stock, dated March 16, 2017, filed with the Secretary of State of the State of Delaware and effective March 16, ~~2017~~⁽⁴⁾2017.(6)

3.5		Amended and Restated ~~Bylaws of the Registrant, as of December 20, 2016~~⁽⁵⁾Bylaws.(7)

4.1		Specimen Stock ~~Certificate (attached hereto)~~Certificate.(8)
~~4.2~~		~~Form of certificate representing the Series A Preferred Stock~~⁽⁶⁾
~~4.3~~ 4.2		~~Form of depositary receipt representing the Depositary Shares~~⁽⁷⁾
~~4.4~~		Deposit Agreement, dated as of March 16, 2017, by and among the Registrant, Computershare, Inc., and Computershare Trust Company, N.A., as joint depositary, and the holders from time to time of the depositary receipts described therein.⁽⁸⁾(9)

4.3		Form of certificate representing the Series A Preferred Stock.(9)

4.4		Form of depositary receipt representing the Depositary Shares.(9)

4.5		Registrant will furnish, upon request, copies of all instruments defining the rights of holders of long-term debt instruments of the registrant and its consolidated subsidiaries.
~~11.0~~		~~Computation of Earnings per Common Share (See Note 2 to the Consolidated Financial Statements.)~~
31.1
~~31.1~~		Rule13a-14(a) Certification of Chief Executive Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (attached hereto).
~~31.2~~
31.2		Rule13a-14(a) Certification of Chief Financial Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (attached hereto).
~~32.0~~
32.0		Section 1350 Certifications of the Chief Executive Officer and Chief Financial Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 (attached hereto).
~~101~~
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		The ~~following materials from the Company’s~~cover page of New York Community Bancorp, Inc.’s Quarterly Report on Form10-Q for the quarter ended ~~September~~June 30, ~~2017,~~2022, formatted in Inline XBRL ~~(Extensible Business Reporting Language): (i)~~(included within the Consolidated Statements of Condition, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statement of Changes in Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.Exhibit 101 attachments).

~~(1)~~

~~Incorporated by reference to Exhibit 3.1 to the Company’s Form10-Q~~ ~~for the quarterly period ended March 31, 2001 (FileNo. 0-22278),~~ ~~as filed with the Securities and Exchange Commission on May 11, 2001.~~

~~(2)~~

~~Incorporated by reference to Exhibit 3.2 to the Company’s Form10-K~~ ~~for the year ended December 31, 2003 (FileNo. 1-31565),~~ ~~as filed with the Securities and Exchange Commission on March 15, 2004.~~

~~(3)~~

~~Incorporated by reference to Exhibit 3.1 to the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on April 27, 2016 (FileNo. 1-31565).~~

~~(4)~~

~~Incorporated herein by reference to Exhibit 3.4 of the Company’s Registration Statement on Form8-A~~ ~~(FileNo. 333-210919),~~ ~~as filed with the Securities and Exchange Commission on March 16, 2017.~~

~~(5)~~

~~Incorporated herein by reference to Exhibit 3.4 of the Company’s Annual Report on Form10-K~~ ~~(FileNo. 001-31565)~~ ~~for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on March 1, 2017.~~

~~(6)~~

~~Incorporated by reference to Exhibit A to Exhibit 4.1 of the Company’s Form8-K,~~ ~~as filed with the Securities and Exchange Commission on March 17, 2017 (FileNo. 1-31565).~~

~~(7)~~

~~Incorporated by reference to Exhibit B to Exhibit 4.1 of the Company’s Form8-K,~~ ~~as filed with the Securities and Exchange Commission on March 17, 2017 (FileNo. 1-31565).~~

~~(8)~~

~~Incorporated by reference to Exhibit 4.1 of the Company’s Form8-K,~~ ~~as filed with the Securities and Exchange Commission on March 17, 2017 (FileNo. 1-31565).~~

* Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request.

** Management plan or compensation plan arrangement.

(1)

Incorporated by reference to Exhibits to the Company's Form 8-K filed with the Securities and Exchange Commission on April 27, 2021 (File No. 1-31565).

(2)

Incorporated by reference to Exhibits to the Company's Form 8-K filed with the Securities and Exchange Commission on April 27, 2022 (File No. 1-31565).

(3)

Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2001 (File No. 0-22278).

(4)

Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2003 (File No. 1-31565).

(5)

Incorporated by reference to Exhibits to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 27, 2016 (File No. 1-31565).

(6)

Incorporated by reference to Exhibits of the Company’s Registration Statement on Form 8-A (File No. 333-210919), as filed with the Securities and Exchange Commission on March 16, 2017.

(7)

Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on June 8, 2022 (File No. 1-31565).

(8)

Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended September 30, 2017 (File No. 1-31565).

(9)

Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017 (File No. 1-31565).

NEW YORK COMMUNITY BANCORP, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


					New York Community Bancorp, Inc.
					~~(Registrant)~~

~~DATE: November 9, 2017~~			~~BY:~~		~~/s/ Joseph R. Ficalora~~
					~~Joseph R. Ficalora~~	~~President, Chief Executive Officer,~~	~~and Director~~(Registrant)

DATE: ~~November 9, 2017~~			~~BY:~~	August 8, 2022		BY:	/s/ Thomas R. Cangemi
							Thomas R. Cangemi Chairman, President, and Chief Executive Officer

DATE: August 8, 2022	BY:	/s/ John J. Pinto
		John J. Pinto Senior Executive Vice President and Chief Financial Officer


	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


	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


	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			—


	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


(in thousands)	For the Nine Months Ended September 30, 2017
Details about Accumulated Other Comprehensive Loss	Amount Reclassified from Accumulated Other Comprehensive Loss⁽¹⁾			Affected Line Item in the Consolidated Statement of Operations and Comprehensive Income
Unrealized gains onavailable-for-sale securities	$	1,848		Net gain on sales of securities
		(770	)	Income tax expense

	$	1,078		Net gain on sales of securities, net of tax

Amortization of defined benefit pension plan items:
Past service liability	$	187		Included in the computation of net periodic (credit) expense⁽²⁾
Actuarial losses		(6,363	)	Included in the computation of net periodic (credit) expense⁽²⁾

		(6,176	)	Total before tax
		2,574		Tax benefit

	$	(3,602	)	Amortization of defined benefit pension plan items, net of tax

Total reclassifications for the period	$	(2,524	)


	December 31, 2016
(in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Mortgage-Related Securities:
GSE certificates	$	7,786	$	—	$	460	$	7,326

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

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

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


(in thousands)	Amortized Cost		Carrying Amount		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Mortgage-Related Securities:
GSEcertificates	$	2,193,489	$	2,193,489	$	64,431	$	2,399	$	2,255,521
GSE CMOs		1,019,074		1,019,074		36,895		57		1,055,912

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

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

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

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


(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


(dollars in thousands)	Amount		Percent of Covered Loans
Loan Category:
One-to-four family	$	1,609,635		94.8	%
Other loans		88,498		5.2

Total covered loans	$	1,698,133		100.0	%


(in thousands)	Accretable Yield
Balance at beginning of period	$	647,470
Accretion		(72,842	)
Reclassification tonon-accretable difference for the six months ended June 30, 2017		(11,381	)
Changes in expected cash flows due to the sale of the covered loan portfolio		(563,247	)

Balance at end of period	$	—


(in thousands)
Covered Loans 90 Days or More Past Due:
One-to-four family	$	124,820
Other loans		6,645

Total covered loans 90 days or more past due	$	131,465


(in thousands)
Covered Loans30-89 Days Past Due:
One-to-four family	$	21,112
Other loans		1,536

Total covered loans30-89 days past due	$	22,648


	For the Three Months Ended
	September 30, 2017						September 30, 2016
(in thousands)	Residential			Participation			Residential			Participation
Carrying value, beginning of period	$	220,586		$	4,853		$	188,331		$	5,663
Additions		6,072			39			12,005			731
Sales		(208,827	)		—			—			—
Increase (decrease) in fair value:
Due to changes in interest rates		(222	)		—			5,668			—
Due to model assumption changes⁽¹⁾		—			—			—			—
Due to loan payoffs		(7,855	)		—			(12,818	)		—
Due to passage of time and other changes		(6,972	)		—			(1,767	)		—
Amortization		—			(813	)		—			(618	)

Carrying value, end of period	$	2,782		$	4,079		$	191,419		$	5,776


	September 30, 2017			December 31, 2016
Expected weighted average life		87 months			82 months
Constant prepayment speed		9.89	%		8.70	%
Discount rate		12.00			10.05
Primary mortgage rate to refinance		4.00			4.11
Cost to service (per loan per year):
Current		$70			$64
30-59 days or less delinquent		220			214
60-89 days delinquent		370			364
90-119 days delinquent		470			464
120 days or more delinquent		870			864


	Gain (Loss) Included in Mortgage Banking Income from Changes in Fair Value⁽¹⁾
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2017			2016⁽²⁾			2017			2016⁽²⁾
Loans held for sale	$	464		$	(1,020	)	$	1,059		$	2,782
Mortgage servicing rights		(9,743	)		(8,917	)		(20,092	)		(76,998	)

Total loss	$	(9,279	)	$	(9,937	)	$	(19,033	)	$	(74,216	)


(in thousands)	Fair Value January 1, 2017		Total Realized/Unrealized Gains/(Losses) Recorded in					Issuances		Settlements			Transfers to/(from) Level 3		Fair Value at September 30, 2017		Change in Unrealized Gains/ (Losses) Related to Instruments Held at September 30, 2017
(in thousands)	Fair Value January 1, 2017		Income/ (Loss)			Comprehensive (Loss) Income		Issuances		Settlements			Transfers to/(from) Level 3		Fair Value at September 30, 2017
Mortgage servicing rights	$	228,099	$	(34,544	)	$	—	$	18,054	$	(208,827	)	$	—	$	2,782	$	(182	)
Interest rate lock commitments		982		(713	)		—		—		—			—		269		269

(in thousands)	Fair Value January 1, 2016		Total Realized/Unrealized Gains/(Losses) Recorded in					Issuances		Settlements			Transfers to/(from) Level 3		Fair Value at September 30, 2016		Change in Unrealized Gains/ (Losses) Related to Instruments Held at September 30, 2016
(in thousands)	Fair Value January 1, 2016		Income/ (Loss)			Comprehensive (Loss) Income		Issuances		Settlements			Transfers to/(from) Level 3		Fair Value at September 30, 2016
Mortgage servicing rights	$	243,389	$	(83,155	)	$	—	$	31,185	$	—		$	—	$	191,419	$	(58,546	)
Interest rate lock commitments		2,526		4,408			—		—		—			—		6,934		6,934


(dollars in thousands)	Fair Value at September 30, 2017	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Mortgage servicing rights	$2,782	Discounted Cash Flow	Weighted Average Constant Prepayment Rate⁽¹⁾		9.89	%
			Weighted Average Discount Rate		12.00
Interest rate lock commitments	269	Discounted Cash Flow	Weighted Average Closing Ratio		69.88


(in millions)	For the Three Months Ended June 30, 2022		For the Six Months Ended June 30, 2022		For the Three Months Ended June 30, 2021		For the Six Months Ended June 30, 2021
Interest income on lease financing (1)	$	12	$	24	$	14	$	28


(in millions)	For the Three Months Ended June 30, 2022		For the Six Months Ended June 30, 2022		For the Three Months Ended June 30, 2021		For the Six Months Ended June 30, 2021
Operating lease cost	$	7	$	14	$	7	$	13
Sublease income		—		—		—		—
Total lease cost	$	7	$	14	$	7	$	13


(in millions, except lease term and discount rate)	June 30, 2022			December 31, 2021
Operating Leases:
Operating lease right-of-use assets	$	232		$	249
Operating lease liabilities	$	232		$	249
Weighted average remaining lease term	13 years			16 years
Weighted average discount rate%		3.00	%		3.05	%


(in millions) Maturities of lease liabilities:	June 30, 2022
2022	$	14
2023		27
2024		26
2025		25
2026		24
Thereafter		171
Total lease payments		287
Less: imputed interest		(55	)
Total present value of lease liabilities	$	232


(in thousands)	Notional Amount		Unrealized⁽¹⁾
(in thousands)	Notional Amount		Gain		Loss
Treasury options	$	20,000	$	—	$	144
Eurodollar futures		20,000		1		—
Forward commitments to sell loans/mortgage-backed securities		365,000		836		461
Forward commitments to buy loans/mortgage-backed securities		305,000		—		861
Interest rate lock commitments		55,886		269		—

Total derivatives	$	765,886	$	1,106	$	1,466


	September 30, 2017
(in thousands)	Gross Amount of Recognized Assets⁽¹⁾		Gross Amount Offset in the Statements of Condition		Net Amount of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Consolidated Statements of Condition				Net Amount
(in thousands)	Gross Amount of Recognized Assets⁽¹⁾		Gross Amount Offset in the Statements of Condition				Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	1,262	$	674	$	588	$	—	$	—	$	588


	September 30, 2017
(in thousands)	Gross Amount of Recognized Liabilities		Gross Amount Offset in the Statements of Condition		Net Amount of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Consolidated Statements of Condition				Net Amount
(in thousands)	Gross Amount of Recognized Liabilities		Gross Amount Offset in the Statements of Condition				Financial Instruments		Cash Collateral Pledged		Net Amount
Derivatives	$	1,466	$	1,248	$	218	$	—	$	—	$	218


	For the Three Months Ended September 30, 2017
(in thousands)	Banking Operations			Residential Mortgage Banking			Total Company
Net interest income	$	273,265		$	3,078		$	276,343
Provision for loan losses		44,585			—			44,585
Non-Interest Income:
Third party⁽¹⁾		99,596			1,973			101,569
Gain on sale of mortgage banking operations		—			7,359			7,359
Inter-segment		(2,411	)		2,411			—

Totalnon-interest income		97,185			11,743			108,928

Non-interest expense⁽²⁾		146,869			15,365			162,234

Income (loss) before income tax expense		178,996			(544	)		178,452
Income tax expense (benefit)		68,200			(216	)		67,984

Net income (loss)	$	110,796		$	(328	)	$	110,468

Identifiable segment assets(period-end)	$	48,457,891		$	—		$	48,457,891


(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


	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


	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


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


(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

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