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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

~~At December 31, 2017, multi-family loans represented $28.1 billion, or 73.2%, of totalnon-covered~~ ~~loans held for investment, reflecting a year-over-year increase of $1.1 billion, or 4.2%.~~

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

The majority of our multi-family loans are made to long-term owners of buildings with apartments that are subject to rent regulation and feature below-market rents. Our borrowers typically use the funds we provide to make building-wide improvements and renovations to certain apartments, as a result of which they are able to increase the rents their tenants pay. In doing so, the borrower creates more cash flows to borrow against in future years.

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

~~While a small percentage of our multi-family loans areten-year~~ fixed rate credits, the vast majority of our multi-family loans feature a term of ten or twelve years, with a fixed rate of interest for the first five or seven years of the loan, and an alternative rate of interest in years six through ten or eight through twelve. The rate charged in the first five or seven years is generally based on intermediate-term interest rates plus a spread. During the remaining years, the loan resets to an annually adjustable rate that is tied to the prime rate of interest, plus a spread. Alternately, the borrower may opt for a fixed rate that is tied to the five-year fixed advance rate of the Federal Home Loan Bank of New York (the~~“FHLB-NY”),~~ plus a spread. The fixed-rate option also requires the payment of one percentage point of the then-outstanding loan balance. In either case, the minimum rate at repricing is equivalent to the rate in the initial~~five-or~~ ~~seven-year term. As the rent roll increases, the typical property owner seeks to refinance the mortgage, and generally does so before the loan reprices in year six or eight.~~

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 net interest rate spread and net interest margin, and the level of net interest income we record. No assumptions are involved in the recognition of prepayment income, as such income is only recorded when cash is received.

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

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

Our emphasis on multi-family loans is driven by several factors, including their structure, which reduces our exposure to interest rate volatility to some degree. Another factor driving our focus on multi-family lending has been the comparative quality of the loans we produce. Reflecting the nature of the buildings securing our loans, our underwriting standards, and the generally conservative~~loan-to-value~~ ~~ratios (“LTVs”) our multi-family loans feature at origination, a relatively small percentage of the multi-family loans that have transitioned tonon-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”), which is the ratio of the property’s net operating income to its debt service; and the ratio of the loan amount to the appraised value (i.e., the LTV) of the property.

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

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

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

~~CRE loans represented $1.0 billion, or 11.7%, of the loans we produced in 2017 for investment, as compared to $1.2 billion, or 12.9%, in the prior year.~~

~~The CRE loans we produce are secured by income-producing properties such as office buildings, retail centers,mixed-use~~ buildings, and multi-tenanted light industrial properties. At December 31, 2017, 69.3% of our CRE loans were secured by properties in New York City, while properties on Long Island accounted for 11.8%. Other parts of New York State accounted for 2.6% of the properties securing our CRE credits, while all other states accounted for 16.3%, combined.

~~The terms of our CRE loans are similar to the terms of our multi-family credits. While a small percentage of our CRE loans featureten-year~~ fixed-rate terms, they primarily feature a fixed rate of interest for the first five or seven years of the loan that is generally based on intermediate-term interest rates plus a spread. During years six through ten or eight through twelve, 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 theFHLB-NY~~ plus a spread. The fixed-rate option also requires the payment of an amount equal to one percentage point of the then-outstanding loan balance. In either case, the minimum rate at repricing is equivalent to the rate in the initial five- or seven-year term.

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

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

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

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

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

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

Because ADC loans are generally considered to have a higher degree of credit risk, especially during a downturn in the credit cycle, borrowers are required to provide a guarantee of repayment and completion. In the twelve months ended December 31, 2017 and 2016, we recovered losses against guarantees of $601,000 and $337,000, respectively. The risk of loss on an ADC loan is largely dependent upon the accuracy of the initial appraisal of the property’s value upon completion of construction; the developer’s experience; the estimated cost of construction, including interest; and the estimated time to complete and/or sell or lease such property.

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

~~Our C&I loans are divided into two categories: specialty finance loans and leases, and other C&I loans, as further described below.~~

At December 31, 2017 and 2016, specialty finance loans and leases represented $1.5 billion and $1.3 billion, respectively, of total loans held for investment, and $1.8 billion and $1.3 billion, respectively, of the C&I loans produced over the course of those years.

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 LIBOR, 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.~~

~~In the twelve months ended December 31, 2017, other C&I loans declined $132.1 million to $500.8 million, and represented $511.4 million of theheld-for-investment~~ ~~loans we produced. Included in the balance atyear-end~~ ~~2017 were taxi medallion-related loans of $99.1 million. The portfolio of taxi medallion-related loans represented 0.26% of totalheld-for-investment~~ ~~loans at December 31, 2017.~~

~~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, 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 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.

At December 31, 2017, other loans totaled $8.5 million and consisted primarily of a variety of consumer loans, most of which were overdraft loans, and loans to non-profit organizations. We currently do not offer home equity loans or lines of credit.

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 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.

Effective January 27, 2017, all loans other than C&I loans less than or equal to $3.0 million are required to be presented to the Management Credit Committee for approval. All multi-family, CRE, and other C&I loans in excess of $5.0 million, and specialty finance loans in excess of $15.0 million, are also required to be presented to the Mortgage Committee or the Credit Committee, as applicable, so that the Committees can review the loans’ associated risks. The Committees 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.

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

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

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

At December 31, 2017 and 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 year-ends.

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

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

At December 31, 2017, the largest concentration of ADC loans held for investment was in New York City, with a total of $337.4 million at that date. The majority of our other C&I loans held for investment were secured by properties and/or businesses located in Metro New York.

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

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

~~The following table sets forth, as of December 31, 2017, the dollar amount of allnon-covered~~ ~~loans held for investment that are due after December 31, 2018, and indicates whether such loans have fixed or adjustable rates of interest:~~

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

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

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

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

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

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

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

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

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

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

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

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

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

~~A loan generally is classified as a“non-accrual”~~ 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 December 31, 2017 and 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 and other assets that are acquired through foreclosure are classified as repossessed assets, and are recorded at fair value at the date of acquisition, less the estimated cost of selling the property. Subsequent declines in the fair value of the assets are charged to earnings and are included in~~non-interest~~ ~~expense. It is our policy to require an appraisal and an environmental assessment of properties classified as OREO before foreclosure, and tore-appraise~~ ~~the properties on anas-needed~~ ~~basis, and not less than annually, until they are sold. We dispose of such properties as quickly and prudently as possible, given current market conditions and the property’s condition.~~

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

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 December 31, 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.

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

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

Other C&I loans are typically underwritten on the basis of the cash flows produced by the borrower’s business, and are generally collateralized by various business assets, including, but not limited to, inventory, equipment, and accounts receivable. As a result, the capacity of the borrower to repay is substantially dependent on the degree to which the business is successful. Furthermore, the collateral underlying the loan may depreciate over time, may not be conducive to appraisal, and may fluctuate in value, based upon the operating results of the business. Accordingly, personal guarantees are also a normal requirement for other C&I loans.

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

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

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

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

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

~~Partially reflecting the net charge-offs noted above, and the provision of $60.9 million for the allowance fornon-covered~~ ~~loan losses, the allowance for losses onnon-covered~~ ~~loans remained relatively unchanged, equaling $158.0 million at the end of this December from $158.3 million at December 31, 2016. Reflecting the increase innon-performingnon-covered~~ ~~loans cited earlier in this discussion, the allowance for losses onnon-covered~~ ~~loans represented 214.50% ofnon-performingnon-covered~~ ~~loans at December 31, 2017, as compared to 277.19% at the prioryear-end.~~

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

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

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

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

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

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

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

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

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

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

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

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

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

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

~~The following table presents information regarding our consolidated allowance for losses onnon-covered~~ ~~loans, ournon-performingnon-covered~~ ~~assets, and ournon-covered~~ ~~loans 30 to 89 days past due at eachyear-end~~ ~~in the five years ended December 31, 2017. Covered loans andnon-covered~~ ~~purchased credit-impaired (“PCI”) loans are considered to be performing due to the application of the yield accretion method, as discussed elsewhere in this report. Therefore, covered loans andnon-covered~~ ~~PCI loans are not reflected in the amounts or ratios provided in this table.~~

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

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

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

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

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

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

~~At December 31, 2017,available-for-sale~~ ~~securities represented $3.5 billion and had an estimated weighted average life of 5.2 years. Included in theyear-end~~ ~~amount were mortgage-related securities of $2.6 billion and other securities of $912.7 million.~~

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

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

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

~~Depending on management’s intent at the time of purchase, securities are classified as either “held to maturity” or “available for sale.”Held-to-maturity~~ securities are securities that management has the positive intent to hold to maturity. In addition to generating cash flows from repayments, securities held to maturity are a source of earnings and serve as collateral for our wholesale borrowings.

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

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

~~At December 31, 2016, the Community Bank and the Commercial Bank heldFHLB-NY~~ ~~stock in the amount of $574.5 million and $16.4 million, respectively.~~

~~Dividends from theFHLB-NY~~ ~~to the Community Bank totaled $31.4 million and $26.2 million, respectively, in 2017 and 2016; dividends from theFHLB-NY~~ ~~to the Commercial Bank totaled $933,000 and $1.4 million in the corresponding years~~.

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

~~Reflecting an increase in the cash surrender value of the underlying policies, our investment in BOLI rose $18.1 million year-over-year to $967.2 million at December 31, 2017.~~

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

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

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

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

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

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

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

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

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

Deposits totaled $29.1 billion and $28.9 billion, and represented 59.2% and 59.0% of total assets, at December 31, 2017 and 2016, respectively. On a year-over-year basis, the deposit mix shifted as interest-bearing checking and money market accounts declined 3.4%, savings accounts declined 1.3%, and~~non-interest-bearing~~ ~~accounts dropped 12.3%. This was offset by growth in our certificates of deposit (“CDs”), which increased 14.1% fromyear-end~~ ~~2016.~~

While the vast majority of our deposits are retail in nature (i.e., they are deposits we have gathered through our branches or through business combinations), institutional deposits and municipal deposits are also part of our deposit mix. Retail deposits rose $383.6 million year-over-year to $21.9 billion, while institutional deposits declined $567.2 million to $2.2 billion at~~year-end.~~ ~~Municipal deposits represented $999.4 million of total deposits at the end of this December, a $361.7 million increase from the balance at December 31, 2016.~~

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

~~The majority of our borrowed funds are wholesale borrowings and consist ofFHLB-NY~~ advances, repurchase agreements, and federal funds purchased, and, to a far lesser extent, junior subordinated debentures. Reflecting a $760.0 million decline in wholesale borrowings to $12.6 billion, the total balance of borrowed funds were $12.9 billion at December 31, 2017.

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

Also included in wholesale borrowings were repurchase agreements of $450.0 million at December 31, 2017 compared to $1.5 billion at December 31, 2016. Repurchase agreements are contracts for the sale of securities owned or borrowed by the Banks with an agreement to repurchase those securities at agreed-upon prices and dates.

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

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

~~Junior subordinated debentures totaled $359.2 million at December 31, 2017, slightly higher than the balance at the prioryear-end.~~

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

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

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

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

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

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

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

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

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

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

The Parent Company’s ability to pay dividends may also depend, in part, upon dividends it receives from the Banks. The ability of the Community Bank and the Commercial Bank to pay dividends and other capital 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 2017, the Banks paid dividends totaling $336.0 million to the Parent Company, leaving $379.5 million that they could dividend to the Parent Company without regulatory approval at~~year-end.~~ Additional sources of liquidity available to the Parent Company at December 31, 2017 included $90.5 million in cash and cash equivalents. If either of the Banks were to apply to the Superintendent for approval to make a dividend or capital distribution in excess of the dividend amounts permitted under the regulations, there can be no assurance that such application would be approved.

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

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

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

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

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

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

~~Of the total loan commitments noted in the preceding table, all $1.9 billion were for loans held for investment.~~

~~Based upon our current liquidity position, we expect that our funding will be sufficient to fulfill these obligations and commitments when they are due.~~

~~At December 31, 2017, we had commitments to purchase GNMA securities of $29.4 million.~~

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

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

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

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

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

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

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

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

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

•Interest-earning cash and cash equivalents increased $487 million reflecting a ~~17%~~367 basis point increase in ~~interest expense due~~the average yield to 5.1 percent driven by higher ~~funding costs.~~

~~Year-Over-Year Comparison~~

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

~~Interest income fell $92.6 million year-over-year as a $37.8 million decline in interest income from securities~~short-term market rates and ~~money market investments was coupled with a $54.8 million decline in interest income from loans.~~

~~The decline in interest income from loans was largely due to a $676.3 million decline~~an increase in the average balance driven by the Signature Transaction and ~~an eight-basis point decline in~~bolstering our on-balance sheet liquidity.

•Interest expense on average interest-bearing deposits increased $1.4 billion to $1.8 billion during the average yield. In addition, prepayment income contributed $47.0 million to the interest income from loans and 12 basis points to the average yield on such assets compared to $60.9 million and 16 basis points in 2016.

~~The year-over-year reduction in interest income from securities was~~year ended December 31, 2023, driven by a ~~$936.0 million decrease in the average balance, coupled with a40-basis~~206 basis point ~~drop in the average yield.~~

~~As a result, the average balance of interest-earning assets declined $396.5 million from the year-earlier level and the average yield fell 18 basis points.~~

~~Interest expense rose $64.7 million year-over-year as interest expense on deposits rose $58.8 million and the interest expense on borrowed funds rose $6.0 million.~~

~~The year-over-year rise in interest expense stemming from deposits was due to a23-basis~~ ~~point rise~~increase in the average cost of ~~such funds~~interest-bearing deposits due to ~~higher short-term~~rising interest ~~rates, offset~~rates. Average interest earning deposits grew $20.3 billion, or 56.4 percent, to $56.3 billion. The balance growth primarily reflects the December acquisition of Flagstar and the March Signature Transaction.

•Interest expense on borrowed funds increased $343 million or 109.6 percent to $656 million driven by a $14.5 million decrease in the average balance. Additionally, the average balance of lower cost deposits such as savings accounts, interest-bearing checking and money market accounts declined, while the average balance of higher cost CDs increased by $1.3 billion.

~~The~~162 basis point increase in ~~the interest income from borrowed funds was driven by~~rates in addition to a~~19-basis~~ ~~point rise in the average cost of such funding and mitigated by a $1.2~~ $2.5 billion ~~decline~~or 16.5 percent increase in the average balance ~~from the year-earlier amount.~~to $17.9 billion.

~~As a result, the average balance of interest-bearing liabilities fell $1.2 billion and the average cost of funds rose 20 basis points year-over-year.~~

Net Interest Margin

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

   For the Twelve Months Ended
   Dec. 31,
2017 Dec. 31,
2016 Change (%)
(dollars in thousands)

Total Interest Income
   $ 1,582,239 $ 1,674,869 -6 %
Prepayment Income:

Loans
   $ 47,004 $ 60,891 -23 %
Securities
   8,130 33,509 -76 %


Total prepayment income
   $ 55,134 $ 94,400 -42 %


GAAP Net Interest Margin
   2.59 % 2.93 % -34 bp
Less:

Prepayment income from loans
   11 bp 14 bp -3 bp
Prepayment income from securities
   2 8 -6 bp


Total prepayment income contribution to net interest margin
   13 bp 22 bp -9 bp


Adjusted Net Interest Margin(non-GAAP)
   2.46 % 2.71 % -25 bp

~~RECONCILIATION OF NET INTEREST MARGIN AND ADJUSTED NET INTEREST MARGIN~~

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

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.

~~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 ~~years~~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 ~~year~~periods 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 Years Ended December 31,
2017 2016 2015
(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⁾
$ 38,400,003 $ 1,417,237 3.69 % $ 39,076,298 $ 1,472,020 3.77 % $ 36,343,407 $ 1,441,462 3.97 %
Securities and money market investments ⁽²⁾⁽³⁾
5,213,859 165,002 3.16 4,934,058 202,849 4.11 7,278,562 250,122 3.44

Total interest-earning assets
43,613,862 1,582,239 3.63 44,010,356 1,674,869 3.81 43,621,969 1,691,584 3.88
Non-interest-earning assets
5,011,020 5,289,245 5,248,236

Total assets
$ 48,624,882 $ 49,299,601 $ 48,870,205

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Interest-bearing liabilities:

Interest-bearing checking and money market accounts
$ 12,787,703 $ 98,980 0.77 % $ 13,322,346 $ 62,166 0.47 % $ 12,674,236 $ 46,467 0.37 %
Savings accounts
5,170,342 28,447 0.55 5,915,020 31,982 0.54 7,546,417 50,776 0.67
Certificates of deposit
8,164,518 102,355 1.25 6,899,706 76,875 1.11 5,698,437 62,906 1.10

Total interest-bearing deposits
26,122,563 229,782 0.88 26,137,072 171,023 0.65 25,919,090 160,149 0.62
Borrowed funds
12,836,919 222,454 1.73 14,059,543 216,464 1.54 14,275,818 1,123,360 ⁽⁴⁾ 7.87 ⁽⁴⁾

Total interest-bearing liabilities
38,959,482 452,236 1.16 40,196,615 387,487 0.96 40,194,908 1,283,509 ⁽⁵⁾ 3.19 ⁽⁵⁾
Non-interest-bearing deposits
2,782,155 2,860,532 2,660,220
Other liabilities
279,466 190,403 201,441

Total liabilities
42,021,103 43,247,550 43,056,569
Stockholders’ equity
6,603,779 6,052,051 5,813,636

Total liabilities and stockholders’ equity
$ 48,624,882 $ 49,299,601 $ 48,870,205

Net interest income/interest rate spread
$ 1,130,003 2.47 % $ 1,287,382 2.85 % $ 408,075 ⁽⁶⁾ 0.69 %⁽⁶⁾

Net interest margin
2.59 % 2.93 % 0.94 %⁽⁷⁾

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

~~(1)~~

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

~~(2)~~

~~Amounts are at amortized cost.~~

~~(3)~~

~~Includes FHLB stock.~~

~~(4)~~

~~The debt repositioning charge accounted for $773.8 million of the interest expense on borrowed funds and for 542 basis points of the average cost in 2015.~~

~~(5)~~

~~The debt repositioning charge accounted for $773.8 million of the interest expense on average interest-bearing liabilities and for 192 basis points of the average cost in 2015.~~

~~(6)~~

~~The debt repositioning charge reduced our 2015 net interest income by $773.8 million and our net interest rate spread by 192 basis points.~~

~~(7)~~

~~The debt repositioning charge reduced our 2015 net interest margin by 177 basis points.~~


	For the Years Ended December 31,
	2023						2022						2021
(dollars in millions)	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 and leases , net (1)	$	81,855	$	4,509	5.51	%	$	49,376	$	1,848	3.74	%	$	43,200	$	1,525	3.53	%
Securities (2) (3)	10,611		444		4.18	%	7,448		200		2.69	%	6,625		156		2.35	%
Reverse repurchase agreements	388		22		5.77	%	460		15		3.24	%	430		4		1.05	%
Interest-earning cash and cash equivalents	10,025		516		5.14	%	1,988		29		1.47	%	2,016		4		0.17	%
Total interest-earning assets	$	102,879	$	5,491	5.34	%	$	59,272	$	2,092	3.53	%	$	52,271	$	1,689	3.23	%
Non-interest-earning assets	7,616						5,130						5,275
Total assets	$	110,495					$	64,402					$	57,546
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing deposits:
Interest-bearing checking and money market accounts	$	29,286	$	943	3.22	%	$	17,910	$	226	1.26	%	$	12,829	$	31	0.24	%
Savings accounts	9,941		169		1.70	%	9,336		60		0.64	%	7,612		28		0.36	%
Certificates of deposit	17,097		646		3.78	%	8,772		97		1.11	%	9,094		55		0.60	%
Total interest-bearing deposits	$	56,324	$	1,758	3.12	%	$	36,018	$	383	1.06	%	$	29,535	$	114	0.38	%
Short term borrowed funds	7,263		305		4.20	%	2,408		56		2.32	%	2,343		8		0.34	%
Other borrowed funds	10,671		351		3.29	%	12,982		257		1.99	%	13,366		278		2.08	%
Total borrowed funds	$	17,934	$	656	3.66	%	$	15,390	$	313	2.04	%	$	15,709	$	286	1.82	%
Total interest-bearing liabilities	$	74,258	$	2,414	3.25	%	$	51,408	$	696	1.35	%	$	45,244	$	400	0.88	%
Non-interest-bearing deposits	21,583						5,124						4,578
Other liabilities	4,073						787						790
Total liabilities	$	99,914					$	57,319					$	50,612
Stockholders’ equity	10,581						7,083						6,934
Total liabilities and stockholders’ equity	$	110,495					$	64,402					$	57,546
Net interest income/interest rate spread			$	3,077	2.09	%			$	1,396	2.17	%			$	1,289	2.35	%
Net interest margin					2.99	%					2.35	%					2.47	%
Ratio of interest-earning assets to interest-bearing liabilities					1.39	x					1.15	x					1.16	x

(1)Amounts are net of net deferred loan origination costs/(fees) and includes loans held for sale and non-performing loans.

(2)Amounts are at amortized cost.

(3)Includes FHLB stock and FRB stock.

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

~~Rate/Volume Analysis~~

   Year Ended
December 31, 2017
Compared to Year Ended
December 31, 2016 Year Ended
December 31, 2016
Compared to Year Ended
December 31, 2015
   Increase/(Decrease) Increase/(Decrease)
   Due to Due to
(in thousands)    Volume Rate Net Volume Rate Net
INTEREST-EARNING ASSETS:

Mortgage and other loans, net
   $ (25,239 ) $ (29,544 ) $ (54,783 ) $ 92,003 $ (61,445 ) $ 30,558
Securities and money market investments
   12,369 (50,216 ) (37,847 ) (121,091 ) 73,818 (47,273 )


Total
   (12,870 ) (79,760 ) (92,630 ) (29,088 ) 12,373 (16,715 )


INTEREST-BEARING LIABILITIES:

Interest-bearing checking and money market accounts
   $ (2,388 ) $ 39,202 $ 36,814 $ 2,478 $ 13,221 $ 15,699
Savings accounts
   (4,109 ) 574 (3,535 ) (9,847 ) (8,947 ) (18,794 )
Certificates of deposit
   15,141 10,339 25,480 13,379 590 13,969
Borrowed funds
   (13,498 ) 19,488 5,990 (16,766 ) (890,130 ) (906,896 )


Total
   (4,854 ) 69,603 64,749 (10,756 ) (885,266 ) (896,022 )


Change in net interest income
   $ (8,016 ) $ (149,363 ) $ (157,379 ) $ (18,332 ) $ 897,639 $ 879,307

~~Provision for (Recoveries of) Loan Losses~~

~~Provision for (Recovery of) Losses~~rate on~~Non-Covered~~ ~~Loans~~

~~The provision for losses onnon-covered~~ ~~loans, like the recovery ofnon-covered~~ loan losses, is based on the methodology used by management in calculating the allowance for losses on such loans. Reflecting this methodology, which is discussed in detail under “Critical Accounting Policies” earlier in this report. each separate line.


	For the Years Ended December 31,
	2023 compared to Year Ended 2022 Increase/(Decrease) Due to:						2022 compared to Year Ended 2021 Increase/(Decrease) Due to:
(in millions)	Volume		Rate		Net		Volume		Rate		Net
INTEREST-EARNING ASSETS:
Mortgage and other loans and leases, net	$	1789	$	872	$	2661	$	231	$	92	$	323
Securities	132		112		244		22		22		44
Reverse repurchase agreements	(4)		11		7		1		10		11
Interest Earning cash and cash equivalents	413		74		487		—		25		25
Total interest-earnings assets	2,327		1,072		3,399		247		156		403
INTEREST-BEARING LIABILITIES:
Interest-bearing checking and money market accounts	366		351		717		64		131		195
Savings accounts	10		99		109		11		21		32
Certificates of deposit	315		234		549		(4)		46		42
Short term borrowed funds	204		45		249		2		46		48
Other borrowed funds	(76)		170		94		(8)		(13)		(21)
Total interest-bearing liabilities	743		975		1,718		83		213		296
Change in net interest income	$	1,584	$	97	$	1,681	$	164	$	(57)	$	107

For the ~~twelve months~~year ended December 31, ~~2017,~~2023, the ~~Company reported a $60.9 million provision for losses onnon-covered~~ ~~loans as~~net interest margin was 2.99 percent, up 64 basis points compared to ~~$11.9 million for~~ the ~~twelve months~~year ended December 31, ~~2016.~~2022. The year-over-year increase was ~~related~~primarily the result of a larger balance sheet with loans at higher yields driven by both the Flagstar acquisition and the Signature Transaction along with the impact of higher interest rates. Average interest-earning assets increased $43.6 billion, or 74 percent, on a year-over-year basis to $102.9 billion for the ~~aforementioned taxi medallion-related charge-offs during~~year ended December 31, 2023, while the ~~third quarter~~average yield rose 181 basis points to 5.34 percent.

Average loan balances rose $32.5 billion, or 66 percent, to $81.9 billion while the average loan yield rose 177 basis points to 5.51 percent on a year-over-year basis. Average cash balances increased $8.0 billion to $10.0 billion, while the average yield rose to 5.14 percent from 1.47 percent. Average securities increased $3.2 billion, or 42 percent, to $10.6 billion, while the average yield improved to 4.18 percent from 2.69 percent.

Average interest-bearing liabilities increased $22.9 billion, or 44 percent, to $74.3 billion while the average cost increased to 3.25 percent from 1.35 percent. Average interest-bearing deposits rose $20.3 billion, or 56 percent, while the average cost of ~~2017.~~

~~Reflecting the 2017 provision and twelve-month net charge-offs of $61.2 million, the allowance for losses onnon-covered~~ ~~loans of $158.0 million was relatively unchanged at the end of this December~~deposits increased to 3.12 percent compared to ~~$158.3~~1.06 percent. Average borrowed funds increased $2.5 billion to $17.9 billion while the average cost rose to 3.66 percent from 2.04 percent. Average non-interest-bearing deposits rose $16.5 billion to $21.6 billion.

Provision for Credit Losses

Comparison to Prior Year to Date

The year ended December 31, 2023 provision for credit losses was $833 million ~~at the prioryear-end.~~

~~Recovery of Losses on Covered Loans~~

~~For full-year 2017, the Company recovered $23.7 million on certain pools of acquired loans covered by FDIC loss-sharing agreements, as~~ compared to ~~$7.7~~$133 million for ~~full-year 2016. The recoveries recorded in~~ the ~~respective years were largely offset by FDIC indemnification expense of $19.0 million and $6.2 million recorded in“Non-interest~~ ~~income.”~~

~~On July 28, 2017, the Company completed the sale of its covered loans to an affiliate of Cerberus. Accordingly, at~~year ended December 31, ~~2017, the Company no longer had any covered~~2022. The 2023 provision primarily reflects an initial $132 million provision for credit losses for acquired loans and related ~~FDIC loss share receivable~~commitments from the Signature Transaction and a net $483 million increase in ACL and unfunded commitment reserves which reflects our actions to build reserves during the fourth quarter to address weakness in the office sector, potential repricing risk in the multi-family portfolio and conditions leading to increases in classified assets. Lastly, the Company recorded a net $10 million provision related to net charge-offs on AFS securities.

Total net loan charge-offs amounted to $208 million, including $112 million for a co-operative loan, $40 million for a CRE loan, and $30 million for commercial loans, mainly from two C&I loans in the fourth quarter. The charged-off co-

operative loan was subsequently transferred to held-for-sale status. On February 29, the loan was sold, realizing a gain of $26 million from its ~~balance sheet.~~

previously written-down fair value estimate. This gain on sale will be recognized in the first quarter of 2024. For ~~additional information about our methodologies~~a more detailed discussion and analysis of the total allowance for ~~recording recoveries of, and provisions for, loan~~credit losses, see the ~~discussion~~"Credit Quality" section of ~~the respective loan loss allowances under “Critical Accounting Policies”~~this MD&A and ~~the discussion of “Asset Quality” that appear earlier in this report.~~

"Note 7 - Allowance for Credit Losses on Loans and Leases".

Non-Interest Income

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

The following table summarizes our ~~subsidiary, Peter B. Cannell & Co., Inc. (“PBC”), an investment advisory firm.~~

non-interest income for the respective periods:


	For the Years Ended December 31,
(in millions)	2023		2022		2021
Bargain purchase gain	$	2,131	$	159	$	—
Fee income	172		27		23
Net return on mortgage servicing rights	103		6		—
Net gain on loan sales and securitizations	89		5		—
Other	68		17		9
Bank-owned life insurance	43		32		29
Net loan administration income	82		3		—
Net loss on securities	(1)		(2)		—
Total non-interest income	$	2,687	$	247	$	61

Non-interest income increased ~~$71.3 million year-over-year to $216.9 million in~~$2.4 billion for the ~~twelve months~~year ended December 31, ~~2017.~~2023 compared to the year ended December 31, 2022 primarily due to the bargain purchase gain of $2.1 billion related to the Signature Transaction. Excluding bargain purchase gains, non-interest income for the year ended December 31, 2023 totaled $556 million as compared to $88 million for the year ended December 31, 2022. For the year ended December 31, 2023, net gains on loan sales, net return on mortgage servicing rights and net loan administration income totaled $274 million compared to $14 million for the year ended December 31, 2022, all driven by a full year of the Flagstar acquisition. The two acquisitions also drove higher fee income, loan administration income and other income driven by mortgage and FDIC loan servicing along with a higher volume of customer based fees.

Non-Interest Expense

Non-interest expense increased $4.3 billion for the year ended December 31, 2023 compared to the year ended December 31, 2022, driven by goodwill impairment in the fourth quarter totaling $2.4 billion. Additionally, merger related expenses increased $223 million due to the closing of the Signature transaction and ongoing integration costs. Excluding the goodwill impairment and merger related expenses, non-interest expense for the year ended December 31, 2023 totaled $2.2 billion as compared to $0.6 billion for the year ended December 31, 2022.

Total operating expenses for the year ended December 31, 2023 were up approximately $1.5 billion compared to the year ended December 31, 2022 primarily driven by a full-year of Flagstar activity and the Signature transaction, which closed in late March of 2023. Included in total operating expenses is a $49 million expense for the FDIC special assessment issued to certain banks nationally related to deposit insurance fund shortfalls, including the assessment issued by the FDIC in February 2024..

Income Tax Expense

For the year ended December 31, 2023, the Company reported a provision for income taxes of $29 million, compared to $176 million for the year ended December 31, 2022. Income tax expense for the current year was impacted by the bargain purchase gain arising from the Signature transaction.

RESULTS OF OPERATIONS: 2022 AS COMPARED TO 2021

The results of operations comparison of 2022 compared to 2021 can be found in the Company’s previously filed Annual Report on Form 10-K for the year-ended December 31, 2022 under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”- Results of Operations: 2022 As Compared to 2021.”

Signature Transaction - Certain Financial Information

In accordance with the guidance provided in Staff Accounting Bulletin Topic 1:K, “Financial Statements of Acquired Troubled Financial Institutions” (“SAB 1:K”) the Company has omitted certain financial information on the Signature Transaction required by Rule 3-05 of Regulation S-X and Article 11 of Regulation S-X. SAB 1:K provides relief from the requirements of Rule 3-05 and Article 11 of Regulation S-X under certain circumstances, including a transaction such as the Signature Transaction, in which the registrant engages in an acquisition of a troubled financial institution for which historical financial statements are not reasonably available or relevant and in which federal assistance is an essential and significant part of the transaction.

FINANCIAL CONDITION

Balance Sheet Summary

Total assets increased $23.9 billion to $114.1 billion as of December 31, 2023, compared to $90.1 billion at December 31, 2022 due to the Signature Transaction, which closed on March 20, 2023, and organic growth.

The Company acquired approximately $11.7 billion of loans, net of purchase accounting adjustments ("PAA"), $33.5 billion of deposits, net of PAA, and $2.1 billion of other liabilities related to the Signature Transaction.

Total loans and leases held for investment were $84.6 billion at December 31, 2023 compared to $69.0 billion at December 31, 2022. The increase was driven by the aforementioned loans acquired from the Signature Transaction and organic loan growth.

The securities portfolio totaled $9.2 billion at December 31, 2023, compared to $9.1 billion at December 31, 2022. As of December 31, 2023, the Company has no held-to-maturity securities portfolio and all of the Company’s securities were designated as “Available-for-Sale”, consistent with December 31, 2022.

Total deposits grew $22.8 billion, or 39 percent to $81.5 billion at December 31, 2023 compared to $58.7 billion at December 31, 2022 primarily ~~attributable~~driven by the deposits assumed in the Signature Transaction. Included in the December 31, 2023 balance are $247 million in non-interest-bearing custodial deposits related to the Signature Transaction.

Wholesale borrowings at December 31, 2023 remained flat at $20.3 billion when compared to December 31, 2022.

Loans held-for-investment

The following ~~factors:~~

table summarizes the composition of our loan portfolio:

~~An $82.0 million gain~~


	At December 31,
	2023				2022
(in millions)	Amount		Percent of Loans Held for Investment		Amount		Percent of Loans Held for Investment
Mortgage Loans:
Multi-family	$	37,265	44.0	%	$	38,130	55.3	%
Commercial real estate	10,470		12.4	%	8,526		12.4	%
One-to-four family first mortgage	6,061		7.2	%	5,821		8.4	%
Acquisition, development, and construction	2,912		3.4	%	1,996		2.8	%
Total mortgage loans	$	56,708	67.0	%	$	54,473	78.9	%
Other Loans:
Commercial and industrial	$	25,254	29.9	%	$	12,276	17.8	%
Other loans	2,657		3.1	%	2,252		3.3	%
Total other loans held for investment	$	27,911	33.0	%	$	14,528	21.1	%
Total loans and leases held for investment	$	84,619	100.0	%	$	69,001	100.0	%
Allowance for credit losses on loans and leases	(992)				(393)
Total loans and leases held for investment, net	$	83,627			$	68,608
Loans held for sale	1,182				1,115
Total loans and leases, net	$	84,809			$	69,723

Loan Maturity and Repricing Analysis

The following table sets forth the maturity or period to repricing of our portfolio of loans held for investment at December 31, 2023. Loans that have adjustable rates are shown as being due in the period during which their interest rates are next subject to change.


(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Other		Total Loans
Amount due:
Within one year	$	3,530	$	1,233	$	14	$	1,049	$	8,323	$	14,149
After one year:
One to five years	28,419		7,946		54		1,775		14,973		53,167
Over five years to fifteen years	5,314		1,263		297		25		3,280		10,179
Over fifteen years	2		28		5,696		63		1,335		7,124
Total due or repricing after one year	33,735		9,237		6,047		1,863		19,588		70,470
Total amounts due or repricing, gross	$	37,265	$	10,470	$	6,061	$	2,912	$	27,911	$	84,619

The following table sets forth, as of December 31, 2023, the dollar amount of all loans held for investment that are due after December 31, 2024, and indicates whether such loans have fixed or adjustable rates of interest:


(in millions)	Fixed		Adjustable		Total
Mortgage Loans:
Multi-family	$	8,758	$	24,977	$	33,735
Commercial real estate	3,381		5,856		9,237
One-to-four family first mortgage	2,201		3,846		6,047
Acquisition, development, and construction	121		1,742		1,863
Total mortgage loans	14,461		36,421		50,882
Other loans	9,836		9,752		19,588
Total loans	$	24,297	$	46,173	$	70,470

The following table summarizes our production of loans held for investment:


	For the Years Ended December 31,
	2023				2022
(in millions)	Amount		Percent of Total		Amount		Percent of Total
Mortgage Loan Originated for Investment:
Multi-family	$	839	4.0	%	$	8,387	49.2	%
Commercial real estate	1,092		5.3	%	1,086		6.4	%
One-to-four family first mortgage	3,739		18.1	%	328		1.9	%
Acquisition, development, and construction	1,571		7.6	%	149		0.9	%
Total mortgage loans originated for investment	$	7,241	35.0	%	$	9,950	58.4	%
Other Loans Originated for Investment:
Specialty finance	$	7,326	35.4	%	$	6,001	35.2	%
Commercial and industrial	4,942		23.9	%	1,016		6.0	%
Other	1,178		5.7	%	83		0.4	%
Total other loans originated for investment	$	13,446	65.0	%	$	7,100	41.6	%
Total loans originated for investment	$	20,687	100.0	%	$	17,050	100.0	%

Multi-Family Loans

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

The multi-family loan portfolio was $37.3 billion at December 31, 2023, down slightly compared to $38.1 billion at December 31, 2022 due to a combination of higher interest rates and our loan diversification strategy.

The majority of our multi-family loans were secured by rental apartment buildings.

At December 31, 2023, $21.1 billion or 57 percent of the Company’s total multi-family loan portfolio is secured by properties in New York State, of which $18.3 billion are subject to rent regulation laws.Of the $18.3 billion properties subject to rent regulation, approximately 38 percent are currently in an interest only period.The weighted average LTV of the New York State rent regulated multi-family portfolio was 58 percent as of December 31, 2023 as compared to 57 percent atDecember 31, 2022.

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

While a percentage of our ~~covered~~multi-family loans are ten-year fixed rate credits, the vast majority of our multi-family loans feature a term of ten or twelve years, with a fixed rate of interest for the first five or seven years of the loan, and an alternative

rate of interest in years six through ten or eight through twelve. The rate charged in the first five or seven years is generally based on intermediate-term interest rates plus a spread.

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

Multi-family loans that refinance within the first five or seven years are typically subject to an established prepayment penalty schedule. Depending on the remaining term of the loan at the time of prepayment, the penalties normally range from five percentage points to one percentage point of the then-current loan balance. If a loan extends past the fifth or seventh year and the borrower selects the fixed-rate option, the prepayment penalties typically reset to a range of five points to one point over years six through ten or eight through twelve. For example, a ten-year multi-family loan that prepays in year three would generally be expected to pay a prepayment penalty equal to three percentage points of the remaining principal balance. A twelve-year multi-family loan that prepays in year one or two would generally be expected to pay a penalty equal to five percentage points.

Because prepayment penalties assessed to the borrower are recorded as interest income, they are reflected in the average yields on our loans and ~~mortgage banking operations.~~

~~A $26.6 million increase~~interest-earning assets, our net interest rate spread and net interest margin, and the level of net interest income we record. No assumptions are involved in the recognition of prepayment income, as such income is recorded when the cash is received.

Our success as a multi-family lender partly reflects the solid relationships we have developed with the market’s leading mortgage brokers and generational direct relationships, 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.

We primarily underwrite our multi-family loans based on the current cash flows produced by the collateral property, with a reliance on the “income” approach to appraising the properties, rather than the “sales” approach. We also consider a variety of other factors, including the physical condition of the underlying property; the net ~~gain on sale~~operating income of ~~securities. This was due~~the mortgaged premises prior to debt service; the DSCR, which is the ratio of the property’s net operating income to its debt service; and the ratio of the loan amount to the ~~previously mentioned securities~~appraised value (i.e., the LTV) of the property.

In addition to requiring a minimum DSCR of 120 percent on multi-family buildings at origination, we obtain a security interest in the personal property located on the premises, and an assignment of rents and leases. Our multi-family loans generally represent no more than 75 percent of the lower of the appraised value or the sales price of the underlying property, and typically feature an amortization period of 30 years. In addition, our multi-family loans may contain an initial interest-only period which typically does not exceed two years; however, these loans are underwritten on a fully amortizing basis. Exceptions to these levels are made to borrowers on a case by case basis and approved by the joint authority of credit and lending officers and when necessary, the Board Credit Committee of the Board.

We continue to monitor our loans held for investment portfolio ~~repositioning~~ and ~~subsequent sale~~the related allowance for credit losses, particularly given the economic pressures facing the commercial real estate and multi-family markets. In general, buildings that are subject to rent regulation have historically tended to be stable, with occupancy levels remaining more or less constant over time. Because the rents are typically below market and the buildings securing our loans are generally maintained in good condition, they have been more likely to retain their tenants in adverse economic times. In addition, we generally exclude any short-term property tax exemptions and abatement benefits the property owners receive when we underwrite our multi-family loans.

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


	At December 31, 2023
	Multi-Family Loans
(in millions)	Amount		Percent of Total
New York City:
Manhattan	$	6,893	18	%
Brooklyn	5,840		16	%
Bronx	3,619		10	%
Queens	2,831		8	%
Staten Island	133		—	%
Total New York City	$	19,316	52	%
New Jersey	5,064		14	%
Long Island	509		1	%
Total Metro New York	$	24,889	67	%
Other New York State	1,233		3	%
Pennsylvania	3,682		10	%
Florida	1,681		5	%
Ohio	1,085		3	%
Arizona	434		1	%
All other states	4,261		11	%
Total	$	37,265	100	%

Commercial Real Estate

At December 31, 2023, CRE loans represented $10.5 billion, or 12 percent, of total loans held for investment, reflecting a $2.0 billion increase when compared to $8.5 billion at December 31, 2022. Approximately $1.9 billion of CRE loans were acquired in the Signature Transaction.

CRE loans represented $1.1 billion, or 5 percent, of the loans we originated for the year ended December 31, 2023 as compared to $1.1 billion, or 6 percent for the year ended December 31, 2022.

The CRE loans we produce are secured by income-producing properties such as office buildings, retail centers, mixed-use buildings, and multi-tenanted light industrial properties. At December 31, 2023, the largest concentration of CRE loans were secured by properties in the metro New York City area. Refer to the Geographical Analysis table included below for additional details.

Approximately $3.4 billion of the CRE portfolio are office properties with an average balance of approximately $10 million and located primarily in the New York metro area.

The terms of more than half of our CRE loans primarily feature a fixed rate of interest for the first five years of the loan that is generally based on intermediate-term interest rates plus a spread. In addition to customary fixed rate terms, we now also offer floating rates advances indexed to CME Term SOFR. These products are generally offered in combination with interest rate cap or swaps that provide borrowers with additional optionality to manage their interest rate risk. Following the initial fixed rate period, the loan resets to an adjustable interest rate that is indexed to CME Term SOFR or Prime, plus a spread. Alternately, the borrower may opt for a fixed rate that is tied to the five-year fixed advance rate of the FHLB-NY plus a spread. The fixed-rate option also requires the payment of an amount equal to one percentage point of the then-outstanding loan balance. In either case, the minimum rate at repricing is equivalent to the rate in the initial five- or seven-year term.

Prepayment penalties apply to certain of our CRE loans. 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.

We originate CRE loans in adherence with 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 primarily depends on the borrower’s credit history, profitability, and expertise in property management, and generally requires a minimum DSCR of 130 percent and a maximum LTV of 65 percent. In addition, the origination of CRE loans typically requires a security interest in the fixtures, equipment, and other personal property of the borrower and/or an assignment of the rents and/or leases. In addition, certain of our CRE loans may contain an interest-only period which typically does not exceed three years; however, these loans are underwritten on a fully amortizing basis.

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


	At December 31, 2023
	Commercial Real Estate Loans
(in millions)	Amount		Percent of Total
New York	$	5,319	51	%
Michigan	1,000		10	%
New Jersey	580		5	%
Florida	457		4	%
Texas	105		1	%
Pennsylvania	374		4	%
Ohio	132		1	%
All other states	2,503		24	%
Total	$	10,470	100	%

Acquisition, Development, and Construction Loans

At December 31, 2023, our ADC loans represented $2.9 billion, or 3 percent, of total loans held for investment, reflecting an increase of $916 million compared to December 31, 2022.

Because ADC loans are generally considered to have a higher degree of credit risk, especially during a downturn in the ~~second quarter.~~credit cycle, borrowers are required to provide a guarantee of repayment and completion. The risk of loss on an ADC loan is largely dependent upon the accuracy of the initial appraisal of the property’s value upon completion of construction; the developer’s experience; the estimated cost of construction, including interest; and the estimated time to complete and/or sell or lease such property.

~~Mortgage banking income fell $7.9~~

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

C&I Loans

At December 31, 2023 C&I loans totaled $25.3 billion or 30 percent of total loans held-for-investment. Included in this portfolio is $5.1 billion in warehouse loans that allow mortgage lenders to fund the closing of residential mortgage loans.

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

A broad range of C&I loans, both collateralized and unsecured, are made available to businesses for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment, and other general corporate needs. In determining the term and structure of C&I loans, several factors are considered, including the purpose, the collateral, and the anticipated sources of repayment. C&I loans are typically secured by business assets and personal guarantees of the borrower, and include financial covenants to monitor the borrower’s financial stability.

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

Underlying mortgage loans are predominantly originated using the agencies' underwriting standards. The guideline for debt to tangible net worth is 15 to 1. At December 31, 2023, we had $5.1 billion outstanding warehouse loans to other mortgage lenders and have relationships in place to lend up to $11.8 billion at our discretion.

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

Specialty Finance

At December 31, 2023, specialty finance loans and leases totaled $5.2 billion or 6 percent of total loans held for investment, up $769 million ~~year-over-year~~or 17 percent compared to ~~$19.3 million,~~December 31, 2022.

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 ~~we exited this line~~senior debt or as a non-cancelable lease. As of December 31, 2023, 84 percent of specialty finance loan commitments are structured as floating rate obligations which will benefit in a rising rate environment.

As of December 31, 2023, the Company originated $7.3 billion of specialty finance loans and leases, representing 35 percent of total originations compared to $6.0 billion for the same period in 2022, representing 35 percent of total originations.

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

One-to-Four Family Loans

At December 31, 2023, one-to-four family loans represented $6.1 billion, including $996 million of LGG, or 7 percent, of total loans held for investment. As of December 31, 2023, the repurchase liability on LGG loans was $456 million. As of December 31, 2022 one-to-four family loans totaled $5.8 billion. These loans include various types of conforming and non-conforming fixed and adjustable rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties. We typically hold certain mortgage loans in LHFI that do not qualify for sale to the Agencies and that have an acceptable yield and risk profile. The LTV requirements on our residential first mortgage loans vary depending on occupancy, property type, loan amount, and FICO scores. Loans with LTVs exceeding 80 percent are required to obtain mortgage insurance. As of December 31, 2023, non-government guaranteed loans in this portfolio had an average current FICO score of 741 and an average LTV of 53.

Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to HUD (if foreclosure timelines are met), which is not paid by the FHA until claimed. The Bank has a unilateral option to repurchase loans sold to GNMA if the loan is due, but unpaid, for three consecutive months (typically referred to as 90 days past due) and can recover losses through a claims process from the guarantor. These loans are recorded in loans held for investment and the liability to repurchase the loans is recorded in other liabilities on the Consolidated Statements of Condition. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. We have reserved for these risks within other assets and as a component of our ACL on residential first mortgages.

Other Loans

At December 31, 2023, other loans totaled $2.7 billion and consisted primarily of home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans and other consumer loans, including overdraft loans.

Our home equity portfolio includes HELOANs, second mortgage loans, and HELOCs. These loans are underwritten and priced in an effort to ensure credit quality and loan profitability. Our debt-to-income ratio on HELOANs and HELOCs is capped at 43 percent and 45 percent, respectively. We currently limit the maximum CLTV to 89.99 percent and FICO scores to a minimum of 700. Second mortgage loans and HELOANs are fixed rate loans and are available with terms up to 20 years. HELOC loans are primarily variable-rate loans that contain a 10-year interest only draw period followed by a 20-year amortizing period. As of December 31, 2023, loans in this portfolio had an average current FICO score of 751.

As of December 31, 2023, loans in our indirect portfolio had an average current FICO score of 743. Point of sale loans consist of unsecured consumer installment loans originated primarily for home improvement purposes through a third-party financial technology company who also provides us a level of credit loss protection.

Loans Held for Sale

Loans held-for-sale at December 31, 2023 totaled $1.2 billion, up from $1.1 billion at December 31, 2022. The Signature Transaction contributed $360 million of Small Business Administration ("SBA") loans to this increase. We classify loans as held for sale when we originate or purchase loans that we intend to sell. We have elected the fair value option for nearly all of this portfolio, except the SBA loans. We estimate the fair value of mortgage loans based on quoted market prices for securities backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral.

Credit Quality

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 December 31, 2023 and December 31, 2022, all of our non-performing loans were non-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 monitor non-accrual loans both within and beyond our primary lending area in the same manner. Monitoring loans generally involves inspecting and re-appraising the collateral properties; holding discussions with the principals and managing agents of the borrowing entities and retain legal counsel, as applicable; requesting financial, operating, and rent roll information; confirming that hazard insurance is in place or force-placing such insurance; monitoring tax payment status. advancing funds as needed; and seeking approval from the courts to appoint a receiver, when necessary to protect the Bank’s interests, including to collect rents, manage property operations, and ensure maintenance of the collateral properties.

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

Non-performing loans are reviewed regularly by management and discussed on a monthly basis with the Board Credit Committee, and the Board of Directors of the Bank, as applicable. In accordance with our charge-off policy, 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.

environmental assessment of properties classified as OREO before foreclosure, and to re-appraise the properties on an as-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. Furthermore, independent appraisers, whose appraisals are carefully reviewed by our experienced in-house appraisal officers and staff, perform appraisals on collateral properties.

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 percent for multi-family loans and 130 percent for CRE loans. At origination, we typically lend up to 75 percent of the appraised value on multi-family buildings and up to 65 percent on commercial properties. Exceptions to these DSCR and LTV limitations are minimal and approved by the joint authority of credit and lending officers and when necessary, the Board Credit Committee of the Board.

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

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

Other C&I loans generally represent loans to commercial businesses which meet certain desired client characteristics and credit standards.The credit standards for commercial borrowers are based on numerous criteria, including historical and projected financial information, strength of management, acceptable collateral, and market conditions and trends in the borrower’s industry.These loans are generally variable rate loans in which the interest rate fluctuates with a specified index rate.

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 either non-performing or as an accruing TDM, 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.

Asset Quality Measures

The following table presents the Company's asset quality measures at the respective dates:


	December 31, 2023		December 31, 2022
Non-performing loans to total loans held for investment	0.51	%	0.20	%
Non-performing assets to total assets	0.39		0.17
Allowance for credit losses on loans and leases to non-performing loans	231.51		278.87
Allowance for credit losses on loans and leases to total loans held for investment	1.17		0.57

Non-Performing Loans

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


					Change from
					December 31, 2022
					to
					December 31, 2023
(in millions)	December 31, 2023		December 31, 2022		Amount
Non-Performing Loans(1)(2):
Non-accrual mortgage loans:
Multi-family	$	138	$	13	$	125
Commercial real estate	128		20		108
One-to-four family first mortgage	95		92		3
Acquisition, development, and construction	$	2	$	—	2
Total non-accrual mortgage loans	$	363	$	125	238
Commercial and industrial	43		3		40
Other non-accrual loans(3)	22		13		9


Total non-performing loans	$	428	$	141	287
Repossessed assets	14		12		2
Total non-performing assets	$	442	$	153	289

(1)Excludes LGG that are insured by U.S government agencies.

(2)Unpaid principal balance.

(3)Includes home equity, consumer and other loans.

The following table sets forth the changes in non-accrual loans for the year ended December 31, 2023:


(in millions)
Balance at December 31, 2022	$	141
New non-accrual, including acquired from acquisition	466


Charge-offs	(97)
Transferred to repossessed assets	(3)
Loan payoffs, including dispositions and principal pay-downs	(36)
Restored to performing status	(43)
Balance at December 31, 2023	$	428

At December 31, 2023 total non-accrual mortgage loans increased $238 million to ~~$44.5~~$363 million, while commercial and industrial loans increased $40 million to $43 million and other non-accrual loans increased $9 million to $22 million compared to December 31, 2022.

At December 31, 2023, NPA to total assets equaled 0.39 percent compared to 0.17 percent at December 31, 2022 while NPL to total loans equaled 0.51 percent compared to 0.20 percent at December 31, 2022. The increase in NPLs was primarily driven by a $125 million increase in multi-family loans and a $108 million in commercial real estate loans, primarily office. Repossessed assets of $14 million were slightly higher compared to $12 million in the ~~twelve months~~prior year.

Delinquencies

The following table presents our loans, 30 to 89 days past due by loan type and the changes in the respective balances:


					Change from
					December 31, 2023
					to
					December 31, 2022
(in millions)	December 31, 2023		December 31, 2022		Amount		Percent
Loans 30 to 89 Days Past Due(1):
Multi-family	$	121	$	34	$	87	256	%
Commercial real estate	28		2		26		1300	%
One-to-four family first mortgage	40		21		19		90	%
Acquisition, development, and construction	2		—		2		NM
Commercial and industrial	37		2		35		1750	%
Other loans	22		11		11		100	%
Total loans 30-89 days past due	$	250	$	70	180		257	%

(1)Excludes LGG that are insured by U.S government agencies.

Allowance for Credit Losses

The following table sets forth the allocation of the consolidated allowance for losses on loans, at each year-end:


	At December 31,
	2023				2022				2021
(dollars in millions)	Amount		Percent of Total Loans and Leases		Amount		Percent of Total Loans and Leases		Amount		Percent of Total Loans and Leases
Multi-family loans	$	307	44	%	$	178	55	%	$	159	76	%
Commercial real estate loans	366		12		46		12		17		15
One-to-four family first mortgage loans	48		7		46		8		1		—
Acquisition, development, and construction loans	36		3		20		3		2		—
Commercial and industrial	132		30				—				—
Other loans	103		3		103		21		20		9
Total loans	$	992	100	%	$	393	100	%	$	199	100	%

(1)Percentages represent the percentage of each loan and lease category to total loans and leases

The allowance for credit losses on loans and leases increased $599 million from December 31, 2022 to December 31, 2023. The day 1 impact of the Signature Transaction that closed on March 20, 2023 added $127 million to the reserve. The remaining net increase of approximately $472 million primarily reflects our actions to build reserves during the fourth quarter to address weakness in the office sector, potential repricing risk in the multi-family portfolio and conditions leading to increases in classified assets, which better aligns the Company with its relevant bank peers, including Category IV banks. The allowance for credit losses on loans and leases represented 232 percent of non-performing loans at December 31, 2023, as compared to 279 percent at the prior year-end.

Based on the acceleration of asset quality metric deterioration and collateral value trends observed during 4Q23, predominantly in office, management employed its judgment and qualitative reserves were increased to the higher end of the range as of December 31, 2023. In applying this judgement, management also considered the severity of emerging risks such as feedback from regulators, market information, the impact of potential internal loan review weaknesses on the identification of emerging risks, deterioration in collateral values or borrower financial statements, trends or indications of degradation in asset quality metrics such as problem loans, charge-offs and nonaccruals, and market indications.

Charge-offs

For the year ended December 31, ~~2017 from $41.6~~2023, our gross charge-offs were $223 million and net charge-offs were $208 million, compared to gross charge-offs of $7 million and net recoveries of $4 million over the same period in 2022.

The following table presents information on the Company's net charge-offs:


	For the Years Ended December 31,
	2023		2022
(in millions)
Charge-offs:
Multi-family	$	119	$	1
Commercial real estate	56		4
One-to-four family residential	4		—

Commercial and industrial	30		—
Other	14		2
Total charge-offs	$	223	$	7

Recoveries:

Commercial real estate	—		(4)


One-to-four family residential	—		—
Commercial and industrial	(11)		(7)
Other	(4)		—
Total recoveries	$	(15)	$	(11)

Net charge-offs (recoveries)	$	208	$	(4)

The following table presents information on the Company's net charge-offs as compared to average loans held for investment outstanding:


	For the Years Ended December 31,
(in millions)	2023			2022			2021
Multi-family
Net charge-offs during the period	$	119		$	1		$	1
Average amount outstanding	$	37,839		$	36,292		$	32,424
Net charge-offs as a percentage of average loans	0.31		%	0.00		%	0.00		%

Commercial real estate
Net charge-offs during the period	$	56		$	—		$	2
Average amount outstanding	$	9,905		$	6,964		$	5,489
Net charge-offs as a percentage of average loans	0.57		%	0.00		%	0.04		%

One-to-Four Family first mortgage
Net charge-offs during the period	$	4		$	—		$	1
Average amount outstanding	$	5,907		$	516		$	191
Net charge-offs as a percentage of average loans	0.06		%	0.00		%	0.52		%

Acquisition, Development and Construction
Net charge-offs during the period	$	—		$	—		$	—
Average amount outstanding	$	2,530		$	203		$	152
Net charge-offs as a percentage of average loans	0.00		%	0.00		%	0.00		%

Commercial and Industrial Loans
Net charge-offs during the period	$	19		$	(7)		$	—
Average amount outstanding	$	21,460		$	—		$	—
Net charge-offs as a percentage of average loans	0.09		%	0.00		%	0.00		%

Other Loans
Net charge-offs (recoveries) during the period	$	10		$	(5)		$	(6)
Average amount outstanding	$	2,552		$	5,401		$	4,944
Net charge-offs (recoveries) as a percentage of average loans	0.38		%	(0.09)		%	(0.12)		%

Total loans
Net charge-offs (recoveries) during the period	$	208		$	(4)		$	(2)
Average amount outstanding	$	80,193		$	49,376		$	43,200
Net charge-offs (recoveries) as a percentage of average loans	0.26		%	(0.01)		%	0.00		%

Lending Authority

We maintain credit limits in compliance with regulatory requirements. Under regulatory guidance, the Bank may not make a loan or extend credit to a single or related group of borrowers in excess of 15 percent of Tier 1 plus Tier 2 capital and any portion of the ACL not included in Tier 2 capital. We have a tracking and reporting process to monitor lending concentration levels, and all new commercial real estate credit exposures to relationships that exceed $200 million and all other commercial credit exposures to relationships that exceed $100 million must be approved by the Board Credit Committee of the Board. Exceptions to these levels are made to borrowers on a case by case basis, with the approval of the Board Credit Committee of the Board. Relationships less than the aforementioned limits including those discussed throughout the loans held for investment section of this document, are approved by the joint authority of credit officers and lending officers. 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, including regulatory considerations, and credit exposures in accordance with the Bank’s strategic objectives and risk appetites.

At December 31, 2023 and December 31, 2022, the largest mortgage loan in our portfolio was a $329 million multi-family loan, which is collateralized by properties located in Brooklyn, New York. As of the date of this report, the loan has been current since origination.

Securities

Total securities were $9.2 billion, or 8 percent, of total assets at December 31, 2023, compared to $9.1 billion, or 10 percent of total assets at December 31, 2022. At December 31, 2023 and December 31, 2022, all of our securities were designated as “Available-for-Sale”. At December 31, 2023, 12 percent of our portfolio are floating rate securities.

As of December 31, 2023, the net unrealized loss on securities available for sale, net of tax, was $581 million as compared to $626 million at December 31, 2022, reflecting the rising interest rate environment.

At December 31, 2023, available-for-sale securities had an estimated weighted average life of six years. Included in the ~~twelve months ended December 31, 2016.~~

~~The net gain on sales~~quarter-end amount were mortgage-related securities of ~~loans, primarily through participations, fell $14.7 million year-over-year to $1.2 million.~~$6.6 billion and other debt securities of $2.6 billion.

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

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

The following table summarizes ~~our sources~~the weighted average yields of~~non-interest~~ ~~income~~ debt securities for the maturities indicated at December 31, 2023:


	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	—	%	4.65	%	—	%	—	%
Due from one to five years	3.33		5.42		—		5.53
Due from five to ten years	2.73		1.61		3.16		5.05
Due after ten years	4.18		—		—		5.74
Total debt securities available for sale	4.09		2.27		3.16		5.56

(1)The weighted average yields are calculated by multiplying each carrying value by its yield and dividing the sum of these results by the total carrying values and are not presented on a tax-equivalent basis.

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

Federal Reserve and Federal Home Loan Bank Stock

At December 31, 2023 the Company had $861 million and $329 million of FHLB-NY stock, at cost, and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2022, the Company had $762 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. The Company maintains an investment in FHLB-NY stock and, as a result of the Flagstar acquisition, FHLB-Indianapolis stock, partly in conjunction with its membership in the ~~twelve months ended~~FHLB and partly related to its access to the FHLB funding it utilizes. In addition, the Company had Federal Reserve Bank stock, at cost, of $203 million and $176 million at December 31, ~~2017, 2016,~~2023 and ~~2015:~~

   For the Years Ended December 31,
(in thousands)    2017    2016    2015
Mortgage banking income
   $ 19,337    $ 27,281    $ 54,113
Fee income
   31,759    32,665    34,058
BOLI income
   27,133    31,015    27,541
Net gain on sales of loans
   1,156    15,806    26,133
Net gain on sales of securities
   29,924    3,347    4,054
FDIC indemnification expense
   (18,961 )    (6,155 )    (9,336 )
Gain on sale of covered loans and mortgage banking operations
   82,026    —      —
Other income:

Peter B. Cannell & Co., Inc.
   22,026    22,537    26,771
Third-party investment product sales
   12,771    11,658    13,292
Recovery of OTTI securities
   1,120    1,214    242
Other
   8,589    6,204    33,895






Total other income
   44,506    41,613    74,200






Totalnon-interest income
   $ 216,880    $ 145,572    $ 210,763

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

~~Non-interest~~ ~~expense has two primary components: operating expenses, which include compensation and benefits, occupancy and equipment, and general and administrative (“G&A”) expenses;~~December 31, 2022, respectively.

Bank-Owned Life Insurance

BOLI is recorded at the total cash surrender value of the policies in the Consolidated Statements of Condition, and the ~~amortization~~income generated by the increase in the cash surrender value of the ~~CDI stemming from~~policies is recorded in “Non-interest income” in the Consolidated Statements of Income and Comprehensive Income. Reflecting an increase in the cash surrender value of the underlying policies, our investment in BOLI at December 31, 2023 rose $19 million to$1.6 billion compared to December 31, 2022.

Goodwill

We record goodwill in our consolidated statements of condition in connection with certain of our business combinations.

~~Non-interest~~ ~~expense totaled $641.4 million in~~ Goodwill, which is tested at least annually for impairment, refers to the ~~twelve months ended~~difference between the purchase price and the fair value of an acquired company’s assets, net of the liabilities assumed. As of December 31, ~~2017,~~2023, the Company identified a triggering event and applied a market approach using the end of day stock price. We evaluated those conditions known and knowable by the Company and how a market participant would view the control premium as confirmed by the subsequent confirming market evidence. This adjusted market capitalization was then compared to ~~$651.6 million~~the carrying value to determine the extent of the shortfall which was calculated to be in excess of the ~~year-earlier twelve-month period. Whilenon-interest~~ ~~expense declined year-over-year,~~goodwill balance. The Company’s assessment concluded that goodwill from historical transactions (2007 and prior) was fully impaired as of December 31, 2023. As a result, the Company recorded an impairment charge of the entire goodwill balance of $2.4 billion.

Parent Company Liquidity

The Parent Company is a separate legal entity from the Bank and must provide for its own liquidity. At December 31, 2023 the Parent Company held cash and cash equivalents of $158 million. In addition to operating expenses, ~~increased modestly~~the Parent Company is responsible for paying any dividends declared to ~~$641.2 million~~our common and preferred stockholders. As a Delaware corporation, the Parent Company is able to pay dividends either from ~~$638.1 million~~surplus or, in ~~2016.~~

~~Compensation~~case there is no surplus, from net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

The Parent Company has three primary funding sources for the payment of dividends, share repurchases, and ~~benefits expense accounted for $9.5 million~~other corporate uses: dividends paid to the Parent Company by the Bank; capital raised through the issuance of equity; and funding raised through the issuance of debt instruments.

Various legal restrictions limit the extent to which the Company’s subsidiary bank can supply funds to the Parent Company and its non-bank subsidiaries. The Bank would require the approval of the ~~year-over-year increase, having grown~~OCC if the dividends it declares in any calendar year were to ~~$361.0 million in 2017.~~exceed the total of its respective net profits for that year combined with its respective retained net profits for the preceding two calendar years, less any required transfer to paid-in capital. The ~~increase was driven by~~term “net profits” is defined as net income for a combination of factors, including an increase in stock-based compensation expense, normal salary increases, and the addition of senior level staff in various departments. This was offset by a $6.9 million decline in G&A expense to $181.3 million, primarily reflecting a $3.8 million decrease in FDIC deposit insurance premiums to $57.3 million.

~~Income Tax Expense~~

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

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

~~RESULTS OF OPERATIONS: 2016 AS COMPARED TO 2015~~

~~Earnings Summary~~

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

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

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

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

~~Net Interest Income~~

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

~~Interest Income~~

In 2016, interest income fell $16.7 million year-over-year to $1.7 billion, as the benefit of a $30.6 million increase in the interest income produced by loans was substantially exceeded by the impact of a $47.3 million decline in the interest income produced by securities and money market investments.

~~The increase in the interest income produced by loans was driven by a $2.7 billion rise in the average balance of such assets to $39.1 billion and tempered by a20-basis~~ point drop in the average yield to 3.77%. The increase in interest income on loans was also partly offset by a $36.4 million decline in the contribution of prepayment income to $60.9 million, and by an~~11-basis~~ ~~point decrease in the contribution to the average yield to 16 basis points.~~

The decline in the interest income produced by securities and money market investments was driven by a $2.3 billion reduction in the average balance of such assets to $4.9 billion, primarily reflecting the aforementioned high volume of securities calls.period. As a result of ~~such calls, prepayment income~~our acquisition of Flagstar, we are also required to seek regulatory approval from ~~securities rose $14.1~~the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024. In connection with receiving regulatory approval from the OCC for the Signature Transaction, the Bank has committed that (i) for a period of two years from the date of the Signature Transaction, it will not declare or pay any dividend without receiving a prior written determination of no supervisory objection from the OCC and (ii) it will not declare or pay dividends on the amount of retained earnings that represents any net bargain purchase gain that is subject to a conditional period that may be imposed by the OCC.In 2023, dividends of $580 million ~~year-over-year~~were paid by the Bank to ~~$33.5 million~~the Parent Company.

At December 31, 2023, we believe the Company has sufficient liquidity and capital resources to meet its cash flow obligations over the next 12 months and for the foreseeable future.

Bank Liquidity

We monitor our liquidity daily to ensure that sufficient funds are available to meet our financial obligations. The following table presents available sources of liquidity as of December 31, 2023:


(Dollars in millions)
Cash and cash equivalents	$	11,475
Unencumbered investment securities	6,300
FHLB borrowing availability	8,400
Federal Reserve Bank borrowing availability through the discount window	1,700
Total Ready Liquidity	$	27,875

CDs due to mature or reprice in one year or less from December 31, 2023 totaled $17.3 billion, representing 80 percent of total CDs at that date. Our ability to attract and retain retail deposits, including CDs, depends on numerous factors, including, among others, the convenience of our branches and our other banking channels; our customers’ satisfaction with the service they receive; the rates of interest we offer; the types of products we feature; and the ~~contribution~~attractiveness of ~~prepayment income~~their terms.

Our decision to compete for deposits also depends on numerous factors, including, among others, our access to deposits through acquisitions, the ~~average yield~~availability of lower-cost funding sources, the impact of competition on ~~securities~~pricing, and ~~money market investments rose 41 basis points~~the need to ~~68 basis points. Largely reflecting~~fund our loan demand.

Deposits

Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the ~~increase~~rates of interest we pay, the types of products we offer, and the attractiveness of their terms. The vast majority of our deposits are retail in ~~prepayment income, the average yield~~nature (i.e., they are deposits we have gathered through our branches or through business combinations).

Depending on ~~securities~~their availability and ~~money market investments rose 67 basis points~~pricing relative to ~~4.11% year-over-year.~~

~~Interest Expense~~

~~In 2016, the interest expense on interest-bearing~~other funding sources, we also include brokered deposits ~~rose $10.9 million year-over-year~~in our deposit mix. Brokered deposits accounted for $9.5 billion of our deposits at December 31, 2023, compared to ~~$171.0 million, as a $218.0 million rise in the average balance to $26.1~~$5.1 billion was accompanied by a three-basis point rise in the average cost to 0.65%. While the average balance of savings accounts fell $1.6 billion year-over-year to $5.9 billion, the decrease was exceeded by the combination of a $1.2 billion rise in CDs to $6.9 billion and a $648.1 million rise in NOW andat December 31, 2022. Brokered money market accounts represented $1.3 billion of total brokered deposits at December 31, 2023 and $2.8 billion at December 31, 2022; brokered interest-bearing checking accounts represented $1.6 billion and $1.0 billion, respectively. At December 31, 2023, we had $6.6 billion of brokered CDs, compared to ~~$13.3 billion. Similarly, while~~$1.3 billion at December 31, 2022.

Our uninsured deposits are the ~~average cost~~portion of ~~savings~~deposit accounts ~~fell 13 basis points year-over-year,~~that exceed the ~~benefit was exceeded by the impact of aone-basis~~ ~~point rise in the average cost of CDs and aten-basis~~ ~~point rise in the average cost of NOW and money market accounts.~~

~~(Recoveries of) Provision for Losses on Loans~~

~~Provision for (Recovery of) Losses onNon-Covered~~ ~~Loans~~

~~The provision for losses onnon-covered~~ ~~loans, like the recovery ofnon-covered~~ ~~loan losses, is~~FDIC insurance limit (currently $250,000). These amounts were estimated based on the ~~methodology~~same methodologies and assumptions used ~~by management in calculating the allowance~~ for ~~losses on such loans. Reflecting this methodology, which is discussed in detail under “Critical Accounting Policies” earlier in this report, we recorded an $11.9 million provision fornon-covered~~ ~~loan losses in the twelve months ended~~regulatory reporting purposes and excludes internal accounts. At December 31, ~~2016~~2023 our deposit base includes $29.3 billion of uninsured deposits, a net increase of $12.9 billion as compared to ~~a $3.3 million recovery ofnon-covered~~ ~~loan losses in the twelve months ended~~ December 31, ~~2015.~~

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

~~Recovery of Losses on Covered Loans~~

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

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

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

~~Non-interest~~ ~~income fell $65.2 million year-over-year to $145.6 million in the twelve months ended December 31, 2016. The reduction was primarily attributable~~2022 due to the ~~following factors:~~

~~Mortgage banking income fell $26.8 million year-over-year to $27.3 million, primarily due to a first-quarter change in the assumptions used to calculate the value~~Signature Transaction. This represents 36 percent of our ~~MSRs, together with an increase in loan payments and curtailments.~~total deposits.

~~Othernon-interest~~ ~~income fell to $41.6 million in the twelve months ended December 31, 2016 from $74.2 million in the twelve months ended December 31, 2015. While certain components of othernon-interest~~ income declined year-over-year, including revenues from PBC and the sale of third-party investments, the bulk of the year-over-year reduction was due to certain gains recorded in the prior year. The amount of other~~non-interest~~ income recorded in 2015 was boosted by the combination of a $13.3 million gain on the sale of a bank-owned property and a $7.8 million gain on the sale of a multi-family property that had been classified as OREO. As no comparable gains were recorded in 2016, these two factors accounted for $21.1 million of the $32.6 million decline in other~~non-interest~~ ~~income from the level recorded in 2015.~~

~~The net gain on sales of loans, primarily through participations, fell $10.3 million year-over-year to $15.8 million.~~

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

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

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

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

~~Income Tax Expense~~

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

~~QUARTERLY FINANCIAL DATA~~

The following table ~~sets forth selected unaudited quarterly financial data for~~indicates the ~~years ended~~amount of time deposits, by account, that are in excess of the FDIC insurance limit (currently $250,000) by time remaining until maturity:


(in millions)	December 31, 2023		December 31, 2022
Portion of U.S. time deposits in excess of insurance limit	$	7,893	$	3,749
Time deposits otherwise uninsured with a maturity of:
3 months or less	1,675		969
Over 3 months through 6 months	1,623		604
Over 6 months through 12 months	2,325		1,269
Over 12 months	2,271		907
Total time deposits otherwise uninsured	$	7,894	$	3,749

Borrowed Funds

The majority of our borrowed funds are wholesale borrowings (FHLB-NY and FHLB-Indianapolis advances), Bank Term Funding Program of the FRB of New York and, to a lesser extent, junior subordinated debentures and subordinated notes. At December 31, ~~2017~~2023, total borrowed funds decreased $65 million to $21.3 billion compared to the balance at December 31, 2022.

Wholesale Borrowings

Wholesale borrowings totaled $20.3 billion at December 31, 2023 and ~~2016:~~

(in thousands, except per share data) 2017    2016
4th 3rd 2nd 1st    4th    3rd    2nd    1st
Net interest income
$ 270,974 $ 276,343 $ 287,769 $ 294,917    $ 315,520    $ 318,423    $ 325,573    $ 327,866
Provision for (recoveries of) loan losses
2,926 44,585 (6,261 ) (4,008 )    3,516    (55 )    895    (176 )
Non-interest income
25,343 108,928 50,437 32,172    32,374    40,595    37,366    35,237
Non-interest expense
148,484 162,234 163,765 166,943    170,602    161,685    160,911    158,448









Income before income taxes
144,907 178,452 180,702 164,154    173,776    197,388    201,133    204,831
Income tax expense
8,386 67,984 65,447 60,197    60,043    72,089    74,673    74,922









Net income
$ 136,521 $ 110,468 $ 115,255 $ 103,957    $ 113,733    $ 125,299    $ 126,460    $ 129,909
Preferred stock dividends
8,207 8,207 8,207 —      —      —      —      —









Net income available to common shareholders
$ 128,314 $ 102,261 $ 107,048 $ 103,957    $ 113,733    $ 125,299    $ 126,460    $ 129,909









Basic earnings per common share
$0.26 $0.21 $0.22 $0.21    $0.23    $0.26    $0.26    $0.27









Diluted earnings per common share
$0.26 $0.21 $0.22 $0.21    $0.23    $0.26    $0.26    $0.27

~~IMPACT OF INFLATION~~

~~The consolidated financial statements~~2022.

FHLB-NY and ~~notes thereto presented in this report have been prepared in accordance~~FHLB-Indianapolis advances accounted for $19.3 billion and $20.3 billion at December 31, 2023 and December 31, 2022, respectively. Pursuant to blanket collateral agreements with ~~GAAP, which requires that we measure~~the Bank, our ~~financial condition~~FHLB-NY, FHLB-Indianapolis advances and ~~operating results in terms~~overnight advances are secured by pledges of ~~historical dollars, without considering changes~~certain eligible collateral in the ~~relative purchasing power~~form of ~~money over time due to inflation.~~ loans and securities. At December 31, 2023 and December 31, 2022, $2.0 billion and $6.8 billion of our wholesale borrowings had callable features, respectively.

The ~~impact~~Company’s wholesale borrowings also include the $1.0 billion drawn on the BTFP. The BTFP draw is secured by pledges of ~~inflation is reflected~~certain eligible collateral in the ~~increased cost~~form of ~~our operations. Unlike industrial companies, nearly all~~securities eligible for purchase by the Federal Reserve Banks in open market operations (for example, U.S. Treasuries, U.S. agency securities, and U.S. agency mortgage-backed securities).

We had no federal funds outstanding at December 31, 2023 and December 31, 2022.

Junior Subordinated Debentures

Junior subordinated debentures totaled $579 million at December 31, 2023 compared to $575 million at December 31, 2022.

Subordinated Notes

At December 31, 2023, the balance of a bank’s assets and liabilities are monetary in nature. As a result, the impact of interest rates on our performance is greater than the impact of general levels of inflation. Interest rates do not necessarily move in the same direction, orsubordinated notes was $438 million compared to ~~the same extent, as the prices of goods and services.~~

~~IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS~~

~~Refer to~~$432 million at December 31, 2022.

See Note ~~2, “Summary of Significant Accounting Policies,~~12 - Borrowed Funds,” in Item 8, “Financial Statements and Supplementary ~~Data,”~~Data” for a further discussion of our wholesale borrowings, our junior subordinated debentures and subordinated debt.

Contractual Obligations

In the ~~impact~~normal course of ~~recent accounting pronouncements~~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. These obligations include commitments to extend credit in the form of mortgage and other loan originations, as well as commercial, performance stand-by, and financial stand-by letters of credit.

These commitments consist of agreements to extend credit, as long as there is no violation of any condition established in the contract under which the loan is made. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee.

The letters of credit we issue consist of performance stand-by, financial stand-by, and commercial letters of credit. Financial stand-by letters of credit primarily are issued for the benefit of other financial institutions, municipalities, or landlords on behalf of certain of our current borrowers, and obligate us to guarantee payment of a specified financial obligation.

Performance stand-by letters of credit are primarily issued for the benefit of local municipalities on behalf of certain of our borrowers. Performance letters of credit obligate us to make payments in the event that a specified third party fails to perform under non-financial contractual obligations. Commercial letters of credit act as a means of ensuring payment to a seller upon shipment of goods to a buyer.

Such letters of credit typically require the presentation of documents that describe the commercial transaction, and provide evidence of shipment and the transfer of title. Fees collected in connection with the issuance of letters of credit are included in “Fee income” in the Consolidated Statements of Income and Comprehensive Income.

For the year ended December 31, 2023, we did not engage in any off-balance sheet transactions that we expect to have a material effect on our financial condition, ~~and~~ results of ~~operations.~~

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

~~While stockholders’ equity, common stockholders’ equity, total~~operations or cash flows.

At December 31, 2023, we had no commitments to purchase securities.

Regulatory Capital

The Bank is subject to regulation, examination, and supervision by the OCC and the Federal Reserve (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 ~~book value per~~of common ~~share~~equity tier 1 capital, tier 1 capital, and total capital to risk-weighted

assets (as such measures are ~~financial~~defined in the regulations). At December 31, 2023, our capital measures continued to exceed the minimum federal requirements for a bank holding 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 ~~are recorded~~date:

The following tables present the actual capital amounts and ratios for the Company:


	Risk-Based Capital
December 31, 2023	Common Equity Tier 1				Tier 1				Total				Leverage Capital
(in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital	$	8,009	9.05	%	$	8,512	9.62	%	$	10,415	11.77	%	$	8,512	7.75	%
Minimum for capital adequacy purposes	3,983		4.50		5,310		6.00		7,081		8.00		4,392		4.00
Excess	$	4,026	4.55	%	$	3,202	3.62	%	$	3,334	3.77	%	$	4,120	3.75	%
December 31, 2022
Total capital	$	6,335	9.06	%	$	6,838	9.78	%	$	8,154	11.66	%	$	6,838	9.70	%
Minimum for capital adequacy purposes	3,146		4.50		4,195		6.00		5,593		8.00		2,819		4.00
Excess	$	3,189	4.56	%	$	2,643	3.78	%	$	2,561	3.66	%	$	4,019	5.70	%

The following tables present the actual capital amounts and ratios for the Bank:


	Risk-Based Capital
December 31, 2023	Common Equity Tier 1				Tier 1				Total				Leverage Capital
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital	$	9,305	10.52	%	$	9,305	10.52	%	$	10,271	11.61	%	$	9,305	8.48	%
Minimum for capital adequacy purposes	3,980		4.50		5,307		6.00		7,076		8.00		4,389		4.00
Excess	$	5,325	6.02	%	$	3,998	4.52	%	$	3,195	3.61	%	$	4,916	4.48	%
December 31, 2022
Total capital	$	7,653	10.96	%	$	7,653	10.96	%	$	7,982	11.43	%	$	7,653	10.87	%
Minimum for capital adequacy purposes	3,142		4.50		4,189		6.00		5,585		8.00		2,817		4.00
Excess	$	4,511	6.46	%	$	3,464	4.96	%	$	2,397	3.43	%	$	4,836	6.87	%

At December 31, 2023, our total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by 377 basis points and the fully phased-in capital conservation buffer by 127 basis points.

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 percent; a minimum tier 1 risk-based capital ratio of 8 percent; a minimum total risk-based capital ratio of 10 percent; and a minimum leverage capital ratio of 5 percent.

On July 27, 2023, the Federal Banking Agencies, the FDIC, the Federal Reserve, and the OCC, released a notice of proposed rulemaking that would make significant amendments to the Basel III Capital Rules applicable to both the Company and the Bank. In general, the proposed rule would align the regulatory capital calculation methodology for Category III and IV banking organizations with the methodology applicable to Category I and II banking organizations. In addition to calculating risk-weighted assets under the current U.S. standardized approach, the proposal introduces a new “Expanded Risk-Based Approach,” including standardized approaches for credit risk, operational risk and credit valuation adjustment risk, as well as a new approach for market risk that would be based upon internal models and standardized supervisory models. If adopted as proposed, the Company would be required to calculate its risk-based capital ratios under both the current U.S. standardized approach and the Expanded Risk-Based Approach and would be subject to the lower of the two resulting ratios for each risk-based capital ratio. In addition, the proposal would require banking organizations to recognize most elements of AOCI in ~~accordance with U.S. generally accepted accounting principles (“GAAP”), tangible common stockholders’ equity, tangible~~regulatory capital, including unrealized gains and losses on available-for-sale securities, and lower thresholds for deductions from CET1 capital for mortgage servicing assets and ~~tangible book~~deferred tax assets, among other things. The proposal, if enacted, would have an effective date of July 1, 2025, with certain elements, such as the recognition of AOCI in regulatory capital and changes in risk-weighted assets calculated under the Expanded Risk-Based Approach, having a three-year phase-in period. We are in the process of evaluating this proposed rulemaking and assessing its potential impact on the Company and the Bank if adopted as proposed.

Reportable Segment and Reporting Unit

In 2023, our chief operating decision maker assessed performance and allocated resources at the consolidated Company level. Following the acquisition of Flagstar Bank, N.A. and closing the Signature Transaction, we are currently in the process of operationalizing the financial reporting – both historical and prospective – for our reportable segments and reporting units, which may result in a change to either or both in future reporting periods.

Critical Accounting Estimates

Various elements of our accounting policies, by their nature, are subject to estimation techniques, valuation assumptions and other subjective assessments. Certain accounting policies that, due to the judgment, estimates and assumptions are critical to an understanding of our Consolidated Financial Statements and the Notes, are described in Item 1. These policies relate to: (a) the determination of our ACL, (b) fair value ~~per common share~~measurements and (c) the acquisition method of accounting. We believe the judgment, estimates and assumptions used in the preparation of our Consolidated Financial Statements and the Notes are ~~not. It is management’s belief that~~appropriate given the factual circumstances at the time. However, given the sensitivity of our Consolidated Financial Statements and the Notes to these~~non-GAAP~~ ~~measures should be disclosed~~ critical accounting policies, the use of other judgments, estimates and assumptions could result in ~~this report~~material differences in our results of operations and/or financial condition.

Allowance for Credit Losses

The allowance for credit losses on loans and ~~others we issue~~leases represents our current estimate of the lifetime credit losses expected from our loan and lease portfolio and our unfunded lending commitments. Management estimates the allowance by projecting and multiplying together the probability-of-default, loss-given-default and exposure-at-default depending on economic parameters for each month of the ~~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,~~remaining contractual term, as well as credit ratings for certain loans within the commercial and industrial portfolio. The loss drivers for certain loans in the commercial and industrial portfolio are derived using credit ratings. The economic forecast and the related~~non-GAAP~~ ~~measures should~~ economic parameters are developed using multiple economic forecast scenarios, including related weightings, over the reasonable and supportable forecast period. The economic forecast scenarios and related economic parameters are sourced from independent third parties. Economic parameters are developed using available information relating to past events, current conditions, and economic forecasts. Historical credit loss experience over the historical loss observation period provides the basis for the estimation of expected credit losses, with qualitative adjustments made for differences in current loan-specific risk characteristics such as levels of and trends in delinquencies and performance of loans, levels of and trends in write-offs and recoveries collected, trends in volume and terms of loans, effects of any changes in reasonable and supportable economic forecasts, effects of any changes in risk selection and underwriting standards, and other changes in lending policies, procedures, and practices, experience, ability, and depth of lending management and other relevant staff, available relevant information sources that support or contradict the registrant’s own forecast, effects of changes in prepayment expectations or other factors affecting assessments of loan contractual term, industry conditions; and effects of changes in credit concentrations. Expected credit losses are estimated over the contractual term of the loans, adjusted for forecasted prepayments when appropriate. The methodology used in the estimation of the allowance for credit losses on loans and leases, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Each quarter the Company reassesses the appropriateness of the economic forecasting period, the reversion period and historical mean.

The allowance for credit losses on loans and leases is measured on a collective (pool) basis when similar risk characteristics exist. The portfolio segment represents the level at which a systematic methodology is applied to estimate credit losses. Management believes the products within each of the entity’s portfolio segments exhibit similar risk characteristics. Smaller pools of homogenous financing receivables with homogeneous risk characteristics were modeled using the methodology selected for the portfolio segment. The Company leverages economic projections including property market and prepayment forecasts from established independent third parties to inform its loss drivers in the forecast, as well as credit ratings for certain loans within the commercial and industrial portfolio.

Loans that do not share risk characteristics are evaluated on an individual basis, including nonaccrual loans. If a loan is determined to be ~~considered~~collateral dependent, or meets the criteria to apply the collateral dependent practical expedient, expected credit losses are determined based on the fair value of the collateral at the reporting date, less costs to sell as appropriate.

The Company maintains an allowance for credit losses on off-balance sheet credit exposures. The Company estimates expected credit losses over the contractual period in ~~isolation or~~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 ~~substitute~~provision for ~~stockholders’ equity, common stockholders’ equity, total~~credit losses expense. The estimate includes consideration of the

likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated life. The Company examined historical credit conversion factor (“CCF”) trends to estimate utilization rates, and chose an appropriate mean CCF based on both management judgment and quantitative analysis. Quantitative analysis involved examination of CCFs over a range of fund-up windows (between 12 and 36 months) and comparison of the mean CCF for each fund-up window with management judgment determining whether the highest mean CCF across fund-up windows made business sense. The Company applies the same standards and estimated loss rates to the credit exposures as to the related class of loans.

When applying this critical accounting estimate we incorporate several inputs and judgments that may be influenced by changes period to period. These include, but are not limited to changes in the economic environment and forecasts, changes in the credit profile and characteristics of the loan portfolio, property valuations and changes in prepayment assumptions.

While changes to the economic environment forecasts, and portfolio characteristics will change from period to period, portfolio prepayments are an integral assumption in estimating the allowance for credit losses on our commercial real estate portfolio (multi -family, CRE and ADC) which comprises 60 percent of the loan portfolio at December 31, 2023. Portfolio prepayments are subject to estimation uncertainty and changes in this assumption could have a material impact to our estimation process. Prepayment assumptions are sensitive to interest rates and existing loan terms and determine the weighted average life of the commercial mortgage loan portfolio. Excluding other factors, as the weighted average life of the portfolio increases or decreases, so will the required amount of the allowance for credit losses on commercial real estate.

Valuation of Mortgage Servicing Rights

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

For further information and sensitivity analysis regarding the valuation of the MSR asset, see "Note 9 - Mortgage Servicing Rights,” in Item 8. “Financial Statements and Supplementary Data."

Acquisition Method of Accounting

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

Goodwill

The Company evaluates goodwill for impairment at least annually or when triggering events are identified. We utilize a market approach to calculate the ~~manner in which we calculate thesenon-GAAP~~ ~~measures may differ from that of other companies reportingnon-GAAP~~ ~~measures with similar names.~~

~~Reconciliations~~fair value of our ~~stockholders’ equity, common stockholders’ equity,~~single reporting unit, which considers how a market participant would view a control premium, complemented by an income approach if deemed necessary. The resulting value is then compared to our book value and ~~tangible common stockholders’ equity; our total assets~~any shortfalls would be recorded as an impairment.

As of December 31, 2023, the Company identified a triggering event and ~~tangible assets;~~applied a market approach using the end of day stock price, control premium for completed bank acquisitions, and an adjustment for Company-specific risk considerations based on subsequent confirming market evidence. This adjusted market capitalization was then compared to the ~~related financial measures~~carrying value to determine the extent of any shortfall which was calculated to be in excess of the goodwill balance. The Company’s assessment concluded that goodwill from historical transactions (2007 and prior) was fully impaired as of December 31, 2023, as confirmed by the Company’s current market capitalization. As a result, the Company recorded an impairment charge of the entire goodwill balance of $2.4 billion. Refer to "Note 2 - Summary of Significant Accounting Policies" and "Note 16 - Intangible Assets" in Item 8, "Financial Statements and Supplementary Data" for the ~~respective periods follow:~~

   At or for the
Twelve Months Ended
December 31,
(dollars in thousands)    2017 2016
Stockholders’ Equity
   $ 6,795,376 $ 6,123,991
Less: Goodwill
   (2,436,131 ) (2,436,131 )
Core deposit intangibles
   —   (208 )
Preferred stock
   (502,840 ) —


Tangible common stockholders’ equity
   $ 3,856,405 $ 3,687,652
Total Assets
   $ 49,124,195 $ 48,926,555
Less: Goodwill
   (2,436,131 ) (2,436,131 )
Core deposit intangibles
   —   (208 )


Tangible assets
   $ 46,688,064 $ 46,490,216
Common stockholders’ equity to total assets
   12.81 % 12.52 %
Tangible common stockholders’ equity to tangible assets
   8.26 7.93
Book value per common share
   $12.88 $12.57
Tangible book value per common share
   7.89 7.57

methodologies and assumptions used in the goodwill impairment analysis.

~~ITEM 7A.~~
Item7A.			~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Quantitative and Qualitative Disclosures about Market 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, operating environment, capital and liquidity requirements, and performance objectives; and to manage that risk in a manner consistent with guidelines approved by the Boards of Directors of the Company ~~the Community Bank,~~ and the ~~Commercial~~ Bank.

Market Risk

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

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

~~In 2017, we~~

We managed our interest rate risk by taking the following actions: (1) ~~We continued~~Continue to ~~emphasize~~increase the ~~origination~~investments portfolio with an overall shorter duration profile; (2) The use of derivatives to manage our interest rate position; (3) Increased the focus on retaining and ~~retention of intermediate-term assets, primarily in the form of multi-family and CRE loans; (2) We increased~~increasing our ~~portfolio of C&I loans, which feature floating rates; and (3) We extended the maturities of certain short-term wholesale borrowings.~~

branch deposits base.

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

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

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

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

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

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

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

~~Interest Rate Sensitivity Analysis~~

   At December 31, 2017
(dollars in thousands)    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⁾
   $ 3,182,859 $ 4,729,234 $ 16,579,975 $ 10,898,656 $ 2,845,843 $ 112,980 $ 38,349,547
Mortgage-related securities ⁽²⁾⁽³⁾
   21,268 58,354 385,627 681,573 1,226,274 245,650 2,618,746
Other securities⁽²⁾
   978,343 1,421 3,869 15,802 323,106 193,959 1,516,500
Interest-earning cash and cash equivalents
   2,373,803 —   —   —   —   —   2,373,803


Total interest-earning assets
   6,556,273 4,789,009 16,969,471 11,596,031 4,395,223 552,589 44,858,596


INTEREST-BEARING LIABILITIES:

Interest-bearing checking and money market accounts
   7,313,506 348,915 673,669 1,980,433 2,619,778 —   12,936,301
Savings accounts
   1,145,791 947,315 234,823 192,785 2,689,287 —   5,210,001
Certificates of deposit
   2,002,350 4,812,757 1,759,923 59,319 9,297 —   8,643,646
Borrowed funds
   1,733,926 2,653,500 7,781,000 600,000 —   145,253 12,913,679


Total interest-bearing liabilities
   12,195,573 8,762,487 10,449,415 2,832,537 5,318,362 145,253 39,703,627


Interest rate sensitivity gap per period⁽⁴⁾
   $ (5,639,300 ) $ (3,973,478 ) $ 6,520,056 $ 8,763,494 $ (923,139 ) $ 407,336 $ 5,154,969


Cumulative interest rate sensitivity gap
   $ (5,639,300 ) $ (9,612,778 ) $ (3,092,722 ) $ 5,670,772 $ 4,747,633 $ 5,154,969


Cumulative interest rate sensitivity gap as a percentage of total assets
   (11.48 )% (19.57 )% (6.30 )% 11.54 % 9.66 % 10.49 %
Cumulative net interest-earning assets as a percentage of net interest-bearing liabilities
   53.76 % 54.13 % 90.15 % 116.56 % 112.00 % 112.98 %

~~(1)~~

~~For the purpose of the gap analysis,non-performingnon-covered~~ ~~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.~~

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

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

Interest rate sensitivity is ~~also~~ monitored through the use of a model that generates estimates of the change in our ~~net portfolio value (“NPV”)~~Economic Value of Equity (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 and MBS prepayment rates, ~~reinvestment rates,~~current market value spreads, and deposit decay rates ~~similar to those utilized in formulating the preceding Interest Rate Sensitivity Analysis.~~

~~The following table sets forth our NPV at December 31, 2017, based~~and betas.

Based on the information and assumptions in effect at ~~that date, and~~December 31, 2023, the following table sets forth our EVE, assuming the changes in interest rates noted:

~~(dollars in thousands)~~

Change in
Interest Rates
(in basis points)⁽¹⁾

Market Value
of Assets

Market Value
of Liabilities

Net Portfolio
Value

Net Change

Portfolio Market
Value Projected
% Change
to Base

— $ 49,590,202 $ 42,154,288 $ 7,435,914 $ — — %
+100 48,897,628 41,901,656 6,995,972 (439,942 ) (5.92 )
+200 48,172,944 41,666,960 6,505,984 (929,930 ) (12.51 )

~~(1)~~
Change in Interest Rates (in basis points)	~~The impact~~	Estimated Percentage Change in Economic Value of~~100-~~ ~~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.~~ Equity
-200 shock		(2.39)%
-100 shock		(1.31)%
+100 shock		(0.28)%
+200 shock		(1.44)%

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

~~As with~~Bank.

Accordingly, while the ~~Interest Rate Sensitivity Analysis, certain shortcomings are inherent in the methodology used in the preceding~~EVE analysis provides an indication of our interest rate risk ~~measurements.~~ 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.

Interest Rate Risk is also monitored through the use of a model that generates Net Interest Income (NII) simulations over a range of interest rate scenarios.Modeling changes in ~~NPV~~NII requires that certain assumptions be made which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the ~~NPV Analysis~~NII analysis presented ~~above~~below assumes that the composition of our interest rate sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration to maturity or repricing of specific assets and liabilities.

Furthermore, the model does not take into account the benefit of any strategic actions we may take to further reduce our exposure to interest rate risk. Accordingly, while the NPV Analysis provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net interest income, and may very well differ from actual results.

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

Based on the information and assumptions in effect at December 31, ~~2017,~~2023, the following table reflects the estimated percentage change in future net interest income for the next twelve months, assuming the changes in interest rates noted:


Change in Interest Rates ~~(in~~ (in basis points) (1)~~(2)~~	Estimated Percentage Change in Future Net Interest Income
~~+100 over one year~~ -200 shock		~~(4.27~~	)(5.81)%
-100 shock	(3.17)%
+100 shock	3.24%
+200 ~~over one year~~ shock		~~(7.83~~	) 6.40%

~~(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 instantaneously and then remain unchanged.

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

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

NII simulations.

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

Our Asset and Liability Management 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.

•Our 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.

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

•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~~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 December 31, ~~2017,~~2023, our analysis indicated that ~~an immediate~~a further inversion of the yield curve would be expected to result in a ~~2.54% decrease~~2.1 increase in net interest income; conversely, an immediate steepening of the yield curve would be expected to result in a ~~2.99% increase.~~

2.4 percent decrease in net interest income. Both scenarios are derived from immediate changes to short-term rates.


ITEM 8.			FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

~~Our~~

Index to Consolidated Financial Statements ~~and Notes thereto and other supplementary data begin on the following page.~~

~~NEW YORK COMMUNITY BANCORP, INC.~~

~~CONSOLIDATED STATEMENTS OF CONDITION~~

   December 31,
(in thousands, except share data)    2017 2016
ASSETS:

Cash and cash equivalents
   $ 2,528,169 $ 557,850
Securities:

Available for sale ($1,263,227 pledged at December 31, 2017)
   3,531,427 104,281
Held-to-maturity ($1,930,533 pledged at December 31, 2016) (fair value of $3,813,959 at December 31, 2016)
   —   3,712,776


Total securities
   3,531,427 3,817,057


Non-covered loans held for sale
   35,258 409,152
Non-covered loans held for investment, net of deferred loan fees and costs
   38,387,971 37,382,722
Less: Allowance for losses onnon-covered loans
   (158,046 ) (158,290 )


Non-covered loans held for investment, net
   38,229,925 37,224,432
Covered loans
   —   1,698,133
Less: Allowance for losses on covered loans
   —   (23,701 )


Covered loans, net
   —   1,674,432


Total loans, net
   38,265,183 39,308,016
Federal Home Loan Bank stock, at cost
   603,819 590,934
Premises and equipment, net
   368,655 373,675
FDIC loss share receivable
   —   243,686
Goodwill
   2,436,131 2,436,131
Core deposit intangibles
   —   208
Mortgage servicing rights ($2,729 and $228,099 measured at fair value at December 31, 2017 and 2016, respectively)
   6,100 233,961
Bank-owned life insurance
   967,173 949,026
Other real estate owned and other repossessed assets ($16,990 covered by loss sharing agreements at December 31, 2016)
   16,400 28,598
Other assets
   401,138 387,413


Total assets
   $ 49,124,195 $ 48,926,555


LIABILITIES AND STOCKHOLDERS’ EQUITY:

Deposits:

Interest-bearing checking and money market accounts
   $ 12,936,301 $ 13,395,080
Savings accounts
   5,210,001 5,280,374
Certificates of deposit
   8,643,646 7,577,170
Non-interest-bearing accounts
   2,312,215 2,635,279


Total deposits
   29,102,163 28,887,903
Borrowed funds:

Wholesale borrowings:

Federal Home Loan Bank advances
   12,104,500 11,664,500
Repurchase agreements
   450,000 1,500,000
Federal funds purchased
   —   150,000


Total wholesale borrowings
   12,554,500 13,314,500
Junior subordinated debentures
   359,179 358,879


Total borrowed funds
   12,913,679 13,673,379
Other liabilities
   312,977 241,282


Total liabilities
   42,328,819 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 488,490,352 and 487,056,676 shares outstanding, respectively)
   4,891 4,871
Paid-in capital in excess of par
   6,072,559 6,047,558
Retained earnings
   237,868 128,435
Treasury stock, at cost (581,749 and 11,213 shares, respectively)
   (7,615 ) (160 )
Accumulated other comprehensive loss, net of tax:

Net unrealized gain (loss) on securities available for sale, net of tax of $(27,961) and $534, respectively
   39,188 (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 $32,121 and $34,355, respectively
   (49,134 ) (50,719 )


Total accumulated other comprehensive loss, net of tax
   (15,167 ) (56,713 )


Total stockholders’ equity
   6,795,376 6,123,991


Total liabilities and stockholders’ equity
   $ 49,124,195 $ 48,926,555



Report of Independent Registered Public Accounting Firms (PCAOB ID 238)			143
Consolidated Statements of Condition as of December 31, 2023 and 2022			79
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the years ended December 31, 2023, 2022 and 2021			80
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021			81
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021			82
Notes to Consolidated Financial Statements			84
Note 1 - Description of Business, Organization and Basis of Presentation			84
Note 2 - Summary of Significant Accounting Policies			85
Note 3 - Business Combinations			92
Note 4 - Accumulated Other Comprehensive Income			99
Note 5 - Investment Securities			100
Note 6 - Loans and Leases			104
Note 7 - Allowance for Credit Losses on Loans and Leases			109
Note 8 - Leases			110
Note 9 - Mortgage Servicing Rights			113
Note 10 - Variable Interest Entities			115
Note 11 - Deposits			115
Note 12 - Borrowed Funds			116
Note 13 - Federal, State, and Local Taxes			119
Note 14 - Stock-Related Benefit Plans			122
Note 15 - Derivative and Hedging Activities			122
Note 16 - Intangible Assets			126
Note 17 - Capital			127
Note 18 - Fair Value Measures			128
Note 19 - Commitment s and Contingencies			135
Note 20 - Employee Benefits			137
Note 2 1 - Parent Company Only Financial Information			142
Note 2 2 - Subsequent Events

New York Community Bancorp, Inc.
Consolidated Statements of Condition
December 31, 2023 December 31, 2022
(in millions, except per share data)
ASSETS:
Cash and cash equivalents $ 11,475 $ 2,032
Securities:
Debt Securities available-for-sale ($2,822 and $434 pledged at December 31, 2023 and December 31, 2022, respectively) 9,145 9,060
Equity investments with readily determinable fair values, at fair value 14 14
Total securities 9,159 9,074
Loans held for sale ($902 and $1,115 measured at fair value, respectively) 1,182 1,115
Loans and leases held for investment, net of deferred loan fees and costs 84,619 69,001
Less: Allowance for credit losses on loans and leases (992) (393)
Total loans and leases held for investment, net 83,627 68,608
Federal Home Loan Bank stock and Federal Reserve Bank stock, at cost 1,392 1,267
Premises and equipment, net 652 491
Core deposit and other intangibles 625 287
Goodwill — 2,426
Mortgage servicing rights 1,111 1,033
Bank-owned life insurance 1,580 1,561
Other assets 3,254 2,250
Total assets $ 114,057 $ 90,144
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Interest-bearing checking and money market accounts $ 30,700 $ 22,511
Savings accounts 8,773 11,645
Certificates of deposit 21,554 12,510
Non-interest-bearing accounts 20,499 12,055
Total deposits 81,526 58,721
Borrowed funds:
Federal Home Loan Bank and Federal Reserve Bank advances 20,250 20,325
Junior subordinated debentures 579 575
Subordinated notes 438 432
Total borrowed funds 21,267 21,332
Other liabilities 2,897 1,267
Total liabilities 105,690 81,320
Stockholders' equity:
Preferred stock at par $0.01 (5,000,000 shares authorized): Series A (515,000 shares issued and outstanding) 503 503
Common stock at par 0.01 (900,000,000 shares authorized; 744,155,791 and 705,429,386
shares issued; and 722,066,370 and 681,217,334 shares outstanding, respectively)
7 7
Paid-in capital in excess of par 8,231 8,130
Retained earnings 443 1,041
Treasury stock, at cost ($22,089,421 and 24,212,052 shares, respectively) (218) (237)
Accumulated other comprehensive loss, net of tax:
Net unrealized loss on securities available for sale, net of tax of $225 and $240, respectively (581) (626)
Net unrealized loss on pension and post-retirement obligations, net of tax of $12 and $18, respectively (28) (46)
Net unrealized gain on cash flow hedges, net of tax of $(6) and $(20), respectively 10 52
Total accumulated other comprehensive loss, net of tax (599) (620)
Total stockholders’ equity 8,367 8,824
Total liabilities and stockholders’ equity $ 114,057 $ 90,144

See accompanying notes to the consolidated financial statements.

~~NEW YORK COMMUNITY BANCORP, INC.~~

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

   Years Ended December 31,
(in thousands, except per share data)    2017 2016 2015
INTEREST INCOME:

Mortgage and other loans
   $ 1,417,237 $ 1,472,020 $ 1,441,462
Securities and money market investments
   165,002 202,849 250,122


Total interest income
   1,582,239 1,674,869 1,691,584


INTEREST EXPENSE:

Interest-bearing checking and money market accounts
   98,980 62,166 46,467
Savings accounts
   28,447 31,982 50,776
Certificates of deposit
   102,355 76,875 62,906
Borrowed funds
   222,454 216,464 1,123,360


Total interest expense
   452,236 387,487 1,283,509


Net interest income
   1,130,003 1,287,382 408,075
Provision for (recovery of) losses onnon-covered loans
   60,943 11,874 (3,334 )
Recovery of losses on covered loans
   (23,701 ) (7,694 ) (11,670 )


Net interest income after provision for (recovery of) loan losses
   1,092,761 1,283,202 423,079


NON-INTEREST INCOME:

Fee income
   31,759 32,665 34,058
Bank-owned life insurance
   27,133 31,015 27,541
Mortgage banking income
   19,337 27,281 54,113
Net gain on sales of loans
   1,156 15,806 26,133
Net gain on sales of securities
   29,924 3,347 4,054
FDIC indemnification expense
   (18,961 ) (6,155 ) (9,336 )
Gain on sale of covered loans and mortgage banking operations
   82,026 —   —
Other
   44,506 41,613 74,200


Totalnon-interest income
   216,880 145,572 210,763


NON-INTEREST EXPENSE:

Operating expenses:

Compensation and benefits
   360,985 351,436 342,624
Occupancy and equipment
   98,963 98,543 102,435
General and administrative
   181,270 188,130 170,541


Total operating expenses
   641,218 638,109 615,600
Amortization of core deposit intangibles
   208 2,391 5,344
Debt repositioning charge
   —   —   141,209
Merger-related expenses
   —   11,146 3,702


Totalnon-interest expense
   641,426 651,646 765,855


Income (loss) before income taxes
   668,215 777,128 (132,013 )
Income tax expense (benefit)
   202,014 281,727 (84,857 )


Net income (loss)
   $ 466,201 $ 495,401 $ (47,156 )
Preferred stock dividends
   24,621 —   —


Net income (loss) available to common shareholders
   $ 441,580 $ 495,401 $ (47,156 )


Basic earnings (loss) per common share
   $0.90 $1.01 $(0.11 )


Diluted earnings (loss) per common share
   $0.90 $1.01 $(0.11 )


Net income (loss)
   $ 466,201 $ 495,401 $ (47,156 )
Other comprehensive income (loss), net of tax:

Change in net unrealized gain (loss) on securities available for sale, net of tax of $29,740; $1,560; and $437, respectively
   41,684 (2,207 ) 475
Change in thenon-credit portion of OTTI losses recognized in other comprehensive income (loss), net of tax of $13; $49; and $44, respectively
   20 77 69
Change in pension and post-retirement obligations, net of tax of $2,234; $2,924; and $1,161, respectively
   1,585 4,015 (1,445 )
Less: Reclassification adjustment for sales ofavailable-for-sale securities, net of tax of $1,245; $1,127; and $306, respectively
   (1,743 ) (1,577 ) (434 )


Total other comprehensive income (loss), net of tax
   41,546 308 (1,335 )


Total comprehensive income (loss), net of tax
   $ 507,747 $ 495,709 $ (48,491 )

New York Community Bancorp, Inc.
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
For the Years Ended December 31,
(in millions, except per share data) 2023 2022 2021
INTEREST INCOME:
Loans and leases $ 4,509 $ 1,848 $ 1,525
Securities and money market investments 982 244 164
Total interest income 5,491 2,092 1,689
INTEREST EXPENSE:
Interest-bearing checking and money market accounts 943 226 31
Savings accounts 169 60 28
Certificates of deposit 646 97 55
Borrowed funds 656 313 286
Total interest expense 2,414 696 400
Net interest income 3,077 1,396 1,289
Provision for credit losses 833 133 3
Net interest income after provision for credit loan losses 2,244 1,263 1,286
NON-INTEREST INCOME:
Fee income 172 27 23
Bank-owned life insurance 43 32 29
Net loss on securities (1) (2) —
Net return on mortgage servicing rights 103 6 —
Net gain on loan sales and securitizations 89 5 —
Net loan administration income 82 3 —
Bargain purchase gain 2,131 159 —
Other 68 17 9
Total non-interest income 2,687 247 61
NON-INTEREST EXPENSE:
Operating expenses:
Compensation and benefits 1,149 354 303
Occupancy and equipment 200 92 88
General and administrative 750 158 127
Total operating expense 2,099 604 518
Intangible asset amortization 126 5 —
Merger-related and restructuring expenses 330 75 23
Goodwill impairment 2,426 — —
Total non-interest expense 4,981 684 541
(Loss) Income before income taxes (50) 826 806
Income tax expense 29 176 210
Net (loss) income $ (79) $ 650 $ 596
Preferred stock dividends 33 33 33
Net (loss) income available to common stockholders $ (112) $ 617 $ 563
Basic (loss) earnings per common share $ (0.16) $ 1.26 $ 1.20
Diluted (loss) earnings per common share $ (0.16) $ 1.26 $ 1.20
Net (loss) income $ (79) $ 650 $ 596
Other comprehensive gain (loss), net of tax:
Change in net unrealized loss on securities available for sale, net of tax of $(15); $223 and $42, respectively 45 (581) (112)
Change in pension and post-retirement obligations, net of tax of $(5); $6 and $(8), respectively 12 (17) 23
Change in net unrealized gain on cash flow hedges, net of tax of $(3); $(24) and $(2), respectively 6 64 6
Reclassification adjustment for defined benefit pension plan, net of tax of $(1); $— and $(2), respectively 6 2 5
Reclassification adjustment for net (loss) gain on cash flow hedges included in net income, net of tax $17; $1 and $(7), respectively (48) (3) 18
Total other comprehensive gain (loss), net of tax 21 (535) (60)
Total comprehensive (loss) income, net of tax $ (58) $ 115 $ 536

See accompanying notes to the consolidated financial statements.

~~NEW YORK COMMUNITY BANCORP, INC.~~

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

   Years Ended December 31,
(in thousands, except share data)    2017 2016 2015
PREFERRED STOCK (Par Value: $0.01):

Balance at beginning of year
   $ —   $ —   $ —
Issuance of preferred stock (515,000 shares)
   502,840 —   —


Balance at end of year
   502,840 —   —


COMMON STOCK (Par Value: $0.01):

Balance at beginning of year
   4,871 4,850 4, 427
Shares issued for restricted stock awards (2,004,212; 2,099,865; and 1,683,564, respectively)
   20 21 17
Shares issued infollow-on common stock offering (40,625,000 shares)
   —   —   406


Balance at end of year
   4,891 4,871 4,850


PAID-IN CAPITAL IN EXCESS OF PAR:

Balance at beginning of year
   6,047,558 6,023,882 5,369,623
Shares issued for restricted stock awards, net of forfeitures
   (11,028 ) (8,985 ) (7,708 )
Compensation expense related to restricted stock awards
   36,029 32,661 30,205
Proceeds fromfollow-on common stock offering, net
   —   —   629,276
Tax effect of stock plans
   —   —   2,486


Balance at end of year
   6,072,559 6,047,558 6,023,882


RETAINED EARNINGS (ACCUMULATED DEFICIT):

Balance at beginning of year
   128,435 (36,568 ) 464,569
Net income (loss)
   466,201 495,401 (47,156 )
Dividends paid on common stock ($0.68; $0.68; and $1.00 per share)
   (332,147 ) (330,810 ) (453,981 )
Dividends paid on preferred stock ($47.81 per share)
   (24,621 ) —   —
Effect of adopting Accounting Standards Update (“ASU”)No. 2016-09⁽¹⁾
   —   412 —


Balance at end of year
   237,868 128,435 (36,568 )


TREASURY STOCK:

Balance at beginning of year
   (160 ) (447 ) (1,118 )
Purchase of common stock (1,284,373; 566,584; and 448,223 shares, respectively)
   (18,463 ) (8,677 ) (7,020 )
Shares issued for restricted stock awards (713,837; 580,087; and 495,777 shares, respectively)
   11,008 8,964 7,691


Balance at end of year
   (7,615 ) (160 ) (447 )


ACCUMULATED OTHER COMPREHENSIVE LOSS, NET OF TAX:

Balance at beginning of year
   (56,713 ) (57,021 ) (55,686 )
Other comprehensive income (loss), net of tax
   41,546 308 (1,335 )


Balance at end of year
   (15,167 ) (56,713 ) (57,021 )


Total stockholders’ equity
   $ 6,795,376 $ 6,123,991 $ 5,934,696

~~(1)~~

~~See Note 2, “Summary of Significant Accounting Policies” for a discussion of the Company’s adoption of Accounting Standards UpdateNo. 2016-09.~~

New York Community Bancorp, Inc.
Consolidated Statements of Changes in Stockholders' Equity

(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
Year Ended December 31, 2023
Balance at December 31, 2022 681,217,334 $ 503 $ 7 $ 8,130 $ 1,041 $ (237) $ (620) $ 8,824
Issuance and exercise of FDIC Equity appreciation instrument 39,032,006 — — 85 — — — 85
Shares issued for restricted stock, net of forfeitures 3,074,565 — — (31) — 31 — —
Compensation expense related to restricted stock awards — — — 47 — — — 47
Net income — — — — (79) — — (79)
Dividends paid on common stock ($0.56) — — — — (486) — — (486)
Dividends paid on preferred stock ($63.76) — — — — (33) — — (33)
Purchase of common stock (1,257,535) — — — — (12) — (12)
Other comprehensive income, net of tax — — — — — — 21 21
Balance at December 31, 2023 722,066,370 $ 503 $ 7 $ 8,231 $ 443 $ (218) $ (599) $ 8,367
Year Ended December 31, 2022
Balance at December 31, 2021 465,015,643 $ 503 $ 5 $ 6,126 $ 741 $ (246) $ (85) $ 7,044
Issuance and exercise of FDIC Equity appreciation instrument 214,990,316 — 2 2,008 — — — 2,010
Shares issued for restricted stock, net of forfeitures 3,548,310 — — (33) — 33 — —
Compensation expense related to restricted stock awards — — — 29 — — — 29
Net income — — — — 650 — — 650
Dividends paid on common stock ($0.68) — — — — (317) — — (317)
Dividends paid on preferred stock ($63.76) — — — — (33) — — (33)
Purchase of common stock (2,336,935) — — — — (24) — (24)
Other comprehensive loss, net of tax — — — — — — (535) (535)
Balance at December 31, 2022 681,217,334 $ 503 $ 7 $ 8,130 $ 1,041 $ (237) $ (620) $ 8,824
Year Ended December 31, 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 — — — 31 — — — 31
Net income — — — — 596 — — 596
Dividends paid on common stock ($0.68) — — — — (316) — — (316)
Dividends paid on preferred stock ($63.76) — — — — (33) — — (33)
Purchase of common stock (1,402,107) — — — — (16) — (16)
Other comprehensive loss, net of tax — — — — — — (60) (60)
Balance at December 31, 2021 465,015,643 $ 503 $ 5 $ 6,126 $ 741 $ (246) $ (85) $ 7,044

See accompanying notes to the consolidated financial statements.

~~NEW YORK COMMUNITY BANCORP, INC.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

   Years Ended December 31,
(in thousands)    2017 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)
   $ 466,201 $ 495,401 $ (47,156 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Provision for (recoveries of) loan losses
   37,242 4,180 (15,004 )
Depreciation and amortization
   32,803 32,811 31,497
Amortization of discounts and premiums, net
   (4,555 ) (26,258 ) (8,069 )
Amortization of core deposit intangibles
   208 2,391 5,344
Net gain on sales of securities
   (29,924 ) (3,347 ) (4,054 )
Gain on trading securities activity
   (316 ) —   —
Net gain on sales of loans
   (87,301 ) (57,398 ) (65,649 )
Stock-based compensation
   36,029 32,661 30,205
Deferred tax expense (benefit)
   21,444 44,746 (31,289 )
Changes in operating assets and liabilities:

Decrease (increase) in other assets
   451,873 326,790 (196,899 )
Increase (decrease) in other liabilities
   23,329 (4,336 ) 15,425
Purchases of securities held for trading
   (202,450 ) —   —
Proceeds from sales of securities held for trading
   202,766 —   —
Origination of loans held for sale
   (1,674,123 ) (4,646,773 ) (4,680,243 )
Proceeds from sales of loans originated for sale
   2,053,484 4,554,785 4,545,466


Net cash provided by (used in) operating activities
   1,326,710 755,653 (420,426 )


CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from repayment of securities held to maturity
   175,375 2,499,205 940,580
Proceeds from repayment of securities available for sale
   387,772 50,192 9,889
Proceeds from sales of securities held to maturity
   547,925 1,297 44,104
Proceeds from sales of securities available for sale
   453,878 322,038 278,689
Purchases of securities held to maturity
   (13,030 ) (213,208 ) (20,021 )
Purchases of securities available for sale
   (1,163,043 ) (279,402 ) (318,027 )
Redemption of Federal Home Loan Bank stock
   90,909 601,941 623,189
Purchases of Federal Home Loan Bank stock
   (103,794 ) (528,904 ) (771,833 )
Proceeds from sales of loans
   2,289,377 1,675,550 1,923,208
Other changes in loans, net
   (1,575,846 ) (2,826,365 ) (4,072,135 )
Purchase of premises and equipment, net
   (27,783 ) (84,179 ) (34,802 )


Net cash provided by (used in) investing activities
   1,061,740 1,218,165 (1,397,159 )


CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in deposits
   214,260 461,145 98,024
Net (decrease) increase in short-term borrowed funds
   (460,000 ) (3,256,300 ) 768,100
Proceeds from long-term borrowed funds
   3,000,000 1,181,000 11,243,500
Repayments of long-term borrowed funds
   (3,300,000 ) —   (10,489,682 )
Tax effect of stock plans⁽¹⁾
   —   —   2,486
Net proceeds from issuance of preferred stock
   502,840 —   —
Proceeds received fromfollow-on common stock offering, net
   —   —   629,682
Cash dividends paid on common stock
   (332,147 ) (330,810 ) (453,981 )
Cash dividends paid on preferred stock
   (24,621 ) —   —
Payments relating to treasury shares received for restricted stock award tax payments⁽¹⁾
   (18,463 ) (8,677 ) (7,020 )


Net cash (used in) provided by financing activities
   (418,131 ) (1,953,642 ) 1,791,109


Net increase (decrease) in cash and cash equivalents
   1,970,319 20,176 (26,476 )
Cash and cash equivalents at beginning of year
   557,850 537,674 564,150


Cash and cash equivalents at end of year
   $ 2,528,169 $ 557,850 $ 537,674


Supplemental information:

Cash paid for interest
   $ 447,476 $ 382,135 $ 540,818
Cash paid for income taxes
   217,682 180,238 187,608
Cash paid for prepayment penalties on borrowings
   —   —   914,965
Non-cash investing and financing activities:

Transfers to other real estate owned from loans
   $ 9,973 $ 20,099 $ 47,096
Transfer of loans from held for investment to held for sale
   1,910,121 1,659,743 1,897,075
Transfer of loans from held for sale to held for investment
   —   —   153,578
Shares issued for restricted stock awards
   11,028 8,985 7,708
Securities transferred from held to maturity to available for sale
   3,040,305 —   —

~~(1)~~

~~See Note 2, “Summary of Significant Accounting Policies” for a discussion of the Company’s adoption of Accounting Standards UpdateNo. 2016-09.~~

New York Community Bancorp, Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31,
(in millions) 2023 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (79) $ 650 $ 596
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses 833 133 3
Amortization of intangibles 126 5 —
Depreciation 39 18 21
Amortization of discounts and premiums, net 221 (37) (5)
Net loss on securities 1 2 —
Net gain on sales of loans (89) (5) (1)
Net gain on sales of fixed assets — (2) —
Gain on business acquisition (2,131) (159) —
Goodwill Impairment 2,426 — —
Stock-based compensation 47 29 31
Deferred tax expense (187) (3) (13)
Changes in operating assets and liabilities:
(Increase) decrease in other assets (721) 348 (284)
Decrease in other liabilities (255) (100) (6)
Purchases of securities held for trading (10) (75) (110)
Proceeds from sales of securities held for trading 10 75 110
Change in loans held for sale, net 32 147 (52)
Net cash provided by operating activities 263 1,026 290
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from repayment of securities available for sale 1,402 732 1,728
Proceeds from sales of securities available for sale including loans that have been securitized 1,858 228 —
Purchase of securities available for sale (3,046) (2,242) (1,796)
Redemption of Federal Home Loan Bank stock 1,501 635 92
Purchases of Federal Home Loan Bank and Federal Reserve Bank stock (1,626) (839) (112)
Proceeds from bank-owned life insurance, net 30 16 12
Proceeds from sales of loans — — 37
Purchases of loans — (162) (161)
Net proceeds from sales of MSR's 50 — —
Other changes in loans, net (4,331) (5,019) (2,558)
Purchases of premises and equipment, net (66) (3) (4)
Cash acquired in business acquisition 24,901 331 —
Net cash provided by (used in) investing activities 20,673 (6,323) (2,762)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposits (10,738) 7,662 2,622
Net (decrease) increase in short-term borrowed funds (550) 2,550 950
Proceeds from long-term borrowed funds 19,850 9,479 2,072
Repayments of long-term borrowed funds (19,374) (13,960) (2,544)
Net disbursement of payments of loans serviced for others (66) (189) —
Cash dividends paid on common stock (486) (317) (316)
Cash dividends paid on preferred stock (33) (33) (33)
Treasury stock repurchased — (7) —
Payments relating to treasury shares received for restricted stock award tax payments (12) (17) (16)
Net cash (used in) provided by financing activities (11,409) 5,168 2,735
Net increase (decrease) in cash, cash equivalents, and restricted cash (1)
9,527 (129) 263
Cash, cash equivalents, and restricted cash at beginning of year (1)
2,082 2,211 1,948
Cash, cash equivalents, and restricted cash at end of year (1)
$ 11,609 $ 2,082 $ 2,211

82

Supplemental information:
Cash paid for interest $ 2,290 $ 657 $ 402
Cash paid for income taxes 54 17 471
Non-cash investing and financing activities:
Transfers to repossessed assets from loans $ 9 $ — $ 1
Securitization of loans to mortgage-backed securities available for sale 222 162 161
Transfer of loans from held for investment to held for sale 163 — 52
Transfer of loans from held for sale to held for investment — — 94
MSRs resulting from sale or securitization of loans — 19 —
Shares issued for restricted stock awards 31 33 28
Business Combinations:
Fair value of tangible assets acquired 37,384 24,449 —
Intangible assets 464 292 —
Mortgage servicing rights — 1,012 —
Liabilities assumed 35,632 23,584 —
Common Stock issued in business combination — 2,010 —
Issuance of FDIC Equity appreciation instrument 85 — —
(1) For further information on restricted cash, see Note 2 - Summary of Significant Accounting Policies

See accompanying notes to the consolidated financial statements.

~~NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION~~

Note 1 - Description of Business, Organization

and Basis of Presentation

Organization

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

The Company is subject to regulation, examination and supervision by the “Commercial Bank,” respectively, and collectively as the “Banks”). 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.

Federal Reserve. The ~~Community~~ Bank is a National Association, subject to federal regulation and oversight by 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 onOCC.

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

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

Flagstar Bank, N.A. currently operates ~~225~~420 branches ~~two~~across twelve states, including strong footholds in the Northeast and Midwest and exposure to markets in the Southeast and West Coast. Flagstar Mortgage operates nationally through a wholesale network of ~~which operate directly under the~~approximately 3,600 third-party mortgage originators. Flagstar Bank N.A. also operates through nine local divisions, each with a history of service and strength: New York Community Bank, ~~name. The remaining 223 Community Bank branches operate through seven 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~~Ohio; and AmTrust Bank ~~currently operates 30 branches~~ in ~~Manhattan, Queens, Brooklyn, Westchester County,~~Arizona and ~~Long Island (all~~Florida.

Liquidity

On a consolidated basis, our funding primarily stems from a combination of the following sources: retail, institutional, and brokered deposits; borrowed funds, primarily in ~~New York), including 18 branches~~the form of wholesale borrowings; cash flows generated through the repayment and sale of loans; and cash flows generated through the repayment and sale of securities.

We manage our liquidity to ensure that ~~operate under the name “Atlantic Bank.”~~

our cash flows are sufficient to support our operations, to compensate for any temporary mismatches between sources and uses of funds caused by variable loan and deposit demand, and to ensure that sufficient funds are available to meet our financial obligations. See Note 22 - Subsequent Events for further information on our recent capital raise.

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, mortgage servicing rights, the ~~evaluation of goodwill for impairment;~~Flagstar acquisition and the ~~evaluation of the need for a valuation allowance on the Company’s deferred tax assets.~~

Signature Transaction.

The accompanying consolidated financial statements include the accounts of the Company and other entities in which the Company has a controlling financial interest. All inter-company accounts and transactions are eliminated in consolidation. The Company currently has certain unconsolidated subsidiaries in the form of wholly-owned statutory business trusts, which were formed to issue guaranteed capital ~~securities (“capital securities”).~~securities. See Note ~~8, “Borrowed~~12 - Borrowed Funds” for additional information regarding these trusts.

~~NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

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

Loans

Effective January 1, 2023, the Company adopted the provisions of Accounting Standards Update (ASU) No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" (ASU 2022-02), which eliminated the accounting for troubled debt restructurings (TDRs) while expanding loan modification and vintage disclosure requirements. Under ASU 2022-02, the Corporation assesses all loan modifications to determine whether one is granted to a borrower experiencing financial difficulty, regardless of whether the modified loan terms include a concession. Modifications granted to borrowers experiencing financial difficulty may be in the form of an interest rate reduction, an other-than-insignificant payment delay, a term extension, principal forgiveness or a combination thereof (collectively referred to as Troubled Debt Modifications or TDMs).
Prior to the adoption of ASU 2022-02, the Company accounted for certain loan modifications and restructurings as TDRs. In general, a modification or restructuring of a loan constituted a TDR if the Company granted a concession to a borrower experiencing financial difficulty.

Adoption of New Accounting Standards

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

Note 2 - Summary of Significant Accounting Policies

Cash and Cash Equivalents

and Restricted Cash

For cash flow reporting purposes, cash and cash equivalents include cash on hand, amounts due from banks, and money market investments, which include federal funds sold and reverse repurchase ~~agreements.~~agreements, if any. At December 31, ~~2017~~2023 and ~~2016,~~2022, the Company’s cash and cash equivalents totaled ~~$2.5~~$11.5 billion and ~~$557.9 million,~~$2.0 billion, respectively. Included in cash and cash equivalents at those dates were ~~$2.1~~$10.7 billion and ~~$138.6~~$837 million, respectively, of interest-bearing deposits in other financial institutions, primarily consisting of balances due from the ~~Federal Reserve Bank of New York. Also included in cash and cash equivalents at December 31, 2017 and 2016~~FRB-NY. There were ~~federal funds sold of $3.1 million and $6.8 million, respectively. In addition, the Company had $250.0 million in pledged~~no reverse repurchase agreements outstanding as of December 31, 2023 and $793 million of reverse repurchase agreements were outstanding at December 31, ~~2017 and 2016.~~

In accordance with the monetary policy of the Board of Governors of the Federal Reserve System (the “FRB”), the Company was required to maintain total reserves with the Federal Reserve Bank of New York of $763.4 million and $162.1 million, respectively,2022. There were no federal funds sold outstanding at December 31, ~~2017~~2023 or December 31, 2022. Restricted cash totaled $134 million and ~~2016,~~$50 million at December 31, 2023 and December 31, 2022, respectively and includes cash that the Bank pledges as maintenance margin on centrally cleared derivatives and is included in other assets on the ~~form~~Consolidated Statements of ~~deposits~~Condition.

Debt Securities and ~~vault cash. The Company was in compliance~~Equity Investments with ~~this requirement at both dates.~~

~~Securities Available for Sale and Held to Maturity~~

Readily Determinable Fair Values

The securities portfolio primarily consists of mortgage-related securities and, to a lesser extent, debt and equity ~~(together, “other”)~~ securities. Securities that are classified as “available for sale” are carried at their estimated fair value, with any

unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholders’ equity. Securities that the Company has the intent and ability to hold to maturity are classified as “held to maturity” and carried at amortized ~~cost, less thenon-credit~~ ~~portion of other-than-temporary impairment (“OTTI”) recorded in accumulated other comprehensive loss (“AOCL”), net of tax.~~

cost.

The fair values of our securities—and particularly our fixed-rate securities—are affected by changes in market interest rates and credit spreads. In general, as interest rates rise and/or credit spreads widen, the fair value of fixed-rate securities will decline. As interest rates fall and/or credit spreads tighten, the fair value of fixed-rate securities will rise. ~~We regularly conduct a review and evaluation of our~~

The Company evaluates available-for-sale debt securities ~~portfolio~~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 ~~decline~~Company has concluded that it expects to receive all contractual cash flows from each security held in ~~the fair value of any security below~~ its carrying amount is other than temporary. If we deem any such decline in value to be other than temporary, the security is written down to its current fair value, creating a new cost basis, and the resultant loss (other than the OTTI of debtavailable-for-sale securities ~~attributable tonon-credit~~ ~~factors) is charged against earnings and recorded in“Non-interest~~ income.” Our assessment of a decline in fair value requires judgment as to the financial position and future prospects of the entity that issued the investment security, as well as a review of the security’s underlying collateral. Broad changes in the overall market or interest rate environment generally will not lead to a write-down.

~~In accordance with OTTI accounting guidance, unless we have the intent~~portfolio.

The Company first assesses whether (i) it intends to sell, or (ii) it is more likely than not that ~~we may be required to sell a security before recovery, OTTI is recognized as a realized loss in earnings to~~ the extent that the decline in fair value is credit-related. If there is a decline in fair value of a security below its carrying amount and we have the intent to sell it, or it is more likely than not that we mayCompany 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 ~~entire amount~~security’s amortized cost basis is written down to fair value through income. If neither of the aforementioned criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is ~~charged~~less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Management has made the accounting policy election to ~~earnings.~~

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 the Company no longer expects 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.

Equity investments with readily determinable fair values are measured at fair value with changes in fair value recognized in net income.

Premiums and discounts on securities are amortized to expense and accreted to income over the remaining period to contractual maturity using ~~a method that approximates~~ the interest method, and are adjusted for anticipated prepayments. Dividend and interest income are recognized when earned. The cost of securities sold is based on the specific identification method.

Federal Home Loan Bank Stock

As a member of the ~~FHLB of New York (the“FHLB-NY”),~~FHLB-NY, the Company is required to hold shares ofFHLB-NY stock, which is carried at cost. In addition, in connection with the Flagstar acquisition, the Company also holds shares of FHLB-Indianapolis stock, which is carried at cost. The Company’s holding requirement varies based on certain factors, including its outstanding borrowings from the~~FHLB-NY.~~

FHLB-NY and FHLB-Indianapolis.

The Company conducts a periodic review and evaluation of its FHLB-NY stock to determine if any impairment exists. The factors considered in this process include, among others, significant deterioration in FHLB-NY earnings performance, credit rating, or asset quality; significant adverse changes in the regulatory or economic environment; and other factors that could raise significant concerns about the creditworthiness and the ability of the FHLB-NY to continue as a going concern.

Loans

Held-for-Sale

The Company classifies loans as LHFS when we originate or purchase loans that we intend to sell. We have elected the fair value option for the majority of our LHFS. The Company estimates the fair value of mortgage loans based on quoted market prices for securities backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral. Changes in fair value are recorded to other noninterest income on the Consolidated Statements of Income and Comprehensive Income. LHFS that are recorded at the lower of cost or fair value may be carried at fair value on a nonrecurring basis when the fair value is less than cost. For further information, see Note 18 - Fair Value Measures.

Loans that are transferred into the LHFS portfolio from the LHFI portfolio, due to a change in intent, are recorded at the lower of cost or fair value. Gains or losses recognized upon the sale of loans are determined using the specific identification method.

Loans Held for Investment

Loans and leases, net, are carried at unpaid principal balances, including unearned discounts, purchase accounting (i.e., acquisition-date fair value) adjustments, net deferred loan origination costs or fees, and the ~~allowances~~allowance for ~~loan losses.~~

~~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”)~~credit losses on loans and is reported under the Company’s Residential Mortgage Banking segment, to Freedom Mortgage Corporation (“Freedom”). 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 Statements of Operations and Comprehensive Income (Loss). Freedom acquired both the Company’s origination and servicing platforms, as well as its mortgage servicing loan portfolio of $20.5 billion and related mortgage servicing rights (“MSRs”) asset of $208.8 million.

Accordingly, all of the loans held for sale that were outstanding at December 31, 2017, were originated by the Community Bank through its previous mortgage banking operation, and are to be sold to Freedom. Such loans are carried at fair value, which is primarily based on quoted market prices for securities backed by similar types of loans. The changes in fair value of these assets are largely driven by changes in mortgage interest rates subsequent to loan funding. In addition, loans originated as “held for investment” and subsequently designated as “held for sale” are transferred to held for sale at fair value.

Additionally, the Company received approval from the FDIC to sell assets covered under its Loss Share Agreements (“LSA”), early terminate the LSA, and entered into an agreement to sell the majority of its~~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 Statements of Operations and Comprehensive Income (Loss). As a result of this sale the Company has no covered loans at December 31, 2017.~~

leases.

The Company recognizes interest income on~~non-covered~~ loans ~~held for investment and held for sale~~ using the interest method over the life of the loan. Accordingly, the Company defers certain loan origination and commitment fees, and certain loan origination costs, and amortizes the net fee or cost as an adjustment to the loan yield over the term of the related loan. When a loan is sold or repaid, the remaining net unamortized fee or cost is recognized in interest income.

Prepayment income on loans is recorded in interest income and only when cash is received. Accordingly, there are no assumptions involved in the recognition of prepayment income.

Two factors are considered in determining the amount of prepayment income: the prepayment penalty percentage set forth in the loan documents, and the principal balance of the loan at the time of prepayment. The volume of loans prepaying may vary from one period to another, often in connection with actual or perceived changes in the direction of market interest rates. When interest rates are declining, rising precipitously, or perceived to be on the verge of rising, prepayment income may increase as more borrowers opt to refinance and lock in current rates prior to further increases taking place.

A loan generally is classified as a~~“non-accrual”~~ “non-accrual” loan when it is 90 days or more past due or when it is deemed to be impaired because the Company no longer expects to collect all amounts due according to the contractual terms of the loan agreement. When a loan is placed onnon-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 onnon-accrual loans is recorded when received in cash.

~~Allowances~~

Loans with Government Guarantees

The Company originates government guaranteed loans which are pooled and sold as Ginnie Mae MBS. Pursuant to Ginnie Mae servicing guidelines, the Company has the unilateral right to repurchase loans securitized in Ginnie Mae pools that are due, but unpaid, for ~~Loan Losses~~

three consecutive months. As a result, once the delinquency criteria have been met, and regardless of whether the repurchase option has been exercised, the Company accounts for the loans as if they had been repurchased. The Company recognizes the loans and corresponding liability as loans with government guarantees and loans with government guarantees repurchase options, respectively, in the Consolidated Statements of Condition. If the loan is repurchased, the liability is cash settled and the loan with government guarantee remains. Once repurchased, the Company works to cure the outstanding loans such that they are re-eligible for sale or may begin foreclosure and recover losses through a claims process with the government agency, as an approved lender.

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

and Leases

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, as well as credit ratings for certain loans within the commercial and industrial portfolio. The Company loss drivers for certain loans in the commercial and industrial portfolio are derived using leverages economic projections including property market and prepayment forecasts from established independent third parties, as well as credit ratings for certain loans within the commercial and industrial portfolio, to inform its loss drivers in the forecast. The Company estimates the exposure-at-default using prepayment models which forecasts prepayments over the life of the ~~balance sheet. Losses~~loans and leases. The economic forecast and the related economic parameters are developed using available information relating to past events, current conditions, multiple economic forecasts scenarios, including related weightings, over the reasonable and supportable forecast period and macroeconomic assumptions. The economic forecast scenarios and related economic parameters are sourced from independent third parties. The economic forecast reasonable and supportable period is 24 months, and afterwards the Company reverts to a historical average loss rate on~~non-covered~~ ~~loans~~ a straight-line basis over a 12-month period. Historical credit loss experience over the historical loss observation period provides the basis for the estimation of expected credit losses, with qualitative factor adjustments made

for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, current collateral valuations, 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 ~~charged against, and recoveries of losses onnon-covered~~ ~~loans are credited back to,~~estimated over the ~~allowance for losses onnon-covered~~ ~~loans.~~

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

forecasted prepayments when appropriate. The contractual term excludes potential extensions or renewals. The methodology used ~~for~~in the ~~allocation~~estimation of the allowance for~~non-covered~~ credit losses on loan ~~losses~~and leases, which is performed at ~~December 31, 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 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. The Company leverages economic projections including property market and prepayment forecasts from established ~~based on management’s evaluation of incurred losses~~independent third parties, as well as credit ratings for certain loans within the commercial and industrial portfolio, to inform its loss drivers in the ~~portfolio in accordance with GAAP, and is comprised of both specific valuation allowances and general valuation allowances.~~

~~Specific valuation allowances~~forecast.

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). 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 the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. The Company applies this classification as necessary to~~non-covered~~ loans individually evaluated for impairment in its 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.

~~The Company generally measures impairment on an individual loan and determines 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.

The Company ~~also follows 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. The Company also takes 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, the Company determines~~maintains an allowance for ~~loan~~credit losses on off-balance sheet credit exposures. At December 31, 2023 and December 31, 2022, the allowance for credit losses on off-balance sheet exposures was $52 million and $23 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 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 estimate, 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, the Company allocates 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~~ characteristics of the loan portfolio, and ~~recovery practices;~~

~~Changes~~changes in ~~international, national, regional,~~prepayment assumptions which will result in provisions to or recoveries from the balance of the allowance for credit losses.

While changes to the economic environment forecasts and ~~local economic~~portfolio characteristics will change from period to period, portfolio prepayments are an integral assumption in estimating the allowance for credit losses on our commercial real estate (multi-family, CRE and ~~business conditions~~ADC) portfolio which comprises 60 percent of the loan portfolio at December 31, 2023. Portfolio prepayments are subject to estimation uncertainty and ~~developments that affect~~changes in this assumption could have a material impact to our estimation process. Prepayment assumptions are sensitive to interest rates and existing loan terms and determine the ~~collectability~~weighted average life of the commercial mortgage loan portfolio. Excluding other factors, as the weighted average life of the portfolio ~~including~~increases or decreases, so will the ~~condition of various market segments;~~

~~Changes in the nature and volume~~required amount 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~~allowance for ~~collateral-dependent loans;~~

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

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

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

~~By considering the factors discussed above, the~~

Goodwill

The Company ~~determines an allowance~~evaluates goodwill for~~non-covered~~ ~~loan losses that is applied to each significant loan portfolio segment~~ impairment at least annually or when triggering events are identified. We utilize a market approach to determine the ~~total allowance for losses onnon-covered~~ ~~loans.~~

fair value of our single reporting unit, which considers how a market participant would view a control premium, complemented by an income approach if deemed necessary. The ~~historical loss period~~resulting value is then compared to our book value and any shortfalls would be recorded as an impairment.

As of December 31, 2023, the Company ~~uses~~identified a triggering event and applied a market approach using the end of day stock price, control premium for completed bank acquisitions, and an adjustment for Company-specific risk considerations based on subsequent confirming market evidence. This adjusted market capitalization was then compared to the carrying value to determine the ~~allowance for loan losses onnon-covered~~ ~~loans is~~extent of any shortfall which was calculated to be in excess of the goodwill balance. The Company’s assessment concluded that goodwill from historical transactions (2007 and prior) was fully impaired as of December 31, 2023, as confirmed by the Company’s current market capitalization. As a ~~rolling 28-quarter look-back period, as~~result, the Company ~~believes this produces~~recorded an ~~appropriate reflection of our historical loss experience.~~

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

~~Periodic inspections~~impairment charge of the ~~loan collateral by qualifiedin-house~~entire goodwill balance of $2.4 billion. Additional information on the methodologies and ~~external property appraisers/inspectors;~~

~~Regular meetings of executive management with the pertinent Board committee, during which observable trends~~assumptions used in the ~~local economy and/~~goodwill impairment analysis can be found in Note 16 - Intangible Assets.

Mortgage Servicing Rights

The Company purchases and originates mortgage loans for sale to the secondary market and sell the loans on either a servicing-retained or servicing-released basis. If the ~~real estate market are discussed;~~Company retains the right to service the loan, an MSR is created at the time of sale which is recorded at fair value. The Company uses an internal valuation model that utilizes an option-adjusted spread, constant prepayment speeds, costs to service and other assumptions to determine the fair value of MSRs.

~~Assessment~~

Management obtains third-party valuations of the ~~aforementioned factors by~~MSR portfolio on a quarterly basis from independent valuation services to assess 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.~~

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 estimatereasonableness of the fair value ~~of any underlying collateral. Fornon-real~~ ~~estate-related consumer credits, the followingpast-due~~ ~~time periods determine when charge-offs are typically recorded:(1) Closed-end~~ ~~credits are charged off~~calculated by our internal valuation model. Changes in the ~~quarter that the loan becomes 120 days past due;(2) Open-end~~ ~~credits~~fair value of our MSRs 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 notification was received that the borrower has filed for bankruptcy.~~

~~The level of future additions to the respectivenon-covered~~ ~~loan loss allowances is based~~reported 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~~ Income and Comprehensive Income in net return on mortgage servicing. For further information, 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.~~

~~Allowance for Losses on Covered Loans~~

The Company sold its covered loan portfolio during the third quarter of 2017; therefore, the Company had no allowance for losses on covered loans as of December 31, 2017. The Company had elected to account for the loans acquired in the AmTrust9 - Mortgage Servicing Rights and Desert Hills acquisitions (the “covered loans”) based on expected cash flows. This election was in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic~~310-30,~~ ~~“Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC310-30”).~~ ~~In accordance with ASC310-30,~~ ~~the Company maintained the integrity of a pool of multiple loans accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.~~

Covered loans were reported exclusive of the FDIC loss share receivable. The covered loans acquired in the AmTrust and Desert Hills Bank (“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 loan pools. A provision for losses on covered loans was recorded to the extent that the expected cash flows from a loan pool have decreased for credit-related items since the acquisition date. Accordingly, during the loss share recovery period, if there is a decrease in expected cash flows due to an increase in estimated credit losses 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 will be increased. During the loss share recovery period, a related credit to~~non-interest~~ ~~income and an increase in the FDIC loss share receivable was recognized at the same time, and was measured based on the applicable loss sharing agreement percentage.~~

~~See~~ Note ~~6, “Allowances for Loan Losses” for a further discussion of the allowances for losses onnon-covered~~ ~~and covered loans.~~

~~Goodwill~~

In connection with the Company’s 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 acquisitions over the fair value of the identifiable net assets acquired, including other identified intangible assets. The determination of whether or not goodwill is impaired could require the Company to make significant judgments and could require the use of significant estimates and assumptions regarding estimated future cash flows. If the Company changes its strategy or if market conditions shift, judgments may change, which may result in adjustments to the recorded goodwill balance. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.

The Company tests 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. Goodwill is allocated to the reporting units based on the reporting unit expected to benefit from the business combination. Previously, the Company had identified two reporting units, which were also our segments: our Banking Operations reporting unit and the Residential Mortgage Banking reporting unit. On September 29, 2017, the Company sold the Residential Mortgage Banking reporting unit; accordingly, the Company has one remaining reporting unit.

Goodwill is evaluated for impairment annually at December 31st, or more frequently if conditions exist that indicate that the carrying value may be impaired. ASC 350 provides for an optional qualitative assessment for testing goodwill for impairment that may allow companies to skip the annual two-step test described below. The qualitative assessment permits companies to assess

whether it is more likely than not (i.e., a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying amount. If the Company concludes based on the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is required to perform the two-step test. If the Company concludes based on the qualitative assessment that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it has completed its goodwill impairment test and does not need to perform the two-step test.

~~Under step one of the two-step test, the fair value of a reporting unit is compared with its carrying value (including goodwill)~~18 - Fair Value Measures. If the fair value of a reporting unit is less than its carrying value, an indication of goodwill impairment exists for that reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of a reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit’s goodwill. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

At December 31, 2017, the Company utilized a quantitative assessment to test goodwill for impairment and determined that the fair value of its single reporting unit exceeded its carrying value thereby concluding that goodwill was not impaired.

Premises and Equipment, Net

Premises, furniture, fixtures, and equipment are carried at cost, less the accumulated depreciation computed on a straight-line basis over the estimated useful lives of the respective assets (generally 20 years for premises and three to ten years for furniture, fixtures, and equipment). Leasehold improvements are carried at cost less the accumulated amortization computed on a straight-line basis over the shorter of the related lease term or the estimated useful life of the improvement.

Depreciation ~~and amortization are~~is included in “Occupancy and equipment expense” in the Consolidated Statements of ~~Operations~~Income and Comprehensive Income, ~~(Loss),~~ and amounted to ~~$32.8~~$39 million, ~~$32.8~~$18 million, and ~~$31.5~~$21 million, respectively, in the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015.~~

2021. Accumulated depreciation as of December 31, 2023 and December 31, 2022 was $526 million and $434 million. The estimated useful lives for the principal classes of assets are as follows:


Premises and Equipment						Useful Lives
Buildings						30
Furniture, fixtures and equipment, and building improvements						13.5
Leasehold improvements						10
ATMs						7

Bank-Owned Life Insurance

The Company has purchased life insurance policies on certain employees. These ~~bank-owned life insurance (“BOLI”)~~BOLI policies are recorded in the Consolidated Statements of Condition at their cash surrender value. Income from these policies and changes in the cash surrender value are recorded in~~“Non-interest~~ “Non-interest income” in the Consolidated Statements of ~~Operations~~Income and Comprehensive ~~Income (Loss).~~Income. At December 31, ~~2017~~2023 and ~~2016,~~2022, the Company’s investment in BOLI was ~~$967.2 million and $949.0 million, respectively. There were no additional purchases of BOLI during the years ended December 31, 2017 or 2016.~~$1.6 billion. The Company’s investment in BOLI generated income of ~~$27.1~~$43 million, ~~$31.0~~$32 million, and ~~$27.5~~$29 million, respectively, during the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015.~~

2021.

Variable Interest Entities

An entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and consolidates the VIE. An entity is deemed to have a controlling financial interest and is the primary beneficiary of a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. For further information, see Note 10 - Variable Interest Entities.

Repossessed Assets

and OREO

Repossessed assets consist of any property ~~(“other real estate owned” or “OREO”)~~ or other assets acquired through, or in lieu of, foreclosure are sold or rented, and are recorded at fair value, less the estimated selling costs, at the date of acquisition. Following foreclosure, management periodically performs a valuation of the asset, and the assets are carried at the lower of the carrying amount or fair value, less the estimated selling costs. Expenses and revenues from operations and changes in valuation, if any, are included in “General and ~~administrative” expense~~administrative expense” in the Consolidated Statements of ~~Operations~~Income and Comprehensive ~~Income (Loss).~~Income. At December 31, ~~2017,~~2023, the Company had ~~$8.2~~$5 million of OREO, $4 million of taxi medallions and $5 million of repossessed specialty equipment. At December 31, 2022, the Company had $8 million of OREO and ~~$8.2~~$4 million of taxi medallions.

Servicing Fee Income

Servicing fee income, late fees and ancillary fees received on loans for which the Company owns the MSR are included in net return on mortgage servicing rights on the Consolidated Statements of Income and Comprehensive Income. The ~~balance at December 31, 2016 was $28.6 million~~fees are based on the outstanding principal and are recorded as income when earned. Subservicing fees, which are included ~~OREO~~in loan administration income on the Consolidated Statements of ~~$17.0 million that was covered under the Company’s FDIC LSA. There were no repossessed taxi medallions at December 31, 2016.~~

Income and Comprehensive Income, are based on a contractual monthly amount per loan including late fees and other ancillary income.

Income Taxes

Income tax expense consists of income taxes that are currently payable and deferred income taxes. Deferred income tax expense is determined by recognizing deferred tax assets and liabilities for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. The Company assesses the deferred tax assets and establishes a valuation allowance when realization of a deferred asset is not considered to be “more likely than not.” The Company considers its expectation of future taxable income in evaluating the need for a valuation allowance.

The Company estimates income taxes payable based on the amount it expects to owe the various tax authorities (i.e., federal, state, and local). Income taxes represent the net estimated amount due to, or to be received from, such tax authorities. In estimating income taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions, taking into account statutory, judicial, and regulatory guidance in the context of the Company’s tax position. In this process, management also relies on tax opinions, recent audits, and historical experience. Although the Company uses the best available information to record income taxes, underlying estimates and assumptions can change over time as a result of unanticipated events or circumstances such as changes in tax laws and judicial guidance influencing its overall tax position.

Derivative Instruments and Hedging Activities

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company utilizes derivative instruments to manage the fair value changes in our MSRs, interest rate lock commitments and LHFS portfolio which are exposed to price and interest rate risk; facilitate asset/liability management; minimize the variability of future cash flows on long-term debt; and to meet the needs of our customers. All derivatives are recognized on the Consolidated Statements of Condition as other assets and liabilities, as applicable, at their estimated fair value.

The Company uses interest rate swaps, swaptions, futures and forward loan sale commitments to mitigate the impact of fluctuations in interest rates and interest rate volatility on the fair value of the MSRs. Changes in their fair value are reflected in current period earnings under the net return on mortgage servicing asset. These derivatives are valued based on quoted prices for similar assets in an active market with inputs that are observable.

The Company also enters into various derivative agreements with customers and correspondents in the form of interest rate lock commitments and forward purchase contracts which are commitments to originate or purchase mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The derivatives are valued using internal models that utilize market interest rates and other unobservable inputs. Changes in the fair value of these commitments due to fluctuations in interest rates are economically hedged through the use of forward loan sale commitments of MBS. The gains and losses arising from this derivative activity are reflected in current period earnings under the net gain on loan sales.

To assist customers in meeting their needs to manage interest rate risk, the Company enters into interest rate swap derivative contracts. To economically hedge this risk, the Company enters into offsetting derivative contracts to effectively eliminate the interest rate risk associated with these contracts.

For additional information regarding the accounting for derivatives, see Note 15 - Derivative and Hedging Activities and for additional information on recurring fair value disclosures, see Note 18 - Fair Value Measures.

Representation and Warranty Reserve

When the Company sells mortgage loans into the secondary mortgage market, it makes customary representations and warranties to the purchasers about various characteristics of each loan. Upon the sale of a loan, the Company recognizes a liability for that guarantee at its fair value as a reduction of our net gain on loan sales. Subsequent to the sale, the liability is re-measured at fair value on an ongoing basis based upon an estimate of probable future losses. An estimate of the fair value of the guarantee associated with the mortgage loans is recorded in other liabilities in the Consolidated Statements of Condition, and was $12 million and $10 million at December 31, 2023 and December 31, 2022, respectively.

Stock-Based Compensation

Under the New York Community Bancorp, Inc. ~~2012 Stock~~2020 Omnibus Incentive Plan (the ~~“2012 Stock~~“2020 Incentive Plan”), which was approved by the Company’s shareholders at its Annual Meeting on June ~~7, 2012,~~3, 2020, shares are available for grant as restricted stock or other forms of related rights. At December 31, ~~2017,~~2023, the Company had ~~7,135,071~~16,143,893 shares available for grant under the ~~2012 Stock~~2020 Incentive Plan, including 1,030,673 shares that were transferred from the New York Community Bancorp, Inc. 2006 Stock Incentive Plan (the “2006 Stock Incentive Plan”), which was approved by the Company’s shareholders at its Annual Meeting on June 7, 2006 and reapproved at its Annual Meeting on June 2, 2011.Plan. Compensation cost related to restricted stock grants is recognized on a straight-line basis over the vesting period. For a more detailed discussion of the Company’s stock-based compensation, see Note ~~13, “Stock-Related Benefit~~14 - Stock-Related Benefits Plans.”

Retirement Plans

The Company’s pension benefit obligations and post-retirement health and welfare benefit obligations, and the related costs, are calculated using actuarial concepts in accordance with GAAP. The measurement of such obligations and expenses requires that certain assumptions be made regarding several factors, most notably including the discount rate and the expected rate of return on plan assets. The Company evaluates these assumptions on an annual basis. Other factors considered by the Company in its evaluation include retirement patterns and mortality ~~rates, turnover, and the rate of compensation increase.~~

rates.

Under GAAP, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in AOCL until they are amortized as a component of net periodic benefit cost.

Earnings ~~(Loss)~~ per Common Share (Basic and Diluted)

Basic ~~earnings (loss) per common share (“EPS”)~~EPS is computed by dividing the net income ~~(loss)~~ 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 earnings ~~(loss)~~ per common ~~share~~share:


	For the Years Ended December 31,
(in millions, except share and per share amounts)	2023		2022		2021
Net (loss) income available to common stockholders	$	(112)	$	617	$	563
Less: Dividends paid on and earnings allocated to participating securities	(5)		(8)		(7)
(Loss) earnings applicable to common stock	$	(117)	$	609	$	556
Weighted average common shares outstanding	713,643,550		483,603,395		463,865,661
(Loss) basic earnings per common share	$	(0.16)	$	1.26	$	1.20
(Loss) earnings applicable to common stock	$	(117)	$	609	$	556
Weighted average common shares outstanding	713,643,550		483,603,395		463,865,661
Potential dilutive common shares	—		1,530,950		767,058
Total shares for diluted (loss) earnings per common share computation	713,643,550		485,134,345		464,632,719
Diluted (loss) earnings per common share and common share equivalents	$	(0.16)	$	1.26	$	1.20

Note 3 - Business Combinations

Signature Bridge Bank

On March 20, 2023, the Company’s wholly owned bank subsidiary, Flagstar Bank N.A. (the “Bank”), entered into a Purchase and Assumption Agreement (the “Agreement”) with the Federal Deposit Insurance Corporation (“FDIC”), as receiver (the "FDIC Receiver") of Signature Bridge Bank, N.A. (“Signature”) to acquire certain assets and assume certain liabilities of Signature (the “Signature Transaction”). Headquartered in New York, New York, Signature Bank was a full-service commercial bank that operated 29 branches in New York, seven branches in California, two branches in North Carolina, one branch in Connecticut, and one branch in Nevada. In connection with the Signature Transaction the Bank assumed all of Signature’s branches. The Bank acquired only certain parts of Signature it believes to be financially and strategically complementary that are intended to enhance the Company’s future growth.

Pursuant to the terms of the Agreement, the Company was not required to make a cash payment to the FDIC on March 20, 2023 as consideration for the ~~years~~acquired assets and assumed liabilities. As the Company and the FDIC remain engaged in ongoing discussions which may impact the assets and liabilities acquired or assumed by the Company in the Signature Transaction. Any items identified that affect the bargain gain are recorded in the period they are identified. The Company may be required to make a payment to the FDIC or the FDIC may be required to make a payment to the Company on the Settlement Date, which will be one year after March 20, 2023, or as agreed upon by the FDIC and the Company.

In addition, as part of the consideration for the Signature Transaction, the Company granted the FDIC equity appreciation rights in the common stock of the Company under an equity appreciation instrument (the "Equity Appreciation Instrument"). On March 31, 2023, the Company issued 39,032,006 shares of Company common stock to the FDIC pursuant to the Equity Appreciation Instrument. On May 19, 2023, the FDIC completed the secondary offering of those shares.

The Company has determined that the Signature Transaction constitutes a business combination as defined by ASC 805, Business Combinations ("ASC 805"). ASC 805 establishes principles and requirements as to how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. Accordingly, the assets acquired and liabilities assumed have been recorded based on their preliminary estimated fair values as of March 20, 2023, which have been adjusted through December 31, 2023 based on changes to those preliminary estimates.

Under the Agreement, the Company is expected to provide certain services to the FDIC to assist the FDIC in its administration of certain assets and liabilities which were not assumed by the Company and which remain under the control of the FDIC (the “Interim Servicing”). The Interim Servicing includes activities related to the servicing of loan portfolios not acquired on behalf of the FDIC for a period of up to one year from the date of the Signature Transaction unless such loans are sold or transferred at an earlier time by the FDIC or until cancelled by the FDIC upon 60-days’ notice. The Interim Servicing

may include other ancillary services requested by the FDIC to assist in their administration of the remaining assets and liabilities of Signature Bank. The FDIC will reimburse the Company for costs associated with the Interim Servicing based upon an agreed upon fee which approximates the cost to provide such services. As the FDIC intends to reimburse the Company for the costs to service the loans, neither a servicing asset nor servicing liability was recognized as part of the Signature Transaction.

The Company did not enter into a loss sharing arrangement with the FDIC in connection with the Signature Transaction.

As the Company finalizes its analysis of the assets acquired and liabilities assumed, there may be adjustments to the recorded carrying values. In many cases, the determination of the fair value of the assets acquired and liabilities assumed required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. While the Company believes that the information available on December 31, 2023, provided a reasonable basis for estimating fair value, the Company may obtain additional information and evidence during the measurement period that may result in changes to the estimated fair value amounts. Fair values subject to change include, but are not limited to, those related to loans and leases, certain deposits, intangibles, deferred tax assets and liabilities and certain other assets and other liabilities.

A summary of the preliminary net assets acquired and related estimated fair value adjustments resulting in the bargain purchase gain is as follows:


(in millions)	March 20, 2023
	(preliminary)
Net assets acquired before fair value adjustments	$	2,973
Fair value adjustments:
Loans	(727)
Core deposit and other intangibles	464
Certificates of deposit	27
Other net assets and liabilities	39
FDIC Equity Appreciation Instrument	(85)
Deferred tax liability	(690)
Bargain purchase gain on Signature Transaction, as initially reported	2,001
Measurement period adjustments, excluding taxes	28
Change in deferred tax liability	102
Bargain purchase gain on Signature Transaction, as adjusted	$	2,131

In connection with the Signature Transaction, the Company recorded a bargain purchase gain, as adjusted, of approximately $2.1 billion during the year ended December 31, ~~2017, 2016,~~2023, which is included in non-interest income in the Company’s Consolidated Statement of Income and ~~2015:~~

   Years Ended December 31,
(in thousands, except share and per share amounts)    2017    2016    2015
Net income (loss) available to common shareholders
   $ 441,580    $ 495,401    $ (47,156 )
Less: Dividends paid on and earnings/(loss) allocated to participating securities
   (3,554 )    (3,795 )    (3,357 )






Earnings/(loss) applicable to common stock
   $ 438,026    $ 491,606    $ (50,513 )






Weighted average common shares outstanding
   487,073,951    485,150,173    448,982,223






Basic earnings (loss) per common share
   $ 0.90    $ 1.01    $ (0.11 )






Earnings (loss) applicable to common stock
   $ 438,026    $ 491,606    $ (50,513 )






Weighted average common shares outstanding
   487,073,951    485,150,173    448,982,223
Potential dilutive common shares
   —      —      —






Total shares for diluted earnings (loss) per common share computation
   487,073,951    485,150,173    448,982,223






Diluted earnings (loss) per common share and common share equivalents
   $0.90    $1.01    $(0.11 )

~~Recently Adopted Accounting Standards~~

~~In March 2016,~~Comprehensive Income.

The bargain purchase gain represents the ~~FASB issued ASUNo. 2016-09,~~ ~~“Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASUNo. 2016-09~~ ~~simplifies several aspects~~excess of the ~~accounting for share-based payment transactions, including~~estimated fair value of the ~~income tax consequences, classification~~assets acquired (including cash payments received from the FDIC) over the estimated fair value of ~~awards as either equity or~~the liabilities ~~classification~~assumed and is influenced significantly by the FDIC-assisted transaction process. Under the FDIC-assisted transaction process, only certain assets and liabilities are transferred to the acquirer and, depending on the ~~Statements~~nature and amount of ~~Cash Flows,~~the acquirers bid, the FDIC may be required to make a cash payment to the Company and ~~accounting~~the Company may be required to make a cash payment to the FDIC.

The assets acquired and liabilities assumed and consideration paid in the Signature Transaction were initially recorded at their estimated fair values based on management’s best estimates using information available at the date of the Signature Transaction, and are subject to adjustment for ~~forfeitures.~~up to one year after the closing date of the Signature Transaction. The Company ~~adopted ASUNo. 2016-09~~ ~~prospectively, effective for~~and the ~~first quarter of 2016. Upon adoption,~~FDIC are engaged in ongoing discussions and settlement payments have been made that have impacted certain assets acquired or certain liabilities assumed by the Company on March 20, 2023 and are included as measurement period adjustments in the table below.


(in millions)	Preliminary as Initially Reported		Measurement Period Adjustments		Preliminary as Adjusted
Purchase Price consideration	$	85			$	85

Fair value of assets acquired:
Cash & cash equivalents	25,043		(142)		24,901
Loans held for sale	232				232
Loans held for investment:
Commercial and industrial	10,102		(214)		9,888
Commercial real estate	1,942		(262)		1,680
Consumer and other	174		(1)		173
Total loans held for investment	12,218		(477)		11,741
CDI and other intangible assets	464		—		464
Other assets	679		(169)		510
Total assets acquired	38,636		(788)		37,848
Fair value of liabilities assumed:
Deposits	33,568		(61)		33,507
Other liabilities	2,982		(857)		2,125
Total liabilities assumed	36,550		(918)		35,632
Fair value of net identifiable assets	2,086		130		2,216
Bargain purchase gain	$	2,001	$	130	$	2,131

During the year ended December 31, 2023, the Company recorded ~~an immaterial cumulative-effect adjustment~~preliminary measurement period adjustments to adjust the estimated fair value of loans and leases acquired and adjust other assets and accrued expenses and other liabilities for balances ultimately retained by the FDIC. Additionally, $449 million of loans were returned to the ~~opening balance of retained earnings. In addition, ASUNo. 2016-09~~ ~~requires that excess tax benefits~~FDIC in accordance with the purchase and ~~shortfalls be recorded as income tax benefit or expense~~sale agreement. The Company also recognized a net change in the ~~income statement, rather than as equity. This resulted in an immaterial benefit~~deferred tax liability due to ~~income tax expense in~~ the ~~first quarter~~measurement period adjustments and the secondary offering of ~~2016. Relative to forfeitures, ASUNo. 2016-09~~ ~~allows an entity’s accounting policy election to either continue to estimate~~shares completed by the ~~number of awards that are expected to vest, as under previous guidance, or account for forfeitures when they occur.~~ FDIC.

The Company ~~elected~~incurred $223 million in acquisition costs related to ~~continue its practice of estimating~~ the ~~number of awards that will be forfeited. The income tax effects of ASUNo. 2016-09~~ ~~on the Statements of Cash Flows~~Signature Transaction primarily for legal, advisory, and other professional services. These costs are ~~now classified as cash flows from operating activities, rather than cash flows from financing activities. The Company elected to apply this cash flow classification guidance prospectively~~recorded within Merger-related and ~~therefore, prior periods were not adjusted. ASUNo. 2016-09~~ ~~also requires the presentation of certain employee withholding taxes as a financing activity~~restructuring expenses on the Consolidated Statements of ~~Cash Flows; this~~Income and Comprehensive Income.

Fair Value of Assets Acquired and Liabilities Assumed

Fair value is ~~consistent with~~defined as the ~~manner~~price that would be received to sell an asset or paid to transfer a liability in ~~which~~an orderly transaction between market participants at the ~~Company has presented such employee withholding taxes in~~measurement date, reflecting assumptions that a market participant would use when pricing an asset or liability. In some cases, the ~~past. Accordingly, no reclassification for prior periods was required.~~

~~In December 2016, the FASB issued ASUNo. 2016-19,~~ ~~“Technical Corrections~~estimation of fair values requires management to make estimates about discount rates, future expected cash flows, market conditions, and ~~Improvements,” which includes various clarifications or corrections to the ASC~~other future events that are ~~not intended~~highly subjective in nature and are subject to ~~have a significant effect on current accounting practice or create significant administrative costs for most entities. ASUNo. 2016-19~~ ~~includes an amendment that clarifies~~change. Described below are the ~~difference between a valuation~~~~approach~~ ~~and a valuation~~~~technique~~ when applying the guidance in ASC Topic 820, Fair Value Measurement. The amendment also requires a company to disclose when there has been a change in either or both a valuation approach or valuation technique. During 2017, the Company changed its valuation technique for its investment securities from the use of a~~yield-to-price~~ calculation to using quoted prices from brokers or pricing services to measure fair value. The Company believes that the use of quoted prices from brokers or pricing services is an appropriate technique given the characteristics of its current investment securities holdings.

~~Recently Issued Accounting Standards~~

~~In February 2018, the FASB issued ASUNo. 2018-02,~~ ~~“Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASUNo. 2018-02~~ ~~was issued to address a narrow-scope financial reporting issue that arose as a consequence of the enactment of the Tax Cuts and Jobs Act of 2017. ASUNo. 2018-02~~ permits an election to reclassify from accumulated other comprehensive income (loss) to retained earnings the stranded tax effects resulting from the difference between the historical federal corporate income tax rate of 35% and the newly enacted 21% federal corporate income tax rate. ASU~~No. 2018-02~~ is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The Company plans to early adopt ASU~~No. 2018-02~~ ~~effective January 1, 2018. The adoption of ASUNo. 2018-02,~~ ~~is not expected to have a material effect on the Company’s Consolidated Statements of Condition, results of operations, or cash flows.~~

~~In May 2017, the FASB issued ASUNo. 2017-09,~~ ~~“Compensation—Stock Compensation (Topic 718).” ASUNo. 2017-09~~ ~~clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under ASUNo. 2017-09,~~ modification accounting is applied only if the fair value, the vesting conditions, and the classification of the award (as an equity or liability instrument) change as a result of the change in terms or conditions. The Company plans to adopt ASU~~No. 2017-09~~ ~~as of January 1, 2018. ASUNo. 2017-09~~ amendments will be applied prospectively to awards modified on or after the effective date. The adoption of ASU No. 2017-09 is not expected to have a material effect on the Company’s Consolidated Statements of Condition, results of operations, or cash flows.

~~In March 2017, the FASB issued ASUNo. 2017-08,~~ ~~“Receivables—Nonrefundable Fees and Other Costs (Subtopic310-20):~~ ~~Premium Amortization on Purchased Callable Debt Securities.” ASUNo. 2017-08~~ ~~specifies that the premium amortization period ends at the earliest call date, rather than the contractual maturity date, for purchasednon-contingently~~ callable debt securities. Shortening the amortization period is generally expected to more closely align the interest income recognition with the expectations incorporated in the market pricing on the underlying securities. The shorter amortization period means that interest income would generally be lower in the periods before the earliest call date and higher thereafter (if the security is not called) compared to current GAAP. Currently, the premium is amortized to the contractual maturity date under GAAP. Because the premium will be amortized to the earliest call date, the holder will not recognize a loss in earnings for the unamortized premium when the call is exercised. This ASU~~No. 2017-08~~ ~~is effective for annual and interim periods in fiscal years beginning after December 15, 2018. The ASUNo. 2017-08~~ specifies that the transition approach to the standard be accounted for on a modified retrospective basis with a cumulative effect adjustment in retained earnings as of the beginning of the period of adoption. The Company plans to adopt ASU~~No. 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 March 2017, the FASB issued ASUNo. 2017-07,~~ “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires companies to present the service cost component of net benefit cost in the income statement line items where they report compensation cost, and all other components of net benefit cost in the income statement separately from the service cost component and outside of operating income, if this subtotal is presented. Additionally, the service cost component will be the only component that can be capitalized. ASU~~No. 2017-07~~ is effective for annual and interim periods in fiscal years beginning after December 15, 2018. The standard requires retrospective application for the amendments related to the presentation of the service cost component and other components of net benefit cost, and prospective application for the amendments related to the capitalization requirements for the service cost components of net benefit cost. The adoption of ASU~~No. 2017-07~~ ~~on January 1, 2018, 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~~methods used to determine the ~~implied~~fair values of the significant assets acquired and liabilities assumed in the Signature Transaction.

Cash and Cash Equivalents

The estimated 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. ASUNo. 2017-04~~ is effective for annual and interim periods in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company plans to adopt ASU~~No. 2017-04~~ prospectively beginning January 1, 2020 and the impact of its adoption on the Company’s Consolidated Statements of Condition, results of operations, or cash flows will be dependent upon goodwill impairment determinations made after that date.

~~In November 2016, the FASB issued ASUNo. 2016-18,~~ ~~“Restricted Cash.” ASUNo. 2016-18~~ will amend the guidance in ASC Topic 230, Statement of Cash Flows, and is intended to reduce the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. ASU~~No. 2016-18~~ ~~will require that the reconciliation of thebeginning-of-period~~ ~~andend-of-period~~ cash and cash equivalents approximates their stated face amounts, ~~shown~~as these financial instruments are either due on ~~the statement of cash flows include restricted cash~~demand or have short-term maturities.

Loans and ~~restricted cash equivalents. If restricted cash and restricted cash equivalents are presented separately from cash and cash equivalents~~leases

The fair value for loans was based on the balance sheet, an entity will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. An entity will also be required to disclose information regarding the nature of the restrictions. ASU~~No. 2016-18~~ requires retrospective application and is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company plans to adopt ASU~~No. 2016-18~~ ~~as of January 1, 2018. The adoption of ASUNo. 2016-18~~ ~~is not expected to have~~ a ~~material impact on the Company’s financial position or results of operations in future filings.~~

~~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~~discounted cash flow ~~issues: debt prepayment or debt extinguishment costs; settlement ofzero-coupon~~ ~~debt instruments or other debt instruments with coupon~~methodology that considered credit loss expectations, market interest rates ~~that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds~~and other market factors such as liquidity from the ~~settlement~~perspective 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;a market participant. Loans were grouped together according to similar characteristics and separately identifiable cash flows and application of the predominance principle. The amendments in ASU No. 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendmentswere treated in the ~~same period.~~aggregate when applying various valuation techniques. The ~~amendments in ASUNo. 2016-15~~ ~~should be applied using a retrospective transition method to each period presented. If it is impracticable to apply~~probability of default, loss given default and prepayment assumptions were the ~~amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company plans to adopt ASUNo. 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, results of operations, or cash flows.~~

~~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~~key factors driving credit losses ~~for assets held~~which were embedded into the estimated cash flows. These assumptions were informed by internal data 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. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The amendments in ASU~~No. 2016-13~~ ~~replace the incurred loss impairment methodology in current GAAP with a methodology that reflects the measurement of expected credit losses based on relevant information about past events, including~~loan characteristics, historical loss experience, and current ~~conditions,~~ and ~~reasonable~~forecasted economic conditions. The interest and ~~supportable forecasts that affect the collectability~~liquidity component of the ~~reported amounts.~~estimate was determined by discounting interest and principal cash flows through the expected life of each loan. The ~~allowance~~discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity. The

discount rates do not include a factor for credit losses ~~is a valuation account~~as that ~~is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. Foravailable-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~~has been included as a ~~write-down. The amendments affect~~reduction to the estimated cash flows. Acquired loans ~~debt securities, trade receivables, net investments in leases,off-balance~~ ~~sheet credit exposures, reinsurance receivables,~~were marked to fair value and adjusted for any ~~other financial assets not excluded from the scope that have the contractual right to receive cash. For public business entities that are SEC filers, the amendments in ASUNo. 2016-13~~ ~~are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity will apply the amendments in ASUNo. 2016-13~~ through a cumulative-effect adjustment to retained earnings as of January 1, 2020 (that is, a modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the effective date of ASU~~No. 2016-13.~~ ~~Amounts previously recognized in accumulated other comprehensive income (loss)~~PCD gross up as of the date of ~~adoption that relate~~the Signature Transaction.

Deposit Liabilities

The fair value of deposit liabilities with no stated maturity (i.e., non-interest-bearing and interest-bearing checking accounts) is equal to ~~improvements in~~the carrying amounts payable on demand. The fair value of certificates of deposit represents contractual cash flows, discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities.

Core Deposit Intangible

Core deposit intangible (“CDI”) is a measure of the value of non-interest-bearing and interest-bearing checking accounts, savings accounts, and money market accounts that are acquired in a business combination. The fair value of the CDI was determined using a discounted cashflow methodology which considered discount rate, customer attrition rates, and other relevant market assumptions. This method estimated the fair value by discounting the present value of the expected cost savings attributable to the core deposit funding, relative to an alternative source of funding. The CDI relating to the Signature Transaction will be ~~collected should continue to be accreted into income~~amortized over ~~the remaining~~an estimated useful life of 10 years using the ~~asset. Recoveries~~sum of ~~amounts previously written off relating to improvements~~years digits depreciation method. The Company evaluates such identifiable intangibles for impairment when an indication of impairment exists. CDI does not significantly impact our liquidity or capital ratios.

PCD loans

Purchased loans that reflect a more than insignificant deterioration of credit from origination are considered PCD. For PCD loans and leases, the initial estimate of expected credit losses is recognized in ~~cash flows after the date of adoption should be recorded in earnings when received. Financial assets for which the guidance in Subtopic310-30,~~ ~~“Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality (“PCD assets”),” has previously been applied should prospectively apply the guidance in ASUNo. 2016-13~~ ~~for PCD assets. A prospective transition approach should be used for PCD assets where upon adoption, the amortized cost basis should be adjusted to reflect the addition of~~ the allowance for credit ~~losses. This transition relief will avoid~~losses (“ACL”) on the ~~need~~date of acquisition using the same methodology as other loans and leases held-for-investment. The following table provides a summary of loans and leases purchased as part of the Signature Transaction with credit deterioration and the associated credit loss reserve at acquisition:


(in millions)	Total
Par value (UPB)	$	583
ACL at acquisition	(13)
Non-credit (discount)	(76)
Fair value	$	494

Unaudited Pro Forma Information – Signature Transaction

The Company’s operating results for the year ended December 31, 2023 include the operating results of the acquired assets and assumed liabilities of Signature subsequent to the acquisition on March 20, 2023. Due to the use of multiple systems and integration of the operating activities into those of the Company, historical reporting for the former Signature operations is impracticable and thus disclosures of the revenue from the assets acquired and income before income taxes is impracticable for the period subsequent to acquisition.

Signature was only in operation from March 12, 2023 to March 20, 2023 and does not have historical financial information on which we could base pro forma information. Additionally, we did not acquire all assets or assume all liabilities of Signature and the historical operations are not consistent with the transaction. Therefore, it is impracticable to provide pro forma information on revenues and earnings for the Signature Transaction in accordance with ASC 805-10-50-2.

Flagstar Bancorp, Inc.

On December 1, 2022, the Company closed the acquisition of Flagstar Bancorp, Inc. (“Flagstar”) in an all-stock transaction (“Flagstar Transaction”). Flagstar was a savings and loan holding company headquartered in Troy, MI.

Pursuant to the terms of the Merger Agreement, each share of Flagstar common stock was converted into 4.0151 shares of the Company’s common shares at the effective time of the merger. In addition, the Company received approval from the Office of the Comptroller of the Currency (the “OCC") to convert Flagstar Bank, FSB to a national bank to be known as Flagstar Bank, N.A., and to merge New York Community Bank into Flagstar Bank, N.A. with Flagstar Bank, N.A. being the surviving entity. Flagstar Bank, FSB, provided commercial, small business, and consumer banking services through 158 branches in Michigan, Indiana, California, Wisconsin, and Ohio. It also provided home loans through a wholesale network of brokers and correspondents in all 50 states. The acquisition of Flagstar added significant scale, geographic diversification, improved funding profile, and a broader product mix to the Company.

The acquisition of Flagstar has been accounted for as a business combination. The Company recorded the preliminary estimate of fair value of the assets acquired and liabilities assumed December 1, 2022, which was subject to adjustment for up to one year after December 1, 2022. As of December 31, 2023, the Company finalized its review of the assets acquired and liabilities assumed, and did not record any material adjustments.

The following table provides an allocation of consideration paid for the fair value of assets acquired and liabilities and equity assumed from Flagstar as of December 1, 2022.


(in millions)	December 1, 2022
Purchase Price consideration	$	2,010

Fair value of assets acquired:
Cash & cash equivalents	331
Securities	2,695
Loans held for sale	1,257
Loans held for investment:
One-to-four family first mortgage	5,438
Commercial and industrial	3,891
Commercial real estate	6,523
Consumer and other	2,156
Total loans held for investment	18,008
CDI and other intangible assets	292
Mortgage servicing rights	1,012
Other assets	2,158
Total assets acquired	25,753
Fair value of liabilities assumed:
Deposits	15,995
Borrowings	6,700
Other liabilities	889
Total liabilities assumed	23,584
Fair value of net identifiable assets	2,169
Bargain purchase gain	$	159

In connection with the acquisition, the Company recorded a bargain purchase gain of approximately $159 million.

The Company incurred $99 million in acquisition costs related to the Flagstar Transaction primarily for legal, advisory, and other professional services. These costs are recorded within Merger-related and restructuring expenses on the Consolidated Statements of Income and Comprehensive Income.

Fair Value of Assets Acquired and Liabilities Assumed

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, reflecting assumptions that a market participant would use when pricing an asset or liability. In some cases, the estimation of fair values requires management to make estimates about discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and are subject to change. Described below are the methods used to determine the fair values of the significant assets acquired and liabilities assumed in the Flagstar acquisition.

Cash and Cash Equivalents

The estimated fair value of cash and cash equivalents approximates their stated face amounts, as these financial instruments are either due on demand or have short-term maturities.

Investment Securities and Federal Home Loan Bank Stock

Quoted market prices for the securities acquired were used to determine their fair values. If quoted market prices were not available for a ~~reporting entity~~specific security, then quoted prices for similar securities in active markets were used to ~~reassess its purchased financial assets~~estimate the fair value. The fair value of FHLB-Indianapolis stock is equivalent to the redemption amount.

Loans

Fair values for loans were based on a discounted cash flow methodology that ~~exist~~considered credit loss expectations, market interest rates and other market factors such as liquidity from the perspective of a market participant. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. The probability of default, loss given default and prepayment assumptions were the key factors driving credit losses which were embedded into the estimated cash flows. These assumptions were informed by internal data on loan characteristics, historical loss experience, and current and forecasted economic conditions. The interest and liquidity component of the estimate was determined by discounting interest and principal cash flows through the expected life of each loan. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity. The discount rates do not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. Acquired loans were marked to fair value and adjusted for any PCD gross up as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. The transition relief also will allow an entity to accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date of ASU~~No. 2016-13.~~ ~~The same transition requirements should be applied to beneficial interests that previously applied Subtopic310-30~~ ~~or have~~merger date.

Core Deposit Intangible

CDI is a ~~significant difference between contractual cash flows and expected cash flows. The Company is evaluating ASUNo. 2016-13,~~ ~~has initiated a working group with multiple members from applicable departments to evaluate the requirements~~measure of the ~~new standard, planning for loss modeling requirements consistent with lifetime expected loss estimates,~~value of non-interest-bearing and ~~assessing the impact it will have on current processes. This evaluation includes~~interest-bearing checking accounts, savings accounts, and money market accounts that are acquired in a ~~review of existing credit models to identify areas where existing credit models used to comply with other regulatory requirements may be leveraged and areas where new models may be required.~~business combination. The ~~adoption of ASUNo. 2016-13~~ ~~could have a material effect on the Company’s Consolidated Statements of Condition and results of operations. The extent~~fair value of the ~~impact upon adoption will likely depend on the characteristics 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 in the financial statements. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early application permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities we may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the leaseCDI stemming from any given business combination is ~~modified, except that lessees are required to recognize aright-of-use~~ ~~asset and a lease liability for all operating leases at each reporting date~~ based on the present value of the ~~remaining minimum rental payments that were tracked and disclosed under previous GAAP.~~expected cost savings attributable to the core deposit funding, relative to an alternative source of funding. The ~~transition guidance in Topic 842 also provides specific guidance for sale and leaseback transactions,build-to-suit~~ ~~leases, leveraged leases, and amounts previously recognized in accordance with~~CDI relating to the ~~business combinations guidance for leases.~~Flagstar acquisition will be amortized over an estimated useful life of 10 years using the sum of years digits depreciation method. The Company ~~plans to adopt ASUNo. 2016-02~~ ~~effective January 1, 2019 using the required modified retrospective approach, which includes presenting the cumulative effect~~evaluates such identifiable intangibles for impairment when an indication 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 recognizeright-of-use~~ ~~assets and lease liabilities for substantially virtually all of our operating lease commitments leases for which we are the lessee as a lease liability and correspondingright-of-use~~ ~~asset on our Consolidated Statements of Condition.~~ impairment exists.

Deposit Liabilities

The Company has assembled a project management team, formed a working group comprised of associates from different disciplines, such as Vendor Risk Management, Real Estate, and Technology, including working with associates engaged in the procurement of goods and services used in the Company’s operations. We have made substantial progress in reviewing contractual arrangements for embedded leases in an effort to identify the Company’s full lease population and is presently evaluating all of its leases, as well as contracts that may contain embedded leases, for compliance 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 to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. As it relates to the Company, it will require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, thus eliminating eligibility for the current~~available-for-sale~~ ~~category. However, FHLB stock is not in the scope of ASUNo. 2016-01~~ ~~and will continue to be presented at cost. The amendments in ASUNo. 2016-01~~ are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Except for the early application guidance for liabilities at fair value in accordance with the fair value option for financial instruments, and certain fair value of ~~financial instruments disclosures, early adoption of the ASU~~deposit liabilities with no stated maturity (i.e., non-interest-bearing and interest-bearing checking accounts) is ~~not permitted. An entity should apply the amendments by means of a cumulative-effect adjustment~~equal to the ~~balance sheet as~~carrying amounts payable on demand. The fair value of certificates of deposit represents contractual cash flows, discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities.

Borrowed Funds

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

PCD loans

Purchased loans that reflect a more than insignificant deterioration of credit from origination are considered PCD. For PCD loans and leases, the ~~fiscal year~~initial estimate of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as ofexpected credit losses is recognized in the ACL on the date of ~~adoption~~acquisition using the same methodology as other loans and leases held-for-investment. The following table provides a summary of ~~ASUNo. 2016-01.~~loans and leases purchased as part of the Flagstar acquisition with credit deterioration and the associated credit loss reserve at acquisition:


(in millions)	Total
Par value (UPB)	$	1,950
ACL at acquisition	(51)
Non-credit (discount)	(33)
Fair value	$	1,866

Unaudited Pro Forma Information

The Company’s results of operations for the year-ended December 31, 2022 and 2023 include the results of operations of Flagstar on and after December 1, 2022. Results for periods prior to December 1, 2022, do not include the results of operations of Flagstar.

The following pro forma financial information presents the unaudited consolidated results of operations of the Company ~~plans to adopt ASUNo. 2016-01~~and Flagstar as if the Flagstar Transaction occurred as of January 1, ~~2018. Upon initial adoption, an immaterial amount~~2021 with pro forma adjustments. The pro forma adjustments give effect to any change in interest income due to the accretion of ~~unrealized losses related~~the net discounts from the fair value adjustments of acquired loans, any change in interest expense due to the~~in-scope~~ ~~equity securities will be reclassified~~ estimated net premium from the fair value adjustments to acquired time deposits and other debt, and the amortization of intangibles had the deposits been acquired as of January 1, 2021. The pro forma amounts for the years ended December 31, 2022 and 2021 do not reflect the anticipated cost savings that have not yet been realized. Acquisition costs incurred by the Company during the years ended December 31, 2022 and 2021 are reflected in the pro forma amounts. The pro forma information does not necessarily reflect the results of operations that would have occurred had the Flagstar Transaction occurred at the beginning of 2021.


	For the Years Ended December 31,
	(unaudited)
(in millions)	2022		2021
Net interest income	$	2,278	$	2,208
Non-interest income	650		1,105
Net income	804		1,207
Net income available to common stockholders	$	771	$	1,174

Note 4 - Accumulated Other Comprehensive Income

The following table sets forth the components in accumulated other comprehensive ~~income to retained earnings.~~

~~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~~income:


(in millions)	Year Ended December 31,
Details about Accumulated Other Comprehensive Loss	Amount Reclassified out of Accumulated Other Comprehensive Loss (1)		Affected Line Item in the Consolidated Statements of Income and Comprehensive Income
Unrealized gains on available-for-sale securities:	$	—	Net gain on securities
	—		Income tax expense
	$	—	Net gain on securities, net of tax
Unrealized gains on cash flow hedges:	$	65	Interest expense
	(17)		Income tax benefit
	$	48	Net gain on cash flow hedges, net of tax
Amortization of defined benefit pension plan items:
Past service liability	$	—	Included in the computation of net periodic credit (2)
Actuarial losses	(7)		Included in the computation of net periodic cost (2)
	(7)		Total before tax
	1		Income tax benefit
	$	(6)	Amortization of defined benefit pension plan items, net of tax
Total reclassifications for the period	$	42

(1)Amounts in ~~an amount that reflects the consideration to which the entity expects to be entitled in exchange~~parentheses indicate expense items.

(2)See Note 20 - Employee Benefits for ~~those goods or services. The provisions ASUNo. 2014-09~~ and related amendments are effective for annual reporting periods beginning after December 15, 2017, and interim reporting periods within that annual period, with early adoption permitted for annual reporting periods beginning after December 15, 2016, and interim reporting periods within that annual period. The Company will adopt ASU~~No. 2014-09~~ and its amendments which established ASC Topic 606, “Revenue from Contracts with Customers” on January 1, 2018. In summary, the core principle of ASC Topic 606 is that an entity recognizes 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’s revenue streams that are covered by ASC Topic 606 are primarily fees earned in connection with performing services for our customers such as investment advisor fees, wire transfer fees, and bounced check fees. Such fees are either satisfied over time if the service is performed over a period of time (as with investment advisor fees or safe deposit box rental fees), or satisfied at a point in time (as with wire transfer fees and bounced check fees). The Company recognizes fees for services performed over time over the time period to which the fees relate. The Company recognizes fees earned at a point in time on the day the fee is earned. The Company will adopt ASU~~No. 2014-09~~ using the modified retrospective approach which includes presenting the cumulative effect of initial application, if any, along with supplementary disclosures. The Company will not record a cumulative effect adjustment upon adoption of ASU~~No. 2014-09.~~

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

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


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


Amortization of defined benefit pension plan items:

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


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


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


Total reclassifications for the period
   $ (3,060 )

~~(1)~~

~~Amounts in parentheses indicate expense items.~~

~~(2)~~

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

~~NOTE 4: SECURITIES~~

additional information.

Note 5 - Investment Securities

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


	December 31, 2023
(in millions)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates	$	1,366	$	1	$	146	$	1,221
GSE CMOs	5,495		48		381		5,162
Private Label CMOs	174		7		1		180
Total mortgage-related debt securities	$	7,035	$	56	$	528	$	6,563
Other Debt Securities:
U. S. Treasury obligations	$	198	$	—	$	—	$	198
GSE debentures	1,899		1		291		1,609
Asset-backed securities (1)	307		—		5		302
Municipal bonds	6		—		—		6
Corporate bonds	365		—		22		343
Foreign notes	35		—		1		34
Capital trust notes	97		5		12		90
Total other debt securities	$	2,907	$	6	$	331	$	2,582
Total debt securities available for sale	$	9,942	$	62	$	859	$	9,145
Equity securities:
Mutual funds	$	16	$	—	$	2	$	14
Total equity securities	$	16	$	—	$	2	$	14
Total securities (2)	$	9,958	$	62	$	861	$	9,159

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

(2)Excludes accrued interest receivable of $38 million included in other assets in the Consolidated Statements of Condition.

100


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

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

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

At December 31, 2023, the Company had $861 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2022, the Company had $762 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. The Company maintains an investment in FHLB-NY stock partly in conjunction with its membership in the FHLB and partly related to its access to the FHLB funding it utilizes. In addition, at December 31, ~~2017~~2023 and ~~2016:~~

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

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








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








Other Securities:

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








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








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

~~(1)~~

~~Government-sponsored enterprise.~~

~~(2)~~

~~Collateralized mortgage obligations.~~

~~(3)~~

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

~~(4)~~

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

   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 December 31, 2017 and 2016, respectively,~~2022, the Company had ~~$603.8~~$203 million and ~~$590.9~~$176 million of~~FHLB-NY~~ Federal Reserve Bank stock, ~~at cost. The Company is required to maintain an investment inFHLB-NY~~ ~~stock in order to have access to the funding it provides.~~

respectively.

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


	December 31,
( in millions)	2023		2022		2021
Gross proceeds	$	1,637	$	228	$	—
Gross realized gains	2		—		—
Gross realized losses	(3)		—		—

There were no unrealized losses on equity securities recognized in earnings for the years ended December 31, ~~2017, 2016, and 2015:~~

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

~~In addition, during~~2023. For the ~~twelve months~~years ended December 31, ~~2017, the Company sought to take advantage~~2022 and 2021 there were unrealized losses on equity securities of ~~favorable bond market conditions~~$2 million and ~~soldheld-to-maturity~~ securities with an amortized cost of $521.0 million resulting in gross proceeds of $547.9 million including a gross realized gain of $26.9 million. Accordingly, the Company transferred the remaining $3.0 billion of~~held-to-maturity~~ ~~securities toavailable-for-sale~~ ~~with a net unrealized gain of $82.8 million classified in other comprehensive loss in the Consolidated Statements of Condition. Having the securities portfolio classified asavailable-for-sale~~ improves the Company’s interest rate risk sensitivity and liquidity measures and provides the Company with more options in meeting the expected future Liquidity Coverage Ratio (“LCR”) requirements.

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


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

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

respectively.

101

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

   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
(dollars in thousands)
Available-for-Sale Securities: ⁽³⁾

Due within one year
   $ —      —   % $ 259,256    1.82 % $ 148    6.51 % $ —      —   % $ 259,617
Due from one to five years
   883,138    3.32 6,950    3.84 291    6.63 48,449    3.57 963,589
Due from five to ten years
   1,002,205    3.44 283,883    3.08 —      —   31,253    8.37 1,361,457
Due after ten years
   674,618    3.09 123,750    3.23 69,942    2.88 48,230    3.77 914,230










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

~~(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.~~

2023:


	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	$	—	$	448	$	—	$	—	$	446
Due from one to five years	178		50		—		353		560
Due from five to ten years	316		1,502		6		105		1,597
Due after ten years	6,541		96		—		345		6,542
Total debt securities available for sale	$	7,035	$	2,096	$	6	$	803	$	9,145

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

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

   Less than Twelve Months    Twelve Months or Longer    Total
(in thousands)    Fair Value    Unrealized Loss    Fair Value    Unrealized Loss    Fair Value    Unrealized Loss
Temporarily ImpairedAvailable-for-Sale Securities:

GSE certificates
   $ 232,546    $ 535    $ 20,440    $ 664    $ 252,986    $ 1,199
GSE debentures
   333,045    2,665    —      —      333,045    2,665
GSE CMOs
   118,694    826    —      —      118,694    826
U. S. Treasury obligations
   199,898    62    —      —      199,898    62
Municipal bonds
   11,169    259    41,054    542    52,223    801
Capital trust notes
   —      —      35,105    8,632    35,105    8,632
Equity securities
   —      —      11,545    261    11,545    261












Total temporarily impairedavailable-for-sale securities
   $ 895,352    $ 4,347    $ 108,144    $ 10,099    $ 1,003,496    $ 14,446

2023:


	Less than Twelve Months				Twelve Months or Longer				Total
(in millions)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government agency and GSE obligations	181		1		1,362		290		1,543		291
GSE certificates	312		5		843		141		1,155		146
Private Label CMOs	29		1		—		—		29		1
GSE CMOs	1,835		77		1,312		304		3,147		381
Asset-backed securities	—		—		228		5		228		5
Municipal bonds	—		—		6		—		6		—
Corporate bonds	—		—		343		22		343		22
Foreign notes	—		—		9		1		9		1
Capital trust notes	—		—		81		12		81		12
Equity securities	—		—		14		2		14		2
Total temporarily impaired securities	$	2,357	$	84	$	4,198	$	777	$	6,555	$	861

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

   Less than Twelve Months    Twelve Months or Longer    Total
(in thousands)    Fair Value    Unrealized Loss    Fair Value    Unrealized Loss    Fair Value    Unrealized Loss
Temporarily ImpairedHeld-to-Maturity Securities:

GSE certificates
   $ 268,891    $ 2,399    $ —      $ —      $ 268,891    $ 2,399
GSE CMOs
   42,980    57    —      —      42,980    57
U. S. Treasury obligations
   200,220    73    —      —      200,220    73
Municipal bonds
   69,765    1,789    —      —      69,765    1,789
Capital trust notes
   —      —      24,364    11,872    24,364    11,872












Total temporarily impairedheld-to-maturity securities
   $ 581,856    $ 4,318    $ 24,364    $ 11,872    $ 606,220    $ 16,190












Temporarily ImpairedAvailable-for-Sale Securities:

GSE certificates
   $ 7,326    $ 460    $ —      $ —      $ 7,326    $ 460
Capital trust notes
   —      —      5,241    2,217    5,241    2,217
Equity securities
   29,059    589    —      —      29,059    589












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

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

At December 31, 2017, the Company had unrealized losses on certain GSE mortgage-related securities, U.S. Treasury obligations, municipal bonds, capital trust notes, and equity securities. The unrealized losses on the Company’s GSE mortgage-related securities, U.S. Treasury obligations, municipal bonds, and capital trust notes at December 31, 2017 were primarily caused by movements in market interest rates and spread volatility, rather than credit risk. These securities are not expected to be settled at a price that is less than the amortized cost of the Company’s investment.

The Company reviews quarterly financial information related to its investments in capital trust notes, as well as other information that is released by each of the issuers of such notes, to determine their continued creditworthiness. The Company continues to monitor these investments and currently estimates that the present value of expected cash flows is not less than the amortized cost of the securities. It is possible that these securities will perform worse than is currently expected, which could lead to adverse changes in cash flows from these securities and potential OTTI losses in the future. Future events that could trigger material unrecoverable declines in the fair values of the Company’s investments, and thus result in potential OTTI losses, include, but are not limited to, government intervention; deteriorating asset quality and credit metrics; significantly higher levels of default and loan loss provisions; losses in value on the underlying collateral; net operating losses; and illiquidity in the financial markets.

The Company considers a decline in the fair value of equity securities to be other than temporary if the Company does not expect to recover the entire amortized cost basis of the security. The unrealized losses on the Company’s equity securities at December 31, 2017 were caused by market volatility. The Company evaluated the near-term prospects of recovering the fair value of these securities, together with the severity and duration of impairment to date, and determined that they were not other-than-temporarily impaired. Nonetheless, it is possible that these equity securities will perform worse than is currently expected, which could lead to adverse changes in their fair value, or to the failure of the securities to fully recover in value as currently anticipated by management. Either event could cause the Company to record an OTTI loss in a future period. Events that could trigger a material decline in the fair value of these securities include, but are not limited to, deterioration in the equity markets; a decline in the quality of the loan portfolio of the issuer in which the Company has invested; and the recording of higher loan loss provisions and net operating losses by such issuer.

2022:


	Less than Twelve Months				Twelve Months or Longer				Total
(in millions)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations	$	1,487	$	4	$	—	$	—	$	1,487	$	4
U.S. Government agency and GSE obligations	243		5		1,156		346		1,399		351
GSE certificates	871		46		420		114		1,291		160
GSE CMOs	2,219		36		925		264		3,144		300
Asset-backed securities	61		2		262		12		323		14
Municipal bonds	9		—		7		—		16		—
Corporate bonds	698		27		97		3		795		30
Foreign notes	20		—		—		—		20		—
Capital trust notes	46		2		34		10		80		12
Equity securities	4		—		10		2		14		2
Total temporarily impaired securities	$	5,658	$	122	$	2,911	$	751	$	8,569	$	873

102

The investment securities designated as having a continuous loss position for twelve months or more at December 31, ~~2017~~2023 consisted of eighty-four agency collateralized mortgage obligations, six capital trusts note, eight asset-backed securities, twelve corporate bonds, thirty-seven US government agency ~~mortgage-related~~bonds, three hundred two mortgage-backed securities, ~~five capital trust notes, two municipal bonds,~~one mutual fund, one foreign debt, and one ~~mutual fund. At December 31, 2016~~municipal bond . The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2022 consisted of twenty three agency collateralized mortgage obligations, five capital ~~trust notes. At~~trusts notes, seven asset-backed securities, two corporate bonds, thirty three US government agency bonds, one hundred thirty three mortgage-backed securities, one mutual fund, and one municipal bond.

The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. We also assess whether (i) we intend to sell, or (ii) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, any previously recognized allowances are charged off and the security’s amortized cost basis is written down to fair value through income. If neither of the aforementioned criteria are met, we evaluate whether the decline in fair value has resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

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

None of the remaining unrealized losses identified as of December 31, ~~2017,~~2023 or December 31, 2022 relates to the marketability of the securities or the issuers’ ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the investment securities were purchased, and do not indicate credit-related impairment. Management based this conclusion on an analysis of each issuer including a detailed credit assessment of each issuer. The Company does not intend to sell, and it is not more likely than not that the Company will be required to sell the positions before the recovery of their amortized cost basis, which may be at maturity. As such, no allowance for credit losses remains with respect to debt securities as of December 31, 2023.

103

Note 6 - Loans and Leases

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


	December 31, 2023				December 31, 2022
(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	$	37,265	44.0	%	$	38,130	55.3	%
Commercial real estate	10,470		12.4	%	8,526		12.4	%
One-to-four family first mortgage	6,061		7.2	%	5,821		8.4	%
Acquisition, development, and construction	2,912		3.4	%	1,996		2.8	%
Total mortgage loans held for investment (1)	$	56,708	67.0	%	$	54,473	78.9	%
Other Loans:
Commercial and industrial	22,065		26.1	%	10,597		15.4	%
Lease financing, net of unearned income of $258 and $85, respectively	3,189		3.8	%	1,679		2.4	%
Total commercial and industrial loans (2)	25,254		29.9	%	12,276		17.8	%
Other	2,657		3.1	%	2,252		3.3	%
Total other loans held for investment	27,911		33.0	%	14,528		21.1	%
Total loans and leases held for investment (1)	$	84,619	100.0	%	$	69,001	100.0	%
Allowance for credit losses on loans and leases	(992)				(393)
Total loans and leases held for investment, net	83,627				68,608
Loans held for sale	1,182				1,115
Total loans and leases, net	$	84,809			$	69,723

(1)Excludes accrued interest receivable of $423 million and $292 million at December 31, 2023 and December 31, 2022, respectively, which is included in other assets in the Consolidated Statements of Condition.

(2)Includes specialty finance loans and leases of $5.2 billion and $4.4 billion at December 31, 2023 and December 31, 2022, respectively.

Loans with Government Guarantees

Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to HUD (if foreclosure timelines are met), which is not paid by the FHA until claimed. The Bank has a unilateral option to repurchase loans sold to GNMA if the loan is due, but unpaid, for three consecutive months (typically referred to as 90 days past due) and can recover losses through a claims process from the guarantor. These loans are recorded in loans held for investment and the liability to repurchase the loans is recorded in other liabilities on the Consolidated Statements of Condition. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. As of December 31, 2023, LGG loans totaled $541 million and the repurchase liability was $456 million.

Repossessed assets and the associated net claims related to government guaranteed loans are recorded in other assets and was $14 million at December 31, 2023.

Loans Held-for-Sale

Loans held-for-sale at December 31, 2023 totaled $1.2 billion, up from $1.1 billion at December 31, 2022. The Signature Transaction contributed $360 million in Small Business Administration ("SBA") loans to this increase. We classify loans as held for sale when we originate or purchase loans that we intend to sell. We have elected the fair value option for nearly all of this portfolio, except the SBA loans. We estimate the fair value of mortgage loans based on quoted market prices for securities ~~having~~backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral.

104

Asset Quality

All asset quality information excludes LGG that are insured by U.S government agencies.

A loan generally is classified as a ~~continuous loss position for twelve months~~non-accrual loan when it is 90 days or more ~~was 8.5% below~~past due or when it is deemed to be impaired because the ~~collective amortized cost~~Company no longer expects to collect all amounts due according to the contractual terms of ~~$118.2 million.~~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 December 31, ~~2016, the fair value of such securities was 32.2% below the collective amortized cost of $43.7 million. At~~2023 and December 31, ~~2017 and 2016, the combined market value of the respective securities represented unrealized losses of $10.1 million and $14.1 million, respectively.~~

~~NOTE 5: LOANS~~

~~The following table sets forth the composition of the loan portfolio at December 31, 2017 and 2016:~~

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

Mortgage Loans:

Multi-family
   $ 28,074,709 73.19 % $ 26,945,052 72.13 %
Commercial real estate
   7,322,226 �� 19.09 7,724,362 20.68
One-to-four family
   477,228 1.24 381,081 1.02
Acquisition, development, and construction
   435,825 1.14 381,194 1.02


Total mortgage loans held for investment
   $ 36,309,988 94.66 $ 35,431,689 94.85


Other Loans:

Commercial and industrial
   1,377,964 3.59 1,341,216 3.59
Lease financing, net of unearned income of $65,041 and $60,278, respectively
   662,610 1.73 559,229 1.50


Total commercial and industrial loans⁽¹⁾
   2,040,574 5.32 1,900,445 5.09
Purchased credit-impaired loans
   —   —   5,762 0.01
Other
   8,460 0.02 18,305 0.05


Total other loans held for investment
   2,049,034 5.34 1,924,512 5.15


Totalnon-covered loans held for investment
   $ 38,359,022 100.00 % $ 37,356,201 100.00 %


Net deferred loan origination costs
   28,949 26,521
Allowance for losses onnon-covered loans
   (158,046 ) (158,290 )


Non-covered loans held for investment, net
   $ 38,229,925 $ 37,224,432


Covered loans
   —   1,698,133
Allowance for losses on covered loans
   —   (23,701 )


Covered loans, net
   $ —   $ 1,674,432
Loans held for sale
   35,258 409,152


Total loans, net
   $ 38,265,183 $ 39,308,016

~~(1)~~

~~Includes specialty finance loans of $1.5 billion and $1.3 billion, and other C&I loans of $500.8 million and $632.9 million, respectively, at December 31, 2017 and 2016.~~

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

~~Non-Covered~~ ~~Loans 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”) loans, most of which are collateralized by income-producing properties such as office buildings, retail centers,~~mixed-use~~ ~~buildings, and multi-tenanted light industrial properties that are located in New York City and on Long Island.~~

~~To a lesser extent, the Company also originatesone-to-four~~ ~~family loans, acquisition, development, and construction (“ADC”) loans, and C&I loans, for investment.One-to-four~~ family loans held for investment were originated through the Company’s mortgage banking operation and primarily consisted of jumbo prime adjustable rate mortgages made to borrowers with a solid credit history.

ADC loans are primarily originated for multi-family and residential tract projects in New York City and on Long Island. C&I loans consist of asset-based loans, equipment loans and leases, and dealer floor-plan loans (together, “specialty finance loans and 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” C&I2022 we had no loans that ~~primarily are made to small~~were nonperforming and~~mid-size~~ ~~businesses in Metro New York. “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’s~~in-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 by~~in-house~~ inspectors or third-party engineers. The Company seeks to minimize the credit risk on ADC loans by maintaining conservative lending policies and rigorous underwriting standards. However, if the estimate of value proves to be inaccurate, the cost of completion is greater than expected, or the length of time to complete and/or sell or lease the collateral property is greater than anticipated, the property could have a value upon completion that is insufficient to assure full repayment of the loan. This could have a material adverse effect on the quality of the ADC loan portfolio, and could result in losses or delinquencies. In addition, the Company utilizes the same stringent appraisal process for ADC loans as it does for its multi-family and CRE loans.

To minimize the risk involved in specialty finance lending and leasing, the Company participates in syndicated loans that are brought to it, and equipment loans and leases that are assigned to it, by a select group of nationally recognized sources who have had long-term relationships with its experienced lending officers. Each of these credits is secured with a perfected first security interest or outright ownership in the underlying collateral, and structured as senior debt or as a~~non-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 innon-covered~~ loans held for investment at December 31, 2017, were loans of $59.5 million to officers, directors, and their related interests and parties. There were no loans to principal shareholders at that date.

~~At December 31, 2016, the Company hadnon-covered~~ purchased credit-impaired (“PCI”) loans, with a carrying value of $5.8 million and an unpaid principal balance of $7.0 million at that date. PCI loans had been covered under the LSA with the FDIC that expired in March 2015 and had been included in~~non-covered~~ ~~loans. Such loans were accounted for under ASC310-30~~ ~~and were initially measured at fair value, which included estimated future credit losses expected to be incurred over the lives of the loans. Under ASC310-30,~~ purchasers are permitted to aggregate acquired loans into one or more pools, provided that the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. There were no such loans accounted for under ASC~~310-30~~ ~~at December 31, 2017.~~

~~Loans Held for Sale~~

At December 31, 2017 the Company had loans held for sale of $35.3 million as compared to $409.2 million at December 31, 2016. The decline reflects the sale of its mortgage banking business, which was acquired as part of its 2009 FDIC-assisted acquisition of AmTrust and was reported under the Company’s Residential Mortgage Banking segment, to 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 Statements of Operations and Comprehensive Income (Loss). Freedom acquired both the Company’s origination and servicing platforms, as well as its mortgage servicing loan portfolio of $20.5 billion and related MSR asset of $208.8 million.

~~The Community Bank’s mortgage banking operations originated, aggregated, sold, and servicedone-to-four~~ ~~family loans. Community banks, credit unions, mortgage companies, and mortgage brokers used its proprietaryweb-accessible~~ ~~mortgage banking platform to originate and closeone-to-four~~ ~~family loans nationwide. These 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.~~

~~Asset Quality~~

still accruing.

The following table presents information regarding the quality of the Company’s~~non-covered~~ loans held for investment at December 31, ~~2017:~~

(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
Multi-family
   $ 1,258    $ 11,078    $ —      $ 12,336    $ 28,062,373    $ 28,074,709
Commercial real estate
   13,227    6,659    —      19,886    7,302,340    7,322,226
One-to-four family
   585    1,966    —      2,551    474,677    477,228
Acquisition, development, and construction
   —      6,200    —      6,200    429,625    435,825
Commercial and industrial⁽¹⁾⁽²⁾
   2,711    47,768    —      50,479    1,990,095    2,040,574
Other
   8    11    —      19    8,441    8,460












Total
   $ 17,789    $ 73,682    $ —      $ 91,471    $ 38,267,551    $ 38,359,022

~~(1)~~

~~Includes $2.7 million and $46.7 million of taxi medallion-related loans that were 30 to 89 days past due and 90 days or more past due, respectively.~~

~~(2)~~

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

2023:


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

(1)Includes lease financing receivables.

(2)Includes $207 million multi-family loans from one borrower that had a payment in the process of collection as of December 31, 2023 and subsequently settled on January 2, 2024.

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:~~

(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
Multi-family
   $ 28    $ 13,558    $ —      $ 13,586    $ 26,931,466    $ 26,945,052
Commercial real estate
   —      9,297    —      9,297    7,715,065    7,724,362
One-to-four family
   2,844    9,679    —      12,523    368,558    381,081
Acquisition, development, and construction
   —      6,200    —      6,200    374,994    381,194
Commercial and industrial⁽¹⁾⁽²⁾
   7,263    16,422    —      23,685    1,876,760    1,900,445
Other⁽³⁾
   248    1,313    —      1,561    16,744    18,305












Total
   $ 10,383    $ 56,469    $ —      $ 66,852    $ 37,283,587    $ 37,350,439

~~(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.~~

2022:


(in millions)	Loans 30-89 Days Past Due		Non- Accrual Loans		Total Past Due Loans		Current Loans		Total Loans Receivable
Multi-family	$	34	$	13	$	47	$	38,083	$	38,130
Commercial real estate	2		20		22		8,504		8,526
One-to-four family first mortgage	21		92		113		5,708		5,821
Acquisition, development, and construction	—		—		—		1,996		1,996
Commercial and industrial(1)	2		3		5		12,271		12,276
Other	11		13		24		2,228		2,252
Total	$	70	$	141	$	211	$	68,790	$	69,001

(1)Includes lease financing receivables, all of which were current.

The following table summarizes the Company’s portfolio of~~non-covered~~ loans held for investment by credit quality indicator at December 31, ~~2017:~~

   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
Credit Quality Indicator:

Pass
   $ 27,874,330    $ 7,255,100    $ 471,571    $ 344,040    $ 35,945,041    $ 1,925,527    $ 8,449    $ 1,933,976
Special mention
   125,752    47,123    3,691    76,033    252,599    20,883    —      20,883
Substandard
   74,627    20,003    1,966    15,752    112,348    94,164    11    94,175
Doubtful
   —      —      —      —      —      —      —      —
















Total
   $ 28,074,709    $ 7,322,226    $ 477,228    $ 435,825    $ 36,309,988    $ 2,040,574    $ 8,460    $ 2,049,034

~~(1)~~

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

2023:


	Mortgage Loans										Other Loans
(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	34,170	$	8,734	$	5,328	$	2,825	$	51,057	$	24,683	$	2,634	$	27,317
Special mention	768		367		—		57		1,192		335		—		335
Substandard	2,327		1,369		733		30		4,459		236		23		259
Doubtful	—		—		—		—		—		—		—		—
Total	$	37,265	$	10,470	$	6,061	$	2,912	$	56,708	$	25,254	$	2,657	$	27,911

105

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:~~

   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
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
Special mention
   164,325    12,604    —      33,210    210,139    54,979    —      54,979
Substandard
   26,105    9,985    9,902    6,200    52,192    73,491    1,313    74,804
Doubtful
   —      —      —      —      —      —      —      —
















Total
   $ 26,945,052    $ 7,724,362    $ 381,081    $ 381,194    $ 35,431,689    $ 1,900,445    $ 18,305    $ 1,918,750

~~(1)~~

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

2022:


	Mortgage Loans										Other Loans
(in millions)	Multi- Family		Commercial Real Estate		One-to- Four Family		Acquisition, Development, and Construction		Total Mortgage Loans		Commercial and Industrial		Other		Total Other Loans
Credit Quality Indicator:
Pass	$	36,622	$	7,871	$	5,710	$	1,992	$	52,195	$	12,208	$	2,238	$	14,446
Special mention	864		230		8		4		1,106		18		—		18
Substandard	644		425		103		—		1,172		50		14		64

Total	$	38,130	$	8,526	$	5,821	$	1,996	$	54,473	$	12,276	$	2,252	$	14,528

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

The ~~interest income~~following table presents, by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of December 31, 2023:


	Vintage Year
(in millions)	2023		2022				2021		2020		2019		Prior To 2019		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Pass	$	2,532	$	13,295			$	10,308	$	8,438	$	4,725	$	9,670	$	1,981	$	108	$	51,057
Special Mention	—		217				69		407		144		341		14		—		1,192
Substandard	45		98				258		336		809		2,910		—		3		4,459
Doubtful	—		—				—		—		—		—		—		—		—
Total mortgage loans	$	2,577	$	13,610			$	10,635	$	9,181	$	5,678	$	12,921	$	1,995	$	111	$	56,708

Current-period gross write-offs	—		(112)				—		—		(2)		(64)		—		—		(178)

Pass(1)	$	9,709	$	3,598			$	1,936	$	1,141	$	911	$	941	$	8,757	$	324	$	27,317
Special Mention	1		182				17		9		6		18		102		—		335
Substandard	10		39				45		28		40		40		46		11		259
Doubtful	—		—				—		—		—		—		—		—		—
Total other loans	$	9,720	$	3,819			$	1,998	$	1,178	$	957	$	999	$	8,905	$	335	$	27,911

Current-period gross write-offs	$	(2)	$	(10)			$	(5)	$	(8)	$	(2)	$	(18)	$	—	$	—	$	(45)

Total	$	12,297	$	17,429	$	—	$	12,633	$	10,359	$	6,635	$	13,920	$	10,900	$	446	$	84,619

When management determines that ~~would have been recorded under~~foreclosure is probable, for loans that are individually evaluated the ~~original terms~~expected credit losses are based on the fair value of~~non-accrual~~ ~~loans~~ the collateral adjusted for selling costs. When the borrower is experiencing financial difficulty at the ~~respective year-ends,~~reporting date and repayment is expected to be provided substantially through the ~~interest income actually recorded~~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.

106

The following table summarizes the extent to which collateral secures the Company’s collateral-dependent loans held for investment by collateral type as of December 31, 2023:


	Collateral Type
(in millions)	Real Property		Other
Multi-family	$	253	$	—
Commercial real estate	256		—
One-to-four family first mortgage	105		—

Commercial and industrial	—		120

Total collateral-dependent loans held for investment	$	614	$	120

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

There were no significant changes in the ~~respective years, is summarized below:~~

   December 31,
(in thousands)    2017    2016    2015
Interest income that would have been recorded
   $ 4,974    $ 3,128    $ 2,288
Interest income actually recorded
   (2,904 )    (1,708 )    (1,574 )






Interest income foregone
   $ 2,070    $ 1,420    $ 714

extent to which collateral secures the Company’s collateral-dependent financial assets during the year ended December 31, 2023.

At December 31, 2023 and December 31, 2022, the Company had $81 million and $121 million of residential mortgage loans in the process of foreclosure, respectively.

Included in loans held for investment at December 31, 2023 and December 31, 2022, were loans of $9 million and $101 million, respectively, to officers, directors, and their related interests and parties. There were no loans to principal shareholders at that date.

Modifications to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company adopted ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings

and Vintage Disclosures. For additional information on the adoption, refer to Note 1 - Description of Business, Organization and Basis of Presentation.

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

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


	Amortized Cost
(dollars in millions)	Interest Rate Reduction		Term Extension		Combination - Interest Rate Reduction & Term Extension		Total		Percent of Total Loan class
Year Ended December 31, 2023
Multi-family	$	122	$	—	$	—	$	122	1.17	%
Commercial real estate	102		1		—		103		0.98	%
One-to-four family first mortgage	3		5		6		14		0.23	%
Commercial and Industrial	—		19		2		21		0.08	%
Other Consumer	$	—	$	—	$	2	2		0.08	%
Total	$	227	$	25	$	10	$	262

107

The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty:


	Interest Rate Reduction				Term Extension
	Weighted-average contractual interest rate
	From		To		Weighted-average Term (in years)
Year Ended December 31, 2023
Multi-family	7.45	%	6.02	%
Commercial real estate	8.83	%	4.56	%
One-to-four family first mortgage	6.08	%	4.79	%
Commercial and industrial	8.44	%	8.08	%	0.58
Other Consumer	9.09	%	4.82	%

As of December 31, 2023, there were $4 million one-to-four family first mortgages that were modified for borrowers experiencing financial difficulty that received term extension and subsequently defaulted during the period and $4 million one-to-four family first mortgages that were combination modifications and subsequently defaulted during the period.

The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. Loans are considered to be in payment default at 90 or more days past due. The following table depicts the performance of loans that have been modified during the reporting period:


	December 31, 2023
(dollars in millions)	Current		30 - 89 Past Due		90+ Past Due		Total

Commercial real estate	1		—		—		1
One-to-four family first mortgage	3		—		8		11
Commercial and industrial	3		9		1		13
Other Consumer	1		1		—		2
Total	$	8	$	10	$	9	$	27

Troubled Debt Restructurings Prior to Adoption of ASU 2022-02

Prior to the adoption of ASU 2022-02, the Company ~~is required to account~~accounted for certain~~held-for-investment~~ loan modifications and restructurings as TDRs. In general, a modification or restructuring of a loan ~~constitutes~~constituted a TDR if the Company ~~grants~~granted a concession to a borrower experiencing financial difficulty. A loan modified as a TDR was generally is placed onnon-accrual status until the Company ~~determines~~determined 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 credit losses on loans and leases, reasonably expected TDRs were 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 December 31, ~~2017,~~2022, loans on which concessions were made with respect to rate reductions and/or extension of maturity dates amounted to ~~$44.6 million; loans on which forbearance agreements were reached amounted to $1.0~~$44 million.

The following table presents information regarding the ~~Company’s~~Company's TDRs as of December 31, ~~2017 and 2016:~~

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

Multi-family
   $ 824    $ 8,061    $ 8,885    $ 1,981    $ 8,755    $ 10,736
Commercial real estate
   —      368    368    —      1,861    1,861
One-to-four family
   —      1,066    1,066    222    1,749    1,971
Acquisition, development, and construction
   8,652    —      8,652    —      —      —
Commercial and industrial
   177    26,408    26,585    1,263    3,887    5,150
Other
   —      —      —      —      202    202












Total
   $ 9,653    $ 35,903    $ 45,556    $ 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.

2022:


	December 31, 2022
(dollars in millions)	Accruing		Non- Accrual		Total
Loan Category:
Multi-family	$	—	$	6	$	6
Commercial real estate	16		19		35

108


Commercial and industrial	—		3		3
Total	$	16	$	28	$	44

The financial effects of the Company’s TDRs for the twelve months ended December 31, ~~2017, 2016, and 2015~~2022 are summarized as follows:

   For the Twelve Months Ended December 31, 2017
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-
Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

One-to-four family
   4    $ 810    $ 986    5.93 % 2.21 % $ —      $ 12
Acquisition, development, and construction
   2    8,652    8,652    5.50 5.50 —      —
Commercial and industrial
   65    52,179    26,409    3.36 3.26 14,273    —










Total
   71    $ 61,641    $ 36,047    $ 14,273    $ 12

   For the Twelve Months Ended December 31, 2016
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-
Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

Multi-family
   1    $ 9,340    $ 8,129    4.63 % 4.00 % $ —      $ —
One-to-four family
   5    900    1,036    4.26 2.65 —      11
Commercial and industrial
   7    4,697    3,935    3.22 3.19 170    —










Total
   13    $ 14,937    $ 13,100    $ 170    $ 11

   For the Twelve Months Ended December 31, 2015
            Weighted Average
Interest Rate
(dollars in thousands)    Number
of
Loans    Pre-Modification
Recorded
Investment    Post-Modification
Recorded
Investment    Pre-
Modification Post-
Modification Charge-off
Amount    Capitalized
Interest
Loan Category:

One-to-four family
   4    $ 568    $ 619    4.02 % 2.72 % $ —      $ 6
Commercial and industrial
   2    1,345    1,312    3.40 3.52 33    —
Other
   2    193    213    4.58 2.00 —      2










Total
   8    $ 2,106    $ 2,144    $ 33    $ 8

At December 31, 2017, seven C&I loans, in the amount of $1.6 million that had been modified as a TDR during the twelve months ended at that date was in payment default. At December 31, 2016, none of the loans that had been modified as a TDR during the twelve months ended at that date were in payment default. At December 31, 2015, one home equity loan in the amount of $143,000 that had been modified as a TDR during the twelve months ended at that date was in payment default. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

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

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

~~Covered Loans~~

~~The Company sold its covered loan portfolio during the third quarter of 2017; therefore, the Company did not have any covered loans outstanding as of December 31, 2017.~~

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

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

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

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




Total covered loans
   $ 1,698,133    100.0 %

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

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

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

On a quarterly basis, the Company had evaluated the estimates of the cash flows it expected to collect. Expected future cash flows from interest payments were based on variable rates at the time of the quarterly evaluation. Estimates of expected cash flows that were impacted by changes in interest rate indices for variable rate loans and prepayment assumptions were treated as prospective yield adjustments and included in interest income. In the twelve months ended December 31, 2017, changes in the accretable yield for covered loans were as follows:

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


Balance at end of period
   $ —

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

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

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

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

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

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

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


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

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

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

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


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

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

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

The primary credit quality indicator for covered loans is the expectation of underlying cash flows. In the twelve months ended December 31, 2016, the Company recorded recoveries of losses on covered loans of $23.7 million. The recoveries were largely due to an increase in expected cash flows in the acquired portfolios of~~one-to-four~~ ~~family and home equity loans, and were partly offset by FDIC indemnification expense of $19.0 million that was recorded in“Non-interest~~ ~~income.”~~

~~NOTE 6: ALLOWANCES FOR LOAN LOSSES~~

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

(in thousands)    Mortgage    Other    Total
Allowances for Loan Losses at December 31, 2017:

Loans collectively evaluated for impairment
   $ 128,275    $ 29,771    $ 158,046

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

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






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

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

(in thousands)    Mortgage    Other    Total
Loans Receivable at December 31, 2017:

Loans individually evaluated for impairment
   $ 31,747    $ 48,810    $ 80,557
Loans collectively evaluated for impairment
   36,278,241    2,000,224    38,278,465






Total
   $ 36,309,988    $ 2,049,034    $ 38,359,022

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

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






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

Weighted Average Interest Rate
(dollars in millions) Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Pre- Modification Post- Modification Charge- off Amount Capitalized Interest
Loan Category:
Commercial real estate 2 $ 22 $ 19 6.00 % 4.02 % $ 3 $ —

Note 7 - 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~~ for the ~~twelve months ended~~periods indicated:


	For the Years Ended December 31,
	2023						2022
(in millions)	Mortgage		Other		Total		Mortgage		Other		Total
Balance, beginning of period	$	290	$	103	$	393	$	178	$	21	$	199
Adjustment for Purchased PCD Loans			13		13		21		30		51
Charge-offs	(178)		(45)		(223)		(5)		(2)		(7)
Recoveries			15		15		4		7		11
Provision for (recovery of) credit losses on loans and leases	644		150		794		92		47		139
Balance, end of period	$	756	$	236	$	992	$	290	$	103	$	393

As of December 31, ~~2017 and 2016:~~

   December 31,
   2017 2016
(in thousands)    Mortgage Other Total Mortgage Other Total
Balance, beginning of period
   $ 125,416 $ 32,874 $ 158,290 $ 124,478 $ 22,646 $ 147,124
Charge-offs
   (375 ) (62,975 ) (63,350 ) (170 ) (3,413 ) (3,583 )
Recoveries
   605 1,558 2,163 1,272 1,603 2,875
Provision for (recovery of)non-covered loan losses
   2,629 58,314 60,943 (164 ) 12,038 11,874


Balance, end of period
   $ 128,275 $ 29,771 $ 158,046 $ 125,416 $ 32,874 $ 158,290

~~See Note 2, “Summary of Significant Accounting Polices” for additional information regarding~~2023, the ~~Company’s~~ allowance for credit losses on~~non-covered~~ ~~loans.~~

loans and leases totaled $992 million, up $599 million compared to December 31, 2022. The increase in the allowance for credit losses on loans and leases was primarily driven by an increase in reserves to address weakness in the office sector, potential repricing risk in the multifamily portfolio and an increase in classified assets. Also contributing to the increase in the allowance for credit losses on loans and leases was the day 1 impact of the Signature Transaction that closed on March 20, 2023, which added $141 million to the reserve.

As of December 31, 2023 and December 31, 2022, the allowance for unfunded commitments totaled $52 million and $23 million, respectively.

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.

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The following table presents additional information about the Company’s ~~impairednon-covered~~nonaccrual loans at December 31, ~~2017:~~

(in thousands)    Recorded
Investment    Unpaid
Principal
Balance    Related
Allowance    Average
Recorded
Investment    Interest
Income
Recognized
Impaired loans with no related allowance:

Multi-family
   $ 8,892    $ 11,470    $ —      $ 9,554    $ 495
Commercial real estate
   5,137    10,252    —      3,522    92
One-to-four family
   1,966    2,072    —      2,489    50
Acquisition, development, and construction
   15,752    25,952    —      10,976    575
Other
   48,810    104,901    —      43,074    2,200










Total impaired loans with no related allowance
   $ 80,557    $ 154,647    $ —      $ 69,615    $ 3,412










Impaired loans with an allowance recorded:

Multi-family
   $ —      $ —      $ —      $ —      $ —
Commercial real estate
   —      —      —      —      —
One-to-four family
   —      —      —      —      —
Acquisition, development, and construction
   —      —      —      —      —
Other
   —      —      —      314    —










Total impaired loans with an allowance recorded
   $ —      $ —      $ —      $ 314    $ —










Total impaired loans:

Multi-family
   $ 8,892    $ 11,470    $ —      $ 9,554    $ 495
Commercial real estate
   5,137    10,252    —      3,522    92
One-to-four family
   1,966    2,072    —      2,489    50
Acquisition, development, and construction
   15,752    25,952    —      10,976    575
Other
   48,810    104,901    —      43,388    2,200










Total impaired loans
   $ 80,557    $ 154,647    $ —      $ 69,929    $ 3,412

2023:


(in millions)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	134	$	—	$	5
Commercial real estate	53		—		2
One-to-four family first mortgage	85		—		—
Acquisition, development, and construction	—		—		—
Other (includes C&I)	22		—		—
Total nonaccrual loans with no related allowance	$	294	$	—	$	7
Nonaccrual loans with an allowance recorded:
Multi-family	$	4	$	—	$	—
Commercial real estate	75		17		3
One-to-four family first mortgage	11		2		—
Acquisition, development, and construction	—		—		—
Other (includes C&I)	44		28		—
Total nonaccrual loans with an allowance recorded	$	134	$	47	$	3
Total nonaccrual loans:
Multi-family	$	138	$	—	$	5
Commercial real estate	128		17		5
One-to-four family first mortgage	96		2		—
Acquisition, development, and construction	—		—		—
Other (includes C&I)	66		28		—
Total nonaccrual loans	$	428	$	47	$	10

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

(in thousands)    Recorded
Investment    Unpaid
Principal
Balance    Related
Allowance    Average
Recorded
Investment    Interest
Income
Recognized
Impaired loans with no related allowance:

Multi-family
   $ 10,742    $ 13,133    $ —      $ 11,431    $ 627
Commercial real estate
   9,117    14,868    —      10,461    143
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










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










Impaired loans with an allowance recorded:

Multi-family
   $ —      $ —      $ —      $ —      $ —
Commercial real estate
   —      —      —      —      —
One-to-four family
   —      —      —      —      —
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:

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










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

~~Allowance for Losses on Covered Loans~~

~~Covered~~2022:


(in millions)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	13	$	—	$	—
Commercial real estate	19		—		1
One-to-four family first mortgage	90		—		—

Other (includes C&I)	3		—		—
Total nonaccrual loans with no related allowance	$	125	$	—	$	1
Nonaccrual loans with an allowance recorded:

Commercial real estate	$	1	$	—	$	—
One-to-four family first mortgage	2		—		—

Other (includes C&I)	13		14		—
Total nonaccrual loans with an allowance recorded	$	16	$	14	$	—
Total nonaccrual loans:
Multi-family	$	13	$	—	$	—
Commercial real estate	20		—		1
One-to-four family first mortgage	92		—		—

Other (includes C&I)	16		14		—
Total nonaccrual loans	$	141	$	14	$	1

Note 8 - 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 ~~were reported exclusive~~that are brought to them, and equipment loans and leases that are assigned to them, by a select group of

110

nationally recognized sources, and are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide. Lease finance receivables are carried at the aggregate of lease payments receivable plus the estimated residual value of the ~~FDIC loss share receivable.~~ leased assets and any initial direct costs incurred to originate these leases, less unearned income, which is accreted to interest income over the lease term using the interest method.

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

The residual value component of a lease financing receivable represents the estimated fair value of the leased equipment at the end of the lease term. In establishing residual value estimates, the Company may rely on industry data, historical experience, and independent appraisals and, where appropriate, information regarding product life cycle, product upgrades and competing products. Upon expiration of a lease, residual assets are remarketed, resulting in either an extension of the lease by the lessee, a lease to a new customer or purchase of the residual asset by the lessee or another party. Impairment of residual values arises if the expected fair value is less than the carrying amount. The Company assesses its net investment in lease financing receivables (including residual values) for impairment on an annual basis with any impairment losses recognized in accordance with the impairment guidance for financial instruments. As such, net investment in lease financing receivables may be reduced by an allowance for credit losses with changes recognized as provision expense. On certain lease financings, the Company obtains residual value insurance from third parties to manage and reduce the risk associated with the residual value of the leased assets. At December 31, 2023 and December 31, 2022, the carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $280 million and $32 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:


	For the Years Ended December 31,
(in millions)	2023		2022		2021
Interest income on lease financing (1)	$	119	$	53	$	53

(1)Included in Interest Income – Loans and leases in the Consolidated Statements of Income and Comprehensive Income.

At December 31, 2023 and December 31, 2022, the carrying value of net investment in leases, excluding purchase accounting adjustments was $3.5 billion and $1.7 billion, respectively. The components of net investment in direct financing leases, including the carrying amount of the lease receivables, as well as the unguaranteed residual asset were as follows:


(in millions)	December 31, 2023		December 31, 2022
Net investment in the lease - lease payments receivable	$	3,187	$	1,685
Net investment in the lease - unguaranteed residual assets	321		60
Total lease payments	$	3,508	$	1,745

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


(in millions)	December 31, 2023
2024	549
2025	602
2026	874
2027	521
2028	293
Thereafter	669
Total lease payments	$	3,508
Plus: deferred origination costs	15
Less: unearned income	(258)
Less: purchase accounting adjustment	$	(76)
Total lease finance receivables, net	$	3,189

Lessee Arrangements

The Company has operating leases for corporate offices, branch locations, and certain equipment. These leases generally have terms of 20 years or less, determined based on the contractual maturity of the lease, and include periods covered by options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. For the vast majority of the Company’s leases, we are not reasonably certain we will exercise our options to renew to the end of all renewal option periods. The Company determines if an arrangement is a lease at inception. Operating leases are included in other assets and other 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 date based on the present value of lease payments over the lease term. As the vast majority of the leases do not provide an implicit rate, the incremental borrowing rate (FHLB borrowing rate) is used based on the information available at commencement date in determining the present value of lease payments. The implicit rate is used when readily determinable. The operating lease ROU asset is measured at cost, which includes the initial measurement of the lease liability, prepaid rent and initial direct costs incurred by the Company, less incentives received.

Variable costs such as the proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred.

The components of lease expense were as follows:


	For the Years Ended December 31,
(in millions)	2023		2022		2021
Operating lease cost	$	86	$	28	$	27

Total lease cost	$	86	$	28	$	27

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


(in millions)	For the Years Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	64	$	28

112

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


(in millions, except lease term and discount rate)	December 31, 2023			December 31, 2022
Operating Leases:
Operating lease right-of-use assets (1)	$	426		$	119
Operating lease liabilities (2)	$	446		$	122
Weighted average remaining lease term	11.2 years			6 years
Weighted average discount rate percent	4.71		%	3.85		%

(1)Included in Other assets in the Consolidated Statements of Condition.

(2)Included in Other liabilities in the Consolidated Statements of Condition.


(in millions)	December 31, 2023
Maturities of lease liabilities:
2024	71
2025	65
2026	58
2027	52
2028	45
Thereafter	296
Total lease payments	$	587
Less: imputed interest	$	(141)
Total present value of lease liabilities	$	446

Note 9 - Mortgage Servicing Rights

The Company has investments in MSRs that result from ~~these loans. Covered loans were aggregated into pools~~the sale of loans ~~with common characteristics. In determining~~to the ~~allowance~~secondary market for ~~losses on covered loans,~~which we retain the ~~Company periodically performed an analysis to estimate the expected cash flows for each of the pools of loans.~~servicing. The Company ~~recorded~~accounts for MSRs at their fair value. A primary risk associated with MSRs is the potential reduction in fair value as a ~~provision for (recovery of) losses on covered loans~~result of higher than anticipated prepayments due to loan refinancing prompted, in part, by declining interest rates or government intervention. Conversely, these assets generally increase in value in a rising interest rate environment to the extent that prepayments are slower than anticipated. The Company utilizes derivatives as economic hedges to offset changes in the ~~expected cash flows~~fair value of the MSRs resulting from the actual or anticipated changes in prepayments stemming from changing interest rate environments. There is also a ~~loan pool had decreased or increased since the acquisition date.~~

~~Accordingly, if there was a decrease in expected cash flows~~risk of valuation decline due to ~~an increase in estimated credit losses (as compared~~higher than expected default rates, which we do not believe can be effectively managed using derivatives. For further information regarding the derivative instruments utilized to ~~the estimates made at the respective acquisition dates), the decrease~~manage our MSR risks, see Note 15 - Derivative and Hedging Activities.

Changes in the ~~present~~fair value of ~~expected cash flows was recorded~~residential first mortgage MSRs were as ~~a provision for covered loan losses charged to earnings, and the allowance for covered loan losses was increased. A related credit tonon-interest~~ ~~income and an increase~~follows:


(in millions)	Year Ended December 31, 2023
Balance at beginning of period	$	1,033
Additions from loans sold with servicing retained	208
Reductions from sales	(51)
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1)	(80)
Changes in estimates of fair value due to interest rate risk (1) (2)	1
Fair value of MSRs at end of period	$	1,111

(1)Changes in ~~the LSA~~fair value are ~~recognized at the same time, and measured based~~included within net return on mortgage servicing rights on the ~~applicable loss sharing agreement percentage.~~

~~If there was an increase in expected cash flows due to a decrease in~~Consolidated Statements of Income and Comprehensive Income.

(2)Represents estimated ~~credit losses (as compared to~~MSR value change resulting primarily from market-driven changes which we manage through the ~~estimates made at the respective acquisition dates), the increase in the present value~~use of ~~expected cash flows was recorded as a recovery of the prior-period impairment charged to earnings, and the allowance for covered loan losses was reduced. A related debit tonon-interest~~ ~~income and a decrease in the LSA was recognized at the same time, and measured based on the applicable LSA percentage.~~

derivatives.

113

The following table summarizes ~~activity~~the hypothetical effect on the fair value of servicing rights using adverse changes of 10 percent and 20 percent to the weighted average of certain significant assumptions used in valuing these assets:


	December 31, 2023
				Fair Value
(dollars in millions)	Actual			10% adverse change		20% adverse change
Option adjusted spread	5.4		%	$	1,091	$	1,072
Constant prepayment rate	7.9		%	1,073		1,040
Weighted average cost to service per loan	$	69		$	1,100	$	1,090


	December 31, 2022
				Fair Value
(dollars in millions)	Actual			10% adverse change		20% adverse change
Option adjusted spread	5.9		%	$	1,012	$	992
Constant prepayment rate	7.9		%	1,000		970
Weighted average cost to service per loan	$	68		$	1,023	$	1,013

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. To isolate the effect of the specified change, the fair value shock analysis is consistent with the identified adverse change, while holding all other assumptions constant. In practice, a change in one assumption generally impacts other assumptions, which may either magnify or counteract the effect of the change. For further information on the fair value of MSRs, see Note 18 - Fair Value Measures.

Contractual servicing and subservicing fees, including late fees and other ancillary income are presented below. Contractual servicing fees are included within net return on mortgage servicing rights on the Consolidated Statements of Income and Comprehensive Income. Contractual subservicing fees including late fees and other ancillary income are included within loan administration income on the Consolidated Statements of Income and Comprehensive Income. Subservicing fee income is recorded for fees earned on subserviced loans, net of third-party subservicing costs.

The following table summarizes income and fees associated with owned MSRs:


(in millions)	Year Ended December 31, 2023		Month Ended December 31, 2022
Net return on mortgage servicing rights
Servicing fees, ancillary income and late fees (1)	$	227	$	20
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes and other	(80)		(8)
Changes in fair value due to interest rate risk	1		10
Gain on MSR derivatives (2)	(47)		(16)
Net transaction costs	2		—
Total return included in net return on mortgage servicing rights	$	103	$	6

(1)Servicing fees are recorded on an accrual basis. Ancillary income and late fees are recorded on a cash basis.

(2)Changes in the ~~allowance~~derivatives utilized as economic hedges to offset changes in fair value of the MSRs.

114

The following table summarizes income and fees associated with our mortgage loans subserviced for ~~losses~~others:


(in millions)	Year Ended December 31, 2023		Year Ended December 31, 2022
Loan administration income on mortgage loans subserviced
Servicing fees, ancillary income and late fees (1)	$	154	$	11
Charges on subserviced custodial balances (2)	(168)		(8)
Other servicing charges	(3)		—
Total (loss) income on mortgage loans subserviced, included in loan administration income	$	(17)	$	3

(1)Servicing fees are recorded on ~~covered~~an accrual basis. Ancillary income and late fees are recorded on a cash basis.

(2)Charges on subserviced custodial balances represent interest due to MSR owner.

We also earned approximately $95 million in service fee income for loans being serviced for the ~~years ended~~FDIC related to the Signature transaction.

Note 10 - Variable Interest Entities

We have no consolidated VIEs as of December 31, ~~2017~~2023 and ~~2016:~~

   December 31,
(in thousands)    2017    2016
Balance, beginning of period
   $ 23,701    $ 31,395
Recovery of losses on covered loans
   (23,701 )    (7,694 )




Balance, end of period
   $ —      $ 23,701

~~NOTE 7: DEPOSITS~~

December 31, 2022.

In connection with our non-qualified mortgage securitization activities, we have retained a five percent interest in the investment securities of certain trusts ("other MBS") and are contracted as the subservicer of the underlying loans, compensated based on market rates, which constitutes a continuing involvement in these trusts. Although we have a variable interest in these securitization trusts, we are not their primary beneficiary due to the relative size of our investment in comparison to the total amount of securities issued by the VIE and our inability to direct activities that most significantly impact the VIE’s economic performance. As a result, we have not consolidated the assets and liabilities of the VIE in our Consolidated Statements of Condition. The Bank’s maximum exposure to loss is limited to our five percent retained interest in the investment securities that had a fair value of $180 million as of December 31, 2023 as well as the standard representations and warranties made in conjunction with the loan transfers.

Note 11 - Deposits

The following table sets forth the weighted average interest rates for each type of deposit at December 31, ~~2017~~2023 and ~~2016:~~

   December 31,
   2017 2016
(dollars in thousands)    Amount    Percent
of Total Weighted
Average
Interest
Rate Amount    Percent
of Total Weighted
Average
Interest
Rate⁽¹⁾
Interest-bearing checking and money market accounts
   $ 12,936,301    44.45 % 0.23 % $ 13,395,080    46.37 % 0.55 %
Savings accounts
   5,210,001    17.90 0.52 5,280,374    18.28 0.46
Certificates of deposit
   8,643,646    29.70 1.31 7,577,170    26.23 1.12
Non-interest-bearing accounts
   2,312,215    7.95 —   2,635,279    9.12 —






Total deposits
   $ 29,102,163    100.00 % 0.58 % $ 28,887,903    100.00 % 0.63 %

2022:


	December 31,
	2023						2022
(dollars in millions)	Amount		Percent of Total		Weighted Average Interest Rate		Amount		Percent of Total		Weighted Average Interest Rate
Interest-bearing checking and money market accounts	$	30,700	37.66	%	3.51	%	$	22,511	38.34	%	2.66	%
Savings accounts	8,773		10.76	%	2.67	%	11,645		19.83	%	1.30	%
Certificates of deposit	21,554		26.44	%	4.42	%	12,510		21.30	%	2.04	%
Non-interest-bearing accounts	20,499		25.14	%	—	%	12,055		20.53	%	—	%
Total deposits	$	81,526	100.00	%	2.79	%	$	58,721	100.00	%	1.71	%

At ~~both~~ December 31, ~~2017~~2023 and ~~2016,~~2022, the aggregate amount of time deposit accounts (including certificates of deposit) that meet or exceed the insured limit was $7.9 billion and $3.7 billion, respectively.

At December 31, 2023 and 2022, the aggregate amount of deposits that had been reclassified as loan balances (i.e., overdrafts) was ~~$3.1 million.~~

$121 million and $4 million, respectively.

115

The scheduled maturities of certificates of deposit ~~(“CDs”)~~ at December 31, ~~2017~~2023 were as follows:

(in thousands)


1 year or less
   $ 5,897,172
More than 1 year through 2 years
   2,461,847
More than 2 years through 3 years
   209,389
More than 3 years through 4 years
   42,485
More than 4 years through 5 years
   21,907
Over 5 years
   10,846


Total CDs
   $ 8,643,646

~~The following table presents a summary of CDs in amounts of $100,000 or more by remaining term to maturity, at December 31, 2017:~~

   CDs of $100,000 or More Maturing Within
(in thousands)    3 Months
or Less    Over 3 to
6 Months    Over 6 to
12 Months    Over
12 Months    Total
Total
   $ 1,333,531    $ 1,495,368    $ 1,064,316    $ 1,595,643    $ 5,488,858


(in millions)
1 year or less	$	17,321
More than 1 year through 2 years	3,879
More than 2 years through 3 years	229
More than 3 years through 4 years	142
More than 4 years through 5 years	7
Over 5 years	3
Total CDs (1)	$	21,581

(1) Excludes PAA

Included in total deposits at both December 31, ~~2017~~2023 and ~~2016~~2022 were brokered deposits of ~~$4.0~~$9.5 billion and ~~$3.9~~$5.1 billion with weighted average interest rates of ~~1.37%~~3.72 percent and ~~0.62%~~.49 percent at the respective year-ends. Brokered money market accounts represented ~~$2.6~~$1.3 billion and ~~$2.5~~$2.8 billion ~~respectively,~~ of the December 31, ~~2017~~2023 and ~~2016~~2022 totals, and brokered interest-bearing checking accounts represented ~~$793.7 million~~$1.6 billion and ~~$1.4~~$1.0 billion, respectively. Brokered CDs represented ~~$567.8 million~~$6.6 billion and $1.3 billion of brokered deposits at December 31, ~~2017. There were no brokered CDs at December 31, 2016.~~

~~NOTE 8: BORROWED FUNDS~~

2023 and 2022, respectively.

Note 12 - Borrowed Funds

The following table summarizes the Company’s borrowed ~~funds at December 31, 2017 and 2016:~~

   December 31,
(in thousands)    2017    2016
Wholesale borrowings:

FHLB advances
   $ 12,104,500    $ 11,664,500
Repurchase agreements
   450,000    1,500,000
Federal funds purchased
   —      150,000




Total wholesale borrowings
   $ 12,554,500    $ 13,314,500
Junior subordinated debentures
   359,179    358,879




Total borrowed funds
   $ 12,913,679    $ 13,673,379

funds:


(in millions)	December 31, 2023		December 31, 2022
Wholesale borrowings:
FHLB advances	$	19,250	$	20,325
FRB term funding	1,000		—


Total wholesale borrowings	$	20,250	$	20,325
Junior subordinated debentures	579		575
Subordinated notes	438		432
Total borrowed funds	$	21,267	$	21,332

Accrued interest on borrowed funds is included in “Other liabilities” in the Consolidated Statements of Condition and amounted to ~~$19.3~~ $50 million and ~~$18.1~~$37 million, respectively, at December 31, ~~2017 and 2016.~~

2023, December 31, 2022.

FHLB Advances

The ~~following table presents an analysis of the~~ contractual maturities and the next call dates of FHLB advances outstanding at December 31, 2023 were as follows:


	Contractual Maturity			Earlier of Contractual Maturity or Next Call Date
(dollars in millions) Year	Amount		Weighted Average Interest Rate (1)	Amount		Weighted Average Interest Rate (1)

2024	7,350		4.57	9,100		4.37
2025	1,500		5.38	1,750		5.11
2026	2,500		5.37	2,500		5.37
2027	4,000		4.62	3,500		4.75
2028	2,400		5.17	2,400		5.17



2032	1,500		3.43	—		—
Total FHLB advances	$	19,250		$	19,250

(1)Does not included the ~~Company’s outstanding~~ effect interest rate swap agreements.

FHLB advances include both straight fixed-rate advances and advances under the FHLB convertible advance program, which gives the FHLB the option of either calling the advance after an initial lock-out period of up to five years and quarterly thereafter until maturity, or a one-time call at the initial call date.

116

At December 31, 2023 and 2022, respectively, the Bank had unused lines of available credit with the FHLB-NY of up to $8.4 billion and $11.3 billion. The Company did not have any overnight advances at December 31, ~~2017, none of which had callable features.~~

   Contractual Maturity
(dollars in thousands)
Year of Maturity
   Amount    Weighted Average
Interest Rate
2018
   $ 3,923,500    1.51
2019
   4,431,000    1.74
2020
   3,150,000    2.09
2021
   600,000    2.21




Total FHLB advances
   $ 12,104,500    1.78 %

~~The Company had no short-term FHLB advances~~2023 and $2.8 billion at December 31, ~~2017. At~~2022. During the year ended December 31, ~~2016, short-term~~2023, the average balance of overnight advances ~~totaled $300.0~~amounted to $624 million, with a weighted average interest rate of ~~0.81%.~~5.08 percent. During the twelve months ended at December 31, 2017 and 2016, the average balances of short-term FHLB advances were $3.3 million and $929.4 billion, with weighted average interest rates of 0.82% and 0.60%, respectively. In 2017 and 2016, the interest expense generated by average short-term FHLB advances was $27,000 and $5.5 million, respectively. During 2015, the average balance of short-term advances was $2.3 billion with a weighted average interest rate of 0.42%, generating interest expense of $9.8 million.

~~At December 31, 2017 and 2016, respectively, the Banks had combined unused lines of available credit with theFHLB-NY~~ ~~of up to $7.1 billion and $7.5 billion. There were no overnightFHLB-NY~~ ~~advances at December 31, 2017. At December 31, 2016, the Banks had $10.0 million outstandingFHLB-NY~~ ~~advances with a weighted average interest rate of 0.78%. During the twelve months~~year ended December 31, ~~2016,~~2022, the average balance of overnight advances amounted to ~~$426.5~~$318 million, with a weighted average interest rate of 0.59%, generating interest expense of $2.5 million. During 2015, the average balance of overnight advances was $572.7 million with a weighted average interest rate of 0.44%. The interest expense generated by average overnight advances was $2.5 million in 2015.

3.48 percent.

Total FHLB advances generated interest expense of ~~$186.0~~$564 million, ~~$172.0~~$251 million and ~~$230.6~~$233 million, in the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015,~~2021, respectively.

Federal Reserve Bank (FRB) Term Funding Program

At December 31, 2023, the Company had $1.0 billion in outstanding borrowings under the FRB Term Funding program. There were no such borrowings outstanding during the years ended 2022 or 2021.

Repurchase Agreements

The ~~following table presents an analysis of the contractual maturities of the Company’s~~Company had no outstanding repurchase agreements ~~accounted for~~ as ~~secured borrowings at~~of December 31, ~~2017. None of these repurchase agreements had callable features.~~

   Contractual Maturity
(dollars in thousands)
Year of Maturity
   Amount    Weighted Average
Interest Rate
2018
   $ 250,000    3.04
2019
   200,000    1.69




Total
   $ 450,000    2.44 %

~~The following table provides the contractual maturity~~2023 and weighted average interest rate of repurchase agreements, and the amortized cost and fair value (including accrued interest) of the securities collateralizing the repurchase agreements, at December 31, 2017:

      Mortgage-Related and
Other Securities    GSE Debentures and
U.S. Treasury
Obligations
(dollars in thousands)
Contractual Maturity
   Amount    Weighted Average
Interest Rate Amortized
Cost    Fair Value    Amortized
Cost    Fair Value
Greater than 90 days
   $ 450,000    2.44 % $ 216,076    $ 217,383    $ 248,065    $ 249,489

2022.

The Company had no short-term repurchase agreements outstanding at December 31, 2017 or 2016. During the year ended December 31, 2015, the Company had average short-term repurchase agreements outstanding of $197.3 million with a weighted average interest rate of 0.31%, generating interest expense of $614,000.

~~At December 31, 2017~~2023 and ~~2016, the~~2022.

There was no accrued interest on repurchase agreements amounted ~~to $760,000 and $1.2 million, respectively.~~at December 31, 2023. The interest expense on repurchase agreements was ~~$16.4 million, $23.3~~$14 million and ~~$99.9~~$18 million infor the years ended December 31, ~~2017, 2016,~~2022 and ~~2015,~~2021, respectively.

Federal Funds Purchased

There were no federal funds purchased outstanding at December 31, ~~2017. At~~2023 and December 31, ~~2016, the balance of federal funds purchased was $150.0 million with a weighted average interest rate of 0.75%.~~

2022.

In ~~2017~~2023 and ~~2016,~~2022, respectively, the average balances of federal funds purchased were ~~to $47.9~~$196 million and ~~$525.4~~$466 million, with weighted average interest rates of ~~0.87%~~5.01 percent and ~~0.51%. In 2015, the average balance of federal funds purchased amounted to $588.8 million with a weighted average interest rate of 0.26%.~~1.65 percent. The interest expense produced by federal funds purchased was ~~$418,000, $2.7~~$10 million, $8 million and ~~$1.5~~$0 million for the years ended December 31, ~~2017, 2016,~~2023, 2022 and ~~2015,~~2021, respectively.

Junior Subordinated Debentures

At December 31, ~~2017~~2023 and ~~2016,~~December 31, 2022, the Company had ~~$359.2~~$609 million and ~~$358.9~~$608 million, respectively, of outstanding junior subordinated deferrable interest debentures (“junior subordinated debentures”) held by statutory business trusts (the “Trusts”) that issued guaranteed capital ~~securities.~~

securities, excluding purchase accounting adjustments.

117

The ~~Trusts are accounted for as unconsolidated subsidiaries, in accordance with GAAP. The proceeds~~following table presents contractual terms of ~~each issuance were invested in a series of~~the 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 December 31, ~~2017:~~

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
   (dollars in thousands)
New York Community Capital Trust V (BONUSES^SMUnits)
   6.000 % $145,253    $ 138,902    Nov. 4, 2002    Nov. 1, 2051    Nov. 4, 2007 ⁽¹⁾
New York Community Capital Trust X
   3.188 123,712    120,000    Dec. 14, 2006    Dec. 15, 2036    Dec. 15, 2011 ⁽²⁾
PennFed Capital Trust III
   4.838 30,928    30,000    June 2, 2003    June 15, 2033    June 15, 2008 ⁽²⁾
New York Community Capital Trust XI
   3.345 59,286    57,500    April 16, 2007    June 30, 2037    June 30, 2012 ⁽²⁾





Total junior subordinated debentures
   $359,179    $ 346,402

~~(1)~~

~~Callable subject to certain conditions as described in the prospectus filed with the SEC on November 4, 2002.~~

~~(2)~~

~~Callable from this date forward.~~

2023:


Issuer	Interest Rate of Capital Securities and Debentures	Junior Subordinated Debentures Amount Outstanding (3)		Capital Securities Amount Outstanding		Date of Original Issue	Stated Maturity
		(dollars in millions)
New York Community Capital Trust V (BONUSES Units) (1)	6.00	$	147	$	141	Nov. 4, 2002	Nov. 1, 2051
New York Community Capital Trust X (2)	7.25	124		120		Dec. 14, 2006	Dec. 15, 2036
PennFed Capital Trust III (2)	8.90	31		30		June 2, 2003	June 15, 2033
New York Community Capital Trust XI (2)	7.24	59		58		April 16, 2007	June 30, 2037
Flagstar Statutory Trust II (2)	8.87	26		25		Dec. 26, 2002	Dec. 26, 2032
Flagstar Statutory Trust III (2)	8.91	26		25		Feb. 19, 2003	April 7, 2033
Flagstar Statutory Trust IV (2)	8.84	26		25		Mar. 19, 2003	Mar 19, 2033
Flagstar Statutory Trust V (2)	7.66	26		25		Dec 29, 2004	Jan. 7, 2035
Flagstar Statutory Trust VI (2)	7.66	26		25		Mar. 30, 2005	April 7, 2035
Flagstar Statutory Trust VII (2)	7.40	51		50		Mar. 29, 2005	June 15, 2035
Flagstar Statutory Trust VIII (2)	7.16	26		25		Sept. 22, 2005	Oct. 7, 2035
Flagstar Statutory Trust IX (2)	7.10	26		25		June 28, 2007	Sept. 15, 2037
Flagstar Statutory Trust X (2)	8.15	15		15		Aug. 31, 2007	Sept 15, 2037
Total junior subordinated debentures (3)		$	609	$	589

(1)Callable subject to certain conditions as described in the prospectus filed with the SEC on November 4, 2002.

(2)Callable at any time.

(3)Excludes Flagstar Acquisition fair value adjustments of $30 million.

The Bifurcated Option Note Unit SecuritiESSM (“BONUSES units”) included in the preceding table were issued by the Company on November 4, 2002 at a public offering price of $50.00 per share. Each of the 5,500,000 BONUSES units offered consisted of a capital security issued by New York Community Capital Trust V, a trust formed by the Company, and a warrant to purchase 2.4953 shares of the common stock of the Company (for a total of approximately ~~13.7~~14 million common shares) at an effective exercise price of $20.04 per share. Each capital security has a maturity of 49 years, with a coupon, or distribution rate, of ~~6.00%~~6.00 percent on the $50.00 per share liquidation amount. The warrants and capital securities werenon-callable for five years from the date of issuance and were not called by the Company when the five-year period passed on November 4, 2007.

The gross proceeds of the BONUSES units totaled ~~$275.0~~$275 million and were allocated between the capital security and the warrant comprising such units in proportion to their relative values at the time of issuance. The value assigned to the warrants, $92.4 million, was recorded as a component of additional~~“paid-in~~ “paid-in capital” in the Company’s Consolidated Statements of Condition. The value assigned to the capital security component was $182.6 million. The $92.4 million difference between the assigned value and the stated liquidation amount of the capital securities was treated as an original issue discount, and is being amortized to interest expense over the49-year life of the capital securities on a level-yield basis. At December 31, ~~2017,~~2023, this discount totaled ~~$66.4~~$64 million.

The other ~~three~~remaining trust preferred securities noted in the preceding table were formed for the purpose of issuing Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary Trusts Holding Solely Junior Subordinated Debentures (collectively, the “Capital Securities”). Dividends on the Capital Securities are payable either quarterly or semi-annually and are deferrable, at the Company’s option, for up to five years. As of December 31, ~~2017,~~2023, all dividends were current.

Interest expense on junior subordinated debentures was ~~$19.6~~$48 million, ~~$18.5~~$22 million, and ~~$17.6~~$18 million, respectively, for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015.~~

~~NOTE 9: FEDERAL, STATE, AND LOCAL TAXES~~

2021.

118

Subordinated Notes

At December 31, 2023 and December 31, 2022, the Company had a total of $438 million and $432 million subordinated notes outstanding; respectively, of fixed-to-floating rate subordinated notes outstanding:


Date of Original Issue	Stated Maturity	Interest Rate	Original Issue Amount
November 6, 2018	November 6, 2028 (1)	5.900%	$	300
October 28, 2020	November 1, 2030 (2)	4.125%	$	150

(1)From and including the date of original issuance to, but excluding November 6, 2023, the Notes will bear interest at an initial rate of 5.90 percent per annum payable semi-annually. Unless redeemed, from and including November 6, 2023 to but excluding the maturity date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month SOFR rate plus 304.16 basis points payable quarterly.

(2)From and including the date of original issuance, the Notes will bear interest at a fixed rate of 4.13 percent through October 31, 2025, and a variable rate tied to SOFR thereafter until maturity. The Company has the option to redeem all or a part of the Notes beginning on November 1, 2025, and on any subsequent interest payment date.

Note 13 - Federal, State, and Local Taxes

The following table summarizes the components of the Company’s net deferred tax asset (liability) at December 31, ~~2017~~2023 and ~~2016:~~

   December 31,
(in thousands)    2017    2016
Deferred Tax Assets:

Allowance for loan losses
   $ 46,239    $ 75,605
Compensation and related benefit obligations
   13,010    27,877
Acquisition accounting and fair value adjustments on securities (including OTTI)
   —      14,455
Acquisition accounting and fair value adjustments on loans (including the FDIC loss share receivable)
   —      7,496
Non-accrual interest
   818    4,791
Restructuring and retirement of borrowed funds
   1,105    6,957
Net operating loss carryforwards
   2,967    5,664
Other
   15,953    18,351




Gross deferred tax assets
   80,092    161,196
Valuation allowance
   —      —




Deferred tax asset after valuation allowance
   $ 80,092    $ 161,196




Deferred Tax Liabilities:

Amortizable intangibles
   $ (1,704 )    $ (1,655 )
Acquisition accounting and fair value adjustments on securities (including OTTI)
   (17,090 )    —
Undistributed earnings of subsidiaries
   (19,003 )    —
Mortgage servicing rights
   (1,794 )    (65,975 )
Premises and equipment
   (12,907 )    (19,310 )
Prepaid pension cost
   (24,324 )    (30,962 )
Leases
   (78,682 )    (65,214 )
Other
   (9,385 )    (10,691 )




Grossdeferred tax liabilities
   $ (164,889 )    $ (193,807 )




Net deferred tax asset (liability)
   $ (84,797 )    $ (32,611 )

2022:


	December 31,
(in millions)	2023		2022
Deferred Tax Assets:
Allowance for credit losses on loans and leases	$	253	$	102
Acquisition accounting and fair value adjustments on securities (including OTTI)	188		227
Acquisition accounting and fair value adjustments on loans	—		36
Capitalized loan costs			46
Right of Use Liability	32		—
Compensation and related benefit obligations	30		23
Capitalized research and development costs	—		10
Accrued Expenses	19		—
Net operating loss carryforwards	8		15
Other	22		18
Gross deferred tax assets	552		477
Valuation allowance	(5)		(5)
Net deferred tax asset after valuation allowance	$	547	$	472
Deferred Tax Liabilities:
Leases	$	(492)	$	(328)
Mortgage servicing rights	(79)		(105)
Premises and equipment	(44)		(18)
Prepaid pension cost	(35)		(29)
Fair value adjustments on loans	(210)		—
Amortizable intangibles	(127)		(71)
Acquisition accounting and fair value adjustments on deposits	(2)		(9)
Right of Use Asset	(32)		—
Deferred Loan fees	(13)		—
Acquisition accounting and fair value adjustments on debt	(9)		(10)
Other	(21)		(9)
Gross deferred tax liabilities	$	(1,064)	$	(579)
Net deferred tax liability	$	(517)	$	(107)

The deferred tax liability represents the anticipated federal, state, and local tax expenses or benefits that are expected to be realized in future years upon the utilization of the underlying tax attributes comprising said balances. ~~At December 31, 2017, the~~The net deferred tax liability is included in “Other liabilities” in the Consolidated Statements of ~~Condition. At~~ Condition at December 31, ~~2016,~~2023 and 2022.

119

The Company evaluates the ~~net federal deferred tax liability is included in “Other liabilities,” and the net state and local~~need for a deferred tax asset ~~is included in “Other assets” in the Consolidated Statements of Condition.~~

~~At December 31, 2017, the Company had~~valuation allowances based on a ~~New York City net operating loss carryforward in the amount of $44.9 million available through 2035. The net operating loss carryforward is available to offset future taxable income.~~

~~The Company has determined that all deductible temporary differences and net operating loss carryforwards are~~ more likely than not ~~to provide a benefit in reducing future federal, state, and local tax liabilities, as applicable.~~standard. The ~~Company has reached this determination~~Company’s evaluation is based on its history of reporting positive taxable income in all relevant tax jurisdictions, the length of time available to utilize the net operating loss carryforwards, and the recognition of taxable income in future periods from taxable temporary differences.

At December 31, 2023 and December 31, 2022, the Company had a state deferred tax asset for net operating losses (“NOL”) of $8 million and $15 million, respectively (net of federal tax impact) which includes total state net operating loss carryforwards of $185 million at December 31, 2023, that expire if unused in calendar years through 2033. In connection with our ongoing assessment of deferred taxes, we analyzed each state net operating loss separately, determined the amount of net operating loss available and estimated the amount which we expected to expire unused. Based on that assessment, we recorded a valuation allowance of $5 million at December 31, 2023 and 2022 to reduce the DTA to the amount which is more likely than not to be realized.

The following table summarizes the Company’s income tax expense ~~(benefit)~~ for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015:~~

   December 31,
(in thousands)    2017    2016    2015
Federal – current
   $ 153,587    $ 216,182    $ (53,273 )
State and local – current
   26,983    20,799    (295 )






Total current
   180,570    236,981    (53,568 )






Federal – deferred
   3,498    18,203    468
State and local – deferred
   17,946    26,543    (31,757 )






Total deferred
   21,444    44,746    (31,289 )






Income tax expense (benefit) reported in net income
   202,014    281,727    $ (84,857 )
Income tax expense (benefit) reported in stockholders’ equity related to:

Employee stock plans
   —      —      (2,486 )
Securitiesavailable-for-sale
   28,495    (2,687 )    131
Pension liability adjustments
   2,234    2,924    (1,161 )
Non-credit portion of OTTI losses
   13    49    44






Total income taxes
   $ 232,756    $ 282,013    $ (88,329 )

2021:


	December 31,
(in millions)	2023		2022		2021
Federal – current	$	156	$	147	$	188
State and local – current	59		32		35
Total current	215		179		223
Federal – deferred	(137)		(10)		(28)
State and local – deferred	(49)		7		15
Total deferred	(186)		(3)		(13)
Income tax expense reported in net income	29		176		210
Income tax expense reported in stockholders’ equity related to:
Securities available-for-sale	15		(223)		(42)
Pension liability adjustments	6		(6)		10
Cash flow hedge	(14)		23		9

Total income taxes	$	36	$	(30)	$	187

The following table presents a reconciliation of statutory federal income tax expense (benefit) to combined actual income tax expense (benefit) reported in net income for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015:~~

   December 31,
(in thousands)    2017    2016    2015
Statutory federal income tax at 35%
   $ 233,875    $ 271,995    $ (46,204 )
State and local income taxes, net of federal income tax effect⁽¹⁾
   29,204    30,772    (20,835 )
Effect of tax law changes
   (41,943 )    —      —
Effect of tax deductibility of ESOP
   (5,083 )    (6,452 )    (7,321 )
Non-taxable income and expense of BOLI
   (9,529 )    (10,808 )    (9,575 )
Federal tax credits
   (1,386 )    (1,607 )    (1,554 )
Adjustments relating to prior tax years
   144    (668 )    (248 )
Merger-related expenses
   —      (850 )    850
Other, net
   (3,268 )    (655 )    30






Total income tax expense (benefit)
   $ 202,014    $ 281,727    $ (84,857 )

~~(1)~~

Includes income tax (benefit) expense for the years ended December 31, 2015 of $(1.4) million for adjustments to deferred taxes necessitated by changes in tax laws of New York City that were enacted in April 2015.

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Reform Act”) was enacted. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things:

2021:

~~Lowering of the U.S. corporate tax rate from 35% to 21% effective January 1, 2018.~~

~~Repeal of corporate alternative minimum tax (AMT) for tax years beginning after December 31, 2017.~~


	December 31,
(in millions)	2023		2022		2021
Statutory federal income tax at 21%	$	(10)	$	174	$	169
State and local income taxes, net of federal income tax effect	8		31		40
Tax Exempt income	$	(6)	$	—	$	—
Non-taxable bargain gain	(447)		(33)		—
Non-deductible goodwill impairment	$	509	$	—	$	—
Non-deductible FDIC deposit insurance premiums	16		10		9
Effect of tax deductibility of deferred compensation	$	(3)	$	(3)	$	(3)
Non-taxable income and expense of BOLI	(9)		(7)		(6)
Non-deductible merger expenses	$	—	$	3	$	3
Non-deductible compensation expense	1		4		—
Federal tax credits	$	(31)	$	(1)	$	—
Adjustments relating to prior tax years	2		(1)		(1)
Other, net	(1)		(1)		(1)
Total income tax expense	$	29	$	176	$	210

~~Reduction of the corporate dividends received deduction of 80% and 70% to 65% and 50%, respectively, for tax years beginning after December 31, 2017.~~

~~Disallowance of the deduction for FDIC premiums for banks with total consolidated assets over $50 billion effective tax years beginning after December 31, 2017.~~

~~Allows for full expensing of qualified property acquired or placed in service between September 27, 2017 and January 1, 2023.~~

Limitation of net operating loss (NOL) carryforwards to 80% of taxable income for losses arising in tax years beginning after December 31, 2017 and prohibiting NOL carrybacks for losses arising in tax years beginning after December 31, 2017 and providing an unlimited life for NOL carryforwards.

U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Reform Act, the Company recorded a tax benefit of $42 million due to the net impact of remeasurement of tax attributes affected by the enactment of the Tax Reform Act.

In March 2014, tax legislation was enacted that changed the manner in which financial institutions and their affiliates are taxed in New York State. In April 2015, similar legislation was enacted for New York City. Most of the provisions were effective for fiscal years beginning in 2015. The most significant changes affecting the Company were as follows:

The tax rate applied to apportioned New York State taxable income was reduced from 7.1% to 6.5%, effective for fiscal years beginning in 2016. For financial institutions with total assets below $100 billion, the New York City statutory tax rate dropped from 9% to 8.85%.

~~Tax is now determined by measuring the apportioned income of the combined group of all domestic affiliates that participate in a unitary business relationship.~~

~~Taxable income is apportioned based on the location of the taxpayer’s customers, with special rules for income from certain financial transactions.~~

~~Thrift institutions that maintain a qualified residential loan portfolio are entitled to a specially computed modification that reduces taxable income.~~

~~New York City taxable income is reduced by net interest income earned on residential portfolio loans that are secured by rent-regulated units or situated inlow-income~~ ~~communities in New York City. This benefit is gradually phased out for financial institutions with total assets between $100 billion and $150 billion.~~

An alternative tax of 0.15% on apportioned capital is imposed to the extent that it exceeds the tax on apportioned income. The New York State alternative tax is capped at $5 million for a tax year and is gradually phased out over six years. The New York City alternative tax is capped at $10 million for a tax year and is not phased out.

~~A reduction to taxable income from the utilization of a net operating loss carryforward is determined without reference to, nor limitation based on, a federal tax deduction of such carryforward.~~

The Company invests in affordable housing projects through limited partnerships that generate federal Low Income Housing Tax Credits. The balances of these investments, which are included in “Other assets” in the Consolidated Statements of Condition, were ~~$46.2~~$372 million and ~~$42.4~~$304 million, respectively, at December 31, ~~2017~~2023 and ~~2016,~~2022, and included commitments of ~~$23.9~~$210 million and ~~$21.9~~$183 million that are expected to be funded over the next ~~four~~5 years. The Company elected to apply the proportional amortization method to these investments. Recognized in the determination of income tax (benefit) expense from operations for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015~~2021 were ~~$4.5~~$34 million ~~$4.0~~, $11 million, and ~~$3.2~~$9 million, respectively,

120

of affordable housing tax credits and other tax benefits, and an offsetting ~~$3.1~~$30 million, ~~$3.0~~$10 million, and ~~$2.4~~$9 million, respectively, for the amortization of the related investments. No impairment losses were recognized in relation to these investments for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015.~~

2021.

GAAP prescribes a recognition threshold and measurement attribute for use in connection with the obligation of a company to recognize, measure, present, and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31, ~~2017,~~2023 and 2022, the Company had ~~$33.7~~$42 million and $40 million of unrecognized gross tax ~~benefits.~~benefits, respectively. Gross tax benefits do not reflect the federal tax effect associated with state tax amounts. The total amount of net unrecognized tax benefits at December 31, ~~2017~~2023 and 2022 that would have affected the effective tax rate, if recognized, was ~~$26.6 million.~~

$34 million and $32 million, respectively.

Interest and penalties (if any) related to the underpayment of income taxes are classified as a component of income tax expense in the Consolidated Statements of ~~Operations~~Income and Comprehensive ~~Income (Loss).~~Income. During the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015,~~2021, the Company recognized income tax expense attributed to interest and penalties of ~~$1.8~~$8 million ~~$1.2~~, $4 million, and ~~$1.1~~$4 million, respectively. Accrued interest and penalties on tax liabilities were ~~$8.9~~$34 million and ~~$6.9~~$26 million, respectively, at December 31, ~~2017~~2023 and ~~2016.~~

2022.

The following table summarizes changes in the liability for unrecognized gross tax benefits for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015:~~

   December 31,
(in thousands)    2017    2016    2015
Uncertain tax positions at beginning of year
   $ 33,487    $ 30,456    $ 24,779
Additions for tax positions relating to current-year operations
   4,332    1,304    3,827
Additions for tax positions relating to prior tax years
   1,398    1,997    2,935
Subtractions for tax positions relating to prior tax years
   (5,101 )    (270 )    (963 )
Reductions in balance due to settlements
   (435 )    —      (122 )






Uncertain tax positions at end of year
   $ 33,681    $ 33,487    $ 30,456

2021:


	December 31,
(in millions)	2023		2022		2021
Uncertain tax positions at beginning of year	$	40	$	39	$	38
Additions for tax positions relating to current-year operations	1		1		2
Additions for tax positions relating to prior tax years	2		—		1
Subtractions for tax positions relating to prior tax years	(1)		—		(2)
Uncertain tax positions at end of year	$	42	$	40	$	39

The Company and its subsidiaries have filed tax returns in many states. The following are the more significant tax filings that are open for examination:

•Federal tax filings for tax years ~~2014~~2019 through the present;

•New York State tax filings for tax years 2010 through the present;

•New York City tax filings for tax years 2011 through the present; and

•New Jersey tax filings for tax years ~~2013~~2018 through the present.

In addition to other state audits, the Company is currently under examination by the following taxing jurisdictions of significance to the Company:

•Federal 2019-2020

•New York State for the tax years 2010 through ~~2014;~~2016; and

•New York City for the tax years 2011 and ~~2012.~~2014.

It is reasonably possible that there will be developments within the next twelve months that would necessitate an adjustment to the balance of unrecognized tax benefits, including decreases of up to ~~$20~~$21 million due to completion of tax authorities’ exams and the expiration of statutes of limitations.

~~As a savings institution, the Community~~

The Bank is subject to a special federal tax provision regarding its frozen tax bad debt reserve. At December 31, ~~2017,~~2023, the ~~Community~~ Bank’s federal tax bad debt base-year reserve was ~~$61.5~~$62 million, with a related federal deferred tax liability of ~~$12.9~~ $13 million, which has not been recognized since the ~~Community~~ Bank does not expect that this reserve will become taxable in the foreseeable future. Events that would result in taxation of this reserve include redemptions of the ~~Community~~ Bank’s stock or certain excess distributions by the ~~Community~~ Bank to the Company.

~~NOTE 10: COMMITMENTS AND CONTINGENCIES~~

~~Pledged Assets~~

~~The Company pledges securities to serve as collateral for its repurchase agreements, among other purposes.~~

121

Note 14 - Stock-Related Benefits Plans

Stock Based Compensation

At December 31, 2017, the Company had pledged available for sale mortgage-related securities and other securities with carrying values of $917.2 million and $346.0 million, respectively. At December 31, 2016, the Company had pledged mortgage-related securities and other securities held to maturity with carrying values of $1.6 billion and $346.7 million, respectively. In addition, the Company had $30.1 billion and $29.4 billion of loans pledged to the~~FHLB-NY~~ ~~to serve as collateral for its wholesale borrowings at the respective year-ends.~~

~~Loan Commitments and Letters of Credit~~

At December 31, 2017 and 2016, the Company had commitments to originate loans, including unused lines of credit, of $1.9 billion and $2.1 billion, respectively. The majority of the outstanding loan commitments at those dates were expected to close within 90 days. In addition, the Company had commitments to originate letters of credit totaling $339.4 million and $324.3 million at December 31, 2017 and 2016.

~~The following table summarizes the Company’soff-balance~~ ~~sheet commitments to originate loans and letters of credit at December 31, 2017:~~

(in thousands)
Mortgage Loan Commitments:

Multi-family and commercial real estate
   $ 377,782
One-to-four family
   3,819
Acquisition, development, and construction
   239,504

Total mortgage loan commitments
   $ 621,105
Other loan commitments
   1,314,170


Total loan commitments
   $ 1,935,275
Commercial, performancestand-by, and financialstand-by letters of credit
   339,403


Total commitments
   $ 2,274,678

~~Lease Commitments~~

~~At December 31, 2017, the Company was obligated under variousnon-cancelable~~ operating lease and license agreements with renewal options on properties used primarily for branch operations. The Company currently expects to renew such agreements upon their expiration in the normal course of business. The agreements contain periodic escalation clauses that provide for increases in the annual rents, commencing at various times during the lives of the agreements, which are primarily based on increases in real estate taxes and~~cost-of-living~~ ~~indices. The remaining projected minimum annual rental commitments under these agreements, exclusive of taxes and other charges, are summarized as follows:~~

(in thousands)
2018
   $ 29,786
2019
   26,425
2020
   20,211
2021
   16,523
2022 and thereafter
   66,555


Total minimum future rentals
   $ 159,500

The rental expense under these leases, which is included in “Occupancy and equipment expense” in the Consolidated Statements of Operations and Comprehensive Income (Loss), amounted to $33.2 million, $32.6 million, and $32.8 million, respectively, in the years ended December 31, 2017, 2016, and 2015. Rental income on Company-owned properties, netted in occupancy and equipment expense, was approximately $9.5 million, $7.1 million, and $3.7 million in the corresponding periods. There was no minimum future rental income under~~non-cancelablesub-lease~~ ~~agreements at December 31, 2017.~~

~~Financial Guarantees~~

The Company provides guarantees and indemnifications to its customers to enable them to complete a variety of business transactions and to enhance their credit standings. These guarantees are recorded at their respective fair values in “Other liabilities” in the Consolidated Statements of Condition. The Company deems the fair value of the guarantees to equal the consideration received.

~~The following table summarizes the Company’s guarantees and indemnifications at December 31, 2017:~~

(in thousands)    Expires
Within One
Year    Expires
After One
Year    Total
Outstanding
Amount    Maximum Potential
Amount of
Future Payments
Financialstand-by letters of credit
   $ 19,996    $ 55,202    $ 75,198    $ 267,174
Performancestand-by letters of credit
   5,786    —      5,786    5,775
Commercial letters of credit
   3,063    209    3,272    66,454








Total letters of credit
   $ 28,845    $ 55,411    $ 84,256    $ 339,403

The maximum potential amount of future payments represents the notional amounts that could be funded under the guarantees and indemnifications if there were a total default by the guaranteed parties or if indemnification provisions were triggered, as applicable, without consideration of possible recoveries under recourse provisions or from collateral held or pledged.

~~The Company collects fees upon the issuance of commercial andstand-by~~ ~~letters of credit. Fees forstand-by~~ letters of credit fees are initially recorded by the Company as a liability, and are recognized as income periodically through the respective expiration dates. Fees for commercial letters of credit are collected and recognized as income at the time that they are issued and upon payment of each set of documents presented. In addition, the Company requires adequate collateral, typically in the form of cash, real property, and/or personal guarantees upon its issuance of Irrevocable~~Stand-by~~ Letters of Credit. Commercial letters of credit are primarily secured by the goods being purchased in the underlying transaction and are also personally guaranteed by the owner(s) of the applicant company.

~~At December 31, 2017, the Company had commitments to purchase GNMA securities of $29.4 million.~~

~~Legal Proceedings~~

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

~~NOTE 11: INTANGIBLE ASSETS~~

~~Goodwill~~

Goodwill is presumed to have an indefinite useful life and is tested for impairment, rather than amortized, at the reporting unit level, at least once a year. There were no changes in the carrying amount of goodwill during the years ended December 31, 2017 or 2016. Goodwill totaled $2.4 billion at each of these dates.

~~Core Deposit Intangibles~~

CDI is a measure of the value of checking and savings deposits acquired in a business combination. As previously noted, the Company has recognized CDI stemming from its various business combinations with other banks and thrifts. The fair value of the CDI stemming from any given business combination is based on the present value of the expected cost savings attributable to the core deposit funding acquired, relative to an alternative source of funding. CDI is amortized over the estimated useful lives of the existing deposit relationships acquired, but does not exceed 10 years. As of December 31, 2017, all CDI was fully amortized. For the year ended December 31, 2017, amortization expenses related to CDI totaled $208,000. The Company evaluates such identifiable intangibles for impairment when an indication of impairment exists. No impairment charges were required to be recorded in 2017, 2016, or 2015. If an impairment loss is determined to exist in the future, the loss will be recorded in~~“Non-interest~~ ~~expense” in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the period in which such impairment is identified.~~

~~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.

The Company completed the sale of its mortgage banking business in the third quarter of 2017, and consequently sold substantially all of its mortgage servicing assets. Accordingly, the value of the MSR asset declined to $6.1 million at December 31, 2017, compared to $234.0 million at December 31, 2016. These balances consisted of two classes of MSRs for which the Company separately manages the economic risk: residential MSRs and participation MSRs (i.e., MSRs on loans sold through participations).

Residential MSRs are carried at fair value, and at December 31, 2017 reflected only loans sold through the FHLB’s Mortgage Partnership Finance Program, with changes in fair value recorded as a component of~~non-interest~~ income in each period. MSRs do not trade in an active open market with readily observable prices. Accordingly, the Company utilizes a third-party valuation specialist to determine the fair value of its MSRs. This specialist determines fair value based on the present value of estimated future net servicing income cash flows, and incorporates assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The specialist and the Company evaluate, and periodically adjust, as necessary, these underlying inputs and assumptions to reflect market conditions and changes in the assumptions that a market participant would consider in valuing MSRs.

The collective amount of contractually specified servicing fees, late fees, and ancillary fees, which is recorded as “Mortgage banking income” in the Consolidated Statements of Operations and Comprehensive Income (Loss), was $1.2 million and $1.3 million, and $941,000 for the years ended December 31, 2017, 2016, and 2015, respectively.

Participation MSRs are initially carried at fair value and are subsequently amortized and carried at the lower of their fair value or amortized amount. The amortization is recorded in proportion to, and over the period of, estimated net servicing income, with impairment of those servicing assets evaluated through an assessment of their fair value via a discounted cash-flow method. The net carrying value is compared to the discounted estimated future net cash flows to determine whether adjustments should be made to carrying values or amortization schedules. Impairment of participation MSRs is recognized through a valuation allowance and a charge to current-period earnings if it is considered to be temporary, or through a direct write-down of the asset and a charge to current-period earnings if it is considered to be other than temporary. The predominant risk characteristics of the underlying loans that are used to stratify the participation MSRs for measurement purposes generally include the (1) loan origination date, (2) loan rate, (3) loan type and size, (4) loan maturity date, and (5) geographic location. Changes in the carrying value of participation MSRs due to amortization or declines in fair value (i.e., impairment), if any, are reported in “Other income” in the period during which such changes occur. In the years ended December 31, 2017 and 2016, there was no impairment related to the Company’s participation MSRs.

~~The following table presents the changes in the balances of residential MSRs and participation MSRs for the years ended December 31, 2017 and 2016:~~

   For the Years Ended December 31,
   2017    2016
(in thousands)    Residential    Participation    Residential    Participation
Carrying value, beginning of year
   $ 228,099    $ 5,862    $ 243,389    $ 4,345
Additions
   18,054    710    45,588    3,774
Sales
   (208,827 )    —      —      —
Increase (decrease) in fair value:

Due to changes in interest rates
   (2,096 )    —      3,341    —
Due to model assumption changes⁽¹⁾
   —      —      (13,088 )    —
Due to loan payoffs
   (22,610 )    —      (33,425 )    —
Due to passage of time and other changes
   (9,891 )    —      (17,706 )    —
Amortization
   —      (3,201 )    —      (2,257 )








Carrying value, end of period
   $ 2,729    $ 3,371    $ 228,099    $ 5,862

~~(1)~~

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

~~speeds.~~

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

   December 31,
   2017 2016
Expected weighted average life
   87 months 82 months
Constant prepayment speed
   9.81 % 8.70 %
Discount rate
   12.00 10.05
Primary mortgage rate to refinance
   4.02 4.11
Cost to service (per loan per year):

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

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

Reflecting the sale of the mortgage banking business the total unpaid principal balance of loans serviced for others declined to $3.7 billion at December 31, 2017 from $25.1 billion at December 31, 2016.

~~NOTE 12: EMPLOYEE BENEFITS~~

~~Retirement Plan~~

On April 1, 2002, three separate pension plans for employees of the former Queens County Savings Bank, the former CFS Bank, and the former Richmond County Savings Bank were merged and renamed the “New York Community Bancorp Retirement Plan” (the “Retirement Plan”). The pension plan for employees of the former Roslyn Savings Bank was merged into the Retirement Plan on September 30, 2004. The pension plan for employees of the former Atlantic Bank of New York was merged into the Retirement Plan on March 31, 2008.

The Retirement Plan covers substantially all employees who had attained minimum age, service, and employment status requirements prior to the date when the individual plans were frozen by the banks of origin. Once frozen, the individual plans ceased to accrue additional benefits, service, and compensation factors, and became closed to employees who would otherwise have met eligibility requirements after the “freeze” date.

~~The following table sets forth certain information regarding the Retirement Plan as of the dates indicated:~~

   December 31,
(in thousands)    2017    2016
Change in Benefit Obligation:

Benefit obligation at beginning of year
   $ 146,429    $ 146,618
Interest cost
   5,616    5,881
Actuarial loss
   8,267    611
Annuity payments
   (6,485 )    (6,473 )
Settlements
   (2,416 )    (208 )




Benefit obligation at end of year
   $ 151,411    $ 146,429




Change in Plan Assets:

Fair value of assets at beginning of year
   $ 220,740    $ 211,888
Actual return on plan assets
   22,297    15,533
Contributions
   —      —
Annuity payments
   (6,485 )    (6,473 )
Settlements
   (2,416 )    (208 )




Fair value of assets at end of year
   $ 234,136    $ 220,740




Funded status (included in “Other assets”)
   $ 82,725    $ 74,311




Changes recognized in other comprehensive income (loss) for the year ended December 31:

Amortization of prior service cost
   $ —      $ —
Amortization of actuarial loss
   (8,209 )    (9,050 )
Net actuarial loss arising during the year
   2,260    706




Total recognized in other comprehensive loss for the year(pre-tax)
   $ (5,949 )    $ (8,344 )




Accumulated other comprehensive loss(pre-tax) not yet recognized in net periodic benefit cost at December 31:

Prior service cost
   $ —      $ —
Actuarial loss, net
   73,591    79,541




Total accumulated other comprehensive loss(pre-tax)
   $ 73,591    $ 79,541

In 2018, an estimated $7.2 million of unrecognized net actuarial loss for the Retirement Plan will be amortized from AOCL into net periodic benefit cost. The comparable amount recognized as net periodic benefit cost in 2017 was $8.2 million. No prior service cost will be amortized in 2018 and none was amortized in 2017. The discount rates used to determine the benefit obligation at December 31, 2017 and 2016 were 3.4% and 3.9%, respectively.

The discount rate reflects rates at which the benefit obligation could be effectively settled. To determine this rate, the Company considers rates of return on high-quality fixed-income investments that are currently available and are expected to be available during the period until the pension benefits are paid. The expected future payments are discounted based on a portfolio of high-quality rated bonds (above-median AA curve) for which the Company relies on the Citigroup Pension Liability Index that is published as of the measurement date.

~~The components of net periodic pension credit were as follows for the years indicated:~~

   Years Ended December 31,
(in thousands)    2017    2016    2015
Components of net periodic pension credit:

Interest cost
   $ 5,616    $ 5,881    $ 6,063
Expected return on plan assets
   (16,290 )    (15,627 )    (17,559 )
Amortization of net actuarial loss
   8,209    9,050    8,208






Net periodic pension credit
   $ (2,465 )    $ (696 )    $ (3,288 )

~~The following table indicates the weighted average assumptions used in determining the net periodic benefit cost for the years indicated:~~

   Years Ended
December 31,
   2017 2016 2015
Discount rate
   3.9 % 4.1 % 4.0 %
Expected rate of return on plan assets
   7.5 7.5 8.0

As of December 31, 2017, Retirement Plan assets were invested in two diversified investment portfolios of the Pentegra Retirement Trust (the “Trust”) (formerly known as “RSI Retirement Trust”), a private placement investment fund.

The Company (in this context, the “Plan Sponsor”) chooses the specific asset allocation for the Retirement Plan within the parameters set forth in the Trust’s Investment Policy Statement. The long-term investment objectives are to maintain the Retirement Plan’s assets at a level that will sufficiently cover the Plan Sponsor’s long-term obligations, and to generate a return on those assets that will meet or exceed the rate at which the Plan Sponsor’s long-term obligations will grow.

~~The Retirement Plan allocates its assets in accordance with the following targets:~~

To hold 55% of its assets in equity securities via investment in the Trust’s Long-Term Growth—Equity (“LTGE”) Portfolio, a diversified portfolio that invests in a number of actively and passively managed equity mutual funds and collective trusts in order to diversify within U.S. and~~non-U.S.~~ ~~equity markets;~~

To hold 44% of its assets in intermediate-term investment-grade bonds via investment in the Trust’s Long-Term Growth—Fixed Income (“LTGFI”) Portfolio, a diversified portfolio that invests in a number of fixed-income mutual funds and collective investment trusts, primarily including intermediate-term bond funds with a focus on U.S. investment grade securities and opportunistic allocations to below-investment grade and~~non-U.S.~~ ~~investments; and~~

~~To hold 1% of its assets in a cash-equivalent portfolio for liquidity purposes.~~

~~In addition, the Retirement Plan holds Company shares, the value of which is approximately equal to 11% of the assets that are held by the Trust.~~

The LTGE and LTGFI portfolios are designed to provide long-term growth of equity and fixed-income assets with the objective of achieving an investment return in excess of the cost of funding the active life, deferred vesting, and all~~30-year~~ ~~term and longer obligations of retired lives in the Trust. Risk and volatility are further managed in accordance with the distinct investment objectives of the Trust’s respective portfolios.~~

~~The following table presents information about the fair value measurements of the investments held by the Retirement Plan as of December 31, 2017:~~

(in thousands)    Total    Quoted Prices in
Active Markets for
Identical Assets
(Level 1)    Significant Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)
Equity:

Large-cap value⁽¹⁾
   $  20,959    $      —      $  20,959    $—
Large-cap growth⁽²⁾
   21,825    —      21,825    —
Large-cap core⁽³⁾
   14,512    —      14,512    —
Mid-cap value⁽⁴⁾
   4,668    —      4,668    —
Mid-cap growth⁽⁵⁾
   4,422    —      4,422    —
Mid-cap core⁽⁶⁾
   4,744    —      4,744    —
Small-cap value⁽⁷⁾
   3,530    —      3,530    —
Small-cap growth⁽⁸⁾
   3,353    —      3,353    —
Small-cap core⁽⁹⁾
   6,908    —      6,908    —
International equity⁽¹⁰⁾
   28,113    —      28,113    —
Fixed Income Funds:
            —
Fixed Income – U.S. Core⁽¹¹⁾
   68,928    —      68,928    —
Intermediate duration⁽¹²⁾
   23,046    —      23,046    —
Equity Securities:
            —
Company common stock
   24,865    24,865    —      —
Cash Equivalents:
            —
Money market^*
   4,263    1,063    3,200    —








   $234,136    $25,928    $208,208    $—

*	~~Includes cash equivalent investments in equity and fixed income strategies.~~

~~(1)~~

~~This category containslarge-cap~~ ~~stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.~~

~~(2)~~

~~This category seeks long-term capital appreciation by investing primarily in large growth companies based in the U.S.~~

~~(3)~~

~~This fund tracks the performance of the S&P 500 Index by purchasing the securities represented in the Index in approximately the same weightings as the Index.~~

~~(4)~~

~~This category employs an indexing investment approach designed to track the performance of the CRSP USMid-Cap~~ ~~Value Index.~~

~~(5)~~

~~This category employs an indexing investment approach designed to track the performance of the CRSP USMid-Cap~~ ~~Growth Index.~~

~~(6)~~

~~This category seeks to track the performance of the S&P Midcap 400 Index.~~

~~(7)~~

~~This category consists of a selection of investments based on the Russell 2000 Value Index.~~

~~(8)~~

~~This category consists of a selection of investments based on the Russell 2000 Growth Index.~~

~~(9)~~

This category consists of an index fund designed to track the Russell 2000, along with a fund investing in readily marketable securities of U.S. companies with market capitalizations within the smallest 10% of the market universe, or smaller than the 1000th largest US company.

~~(10)~~

~~This category has investments in medium to largenon-US~~ companies, including high quality, durable growth companies and companies based in countries with stable economic and political systems. A portion of this category consists of an index fund designed to track the MSC ACWI~~ex-US~~ ~~Net Dividend Return Index.~~

~~(11)~~

This category currently includes equal investments in three mutual funds, two of which usually hold at least 80% of fund assets in investment grade fixed income securities, seeking to outperform the Barclays US Aggregate Bond Index while maintaining a similar duration to that index. The third fund targets investments of 50% or more in mortgage-backed securities guaranteed by the US government and its agencies.

~~(12)~~

This category consists of a mutual fund which invest in a diversified portfolio of high-quality bonds and other fixed income securities, including U.S. Government obligations, mortgage-related and asset backed securities, corporate and municipal bonds, CMOs, and other securities mostly rated A or better.

~~Current Asset Allocation~~

~~The asset allocations for the Retirement Plan as of December 31, 2017 and 2016 were as follows:~~

   At December 31,
   2017 2016
Equity securities
   59 % 56 %
Debt securities
   39 43
Cash equivalents
   2 1


Total
   100 % 100 %

~~Determination of Long-Term Rate of Return~~

The long-term rate of return on Retirement Plan assets assumption was based on historical returns earned by equities and fixed income securities, and adjusted to reflect expectations of future returns as applied to the Retirement Plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn long-term rates of return in the ranges of 6% to 9% and 3% to 5%, respectively, with an assumed long-term inflation rate of 2.5% reflected within these ranges. When these overall return expectations are applied to the Retirement Plan’s target allocations, the result is an expected rate of return of 5% to 7%.

~~Expected Contributions~~

~~The Company does not expect to contribute to the Retirement Plan in 2018.~~

~~Expected Future Annuity Payments~~

~~The following annuity payments, which reflect expected future service, as appropriate, are expected to be paid by the Retirement Plan during the years indicated:~~

(in thousands)
2018
   $ 7,153
2019
   7,301
2020
   7,371
2021
   7,513
2022
   7,565
2023 and thereafter
   39,930


Total
   $ 76,833

~~Qualified Savings Plan~~

The Company maintains a defined contribution qualified savings plan in which all full-time employees are able to participate after three months of service and having attained age 21. No matching contributions are made by the Company to this plan.

~~Post-Retirement Health and Welfare Benefits~~

The Company offers certain post-retirement benefits, including medical, dental, and life insurance (the “Health & Welfare Plan”) to retired employees, depending on age and years of service at the time of retirement. The costs of such benefits are accrued during the years that an employee renders the necessary service.

The Health & Welfare Plan is an unfunded plan and is not expected to hold assets for investment at any time. Any contributions made to the Health & Welfare Plan are used to immediately pay plan premiums and claims as they come due.

~~The following table sets forth certain information regarding the Health & Welfare Plan as of the dates indicated:~~

   December 31,
(in thousands)    2017    2016
Change in benefit obligation:

Benefit obligation at beginning of year
   $ 16,294    $ 17,280
Service cost
   —      5
Interest cost
   577    639
Actuarial loss (gain)
   517    (673 )
Premiums and claims paid
   (1,039 )    (957 )




Benefit obligation at end of year
   $ 16,349    $ 16,294




Change in plan assets:

Fair value of assets at beginning of year
   $ —      $ —
Employer contribution
   1,039    957
Premiums and claims paid
   (1,039 )    (957 )




Fair value of assets at end of year
   $ —      $ —




Funded status (included in “Other liabilities”)
   $ (16,349 )    $ (16,294 )




Changes recognized in other comprehensive (loss) income for the year ended December 31:

Amortization of prior service cost
   $ 249    $ 249
Amortization of actuarial gain
   (274 )    (326 )
Net actuarial loss (gain) arising during the year
   517    (673 )




Total recognized in other comprehensive loss for the year(pre-tax)
   $ 492    $ (750 )




Accumulated other comprehensive loss(pre-tax) not yet recognized in net periodic benefit cost at December 31:

Prior service cost
   $ (1,034 )    $ (1,283 )
Actuarial loss, net
   5,380    5,137




Total accumulated other comprehensive loss(pre-tax)
   $ 4,346    $ 3,854

~~The discount rates used in the preceding table were 3.3% and 3.7%, respectively, at December 31, 2017 and 2016.~~

~~The estimated net actuarial loss and the prior service liability that will be amortized from AOCL into net periodic benefit cost in 2018 are $309,000 and $249,000, respectively.~~

~~The following table presents the components of net periodic benefit cost for the years indicated:~~

   Years Ended December 31,
(in thousands)    2017    2016    2015
Components of Net Periodic Benefit Cost:

Service cost
   $ —      $ 5    $ 4
Interest cost
   577    639    700
Amortization of past-service liability
   (249 )    (249 )    (249 )
Amortization of net actuarial loss
   274    326    383






Net periodic benefit cost
   $ 602    $ 721    $ 838

~~The following table presents the weighted average assumptions used in determining the net periodic benefit cost for the years indicated:~~

   Years Ended December 31,
   2017 2016 2015
Discount rate
   3.7 % 3.8 % 4.0 %
Current medical trend rate
   6.5 6.5 6.5
Ultimate trend rate
   5.0 5.0 5.0
Year when ultimate trend rate will be reached
   2023 2022 2018

Had the assumed medical trend rate at December 31, 2017 increased by 1% for each future year, the accumulated post-retirement benefit obligation at that date would have increased by $736,000, and the aggregate of the benefits earned and the interest components of 2017 net post-retirement benefit cost would each have increased by $28,000. Had the assumed medical trend rate decreased by 1% for each future year, the accumulated post-retirement benefit obligation at December 31, 2017 would have declined by $623,000, and the aggregate of the benefits earned and the interest components of 2017 net post-retirement benefit cost would each have declined by $24,000.

~~Expected Contributions~~

~~The Company expects to contribute $1.3 million to the Health & Welfare Plan to pay premiums and claims in the fiscal year ending December 31, 2018.~~

~~Expected Future Payments for Premiums and Claims~~

~~The following amounts are currently expected to be paid for premiums and claims during the years indicated under the Health & Welfare Plan:~~

(in thousands)
2018
   $ 1,328
2019
   1,288
2020
   1,252
2021
   1,213
2022
   1,167
2023 and thereafter
   5,171


Total
   $ 11,419

~~NOTE 13: STOCK-RELATED BENEFIT PLANS~~

~~New York Community Bank Employee Stock Ownership Plan~~

All full-time employees who have attained 21 years of age and have completed twelve consecutive months of credited service are eligible to participate in the Employee Stock Ownership Plan (“ESOP”), with benefits vesting on a~~six-year~~ basis, starting with 20% in the second year of employment and continuing in 20% increments in each successive year. Benefits are payable upon death, retirement, disability, or separation from service, and may be paid in stock. However, in the event of a change in control, as defined in the ESOP, any unvested portion of benefits shall vest immediately.

In 2017, 2016, and 2015, the Company allocated 695,675, 617,031, and 552,829 shares, respectively, to participants in the ESOP. For the years ended December 31, 2017, 2016, and 2015, the Company recorded ESOP-related compensation expense of $9.2 million, $9.8 million, and $9.2 million, respectively.

~~Supplemental Executive Retirement Plan~~

~~In 1993, the Community Bank established a Supplemental Executive Retirement Plan (“SERP”), which provided additional unfunded,non-qualified~~ benefits to certain participants in the ESOP in the form of Company common stock. The SERP was frozen in 1999. Trust-held assets, consisting entirely of Company common stock, amounted to 1,819,985 and 1,729,319 shares, respectively, at December 31, 2017 and 2016, including shares purchased through dividend reinvestment. The cost of these shares is reflected as a reduction of~~paid-in~~ ~~capital in excess of par in the Consolidated Statements of Condition.~~

~~Stock Incentive and Stock Option Plans~~

~~At December 31, 2017,~~2023, the Company had a total of ~~7,135,071~~16,143,893 shares available for grants as ~~options,~~ restricted stock, options, or other forms of related rights under the ~~New York Community~~2020 Incentive Plan, which includes the remaining shares available, converted at the merger conversion factor from the legacy Flagstar Bancorp, Inc. ~~2012~~2016 Stock ~~Incentive Plan ( “2012 Stock Incentive Plan”), which was approved by the Company’s shareholders at its Annual Meeting on June 7, 2012.~~Plan. The Company granted ~~2,956,249~~9,995,495 shares of restricted stock, with an average fair value of ~~$15.16~~$10.24 per share on the date of grant, during the ~~twelve months~~year ended December 31, 2017. During 2016 and 2015, the Company granted 2,805,652 shares and 2,352,641 shares, respectively, of restricted stock, which had average fair values of $15.21 and $15.83 per share on the respective grant dates. 2023.

The shares of restricted stock that were granted during the ~~years~~year ended December 31, ~~2017, 2016,~~2023 and ~~2015~~2022, vest over a ~~period of~~one to five ~~years.~~years period. Compensation and benefits expense related to the ~~restricted stock~~RSAs grants is recognized on a straight-line basis over the vesting period and totaled ~~$36.0~~$44 million, ~~$32.7~~$25 million and ~~$30.2~~$27 million ~~respectively,~~ for the years ended December 31, ~~2017, 2016,~~2023, 2022 and ~~2015.~~

2021.

The following table provides a summary of activity with regard to restricted stock awards ~~in the year ended December 31, 2017:~~

   For the Year Ended December 31, 2017
   Number of Shares    Weighted Average
Grant Date
Fair Value
Unvested at beginning of year
   6,930,306    15.37
Granted
   2,956,249    15.16
Vested
   (3,867,828 )    15.19
Cancelled
   (444,560 )    15.55



Unvested at end of year
   5,574,167    15.38

(RSAs):


	Year Ended December 31, 2023
	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at beginning of year	9,576,602	$	10.92
Granted	9,995,495	10.24
Vested	(3,105,582)	10.99
Forfeited	(1,292,574)	10.62
Unvested at end of period	15,173,941	$	10.49

As of December 31, ~~2017,~~2023, unrecognized compensation cost relating to unvested restricted stock totaled ~~$78.7~~$119 million. This amount will be recognized over a remaining weighted average period of ~~3.1~~2.7 years.

~~NOTE 14: FAIR VALUE MEASUREMENTS~~

The following table provides a summary of activity with regard to Performance-Based Restricted Stock Units ("PSUs") in the year ended December 31, 2023:


	Number of Shares	Weighted Average Grant Date Fair Value		Performance Period	Expected Vesting Date
Outstanding at beginning of year	794,984	$	10.73
Granted	566,656	8.95
Released	(143,352)	10.34
Forfeited	—	—
Outstanding at end of period	1,218,288	9.95		January 1, 2022 - December 31, 2025	March 31, 2023 - 2026

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 $4 million, $3 million and $5 million for the for the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023, unrecognized compensation cost relating to unvested restricted stock totaled $5 million. This amount will be recognized over a remaining weighted average period of 1.53 years. As of December 31, 2023, the Company believes it is probable that the performance conditions will be met.

Forfeitures of RSAs and PSUs are accounted for as they occur.

Note 15 - Derivative and Hedging Activities

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

122

Derivative financial instruments are recorded at fair value in other assets and other liabilities on the Consolidated Statements of Condition. The Company's policy is to present our derivative assets and derivative liabilities on the Consolidated Statement of Condition on a gross basis, even when provisions allowing for set-off are in place. However, for derivative contracts cleared through certain central clearing parties, variation margin payments are recognized as settlements. We are exposed to non-performance risk by the counterparties to our various derivative financial instruments. A majority of our derivatives are centrally cleared through a Central Counterparty Clearing House or consist of residential mortgage interest rate lock commitments further limiting our exposure to non-performance risk. We believe that the non-performance risk inherent in our remaining derivative contracts is minimal based on credit standards and the collateral provisions of the derivative agreements.

Derivatives not designated as hedging instruments. The Company maintains a derivative portfolio of interest rate swaps, foreign currency swaps, futures, swaptions and forward commitments used to manage exposure to changes in interest rates and MSR asset values and to meet the needs of customers. The Company also enters into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Market risk on interest rate lock commitments and mortgage LHFS is managed using corresponding forward sale commitments and US Treasury futures. Changes in the fair value of derivatives not designated as hedging instruments are recognized on the Consolidated Statements of Income and Comprehensive Income.

Derivatives designated as hedging instruments. The Company has designated certain interest rate swaps as cash flow hedges on overnight SOFR-based variable interest payments on federal home loan bank advances. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income on the Consolidated Statements of Condition and reclassified into interest expense in the same period in which the hedged transaction is recognized in earnings. At December 31, 2023, the Company had $10 million (net-of-tax) of unrealized gains on derivatives classified as cash flow hedges recorded in accumulated other comprehensive loss. The Company had $52 million (net-of-tax) of unrealized gains on derivatives classified as cash flow hedges recorded in accumulated other comprehensive loss at December 31, 2022.

Derivatives that are designated in hedging relationships are assessed for effectiveness using regression analysis at inception and qualitatively thereafter, unless regression analysis is deemed necessary. All designated hedge relationships were, and are expected to be, highly effective as of December 31, 2023.

Fair Value of Hedges of Interest Rate Risk

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

The Company has interest rate swaps with a notional amounts of $2.0 billion to hedge certain multi-family loans using the portfolio layer method. For the year ended December 31, 2023, the floating rate received related to the net settlement of these interest rate swaps was greater than the fixed rate payments. As such, interest income from loans and leases in the accompanying Consolidated Statements of Income and Comprehensive Income was increased by $24 million for the year ended December 31, 2023 and decreased by $6 million for the year ended December 31, 2022, respectively.

The fair value basis adjustment on our hedged real estate loans is included in loans and leases held for investment on our Consolidated Statements of Condition. The carrying amount of our hedged loans was $6.1 billion at December 31, 2023, of which unrealized gains of $9 million were due to the fair value hedge relationship. We have designated $2.0 billion of this portfolio of loans in a hedging relationship as of December 31, 2023.

123

The following tables set forth information regarding the Company’s derivative financial instruments:


	December 31, 2023
			Fair Value
(in millions)	Notional Amount		Other Assets		Other Liabilities		Expiration Dates
Derivatives designated as cash flow hedging instruments:
Interest rate swaps on FHLB advances	$	5,500	$	—	$	2	2025-2028
Total	5,500		—		2
Derivatives designated as fair value hedging instruments:
Interest rate swaps on multi-family loans held for investment	$	2,000	$	—	$	1	2025-2027
Derivatives not designated as hedging instruments:
Assets

Mortgage-backed securities forwards	$	1,012	$	11	$	—	2024
Rate lock commitments	1,490		12		—		2024
Interest rate swaps and swaptions	5,431		115		—		2024-2041

Total	$	7,933	$	138	$	—
Liabilities
Futures	$	2,235	$	—	$	1	2024
Mortgage-backed securities forwards	1,048		$	—	32		2024
Rate lock commitments	77		—		3		2024
Interest rate swaps and swaptions	2,720		—		59		2024-2054

Total derivatives not designated as hedging instruments	$	6,080	$	—	$	95


	December 31, 2022
			Fair Value
(in millions)	Notional Amount		Other Assets		Other Liabilities		Expiration Date
Derivatives designated as cash flow hedging instruments:
Interest rate swaps	$	3,750	$	5	$	—	2023-2027
Total	3,750		5		—
Derivatives not designated as hedging instruments:
Assets
Futures	$	1,205	$	2	$	—	2023
Mortgage-backed securities forwards	1,065		36		—		2023
Rate lock commitments	1,539		9		—		2023
Interest rate swaps and swaptions	7,594		182		—		2023-2032
Total	$	11,403	$	229	$	—
Liabilities
Mortgage-backed securities forwards	$	739	$	—	$	61	2023
Rate lock commitments	527		—		10		2023
Interest rate swaps and swaptions	2,445		—		65		2023-2053
Total derivatives not designated as hedging instruments	$	3,711	$	—	$	136

124

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


	December 31, 2023
							Gross Amounts Not Offset in the Statements of Condition
(in millions)	Gross Amount		Gross Amounts Netted in the Statements of Condition		Net Amount Presented in the Statements of Condition		Financial Instruments		Cash Collateral Pledged (Received)
Derivatives designated hedging instruments:
Interest rate swaps on FHLB advances	$	2	$	—	$	2	$	—	$	75
Interest rate swaps on multi-family loans held for investment(1)	$	1	$	—	$	1	$	—	$	27
Derivatives not designated as hedging instruments:
Assets
Mortgage-backed securities forwards	$	11	$	—	$	11	$	—	$	(1)
Interest rate swaptions	115		—		115		—		(34)

Total derivative assets	$	126	$	—	$	126	$	—	$	(35)
Liabilities
Futures	$	1	$	—	$	1	$	—	$	3
Mortgage-backed securities forwards	32		—		32		—		57
Interest rate swaps (1)	59		—		59		—		42
Total derivative liabilities	$	92	$	—	$	92	$	—	$	102

(1)Variation margin pledged to, or received from, a Central Counterparty Clearing House to cover the prior days fair value of open positions is considered settlement of the derivative position for accounting purposes.

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


	December 31, 2022
							Gross Amounts Not Offset in the Statements of Condition
(in millions)	Gross Amount		Gross Amounts Netted in the Statements of Condition		Net Amount Presented in the Statements of Condition		Financial Instruments		Cash Collateral Pledged (Received)
Derivatives designated hedging instruments:
Interest rate swaps on FHLB advances	$	5	$	—	$	5	$	4	$	27
Derivatives not designated as hedging instruments:
Assets
Mortgage-backed securities forwards	$	36	$	—	$	36	$	—	$	(9)
Interest rate swaptions	182		—		182		—		(36)
Futures	2				2				1
Total derivative assets	$	220	$	—	$	220	$	—	$	(44)
Liabilities
Mortgage-backed securities forwards	$	61	$	—	$	61	$	—	$	54
Interest rate swaps (1)	65		—		65		—		29
Total derivative liabilities	$	126	$	—	$	126	$	—	$	83

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of amounts subject to variability caused by changes in interest rates from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Changes in the fair value of derivatives designated and that qualify as cash flow hedges are initially recorded in other comprehensive income and are subsequently reclassified into earnings in the period that the hedged transaction affects earnings.

125

Interest rate swaps with notional amounts totaling $5.5 billion and $3.8 billion as of December 31, 2023 and December 31, 2022, were designated as cash flow hedges of certain FHLB borrowings.

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


	For the Years Ended December 31,
(in millions)	2023		2022		2021
Amount of gain (loss) recognized in AOCL	$	9	$	88	$	8
Amount of reclassified from AOCL to interest expense	$	(65)	$	(4)	$	25

Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate borrowings. During the next twelve months, additional interest expense reduction of $98 million is expected to be reclassified out of AOCL.

Derivatives not Designated as Hedging Instruments

The following table presents the net gain (loss) recognized in income on derivatives not designated as hedging instruments, net of the impact of offsetting positions:


		For the Years Ended December 31,
(dollars in millions)		2023		2022
Derivatives not designated as hedging instruments	Location of Gain (Loss)
Futures	Net return on mortgage servicing rights	$	1	$	(1)
Interest rate swaps and swaptions	Net return on mortgage servicing rights	(34)		(11)
Mortgage-backed securities forwards	Net return on mortgage servicing rights	(15)		(4)
Rate lock commitments and US Treasury futures	Net gain on loan sales	2		28
Forward commitments	Other noninterest income	—		(1)
Interest rate swaps (1)	Other non-interest income	(1)		—

Total derivative (loss) gain		$	(47)	$	11

(1) Includes customer-initiated commercial interest rate swaps.

Note 16 - Intangible Assets

Goodwill

We record goodwill in our consolidated statements of condition in connection with certain of our business combinations. Goodwill, which is tested at least annually for impairment, refers to the difference between the purchase price and the fair value of an acquired company’s assets, net of the liabilities assumed. As of December 31, 2023, the Company identified a triggering event and applied a market approach using the end of day stock price. We evaluated those conditions known and knowable by the company and how a market participant would view the control premium as confirmed by the subsequent confirming market evidence. This adjusted market capitalization was then compared to the carrying value to determine the extent of the shortfall which was calculated to be in excess of the goodwill balance. The Company’s assessment concluded that goodwill from historical transactions (2007 and prior) was fully impaired as of December 31, 2023. As a result, the Company recorded an impairment charge of the entire goodwill balance of $2.4 billion.

Goodwill and related changes in the carrying amount during the year ended December 31, 2023 are as follows:


(in millions)	Gross Carrying Amount
Balance at December 31, 2022	$	2,426
Impairment	(2,426)
Balance at December 31, 2023	$	—

126

Finite-lived Intangible Assets

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

At December 31, 2023, intangible assets consisted of the following:


	December 31, 2023						December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Core deposit intangible	$	700	$	(113)	$	587	$	250	$	(4)	$	246
Other intangible assets	56		(18)		38		42		(1)		41
Total other intangible assets	$	756	$	(131)	$	625	$	292	$	(5)	$	287

As of December 31, 2023 the weighted average amortization period for core deposit intangible and other intangible assets is 10 years and 5.1 years, respectively.

The estimated amortization expense of CDI and other intangible assets for the next five years is as follows:


(in millions)	Amortization Expense
2024	$	132
2025	107
2026	94
2027	81
2028	68
Total	$	482

Note 17 - Capital

The quantitative measures established to ensure capital adequacy require that banks maintain minimum amounts and ratios of leverage capital to average assets and of common equity tier 1 capital, tier 1 capital, and total capital to risk-weighted assets (as such measures are defined in the regulations). At December 31, 2023, our capital measures continued to exceed the minimum federal requirements for a bank holding company and for a bank. The following tables 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:

The following table presents the actual capital amounts and ratios for the Company:


	Risk-Based Capital
December 31, 2023	Common Equity Tier 1				Tier 1				Total				Leverage Capital
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital	$	8,009	9.05	%	$	8,512	9.62	%	$	10,415	11.77	%	$	8,512	7.75	%
Minimum for capital adequacy purposes	3,983		4.50		5,310		6.00		7,081		8.00		4,392		4.00
Excess	$	4,026	4.55	%	$	3,202	3.62	%	$	3,334	3.77	%	$	4,120	3.75	%
December 31, 2022
Total capital	$	6,335	9.06	%	$	6,838	9.78	%	$	8,154	11.66	%	$	6,838	9.70	%
Minimum for capital adequacy purposes	3,146		4.50		4,195		6.00		5,593		8.00		2,819		4.00
Excess	$	3,189	4.56	%	$	2,643	3.78	%	$	2,561	3.66	%	$	4,019	5.70	%

127

The following table presents the actual capital amounts and ratios for the Bank:


	Risk-Based Capital
December 31, 2023	Common Equity Tier 1				Tier 1				Total				Leverage Capital
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital	$	9,305	10.52	%	$	9,305	10.52	%	$	10,271	11.61	%	$	9,305	8.48	%
Minimum for capital adequacy purposes	3,980		4.50		5,307		6.00		7,076		8.00		4,389		4.00
Excess	$	5,325	6.02	%	$	3,998	4.52	%	$	3,195	3.61	%	$	4,916	4.48	%
December 31, 2022
Total capital	$	7,653	10.96	%	$	7,653	10.96	%	$	7,982	11.43	%	$	7,653	10.87	%
Minimum for capital adequacy purposes	3,142		4.50		4,189		6.00		5,585		8.00		2,817		4.00
Excess	$	4,511	6.46	%	$	3,464	4.96	%	$	2,397	3.43	%	$	4,836	6.87	%

Preferred Stock

On March 17, 2017, the Company issued 20,600,000 depositary shares, each representing a 1/40th interest in a share of the Company’s Fixed-to-Floating Rate Series A Noncumulative Perpetual Preferred Stock, par value $0.01 per share, with a liquidation preference of $1.00 per share (equivalent to $25 per depositary share). Dividends will accrue on the depositary shares at a fixed rate equal to 6.375 percent per annum until March 17, 2027, and a floating rate equal to Three-month LIBOR plus 382.1 basis points per annum beginning on March 17, 2027. Dividends will be payable in arrears on March 17, June 17, September 17, and December 17 of each year, which commenced on June 17, 2017.

Treasury Stock Repurchases

On October 23, 2018, the Board of Directors approved the repurchase of up to $300 million of the Company’s outstanding common stock. As of December 31, 2023, the Company has repurchased a total of 30 million shares at an average price of $9.61 or an aggregate purchase of $286 million. The Company had no repurchases during 2023. During the year ended December 31, 2022, the Company repurchased 871,710 shares, at a cost of $8 million.

Note 18 - Fair Value Measures

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.

•

128

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 as of December 31, ~~2017~~2023 and ~~2016,~~December 31, 2022, and that were included in the Company’s Consolidated Statements of Condition at those dates:

   Fair Value Measurements at December 31, 2017
(in thousands)    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)    Netting
Adjustments⁽¹⁾    Total
Fair Value
Assets:

Mortgage-Related Securities Available for Sale:

GSE certificates
   $ —      $ 2,068,842    $ —      $ —      $ 2,068,842
GES CMOs
      549,904          549,904










Total mortgage-related securities
   $ —      $ 2,618,746    $ —      $ —      $ 2,618,746










Other Securities Available for Sale:

U. S. Treasury Obligations
   $ 199,898    $ —      $ —      $ —      $ 199,898
GSE debentures
   —      473,258    —      —      473,258
Corporate bonds
   —      90,775    —      —      90,775

Municipal bonds
   —      70,120    —      —      70,120
Capital trust notes
   —      46,096    —      —      46,096
Preferred stock
   15,434    —      —      —      15,434
Mutual funds and common stock
   —      17,100    —      —      17,100










Total other securities
   $ 215,332    $ 697,349    $ —      $ —      $ 912,681










Total securities available for sale
   $ 215,332    $ 3,316,095    $ —      $ —      $ 3,531,427










Other Assets:

Loans held for sale
   $ —      $ 35,258    $ —      $ —      $ 35,258
Mortgage servicing rights
   —      —      2,729    —      2,729

~~The Company had no liabilities that were measured at fair value on a recurring basis at December 31, 2017.~~

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

Mortgage-Related Securities Available for Sale:

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




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




Other Securities Available for Sale:

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




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




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




Other Assets:

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

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

~~(1)~~

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

~~(2)~~

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


	December 31, 2023
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Netting Adjustments		Total Fair Value
Assets:
Mortgage-related Debt Securities Available for Sale:
GSE certificates	$	—		$	1,221	$	—	$	—	$	1,221
GSE CMOs	—			5,162		—		—		5,162
Private Label CMOs	—			148		32		—		180
Total mortgage-related debt securities	$	—		$	6,531	$	32	$	—	$	6,563
Other Debt Securities Available for Sale:
U. S. Treasury obligations	$	198		$	—	$	—	$	—	$	198
GSE debentures	—			1,609		—		—		1,609
Asset-backed securities	—			302		—		—		302
Municipal bonds	—			6		—		—		6
Corporate bonds	—			343		—		—		343
Foreign notes	—			34		—		—		34
Capital trust notes	—			90		—		—		90
Total other debt securities	$	198		$	2,384	$	—	$	—	$	2,582
Total debt securities available for sale	$	198		$	8,915	$	32	$	—	$	9,145
Equity securities:
Mutual funds and common stock	—			14		—		—		14
Total equity securities	—			14		—		—		14
Total securities	$	198		$	8,929	$	32	$	—	$	9,159
Loans held-for-sale
Residential first mortgage loans	$	—		$	770	$	—	$	—	$	770
Acquisition, development, and construction	—			123		—		—		123
Commercial and industrial loans	—		—	9		—		—		9
Derivative assets
Interest rate swaps and swaptions	—			115		—		—		115
Futures	—			—		—		—		—
Rate lock commitments (fallout-adjusted)	—			—		12		—		12
Mortgage-backed securities forwards	—			11		—		—		11
Mortgage servicing rights	—			—		1,111		—		1,111
Total assets at fair value	$	198		$	9,957	$	1,155	$	—	$	11,310
Derivative liabilities
Mortgage-backed securities forwards	—			32		—		—		32
Futures	—			1		—		—		1
Interest rate swaps and swaptions	—			59		—		—		59
Rate lock commitments (fallout-adjusted)	—			—		3		—		3
Total liabilities at fair value	$	—		$	92	$	3	$	—	$	95

129


	December 31, 2022
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Netting Adjustments		Total Fair Value
Assets:
Mortgage-related Debt Securities Available for Sale:
GSE certificates	$	—	$	1,297	$	—	$	—	$	1,297
GSE CMOs	—		3,301		—		—		3,301
Private Label CMOs	—		191		—		—		191
Total mortgage-related debt securities	$	—	$	4,789	$	—	$	—	$	4,789
Other Debt Securities Available for Sale:
U. S. Treasury obligations	$	1,487	$	—	$	—	$	—	$	1,487
GSE debentures	—		1,398		—		—		1,398
Asset-backed securities	—		361		—		—		361
Municipal bonds	—		30		—		—		30
Corporate bonds	—		885		—		—		885
Foreign notes	—		20		—		—		20
Capital trust notes	—		90		—		—		90
Total other debt securities	$	1,487	$	2,784	$	—	$	—	$	4,271
Total debt securities available for sale	$	1,487	$	7,573	$	—	$	—	$	9,060
Equity securities:
Mutual funds and common stock	—		14		—		—		14
Total equity securities	—		14		—		—		14
Total securities	$	1,487	$	7,587	$	—	$	—	$	9,074
Loans held-for-sale
Residential first mortgage loans	$	—	$	1,115	$	—	$	—	$	1,115
Derivative assets
Interest rate swaps and swaptions	—		182		—		—		182
Futures	—		2		—		—		2
Rate lock commitments (fallout-adjusted)	—		—		9		—		9
Mortgage-backed securities forwards	—		36		—		—		36
Mortgage servicing rights	—		—		1,033		—		1,033
Total assets at fair value	$	1,487	$	8,922	$	1,042	$	—	$	11,451
Derivative liabilities
Mortgage-backed securities forwards	—		61		—		—		61
Interest rate swaps and swaptions	—		65		—		—		65
Rate lock commitments (fallout-adjusted)	—		—		10		—		10
Total liabilities at fair value	$	—	$	126	$	10	$	—	$	136

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.

130

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 December 31, 2017. Prior to the sale of the mortgage banking business, management believed that the mortgage banking business operated on a short-term cycle. Therefore, in order to reflect the most relevant valuations for the key components of this business, and to reduce timing differences in amounts recognized in earnings, the Company has elected to record loans held for sale at fair value to match the recognition of IRLCs, MSRs, and derivatives, all of which are recorded at fair value in earnings. Fair value was based on independent quoted market prices of mortgage-backed securities comprised of loans with similar features to those of the Company’s loans held for sale, where available, and adjusted as necessary for such items as servicing value, guaranty fee premiums, and credit spread adjustments.

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

   December 31, 2017    December 31, 2016
(in thousands)    Fair Value
Carrying
Amount    Aggregate
Unpaid
Principal    Fair Value
Carrying Amount
Less Aggregate
Unpaid Principal    Fair Value
Carrying
Amount    Aggregate
Unpaid
Principal    Fair Value
Carrying Amount
Less Aggregate
Unpaid Principal
Loans held for sale
   $ 35,258    $ 34,563    $ 695    $ 409,152    $ 408,928    $ 224

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

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

   (Loss) Gain Included in
Mortgage Banking Income
from Changes in Fair Value⁽¹⁾
   For the Twelve Months Ended December 31,
(in thousands)    2017    2016    2015
Loans held for sale
   $ 899    $ (5,616 )    $ (472 )
Mortgage servicing rights
   (20,076 )    (27,453 )    (5,610 )






Total (loss) gain
   $ (19,177 )    $ (33,069 )    $ (6,082 )

~~(1)~~

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

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

~~Changes in Level 3~~

Fair Value Measurements

Using Significant Unobservable Inputs

The following tables ~~present, for the twelve months ended December 31, 2017 and 2016,~~include a ~~roll-forward~~roll forward of the ~~balance sheet~~Consolidated Statements of Condition amounts (including ~~changes~~the change in fair value) for financial instruments classified inby us within Level 3 of the valuation hierarchy:

(in thousands)    Fair Value
January 1,
2017

Total Realized/Unrealized
Gains/(Losses) Recorded in
   Issuances    Settlements Transfers
to/(from)
Level 3    Fair Value
at Dec. 31,
2017    Change in
Unrealized
Gains/(Losses)
Related to
Instruments Held at
December 31, 2017
      Income/
(Loss) Comprehensive
(Loss) Income
Mortgage servicing rights
   $ 228,099    $ (20,076 ) $ —      $ 18,054    $ (223,348 ) $ —      $ 2,729    $ (222 )
Interest rate lock commitments
   982    (982 ) —      —      —   —      —      —
(in thousands)    Fair Value
January 1,
2016

Total Realized/Unrealized
Gains/(Losses) Recorded in
   Issuances    Settlements Transfers
to/(from)
Level 3    Fair Value
at Dec. 31,
2016    Change in
Unrealized
Gains/(Losses)
Related to
Instruments Held at
December 31, 2016
      Income/
(Loss) Comprehensive
(Loss) Income
Mortgage servicing rights
   $ 243,389    $ (27,453 ) $ —      $ 45,588    $ (33,425 ) $ —      $ 228,099    $ (27,453 )
Interest rate lock commitments
   2,526    (1,544 ) —      —      —   —      982    982

~~The Company’s policy is~~


(dollars in millions)	Balance at Beginning of Year		Total Gains / (Losses) Recorded in Earnings (1)		Purchases / Originations		Sales		Settlement		Transfers In (Out)		Balance at End of Year
Year Ended December 31, 2023
Assets
Mortgage servicing rights (1)	$	1,033	$	(79)	$	208	$	(51)	—		—		$	1,111
Private Label CMOs	—		—		—		—		—		32		32
Rate lock commitments (net) (1)(2)	(1)		(49)		104		—		—		(45)		9
Totals	$	1,032	$	(128)	$	312	$	(51)	$	—	$	(13)	$	1,152

(1)We utilized swaptions, futures, forward agency and loan sales and interest rate swaps to ~~recognize transfers in~~manage the risk associated with mortgage servicing rights and rate lock commitments. Gains and losses for individual lines do not reflect the effect of our risk management activities related to such Level 3 instruments.

(2)Rate lock commitments are reported on a fallout-adjusted basis. Transfers out of ~~Levels 1, 2, and~~Level 3 asrepresent the settlement value of the ~~end of~~commitments that are transferred to LHFS, which are classified as Level 2 assets.

The following tables present the ~~reporting period. There were no transfers in or out of Levels 1, 2, or 3 during the twelve months ended December 31, 2017 or 2016.~~

~~For~~quantitative information about recurring Level 3 ~~assets and liabilities measured at~~ fair value ~~on a recurring basis~~financial instruments and the fair value measurements as of December 31, ~~2017, the significant unobservable~~2023:

Fair Value

Valuation Technique

Unobservable Input (1)

Range
(Weighted Average)

(dollars in millions)

Assets

Mortgage servicing rights

$1,111

Discounted cash flows

Option adjusted spread

5.0% - 21.7% 5.4%

Constant prepayment rate

—% - 10.0% 7.9%

Weighted average cost to service per loan

$65.0 - $90.0 $69.0

Private Label CMOs

$32

Discounted cash flows

Constant default rates

0.10% - 0.30%

Weighted average life

8.2 - 11.8

Rate lock commitments (net)

Consensus pricing

Origination pull-through rate

64.30%

(1)Unobservable inputs ~~used in the~~were weighted by their relative fair value ~~measurements were as follows:~~

(dollars in thousands)    Fair Value at
Dec. 31, 2017    Valuation Technique
Significant Unobservable Inputs
   Significant
Unobservable
Input Value
Mortgage servicing rights
   $ 2,729    Discounted Cash Flow    Weighted Average Constant Prepayment Rate⁽¹⁾    9.81 %
         Weighted Average Discount Rate    12.00

~~(1)~~

~~Represents annualized loan repayment rate assumptions.~~

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

instruments.

131

Assets Measured at Fair Value on aNon-Recurring Basis

Certain assets are measured at fair value on anon-recurring basis. Such instruments are subject to fair value adjustments under certain circumstances (e.g., when there is evidence of impairment). The following tables present assets ~~and liabilities~~ that were measured at fair value on anon-recurring basis as of December 31, ~~2017~~2023 and ~~2016,~~December 31, 2022, and that were included in the Company’s Consolidated Statements of Condition at those dates:

   Fair Value Measurements at December 31, 2017 Using
(in thousands)    Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)    Significant Other
Observable Inputs
(Level 2)    Significant
Unobservable Inputs
(Level 3)    Total Fair
Value
Certain impaired loans⁽¹⁾
   $ —      $ —      $ 45,837    $ 45,837
Other assets⁽²⁾
   —      —      4,357    4,357








Total
   $ —      $ —      $ 50,194    $ 50,194

~~(1)~~

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

~~(2)~~

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

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








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

~~(1)~~

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

~~(2)~~

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


	Fair Value Measurements at December 31, 2023 Using
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain impaired loans (1)	$	—	$	—	$	197	$	197
Other assets(2)	—		—		50		50
Total	$	—	$	—	$	247	$	247

(1)Represents the fair value of impaired loans, based on the value of the collateral.

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


	Fair Value Measurements at December 31, 2022 Using
(in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Certain impaired loans (1)	$	—	$	—	$	28	$	28
Other assets(2)	—		—		41		41
Total	$	—	$	—	$	69	$	69

(1)Represents the fair value of impaired loans, based on the value of the collateral.

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.

132

The following tables summarize the carrying values, estimated fair values, and fair value measurement levels of financial instruments that were not carried at fair value on the Company’s Consolidated Statements of Condition at December 31, ~~2017~~2023 and ~~2016:~~

   December 31, 2017
         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
   $ 2,528,169    $ 2,528,169    $ 2,528,169 $ —   $ —
FHLB stock⁽¹⁾
   603,819    603,819    —   603,819 —
Loans, net
   38,265,183    38,254,538    —   —   38,254,538
Financial Liabilities:

Deposits
   $ 29,102,163    $ 29,044,852    $ 20,458,517 ⁽²⁾ $ 8,586,335 ⁽³⁾ $ —
Borrowed funds
   12,913,679    12,780,653    —   12,780,653 —

~~(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.~~

   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 —

~~(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.~~

December 31, 2022:


	December 31, 2023
					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 and cash equivalents	$	11,475	$	11,475	$	11,475		$	—		$	—
FHLB and FRB stock (1)	$	1,392	$	1,392	$	—		$	1,392		$	—
Loans and leases held for investment, net	$	83,627	$	79,333	$	—		$	—		$	79,333
Financial Liabilities:
Deposits	$	81,526	$	81,247	$	59,972	(2)	$	21,275	(3)	$	—
Borrowed funds	$	21,267	$	21,082	$	—		$	21,082		$	—

(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, 2022
					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 and cash equivalents	$	2,032	$	2,032	$	2,032		$	—		$	—
FHLB and FRB stock (1)	$	1,267	$	1,267	$	—		$	1,267		$	—
Loans and leases held for investment, net	$	68,608	$	65,673	$	—		$	—		$	65,673
Financial Liabilities:
Deposits	$	58,721	$	58,479	$	46,211	(2)	$	12,268	(3)	$	—
Borrowed funds	$	21,332	$	21,231	$	—		$	21,231		—

(1)Carrying value and estimated fair value are at cost.

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

(3)Certificates of deposit.

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

Cash and Cash Equivalents

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

Securities

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

Federal Home Loan Bank Stock

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

133

Loans

and leases

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. The estimated fair values ofnon-performing~~ ~~mortgage and other~~quality on an exit price basis. For those loans ~~are based on recent collateral appraisals.~~

The methods used to estimate the fair values of 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~~used a quoted market ~~with readily observable prices. Accordingly, the Company bases~~price for each individual loan.

MSRs

The significant unobservable inputs used in the fair value measurement of ~~its~~the MSRs onare option adjusted spreads, prepayment rates and cost to service. Significant increases (decreases) in all three assumptions in isolation result in a ~~valuation performed by a third-party valuation specialist. This specialist determines~~significantly lower (higher) fair value ~~based on~~measurement. Weighted average life (in years) is used to determine the present value of estimated future net servicing income cash flows, and incorporates assumptions that market participants would use to estimate fair value, including estimates of prepayment speeds, discount rates, default rates, refinance rates, servicing costs, escrow account earnings, contractual servicing fee income, and ancillary income. The specialist and the Company evaluate, and periodically adjust, as necessary, these underlying inputs and assumptions to reflect market conditions and changeschange in ~~the assumptions that a market participant would consider in valuing MSRs.~~

~~Derivative Financial Instruments~~

For exchange-traded futures and exchange-traded options, fair value is based on observable quoted market prices in an active market. For forward commitments to buy and sell loans and mortgage-backed securities, fair value is based on observable market prices for similar loans and securities in an active market. The fair value of ~~IRLCs~~MSRs. For December 31, 2023, the weighted average life (in years) for~~one-to-four~~ ~~family~~ the entire portfolio was 6.83.

Rate lock commitments

The significant unobservable input used in the fair value measurement of the rate lock commitments is the pull through rate. The pull through rate is a statistical analysis of our actual rate lock fallout history to determine the sensitivity of the residential mortgage ~~loans that the Company intends~~loan pipeline compared to ~~sell is~~interest rate changes and other deterministic values. New market prices are applied based on ~~internally developed models. The key model inputs primarily include~~updated loan characteristics and new fallout ratios (i.e. the ~~sum~~inverse of the pull through rate) are applied accordingly. Significant increases (decreases) in the pull through rate in isolation result in a significantly higher (lower) fair value ~~of the forward commitment based on the loans’ expected settlement dates, the value of MSRs arrived at by an independent MSR broker, government agency price adjustment factors, and historical IRLCfall-out~~ ~~factors.~~

measurement.

Deposits

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

Borrowed Funds

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

Off-Balance Sheet Financial Instruments

The fair values of commitments to extend credit and unadvanced lines of credit are estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions, considering the remaining terms of the commitments and the creditworthiness of the potential borrowers. The estimated fair values of suchoff-balance sheet financial instruments were insignificant at December 31, ~~2017~~2023 and ~~2016.~~

~~NOTE 15: DERIVATIVE FINANCIAL INSTRUMENTS~~

December 31, 2022.

Fair Value Option

We elected the fair value option for certain items as discussed throughout the Notes to the Consolidated Financial Statements to more closely align the accounting method with the underlying economic exposure. Interest income on LHFS is accrued on the principal outstanding primarily using the "simple-interest" method.

The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected:


	For the Years Ended December 31,
(dollars in millions)	2023		2022
Assets
Loans held-for-sale
Net gain on loan sales	$	43	$	8

134

The following table reflects the difference between the aggregate fair value and aggregate remaining contractual principal balance outstanding for assets and liabilities for which the fair value option has been elected:


	December 31, 2023
(dollars in millions)	Unpaid Principal Balance		Fair Value		Fair Value Over / (Under) UPB
Assets:
Nonaccrual loans:
Loans held-for-sale	$	2	$	2	$	—

Total non-accrual loans	$	2	$	2	$	—
Other performing loans:
Loans held-for-sale	$	869	$	894	$	25
Total other performing loans	$	869	$	894	$	25
Total loans:
Loans held-for-sale	$	871	$	896	$	25
Total loans	$	871	$	896	$	25


	December 31, 2022
(dollars in millions)	Unpaid Principal Balance		Fair Value		Fair Value Over / (Under) UPB
Assets:
Other performing loans:
Loans held-for-sale	$	1,095	$	1,115	$	20
Total other performing loans	$	1,095	$	1,115	$	20
Total loans:
Loans held-for-sale	$	1,095	$	1,115	$	20
Total loans	$	1,095	$	1,115	$	20

Note 19 - Commitments and Contingencies

Pledged Assets

The Company pledges securities to serve as collateral for its repurchase agreements, among other purposes. We had ~~no derivative financial instruments as~~pledged investment securities of $2.8 billion and $434 million at December 31, ~~2017, due~~2023 and December 31, 2022, respectively. In addition, the Company had $43.1 billion and $44.5 billion of loans pledged to the ~~sale~~FHLB-NY to serve as collateral for its wholesale borrowings at the respective year-ends.

Loan Commitments and Letters of Credit

In the ~~mortgage banking business.~~

~~During 2016 and until December 2017, the Company’s derivative financial instruments consisted~~normal course of financial forward and futures contracts, interest rate swaps, IRLCs, and options. These derivatives related to mortgage banking operations, residential MSRs, and other risk management activities, and sought to mitigate or reduce the Company’s exposure to losses from adverse changes in interest rates. These activities varied in scope basedbusiness, we have various commitments outstanding which are not included on ~~the level and volatility of interest rates, other changing market conditions, and the types of assets held.~~

In accordance with the applicable accounting guidance, the Company took into account the impact of collateral and master netting agreements that allowed it to settle all derivative contracts held with a single counterparty on a net basis, and to offset the net derivative position with the related collateral when recognizing derivative assets and liabilities. As a result, the Company’sour Consolidated Statements of Financial ~~Condition could reflect derivative contracts with negative~~Condition. The majority of the outstanding loan commitments were expected to close within 90 days.

The following table summarizes the Company’s off-balance sheet commitments to originate loans and letters of credit:


	December 31,
(in millions)	2023		2022
Multi-family and commercial real estate	$	52	$	216
One-to-four family including interest rate locks	1,694		2,066
Acquisition, development, and construction	3,926		3,539
Warehouse loan commitments	7,074		8,042
Other loan commitments	11,315		7,964
Total loan commitments	$	24,061	$	21,827
Commercial, performance stand-by, and financial stand-by letters of credit	915		541
Total commitments	$	24,976	$	22,368

135

Financial Guarantees

The Company provides guarantees and indemnifications to its customers to enable them to complete a variety of business transactions and to enhance their credit standings. These guarantees are recorded at their respective fair values ~~that were included~~ in ~~derivative assets, and contracts with positive fair values that were included~~“Other liabilities” in ~~derivative liabilities.~~

~~Changes in~~the Consolidated Statements of Condition. The Company deems the fair value of ~~these derivatives~~the guarantees to equal the consideration received.

The following table summarizes the Company’s guarantees and indemnifications at December 31, 2023:


(in millions)	Expires Within One Year		Expires After One Year		Total Outstanding Amount		Maximum Potential Amount of Future Payments
Financial stand-by letters of credit	$	254	$	288	$	542	$	639
Performance stand-by letters of credit	100		2		102		102
Commercial letters of credit	3		—		3		174
Total letters of credit	$	357	$	290	$	647	$	915

The maximum potential amount of future payments represents the notional amounts that could be funded under the guarantees and indemnifications if there were ~~reflected in current-period earnings. None~~a total default by the guaranteed parties or if indemnification provisions were triggered, as applicable, without consideration of ~~these derivatives were designated as hedges for accounting purposes.~~

possible recoveries under recourse provisions or from collateral held or pledged.

The Company used various financial instruments, including derivatives, in connection with its prior strategies to reduce pricing risk resulting from changes in interest rates. Derivative instruments included IRLCs entered into with borrowers or correspondents/brokers to acquire agency conforming fixedcollects fees upon the issuance of commercial and ~~adjustable rate residential mortgage loans that were held for sale, as well as Treasury options and Eurodollar futures.~~

~~The Company entered into forward contracts to sell fixed rate mortgage-backed securities to protect against changes in the prices~~stand-by letters of ~~agency conforming fixed rate loans held for sale. Forward contracts were entered into with securities dealers in an amount related to the portion~~credit. Stand-by letters of ~~IRLCs that was expected to close. The value of these forward sales contracts moved inversely with the value of the loans in response to changes in interest rates.~~

~~To manage the price risk associated with fixed-ratenon-conforming~~ ~~mortgage loans,~~credit fees are initially recorded by the Company generally entered into forward contracts on mortgage-backed securities or forward commitments to sell loans to approved investors. Short positions in Eurodollar futures contracts were used to manage price risk on adjustable rate mortgage loans heldas a liability and are recognized as income periodically through the respective expiration dates. Fees for ~~sale.~~

~~The Company used interest rate swaps to hedge~~commercial letters of credit are collected and recognized as income at the ~~fair value~~time that they are issued and upon payment of ~~its residential MSRs. The Company also purchased put and call options to manage the risk associated with variations in the amount~~each set of ~~IRLCs that ultimately closed.~~

documents presented. In addition, the Company ~~mitigated a portion~~requires adequate collateral, typically in the form of cash, real property, and/or personal guarantees upon its issuance of irrevocable stand-by letters of credit. Commercial letters of credit are primarily secured by the goods being purchased in the underlying transaction and are also personally guaranteed by the owner(s) of the ~~risk associated with changes~~applicant company.

At December 31, 2023, the Company had no commitments to purchase securities.

Legal Proceedings

The Company is involved in various legal actions arising in the ~~value~~ordinary course of ~~MSRs. The general strategy for mitigating this risk was to purchase~~its business, including stockholder class and derivative ~~instruments, the value of which changed~~actions. All such actions in the ~~opposite direction~~aggregate involve amounts that are believed by management to be immaterial to the financial condition and results of ~~interest rates, thus partially offsetting changes~~operations of the Company. The outcome of any pending litigation is uncertain. There can be no assurance (i) that we will not incur material losses due to damages, penalties, costs and/or expenses as a result of such litigation, (ii) that the reserves we have established will be sufficient to cover such losses, or (iii) that such losses will not materially exceed such reserves and have a material impact on our financial condition or results of operations. The Company may incur significant legal expenses in defending the ~~value~~litigation described above during the pendency of ~~our servicing assets, which tended~~these matters, and in connection with any other potential cases, including expenses for the potential reimbursement of legal fees of officers and directors under indemnification obligations.

136

Note 20 - Employee Benefits

Retirement Plan

The New York Community Bancorp, Inc. Retirement Plan (the “Retirement Plan”) covers substantially all employees who had attained minimum age, service, and employment status requirements prior to ~~move in~~ the ~~same direction as interest rates. Accordingly,~~date when the ~~Company purchased Eurodollar futures~~individual plans were frozen by the banks of origin. Once frozen, the individual plans ceased to accrue additional benefits, service, and ~~call options on Treasury securities,~~compensation factors, and ~~entered into forward contracts~~became closed to ~~purchase mortgage-backed securities.~~

employees who would otherwise have met eligibility requirements after the “freeze” date.

The following table sets forth certain information regarding the ~~effect~~Retirement Plan as of ~~derivative instruments~~the dates indicated:


	December 31,
(in millions)	2023		2022
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	116	$	158
Interest cost	5		4
Actuarial gain	2		(38)
Annuity payments	(7)		(7)
Settlements	(1)		(1)
Benefit obligation at end of year	$	115	$	116
Change in Plan Assets:
Fair value of assets at beginning of year	$	228	$	283
Actual return (loss) on plan assets	33		(47)
Annuity payments	(7)		(7)
Settlements	(1)		(1)
Fair value of assets at end of year	$	253	$	228
Funded status (included in “Other assets”)	$	138	$	112
Changes recognized in other comprehensive income for the year ended December 31:
Amortization of actuarial loss	$	(7)	$	(2)
Net actuarial (gain) loss arising during the year	(18)		26
Total recognized in other comprehensive income for the year (pre-tax)	$	(25)	$	24
Accumulated other comprehensive loss (pre-tax) not yet recognized in net periodic benefit cost at December 31:
Actuarial loss, net	$	41	$	66
Total accumulated other comprehensive loss (pre-tax)	$	41	$	66

In 2024 $3 million of unrecognized net actuarial loss for the Retirement Plan will be amortized from AOCL into net periodic benefit cost, respectively. The comparable amount recognized as net actuarial loss for the Retirement Plan in 2023 was $7 million and no prior service cost was amortized in 2022. The discount rates used to determine the benefit obligation at December 31, 2023 and 2022 were 4.7 percent and 4.9 percent, respectively.

The discount rate reflects rates at which the benefit obligation could be effectively settled. To determine this rate, the Company considers rates of return on high-quality fixed-income investments that are currently available and are expected to be available during the period until the pension benefits are paid. The expected future payments are discounted based on a portfolio of high-quality rated bonds (AA or better) for which the Company relies on the ~~Consolidated Statements~~Financial Times Stock Exchange (“FTSE”) Pension Liability Index that is published as of ~~Operations and Comprehensive Income~~the measurement date.

The components of net periodic pension (credit) expense were as follows for the ~~periods~~years indicated:

   (Loss) Gain Included in Mortgage Banking Income
   For the Twelve Months Ended December 31,
(in thousands)    2017    2016    2015
Treasury options
   $ (262 )    $ (2,795 )    $ (8,222 )
Treasury and Eurodollar futures
   55    165    501
Interest rate swaps
   3,068    (4,561 )    —
Forward commitments to buy/sell loans/mortgage-backed securities
   (8,815 )    (4,963 )    5,752






Total (loss) gain
   $ (5,954 )    $ (12,154 )    $ (1,969 )


	Years Ended December 31,
(in millions)	2023		2022		2021
Components of net periodic pension expense (credit):
Interest cost	$	5	$	4	$	4
Expected return on plan assets	(14)		(16)		(16)
Amortization of net actuarial loss	7		2		7
Net periodic pension credit	$	(2)	$	(10)	$	(5)

137

The following table indicates the weighted average assumptions used in determining the net periodic benefit cost for the years indicated:


	Years Ended December 31,
	2023		2022		2021
Discount rate	4.9	%	2.6	%	2.2	%
Expected rate of return on plan assets	6.3		6.0		6.3

The primary long-term objective for the Plan is to maintain assets at a level that will sufficiently cover future beneficiary obligations. A secondary long-term objective is to achieve long-term growth in assets. The Plan will be structured to include a volatility reducing component (the fixed income commitment) and a growth component (the equity commitment).

To achieve the Companies (in this context, the "Plan Sponsor") long-term investment objectives, the Trustee will invest the assets of the Plan in a diversified combination of asset classes, investment strategies, and pooled vehicles. The asset allocation guidelines in the table below reflect the plan sponsor’s risk tolerance and long-term objectives for the Plan. These parameters will be reviewed on a regular basis and subject to change following discussions between the plan sponsor and the Trustee.

Initially, the following asset allocation targets and ranges will guide the Trustee in structuring the overall allocation in the Plan’s investment portfolio. The plan sponsor or the Trustee may amend these allocations to reflect the most appropriate standards consistent with changing circumstances. Any such fundamental amendments in strategy will be discussed between the

plan sponsor and the Trustee prior to implementation.

Based on the above considerations, the following asset allocation ranges will be implemented:


Asset Allocation Parameters by Asset Class
Equity	Minimum	Target	Maximum
U.S. Large-Cap		27%
U.S. Mid-Cap		7%
U.S. Small-Cap		7%
Non-U.S.		14%
Total - Equity	45%	55%	65%

Total - Fixed Income/Cash Equivalents	35%	45%	55%

The parameters for each asset class provide the Trustee with the latitude for managing the Plan within a minimum and maximum range. The Trustee will have full discretion to buy, sell, invest and reinvest in these asset segments based on these guidelines which includes allowing the underlying investments to fluctuate within the stated policy ranges. The Plan will maintain a cash equivalents component (not to exceed 3 percent under normal circumstances) within the fixed income allocation for liquidity purposes.

The Trustee will monitor the actual asset segment exposures of the Plan on a regular basis and, periodically, may adjust the asset allocation within the ranges set forth above as it deems appropriate. Periodic reallocation of assets will be based on the Trustee’s perception of the changing risk/return opportunities of the respective asset classes.

138

The following table presents information about the fair value measurements of the investments held by the Retirement Plan as of December 31, 2023:


(in millions)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity:
Large-cap value (1)	$	12	$	12	$	—	$	—
Large-cap growth (2)	22		22		—		—
Large-cap core (3)	17		17		—		—


Mid-cap core (4)	15		15		—		—


Small-cap core (5)	16		16		—		—
International growth (6)	18		18		—		—
International value (7)	10		10		—		—
Fixed Income Funds:

Intermediate - Core Plus (8)	98		98		—		—
Equity Securities:
Company common stock	31		31		—		—
Common/Collective Trusts-Equity:
Large cap value (9)	13		—		13		—
Cash Equivalents:
Money market (10)	1		1				—
	$	253	$	240	$	13	$	—

(1)This category consists of a mutual fund holding 100-160 stocks, designed to track and outperform the Russell 1000 Value Index.

(2)This category consists of two mutual funds which invest primarily in large-cap U.S. - based growth companies, one concentrating on long-term capital growth, the other in long-term capital appreciation and current income.

(3)This category contains stocks of the S&P 500 Index. The stocks are maintained in approximately the same weightings as the index.

(4)This category contains stocks of the CRSP U.S. Mid Cap Index, a broadly diversified index of stocks of medium-size U.S. companies. The stocks are maintained.

(5)This category seeks long-term capital appreciation through investment primarily in common stock of small-capitalization companies, with similar risk levels and characteristics to the Russell 2000 Index.

(6)This category consists of investments with long-term growth potential located primarily in Europe, the Pacific Basin, and other developed and emerging markets.

(7)This category invests primarily in medium to large well-established non-US companies. Under normal circumstances, at least 80 percent of total assets will be invested in equity securities, including common stocks, preferred stocks, and convertible securities.

(8)This category currently includes equal investments in four mutual funds, seeking to outperform the Bloomberg Barclays U.S. Aggregate Bond Index. Two of the funds hold at least 80 percent in investment grade fixed-income securities while one other holds at least 65 percent; the fourth fund targets investments of 50 percent or more in mortgage-backed securities guaranteed by the US government and its agencies.

(9)This category contains large-cap stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.

(10)This category consists of a money market fund and is used for liquidity purposes.

Current Asset Allocation

The asset allocations for the Retirement Plan were as follows:


	December 31,
	2023		2022
Equity securities	61	%	60	%
Debt securities	39	%	38	%
Cash equivalents	—	%	2	%
Total	100	%	100	%

Determination of Long-Term Rate of Return

The long-term rate of return on Retirement Plan assets assumption was based on historical returns earned by equities and fixed income securities, and adjusted to reflect expectations of future returns as applied to the Retirement Plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn long-term rates of return in the ranges of 6 percent to 8 percent and 3 percent to 5 percent, respectively, with an assumed long-term inflation rate of 2.5 percent reflected within these ranges. When these overall return expectations are applied to the Retirement Plan’s target allocations, the result is an expected rate of return of 5 percent to 7 percent.

139

Expected Contributions

The Company ~~had~~does not expect to contribute to the Retirement Plan in ~~place an enforceable master netting arrangement with every counterparty. All master netting arrangements included rights~~2023.

Expected Future Annuity Payments

The following annuity payments, which reflect expected future service, as appropriate, are expected to ~~offset associated with~~be paid by the ~~Company’s recognized derivative assets, derivative liabilities,~~Retirement Plan during the years indicated:


(in millions)
2024	$	8
2025	8
2026	8
2027	8
2028	8
2029 and thereafter	43
Total	$	83

Qualified Savings Plan (401(k) Plan)

The Company maintains a defined contribution qualified savings plan in the form of a 401(k) plan in which all salaried employees are able to participate after one month of service and ~~cash collateral received~~having attained age 21. The Company instituted a safe harbor matching contribution program during the year ended December 31, 2020, and ~~pledged. Accordingly,~~accordingly, the Company ~~where appropriate, offset~~matches a portion of employee 401(k) plan contributions. Such expense totaled $21 million and $7 million for the year ended December 31, 2023 and 2022, respectively. Flagstar also maintains a defined contribution qualified savings plan in the form of a 401(k) plan in which certain employees are able to participate.

Post-Retirement Health and Welfare Benefits

140

The following table sets forth certain information regarding the Health & Welfare Plan as of the dates indicated:


	December 31,
(in millions)	2023		2022
Change in benefit obligation:
Benefit obligation at beginning of year	$	7	$	10
Interest cost	1		—
Actuarial gain	1		(2)
Premiums and claims paid	(1)		(1)
Benefit obligation at end of year	$	8	$	7
Change in plan assets:
Fair value of assets at beginning of year	$	—	$	—
Employer contribution	1		1
Premiums and claims paid	(1)		(1)
Fair value of assets at end of year	$	—	$	—
Funded status (included in “Other liabilities”)	$	(8)	$	(7)
Changes recognized in other comprehensive income for the year ended December 31:
Amortization of prior service cost			—
Amortization of actuarial gain			—
Net actuarial (gain) loss arising during the year	1		(2)
Total recognized in other comprehensive income for the year (pre-tax)	$	1	$	(2)
Accumulated other comprehensive (gain) loss (pre-tax) not yet recognized in net periodic benefit cost at December 31:
Prior service cost			—
Actuarial (gain) loss, net	(1)		(2)
Total accumulated other comprehensive income (pre-tax)	$	(1)	$	(2)

The discount rates used in the preceding table were 4.6 percent at December 31, 2023 and 4.8 percent at December 31, 2022.

The estimated net actuarial loss and the prior service liability that will be amortized from AOCL into net periodic benefit cost in 2024 are less than $1 million, respectively.

The net periodic benefit costs and all ~~derivative asset~~components thereof for the years-ended December 31, 2023 and ~~liability positions with the cash collateral received and pledged.~~

2022 were less than $1 million.

The following table presents the ~~effect of~~weighted average assumptions used in determining the ~~master netting arrangements on~~net periodic benefit cost for the ~~presentation of the derivative assets in the Consolidated Statements of Condition as of December 31, 2016:~~

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

~~(1)~~

~~Included $1.9~~years indicated:
Years Ended December 31,
2023 2022 2021
Discount rate 4.8% 2.3% 2.0%
Current medical trend rate 6.5 6.5 6.5
Ultimate trend rate 5.0 5.0 5.0
Year when ultimate trend rate will be reached 2029 2028 2027

Expected Contributions

The Company expects to contribute $1 million ~~to purchase Treasury options.~~

~~The following table presents the effect the master netting arrangements had on the presentation of the derivative liabilities in the Consolidated Statements of Condition as of December 31, 2016:~~

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

~~NOTE 16: DIVIDEND RESTRICTIONS~~

The Parent Company is a separate legal entity from each of the Banks and must provide for its own liquidity. In addition to operating expenses and any share repurchases, the Parent Company is responsible for paying any dividends declared to the ~~Company’s shareholders. As a Delaware corporation, the Parent Company is able~~Health & Welfare Plan to pay ~~dividends either from surplus or,~~premiums and claims 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.~~

ending December 31, 2023.

141

Expected Future Payments for Premiums and Claims

The ~~Company is required~~following amounts are currently expected to ~~receive anon-objection~~ ~~from the FRB to pay cash dividends on its outstanding common~~be paid for premiums and ~~preferred stock. The Company receivednon-objections~~ ~~from the FRB for each of the four quarterly cash dividends and the three preferred stock dividends it paid~~claims during the ~~year. The FRB has advised~~years indicated under the ~~Company to continue the exchange of written documentation to obtain theirnon-objection~~ ~~to the declaration of dividends.~~

~~Various legal restrictions limit the extent to which the Company’s subsidiary banks can supply funds to the~~Health & Welfare Plan:


(in millions)
2024	$	1
2025	1
2026	1
2027	1
2028	1
2029 and thereafter	2
Total	$	7

Note 21 - Parent ~~Company and itsnon-bank~~ subsidiaries. The Company’s subsidiary banks would require the approval of the Superintendent of the NYSDFS if the dividends they declared in any calendar year were to exceed the total of their respective net profits for that year combined with their respective retained net profits for the preceding two calendar years, less any required transfer to~~paid-in~~ capital. The term “net profits” is defined as the remainder of all earnings from current operations plus actual recoveries on loans, investments, and other assets, after deducting from the total thereof all current operating expenses, actual losses if any, and all federal, state, and local taxes. In 2017, dividends of $336.0 million were paid by the Banks to the Parent Company; at December 31, 2017, the Banks could have paid additional dividends of $379.5 million to the Parent Company without regulatory approval.

~~NOTE 17: PARENT COMPANY-ONLY FINANCIAL INFORMATION~~

Company-Only Financial Information

The following tables present the condensed financial statements for New York Community Bancorp, Inc. ~~(parent company~~(Parent Company only):

Condensed Statements of Condition

   December 31,
(in thousands)    2017    2016
ASSETS:

Cash and cash equivalents
   $ 90,536    $ 63,727
Securities available for sale
   —      2,002
Investments in subsidiaries
   7,050,139    6,426,276
Receivables from subsidiaries
   4,750    7,839
Other assets
   23,980    34,102




Total assets
   $ 7,169,405    $ 6,533,946




LIABILITIES AND STOCKHOLDERS’ EQUITY:

Junior subordinated debentures
   $ 359,179    $ 358,879
Other liabilities
   14,850    51,076




Total liabilities
   374,029    409,955




Stockholders’ equity
   6,795,376    6,123,991




Total liabilities and stockholders’ equity
   $ 7,169,405    $ 6,533,946


	December 31,
(in millions)	2023		2022
ASSETS:
Cash and cash equivalents	$	158	$	121
Investments in subsidiaries	9,160		9,633
Other assets	80		85
Total assets	$	9,398	$	9,839
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Junior subordinated debentures	$	579	$	575
Subordinated notes	438		432
Other liabilities	14		8
Total liabilities	$	1,031	$	1,015
Stockholders’ equity	$	8,367	$	8,824
Total liabilities and stockholders’ equity	$	9,398	$	9,839

Condensed Statements of Income ~~(Loss)~~

   Years Ended December 31,
(in thousands)    2017    2016    2015
Interest income
   $ 943    $ 527    $ 1,027
Dividends received from subsidiaries
   336,000    330,000    345,000
Other income
   1,700    679    527






Gross income
   338,643    331,206    346,554
Operating expenses
   54,333    49,157    48,255






Income before income tax benefit and equity in underdistributed (overdistributed) earnings of subsidiaries
   284,310    282,049    298,299
Income tax benefit
   19,575    19,592    20,720






Income before equity in underdistributed (overdistributed) earnings of subsidiaries
   303,885    301,641    319,019
Equity in underdistributed (overdistributed) earnings of subsidiaries
   162,316    193,760    (366,175 )






Net income (loss)
   $ 466,201    $ 495,401    $ (47,156 )


	Years Ended December 31,
(in millions)	2023		2022		2021
Dividends received from subsidiaries	$	580	$	335	$	380
Other income	2		160		1
Gross income	582		495		381
Operating expenses	108		55		50
Income before income tax benefit and equity in undistributed (loss) earnings of subsidiaries	474		440		331
Income tax benefit	25		14		14
Income before equity in undistributed (loss) earnings of subsidiaries	499		454		345
Equity in undistributed (loss) earnings of subsidiaries	(578)		196		251
Net (loss) income	$	(79)	$	650	$	596

142

Condensed Statements of Cash Flows

   Years Ended December 31,
(in thousands)    2017    2016    2015
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)
   $ 466,201    $ 495,401    $ (47,156 )
Change in other assets
   10,122    316    (2,253 )
Change in other liabilities
   (36,226 )    (2,252 )    22,236
Other, net
   36,330    33,333    32,955
Equity in (underdistributed) overdistributed earnings of subsidiaries
   (162,316 )    (193,760 )    366,175






Net cash provided by operating activities
   $ 314,110    $ 333,038    $ 371,957






CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales and repayments of securities
   $ 2,000    $ —      $ —
Change in receivable from subsidiaries, net
   3,089    (204 )    224
Investment in subsidiaries
   (420,000 )    —      (560,000 )






Net cash used in investing activities
   (414,911 )    $ (204 )    $ (559,776 )






CASH FLOWS FROM FINANCING ACTIVITIES:

Treasury stock purchases
   $ (18,463 )    $ (8,677 )    $ (7,020 )
Cash dividends paid on common and preferred stock
   (356,768 )    (330,810 )    (453,981 )
Proceeds from issuance of preferred stock
   502,840    —      —
Proceeds fromfollow-on common stock offering, net
   —      —      629,682






Net cash provided by (used in) financing activities
   $ 127,609    $ (339,487 )    $ 168,681






Net increase (decrease) in cash and cash equivalents
   26,809    (6,653 )    (19,138 )
Cash and cash equivalents at beginning of year
   63,727    70,380    89,518






Cash and cash equivalents at end of year
   $ 90,536    $ 63,727    $ 70,380

~~NOTE 18: CAPITAL~~


	Years Ended December 31,
(in millions)	2023		2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(79)	$	650	$	596
Change in other assets	30		(3)		(22)
Change in other liabilities	6		(4)		1
Other, net	65		(130)		32
Equity in undistributed (loss) earnings of subsidiaries	578		(196)		(251)
Net cash provided by operating activities	$	600	$	317	$	356
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired in business acquisition	—		34		—
Change in receivable from subsidiaries, net	(32)		5		(3)
Net cash (used in) provided by investing activities	$	(32)	$	39	$	(3)
CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury stock repurchased	(12)		(24)		(16)
Cash dividends paid on common and preferred stock	(519)		(350)		(349)
Net cash used in financing activities	(531)		(374)		(365)
Net increase (decrease) in cash and cash equivalents	37		(18)		(12)
Cash and cash equivalents at beginning of year	121		139		151
Cash and cash equivalents at end of year	$	158	$	121	$	139

Note 22 - Subsequent Events

Loan Sales

On February 29, 2024, the Company sold the commercial co-operative loan classified as held for sale at a gain. Additionally, on March 13, 2024 the Company completed a sale of consumer loans with a net book value of $899 million. These two sales will be recorded in the quarter ended March 31, 2024 and will result in a net gain.

Equity Capital Raise

On March 7, 2024, we entered into separate investment agreements with affiliates of funds managed by Liberty and certain other investors. The Investors invested an aggregate of approximately $1.05 billion in the Company ~~is subject to examination, regulation,~~in exchange for the sale and ~~periodic reporting under the Bank Holding Company Act of 1956, as amended, which is administered~~issuance by the ~~FRB. The FRB has adopted capital adequacy guidelines for bank holding companies (on~~Company of (a) 76,630,965 shares of our common stock, at a ~~consolidated basis) that are substantially similar to those~~purchase price per share of ~~the FDIC for the Banks.~~

The following tables present the regulatory capital ratios for the Company at December 31, 2017 and 2016, in comparison with the minimum amounts and ratios required by the FRB for capital adequacy purposes:

   Risk-Based Capital
At December 31, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,869,129    11.36 % $ 4,371,969    12.84 % $ 4,877,208    14.32 % $ 4,371,969    9.58 %
Minimum for capital adequacy purposes
   1,532,448    4.50 2,043,265    6.00 2,724,353    8.00 1,826,141    4.00










Excess
   $ 2,336,681    6.86 % $ 2,328,704    6.84 % $ 2,152,855    6.32 % $ 2,545,828    5.58 %

   Risk-Based Capital
At December 31, 2016    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,748,231    10.62 % $ 3,748,231    10.62 % $ 4,277,759    12.12 % $ 3,748,231    8.00 %
Minimum for capital adequacy purposes
   1,588,699    4.50 2,118,266    6.00 2,824,355    8.00 1,875,062    4.00










Excess
   $ 2,159,532    6.12 % $ 1,629,965    4.62 % $ 1,453,404    4.12 % $ 1,873,169    4.00 %

~~In accordance with Basel III, the inclusion of trust preferred securities as tier 1 capital was phased out completely in 2016.~~

~~In addition, Basel III calls for thephase-in~~$2.00, (b) 192,062 shares of a ~~capital conservation buffer over a five-year period beginning with 0.625% in 2016 and reaching 2.50% in 2019, when fully phased in. At December 31, 2017,~~new series of our ~~total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by 632 basis points and the fullyphased-in~~ ~~capital conservation buffer by 382 basis points.~~

The Banks are subject to regulation, examination, and supervision by the NYSDFS and the FDIC (the “Regulators”). The Banks are 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.

As of December 31, 2017, the Company, the Community Bank, and the Commercial Bank are categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, a bank must maintain a minimum common equity tier 1 risk-based capital ratio of 6.50%; 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%. In the opinion of management, no conditions or events have transpired since December 31, 2017 to change these capital adequacy classifications.

The following tables present the actual capital amounts and ratios for the Community Bank at December 31, 2017 and 2016 in comparison to the minimum amounts and ratios required for capital adequacy purposes.

   Risk-Based Capital
At December 31, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 4,253,233    13.43 % $ 4,253,233    13.43 % $ 4,387,620    13.86 % $ 4,253,233    10.06 %
Minimum for capital adequacy purposes
   1,424,795    4.50 1,899,727    6.00 2,532,969    8.00 1,691,041    4.00










Excess
   $ 2,828,438    8.93 % $ 2,353,506    7.43 % $ 1,854,651    5.86 % $ 2,562,192    6.06 %

   Risk-Based Capital
At December 31, 2016    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 3,686,510    11.23 % $ 3,686,510    11.23 % $ 3,843,382    11.71 % $ 3,686,510    8.45 %
Minimum for capital adequacy purposes
   1,477,056    4.50 1,969,408    6.00 2,625,877    8.00 1,744,601    4.00










Excess
   $ 2,209,454    6.73 % $ 1,717,102    5.23 % $ 1,217,505    3.71 % $ 1,941,909    4.45 %

The following tables present the actual capital amounts and ratios for the Commercial Bank at December 31, 2017 and 2016 in comparison to the minimum amounts and ratios required for capital adequacy purposes:

   Risk-Based Capital
At December 31, 2017    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 380,194    15.95 % $ 380,194    15.95 % $ 404,643    16.97 % $ 380,194    11.37 %
Minimum for capital adequacy purposes
   107,285    4.50 143,047    6.00 190,729    8.00 133,801    4.00










Excess
   $ 272,909    11.45 % $ 237,147    9.95 % $ 213,914    8.97 % $ 246,393    7.37 %

   Risk-Based Capital
At December 31, 2016    Common Equity
Tier 1 Tier 1 Total Leverage Capital
(dollars in thousands)    Amount    Ratio Amount    Ratio Amount    Ratio Amount    Ratio
Total capital
   $ 370,707    14.14 % $ 370,707    14.14 % $ 397,259    15.15 % $ 370,707    10.53 %
Minimum for capital adequacy purposes
   117,973    4.50 157,297    6.00 209,729    8.00 140,813    4.00










Excess
   $ 252,734    9.64 % $ 213,410    8.14 % $ 187,530    7.15 % $ 229,894    6.53 %

~~On March 17, 2017, the Company issued 20,600,000 depositary shares, each representing a 1/40th interest in a share of the Company’sFixed-to-Floating~~ ~~Rate Series A Noncumulative Perpetual Preferred Stock,~~preferred stock, par value $0.01 per share, ~~with~~designated as Series B Preferred Stock, at a ~~liquidation preference of $1,000~~price per share ~~(equivalent to $25~~of $2,000, each share of which is convertible into 1,000 shares of common stock (or, in certain limited circumstances, one share of Series C Preferred Stock), (c) 256,307 shares of a new series of our preferred stock, par value $0.01 per ~~depositary share). Dividends will accrue on the depositary shares~~share, designated as Series C Preferred Stock, at a ~~fixed rate equal~~price per share of $2,000, each share of which is convertible into 1,000 shares of common stock, and (d) warrants affording the holder thereof the right, until the seven-year anniversary of the issuance of such warrant, to ~~6.375%~~purchase for $2,500 per ~~annum until March 17, 2027,~~share, shares of Series D NVCE Stock, each share of Series D NVCE Stock is convertible into 1,000 shares of common stock (or, in certain limited circumstances, one share of Series C Preferred Stock), and ~~a floating rate equal~~all of which shares of Series D NVCE Stock, upon issuance, will represent the right (on an as converted basis) to ~~Three-month LIBOR plus 382.1 basis points per annum beginning~~receive 315,000,000 shares of common stock. The transaction closed on March ~~17, 2027. Dividends will be payable in arrears on March 17, June 17, September 17, and December 17 of each year, which commenced on June 17, 2017.~~

~~NOTE 19: SEGMENT REPORTING~~

Reflecting the sale of the Company’s mortgage banking business, the Residential Mortgage Banking segment will no longer be reportable. The information presented below represents activity in the Residential Mortgage Banking segment through September 30, 2017.

The Company’s operations were divided into two reportable business segments: Banking Operations and Residential Mortgage Banking. These operating segments have been identified based on the Company’s organizational structure. The segments required unique technology and marketing strategies, and offer different products and services. While the Company is managed as an integrated organization, individual executive managers were held accountable for the operations of these business segments.

The Company measures and presents information for internal reporting purposes in a variety of ways. The internal reporting system presently used by management in the planning and measurement of operating activities, and to which most managers are held accountable, is based on organizational structure.

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

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

~~Banking Operations Segment~~

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

~~Residential Mortgage Banking Segment~~

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

~~The following tables provide a summary of the Company’s segment results for the years ended December 31, 2017, 2016, and 2015 on an internally managed accounting basis:~~

   For the Twelve Months Ended December 31, 2017
(in thousands)    Banking
Operations    Residential
Mortgage Banking    Total Company
Net interest income
   $ 1,121,460    $ 8,543    $ 1,130,003
Provision for loan losses
   37,242    —      37,242
Non-Interest Income:

Third party⁽¹⁾
   188,564    20,957    209,521
Gain on sale of mortgage banking operation
   —      7,359    7,359
Inter-segment
   (10,222 )    10,222    —






Totalnon-interest income
   178,342    38,538    216,880






Non-interest expense⁽²⁾
   594,394    47,032    641,426






Income before income tax expense
   668,166    49    668,215
Income tax expense
   201,994    20    202,014






Net income
   $ 466,172    $ 29    $ 466,201






Identifiable segment assets(period-end)
   $ 49,124,195    $ —      $ 49,124,195

11, 2024.

143

~~(1)~~	~~Includes ancillary fee income.~~
			Report of Independent Registered Public Accounting Firm

~~(2)~~

~~Includes both direct and indirect expenses.~~

   For the Twelve Months Ended December 31, 2016
(in thousands)    Banking
Operations    Residential
Mortgage Banking    Total Company
Net interest income
   $ 1,272,423    $ 14,959    $ 1,287,382
Provision for loan losses
   4,180    —      4,180
Non-Interest Income:

Third party⁽¹⁾
   116,200    29,372    145,572
Inter-segment
   (17,645 )    17,645    —






Totalnon-interest income
   98,555    47,017    145,572






Non-interest expense⁽²⁾
   584,894    66,752    651,646






Income (loss) before income tax expense (benefit)
   781,904    (4,776 )    777,128
Income tax expense (benefit)
   283,656    (1,929 )    281,727






Net income (loss)
   $ 498,248    $ (2,847 )    $ 495,401






Identifiable segment assets(period-end)
   $ 48,195,581    $ 730,974    $ 48,926,555

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

   For the Twelve Months Ended December 31, 2015
(in thousands)    Banking
Operations    Residential
Mortgage Banking    Total Company
Net interest income
   $ 393,074    $ 15,001    $ 408,075
Recoveries of loan losses
   (15,004 )    —      (15,004 )
Non-Interest Income:

Third party⁽¹⁾
   154,847    55,916    210,763
Inter-segment
   (15,359 )    15,359    —






Totalnon-interest income
   139,488    71,275    210,763






Non-interest expense⁽²⁾
   700,469    65,386    765,855






(Loss) income before income tax expense
   (152,903 )    20,890    (132,013 )
Income tax (benefit) expense
   (93,297 )    8,440    (84,857 )






Net (loss) income
   $ (59,606 )    $ 12,450    $ (47,156 )






Identifiable segment assets(period-end)
   $ 49,619,931    $ 697,865    $ 50,317,796

~~(1)~~

~~Includes ancillary fee income.~~

~~(2)~~

~~Includes both direct and indirect expenses.~~

~~Report of Independent Registered Public Accounting Firm~~

To the Stockholders and Board of Directors

New York Community Bancorp, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of condition of New York Community Bancorp, Inc. and subsidiaries (the Company) as of December 31, ~~2017~~2023 and ~~2016,~~2022, the related consolidated statements of ~~operations~~(loss) income and comprehensive (loss) income, ~~(loss),~~ changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2017,~~2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2023 and ~~2016,~~2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, ~~2017,~~2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, ~~2017,~~2023, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March ~~1, 2018~~14, 2024 expressed an ~~unqualified~~adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~We have served~~

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment

As discussed in Notes 2 and 16 to the consolidated financial statements, the Company recorded an impairment charge of its entire goodwill balance of $2.4 billion as of December 31, 2023. The Company evaluates goodwill for impairment at least annually or when triggering events are identified. The Company utilizes a market approach to determine the fair value of its single reporting unit, which considers how a market participant would view a control premium, complemented by an income approach if deemed necessary. As of December 31, 2023, the Company identified a triggering event and applied a market approach using the end of day stock price, a control premium for recently completed bank acquisitions, and an adjustment for Company-specific risk considerations based on subsequent confirming market evidence. The adjusted market capitalization was then compared to the Company’s carrying value to determine the extent of any shortfall. The calculated shortfall was in excess of the goodwill balance as of December 31, 2023.

144

We identified the assessment of goodwill for impairment as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor ~~since 1993.~~

~~New York, New York~~

judgment was involved in the evaluation of the market approach and significant unobservable assumptions which included the control premium and Company-specific risk considerations. There was also a high degree of subjectivity and potential for management bias related to the timing and magnitude of adjustments made to the key assumptions used in the valuation.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment analysis, including internal controls over the development of the market approach and the determination of the control premium and the impact of Company-specific risk considerations.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

•evaluating the reasonableness of the valuation approach used for compliance with U.S. generally accepted accounting principles

•evaluating the control premium assumption by comparing to data from recently completed peer bank acquisitions

•evaluating the adjustment for Company-specific risk considerations based on confirming market evidence from events occurring after the measurement date.

Allowance for credit losses on loans and leases evaluated on a collective basis

As discussed in Notes 2 and 7 to the consolidated financial statements, the Company’s total allowance for credit losses (ACL) on loans and leases as of December 31, 2023 was $992 million, a substantial portion of which is related to the one-to-four family first mortgage, multi-family, commercial and industrial, specialty finance, and commercial real estate portfolio segments measured on a collective basis when similar risk characteristics exist (collective ACL). Management estimates the collective ACL by projecting and multiplying together the probability-of-default (PD), loss-given-default (LGD) and exposure-at-default depending on economic parameters for each month of the remaining contractual term. The loss drivers for certain loans within the commercial and industrial portfolio are derived using credit ratings. The Company estimates the exposure-at-default using prepayment models which forecasts prepayments over the life of the loans and leases. The economic forecast and the related economic parameters are developed using multiple economic forecast scenarios, including related weightings, over the reasonable and supportable forecast period. After the reasonable and supportable forecast period, the Company reverts to a historical average loss rate on a straight-line basis over 12 months. Historical credit loss experience over the historical loss observation period provides the basis for the estimation of expected credit losses, with qualitative factor adjustments made for differences in current loan-specific risk characteristics as well as for changes in environmental conditions.

We identified the assessment of the collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the collective ACL methodology, including the methods and models used to estimate the PD, LGD, and prepayments and their significant assumptions. Such significant assumptions included portfolio segmentation, the selection of the multiple economic forecast scenarios including related weightings, economic parameters, credit ratings, the reasonable and supportable forecast period, the reversion period and the historical loss observation period. The assessment also included the evaluation of the qualitative factor adjustments and their significant assumptions for differences in loan-specific risk characteristics and changes in environmental conditions. The assessment also included an evaluation of the conceptual soundness and performance of the PD, LGD, and prepayment models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

•development of the collective ACL methodology

•continued use and appropriateness of the PD, LGD, and prepayment models

•performance monitoring of the PD, LGD, and prepayment models

145

•identification and determination of the significant assumptions used in the PD, LGD, and prepayment models

•development of the qualitative factor adjustments, including the significant assumptions used in the measurement of the qualitative factors

•analysis of the collective ACL results, trends, and ratios.

We evaluated the Company’s process to develop the collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk and valuation professionals with specialized skills and knowledge, who assisted in:

•evaluating the Company’s collective ACL methodology for compliance with U.S. generally accepted accounting principles

•evaluating judgments made by the Company relative to the assessment and performance testing of the PD, LGD, and prepayment models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices

•assessing the conceptual soundness and performance of the PD, LGD, and prepayment models by inspecting the model documentation to determine whether the models are suitable for their intended use

•evaluating the selection of the multiple economic forecast scenarios including the related weightings, and underlying economic parameters by comparing them to the Company’s business environment and relevant industry practices

•evaluating the length of the reasonable and supportable forecast period, the reversion period and the historical loss observation periods by comparing them to specific portfolio risk characteristics and trends

•testing individual credit ratings for a selection of certain borrower relationships by evaluating the financial performance of the borrower, sources of repayment, and any relevant guarantees or underlying collateral

•determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practice

•evaluating the methodology used to develop the qualitative factor adjustments and their significant assumptions and the effect of those adjustments on the collective ACL compared with relevant credit risk factors, current collateral valuations, and consistency with credit trends and identified limitations of the underlying quantitative models.

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate by evaluating the:

•determination of cumulative results of the audit procedures

•qualitative aspects of the Company’s accounting practices

•potential bias in the accounting estimate.

Fair value measurements of acquired loans and core deposit intangible asset

As discussed in Note 3 to the consolidated financial statements, the Company acquired certain assets and assumed certain liabilities of Signature Bridge Bank, N.A. on March ~~1, 2018~~

~~Report~~20, 2023. The Company accounted for this transaction as a business combination with the assets acquired and liabilities assumed being measured based on their estimated fair values. As part of ~~Independent Registered Public Accounting Firm~~

the acquisition, the Company acquired loans and established a core deposit intangible (CDI) asset with a fair value of $12.0 billion and $464 million, respectively. The fair value of acquired loans was based on a discounted cash flow methodology which incorporated discount rates, prepayment rates, probability of default and loss given default rates, and other market assumptions. The fair value of the CDI asset was measured using a discounted cash flow methodology which utilized discount rates, customer attrition rates, and other market assumptions.

We identified the assessment of the fair value measurements of acquired loans and the CDI asset at the acquisition date as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex

146

auditor judgment was involved in the assessment of the fair value measurements due to significant measurement uncertainty. Specifically, the assessment of the fair value measurements involved an evaluation of the valuation methodologies and certain significant assumptions: including discount rates, prepayment rates, probability of default and loss given default rates for acquired loans; and discount rates and customer attrition rates for the CDI asset.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s fair value measurements of acquired loans and the CDI asset at the acquisition date. This included controls related to the (1) determination of certain significant assumptions used in the discounted cash flow methodologies for acquired loans and the CDI asset, and (2) assessment of the overall fair value measurement for acquired loans and the CDI asset. We evaluated the Company’s process to determine the estimated fair value of the CDI asset at the acquisition date by testing certain sources of data and subjective assumptions that the Company used and considered the relevance and reliability of such data and subjective assumptions. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

•evaluating the Company’s fair value methodologies for compliance with U.S. generally accepted accounting principles

•assessing the Company’s estimate of fair value of acquired loans by developing independent ranges of fair values, using market participant derived discount rates, prepayment rates, and probability of default and loss given default rates, and comparing them to the Company’s estimate of fair value and

•evaluating the discount rates and customer attrition rates by comparing the information used to develop such assumptions to market data and deposit activity observed subsequent to the acquisition date.

Fair value measurement of mortgage servicing rights

As discussed in Notes 9 and 18 to the consolidated financial statements, the Company’s mortgage servicing rights (MSRs) as of December 31, 2023 was $1.1 billion. The Company purchases and originates mortgage loans for sale to the secondary market and sells certain of these loans on a servicing-retained basis. For these loans, the Company recognizes a MSR at the time of sale which is recorded at fair value. The Company uses an internal valuation model which utilizes an option-adjusted spread, constant prepayment rate, costs to service and other assumptions to determine the fair value of the MSRs. The Company obtains independent third-party valuations of the estimated fair value of MSRs on a quarterly basis to assess the reasonableness of the Company’s internal fair value estimate.

We identified the assessment of the fair value measurement of MSRs as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the internal valuation model and significant unobservable assumptions, which included option-adjusted spread and constant prepayment rate. There was also a high degree of subjectivity and potential for management bias related to the timing and magnitude of adjustments made to the significant assumptions used in the valuation.

•assessment of the internal valuation model

•evaluation of certain significant assumptions used in estimating the fair value

•comparison of the MSR fair value to independent valuations.

We evaluated the Company’s process to determine the estimated fair value of MSRs by testing certain sources of data and subjective assumptions that the Company used and considered the relevance and reliability of such data and subjective assumptions. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

•evaluating the design of the internal valuation model used to estimate the MSR fair value in accordance with relevant U.S. generally accepted accounting principles

147

•evaluating the significant assumptions, including the timing of any significant updates made to the assumptions during the year, based on an analysis of backtesting results and a comparison of significant assumptions to available data for comparable entities and independent third-party valuations.


/s/ KPMG LLP

We have served as the Company’s auditor since 1993.

New York, New York
March 14, 2024

148


			Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

New York Community Bancorp, Inc.

Opinion on Internal Control ~~over~~Over Financial Reporting

We have audited New York Community Bancorp, Inc. and ~~subsidiaries’~~subsidiaries' (the Company) internal control over financial reporting as of December 31, ~~2017,~~2023, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained ~~in all material respects,~~ effective internal control over financial reporting as of December 31, ~~2017,~~2023, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of condition of the Company as of December 31, ~~2017~~2023 and ~~2016,~~2022, the related consolidated statements of ~~operations~~(loss) income and comprehensive (loss) income, ~~(loss),~~ changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2017,~~2023, and the related notes (collectively, the consolidated financial statements), and our report dated March ~~1, 2018,~~14, 2024 expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses related to the following have been identified and included in management’s assessment:

•the Company's Board of Directors did not exercise sufficient oversight responsibilities, which led to the Company lacking a sufficient complement of qualified leadership resources to conduct effective risk assessment and monitoring activities,

•the Company lacked effective periodic risk assessment processes to identify and timely respond to emerging risks in certain financial reporting processes and related internal controls, including internal loan review, that were responsive to changes in the business operations and regulatory and economic environments in which the Company operates,

•the Company’s recurring monitoring activities over process level control activities, including internal loan review, were not operating effectively, and

•the Company did not sufficiently maintain effective control activities related to internal loan review. Specifically, the Company’s internal loan review processes lacked an appropriate framework to ensure that ratings were consistently accurate, timely, and appropriately challenged. These ineffective controls impact the Company’s ability to accurately disclose loan rating classifications, identify problem loans, and ultimately the recognition of the allowance for credit losses on loans and leases.

The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

The Company acquired Signature Bridge Bank, N.A. during 2023, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, Signature Bridge Bank, N.A.’s internal control over financial reporting associated with total acquired assets of approximately $38 billion and total revenues associated with the acquired assets and liabilities assumed of approximately $1 billion included in the consolidated financial statements of the Company as of and for the year ended December 31, 2023. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Signature Bridge Bank, N.A.

149

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ~~Management’s~~Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control ~~over~~Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~New York, New York~~

~~March 1, 2018~~

~~ITEM 9.~~
/s/			~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~KPMG LLP
New York, New York
March 14, 2024

~~None.~~

150

~~ITEM 9A.~~
Item 9.			~~CONTROLS AND PROCEDURES~~Changes in and Disagreement with Accountants on Accounting and Financial Disclosures

None.


Item 9A.			Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision, and with the participation, of our Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule13a-15(b), as adopted by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this annual ~~report.~~

~~Disclosure~~report because of the material weaknesses in internal control over financial reporting described below. Notwithstanding the material weaknesses, based on additional analyses and other procedures performed, management concluded that the financial statements included in this report fairly present in all material respects our financial position, results of operations, capital position, and cash flows for the periods presented in conformity with GAAP.

Per Rules 13a-15(e) and 15d-15(e), disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial ~~reporting.~~reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our system of internal control is designed under the supervision of management, including our Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles (“GAAP”).

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of ~~assets;~~assets of the Company; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are made only in accordance with the authorization of management and the Boards of Directors of the Company and ~~the Banks; and~~ provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. ~~Projections~~Also, projections of any evaluation of effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions or that the degree of compliance with policies and procedures may deteriorate.

The Company acquired certain assets and assumed certain liabilities of Signature Bridge Bank, N.A. on March 20, 2023. The scope of management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, excludes the internal control over financial reporting associated with total acquired assets of approximately $38 billion and total revenues associated with the acquired assets and liabilities assumed of approximately $1 billion included in the consolidated financial statements of the Company as of and for the year ended December 31, 2023.

As of December 31, ~~2017,~~2023, management assessed the effectiveness of the Company’s internal control over financial reporting based upon the framework established inInternal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis.

151

Based ~~upon its~~on this assessment, because of the following material weaknesses, management concluded that the ~~Company’s~~Company did not maintain effective internal control over financial reporting as of December 31, ~~2017 was~~2023.

Control environment – Our Board of Directors did not exercise sufficient oversight responsibilities, which led to us lacking a sufficient complement of qualified leadership resources to conduct effective ~~using this criteria.~~

~~The effectiveness~~risk assessment and monitoring activities.

Risk assessment – We lacked effective periodic risk assessment processes to identify and timely respond to emerging risks in certain financial reporting processes and related internal controls, including internal loan review, that were responsive to changes in the business operations and regulatory and economic environments in which the Company operates.

Monitoring – Our recurring monitoring activities over process level control activities, including internal loan review, were not operating effectively.

Control activities – We did not sufficiently maintain effective control activities related to internal loan review. Specifically, our internal loan review processes lacked an appropriate framework to ensure that ratings were consistently accurate, timely, and appropriately challenged. These ineffective controls impact the Company’s ability to accurately disclose loan rating classifications, identify problem loans, and ultimately the recognition of the ~~Company’s~~allowance for credit losses on loans and leases.

These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis, and therefore we concluded that the deficiencies represent material weaknesses in our internal control over financial reporting and our internal control over financial reporting was not effective as of December 31, ~~2017 has been audited by KPMG LLP, an~~2023.

The Company’s independent registered public accounting firm, ~~that~~KPMG LLP, which audited the ~~Company’s~~2023 consolidated financial statements ~~as of and for the year ended December 31, 2017, as stated in their report,~~ included in ~~Item 8 on the preceding page, which expresses~~this Form 10-K, has expressed an ~~unqualified~~adverse opinion on the effectiveness of the Company’s internal control over financial reporting. KPMG LLP’s report appears on page 144 of this Annual Report on Form 10-K.

Remediation Status of Reported Material Weaknesses

The Company is currently working to remediate the material weaknesses described above, including assessing the need for additional remediation steps and implementing additional measures to remediate the underlying causes that gave rise to the material weaknesses. The Company is committed to maintaining a strong internal control environment and to ensuring that proper oversight and a consistent tone is communicated throughout the organization. The Company expects that existing deficiencies will be remediated through implementation of processes and controls designed to ensure strict compliance with U.S. GAAP.

Specifically, we are in the process of strengthening our internal control over financial reporting as follows:

•Appointed several new members to the Board of ~~December 31, 2017.~~

Directors with extensive experience as financial experts in our industry and backgrounds in risk management. Additionally, several members of the Board of Directors resigned.

•Appointed a new Chief Risk Officer and Chief Audit Executive, both of whom have large bank experience. We are in the process of identifying and appointing a new Director of Loan Review who has prior large bank commercial loan experience.

•Increasing the frequency and nature of reporting from our internal loan review team and first line business units to the Board Risk Committee to support the Board's risk oversight role.

•Expanding the use of independent credit analysis and reducing the Company's reliance on tools and analysis prepared by our lines of business.

•Improving the internal loan review team's ability to independently challenge risk rating scorecard model methodologies and results.

•Assessing the adequacy of staffing levels and expertise within the internal loan review program, taking into account, among other things, the size, complexity, and risk profile of the Company's loan portfolio.

152

•Providing additional risk rating process training for all internal loan review employees.

We have enhanced our control environment, risk assessment and monitoring activities by addressing our Board composition and key members of executive management, including the Chief Risk Officer and Chief Audit Executive. Progress has been made on our remedial actions, but we are still in the process of developing and implementing enhanced processes, procedures and controls related to internal loan review. We believe our actions will be effective in remediating the material weaknesses, and we continue to devote significant time and attention to these efforts. In addition, the material weaknesses will not be considered remediated until the applicable remedial processes, procedures and controls have been in place for a sufficient period of time and management has concluded, through testing, that these controls are effective.

(c) Changes in Internal Control over Financial Reporting

~~There~~

The Company is working to integrate Signature into its overall internal control over financial reporting processes. Except for changes made in connection with this integration of Signature, and the material weaknesses in internal control over financial reporting noted above, there have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules13a-15(f) and15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~ITEM~~
Item 9B.			~~OTHER INFORMATION~~Other Information

During the fourth quarter ended December 31, 2023, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.


Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

153

PART III

~~ITEM~~
Item 10.			~~DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE~~Directors, Executive Officers of the Registrant and Corporate Governance

Information regarding our directors, executive officers, and corporate governance appears in our Proxy Statement for the Annual Meeting of Shareholders to be held ~~on June 5, 2018~~for fiscal year 2024 (hereafter referred to as our ~~“2018~~“2024 Proxy Statement”) under the captions “Information with Respect to Nominees, Continuing Directors, and Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Meetings and Committees of the Board of Directors,” and “Corporate Governance,” and is incorporated herein by this reference.

A copy of our Code of Business Conduct and Ethics, which applies to our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Chief Accounting Officer as officers of the Company, and all other senior financial officers of the Company designated by the Chief Executive Officer from time to time, is available on the Investor Relations portion of our ~~websites,~~website: www.myNYCB.com ~~www.NewYorkCommercialBank.com, and www.NYCBfamily.com,~~ and will be provided, without charge, upon written request to the Chief Corporate Governance Officer and Corporate Secretary at ~~615 Merrick~~102 Duffy Avenue, ~~Westbury,~~Hicksville, NY ~~11590.~~

11801.

~~ITEM~~
Item 11.			~~EXECUTIVE COMPENSATION~~Executive Compensation

Information regarding executive compensation appears in our ~~2018~~2024 Proxy Statement under the captions “Compensation Committee Report,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Executive Compensation and Related Information,” and “Director Compensation,” and is incorporated herein by this reference.

~~ITEM~~
Item 12.			~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table provides information regarding the Company’s equity compensation plans at December 31, ~~2017:~~

2023:


Plan Category		Number of Securities to Be Issued Upon Exercise		Weighted Average Exercise Price (1)								Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
~~Plan category~~			~~Number of securities to be~~ ~~issued upon exercise of~~ ~~outstanding options,~~ ~~warrants, and rights~~ ~~(a)~~	~~Weighted-average exercise~~ ~~price of outstanding~~ ~~options, warrants, and~~ ~~rights~~ ~~(b)~~		~~Number of securities~~ ~~remaining available for~~ ~~future issuance under~~ ~~equity compensation plans~~ ~~(excluding securities~~ ~~reflected in column (a))~~ ~~(c)~~
Equity compensation plans approved by security holders					$	— 16,143,893		—		~~7,135,071~~
Equity compensation plans not approved by security holders							—		—		—		—
Total		—		$	—		16,143,893
~~Total~~	—		—	~~7,135,071~~

Information relating to the security ownership of certain beneficial owners and management appears in our ~~2018~~2024 Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners” and “Information with Respect to Nominees, Continuing Directors, and Executive Officers.”

~~ITEM~~
Item 13.			~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE~~Certain Relationship and Related Transactions, and Director Independence

Information regarding certain relationships and related transactions, and director independence, appears in our ~~2018~~2024 Proxy Statement under the captions “Transactions with Certain Related Persons” and “Corporate Governance,” respectively, and is incorporated herein by this reference.

~~ITEM~~
Item 14.			~~PRINCIPAL ACCOUNTANT FEES AND SERVICES~~Principal Accounting Fees and Services

Our independent registered public accounting firm is KPMG LLP, New York, New York, Auditor Firm ID: 185.

Information regarding principal ~~accountant~~accounting fees and services appears in our ~~2018~~2024 Proxy Statement under the caption “Audit andNon-Audit Fees,” and is incorporated herein by this reference.

154

PART IV

~~ITEM~~
Item 15.			~~EXHIBITS AND FINANCIAL STATEMENT SCHEDULES~~Exhibits, Financial Statement Schedules

(a) Documents Filed Asas Part of ~~This~~this Report

1. Financial Statements

The following are incorporated by reference from Item 8 hereof:

•Reports of Independent Registered Public Accounting Firm;

•Consolidated Statements of Condition at December 31, ~~2017~~2023 and ~~2016;~~2022;

•Consolidated Statements of ~~Operations~~Income and Comprehensive Income ~~(Loss)~~ for each of the years in the three-year period ended December 31, ~~2017;~~2023;

•Consolidated Statements of Changes in Stockholders’ Equity for each of the years in the three-year period ended December 31, ~~2017;~~2023;

•Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, ~~2017;~~2023; and

•Notes to the Consolidated Financial Statements.

The following are incorporated by reference from Item 9A hereof:

•Management’s Report on Internal Control over Financial Reporting; and

•Changes in Internal Control over Financial Reporting.

2. Financial Statement Schedules

Financial statement schedules have been omitted because they are not applicable or because the required information is provided in the Consolidated Financial Statements or Notes thereto.

3. Exhibits Required by Securities and Exchange Commission RegulationS-K

The following exhibits are filed as part of this Form10-K, and this list includes the Exhibit Index.


Exhibit No.
2.1		Agreement and Plan of Merger, dated as of April 24, 2021, by and among New York Community Bancorp, Inc., 615 Corp. and Flagstar Bancorp, Inc . (1)
~~Exhibit~~2.2		Amendment No.	1 to the Agreement and Plan of Merger, dated April 26, 2022, by and among New York Community Bancorp, Inc., 615 Corp., and Flagstar Bancorp, Inc.(2)
2.3		Amendment No. 2 to the Agreement and Plan of Merger, dated October 27, 2022, by and among New York Community Bancorp, Inc., 615 Corp. and Flagstar Bancorp, Inc. (3)
~~3.1~~2.4		Purchase and Assumption Agreement – All Deposits, dated March 20, 2023, among FDIC, as receiver of Signature Bridge Bank, the FDIC and Flagstar Bank, N.A. (4)
2.5		Amendment No. 1 to the Equity Appreciation Instrument, dated March 27 , 2023 (4)
3.1		Amended and Restated Certificate of Incorporation⁽¹⁾(5 )
3.2
~~3.2~~	Certificates of Amendment of Amended and Restated Certificate of Incorporation⁽²⁾(6 )
3.3
~~3.3~~	Certificate of Amendment of Amended and Restated Certificate of Incorporation⁽³⁾(7 )
3.4
~~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⁾(8 )
3.5		Certificate of Designations of the Registrant with respect to Series B Noncumulative Convertible Preferred Stock, dated March 11, 2024, filed with the Secretary of State of the State of Delaware and effective March 11, 2024 (9)
~~3.5~~3.6		Certificate of Designations of the Registrant with respect to Series C Noncumulative Convertible Preferred Stock, dated March 11, 2024, filed with the Secretary of State of the State of Delaware and effective March 11, 2024 (10)
3.7		Certificate of Designations of the Registrant with respect to Series D Non-Voting Common Equivalent Stock, dated March 11, 2024, filed with the Secretary of State of the State of Delaware and effective March 11, 2024 (11)
3.8		Amended and Restated Bylaws⁽⁵⁾(9)
4.1
~~4.1~~	Specimen Stock Certificate⁽⁶⁾(10 )
4.2
~~4.2~~	Deposit Agreement, dated as of March 16, 2017, by and among the Registrant, Computershare, Inc, and Computershare Trust Company, N.A., as joint depositary, and the holders from time to time of the depositary receipts described therein⁽⁷⁾(11 )
4.3
~~4.3~~	Form of certificate representing the Series A Preferred Stock⁽⁷⁾(11 )

155


4.4
~~4.4~~	Form of depositary receipt representing the Depositary Shares⁽⁷⁾(11 )
4.5		Form of warrant agreement for shares of Series D Non-Voting Common Equivalent Stock (14)
4.5		Description of securities registered pursuant to Section 12 of the Securities and Exchange Act of 1934(12)
4.6		Registrant will furnish, upon request, copies of all instruments defining the rights of holders of long-term debt instruments of the registrant and its consolidated subsidiaries.
10.1
~~10.1~~	Form of Employment Agreement between New York Community Bancorp, Inc. and ~~Joseph R. Ficalora, Robert Wann, Thomas R. Cangemi, James J. Carpenter, and~~ John J. Pinto*⁽⁸⁾Pinto (13)
10.2(P)
~~10.2~~	Synergy Financial Group, Inc. 2004 Stock Option Plan (as assumed by New York Community Bancorp, Inc. effective October 1, 2007)*⁽⁹⁾

*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)

156

(2)Incorporated by reference to Exhibits to the Company's Form 8-K filed with the Securities and Exchange Commission on April 27, 2022 (File No. 1-31565)

(3)Incorporated by reference to Exhibits to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 28, 2022 (File No. 1-31565)

(4)Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2023 (File No. 1-31565)

(5)Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2001 (File No. 1-31565)

(6)Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2003 (File No. 1-31565)

(7)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)

(8)Incorporated herein by reference to Exhibit 3.4 of the Registrant’s Registration Statement on Form 8-A (File No. 333-210919), as filed with the Securities and Exchange Commission on March 16, 2017

(9)Incorporated herein by reference to Exhibits to the Registrant’s Current Report on Form 8-K (File No. 1-31565), as filed with the Securities and Exchange Commission on March 14, 2024

(10)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)

(11)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)

(12)Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2019 (File No. 1-31565)

(13) Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on March 9, 2006 (File No. 1-31565)

(14)Incorporated by reference to Exhibits filed with the Company’s Registration Statement filed on Form S-1, Registration No. 33-66852

(15)Incorporated by reference to Exhibits filed with the 1995 Proxy Statement for the Annual Meeting of Shareholders held on April 19, 1995 (File No. 0-22278)

(16)Incorporated by reference to Exhibits filed with the 2006 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2006 (File No. 1-31565)

(17)Incorporated by reference to Exhibits filed with the 2012 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2012 (File No. 1-31565)

(18)Incorporated by reference to Exhibits filed with the Company’s Registration Statement filed on Form S-8 filed, Registration No. 333-241023

(19)Incorporated by reference to Exhibits filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2022 (File No. 001-31565)

(20)Incorporated by reference to Exhibits filed with the Company’s Form 8-K filed with the Securities and Exchange Commission on December 1, 2022 (File No. 1-31565)

(21)Incorporated by reference to Exhibit 10.1 to Flagstar Bancorp, Inc.’s Form 10-Q filed with the Securities and Exchange Commission on November 6, 2015 (File No. 1-16577)

(22)Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2022 (File No. 1-31565)

(23)Incorporated by reference to Exhibits to the Company’s Current Report on Form 8-K (File No. 1-31565), as filed with the Securities and Exchange Commission on March 8, 2024

(24)Incorporated by reference to Exhibits filed with the Company’s Form 10-K for the year ended December 31, 2021 (File No. 1-31565)

*
Item 16.			~~Management plan or compensation plan arrangement.~~Form 10-K Summary

~~(1)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-Q~~ ~~for the quarterly period ended March 31, 2001(File No. 0-22278)~~

~~(2)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-K~~ ~~for the year ended December 31, 2003(File No. 1-31565)~~

~~(3)~~

~~Incorporated by reference to Exhibits to the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on April 27, 2016 (FileNo. 1-31565)~~

~~(4)~~

~~Incorporated herein by reference to 3.4 of the Registrant’s Registration Statement on Form8-A~~ ~~(FileNo. 333-210919),~~ ~~as filed with the Securities and Exchange Commission on March 16, 2017~~

~~(5)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-K~~ ~~for the year ended December 31, 2016(File No. 1-31565)~~

~~(6)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form10-Q~~ ~~filed with the Securities and Exchange Commission on November 9, 2017 (FileNo. 1-31565)~~

~~(7)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on March 17, 2017~~

~~(8)~~

~~Incorporated by reference to Exhibits filed with the Company’s Form8-k~~ ~~filed with the Securities and Exchange Commission on March 9, 2006~~

~~(9)~~ ~~Incorporated by reference to Exhibits to FormS-8,~~ ~~Registration Statement filed on October 4, 2007, RegistrationNo. 333-146512~~
~~(10)~~ ~~Incorporated by reference to Exhibits filed with the Company’s Registration Statement filed on FormS-1,~~ ~~RegistrationNo. 33-66852~~
~~(11)~~ ~~Incorporated by reference to Exhibits to FormS-8,~~ ~~Registration Statement filed on October 27, 1994, RegistrationNo. 33-85682~~
~~(12)~~ ~~Incorporated by reference to Exhibits filed with the 1995 Proxy Statement for the Annual Meeting of Shareholders held on April 19, 1995~~
~~(13)~~ ~~Incorporated by reference to Exhibits filed with the 2006 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2006~~
~~(14)~~ ~~Incorporated by reference to Exhibits filed with the 2012 Proxy Statement for the Annual Meeting of Shareholders held on June 7, 2012~~
~~(15)~~ ~~Incorporated by reference to Exhibits filed with the Company’s Form8-K~~ ~~filed with the Securities and Exchange Commission on March 16, 2017 (FileNo. 1-31565)~~

~~ITEM 16.~~

~~FORM10-K~~ ~~SUMMARY~~

None.

157

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DATE:

March ~~1, 2018~~ 14, 2024

New York Community Bancorp, Inc.

(Registrant)

/s/ Alessandro P. DiNello

~~/s/ Joseph R. Ficalora~~

Alessandro P. DiNello

~~Joseph R. Ficalora~~

President and Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Alessandro P. DiNello

3/14/24

/s/ John J. Pinto

3/14/24

~~/s/ Joseph R. Ficalora~~

Alessandro P. DiNello

John J. Pinto

~~3/1/18~~

~~/s/ Thomas R. Cangemi~~

~~3/1/18~~

~~Joseph R. Ficalora~~President and Executive Chairman (Principal Executive Officer)

~~Thomas R. Cangemi~~

~~President, Chief Executive Officer,~~

~~and Director~~

Senior Executive Vice President and

Chief Financial Officer

~~(Principal Executive Officer)~~

(Principal Financial Officer)

/s/ Alessandro P. DiNello

3/14/24

/s/ Bryan L Marx

3/14/24

Alessandro P. DiNello

Bryan L Marx

~~/s/ John J. Pinto~~

Director

~~3/1/18~~

~~John J. Pinto~~

~~Executive Vice President and~~

~~Chief Accounting Officer~~

(Principal Accounting ~~Officer)~~Officer

/s/ ~~Dominick Ciampa~~

Marshall Lux

3/~~1/18~~14/24

~~/s/ Maureen E. Clancy~~

~~3/1/18~~

~~Dominick Ciampa~~

~~Maureen E. Clancy~~

~~Chairman of the Board of Directors~~

~~Director~~

~~/s/ Hanif W. Dahya~~

~~3/1/18~~

~~/s/ Leslie D. Dunn~~

~~3/1/18~~

~~Hanif W. Dahya~~

~~Leslie D. Dunn~~

~~Director~~

~~/s/ Michael J. Levine~~

~~3/1/18~~

~~/s/ James J. O’Donovan~~

~~3/1/18~~

~~Michael J. Levine~~

~~James J. O’Donovan~~

~~Director~~

~~/s/ Lawrence Rosano, Jr.~~

~~3/1/18~~

~~/s/ Ronald A. Rosenfeld~~

~~3/1/18~~

~~Lawrence Rosano, Jr.~~

~~Ronald A. Rosenfeld~~

~~Director~~

/s/ Lawrence J. Savarese

3/~~1/18~~

~~/s/ John M. Tsimbinos~~

~~3/1/18~~14/24

Marshall Lux

Lawrence J. Savarese

Presiding Director

Director

/s/ Peter Schoels

~~John M. Tsimbinos~~3/14/24

/s/ David L. Treadwell

3/14/24

~~Director~~Peter Schoels

David L. Treadwell

~~Director~~

Director

/s/ ~~Robert Wann~~

Jennifer R. Whip

3/~~1/18~~14/24

~~Robert Wann~~Jennifer R. Whip

~~Senior Executive Vice President,~~

~~Chief Operating Officer, and~~ Director

~~155~~

158


~~Name~~	~~Jurisdiction of~~ ~~Organization~~	~~Purpose~~
~~DHB Real Estate, LLC~~	~~Arizona~~	~~Organized to own interests in real estate~~

~~Ferry Development Holding Company~~	~~Delaware~~	~~Formed to hold and manage investment portfolios for the Company~~

~~NYCB Mortgage Company, LLC~~	~~Delaware~~	~~Holding company for Walnut Realty Holding Company, LLC~~

~~NYCB Specialty Finance Company, LLC~~	~~Delaware~~	~~Originates asset-based, equipment financing, and dealer-floor plan loans~~

~~Woodhaven Investments, LLC.~~	~~Delaware~~	~~Holding company for Ironbound Investment Company, Inc.~~

~~Eagle Rock Investment Corp.~~	~~New Jersey~~	~~Formed to hold and manage investment portfolios for the Company~~

~~Pacific Urban Renewal, Inc.~~	~~New Jersey~~	~~Owns a branch building~~

~~Synergy Capital Investments, Inc.~~	~~New Jersey~~	~~Formed to hold and manage investment portfolios for the Company~~

~~BSR 1400 Corp.~~	~~New York~~	~~Organized to own interests in real estate~~

~~Bellingham Corp.~~	~~New York~~	~~Organized to own interests in real estate~~

~~NYCB Insurance Agency, Inc.~~	~~New York~~	~~Receives revenues from third parties on the sale ofnon-deposit~~ ~~insurance products~~

~~Main Omni Realty Corp.~~	~~New York~~	~~Organized to own interests in real estate~~

~~NYB Realty Holding Company, LLC~~	~~New York~~	~~Holding company for~~owns interests in 10 additional active entities organized as indirect wholly-owned subsidiaries ~~owning an interest in real estate~~

~~RCBK Mortgage Corp.~~	~~New York~~	~~Organized to own interests in loans~~

~~RSB Agency, Inc.~~	~~New York~~	~~Sellsnon-deposit~~ ~~investment products~~

~~Richmond Enterprises, Inc.~~	~~New York~~	~~Holding company for Peter B. Cannell & Co., Inc.~~

~~Roslyn National Mortgage Corporation~~	~~New York~~	~~Formerly operated as a mortgage loan originator and servicer and currently holds an interest in its former office space~~

~~100 Duffy Realty, LLC~~	~~New York~~	~~Owns a back-office building~~


~~Name~~	~~Jurisdiction of~~ ~~Organization~~	~~Purpose~~
~~Peter B. Cannell & Co., Inc.~~	~~Delaware~~	~~Advises high net worth individuals and institutions on the management of their assets~~

~~Roslyn Real Estate Asset Corp.~~	~~Delaware~~	~~A REIT organized for the purpose of investing in~~ ~~mortgage-related assets~~

~~Walnut Realty Holding Company, LLC~~	~~Delaware~~	~~Owns two back-office buildings~~

~~Your New REO, LLC~~	~~Delaware~~	~~Owns a website that lists bank-owned properties for sale~~

~~Ironbound Investment Company, LLC.~~	~~Florida~~	~~Organized for the purpose of investing in mortgage-related assets~~

~~1400 Corp.~~	~~New York~~	~~Holding company for Roslyn Real Estate Asset Corp.~~

~~Prospect Realty Holding Company, LLC~~	~~New York~~	~~Owns a back-office building~~


~~Name~~	~~Jurisdiction of~~ ~~Organization~~	~~Purpose~~
~~Beta Investments, Inc.~~	~~Delaware~~	~~Holding company for Omega Commercial Mortgage Corp. and Long Island Commercial Capital Corp.~~


~~Name~~	~~Jurisdiction of~~ ~~Organization~~	~~Purpose~~
~~Omega Commercial Mortgage Corp.~~	~~Delaware~~	~~A REIT organized for the purpose of investing in~~ ~~mortgage-related assets~~
~~Long Island Commercial Capital Corp.~~	~~New York~~	~~A REIT organized for the purpose of investing in~~ ~~mortgage-related assets~~


			Market Price
	Dividends Declared per Common Share		High		Low		Close
2017
1st Quarter		$0.17	$	16.26	$	13.67	$	13.97
2nd Quarter		0.17		14.12		12.61		13.13
3rd Quarter		0.17		13.48		11.67		12.89
4th Quarter		0.17		13.76		11.94		13.02

2016
1st Quarter		$0.17	$	16.17	$	14.32	$	15.90
2nd Quarter		0.17		15.97		14.25		14.99
3rd Quarter		0.17		15.49		14.05		14.23
4th Quarter		0.17		17.67		13.74		15.91


~~For the fiscal year ended:~~☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED December 31, ~~2017~~				~~Commission File Number1-31565~~2023


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

~~ITEM~~
Item 1B.			~~UNRESOLVED STAFF COMMENTS~~Unresolved Staff Comments

~~ITEM~~
Item 4.			~~MINE SAFETY DISCLOSURES~~Mine Safety Disclosures

~~ITEM~~
Item 5.			~~MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES~~Market For the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases


	12/31/2012		12/31/2013		12/31/2014		12/31/2015		12/31/2016		12/31/2017
New York Community Bancorp, Inc.	$	100.00	$	137.85	$	139.58	$	151.05	$	154.30	$	132.87
S&PMid-Cap 400 Index	$	100.00	$	133.50	$	146.54	$	143.35	$	173.08	$	201.20
SNL U.S. Bank and Thrift Index	$	100.00	$	136.92	$	152.85	$	155.94	$	196.86	$	231.49


	12/31/2018		12/31/2019		12/31/2020		12/31/2021		12/31/2022		12/31/2023
New York Community Bancorp, Inc.	$	100.00	$	135.38	$	127.51	$	156.41	$	118.03	$	149.75
S&P Mid-Cap 400 Index	$	100.00	$	126.20	$	143.44	$	178.95	$	155.58	$	181.15
S&P U.S. BMI Banks Index	$	100.00	$	137.36	$	119.83	$	162.92	$	135.13	$	147.41


(dollars in thousands, except per share data)
Period	Total Shares of Common Stock Repurchased		Average Price Paid per Common Share		Total Allocation
First Quarter 2017		648,793		$15.62	$	10,132
Second Quarter 2017		37,414		13.43		502
Third Quarter 2017		26,670		12.89		344
Fourth Quarter 2017:
October		7,399		12.88		95
November		2,686		12.86		35
December		561,411		13.10		7,355

Total Fourth Quarter 2017		571,496		13.10		7,485

2017 Total		1,284,373		$14.37	$	18,463


(dollars in millions, except share data)
Period	Total Shares of Common Stock Repurchased	Average Price Paid per Common Share		Total Allocation		Total Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs
First Quarter 2023	976,454	$	9.33	$	9	0
Second Quarter 2023	190,177	10.36		2		0
Third Quarter 2023	33,956	12.50		0		0
Fourth Quarter 2023
October 1 - 31, 2023	1,525	10.29		0		—
November 1 - 30, 2023	4,897	9.34		—		—
December 1 - 31, 2023	50,526	9.92		1		—
Total Fourth Quarter 2023	56,948	$	16.57	1		—
2023 Total	1,257,535	$	9.59	$	12	—


	At or For the Years Ended December 31,
(dollars in thousands, except share data)	2017			2016			2015			2014			2013
EARNINGS SUMMARY:
Net interest income⁽¹⁾	$	1,130,003		$	1,287,382		$	408,075		$	1,140,353		$	1,166,616
Provision for (recovery of) losses onnon-covered loans		60,943			11,874			(3,334	)		—			18,000
(Recovery of) provision for losses on covered loans		(23,701	)		(7,694	)		(11,670	)		(18,587	)		12,758
Non-interest income		216,880			145,572			210,763			201,593			218,830
Non-interest expense:
Operating expenses⁽²⁾		641,218			638,109			615,600			579,170			591,778
Amortization of core deposit intangibles		208			2,391			5,344			8,297			15,784
Debt repositioning charge		—			—			141,209			—			—
Merger-related expenses		—			11,146			3,702			—			—
Totalnon-interest expense		641,426			651,646			765,855			587,467			607,562
Income tax expense (benefit)		202,014			281,727			(84,857	)		287,669			271,579
Net income (loss)⁽³⁾		466,201			495,401			(47,156	)		485,397			475,547
Preferred stock dividends		24,621			—			—			—			—
Net income available to common shareholders		441,580			495,401			(47,156	)		485,397			475,547
Basic earnings (loss) per common share⁽³⁾		$0.90			$1.01			$(0.11	)		$1.09			$1.08
Diluted earnings (loss) per common share⁽³⁾		0.90			1.01			(0.11	)		1.09			1.08
Dividends paid per common share		0.68			0.68			1.00			1.00			1.00

SELECTED RATIOS:
Return on average assets⁽³⁾		0.96	%		1.00	%		(0.10	)%		1.01	%		1.07	%
Return on average common stockholders’ equity⁽³⁾		7.12			8.19			(0.81	)		8.41			8.46
Average common stockholders’ equity to average assets		12.76			12.28			11.90			12.01			12.66
Operating expenses to average assets⁽²⁾		1.32			1.29			1.26			1.21			1.33
Efficiency ratio⁽¹⁾⁽²⁾		47.61			44.53			99.48			43.16			42.71
Net interest rate spread⁽¹⁾		2.47			2.85			0.69			2.57			2.90
Net interest margin⁽¹⁾		2.59			2.93			0.94			2.67			3.01
Common dividend payout ratio		75.56			67.33			—			91.74			92.59

BALANCE SHEET SUMMARY:
Total assets	$	49,124,195		$	48,926,555		$	50,317,796		$	48,559,217		$	46,688,287
Loans, net of allowances for loan losses		38,265,183			39,308,016			38,011,995			35,647,639			32,727,507
Allowance for losses onnon-covered loans		158,046			158,290			147,124			139,857			141,946
Allowance for losses on covered loans		—			23,701			31,395			45,481			64,069
Securities		3,531,427			3,817,057			6,173,645			7,096,450			7,951,020
Deposits		29,102,163			28,887,903			28,426,758			28,328,734			25,660,992
Borrowed funds		12,913,679			13,673,379			15,748,405			14,226,487			15,105,002
Common stockholders’ equity		6,292,536			6,123,991			5,934,696			5,781,815			5,735,662
Common shares outstanding		488,490,352			487,056,676			484,943,308			442,587,190			440,809,365
Book value per common share		$12.88			$12.57			$12.24			$13.06			$13.01
Common stockholders’ equity to total assets		12.81	%		12.52	%		11.79	%		11.91	%		12.29	%

ASSET QUALITY RATIOS (excluding covered assets andnon-covered purchased credit-impaired loans):
Non-performingnon-covered loans to totalnon-covered loans		0.19	%		0.15	%		0.13	%		0.23	%		0.35	%
Non-performingnon-covered assets to totalnon-covered assets		0.18			0.14			0.13			0.30			0.40
Allowance for losses onnon-covered loans tonon-performingnon-covered loans		214.50			277.19			310.08			181.75			137.10
Allowance for losses onnon-covered loans to totalnon-covered loans		0.41			0.42			0.41			0.42			0.48
Net charge-offs (recoveries) to average loans⁽⁴⁾		0.16			0.00			(0.02	)		0.01			0.05

ASSET QUALITY RATIOS (including covered assets andnon-covered purchased credit-impaired loans):⁽⁵⁾
Totalnon-performing loans to total loans		0.19	%		0.48	%		0.49	%		0.66	%		0.97	%
Totalnon-performing assets to total assets		0.18			0.44			0.45			0.68			0.91
Allowances for loan losses to totalnon-performing loans		214.50			96.39			96.51			78.92			65.40
Allowances for loan losses to total loans		0.41			0.47			0.47			0.52			0.63

~~ITEM 2.~~
Item 1C.			~~PROPERTIES~~Cybersecurity

~~(1)~~
Item 7.			~~The 2015 amount reflects the impact~~Management's Discussion and Analysis of ~~a $773.8 million debt repositioning charge recorded as interest expense in the fourth quarter~~Financial Condition and Results of ~~the year.~~Operations


	Constant Maturity Treasury Rates
	Five-Year						Ten-Year
	2017			2016			2017			2016
High		2.26	%		2.10	%		2.62	%		2.60	%
Low		1.63			0.94			2.05			1.37
Average		1.91			1.33			2.33			1.84


	For the Twelve Months Ended December
	2017			2016
Change in prices:		2.1	%		2.1	%


	For the Three Months Ended December 31,
	2017			2016
Residential rental vacancy rate in New York		4.9	%		5.4	%
Manhattan office vacancy rate		10.1			10.4


	At December 31, 2017
	Multi-Family Loans					Commercial Real Estate Loans
(dollars in thousands)	Amount		Percent of Total			Amount		Percent of Total
New York City:
Manhattan	$	7,399,409		26.36	%	$	3,712,116		50.70	%
Brooklyn		4,340,472		15.46			563,867		7.70
Bronx		3,783,194		13.48			95,758		1.31
Queens		2,252,315		8.02			647,774		8.84
Staten Island		78,513		0.28			55,721		0.76

Total New York City	$	17,853,903		63.60	%	$	5,075,236		69.31	%

Long Island		517,651		1.84			862,888		11.79
Other New York State		971,697		3.46			191,797		2.62
All other states		8,731,458		31.10			1,192,305		16.28

Total	$	28,074,709		100.00	%	$	7,322,226		100.00	%


	Non-Covered Loans Held for Investment at December 31, 2017
(in thousands)	Multi-Family		Commercial Real Estate		One-to-Four Family		Acquisition, Development, and Construction		Other		Total Loans
Amount due:
Within one year	$	1,170,796	$	858,534	$	8,985	$	374,369	$	1,071,480	$	3,484,164
After one year:
One to five years		18,470,347		4,567,130		119,823		52,414		536,467		23,746,181
Over five years		8,433,566		1,896,562		348,420		9,042		441,087		11,128,677

Total due or repricing after one year		26,903,913		6,463,692		468,243		61,456		977,554		34,874,858

Total amounts due or repricing, gross	$	28,074,709	$	7,322,226	$	477,228	$	435,825	$	2,049,034	$	38,359,022


	Due after December 31, 2018
(in thousands)	Fixed		Adjustable		Total
Mortgage Loans:
Multi-family	$	2,817,144	$	24,086,769	$	26,903,913
Commercial real estate		506,207		5,957,485		6,463,692
One-to-four family		20,337		447,906		468,243
Acquisition, development, and construction		666		60,790		61,456

Total mortgage loans		3,344,354		30,552,950		33,897,304
Other loans		26,788		950,766		977,554

Total loans	$	3,371,142	$	31,503,716	$	34,874,858


	December 31,				Change from December 31, 2016 to December 31, 2017
(dollars in thousands)	2017		2016		Amount			Percent
Non-PerformingNon-Covered Loans:
Non-accrualnon-covered mortgage loans:
Multi-family	$	11,078	$	13,558	$	(2,480	)		(18.29	)%
Commercial real estate		6,659		9,297		(2,638	)		(28.37	)
One-to-four family residential		1,966		9,679		(7,713	)		(79.69	)
Acquisition, development, and construction		6,200		6,200		—			—

Totalnon-accrualnon-covered mortgage loans		25,903		38,734		(12,831	)		(33.13	)
Non-accrualnon-covered other loans⁽¹⁾		47,779		17,735		30,044			169.41

Totalnon-performingnon-covered loans	$	73,682	$	56,469	$	17,213			30.48


(in thousands)
Balance at December 31, 2016	$	56,469
Newnon-accrual		78,743
Charge-offs		(24,971	)
Transferred to other real estate owned		(8,233	)
Loan payoffs, including dispositions and principalpay-downs		(28,236	)
Restored to performing status		(90	)

Balance at December 31, 2017	$	73,682


	Loan No. 1⁽²⁾	Loan No. 2	Loan No. 3	Loan No. 4	Loan No. 5
Type of Loan	C&I	Multi-Family	ADC	CRE	Multi-Family
Origination date	4/29/14	1/05/06	7/07/04	1/19/07	4/24/07
Origination balance	$13,325,000	$12,640,000	$6,200,000	$3,000,000	$2,000,000
Full commitment balance⁽¹⁾	$13,325,000	$12,640,000	$6,200,000	$3,000,000	$2,000,000
Balance at December 31, 2017	$7,677,946	$7,434,196	$6,200,000	$2,513,830	$1,780,488
Associated allowance	None	None	None	None	None
Non-accrual date	June 2017	March 2014	October 2016	December 2017	July 2017
Origination LTV	N/A	79%	57%	63%	54%
Current LTV	N/A	57%	67%	50%	68%
Last appraisal	N/A	February 2017	April 2017	December 2017	September 2017


~~No. 1 –~~		The borrower is an owner of a finance company based in Delaware. The loan is collateralized by various taxi medallion-related loans, which in turn, are collateralized by taxi medallions in New York City and Chicago.

~~No. 2 –~~		~~The borrower is an owner of real estate and is based in New Jersey. The loan is collateralized by a multi-family complex with 314 residential units and four retail stores in Atlantic City, New Jersey.~~

~~No. 3 –~~		~~The borrower is an owner of real estate and is based in Maryland. The loan is collateralized by 1,031 acres of vacant land in La Plata, Maryland.~~

~~No. 4 –~~		~~The borrower is an owner of real estate and is based in New York. The loan is collateralized by a retail building containing 22,120 square feet of rental area in Nanuet, New York.~~

~~No. 5 –~~		~~The borrower is an owner of real estate and is based in Connecticut. The loan is collateralized by a multi-family building with 80 residential units in Waterbury, Connecticut.~~


(in thousands)	Accruing			Non-Accrual			Total
Balance at December 31, 2016	$	3,466		$	16,454		$	19,920
New TDRs		8,960			38,433			47,393
Transferred to other real estate owned		—			(877	)		(877	)
Charge-offs		—			(11,956	)		(11,956	)
Transferred from accruing tonon-accrual		(1,881	)		1,881			—
Loan payoffs, including dispositions and principalpay-downs		(892	)		(8,032	)		(8,924	)

Balance at December 31, 2017	$	9,653		$	35,903		$	45,556


(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			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


(in thousands)
New York	$	52,705
New Jersey		10,976
Maryland		6,200
Connecticut		1,781
Arizona		1,174
All other states		846

Totalnon-performing loans	$	73,682


(in thousands)	Certificates of Deposit		Long-Term Debt ⁽¹⁾		Operating Leases		Total
One year or less	$	5,897,172		$ 4,173,500	$	29,786	$	10,100,458
One to three years		2,671,236		7,781,000		46,636		10,498,872
Three to five years		64,392		600,000		16,523		680,915
More than five years		10,846		359,179		66,555		436,580

Total	$	8,643,646		$12,913,679	$	159,500	$	21,716,825


(in thousands)
Mortgage Loan Commitments:
Multi-family and commercial real estate	$	377,782
One-to-four family		3,819
Acquisition, development, and construction		239,504

Total mortgage loan commitments	$	621,105
Other loan commitments⁽¹⁾		1,314,170

Total loan commitments	$	1,935,275
Commercial, performancestand-by, and financialstand-by letters of credit		339,403

Total commitments	$	2,274,678


At December 31, 2017	Actual					Minimum Required Ratio
(dollars in thousands)	Amount		Ratio			Minimum Required Ratio
Common equity tier 1 capital	$	3,869,129		11.36	%		4.50	%
Tier 1 risk-based capital		4,371,969		12.84			6.00
Total risk-based capital		4,877,208		14.32			8.00
Leverage capital		4,371,969		9.58			4.00

At December 31, 2016	Actual					Minimum Required Ratio
(dollars in thousands)	Amount		Ratio			Minimum Required Ratio
Common equity tier 1 capital	$	3,748,231		10.62	%		4.50	%
Tier 1 risk-based capital		3,748,231		10.62			6.00
Total risk-based capital		4,277,759		12.12			8.00
Leverage capital		3,748,231		8.00			4.00


	For the Twelve Months Ended
	Dec. 31, 2017			Dec. 31, 2016			Change (%)
(dollars in thousands)

Total Interest Income	$	1,582,239		$	1,674,869			-6	%

Prepayment Income:
Loans	$	47,004		$	60,891			-23	%
Securities		8,130			33,509			-76	%

Total prepayment income	$	55,134		$	94,400			-42	%

GAAP Net Interest Margin		2.59	%		2.93	%		-34	bp
Less:
Prepayment income from loans		11	bp		14	bp		-3	bp
Prepayment income from securities		2			8			-6	bp

Total prepayment income contribution to net interest margin		13	bp		22	bp		-9	bp

Adjusted Net Interest Margin(non-GAAP)		2.46	%		2.71	%		-25	bp


	Year Ended December 31, 2017 Compared to Year Ended December 31, 2016									Year Ended December 31, 2016 Compared to Year Ended December 31, 2015
	Increase/(Decrease)									Increase/(Decrease)
	Due to									Due to
(in thousands)	Volume			Rate			Net			Volume			Rate			Net
INTEREST-EARNING ASSETS:
Mortgage and other loans, net	$	(25,239	)	$	(29,544	)	$	(54,783	)	$	92,003		$	(61,445	)	$	30,558
Securities and money market investments		12,369			(50,216	)		(37,847	)		(121,091	)		73,818			(47,273	)

Total		(12,870	)		(79,760	)		(92,630	)		(29,088	)		12,373			(16,715	)


INTEREST-BEARING LIABILITIES:
Interest-bearing checking and money market accounts	$	(2,388	)	$	39,202		$	36,814		$	2,478		$	13,221		$	15,699
Savings accounts		(4,109	)		574			(3,535	)		(9,847	)		(8,947	)		(18,794	)
Certificates of deposit		15,141			10,339			25,480			13,379			590			13,969
Borrowed funds		(13,498	)		19,488			5,990			(16,766	)		(890,130	)		(906,896	)

Total		(4,854	)		69,603			64,749			(10,756	)		(885,266	)		(896,022	)

Change in net interest income	$	(8,016	)	$	(149,363	)	$	(157,379	)	$	(18,332	)	$	897,639		$	879,307


(in thousands, except per share data)	2017										2016
(in thousands, except per share data)	4th		3rd		2nd			1st			4th		3rd			2nd		1st
Net interest income	$	270,974	$	276,343	$	287,769		$	294,917		$	315,520	$	318,423		$	325,573	$	327,866
Provision for (recoveries of) loan losses		2,926		44,585		(6,261	)		(4,008	)		3,516		(55	)		895		(176	)
Non-interest income		25,343		108,928		50,437			32,172			32,374		40,595			37,366		35,237
Non-interest expense		148,484		162,234		163,765			166,943			170,602		161,685			160,911		158,448

Income before income taxes		144,907		178,452		180,702			164,154			173,776		197,388			201,133		204,831
Income tax expense		8,386		67,984		65,447			60,197			60,043		72,089			74,673		74,922

Net income	$	136,521	$	110,468	$	115,255		$	103,957		$	113,733	$	125,299		$	126,460	$	129,909
Preferred stock dividends		8,207		8,207		8,207			—			—		—			—		—

Net income available to common shareholders	$	128,314	$	102,261	$	107,048		$	103,957		$	113,733	$	125,299		$	126,460	$	129,909

Basic earnings per common share		$0.26		$0.21		$0.22			$0.21			$0.23		$0.26			$0.26		$0.27

Diluted earnings per common share		$0.26		$0.21		$0.22			$0.21			$0.23		$0.26			$0.26		$0.27