ISBC 2017 Form 10-K & 2018 Proxy Statement

FORM 10-K Loan Originations and Purchases. The following table shows our loan originations, loan purchases and repayment activities with respect to our portfolio of loans receivable for the periods indicated. Origination, sale and repayment activities with respect to our loans-held-for-sale are excluded from the table. Years Ended December 31, 2017 2016 2015 (In thousands) Loan originations and purchases Loan originations: Commercial loans: Multi-family loans $ 1,164,910 $ 2,162,447 $ 2,079,201 Commercial real estate loans 705,107 1,078,601 936,889 Commercial and industrial loans 663,433 608,899 930,777 Construction loans 414,183 451,505 82,455 Total commercial loans 2,947,633 4,301,452 4,029,322 Residential mortgage loans 516,532 523,342 646,521 Consumer and other loans: Home equity loans 16,781 14,614 23,177 Home equity credit lines 36,505 145,147 131,533 Other 79,717 100,262 93,081 Total consumer and other loans 133,003 260,023 247,791 Total loan originations 3,597,168 5,084,817 4,923,634 Loan purchases: Commercial loans: Multi-family loans — — 2,760 Commercial real estate loans — — 141,563 Total commercial loans — — 144,323 Residential mortgage loans 540,898 141,562 54,300 Consumer and other loans — — — Total loan purchases 540,898 141,562 198,623 Loans sold (48,099) (9,752) (394,742) Principal repayments (2,809,630) (3,302,545) (2,945,852) Other items, net (1) 1,909 (5,360) (8,100) Net increase in loan portfolio $ 1,282,246 $ 1,908,722 $ 1,773,563 (1) Other items include charge-offs and recoveries, loan loss provisions, loans transferred to other real estate owned, and amortization and accretion of deferred fees and costs, discounts and premiums, and purchase accounting adjustments. Credit Policy and Procedures Loan Approval Procedures and Authority. The credit approval process provides for prompt and thorough underwriting and approval or decline of loan requests. The approval method used is a hierarchy of individual credit authorities for new credit requests and renewals. All credit actions require a total of two signatures, one from the Bank’s business line and one from the Bank’s credit risk management group. Transactions exceeding certain thresholds are submitted to the Bank’s Credit Approval Committee for decision. Our credit authority standards and limits are reviewed periodically by the Board of Directors. Approval limits are established on criteria such as the risk associated with each credit action, amount, and aggregate credit exposure of a borrower. The Bank’s Credit Risk Committee approves authorities for lending and credit personnel, which are ultimately submitted to our Board for ratification. Credit authorities are based on position, capability, and experience of the individuals. 9