LOANS

Loans consist of the following:



(Dollars in thousands)	March 31, 2020			December 31, 2019
Permanent mortgages on:
Multifamily residential	$	4,058,869		$	3,985,981
Single family residential	1,930,831			2,021,320
Commercial real estate	205,657			203,134
Construction and land loans	22,857			20,442
Non-Mortgage (‘‘NM’’) loans	100			100
Total	6,218,314			6,230,977
Allowance for loan losses	(40,657		)	(36,001		)
Loans held for investment, net	$	6,177,657		$	6,194,976

Certain loans have been pledged to secure borrowing arrangements (see Note 8).

The following table summarizes activity in and the allocation of the allowance for loan losses by portfolio segment:



(Dollars in thousands)	Multifamily Residential		Single Family Residential			Commercial Real Estate			Land, Construction and NM			Total
Three months ended March 31, 2020
Allowance for loan losses:
Beginning balance allocated to portfolio segments	$	23,372	$	10,076		$	2,341		$	212		$	36,001
Provision for (reversal of) loan losses	3,936		1,069			336			(41		)	5,300
Charge-offs	—		(722		)	—			—			(722		)
Recoveries	—		3			—			75			78
Ending balance allocated to portfolio segments	$	27,308	$	10,426		$	2,677		$	246		$	40,657
Three months ended March 31, 2019
Allowance for loan losses:
Beginning balance allocated to portfolio segments	$	21,326	$	10,125		$	2,441		$	422		$	34,314
Provision for (reversal of) loan losses	720		(239		)	(163		)	(18		)	300
Charge-offs	—		—			—			—			—
Recoveries	—		3			—			75			78
Ending balance allocated to portfolio segments	$	22,046	$	9,889		$	2,278		$	479		$	34,692

The following table summarizes the allocation of the allowance for loan losses by impairment methodology:



(Dollars in thousands)	Multifamily Residential		Single Family Residential		Commercial Real Estate		Land, Construction and NM		Total
As of March 31, 2020:
Ending allowance balance allocated to:
Loans individually evaluated for impairment	$	—	$	25	$	—	$	—	$	25
Loans collectively evaluated for impairment	27,308		10,401		2,677		246		40,632
Ending balance	$	27,308	$	10,426	$	2,677	$	246	$	40,657
Loans:
Ending balance: individually evaluated for impairment	$	537	$	6,331	$	—	$	—	$	6,868
Ending balance: collectively evaluated for impairment	4,058,332		1,924,500		205,657		22,957		6,211,446
Ending balance	$	4,058,869	$	1,930,831	$	205,657	$	22,957	$	6,218,314
As of December 31, 2019:
Ending allowance balance allocated to:
Loans individually evaluated for impairment	$	—	$	815	$	—	$	—	$	815
Loans collectively evaluated for impairment	23,372		9,261		2,341		212		35,186
Ending balance	$	23,372	$	10,076	$	2,341	$	212	$	36,001
Loans:
Ending balance: individually evaluated for impairment	$	541	$	7,097	$	—	$	—	$	7,638
Ending balance: collectively evaluated for impairment	3,985,440		2,014,223		203,134		20,542		6,223,339
Ending balance	$	3,985,981	$	2,021,320	$	203,134	$	20,542	$	6,230,977

The Company assigns a risk rating to all loans and periodically performs detailed reviews of all such loans to identify credit risks and to assess the overall collectability of the portfolio. During these internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, as well as the financial performance and other characteristics of loan collateral. These credit quality indicators are used to assign a risk rating to each individual loan. The risk ratings can be grouped into six major categories, defined as follows:

Pass assets are those which are performing according to contract and have no existing or known weaknesses deserving of management’s close attention. The basic underwriting criteria used to approve the loans are still valid, and all payments have essentially been made as planned.

Watch assets are expected to have an event occurring in the next 90 to 120 days that will lead to a change in risk rating with the change being either favorable or unfavorable. These assets require heightened monitoring of the event by management.

Special mention assets have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard assets are inadequately protected by the current net worth and/or paying capacity of the obligor or by the collateral pledged. These assets have well-defined weaknesses: the primary source of repayment is gone or severely impaired (i.e., bankruptcy or loss of employment) and/or there has been a deterioration in collateral value. In addition, there is the distinct possibility that the Company will sustain some loss, either directly or indirectly (i.e., the cost of monitoring), if the deficiencies are not corrected. A deterioration in collateral value alone does not mandate that an asset be adversely classified if such factor does not indicate that the primary source of repayment is in jeopardy.

Doubtful assets have the weaknesses of those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable based on current facts, conditions and values.

Loss assets are considered uncollectible and of such little value that their continuance as assets, without establishment of a specific valuation allowance or charge-off, is not warranted. This classification does not necessarily mean that an asset has absolutely no recovery or salvage value; but rather, it is not practical or desirable to defer writing off a basically worthless asset (or portion thereof) even though partial recovery may be affected in the future.

The following table summarizes the loan portfolio allocated by management’s internal risk ratings at March 31, 2020 and December 31, 2019:



(Dollars in thousands)	Multifamily Residential		Single Family Residential		Commercial Real Estate		Land, Construction and NM		Total
As of March 31, 2020:
Grade:
Pass	$	3,989,553	$	1,898,641	$	203,857	$	22,957	$	6,115,008
Watch	51,699		14,844		1,800		—		68,343
Special mention	16,692		10,108		—		—		26,800
Substandard	925		7,238		—		—		8,163
Doubtful	—		—		—		—		—
Total	$	4,058,869	$	1,930,831	$	205,657	$	22,957	$	6,218,314
As of December 31, 2019:
Grade:
Pass	$	3,917,264	$	1,980,845	$	200,371	$	20,542	$	6,119,022
Watch	47,309		16,432		2,763		—		66,504
Special mention	19,708		13,635		—		—		33,343
Substandard	1,700		8,808		—		—		10,508
Doubtful	—		1,600		—		—		1,600
Total	$	3,985,981	$	2,021,320	$	203,134	$	20,542	$	6,230,977

The following table summarizes an aging analysis of the loan portfolio by the time past due at March 31, 2020 and December 31, 2019:



(Dollars in thousands)	30 Days		60 Days		90+ Days		Non-accrual		Current		Total
As of March 31, 2020:
Loans:
Multifamily residential	$	—	$	897	$	—	$	537	$	4,057,435	$	4,058,869
Single family residential	1,066		1,720		—		5,036		1,923,009		1,930,831
Commercial real estate	—		—		—		—		205,657		205,657
Land, construction and NM	—		—		—		—		22,957		22,957
Total	$	1,066	$	2,617	$	—	$	5,573	$	6,209,058	$	6,218,314
As of December 31, 2019:
Loans:
Multifamily residential	$	1,411	$	—	$	—	$	541	$	3,984,029	$	3,985,981
Single family residential	4,037		690		—		5,792		2,010,801		2,021,320
Commercial real estate	—		—		—		—		203,134		203,134
Land, construction and NM	—		—		—		—		20,542		20,542
Total	$	5,448	$	690	$	—	$	6,333	$	6,218,506	$	6,230,977

At March 31, 2020, there were 5 single family residential loans totaling $6.0 million and 1 multifamily residential loan totaling $595 thousand that would have been reported as 30 days delinquent loans if not for COVID-19 related requests. See Note 2 to the unaudited consolidated financial statements for additional information.

The following table summarizes information related to impaired loans at March 31, 2020 and December 31, 2019:



	As of March 31, 2020						As of December 31, 2019
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Multifamily residential	$	537	$	614	$	—	$	541	$	618	$	—
Single family residential	5,430		6,472		—		4,588		4,915		—
	5,967		7,086		—		5,129		5,533		—
With an allowance recorded:
Single family residential	901		898		25		2,509		2,484		815
	901		898		25		2,509		2,484		815
Total:
Multifamily residential	537		614		—		541		618		—
Single family residential	6,331		7,370		25		7,097		7,399		815
	$	6,868	$	7,984	$	25	$	7,638	$	8,017	$	815

The following tables summarize information related to impaired loans for the three months ended March 31, 2020 and 2019:



	Three Months Ended March 31,
	2020						2019
(Dollars in thousands)	Average Recorded Investment		Interest Income		Cash Basis Interest		Average Recorded Investment		Interest Income		Cash Basis Interest
With no related allowance recorded:
Multifamily residential	$	539	$	8	$	8	$	560	$	3	$	3
Single family residential	4,790		19		14		4,148		36		—
Commercial real estate	—		—		—		—		—		—
	5,329		27		22		4,708		39		3
With an allowance recorded:
Single family residential	2,105		11		—		929		12		—
	2,105		11		—		929		12		—
Total:
Multifamily residential	539		8		8		560		3		3
Single family residential	6,895		30		14		5,077		48		—
Commercial real estate	—		—		—		—		—		—
	$	7,434	$	38	$	22	$	5,637	$	51	$	3

The following table summarizes the recorded investment related to troubled debt restructurings ("TDRs") at March 31, 2020 and December 31, 2019:



(Dollars in thousands)	March 31, 2020		December 31, 2019
Troubled debt restructurings:
Single family residential	$	1,296	$	1,305

The Company has allocated $25 thousand of its allowance for loan losses for loans modified in TDRs at both March 31, 2020 and December 31, 2019. The Company does not have commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs. There were no new troubled debt restructurings during the three months ended March 31, 2020 and 2019. See Note 2 to the unaudited consolidated financial statements for additional information.

The Company had no TDRs with a subsequent payment default within twelve months following the modification during the three months ended March 31, 2020 and 2019. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.