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LOANS
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
LOANS LOANS
Loans consist of the following:
(Dollars in thousands)June 30,
2020		December 31,
2019
Permanent mortgages on:
Multifamily residential$4,082,224  $3,985,981  
Single family residential1,969,563  2,021,320  
Commercial real estate211,135  203,134  
Construction and land loans18,017  20,442  
Non-Mortgage (‘‘NM’’) loans100  100  
Total6,281,039  6,230,977  
Allowance for loan losses(45,985) (36,001) 
Loans held for investment, net$6,235,054  $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 ResidentialSingle Family ResidentialCommercial Real EstateLand, Construction and NMTotal
Three months ended June 30, 2020
Allowance for loan losses:
Beginning balance allocated to portfolio segments$27,308  $10,426  $2,677  $246  $40,657  
Provision for (reversal of) loan losses3,529  1,199  628  (106) 5,250  
Charge-offs—  —  —  —  —  
Recoveries—  3  —  75  78  
Ending balance allocated to portfolio segments$30,837  $11,628  $3,305  $215  $45,985  
Three months ended June 30, 2019
Allowance for loan losses:
Beginning balance allocated to portfolio segments$22,046  $9,889  $2,278  $479  $34,692  
Provision for (reversal of) loan losses699  (454) 134  71  450  
Charge-offs—  —  —  —  —  
Recoveries—  4  —  75  79  
Ending balance allocated to portfolio segments$22,745  $9,439  $2,412  $625  $35,221  
Six months ended June 30, 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 losses7,465  2,268  964  (147) 10,550  
Charge-offs—  (722) —  —  (722) 
Recoveries—  6  —  150  156  
Ending balance allocated to portfolio segments$30,837  $11,628  $3,305  $215  $45,985  
Six months ended June 30, 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 losses1,419  (693) (29) 53  750  
Charge-offs—  —  —  —  —  
Recoveries—  7  —  150  157  
Ending balance allocated to portfolio segments$22,745  $9,439  $2,412  $625  $35,221  
The following table summarizes the allocation of the allowance for loan losses by impairment methodology:
(Dollars in thousands)Multifamily ResidentialSingle Family ResidentialCommercial Real EstateLand, Construction and NMTotal
As of June 30, 2020:
Ending allowance balance allocated to:
Loans individually evaluated for impairment$—  $25  $—  $—  $25  
Loans collectively evaluated for impairment30,837  11,603  3,305  215  45,960  
Ending balance$30,837  $11,628  $3,305  $215  $45,985  
Loans:
Ending balance: individually evaluated for impairment$533  $5,643  $—  $—  $6,176  
Ending balance: collectively evaluated for impairment4,081,691  1,963,920  211,135  18,117  6,274,863  
Ending balance$4,082,224  $1,969,563  $211,135  $18,117  $6,281,039  
As of December 31, 2019:
Ending allowance balance allocated to:
Loans individually evaluated for impairment$—  $815  $—  $—  $815  
Loans collectively evaluated for impairment23,372  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 impairment3,985,440  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 June 30, 2020 and December 31, 2019. The increase in Watch risk rated loans during the six months ended June 30, 2020, was attributable to the Company's loan modification program in connection with the COVID-19 pandemic. See Note 2 for further discussion regarding COVID-19.
(Dollars in thousands)Multifamily ResidentialSingle Family ResidentialCommercial Real EstateLand, Construction and NMTotal
As of June 30, 2020:
Grade:
Pass$3,833,884  $1,765,005  $155,736  $18,117  $5,772,742  
Watch223,406  185,320  55,399  —  464,125  
Special mention20,739  12,695  —  —  33,434  
Substandard4,195  6,543  —  —  10,738  
Doubtful—  —  —  —  —  
Total$4,082,224  $1,969,563  $211,135  $18,117  $6,281,039  
As of December 31, 2019:
Grade:
Pass$3,917,264  $1,980,845  $200,371  $20,542  $6,119,022  
Watch47,309  16,432  2,763  —  66,504  
Special mention19,708  13,635  —  —  33,343  
Substandard1,700  8,808  —  —  10,508  
Doubtful—  1,600  —  —  1,600  
Total$3,985,981  $2,021,320  $203,134  $20,542  $6,230,977  
The following table summarizes an aging analysis of the loan portfolio by the time past due at June 30, 2020 and December 31, 2019:
(Dollars in thousands)30 Days60 Days90+ DaysNon-accrualCurrentTotal
As of June 30, 2020:
Loans:
Multifamily residential$—  $—  $—  $533  $4,081,691  $4,082,224  
Single family residential—  37  —  4,358  1,965,168  1,969,563  
Commercial real estate—  —  —  —  211,135  211,135  
Land, construction and NM—  —  —  —  18,117  18,117  
Total$—  $37  $—  $4,891  $6,276,111  $6,281,039  
As of December 31, 2019:
Loans:
Multifamily residential$1,411  $—  $—  $541  $3,984,029  $3,985,981  
Single family residential4,037  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  
The following table summarizes information related to impaired loans at June 30, 2020 and December 31, 2019:
As of June 30, 2020As of December 31, 2019
(Dollars in thousands)Recorded InvestmentUnpaid Principal BalanceRelated AllowanceRecorded InvestmentUnpaid Principal BalanceRelated Allowance
With no related allowance recorded:
Multifamily residential$533  $609  $—  $541  $618  $—  
Single family residential4,749  5,794  —  4,588  4,915  —  
5,282  6,403  —  5,129  5,533  —  
With an allowance recorded:
Single family residential894  890  25  2,509  2,484  815  
894  890  25  2,509  2,484  815  
Total:
Multifamily residential533  609  —  541  618  —  
Single family residential5,643  6,684  25  7,097  7,399  815  
$6,176  $7,293  $25  $7,638  $8,017  $815  
The following tables summarize information related to impaired loans for the three and six months ended June 30, 2020 and 2019:
Three Months Ended June 30,
20202019
(Dollars in thousands)Average Recorded InvestmentInterest IncomeCash Basis InterestAverage Recorded InvestmentInterest IncomeCash Basis Interest
With no related allowance recorded:
Multifamily residential$535  $8  $8  $2,195  $9  $9  
Single family residential4,924  25  20  4,715  59  25  
5,459  33  28  6,910  68  34  
With an allowance recorded:
Single family residential898  10  —  1,475  12  —  
898  10  —  1,475  12  —  
Total:
Multifamily residential535  8  8  2,195  9  9  
Single family residential5,822  35  20  6,190  71  25  
$6,357  $43  $28  $8,385  $80  $34  
Six Months Ended June 30,
20202019
(Dollars in thousands)Average Recorded InvestmentInterest IncomeCash Basis Interest Average Recorded InvestmentInterest IncomeCash Basis Interest
With no related allowance recorded:
Multifamily residential$537  $17  $17  $1,494  $12  $12  
Single family residential4,775  44  34  4,518  95  25  
5,312  61  51  6,012  107  37  
With an allowance recorded:
Single family residential1,587  21  —  1,242  24  —  
1,587  21  —  1,242  24  —  
Total:
Multifamily residential537  17  17  1,494  12  12  
Single family residential6,362  65  34  5,760  119  25  
$6,899  $82  $51  $7,254  $131  $37  

The following table summarizes the recorded investment related to TDRs at June 30, 2020 and December 31, 2019:
(Dollars in thousands)June 30,
2020		December 31,
2019
Troubled debt restructurings:
Single family residential$3,953  $1,305  
The Company has allocated $25 thousand of its allowance for loan losses for loans modified in TDRs at both June 30, 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.
During the three and six months ended June 30, 2020, the Company modified the terms of two loans that qualified as TDRs. The following table provides a detail of these modifications:
(Dollars in thousands)Number of ContractsPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Single family residential2$2,672  $2,672  
Terms of the two modifications above included suspension of loan payments for six months with eligibility for an extension of the loan term, should previously existing past due amounts be paid in full. Prior to modification, both loans were classified as non-accrual and impaired. The current quarter's TDRs above resulted in no increase to the allowance for loan losses and no charge offs, primarily due to collateral support provided by the secondary sources of repayment. There were no new TDRs during the three or six months ended June 30, 2019.

The Company had no TDRs with a subsequent payment default within twelve months following the modification during the three or six months ended June 30, 2020 and 2019. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.