LOANS (Tables)

6 Months Ended

Jun. 30, 2020

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 residential	1,969,563		2,021,320
Commercial real estate	211,135		203,134
Construction and land loans	18,017		20,442
Non-Mortgage (‘‘NM’’) loans	100		100
Total	6,281,039		6,230,977
Allowance for loan losses	(45,985)		(36,001)
Loans held for investment, net	$	6,235,054	$	6,194,976

Schedule Allowance for Loan Losses

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 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 losses	3,529		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 losses	699		(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 losses	7,465		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 losses	1,419		(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 Residential		Single Family Residential		Commercial Real Estate		Land, Construction and NM		Total
As of June 30, 2020:
Ending allowance balance allocated to:
Loans individually evaluated for impairment	$	—	$	25	$	—	$	—	$	25
Loans collectively evaluated for impairment	30,837		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 impairment	4,081,691		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 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

Schedule of Loan Portfolio by Internal Risk Indicators

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 Residential		Single Family Residential		Commercial Real Estate		Land, Construction and NM		Total
As of June 30, 2020:
Grade:
Pass	$	3,833,884	$	1,765,005	$	155,736	$	18,117	$	5,772,742
Watch	223,406		185,320		55,399		—		464,125
Special mention	20,739		12,695		—		—		33,434
Substandard	4,195		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
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

Schedule or Past Due Loans Receivable

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 Days		60 Days		90+ Days		Non-accrual		Current		Total
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 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

Schedule of Impaired Loans Receivables

The following table summarizes information related to impaired loans at June 30, 2020 and December 31, 2019:


	As of June 30, 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	$	533	$	609	$	—	$	541	$	618	$	—
Single family residential	4,749		5,794		—		4,588		4,915		—


	5,282		6,403		—		5,129		5,533		—
With an allowance recorded:

Single family residential	894		890		25		2,509		2,484		815


	894		890		25		2,509		2,484		815
Total:
Multifamily residential	533		609		—		541		618		—
Single family residential	5,643		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,
	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	$	535	$	8	$	8	$	2,195	$	9	$	9
Single family residential	4,924		25		20		4,715		59		25


	5,459		33		28		6,910		68		34
With an allowance recorded:

Single family residential	898		10		—		1,475		12		—


	898		10		—		1,475		12		—
Total:
Multifamily residential	535		8		8		2,195		9		9
Single family residential	5,822		35		20		6,190		71		25


	$	6,357	$	43	$	28	$	8,385	$	80	$	34


	Six Months Ended June 30,
	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	$	537	$	17	$	17	$	1,494	$	12	$	12
Single family residential	4,775		44		34		4,518		95		25


	5,312		61		51		6,012		107		37
With an allowance recorded:

Single family residential	1,587		21		—		1,242		24		—


	1,587		21		—		1,242		24		—
Total:
Multifamily residential	537		17		17		1,494		12		12
Single family residential	6,362		65		34		5,760		119		25


	$	6,899	$	82	$	51	$	7,254	$	131	$	37

Schedule of Troubled Debt Restructurings

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 following table provides a detail of these modifications:


(Dollars in thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:

Single family residential	2	$	2,672	$	2,672