Loans Receivable and Allowance for Loan Losses

Loans receivable at June 30, 2018 and December 31, 2017 are summarized as follows:



	June 30,			December 31,
	2018			2017
	(In thousands)
Real estate loans:
One-to-four family	$	1,763,158		$	1,616,259
Multifamily and commercial	1,971,803			1,871,210
Construction	254,850			233,652
Commercial business loans	292,113			277,970
Consumer loans:
Home equity loans and advances	414,388			448,020
Other consumer loans	956			998
Total loans	4,697,268			4,448,109
Net deferred loan costs	14,310			10,539
Allowance for loan losses	(62,524		)	(58,178		)
Loans receivable, net	$	4,649,054		$	4,400,470

The Company had no loans held for sale at June 30, 2018 and December 31, 2017.

The Company sold $3.7 million of residential loans to third parties during the three and six months ended June 30, 2018. The Company sold $31.2 million of residential loans to third parties during the three and six months ended June 30, 2017.

The Company purchased $2.6 million of residential loans and $2.1 million of commercial real estate loans from third parties during the three and six months ended June 30, 2018. The Company purchased $7.4 million of residential loans from third parties during the three and six months ended June 30, 2017.

At June 30, 2018 and December 31, 2017, the carrying value of real estate loans serviced by the Company for investors was $456.6 million and $478.8 million, respectively.

The following tables summarize the aging of loans receivable by portfolio segment at June 30, 2018 and December 31, 2017:



	June 30, 2018
	30-59 days		60-89 days	Greater than 90 days	Total past due	Current	Total
	(In Thousands)
Real estate loans:
One to four family	$	5,484	1,923	2,218	9,625	1,753,533	$	1,763,158
Multifamily and commercial	164		—	118	282	1,971,521	1,971,803
Construction	—		—	—	—	254,850	254,850
Commercial business loans	—		154	384	538	291,575	292,113
Consumer loans:
Home equity loans advances	808		892	1,041	2,741	411,647	414,388
Other consumer loans	—		1	—	1	955	956
Total loans	$	6,456	2,970	3,761	13,187	4,684,081	$	4,697,268



	December 31, 2017
	30-59 days		60-89 days	Greater than 90 days	Total past due	Current	Total
	(In thousands)
Real estate loans:
One to four family	$	7,080	1,229	3,360	11,669	1,604,590	$	1,616,259
Multifamily and commercial	138		380	1,329	1,847	1,869,363	1,871,210
Construction	—		—	—	—	233,652	233,652
Commercial business loans	89		730	1,263	2,082	275,888	277,970
Consumer loans:
Home equity loans advances	1,421		26	573	2,020	446,000	448,020
Other consumer loans	—		—	—	—	998	998
Total loans	$	8,728	2,365	6,525	17,618	4,430,491	$	4,448,109

The Company considers a loan to be delinquent when we have not received a payment within 30 days of its contractual due date. A loan is designated as a non-accrual loan when the payment of interest is more than three months in arrears of its contractual due date. The accrual of income on a non-accrual loan is reversed and discontinued until the outstanding payments in arrears have been collected. The Company identifies loans that may need to be charged-off as a loss by reviewing all delinquent loans, classified loans and other loans that management may have concerns about collectability. At June 30, 2018 and December 31, 2017, non-accrual loans totaled $3.8 million and $6.5 million, respectively.

At June 30, 2018 and December 31, 2017, there were no loans past due 90 days or more and still accruing interest.

The following table summarizes loans receivable and allowance for loan losses by portfolio segment and impairment method:



	June 30, 2018
	One to four family		Multifamily and commercial	Construction	Commercial Business	Home equity loans and advances	Other consumer	Unallocated	Total
	(In thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	476	—	—	355	11	—	—	$	842
Collectively evaluated for impairment	18,073		22,802	6,728	10,565	2,859	7	648	61,682
Total	$	18,549	22,802	6,728	10,920	2,870	7	648	$	62,524

Total loans:
Individually evaluated for impairment	$	10,605	2,856	—	2,951	3,436	—	—	$	19,848
Collectively evaluated for impairment	1,752,553		1,968,947	254,850	289,162	410,952	956	—	4,677,420
Total	$	1,763,158	1,971,803	254,850	292,113	414,388	956	—	$	4,697,268



	December 31, 2017
	One to four family		Multifamily and commercial	Construction	Commercial Business	Home equity loans and advances	Other consumer	Unallocated	Total
	(In thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	423	28	—	80	15	—	—	$	546
Collectively evaluated for impairment	19,568		19,905	5,217	8,195	4,562	8	177	57,632
Total	$	19,991	19,933	5,217	8,275	4,577	8	177	$	58,178

Total loans:
Individually evaluated for impairment	$	11,644	3,693	—	4,263	2,591	—	—	$	22,191
Collectively evaluated for impairment	1,604,615		1,867,517	233,652	273,707	445,429	998	—	4,425,918
Total	$	1,616,259	1,871,210	233,652	277,970	448,020	998	—	$	4,448,109

Loan modifications to borrowers experiencing financial difficulties that are considered Troubled Debt Restructurings ("TDRs") primarily involve the lowering of the monthly payments on such loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. These modifications generally do not result in the forgiveness of principal or accrued interest. In addition, the Company attempts to obtain additional collateral or guarantor support when modifying such loans. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

The following tables present the number of loans modified as TDRs during the three and six months ended June 30, 2018 and 2017, along with their balances immediately prior to the modification date and post-modification. Post-modification recorded investment represents the net book balance immediately following modification.



	For the Three Months Ended
	June 30, 2018					June 30, 2017
	No. of Loans	Pre-modification recorded investment		Post-modification recorded investment		No. of Loans	Pre-modification recorded investment		Post-modification recorded investment
		(In thousands)					(In thousands)
Troubled Debt Restructurings
Real estate loans:
One to four family	3	$	378	$	380	2	$	461	$	461
Consumer loans:
Home equity loans and advances	—	—		—		1	39		39
Total loans	3	$	378	$	380	3	$	500	$	500



	For the Six Months Ended
	June 30, 2018					June 30, 2017
	No. of Loans	Pre-modification recorded investment		Post-modification recorded investment		No. of Loans	Pre-modification recorded investment		Post-modification recorded investment
		(In thousands)					(In thousands)
Troubled Debt Restructurings
Real estate loans:
One to four family	4	$	462	$	462	3	$	543	$	543
Consumer loans:
Home equity loans and advances	1	588		588		1	39		39
Total loans	5	$	1,050	$	1,050	4	$	582	$	582

The activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2018 and 2017 was as follows:



	For the Three Months Ended June 30,
	One to four family			Multifamily and commercial		Construction	Commercial Business		Home equity loans and advances		Other consumer		Unallocated		Total
	(In Thousands)
2018
Balance at beginning of period	$	18,828		19,097		6,574	10,800		3,924		7		722		$	59,952
Provision charged (credited)	(324		)	3,705		154	87		(1,153	)	5		(74	)	2,400
Recoveries	51			—		—	36		99		3		—		189
Charge-offs	(6		)	—		—	(3	)	—		(8	)	—		(17		)
Balance at end of period	$	18,549		22,802		6,728	10,920		2,870		7		648		$	62,524

2017
Balance at beginning of period	$	18,818		17,638		4,253	7,014		4,129		10		46		$	51,908
Provision charged (credited)	48			485		345	(376	)	(170	)	4		39		375
Recoveries	93			—		—	73		6		—		—		172
Charge-offs	(197		)	(38	)	—	(148	)	—		(6	)	—		(389		)
Balance at end of period	$	18,762		18,085		4,598	6,563		3,965		8		85		$	52,066



	For the Six Months Ended June 30,
	One to four family			Multifamily and commercial		Construction	Commercial Business		Home equity loans and advances		Other consumer		Unallocated		Total
2018
Balance at beginning of period	$	19,991		19,933		5,217	8,275		4,577		8		177		$	58,178
Provision charged (credited)	(1,552		)	2,998		1,508	2,783		(1,810	)	2		471		4,400
Recoveries	171			—		3	87		103		5		—		369
Charge-offs	(61		)	(129	)	—	(225	)	—		(8	)	—		(423		)
Balance at end of period	$	18,549		22,802		6,728	10,920		2,870		7		648		$	62,524

2017
Balance at beginning of period	$	18,599		17,616		4,598	6,358		4,231		11		436		$	51,849
Provision charged (credited)	428			674		—	204		(209	)	5		(351	)	751
Recoveries	115			—		—	149		13		—		—		277
Charge-offs	(380		)	(205	)	—	(148	)	(70	)	(8	)	—		(811		)
Balance at end of period	$	18,762		18,085		4,598	6,563		3,965		8		85		$	52,066

The following table presents loans individually evaluated for impairment by loan segment:



	June 30, 2018
	Recorded investment		Unpaid principal balance		Specific allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One to four family	$	7,707	$	8,890	$	—
Multifamily and commercial	2,856		4,204		—
Commercial business loans	16		22		—
Consumer loans:
Home equity loans and advances	3,090		3,445		—
	13,669		16,561		—
With a specific allowance recorded:
Real estate loans:
One to four family	2,898		2,945		476
Commercial business loans	2,935		2,727		355
Consumer loans:
Home equity loans and advances	346		346		11
	6,179		6,018		842
Total:
Real estate loans:
One to four family	10,605		11,835		476
Multifamily and commercial	2,856		4,204		—
Commercial business loans	2,951		2,749		355
Consumer loans:
Home equity loans and advances	3,436		3,791		11
Total loans	$	19,848	$	22,579	$	842



	December 31, 2017
	Recorded investment		Unpaid principal balance		Specific allowance
	(In thousands)
With no allowance recorded:
Real estate loans:
One to four family	$	8,870	$	9,704	$	—
Multifamily and commercial	2,058		2,933		—
Commercial business loans	1,522		2,015		—
Consumer loans:
Home equity loans and advances	2,161		2,601		—
	14,611		17,253		—
With a specific allowance recorded:
Real estate loans:
One to four family	2,774		2,788		423
Multifamily and commercial	1,635		2,208		28
Commercial business loans	2,741		2,741		80
Consumer loans:
Home equity loans and advances
	430		430		15
Total:	7,580		8,167		546
Real estate loans:
One to four family	11,644		12,492		423
Multifamily and commercial	3,693		5,141		28
Commercial business loans	4,263		4,756		80
Consumer loans:
Home equity loans and advances	2,591		3,031		15
Total loans	$	22,191	$	25,420	$	546

Specific allocations of the allowance for loan losses attributable to impaired loans totaled $842 thousand and $546 thousand at June 30, 2018 and December 31, 2017, respectively. At June 30, 2018 and December 31, 2017, impaired loans for which there was no related allowance for loan losses totaled $13.7 million and $14.6 million, respectively.

The following table presents interest income recognized for loans individually evaluated for impairment by loan segment for the three and six months ended June 30, 2018 and 2017:



	For the Three Months Ended
	June 30, 2018				June 30, 2017
	Average recorded Investment		Interest Income Recognized		Average recorded Investment		Interest Income Recognized
	(In thousands)				(In thousands)
Real estate loans:
One to four family	$	10,715	$	103	$	15,202	$	169
Multifamily and commercial	2,718		30		3,295		41
Commercial business loans	3,180		25		3,237		28
Consumer loans:
Home equity loans and advances	3,260		39		4,221		60
Total loans	$	19,873	$	197	$	25,955	$	298



	For the Six Months Ended
	June 30, 2018				June 30, 2017
	Average recorded Investment		Interest Income Recognized		Average recorded Investment		Interest Income Recognized
	(In thousands)				(In thousands)
Real estate loans:
One to four family	$	11,025	$	103	$	16,175	$	156
Multifamily and commercial	3,043		28		5,311		27
Construction	—		—		168		—
Commercial business loans	3,541		25		3,662		27
Consumer loans:
Home equity loans and advances	3,037		38		3,963		48
Total loans	$	20,646	$	194	$	29,279	$	258

The Company utilizes an internal eight-point risk rating system to summarize its loan portfolio into categories with similar risk characteristics. Loans deemed to be “acceptable quality” are rated 1 through 4 (Pass), with a rating of 1 established for loans with minimal risk. Loans that are deemed to be of “questionable quality” are rated 5 (Special Mention) or 6 (Substandard). Loans with adverse classifications are rated 7 (Doubtful) or 8 (Loss). The risk ratings are also confirmed through periodic loan review examinations which are currently performed by both an independent third-party and the Company's internal loan review department. Results from examinations are presented to the Audit Committee of the Board of Directors.

The following table presents loans receivable by credit quality risk indicator and by loan segment:



	June 30, 2018
	Real Estate
	One to four family		Multifamily and commercial	Construction	Commercial Business	Home equity loans and advances	Other consumer	Total
	(In thousands)
Pass	$	1,754,543	1,955,847	254,850	283,807	412,434	956	$	4,662,437
Special mention	—		2,402	—	3,472	—	—	5,874
Substandard	8,615		13,554	—	4,834	1,954	—	28,957
Doubtful	—		—	—	—	—	—	—
Total	$	1,763,158	1,971,803	254,850	292,113	414,388	956	$	4,697,268



	December 31, 2017
	Real Estate
	One to four family		Multifamily and commercial	Construction	Commercial Business	Home equity loans and advances	Other consumer	Total
	(In thousands)

Pass	$	1,606,672	1,851,772	233,652	268,355	446,364	998	$	4,407,813
Special mention	—		4,782	—	3,678	—	—	8,460
Substandard	9,587		14,656	—	5,937	1,656	—	31,836
Doubtful	—		—	—	—	—	—	—
Total	$	1,616,259	1,871,210	233,652	277,970	448,020	998	$	4,448,109