5. BBX Capital’s Loans Receivable

BBX Capital’s loans receivable portfolio consisted of the following components (in thousands):



		June 30,	December 31,
		2016	2015
Commercial non-real estate	$	1,211	11,250
Commercial real estate		11,292	16,294
Small business		3,360	4,054
Consumer		2,124	2,368
Residential		16,231	69
Loans receivable -net	$	34,218	34,035

As of June 30, 2016, foreclosure proceedings were in-process on $11.3 million of BBX Capital’s residential loans, $0.3 million of consumer loans and $64,000 of small business loans.

The total discount on loans receivable was $4.1 million and $3.3 million as of June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016, $16.1 million of residential loans, net of a $1.2 million discount were transferred from loans held-for-sale to loans receivable.

The recorded investment (unpaid principal balance less charge-offs and discounts) of non-accrual loans receivable was as follows (in thousands):



		June 30,	December 31,
Loan Class		2016	2015
Commercial non-real estate	$	1,211	1,250
Commercial real estate		9,351	9,639
Small business		3,360	4,054
Consumer		2,025	2,368
Residential		14,722	69
Total nonaccrual loans	$	30,669	17,380

An age analysis of the past due recorded investment in BBX Capital’s loans receivable as of June 30, 2016 and December 31, 2015 was as follows (in thousands):



							Total
		31-59 Days	60-89 Days	90 Days	Total		Loans
June 30, 2016		Past Due	Past Due	or More (1)	Past Due	Current	Receivable
Commercial non-real estate	$	-	-	330	330	881	1,211
Commercial real estate		-	-	3,986	3,986	7,306	11,292
Small business		-	64	27	91	3,269	3,360
Consumer		122	28	527	677	1,447	2,124
Residential		22	276	11,285	11,583	4,648	16,231
Total	$	144	368	16,155	16,667	17,551	34,218



							Total
		31-59 Days	60-89 Days	90 Days	Total		Loans
December 31, 2015		Past Due	Past Due	or More (1)	Past Due	Current	Receivable
Commercial non-real estate	$	-	-	329	329	10,921	11,250
Commercial real estate		-	-	3,986	3,986	12,308	16,294
Small business:		-	205	-	205	3,849	4,054
Consumer		316	138	562	1,016	1,352	2,368
Residential		-	24	42	66	3	69
Total	$	316	367	4,919	5,602	28,433	34,035

BBX Capital had no loans that were 90 days or more past due and still accruing interest as of June 30, 2016 and December 31, 2015.

The activity in BBX Capital’s allowance for loan losses for the three and six months ended June 30, 2016 and 2015 was as follows (in thousands):



		For the Three Months		For the Six Months
		Ended June 30,		Ended June 30,
Allowance for Loan Losses:		2016	2015	2016	2015
Beginning balance	$	-	381	-	977
Charge-offs :		(66)	(221)	(96)	(896)
Recoveries :		6,353	6,620	8,131	10,520
Provision :		(6,287)	(6,608)	(8,035)	(10,429)
Ending balance	$	-	172	-	172
Ending balance individually evaluated for impairment	$	-	-	-	-
Ending balance collectively evaluated for impairment		-	172	-	172
Total	$	-	172	-	172
Loans receivable:
Ending balance individually evaluated for impairment	$	26,986	15,862	26,986	15,862
Ending balance collectively evaluated for impairment		7,232	15,585	7,232	15,585
Total	$	34,218	31,447	34,218	31,447
Proceeds from loan sales	$	-	-	-	89
Transfer from loans held-for-sale	$	16,078	7,365	16,078	7,365

Impaired Loans – BBX Capital’s loans are considered impaired when, based on current information and events, BBX Capital believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impairment is evaluated based on past due status for consumer and residential loans. Impairment is evaluated by BBX Capital for commercial and small business loans based on past payment history, financial strength of the borrower or guarantors, and cash flow associated with the collateral or business. BBX Capital’s collateral dependent impaired loans are charged down to the fair value of collateral less cost to sell. Interest payments on impaired loans are recognized on a cash basis as interest income. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

BBX Capital’s impaired loans as of June 30, 2016 and December 31, 2015 were as follows (in thousands):



		As of June 30, 2016			As of December 31, 2015
			Unpaid			Unpaid
		Recorded	Principal	Related	Recorded	Principal	Related
		Investment	Balance	Allowance	Investment	Balance	Allowance

Total with allowance recorded	$	-	-	-	-	-	-
Total with no allowance recorded		30,846	53,528	-	17,380	30,212	-
Total	$	30,846	53,528	-	17,380	30,212	-

Average recorded investment and interest income recognized on BBX Capital’s impaired loans for the three and six months ended June 30, 2016 were as follows (in thousands):



		For the Three Months Ended		For the Six Months Ended
		June 30, 2016		June 30, 2016
		Average Recorded	Interest Income	Average Recorded	Interest Income
		Investment	Recognized	Investment	Recognized
Total with allowance recorded	$	-	-	-	-
Total with no allowance recorded		31,192	305	23,995	642
Total	$	31,192	305	23,995	642

Average recorded investment and interest income recognized on BBX Capital’s impaired loans for the three and six months ended June 30, 2015 were as follows (in thousands):



		For the Three Months Ended		For the Six Months Ended
		June 30, 2015		June 30, 2015
		Average Recorded	Interest Income	Average Recorded	Interest Income
		Investment	Recognized	Investment	Recognized
Total with allowance recorded	$	68	2	68	3
Total with no allowance recorded		23,082	357	24,543	712
Total	$	23,150	359	24,611	715

BBX Capital’s impaired loans without valuation allowances represent loans that were written-down to the fair value of the collateral less cost to sell, loans in which the collateral value less cost to sell was greater than the carrying value of the loan, loans in which the present value of the cash flows discounted at the loans’ effective interest rate was equal to or greater than the carrying value of the loans, or loans that were collectively measured for impairment.

BBX Capital had no commitments to lend additional funds on impaired loans as of June 30, 2016.