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Loans Receivable
 3 Months Ended
Mar. 31, 2020
Receivables [Abstract]  
Loans Receivable Loans Receivable
The following table summarizes the Company’s loans receivable (in thousands):
 
March 31, 2020
 
December 31, 2019
Secured mortgage loans(1)
$
169,176

 
$
161,964

Mezzanine and other
59,998

 
27,752

Unamortized discounts, fees, and costs
792

 
863

Reserve for loan losses
(9,314
)
 
—

 
$
220,652

 
$
190,579

_______________________________________
(1)
At March 31, 2020, the Company had $16 million remaining of commitments to fund $174 million of senior housing development projects. At December 31, 2019, the Company had $25 million remaining of commitments to fund $174 million of senior housing development projects.
2020 Loans Receivable Transactions
For certain residents that qualify, CCRCs may offer to lend residents the necessary funds to satisfy the entrance fee requirements so that they are able to move into a community while still continuing the process of selling their previous home. The loans are due upon sale of the previous residence. Upon completing the CCRC Acquisition (see Note 3) in January 2020, the Company began consolidating 13 CCRCs, which hold approximately $30 million of such notes receivable from various community residents.
Loans Receivable Internal Ratings
In connection with the Company’s quarterly review process or upon the occurrence of a significant event, loans receivable are reviewed and assigned an internal rating of Performing, Watch List, or Workout. Loans that are deemed Performing meet all present contractual obligations, and collection and timing, of all amounts owed is reasonably assured. Watch List Loans are defined as loans that do not meet the definition of Performing or Workout. Workout Loans are defined as loans in which the Company has determined, based on current information and events, that: (i) it is probable it will be unable to collect all amounts due according to the contractual terms of the agreement, (ii) the borrower is delinquent on making payments under the contractual terms of the agreement, and (iii) the Company has commenced action or anticipates pursuing action in the near term to seek recovery of its investment.
The following table summarizes, by year of origination, the Company’s internal ratings for loans receivables as of March 31, 2020 (dollars in thousands):
Investment Type
 
Year of Origination
 
Total
 
2020
 
2019
 
2018
 
2017
 
2016
 
Secured mortgage loans
 
 
 
 
 
 
 
 
 
 
 
 
Risk rating:
 
 
 
 
 
 
 
 
 
 
 
 
Performing loans
 
$
—

 
$
55,955

 
$
—

 
$
108,484

 
$
—

 
$
164,439

Watch list loans
 
—

 
—

 
—

 
—

 
—

 
—

Workout loans
 
—

 
—

 
—

 
—

 
—

 
—

Total secured mortgage loans
 
$
—

 
$
55,955

 
$
—

 
$
108,484

 
$
—

 
$
164,439

Mezzanine and other
 
 
 
 
 
 
 
 
 
 
 
 
Risk rating:
 
 
 
 
 
 
 
 
 
 
 
 
Performing loans
 
$
2,901

 
$
36,114

 
$
—

 
$
8,896

 
$
8,302

 
$
56,213

Watch list loans
 
—

 
—

 
—

 
—

 
—

 
—

Workout loans
 
—

 
—

 
—

 
—

 
—

 
—

Total mezzanine and other
 
$
2,901

 
$
36,114

 
$
—

 
$
8,896

 
$
8,302

 
$
56,213


Reserve for Loan Losses
The Company evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis. The Company’s evaluation considers industry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. The Company’s borrowers furnish property, portfolio, and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis; the Company utilizes this financial information to calculate the debt service coverages that it uses in its assessment of internal ratings, which is a primary credit quality indicator. Debt service coverage information is evaluated together with other property, portfolio, and operator performance information, including revenue, expense, net operating income, occupancy, rental rates, capital expenditures, and EBITDA (defined as earnings before interest, tax, and depreciation and amortization), along with other liquidity measures.
In its assessment of credit losses for loans receivable and unfunded loan commitments, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasts future economic conditions through the maturity date of each loan to estimate a probability of default and a resulting loss for each loan receivable. Future economic conditions are based primarily on near-term economic forecasts from the Federal Reserve and reasonable assumptions for long-term economic trends.
The following table summarizes the Company’s reserve for loan losses at March 31, 2020 (in thousands):
 
March 31, 2020
 
Secured Mortgage Loans
 
Mezzanine and Other
 
Total
Reserve for loan losses, January 1, 2020
$
—

 
$
—

 
$
—

Cumulative-effect of adopting of ASU 2016-13 to beginning retained earnings
513

 
907

 
1,420

Provision for expected loan losses
4,224

 
3,670

 
7,894

Reserve for loan losses, March 31, 2020
$
4,737

 
$
4,577

 
$
9,314


At March 31, 2020, a liability of $1 million related to expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities.
Credit loss expenses are recorded in impairments and loan loss reserves (recoveries), net. The change in the provision for expected loan losses during the quarter ended March 31, 2020 is primarily due to the current and anticipated economic impact of COVID-19.