Loans Receivable Loans Receivable

6 Months Ended

Jun. 30, 2015

Loans receivable are as follows:



(In thousands)	June 30, 2015			December 31, 2014
Amortized cost:
Real estate loans	$	174,719		$	243,407
Commercial loans	84,692			78,605
Total	$	259,411		$	322,012

Fair value:
Real estate loans	$	177,648		$	245,112
Commercial loans	84,693			80,107
Total	$	262,341		$	325,219

Valuation allowance:
Specific	$	75		$	115
General	2,311			2,371
Total	$	2,386		$	2,486

	For the Three Months Ended June 30,
	For the Three Months Ended June 30,
	2015			2014
Increase (decrease) in valuation allowance	$	(53	)	$	16
Loans receivable charged off	—			—

	For the Six Months Ended June 30,
	For the Six Months Ended June 30,
	2015			2014
Increase (decrease) in valuation allowance	$	(100	)	$	479
Loans receivable charged off	—			—

Loans receivable in non-accrual status were $9.5 million and $14.2 million as of June 30, 2015 and December 31, 2014, respectively.

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

The real estate loans are secured by commercial real estate primarily located in Arizona, Maryland, New York and Texas. These loans generally earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. The commercial loans are with small business owners who have secured the related financing with the assets of the business. Commercial loans generally earn interest on a fixed basis and have varying maturities not exceeding 10 years.

The Company utilizes a risk rating system to assign a risk to each of its real estate loans. The loan rating system takes into consideration credit quality indicators including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the Company’s position in the capital structure, and the overall leverage in the capital structure. Based on this rating system, none of the real estate loans were considered to be impaired at June 30, 2015, and accordingly, the Company determined that a specific valuation allowance was not required.