Loans

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loans

Loans

Loans held-for-investment, net, consists of the following (in thousands): 

	December 31,
	2017			2016
Originated loans:
Real estate loans:
Multifamily	$	1,735,712		$	1,506,335
Commercial mortgage	445,225			412,667
One-to-four family residential mortgage	100,942			105,968
Home equity and lines of credit	66,254			65,437
Construction and land	34,545			14,065
Total real estate loans	2,382,678			2,104,472
Commercial and industrial loans	34,828			31,906
Other loans	1,430			1,497
Deferred loan cost, net	6,339			6,471
Originated loans held-for-investment, net	2,425,275			2,144,346
PCI Loans	22,741			30,498
Loans acquired:
One-to-four family residential mortgage	275,053			317,639
Multifamily	199,149			215,389
Commercial mortgage	163,962			188,001
Home equity and lines of credit	20,455			25,522
Construction and land	17,201			20,887
Total acquired real estate loans	675,820			767,438
Commercial and industrial loans	16,946			25,443
Other loans	37			359
Total loans acquired	692,803			793,240
Loans held for investment, net	3,140,819			2,968,084
Allowance for loan losses	(26,160		)	(24,595		)
Net loans held-for-investment	$	3,114,659		$	2,943,489

The Company had no loans held-for-sale at December 31, 2017, or December 31, 2016. 

PCI loans totaled $22.7 million at December 31, 2017, as compared to $30.5 million at December 31, 2016. The majority of the PCI loan balance is attributable to those loans acquired as part of an FDIC-assisted transaction. The Company accounts for PCI loans utilizing U.S. GAAP applicable to loans acquired with deteriorated credit quality. At December 31, 2017, PCI loans consisted of approximately 27% commercial real estate loans and 50% commercial and industrial loans, with the remaining balance in residential and home equity loans. At December 31, 2016, PCI loans consisted of approximately 30% commercial real estate loans and 48% commercial and industrial loans, with the remaining balance in residential and home equity loans.

The following table sets forth information regarding the estimates of the contractually required payments, the cash flows expected to be collected, and the estimated fair value of the PCI loans acquired from Hopewell Valley at January 8, 2016 (in thousands):

	January 8, 2016
Contractually required principal and interest at acquisition	$	16,580
Contractual cash flows not expected to be collected (non-accretable discount)	(9,929		)
Expected cash flows to be collected at acquisition	6,651
Interest component of expected cash flows (accretable discount)	(845		)
Fair value of acquired loans	$	5,806

The following details the accretable yield (in thousands):   

	For The Year Ended December 31,
	2017			2016
Balance at the beginning of year	$	24,215		$	22,853
Acquisition	—			845
Accretion into interest income	(5,477		)	(5,225		)
Net reclassification from non-accretable difference(1)	5,764			5,742
Balance at end of year	$	24,502		$	24,215

_______________________

(1) Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loans.

The Company does not have any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios.

We provide for loan losses based on the consistent application of our documented allowance for loan loss methodology. Loan losses are charged to the allowance for loans losses and recoveries are credited to it. Additions to the allowance for loan losses are provided by charges against income based on various factors which, in our judgment, deserve current recognition in estimating incurred losses. Loan losses are charged-off in the period the loans, or portion thereof, are deemed uncollectible. Generally, the Company will record a loan charge-off (including a partial charge-off) to reduce a loan to the estimated fair value of the underlying collateral, less cost to sell, for collateral dependent loans. We regularly review the loan portfolio in order to maintain the allowance for loan losses in accordance with U.S. GAAP. At December 31, 2017 and 2016, the allowance for loan losses related to loans held-for-investment (excluding PCI loans) consisted primarily of the following two components:

(1) Specific allowances are established for impaired loans (generally defined by the Company as non-accrual loans with an outstanding balance of $500,000 or greater and all loans restructured in troubled debt restructurings). The amount of impairment, if any, provided for as a specific reserve determined by the deficiency, if any, between the present value of expected future cash flows discounted at the original loan’s effective interest rate or the underlying collateral value (less estimated costs to sell and discounts for quick sales,) if the loan is collateral dependent, and the carrying value of the loan. Impaired loans that have no impairment losses are not considered for general allowances described below. Generally, the Company charges down a loan to the estimated fair value of the underlying collateral, less costs to sell for collateral dependent loans and, if necessary, maintains a specific reserve in the allowance for loan losses related to cash flow dependent impaired loans where the present value of the expected future cash flows, discounted at the loan’s original contractual interest rate, is less than the carrying value of the loan unless management determines that such shortfall should be charged off.

(2) General allowances are established for loan losses on a portfolio basis for loans that do not meet the definition of impaired. The portfolio is grouped into similar risk characteristics, primarily loan type, loan-to-value, if collateral dependent, and internal credit risk ratings. We apply an estimated loss rate to each loan group. The loss rates applied are based on our net loss experience (using appropriate look-back and loss emergence periods) as adjusted, if appropriate, for our qualitative assessment of factors which may not be fully captured in our historical quantitative net loss rates related to:

• changes in lending policies and procedures;

• changes in local, regional, national, and international economic and business conditions and developments that affect the collectability of our portfolio, including the condition of various market segments;

• changes in the nature and volume of our portfolio and in the terms of our loans;

• changes in the experience, ability and depth of lending management and other relevant staff;

• changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans;

• changes in the quality of our loan review system;

• changes in the value of underlying collateral for collateral-dependent loans;

• the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

• the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our existing portfolio.

The loss emergence period is the estimated time from the date of the loss event to the actual recognition of the loss (typically the first charge-off), and is determined based upon a study of the Company's past loss experience by loan groups. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revisions based upon changes in economic and real estate market conditions. Actual loan losses may be significantly more than the allowance for loan losses we have established, which could have a material negative effect on our financial results. Prior to December 31, 2016, we maintained an amount identified as the unallocated component within the allowance for loan losses related to indicators of loan losses not fully captured in other components of the allowance for loan losses methodology, as well as the inherent imprecision of the loss estimation process. During the fourth quarter of 2016, the Company enhanced the allowance for loan losses qualitative framework to more fully capture the risks related to certain loan loss factors. These enhancements are meant to increase the level of precision in the allowance for loan losses. As a result, the Company no longer has an unallocated reserve in its allowance for loan losses, as the risks and uncertainties meant to be captured by the unallocated allowance have been included in the qualitative framework for the respective loan portfolios.

Held-for-investment loans acquired with no evidence of credit deterioration are initially valued at an estimated fair value on the date of acquisition, with no initial related allowance for loan losses. These loans are evaluated for impairment on a quarterly basis as part of our analysis of the allowance for loan losses. 

In underwriting a loan secured by real property, we require an appraisal (or an automated valuation model) of the property by an independent licensed appraiser approved by the Company’s board of directors. The appraisal is subject to review by an independent third-party hired by the Company.  We review and inspect properties before disbursement of funds during the term of a construction loan. Generally, management obtains updated appraisals when a loan is deemed impaired, or sooner if management deems it appropriate. These appraisals may be more limited than those prepared for the underwriting of a new loan. In addition, when the Company acquires other real estate owned, it generally obtains a current appraisal to substantiate the net carrying value of the asset.

We evaluate the allowance for loan losses based on the combined total of the impaired and general components for loans. Generally when the loan portfolio increases, absent other factors, our allowance for loan loss methodology results in a higher dollar amount of estimated incurred losses. Conversely, when the loan portfolio decreases, absent other factors, our allowance for loan loss methodology results in a lower dollar amount of estimated incurred losses.

Each quarter we evaluate the allowance for loan losses and adjust the allowance as appropriate through a provision for loan losses. While we use the best information available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the information used in making the evaluations. In addition, as an integral part of their examination process, the Office of the Comptroller of the Currency (OCC) will periodically review the allowance for loan losses. The OCC may require us to adjust the allowance based on their analysis of information available to them at the time of their examination.

A summary of changes in the allowance for loan losses for the years ended December 31, 2017, 2016, and 2015 follows (in thousands): 

	December 31,
	2017			2016			2015
Balance at beginning of year	$	24,595		$	24,770		$	26,292
Provision for loan losses	1,411			635			353
Recoveries	556			194			140
Charge-offs	(402		)	(1,004		)	(2,015		)
Balance at end of year	$	26,160		$	24,595		$	24,770

The following table sets forth activity in our allowance for loan losses, by loan type, for the years ended December 31, 2017 and 2016.  The following table also details the amount of loans receivable held-for-investment, net of deferred loan fees and costs, that are evaluated individually, and collectively, for impairment, and the related portion of allowance for loan losses that is allocated to each loan portfolio segment (in thousands):

	December 31, 2017
	Real Estate
	Commercial			One-to-Four Family			Construction and Land		Multifamily			Home Equity and Lines of Credit			Commercial and Industrial			Other			Unallocated		Originated Loans Total			PCI		Acquired Loans			Total
Allowance for loan losses:
Beginning Balance	$	5,432		$	664		$	172	$	14,952		$	588		$	1,720		$	96		$	—	$	23,624		$	896	$	75		$	24,595
Charge-offs	(4		)	—			—		(184		)	(104		)	(73		)	—			—		(365		)	—		(37		)	(402		)
Recoveries	70			—			—		277			97			79			—			—		523			—		33			556
Provisions (credit)	(302		)	(161		)	438		2,329			(459		)	(453		)	(2		)	—		1,390			55		(34		)	1,411
Ending Balance	$	5,196		$	503		$	610	$	17,374		$	122		$	1,273		$	94		$	—	$	25,172		$	951	$	37		$	26,160
Ending balance: individually evaluated for impairment	$	—		$	38		$	—	$	—		$	4		$	3		$	—		$	—	$	45		$	—	$	37		$	82
Ending balance: collectively evaluated for impairment	$	5,196		$	465		$	610	$	17,374		$	118		$	1,270		$	94		$	—	$	25,127		$	951	$	—		$	26,078
Loans, net:
Ending Balance	$	445,781		$	101,650		$	34,620	$	1,739,220		$	67,679		$	34,893		$	1,432		$	—	$	2,425,275		$	22,741	$	692,803		$	3,140,819
Ending balance: individually evaluated for impairment	$	16,008		$	1,996		$	—	$	1,310		$	69		$	159		$	—		$	—	$	19,542		$	—	$	1,543		$	21,085
Ending balance: collectively evaluated for impairment	$	429,773		$	99,654		$	34,620	$	1,737,910		$	67,610		$	34,734		$	1,432		$	—	$	2,405,733		$	22,741	$	691,260		$	3,119,734

	December 31, 2016
	Real Estate
	Commercial			One-to-Four Family			Construction and Land			Multifamily			Home Equity and Lines of Credit			Commercial and Industrial			Other			Unallocated			Originated Loans Total			PCI		Acquired Loans			Total
Allowance for loan losses:
Beginning Balance	$	7,106		$	787		$	261		$	12,387		$	795		$	1,288		$	155		$	1,093		$	23,872		$	783	$	115		$	24,770
Charge-offs	(638		)	(20		)	—			(278		)	—			(66		)	(2		)	—			(1,004		)	—		—			(1,004		)
Recoveries	181			2			—			—			2			4			5			—			194			—		—			194
Provisions (credit)	(1,217		)	(105		)	(89		)	2,843			(209		)	494			(62		)	(1,093		)	562			113		(40		)	635
Ending Balance	$	5,432		$	664		$	172		$	14,952		$	588		$	1,720		$	96		$	—		$	23,624		$	896	$	75		$	24,595
Ending balance: individually evaluated for impairment	$	64		$	66		$	—		$	95		$	23		$	5		$	—		$	—		$	253		$	—	$	75		$	328
Ending balance: collectively evaluated for impairment	$	5,368		$	598		$	172		$	14,857		$	565		$	1,715		$	96		$	—		$	23,371		$	896	$	—		$	24,267
Loans, net:
Ending Balance	$	413,352		$	106,524		$	14,092		$	1,510,100		$	66,767		$	32,013		$	1,498		$	—		$	2,144,346		$	30,498	$	793,240		$	2,968,084
Ending balance: individually evaluated for impairment	$	20,710		$	2,180		$	—		$	1,372		$	336		$	101		$	—		$	—		$	24,699		$	—	$	1,591		$	26,290
Ending balance: collectively evaluated for impairment	$	392,642		$	104,344		$	14,092		$	1,508,728		$	66,431		$	31,912		$	1,498		$	—		$	2,119,647		$	30,498	$	791,649		$	2,941,794

The Company monitors the credit quality of its loan portfolio on a regular basis. Credit quality is monitored by reviewing certain credit quality indicators. Management has determined that loan-to-value ratios (at period end) and internally assigned credit risk ratings by loan type are the key credit quality indicators that best measure the credit quality of the Company’s loan receivables. Loan-to-value (“LTV”) ratios used by management in monitoring credit quality are based on current period loan balances and original appraised values at time of origination (unless a current appraisal has been obtained as a result of the loan being deemed impaired). In calculating the provision for loan losses, based on past loan loss experience, management has determined that commercial real estate loans and multifamily loans having loan-to-value ratios, as described above, of less than 35%, and one-to-four family loans having loan-to-value ratios, as described above, of less than 60%, require less of a loss factor than those with higher loan to value ratios.

The Company maintains a credit risk rating system as part of the risk assessment of its loan portfolio. The Company’s lending officers are required to assign a credit risk rating to each loan in their portfolio at origination. This risk rating is reviewed periodically and adjusted if necessary. Monthly, management presents monitored assets to the loan committee. In addition, the Company engages a third-party independent loan reviewer that performs semi-annual reviews of a sample of loans, validating the credit risk ratings assigned to such loans. The credit risk ratings play an important role in the establishment of the loan loss provision and the allowance for loan losses for originated loans held-for-investment. After determining the general reserve loss factor for each originated portfolio segment held-for-investment, the originated portfolio segment held-for-investment balance collectively evaluated for impairment is multiplied by the general reserve loss factor for the respective portfolio segment in order to determine the general reserve.

When assigning a risk rating to a loan, management utilizes the Bank’s internal nine-point credit risk rating system. 

1. Strong

2. Good

3. Acceptable

4. Adequate

5. Watch

6. Special Mention

7. Substandard

8. Doubtful

9. Loss

Loans rated 1 to 5 are considered pass ratings. An asset is classified substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence, and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable based on current circumstances. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Assets which do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses, are required to be designated special mention.

The following table details the recorded investment of originated loans receivable held-for-investment, net of deferred fees and costs, by loan type and credit quality indicator at December 31, 2017 and 2016 (in thousands): 

	At December 31, 2017
	Real Estate
	Multifamily				Commercial				One-to-Four Family				Construction and Land		Home Equity and Lines of Credit		Commercial and Industrial		Other		Total
	< 35% LTV		=> 35% LTV		< 35% LTV		=> 35% LTV		< 60% LTV		=> 60% LTV
Internal Risk Rating
Pass	$	131,792	$	1,603,947	$	84,620	$	346,857	$	60,400	$	38,504	$	34,620	$	67,426	$	34,141	$	1,432	$	2,403,739
Special Mention	—		1,897		410		2,170		683		—		—		28		571		—		5,759
Substandard	—		1,584		—		11,724		1,470		593		—		225		181		—		15,777
Originated loans held-for-investment, net	$	131,792	$	1,607,428	$	85,030	$	360,751	$	62,553	$	39,097	$	34,620	$	67,679	$	34,893	$	1,432	$	2,425,275
	At December 31, 2016
	Real Estate
	Multifamily				Commercial				One-to-Four Family				Construction and Land		Home Equity and Lines of Credit		Commercial and Industrial		Other		Total
	< 35% LTV		=> 35% LTV		< 35% LTV		=> 35% LTV		< 60% LTV		=> 60% LTV
Internal Risk Rating
Pass	$	122,525	$	1,381,231	$	65,612	$	323,842	$	59,214	$	43,316	$	14,092	$	66,489	$	31,173	$	1,498	$	2,108,992
Special Mention	25		4,636		—		3,852		705		—		—		29		696		—		9,943
Substandard	40		1,643		1,179		18,867		1,807		1,482		—		249		144		—		25,411
Originated loans held-for-investment, net	$	122,590	$	1,387,510	$	66,791	$	346,561	$	61,726	$	44,798	$	14,092	$	66,767	$	32,013	$	1,498	$	2,144,346

Included in loans receivable are loans for which the accrual of interest income has been discontinued due to deterioration in the financial condition of the borrowers. The recorded investment of these nonaccrual loans was $5.5 million and $7.3 million at December 31, 2017, and December 31, 2016, respectively. Generally, originated loans are placed on non-accruing status when they become 90 days or more delinquent, or sooner if considered appropriate by management, and remain on non-accrual status until they are brought current, have six consecutive months of performance under the loan terms, and factors indicating reasonable doubt about the timely collection of payments no longer exist. Therefore, loans may be current in accordance with their loan terms, or may be less than 90 days delinquent and still be on a non-accruing status.

Non-accrual amounts include loans deemed to be impaired of $3.1 million and $5.7 million at December 31, 2017, and December 31, 2016, respectively. Loans on non-accrual status with principal balances less than $500,000, and therefore not meeting the Company’s definition of an impaired loan, amounted to $2.4 million at December 31, 2017, and $1.7 million at December 31, 2016. There was no loans held-for-sale at December 31, 2017, or December 31, 2016. Loans past due 90 days or more and still accruing interest were $28,000 and $60,000 at December 31, 2017, and December 31, 2016, respectively, and consisted of loans that are well secured and in the process of collection. 

The following table sets forth the detail, and delinquency status, of originated and acquired non-performing loans (non-accrual loans and loans past due ninety days or more and still accruing), net of deferred fees and costs, at December 31, 2017 and 2016 (in thousands), excluding PCI loans which have been segregated into pools. For PCI loans, each loan pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.

	At December 31, 2017
	Total Non-Performing Loans
	Non-Accruing Loans
	0-29 Days Past Due		30-89 Days Past Due		90 Days or More Past Due		Total		90 Days or More Past Due and Accruing		Total Non-Performing Loans
Loans held-for-investment:
Real estate loans:
Commercial
LTV => 35%
Substandard	$	432	$	314	$	2,305	$	3,051	$	—	$	3,051
Total commercial	432		314		2,305		3,051		—		3,051
One-to-four family residential
LTV < 60%
Substandard	—		206		328		534		—		534
LTV => 60%
Substandard	—		—		39		39		—		39
Total one-to-four family residential	—		206		367		573		—		573
Home equity and lines of credit
Substandard	79		—		—		79		—		79
Total home equity and lines of credit	79		—		—		79		—		79
Commercial and industrial loans
Substandard	—		—		72		72		—		72
Total commercial and industrial loans	—		—		72		72		—		72
Total non-performing loans held-for-investment	511		520		2,744		3,775		—		3,775
Loans acquired:
Real Estate Loans:
Commercial
LTV < 35%
Substandard	—		—		205		205		—		205
LTV => 35%
Substandard	—		773		58		831		—		831
Total Commercial	—		773		263		1,036		—		1,036
One-to-four family residential
LTV < 60%
Substandard	—		201		—		201		27		228
Total one-to-four family residential	—		201		—		201		27		228
Multifamily
LTV => 35%
Substandard	—		417		—		417		—		417
Total Multifamily	—		417		—		417		—		417
Home equity and lines of credit
Substandard	—		28		49		77		—		77
Total home equity and lines of credit	—		28		49		77		—		77
Commercial and industrial	—		—		2		2		—		2
Substandard
Total commercial and industrial loans	—		—		2		2		—		2
Other loans
Pass	—		—		—		—		1		1
Total other	—		—		—		—		1		1
Total non-performing loans acquired	—		1,419		314		1,733		28		1,761
Total non-performing loans	$	511	$	1,939	$	3,058	$	5,508	$	28	$	5,536

	At December 31, 2016
	Total Non-Performing Loans
	Non-Accruing Loans
	0-29 Days Past Due		30-89 Days Past Due		90 Days or More Past Due		Total		90 Days or More Past Due and Accruing		Total Non-Performing Loans
Loans held-for-investment:
Real estate loans:
Commercial
LTV => 35%
Substandard	$	341	$	—	$	4,882	$	5,223	$	—	$	5,223
Total commercial	341		—		4,882		5,223		—		5,223
One-to-four family residential
LTV < 60%
Special Mention	—		—		—		—				—
Substandard	384		383		442		1,209		9		1,218
Total	384		383		442		1,209		9		1,218
LTV => 60%
Substandard	—		—		—		—		43		43
Total	—		—		—		—		43		43
Total one-to-four family residential	384		383		442		1,209		52		1,261
Multifamily
LTV < 35%
Substandard	40		—		—		40		—		40
LTV => 35%
Substandard	—		—		3		3		—		3
Total multifamily	40		—		3		43		—		43
Home equity and lines of credit
Substandard	—		96		—		96		—		96
Total home equity and lines of credit	—		96		—		96		—		96
Total non-performing loans held-for-investment	765		479		5,327		6,571		52		6,623
Loans acquired:
Real estate loans:
Commercial
LTV < 35%
Substandard	—		—		231		231		—		231
LTV => 35%
Substandard	—		—		59		59		—		59
Total commercial	—		—		290		290		—		290
One-to-four family residential
LTV < 60%
Substandard	420		—		—		420		—		420
Total one-to-four family residential	420		—		—		420		—		420
Home equity and lines of credit
Substandard	—		—		31		31		8		39
Total home equity and lines of credit	—		—		31		31		8		39
Commercial and industrial
Substandard	—		—		9		9		—		9
Total commercial and industrial loans	—		—		9		9		—		9
Total non-performing loans acquired	420		—		330		750		8		758
Total non-performing loans	$	1,185	$	479	$	5,657	$	7,321	$	60	$	7,381

The following table sets forth the detail and delinquency status of originated and acquired loans, net of deferred fees and costs, by performing and non-performing loans at December 31, 2017 and 2016 (in thousands):

	December 31, 2017
	Performing (Accruing) Loans
	0-29 Days Past Due		30-89 Days Past Due		Total		Non-Performing Loans		Total Loans Receivable, net
Loans held-for-investment:
Real estate loans:
Commercial
LTV < 35%
Pass	$	84,620	$	—	$	84,620	$	—	$	84,620
Special Mention	—		410		410		—		410
Total	84,620		410		85,030		—		85,030
LTV => 35%
Pass	346,229		628		346,857		—		346,857
Special Mention	832		1,338		2,170		—		2,170
Substandard	7,675		998		8,673		3,051		11,724
Total	354,736		2,964		357,700		3,051		360,751
Total commercial	439,356		3,374		442,730		3,051		445,781
One-to-four family residential
LTV < 60%
Pass	57,907		2,493		60,400		—		60,400
Special Mention	—		683		683		—		683
Substandard	322		614		936		534		1,470
Total	58,229		3,790		62,019		534		62,553
LTV => 60%
Pass	38,504		—		38,504		—		38,504
Substandard	554		—		554		39		593
Total	39,058		—		39,058		39		39,097
Total one-to-four family residential	97,287		3,790		101,077		573		101,650
Construction and land
Pass	34,614		6		34,620		—		34,620
Total construction and land	34,614		6		34,620		—		34,620
Multifamily
LTV < 35%
Pass	131,488		304		131,792		—		131,792
Total	131,488		304		131,792		—		131,792
LTV= > 35%
Pass	1,603,714		233		1,603,947		—		1,603,947
Special Mention	638		1,259		1,897		—		1,897
Substandard	83		1,501		1,584		—		1,584
Total	1,604,435		2,993		1,607,428		—		1,607,428
Total multifamily	1,735,923		3,297		1,739,220		—		1,739,220
Home equity and lines of credit
Pass	67,426		—		67,426		—		67,426
Special Mention	28		—		28		—		28
Substandard	146		—		146		79		225
Total home equity and lines of credit	67,600		—		67,600		79		67,679
Commercial and industrial loans
Pass	34,003		138		34,141		—		34,141
Special Mention	547		24		571		—		571
Substandard	109		—		109		72		181
Total commercial and industrial loans	34,659		162		34,821		72		34,893
Other loans
Pass	1,403		29		1,432		—		1,432
Total other loans	1,403		29		1,432		—		1,432

	December 31, 2017
	Performing (Accruing) Loans
	0-29 Days Past Due		30-89 Days Past Due		Total		Non-Performing Loans		Total Loans Receivable, net
Total originated loans held-for-investment	2,410,842		10,658		2,421,500		3,775		2,425,275
Acquired loans:
One-to-four family residential
LTV < 60%
Pass	250,149		224		250,373		—		250,373
Special Mention	455		—		455		—		455
Substandard	417		150		567		228		795
Total	251,021		374		251,395		228		251,623
LTV => 60%
Pass	23,295		—		23,295		—		23,295
Substandard	135		—		135		—		135
Total	23,430		—		23,430		—		23,430
Total one-to-four family residential	274,451		374		274,825		228		275,053
Commercial
LTV < 35%
Pass	50,035		70		50,105		—		50,105
Special Mention	91		—		91		—		91
Substandard	—		181		181		205		386
Total	50,126		251		50,377		205		50,582
LTV => 35%
Pass	108,125		158		108,283		—		108,283
Special Mention	—		133		133		—		133
Substandard	3,703		430		4,133		831		4,964
Total	111,828		721		112,549		831		113,380
Total commercial	161,954		972		162,926		1,036		163,962
Construction and land
Pass	17,201		—		17,201		—		17,201
Total construction and land	17,201		—		17,201		—		17,201
Multifamily
LTV < 35%
Pass	189,551		—		189,551		—		189,551
Special Mention	78		—		78		—		78
Substandard	153		—		153		—		153
Total	189,782		—		189,782		—		189,782
LTV => 35%
Pass	8,950		—		8,950		—		8,950
Substandard	—		—		—		417		417
Total	8,950		—		8,950		417		9,367
Total multifamily	198,732		—		198,732		417		199,149
Home equity and lines of credit
Pass	20,291		—		20,291		—		20,291
Substandard	87		—		87		77		164
Total home equity and lines of credit	20,378		—		20,378		77		20,455
Commercial and industrial
Pass	16,904		40		16,944		—		16,944
Substandard	—		—		—		2		2
Total commercial and industrial	16,904		40		16,944		2		16,946
Other	36		—		36		1		37
Total loans acquired	689,656		1,386		691,042		1,761		692,803
	$	3,100,498	$	12,044	$	3,112,542	$	5,536	$	3,118,078

	December 31, 2016
	Performing (Accruing) Loans
	0-29 Days Past Due		30-89 Days Past Due		Total		Non-Performing Loans		Total Loans Receivable, net
Loans held-for-investment:
Real estate loans:
Commercial
LTV < 35%
Pass	$	65,189	$	423	$	65,612	$	—	$	65,612
Substandard	1,179		—		1,179		—		1,179
Total	66,368		423		66,791		—		66,791
LTV => 35%
Pass	322,307		1,535		323,842		—		323,842
Special Mention	3,852		—		3,852		—		3,852
Substandard	12,600		1,044		13,644		5,223		18,867
Total	338,759		2,579		341,338		5,223		346,561
Total commercial	405,127		3,002		408,129		5,223		413,352
One-to-four family residential
LTV < 60%
Pass	56,787		2,427		59,214		—		59,214
Special Mention	—		705		705		—		705
Substandard	589		—		589		1,218		1,807
Total	57,376		3,132		60,508		1,218		61,726
LTV => 60%
Pass	43,316		—		43,316		—		43,316
Substandard	1,439		—		1,439		43		1,482
Total	44,755		—		44,755		43		44,798
Total one-to-four family residential	102,131		3,132		105,263		1,261		106,524
Construction and land
Pass	14,092		—		14,092		—		14,092
Total construction and land	14,092		—		14,092		—		14,092
Multifamily
LTV < 35%
Pass	122,525		—		122,525		—		122,525
Special Mention	25		—		25		—		25
Substandard	—		—		—		40		40
Total	122,550		—		122,550		40		122,590
LTV => 35%
Pass	1,380,331		900		1,381,231		—		1,381,231
Special Mention	4,636		—		4,636		—		4,636
Substandard	1,640		—		1,640		3		1,643
Total	1,386,607		900		1,387,507		3		1,387,510
Total multifamily	1,509,157		900		1,510,057		43		1,510,100
Home equity and lines of credit
Pass	66,369		120		66,489		—		66,489
Special Mention	29		—		29		—		29
Substandard	153		—		153		96		249
Total home equity and lines of credit	66,551		120		66,671		96		66,767
Commercial and industrial loans
Pass	31,040		133		31,173		—		31,173
Special Mention	696		—		696		—		696
Substandard	144		—		144		—		144
Total Commercial and industrial loans	31,880		133		32,013		—		32,013
Other loans
Pass	1,452		46		1,498		—		1,498
Total other loans	1,452		46		1,498		—		1,498
Total originated loans held-for-investment	2,130,390		7,333		2,137,723		6,623		2,144,346

	December 31, 2016
	Performing (Accruing) Loans
	0-29 Days Past Due		30-89 Days Past Due		Total		Non-Performing Loans		Total Loans Receivable, net
Loans acquired:
One-to-four family residential
LTV < 60%
Pass	285,116		21		285,137		—		285,137
Special Mention	502		—		502		—		502
Substandard	654		261		915		420		1,335
Total	286,272		282		286,554		420		286,974
LTV => 60%
Pass	30,199		—		30,199		—		30,199
Substandard	259		207		466		—		466
Total	30,458		207		30,665		—		30,665
Total one-to-four family residential	316,730		489		317,219		420		317,639
Commercial
LTV < 35%
Pass	61,646		7		61,653		—		61,653
Special Mention	286		—		286		—		286
Substandard	406		1,040		1,446		231		1,677
Total	62,338		1,047		63,385		231		63,616
LTV => 35%
Pass	119,932		132		120,064		—		120,064
Special Mention	446		138		584		—		584
Substandard	3,419		259		3,678		59		3,737
Total	123,797		529		124,326		59		124,385
Total commercial	186,135		1,576		187,711		290		188,001
Construction and land
Substandard	20,887		—		20,887		—		20,887
Total construction and land	20,887		—		20,887		—		20,887
Multifamily
LTV < 35%
Pass	205,025		—		205,025		—		205,025
Special Mention	99		111		210		—		210
Substandard	156		—		156		—		156
Total	205,280		111		205,391		—		205,391
LTV => 35%
Pass	9,569		—		9,569		—		9,569
Special Mention	—		429		429		—		429
Total	9,569		429		9,998		—		9,998
Total multifamily	214,849		540		215,389		—		215,389
Home equity and lines of credit
Pass	25,340		45		25,385		—		25,385
Substandard	—		98		98		39		137
Total home equity and lines of credit	25,340		143		25,483		39		25,522
Commercial and industrial loans
Pass	25,419		—		25,419		—		25,419
Substandard	—		15		15		9		24
Total Commercial and industrial loans	25,419		15		25,434		9		25,443
Other loans
Pass	355		4		359		—		359
Total loans acquired	789,715		2,767		792,482		758		793,240
	$	2,920,105	$	10,100	$	2,930,205	$	7,381	$	2,937,586

The following table summarizes originated and acquired (subsequent to acquisition) impaired loans as of December 31, 2017 and 2016 (in thousands): 

	At December 31, 2017							December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With No Allowance Recorded:
Real estate loans:
Commercial
LTV < 35%
Substandard	$	—	$	139	$	—		$	—	$	139	$	—
LTV => 35%
Pass	6,263		7,150		—			3,911		4,047		—
Substandard	9,745		10,560		—			14,780		16,868		—
One-to-four family residential
LTV < 60%
Pass	1,189		1,254		—			633		633		—
Substandard	251		251		—			184		184		—
LTV => 60%
Pass	136		161		—			—		—		—
Substandard	135		286		—			620		848		—
Multifamily
LTV < 35%
Substandard	153		153		—			156		156		—
LTV => 35%
Pass	1,309		1,780		—			63		534		—
Home Equity
Pass	33		33		—			39		39		—
Commercial and industrial loans
Substandard	135		135		—			75		75		—
With a Related Allowance Recorded:
Real estate loans:
Commercial
LTV => 35%
Substandard	—		—		—			2,019		2,019		(64		)
One-to-four family residential
LTV < 60%
Pass	411		411		(7		)	—		—		—
Special Mention	—		—		—			—		—		—
Substandard	997		997		(49		)	1,522		1,522		(97		)
LTV => 60%
Pass	268		268		(19		)	275		275		(3		)
Substandard	—		—		—			381		381		(41		)
Multifamily
LTV => 35%
Pass	—		—		—			1,309		1,309		(95		)
Home equity and lines of credit
Pass	—		—		—			258		258		(5		)
Substandard	36		36		(4		)	39		39		(18		)
Commercial and industrial loans
Special Mention	24		24		(3		)	26		26		(5		)
Total:
Real estate loans:
Commercial	16,008		17,849		—			20,710		23,073		(64		)
One-to-four family residential	3,387		3,628		(75		)	3,615		3,843		(141		)
Construction and land	—		—		—			—		—		—
Multifamily	1,462		1,933		—			1,528		1,999		(95		)
Home equity and lines of credit	69		69		(4		)	336		336		(23		)
Commercial and industrial loans	159		$	159	(3		)	101		101		(5		)
	$	21,085	$	23,638	$	(82	)	$	26,290	$	29,352	$	(328	)

Included in the table above at December 31, 2017, are impaired loans with carrying balances of $14.5 million that were not written down by charge-offs or for which there are no specific reserves in our allowance for loan losses.  Included in the impaired loans at December 31, 2016, are loans with carrying balances of $11.5 million that were not written down by charge-offs or for which there are no specific reserves in our allowance for loan losses.  Loans not written down by charge-offs or specific reserves at December 31, 2017 and 2016, have sufficient collateral values, less costs to sell (including any discounts to facilitate a sale), or sufficient future cash flows to support the carrying balances of the loans. 

The following table summarizes the average recorded investment in originated and acquired impaired loans (excluding PCI loans) and interest recognized on impaired loans as of, and for, the years ended December 31, 2017, and December 31, 2016 (in thousands):

	December 31, 2017				December 31, 2016
	Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income
With No Allowance Recorded:
Real estate loans:
Commercial
LTV < 35%
Substandard	$	—	$	45	$	—	$	39
LTV => 35%
Pass	5,516		334		3,980		192
Special Mention	—		—		—		—
Substandard	12,402		431		13,853		450
One-to-four family residential
LTV < 60%
Pass	854		56		559		31
Substandard	372		14		213		21
One-to-four family residential
LTV => 60%
Pass	55		4		—		—
Substandard	289		13		339		26
Multifamily
LTV < 35%
Substandard	154		6		62		6
LTV => 35%
Pass	563		56		69		17
Substandard	—		—		582		—
Home equity and lines of credit
Pass	36		2		8		3
Commercial and industrial loans
Substandard	127		—		81		—
With a Related Allowance Recorded:
Real estate loans:
Commercial
LTV => 35%
Substandard	404		—		5,800		62
One-to-four family residential
LTV < 60%
Pass	165		7		137		—
Special Mention	—		—		—		—
Substandard	1,264		20		1,575		26
LTV => 60%
Pass	271		19		110		6
Special Mention	—		—		—		—
Substandard	152		—		796		4
Multifamily
LTV => 35%
Pass	778		—		794		50
Substandard	180		—		546		—
Home equity and lines of credit

	December 31, 2017				December 31, 2016
	Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income
Pass	153		—		264		8
Special Mention	—		—		34		—
Substandard	37		1		40		1
Commercial and industrial loans
Special Mention	25		1		27		1
Total:
Real estate loans:
Commercial	18,322		810		23,633		743
One-to-four family residential	3,422		133		3,729		114
Multifamily	1,675		62		2,053		73
Home equity and lines of credit	226		3		346		12
Commercial and industrial loans	152		1		108		1
	$	23,797	$	1,009	$	29,869	$	943

There was one one-to-four family residential loan modified as a troubled debt restructuring (“TDR”) during the year ended December 31, 2017. This loan had a pre- and post-modification balance of $256,000 as of the date of modification, and was restructured to receive a reduced interest rate. Since modification, the loan subsequently defaulted. There were no loans modified as TDRs during the year ended December 31, 2016.

At December 31, 2017 and 2016, we had TDRs of $18.3 million and $22.4 million, respectively.

Management classifies all troubled debt restructurings as impaired loans.  Impaired loans are individually assessed to determine that the loan’s carrying value is not in excess of the estimated fair value of the collateral (less cost to sell), if the loan is collateral dependent, or the present value of the expected future cash flows, if the loan is not collateral dependent. Management performs a detailed evaluation of each impaired loan and generally obtains updated appraisals as part of the evaluation.  In addition, management adjusts estimated fair values down to appropriately consider recent market conditions, our willingness to accept a lower sales price to effect a quick sale, and costs to dispose of any supporting collateral.  Determining the estimated fair value of underlying collateral (and related costs to sell) can be difficult in illiquid real estate markets and is subject to significant assumptions and estimates.  Management employs an independent third-party expert in appraisal preparation and review to ascertain the reasonableness of updated appraisals.  Projecting the expected cash flows under troubled debt restructurings which are not collateral dependent is inherently subjective and requires, among other things, an evaluation of the borrower’s current and projected financial condition. Actual results may be significantly different than our projections and our established allowance for loan losses on these loans, which could have a material effect on our financial results.