LOANS RECEIVABLE

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

LOANS RECEIVABLE

LOANS RECEIVABLE

Loans receivable consist of the following:

	March 31, 2018			December 31, 2017
	(in thousands)
SBA 7(a) loans, subject to credit risk	$	48,443		$	58,298
SBA 7(a) loans, subject to secured borrowings	21,881			21,664
Commercial mortgage loans	—			424
Loans receivable	70,324			80,386
Deferred capitalized costs	835			1,132
Loan loss reserves	(468		)	(462		)
Loans receivable, net	$	70,691		$	81,056

SBA 7(a) Loans, Subject to Credit Risk—Represents the non‑government guaranteed retained portion of loans originated under the SBA 7(a) Program and the government guaranteed portion of loans that have not yet been fully funded or sold.

SBA 7(a) Loans, Subject to Secured Borrowings—Represents the government guaranteed portion of loans which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans. There is no credit risk associated with these loans since the SBA has guaranteed payment of the principal.

Commercial Mortgage Loans—Represents loans to small businesses primarily collateralized by first liens on the real estate of the related business.

At March 31, 2018 and December 31, 2017, 100.0% of our loans subject to credit risk were current. We classify loans with negative characteristics in substandard categories ranging from special mention to doubtful. At March 31, 2018 and December 31, 2017, $470,000 and $388,000, respectively, of loans subject to credit risk were classified in substandard categories.

At March 31, 2018 and December 31, 2017, our loans subject to credit risk were 96.8% and 97.3%, respectively, concentrated in the hospitality industry.