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Loans held for sale

3 Months Ended

Mar. 31, 2025

6. Loans held for sale

Loans held for sale are carried at the lower of cost or estimated fair value. At March 31, 2025, the Bank had $29.6 million of performing multi-family loans held for sale net of a valuation allowance of $2.6 million. These loans are anticipated to close in the second quarter of 2025. At December 31, 2024, the Company had $70.1 million in performing multi-family loans held for sale net of a valuation allowance of $3.8 million. The valuation allowance in both periods represents the loss recorded to mark these loans down to the estimated price that could be obtained in a whole loan sale. The valuation allowance was recorded in net gain (loss) on sale of loans in the Consolidated Statements of Operations.

The Company has implemented a strategy of selling certain delinquent and non-performing loans. Once the Company has decided to sell a loan, the sale usually closes in a short period of time, generally within the same quarter. Loans designated held for sale are reclassified from loans held for investment to loans held for sale. Terms of sale generally includes cash due upon the closing of the sale, no contingencies or recourse to the Company and servicing is released to the buyer.

The following tables show loans sold during the periods indicated:


	For the three months ended March 31, 2025
(Dollars in thousands)	Loans sold	Proceeds		Net charge-offs		Net gain ⁽¹⁾

Performing loans
Multi-family residential	12	$	35,388	$	—	$	—
Commercial	1		3,274		—		—
Small Business Administration	4		5,804		—		434
Total	17	$	44,466	$	—	$	434
Delinquent and non-performing loans
Multi-family residential	1	$	550	$	—	$	134
Commercial	1		5,099		—		238
One-to-four family - mixed-use property	1		137		—		19
Total	3	$	5,786	$	—	$	391

	For the three months ended March 31, 2024
(Dollars in thousands)	Loans sold	Proceeds		Net charge-offs		Net gain

Delinquent and non-performing loans
Multi-family residential	3	$	1,551	$	—	$	55
Commercial	2		971		—		—
One-to-four family - mixed-use property	4		1,288		—		55
Total	9	$	3,810	$	—	$	110

(1) Does not include $0.2 million net loss on sale recorded to write-down performing mortgage loans to their anticipated sales price.