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Loans Held for Investment | 6 Months Ended
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Dec. 31, 2020
Loans Held for Investment |
Loans Held for Investment | Note 5: Loans Held for Investment Loans held for investment, net of fair value adjustments, consisted of the following:
|  | December 31, |  | June 30,
(In Thousands) |  | 2020 |  | 2020
Mortgage loans: |  |  |  |  |  |
Single-family |  | $ | 257,864 |  | $ | 298,810
Multi-family |  |  | 488,412 |  |  | 491,903
Commercial real estate |  |  | 102,551 |  |  | 105,235
Construction (1) |  |  | 7,135 |  |  | 7,801
Other |  |  | 141 |  |  | 143
Commercial business loans (2) |  |  | 882 |  |  | 480
Consumer loans (3) |  |  | 95 |  |  | 94
Total loans held for investment, gross |  |  | 857,080 |  |  | 904,466
Advance payments of escrows |  |  | 142 |  |  | 68
Deferred loan costs, net |  |  | 6,402 |  |  | 6,527
Allowance for loan losses |  |  | (8,538) |  |  | (8,265)
Total loans held for investment, net |  | $ | 855,086 |  | $ | 902,796
| (1) |  | Net of $2.7 million and $4.0 million of undisbursed loan funds as of December 31, 2020 and June 30, 2020, respectively.
| (2) |  | Net of $520 thousand and $935 thousand of undisbursed lines of credit as of December 31, 2020 and June 30, 2020, respectively.
| (3) |  | Net of $422 thousand and $448 thousand of undisbursed lines of credit as of December 31, 2020 and June 30, 2020, respectively.
The following table sets forth information at December 31, 2020 regarding the dollar amount of loans held for investment that are contractually repricing during the periods indicated, segregated between adjustable rate loans and fixed rate loans. Fixed-rate loans comprised one percent of loans held for investment at December 31, 2020 and June 30, 2020, respectively. Adjustable rate loans having no stated repricing dates that reprice when the index they are tied to reprices (e.g. prime rate index) and checking account overdrafts are reported as repricing within one year. The table does not include any estimate of prepayments which may cause the Corporation’s actual repricing experience to differ materially from that shown.
|  | Adjustable Rate |  |  |  |  |  |
|  |  |  |  | After |  | After |  | After |  |  |  |  |  |
|  |  |  |  | One Year |  | 3 Years |  | 5 Years |  |  |  |  |  |
|  | Within One |  | Through 3 |  | Through 5 |  | Through 10 |  |  |  |  |  |
(In Thousands) |  | Year |  | Years |  | Years |  | Years |  | Fixed Rate |  | Total
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 69,861 |  | $ | 51,462 |  | $ | 62,242 |  | $ | 64,482 |  | $ | 9,817 |  | $ | 257,864
Multi-family |  |  | 162,764 |  |  | 154,224 |  |  | 153,475 |  |  | 17,810 |  |  | 139 |  |  | 488,412
Commercial real estate |  |  | 48,239 |  |  | 30,205 |  |  | 23,822 |  |  | — |  |  | 285 |  |  | 102,551
Construction |  |  | 6,477 |  |  | — |  |  | — |  |  | — |  |  | 658 |  |  | 7,135
Other |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 141 |  |  | 141
Commercial business loans |  |  | 500 |  |  | — |  |  | — |  |  | — |  |  | 382 |  |  | 882
Consumer loans |  |  | 95 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 95
Total loans held for investment, gross |  | $ | 287,936 |  | $ | 235,891 |  | $ | 239,539 |  | $ | 82,292 |  | $ | 11,422 |  | $ | 857,080
The Corporation has developed an internal loan grading system to evaluate and quantify the Bank’s loans held for investment portfolio with respect to quality and risk. Management continually evaluates the credit quality of the Corporation’s loan portfolio and conducts a quarterly review of the adequacy of the allowance for loan losses using quantitative and qualitative methods. The Corporation has adopted an internal risk rating policy in which each loan is rated for credit quality with a rating of pass, special mention, substandard, doubtful or loss. The two primary components that are used during the loan review process to determine the proper allowance levels are individually evaluated allowances and collectively evaluated allowances. Quantitative loan loss factors are developed by determining the historical loss experience, expected future cash flows, discount rates and collateral fair values, among others. Qualitative loan loss factors are developed by assessing general economic indicators such as gross domestic product, retail sales, unemployment rates, employment growth, California home sales and median California home prices as well as the forecasted economic impact of the novel coronavirus of 2019 ("COVID-19"). The Corporation assigns individual factors for the quantitative and qualitative methods for each loan category and each internal risk rating. The Corporation categorizes all of the loans held for investment into risk categories based on relevant information about the ability of the borrower to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. A description of the general characteristics of the risk grades is as follows:
| · |  | Pass - These loans range from minimal credit risk to average, but still acceptable, credit risk. The likelihood of loss is considered remote.
| · |  | Special Mention - A special mention loan has potential weaknesses that may be temporary or, if left uncorrected, may result in a loss. While concerns exist, the bank is currently protected and loss is considered unlikely and not imminent.
| · |  | Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
| · |  | Doubtful - A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.
| · |  | Loss - A loss loan is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted.
The following tables summarize gross loans held for investment, net of fair value adjustments, by loan types and risk category at the dates indicated:
|  | December 31, 2020
|  | Single- |  | Multi- |  | Commercial |  |  |  |  | Other |  | Commercial |  |  |  |  |  |
(In Thousands) |  | family |  | family |  | Real Estate |  | Construction |  | Mortgage |  | Business |  | Consumer |  | Total
Pass |  | $ | 245,747 |  | $ | 484,680 |  | $ | 102,551 |  | $ | 7,135 |  | $ | 141 |  | $ | 882 |  | $ | 95 |  | $ | 841,231
Special Mention |  |  | 935 |  |  | 3,732 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,667
Substandard |  |  | 11,182 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,182
Total loans held for investment, gross |  | $ | 257,864 |  | $ | 488,412 |  | $ | 102,551 |  | $ | 7,135 |  | $ | 141 |  | $ | 882 |  | $ | 95 |  | $ | 857,080
|  | June 30, 2020
|  | Single- |  | Multi- |  | Commercial |  |  |  |  | Other |  | Commercial |  |  |  |  |  |
(In Thousands) |  | family |  | family |  | Real Estate |  | Construction |  | Mortgage |  | Business |  | Consumer |  | Total
Pass |  | $ | 289,942 |  | $ | 488,126 |  | $ | 105,235 |  | $ | 6,098 |  | $ | 143 |  | $ | 445 |  | $ | 94 |  | $ | 890,083
Special Mention |  |  | 3,120 |  |  | 3,777 |  |  | — |  |  | 1,703 |  |  | — |  |  | — |  |  | — |  |  | 8,600
Substandard |  |  | 5,748 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 35 |  |  | — |  |  | 5,783
Total loans held for investment, gross |  | $ | 298,810 |  | $ | 491,903 |  | $ | 105,235 |  | $ | 7,801 |  | $ | 143 |  | $ | 480 |  | $ | 94 |  | $ | 904,466
The allowance for loan losses is maintained at a level sufficient to provide for estimated losses based on evaluating known and inherent risks in the loans held for investment and upon management’s continuing analysis of the factors underlying the quality of the loans held for investment. These factors include changes in the size and composition of the loans held for investment, actual loan loss experience, current economic conditions, detailed analysis of individual loans for which full collectability may not be assured, and determination of the realizable value of the collateral securing the loans. The provision (recovery) for (from) the allowance for loan losses is charged (credited) against operations on a quarterly basis, as necessary, to maintain the allowance at appropriate levels. Although management believes it uses the best information available to make such determinations, there can be no assurance that regulators, in reviewing the Corporation’s loans held for investment, will not request a significant increase in its allowance for loan losses. Future adjustments to the allowance for loan losses may be necessary and results of operations could be significantly and adversely affected as a result of economic, operating, regulatory, and other conditions beyond the Corporation’s control. In response to the COVID-19 pandemic, which has negatively impacted the current economic environment, the qualitative component has been increased in the allowance for loan losses methodology. Non-performing loans are charged-off to their fair market values in the period the loans, or portion thereof, are deemed uncollectible, generally after the loan becomes 150 days delinquent for real estate secured first trust deed loans and 120 days delinquent for commercial business or real estate secured second trust deed loans. For loans that were modified from their original terms, were re-underwritten and identified in the Corporation’s asset quality reports as troubled debt restructurings ("restructured loans"), the charge-off occurs when the loan becomes 90 days delinquent; and where borrowers file bankruptcy, the charge-off occurs when the loan becomes 60 days delinquent. The amount of the charge-off is determined by comparing the loan balance to the estimated fair value of the underlying collateral, less disposition costs, with the loan balance in excess of the estimated fair value charged-off against the allowance for loan losses. The allowance for loan losses for non-performing loans is determined by applying ASC 310, "Receivables." For restructured loans that are less than 90 days delinquent, the allowance for loan losses are segregated into (a) individually evaluated allowances for those loans with applicable discounted cash flow calculations still in their restructuring period, classified lower than pass, and containing an embedded loss component or (b) collectively evaluated allowances based on the aggregated pooling method. For non-performing loans less than 60 days delinquent where the borrower has filed bankruptcy, the collectively evaluated allowances are assigned based on the aggregated pooling method. For non-performing commercial real estate loans, an individually evaluated allowance is derived based on the loan’s discounted cash flow fair value (for restructured loans) or collateral fair value less estimated selling costs and if the fair value is higher than the loan balance, no allowance is required. The following table is provided to disclose additional details for the periods indicated on the Corporation’s allowance for loan losses:
|  | For the Quarter Ended |  | For the Six Months Ended |
|  | December 31, |  | December 31, |
(Dollars in Thousands) |  | 2020 |  | 2019 |  | 2020 |  | 2019 |
Allowance at beginning of period |  | $ | 8,490 |  | $ | 6,929 |  | $ | 8,265 |  | $ | 7,076 |
Provision (recovery) for loan losses |  |  | 39 |  |  | (22) |  |  | 259 |  |  | (203) |
Recoveries: |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  |  | 9 |  |  | 13 |  |  | 14 |  |  | 49 |
Consumer loans |  |  | 1 |  |  | 1 |  |  | 1 |  |  | 1 |
Total recoveries |  |  | 10 |  |  | 14 |  |  | 15 |  |  | 50 |
Charge-offs: |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  |  | — |  |  | — |  |  | — |  |  | (1) |
Consumer loans |  |  | (1) |  |  | — |  |  | (1) |  |  | (1) |
Total charge-offs |  |  | (1) |  |  | — |  |  | (1) |  |  | (2) |
Net recoveries (charge-offs) |  |  | 9 |  |  | 14 |  |  | 14 |  |  | 48 |
Balance at end of period |  | $ | 8,538 |  | $ | 6,921 |  | $ | 8,538 |  | $ | 6,921 |
Allowance for loan losses as a percentage of gross loans held for investment at the end of the period |  |  | 0.99 | % |  | 0.73 | % |  | 0.99 | % |  | 0.73 | %
Net (recoveries) charge-offs as a percentage of average loans receivable, net, during the period (annualized) |  |  | (0.00) | % |  | (0.01) | % |  | (0.00) | % |  | (0.01) | %
The following tables denote the past due status of the Corporation’s gross loans held for investment, net of fair value adjustments, at the dates indicated.
|  | December 31, 2020
|  |  |  |  | 30‑89 Days |  |  |  |  | Total Loans Held for
(In Thousands) |  | Current |  | Past Due |  | Non-Accrual (1) |  | Investment, Gross
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 246,334 |  | $ | 348 |  | $ | 11,182 |  | $ | 257,864
Multi-family |  |  | 488,412 |  |  | — |  |  | — |  |  | 488,412
Commercial real estate |  |  | 102,551 |  |  | — |  |  | — |  |  | 102,551
Construction |  |  | 7,135 |  |  | — |  |  | — |  |  | 7,135
Other |  |  | 141 |  |  | — |  |  | — |  |  | 141
Commercial business loans |  |  | 882 |  |  | — |  |  | — |  |  | 882
Consumer loans |  |  | 93 |  |  | 2 |  |  | — |  |  | 95
Total loans held for investment, gross |  | $ | 845,548 |  | $ | 350 |  | $ | 11,182 |  | $ | 857,080
| (1) |  | All loans 90 days or greater past due are placed on non-accrual status.
|  | June 30, 2020
|  |  |  |  | 30‑89 Days |  |  |  |  | Total Loans Held for
(In Thousands) |  | Current |  | Past Due |  | Non-Accrual (1) |  | Investment, Gross
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 293,326 |  | $ | 219 |  | $ | 5,265 |  | $ | 298,810
Multi-family |  |  | 491,903 |  |  | — |  |  | — |  |  | 491,903
Commercial real estate |  |  | 105,235 |  |  | — |  |  | — |  |  | 105,235
Construction |  |  | 7,801 |  |  | — |  |  | — |  |  | 7,801
Other |  |  | 143 |  |  | — |  |  | — |  |  | 143
Commercial business loans |  |  | 445 |  |  | — |  |  | 35 |  |  | 480
Consumer loans |  |  | 94 |  |  | — |  |  | — |  |  | 94
Total loans held for investment, gross |  | $ | 898,947 |  | $ | 219 |  | $ | 5,300 |  | $ | 904,466
| (1) |  | All loans 90 days or greater past due are placed on non-accrual status.
The following tables summarize the Corporation’s allowance for loan losses and recorded investment in gross loans, by portfolio type, at the dates and for the periods indicated.
|  | Quarter Ended December 31, 2020 |
|  | Single- |  | Multi- |  | Commercial |  |  |  |  |  |  |  | Commercial |  |  |  |  |  |  |
(In Thousands) |  | family |  | family |  | Real Estate |  | Construction |  | Other |  | Business |  | Consumer |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance at beginning of period |  | $ | 2,671 |  | $ | 4,490 |  | $ | 1,162 |  | $ | 116 |  | $ | 3 |  | $ | 42 |  | $ | 6 |  | $ | 8,490 |
Provision (recovery) for loan losses |  |  | 26 |  |  | 50 |  |  | (30) |  |  | (6) |  |  | — |  |  | (1) |  |  | — |  |  | 39 |
Recoveries |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 10 |
Charge-offs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | (1) |
Allowance for loan losses, end of period |  | $ | 2,706 |  | $ | 4,540 |  | $ | 1,132 |  | $ | 110 |  | $ | 3 |  | $ | 41 |  | $ | 6 |  | $ | 8,538 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 570 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 570 |
Collectively evaluated for impairment |  |  | 2,136 |  |  | 4,540 |  |  | 1,132 |  |  | 110 |  |  | 3 |  |  | 41 |  |  | 6 |  |  | 7,968 |
Allowance for loan losses, end of period |  | $ | 2,706 |  | $ | 4,540 |  | $ | 1,132 |  | $ | 110 |  | $ | 3 |  | $ | 41 |  | $ | 6 |  | $ | 8,538 |
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 9,237 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 9,237 |
Collectively evaluated for impairment |  |  | 248,627 |  |  | 488,412 |  |  | 102,551 |  |  | 7,135 |  |  | 141 |  |  | 882 |  |  | 95 |  |  | 847,843 |
Total loans held for investment, gross |  | $ | 257,864 |  | $ | 488,412 |  | $ | 102,551 |  | $ | 7,135 |  | $ | 141 |  | $ | 882 |  | $ | 95 |  | $ | 857,080 |
Allowance for loan losses as a percentage of gross loans held for investment |  |  | 1.05 | % |  | 0.93 | % |  | 1.10 | % |  | 1.54 | % |  | 2.13 | % |  | 4.65 | % |  | 6.32 | % |  | 0.99 | %
|  | Quarter Ended December 31, 2019 |
|  | Single- |  | Multi- |  | Commercial |  |  |  |  | Commercial |  |  |  |  |  |  |
(In Thousands) |  | family |  | family |  | Real Estate |  | Construction |  | Business |  | Consumer |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance at beginning of period |  | $ | 2,234 |  | $ | 3,507 |  | $ | 1,085 |  | $ | 74 |  | $ | 20 |  | $ | 9 |  | $ | 6,929 |
Provision (recovery) for loan losses |  |  | (90) |  |  | (5) |  |  | (27) |  |  | 94 |  |  | 8 |  |  | (2) |  |  | (22) |
Recoveries |  |  | 13 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 14 |
Charge-offs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Allowance for loan losses, end of period |  | $ | 2,157 |  | $ | 3,502 |  | $ | 1,058 |  | $ | 168 |  | $ | 28 |  | $ | 8 |  | $ | 6,921 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 46 |  | $ | — |  | $ | — |  | $ | — |  | $ | 6 |  | $ | — |  | $ | 52 |
Collectively evaluated for impairment |  |  | 2,111 |  |  | 3,502 |  |  | 1,058 |  |  | 168 |  |  | 22 |  |  | 8 |  |  | 6,869 |
Allowance for loan losses, end of period |  | $ | 2,157 |  | $ | 3,502 |  | $ | 1,058 |  | $ | 168 |  | $ | 28 |  | $ | 8 |  | $ | 6,921 |
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 3,053 |  | $ | — |  | $ | — |  | $ | — |  | $ | 43 |  | $ | — |  | $ | 3,096 |
Collectively evaluated for impairment |  |  | 344,291 |  |  | 479,151 |  |  | 107,613 |  |  | 6,914 |  |  | 535 |  |  | 140 |  |  | 938,644 |
Total loans held for investment, gross |  | $ | 347,344 |  | $ | 479,151 |  | $ | 107,613 |  | $ | 6,914 |  | $ | 578 |  | $ | 140 |  | $ | 941,740 |
Allowance for loan losses as a percentage of gross loans held for investment |  |  | 0.62 | % |  | 0.73 | % |  | 0.98 | % |  | 2.43 | % |  | 4.84 | % |  | 5.71 | % |  | 0.73 | %
|  | Six Months Ended December 31, 2020 |
|  | Single- |  | Multi- |  | Commercial |  |  |  |  |  |  | Commercial |  |  |  |  |  |  |
(In Thousands) |  | family |  | family |  | Real Estate |  | Construction |  | Other |  | Business |  | Consumer |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance at beginning of period |  | $ | 2,622 |  | $ | 4,329 |  | $ | 1,110 |  | $ | 171 |  | $ | 3 |  | $ | 24 |  | $ | 6 |  | $ | 8,265 |
Provision (recovery) for loan losses |  |  | 70 |  |  | 211 |  |  | 22 |  |  | (61) |  |  | — |  |  | 17 |  |  | — |  |  | 259 |
Recoveries |  |  | 14 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 15 |
Charge-offs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | (1) |
Allowance for loan losses, end of period |  | $ | 2,706 |  | $ | 4,540 |  | $ | 1,132 |  | $ | 110 |  | $ | 3 |  | $ | 41 |  | $ | 6 |  | $ | 8,538 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 570 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 570 |
Collectively evaluated for impairment |  |  | 2,136 |  |  | 4,540 |  |  | 1,132 |  |  | 110 |  |  | 3 |  |  | 41 |  |  | 6 |  |  | 7,968 |
Allowance for loan losses, end of period |  | $ | 2,706 |  | $ | 4,540 |  | $ | 1,132 |  | $ | 110 |  | $ | 3 |  | $ | 41 |  | $ | 6 |  | $ | 8,538 |
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 9,237 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 9,237 |
Collectively evaluated for impairment |  |  | 248,627 |  |  | 488,412 |  |  | 102,551 |  |  | 7,135 |  |  | 141 |  |  | 882 |  |  | 95 |  |  | 847,843 |
Total loans held for investment, gross |  | $ | 257,864 |  | $ | 488,412 |  | $ | 102,551 |  | $ | 7,135 |  | $ | 141 |  | $ | 882 |  | $ | 95 |  | $ | 857,080 |
Allowance for loan losses as a percentage of gross loans held for investment |  |  | 1.05 | % |  | 0.93 | % |  | 1.10 | % |  | 1.54 | % |  | 2.13 | % |  | 4.65 | % |  | 6.32 | % |  | 0.99 | %
|  | Six Months Ended December 31, 2019 |
|  | Single- |  | Multi- |  | Commercial |  |  |  |  |  |  | Commercial |  |  |  |  |  |
(In Thousands) |  | family |  | family |  | Real Estate |  | Construction |  | Other |  | Business |  | Consumer |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance at beginning of period |  | $ | 2,709 |  | $ | 3,219 |  | $ | 1,050 |  | $ | 61 |  | $ | 3 |  | $ | 26 |  | $ | 8 |  | $ | 7,076 |
Provision (recovery) for loan losses |  |  | (600) |  |  | 283 |  |  | 8 |  |  | 107 |  |  | (3) |  |  | 2 |  |  | — |  |  | (203) |
Recoveries |  |  | 49 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 50 |
Charge-offs |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | (2) |
Allowance for loan losses, end of period |  | $ | 2,157 |  | $ | 3,502 |  | $ | 1,058 |  | $ | 168 |  | $ | — |  | $ | 28 |  | $ | 8 |  | $ | 6,921 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 46 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 6 |  | $ | — |  | $ | 52 |
Collectively evaluated for impairment |  |  | 2,111 |  |  | 3,502 |  |  | 1,058 |  |  | 168 |  |  | — |  |  | 22 |  |  | 8 |  |  | 6,869 |
Allowance for loan losses, end of period |  | $ | 2,157 |  | $ | 3,502 |  | $ | 1,058 |  | $ | 168 |  | $ | — |  | $ | 28 |  | $ | 8 |  | $ | 6,921 |
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 3,053 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 43 |  | $ | — |  | $ | 3,096 |
Collectively evaluated for impairment |  |  | 344,291 |  |  | 479,151 |  |  | 107,613 |  |  | 6,914 |  |  | — |  |  | 535 |  |  | 140 |  |  | 938,644 |
Total loans held for investment, gross |  | $ | 347,344 |  | $ | 479,151 |  | $ | 107,613 |  | $ | 6,914 |  | $ | — |  | $ | 578 |  | $ | 140 |  | $ | 941,740 |
Allowance for loan losses as a percentage of gross loans held for investment |  |  | 0.62 | % |  | 0.73 | % |  | 0.98 | % |  | 2.43 | % |  | — | % |  | 4.84 | % |  | 5.71 | % |  | 0.73 | %
The following tables identify the Corporation’s total recorded investment in non-performing loans by type at the dates and for the periods indicated. Generally, a loan is placed on non-accrual status when it becomes 90 days past due as to principal or interest or if the loan is deemed impaired, after considering economic and business conditions and collection efforts, where the borrower’s financial condition is such that collection of the contractual principal or interest on the loan is doubtful. In addition, interest income is not recognized on any loan where management has determined that collection is not reasonably assured. A non-performing loan may be restored to accrual status when delinquent principal and interest payments are brought current, the borrower(s) has demonstrated sustained payment performance and future monthly principal and interest payments are expected to be collected on a timely basis. Loans with a related allowance reserve have been individually evaluated for impairment using either a discounted cash flow analysis or, for collateral dependent loans, current appraisals less costs to sell, to establish realizable value. This analysis may identify a specific impairment amount needed or may conclude that no reserve is needed. Loans that are not individually evaluated for impairment are included in pools of homogeneous loans for evaluation of related allowance reserves.
|  | At December 31, 2020
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Net
|  | Principal |  | Related |  | Recorded |  |  |  |  | Recorded
(In Thousands) |  | Balance |  | Charge-offs |  | Investment |  | Allowance (1) |  | Investment
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance |  | $ | 9,636 |  | $ | — |  | $ | 9,636 |  | $ | (928) |  | $ | 8,708
Without a related allowance (2) |  |  | 2,015 |  |  | (453) |  |  | 1,562 |  |  | — |  |  | 1,562
Total single-family |  |  | 11,651 |  |  | (453) |  |  | 11,198 |  |  | (928) |  |  | 10,270
Total non-performing loans |  | $ | 11,651 |  | $ | (453) |  | $ | 11,198 |  | $ | (928) |  | $ | 10,270
| (1) |  | Consists of collectively and individually evaluated allowances, specifically assigned to the individual loan, and fair value credit adjustments.
| (2) |  | There was no related allowance for loan losses because the loans have been charged-off to their fair value or the fair value of the collateral is higher than the loan balance.
|  | At June 30, 2020
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Net
|  | Principal |  | Related |  | Recorded |  |  |  |  | Recorded
(In Thousands) |  | Balance |  | Charge-offs |  | Investment |  | Allowance (1) |  | Investment
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance |  | $ | 3,289 |  | $ | — |  | $ | 3,289 |  | $ | (438) |  | $ | 2,851
Without a related allowance (2) |  |  | 2,509 |  |  | (467) |  |  | 2,042 |  |  | — |  |  | 2,042
Total single-family |  |  | 5,798 |  |  | (467) |  |  | 5,331 |  |  | (438) |  |  | 4,893
Commercial business loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance |  |  | 35 |  |  | — |  |  | 35 |  |  | (4) |  |  | 31
Total commercial business loans |  |  | 35 |  |  | — |  |  | 35 |  |  | (4) |  |  | 31
Total non-performing loans |  | $ | 5,833 |  | $ | (467) |  | $ | 5,366 |  | $ | (442) |  | $ | 4,924
| (1) |  | Consists of collectively and individually evaluated allowances, specifically assigned to the individual loan, and fair value credit adjustments.
| (2) |  | There was no related allowance for loan losses because the loans have been charged-off to their fair value or the fair value of the collateral is higher than the loan balance.
At December 31, 2020, there were no commitments to lend additional funds to those borrowers whose loans were classified as non-performing . For the quarter ended December 31, 2020 and 2019, the Corporation’s average recorded investment in non-performing loans was $9.9 million and $4.0 million, respectively. The Corporation records payments on non-performing loans utilizing the cash basis or cost recovery method of accounting during the periods when the loans are on non-performing status. For the quarter ended December 31, 2020, the Bank received $43,000 in interest payments from non-performing loans, of which $29,000 was recognized as interest income and the remaining $14,000 was applied to reduce the loan balances under the cost recovery method. In comparison, for the quarter ended December 31, 2019, the Bank received $57,000 in interest payments from non-performing loans, of which $34,000 was recognized as interest income and the remaining $23,000 was applied to reduce the loan balances under the cost recovery method. For the six months ended December 31, 2020 and 2019, the Corporation’s average recorded investment in non-performing loans was $7.6 million and $4.7 million, respectively. For the six months ended December 31, 2020, the Bank received $93,000 in interest payments from non-performing loans, of which $70,000 was recognized as interest income and the remaining $23,000 was applied to reduce the loan balances under the cost recovery method. In comparison, for the six months ended December 31, 2019, the Bank received $204,000 in interest payments from non-performing loans, of which $157,000 was recognized as interest income and the remaining $47,000 was applied to reduce the loan balances under the cost recovery method. The following tables present the average recorded investment in non-performing loans and the related interest income recognized for the quarter and six months ended December 31, 2020 and 2019:
|  | Quarter Ended December 31,
|  | 2020 |  | 2019
|  | Average |  | Interest |  | Average |  | Interest
|  | Recorded |  | Income |  | Recorded |  | Income
(In Thousands) |  | Investment |  | Recognized |  | Investment |  | Recognized
Without related allowances: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 1,570 |  | $ | — |  | $ | 2,874 |  | $ | 21
|  |  | 1,570 |  |  | — |  |  | 2,874 |  |  | 21
With related allowances: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  |  | 8,285 |  |  | 29 |  |  | 1,105 |  |  | 12
Commercial business loans |  |  | 19 |  |  | — |  |  | 44 |  |  | 1
|  |  | 8,304 |  |  | 29 |  |  | 1,149 |  |  | 13
Total |  | $ | 9,874 |  | $ | 29 |  | $ | 4,023 |  | $ | 34
|  | Six Months Ended December 31,
|  | 2020 |  | 2019
|  | Average |  | Interest |  | Average |  | Interest
|  | Recorded |  | Income |  | Recorded |  | Income
(In Thousands) |  | Investment |  | Recognized |  | Investment |  | Recognized
Without related allowances: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 1,726 |  | $ | — |  | $ | 2,980 |  | $ | 111
Construction |  |  | — |  |  | — |  |  | 542 |  |  | 20
|  |  | 1,726 |  |  | — |  |  | 3,522 |  |  | 131
With related allowances: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  |  | 5,897 |  |  | 69 |  |  | 1,151 |  |  | 24
Commercial business loans |  |  | 26 |  |  | 1 |  |  | 45 |  |  | 2
|  |  | 5,923 |  |  | 70 |  |  | 1,196 |  |  | 26
Total |  | $ | 7,649 |  | $ | 70 |  | $ | 4,718 |  | $ | 157
For the quarter ended December 31, 2020, 16 loans were newly restructured (forbearance loans which were downgraded when their monthly payment deferrals were extended beyond six months, consistent with the Interagency Statement), while one restructured loan was upgraded to the pass category. For the quarter ended December 31, 2019, no new loans were restructured from their original terms and classified as restructured loans, while one restructured loan was downgraded from pass to the substandard category and one restructured loan was upgraded from special mention to the pass category. During both quarters ended December 31, 2020 and 2019, no restructured loans were in default within a 12-month period subsequent to their original restructuring. Additionally, during the quarter ended December 31, 2020 and 2019, there was no loan whose modification was extended beyond the initial maturity of the modification. At both December 31, 2020 and June 30, 2020, there were no commitments to lend additional funds to those borrowers whose loans were restructured. For the six months ended December 31, 2020, 17 loans were newly restructured (including 16 COVID-19 related loan forbearance modifications which were downgraded when their monthly payment deferrals were extended beyond six months, consistent with the Interagency Statement), while two restructured loans were upgraded to the pass category. For the six months ended December 31, 2019, no new loans were restructured from their original terms and classified as restructured loans, while two substandard restructured loans were paid off, one restructured loan was downgraded from pass to the substandard category and one restructured loan was upgraded from special mention to the pass category. During both six months ended December 31, 2020 and 2019, no restructured loans were in default within a 12-month period subsequent to their original restructuring. Additionally, during the six months ended December 31, 2020 and 2019, there was no loan whose modification was extended beyond the initial maturity of the modification. As of December 31, 2020, the Corporation held 23 restructured loans with a net outstanding balance of $8.2 million, and all loans were classified as substandard and on non-accrual status. As of June 30, 2020, the Corporation held eight restructured loans with a net outstanding balance of $2.6 million, and all loans were classified as substandard on non-accrual status. As of December 31, 2020 , all of the restructured loans were current with respect to their modified payment terms, as compared to June 30, 2020 when $1.2 million or 44% of the restructured loans were current with respect to their modified payment terms. The Corporation upgrades restructured single-family loans to the pass category if the borrower has demonstrated satisfactory contractual payments for at least six consecutive months; 12 months for those loans that were restructured more than once; and if the borrower has demonstrated satisfactory contractual payments beyond 12 consecutive months, the loan is no longer categorized as a restructured loan. In addition to the payment history described above, multi-family, commercial real estate, construction and commercial business loans must also demonstrate a combination of the following characteristics to be upgraded: satisfactory cash flow, satisfactory guarantor support, and additional collateral support, among others. To qualify for restructuring, a borrower must provide evidence of their creditworthiness such as, current financial statements, their most recent income tax returns, current paystubs, current W‑2s, and most recent bank statements, among other documents, which are then verified by the Corporation. The Corporation re-underwrites the loan with the borrower’s updated financial information, new credit report, current loan balance, new interest rate, remaining loan term, updated property value and modified payment schedule, among other considerations, to determine if the borrower qualifies. The following table summarizes at the dates indicated the restructured loan balances, net of allowance for loan losses, by loan type:
|  | At |  | At
(In Thousands) |  | December 31, 2020 |  | June 30, 2020
Restructured loans on non-accrual status: |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |
Single-family |  | $ | 8,208 |  | $ | 2,612
Commercial business loans |  |  | — |  |  | 31
Total |  |  | 8,208 |  |  | 2,643
Total restructured loans |  | $ | 8,208 |  | $ | 2,643
The following tables identify the Corporation’s total recorded investment in restructured loans by type at the dates and for the periods indicated.
|  | At December 31, 2020
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Net
|  | Principal |  | Related |  | Recorded |  |  |  |  | Recorded
(In Thousands) |  | Balance |  | Charge-offs |  | Investment |  | Allowance (1) |  | Investment
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance |  | $ | 7,939 |  | $ | — |  | $ | 7,939 |  | $ | (587) |  | $ | 7,352
Without a related allowance (2) |  |  | 1,221 |  |  | (365) |  |  | 856 |  |  | — |  |  | 856
Total single-family |  |  | 9,160 |  |  | (365) |  |  | 8,795 |  |  | (587) |  |  | 8,208
Total restructured loans |  | $ | 9,160 |  | $ | (365) |  | $ | 8,795 |  | $ | (587) |  | $ | 8,208
| (1) |  | Consists of collectively and individually evaluated allowances, specifically assigned to the individual loan.
| (2) |  | There was no related allowance for loan losses because the loans have been charged-off to their fair value or the fair value of the collateral is higher than the loan balance.
|  | At June 30, 2020
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Net
|  | Principal |  | Related |  | Recorded |  |  |  |  | Recorded
(In Thousands) |  | Balance |  | Charge-offs |  | Investment |  | Allowance (1) |  | Investment
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance |  | $ | 1,650 |  | $ | — |  | $ | 1,650 |  | $ | (108) |  | $ | 1,542
Without a related allowance (2) |  |  | 1,435 |  |  | (365) |  |  | 1,070 |  |  | — |  |  | 1,070
Total single-family |  |  | 3,085 |  |  | (365) |  |  | 2,720 |  |  | (108) |  |  | 2,612
Commercial business loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance |  |  | 35 |  |  | — |  |  | 35 |  |  | (4) |  |  | 31
Total commercial business loans |  |  | 35 |  |  | — |  |  | 35 |  |  | (4) |  |  | 31
Total restructured loans |  | $ | 3,120 |  | $ | (365) |  | $ | 2,755 |  | $ | (112) |  | $ | 2,643
| (1) |  | Consists of collectively and individually evaluated allowances, specifically assigned to the individual loan.
| (2) |  | There was no related allowance for loan losses because the loans have been charged-off to their fair value or the fair value of the collateral is higher than the loan balance.
During the quarter and six months ended December 31, 2020 and 2019, no properties were acquired in the settlement of loans and no previously foreclosed upon properties were sold. As of both December 31, 2020 and June 30, 2020, there was no real estate owned property. A new appraisal is obtained on each of the properties at the time of foreclosure and fair value is derived by using the lower of the appraised value or the listing price of the property, net of selling costs. Any initial loss is recorded as a charge to the allowance for loan losses before being transferred to real estate owned. Subsequent to transfer to real estate owned, if there is further deterioration in real estate values, specific real estate owned loss reserves are established and charged to the condensed consolidated statements of operations. In addition, the Corporation records costs to carry real estate owned as real estate owned operating expenses as incurred. The Coronavirus Aid, Relief, and Economic Security Act of 2020 signed into law on March 27, 2020 ("CARES Act") and Interagency Statement provided guidance around the modification of loans as a result of the COVID-19 pandemic, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act and Interagency Statement prior to any relief and were not extended beyond their initial six months of deferred payments, are not considered restructured loans. This includes short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. To qualify as an eligible loan under the CARES Act and Interagency Statement, a loan modification must be (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (a) 60 days after the date of termination of the national emergency declared by the President or (b) December 31, 2020. In addition, the bank regulatory agencies issued the Revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus ("Interagency Statement") stating that COVID-19 related short-term modifications (i.e., six months or less) granted to loans that were current as of the loan modification program implementation date are not restructured loans. On December 27, 2020, the Consolidated Appropriations Act 2021 (H.R. 133) was signed into law. Among other purposes, this act provides coronavirus emergency response and relief, including extending relief offered under the CARES Act related to restructured loans as a result of COVID-19 through January 1, 2022 or 60 days after the end of the national emergency declared by the President, whichever is earlier. As of December 31, 2020, the Corporation had six single-family forbearance loans, with outstanding balances of $1.8 million or 0.21 percent of total loans, and two multi-family loans with outstanding balances of $763,000 or 0.09 percent of total loans that were modified in accordance with the CARES Act and Interagency Statement. In addition, as of December 31, 2020, the Corporation had two pending requests for payment relief for a single-family loan of $684,000 and a multi-family loan of $1.1 million. As of December 31, 2020, loan forbearance related to COVID-19 hardship requests are described below:
|  | Forbearance Granted |  | Forbearance Completed (1) |  | Forbearance Remaining
|  | Number of |  |  |  |  | Number of |  |  |  |  | Number of |  |  |
(Dollars In Thousands) |  | Loans |  | Amount |  | Loans |  | Amount |  | Loans |  | Amount
Single-family loans |  | 58 |  | $ | 23,239 |  | 52 |  | $ | 21,404 |  | 6 |  | $ | 1,835
Multi-family loans |  | 5 |  |  | 2,346 |  | 3 |  |  | 1,583 |  | 2 |  |  | 763
Commercial real estate loans |  | 2 |  |  | 1,066 |  | 2 |  |  | 1,066 |  | — |  |  | —
Total loan forbearance |  | 65 |  | $ | 26,651 |  | 57 |  | $ | 24,053 |  | 8 |  | $ | 2,598
| (1) |  | Includes 16 single-family loans totaling $6.3 million which were subsequently extended and classified as restructured loans, consistent with the Interagency Statement.
As of December 31, 2020, certain characteristics of loans in forbearance are described below:
|  |  |  |  |  |  |  |  |  |  |  |  | Weighted |  | Weighted Avg.
|  |  |  |  |  |  | % of |  |  |  | Weighted |  | Avg. Debt |  | Forbearance
|  | Number |  |  |  |  | Total |  | Weighted |  | Avg. |  | Coverage |  | Period
(Dollars In Thousands) |  | of Loans |  |  | Amount |  | Loans |  | Avg. LTV(1) |  | FICO(2) |  | Ratio(3) |  | Granted(4)
Single-family loans |  | 6 |  | $ | 1,835 |  | 0.21 | % | 75 | % | 725 |  | N/A |  | 6.0
Multi-family loans |  | 2 |  |  | 763 |  | 0.09 | % | 56 | % | 711 |  | 1.26 | x | 5.0
Total loans in forbearance |  | 8 |  | $ | 2,598 |  | 0.30 | % | 69 | % | 721 |  | 1.26 | x | 5.7
(1)Current loan balance in comparison to the original appraised value. (2)At time of loan origination, borrowers and/or guarantors. (3)At time of loan origination. (4)In months.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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