Loans Receivable Held for Sale (Loans receivable held for sale)

12 Months Ended

Dec. 31, 2013

Loans receivable held for sale

Loans Receivable Held for Sale

Loans Receivable Held for Sale

Note 4 – Loans Receivable Held for Sale

There were no loans receivable held for sale at December 31, 2013. Loans receivable held for sale at December 31, 2012 totaled $19.1 million.

During the early part of 2013, certain loans held for investment were reclassified to loans receivable held for sale at the lower of cost or fair value, less estimated selling costs. At the time of transfers, the carrying amount of these loans totaled $8.8 million, and required additional charge-offs of $1.5 million.

Loans sold during 2013 totaled $16.5 million with a net gain of $110 thousand. Additionally, a loan receivable held for sale secured by a church building, which had a carrying amount of $753 thousand, was transferred to REO during 2013.

Loans sold during 2012 totaled $2.9 million with a net loss of $253 thousand. During 2012, two loans receivable held-for-sale secured by commercial real estate properties, which had a total carrying amount of $334 thousand, net of charge-offs of $327 thousand, were transferred to REO.

During the third quarter of 2013, management determined that certain performing loans that were classified as held for sale for longer than one year were not to be marketed for sale and therefore, transferred such loans to held for investment at the carrying value of the loan. Loans transferred from held for sale to held for investment totaled $7.4 million and consisted of $2.5 million in multi-family loans, $1.4 million in commercial real estate loans and $3.5 million in church loans.