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

6 Months Ended

Jun. 30, 2013

Loans receivable held for sale

Loans receivable held for sale

Loans Receivable

NOTE (5) – Loans Receivable Held For Sale

Loans receivable held for sale at June 30, 2013 and December 31, 2012 were as follows:

	June 30, 2013		December 31, 2012
	(In thousands)
One-to-four units	$	-	$	7,916
Five or more units	3,808		5,795
Commercial real estate	1,349		1,358
Church	4,283		4,300
Valuation allowance for unrealized losses	(314)		(318)
Loans receivable held for sale, net	$	9,126	$	19,051
Non-performing loans receivable held for sale (1)	$	1,904	$	10,168
Valuation allowance	-		-
Non-performing loans receivable held for sale, net	$	1,904	$	10,168
Performing loans receivable held for sale	$	7,536	$	9,201
Valuation allowance	(314)		(318)
Performing loans receivable held for sale, net	$	7,222	$	8,883

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(1) Net of charge-offs of $679 thousand and $2.5 million at June 30, 2013 and December 31, 2012.

When management decides to sell certain loans held in portfolio, we reclassify them to held for sale at the lower of cost or fair value, less estimated selling costs.  During the first quarter of 2013, eight non-performing loans secured by five or more units, seven non-performing loans secured by commercial real estate and two non-performing loans secured by churches, were transferred to held-for-sale.  At the time of transfer, these loans had a carrying amount of $7.7 million and required additional charge-offs of $1.5 million, which were reserved for at year-end 2012.  These loans were sold during the second quarter of 2013 with a net gain of $81 thousand.  Additionally, $9.3 million of delinquent and non-performing loans secured by one-to-four units and church properties were sold at a net gain of $16 thousand during the first quarter of 2013.  There were no loan sales during the first half of 2012.  No loans receivable held for sale were transferred to REO during the six months ended June 30, 2013 and 2012.

Net write-downs on non-performing loans receivable held for sale to lower of cost or fair value totaled $471 thousand for the six months ended June 30, 2013, compared to $187 thousand for the same period in 2012. Additionally, during the first half of 2013 and 2012, we decreased our valuation allowance by $3 thousand and $1 thousand on loans held for sale that are considered performing loans.