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

9 Months Ended

Sep. 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 totaled $1.1 million at June 30, 2013 and $19.1 million at December 31, 2012.

During the nine months ended September 30, 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, which were reserved for at year-end 2012.

During the third quarter of 2013, management determined that certain loans held for sale were no longer to be marketed for sale and therefore, transferred such loans to held for investment at the lower of cost or fair value.  Loans transferred 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.

Loans sold during the first nine months of 2013 totaled $15.5 million with a net gain of $97 thousand.  Additionally, a loan receivable held for sale secured by a church building was transferred to REO during the nine months ended September 30, 2013.

Loans sold during the first the nine months of 2012 totaled $1.8 million with a net loss of $280 thousand.  During the nine months ended September 30, 2012, two loans receivable held for sale were transferred to REO.  The loans were secured by commercial real estate properties, which had a total carrying amount of $333 thousand, net of charge-offs of $327 thousand.