Loans Receivable Held-for-Sale, Net

9 Months Ended

Sep. 30, 2012

Loans Receivable Held-For-Sale, Net [Abstract]

Loans Receivable Held-for-Sale, Net

NOTE (5) – Loans Receivable Held-for-Sale, Net

Loans receivable held-for-sale at September 30, 2012 and December 31, 2011 were as follows:

	September 30, 2012			December 31, 2011
	(In thousands)
Five or more units residential	$	5,856		$	6,395
Commercial real estate		1,362			1,712
Church		4,318			5,550
Valuation allowance for unrealized losses		(321	)		(674	)
Loans receivable, held for sale, net	$	11,215		$	12,983
Non-performing loans receivable held for sale (1)	$	3,568		$	5,612
Valuation allowance		0			(382	)
Non-performing loans receivable held for sale, net	$	3,568		$	5,230
Performing loans receivable held for sale (2)	$	7,968		$	8,045
Valuation allowance		(321	)		(292	)
Performing loans receivable held for sale, net	$	7,647		$	7,753

(1) Net of charge-offs of $719 thousand and $953 thousand at September 30, 2012 and December 31, 2011.

(2) Includes $5.5 million and $5.6 million of loans that were carried at cost at September 30, 2012 and December 31, 2011.

Upon our decision to sell certain delinquent and non-performing 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 nine months ended September 30, 2012, two non-performing loans, which had a total carrying amount of $616 thousand and were secured by commercial real estate, were transferred to held-for-sale.

Certain delinquent and non-performing loans, primarily commercial real estate and church loans, totaling $1.8 million were sold during the three months and nine months ended September 30, 2012. Net loss on sales of non-performing loans totaled $280 thousand for the three and nine months ended September 30, 2012.

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. A loan receivable held-for-sale secured by a church building, which had a carrying amount of $266 thousand, net of a charge-off of $292 thousand, was transferred to REO during the nine months ended September 30, 2011.

Net lower of cost or market recoveries on non-performing loans receivable held-for-sale totaled $296 thousand and $109 thousand for the three and nine months ended September 30, 2012, compared to write-downs of $702 thousand and $667 thousand for the comparable periods in 2011. Additionally, during the three and nine months ended September 30, 2012, we increased our valuation allowance by $29 thousand and $28 thousand on loans held for sale that are still considered performing loans compared to increases of $0 and $61 thousand during the same periods in 2011.