NOTE (6) – Loans Receivable Held For Sale

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


	March 31, 2013			December 31, 2012
	(In thousands)
One-to-four units	$	0		$	7,916
Five or more units		6,857			5,795
Commercial real estate		4,008			1,358
Church		4,758			4,300
Valuation allowance for unrealized losses		(317	)		(318	)

Loans receivable held for sale, net	$	15,306		$	19,051


Non-performing loans receivable held for sale (1)	$	8,060		$	10,168
Valuation allowance		0			0

Non-performing loans receivable held for sale, net	$	8,060		$	10,168


Performing loans receivable held for sale	$	7,563		$	9,201
Valuation allowance		(317	)		(318	)

Performing loans receivable held for sale, net	$	7,246		$	8,883

(1)	Net of charge-offs of $3.2 million and $2.5 million at March 31, 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 three months ended March 31, 2013, eight non-performing loans secured by five or more units, seven non-performing loans secured by commercial real estate and seven non-performing loans secured by churches, were transferred to held for sale. The loans had a carrying amount of $6.2 million, net of charge-offs of $2.4 million.

During the first quarter of 2013, certain delinquent and non-performing loans secured by one-to-four units and church properties totaling $9.3 million were sold at a net gain of $16 thousand. There were no loan sales during the first quarter of 2012. No loans receivable held for sale were transferred to REO during the three months ended March 31, 2013 and 2012.

Net lower of cost or market write-downs on non-performing loans receivable held for sale totaled $471 thousand for the three months ended March 31, 2013, compared to net lower of cost or market recoveries of $1 thousand for the same period in 2012. Additionally, during the first quarter of 2013 and 2012, we decreased our valuation allowance by $1 thousand on loans held for sale that are considered performing loans.