Loans Receivable

12 Months Ended

Dec. 31, 2012

Loans Receivable, Net [Abstract]

Loans Receivable

 Loans Receivable

Loans receivable are as follows:

	As of December 31,
(In thousands)	2012			2011
Total loans receivable	$	401,961		$	263,187
Valuation allowance:
Specific	$	3,000		$	19,041
General	2,620			764
Total	$	5,620		$	19,805
Impaired loans:
With a specific valuation allowance	$	1,775		$	29,702
Without a valuation allowance	31,023			30,357
Unpaid principal balance	35,872			93,922
	For the Year Ended December 31,
	2012			2011
Increase (decrease) in valuation allowance	$	(14,118	)	$	130
Loans receivable charged off	463			759

Loans receivable in non-accrual status were $3 million and $30 million at December 31, 2012 and 2011, respectively. If these loans had been current, additional interest income of $498,000 and $805,000 would have been recognized in accordance with their original terms for the years ended December 31, 2012 and 2011, respectively.

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

The Company's six largest loans receivable, which have an aggregate amortized cost of $242 million and an aggregate fair value of $244 million at December 31, 2012, are secured by commercial real estate located primarily in New York City, Chicago, California, Hawaii and Boston. These loans earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. As part of the evaluation process, the Company reviews certain credit quality indicators for these loans. The Company utilizes an internal risk rating system to assign a risk to each of its commercial loans. The loan rating system takes into consideration credit quality indicators including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower's financial condition and performance with respect to loan terms, the Company's position in the capital structure, and the overall leverage in the capital structure. An additional credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to the borrower's principal and interest payments. At December 31, 2012, each of the six largest loans referred to above had a debt service coverage ratio greater than 3.0, except one that is lower due to a recent and temporary rate abatement.