Loans Receivable

3 Months Ended

Mar. 31, 2013

Loans Receivable, Net [Abstract]

Loans Receivable

Loans Receivable

Loans receivable are as follows:

(In thousands)	March 31, 2013		December 31, 2012
Loans receivable	$	456,533	$	401,961
Valuation allowance:
Specific	$	3,500	$	3,000
General	2,682		2,620
Total	$	6,182	$	5,620
Impaired loans:
With a specific valuation allowance	$	3,003	$	1,775
Without a valuation allowance	30,000		31,023
Unpaid principal balance	36,003		35,872
	For the Three Months Ended March 31,
	2013		2012
Increase (decrease) in valuation allowance	$	62	$	(6,896	)
Loans receivable charged off	463		85

Loans receivable in non-accrual status were $3 million at both March 31, 2013 and December 31, 2012. If these loans had been current, additional interest income of $0.7 million and $0.2 million would have been recognized in accordance with their original terms for the three months ended March 31, 2013 and 2012, 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 $243 million and an aggregate fair value of $250 million at March 31, 2013, are secured by commercial real estate located primarily in New York City, California, Hawaii and Chicago. These loans earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025.

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. Based on this rating system, one loan with an aggregate cost basis of $30 million was considered to be impaired at March 31, 2013. A determination was made as to the amount of loss in the event of a default and whether the loss is probable. The results of the determination were considered in connection with the valuation allowance noted above.