Bank Loans

9 Months Ended

Sep. 30, 2011

Bank Loans

Bank Loans

NOTE 8 - Bank Loans

The following table presents the balance and associated percentage of each major loan category in our loan portfolio at September 30, 2011 and December 31, 2010 (in thousands, except percentages):

	September 30, 2011						December 31, 2010
	Balance			Percent			Balance			Percent
Consumer (1)	$	364,288			63.7	%	$	266,806			68.2	%
Commercial and industrial		125,388			21.9			41,965			10.7
Residential real estate		53,185			9.3			49,550			12.7
Home equity lines of credit		25,386			4.4			30,966			7.9
Commercial real estate		3,306			0.6			1,637			0.4
Construction and land		514			0.1			524			0.1
		572,067			100.0	%		391,448			100.0	%
Unamortized loan origination costs, net of loan fees		66						392
Loans in process		(10)						233
Allowance for loan losses		(3,830	)					(2,331	)
	$	568,293					$	389,742

⁽¹⁾  Includes securities-based loans of $364.0 million and $266.1 million at September 30, 2011 and December 31, 2010, respectively.

Changes in the allowance for loan losses for the periods presented were as follows (in thousands):

	Three Months Ended September 30,					Nine Months Ended  September 30,
	2011		2010			2011		2010
Allowance for loan losses, beginning of period	$	3,251	$	1,669		$	2,331	$	1,702
Provision for loan losses		559		(51)			1,465		216
Charge-offs:
Residential real estate		0		(66)			0		(215	)
Other		0		0			0		(2	)
Total charge-offs		0		(66	)		0		(217	)
Recoveries		20		4			34		122
Allowance for loan losses, end of period	$	3,830	$	1,823		$	3,830	$	1,823

A loan is impaired when it is probable that interest and principal payments will not be made in accordance with the contractual terms of the loan agreement. At September 30, 2011, we had $0.9 million of nonaccrual loans that were more than 90 days past due, for which there was a specific allowance of $0.2 million. Further, we had $0.4 million in troubled debt restructurings at September 30, 2011. At December 31, 2010, we had $1.1 million of nonaccrual loans that were more than 90 days past due, for which there was a specific allowance of $0.2 million. Further, we had $0.4 million in troubled debt restructurings at December 31, 2010. The gross interest income related to impaired loans, which would have been recorded had these loans been current in accordance with their original terms, and the interest income recognized on these loans during the year, were insignificant to the consolidated financial statements.

In general, we are a secured lender. At September 30, 2011 and December 31, 2010, approximately 98.7% and 98.0% of our loan portfolio was collateralized, respectively. Collateral is required in accordance with the normal credit evaluation process based upon the creditworthiness of the customer and the credit risk associated with the particular transaction.

At September 30, 2011 and December 31, 2010, Stifel Bank had loans outstanding to its executive officers, directors, and their affiliates in the amount of $0.8 million and $0.9 million, respectively, and loans outstanding to other Stifel Financial Corp. executive officers, directors, and their affiliates in the amount of $2.9 million and $3.5 million, respectively. Such loans and other extensions of credit were made in the ordinary course of business and were made on substantially the same terms (including interest rates and collateral requirements) as those prevailing at the time for comparable transactions with other persons.

At September 30, 2011 and December 31, 2010, we had mortgage loans held for sale of $114.5 million and $86.3 million, respectively. For the three months ended September 30, 2011 and 2010, we recognized gains of $2.0 million and $1.4 million from the sale of loans originated for sale, net of fees and costs to originate these loans. For the nine months ended September 30, 2011 and 2010, we recognized gains of $5.4 million and $4.6 million, respectively, from the sale of loans originated for sale, net of fees and costs to originate these loans.