Note 3 - Allowance for Loan Losses

6 Months Ended

Jun. 30, 2011

Allowance for Credit Losses [Text Block]

NOTE 3 – ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses for the three and six months ended June 30, 2011 and 2010 were as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011			2010
Balance, beginning of period	$	25,732,584	$	28,730,006		$	36,068,515		$	28,392,938
Provision		486,932		1,510,680			788,730			1,847,748
Charge-off		—		(5,121,806	)		(10,637,729	)		(5,121,806	)
Balance, end of period	$	26,219,516	$	25,118,880		$	26,219,516		$	25,118,880

As of June 30, 2011 and December 31, 2010, there was a general allowance for loan losses of $3,209,000 and $3,746,000, respectively, and a specific allowance for loan losses on thirteen and thirteen loans in the total amount of $23,010,516 and $32,322,515, respectively.

The following tables show the allocation of the allowance for loan losses as of and for the three and six months ended June 30, 2011 and as of and for the year ended December 31, 2010 by portfolio segment and by impairment methodology:

2011		Commercial Real Estate			Condominiums			Single Family Homes		Improved and Unimproved Land		Total
Allowance for loan losses:
	Three Months Ended June 30, 2011
Beginning balance		$	4,080,561		$	5,527,517		$	—	$	16,124,506	$	25,732,584
Provision			(107,636	)		2,956			—		591,612		486,932
Ending Balance		$	3,972,925		$	5,530,473		$	—	$	16,716,118	$	26,219,516
	Six Months Ended June 30, 2011
Beginning balance		$	4,453,677		$	15,706,726		$	—	$	15,908,112	$	36,068,515
Charge-offs			—			(10,637,729	)		—		—		(10,637,729	)
Provision			(480,752	)		461,476			—		808,006		788,730
Ending balance		$	3,972,925		$	5,530,473		$	—	$	16,716,118	$	26,219,516
Ending balance: individually evaluated for impairment		$	763,925		$	5,530,473		$	—	$	16,716,118	$	23,010,516
Ending balance: collectively evaluated for impairment		$	3,209,000		$	—		$	—	$	—	$	3,209,000
Loans:
Ending balance		$	$46,515,991		$	14,546,722		$	250,000	$	47,277,913	$	108,590,626
Ending balance: individually evaluated for impairment		$	17,751,788		$	14,546,722		$	250,000	$	47,277,913	$	79,826,423
Ending balance: collectively evaluated for impairment		$	28,764,203		$	—		$	—	$	—	$	28,764,203

2010	Commercial Real Estate			Condominiums			Apartments			Single Family Homes			Improved and Unimproved Land		Total
Allowance for loan losses:
Beginning balance	$	12,617,784		$	13,977,684		$	—		$	6,622		$	1,790,848	$	28,392,938
Charge-offs		(4,988,010	)		(3,761,680	)		(94,633	)		—			—		(8,844,323	)
Provision		(3,176,097	)		5,490,722			94,633			(6,622	)		14,117,264		16,519,900
Ending balance	$	4,453,677		$	15,706,726		$	—		$	—		$	15,908,112	$	36,068,515
Ending balance: individually evaluated for impairment	$	752,297		$	15,706,726		$	—		$	—		$	15,863,492	$	32,322,515
Ending balance: collectively evaluated for impairment	$	3,701,380		$	—		$	—		$	—		$	44,620	$	3,746,000
Loans:
Ending balance	$	$69,024,479		$	41,037,978		$	—		$	325,125		$	47,277,913	$	157,665,495
Ending balance: individually evaluated for impairment	$	33,354,222		$	41,037,978		$	—		$	325,125		$	46,847,913	$	121,565,238
Ending balance: collectively evaluated for impairment	$	35,670,257		$	—		$	—		$	—		$	430,000	$	36,100,257

The following tables show an aging analysis of the loan portfolio by the time past due as of June 30, 2011 and December 31, 2010:

June 30, 2011	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
Commercial real estate	$	—	$	334,851	$	17,416,937	$	17,751,788	$	28,764,203	$	46,515,991
Condominiums		—		—		14,546,722		14,546,722		——		14,546,722
Single family homes		—		—		250,000		250,000		—		250,000
Improved and unimproved land		—		—		47,277,913		47,277,913		—		47,277,913
	$	—	$	334,851	$	79,491,572	$	79,826,423	$	28,764,203	$	108,590,626

December 31, 2010	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
Commercial real estate	$	2,000,000	$	4,492,715	$	33,354,222	$	39,846,937	$	29,177,542	$	69,024,479
Condominiums		—		—		41,037,978		41,037,978		—		41,037,978
Single family homes		—		—		325,125		325,125		—		325,125
Improved and unimproved land		—		—		46,847,913		46,847,913		430,000		47,277,913
	$	2,000,000	$	4,492,715	$	121,565,238	$	128,057,953	$	29,607,542	$	157,665,495

All of the loans that are 90 or more days past due as listed above are on non-accrual status as of June 30, 2011 and December 31, 2010.

The following tables show information related to impaired loans as of and for the three and six months ended June 30, 2011 and as of and for the year ended December 31, 2010:

	As of June 30, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	16,076,192	$	16,338,185	$	—
Condominiums		3,540,459		3,511,722		—
Single family homes		250,180		250,000		—
Improved and unimproved land		2,849,248		5,046,974		—
With an allowance recorded:
Commercial Real Estate		2,167,312		1,413,603		763,925
Condominiums		11,568,874		11,035,000		5,530,473
Single family homes		—		—		—
Improved and unimproved land		42,319,477		42,230,939		16,716,118
Total:
Commercial Real Estate	$	18,243,504	$	17,751,788	$	763,925
Condominiums	$	15,109,333	$	14,546,722	$	5,530,473
Single family homes	$	250,180	$	250,000	$	—
Improved and unimproved land	$	45,168,725	$	47,277,913	$	16,716,118

	Three Months Ended June 30, 2011				Six Months Ended June 30, 2011
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	22,566,627	$	400,383	$	25,398,983	$	801,479
Condominiums		3,537,378		90,000		3,534,667		90,000
Single family homes		250,180		4,584		275,462		11,460
Improved and unimproved land		2,284,767		—		73,817		—
With an allowance recorded:
Commercial Real Estate		1,078,847		5,570		1,135,460		22,281
Condominiums		11,567,086		70,313		16,265,946		178,989
Single family homes		——		—		—		—
Improved and unimproved land		46,129,865		64,094		48,399,058		106,094
Total:
Commercial Real Estate	$	23,645,474	$	405,953	$	26,534,443	$	823,760
Condominiums	$	15,104,464	$	160,313	$	19,800,613	$	268,989
Single family homes	$	250,180	$	4,584	$	275,462	$	11,460
Improved and unimproved land	$	48,414,632	$	64,094	$	48,472,875	$	106,094

	As of December 31, 2010						Year Ended December 31, 2010
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	30,592,387	$	30,176,681	$	—	$	40,078,123	$	2,449,101
Condominiums		3,758,642		3,745,857		—		3,764,720		69,026
Apartments		—		—		—		—		—
Single family homes		325,980		325,125		—		313,948		13,451
Improved and unimproved land		18,657,499		18,028,102		—		15,895,534		—
With an allowance recorded:
Commercial Real Estate		3,182,057		3,177,542		752,297		6,174,450		55,703
Condominiums		39,753,600		37,292,121		15,706,726		54,645,622		64,466
Apartments		—		—		—		3,326,308		245,583
Single family homes		—		—		—		—		—
Improved and unimproved land		28,972,550		28,819,811		15,863,492		27,943,631		46,435
Total:
Commercial Real Estate	$	33,774,444	$	33,354,222	$	752,297	$	46,252,573	$	2,504,804
Condominiums	$	43,512,242	$	41,037,978	$	15,706,726	$	58,410,342	$	133,492
Apartments	$	—	$	—	$	—	$	3,326,308	$	245,583
Single family homes	$	325,980	$	325,125	$	—	$	313,948	$	13,451
Improved and unimproved land	$	47,630,048	$	46,847,913	$	15,863,492	$	43,839,165	$	46,435

The Partnership does not have commitments to lend additional funds to borrowers with loans whose terms have been modified in troubled debt restructurings.

The Partnership’s average recorded investment in impaired loans (including loans delinquent in payments greater than 90 days) was approximately $153,785,000 as of June 30, 2010.  Interest income recognized on impaired loans totaled approximately $713,000 for the three months ended June 30, 2010 and $1,526,000 for the six months ended June 30, 2010.  Interest income received on impaired loans totaled approximately $969,000 for the three months ended June 30, 2010 and $2,138,000 for the six months ended June 30, 2010.