Discontinued Operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations [Abstract]

Discontinued Operations

Note 8. Discontinued Operations:

Discontinued operations consisted of the following:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	(In thousands)
Net gains (losses) on sales of real estate	$	(19	)	$	—		$	(19	)	$	570
Net operating losses		(146	)		(81	)		(416	)		(523	)
Impairment losses		(7	)		(418	)		(208	)		(650	)
Discontinued operations	$	(172	)	$	(499	)	$	(643	)	$	(603	)

During 2012, we foreclosed on the underlying collateral (limited service hospitality properties) of two loans with a combined estimated fair value at foreclosure of $1,481,000 and sold both of these properties during 2012. One property was sold for $1,375,000 including cash proceeds of $550,000 and financing of $825,000. The other property was sold solely for cash proceeds. No gain or loss was recorded on these sales. In addition, we sold a property during 2012 with an estimated fair value of $76,000 and recorded a loss of $19,000. During 2011, previously deferred gains of $685,000 from property sales we financed were recognized as gains due to principal reductions on the underlying loans. During June 2011, we sold an asset acquired through foreclosure for $1.3 million, received cash proceeds of $128,000 and financed the remainder of $1,172,000. A loss of $115,000 was recorded on the transaction.

Net operating losses from discontinued operations relate to the operations and holding costs of our real estate owned.

Impairment losses represent declines in the estimated fair value of our real estate owned subsequent to initial valuation. Impairment losses during the nine months ended September 30, 2012 primarily relate to a retail establishment acquired in the third quarter of 2009 which continues to experience declines in its value.