Loans Receivable, net (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Loans Receivables, Net

Loans receivable, net, consisted of the following:  

	June 30,			December 31,
	2013			2012
	(In thousands)
Commercial mortgage loans	$	118,677		$	128,401
SBIC commercial mortgage loans		55,239			47,621
SBA 7(a) loans, subject to secured borrowings		36,585			37,909
SBA 7(a) loans		28,195			28,196
Total loans receivable		238,696			242,127
Adjusted by:
Deferred capitalized costs, net		247			277
Loan loss reserves		(3,827	)		(3,413	)
Loans receivable, net	$	235,116		$	238,991

Aging of Loans Receivable

The following tables represent an aging of our Loans Receivable Subject to Credit Risk (loans receivable less SBA 7(a) loans, subject to secured borrowings as the SBA has guaranteed payment of the principal). Balances are prior to loan loss reserves and deferred capitalized costs, net.

June 30, 2013
Category	Totals				Commercial Mortgage Loans				SBA 7(a) Loans
	(Dollars in thousands)
Current (1)	$	196,083	97.0	%	$	168,554	96.9	%	$	27,529	97.6	%
Between 29 and 59 days delinquent		1,571	0.8	%		1,367	0.8	%		204	0.7	%
Between 60 and 89 days delinquent		1,080	0.5	%		954	0.6	%		126	0.5	%
Over 89 days delinquent (2)		3,377	1.7	%		3,041	1.7	%		336	1.2	%
	$	202,111	100.0	%	$	173,916	100.0	%	$	28,195	100.0	%

(1) Includes $6.0 million of loans classified as troubled debt restructurings which were current at June 30, 2013 based on revised note terms.

(2) Loans are classified as troubled debt restructurings. We foreclosed on the collateral underlying these three loans—limited service hospitality properties in July 2013.

December 31, 2012
Category	Totals				Commercial Mortgage Loans				SBA 7(a) Loans
	(Dollars in thousands)
Current (1)	$	198,282	97.1	%	$	170,429	96.8	%	$	27,853	98.8	%
Between 29 and 59 days delinquent		2,824	1.4	%		2,482	1.4	%		342	1.2	%
Between 60 and 89 days delinquent		1	—			—	—			1	—
Over 89 days delinquent		3,111	1.5	%		3,111	1.8	%		—	—
	$	204,218	100.0	%	$	176,022	100.0	%	$	28,196	100.0	%

(1) Includes $7.6 million of loans classified as troubled debt restructurings which were current at December 31, 2012 based on revised note terms.

Classified Loans Receivable

Management has classified our Loans Receivable Subject to Credit Risk as follows (balances represent our investment in the loans prior to loan loss reserves and deferred capitalized costs):

	June 30, 2013
	Totals		%			Commercial Mortgage Loans		%			SBA 7(a) Loans		%
	(Dollars in thousands)
Satisfactory	$	185,564		91.8	%	$	158,769		91.3	%	$	26,795		95.0	%
OAEM		1,874		0.9	%		1,404		0.8	%		470		1.7	%
Substandard		10,017		5.0	%		9,747		5.6	%		270		1.0	%
Doubtful		4,656		2.3	%		3,996		2.3	%		660		2.3	%
	$	202,111		100.0	%	$	173,916		100.0	%	$	28,195		100.0	%

	December 31, 2012
	Totals		%			Commercial Mortgage Loans		%			SBA 7(a) Loans		%
	(Dollars in thousands)
Satisfactory	$	187,749		92.0	%	$	159,994		90.9	%	$	27,755		98.5	%
OAEM		81		—			—		—			81		0.3	%
Substandard		13,043		6.4	%		12,917		7.3	%		126		0.4	%
Doubtful		3,345		1.6	%		3,111		1.8	%		234		0.8	%
	$	204,218		100.0	%	$	176,022		100.0	%	$	28,196		100.0	%

Loan Loss Reserves

The activity in our loan loss reserves was as follows:

	Six Months Ended June 30, 2013
	Total			Commercial Mortgage Loans			SBA 7(a) Loans
	(In thousands)
Balance, beginning of year	$	3,413		$	2,850		$	563
Provision for loan losses		758			494			264
Reduction of loan losses		(344	)		(342	)		(2	)
Balance, end of period	$	3,827		$	3,002		$	825

	Six Months Ended June 30, 2012
	Total			Commercial Mortgage Loans			SBA 7(a) Loans
	(In thousands)
Balance, beginning of year	$	1,812		$	1,329		$	483
Provision for loan losses		816			726			90
Reduction of loan losses		(223	)		(194	)		(29	)
Principal balances written-off		(799	)		(627	)		(172	)
Balance, end of period	$	1,606		$	1,234		$	372

Loans Considered to be Impaired Loans

Information on those loans considered to be impaired loans was as follows:

	June 30, 2013
	Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Impaired loans requiring reserves (1)	$	10,958	$	9,322	$	1,636
Impaired loans expected to be fully recoverable (1)		2,178		2,059		119
Total impaired loans (2)	$	13,136	$	11,381	$	1,755
Loan loss reserves	$	2,049	$	1,666	$	383

	December 31, 2012
	Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Impaired loans requiring reserves (1)	$	10,927	$	10,049	$	878
Impaired loans expected to be fully recoverable (1)		2,244		2,123		121
Total impaired loans (3)	$	13,171	$	12,172	$	999
Loan loss reserves	$	1,535	$	1,382	$	153

(1) Balances represent our recorded investment. Includes loans classified as troubled debt restructurings.

(2) The unpaid principal balance of our impaired commercial mortgage loans was $12,021,000 at June 30, 2013. The unpaid principal balance of our impaired SBA 7(a) loans (excluding the government guaranteed portion) was $863,000 at June 30, 2013.

(3) The unpaid principal balance of our impaired commercial mortgage loans was $12,703,000 at December 31, 2012. The unpaid principal balance of our impaired SBA 7(a) loans (excluding the government guaranteed portion) was $362,000 at December 31, 2012.

	Three Months Ended June 30, 2013						Three Months Ended June 30, 2012
	Total		Commercial Mortgage Loans		SBA 7(a) Loans		Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Average impaired loans	$	13,195	$	11,442	$	1,753	$	8,221	$	7,731	$	490
Interest income on impaired loans	$	101	$	84	$	17	$	98	$	96	$	2

	Six Months Ended June 30, 2013						Six Months Ended June 30, 2012
	Total		Commercial Mortgage Loans		SBA 7(a) Loans		Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Average impaired loans	$	13,120	$	11,621	$	1,499	$	8,237	$	7,726	$	511
Interest income on impaired loans	$	210	$	173	$	37	$	187	$	182	$	5

Troubled Debt Restructurings

Detailed information on our troubled debt restructurings was as follows:

	June 30, 2013
	Commercial Mortgage Loans				SBA 7(a) Loan
	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance
	(In thousands)
Troubled debt restructurings requiring reserves (1)	$	9,303	$	9,913	$	210	$	235
Troubled debt restructurings without reserves		2,063		2,108		—		—
Total troubled debt restructurings	$	11,366	$	12,021	$	210	$	235
Number of loans		8				1
Loan loss reserves	$	1,666			$	135

	December 31, 2012
	Commercial Mortgage Loans				SBA 7(a) Loan
	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance
	(In thousands)
Troubled debt restructurings requiring reserves (1)	$	10,049	$	10,531	$	854	$	846
Troubled debt restructurings without reserves		2,123		2,172		—		—
Total troubled debt restructurings	$	12,172	$	12,703	$	854	$	846
Number of loans		8				1
Loan loss reserves	$	1,382			$	130

(1) At December 31, 2012, the SBA 7(a) loan recorded investment and unpaid principal balance include the government guaranteed portion of $634,000 on which we have no credit loss exposure. However, during 2013, the government guaranteed portion of $634,000 was reclassified from secured borrowings to loans receivable, net, representing a non-cash transaction since it was repurchased by the SBA from the secondary market. Therefore, at June 30, 2013, the SBA 7(a) loan recorded investment and unpaid principal balance do not include the government guaranteed portion of $634,000.