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Loans Receivable, net (Tables)
 9 Months Ended
Sep. 30, 2013
Receivables [Abstract]  
Loans Receivables, Net

Loans receivable, net, consisted of the following:

 

     September 30,     December 31,  
     2013     2012  
     (In thousands)  

Commercial mortgage loans

    $ 114,745      $ 128,401   

SBIC commercial mortgage loans

      54,044        47,621   

SBA 7(a) loans, subject to secured borrowings

      35,213        37,909   

SBA 7(a) loans

      28,663        28,196   
  

 

 

    

 

 

  

Total loans receivable

      232,665        242,127   

Adjusted by:

     

Deferred capitalized costs, net

      239        277   

Loan loss reserves

      (2,852 )      (3,413 ) 
  

 

 

    

 

 

  

Loans receivable, net

    $ 230,052      $ 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.

 

September 30, 2013

  

Category

    Totals     Commercial
Mortgage
Loans		     SBA 7(a)
Loans		  
     (Dollars in thousands)  

Current (1)

    $ 193,089         97.8 %    $ 165,006         97.8 %    $ 28,083         98.0 % 

Between 29 and 59 days delinquent (2)

      4,114         2.1 %      3,783         2.2 %      331         1.1 % 

Between 60 and 89 days delinquent

      —           —          —           —          —           —     

Over 89 days delinquent

      249         0.1 %      —           —          249         0.9 % 
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  
   $ 197,452         100.0 %    $ 168,789         100.0 %    $ 28,663         100.0 % 
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  

 

(1) Includes $5.8 million of loans classified as troubled debt restructurings which were current at September 30, 2013 based on revised note payment terms.
(2) Includes two commercial loans totaling $2.3 million which are classified as troubled debt restructurings.

 

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 payment 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):

 

     September 30, 2013  
     Totals      %     Commercial
Mortgage
Loans		      %     SBA 7(a)
Loans		      %  
     (Dollars in thousands)  

Satisfactory

    $ 184,534         93.5 %    $ 156,760         92.9 %    $ 27,774         96.9 % 

OAEM

      4,205         2.1 %      3,920         2.3 %      285         1.0 % 

Substandard

      7,323         3.7 %      7,140         4.2 %      183         0.6 % 

Doubtful

      1,390         0.7 %      969         0.6 %      421         1.5 % 
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  
   $ 197,452         100.0 %    $ 168,789         100.0 %    $ 28,663         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:

 

     Nine Months Ended September 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

      960        767        193   

Reduction of loan losses

      (398 )      (395 )      (3 ) 

Principal balances written-off

      (1,123 )      (988 )      (135 ) 
  

 

 

    

 

 

    

 

 

  

Balance, end of period

    $ 2,852      $ 2,234      $ 618   
  

 

 

    

 

 

    

 

 

  

 

     Nine Months Ended September 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

      1,203        1,103        100   

Reduction of loan losses

      (149 )      (115 )      (34 ) 

Recoveries

      (408 )      (408 )      —     

Principal balances written-off

      (391 )      (219 )      (172 ) 
  

 

 

    

 

 

    

 

 

  

Balance, end of period

    $ 2,067      $ 1,690      $ 377   
  

 

 

    

 

 

    

 

 

  
Loans Considered to be Impaired Loans

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

 

     September 30, 2013  
            Commercial         
            Mortgage      SBA 7(a)  
     Total      Loans      Loans  
     (In thousands)  

Impaired loans requiring reserves (1)

    $ 6,523       $ 6,222       $ 301   

Impaired loans expected to be fully recoverable (1)

      2,049         1,929         120   
  

 

 

     

 

 

     

 

 

  

Total impaired loans (2)

    $ 8,572       $ 8,151       $ 421   
  

 

 

     

 

 

     

 

 

  

Loan loss reserves

    $ 840       $ 697       $ 143   
  

 

 

     

 

 

     

 

 

  
     December 31, 2012  
            Commercial         
            Mortgage      SBA 7(a)  
     Total      Loans      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 $8,625,000 at September 30, 2013. The unpaid principal balance of our impaired SBA 7(a) loans (excluding the government guaranteed portion) was $455,000 at September 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 September 30,  
     2013      2012  
            Commercial                    Commercial         
            Mortgage      SBA 7(a)             Mortgage      SBA 7(a)  
     Total      Loans      Loans      Total      Loans      Loans  
     (In thousands)  

Average impaired loans

    $ 9,783       $ 8,775       $ 1,008       $ 9,885       $ 8,799       $ 1,086   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Interest income on impaired loans

    $ 112       $ 110       $ 2       $ 88       $ 84       $ 4   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

     Nine Months Ended September 30,  
     2013      2012  
            Commercial                    Commercial         
            Mortgage      SBA 7(a)             Mortgage      SBA 7(a)  
     Total      Loans      Loans      Total      Loans      Loans  
     (In thousands)  

Average impaired loans

    $ 11,910       $ 10,676       $ 1,234       $ 8,788       $ 8,083       $ 705   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Interest income on impaired loans

    $ 322       $ 283       $ 39       $ 277       $ 266       $ 11   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Troubled Debt Restructurings

Detailed information on our troubled debt restructurings was as follows at September 30, 2013:

 

     Commercial Mortgage Loans  
            Unpaid  
     Recorded      Principal  
     Investment      Balance  
     (In thousands)  

Troubled debt restructurings requiring reserves

    $ 6,203       $ 6,649   

Troubled debt restructurings without reserves

      1,933         1,976   
  

 

 

     

 

 

  

Total troubled debt restructurings

    $ 8,136       $ 8,625   
  

 

 

     

 

 

  

Number of loans

      6      
  

 

 

     

Loan loss reserves

    $ 697      
  

 

 

     

 

     December 31, 2012  
     Commercial Mortgage Loans      SBA 7(a) Loan  
            Unpaid             Unpaid  
     Recorded      Principal      Recorded      Principal  
     Investment      Balance      Investment      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 and which, during 2013, was reclassified from secured borrowings to loans receivable, net, since it was repurchased by the SBA from the secondary market.