NOTE 4: LOANS

The following is a summary of our loans as of:

(dollars in thousands)	September 30, 2014			December 31, 2013
Outstanding principal balance:
Loans secured by real estate:
Residential properties:
Multifamily	$	455,064		$	405,984
Single family		337,536			227,096
Total real estate loans secured by residential properties		792,600			633,080
Commercial properties		186,485			154,982
Land and construction		3,232			3,794
Total real estate loans		982,317			791,856
Commercial and industrial loans		100,182			93,255
Consumer loans		19,286			18,484
Total loans		1,101,785			903,595
Premiums, discounts and deferred fees and expenses		(10	)		50
Total	$	1,101,775		$	903,645

As of September 30, 2014 and December 31, 2013, the principal balances shown above are net of unaccreted discount related to loans acquired in an acquisition of $1.5 million and $3.1 million, respectively.

In 2012, the Company purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of these purchased credit impaired loans is as follows for the periods indicated:

(dollars in thousands)	Nine Months Ended September 30, 2014			Year Ended December 31, 2013
Outstanding principal balance:
Loans secured by real estate:
Commercial properties	$	4,633		$	5,543
Land		-			2,331
Total real estate loans		4,633			7,874
Commercial and industrial loans		2,436			2,489
Consumer loans		249			260
Total loans		7,318			10,623
Unaccreted discount on purchased credit impaired loans		(1,368	)		(2,945	)
Total	$	5,950		$	7,678

Accretable yield, or income expected to be collected on purchased credit impaired loans, is as follows as of:

(dollars in thousands)	September 30, 2014			December 31, 2013

Beginning balance	$	2,349		$	1,531
Accretion of income		(1,040	)		(730	)
Reclassifications from nonaccretable difference		(391	)		1,879
Disposals		(85	)		(331	)
Ending balance	$	833		$	2,349

The following table summarizes our delinquent and nonaccrual loans as of:

	Past Due and Still Accruing												Total Past
(dollars in thousands)	30–59 Days			60-89 Days			90 Days or More			Nonaccrual			Due and Nonaccrual			Current		Total
September 30, 2014:
Real estate loans:
Residential properties	$	-		$	145		$	-		$	1,820		$	1,965		$	790,635	$	792,600
Commercial properties		-			-			3,936			596			4,532			181,953		186,485
Land and construction		-			-			-			-			-			3,232		3,232
Commercial and industrial loans		-			1,728			1,040			344			3,112			97,070		100,182
Consumer loans		-			-			645			120			765			18,521		19,286
Total	$	-		$	1,873		$	5,621		$	2,880		$	10,374		$	1,091,411	$	1,101,785

Percentage of total loans		0.00	%		0.17	%		0.51	%		0.26	%		0.94	%

December 31, 2013:
Real estate loans:
Residential properties	$	-		$	-		$	-		$	1,820		$	1,820		$	631,260	$	633,080
Commercial properties		-			-			417			598			1,015			153,967		154,982
Land and construction		-			-			1,480			-			1,480			2,314		3,794
Commercial and industrial loans		-			2,744			1,315			344			4,403			88,852		93,255
Consumer loans		-			-			-			132			132			18,352		18,484
Total	$	-		$	2,744		$	3,212		$	2,894		$	8,850		$	894,745	$	903,595

Percentage of total loans		0.00	%		0.30	%		0.36	%		0.32	%		0.98	%

Accrual of interest on loans is discontinued when reasonable doubt exists as to the full, timely collection of interest or principal and, generally, when a loan becomes contractually past due for ninety days or more with respect to principal or interest. The accrual of interest may be continued on a well-secured loan contractually past due ninety days or more with respect to principal or interest if the loan is in the process of collection or collection of the principal and interest is deemed probable. The Bank considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. The determination of past due, nonaccrual or impairment status of loans acquired in an acquisition, other than loans deemed purchased impaired, is the same as loans we originate.

As of September 30, 2014 and December 31, 2013, the Company had one loan with a balance of $0.1 million classified as a troubled debt restructuring (“TDR”) which is included as nonaccrual in the table above. This loan was classified as a TDR as a result of a reduction in required principal payments and an extension of the maturity date of the loan.