PBNY » Topics » (b) Loans

This excerpt taken from the PBNY 10-Q filed Feb 6, 2009.

Loans

Loans are not generally recorded at fair value on a recurring basis. The Company may record nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of these loans. Nonrecurring adjustments also include certain impairment amounts for collateral dependant loans calculated in accordance with SFAS No. 114, “Accounting by Creditors for Impairment of a loan”, when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based upon recent comparable sales of similar properties. Any fair value adjustments for loans categorized here are classified as Level 2. Estimates of fair value used for other collateral supporting commercial loans generally are based on assumptions not observable in the market place and therefore such valuations have been classified as Level 3. Loans subject to nonrecurring fair value measurements were $13.1 million which equals the carrying value at December 31, 2008, of which all have been classified as Level 2. Changes in fair value recognized on partial charge-offs on loans held by the company for the three months ended December 31, 2008 were $78. The allowance for loan losses associated with impaired loans was $4.3 million at December 31, 2008.

This excerpt taken from the PBNY 10-Q filed Feb 8, 2008.

4. Loans

Major classifications of loans, excluding loans held for sale, are summarized below:

 

     December 31, 2007    September 30, 2007

Real estate – residential mortgage

   $ 500,172    $ 500,825

Real estate – commercial mortgage

     532,151      535,003

Real estate – acquisition, development and construction

     159,242      153,074

Commercial and industrial

     218,011      207,156

Consumer loans

     245,861      242,000
             

Total

   $ 1,655,437    $ 1,638,058
             
This excerpt taken from the PBNY 10-K filed Dec 13, 2007.

(b) Loans

Fair values were estimated for portfolios of loans with similar financial characteristics. For valuation purposes, the total loan portfolio was segregated into adjustable-rate and fixed-rate categories. Fixed-rate loans were further segmented by type, such as residential mortgage, commercial mortgage, commercial business and consumer loans. Loans were also segmented by maturity dates. Fair values were estimated by discounting scheduled future cash flows through estimated maturity using a discount rate equivalent to the current market rate on loans that are similar with regard to collateral, maturity and the type of borrower. The discounted value of the cash flows was reduced by a credit risk adjustment based on loan categories. Based on the current composition of the Company’s loan portfolio, as well as past experience and current economic conditions and trends, the future cash flows were adjusted by prepayment assumptions that shortened the estimated remaining time to maturity and therefore affected the fair value estimates.

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