Loans Receivable

12 Months Ended

Dec. 31, 2013

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans Receivable

 Loans Receivable

Loans receivable are as follows:

	As of December 31,
(In thousands)	2013		2012
Amortized cost:
Real estate loans	$	282,357	$	336,533
Commercial loans	61,226		65,428
Total	$	343,583	$	401,961
Fair value:
Real estate loans	$	284,017	$	339,079
Commercial loans	62,729		67,364
Total	$	346,746	$	406,443
Valuation allowance:
Specific	$	—	$	3,000
General	2,087		2,620
Total	$	2,087	$	5,620
Impaired loans:
With a specific valuation allowance	$	—	$	1,775
Without a valuation allowance	—		31,023
Unpaid principal balance	—		35,872
	For the Year Ended December 31,
	2013		2012
Increase (decrease) in valuation allowance	$	308	$	(14,118	)
Loans receivable charged off	—		463

There were no loans receivable in non-accrual status December 31, 2013, compared to $3 million at December 31, 2012. If these loans had been current at December 31, 2012, additional interest income of $498,000 would have been recognized in accordance with their original terms for the year ended December 31, 2012.

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

The real estate loans are secured by commercial real estate primarily located in Arizona, California, Hawaii, Illinois, New York and Texas. These loans generally earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. The commercial loans are with small business owners who have secured the related financing with the assets of the business. These loans generally earn interest on a fixed basis and have varying maturities not exceeding 10 years.

The Company utilizes an internal risk rating system to assign a risk to each of its real estate loans. The loan rating system takes into consideration credit quality indicators including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the Company’s position in the capital structure, and the overall leverage in the capital structure. Based on this rating system, none of the real estate loans were considered to be impaired at December 31, 2013, and accordingly, the Company determined that a specific valuation allowance was not required.