Loans (Tables)

9 Months Ended

Sep. 30, 2012

Loans Tables

Schedule of net Loans

	At September 30,			At December 31,
	2012			2011
Residential real estate	$	32,430		$	30,434
Multi-family real estate		4,182			4,109
Commercial real estate		39,221			41,307
Land and construction		7,323			11,783
Commercial		3,959			3,713
Consumer		123			175
Total loans		87,238			91,521
Add (deduct):
Net deferred loan fees, costs and premiums		149			45
Allowance for loan losses		(1,936	)		(2,349	)
Loans, net	$	85,451		$	89,217

Schedule of activity in the allowance for loan losses by portfolio segment

An analysis of the change in the allowance for loan losses follows (in thousands):

	Residential			Multi-Family			Commercial			Land
	Real			Real			Real			and
	Estate			Estate			Estate			Construction			Commercial			Consumer		Total
Three Months Ended September 30, 2012:
Beginning balance	$	703		$	245		$	799		$	215		$	115		$	25	$	2,102
Provision (credit) for loan losses		(231	)		15			364			36			12			0		196
Charge-offs		0			(1	)		(346	)		(53	)		0			0		(400	)
Recoveries		17			0			0			17			0			4		38
Ending balance	$	489		$	259		$	817		$	215		$	127		$	29	$	1,936
Nine Months Ended September 30, 2012:
Beginning balance	$	549		$	247		$	1,190		$	187		$	161		$	15	$	2,349
Provision (credit) for loan losses		70			12			154			170			(33	)		5		378
Charge-offs		(146	)		0			(557	)		(388	)		(1	)		0		(1,092	)
Recoveries		16			0			30			246			0			9		301
Ending balance	$	489		$	259		$	817		$	215		$	127		$	29	$	1,936

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (unaudited), Continued

(3) Loans, Continued.

	Residential Real Estate			Multi-Family Real Estate		Commercial Real Estate			Land and Construction			Consumer		Total
Three Months Ended September 30, 2011:
Beginning balance	$	1,093		$	308	$	1,400		$	197		$	77	$	3,075
Provision for loan losses		(644	)		135		374			(117	)		9		(243	)
Charge-offs		0			0		(150	)		0			0		(150	)
Recoveries		328			2		0			121			4		455
Ending balance	$	777		$	445	$	1,624		$	201		$	90	$	3,137
Nine Months Ended September 30, 2011:
Beginning balance	$	1,285		$	282	$	1,542		$	514		$	80	$	3,703
Provision (credit) for loan losses		(562	)		158		284			772			0		652
Charge-offs		(308	)		0		(202	)		(1,230	)		0		(1,740	)
Recoveries		362			5		0			145			10		522
Ending balance	$	777		$	445	$	1,624		$	201		$	90	$	3,137

Schedule of risk rated classified loans by credit quality indicator

			OLEM
			(Other Loans
			Especially
	Pass		Mentioned)		Substandard		Doubtful		Loss		Total
At September 30, 2012:
Residential real estate:
Closed-end first mortgages	$	21,678	$	2,919	$	4,709	$	0	$	0	$	29,306
Closed-end second mortgages		3,124		0		0		0		0		3,124
Total residential real estate		24,802		2,919		4,709		0		0		32,430
Multi-family real estate		4,182		0		0		0		0		4,182
Commercial real estate:
Owner-occupied		9,949		1,979		78		0		0		12,006
Non-owner-occupied		12,235		1,125		13,855		0		0		27,215
Total commercial real estate		22,184		3,104		13,933		0		0		39,221
Land and construction		6,369		49		905		0		0		7,323
Commercial		3,959		0		0		0		0		3,959
Consumer		123		0		0		0		0		123
Total	$	61,619	$	6,072	$	19,547	$	0	$	0	$	87,238
At December 31, 2011:
Residential real estate:
Closed-end first mortgages	$	18,588	$	3,686	$	5,001	$	0	$	0	$	27,275
Closed-end second mortgages		3,159		0		0		0		0		3,159
Total residential real estate		21,747		3,686		5,001		0		0		30,434
Multi-family real estate		4,109		0		0		0		0		4,109
Commercial real estate:
Owner-occupied		10,132		2,012		369		0		0		12,513
Non-owner-occupied		10,822		2,764		15,208		0		0		28,794
Total commercial real estate		20,954		4,776		15,577		0		0		41,307
Land and construction		4,493		49		7,241		0		0		11,783
Commercial		3,713		0		0		0		0		3,713
Consumer		107		68		0		0		0		175
Total	$	55,123	$	8,579	$	27,819	$	0	$	0	$	91,521

Schedule of aging analysis of past due loans, segregated by class of loans

	Accruing Loans
					Greater
	30-59		60-89		Than 90		Total
	Days		Days		Days		Past				Nonaccrual		Total
	Past Due		Past Due		Past Due		Due		Current		Loans		Loans
At September 30, 2012:
Residential real estate:
Closed-end first mortgages	$	0	$	0	$	0	$	0	$	24,597	$	4,709	$	29,306
Closed-end second mortgages		0		0		0		0		3,124		0		3,124
Subtotal		0		0		0		0		27,721		4,709		32,430
Multi-family real estate		0		0		0		0		4,182		0		4,182
Commercial real estate:
Owner-occupied		0		0		0		0		11,928		78		12,006
Non-owner-occupied		0		0		0		0		13,360		13,855		27,215
Subtotal		0		0		0		0		25,288		13,933		39,221
Land and construction		0		0		0		0		6,418		905		7,323
Commercial		701		0		0		701		3,258		0		3,959
Consumer		0		0		0		0		123		0		123
Total	$	701	$	0	$	0	$	701	$	66,990	$	19,547	$	87,238
At December 31, 2011:
Residential real estate:
Closed-end first mortgages	$	0	$	768	$	0	$	768	$	21,506	$	5,001	$	27,275
Closed-end second mortgages		0		0		0		0		3,159		0		3,159
Subtotal		0		768		0		768		24,665		5,001		30,434
Multi-family real estate		0		0		0		0		4,109		0		4,109
Commercial real estate:
Owner-occupied		0		0		0		0		12,144		369		12,513
Non-owner-occupied		0		0		0		0		13,586		15,208		28,794
Subtotal		0		0		0		0		25,730		15,577		41,307
Land and construction		0		0		0		0		4,542		7,241		11,783
Commercial		0		0		0		0		3,713		0		3,713
Consumer		0		0		0		0		175		0		175
Total	$	0	$	768	$	0	$	768	$	62,934	$	27,819	$	91,521

Schedule of Impaired loans

	At September 30, 2012						At December 31, 2011
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate-
Closed-end first mortgages	$	7,628	$	8,079	$	0	$	7,919	$	8,465	$	0
Commercial real estate:
Owner-occupied		78		78		0		369		376		0
Non-owner-occupied		13,855		16,730		0		15,208		17,584		0
Land and construction		905		2,429		0		7,241		11,652		0
Consumer		0		0		0		68		68		0
With an allowance recorded:
Commercial real estate-
Non-owner-occupied		0		0		0		1,139		1,139		11
Total:
Residential real estate-
Closed-end first mortgages	$	7,628	$	8,079	$	0	$	7,919	$	8,465	$	0
Commercial real estate:
Owner-occupied	$	78	$	78	$	0	$	369	$	376	$	0
Non-owner-occupied	$	13,855	$	16,730	$	0	$	16,347	$	18,723	$	11
Land and construction	$	905	$	2,429	$	0	$	7,241	$	11,652	$	0
Consumer	$	0	$	0	$	0	$	68	$	68	$	0
Total	$	22,466	$	27,316	$	0	$	31,944	$	39,284	$	11

The average net investment in impaired loans and interest income recognized and received on impaired loans are as follows (in thousands):

	Three Months Ended September 30,
	2012						2011
	Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income
	Investment		Recognized		Received		Investment		Recognized		Received
Residential real estate-
Closed-end first mortgages	$	7,688	$	52	$	102	$	11,080	$	66	$	71
Multi-family real estate	$	0	$	0	$	0	$	0	$	0	$	0
Commercial real estate:
Owner-occupied	$	78	$	0	$	0	$	296	$	0	$	0
Non-owner-occupied	$	14,199	$	0	$	63	$	18,404	$	10	$	92
Land and construction	$	2,372	$	0	$	25	$	6,746	$	0	$	28
Consumer-
Non-real estate secured	$	0	$	0	$	0	$	216	$	1	$	1
Total	$	24,337	$	52	$	190	$	36,742	$	77	$	192

	Nine Months Ended September 30,
	2012						2011
	Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income
	Investment		Recognized		Received		Investment		Recognized		Received
Residential real estate-
Closed-end first mortgages	$	7,863	$	156	$	254	$	11,686	$	174	$	211
Multi-family real estate	$	0	$	0	$	0	$	0	$	0	$	0
Commercial real estate:
Owner-occupied	$	177	$	0	$	0	$	466	$	0	$	1
Non-owner-occupied	$	14,682	$	0	$	172	$	19,009	$	95	$	303
Land and construction	$	4,681	$	0	$	69	$	7,704	$	21	$	119
Consumer-
Non-real estate secured	$	0	$	0	$	0	$	224	$	5	$	5
Total	$	27,403	$	156	$	495	$	39,089	$	295	$	639

Troubled debt restructuring

	Nine Months Ended September 30, 2011
	Outstanding Recorded Investment
	Number
	of		Pre-		Post-
	Contracts		Modification		Modification
Troubled Debt Restructurings:
Real estate mortgage loans:
Residential real estate:
Modified interest rate and amortization		1	$	1,289	$	1,289
Commercial real estate:
Modified interest rate and amortization		4		6,321		6,321
Land and construction:
Modified interest rate and amortization		1		2,080		2,080
Total		6	$	9,690	$	9,690

(continued)

(3) Loans, Continued.  There were no defaults of TDR’s during the nine months ended September 30, 2012.  The following schedule summarizes troubled debt restructurings that subsequently defaulted during three and nine months ended September 30, 2011.

	Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Troubled debt restructurings that subsequently defaulted which were restructured during the last twelve months (dollars in thousands):
Real estate mortgage loans-Land and construction		1	$	2,806		1	$	2,806