Stockholders' equity was $19.7 million, or 5% of the Company’s total assets, at June 30, 2012. At June 30, 2012, the Bank’s Total Risk-Based Capital ratio was 13.34%, its Tier 1 Risk-Based Capital ratio was 12.02%, and its Core Capital and Tangible Capital ratios were 8.57%.
As previously announced, the Company is currently implementing a Recapitalization Plan to increase capital and reduce debt and senior securities, including a sale of additional common stock and exchanges of preferred stock for common stock at a discount to the preferred stock’s liquidation preference amount, to further strengthen the Company’s capital ratios and position the Bank for future growth.
Non-performing assets (“NPAs”) include non-accrual loans and real estate owned through foreclosure or deed in lieu of foreclosure (“REO”). NPAs at June 30, 2012 were $48.3 million, or 12.35% of total assets, compared to $51.4 million, or 12.43% of total assets, at December 31, 2011. At June 30, 2012, non-accrual loans were $44.7 million compared to $44.7 million at December 31, 2011. These loans consist of delinquent loans that are 90 days or more past due and troubled debt restructurings (“TDRs”) that do not qualify for accrual status.The non-accrual loans at June 30, 2012 included 34 church loans totaling $25.2 million, 22 one-to-four family residential real estate loans totaling $8.7 million, 14 commercial real estate loans totaling $6.1 million, 9 five or more units residential real estate loans totaling $4.3 million, a land loan for $292 thousand, and a consumer loan for $70 thousand. During the first six months of 2012, REO decreased by $3.2 million to $3.5 million at June 30, 2012, from $6.7 million at the end of 2011. At June 30, 2012, the Bank’s REO consisted of two one-to-four family residential properties, and eight commercial real estate properties, seven of which are church buildings. As part of our efforts to reduce non-performing assets, we sold seven REO properties for total proceeds of $5.9 million, and recorded a corresponding net gain of $395 thousand, during the first six months of 2012.