Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Joe Morford – RBC Capital Markets.
Joe Morford – RBC Capital Markets
I wondered if you could just sort of start off and talk a little bit about the inflows of new problem loans that you did see in the quarter. It looked like the bulk of the increase came in resi, construction and commercial land. Just give us a little more details on what they were.
Li Yu
The inflows are really, the one in particular that I on a daily basis watch the most is 30 to 89 days. The inflows in the first quarter are basically to the NPL segment, it’s basically these 30 to 89 days in the fourth quarter that was happening over there and largely is a couple of land loans and a couple of construction loans and that was going in to non-performing category during the first quarter and that reaches the magic 90 days limitation that will place them in non-accrual.
I believe in the first quarter press release I’ve indicated that at the time roughly 40% of the loan would be resolved. In the first quarter roughly about that number holds, about 40% resolved, actually about 50% resolved, the remaining 50% has flowed in to non-accrual category. Based on the actual situation, as of March 31st, the situation improves. I think the early situation is roughly 70% of the number of the March 31st 30 to 89 days will be resolved or are already resolved or will be resolved.
We are hopeful that another 10% to 15% will also be resolved in the quarter. The only one item we think is more sure or more probably than not is roughly a $5 million loan that will be heading to the non-accrual category. So, the importance of 30 to 89 days to me is because that’s the first time the weakness is showing then we are busy immediately evaluating these kind of loans and then taking the appropriate reserve that is needed for these loans.
Joe Morford – RBC Capital Markets
Do you have loans that are 90 days past due and still accruing or are all of those just in non-performing loans?
Li Yu
We don’t have anything in 90 days still accruing. We try to – some loans, admittedly the loan-to-value ratio is really low that we can still accrue the interest but we’re not practicing that at this moment. Whatever is past 90 days we just reversed the interest that accrued in the past 90 days and put it in non-accrual.
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