Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Dave Rochester – FBR Capital Markets.
Dave Rochester – FBR Capital Markets
As you’ve seen appraisals come in on troubled CRE or commercial construction loans, could you ballpark a rough range for what you’re seeing in terms of collateral value deflation on average? And, if you can break the land component out of there that would be great.
Dominique Ng
In terms of the current appraisal value versus the original value and how much in duration and so forth?
Dave Rochester – FBR Capital Markets
Exactly, just for the commercial construction projects and CRE.
Dominique Ng
In commercial construction and CRE we have not see too big of a decline. I think it varies obviously, I think for commercial construction often times it depends on the projects. Most of the construction that we have on the commercial side they have anchor tenants, strong credit tenants and when these leases are still going forward – the appraisal have come back in not really reduced in value much at all.
I think usually what we will find is that if there is any commercial project that if they initially intended to have certain tenants and those certain tenants are not coming in and now it goes from a supposed to be fully leased tenant type of project has turned in to maybe a half empty type of project then I think the appraisal value drops substantially.
Dave Rochester – FBR Capital Markets
Could you also give some color on the losses in the commercial construction book as to product type and region and possibly what the severities were on those?
Dominique Ng
Are you again, looking at just commercial construction and commercial real estate?
Dave Rochester – FBR Capital Markets
Exactly, I’m just trying to figure out is that primarily retail on the commercial construction book and then as to location if that’s in Inland Empire, LA County?
Dominique Ng
I think again, Inland Empire has a little bit more stress than do the rest of – specifically, we had a couple of projects in Sacramento that we had some issues then in Inland Empire we have some issues. So far, in LA still holding up pretty good. Now, we have taken losses due to unusual circumstances as we mentioned earlier. We may have a property that even today appraised at a value substantially better than the loan balance but just because of a bankruptcy issue and we do not want to sort of like prolong this NPA on our books and we decided to sell this loan at a discount.
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