View Filing Data

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2012	May 03, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	PMC COMMERCIAL TRUST /TX
Entity Central Index Key	0000908311
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		10,584,554

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
Loans receivable, net:
Commercial mortgage loans receivable	$ 142,190	$ 133,327
SBA 7(a) loans receivable, subject to secured borrowings	35,378	30,476
SBIC commercial mortgage loans receivable	35,215	32,153
SBA 7(a) loans receivable	22,961	22,997
Commercial mortgage loans receivable, subject to structured notes payable	0	15,474
Loans receivable, net	235,744	234,427
Cash and cash equivalents	3,254	6,502
Real estate owned	1,241	1,259
Restricted cash and cash equivalents	0	2,233
Other assets	7,059	6,826
Total assets	247,298	251,247
Debt:
Secured borrowings - government guaranteed loans	37,846	32,546
Junior subordinated notes	27,070	27,070
Revolving credit facility	15,700	17,800
SBIC debentures payable	13,183	13,181
Structured notes payable	0	5,264
Debt	93,799	95,861
Borrower advances	3,685	3,863
Accounts payable and accrued expenses	2,216	2,095
Dividends payable	1,716	1,692
Total liabilities	101,416	103,511
Commitments and contingencies
Beneficiaries' equity:
Common shares of beneficial interest; authorized 100,000,000 shares of $0.01 par value; 11,120,883 and 11,110,883 shares issued at March 31, 2012 and December 31, 2011, respectively; 10,584,554 and 10,574,554 shares outstanding at March 31, 2012 and December 31, 2011, respectively	111	111
Additional paid-in capital	152,974	152,934
Net unrealized appreciation of retained interests in transferred assets	349	394
Cumulative net income	175,941	176,096
Cumulative dividends	(179,492)	(177,798)
Beneficiaries' equity before treasury stock	149,883	151,737
Less: Treasury stock; at cost, 536,329 shares at March 31, 2012 and December 31, 2011	(4,901)	(4,901)
Total beneficiaries' equity	144,982	146,836
Noncontrolling interests - cumulative preferred stock of subsidiary	900	900
Total equity	145,882	147,736
Total liabilities and equity	$ 247,298	$ 251,247

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Common stock, shares authorized	100,000,000	100,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	11,120,883	11,110,883
Common stock, shares outstanding	10,584,554	10,574,554
Treasury stock, shares	536,329	536,329

Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues:
Interest income	$ 3,398	$ 3,367
Premium income	113	431
Other income	276	258
Total revenues	3,787	4,056
Expenses:
Salaries and related benefits	1,144	1,117
Interest	883	973
Strategic alternatives	850
Provision for loan losses, net	475	313
General and administrative	460	504
Total expenses	3,812	2,907
Income (loss) before income tax benefit (provision) and discontinued operations	(25)	1,149
Income tax benefit (provision)	19	(25)
Income (loss) from continuing operations	(6)	1,124
Discontinued operations	(149)	(208)
Net income (loss)	$ (155)	$ 916
Weighted average shares outstanding:
Basic	10,576	10,561
Diluted	10,576	10,617
Basic and diluted earnings (loss) per share:
Income (loss) from continuing operations		$ 0.11
Discontinued operations	$ (0.01)	(0.02)
Net income (loss)	$ (0.01)	$ 0.09

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ (155)	$ 916
Change in unrealized appreciation of retained interests in transferred assets:
Net unrealized appreciation (depreciation) arising during period	(9)	67
Net realized gains included in net income (loss)	(36)	(20)
Change in unrealized appreciation of retained interests in transferred assets	(45)	47
Comprehensive income (loss)	$ (200)	$ 963

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

This element represents Other Comprehensive Income or Loss, Net of Tax, for the period. Includes deferred gains or losses on qualifying hedges, unrealized holding gains or losses on available-for-sale securities, minimum pension liability, and cumulative translation adjustment. While for technical reasons this element has no balance attribute, the default assumption is a credit balance consistent with its label.

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+ Details

Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Shares of Beneficial Interest Outstanding	Cumulative Preferred Stock of Subsidiary	Additional Paid-in Capital	Net Unrealized Appreciation of Retained Interests in Transferred Assets	Cumulative Net Income	Cumulative Dividends	Treasury Stock
Balance, shares at Dec. 31, 2010		10,559,554
Balance at Dec. 31, 2010	$ 150,560	$ 111	$ 900	$ 152,756	$ 276	$ 172,449	$ (171,031)	$ (4,901)
Net unrealized depreciation/appreciation	47				47
Share-based compensation expense, shares		10,000
Share-based compensation expense	49			49
Dividends	(1,691)						(1,691)
Net income (loss)	916					916
Balance, shares at Mar. 31, 2011		10,569,554
Balance at Mar. 31, 2011	$ 149,881	$ 111	900	152,805	323	173,365	(172,722)	(4,901)
Balance, shares at Dec. 31, 2011	10,574,554	10,574,554
Balance at Dec. 31, 2011	$ 147,736	$ 111	900	152,934	394	176,096	(177,798)	(4,901)
Net unrealized depreciation/appreciation	(45)				(45)
Share-based compensation expense, shares		10,000
Share-based compensation expense	40			40
Dividends	(1,694)						(1,694)
Net income (loss)	$ (155)					(155)
Balance, shares at Mar. 31, 2012	10,584,554	10,584,554
Balance at Mar. 31, 2012	$ 145,882	$ 111	$ 900	$ 152,974	$ 349	$ 175,941	$ (179,492)	$ (4,901)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

Number of shares (or other type of equity) issued during the period as a result of any equity-based compensation plan other than an employee stock ownership plan (ESOP), net of any shares forfeited. Shares issued could result from the issuance of restricted stock, the exercise of stock options, stock issued under employee stock purchase plans, and/or other employee benefit plans.

+ References + Details

- Definition

Value of stock (or other type of equity) issued during the period as a result of any equity-based compensation plan other than an employee stock ownership plan (ESOP), net of stock value of such awards forfeited. Stock issued could result from the issuance of restricted stock, the exercise of stock options, stock issued under employee stock purchase plans, and/or other employee benefit plans.

+ References + Details

- Definition

Total of Stockholders' Equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity including portions attributable to both the parent and noncontrolling interests (previously referred to as minority interest), if any. The entity including portions attributable to the parent and noncontrolling interests is sometimes referred to as the economic entity. This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Dividends per share	$ 0.16	$ 0.16
Cumulative Dividends
Dividends per share	$ 0.16	$ 0.16

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net income (loss)	$ (155)	$ 916
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Impairment losses	18
Net gains on sales of real estate		(2)
Deferred income taxes	(160)	(178)
Provision for loan losses, net	475	313
Unrealized premium adjustment	544	397
Amortization and accretion, net	(31)	159
Share-based compensation	40	49
Capitalized loan origination costs	(76)	(39)
Loans funded, held for sale	(4,941)	(6,809)
Proceeds from sale of guaranteed loans	1,258	4,680
Principal collected on loans	155	111
Loan fees remitted, net	(13)	(61)
Change in operating assets and liabilities:
Other assets	(146)	(509)
Borrower advances	(178)	238
Accounts payable and accrued expenses	70	(563)
Other liabilities	43	(16)
Net cash used in operating activities	(3,097)	(1,314)
Cash flows from investing activities:
Loans funded	(5,790)	(1,263)
Principal collected on loans	7,584	2,750
Principal collected on retained interests in transferred assets	29	36
Purchase of furniture and equipment	(7)	(31)
Investment in real estate owned		(17)
Proceeds from unconsolidated subsidiary		1,373
Release of restricted cash and cash equivalents	2,233	336
Net cash provided by investing activities	4,049	3,184
Cash flows from financing activities:
Repayment of revolving credit facility, net	(2,100)	(1,600)
Payment of principal on structured notes payable	(5,264)	(1,960)
Proceeds from secured borrowings - government guaranteed loans	4,989	3,786
Payment of principal on secured borrowings - government guaranteed loans	(155)	(111)
Payment of dividends	(1,670)	(1,690)
Net cash used in financing activities	(4,200)	(1,575)
Net increase (decrease) in cash and cash equivalents	(3,248)	295
Cash and cash equivalents, beginning of year	6,502	2,642
Cash and cash equivalents, end of period	$ 3,254	$ 2,937

Basis of Presentation:

3 Months Ended

Mar. 31, 2012

Basis of Presentation: [Abstract]

Basis of Presentation:

Note 1. Basis of Presentation:

The accompanying interim financial statements of PMC Commercial Trust (“PMC Commercial” or together with its wholly-owned subsidiaries, “we,” “us” or “our”) have not been audited by independent accountants. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statement presentation. In the opinion of management, the financial statements include all normal recurring adjustments necessary for a fair statement of the results for the interim period. All material intercompany balances and transactions have been eliminated. The results for the three months ended March 31, 2012 are not necessarily indicative of future financial results. Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and (2) the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Our most sensitive estimates involve the valuation of our real estate owned and determination of loan loss reserves.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
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+ Details

Recently Issued Accounting Pronouncements:

3 Months Ended

Mar. 31, 2012

Recently Issued Accounting Pronouncements: [Abstract]

Recently Issued Accounting Pronouncements:

Note 2. Recently Issued Accounting Pronouncements:

Accounting Standards Update (“ASU”) 2011-04, Fair Value Measurement (Topic 820); Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP was issued in May 2011. This ASU provides additional guidance on fair value measurements and requires additional fair value disclosures including quantitative and qualitative information for recurring Level 3 fair value measurements. In addition, entities must report the level in the fair value hierarchy of assets and liabilities not recorded at fair value but where fair value is disclosed. This ASU was effective for interim and annual periods beginning on or after December 15, 2011.

- Definition

The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period.

+ References + Details

Loans Receivable, net:

3 Months Ended

Mar. 31, 2012

Loans Receivable, net: [Abstract]

Loans Receivable, net:

Note 3. Loans Receivable, net:

Loans receivable, net, consisted of the following:


	March 31,			December 31,
	2012			2011
	(In thousands)
Commercial mortgage loans	$	144,098		$	134,835
SBIC commercial mortgage loans		35,501			32,416
SBA 7(a) loans, subject to secured borrowings		34,986			30,151
SBA 7(a) loans		23,235			23,238
Commercial mortgage loans, subject to structured notes payable (1)		—			15,474

Total loans receivable		237,820			236,114
Adjusted by:
Deferred capitalized costs, net		196			125
Loan loss reserves		(2,272	)		(1,812	)

Loans receivable, net	$	235,744		$	234,427

(1)

We repaid the 2003 Joint Venture structured notes on February 15, 2012.

Commercial mortgage loans

Represents the loans held by our parent company, PMC Commercial Trust.

SBIC commercial mortgage loans

Represents loans of our licensed Small Business Investment Company (“SBIC”) subsidiaries.

SBA 7(a) loans, subject to secured borrowings

Represents the government guaranteed portion of loans which were sold with the proceeds received from the sale reflected as secured borrowings – government guaranteed loans (a liability on our consolidated balance sheet). There is no credit risk associated with these loans since the SBA has guaranteed payment of the principal.

SBA 7(a) loans

Represents the non-government guaranteed retained portion of loans originated under the SBA 7(a) program and the government guaranteed portion of loans that have not yet been fully funded or sold. The balance is net of retained loan discounts of $1.6 million at both March 31, 2012 and December 31, 2011.

Commercial mortgage loans, subject to structured notes payable

Represented loans contributed to special purpose entities in exchange for a subordinated financial interest in that entity. The collateral of the structured notes payable included these loans.

Concentration Risks

We have certain concentrations of investments. Substantially all of our revenue is generated from loans collateralized by hospitality properties. At both March 31, 2012 and December 31, 2011, our loans were 93% concentrated in the hospitality industry. Any economic factors that negatively impact the hospitality industry, including recessions, depressed commercial real estate markets, travel restrictions, gasoline prices, bankruptcies or other political or geopolitical events, could have a material adverse effect on our financial condition and results of operations.

At both March 31, 2012 and December 31, 2011, 18% of our loans were collateralized by properties in Texas. No other state had a concentration of 10% or greater of our loans receivable at March 31, 2012. A decline in economic conditions in any state in which we have a concentration of investments could have a material adverse effect on our financial condition and results of operations.

We have not loaned more than 10% of our assets to any single borrower; however, we have an affiliated group of obligors representing 5% of our loans receivable at both March 31, 2012 and December 31, 2011. Any decline in the financial status of this group could have a material adverse effect on our financial condition and results of operations.

Aging

The following tables represent an aging of our Loans Receivable Subject to Credit Risk (loans receivable less SBA 7(a) loans, subject to secured borrowings as the SBA has guaranteed payment of the principal). Balances are prior to loan loss reserves and deferred capitalized costs, net.


March 31, 2012
Category	Totals				Commercial Mortgage Loans				SBA 7(a) Loans
	(Dollars in thousands)
Current (1)	$	195,567	96.4	%	$	172,992	96.3	%	$	22,575	97.2	%
Between 30 and 59 days delinquent		5,450	2.7	%		5,163	2.9	%		287	1.2	%
Between 60 and 89 days delinquent		—	—			—	—			—	—
Over 89 days delinquent (2)		1,817	0.9	%		1,444	0.8	%		373	1.6	%

	$	202,834	100.0	%	$	179,599	100.0	%	$	23,235	100.0	%

(1)

Includes $6.3 million of loans classified as troubled debt restructurings which are current based on revised note terms. Of these loans, $5.6 million are paying interest only.

(2)

Includes a $1.4 million loan on which the borrower has filed for Chapter 11 Bankruptcy. We are classified as a secured creditor in the bankruptcy proceeding.


December 31, 2011
Category	Totals				Commercial Mortgage Loans				SBA 7(a) Loans
	(Dollars in thousands)
Current (1)	$	202,217	98.2	%	$	179,497	98.2	%	$	22,720	97.7	%
Between 30 and 59 days delinquent		1,224	0.6	%		1,090	0.6	%		134	0.6	%
Between 60 and 89 days delinquent		696	0.3	%		696	0.4	%		—	—
Over 89 days delinquent (2)		1,826	0.9	%		1,442	0.8	%		384	1.7	%

	$	205,963	100.0	%	$	182,725	100.0	%	$	23,238	100.0	%

(1)

Includes $6.3 million of loans classified as troubled debt restructurings which are current based on revised note terms. Of these loans, $5.6 million are paying interest only.

(2)

Includes a $1.4 million loan on which the borrower has filed for Chapter 11 Bankruptcy. We are classified as a secured creditor in the bankruptcy proceeding.

Loan Loss Reserves

We have a quarterly review process to identify and evaluate potential exposure to loan losses. Loans that require specific identification review are identified based on one or more negative characteristics including, but not limited to, non-payment or lack of timely payment of interest and/or principal, non-payment or lack of timely payment of property taxes for an extended period of time, insurance defaults and/or franchise defaults. The specific identification evaluation begins with an evaluation of the estimated fair value of the loan. In determining estimated fair value, management utilizes the present value of the expected future cash flows discounted at the loan’s effective interest rate and/or an estimation of underlying collateral values using appraisals, broker price opinions, tax assessed value and/or revenue analysis. Management uses appraisals as tools in conjunction with other determinants of collateral value to estimate collateral values, not as the sole determinant of value. The property valuation takes into consideration current information on property values in general and value changes in commercial real estate and/or hospitality properties. The probability of liquidation is then determined. These probability determinations include macroeconomic factors, the location of the property and economic environment where the property is located, industry specific factors, our historical experience with similar borrowers and/or individual borrower or collateral characteristics, and in certain circumstances, the financial strength of the guarantors. The liquidation probability is then applied to the identified loss exposure to determine the general or specific reserve for that loan and the ultimate determination as to whether it is considered impaired.

Management closely monitors our loans which require evaluation for loan loss reserves based on specific criteria which classify the loans into three categories: Doubtful, Substandard and Other Assets Especially Mentioned (“OAEM”) (together “Specific Identification Loans”). Loans classified as Doubtful are generally loans which are not complying with their contractual terms, the collection of the balance of the principal is considered impaired and liquidation of the collateral securing the loan is probable. These loans are typically placed on non-accrual status and are generally in the foreclosure process. Loans classified as Substandard are generally those loans that are either not complying or had previously not complied with their contractual terms and have other credit weaknesses which may make payment default or principal exposure likely but not yet certain. Loans classified as OAEM are generally loans for which the credit quality of the borrowers has temporarily deteriorated. Typically these borrowers, whose loans are classified as OAEM, are current on their payments; however, they may be delinquent on their property taxes, insurance, or franchise fees or may be under agreements which provided for interest only payments during a short period of time. In addition, included in OAEM are loans for which the borrowers have filed for Chapter 11 Bankruptcy and we are classified as a secured creditor in the bankruptcy proceedings. Until bankruptcy plans are confirmed, the loans are typically delinquent.

Management has classified our Loans Receivable Subject to Credit Risk as follows (balances represent our investment in the loans prior to loan loss reserves and deferred capitalized costs):


	March 31, 2012
	Totals		%			Commercial Mortgage Loans		%			SBA 7(a) Loans		%
	(Dollars in thousands)
Satisfactory	$	186,801		92.1	%	$	164,466		91.6	%	$	22,335		96.1	%
OAEM		2,082		1.0	%		1,950		1.1	%		132		0.6	%
Substandard		11,958		5.9	%		11,739		6.5	%		219		0.9	%
Doubtful		1,993		1.0	%		1,444		0.8	%		549		2.4	%

	$	202,834		100.0	%	$	179,599		100.0	%	$	23,235		100.0	%


	December 31, 2011
	Totals		%			Commercial Mortgage Loans		%			SBA 7(a) Loans		%
	(Dollars in thousands)
Satisfactory	$	189,836		92.2	%	$	167,397		91.6	%	$	22,439		96.5	%
OAEM		3,354		1.6	%		3,317		1.8	%		37		0.2	%
Substandard		10,790		5.2	%		10,569		5.8	%		221		1.0	%
Doubtful		1,983		1.0	%		1,442		0.8	%		541		2.3	%

	$	205,963		100.0	%	$	182,725		100.0	%	$	23,238		100.0	%

Our provision for loan losses (excluding reductions of loan losses) as a percentage of our weighted average outstanding Loans Receivable Subject To Credit Risk was 0.24% and 0.18% during the three months ended March 31, 2012 and 2011, respectively. To the extent one or several of our borrowers experience significant operating difficulties and we are forced to liquidate the collateral underlying the loan, future losses may be substantial.

The activity in our loan loss reserves was as follows:


	Three Months Ended March 31, 2012
	Total			Commercial Mortgage Loans			SBA 7(a) Loans
	(In thousands)
Balance, beginning of year	$	1,812		$	1,329		$	483
Provision for loan losses		482			410			72
Reduction of loan losses		(7	)		(7	)		—
Principal balances written-off		(15	)		—			(15	)

Balance, end of period	$	2,272		$	1,732		$	540


	Three Months Ended March 31, 2011
	Total			Commercial Mortgage Loans			SBA 7(a) Loans
	(In thousands)
Balance, beginning of year	$	1,609		$	1,303		$	306
Provision for loan losses		378			310			68
Reduction of loan losses		(65	)		(47	)		(18	)
Principal balances written-off		(35	)		—			(35	)

Balance, end of period	$	1,887		$	1,566		$	321

Information on those loans considered to be impaired loans was as follows:


	March 31, 2012						December 31, 2011
	Total		Commercial Mortgage Loans		SBA 7(a) Loans		Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Impaired loans requiring reserves (1)	$	7,456	$	7,055	$	401	$	7,411	$	7,027	$	384
Impaired loans expected to be fully recoverable (1)		834		681		153		846		689		157

Total impaired loans (2)	$	8,290	$	7,736	$	554	$	8,257	$	7,716	$	541

Loan loss reserves	$	646	$	421	$	225	$	563	$	372	$	191

(1)

Includes loans classified as troubled debt restructurings.

(2)

The unpaid principal balance of our impaired commercial loans was $7,933,000 and $7,940,000 at March 31, 2012 and December 31, 2011, respectively. The unpaid principal balance of our impaired SBA 7(a) loans (excluding the government guaranteed portion) was $615,000 and $593,000 at March 31, 2012 and December 31, 2011, respectively.


	Three Months Ended March 31, 2012						Three Months Ended March 31, 2011
	Total		Commercial Mortgage Loans		SBA 7(a) Loans		Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Average impaired loans	$	8,261	$	7,726	$	535	$	2,444	$	2,053	$	391

Interest income on impaired loans	$	89	$	87	$	2	$	2	$	—	$	2

Our recorded investment in Non-Accrual Loans at March 31, 2012 of $3,685,000 was comprised of $402,000 of SBA 7(a) loans and $3,283,000 of commercial mortgage loans. Our recorded investment in Non-Accrual Loans at December 31, 2011 of $1,820,000 was comprised of $384,000 of SBA 7(a) loans and $1,436,000 of commercial mortgage loans. We did not have any loans receivable past due 90 days or more which were accruing interest at March 31, 2012 or December 31, 2011.

Information on our troubled debt restructurings which consisted of four commercial mortgage loans was as follows at March 31, 2012:


	Recorded Investment		Unpaid Principal Balance
	(In thousands)
Troubled debt restructurings requiring reserves	$	5,594	$	5,730
Troubled debt restructurings without reserves		681		740

Total troubled debt restructurings	$	6,275	$	6,470

Loan loss reserves	$	232

The modifications were primarily extended interest only periods; however, for one loan the borrower filed Chapter 11 Bankruptcy and the plan was confirmed with modified terms including extended interest only and amortization periods. In addition, the interest rate was reduced on one of the commercial mortgage loans with an extended interest only period.

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5074-111524

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5066-111524

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5162-111524

+ Details

Other Assets:

3 Months Ended

Mar. 31, 2012

Other Assets: [Abstract]

Other Assets:

Note 4. Other Assets:

Other assets consisted of the following:


	March 31,		December 31,
	2012		2011
	(In thousands)
Deferred tax asset, net	$	1,569	$	1,409
Deferred borrowing costs, net		1,116		1,128
Servicing asset, net		984		979
Retained interests in transferred assets		923		996
Investment in variable interest entity		820		820
Interest receivable		709		710
Prepaid expenses and deposits		327		303
Other		611		481

	$	7,059	$	6,826

Debt:

3 Months Ended

Mar. 31, 2012

Debt: [Abstract]

Debt:

Note 5. Debt:

Information on our debt was as follows:


	Carrying Value (1)				Weighted Average Coupon Rate at
	March 31,		December 31,		March 31,			December 31,
	2012		2011		2012			2011
	(Dollars in thousands, except footnotes)
Secured borrowings - government guaranteed loans:
Loans sold for a premium and excess spread	$	31,905	$	26,569		3.77	%		3.77	%
Loans sold for excess spread		5,941		5,977		1.58	%		1.58	%

		37,846		32,546

Junior subordinated notes		27,070		27,070		3.83	%		3.62	%
Revolving credit facility		15,700		17,800		2.43	%		2.47	%
Debentures payable		13,183		13,181		4.99	%		4.99	%
Structured notes payable - 2003 Joint Venture (2)		—		5,264		N/A			3.08	%

Debt	$	93,799	$	95,861

(1)

The face amount of debt as of March 31, 2012 and December 31, 2011 was $93,806,000 and $95,870,000, respectively.

(2)

We repaid the 2003 Joint Venture structured notes on February 15, 2012.

Principal payments on our debt at March 31, 2012 were as follows:


Twelve Months Ending March 31,	Total		Secured Borrowings (1)		All Other Debt (2)
	(In thousands)
2013	$	979	$	979	$	—
2014		5,203		1,013		4,190
2015		20,748		1,048		19,700
2016		1,085		1,085		—
2017		1,125		1,125		—
Thereafter		64,666		32,596		32,070

	$	93,806	$	37,846	$	55,960

(1)

Principal payments are dependent upon cash flows received from the underlying loans. Our estimate of their repayment is based on scheduled principal payments on the underlying loans. Our estimate will differ from actual amounts to the extent we experience prepayments and/or loan liquidations or charge-offs. No payment is due unless payments are received from the borrowers on the loans underlying them.

(2)

Represents the revolving credit facility, junior subordinated notes and debentures payable.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Share-Based Compensation Plans:

3 Months Ended

Mar. 31, 2012

Share-Based Compensation Plans: [Abstract]

Share-Based Compensation Plans:

Note 6. Share-Based Compensation Plans:

We issued an aggregate of 10,000 restricted shares to executive officers on March 12, 2012 at the then current market price of the shares of $7.27 (the closing price on March 9, 2012). We issued an aggregate of 10,000 restricted shares to executive officers on March 13, 2011 at the then current market price of the shares of $8.72. The restricted shares vest based on two years of continuous service with one-third of the shares vesting immediately upon issuance of the shares and one-third vesting at the end of each of the next two years. Restricted share awards provide for accelerated vesting if there is a change in control (as defined in the plan). Compensation expense related to the restricted shares is being recognized over the vesting periods. We recorded compensation expense of $40,000 and $49,000 during the three months ended March 31, 2012 and 2011, respectively, related to restricted shares. As of March 31, 2012, there was $62,000 of total unrecognized compensation expense related to restricted shares which will be recognized over the next two years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Income Taxes:

3 Months Ended

Mar. 31, 2012

Income Taxes: [Abstract]

Income Taxes:

Note 7. Income Taxes:

PMC Commercial has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a REIT, PMC Commercial must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our shareholders. As a REIT, PMC Commercial generally will not be subject to corporate level Federal income tax on net income that is currently distributed to shareholders.

PMC Commercial has wholly-owned taxable REIT subsidiaries (“TRS’s”) which are subject to Federal income taxes. The income generated from the TRS’s is taxed at normal corporate rates.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Discontinued Operations:

3 Months Ended

Mar. 31, 2012

Discontinued Operations: [Abstract]

Discontinued Operations:

Note 8. Discontinued Operations:

Discontinued operations consisted of the following:


	Three Months Ended March 31,
	2012			2011
	(In thousands)
Gains on sales of real estate	$	—		$	2
Net operating losses		(131	)		(210	)
Impairment losses		(18	)		—

Discontinued operations	$	(149	)	$	(208	)

Net operating losses from discontinued operations relate to the operations and holding costs of our real estate owned.

Impairment losses represent declines in the estimated fair value of our real estate owned subsequent to initial valuation.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

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+ Details

Earnings Per Share:

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share:

Note 9. Earnings (Loss) Per Share (“EPS”):

The computations of basic EPS are based on our weighted average shares outstanding. No shares were added to the weighted average shares outstanding for purposes of calculating diluted EPS during the three months ended March 31, 2012 as options were anti-dilutive. During the three months ended March 31, 2011, the weighted average shares outstanding were increased by 56,000 shares to reflect the dilutive effect of stock options.

Not included in the computation of diluted EPS were outstanding options to purchase 95,000 and 35,000 common shares during three months ended March 31, 2012 and 2011, respectively, because the options’ exercise prices were greater than the average market price of the shares.

Fair Value Measurements:

3 Months Ended

Mar. 31, 2012

Fair Value Measurements:[abstract="Fair Value Measurements:] [Abstract]

Fair Value Measurements:[abstract="Fair Value Measurements:]

Note 10. Fair Value Measurements:

For impaired loans measured at fair value on a nonrecurring basis during the three months ended March 31, 2012 and 2011, the following table provides the carrying value of the related individual assets at quarter end. We used Level 3 inputs to determine the estimated fair value of our impaired loans.


	Carrying Value at March 31,				Provision for Loan Losses Three Months Ended March 31, (2)
	2012		2011		2012		2011
	(In thousands)
Impaired loans (1)	$	7,644	$	2,174	$	71	$	18

(1)

Carrying value represents our impaired loans net of loan loss reserves. Our carrying value is determined based on management’s assessment of the fair value of the collateral based on numerous factors including operating statistics to the extent available, appraised value of the collateral, tax assessed value and market environment.

(2)

Represents the net change in the provision for loan losses included in our consolidated statements of income related specifically to our impaired loans during the periods presented.

For real estate owned, our carrying value approximates the estimated fair value at the time of foreclosure and the lower of cost or fair value thereafter. We use Level 3 inputs to determine the estimated fair value of our real estate owned. The carrying value of our real estate owned is established at the time of foreclosure based upon management’s assessment of its fair value based on numerous factors including operating statistics to the extent available, the appraised value, tax assessed value and market environment.

The estimated fair values of our financial instruments were as follows:


	March 31, 2012				December 31, 2011
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(In thousands)
Assets:
Loans receivable, net	$	235,744	$	223,372	$	234,427	$	224,395
Cash and cash equivalents		3,254		3,254		6,502		6,502
Restricted cash and cash equivalents		—		—		2,233		2,233

Liabilities:
SBIC debentures and structured notes payable		13,183		13,435		18,445		19,027
Secured borrowings - government guaranteed loans		37,846		37,846		32,546		32,546
Revolving credit facility		15,700		15,700		17,800		17,800
Junior subordinated notes		27,070		22,577		27,070		22,595

We used Level 3 inputs to determine the estimated fair value of our financial instruments. In general, estimates of fair value may differ from the carrying amounts of the financial assets and liabilities primarily as a result of the effects of discounting future cash flows. Considerable judgment is required to interpret market data and develop estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts we could realize in a current market exchange.

Loans receivable, net: Our loans receivable are recorded at cost and adjusted by net loan origination fees and discounts. In order to determine the estimated fair value of our loans receivable, we use a present value technique for the anticipated future cash flows using certain assumptions including a discount rate based on current market interest rates, prepayment tendencies and potential loan losses. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement. Reserves are established based on numerous factors including, but not limited to, the creditor’s payment history, collateral value, guarantor support, expected future cash flows and other factors. In the absence of a readily ascertainable market value, the estimated value of our loans receivable may differ from the values that would be placed on the portfolio if a ready market for the loans receivable existed.

Cash and cash equivalents: The carrying amount is considered to be reasonable estimates of fair value due to the short maturity of these funds.

Restricted cash and cash equivalents: Restricted cash and cash equivalents were comprised of our collection and reserve accounts of the securitization. The carrying amount was considered to be a reasonable estimate of their fair value due to (1) the maturity of the collection account and (2) the reserve account was used in conjunction with the exercise of our “clean-up call” option. At March 31, 2012, we no longer have any restricted cash and cash equivalents.

SBIC debentures and structured notes payable and junior subordinated notes: The estimated fair value is based on a present value calculation based on prices of the same or similar instruments after considering market risks, current interest rates, and remaining maturities. The structured notes payable were repaid on February 15, 2012.

Secured borrowings - government guaranteed loans: The estimated fair value approximates cost as the interest rates on these secured borrowings approximates current market interest rates.

Revolving credit facility: The carrying amount is a reasonable estimation of fair value as the interest rate on this instrument is variable and was set in a third-party transaction.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Commitments and Contingencies:

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies: [Abstract]

Commitments and Contingencies:

Note 11. Commitments and Contingencies:

Loan Commitments

Commitments to extend credit are agreements to lend to a customer provided the terms established in the contract are met. Our outstanding loan commitments and approvals to fund loans were $23.2 million at March 31, 2012, of which $12.2 million were for prime-based loans to be originated by our SBA 7(a) subsidiary, the government guaranteed portion of which is intended to be sold. Commitments generally have fixed expiration dates. Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements.

Operating Lease

We lease office space in Dallas, Texas under a lease which expires in February 2015. Future minimum lease payments are as follows:


Twelve Months Ending March 31,	Total
	(In thousands)
2013	$	165
2014		213
2015		200

	$	578

Employment Agreements

We have employment agreements with our executive officers for terms expiring December 31, 2014. Under certain circumstances, as defined within the agreements, the agreements provide for (1) severance compensation or change in control payments to the executive officer in an amount equal to 2.99 times the average of the last three years annual compensation paid to the executive officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual salary paid to the executive officer.

Litigation

In the normal course of business we are periodically party to certain legal actions and proceedings involving matters that are generally incidental to our business (i.e., collection of loans receivable). In management’s opinion, the resolution of these legal actions and proceedings will not have a material adverse effect on our consolidated financial statements.

Other

If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced by us, the SBA may seek recovery of the principal loss related to the deficiency from us. With respect to the guaranteed portion of SBA loans that have been sold, the SBA will first honor its guarantee and then seek compensation from us in the event that a loss is deemed to be attributable to technical deficiencies. Based on historical experience, we do not expect that this contingency would be material to the financial statements if asserted.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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+ Details