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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2011	Mar. 05, 2012	Jun. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	PMC COMMERCIAL TRUST /TX
Entity Central Index Key	0000908311
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 82
Entity Common Stock, Shares Outstanding		10,574,554

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Loans receivable, net:
Commercial mortgage loans receivable	$ 133,327	$ 122,581
SBIC commercial mortgage loans receivable	32,153	31,113
SBA 7(a) loans receivable, subject to secured borrowings	30,476	20,533
SBA 7(a) loans receivable	22,997	18,570
Commercial mortgage loans receivable, subject to structured notes payable	15,474	40,421
Loans receivable, net	234,427	233,218
Cash and cash equivalents	6,502	2,642
Restricted cash and cash equivalents	2,233	5,786
Real estate owned	1,259	3,477
Other assets	6,826	7,004
Total assets	251,247	252,127
Debt:
Secured borrowings - government guaranteed loans	32,546	21,765
Junior subordinated notes	27,070	27,070
Revolving credit facility	17,800	13,800
SBIC debentures payable	13,181	8,177
Structured notes payable	5,264	22,157
Debt	95,861	92,969
Borrower advances	3,863	3,462
Accounts payable and accrued expenses	2,095	2,739
Dividends payable	1,692	1,712
Deferred gains on property sales	0	685
Total liabilities	103,511	101,567
Commitments and contingencies
Beneficiaries' equity:
Common shares of beneficial interest; authorized 100,000,000 shares of $0.01 par value; 11,110,883 and 11,095,883 shares issued at December 31, 2011 and 2010, respectively; 10,574,554 and 10,559,554 shares outstanding at December 31, 2011 and 2010, respectively	111	111
Additional paid-in capital	152,934	152,756
Net unrealized appreciation of retained interests in transferred assets	394	276
Cumulative net income	176,096	172,449
Cumulative dividends	(177,798)	(171,031)
Total beneficiaries' equity	151,737	154,561
Less: Treasury stock; at cost, 536,329 shares at December 31, 2011 and 2010	(4,901)	(4,901)
Total beneficiaries' equity	146,836	149,660
Noncontrolling interests - cumulative preferred stock of subsidiary	900	900
Total equity	147,736	150,560
Total liabilities and equity	$ 251,247	$ 252,127

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2011	Dec. 31, 2010
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	11,110,883	11,095,883
Common stock, shares outstanding	10,574,554	10,559,554
Treasury stock, shares	536,329	536,329

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues:
Interest income	$ 13,571	$ 13,537	$ 11,180
Premium income	1,450	709	1,343
Income from retained interests in transferred assets	215	163	2,862
Other income	840	1,054	882
Total revenues	16,076	15,463	16,267
Expenses:
Salaries and related benefits	4,329	3,927	3,871
Interest	3,693	4,016	2,869
General and administrative	2,010	2,168	2,096
Strategic alternatives	778
Provision for loan losses, net	460	641	989
Permanent impairments on retained interests in transferred assets			552
Total expenses	11,270	10,752	10,377
Income before income tax benefit (provision) and discontinued operations	4,806	4,711	5,890
Income tax benefit (provision)	(114)	131	167
Income from continuing operations	4,692	4,842	6,057
Discontinued operations	(1,045)	(545)	704
Net income	$ 3,647	$ 4,297	$ 6,761
Weighted average shares outstanding:
Basic	10,570	10,554	10,573
Diluted	10,584	10,570	10,573
Basic and diluted earnings per share:
Income from continuing operations	$ 0.44	$ 0.46	$ 0.57
Discontinued operations	(0.10)	(0.05)	0.07
Net income	$ 0.34	$ 0.41	$ 0.64

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 3,647	$ 4,297	$ 6,761
Change in net unrealized appreciation of retained interests in transferred assets:
Net unrealized appreciation (depreciation) arising during period	223	240	(206)
Realized gains included in net income	(105)	(24)	(89)
Total change in net unrealized appreciation of retained interests in transferred assets	118	216	(295)
Comprehensive income	$ 3,765	$ 4,513	$ 6,466

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 8, 9, 10, 11, 12, 13, 14
-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 Accounting Research Bulletin (ARB)
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-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 AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A5
-Appendix A

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e557-108580

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-URI http://asc.fasb.org/extlink&oid=6518256

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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6519514

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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=6508144

Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Research Bulletin (ARB)
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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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 87-21
-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 Accounting Research Bulletin (ARB)
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-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)
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-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 Statement of Financial Accounting Standard (FAS)
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-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 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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-Appendix A

+ 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.

+ References

+ Details

Consolidated Statements of Equity - 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 at Dec. 31, 2008	$ 154,362	$ 111	$ 900	$ 152,460	$ 620	$ 160,925	$ (156,829)	$ (3,825)
Balance, shares at Dec. 31, 2008		10,694,788
Net unrealized depreciation/appreciation	(295)				(295)
Share-based compensation expense	151			151
Share-based compensation expense, shares		18,400
Treasury shares, net	(1,076)							(1,076)
Treasury shares, net, shares		(164,834)
Dividends	(7,445)						(7,445)
Net income	6,761					6,761
Balance at Dec. 31, 2009	152,458	$ 111	900	152,611	325	167,686	(164,274)	(4,901)
Balance, shares at Dec. 31, 2009		10,548,354
Net unrealized depreciation/appreciation	216				216
Cumulative effect adjustment	201				(265)	466
Share-based compensation expense	134			134
Share-based compensation expense, shares		9,700
Shares issued through exercise of stock options	11			11
Shares issued through exercise of stock options, shares		1,500
Dividends	(6,757)						(6,757)
Net income	4,297					4,297
Balance at Dec. 31, 2010	$ 150,560	$ 111	900	152,756	276	172,449	(171,031)	(4,901)
Balance, shares at Dec. 31, 2010	10,559,554	10,559,554
Net unrealized depreciation/appreciation	$ 118				118
Share-based compensation expense	178			178
Share-based compensation expense, shares		15,000
Dividends	(6,767)						(6,767)
Net income	3,647					3,647
Balance at Dec. 31, 2011	$ 147,736	$ 111	$ 900	$ 152,934	$ 394	$ 176,096	$ (177,798)	$ (4,901)
Balance, shares at Dec. 31, 2011	10,574,554	10,574,554

Consolidated Statements of Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Dividends per share	$ 0.64	$ 0.64	$ 0.705
Cumulative Dividends
Dividends per share	$ 0.64	$ 0.64	$ 0.705

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities:
Net income	$ 3,647	$ 4,297	$ 6,761
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Permanent impairments on retained interests in transferred assets			552
Impairment losses	887	325
Gains on foreclosure and sales of real estate	(532)	(78)	(1,195)
Deferred income taxes	(369)	(645)	(256)
Provision for loan losses, net	460	641	989
Unrealized premium adjustment	1,441	1,501	(23)
Amortization and accretion, net	(135)	231	(377)
Share-based compensation	178	134	151
Capitalized loan origination costs	(260)	(316)	(239)
Loans funded, held for sale	(26,350)	(27,602)	(24,384)
Proceeds from sale of guaranteed loans	15,774		24,996
Principal collected on loans	1,812	427
Loan fees remitted, net	(81)	(20)	(65)
Change in operating assets and liabilities:
Borrower advances	401	1,104	(451)
Accounts payable and accrued expenses	(614)	272	(749)
Other liabilities	(25)	(54)	(140)
Other assets	(296)	(321)	290
Net cash provided by (used in) operating activities	(4,062)	(20,104)	5,860
Cash flows from investing activities:
Loans funded	(12,002)	(10,838)	(6,051)
Principal collected on loans receivable	19,661	20,572	14,640
Principal collected on retained interests in transferred assets	132	200	308
Investment in retained interests in transferred assets			(559)
Principal collected on mortgage-backed security of affiliate			162
Purchase of furniture, fixtures, and equipment	(31)		(5)
Proceeds received from sales of real estate owned, net	415	2,373
Proceeds from (investment in) unconsolidated subsidiary	1,373	(1,024)
Release of (investment in) restricted cash and cash equivalents, net	3,553	(1,024)	1,181
Net cash provided by investing activities	13,101	10,259	9,676
Cash flows from financing activities:
Purchase of treasury shares			(1,076)
Proceeds from issuance of common shares		11
Proceeds from (repayment of) revolving credit facility, net	4,000	(9,200)	300
Proceeds from issuance of SBIC debentures	5,000
Payment of principal on structured notes payable	(16,893)	(5,404)	(5,817)
Proceeds from secured borrowings - government guaranteed loans	11,639	28,445
Payment of principal on secured borrowings - government guaranteed loans	(1,812)	(427)
Redemption of redeemable preferred stock of subsidiary		(2,000)	(2,000)
Payment of borrowing costs	(326)		(30)
Payment of dividends	(6,787)	(6,776)	(9,681)
Net cash provided by (used in) financing activities	(5,179)	4,649	(18,304)
Net increase (decrease) in cash and cash equivalents	3,860	(5,196)	(2,768)
Cash and cash equivalents, beginning of year	2,642	7,838	10,606
Cash and cash equivalents, end of year	$ 6,502	$ 2,642	$ 7,838

Summary of Significant Accounting Policies:

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies: [Abstract]

Summary of Significant Accounting Policies:

Note 1. Summary of Significant Accounting Policies:

Business

PMC Commercial Trust (“PMC Commercial” or together with its wholly-owned subsidiaries, “we,” “us” or “our”) was organized in 1993 as a Texas real estate investment trust (“REIT”). Our common shares of beneficial interest (“Common Shares”) are traded on the NYSE Amex (symbol “PCC”). We primarily obtain income from the yield and other related fee income earned on our investments from our lending activities. To date, these investments have principally been in the hospitality industry.

Principles of Consolidation

The accompanying consolidated financial statements have been prepared by management in accordance with U.S. generally accepted accounting principles, or GAAP. We consolidate entities that we control as well as variable interest entities (“VIEs”) for which we are the primary beneficiary. A VIE is an entity for which control is achieved through means other than voting rights. An entity should consolidate a VIE if that entity will absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both. To the extent we do not have a majority voting interest, we use the equity method to account for investments for which we have the ability to exercise significant influence over operating and financial policies. Consolidated net income includes our share of the net earnings of any VIE for which we are not the primary beneficiary. All material intercompany balances and transactions have been eliminated.

During 2005, PMC Commercial issued notes payable (the “Junior Subordinated Notes”) of approximately $27,070,000 due March 30, 2035 to a special purpose subsidiary deemed to be a VIE and recorded our investment in the VIE of $820,000. As a result, our exposure related to the Junior Subordinated Notes is $26,250,000. The Junior Subordinated Notes, included in our consolidated balance sheets, are subordinated to PMC Commercial’s existing debt. Since PMC Commercial is not considered to be the primary beneficiary, the VIE is not consolidated in PMC Commercial’s financial statements and the equity method is used to account for our investment in the VIE.

Recently Issued Accounting Pronouncements

Accounting Standards Concept (“ASC”) topic 310 Update 2011-02 (“ASC 2011-02”) was issued in April 2011. ASC 2011-02 clarified guidance for loans which have been restructured, on a creditor’s evaluation of whether (1) it has granted a concession and (2) a debtor is experiencing financial difficulties. ASC 2011-02 was effective for the first interim or annual period beginning on or after June 15, 2011, and has been applied retrospectively to the beginning of the annual period of adoption. As a result of adopting the amendments in ASC 2011-02, we reassessed all restructurings that occurred on or after January 1, 2011 for identification as troubled debt restructurings. We identified as troubled debt restructurings certain loans receivable for which the loan loss reserves had previously been measured under a general loan loss methodology. Upon identifying these loans receivable as troubled debt restructurings we identified them as impaired under the guidance in Section 310-10-35. The amendments of ASC 2011-02 required prospective application of the impairment measurement guidance in Section 310-10-35 for those loans receivable newly identified as impaired.

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 required 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 is effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. We are currently evaluating the impact of this ASU on our financial statements.

ASC topic 860 was issued in June 2009. ASC 860 amended the accounting guidance for transfers of financial assets including (1) eliminating the concept of qualified special purpose entities for prospective securitizations, (2) a new unit of account definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, (3) clarifications and changes to the derecognition criteria for a transfer to be accounted for as a sale, (4) a change to the amount of recognized gain or loss on a transfer of financial assets accounted for as a sale when beneficial interests are received by the transferor, and (5) extensive new disclosures. ASC 860 was effective for interim and annual reporting periods beginning after November 15, 2009. This standard affected our accounting for secondary market loan transactions beginning on January 1, 2010, the date we adopted the standard. We are required to treat certain legally sold portions of loans (those sold for excess spread and those sold for excess spread and a 10% cash premium) as secured borrowings for the life of the loan. The impact to our consolidated balance sheet was to reflect the government guaranteed portion of our SBA 7(a) loans as loans receivable and secured borrowings for these legally sold portions of our loans. For statement of cash flow purposes, proceeds received from the sale of the guaranteed portion of SBA 7(a) loans are reflected as a either an operating or financing activity; whereas previously these proceeds were reflected solely as operating activities.

ASC topic 810 was issued in June 2009. ASC 810 requires an entity to perform an analysis to determine whether the entity’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the entity that has both of the following characteristics: (1) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (2) the obligation to absorb the losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from that entity that could potentially be significant to the variable interest entity. ASC 810 was effective for interim and annual reporting periods beginning after November 15, 2009. Our off-balance sheet securitizations were consolidated beginning January 1, 2010, the date we adopted the standard. Determining the carrying amounts of the assets and liabilities of the securitizations was not practicable and the assets of the securitizations can only be used to settle obligations of the securitizations; therefore, the unpaid principal balance method was used to recognize assets and liabilities of the securitizations. The difference of approximately $466,000 between the net amounts added to our consolidated balance sheet as assets and liabilities and our retained interests in transferred assets was recognized as a cumulative effect adjustment in our beneficiaries’ equity. Unrealized appreciation of retained interests in transferred assets of $265,000 was reversed in conjunction with the consolidation; therefore, the net effect to our beneficiaries’ equity was an increase of approximately $201,000.

Loans Receivable, net

We primarily originate loans to small businesses collateralized by first liens on the real estate of the related business. Loans receivable are carried at their unamortized principal balance less net loan origination fees, discounts and loan loss reserves. For loans originated under the Small Business Administration’s (“SBA”) 7(a) Guaranteed Loan Program (“SBA 7(a) Program”) upon sale of the SBA guaranteed portion of the loans which are accounted for as sales, the unguaranteed portion of the loan retained by us is valued on a fair value basis and a discount (the “Retained Loan Discount”) is recorded as a reduction in basis of the retained portion of the loan.

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 principal and/or interest, 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 values 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 due to the current economic environment. 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 relating primarily to the hospitality industry, our historical experience with similar borrowers and/or individual borrower or collateral characteristics, and in certain circumstances, the 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.

Real Estate Owned (“REO”)

REO consists of properties acquired by foreclosure in partial or total satisfaction of non-performing loans. REO acquired in satisfaction of a loan is recorded at estimated fair value less estimated costs to sell the property at the date of foreclosure. Any excess of the carrying value of the loan over the estimated fair value of the property less estimated costs to sell is charged-off to the loan loss reserve when title to the property is obtained. Any excess of the estimated fair value of the property less estimated costs to sell and the carrying value is recorded as gain on foreclosure within discontinued operations when title to the property is obtained. Subsequent to foreclosure, REO is valued at the lower of cost or market. Any impairment losses and operating costs subsequent to foreclosure are recorded within discontinued operations.

Cash and Cash Equivalents

We generally consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Generally, we maintain cash, cash equivalents and restricted investments in accounts in excess of federally insured limits with a financial institution. We regularly monitor the financial institution and do not believe a significant credit risk is associated with the deposits in excess of federally insured amounts.

Restricted Cash and Cash Equivalents

Represents the collection and cash reserve accounts required to be held on behalf of the structured noteholders as collateral pursuant to the securitization transaction documents. Cash reserve accounts may be required to be used to repay the structured noteholders pursuant to the transaction documents.

Deferred Borrowing Costs

Costs incurred in connection with the issuance of debt are capitalized and are being amortized to expense over the life of the related obligation using the effective interest method. Deferred borrowing costs are included in other assets on our consolidated balance sheets.

Borrower Advances

In general, as part of the monitoring process to verify that the borrowers’ cash equity is utilized for its intended purpose, we receive deposits from our borrowers and release funds upon presentation of appropriate documentation. Funds held on behalf of borrowers are included as a liability on the consolidated balance sheets.

Revenue Recognition Policies

Interest Income

Interest income includes interest earned on loans and our short-term investments and the amortization of net loan origination fees and discounts. Interest income on loans is accrued as earned with the accrual of interest suspended when the related loan becomes a non-accrual loan. A loan receivable is generally classified as non-accrual (a “Non-Accrual Loan”) if (1) it is past due as to payment of principal or interest for a period of 60 days or more, (2) any portion of the loan is classified as doubtful or is charged-off or (3) if the repayment in full of the principal and/or interest is in doubt. Generally, loans are charged-off when management determines that we will be unable to collect any remaining amounts due under the loan agreement, either through liquidation of collateral or other means. Interest income on a Non-Accrual Loan is recognized on either the cash basis or the cost recovery basis.

Origination fees and direct loan origination costs, net, are deferred and recognized as an adjustment of yield over the life of the related loan receivable using the effective interest method.

For loans recorded with a Retained Loan Discount, these discounts are recognized as an adjustment of yield over the life of the related loan receivable using the effective interest method.

Premium Income

We sell the guaranteed portion of our SBA 7(a) Program loans to investors. These guaranteed portions may be sold for (1) a cash premium and the minimum 1% required servicing spread, (2) future servicing spread greater than 1% and no cash premium or (3) future servicing spread greater than 1% and a 10% cash premium. The guaranteed portion of loans sold for a cash premium and the minimum 1% required servicing spread are recorded as sales (i.e., we record premium income). Premium income represents the difference between the relative fair value attributable to the sale of the guaranteed portion of a loan originated under the SBA 7(a) Program for a cash premium and the required 1% servicing spread and the principal balance (cost) allocated to the loan. We are required to permanently treat certain of the proceeds received from legally sold portions of loans (those loans sold solely for excess spread and those sold for a cash premium and excess spread) as secured borrowings (a liability on our consolidated balance sheet) for the life of the loan. To the extent secured borrowings include cash premiums, these premiums are amortized as a reduction to interest expense over the life of the loan using the effective interest method and any remaining balance is fully amortized when the loan is repaid in full.

Income from Retained Interests in Transferred Assets

Income from retained interests in transferred assets represents the accretion (recognized using the effective interest method) on our retained interests which is determined based on estimates of future cash flows.

Other Income

Other income consists primarily of servicing income, prepayment fees and other loan related income. Servicing income represents the fees we receive for servicing loans of the sold portion of our SBA 7(a) Program loans and is recognized as revenue when the services are performed. Historically, we also recorded servicing income for fees received for servicing loans of our off-balance sheet securitizations. Prepayment fees are recognized as revenue when loans are prepaid. Late fees and other loan related fees are recognized as revenue when chargeable, assuming collectibility is reasonably assured.

Income Taxes

We have elected to be taxed as a REIT under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent we qualify for taxation as a REIT, we generally will not be subject to a Federal corporate income tax on our taxable income that is distributed to our shareholders. We may, however, be subject to certain Federal excise taxes and state and local taxes on our income and property. If PMC Commercial fails to qualify as a REIT in any taxable year, it will be subject to Federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and will not be able to qualify as a REIT for four subsequent taxable years. In order to remain qualified as a REIT under the Code, we must satisfy various requirements in each taxable year, including, among others, limitations on share ownership, asset diversification, sources of income, and the distribution of at least 90% of our taxable income within the specified time in accordance with the Code.

PMC Commercial has wholly-owned taxable REIT subsidiaries (“TRS’s”) which are subject to Federal income taxes. The income generated from the taxable REIT subsidiaries is taxed at normal corporate rates. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

We have established a policy on classification of penalties and interest related to audits of our Federal and state income tax returns. If incurred, our policy for recording interest and penalties associated with audits will be to record such items as a component of income before income tax provision (benefit) and discontinued operations. Penalties, if incurred, will be recorded in general and administrative expense and interest paid or received will be recorded in interest expense or interest income, respectively, in the consolidated statements of income.

Earnings per Share

Earnings per share is computed by dividing net income by the weighted-average number of shares outstanding. Diluted earnings per share includes the dilutive effect, if any, of share-based compensation awards.

Distributions to Shareholders

Distributions to shareholders are recorded on the ex-dividend date.

Share-Based Compensation Plans

We have options outstanding and issue restricted shares under share-based compensation plans described more fully in Note 12. We use fair value recognition provisions to account for all awards granted, modified or settled.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from our estimates. Our most sensitive estimates involved determination of loan loss reserves and valuation of our real estate owned.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation. These reclassifications had no effect on previously reported net income or cash flows.

Loans Receivable, net:

12 Months Ended

Dec. 31, 2011

Loans Receivable, net: [Abstract]

Loans Receivable, net:

Note 2. Loans Receivable, net:

Loans receivable, net, consisted of the following:

		September 30,			September 30,
	December 31,
	2011			2010
	(In thousands)
Commercial mortgage loans (1)	$	134,835		$	124,065
SBIC commercial mortgage loans		32,416			31,289
SBA 7(a) loans, subject to secured borrowings		30,151			20,326
SBA 7(a) loans		23,238			18,673
Commercial mortgage loans, subject to structured notes payable (2)		15,474			40,514

Total loans receivable		236,114			234,867
Add/(deduct):
Deferred capitalized costs (commitment fees), net		125			(40	)
Loan loss reserves		(1,812	)		(1,609	)

Loans receivable, net	$	234,427		$	233,218

(1)

At December 31, 2010, these loans were pledged to our revolving credit facility.

(2)

We repaid the remaining 2003 Joint Venture structured notes on February 15, 2012; as a result, these loans were no longer encumbered as of that date.

Commercial mortgage loans

Represents all of the loans of 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 Loans Discounts of $1.6 million and $1.3 million at December 31, 2011 and 2010, respectively.

Commercial mortgage loans, subject to structured notes payable

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

Concentration Risks

We have certain concentrations of investments. Substantially all of our revenue is generated from loans collateralized by hospitality properties. At December 31, 2011, our loans were 93.5% concentrated in the hospitality industry. Any economic factors that negatively impact the hospitality industry, including recessions, depressed commercial real estate markets, travel restrictions, bankruptcies or other political or geopolitical events, could have a material adverse effect on our financial condition and results of operations.

At 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 December 31, 2011. 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 December 31, 2011. Any significant 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 principal on these loans). Balances are prior to loan loss reserves and deferred capitalized costs, net.

		September 30,	September 30,			September 30,	September 30,			September 30,	September 30,
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.

		September 30,	September 30,			September 30,	September 30,			September 30,	September 30,
December 31, 2010
Category	Totals				Commercial Mortgage Loans				SBA 7(a) Loans
	(Dollars in thousands)
Current (1)	$	196,539	91.6	%	$	178,592	91.1	%	$	17,947	96.2	%
Between 30 and 59 days delinquent		4,877	2.3	%		4,664	2.4	%		213	1.1	%
Between 60 and 89 days delinquent		5,576	2.6	%		5,253	2.7	%		323	1.7	%
Over 89 days delinquent (2)		7,549	3.5	%		7,359	3.8	%		190	1.0	%

	$	214,541	100.0	%	$	195,868	100.0	%	$	18,673	100.0	%

(1)

Includes $9.0 million of loans which are current under agreements which provide for interest only payments during a short period of time (not more than six months remaining) in exchange for additional collateral. Of this, $7.2 million relates to an affiliated group of obligors described above.

(2)

Includes $6.3 million of loans on which the borrowers have filed for Chapter 11 Bankruptcy. We are classified as a secured creditor in the bankruptcy proceedings. In addition, the collateral underlying $1.1 million of loans included in the over 89 days delinquent category were in the foreclosure process.

Loan Loss Reserves

Management closely monitors our loans which require evaluation for loan loss reserves based on specific identification metrics which are classified 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 on which the fair value of the collateral is less than the remaining unamortized principal balance. 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 the borrowers are current on their payments; however, they may be delinquent on their property taxes, insurance, or franchise fees.

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 commitment fees):

		September 30,		September 30,			September 30,		September 30,			September 30,		September 30,
	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	%

		September 30,		September 30,			September 30,		September 30,			September 30,		September 30,
	December 31, 2010
	Totals		%			Commercial Mortgage Loans		%			SBA 7(a) Loans		%
	(Dollars in thousands)
Satisfactory	$	187,630		87.5	%	$	169,880		86.7	%	$	17,750		95.1	%
OAEM		16,886		7.9	%		16,872		8.6	%		14		0.1	%
Substandard		9,113		4.2	%		8,469		4.3	%		644		3.4	%
Doubtful		912		0.4	%		647		0.3	%		265		1.4	%

	$	214,541		100.0	%	$	195,868		100.0	%	$	18,673		100.0	%

The decrease in our loans classified as OAEM from 2010 to 2011 is due primarily to improvement in the affiliated group of obligors discussed above due to a modification of certain of their loan terms and loans previously included in OAEM for which the borrowers had filed for Chapter 11 Bankruptcy and we were classified as a secured creditor in the bankruptcy proceedings which are paying according to their modified terms.

Our provision for loan losses (excluding reductions of loan losses) as a percentage of our weighted average Loans Receivable Subject To Credit Risk was 0.40% and 0.46% during 2011 and 2010, respectively. Whenever our borrowers experience significant operating difficulties and we are forced to liquidate the collateral underlying the loan, losses may be substantial.

During the five-year period ended December 31, 2011, our aggregate provision for loan losses, net, was approximately $2.6 million or 27 basis points per year based on the five-year average of our loans receivable. Our total loan loss reserves as a percentage of our Loans Receivable Subject To Credit Risk were 88 basis points at December 31, 2011.

The activity in our loan loss reserves was as follows:

		September 30,			September 30,			September 30,
	Year Ended December 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		826			429			397
Reduction of loan losses		(366	)		(342	)		(24	)
Principal balances written-off		(257	)		(61	)		(196	)

Balance, end of year	$	1,812		$	1,329		$	483

		September 30,			September 30,			September 30,			September 30,
	Years Ended December 31,
	2010
	Total			Commercial Mortgage Loans			SBA 7(a) Loans			Total 2009
	(In thousands)
Balance, beginning of year	$	1,257		$	1,055		$	202		$	480
Provision for loan losses		1,019			607			412			1,076
Reduction of loan losses		(378	)		(309	)		(69	)		(87	)
Consolidation of the 2000 Joint Venture and the 1998 Partnership reserves		184			184			—			—
Principal balances written-off		(473	)		(234	)		(239	)		(212	)

Balance, end of year	$	1,609		$	1,303		$	306		$	1,257

Impaired Loan Data

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

		September 30,		September 30,		September 30,
	At December 31, 2011
	Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Impaired loans requiring reserves (1)	$	7,411	$	7,027	$	384
Impaired loans expected to be fully recoverable (1)		846		689		157

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


Loan loss reserves	$	563	$	372	$	191

		September 30,		September 30,		September 30,		September 30,
	At December 31,
	2010
	Total		Commercial Mortgage Loans		SBA 7(a) Loans		2009
	(In thousands)
Impaired loans requiring reserves	$	687	$	419	$	268	$	3,132
Impaired loans expected to be fully recoverable		228		228		—		228

Total impaired loans (3)	$	915	$	647	$	268	$	3,360


Loan loss reserves	$	219	$	25	$	194	$	364

(1)

Includes loans classified as troubled debt restructurings.

(2)

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

(3)

The unpaid principal balance of our impaired commercial mortgage loans was $678,000 at December 31, 2010. The unpaid principal balance of our impaired SBA 7(a) loans (excluding the government guaranteed portion) was $288,000 at December 31, 2010.

		September 30,		September 30,		September 30,
	Year Ended December 31, 2011
	Total		Commercial Mortgage Loans		SBA 7(a) Loans
	(In thousands)
Average impaired loans	$	8,176	$	7,610	$	566


Interest income on impaired loans	$	290	$	271	$	19

		September 30,		September 30,		September 30,		September 30,
	Years Ended December 31,
	2010
	Total		Commercial Mortgage Loans		SBA 7(a) Loans		2009
	(In thousands)
Average impaired loans	$	4,317	$	3,558	$	759	$	5,661


Interest income on impaired loans	$	114	$	89	$	25	$	83

Our recorded investment in Non-Accrual Loans at December 31, 2011 of $1,820,000 was comprised of $384,000 of SBA 7(a) Program loans and $1,436,000 of commercial mortgage loans. Our recorded investment in Non-Accrual Loans at December 31, 2010 of $12,275,000 was comprised of $519,000 of SBA 7(a) Program loans and $11,756,000 of commercial mortgage loans. We did not have any loans receivable past due 90 days or more which were accruing interest at December 31, 2011 or 2010. Our Non-Accrual Loans at December 31, 2010 consist of loans delinquent 60 days or more including loans for which the borrowers filed for Chapter 11 Bankruptcy whose bankruptcy plans were confirmed and are now paying according to modified terms and a loan classified as a troubled debt restructuring that is now current under agreed upon modified terms.

Information on our troubled debt restructurings which consisted of four commercial mortgage loans was as follows at December 31, 2011:

		September 30,		September 30,
			Unpaid
	Recorded		Principal
	Investment		Balance
	(In thousands)
Troubled debt restructurings requiring reserves	$	5,591	$	5,730
Troubled debt restructurings without reserves		689		749

Total troubled debt restructurings	$	6,280	$	6,479


Loan loss reserves	$	236

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 an extended interest only period and re-amortization. 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:

12 Months Ended

Dec. 31, 2011

Other Assets: [Abstract]

Other Assets:

Note 3. Other Assets:

Other assets consisted of the following:

		September 30,		September 30,
	December 31,
	2011		2010
	(In thousands)
Deferred tax asset, net	$	1,409	$	1,039
Deferred borrowing costs, net		1,128		836
Retained interests in transferred assets		996		1,010
Servicing asset, net		979		758
Investment in VIE’s (1)		820		2,183
Interest receivable		710		691
Prepaid expenses and deposits		303		286
Other		481		201

	$	6,826	$	7,004

(1)

In January 2011, our lessee exercised the fixed purchase option related to one of our unconsolidated variable interest entities. No gain or loss was recorded on the transaction.

Debt:

12 Months Ended

Dec. 31, 2011

Debt: [Abstract]

Debt:

Note 4. Debt:

Information on our debt was as follows:

		September 30,		September 30,		September 30,			September 30,
	Carrying Value at December 31, (1)				Weighted Average Coupon Rate at December 31,
	2011		2010		2011			2010
	(Dollars in thousands, except footnotes)
Structured notes payable:
2003 Joint Venture	$	5,264	$	7,094		3.08	%		2.80	%
2000 Joint Venture		—		11,724		NA			7.28	%
1998 Partnership		—		3,339		NA			2.25	%

		5,264		22,157


Junior subordinated notes		27,070		27,070		3.62	%		3.54	%


Revolving credit facility		17,800		13,800		2.47	%		3.25	%


Debentures payable		13,181		8,177		4.99	%		5.90	%


Secured borrowings—government guaranteed loans (2):
Loans sold for a premium and excess spread		26,569		15,664		3.77	%		3.87	%
Loans sold for excess spread		5,977		6,101		1.58	%		1.58	%

		32,546		21,765


Debt	$	95,861	$	92,969

(1)

The face amount of debt as of December 31, 2011 and 2010 was $95,870,000 and $92,982,000, respectively.

(2)

The weighted average interest rate on the underlying loans at December 31, 2011 was 5.96%.

Principal payments on our debt at December 31, 2011 were as follows:

		September 30,		September 30,		September 30,
Years Ending December 31,	Total		Structured Notes and Secured Borrowings (1)		All Other Debt (2)
	(In thousands)
2012	$	6,104	$	6,104	$	—
2013		5,059		869		4,190
2014		18,697		897		17,800
2015		4,929		929		4,000
2016		961		961		—
Thereafter		60,120		28,050		32,070

	$	95,870	$	37,810	$	58,060

(1)

Principal payments are generally 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 losses. No payment is due on the secured borrowings unless payments are received from the borrowers on the loans underlying them. The 2003 Joint Venture structured notes were repaid on February 15, 2012; therefore, they are shown above in the year ending December 31, 2012.

(2)

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

Structured notes payable

Structured notes payable are collateralized by the loans of the securitizations. Repayment of their principal is based on collections of principal on the underlying loans receivable. We have no obligation to pay these notes, nor do the noteholders have any recourse against our assets (other than the underlying loans receivable and restricted cash of the securitzation). We repaid the 2003 Joint Venture structured notes payable on February 15, 2012.

Junior subordinated notes

The Junior Subordinated Notes bear interest at a floating rate which resets on a quarterly basis at the 90-day LIBOR plus 3.25%. The Junior Subordinated Notes may be redeemed at par at our option. Interest payments are due on a quarterly basis.

Revolving credit facility

PMC Commercial has a revolving credit facility which initially provided credit availability up to $30 million which expires on June 30, 2014. The total amount available under the revolving credit facility increased to $35 million on January 1, 2012. In addition, the amount available under the revolving credit facility will automatically increase on January 1, 2013 by $5 million to $40 million provided there is no event of default or potential default on that date and the non-performing loan ratio, as defined, is not more than 20% on that date. We are charged interest on the balance outstanding under the revolving credit facility at our election of either the prime rate of the lender less 50 basis points or the 30-day LIBOR plus 2%. In addition, we are charged an unused fee equal to 37.5 basis points computed based on our daily available balance. The credit facility requires us to meet certain covenants. We have a minimum net worth covenant ($142 million) within our credit facility that may limit our ability to pay dividends. At December 31, 2011, we were in compliance with the covenants of this facility.

SBIC debentures payable

SBIC debentures represent amounts due to the SBA and have semi-annual interest only payments until maturity.

Secured borrowings – government guaranteed loans

Secured borrowings – government guaranteed loans represents sold SBA 7(a) Program loans which are treated as secured borrowings if the loans were sold solely for excess spread or if the loans were sold for excess spread and a cash premium of 10%. To the extent secured borrowings include cash premiums, these premiums are included in secured borrowings and amortized as a reduction to interest expense over the life of the loan using the effective interest method and fully amortized when the loan is repaid in full.

Interest Paid

During 2011, 2010 and 2009 interest paid was $3,733,000, $3,791,000, and $2,669,000, respectively.

- 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

Cumulative Preferred Stock of Subsidiary

12 Months Ended

Dec. 31, 2011

Cumulative Preferred Stock of Subsidiary:/Dividends Paid and Declared: [Abstract]

Cumulative Preferred Stock of Subsidiary

Note 5. Cumulative Preferred Stock of Subsidiary:

One of our SBICs has outstanding 30,000 shares of $100 par value, 3% cumulative preferred stock (the “3% Preferred Stock”) held by the SBA. Our SBIC is entitled to redeem, in whole or part, the 3% Preferred Stock by paying the par value ($3.0 million) of these securities plus dividends accumulated and unpaid on the date of redemption. While the 3% Preferred Stock may be redeemed, redemption is not mandatory. The 3% Preferred Stock was valued at $900,000 when acquired in 2004. Dividends of $90,000 were recognized on the 3% Preferred Stock during 2011, 2010 and 2009 and are reflected in our consolidated statements of income as interest expense.

Earnings Per Share:

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Earnings Per Share:

Note 6. Earnings Per Share:

The computations of basic earnings per common share are based on our weighted average shares outstanding. The weighted average number of common shares outstanding was 10,570,000, 10,554,000 and 10,573,000 for the years ended December 31, 2011, 2010 and 2009, respectively. For purposes of calculating diluted earnings per share, the weighted average shares outstanding were increased by 14,000 and 16,000 shares during 2011 and 2010, respectively, for the dilutive effect of share options. No shares were added to the weighted average shares outstanding for purposes of calculating diluted earnings per share during 2009 as options were anti-dilutive.

Not included in the computation of diluted earnings per share were outstanding options to purchase 81,000, 77,000 and 90,000 common shares during 2011, 2010 and 2009, respectively, because the options’ exercise prices were greater than the average market price of the shares.

Dividends Paid and Declared

12 Months Ended

Dec. 31, 2011

Cumulative Preferred Stock of Subsidiary:/Dividends Paid and Declared: [Abstract]

Dividends Paid and Declared

Note 7. Dividends Paid and Declared:

During 2011, our dividends were declared as follows:

	September 30,		September 30,
Record Date	Date Paid	Amount Per Share
March 31, 2011	April 11, 2011	$	0.16
June 30, 2011	July 11, 2011		0.16
September 30, 2011	October 11, 2011		0.16
December 31, 2011	January 9, 2012		0.16

		$	0.64

We have certain covenants within our revolving credit facility that limit our ability to pay dividends. These restrictions have not historically limited the amount of dividends we have paid and management does not believe that they will restrict future dividend payments.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-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 SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-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 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-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 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
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-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 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 21: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6521494

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

+ Details

Income Taxes:

12 Months Ended

Dec. 31, 2011

Income Taxes: [Abstract]

Income Taxes:

Note 8. Income Taxes:

PMC Commercial has elected to be taxed as a REIT under 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 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.

The following reconciles net income to REIT taxable income:

		September 30,			September 30,			September 30,
	Years Ended December 31,
	2011			2010			2009
	(In thousands)
Net income	$	3,647		$	4,297		$	6,761
Book/tax differences:
Gains related to real estate		(235	)		387			(1,110	)
Strategic alternatives		678			—			—
Impairment losses		804			317			—
Severance payments		(100	)		(33	)		(1,435	)
Amortization and accretion		(68	)		(102	)		(232	)
Loan valuation		184			(241	)		497
Other, net		8			(174	)		(306	)

Subtotal		4,918			4,451			4,175

Adjustment for TRS net loss (income), net of tax		(131	)		340			413
Dividend distribution from TRS		1,000			300			—

REIT taxable income	$	5,787		$	5,091		$	4,588


Distributions declared	$	6,767		$	6,757		$	7,445


Basic weighted average common shares outstanding		10,570			10,554			10,573

Dividends per share for dividend reporting purposes were as follows:

		September 30,		September 30,			September 30,		September 30,			September 30,		September 30,
	Years Ended December 31,
	2011					2010					2009
	Amount					Amount					Amount
	Per Share		Percent			Per Share		Percent			Per Share		Percent
Non-qualified dividends	$	0.477		74.53	%	$	0.568		88.75	%	$	0.705		100.00	%
Qualified dividends		0.095		14.78	%		0.028		4.37	%		—		—
Non-taxable return of capital		0.068		10.69	%		0.044		6.88	%		—		—

	$	0.640		100.00	%	$	0.640		100.00	%	$	0.705		100.00	%

In order to meet our taxable income distribution requirements, we may make an election under the Code to treat a portion of the distributions declared and paid in the current year as distributions of the prior year’s taxable income.

PMC Commercial has wholly-owned TRS’s which are subject to Federal income taxes. The income generated from the TRS’s is taxed at normal corporate rates.

We calculate our current and deferred tax provisions based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. Adjustments based on the final tax returns are generally recorded in the period when the returns are filed.

Income tax provision (benefit) related to the TRS’s consisted of the following:

		September 30,			September 30,			September 30,
	Years Ended December 31,
	2011			2010			2009
	(In thousands)

Federal:
Current provision	$	483		$	514		$	89
Deferred benefit		(369	)		(645	)		(256	)

Income tax provision (benefit)	$	114		$	(131	)	$	(167	)

The provision (benefit) for income taxes results in effective tax rates that differ from Federal statutory rates of 34%. The reconciliation of TRS income tax attributable to net income (loss) computed at Federal statutory rates to income tax provision (benefit) was as follows:

		September 30,		September 30,			September 30,
	Years Ended December 31,
	2011		2010			2009
	(In thousands)
Income (loss) before income taxes for TRS’s	$	245	$	(471	)	$	(580	)


Expected Federal income tax provision (benefit)	$	83	$	(160	)	$	(198	)
Preferred dividend of subsidiary		31		31			31
Other adjustments		—		(2	)		—

Income tax provision (benefit)	$	114	$	(131	)	$	(167	)

We have identified our Federal tax returns and our state returns in Texas as “major” tax jurisdictions. The periods subject to examination for our Federal tax returns and state returns in Texas are the 2008 through 2010 tax years. We believe that all income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain tax positions have been recorded.

The components of our net deferred tax asset were as follows:

		September 30,		September 30,
	December 31,
	2011		2010
	(In thousands)
Deferred tax assets:
Secured borrowings—government guaranteed loans	$	814	$	489
Retained interests in transferred assets		364		315
Servicing asset		225		164
Net operating losses		25		28
Loans receivable		—		42
Other		38		3

Total gross deferred tax assets		1,466		1,041


Deferred tax liabilities:
Loans receivable		56		—
Discount on debentures payable		1		2

Total gross deferred tax liabilities		57		2


Deferred tax asset, net	$	1,409	$	1,039

The net operating loss carryforwards at December 31, 2011 were generated by a TRS and are available to offset future taxable income of this TRS. The net operating loss carryforwards expire from 2027 to 2030.

We paid $612,000, $538,000 and $109,000 in income taxes during 2011, 2010 and 2009, respectively.

- 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
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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

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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
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Discontinued Operations:

12 Months Ended

Dec. 31, 2011

Discontinued Operations: [Abstract]

Discontinued Operations:

Note 9. Discontinued Operations:

Our discontinued operations consisted of the following:

		September 30,			September 30,			September 30,
	Years Ended December 31,
	2011			2010			2009
	(In thousands)
Gains on sales of real estate	$	532		$	78		$	721
Gain on foreclosure		—			—			389
Net operating losses		(690	)		(298	)		(406	)
Impairment losses		(887	)		(325	)		—

Discontinued operations	$	(1,045	)	$	(545	)	$	704

Gains on sales of real estate generally represents gains on the sales of hotel properties and income recognition of previously unamortized gains. We sold two properties during 2011 and recorded net losses of $153,000 which offset our gains on sales of real estate during this year. We also had a gain on the sale of REO acquired through foreclosure of $76,000 during 2010.

Gain on foreclosure represents the initial adjustment of the carrying value to the estimated fair value of our REO upon foreclosure. During 2009, the estimated fair value after selling costs of the collateral underlying a limited service hospitality property included in REO on our consolidated balance sheet was in excess of its cost.

Net operating losses represent the net of revenues and expenses of our REO. During 2010 and 2011, these losses resulted primarily from our hospitality properties included in REO. During 2009, net operating losses represent primarily the net losses related to a golf course which was subsequently sold.

Impairment losses represent declines in the estimated fair value of our REO subsequent to initial valuation. During 2011, our impairment losses are primarily related to a full service hospitality property. The property experienced significant operating losses, is in need of major capital improvements and has been held for an extended period of time with limited market sales activity, including an unsuccessful auction during the third quarter of 2011, which contributed to the decline in its value. During 2010, our impairment losses are related to the full service hospitality property and a retail establishment.

- 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).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
-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
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-Name Accounting Standards Codification
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+ Details

Dividend Reinvestment and Cash Purchase Plan:

12 Months Ended

Dec. 31, 2011

Dividend Reinvestment and Cash Purchase Plan: [Abstract]

Dividend Reinvestment and Cash Purchase Plan:

Note 10. Dividend Reinvestment and Cash Purchase Plan:

We have a dividend reinvestment and cash purchase plan (the “Plan”). Participants in the Plan have the option to reinvest all or a portion of dividends received. The purchase price of the Common Shares is 100% of the average of the closing price of the Common Shares as published for the five trading days immediately prior to the dividend record date or prior to the optional cash payment purchase date, whichever is applicable. Our transfer agent, on our behalf, uses the open market to purchase Common Shares with proceeds from the dividend reinvestment portion of the Plan.

Profit Sharing Plan:

12 Months Ended

Dec. 31, 2011

Profit Sharing Plan: [Abstract]

Profit Sharing Plan:

Note 11. Profit Sharing Plan:

We have a profit sharing plan available to our full-time employees after one year of employment. Vesting increases ratably to 100% after the sixth year of employment. Pursuant to our profit sharing plan, approximately $234,000, $216,000 and $199,000 was expensed during 2011, 2010 and 2009, respectively. Contributions to the profit sharing plan are at the discretion of our Board of Trust Managers.

Share-Based Compensation Plans:

12 Months Ended

Dec. 31, 2011

Share-Based Compensation Plans: [Abstract]

Share-Based Compensation Plans:

Note 12. Share-Based Compensation Plans:

At December 31, 2011, we had options outstanding under share-based compensation plans. The 2005 Equity Incentive Plan was approved by our shareholders on June 11, 2005 and permits the grant of options to our employees, executive officers and Board of Trust Managers and restricted shares to our executive officers and Board of Trust Managers for up to 500,000 Common Shares. We believe that these awards better align the interests of our employees, executive officers and Board of Trust Managers with those of our shareholders.

Option awards are granted with an exercise price equal to the market price of our Common Shares at the date of grant and vest immediately upon grant with five-year contractual terms. A summary of the status of our stock options as of December 31, 2011, 2010 and 2009 and the changes during the years ended on those dates are as follows:

		September 30,			September 30,		September 30,			September 30,		September 30,		September 30,
	2011					2010					2009
	Number of			Weighted		Number of			Weighted		Number of		Weighted
	Shares			Average		Shares			Average		Shares		Average
	Underlying			Exercise		Underlying			Exercise		Underlying		Exercise
	Options			Prices		Options			Prices		Options		Prices
Outstanding, January 1		90,750		$	10.11		89,650		$	11.77		74,650	$	12.46
Granted		27,000		$	8.75		26,500		$	8.35		15,000	$	8.35
Exercised		—			—		(1,500	)	$	7.65		—		—
Expired		(23,000	)	$	12.72		(23,900	)	$	14.54		—		—


Outstanding and exercisable, December 31		94,750		$	9.09		90,750		$	10.11		89,650	$	11.77


Weighted-average fair value per share of stock options granted during the year	$	1.10				$	1.24				$	0.71

Upon notification of intent to exercise stock options, our policy is to first verify that the options are exercisable, then to contact our transfer agent instructing them to issue new shares and then to collect the cash proceeds.

The fair value of each share option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

		September 30,			September 30,			September 30,
	Years Ended December 31,
	2011			2010			2009
Assumption:
Expected Term (years)		3.0			3.0			3.0
Risk-Free Interest Rate		0.71	%		1.23	%		1.91	%
Expected Dividend Yield		7.31	%		7.66	%		8.44	%
Expected Volatility		33.58	%		40.29	%		28.04	%
Forfeiture Rate		2.00	%		10.00	%		10.00	%

The expected term of the options represents the period of time that the options are expected to be outstanding and was determined based on our historical data. The risk-free rate was based on the 3-year U.S. Treasury rate corresponding to the expected term of the options. We used historical information to determine our expected volatility and forfeiture rates. We recorded compensation expense of $30,000, $33,000 and $11,000 during 2011, 2010 and 2009, respectively, related to these option grants.

The following table summarizes information about share options outstanding at December 31, 2011:

September 30,

Options Outstanding and Exercisable

Weighted

Average

Weighted

Remaining

Average

Range of

Number

Contract Life

Exercise

Exercise Prices

Outstanding

(in years)

Price

$7.65 to $8.65

82,500

3.30

8.36

$14.01

12,250

0.45

14.01

$7.65 to $14.01

94,750

2.93

9.09

A summary of our restricted shares as of December 31, 2011, 2010 and 2009 and the changes during the years ended on those dates are as follows:

		September 30,			September 30,		September 30,			September 30,		September 30,			September 30,
	2011					2010					2009
				Weighted					Weighted					Weighted
				Average Grant					Average Grant					Average Grant
	Number of			Date Fair Value		Number of			Date Fair Value		Number of			Date Fair Value
	Shares			Per Share		Shares			Per Share		Shares			Per Share
Balance, January 1		12,066		$	8.35		17,416		$	8.14		13,200		$	9.05
Granted		15,000		$	8.73		13,100		$	8.35		18,400		$	8.35
Vested		(16,035	)	$	8.55		(15,050	)	$	8.11		(14,184	)	$	9.25
Forfeited		—			—		(3,400	)	$	8.35		—			—

Balance, December 31		11,031		$	8.57		12,066		$	8.35		17,416		$	8.14

The restricted share awards generally 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 $148,000, $101,000 and $140,000 during 2011, 2010 and 2009, respectively, related to our restricted share issuances. At December 31, 2011, there was $29,000 of total unrecognized compensation expense related to the restricted shares which will be recognized over the next two years. The estimated fair value of restricted shares vested during 2011 was $140,000.

- 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

Supplemental Disclosure of Cash Flow Information:

12 Months Ended

Dec. 31, 2011

Supplemental Disclosure of Cash Flow Information: [Abstract]

Supplemental Disclosure of Cash Flow Information:

Note 13. Supplemental Disclosure of Cash Flow Information:

Our non-cash activities were as follows:

		September 30,		September 30,		September 30,
	Years Ended December 31,
	2011		2010		2009
	(In thousands)
Consolidation of loans receivable	$	—	$	—	$	32,563


Reclassification from loans receivable to real estate owned	$	409	$	4,040	$	4,948


Reclassifications reducing secured borrowings - government guaranteed loans and loans receivable, net	$	—	$	7,692	$	—


Loans receivable originated to facilitate sales of real estate owned	$	1,172	$	3,325	$	—


Consolidation of off-balance sheet securitizations:
Loans receivable, net	$	—	$	27,752	$	—

Restricted cash and cash equivalents	$	—	$	3,396	$	—

Structured notes payable	$	—	$	19,524	$	—

Fair Values of Financial Instruments:

12 Months Ended

Dec. 31, 2011

Fair Values of Financial Instruments: [Abstract]

Fair Values of Financial Instruments:

Note 14. Fair Values of Financial Instruments:

For impaired loans measured at fair value on a nonrecurring basis during 2011 and 2010 the following table provides the carrying value of the related individual assets at year end. We used Level 3 inputs to determine the estimated fair value of our impaired loans.

September 30,

Carrying Value at

Provision for

December 31,

Loan Losses (2)

2011

2010

2011

2010

(In thousands)

Impaired loans (1)

7,694

696

438

160

(1)

Carrying value represents our impaired loans net of loan loss reserves.

(2)

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

For REO, our carrying value approximates the estimated fair value at the time of foreclosure and the lower of cost or market thereafter. We used Level 3 inputs to determine the estimated fair value of our REO. The carrying value of our REO 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 of the collateral, tax assessed value and market environment.

The following is activity for our REO:

		September 30,			September 30,
	Years Ended
	December 31,
	2011			2010
	(In thousands)
Balance as of beginning of year	$	3,477		$	5,479
Foreclosures		409			4,040
Additions		17			—
Proceeds from sales		(1,604	)		(5,793	)
Gain (loss)		(153	)		76
Impairment losses		(887	)		(325	)

Balance as of end of year	$	1,259		$	3,477

The estimated fair value of our financial instruments was as follows:

		September 30,		September 30,		September 30,		September 30,
	December 31,
	2011				2010
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(In thousands)

Assets:
Loans receivable, net	$	234,427	$	224,395	$	233,218	$	228,821
Cash and cash equivalents		6,502		6,502		2,642		2,642
Restricted cash and cash equivalents		2,233		2,233		5,786		5,786

Liabilities:
Structured notes and SBIC debentures payable		18,445		19,027		30,334		30,781
Secured borrowings—government guaranteed loans		32,546		32,546		21,765		21,765
Revolving credit facility		17,800		17,800		13,800		13,800
Junior Subordinated Notes		27,070		22,595		27,070		22,310

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. Loan loss 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 a reasonable estimation of fair value due to the short maturity of these instruments.

Restricted cash and cash equivalents: Restricted cash and cash equivalents represent our collection and reserve accounts of the securitizations. The carrying amount is considered to be a reasonable estimate of their fair value due to (1) the short maturity of the collection accounts, (2) the reserve accounts can be used at any time in conjunction with the exercise of our “clean-up call” options.

Structured notes and SBIC debentures 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, remaining maturities and actual exercise of “clean-up call” options.

Secured borrowings – government guaranteed loans: The estimated fair value approximates cost as the interest rate 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 current 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-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 FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-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 107
-Paragraph 15A
-Subparagraph a-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 FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-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 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-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 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-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 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-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 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Commitments and Contingencies:

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies: [Abstract]

Commitments and Contingencies:

Note 15. 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 new loans were approximately $14.3 million at December 31, 2011, the majority of which were for prime-based loans to be originated under the SBA 7(a) Program, 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 under this lease are as follows:

		September 30,
Years Ending December 31,	Total
	(In thousands)
2012	$	113
2013		212
2014		217
2015		36

	$	578

Rent expense amounted to $179,000, $168,000 and $186,000 during 2011, 2010 and 2009, respectively.

Employment Agreements

We have employment agreements with our executive officers for three-year 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 compensation 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 our SBLC, 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.

Pursuant to SBA rules and regulations, distributions from our SBLC and SBICs are limited. In order to operate as a small business lending company, a licensee is required to maintain a minimum net worth (as defined by SBA regulations) of the greater of (1) 10% of the outstanding loans receivable of our SBLC or (2) $1.0 million, as well as certain other regulatory restrictions such as change in control provisions. At December 31, 2011, dividends of approximately $1.1 million were available for distribution from our SBLC.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-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 FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-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 Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Mortgage Loans On Real Estate

12 Months Ended

Dec. 31, 2011

Mortgage Loans On Real Estate [Abstract]

MORTGAGE LOANS ON REAL ESTATE

SCHEDULE IV

PMC COMMERCIAL TRUST AND SUBSIDIARIES

MORTGAGE LOANS ON REAL ESTATE

AS OF DECEMBER 31, 2011

(Dollars in thousands, except footnotes)

Conventional Loans—States 2% or greater (1)(2):

		September 30,		September 30,		September 30,	September 30,	September 30,	September 30,		September 30,			September 30,
													Principal amount
Geographic	Number								Final	Carrying			of loan subject to
Dispersion of	of						Interest Rate		Maturity	Amount of			delinquent principal
Collateral	Loans						Variable	Fixed	Date	Mortgage			or “interest”
			Size of Loans
			From		To
Texas		29	$	0	$	1,000	3.12% to 7.25%	7.00% to 10.78%	11/15/13—8/16/31	$	13,859		$	—
Texas (3)		9	$	1,000	$	2,000	3.12% to 5.25%	7.00% to 10.25%	5/1/21—11/18/30		11,094			1,442
Texas		4	$	2,000	$	3,000	2.87% to 3.62%	NA	11/29/26—6/7/27		9,674			—
Texas		2	$	3,000	$	4,000	3.52% to 4.87%	NA	11/29/26—12/13/27		6,129			—

Arizona		5	$	0	$	1,000	4.37% to 7.50%	9.25% to 9.31%	7/16/13—9/14/31		3,175			—
Arizona		4	$	1,000	$	2,000	4.87%	9.25% to 10.00%	7/8/19—9/29/24		5,289			—
Arizona		2	$	2,000	$	3,000	4.37%	NA	10/13/25—12/21/25		4,651			—
Arizona		1	$	4,000	$	5,000	3.37%	NA	1/30/28		4,595			—

Virginia (4)		2	$	0	$	1,000	7.50%	8.50%	6/1/17—12/30/31		1,526			—
Virginia		2	$	1,000	$	2,000	4.37%	8.90%	11/30/18—2/28/23		2,954			—
Virginia (5)		3	$	2,000	$	3,000	3.50% to 5.75%	NA	1/30/23—3/27/27		7,506			—
Virginia		1	$	5,000	$	6,000	3.37%	NA	1/31/28		5,689			—

Ohio		2	$	0	$	1,000	4.37% to 5.37%	NA	11/8/12—2/16/26		1,018			—
Ohio		2	$	1,000	$	2,000	3.37% to 4.37%	NA	10/27/25—5/4/27		3,045			—
Ohio		3	$	2,000	$	3,000	3.37% to 3.68%	NA	10/30/26—4/21/28		7,807			—

Alabama		3	$	0	$	1,000	3.75%	9.50%	6/15/18—11/21/20		1,670			—
Alabama		1	$	1,000	$	2,000	4.62%	NA	3/1/22		1,628			—
Alabama		2	$	2,000	$	3,000	4.37%	NA	3/1/26—10/1/26		5,096			—

Florida		1	$	0	$	1,000	3.50%	NA	11/1/25		180			—
Florida		2	$	1,000	$	2,000	4.12%	9.40%	9/2/18—10/1/26		2,786			—
Florida		2	$	2,000	$	3,000	3.50%	8.24%	1/1/24—11/1/25		4,938			—

Michigan		3	$	0	$	1,000	3.25% to 4.25%	NA	12/1/12—4/30/27		1,817			—
Michigan		4	$	1,000	$	2,000	3.25% to 7.25%	NA	2/10/26—8/23/30		5,775			—

Oregon		3	$	0	$	1,000	NA	9.00% to 9.90%	2/2/18—6/13/21		1,871			—
Oregon		1	$	2,000	$	3,000	4.62%	NA	9/8/25		2,042			—
Oregon		1	$	3,000	$	4,000	7.25%	NA	5/13/30		3,356			—

North Carolina		4	$	0	$	1,000	3.87% to 4.62%	9.50% to 9.85%	12/20/16—1/23/23		3,331			—
North Carolina		2	$	1,000	$	2,000	4.37% to 4.87%	NA	6/11/21—5/5/23		2,519			-

California		4	$	0	$	1,000	4.37% to 4.62%	8.90% to 9.00%	7/10/18—12/28/24		2,175			—
California		2	$	1,000	$	2,000	4.12% to 4.75%	NA	12/12/26—12/13/26		3,513			—

Georgia		4	$	0	$	1,000	4.25% to 4.62%	9.25% to 10.25%	12/26/17—10/19/21		2,053			—
Georgia		2	$	1,000	$	2,000	3.87%	8.75%	12/14/27—12/1/29		2,936			—

Indiana		2	$	0	$	1,000	4.37%	NA	12/4/22		1,292			—
Indiana		2	$	1,000	$	2,000	3.87% to 8.25%	NA	2/7/23—12/14/31		3,256			—

Utah		3	$	0	$	1,000	4.62% to 7.00%	NA	2/23/18—8/30/35		1,642			—
Utah		1	$	2,000	$	3,000	7.00%	NA	8/30/35		2,274			—

Iowa		1	$	1,000	$	2,000	4.12%	NA	5/30/26		1,472			—
Iowa		1	$	2,000	$	3,000	4.37%	NA	5/12/23		2,233			—

Other		19	$	0	$	1,000	4.37% to 7.25%	8.25% to 10.25%	8/20/14—6/1/32		10,419			—
Other		14	$	1,000	$	2,000	2.87% to 7.00%	8.88% to 9.78%	6/27/16—11/24/27		19,086			—
Other		2	$	2,000	$	3,000	4.12%	10.25%	6/22/20—11/3/25		4,540			—
General Reserve											(957	)

		157								$	180,954	(6)	$	1,442

Footnotes:

(1)

Approximately 93.5% of our loans are collateralized by hotels.

(2)

There are four loans which are secured by second liens on properties which are subordinated to our first liens on the respective properties.

(3)

Includes two loans with a face value of $2,942,000 and valuation reserves of $137,000.

(4)

Includes a loan with a face value of $1,050,000 and a valuation reserve of $21,000.

(5)

Includes a loan with a face value of $3,179,000 and a valuation reserve of $214,000.

(6)

For Federal income tax purposes, the cost basis of our mortgage loans on real estate was approximately $182,987,000 (unaudited).

SCHEDULE IV

PMC COMMERCIAL TRUST AND SUBSIDIARIES

MORTGAGE LOANS ON REAL ESTATE

AS OF DECEMBER 31, 2011

(Dollars in thousands, except footnotes)

SBA 7(a) Loans—States 2% or greater (1) (2):

		September 30,		September 30,		September 30,	September 30,	September 30,		September 30,		September 30,		September 30,
												Principal amount
	Number							Final	Carrying			of loans subject to
	of							Maturity	Amount of			delinquent principal
	Loans						Interest Rate ⁽²⁾	Date	Mortgages			or “interest”
			Size of Loans
			From		To
Texas (3)		34	$	0	$	500	4.13% to 6.00%	9/29/12—2/8/36	$	2,857			$	126
Ohio		14	$	0	$	500	4.25% to 6.00%	5/11/13—12/29/36		1,639				—
Michigan		14	$	0	$	500	5.25% to 6.00%	9/15/12—12/14/36		1,638				—
North Carolina		5	$	0	$	500	6.00%	9/8/32—2/28/37		1,417				—
Indiana		8	$	0	$	500	4.75% to 6.00%	11/19/19—8/4/36		1,361				—
Georgia		8	$	0	$	500	4.25% to 6.00%	3/16/13—6/25/35		1,188				—
Alabama		4	$	0	$	500	5.00% to 6.00%	7/27/25—8/25/36		1,064				—
Mississippi		3	$	0	$	500	5.75% to 6.00%	5/18/35—11/4/36		1,041				—
Florida		8	$	0	$	500	5.75% to 6.00%	6/12/16—12/29/36		1,033				—
Iowa (4)		3	$	0	$	500	5.75% to 6.00%	11/26/33—11/28/36		736				224
Connecticut		2	$	0	$	1,000	5.13% to 5.63%	12/5/14—11/30/36		713				—
Arizona		5	$	0	$	500	5.75% to 6.00%	10/28/19—4/28/36		665				—
Oklahoma		6	$	0	$	500	4.75% to 6.00%	9/9/24—11/10/35		658				—
Wisconsin		4	$	0	$	500	5.00% to 6.00%	4/23/20—12/16/33		618				—
Kansas		3	$	0	$	500	6.00%	10/29/32—5/4/36		592				—
Missouri		4	$	0	$	500	5.25% to 6.00%	4/16/18—12/14/29		410				—
Other (5)		42	$	0	$	500	4.50% to 6.00%	3/27/14—12/2/36		2,677				34
Government guaranteed portions (6)										3,307				—
Secured borrowings (7)										30,151				—
General Reserve										(292	)

		167							$	53,473	(8)		$	384

Footnotes:

(1)

Includes approximately $995,000 of loans not secured by real estate. Also includes $450,000 of loans with subordinate lien positions.

(2)

Interest rates are variable at spreads over the prime rate unless otherwise noted.

(3)

Includes a loan with a face value of $564,000, valuation reserves of $72,000, and a fixed interest rate of 5.50%.

(4)

Includes a loan with a face value of $1,032,000, valuation reserves of $85,000, and a fixed interest rate of 5.75%.

(5)

Includes two loans with a face value of $248,000, valuation reserves of $34,000. Also includes three loans with fixed interest rates of 5.00%, 5.75%, and 6.00%.

(6)

Represents the government guaranteed portions of our SBA 7(a) loans detailed above. As there is no risk of loss to us related to these portions of the guaranteed loans, the geographic information is not presented as it is not meaningful.

(7)

Represents the guaranteed portion of loans which were sold with the proceeds received from the sale reflected as secured borrowings. excluding deferred cash premiums.

(8)

For Federal income tax purposes, the cost basis of our loans was approximately $22,946,000 (unaudited).

SCHEDULE IV

PMC COMMERCIAL TRUST AND SUBSIDIARIES

MORTGAGE LOANS ON REAL ESTATE

AS OF DECEMBER 31, 2011

(In thousands, except footnotes)

	September 30,			September 30,
Balance at December 31, 2008			$	179,807

Additions during period:
New mortgage loans (1)	62,998

Other - non cash change in loan	100

Other - deferral for collection of commitment fees, net of costs	304

Other - accretion of loan fees and discounts	213			63,615


Deductions during period:
Collections of principal	(14,642	)

Foreclosures	(4,948	)

Cost of mortgages sold, net	(26,201	)

Other - bad debt expense, net of recoveries	(989	)		(46,780	)


Balance at December 31, 2009			$	196,642

Additions during period:
New mortgage loans (2)	69,701

Other - deferral for collection of commitment fees, net of costs	324

Other - accretion of loan fees and discounts	317			70,343


Deductions during period:
Collections of principal (3)	(20,999	)

Foreclosures	(4,040	)

Cost of mortgages sold, net	(7,903	)

Other - consolidation of loan loss reserves	(184	)

Other - bad debt expense, net of recoveries	(641	)		(33,767	)


Balance at December 31, 2010			$	233,218

Additions during period:
New mortgage loans (4)	39,524

Other - deferral for collection of commitment fees, net of costs	410

Other - accretion of loan fees and discounts	17			39,951


Deductions during period:
Collections of principal	(21,473	)

Foreclosures	(409	)

Cost of mortgages sold, net	(16,400	)

Other - bad debt expense, net of recoveries	(460	)		(38,742	)


Balance at December 31, 2011			$	234,427

Footnotes:

(1)

Includes $12,570,000 from the exercise of our “clean-up call” provision related to the 2002 Joint Venture and $19,993,000 from the attainment of the “clean-up call” provision related to the 2003 Joint Venture.

(2)

Includes $22,912,000 and $5,024,000 from consolidation of the 2000 Joint Venture and the 1998 Partnership, respectively, due to a change in accounting rules effective January 1, 2010 and two loans totaling $3,325,000 which were originated in connection with sales of real estate owned which did not require cash expenditures.

(3)

Includes $7,692,000 representing reclassifications reducing secured borrowings and loans receivable.

(4)

Includes a loan of $1,172,000 which was originated in connection with the sale of real estate owned which did not require cash expenditure.