PMC Commercial Trust is a real estate investment trust that originates loans to small business enterprises and owns limited servicehospitality properties. As a commercial lender they originate loans to small business enterprises primarily collateralized by first liens on real estate of the related business. Their loans are primarily to borrowers in the lodging industry but they also originate loans for commercial real estate and the service retail and manufacturing industries. PMC Commercial Trust has a market cap of $77.14 million; its shares were traded at around $7.25 with a P/E ratio of 8.53 and P/S ratio of 3.34. The dividend yield of PMC Commercial Trust stocks is 12.41%. Highlight of Business Operations:In October 2008, due to economic and market conditions, we announced cost reduction initiatives. These initiatives included streamlining our sales, credit and servicing, as well as outsourcing some functions. Management estimates annual savings for these initiatives to be approximately $1.0 million to $1.2 million which will primarily be a reduction of salaries and related benefits on our consolidated income statement.
Our aggregate portfolio continues to have minimal loan losses; however, we believe that worsening economic conditions have subjected our borrowers to financial stress. We have seen an increase in payment delinquencies, slow pays, insufficient funds payments, late fees, non-payment of real estate taxes and borrower requests for deferments of payment of principal and interest. Our recorded investment in non-accrual loans increased from $5,062,000 (2.8% of our retained loans) at December 31, 2008 to $7,229,000 (3.7% of our retained loans) at March 31, 2009. Additional changes to the facts and circumstances of the individual borrowers, the limited service hospitality industry and the economy may require the establishment of significant additional loan loss reserves and the effect on our results of operations and financial condition may be material.
During the first three months of 2009 we funded approximately $3.5 million of loans. We anticipate that our fundings during 2009 will be between $20 million and $30 million. We have been concentrating on longer-term loan originations with real estate for collateral and are now targeting loans between $500,000 and $2,000,000. However, there remains significant competition for SBA 7(a) Program loans from banks that are willing and able to provide lower interest rate terms than us primarily due to fees generated from other bank products.
In addition to our retained portfolio of $194 million, at March 31, 2009, we service approximately $81 million of aggregate principal balance remaining on loans that were sold in structured loan sale transactions and Secondary Market Loan Sales. Since we retain a residual interest in the cash flows from these sold loans, the performance of these loans impacts our profitability and our cash available for dividend distributions. Therefore, we provide information on both our loans retained (the Retained Portfolio) and combined with sold loans that we service (the Serviced Portfolio).
Loans funded during the first three months of 2009 were approximately $3.5 million, which is significantly less than the $17.1 million of loans we funded during the comparable period of 2008. We currently anticipate loan fundings to be between $20 million and $30 million during 2009. At March 31, 2009, December 31, 2008 and March 31, 2008, our outstanding commitments to fund loans were approximately $6.7 million, $10.0 million and $23.1 million, respectively. All of our current commitments are for variable-rate SBA 7(a) Program loans based on the prime rate which provide an interest rate match with our present sources of funds and these loans also provide an SBA guarantee for a portion of the loan amount. Due to our enhanced marketing efforts and the Stimulus Bill which eliminated fees on SBA 7(a) Program loans, we have seen an increase in our outstanding commitments to funds loans. As of April 30, 2009, our outstanding commitments to funds loans were approximately $12.0 million.
At March 31, 2009 and December 31, 2008, we had reserves of $616,000 and $480,000, respectively. Our provision for loan losses (excluding reductions of loan losses) as a percentage of our weighted average outstanding loans receivable was 0.08% and 0.04% during the three months ended March 31, 2009 and 2008, respectively. To the extent one or several of our loans experience significant operating difficulties and we are forced to liquidate the loans, future losses may be substantial.
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