EnerBank provides unsecured consumer installment loans for financing home improvements. These loans totaled $439 million, net of an allowance for loan losses of $5 million, at September 30, 2011, and $386 million, net of an allowance for loan losses of $5 million, at December 31, 2010. At September 30, 2011, $16 million of EnerBank's loans were classified as current notes receivable and $423 million were classified as non-current notes receivable on CMS Energy's consolidated balance sheets. At December 31, 2010, $11 million of EnerBank's loans were classified as current notes receivable and $375 million were classified as non-current notes receivable on CMS Energy's consolidated balance sheets.

The allowance for loan losses is a valuation allowance to reflect estimated credit losses. The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries. Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors. Loan losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

Presented in the following table are the changes in the allowance for loan losses:

Loans that are 30 days or more past due are considered delinquent. Presented in the following table is the delinquency status of EnerBank's consumer loans at September 30, 2011: