CASH 2017 Annual Report
14 At September 30, 2017, approximately $134.5 million, or 10%, of the Company’s loan portfolio consisted of purchased loans, including the purchased student loan portfolio balance of $123.7 million. The remainder of the Company's purchased loan portfolio is secured by properties located in Iowa, North Dakota and South Dakota. The Company believes that purchasing loans outside of its market areas assists the Company in diversifying its portfolio and may lessen the adverse effects on the Company’s business or operations which could result in the event of a downturn or weakening of the local economy in which the Company conducts its primary operations. However, additional risks are associated with purchasing loans outside of the Company’s market areas, including the lack of knowledge of the local market and difficulty in monitoring and inspecting the property securing the loans. During fiscal 2017, the Company purchased a $148.7 million student loan portfolio discounted to $133.8 million, $7.1 million of commercial real estate participation loans and $0.5 million of other loans. Non-Performing Assets, Other Loans of Concern and Classified Assets When a borrower fails to make a required payment on retail bank real estate secured loans and consumer loans within 16 days after the payment is due, the Company generally initiates collection procedures by mailing a delinquency notice. The customer is contacted again, by written notice or telephone, before the payment is 30 days past due and again before 60 days past due. Generally, delinquencies are cured promptly; however, if a loan has been delinquent for more than 90 days, satisfactory payment arrangements must be adhered to or the Company may initiate foreclosure or repossession. For premium finance loans, a notice of cancellation is sent 18 days after the missed payment. If the account is not brought current, the Company may cancel the underlying insurance policy. The following table sets forth the Company’s loan delinquencies by type, by amount and by percentage of type at September 30, 2017. Loans Delinquent For: 30-59 Days (1) 60-89 Days (2) 90 Days and Over (3) Number Amount Percent of Category Number Amount Percent of Category Number Amount Percent of Category (Dollars in Thousands) Real Estate: 1-4 Family 1 $ 370 8.4% 1 $ 79 2.6% — $ — —% Commercial & Multi- Family — — —% — — —% 3 685 1.8% Agricultural — — —% — — —% 13 34,198 91.0% Consumer 82 2,512 57.2% 21 558 18.1% 51 1,406 3.7% Agricultural Operating — — —% — — —% 1 97 0.3% Premium Finance 327 1,509 34.4% 241 2,442 79.3% 1,010 1,205 3.2% Total 410 $ 4,391 100.0% 263 $ 3,079 100.0% 1,078 $ 37,591 100.0% (1) As of September 30, 2017, 80 of the consumer loans, which totaled $2.5 million, were student loans that are insured by ReliaMax Surety. (2) As of September 30, 2017, 20 of the consumer loans, which totaled $0.1 million, were student loans that are insured by ReliaMax Surety. (3) As of September 30, 2017, 50 of the consumer loans, which totaled $1.4 million were student loans that are insured by ReliaMax Surety. Delinquencies 90 days and over constituted 2.8% of total loans and 0.72% of total assets. Excluding the insured student loans, delinquencies 90 days and over would have constituted 2.7% of total loans and 0.70% of total assets.
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