Document and Entity Information
Document and Entity Information - $ / shares | Jul. 31, 2019 | Sep. 30, 2019 |
Registrant CIK | 0000038723 | |
Fiscal Year End | --12-31 | |
Registrant Name | 1st Franklin Financial Corporation | |
SEC Form | 10-Q | |
Period End date | Sep. 30, 2019 | |
Tax Identification Number (TIN) | 58-0521233 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | false | |
Emerging Growth Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 2-27985 | |
Entity Incorporation, State or Country Code | GA | |
Entity Address, Address Line One | 135 East Tugalo Street | |
Entity Address, Address Line Two | Post Office Box 880 | |
Entity Address, City or Town | Toccoa | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30577 | |
City Area Code | 706 | |
Local Phone Number | 886-7571 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Voting Common Stock | ||
Number of common stock shares outstanding | 1,700 | |
Entity Listing, Par Value Per Share | $ 100 | |
Nonvoting Common Stock | ||
Number of common stock shares outstanding | 168,300 | |
Entity Listing, Par Value Per Share | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents | $ 41,517,031 | $ 10,279,497 | |
Restricted Cash | 7,996,332 | 3,746,371 | |
LOANS: | |||
Direct Cash Loans | 694,085,044 | 651,085,493 | |
Real Estate Loans | 36,017,098 | 31,655,000 | |
Sales Finance Contracts | 69,209,399 | 50,693,568 | |
Loans, Total | 799,311,541 | 733,434,061 | |
Unearned Finance Charges | 109,893,746 | 98,377,069 | |
Unearned Insurance Premiums and Commissions | 52,676,212 | 49,949,190 | |
Allowance for Loan Losses | 48,500,000 | 43,000,000 | |
Net Loans | 588,241,583 | 542,107,802 | |
INVESTMENT SECURITIES: | |||
Available for Sale, at fair value | 209,876,729 | 212,199,716 | |
Held to Maturity, at amortized cost | 380,943 | 787,987 | |
Other Investments and Securities, at Cost | 210,257,672 | 212,987,703 | |
Other Assets | 57,094,014 | 27,246,364 | |
ASSETS, Total | 905,106,632 | 796,367,737 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Senior Debt | 559,263,856 | 500,322,650 | |
Accrued Expenses and Other Liabilities | 56,991,441 | 24,914,479 | |
Subordinated Debt | 28,474,992 | 30,270,450 | |
LIABILITIES, Total | 644,730,289 | 555,507,579 | |
COMMITMENTS AND CONTINGENCIES | [1] | ||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | 0 | 0 | |
Accumulated Other Comprehensive Income | 10,020,955 | (319,979) | |
Retained Earnings | 250,185,388 | 241,082,137 | |
Stockholders' Equity, Total | 260,376,343 | 240,860,158 | |
LIABILITIES AND STOCKHOLDERS' EQUITY, TOTAL | 905,106,632 | 796,367,737 | |
Voting Common Stock | |||
STOCKHOLDERS' EQUITY: | |||
Common Stock, Value, Issued | 170,000 | 170,000 | |
Nonvoting Common Stock | |||
STOCKHOLDERS' EQUITY: | |||
Common Stock, Value, Issued | $ 0 | $ 0 | |
[1] | Note 6. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Position (Unaudited) - Parenthetical - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock, Par or Stated Value Per Share | $ 100 | $ 100 |
Preferred Stock, Shares Authorized | 6,000 | 6,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Shares, Issued | 170,000 | 170,000 |
Common Stock, Shares, Outstanding | 170,000 | 170,000 |
Voting Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 100 | $ 100 |
Common Stock, Shares Authorized | 2,000 | 2,000 |
Common Stock, Shares, Issued | 1,700 | 1,700 |
Common Stock, Shares, Outstanding | 1,700 | 1,700 |
Nonvoting Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Shares Authorized | 198,000 | 198,000 |
Common Stock, Shares, Issued | 168,300 | 168,300 |
Common Stock, Shares, Outstanding | 168,300 | 168,300 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
Interest Income | $ 53,048,658 | $ 45,634,069 | $ 153,477,699 | $ 131,916,120 |
Interest Expense | 5,147,181 | 3,432,150 | 14,224,492 | 10,005,841 |
NET INTEREST INCOME | 47,901,477 | 42,201,919 | 139,253,207 | 121,910,279 |
Provision for loan losses | 15,276,415 | 10,211,067 | 39,784,720 | 25,382,742 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 32,625,062 | 31,990,852 | 99,468,487 | 96,527,537 |
NET INSURANCE INCOME | ||||
Premiums and Commissions | 12,634,439 | 11,464,393 | 36,459,276 | 32,530,460 |
Insurance Claims and Expenses | 3,446,332 | 3,215,749 | 9,848,881 | 8,497,233 |
Total Net Insurance Income | 9,188,107 | 8,248,644 | 26,610,395 | 24,033,227 |
OTHER REVENUE | 1,534,995 | 1,423,600 | 4,202,097 | 3,899,369 |
OTHER OPERATING EXPENSES: | ||||
Personnel Expense | 24,071,344 | 21,663,177 | 70,683,676 | 66,094,449 |
Occupancy Expense | 4,570,912 | 4,344,865 | 13,547,995 | 12,839,274 |
Other Expense | 10,288,739 | 8,613,436 | 31,542,886 | 25,933,033 |
Operating Expenses, Total | 38,930,995 | 34,621,478 | 115,774,557 | 104,866,756 |
INCOME BEFORE INCOME TAXES | 4,417,169 | 7,041,618 | 14,506,422 | 19,593,377 |
Provision for Income Taxes | 983,086 | 833,099 | 2,707,089 | 2,411,017 |
Net Income (Loss) | $ 3,434,083 | $ 6,208,519 | $ 11,799,333 | $ 17,182,360 |
BASIC EARNINGS PER SHARE | ||||
170,000 Shares Outstanding for All Periods (1,700 voting, 168,300 non-voting) | $ 20.20 | $ 36.52 | $ 69.41 | $ 101.07 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Income (Unaudited) - Parenthetical - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common Stock, Shares, Issued | 170,000 | 170,000 |
Common Stock, Shares, Outstanding | 170,000 | 170,000 |
Voting Common Stock | ||
Common Stock, Shares, Issued | 1,700 | 1,700 |
Common Stock, Shares, Outstanding | 1,700 | 1,700 |
Nonvoting Common Stock | ||
Common Stock, Shares, Issued | 168,300 | 168,300 |
Common Stock, Shares, Outstanding | 168,300 | 168,300 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Details | |||||
Net Income (Loss) | $ 3,434,083 | $ 6,208,519 | $ 11,799,333 | $ 17,182,360 | |
Net changes related to available-for-sale securities | |||||
Unrealized gains (losses) during period | 2,286,627 | (4,517,009) | 13,465,571 | (11,147,420) | |
Income tax (provision) benefit | (479,362) | 948,700 | (2,808,551) | 3,116,306 | |
Net unrealized (losses) gains | 1,807,265 | (3,568,309) | 10,657,020 | (8,031,114) | |
Reclassification of (gains)/losses to Net Income (Loss) | [1] | 239,796 | 115,255 | 244,086 | 288,862 |
Other Comprehensive Income (Loss) | 1,567,469 | (3,683,564) | 10,412,934 | (8,319,976) | |
Total Comprehensive Income | $ 5,001,552 | $ 2,524,955 | $ 22,215,267 | $ 8,862,384 | |
[1] | Reclassified $303,539 to other operating expenses and $63,743 to provision for income taxes on the Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) during the three-month period ended September 30, 2019. Reclassified $115,255 to other operating expenses and $0 to provision for income taxes on the Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) during the three-month period ended September 30, 2018. Reclassified $308,970 to other operating expenses and $64,884 to provision for income taxes on the Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) during the nine-month period ended September 30, 2019. Reclassified $303,560 to other operating expenses and $14,697 to provision for income taxes on the Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) during the nine-month period ended September 30, 2018. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss | Total | |
Equity Balance, Starting at Dec. 31, 2017 | $ 170,000 | $ 227,329,870 | $ 4,596,132 | $ 232,096,002 | |
Shares Outstanding, Starting at Dec. 31, 2017 | 170,000 | ||||
Comprehensive Income (Loss): | |||||
Net Income (Loss) | $ 0 | 17,182,360 | 0 | ||
Other Comprehensive Income (Loss) | 0 | 0 | (9,111,999) | (8,319,976) | |
Total Comprehensive Income (Loss) | 0 | 0 | 0 | 8,070,361 | |
Cash Distributions Paid | $ 0 | (2,796,641) | 0 | (2,796,641) | |
Shares Outstanding, Ending at Sep. 30, 2018 | 170,000 | ||||
Equity Balance, Ending at Sep. 30, 2018 | $ 170,000 | 240,923,566 | (3,723,844) | 237,369,722 | |
Equity Balance, Starting at Jun. 30, 2018 | $ 170,000 | 236,198,947 | (40,280) | 236,328,667 | |
Shares Outstanding, Starting at Jun. 30, 2018 | 170,000 | ||||
Comprehensive Income (Loss): | |||||
Net Income (Loss) | $ 0 | 6,208,519 | 0 | ||
Other Comprehensive Income (Loss) | 0 | 0 | (3,683,564) | (3,683,564) | |
Total Comprehensive Income (Loss) | 0 | 0 | 0 | 2,524,955 | |
Cash Distributions Paid | $ 0 | (1,483,900) | 0 | (1,483,900) | |
Shares Outstanding, Ending at Sep. 30, 2018 | 170,000 | ||||
Equity Balance, Ending at Sep. 30, 2018 | $ 170,000 | 240,923,566 | (3,723,844) | 237,369,722 | |
Comprehensive Income (Loss): | |||||
Adjustment Resulting from the Adoption of Accounting Standard | [1] | 0 | (792,023) | 792,023 | 0 |
Equity Balance, Starting at Dec. 31, 2018 | $ 170,000 | 241,082,137 | (391,979) | 240,860,158 | |
Shares Outstanding, Starting at Dec. 31, 2018 | 170,000 | ||||
Comprehensive Income (Loss): | |||||
Net Income (Loss) | $ 0 | 11,799,333 | 0 | ||
Other Comprehensive Income (Loss) | 0 | 0 | 10,412,934 | 10,412,934 | |
Total Comprehensive Income (Loss) | 0 | 0 | 0 | 22,212,267 | |
Cash Distributions Paid | $ 0 | (2,696,082) | 0 | (2,696,082) | |
Shares Outstanding, Ending at Sep. 30, 2019 | 170,000 | ||||
Equity Balance, Ending at Sep. 30, 2019 | $ 170,000 | 250,185,388 | 10,020,955 | 260,376,343 | |
Equity Balance, Starting at Jun. 30, 2019 | $ 170,000 | 248,605,305 | 8,453,486 | 257,228,791 | |
Shares Outstanding, Starting at Jun. 30, 2019 | 170,000 | ||||
Comprehensive Income (Loss): | |||||
Net Income (Loss) | $ 0 | 3,434,083 | 0 | ||
Other Comprehensive Income (Loss) | 0 | 0 | 1,567,469 | 1,567,469 | |
Total Comprehensive Income (Loss) | 0 | 0 | 0 | 5,001,552 | |
Cash Distributions Paid | $ 0 | (1,854,000) | 0 | (1,854,000) | |
Shares Outstanding, Ending at Sep. 30, 2019 | 170,000 | ||||
Equity Balance, Ending at Sep. 30, 2019 | $ 170,000 | $ 250,185,388 | $ 10,020,955 | $ 260,376,343 | |
[1] | Note 1. |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | $ 11,799,333 | $ 17,182,360 |
Adjustments to reconcile Net Income (Loss) to net cash provided by operating activities: | ||
Provision for loan losses | 39,784,720 | 25,382,742 |
Depreciation and amortization | 3,651,447 | 3,461,538 |
Provision for deferred income taxes | 256,206 | 262,195 |
Other | (339,217) | (306,016) |
Decrease (increase) in miscellaneous other assets | 761,489 | 2,314,108 |
Decrease in other liablities | (1,235,936) | (3,336,855) |
Net Cash Provided by (Used in) Operating Activities | 54,678,042 | 44,960,072 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loans originated or purchased | (396,539,863) | (360,873,800) |
Loan payments | 310,621,362 | 281,512,528 |
Purchases of marketable debt securities | (3,265,479) | (27,308,528) |
Redemptions of marketable debt securities | 19,458,211 | 20,211,828 |
Fixed asset additions, net | (3,984,503) | (2,044,133) |
Fixed asset net proceeds from sales | 70,059 | 60,803 |
Net Cash Provided by (Used in) Investing Activities | (73,640,213) | (88,441,302) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase (decrease) in senior demand notes outstanding | 1,578,466 | 2,111,158 |
Advances on credit line | 135,737,281 | 16,225,907 |
Payments on credit line | (98,717,281) | (8,025,907) |
Commercial paper issued | 58,717,169 | 48,174,635 |
Commercial paper redeemed | (38,374,429) | (34,270,493) |
Subordinated debt securities issued | 4,712,414 | 4,543,350 |
Subordinated debt securities redeemed | (6,507,872) | (6,581,094) |
Dividends / Distributions | (2,696,082) | (2,796,641) |
Net Cash Provided by (Used in) Financing Activities | 54,449,666 | 19,380,915 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 35,487,495 | (24,100,315) |
CASH AND CASH EQUIVALENTS, beginning | 14,025,868 | 35,243,781 |
CASH AND CASH EQUIVALENTS, ending | 49,513,363 | 11,143,466 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid during the period for Interest | 14,013,622 | 9,982,942 |
Income Taxes Paid | 2,307,000 | 1,840,000 |
Non-cash Exchange of Investment Securities | $ 0 | $ 341,692 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 1 - Basis of Presentation | Note 1 – Basis of Presentation The accompanying unaudited condensed consolidated financial statements of 1 st In the opinion of Management of the Company, the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the Company's consolidated financial position as of September 30, 2019 and December 31, 2018, its consolidated results of operations and comprehensive income for the three and nine-month periods ended September 30, 2019 and 2018 and its consolidated cash flows for the nine months ended September 30, 2019 and 2018. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, the Company believes that the disclosures herein are adequate to make the information presented not misleading. The Company’s financial condition and results of operations as of and for the three- and nine-month periods ended September 30, 2019 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period. The preparation of financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at and as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The computation of earnings per share is self-evident from the accompanying Condensed Consolidated Statements of Income and Retained Earnings (Unaudited). The Company has no dilutive securities outstanding. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported shown in the condensed consolidated statements of cash flows: September 30, 2019 September 30, 2018 Cash and Cash Equivalents $ 41,517,031 $ 9,542,875 Restricted Cash 7,996,332 1,600,591 Total Cash, Cash Equivalents and Restricted Cash $ 49,513,363 $ 11,143,466 Recent Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 (“ASC 606”), “Revenue from Contracts with Customers”. Under the guidance, companies are required to recognize revenue when the seller satisfies a performance obligation, which would be when the buyer takes control of the good or service. The Company adopted this guidance using the “modified retrospective” method effective January 1, 2018; as such, the Company applied the guidance only to the most recent period presented in the financial statements. The Company categorizes its primary sources of revenue into three categories: (1) interest related revenues, (2) insurance related revenue and (3) revenue from contracts with customers. · · · Other revenues, as a whole, are immaterial to total revenues. There was no change to previously reported amounts from the cumulative effect of the adoption of ASC 606. In February 2016, the FASB issued ASU 2016-02, “Leases Topic (842): Leases.” This ASU supersedes existing guidance on accounting for leases in Leases (Topic 840). The update requires disclosures regarding key information about leasing arrangements and requires all leases for a leasee to be recognized on the balance sheet as a right-of-use asset and a corresponding lease liability. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize a right-of-use asset or lease liability. The Company adopted the new standard during the first quarter using the modified retrospective transition method resulting in the recording of a right-to-use asset of $29.7 million on the balance sheet and a corresponding liability. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. The Company utilized the package of practical expedients allowing the Company to not reassess whether a contract is or contains a lease, lease classification and initial direct costs. As part of the adoption of the accounting standard, the Company elected to not recognize short-term leases on the condensed consolidated balance sheet. All non-lease components, such as common area maintenance, were excluded. See Note 5. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses”. This ASU amends existing guidance to replace current generally accepted accounting principles used to measure a reporting company’s credit losses. The objective of the update is to provide financial statement users with more information regarding the expected credit losses on commitments to extend credit held by a reporting company at each reporting date. Amendments in the update replace the incurred losses and impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of information that supports credit loss estimates. The ASU is effective for annual and interim periods beginning after December 15, 2019. The Company is in the process of reviewing potential methods to calculate the expected credit losses and evaluating the impact this accounting standard is expected to have on our consolidated financial statements. There have been no updates to other recent accounting pronouncements described in our 2018 Annual Report and no new pronouncements that Management believes would have a material impact on the Company. |
Note 2 - Allowance For Loan Los
Note 2 - Allowance For Loan Losses | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 2 - Allowance For Loan Losses | Note 2 – Allowance for Loan Losses The allowance for loan losses is based on Management's evaluation of the inherent risks and changes in the composition of the Company's loan portfolio. Management’s approach to estimating and evaluating the allowance for loan losses is on a total portfolio level based on historical loss trends, bankruptcy trends, delinquency trends, the level of receivables at the balance sheet date, payment patterns and economic conditions primarily including, but not limited to, unemployment levels and gasoline prices. Historical loss trends are tracked on an on-going basis. The trend analysis includes statistical analysis of the correlation between loan date and charge off date, charge off statistics by the total loan portfolio, and charge off statistics by branch, division and state. If trends indicate an adjustment to the allowance for loan losses is warranted, Management will make what it considers to be appropriate adjustments. The level of receivables at the balance sheet date is reviewed and adjustments to the allowance for loan losses are made if Management determines increases or decreases in the level of receivables warrants an adjustment. The Company uses monthly unemployment statistics, and various other monthly or periodic economic statistics, published by departments of the U.S. government and other economic statistics providers to determine the economic component of the allowance for loan losses. Such allowance is, in the opinion of Management, sufficiently adequate for probable losses in the current loan portfolio. As the estimates used in determining the loan loss reserve are influenced by outside factors, such as consumer payment patterns and general economic conditions, there is uncertainty inherent in these estimates. Actual results could vary based on future changes in significant assumptions. Management does not disaggregate the Company’s loan portfolio by loan class when evaluating loan performance. The total portfolio is evaluated for credit losses based on graded contractual delinquency and other economic conditions. The Company classifies delinquent accounts at the end of each month according to the Company’s graded delinquency rules which includes the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories of 30-59 days past due, 60-89 days past due, or 90 or more days past due based on the Company’s graded delinquency policy. When a loan meets the Company’s charge-off policy, the loan is charged off, unless Management directs that it be retained as an active loan. In making this charge off evaluation, Management considers factors such as pending insurance, bankruptcy status and other indicators of collectability. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable. Management ceases accruing finance charges on loans that meet the Company’s non-accrual policy based on grade delinquency rules, generally when two payments remain unpaid on precomputed loans or when an interest-bearing loan is 60 days or more past due. Finance charges are then only recognized to the extent there is a loan payment received or when the account qualifies for return to accrual status. Accounts return to accrual status when the graded delinquency on a precomputed loan is less than two payments and on an interest-bearing loan when it is less than 60 days past due. There were no loans 60 days or more past due and still accruing interest at September 30, 2019 or December 31, 2018. The Company’s principal balances on non-accrual loans by loan class as of September 30, 2019 and December 31, 2018 are as follows: Loan Class September 30, 2019 December 31, 2018 Consumer Loans $ 30,738,299 $ 28,218,125 Real Estate Loans 1,264,462 1,189,848 Sales Finance Contracts 2,093,991 1,607,609 Total $ 34,096,752 $ 31,015,582 An age analysis of principal balances on past due loans, segregated by loan class, as of September 30, 2019 and December 31, 2018 follows: September 30, 2019 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Loans Consumer Loans $ 21,247,048 $ 11,241,713 $ 23,068,842 $ 55,557,603 Real Estate Loans 751,397 514,353 1,508,314 2,774,064 Sales Finance Contracts 1,202,522 766,169 1,561,036 3,529,727 Total $ 23,200,967 $ 12,522,235 $ 26,138,192 $ 61,861,394 December 31, 2018 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Loans Consumer Loans $ 17,186,773 $ 9,540,549 $ 20,260,825 $ 46,988,147 Real Estate Loans 762,705 329,915 1,142,368 2,234,988 Sales Finance Contracts 1,197,338 572,552 1,193,146 2,963,036 Total $ 19,146,816 $ 10,443,016 $ 22,596,339 $ 52,186,171 In addition to the delinquency rating analysis, the ratio of bankrupt accounts to the total loan portfolio is also used as a credit quality indicator. The ratio of bankrupt accounts outstanding to total principal loan balances outstanding at September 30, 2019 and December 31, 2018 was 2.19% and 2.09%, respectively. Nearly our entire loan portfolio consists of small homogeneous consumer loans (of the product types set forth in the table below) September 30, 2019 Principal Balance % Portfolio 9 Months Net Charge Offs % Net Charge Offs Consumer Loans $ 692,024,520 86.9 % $ 32,672,235 95.3 % Real Estate Loans 35,394,803 4.5 31,586 .1 Sales Finance Contracts 68,542,529 8.6 1,580,899 4.6 Total $ 795,961,852 100.0 % $ 34,284,720 100.0 % September 30, 2018 Principal Balance % Portfolio 9 Months Net Charge Offs (Recoveries) % Net Charge Offs Consumer Loans $ 591,483,591 88.4 % $ 25,432,686 96.4 % Real Estate Loans 29,914,177 4.5 14,646 .1 Sales Finance Contracts 47,453,102 7.1 935,410 3.5 Total $ 668,850,870 100.0 % $ 26,382,742 100.0 % Sales finance contracts are similar to consumer loans in nature of loan product, terms, customer base to whom these products are marketed, factors contributing to risk of loss and historical payment performance, and together with consumer loans, represented approximately 96% of principal balances outstanding in Company’s loan portfolio at both September 30, 2019 and 2018. As a result of these similarities, which have resulted in similar historical performance, consumer loans and sales finance contracts represent substantially all loan losses. Real estate loans and related losses have historically been insignificant, and, as a result, we do not stratify the loan portfolio for purposes of determining and evaluating our loan loss allowance. Due to the composition of the loan portfolio, the Company determines and monitors the allowance for loan losses on a collectively evaluated, single portfolio segment basis. Therefore, a roll forward of the allowance for loan loss activity at the portfolio segment level is the same as at the total portfolio level. We have not acquired any impaired loans with deteriorating quality during any period reported. The following table provides additional information on our allowance for loan losses based on a collective evaluation: Three Months Ended Nine Months Ended Sept. 30, 2019 Sept. 30, 2018 Sept. 30, 2019 Sept. 30, 2018 Allowance for Credit Losses: Beginning Balance $ 46,000,000 $ 41,000,000 $ 43,000,000 $ 42,500,000 Provision for Loan Losses 15,276,415 10,211,067 39,784,720 25,382,742 Charge-offs (17,191,431) (13,263,402) (46,918,301) (37,632,941) Recoveries 4,415,016 3,552,335 12,633,581 11,250,199 Ending balance; collectively evaluated for impairment $ 48,500,000 $ 41,500,000 $ 48,500,000 $ 41,500,000 Three Months Ended Nine Months Ended Sept. 30, 2019 Sept. 30, 2018 Sept. 30, 2019 Sept. 30, 2018 Finance receivables: Ending balance; collectively evaluated for impairment $ 795,961,852 $ 668,850,870 $ 795,961,852 $ 668,850,870 Troubled Debt Restructurings ("TDRs") represent loans on which the original terms have been modified as a result of the following conditions: (i) the restructuring constitutes a concession and (ii) the borrower is experiencing financial difficulties. Loan modifications by the Company involve payment alterations, interest rate concessions and/or reductions in the amount owed by the borrower. The following table presents a summary of loans that were restructured during the three months ended September 30, 2019. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 4,891 $ 14,728,552 $ 14,165,603 Real Estate Loans 17 166,560 166,560 Sales Finance Contracts 244 834,043 791,130 Total 5,152 $ 15,729,155 $ 15,123,293 The following table presents a summary of loans that were restructured during the three months ended September 30, 2018. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 4,162 $ 11,025,238 $ 10,702,334 Real Estate Loans 11 114,010 111,556 Sales Finance Contracts 155 414,895 399,751 Total 4,328 $ 11,554,143 $ 11,213,641 The following table presents a summary of loans that were restructured during the nine months ended September 30, 2019. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 13,681 $ 39,399,828 $ 37,818,108 Real Estate Loans 35 489,615 487,793 Sales Finance Contracts 616 2,192,823 2,087,154 Total 14,332 $ 42,082,266 $ 40,393,055 The following table presents a summary of loans that were restructured during the nine months ended September 30, 2018. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 11,667 $ 29,000,014 $ 28,038,080 Real Estate Loans 35 311,583 302,117 Sales Finance Contracts 420 1,132,852 1,089,140 Total 12,122 $ 30,444,449 $ 29,429,337 TDRs that occurred during the twelve months ended September 30, 2019 and subsequently defaulted during the three months ended September 30, 2019 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 2,070 $ 3,893,834 Real Estate Loans - - Sales Finance Contracts 64 187,803 Total 2,134 $ 4,081,637 TDRs that occurred during the twelve months ended September 30, 2018 and subsequently defaulted during the three months ended September 30, 2018 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 1,572 $ 2,445,911 Real Estate Loans 1 4,233 Sales Finance Contracts 56 104,284 Total 1,629 $ 2,554,428 TDRs that occurred during the twelve months ended September 30, 2019 and subsequently defaulted during the nine months ended September 30, 2019 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 4,932 $ 8,811,884 Real Estate Loans - - Sales Finance Contracts 183 466,862 Total 5,115 $ 9,278,746 TDRs that occurred during the twelve months ended September 30, 2018 and subsequently defaulted during the nine months ended September 30, 2018 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 3,817 $ 5,915,570 Real Estate Loans 1 4,233 Sales Finance Contracts 114 236,196 Total 3,932 $ 6,155,999 The level of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance of loan losses. |
Note 3 - Investment Securities
Note 3 - Investment Securities | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 3 - Investment Securities | Note 3 – Investment Securities Debt securities available-for-sale are carried at estimated fair value. Debt securities designated as "Held to Maturity" are carried at amortized cost based on Management's intent and ability to hold such securities to maturity. The amortized cost and estimated fair values of these debt securities were as follows: As of September 30, 2019 As of December 31, 2018 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Available-for-Sale Obligations of states and political subdivisions $ 197,134,136 $ 209,473,764 $ 212,613,724 $ 211,888,274 Corporate securities 130,316 402,965 130,316 311,442 $ 197,264,452 $ 209,876,729 $ 212,744,040 $ 212,199,716 Held to Maturity Obligations of states and political subdivisions $ 380,943 $ 391,046 $ 787,987 $ 793,283 Gross unrealized losses on investment securities totaled $20,442 and $4,415,799 at September 30, 2019 and December 31, 2018, respectively. The following table provides an analysis of investment securities in an unrealized loss position for which other-than-temporary impairments have not been recognized as of September 30, 2019 and December 31, 2018: Less than 12 Months 12 Months or Longer Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for Sale: Obligations of states and political subdivisions $ 1,208,938 $ (16,474)- $ 988,913 $ (3,968) $ 2,197,851 $ (20,442) Less than 12 Months 12 Months or Longer Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for Sale: Obligations of states and political subdivisions $ 23,436,091 $ (328,667) $ 63,308,903 $ (4,082,022) $ 86,744,994 $ (4,410,689) Held to Maturity: Obligations of states and political subdivisions 400,812 (5,110) - - 400,812 (5,110) Total $ 23,836,903 $ (333,777) $ 63,308,903 $ (4,082,022) $ 87,145,806 $ (4,415,799) The previous two tables represent 2 and 103 investments held by the Company at September 30, 2019 and December 31, 2018, respectively, the majority of which are rated “A” or higher by Moody’s and/or Standard & Poor’s. The unrealized losses on the Company’s investments listed in the above table were primarily the result of interest rate and market fluctuations. Based on the credit ratings of these investments, along with the consideration of whether the Company has the intent to sell or will be more likely than not required to sell the applicable investment before recovery of amortized cost basis, the Company does not consider the impairment of any of these investments to be other-than-temporary at September 30, 2019 or December 31, 2018. The Company’s insurance subsidiaries internally designate certain investments as restricted to cover their policy reserves and loss reserves. Funds are held in separate trusts for the benefit of each insurance subsidiary at U.S. Bank National Association ("US Bank"). US Bank serves as trustee under trust agreements with the Company's property and casualty insurance company subsidiary (“Frandisco P&C”), as grantor, and American Bankers Insurance Company of Florida, as beneficiary. At September 30, 2019, these trusts held $40.8 million in available-for-sale investment securities at market value. US Bank also serves as trustee under trust agreements with the Company's life insurance company subsidiary (“Frandisco Life”), as grantor, and American Bankers Life Assurance Company, as beneficiary. At September 30, 2019, these trusts held $19.2 million in available-for-sale investment securities at market value and $.4 million in held-to-maturity investment securities at amortized cost. The amounts required to be held in each trust change as required reserves change. All earnings on assets in the trusts are remitted to the Company's insurance subsidiaries. |
Note 4 - Fair Value
Note 4 - Fair Value | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 4 - Fair Value | Note 4 – Fair Value Under ASC No. 820, fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurements. Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. The following methods and assumptions are used by the Company in estimating fair values of its financial instruments: Cash and Cash Equivalents: Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between origination of the instruments and their expected realization. The estimate of the fair value of cash and cash equivalents is classified as a Level 1 financial asset. Loans: The carrying value of the Company’s direct cash loans and sales finance contracts approximates the fair value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company’s real estate loans approximates the carrying value since the interest rate charged by the Company approximates market rate. The estimate of fair value of loans is classified as a Level 3 financial asset. Marketable Debt Securities: The Company values Level 2 securities using various observable market inputs obtained from a pricing service. The pricing service prepares evaluations of fair value for our Level 2 securities using proprietary valuation models based on techniques such as multi-dimensional relational models, and series of matrices that use observable market inputs. The fair value measurements and disclosures guidance defines observable market inputs as the assumptions market participants would use in pricing the asset developed on market data obtained from sources independent of the Company. The extent of the use of each observable market input for a security depends on the type of security and the market conditions at the balance sheet date. Depending on the security, the priority of the use of observable market inputs may change as some observable market inputs may not be relevant or additional inputs may be necessary. The Company uses the following observable market inputs (“standard inputs”), listed in the approximate order of priority, in the pricing evaluation of Level 2 securities: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research data. State, municipalities and political subdivisions securities are priced by our pricing service using material event notices and new issue data inputs in addition to the standard inputs. See additional information, including the table below, regarding fair value under ASC No. 820, and the fair value measurement of available-for-sale marketable debt securities. Corporate Securities: The Company estimates the fair value of corporate securities with readily determinable fair values based on quoted prices observed in active markets; therefore, these investments are classified as Level 1. Senior Debt Securities: The carrying value of the Company’s senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected repayment. The estimate of fair value of senior debt securities is classified as a Level 2 financial liability. Subordinated Debt Securities: The carrying value of the Company’s variable rate subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. The estimate of fair value of subordinated debt securities is classified as a Level 2 financial liability. The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs and how the data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available-for-sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. We validate prices received using a variety of methods including, but not limited, to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported. Assets measured at fair value as of September 30, 2019 and December 31, 2018 were available-for-sale investment securities which are summarized below: Fair Value Measurements at Reporting Date Using Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable September 30, Assets Inputs Inputs Description 2019 (Level1) (Level2) (Level3) Corporate securities $ 402,965 $ 402,965 $ -- $ -- Obligations of states and political subdivisions 209,473,764 -- 209,473,764 -- Total $ 209,876,729 $ 402,965 $ 209,473,764 $ -- Fair Value Measurements at Reporting Date Using Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable December 31, Assets Inputs Inputs Description 2018 (Level1) (Level2) (Level3) Corporate securities $ 311,442 311,442 $ -- $ -- Obligations of states and political subdivisions 211,888,274 -- 211,888,274 -- Total $ 212,199,716 $ 311,442 $ 211,888,274 $ -- |
Note 5 - Leases
Note 5 - Leases | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 5 - Leases | Note 5 – Leases The Company is obligated under operating leases for its branch loan offices and home office locations. The operating leases are recorded as operating lease right-of-use (“ROU”) assets and operating lease liabilities. The ROU asset is included in other assets and the corresponding liability is included in accounts payable and accrued expenses on the Company’s condensed consolidated statement of financial position. ROU assets represent the Company’s right to use an underlying asset during the lease term and the operating lease liabilities represent the Company’s obligations for lease payments in accordance with the lease. Recognition of ROU assets and liabilities are recognized at the lease commitment based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commitment date or adoption date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the condensed consolidated statement of income. Remaining lease terms range from 1 to 10 years. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of Topic 842. Operating leases with a term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. At September 30, 2019, the operating lease ROU assets and liabilities were $30.3 million and $30.6 million, respectively. The table below summarizes our lease expense and other information related to the Company’s operating leases with respect to FASB ASC 842: Three Months Ended Sept. 30, 2019 Operating lease expense $ 1,697,444 Other Information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,653,642 Nine Months Ended Sept. 30, 2019 Operating lease expense $ 4,975,191 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 4,843,874 Weighted-average remaining lease term – operating leases (in years) 6.80 Weighted-average discount rate – operating leases 5.78 % Lease Maturity Schedule as of September 30, 2019: Amount Remainder of 2019 $ 1,691,811 2020 6,560,469 2021 5,867,403 2022 5,254,912 2023 4,461,878 2024 and beyond 13,159,595 Total 36,996,068 Less: Interest (6,365,567) Present Value of Lease Liability $ 30,630,501 Lease maturity schedule as of December 31, 2018: Amount 2019 $ 7,015,801 2020 5,930,343 2021 4,361,351 2022 2,836,961 2023 1,357,035 2024 and beyond 103,754 Total $ 21,605,245 |
Note 6 - Commitments and Contin
Note 6 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 6 - Commitments and Contingencies | Note 6 – Commitments and Contingencies The Company is, and expects in the future to be, involved in various legal proceedings incidental to its business from time to time. Management makes provisions in its financial statements for legal, regulatory, and other contingencies when, in the opinion of Management, a loss is probable and reasonably estimable. At September 30, 2019, no such known proceedings or amounts, individually or in the aggregate, were expected to have a material impact on the Company or its financial condition or results of operations. |
Note 7 - Income Taxes
Note 7 - Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 7 - Income Taxes | Note 7 – Income Taxes The Company has elected to be, and is, treated as an S corporation for income tax reporting purposes. Taxable income or loss of an S corporation is passed through to and included in the individual tax returns of the shareholders of the Company, rather than being taxed at the corporate level. Notwithstanding this election, income taxes are reported for, and paid by, the Company's insurance subsidiaries, as they are not allowed by law to be treated as S corporations, as well as for the Company in Louisiana, which does not recognize S corporation status. On December 22, 2017, the adoption of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) resulted in significant changes to the U.S. tax code, including a reduction in the maximum federal corporate income tax rate from 35% to 21%, effective January 1, 2018. The tax rates of the Company’s insurance subsidiaries were also below statutory rates due to investments in tax exempt bonds. Effective income tax rates were approximately 22% and 19% during the three- and nine-month periods ended September 30, 2019, respectively, compared to 12% during the same periods in 2018. During the current year, the S Corporation has incurred a loss, which lowered the overall pre-tax income of the Company resulting in a higher effective tax rate for the 2019 reporting periods. |
Note 8 - Credit Agreement
Note 8 - Credit Agreement | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 8 - Credit Agreement | Note 8 – Credit Agreement Effective September 11, 2009, the Company entered into a credit facility with Wells Fargo Preferred Capital, Inc. The credit agreement provides for borrowings of up to $100.0 million or 70% of the Company's net finance receivables (as defined in the credit agreement), whichever is less and has a maturity date of December 31, 2019. Outstanding borrowings on the credit line were $90.2 million and $53.2 million at September 30, 2019 and December 31, 2018, respectively. Available borrowings under the credit agreement were $9.8 million and $46.8 million at September 30, 2019 and December 31, 2018, at interest rates of 5.14% and 5.74%, respectively. The credit agreement contains covenants customary for financing transactions of this type. At September 30, 2019, the Company believes it was in compliance with all covenants. The Company and Wells Fargo are currently in negotiations on an amended and restated loan and security agreement. The new agreement will increase available borrowings and extend the maturity date on the current agreement. |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 9 - Related Party Transactions | Note 9 – Related Party Transactions The Company engages from time to time in transactions with related parties. The Company has an outstanding loan to a real estate development partnership of which one of the Company’s beneficial owners is a partner. Balance on the commercial loan (including principal and accrued interest) was $1,630,018 at September 30, 2019. The Company also has a loan for premium payments to a trust of an executive officer’s irrevocable life insurance policy. The principal balance on this loan at September 30, 2019 was $417,614. Please refer to the disclosure contained in Note 11 “Related Party Transactions” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2018 for additional information on related party transactions. |
Note 10 - Segment Financial Inf
Note 10 - Segment Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Note 10 - Segment Financial Information | Note 10 – Segment Financial Information The Company discloses segment information in accordance with FASB ASC 280. FASB ASC 280 requires companies to determine segments based on how management makes decisions about allocating resources to segments and measuring their performance. The Company maintains eight operating divisions, with one reportable business segment. The Company has eight divisions which comprise its operations: Division I through Division V, Division VII, Division VIII and Division IX. Each division consists of branch offices that are aggregated based on vice president responsibility and geographic location. Division I consists of offices located in South Carolina. Offices in North Georgia comprises Division II, Division III consists of offices in South Georgia and Division IX consists of offices in West Georgia. Division IV represents our Alabama offices, Division V represents our Mississippi offices, Division VII represents our Tennessee offices and Division VIII represents our Louisiana offices. Accounting policies of each of the divisions are the same as those for the Company as a whole. Performance is measured based on objectives set at the beginning of each year and include various factors such as division profit, growth in earning assets and delinquency and loan loss management. All division revenues result from transactions with third parties. The Company does not allocate income taxes or corporate headquarter expenses to the divisions. The following table summarizes revenues, profit and assets by each of the Company's divisions. Also, in accordance therewith, a reconciliation to consolidated revenues and net income is provided. Division Division Division Division Division Division Division Division I II III IV V VII VIII IX Total (in thousands) Division Revenues: 3 Months ended 9/30/2019 $ 9,838 $ 9,363 $ 9,067 $ 9,580 $ 5,852 $ 5,773 $ 5,212 $ 8,636 $ 63,321 3 Months ended 9/30/2018 $ 7,900 $ 8,389 $ 8,435 $ 8,729 $ 5,250 $ 4,116 $ 4,170 $ 7,529 $ 54,518 9 Months ended 9/30/2019 $ 27,749 $ 27,357 $ 26,565 $ 27,985 $ 17,044 $ 16,455 $ 14,752 $ 25,188 $ 183,095 9 Months ended 9/30/2018 $ 22,435 $ 24,405 $ 24,385 $ 25,789 $ 15,422 $ 11,318 $ 12,070 $ 21,934 $ 157,758 Division Profit: 3 Months ended 9/30/2019 $ 3,828 $ 4,103 $ 3,759 $ 3,044 $ 1,535 $ 1,153 $ 1,180 $ 3,165 $ 21,767 3 Months ended 9/30/2018 $ 2,907 $ 3,715 $ 3,521 $ 3,126 $ 1,539 $ 864 $ 943 $ 2,752 $ 19,367 9 Months ended 9/30/2019 $ 10,049 $ 11,379 $ 11,327 $ 9,113 $ 4,557 $ 3,617 $ 3,444 $ 9,146 $ 62,632 9 Months ended 9/30/2018 $ 7,876 $ 10,269 $ 10,313 $ 9,216 $ 4,806 $ 1,882 $ 2,727 $ 8,141 $ 55,230 Division Assets: 9/30/2019 $ 101,419 $ 104,701 $ 98,198 $ 119,514 $ 63,258 $ 69,186 $ 55,646 $ 94,842 $ 706,764 12/31/2017 $ 86,315 $ 96,884 $ 89,411 $ 107,401 $ 56,240 $ 55,032 $ 45,518 $ 84,381 $ 621,182 3 Months Ended 9/30/2019 3 Months Ended 9/30/2018 9 Months Ended 9/30/2019 9 Months Ended 9/30/2018 (in 000’s) (in 000’s) (in 000’s) (in 000’s) Reconciliation of Revenues: Total revenues from reportable divisions $ 63,321 $ 54,518 $ 183,095 $ 157,758 Corporate finance charges earned, not allocated to divisions 41 28 106 79 Corporate investment income earned, not allocated to divisions 1,836 1,789 5,508 5,306 Timing difference of insurance income allocation to divisions 2,018 2,185 5,421 5,169 Other revenue not allocated to divisions 2 2 9 34 Consolidated Revenues $ 67,218 $ 58,522 $ 194,139 $ 168,346 3 Months Ended 9/30/2019 3 Months Ended 9/30/2018 9 Months Ended 9/30/2019 9 Months Ended 9/30/2018 (in 000’s) (in 000’s) (in 000’s) (in 000’s) Reconciliation of Profit: Profit per division $ 21,767 $ 19,366 $ 62,632 $ 55,229 Corporate earnings not allocated 3,896 4,004 11,043 10,588 Corporate expenses not allocated (21,246) (16,329) (59,169) (46,224) Income taxes not allocated (983) (833) (2,707) (2,411) Consolidated Net Income $ 3,434 $ 6,208 $ 11,799 $ 17,182 |
Note 1 - Basis of Presentation_
Note 1 - Basis of Presentation: Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Recent Accounting Pronouncements: | Recent Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 (“ASC 606”), “Revenue from Contracts with Customers”. Under the guidance, companies are required to recognize revenue when the seller satisfies a performance obligation, which would be when the buyer takes control of the good or service. The Company adopted this guidance using the “modified retrospective” method effective January 1, 2018; as such, the Company applied the guidance only to the most recent period presented in the financial statements. The Company categorizes its primary sources of revenue into three categories: (1) interest related revenues, (2) insurance related revenue and (3) revenue from contracts with customers. · · · Other revenues, as a whole, are immaterial to total revenues. There was no change to previously reported amounts from the cumulative effect of the adoption of ASC 606. In February 2016, the FASB issued ASU 2016-02, “Leases Topic (842): Leases.” This ASU supersedes existing guidance on accounting for leases in Leases (Topic 840). The update requires disclosures regarding key information about leasing arrangements and requires all leases for a leasee to be recognized on the balance sheet as a right-of-use asset and a corresponding lease liability. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize a right-of-use asset or lease liability. The Company adopted the new standard during the first quarter using the modified retrospective transition method resulting in the recording of a right-to-use asset of $29.7 million on the balance sheet and a corresponding liability. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. The Company utilized the package of practical expedients allowing the Company to not reassess whether a contract is or contains a lease, lease classification and initial direct costs. As part of the adoption of the accounting standard, the Company elected to not recognize short-term leases on the condensed consolidated balance sheet. All non-lease components, such as common area maintenance, were excluded. See Note 5. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses”. This ASU amends existing guidance to replace current generally accepted accounting principles used to measure a reporting company’s credit losses. The objective of the update is to provide financial statement users with more information regarding the expected credit losses on commitments to extend credit held by a reporting company at each reporting date. Amendments in the update replace the incurred losses and impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of information that supports credit loss estimates. The ASU is effective for annual and interim periods beginning after December 15, 2019. The Company is in the process of reviewing potential methods to calculate the expected credit losses and evaluating the impact this accounting standard is expected to have on our consolidated financial statements. There have been no updates to other recent accounting pronouncements described in our 2018 Annual Report and no new pronouncements that Management believes would have a material impact on the Company. |
Note 1 - Basis of Presentatio_2
Note 1 - Basis of Presentation: Schedule of reconciliation of cash, cash equivalents and restricted cash (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | September 30, 2019 September 30, 2018 Cash and Cash Equivalents $ 41,517,031 $ 9,542,875 Restricted Cash 7,996,332 1,600,591 Total Cash, Cash Equivalents and Restricted Cash $ 49,513,363 $ 11,143,466 |
Note 2 - Allowance For Loan L_2
Note 2 - Allowance For Loan Losses: Schedule of Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Allowance for Loan Losses | Loan Class September 30, 2019 December 31, 2018 Consumer Loans $ 30,738,299 $ 28,218,125 Real Estate Loans 1,264,462 1,189,848 Sales Finance Contracts 2,093,991 1,607,609 Total $ 34,096,752 $ 31,015,582 |
Note 2 - Allowance For Loan L_3
Note 2 - Allowance For Loan Losses: Past Due Financing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Past Due Financing Receivables | September 30, 2019 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Loans Consumer Loans $ 21,247,048 $ 11,241,713 $ 23,068,842 $ 55,557,603 Real Estate Loans 751,397 514,353 1,508,314 2,774,064 Sales Finance Contracts 1,202,522 766,169 1,561,036 3,529,727 Total $ 23,200,967 $ 12,522,235 $ 26,138,192 $ 61,861,394 December 31, 2018 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Loans Consumer Loans $ 17,186,773 $ 9,540,549 $ 20,260,825 $ 46,988,147 Real Estate Loans 762,705 329,915 1,142,368 2,234,988 Sales Finance Contracts 1,197,338 572,552 1,193,146 2,963,036 Total $ 19,146,816 $ 10,443,016 $ 22,596,339 $ 52,186,171 |
Note 2 - Allowance For Loan L_4
Note 2 - Allowance For Loan Losses: Schedule of Loans and Financing Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Loans and Financing Receivable | September 30, 2019 Principal Balance % Portfolio 9 Months Net Charge Offs % Net Charge Offs Consumer Loans $ 692,024,520 86.9 % $ 32,672,235 95.3 % Real Estate Loans 35,394,803 4.5 31,586 .1 Sales Finance Contracts 68,542,529 8.6 1,580,899 4.6 Total $ 795,961,852 100.0 % $ 34,284,720 100.0 % September 30, 2018 Principal Balance % Portfolio 9 Months Net Charge Offs (Recoveries) % Net Charge Offs Consumer Loans $ 591,483,591 88.4 % $ 25,432,686 96.4 % Real Estate Loans 29,914,177 4.5 14,646 .1 Sales Finance Contracts 47,453,102 7.1 935,410 3.5 Total $ 668,850,870 100.0 % $ 26,382,742 100.0 % |
Note 2 - Allowance For Loan L_5
Note 2 - Allowance For Loan Losses: Allowance for Credit Losses on Financing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Allowance for Credit Losses on Financing Receivables | Three Months Ended Nine Months Ended Sept. 30, 2019 Sept. 30, 2018 Sept. 30, 2019 Sept. 30, 2018 Allowance for Credit Losses: Beginning Balance $ 46,000,000 $ 41,000,000 $ 43,000,000 $ 42,500,000 Provision for Loan Losses 15,276,415 10,211,067 39,784,720 25,382,742 Charge-offs (17,191,431) (13,263,402) (46,918,301) (37,632,941) Recoveries 4,415,016 3,552,335 12,633,581 11,250,199 Ending balance; collectively evaluated for impairment $ 48,500,000 $ 41,500,000 $ 48,500,000 $ 41,500,000 Three Months Ended Nine Months Ended Sept. 30, 2019 Sept. 30, 2018 Sept. 30, 2019 Sept. 30, 2018 Finance receivables: Ending balance; collectively evaluated for impairment $ 795,961,852 $ 668,850,870 $ 795,961,852 $ 668,850,870 |
Note 2 - Allowance For Loan L_6
Note 2 - Allowance For Loan Losses: Troubled Debt Restructurings on Financing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Troubled Debt Restructurings on Financing Receivables | Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 4,891 $ 14,728,552 $ 14,165,603 Real Estate Loans 17 166,560 166,560 Sales Finance Contracts 244 834,043 791,130 Total 5,152 $ 15,729,155 $ 15,123,293 The following table presents a summary of loans that were restructured during the three months ended September 30, 2018. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 4,162 $ 11,025,238 $ 10,702,334 Real Estate Loans 11 114,010 111,556 Sales Finance Contracts 155 414,895 399,751 Total 4,328 $ 11,554,143 $ 11,213,641 The following table presents a summary of loans that were restructured during the nine months ended September 30, 2019. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 13,681 $ 39,399,828 $ 37,818,108 Real Estate Loans 35 489,615 487,793 Sales Finance Contracts 616 2,192,823 2,087,154 Total 14,332 $ 42,082,266 $ 40,393,055 The following table presents a summary of loans that were restructured during the nine months ended September 30, 2018. Number Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Consumer Loans 11,667 $ 29,000,014 $ 28,038,080 Real Estate Loans 35 311,583 302,117 Sales Finance Contracts 420 1,132,852 1,089,140 Total 12,122 $ 30,444,449 $ 29,429,337 TDRs that occurred during the twelve months ended September 30, 2019 and subsequently defaulted during the three months ended September 30, 2019 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 2,070 $ 3,893,834 Real Estate Loans - - Sales Finance Contracts 64 187,803 Total 2,134 $ 4,081,637 TDRs that occurred during the twelve months ended September 30, 2018 and subsequently defaulted during the three months ended September 30, 2018 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 1,572 $ 2,445,911 Real Estate Loans 1 4,233 Sales Finance Contracts 56 104,284 Total 1,629 $ 2,554,428 TDRs that occurred during the twelve months ended September 30, 2019 and subsequently defaulted during the nine months ended September 30, 2019 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 4,932 $ 8,811,884 Real Estate Loans - - Sales Finance Contracts 183 466,862 Total 5,115 $ 9,278,746 TDRs that occurred during the twelve months ended September 30, 2018 and subsequently defaulted during the nine months ended September 30, 2018 are listed below. Number Loans Pre-Modification Recorded Investment Consumer Loans 3,817 $ 5,915,570 Real Estate Loans 1 4,233 Sales Finance Contracts 114 236,196 Total 3,932 $ 6,155,999 |
Note 3 - Investment Securities_
Note 3 - Investment Securities: Schedule of amortized cost and estimated fair values of debt securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of amortized cost and estimated fair values of debt securities | As of September 30, 2019 As of December 31, 2018 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Available-for-Sale Obligations of states and political subdivisions $ 197,134,136 $ 209,473,764 $ 212,613,724 $ 211,888,274 Corporate securities 130,316 402,965 130,316 311,442 $ 197,264,452 $ 209,876,729 $ 212,744,040 $ 212,199,716 Held to Maturity Obligations of states and political subdivisions $ 380,943 $ 391,046 $ 787,987 $ 793,283 |
Note 3 - Investment Securitie_2
Note 3 - Investment Securities: Schedule of Investment Securities Fair Value and Unrealized Losses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Investment Securities Fair Value and Unrealized Losses | Less than 12 Months 12 Months or Longer Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for Sale: Obligations of states and political subdivisions $ 1,208,938 $ (16,474)- $ 988,913 $ (3,968) $ 2,197,851 $ (20,442) Less than 12 Months 12 Months or Longer Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for Sale: Obligations of states and political subdivisions $ 23,436,091 $ (328,667) $ 63,308,903 $ (4,082,022) $ 86,744,994 $ (4,410,689) Held to Maturity: Obligations of states and political subdivisions 400,812 (5,110) - - 400,812 (5,110) Total $ 23,836,903 $ (333,777) $ 63,308,903 $ (4,082,022) $ 87,145,806 $ (4,415,799) |
Note 4 - Fair Value_ Fair Value
Note 4 - Fair Value: Fair Value Measurements, by Fair Value hierarchy (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Fair Value Measurements, by Fair Value hierarchy | Fair Value Measurements at Reporting Date Using Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable September 30, Assets Inputs Inputs Description 2019 (Level1) (Level2) (Level3) Corporate securities $ 402,965 $ 402,965 $ -- $ -- Obligations of states and political subdivisions 209,473,764 -- 209,473,764 -- Total $ 209,876,729 $ 402,965 $ 209,473,764 $ -- Fair Value Measurements at Reporting Date Using Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable December 31, Assets Inputs Inputs Description 2018 (Level1) (Level2) (Level3) Corporate securities $ 311,442 311,442 $ -- $ -- Obligations of states and political subdivisions 211,888,274 -- 211,888,274 -- Total $ 212,199,716 $ 311,442 $ 211,888,274 $ -- |
Note 5 - Leases_ Schedule of Le
Note 5 - Leases: Schedule of Lease expense and other information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Lease expense and other information | Three Months Ended Sept. 30, 2019 Operating lease expense $ 1,697,444 Other Information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,653,642 Nine Months Ended Sept. 30, 2019 Operating lease expense $ 4,975,191 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 4,843,874 Weighted-average remaining lease term – operating leases (in years) 6.80 Weighted-average discount rate – operating leases 5.78 % Lease Maturity Schedule as of September 30, 2019: Amount Remainder of 2019 $ 1,691,811 2020 6,560,469 2021 5,867,403 2022 5,254,912 2023 4,461,878 2024 and beyond 13,159,595 Total 36,996,068 Less: Interest (6,365,567) Present Value of Lease Liability $ 30,630,501 Lease maturity schedule as of December 31, 2018: Amount 2019 $ 7,015,801 2020 5,930,343 2021 4,361,351 2022 2,836,961 2023 1,357,035 2024 and beyond 103,754 Total $ 21,605,245 |
Note 10 - Segment Financial I_2
Note 10 - Segment Financial Information: Schedule of Segment Reporting Information, by Segment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Segment Reporting Information, by Segment | Division Division Division Division Division Division Division Division I II III IV V VII VIII IX Total (in thousands) Division Revenues: 3 Months ended 9/30/2019 $ 9,838 $ 9,363 $ 9,067 $ 9,580 $ 5,852 $ 5,773 $ 5,212 $ 8,636 $ 63,321 3 Months ended 9/30/2018 $ 7,900 $ 8,389 $ 8,435 $ 8,729 $ 5,250 $ 4,116 $ 4,170 $ 7,529 $ 54,518 9 Months ended 9/30/2019 $ 27,749 $ 27,357 $ 26,565 $ 27,985 $ 17,044 $ 16,455 $ 14,752 $ 25,188 $ 183,095 9 Months ended 9/30/2018 $ 22,435 $ 24,405 $ 24,385 $ 25,789 $ 15,422 $ 11,318 $ 12,070 $ 21,934 $ 157,758 Division Profit: 3 Months ended 9/30/2019 $ 3,828 $ 4,103 $ 3,759 $ 3,044 $ 1,535 $ 1,153 $ 1,180 $ 3,165 $ 21,767 3 Months ended 9/30/2018 $ 2,907 $ 3,715 $ 3,521 $ 3,126 $ 1,539 $ 864 $ 943 $ 2,752 $ 19,367 9 Months ended 9/30/2019 $ 10,049 $ 11,379 $ 11,327 $ 9,113 $ 4,557 $ 3,617 $ 3,444 $ 9,146 $ 62,632 9 Months ended 9/30/2018 $ 7,876 $ 10,269 $ 10,313 $ 9,216 $ 4,806 $ 1,882 $ 2,727 $ 8,141 $ 55,230 Division Assets: 9/30/2019 $ 101,419 $ 104,701 $ 98,198 $ 119,514 $ 63,258 $ 69,186 $ 55,646 $ 94,842 $ 706,764 12/31/2017 $ 86,315 $ 96,884 $ 89,411 $ 107,401 $ 56,240 $ 55,032 $ 45,518 $ 84,381 $ 621,182 3 Months Ended 9/30/2019 3 Months Ended 9/30/2018 9 Months Ended 9/30/2019 9 Months Ended 9/30/2018 (in 000Â’s) (in 000Â’s) (in 000Â’s) (in 000Â’s) Reconciliation of Revenues: Total revenues from reportable divisions $ 63,321 $ 54,518 $ 183,095 $ 157,758 Corporate finance charges earned, not allocated to divisions 41 28 106 79 Corporate investment income earned, not allocated to divisions 1,836 1,789 5,508 5,306 Timing difference of insurance income allocation to divisions 2,018 2,185 5,421 5,169 Other revenue not allocated to divisions 2 2 9 34 Consolidated Revenues $ 67,218 $ 58,522 $ 194,139 $ 168,346 3 Months Ended 9/30/2019 3 Months Ended 9/30/2018 9 Months Ended 9/30/2019 9 Months Ended 9/30/2018 (in 000Â’s) (in 000Â’s) (in 000Â’s) (in 000Â’s) Reconciliation of Profit: Profit per division $ 21,767 $ 19,366 $ 62,632 $ 55,229 Corporate earnings not allocated 3,896 4,004 11,043 10,588 Corporate expenses not allocated (21,246) (16,329) (59,169) (46,224) Income taxes not allocated (983) (833) (2,707) (2,411) Consolidated Net Income $ 3,434 $ 6,208 $ 11,799 $ 17,182 |
Note 1 - Basis of Presentatio_3
Note 1 - Basis of Presentation: Schedule of reconciliation of cash, cash equivalents and restricted cash (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Details | ||
Cash and Cash Equivalents | $ 41,517,031 | $ 9,542,875 |
Restricted Cash | 7,996,332 | 1,600,591 |
Total Cash, Cash Equivalents and Restricted Cash | $ 49,513,363 | $ 11,143,466 |
Note 2 - Allowance For Loan L_7
Note 2 - Allowance For Loan Losses (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Details | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | $ 0 | $ 0 |
Ratio of bankrupt accounts to total principal loan balances | 2.19% | 2.09% |
Note 2 - Allowance For Loan L_8
Note 2 - Allowance For Loan Losses: Schedule of Allowance for Loan Losses (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Cosumer Loans | ||
Financing Receivable, Nonaccrual | $ 30,738,299 | $ 28,218,125 |
Real Estate Loans | ||
Financing Receivable, Nonaccrual | 1,264,462 | 1,189,848 |
Sales Finance Contracts | ||
Financing Receivable, Nonaccrual | 2,093,991 | 1,607,609 |
Financing Receivable, Nonaccrual | $ 34,096,752 | $ 31,015,582 |
Note 2 - Allowance For Loan L_9
Note 2 - Allowance For Loan Losses: Past Due Financing Receivables (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Cosumer Loans | ||
Financing Receivable, Past Due | $ 55,557,603 | $ 46,988,147 |
Real Estate Loans | ||
Financing Receivable, Past Due | 2,774,064 | 2,234,988 |
Sales Finance Contracts | ||
Financing Receivable, Past Due | 3,529,727 | 2,963,036 |
Financing Receivable, Past Due | 61,861,394 | 52,186,171 |
Financial Asset, 30 to 59 Days Past Due | Cosumer Loans | ||
Financing Receivable, Past Due | 21,247,048 | 17,186,773 |
Financial Asset, 30 to 59 Days Past Due | Real Estate Loans | ||
Financing Receivable, Past Due | 751,397 | 762,705 |
Financial Asset, 30 to 59 Days Past Due | Sales Finance Contracts | ||
Financing Receivable, Past Due | 1,202,522 | 1,197,338 |
Financial Asset, 30 to 59 Days Past Due | ||
Financing Receivable, Past Due | 23,200,967 | 19,146,816 |
Financial Asset, 60 to 89 Days Past Due | Cosumer Loans | ||
Financing Receivable, Past Due | 11,241,713 | 9,540,549 |
Financial Asset, 60 to 89 Days Past Due | Real Estate Loans | ||
Financing Receivable, Past Due | 514,353 | 329,915 |
Financial Asset, 60 to 89 Days Past Due | Sales Finance Contracts | ||
Financing Receivable, Past Due | 766,169 | 572,552 |
Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due | 12,522,235 | 10,443,016 |
Financial Asset, Equal to or Greater than 90 Days Past Due | Cosumer Loans | ||
Financing Receivable, Past Due | 23,068,842 | 20,260,825 |
Financial Asset, Equal to or Greater than 90 Days Past Due | Real Estate Loans | ||
Financing Receivable, Past Due | 1,508,314 | 1,142,368 |
Financial Asset, Equal to or Greater than 90 Days Past Due | Sales Finance Contracts | ||
Financing Receivable, Past Due | 1,561,036 | 1,193,146 |
Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Financing Receivable, Past Due | $ 26,138,192 | $ 22,596,339 |
Note 2 - Allowance For Loan _10
Note 2 - Allowance For Loan Losses: Schedule of Loans and Financing Receivable (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Financing Receivable, before Allowance for Credit Loss | $ 795,961,852 | $ 668,850,870 |
Financing Receivable, percent of portfolio | 100.00% | 100.00% |
Financing Receivable, 3-months net charge-offs | $ 34,284,720 | $ 26,382,742 |
Financing Receivable, percent net charge-offs | 100.00% | 100.00% |
Cosumer Loans | ||
Financing Receivable, before Allowance for Credit Loss | $ 692,024,520 | $ 591,483,591 |
Financing Receivable, percent of portfolio | 86.90% | 88.40% |
Financing Receivable, 3-months net charge-offs | $ 32,672,235 | $ 25,432,686 |
Financing Receivable, percent net charge-offs | 95.30% | 96.40% |
Real Estate Loans | ||
Financing Receivable, before Allowance for Credit Loss | $ 35,394,803 | $ 29,914,177 |
Financing Receivable, percent of portfolio | 4.50% | 4.50% |
Financing Receivable, 3-months net charge-offs | $ 31,586 | $ 14,646 |
Financing Receivable, percent net charge-offs | 0.10% | 0.10% |
Sales Finance Contracts | ||
Financing Receivable, before Allowance for Credit Loss | $ 68,542,529 | $ 47,453,102 |
Financing Receivable, percent of portfolio | 8.60% | 7.10% |
Financing Receivable, 3-months net charge-offs | $ 1,580,899 | $ 935,410 |
Financing Receivable, percent net charge-offs | 4.60% | 3.50% |
Note 2 - Allowance For Loan _11
Note 2 - Allowance For Loan Losses: Allowance for Credit Losses on Financing Receivables (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
Loans and Leases Receivable, Allowance, Beginning Balance | $ 46,000,000 | $ 41,000,000 | $ 43,000,000 | $ 42,500,000 |
Provision for Loan, Lease, and Other Losses | 15,276,415 | 10,211,067 | 39,784,720 | 25,382,742 |
Financing Receivable, Allowance for Credit Loss, Writeoff | (17,191,431) | (13,263,402) | (46,918,301) | (37,632,941) |
Financing Receivable, Allowance for Credit Loss, Recovery | 4,415,016 | 3,552,335 | 12,633,581 | 11,250,199 |
Loans and Leases Receivable, Allowance, collectively evaluated for impairment | 48,500,000 | 41,500,000 | 48,500,000 | 41,500,000 |
Financing Receivable, Collectively Evaluated for Impairment | $ 795,961,852 | $ 668,850,870 | $ 795,961,852 | $ 668,850,870 |
Note 2 - Allowance For Loan _12
Note 2 - Allowance For Loan Losses: Troubled Debt Restructurings on Financing Receivables (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Current 12 months | ||||
Financing Receivable, Modifications, Number of Contracts | 5,152 | 4,328 | 14,332 | 12,122 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 15,729,155 | $ 11,554,143 | $ 42,082,266 | $ 30,444,449 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 15,123,293 | $ 11,213,641 | $ 40,393,055 | $ 29,429,337 |
Current 12 months | Cosumer Loans | ||||
Financing Receivable, Modifications, Number of Contracts | 4,891 | 4,162 | 13,681 | 11,667 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 14,728,552 | $ 11,025,238 | $ 39,399,828 | $ 29,000,014 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 14,165,603 | $ 10,702,334 | $ 37,818,108 | $ 28,038,080 |
Current 12 months | Real Estate Loans | ||||
Financing Receivable, Modifications, Number of Contracts | 17 | 11 | 35 | 35 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 166,560 | $ 114,010 | $ 489,615 | $ 311,583 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 166,560 | $ 111,556 | $ 487,793 | $ 302,117 |
Current 12 months | Sales Finance Contracts | ||||
Financing Receivable, Modifications, Number of Contracts | 244 | 155 | 616 | 420 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 834,043 | $ 414,895 | $ 2,192,823 | $ 1,132,852 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 791,130 | $ 399,751 | $ 2,087,154 | $ 1,089,140 |
Previous 12 months | ||||
Financing Receivable, Modifications, Number of Contracts | 2,134 | 1,629 | 5,115 | 3,932 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 4,081,637 | $ 2,554,428 | $ 9,278,746 | $ 6,155,999 |
Previous 12 months | Cosumer Loans | ||||
Financing Receivable, Modifications, Number of Contracts | 2,070 | 1,572 | 4,932 | 3,817 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 3,893,834 | $ 2,445,911 | $ 8,811,884 | $ 5,915,570 |
Previous 12 months | Real Estate Loans | ||||
Financing Receivable, Modifications, Number of Contracts | 0 | 1 | 0 | 1 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 0 | $ 4,233 | $ 0 | $ 4,233 |
Previous 12 months | Sales Finance Contracts | ||||
Financing Receivable, Modifications, Number of Contracts | 64 | 56 | 183 | 114 |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 187,803 | $ 104,284 | $ 466,862 | $ 236,196 |
Note 3 - Investment Securities
Note 3 - Investment Securities (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Details | ||
Basis for Valuation, Debt Securities | Debt securities available-for-sale are carried at estimated fair value. Debt securities designated as 'Held to Maturity' are carried at amortized cost based on Management's intent and ability to hold such securities to maturity | |
Gross unrealized losses on investment securities | $ 20,442 | $ 4,415,799 |
Note 3 - Investment Securitie_3
Note 3 - Investment Securities: Schedule of amortized cost and estimated fair values of debt securities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
US States and Political Subdivisions Debt Securities | ||
Available-for-sale Securities, Amortized Cost Basis | $ 197,134,136 | $ 212,613,724 |
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 209,473,764 | 211,888,274 |
Held to Maturity, at amortized cost | 380,943 | 787,987 |
Debt Securities, Held-to-maturity, Fair Value | 391,046 | 793,283 |
Corporate Debt Securities | ||
Available-for-sale Securities, Amortized Cost Basis | 130,316 | 130,316 |
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 402,965 | 311,442 |
Available-for-sale Securities, Amortized Cost Basis | 197,264,452 | 212,744,040 |
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 209,876,729 | 212,199,716 |
Held to Maturity, at amortized cost | $ 380,943 | $ 787,987 |
Note 3 - Investment Securitie_4
Note 3 - Investment Securities: Schedule of Investment Securities Fair Value and Unrealized Losses (Details) | Dec. 31, 2018USD ($) |
US States and Political Subdivisions Debt Securities | |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | $ 400,812 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | (5,110) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 0 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Loss | 0 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 400,812 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss | (5,110) |
Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 23,836,903 |
Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses | (333,777) |
Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 63,308,903 |
Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses | (4,082,022) |
Securities, Continuous Unrealized Loss Position, Fair Value | 87,145,806 |
Continuous Unrealized Loss Position, Aggregate Losses | $ (4,415,799) |
Note 4 - Fair Value_ Fair Val_2
Note 4 - Fair Value: Fair Value Measurements, by Fair Value hierarchy (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Corporate Debt Securities | ||
Investments, Fair Value Disclosure | $ 402,965 | $ 311,442 |
US States and Political Subdivisions Debt Securities | ||
Investments, Fair Value Disclosure | 209,473,764 | 211,888,274 |
Investments, Fair Value Disclosure | 209,876,729 | 212,199,716 |
Fair Value, Inputs, Level 1 | Corporate Debt Securities | ||
Investments, Fair Value Disclosure | 402,965 | 311,442 |
Fair Value, Inputs, Level 1 | US States and Political Subdivisions Debt Securities | ||
Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | ||
Investments, Fair Value Disclosure | 402,965 | 311,442 |
Fair Value, Inputs, Level 2 | Corporate Debt Securities | ||
Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | US States and Political Subdivisions Debt Securities | ||
Investments, Fair Value Disclosure | 209,473,764 | 211,888,274 |
Fair Value, Inputs, Level 2 | ||
Investments, Fair Value Disclosure | 209,473,764 | 211,888,274 |
Fair Value, Inputs, Level 3 | Corporate Debt Securities | ||
Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | US States and Political Subdivisions Debt Securities | ||
Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Investments, Fair Value Disclosure | $ 0 | $ 0 |
Note 5 - Leases_ Schedule of _2
Note 5 - Leases: Schedule of Lease expense and other information (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Details | |||
Operating lease expense | $ 1,697,444 | $ 4,975,191 | |
Operating cash flows from operating leases | 1,653,642 | $ 4,843,874 | |
Weighted-average remaining lease term - operating leases (in years) | 6.80 | ||
Weighted-average discount rate - operating leases | 5.78% | ||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | 1,691,811 | $ 1,691,811 | $ 7,015,801 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 6,560,469 | 6,560,469 | 5,930,343 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 5,867,403 | 5,867,403 | 4,361,351 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 5,254,912 | 5,254,912 | 2,836,961 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 4,461,878 | 4,461,878 | 1,357,035 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 13,159,595 | 13,159,595 | 103,754 |
Lessee, Operating Lease, Liability, Payments, Due | 36,996,068 | 36,996,068 | $ 21,605,245 |
Less: Interest | (6,365,567) | (6,365,567) | |
Present Value of Lease Liability | $ 30,630,501 | $ 30,630,501 |
Note 7 - Income Taxes (Details)
Note 7 - Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
Effective Income Tax Rate Reconciliation, Percent | 22.00% | 12.00% | 19.00% | 12.00% |
Note 8 - Credit Agreement (Deta
Note 8 - Credit Agreement (Details) - Wells Fargo Preferred Capital, Inc. - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Line of Credit Facility, Initiation Date | Sep. 11, 2009 | |
Line of Credit Facility, Description | the Company entered into a credit facility with Wells Fargo Preferred Capital, Inc. The credit agreement provides for borrowings of up to $100.0 million or 70% of the Company's net finance receivables (as defined in the credit agreement), whichever is less | |
Line of Credit Facility, Commitment maturity date | Dec. 31, 2019 | |
Line of Credit Facility, Current Borrowing Capacity | $ 9.8 | $ 46.8 |
Line of Credit Facility, Interest Rate at Period End | 5.14% | 5.74% |
Note 9 - Related Party Transa_2
Note 9 - Related Party Transactions (Details) | Sep. 30, 2019USD ($) |
Details | |
Balance on commercial loan (including principal and accrued interest) | $ 1,630,018 |
Balance on loan for premium payments (including principal and accrued interest) | $ 417,614 |
Note 10 - Segment Financial I_3
Note 10 - Segment Financial Information: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Division I | ||||
Segment Reporting Information, Revenue for Reportable Segment | $ 9,838 | $ 7,900 | $ 27,749 | $ 22,435 |
Profit (Loss) | 3,828 | 2,907 | 10,049 | 7,876 |
Segment Reporting Information, Net Assets | 101,419 | 101,419 | ||
Segment Reporting Information, Net Assets | 86,315 | |||
Division II | ||||
Segment Reporting Information, Revenue for Reportable Segment | 9,363 | 8,389 | 27,357 | 24,405 |
Profit (Loss) | 4,103 | 3,715 | 11,379 | 10,269 |
Segment Reporting Information, Net Assets | 104,701 | 104,701 | ||
Segment Reporting Information, Net Assets | 96,884 | |||
Division III | ||||
Segment Reporting Information, Revenue for Reportable Segment | 9,067 | 8,435 | 26,565 | 24,385 |
Profit (Loss) | 3,759 | 3,521 | 11,327 | 10,313 |
Segment Reporting Information, Net Assets | 98,198 | 98,198 | ||
Segment Reporting Information, Net Assets | 89,411 | |||
Division IV | ||||
Segment Reporting Information, Revenue for Reportable Segment | 9,580 | 8,729 | 27,985 | 25,789 |
Profit (Loss) | 3,044 | 3,126 | 9,113 | 9,216 |
Segment Reporting Information, Net Assets | 119,514 | 119,514 | ||
Segment Reporting Information, Net Assets | 107,401 | |||
Division V | ||||
Segment Reporting Information, Revenue for Reportable Segment | 5,852 | 5,250 | 17,044 | 15,422 |
Profit (Loss) | 1,535 | 1,539 | 4,557 | 4,806 |
Segment Reporting Information, Net Assets | 63,258 | 63,258 | ||
Segment Reporting Information, Net Assets | 56,240 | |||
Division VII | ||||
Segment Reporting Information, Revenue for Reportable Segment | 5,773 | 4,116 | 16,455 | 11,318 |
Profit (Loss) | 1,153 | 864 | 3,617 | 1,882 |
Segment Reporting Information, Net Assets | 69,186 | 69,186 | ||
Segment Reporting Information, Net Assets | 55,032 | |||
Division VIII | ||||
Segment Reporting Information, Revenue for Reportable Segment | 5,212 | 4,170 | 14,752 | 12,070 |
Profit (Loss) | 1,180 | 943 | 3,444 | 2,727 |
Segment Reporting Information, Net Assets | 55,646 | 55,646 | ||
Segment Reporting Information, Net Assets | 45,518 | |||
Division IX | ||||
Segment Reporting Information, Revenue for Reportable Segment | 8,636 | 7,529 | 25,188 | 21,934 |
Profit (Loss) | 3,165 | 2,752 | 9,146 | 8,141 |
Segment Reporting Information, Net Assets | 94,842 | 94,842 | ||
Segment Reporting Information, Net Assets | 84,381 | |||
Segment Reporting Information, Revenue for Reportable Segment | 63,321 | 54,518 | 183,095 | 157,758 |
Profit (Loss) | 21,767 | 19,367 | 62,632 | 55,230 |
Segment Reporting Information, Net Assets | 706,764 | 706,764 | ||
Segment Reporting Information, Net Assets | 621,182 | |||
Reconciliation of Revenues | ||||
Total revenues from reportable divisions | 63,321 | 54,518 | 183,095 | 157,758 |
Corporate finance charges earned not allocated to divisions | 41 | 28 | 106 | 79 |
Corporate investment income earned not allocated to divisions | 1,836 | 1,789 | 5,508 | 5,306 |
Timing difference of insurance income allocation to divisions | 2,018 | 2,185 | 5,421 | 5,169 |
Other revenue not allocated to divisions | 2 | 2 | 9 | 34 |
Consolidated Revenues | 67,218 | 58,522 | 194,139 | 168,346 |
Profit per division | 21,767 | 19,366 | 62,632 | 55,229 |
Corporate earnings not allocated | 3,896 | 4,004 | 11,043 | 10,588 |
Corporate expenses not allocated | (21,246) | (16,329) | (59,169) | (46,224) |
Income Taxes not allocated | (983) | (833) | (2,707) | (2,411) |
Consolidated Net Income | $ 3,434 | $ 6,208 | $ 11,799 | $ 17,182 |