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SNV » Topics » We may experience increased delinquencies and credit losses, which could have a material adverse effect on our capital, financial condition and results of operations.This excerpt taken from the SNV 8-K filed Sep 15, 2009. We may
experience increased delinquencies and credit losses, which
could have a material adverse effect on our capital, financial
condition and results of operations.
Like other lenders, we face the risk that our customers will not
repay their loans. A customer’s failure to repay us is
preceded generally by missed payments. In some instances, a
customer may
declare bankruptcy prior to missing payments, although this is
not generally the case. Customers who declare bankruptcy
frequently do not repay their loans. Where our loans are secured
by collateral, we may attempt to seize the collateral when and
if customers default on their loans. The value of the collateral
may not equal the amount of the unpaid loan, and we may be
unsuccessful in recovering the remaining balance from our
customers. Rising delinquencies and rising rates of bankruptcy
are often precursors of future charge-offs and may require us to
increase our allowance for loan losses. Higher charge-off rates
and an increase in our allowance for loan losses may hurt our
overall financial performance if we are unable to raise revenue
to compensate for these losses and may increase our cost of
funds.
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