WFBC » Topics » Classified and Criticized Assets.

These excerpts taken from the WFBC 10-K filed Sep 16, 2008.
Classified and Criticized Assets.    Federal regulations require that each insured institution classify its assets on a regular basis. Furthermore, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, based upon their judgment, classify them. There are three classifications for problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of current existing facts, conditions and values, questionable, and there is a high probability of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Federal regulations also require another unclassified category designated “special mention” to be established and maintained for assets that do not currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful, or loss.

 

At June 30, 2008, the Company had $18.1 million of assets classified as substandard, consisting of $15.9 million of construction, land, and commercial real estate and business loans, $1.5 million of single-family residential real estate loans, and $735 thousand of consumer loans, and $829 thousand classified as doubtful, consisting of commercial real estate and business loans and consumer loans in the amounts of $806 thousand and $23 thousand, respectively. This compares to $8.2 million of assets classified as substandard, consisting of $6.2 million of commercial real estate and business loans, $1.3 million of single-family residential real estate loans, $660 thousand of consumer loans, and $1.4 million classified as doubtful, consisting of commercial real estate and business loans at June 30, 2007. There were no loans classified as loss at June 30, 2008 or 2007.

 

Classified
and Criticized Assets.
  
Federal regulations require that each insured institution classify its assets
on a regular basis. Furthermore, in connection with examinations of insured
institutions, federal examiners have authority to identify problem assets and,
based upon their judgment, classify them. There are three classifications for
problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have
one or more defined weaknesses and are characterized by the distinct
possibility that the insured institution will sustain some loss if the
deficiencies are not corrected. Doubtful assets have weaknesses of substandard
assets with the additional characteristic that the weaknesses make collection
or liquidation in full on the basis of current existing facts, conditions and
values, questionable, and there is a high probability of loss. An asset
classified as loss is considered uncollectible and of such little value that
continuance as an asset of the institution is not warranted. Federal
regulations also require another unclassified category designated “special
mention” to be established and maintained for assets that do not currently
expose an insured institution to a sufficient degree of risk to warrant
classification as substandard, doubtful, or loss.



 



At June 30,
2008, the Company had $18.1 million of assets classified as substandard,
consisting of $15.9 million of construction, land, and commercial real
estate and business loans, $1.5 million of single-family residential real
estate loans, and $735 thousand of consumer loans, and $829 thousand
classified as doubtful, consisting of commercial real estate and business loans
and consumer loans in the amounts of $806 thousand and $23 thousand,
respectively. This compares to $8.2 million of assets classified as
substandard, consisting of $6.2 million of commercial real estate and
business loans, $1.3 million of single-family residential real estate loans,
$660 thousand of consumer loans, and $1.4 million classified as doubtful,
consisting of commercial real estate and business loans at June 30, 2007. There
were no loans classified as loss at June 30, 2008 or 2007.



 



These excerpts taken from the WFBC 10-K filed May 5, 2008.
Classified and Criticized Assets.    Federal regulations require that each insured institution classify its assets on a regular basis. Furthermore, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, based upon their judgment, classify them. There are three classifications for problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of current existing facts, conditions and values, questionable, and there is a high probability of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Federal regulations also require another unclassified category designated “special mention” to be established and maintained for assets that do not currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful, or loss.

 

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At June 30, 2007, the Company had $8.2 million of assets classified as substandard, consisting of $6.2 million of commercial real estate and business loans, $1.3 million of single-family mortgage loans, and $660 thousand of consumer loans, and $1.4 million classified as doubtful, consisting of commercial real estate and business loans. This compares to $6.6 million of assets classified as substandard, consisting of $5.1 million of commercial real estate and business loans, $974 thousand of single-family mortgage loans, $525 thousand of consumer loans, and $12.4 million classified as doubtful, consisting of $12.3 million of commercial real estate and business loans and $86 thousand of single-family mortgage loans at June 30, 2006. There were no loans classified as loss at June 30, 2007 or 2006.

 

Classified
and Criticized Assets.
  
Federal regulations require that each insured institution classify its assets
on a regular basis. Furthermore, in connection with examinations of insured
institutions, federal examiners have authority to identify problem assets and,
based upon their judgment, classify them. There are three classifications for
problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have
one or more defined weaknesses and are characterized by the distinct
possibility that the insured institution will sustain some loss if the
deficiencies are not corrected. Doubtful assets have weaknesses of substandard
assets with the additional characteristic that the weaknesses make collection
or liquidation in full on the basis of current existing facts, conditions and
values, questionable, and there is a high probability of loss. An asset
classified as loss is considered uncollectible and of such little value that
continuance as an asset of the institution is not warranted. Federal regulations
also require another unclassified category designated “special mention” to be
established and maintained for assets that do not currently expose an insured
institution to a sufficient degree of risk to warrant classification as
substandard, doubtful, or loss.



 



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At June 30,
2007, the Company had $8.2 million of assets classified as substandard,
consisting of $6.2 million of commercial real estate and business loans,
$1.3 million of single-family mortgage loans, and $660 thousand of
consumer loans, and $1.4 million classified as doubtful, consisting of
commercial real estate and business loans. This compares to $6.6 million
of assets classified as substandard, consisting of $5.1 million of commercial
real estate and business loans, $974 thousand of single-family mortgage
loans, $525 thousand of consumer loans, and $12.4 million classified as
doubtful, consisting of $12.3 million of commercial real estate and business
loans and $86 thousand of single-family mortgage loans at June 30, 2006.
There were no loans classified as loss at June 30, 2007 or 2006.



 



This excerpt taken from the WFBC 10-K filed Oct 1, 2007.
Classified and Criticized Assets.   Federal regulations require that each insured institution classify its assets on a regular basis. Furthermore, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, based upon their judgment, classify them. There are three classifications for problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of current existing facts, conditions and values, questionable, and there is a high probability of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Federal regulations also require another unclassified category designated “special mention” to be established and maintained for assets that do not

12




currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful, or loss. At June 30, 2007, the Company had $8.2 million of assets classified as substandard, consisting of $6.2 million of commercial real estate and business loans, $1.3 million of single-family mortgage loans, and $660 thousand of consumer loans, and $1.4 million classified as doubtful, consisting of commercial real estate and business loans. This compares to $6.6 million of assets classified as substandard, consisting of $5.1 million of commercial real estate and business loans, $974 thousand of single-family mortgage loans, $525 thousand of consumer loans, and $12.4 million classified as doubtful, consisting of $12.3 million of commercial real estate and business loans and $86 thousand of single-family mortgage loans at June 30, 2006. There were no loans classified as loss at June 30, 2007 or 2006.

This excerpt taken from the WFBC 10-K filed Sep 26, 2006.
Classified and Criticized Assets.   Federal regulations require that each insured institution classify its assets on a regular basis. Furthermore, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, based upon their judgment, classify them. There are three classifications for problem assets: “substandard,” “doubtful,” and “loss”. Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of current existing facts, conditions and values, questionable, and there is a high probability of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Federal regulations also require another unclassified category designated “special mention” to be established and maintained for assets that do not currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful, or loss. At June 30, 2006, the Company had $6.6 million of assets classified as substandard, consisting of $974 thousand of single-family mortgage loans, $5.1 million of commercial real estate and business loans and $525 thousand of consumer loans, and $12.4 million classified as doubtful, consisting of $12.3 million of commercial real estate and business loans and $86 thousand of single-family mortgage loans. There were no loans classified as loss at June 30, 2006. This compares to $1.9 million of assets classified as substandard, consisting of $1.2 million of commercial business and construction loans and $665 thousand of single-family mortgage loans, and $487 thousand classified as doubtful, consisting entirely of commercial real estate and business loans at June 30, 2005.

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