Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | |
Voting Common Stock | Nonvoting Common Stock | ||
Entity Registrant Name | '1st Franklin Financial Corporation | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0000038723 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 1,700 | 168,300 |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_FIN
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
ASSETS | ' | ' | ||
Cash and Cash Equivalents | $58,883,462 | $26,399,839 | ||
Restricted Cash | 1,586,081 | 974,452 | ||
LOANS: | ' | ' | ||
Direct Cash Loans | 413,005,369 | 445,754,712 | ||
Real Estate Loans | 19,950,446 | 20,329,655 | ||
Sales Finance Contracts | 22,015,533 | 22,269,833 | ||
Loans, Total | 454,971,348 | 488,354,200 | ||
Unearned Finance Charges | 53,258,614 | 59,649,718 | ||
Unearned Insurance Premiums and Commissions | 31,020,576 | 34,596,733 | ||
Allowance for Loan Losses | 24,680,789 | 24,680,789 | ||
Net Loans | 346,011,369 | 369,426,960 | ||
INVESTMENT SECURITIES: | ' | ' | ||
Available for Sale, at fair value | 112,762,784 | 106,061,584 | ||
Held to Maturity, at amortized cost | 27,765,760 | 29,777,456 | ||
Marketable Debt Securities, Total | 140,528,544 | 135,839,040 | ||
Equity Method Investments | 10,499,100 | 10,211,635 | ||
OTHER ASSETS | ' | ' | ||
Other Assets | 16,470,514 | 18,909,135 | ||
ASSETS, Total | 573,979,070 | 561,761,061 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ||
Senior Debt | 317,890,010 | 308,015,152 | ||
Accounts Payable and Accrued Expenses | 15,276,290 | 21,014,769 | ||
Subordinated Debt | 39,936,242 | 40,378,507 | ||
LIABILITIES, Total | 373,102,542 | 369,408,428 | ||
COMMITMENTS AND CONTINGENCIES | ' | [1] | ' | [1] |
STOCKHOLDERS' EQUITY: | ' | ' | ||
Common Stock | 170,000 | 170,000 | ||
Accumulated Other Comprehensive Income | -113,451 | -2,472,734 | ||
Retained Earnings | 200,819,979 | 194,655,367 | ||
Stockholders' Equity, Total | 200,876,528 | 192,352,633 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY, TOTAL | $573,979,070 | $561,761,061 | ||
[1] | See Note 6. |
CONSOLIDATED_STATEMENTS_OF_FIN1
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - Parenthetical (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Preferred Stock, Par Value | $100 | $100 |
Preferred Stock, Shares Authorized | 6,000 | 6,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Voting Common Stock | ' | ' |
Common Stock, Par Value | $100 | $100 |
Common Stock, Shares Authorized | 2,000 | 2,000 |
Common Stock, Shares Outstanding | 1,700 | 1,700 |
Nonvoting Common Stock | ' | ' |
Common Stock, Par Value | $0 | $0 |
Common Stock, Shares Authorized | 198,000 | 198,000 |
Common Stock, Shares Outstanding | 168,300 | 168,300 |
CONDENSED_STATEMENTS_OF_INCOME
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
INTEREST INCOME | ' | ' |
Interest Income | $35,929,184 | $32,853,373 |
INTEREST EXPENSE | ' | ' |
Interest Expense | 2,889,252 | 2,841,259 |
NET INTEREST INCOME | 33,039,932 | 30,012,114 |
Provision for loan losses | 5,894,232 | 5,505,821 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 27,145,700 | 24,506,293 |
INSURANCE INCOME | ' | ' |
Premiums and Commissions | 11,863,199 | 11,141,943 |
Insurance Claims and Expenses | 2,149,027 | 2,271,385 |
Net Insurance Income, Total | 9,714,172 | 8,870,558 |
OTHER REVENUE | 1,593,291 | 1,347,595 |
OPERATING EXPENSES: | ' | ' |
Personnel Expense | 16,619,454 | 15,941,739 |
Occupancy Expense | 3,244,937 | 3,020,456 |
Other Expense | 6,663,689 | 5,642,794 |
Operating Expenses, Total | 26,528,080 | 24,604,989 |
INCOME BEFORE INCOME TAXES | 11,925,083 | 10,119,457 |
Provision for Income Taxes | 1,140,471 | 1,025,592 |
Net Income (Loss) | 10,784,612 | 9,093,865 |
RETAINED EARNINGS, Beginning of Period | 194,655,367 | 174,265,215 |
Distributions on Common Stock | 4,620,000 | 1,763,448 |
RETAINED EARNINGS, End of Period | $200,819,979 | $181,595,632 |
BASIC EARNINGS PER SHARE | $63.44 | $53.49 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ||
Net Income (Loss) | $10,784,612 | $9,093,865 | ||
Other Comprehensive Income: | ' | ' | ||
Unrealized gains (losses) during period | 3,234,442 | -932,791 | ||
Income tax (provision) benefit | -875,152 | 260,245 | ||
Net unrealized (losses) gains | 2,359,290 | -672,546 | ||
Reclassification of (gains)/losses to Net Income (Loss) | 7 | [1] | 48,927 | [2] |
Total Other Comprehensive Income (Loss) | 2,359,283 | -721,473 | ||
Total Comprehensive Income | $13,143,895 | $8,372,392 | ||
[1] | Reclassified $9 to other operating expenses and $2 to provision for income taxes on the Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) for the Three Months Ended March 31, 2014. | |||
[2] | Reclassified $68,608 to other operating expenses and $19,681 to provision for income taxes on the Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) for the Three Months Ended March 31, 2013. |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net Income (Loss) | $10,784,612 | $9,093,865 |
Adjustments to reconcile Net Income (Loss) to net cash provided by operating activities: | ' | ' |
Provision for loan losses | 5,894,232 | 5,505,821 |
Depreciation and amortization | 744,421 | 700,819 |
Provision for deferred income taxes | -98,342 | -122,196 |
Earnings in equity method investment | -287,465 | ' |
Other | 278,425 | 208,839 |
Decrease (increase) in miscellaneous assets | 2,192,964 | 1,439,884 |
Decrease in other liablities | -6,515,287 | -6,742,079 |
Net Cash Provided by (Used in) Operating Activities | 12,993,560 | 10,084,953 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Loans originated or purchased | -65,353,269 | -63,355,815 |
Loan payments | 82,874,628 | 77,916,587 |
Decrease (increase) in restricted cash | -611,629 | -229,666 |
Purchases of marketable debt securities | -6,968,202 | -7,712,335 |
Sales of marketable debt securities | ' | 916,406 |
Redemptions of marketable debt securities | 5,235,000 | 3,114,998 |
Fixed asset additions, net | -499,058 | -564,225 |
Net Cash Provided by (Used in) Investing Activities | 14,677,470 | 10,085,950 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Net increase (decrease) in senior demand notes outstanding | 4,081,095 | 795,293 |
Advances on credit line | 131,016 | 532,392 |
Payments on credit line | -131,016 | -532,392 |
Commercial paper issued | 12,680,956 | 14,598,835 |
Commercial Paper redeemed | -6,887,193 | -7,316,838 |
Subordinated debt issued | 2,134,671 | 2,637,172 |
Subordinated debt redeemed | -2,576,936 | -2,819,863 |
Dividends / Distributions | -4,620,000 | -1,763,448 |
Net Cash Provided by (Used in) Financing Activities | 4,812,593 | 6,131,151 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 32,483,623 | 26,302,054 |
CASH AND CASH EQUIVALENTS, beginning | 26,399,839 | 28,186,035 |
CASH AND CASH EQUIVALENTS, ending | 58,883,462 | 54,488,089 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' |
Cash paid during the period for Interest | 2,889,769 | 2,808,768 |
Cash paid during the period for Taxes | 100,000 | 50,000 |
Non-cash Exchange of Investment Securities | ' | $819,908 |
Note_1_Basis_of_Presentation
Note 1 - Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Notes | ' |
Note 1 - Basis of Presentation | ' |
Note 1 – Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements of 1st Franklin Financial Corporation and subsidiaries (the "Company") should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto as of December 31, 2013 and for the year then ended included in the Company's 2013 Annual Report filed with the Securities and Exchange Commission. | |
In the opinion of Management of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company's consolidated financial position as of March 31, 2014 and December 31, 2013, its consolidated results of operations, comprehensive income and cash flows for the three-month periods ended March 31, 2014 and 2013. 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 months ended March 31, 2014 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. | |
Recent Accounting Pronouncements: | |
There were no recently released accounting pronouncements that Management believes would have a material impact on the Company. |
Note_2_Allowance_For_Loan_Loss
Note 2 - Allowance For Loan Losses | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
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, 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. Delinquency and bankruptcy filing trends are also tracked. 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 contractual delinquency and other economic conditions. The Company classifies delinquent accounts at the end of each month according to the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories based on the number of days past due. When three installments are past due, we classify the account as being 60-89 days past due; when four or more installments are past due, we classify the account as being 90 days or more past due. When a loan becomes five installments past due, it 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. In addition, no installment is counted as being past due if at least 80% of the contractual payment has been paid. In connection with any bankruptcy court-initiated repayment plan and as allowed by state regulatory authorities, the Company effectively resets the delinquency rating of each account to coincide with the court initiated repayment plan. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable. | |||||
When a loan becomes 60 days or more past due based on its original terms, it is placed in nonaccrual status. At such time, the accrual of any additional finance charges is discontinued. 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. Nonaccrual loans return to accrual status when the loan becomes less than 60 days past due. | |||||
There were no loans past due 60 days or more and still accruing interest at March 31, 2014 or December 31, 2013. The Company’s principal balances on non-accrual loans by loan class as of March 31, 2014 and December 31, 2013 are as follows: | |||||
March 31, | 31-Dec-13 | ||||
Loan Class | 2014 | ||||
Consumer Loans | $ 33,444,368 | $ 33,680,602 | |||
Real Estate Loans | 885,952 | 969,149 | |||
Sales Finance Contracts | 769,281 | 816,196 | |||
Total | $ 35,099,601 | $ 35,465,947 | |||
An age analysis of principal balances on past due loans, segregated by loan class, as of March 31, 2014 and December 31, 2013 follows: | |||||
90 Days or | Total | ||||
30-59 Days | 60-89 Days | More | Past Due | ||
31-Mar-14 | Past Due | Past Due | Past Due | Loans | |
Consumer Loans | $12,039,743 | $6,397,079 | $12,647,531 | $31,084,353 | |
Real Estate Loans | 358,754 | 98,503 | 700,230 | 1,157,487 | |
Sales Finance Contracts | 362,532 | 227,180 | 383,887 | 973,599 | |
Total | $12,761,029 | $6,722,762 | $13,731,648 | $33,215,439 | |
90 Days or | Total | ||||
30-59 Days | 60-89 Days | More | Past Due | ||
31-Dec-13 | Past Due | Past Due | Past Due | Loans | |
Consumer Loans | $11,939,226 | $6,542,571 | $13,438,184 | $31,919,981 | |
Real Estate Loans | 299,094 | 173,842 | 547,012 | 1,019,948 | |
Sales Finance Contracts | 391,658 | 203,821 | 448,991 | 1,044,470 | |
Total | $12,629,978 | $6,920,234 | $14,434,187 | $33,984,399 | |
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 March 31, 2014 and December 31, 2013 was 2.86% and 2.54%, respectively. | |||||
Nearly our entire loan portfolio consists of small homogeneous consumer loans (of the product types set forth in the table below). | |||||
3 Months | % | ||||
Principal | % | Net | Net | ||
31-Mar-14 | Balance | Portfolio | Charge Offs | Charge Offs | |
Consumer Loans | $410,972,676 | 90.8% | $5,713,824 | 96.9 | |
Real Estate Loans | 19,619,407 | 4.4 | (1,222) | - | |
Sales Finance Contracts | 21,863,183 | 4.8 | 181,630 | 3.1 | |
Total | $452,455,266 | 100.0% | $5,894,232 | 100.0% | |
3 Months | % | ||||
Principal | % | Net | Net | ||
31-Mar-13 | Balance | Portfolio | Charge Offs | Charge Offs | |
Consumer Loans | $377,438,957 | 90.4% | $5,391,499 | 97.9% | |
Real Estate Loans | 19,869,198 | 4.8 | (10,754) | (.2) | |
Sales Finance Contracts | 19,870,044 | 4.8 | 125,076 | 2.3 | |
Total | $417,178,199 | 100.0% | $5,505,821 | 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% and 95% of the Company’s loan portfolio at March 31, 2014 and 2013, respectively. 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 | |||||
Mar. 31, 2014 | Mar. 31, 2013 | ||||
Allowance for Credit Losses: | |||||
Beginning Balance | $ 24,680,789 | $ 22,010,085 | |||
Provision for Loan Losses | 5,894,232 | 5,505,821 | |||
Charge-offs | (8,443,132) | (8,078,352) | |||
Recoveries | 2,548,900 | 2,572,531 | |||
Ending Balance | $ 24,680,789 | $ 22,010,085 | |||
Ending Balance; collectively evaluated for impairment | $ 24,680,789 | $ 22,010,085 | |||
Finance receivables: | |||||
Ending Balance | $ 452,455,266 | $417,178,199 | |||
Ending balance; collectively evaluated for impairment | $ 452,455,266 | $ 417,178,199 | |||
Troubled Debt Restructings ("TDR's") represent loans on which the original terms of the loans 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 March 31, 2014. | |||||
Number | Pre-Modification | Post-Modification | |||
Of | Recorded | Recorded | |||
Loans | Investment | Investment | |||
Consumer Loans | 879 | $ 2,776,850 | $ 2,590,986 | ||
Real Estate Loans | 15 | 113,052 | 113,052 | ||
Sales Finance Contracts | 43 | 108,299 | 104,674 | ||
Total | 937 | $ 2,998,201 | $ 2,808,712 | ||
The following table presents a summary of loans that were restructured during the three months ended March 31, 2013. | |||||
Number | Pre-Modification | Post-Modification | |||
Of | Recorded | Recorded | |||
Loans | Investment | Investment | |||
Consumer Loans | 853 | $ 2,703,413 | $ 2,514,775 | ||
Real Estate Loans | 12 | 93,942 | 91,942 | ||
Sales Finance Contracts | 40 | 78,849 | 75,140 | ||
Total | 905 | $ 2,876,204 | $ 2,681,857 | ||
TDRs that occurred during the previous twelve months and subsequently defaulted during the three months ended March 31, 2014 are listed below. | |||||
Number | Pre-Modification | ||||
Of | Recorded | ||||
Loans | Investment | ||||
Consumer Loans | 184 | $ 360,106 | |||
Real Estate Loans | - | - | |||
Sales Finance Contracts | 7 | 8,538 | |||
Total | 191 | $ 368,644 | |||
TDRs that occurred during the twelve months ended March 31, 2013 and subsequently defaulted during the three months ended March 31, 2013 are listed below. | |||||
Number | Pre-Modification | ||||
Of | Recorded | ||||
Loans | Investment | ||||
Consumer Loans | 156 | $ 306,088 | |||
Real Estate Loans | - | - | |||
Sales Finance Contracts | 8 | 9,186 | |||
Total | 164 | $ 315,274 | |||
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 | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
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 | As of | ||||||
31-Mar-14 | 31-Dec-13 | ||||||
Estimated | Estimated | ||||||
Amortized | Fair | Amortized | Fair | ||||
Cost | Value | Cost | Value | ||||
Available-for-Sale: | |||||||
Obligations of states and political subdivisions | $112,879,390 | $112,338,968 | $109,412,622 | $105,628,550 | |||
Corporate securities | 130,316 | 423,816 | 130,316 | 433,034 | |||
$113,009,706 | $112,762,784 | $109,542,938 | $106,061,584 | ||||
Held to Maturity: | |||||||
Obligations of states and political subdivisions | $27,765,760 | $28,169,368 | $29,777,456 | $30,169,874 | |||
Gross unrealized losses on investment securities totaled $2,738,677 and $5,195,856 at March 31, 2014 and December 31, 2013, 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 March 31, 2014 and December 31, 2013: | |||||||
Less than 12 Months | 12 Months or Longer | Total | |||||
March 31,2014 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |
Value | Losses | Value | Losses | Value | Losses | ||
Available for Sale: | |||||||
Obligations of states and political subdivisions | $ 34,492,747 | $ 1,379,288 | $ 11,283,696 | $ 1,155,602 | $ 45,776,443 | $ 2,534,890 | |
Held to Maturity: | |||||||
Obligations of states and political subdivisions | 961,092 | 15,357 | 4,122,265 | 188,430 | 5,083,357 | 203,787 | |
Total | $ 35,453,839 | $ 1,394,645 | $ 15,405,961 | $ 1,344,032 | $50,859,800 | $ 2,738,677 | |
Less than 12 Months | 12 Months or Longer | Total | |||||
31-Dec-13 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |
Value | Losses | Value | Losses | Value | Losses | ||
Available for Sale: | |||||||
Obligations of states and political subdivisions | $ 51,088,253 | $ 3,354,098 | $ 9,763,723 | $ 1,671,183 | $ 60,851,976 | $ 5,025,281 | |
Held to Maturity: | |||||||
Obligations of states and political subdivisions | 2,229,451 | 38,968 | 3,168,698 | 131,607 | 5,398,149 | 170,575 | |
Total | $ 53,317,704 | $ 3,393,066 | $ 12,932,421 | $ 1,802,790 | $ 66,250,125 | $ 5,195,856 | |
The previous two tables represent 79 and 112 investments held by the Company at March 31, 2014 and December 31, 2013, respectively, the majority of which are rated “A” or higher by Standard & Poor’s. The unrealized losses on the Company’s investments listed in the above tables 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 March 31, 2014 or December 31, 2013, respectivly. | |||||||
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 a trust agreement with the Company's property and casualty insurance company subsidiary ("Frandisco P&C"), as grantor, and American Bankers Insurance Company of Florida as the beneficiary. At March 31, 2014, this trust held $20.3 million in available-for-sale investment securities at market value and $10.2 million in held-to-maturity investment securities at amortized cost. US Bank also serves as trustee under a trust agreement with the Company's life insurance subsidiary (“Frandisco Life”) as grantor and American Bankers Life Assurance Company as beneficiary. At March 31, 2014, the trust for Frandisco Life held $3.0 million in available-for-sale investment securities at market value and $1.0 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 Frandisco P&C and Frandisco Life, respectively. Any charges associated with the trust are paid by the beneficiaries of each trust. |
Note_4_Fair_Value
Note 4 - Fair Value | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
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 fair value of cash and cash equivalents is classified as 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 Level 3 financial asset. | |||||
Marketable Debt Securities: The fair value of marketable debt securities is based on quoted market prices, when available. If a quoted market price is not available, fair value is estimated using market prices for similar securities. The estimate of fair value of held-to-maturity marketable debt securities is classified as Level 2 financial asset. 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. | |||||
Equity Method Investment: The fair value of equity method investment is estimated based on the Company's allocable share of the investee net asset value as of the rerporting date. Equity method investment is a Level 2 financial asset. | |||||
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 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 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 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 March 31, 2014 and December 31, 2013 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 | |||
March 31, | Assets | Inputs | Inputs | ||
Description | 2014 | (Level 1) | (Level 2) | (Level 3) | |
Corporate securities | $ 423,816 | $ 423,816 | $ -- | $ -- | |
Obligations of states and political subdivisions | 112,338,968 | -- | 112,338,968 | -- | |
Total | $ 112,762,784 | $ 423,816 | $ 112,338,968 | $ -- | |
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 | 2013 | (Level 1) | (Level 2) | (Level 3) | |
Corporate securities | $ 433,034 | $ 433,034 | $ -- | $ -- | |
Obligations of states and political subdivisions | 105,628,550 | -- | 105,628,550 | -- | |
Total | $ 106,061,584 | $ 433,034 | $ 105,628,550 | $ -- |
Note_5_Equity_Method_Investmen
Note 5 - Equity Method Investment | 3 Months Ended | ||
Mar. 31, 2014 | |||
Notes | ' | ||
Note 5 - Equity Method Investment | ' | ||
Note 5 – Equity Method Investment | |||
The Company has one investment accounted for using the equity method of accounting. On November 1, 2013, the Company invested $10.0 million in Meritage Capital, Centennial Absolute Return Fund, L.P. (the "Fund"). The carrying value of this investment was $10.5 million and $10.2 million as of March 31, 2014 and December 31, 2013, respectively. The Company's ownership interest in the Fund was 12.51% and 12.14% at March 31, 2014 and December 31, 2013, respectively. An additional $15.0 million was invested on April 1, 2014. The Company has no investment commitments to the fund. | |||
Condensed financial statement information of the equity method investment is as follows: | |||
31-Mar-14 | December 31,2013 | ||
Company's equity method investment | $ 10,449,100 | $ 10,211,635 | |
Partnership assets | $ 103,607,349 | $ 88,602,340 | |
Partnership liabilities | $ 18,225,080 | $ 2,873,918 | |
Partnership net income | $ 2,526,486 | $ 7,983,103 |
Note_6_Commitments_and_Conting
Note 6 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
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 March 31, 2014, 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 | 3 Months Ended |
Mar. 31, 2014 | |
Notes | ' |
Note 7 - Income Taxes | ' |
Note 7 – Income Taxes | |
Effective income tax rates were approximately 10% during the three-month periods ended March 31, 2014 and 2013. 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. The tax rates of the Company’s insurance subsidiaries are below statutory rates due to investments in tax exempt bonds held by the Company’s property insurance subsidiary. |
Note_8_Credit_Agreement
Note 8 - Credit Agreement | 3 Months Ended |
Mar. 31, 2014 | |
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 September 11, 2016. Available borrowings under the credit agreement were »$100.0 million at March 31, 2014 and December 31, 2013, at an interest rate of 3.75%. The credit agreement contains covenants customary for financing transactions of this type. At March 31, 2014, the Company was in compliance with all covenants. |
Note_9_Related_Party_Transacti
Note 9 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Notes | ' |
Note 9 - Related Party Transactions | ' |
Note 9 – Related Party Transactions | |
The Company engages from time to time in transactions with related parties. Please refer to the disclosure contained in Note 10 “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, 2013 for additional information on such transactions. |
Note_10_Segment_Financial_Info
Note 10 - Segment Financial Information | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Notes | ' | ||||||
Note 10 - Segment Financial Information | ' | ||||||
Note 10 – Segment Financial Information | |||||||
The Company has five reportable segments: Division I through Division V. Each segment consists of a number 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 comprise Division II, Division III consists of offices in South Georgia. Division IV represents our Alabama and Tennessee offices, and our offices in Louisiana and Mississippi encompass Division V. | |||||||
Accounting policies of each of the segments 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 segment profit, growth in earning assets and delinquency and loan loss management. All segment revenues result from transactions with third parties. The Company does not allocate income taxes or corporate headquarter expenses to the segments. | |||||||
In accordance with the requirements of ASC 280, “Segment Reporting,” the following table summarizes revenues, profit and assets by business segment. Also in accordance therewith, a reconciliation to consolidated net income is provided. | |||||||
Division | Division | Division | Division | Division | |||
I | II | III | IV | V | Total | ||
(in thousands) | |||||||
Segment Revenues: | |||||||
3 Months ended 3/31/2014 | $ 6,540 | $ 11,406 | $ 10,893 | $ 9,390 | $ 8,530 | $ 46,759 | |
3 Months ended 3/31/2013 | 5,811 | 10,444 | 10,048 | 8,676 | 7,880 | 42,859 | |
Segment Profit: | |||||||
3 Months ended 3/31/2014 | $ 2,603 | $ 5,897 | $ 5,420 | $ 3,937 | $ 3,456 | $ 21,313 | |
3 Months ended 3/31/2013 | 2,010 | 5,252 | 4,796 | 3,440 | 3,275 | 18,773 | |
Segment Assets: | |||||||
3/31/2014 | $ 49,796 | $ 94,052 | $ 91,324 | $ 92,951 | $ 66,749 | $ 394,872 | |
12/31/2013 | 53,529 | 100,646 | 97,290 | 96,440 | 70,898 | 418,803 | |
3 Months | 3 Months | ||||||
Ended | Ended | ||||||
3/31/14 | 3/31/13 | ||||||
(in Thousands) | (in Thousands) | ||||||
Reconciliation of Profit: | |||||||
Profit per segment | $21,313 | $ 18,773 | |||||
Corporate earnings not allocated | 2,627 | 2,484 | |||||
Corporate expenses not allocated | (12,015) | (11,137) | |||||
Income taxes not allocated | (1,140) | (1,026) | |||||
Net income | $ 10,785 | $ 9,094 |
Note_1_Basis_of_Presentation_C
Note 1 - Basis of Presentation: Comprehensive Income Policy (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Policies | ' |
Comprehensive Income Policy | ' |
There were no recently released accounting pronouncements that Management believes would have a material impact on the Company. |
Note_2_Allowance_For_Loan_Loss1
Note 2 - Allowance For Loan Losses: Loans Receivable, Nonaccrual status policy (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Policies | ' |
Loans Receivable, Nonaccrual status policy | ' |
When a loan becomes 60 days or more past due based on its original terms, it is placed in nonaccrual status. At such time, the accrual of any additional finance charges is discontinued. 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. Nonaccrual loans return to accrual status when the loan becomes less than 60 days past due. |
Note_2_Allowance_For_Loan_Loss2
Note 2 - Allowance For Loan Losses: Schedule of Allowance for Loan Losses (Tables) | 3 Months Ended | ||
Mar. 31, 2014 | |||
Tables/Schedules | ' | ||
Schedule of Allowance for Loan Losses | ' | ||
March 31, | 31-Dec-13 | ||
Loan Class | 2014 | ||
Consumer Loans | $ 33,444,368 | $ 33,680,602 | |
Real Estate Loans | 885,952 | 969,149 | |
Sales Finance Contracts | 769,281 | 816,196 | |
Total | $ 35,099,601 | $ 35,465,947 |
Note_2_Allowance_For_Loan_Loss3
Note 2 - Allowance For Loan Losses: Past Due Financing Receivables (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Tables/Schedules | ' | ||||
Past Due Financing Receivables | ' | ||||
90 Days or | Total | ||||
30-59 Days | 60-89 Days | More | Past Due | ||
31-Mar-14 | Past Due | Past Due | Past Due | Loans | |
Consumer Loans | $12,039,743 | $6,397,079 | $12,647,531 | $31,084,353 | |
Real Estate Loans | 358,754 | 98,503 | 700,230 | 1,157,487 | |
Sales Finance Contracts | 362,532 | 227,180 | 383,887 | 973,599 | |
Total | $12,761,029 | $6,722,762 | $13,731,648 | $33,215,439 | |
90 Days or | Total | ||||
30-59 Days | 60-89 Days | More | Past Due | ||
31-Dec-13 | Past Due | Past Due | Past Due | Loans | |
Consumer Loans | $11,939,226 | $6,542,571 | $13,438,184 | $31,919,981 | |
Real Estate Loans | 299,094 | 173,842 | 547,012 | 1,019,948 | |
Sales Finance Contracts | 391,658 | 203,821 | 448,991 | 1,044,470 | |
Total | $12,629,978 | $6,920,234 | $14,434,187 | $33,984,399 |
Note_2_Allowance_For_Loan_Loss4
Note 2 - Allowance For Loan Losses: Schedule of Loans and Financing Receivable (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Loans and Financing Receivable | ' | ||||
3 Months | % | ||||
Principal | % | Net | Net | ||
31-Mar-14 | Balance | Portfolio | Charge Offs | Charge Offs | |
Consumer Loans | $410,972,676 | 90.8% | $5,713,824 | 96.9 | |
Real Estate Loans | 19,619,407 | 4.4 | (1,222) | - | |
Sales Finance Contracts | 21,863,183 | 4.8 | 181,630 | 3.1 | |
Total | $452,455,266 | 100.0% | $5,894,232 | 100.0% | |
3 Months | % | ||||
Principal | % | Net | Net | ||
31-Mar-13 | Balance | Portfolio | Charge Offs | Charge Offs | |
Consumer Loans | $377,438,957 | 90.4% | $5,391,499 | 97.9% | |
Real Estate Loans | 19,869,198 | 4.8 | (10,754) | (.2) | |
Sales Finance Contracts | 19,870,044 | 4.8 | 125,076 | 2.3 | |
Total | $417,178,199 | 100.0% | $5,505,821 | 100.0% |
Note_2_Allowance_For_Loan_Loss5
Note 2 - Allowance For Loan Losses: Allowance for Credit Losses on Financing Receivables (Tables) | 3 Months Ended | ||
Mar. 31, 2014 | |||
Tables/Schedules | ' | ||
Allowance for Credit Losses on Financing Receivables | ' | ||
Three Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | ||
Allowance for Credit Losses: | |||
Beginning Balance | $ 24,680,789 | $ 22,010,085 | |
Provision for Loan Losses | 5,894,232 | 5,505,821 | |
Charge-offs | (8,443,132) | (8,078,352) | |
Recoveries | 2,548,900 | 2,572,531 | |
Ending Balance | $ 24,680,789 | $ 22,010,085 | |
Ending Balance; collectively evaluated for impairment | $ 24,680,789 | $ 22,010,085 | |
Finance receivables: | |||
Ending Balance | $ 452,455,266 | $417,178,199 | |
Ending balance; collectively evaluated for impairment | $ 452,455,266 | $ 417,178,199 |
Note_2_Allowance_For_Loan_Loss6
Note 2 - Allowance For Loan Losses: Troubled Debt Restructurings on Financing Receivables (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Tables/Schedules | ' | |||
Troubled Debt Restructurings on Financing Receivables | ' | |||
Number | Pre-Modification | Post-Modification | ||
Of | Recorded | Recorded | ||
Loans | Investment | Investment | ||
Consumer Loans | 879 | $ 2,776,850 | $ 2,590,986 | |
Real Estate Loans | 15 | 113,052 | 113,052 | |
Sales Finance Contracts | 43 | 108,299 | 104,674 | |
Total | 937 | $ 2,998,201 | $ 2,808,712 | |
The following table presents a summary of loans that were restructured during the three months ended March 31, 2013. | ||||
Number | Pre-Modification | Post-Modification | ||
Of | Recorded | Recorded | ||
Loans | Investment | Investment | ||
Consumer Loans | 853 | $ 2,703,413 | $ 2,514,775 | |
Real Estate Loans | 12 | 93,942 | 91,942 | |
Sales Finance Contracts | 40 | 78,849 | 75,140 | |
Total | 905 | $ 2,876,204 | $ 2,681,857 | |
TDRs that occurred during the previous twelve months and subsequently defaulted during the three months ended March 31, 2014 are listed below. | ||||
Number | Pre-Modification | |||
Of | Recorded | |||
Loans | Investment | |||
Consumer Loans | 184 | $ 360,106 | ||
Real Estate Loans | - | - | ||
Sales Finance Contracts | 7 | 8,538 | ||
Total | 191 | $ 368,644 | ||
TDRs that occurred during the twelve months ended March 31, 2013 and subsequently defaulted during the three months ended March 31, 2013 are listed below. | ||||
Number | Pre-Modification | |||
Of | Recorded | |||
Loans | Investment | |||
Consumer Loans | 156 | $ 306,088 | ||
Real Estate Loans | - | - | ||
Sales Finance Contracts | 8 | 9,186 | ||
Total | 164 | $ 315,274 |
Note_3_Investment_Securities_S
Note 3 - Investment Securities: Schedule of Investment Securities, Amortized Cost and Estimated Fair Value (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Investment Securities, Amortized Cost and Estimated Fair Value | ' | ||||
As of | As of | ||||
31-Mar-14 | 31-Dec-13 | ||||
Estimated | Estimated | ||||
Amortized | Fair | Amortized | Fair | ||
Cost | Value | Cost | Value | ||
Available-for-Sale: | |||||
Obligations of states and political subdivisions | $112,879,390 | $112,338,968 | $109,412,622 | $105,628,550 | |
Corporate securities | 130,316 | 423,816 | 130,316 | 433,034 | |
$113,009,706 | $112,762,784 | $109,542,938 | $106,061,584 | ||
Held to Maturity: | |||||
Obligations of states and political subdivisions | $27,765,760 | $28,169,368 | $29,777,456 | $30,169,874 |
Note_3_Investment_Securities_S1
Note 3 - Investment Securities: Schedule of Investment Securities, Fair Value and Unrealized Losses (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Tables/Schedules | ' | ||||||
Schedule of Investment Securities, Fair Value and Unrealized Losses | ' | ||||||
Less than 12 Months | 12 Months or Longer | Total | |||||
March 31,2014 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |
Value | Losses | Value | Losses | Value | Losses | ||
Available for Sale: | |||||||
Obligations of states and political subdivisions | $ 34,492,747 | $ 1,379,288 | $ 11,283,696 | $ 1,155,602 | $ 45,776,443 | $ 2,534,890 | |
Held to Maturity: | |||||||
Obligations of states and political subdivisions | 961,092 | 15,357 | 4,122,265 | 188,430 | 5,083,357 | 203,787 | |
Total | $ 35,453,839 | $ 1,394,645 | $ 15,405,961 | $ 1,344,032 | $50,859,800 | $ 2,738,677 | |
Less than 12 Months | 12 Months or Longer | Total | |||||
31-Dec-13 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |
Value | Losses | Value | Losses | Value | Losses | ||
Available for Sale: | |||||||
Obligations of states and political subdivisions | $ 51,088,253 | $ 3,354,098 | $ 9,763,723 | $ 1,671,183 | $ 60,851,976 | $ 5,025,281 | |
Held to Maturity: | |||||||
Obligations of states and political subdivisions | 2,229,451 | 38,968 | 3,168,698 | 131,607 | 5,398,149 | 170,575 | |
Total | $ 53,317,704 | $ 3,393,066 | $ 12,932,421 | $ 1,802,790 | $ 66,250,125 | $ 5,195,856 |
Note_4_Fair_Value_Fair_Value_M
Note 4 - Fair Value: Fair Value Measurements, by Fair Value hierarchy (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
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 | |||
March 31, | Assets | Inputs | Inputs | ||
Description | 2014 | (Level 1) | (Level 2) | (Level 3) | |
Corporate securities | $ 423,816 | $ 423,816 | $ -- | $ -- | |
Obligations of states and political subdivisions | 112,338,968 | -- | 112,338,968 | -- | |
Total | $ 112,762,784 | $ 423,816 | $ 112,338,968 | $ -- | |
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 | 2013 | (Level 1) | (Level 2) | (Level 3) | |
Corporate securities | $ 433,034 | $ 433,034 | $ -- | $ -- | |
Obligations of states and political subdivisions | 105,628,550 | -- | 105,628,550 | -- | |
Total | $ 106,061,584 | $ 433,034 | $ 105,628,550 | $ -- |
Note_5_Equity_Method_Investmen1
Note 5 - Equity Method Investment: Equity Method Investments (Tables) | 3 Months Ended | ||
Mar. 31, 2014 | |||
Tables/Schedules | ' | ||
Equity Method Investments | ' | ||
31-Mar-14 | December 31,2013 | ||
Company's equity method investment | $ 10,449,100 | $ 10,211,635 | |
Partnership assets | $ 103,607,349 | $ 88,602,340 | |
Partnership liabilities | $ 18,225,080 | $ 2,873,918 | |
Partnership net income | $ 2,526,486 | $ 7,983,103 |
Note_10_Segment_Financial_Info1
Note 10 - Segment Financial Information: Schedule of Segment Reporting Information, by Segment (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Tables/Schedules | ' | ||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||
Division | Division | Division | Division | Division | |||
I | II | III | IV | V | Total | ||
(in thousands) | |||||||
Segment Revenues: | |||||||
3 Months ended 3/31/2014 | $ 6,540 | $ 11,406 | $ 10,893 | $ 9,390 | $ 8,530 | $ 46,759 | |
3 Months ended 3/31/2013 | 5,811 | 10,444 | 10,048 | 8,676 | 7,880 | 42,859 | |
Segment Profit: | |||||||
3 Months ended 3/31/2014 | $ 2,603 | $ 5,897 | $ 5,420 | $ 3,937 | $ 3,456 | $ 21,313 | |
3 Months ended 3/31/2013 | 2,010 | 5,252 | 4,796 | 3,440 | 3,275 | 18,773 | |
Segment Assets: | |||||||
3/31/2014 | $ 49,796 | $ 94,052 | $ 91,324 | $ 92,951 | $ 66,749 | $ 394,872 | |
12/31/2013 | 53,529 | 100,646 | 97,290 | 96,440 | 70,898 | 418,803 | |
Note_10_Segment_Financial_Info2
Note 10 - Segment Financial Information: Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Tables/Schedules | ' | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | ' | ||||
3 Months | 3 Months | ||||
Ended | Ended | ||||
3/31/14 | 3/31/13 | ||||
(in Thousands) | (in Thousands) | ||||
Reconciliation of Profit: | |||||
Profit per segment | $21,313 | $ 18,773 | |||
Corporate earnings not allocated | 2,627 | 2,484 | |||
Corporate expenses not allocated | (12,015) | (11,137) | |||
Income taxes not allocated | (1,140) | (1,026) | |||
Net income | $ 10,785 | $ 9,094 |
Note_2_Allowance_For_Loan_Loss7
Note 2 - Allowance For Loan Losses (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Details | ' | ' |
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | $0 | $0 |
Ratio of bankrupt accounts to total principal loan balances | 2.86% | 2.54% |
Note_2_Allowance_For_Loan_Loss8
Note 2 - Allowance For Loan Losses: Schedule of Allowance for Loan Losses (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Financing Receivable, Recorded Investment, Nonaccrual Status | $35,099,601 | $35,465,947 |
Cosumer Loans | ' | ' |
Financing Receivable, Recorded Investment, Nonaccrual Status | 33,444,368 | 33,680,602 |
Real Estate Loans | ' | ' |
Financing Receivable, Recorded Investment, Nonaccrual Status | 885,952 | 969,149 |
Sales Finance Contracts | ' | ' |
Financing Receivable, Recorded Investment, Nonaccrual Status | $769,281 | $816,196 |
Note_2_Allowance_For_Loan_Loss9
Note 2 - Allowance For Loan Losses: Past Due Financing Receivables (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due | $12,761,029 | $12,629,978 |
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due | 6,722,762 | 6,920,234 |
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due | 13,731,648 | 14,434,187 |
Financing Receivable, Recorded Investment, Past Due | 33,215,439 | 33,984,399 |
Cosumer Loans | ' | ' |
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due | 12,039,743 | 11,939,226 |
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due | 6,397,079 | 6,542,571 |
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due | 12,647,531 | 13,438,184 |
Financing Receivable, Recorded Investment, Past Due | 31,084,353 | 31,919,981 |
Real Estate Loans | ' | ' |
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due | 358,754 | 299,094 |
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due | 98,503 | 173,842 |
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due | 700,230 | 547,012 |
Financing Receivable, Recorded Investment, Past Due | 1,157,487 | 1,019,948 |
Sales Finance Contracts | ' | ' |
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due | 362,532 | 391,658 |
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due | 227,180 | 203,821 |
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due | 383,887 | 448,991 |
Financing Receivable, Recorded Investment, Past Due | $973,599 | $1,044,470 |
Recovered_Sheet1
Note 2 - Allowance For Loan Losses: Schedule of Loans and Financing Receivable (Details) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
Financing Receivable, Gross | $452,455,266 | $417,178,199 |
Financing Receivable, percent of portfolio | 100.00% | 100.00% |
Financing Receivable, 3-months net charge-offs | 5,894,232 | 5,505,821 |
Financing Receivable, percent net charge-offs | 100.00% | 100.00% |
Cosumer Loans | ' | ' |
Financing Receivable, Gross | 410,972,676 | 377,438,957 |
Financing Receivable, percent of portfolio | 90.80% | 90.40% |
Financing Receivable, 3-months net charge-offs | 5,713,824 | 5,391,499 |
Financing Receivable, percent net charge-offs | 96.90% | 97.90% |
Real Estate Loans | ' | ' |
Financing Receivable, Gross | 19,619,407 | 19,869,198 |
Financing Receivable, percent of portfolio | 4.40% | 4.80% |
Financing Receivable, 3-months net charge-offs | -1,222 | -10,754 |
Financing Receivable, percent net charge-offs | ' | -0.20% |
Sales Finance Contracts | ' | ' |
Financing Receivable, Gross | 21,863,183 | 19,870,044 |
Financing Receivable, percent of portfolio | 4.80% | 4.80% |
Financing Receivable, 3-months net charge-offs | $181,630 | $125,076 |
Financing Receivable, percent net charge-offs | 3.10% | 2.30% |
Recovered_Sheet2
Note 2 - Allowance For Loan Losses: Allowance for Credit Losses on Financing Receivables (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Details | ' | ' |
Loans and Leases Receivable, Allowance, Beginning Balance | $24,680,789 | $22,010,085 |
Allowance for Loan and Lease Losses, Provision for Loss, Gross | 5,894,232 | 5,505,821 |
Allowance for Doubtful Accounts Receivable, Charge-offs | -8,443,132 | -8,078,352 |
Allowance for Loan and Lease Losses, Recoveries of Bad Debts | 2,548,900 | 2,572,531 |
Loans and Leases Receivable, Allowance, Ending Balance | 24,680,789 | 22,010,085 |
Financing Receivable | 452,455,266 | 417,178,199 |
Financing Receivable, Collectively Evaluated for Impairment | $452,455,266 | $417,178,199 |
Recovered_Sheet3
Note 2 - Allowance For Loan Losses: Troubled Debt Restructurings on Financing Receivables (Details) (USD $) | Mar. 31, 2014 |
3 months ended March 31, 2014 | ' |
Financing Receivable, Modifications, Number of Contracts | 937 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | $2,998,201 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 2,808,712 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | 191 |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | 368,644 |
3 months ended March 31, 2014 | Cosumer Loans | ' |
Financing Receivable, Modifications, Number of Contracts | 879 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 2,776,850 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 2,590,986 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | 184 |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | 360,106 |
3 months ended March 31, 2014 | Real Estate Loans | ' |
Financing Receivable, Modifications, Number of Contracts | 15 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 113,052 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 113,052 |
3 months ended March 31, 2014 | Sales Finance Contracts | ' |
Financing Receivable, Modifications, Number of Contracts | 43 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 108,299 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 104,674 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | 7 |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | 8,538 |
3 months ended March 31, 2013 | ' |
Financing Receivable, Modifications, Number of Contracts | 905 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 2,876,204 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 2,681,857 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | 164 |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | 315,274 |
3 months ended March 31, 2013 | Cosumer Loans | ' |
Financing Receivable, Modifications, Number of Contracts | 853 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 2,703,413 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 2,514,775 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | 156 |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | 306,088 |
3 months ended March 31, 2013 | Real Estate Loans | ' |
Financing Receivable, Modifications, Number of Contracts | 12 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 93,942 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 91,942 |
3 months ended March 31, 2013 | Sales Finance Contracts | ' |
Financing Receivable, Modifications, Number of Contracts | 40 |
Financing Receivable, Modifications, Pre-Modification Recorded Investment | 78,849 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 75,140 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | 8 |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $9,186 |
Note_3_Investment_Securities_D
Note 3 - Investment Securities (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Details | ' | ' |
Available-for-sale Securities, Basis for Valuation, Other than Equity 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 | $2,738,677 | $5,195,856 |
Note_3_Investment_Securities_S2
Note 3 - Investment Securities: Schedule of Investment Securities, Amortized Cost and Estimated Fair Value (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Available-for-sale Securities, Amortized Cost Basis | $113,009,706 | $109,542,938 |
Available-for-sale Securities, Fair Value Disclosure | 112,762,784 | 106,061,584 |
Held to Maturity, at amortized cost | 27,765,760 | 29,777,456 |
US States and Political Subdivisions Debt Securities | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 112,879,390 | 109,412,622 |
Available-for-sale Securities, Fair Value Disclosure | 112,338,968 | 105,628,550 |
Held to Maturity, at amortized cost | 27,765,760 | 29,777,456 |
Held-to-maturity Securities, Fair Value | 28,169,368 | 30,169,874 |
Corporate Debt Securities | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 130,316 | 130,316 |
Available-for-sale Securities, Fair Value Disclosure | $423,816 | $433,034 |
Note_3_Investment_Securities_S3
Note 3 - Investment Securities: Schedule of Investment Securities, Fair Value and Unrealized Losses (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $35,453,839 | $53,317,704 |
Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses | 1,394,645 | 3,393,066 |
Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 15,405,961 | 12,932,421 |
Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses | 1,344,032 | 1,802,790 |
Securities, Continuous Unrealized Loss Position, Fair Value | 50,859,800 | 66,250,125 |
Continuous Unrealized Loss Position, Aggregate Losses | 2,738,677 | 5,195,856 |
US States and Political Subdivisions Debt Securities | ' | ' |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 34,492,747 | 51,088,253 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses | 1,379,288 | 3,354,098 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 11,283,696 | 9,763,723 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses | 1,155,602 | 1,671,183 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 45,776,443 | 60,851,976 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses | 2,534,890 | 5,025,281 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 961,092 | 2,229,451 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses | 15,357 | 38,968 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 4,122,265 | 3,168,698 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses | 188,430 | 131,607 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | 5,083,357 | 5,398,149 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses | $203,787 | $170,575 |
Note_4_Fair_Value_Fair_Value_M1
Note 4 - Fair Value: Fair Value Measurements, by Fair Value hierarchy (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Investments, Fair Value Disclosure | $112,762,784 | $106,061,584 |
Corporate Debt Securities | ' | ' |
Investments, Fair Value Disclosure | 423,816 | 433,034 |
US States and Political Subdivisions Debt Securities | ' | ' |
Investments, Fair Value Disclosure | 112,338,968 | 105,628,550 |
Fair Value, Inputs, Level 1 | ' | ' |
Investments, Fair Value Disclosure | 423,816 | 433,034 |
Fair Value, Inputs, Level 1 | Corporate Debt Securities | ' | ' |
Investments, Fair Value Disclosure | 423,816 | 433,034 |
Fair Value, Inputs, Level 2 | ' | ' |
Investments, Fair Value Disclosure | 112,338,968 | 105,628,550 |
Fair Value, Inputs, Level 2 | US States and Political Subdivisions Debt Securities | ' | ' |
Investments, Fair Value Disclosure | $112,338,968 | $105,628,550 |
Note_5_Equity_Method_Investmen2
Note 5 - Equity Method Investment: Equity Method Investments (Details) (USD $) | 0 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Details | ' | ' |
Equity Method Investments | $10,499,100 | $10,211,635 |
Equity Method Investment, Summarized Financial Information, Assets | 103,607,349 | 88,602,340 |
Equity Method Investment, Summarized Financial Information, Liabilities | 18,225,080 | 2,873,918 |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $2,526,486 | $7,983,103 |
Note_7_Income_Taxes_Details
Note 7 - Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Details | ' | ' |
Effective Income Tax Rate Reconciliation, Percent | 10.00% | 10.00% |
Note_8_Credit_Agreement_Detail
Note 8 - Credit Agreement (Details) (Wells Fargo Preferred Capital, Inc., USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Wells Fargo Preferred Capital, Inc. | ' |
Line of Credit Facility, Initiation Date | 11-Sep-09 |
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, Borrowing Capacity, Description | '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 | 11-Sep-16 |
Line of Credit Facility, Current Borrowing Capacity | $0 |
Note_10_Segment_Financial_Info3
Note 10 - Segment Financial Information (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Details | ' |
Number of Operating Segments | 5 |
Segment Reporting, Factors Used to Identify Entity's Reportable Segments | 'Each segment consists of a number 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 comprise Division II, Division III consists of offices in South Georgia. Division IV represents our Alabama and Tennessee offices, and our offices in Louisiana and Mississippi encompass Division V. |
Note_10_Segment_Financial_Info4
Note 10 - Segment Financial Information: Schedule of Segment Reporting Information, by Segment (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Segment Reporting Information, Revenue for Reportable Segment | $46,759 | $42,859 | ' |
Profit (Loss) | 21,313 | 18,773 | ' |
Segment Reporting Information, Net Assets | 394,872 | ' | 418,803 |
Division I | ' | ' | ' |
Segment Reporting Information, Revenue for Reportable Segment | 6,540 | 5,811 | ' |
Profit (Loss) | 2,603 | 2,010 | ' |
Segment Reporting Information, Net Assets | 49,796 | ' | 53,529 |
Division II | ' | ' | ' |
Segment Reporting Information, Revenue for Reportable Segment | 11,406 | 10,444 | ' |
Profit (Loss) | 5,897 | 5,252 | ' |
Segment Reporting Information, Net Assets | 94,052 | ' | 100,646 |
Division III | ' | ' | ' |
Segment Reporting Information, Revenue for Reportable Segment | 10,893 | 10,048 | ' |
Profit (Loss) | 5,420 | 4,796 | ' |
Segment Reporting Information, Net Assets | 91,324 | ' | 97,290 |
Division IV | ' | ' | ' |
Segment Reporting Information, Revenue for Reportable Segment | 9,390 | 8,676 | ' |
Profit (Loss) | 3,937 | 3,440 | ' |
Segment Reporting Information, Net Assets | 92,951 | ' | 96,440 |
Division V | ' | ' | ' |
Segment Reporting Information, Revenue for Reportable Segment | 8,530 | 7,880 | ' |
Profit (Loss) | 3,456 | 3,275 | ' |
Segment Reporting Information, Net Assets | $66,749 | ' | $70,898 |
Note_10_Segment_Financial_Info5
Note 10 - Segment Financial Information: Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Details | ' | ' |
Profit per segments | $21,313 | $18,773 |
Corporate earnings not allocated | 2,627 | 2,484 |
Corporate expenses not allocated | -12,015 | -11,137 |
Income taxes not allocated | -1,140 | -1,026 |
Net income per segments | $10,785 | $9,094 |