Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. HIBERNIA BANCORP, INC. (1437425) 10-Q published on Nov 14, 2011 at 3:21 pm
Reporting Period: Sep 29, 2011
Our loan and lease portfolio also includes certain loans and leases that have been modified in a troubled debt restructuring (TDR), where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as non-performing at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months.
When we modify loans and leases in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.
There were no loans modified in a TDR during the three or nine months ended September 30, 2011. The Company had no loans modified in a TDR which had payment defaults during the three and nine months ended September 30, 2011. Default occurs when a loan or lease is 90 days or more past due.
As of September 30, 2011, the Company had two TDRs, both of which are included in impaired loans and were modified before December 31, 2010. The outstanding balance of the two TDRs as of September 30, 2011 was $150,000. TDR loans were individually evaluated and any valuation allowance is recorded in the allowance for loan losses on the balance sheet. As of September 30, 2011, the Company had no commitments to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructurings.
Hibernia's non-performing assets, defined as non-accrual loans, accruing loans past due 90 days or more and other real estate owned, totaled $762,000, or 1.0%, of total assets at September 30, 2011, compared to $1.1 million, or 1.5%, of total assets at December 31, 2010. The non-performing assets totaling $762,000 at September 30, 2011, consist of three loans secured by first mortgages on one-to-four family residential real estate and two one-to-four family residential properties acquired through foreclosure. The net decrease in non-performing assets for the nine months ended September 30, 2011 was primarily due to Company’s receipt of a payment in the amount of $596,000 on one of its non-performing loans. The amount received was sufficient to retire the loan’s $557,000 principal balance, reimburse the Company for its collection expenses and pay a portion of the contractual interest due. Additionally, one loan with as balance of $147,000 which was previously included in non-performing assets was returned to accruing status. These decreases were partially offset by the addition on one loan with a balance of $379,000 to non-performing assets. Management believes that it has established sufficient allowances to cover any losses that may be incurred on these non-performing assets.
Contract with Third Party Processor. The Company is currently under contract with a third party processor for “on-line” data processing services. The contract is for a four-year term which expires on April 17, 2014 and is automatically renewable after the initial term for successive terms of five years at the then current rates of the third party processor unless terminated by either party.