Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from Erika Penala from Merrill Lynch.
Erika Penala – Merrill Lynch
Are the C&I losses that you’re taking concentrated in any one sector, and are you seeing any weakness in the lender finance arena?
George Jones
No, and no, would be the answers to those questions. We really don’t see it concentrated in any one or two industries. It’s more broad based than that, and we have not seen issues and problems in the lender finance area.
Erika Penala – Merrill Lynch
The $8.8 million lot development loan is this -- does it have a structure on top of the dirt? And what is the bid-ask spread, so to speak, between the interested parties in a secondary market transaction, and what your expectations are –
George Jones
Right, we’re involved in negotiations right now, and it probably wouldn’t be the thing to do to talk about specifics of transactions that we’re talking about. But, I mentioned, I believe, that we have a recent appraisal – within 12 months – that supports the value that we have on the books today. And we did have significant cash equity injected upfront on that particular loan. Back to your first question, yes, they are fully developed lots ready to be delivered to the builder, and we have additional property for future expansion pledged on the credit also.
Erika Penala – Merrill Lynch
Do you mind giving us more color on that $9.6 million C&I loan that’s 90 days past due, in terms of the industry or –
George Jones
Well, let’s see, it’s a credit we’ve had for some time. We know the principals quite well. They are experiencing a downturn in this particular industry and product. They are very good folks and we expect to be able to work out of that problem, so to speak, over a reasonable period of time – probably 18 months to 2 years.
Erika Penala – Merrill Lynch
Would you remind us what your average C&I loan size is?
George Jones
Well, our average C&I loan is probably a little bit over $1 million, but we have a number of smaller loans. Our sweet spot, Erika, is between the $2 million and $10 million, so if you really look at what we would consider real average loans it’s in that category as opposed to the $1 million. It’s a little bit larger than that we believe – probably in the $2 million to $2.5 million range.
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