Question-and-Answer Session
Operator
At this time I would like to remind everyone, if you would like to ask a question, please press *, then the number 1 on your telephone key pad. We’ll pause for just a moment to compile the ?. [inaudible] roster.
Your first question comes from Matthew Clark, with KBW.
Matthew Clark
Hi this is Matt. Just first on the top proceeds – did you guys pay a dividend there and recognize any in the 4th Quarter? It looks like it was embedded in the total number?
Rene Jones
No, that dividend would have to be declared for the first quarter and then now paid for the first quarter.
Matthew Clark
And then on the mortgage-related re-negotiated loan, that are not accrual. Can you update us or let us know what your policy is in terms of how long it must take while they stay current on P&R before they return to accrual?
Rene Jones
In that case, the answer is pretty simple, once we modify the loan for someone who has missed a payment, we would require at least that they make at least six consecutive payments before we rolled that out of non-accrual.
I think we’ve been modifying loans probably May- March time-frame, so that gives you sort of some sense of what’s going on there. A lot of the loans that we’ve modified in the recent quarter actually have been current and are paying, so they never roll into nonperforming. So they’ve been making their payments all along, but what we’re trying to is to be really pro-active there and help people stay in their homes and sort of avoid outsides risk in the future.
Matthew Clark
And what has your experience been, in terms of, given that you’ve been doing in term of subsequent delinquencies in terms of what you’ve renegotiated.?
Rene Jones
You need, probably, six months of experience, so you can only have maybe a quarter or so of experience, so the things that have seasoned out the six months were probably in the 40s, who would admit, 40s range, that we default, which we think is better than what we’re hearing in the industry.
I think the primary reason is because our book of residential mortgages is so small that we have actually been able to deal with individuals on a person-to-person basis. Our view is that modifying a loan probably makes sense as long as that number doesn’t get above 60 or 70%.
- To read the full transcript on Seeking Alpha, click here »
