XML 23 R11.htm IDEA: XBRL DOCUMENT
v3.10.0.1

4) Loans Held For Sale | 6 Months Ended
--- | ---
Jun. 30, 2018
Notes |
4) Loans Held For Sale | 4) Loans Held for Sale Fair Value Option Election Accounting Standards Codification (“ASC”) No. 825, “Financial Instruments”, allows for the option to report certain financial assets and liabilities at fair value initially and at subsequent measurement dates with changes in fair value included in earnings. The option may be applied instrument by instrument, but it is irrevocable. The Company elected the fair value option for loans held for sale originated after July 1, 2017. The Company believes the fair value option most closely aligns the timing of the recognition of gains and costs. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Electing fair value also reduces certain timing differences and better matches changes in the fair value of these assets with changes in the fair value of the related derivatives used for these assets. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on mortgage loans held for investment and is included in mortgage fee income on the condensed consolidated statement of earnings. None of these loans are 90 or more days past due nor on nonaccrual status as of June 30, 2018. See Note 8 to the condensed consolidated financial statements for additional disclosures regarding loans held for sale. The following is a summary of the aggregate fair value and the aggregate unpaid principal balance of loans held for sale for the periods presented:
| As of June 30, 2018
Aggregate fair value | $ 170,538,537
Unpaid principal balance | 165,180,172
Unrealized gain | 5,358,365
Mortgage Fee Income Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination and sale of mortgage loans held for sale. Major categories of mortgage fee income for loans held for sale are as follows:
| Three Months Ended June 30 |  | Six Months Ended June 30
| 2018 |  | 2017 |  | 2018 |  | 2017
Loan fees | $ 7,843,728 |  | $ 8,758,784 |  | $ 13,589,036 |  | $ 18,063,709
Interest income | 1,588,550 |  | 1,848,092 |  | 2,705,004 |  | 3,582,619
Secondary gains | 21,765,939 |  | 32,446,222 |  | 36,318,341 |  | 58,640,572
Change in fair value of loan commitments | 2,169 |  | (1,011,879) |  | 443,127 |  | 1,155,714
Change in fair value of loans held for sale | 810,755 | (1) | - |  | 4,766,844 | (1) | -
Provision for loan loss reserve | (302,061) |  | (526,818) |  | (653,112) |  | (953,453)
Mortgage fee income | $ 31,709,080 |  | $ 41,514,401 |  | $ 57,169,240 |  | $ 80,489,161
(1) See Fair Value Option Election |  |  |  |  |  |  |
Loan Loss Reserve When a repurchase demand corresponding to a mortgage loan previously held for sale and sold to a third-party investor is received from a third-party investor, the relevant data is reviewed and captured so that an estimated future loss can be calculated. The key factors that are used in the estimated loss calculation are as follows: (i) lien position, (ii) payment status, (iii) claim type, (iv) unpaid principal balance, (v) interest rate, and (vi) validity of the demand. Other data is captured and is useful for management purposes; the actual estimated loss is generally based on these key factors. The Company conducts its own review upon the receipt of a repurchase demand. In many instances, the Company is able to resolve the issues relating to the repurchase demand by the third-party investor without having to make any payments to the investor. The following is a summary of the loan loss reserve that is included in other liabilities and accrued expenses:
| As of June 30 2018 |  | As of December 31 2017
Balance, beginning of period | $ 2,571,524 |  | $ 627,733
Provision on current loan originations (1) | 653,112 |  | 1,851,187
Charge-offs, net of recaptured amounts | (44,382) |  | 92,604
Balance, end of period | $ 3,180,254 |  | $ 2,571,524
(1) Included in Mortgage fee income |  |  |
The Company believes the loan loss reserve represents probable loan losses incurred as of the balance sheet date. Actual loan loss experience could change, in the near-term, from the established reserve based upon claims that could be asserted by third-party investors. The Company believes there is potential to resolve any alleged claims by third-party investors on acceptable terms. If the Company is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third-party investor, the Company believes it has significant defenses to any such action and intends to vigorously defend itself against such action.

X
- Definition Represents the textual narrative disclosure of 4) Loans Held For Sale, during the indicated time period. + References No definition available. + Details
Name: | fil_LoansHeldForSaleDisclosure0TextBlock
Namespace Prefix: | fil_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration