The Department reviewed audited financial statements provided by First Guaranty Mortgage Corporation for year-end 2014 and 2015. Richey May & Co. completed the independent audits in accordance with generally accepted accounting principles. The financial analysis is based on a review of the stated financial condition of the company and should not be considered an attestation regarding the validity of the figures. Capital
The capital position of the Licensee appears satisfactory. As of December 31, 2015, the Licensee reported $94,771,851 in capital in relation to total assets of $611,614,947. This reflects a capital to asset ratio of 15.50%. The capital to assets ratio has increased slightly from 12.10% as of December 31, …show more content…
The largest asset classes reported by the Licensee as of December 31, 2015 were Mortgage Loans Held for Sale, At Fair Market Value, which made up 31.17% of total assets, and Loans Eligible for Repurchase from GNMA, which made up 22.89% of total assets. The sample file review and the Licensee’s responses to examination inquiries indicated the Licensee does not originate high risk loan products such as payment option ARMs, negative amortization products, second lien purchase money loans, extended amortization, or subprime loans. The Licensee utilizes derivative instruments to reduce its risk exposure to fluctuations in interest …show more content…
As of December 31, 2015, Total Current Assets totaled $553,392,422 and Total Current Liabilities totaled $512,484,472 which resulted in Net Current Assets of $40,907,950. The current ratio as of the same date was 1.08:1. Based on a review of the December 31, 2015 financial statements, First Guaranty Mortgage Corporation’s earnings, lines of credit, and available cash balance indicates the Licensee does not appear to have problems meeting current cash needs.
The Licensee’s business requires substantial cash to support its operating activities. As a result, the Licensee is dependent on its warehouse lines of credit, and other financing facilities in order to finance its continued operations. If the Licensee’s principal lenders decided to terminate or not to renew any of these credit facilities with the Licensee, the loss of borrowing capacity could have a material adverse impact on the Licensee’s consolidated financial statements unless the Licensee found a suitable alternative
The capital position of the Licensee appears satisfactory. As of December 31, 2015, the Licensee reported $94,771,851 in capital in relation to total assets of $611,614,947. This reflects a capital to asset ratio of 15.50%. The capital to assets ratio has increased slightly from 12.10% as of December 31, …show more content…
The largest asset classes reported by the Licensee as of December 31, 2015 were Mortgage Loans Held for Sale, At Fair Market Value, which made up 31.17% of total assets, and Loans Eligible for Repurchase from GNMA, which made up 22.89% of total assets. The sample file review and the Licensee’s responses to examination inquiries indicated the Licensee does not originate high risk loan products such as payment option ARMs, negative amortization products, second lien purchase money loans, extended amortization, or subprime loans. The Licensee utilizes derivative instruments to reduce its risk exposure to fluctuations in interest …show more content…
As of December 31, 2015, Total Current Assets totaled $553,392,422 and Total Current Liabilities totaled $512,484,472 which resulted in Net Current Assets of $40,907,950. The current ratio as of the same date was 1.08:1. Based on a review of the December 31, 2015 financial statements, First Guaranty Mortgage Corporation’s earnings, lines of credit, and available cash balance indicates the Licensee does not appear to have problems meeting current cash needs.
The Licensee’s business requires substantial cash to support its operating activities. As a result, the Licensee is dependent on its warehouse lines of credit, and other financing facilities in order to finance its continued operations. If the Licensee’s principal lenders decided to terminate or not to renew any of these credit facilities with the Licensee, the loss of borrowing capacity could have a material adverse impact on the Licensee’s consolidated financial statements unless the Licensee found a suitable alternative