The capital position of the Licensee appears sufficient. As of December 31, 2014, the Licensee reported $30,562,375 in capital in relation to total assets of $48,700,055. This reflects a capital ratio of 62.76% of total assets. The capital to assets ratio has declined slightly from 61.35% as of December 31, 2013. The reported Partner’s Equity increased from $28,556,701 as of December 31, 2013 to $30,562,375.
The Licensee’s currently has 123 wholesale and retail offices in 23 states in order to reduce the credit risk associated with specific geographic areas. In addition, to maintaining cash in bank deposits, which at times may exceed federally insured limits. The Licensee maintains an allowance for loan losses and a reserve for possible losses on loan sold. During 2014, the Licensee has reserved $172,000 to settle any investor repurchase claims. This estimate was based on historical experience. At this time it appears that the Management is limiting the licensee’s exposure too significant credit risk and Capital remains sound in relation to inherent industry risk.
Asset Quality …show more content…
SecurityNational Mortgage does not retain loans in the long-term portfolio, but focuses on selling in the secondary market. From the time period of January 1, 2014 through December 31, 2014, the number of loans repurchased nationally was 8 loans totaling $1,630,000. The largest asset class reported by the Licensee as of December 31, 2014 was Cash and cash equivalents, which made up 19.98% of total assets. The second largest asset as of the same date was Capitalized Mortgage Servicing Rights (MSR) comprising 16.09% of total assets. The Value of the MSRs is derived from net cash flows associated with servicing contracts. The Licensee receives a servicing fee of about .250% annually on the reaming outstanding principle balances of the