Risk Assets
Risk assets are comprised of nonaccrual loans, accruing restructured loans, accruing loans 90 days or more past due (accruing loans include accrued
interest receivable), and other property owned.
Components of Risk Assets
(dollars in thousands)
As of December 31
2015
2014
2013
Loans:
Nonaccrual
Accruing restructured
Accruing loans 90 days or more past due
$9,065
1,646
--
$13,693
1,587
--
$15,220
1,899
--
Total risk loans
Other property owned
10,711
510
15,280
136
17,119
69
Total risk assets
$11,221
$15,416
$17,188
0.3%
0.3%
0.2%
0.5%
0.4%
0.3%
0.6%
0.5%
0.2%
Total risk loans as a percentage of total loans
Nonaccrual loans as a percentage of total loans
Total delinquencies as a percentage of total loans
Our risk assets have decreased from December 31, 2014 and remain at acceptable levels. Total risk loans as a percentage of total loans remains well within
our established risk management guidelines.
The decrease in nonaccrual loans was due to a small number of nonaccrual loans to one borrower being repaid in full during the year ended December 31,
2015. Nonaccrual loans remained at an acceptable level at December 31, 2015, 2014, and 2013 and 50.8%, 49.1%, and 80.2% of our nonaccrual loans
were current at December 31, 2015, 2014, and 2013, respectively.
The decrease in total delinquencies as a percentage of total loans was primarily due to decrease in nonaccrual loans as described above.
Allowance for Loan Losses
The allowance for loan losses is an estimate of losses on loans in our portfolio as of the financial statement date. We determine the appropriate level of
allowance for loan losses based on the periodic evaluation of factors such as loan loss history, estimated probability of default, estimated loss severity,
portfolio quality, and current economic and environmental conditions.
Allowance Coverage Ratios
2015
2014
2013
0.5%
175.3%
148.3%
(0.0%)
5.9%
0.5%
106.4%
95.3%
0.0%
4.0%
0.6%
111.3%
98.9%
0.1%
5.9%
As of December 31
Allowance as a percentage of:
Loans
Nonaccrual loans
Total risk loans
Net (recoveries) charge-offs as a percentage of average loans
Adverse assets to risk funds
In our opinion, the allowance for loan losses was reasonable in relation to the risk in our loan portfolio at December 31, 2015.
Additional loan information is included in Notes 3, 9, 10, and 11 to the accompanying Consolidated Financial Statements.
RESULTS OF OPERATIONS
Profitability Information
(dollars in thousands)
For the year ended December 31
Net income
Return on average assets
Return on average members' equity
6
2015
2014
2013
$60,583
1.8%
8.9%
$65,851
2.1%
10.5%
$60,592
2.0%
10.6%