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Prepare forecasted financial statements for Year 7 (cash flow statement, income statement, and
balance sheet). Prepare a brief justification for each assumption that you make when forecasting
a specific value.
Exhibit 1:
Annual Summary Financial Statements
Bastion Finance
Summary of Audited Financial Statements ($ Millions)
Income Statements Year 1 Year 2 Year3 Year 4 Year 5 Year 6
Revenues
Interest Income 4.3 19.0 28.3 36.4 39.2 46.7
Loan Fees 5.2 15.4 8.0 11.2 20.0 22.8
Operating Revenue 9.5 34.4 36.3 47.6 59.2 69.5
Expenses
Interest Expense 4.5 15.8 24.7 31.7 41.5 48.7
Salaries and Wages 0.7 0.8 0.9 1.1 1.3 1.5
Other 0.2 0.2 0.2 0.3 0.3 0.5
Operating Expenses 5.4 16.8 25.8 33.1 43.1 50.7
Operating Income 4.1 17.6 10.5 14.5 16.1 18.8
Bad Debts 0.0 0.0 0.0 0.0 3.9 6.3
Income Tax 0.0 0.0 0.0 0.0 4.8 1.6
Net Income 4.1 17.6 10.5 14.5 7.4 10.9
Statements of Retained Earnings
Beginning Retained Earnings 0.0 1.1 5.7 5.2 5.7 6.1
Net Income 4.1 17.6 10.5 14.5 7.4 10.9
Dividends 3.0 13.0 11.0 14.0 7.0 10.0
Ending Retained Earnings 1.1 5.7 5.2 5.7 6.1 7.0
Balance Sheets
Assets
Cash 2.9 2.0 71.8 96.2 102.4 81.1
Loans Receivable 74.5 232.9 264.8 312.6 349.3 393.3
Total Assets 77.4 234.9 336.6 408.8 451.7 474.4
Liabilities
Interest Payable 1.1 4.0 6.2 7.9 10.4 12.2
Term Deposits 75.0 225.0 325.0 395.0 435.0 455.0
Total Liabilities 76.1 229.0 331.2 402.9 445.4 467.2
Owners Equity
Common Stock 0.2 0.2 0.2 0.2 0.2 0.2
Retained Earnings 1.1 5.7 5.2 5.7 6.1 7.0
Total Liabilities and Equity 77.4 234.9 336.6 408.8 451.7 474.4
Exhibit 2:
Information from the Companys Annual Report to Shareholders.
Bastion Finance
Fiscal Year
The fiscal year for Bastion Finance runs from March 16 through March 15. To avoid confusion,
dates are not used in the following discussion. Instead, references are made to each full fiscal
year of operation. Thus Year 1 refers to the firms first full year of business and Year 6 to its most
recently completed year.
Company Regulatory Matters
The company is organized as a commercial investment company. It is not subject to regulatory
oversight as a bank. Securities regulations require that term investors be supplied with a current
prospectus. Depositors investments are not insured or guaranteed by any governmental agency.
Company Shareholders
Shares in Bastion Finance are not listed on any exchange nor are they publicly traded. Private
transactions between individuals have occurred infrequently. As of the end of Year 6, the firm is
aware of 15 individuals owning sharesmost consist of very small holdings. The five largest
shareholders and their holdings are:
Shares
%
Eric Lombard 1,290,000 43%
Walter Carson 1,050,000 35%
Lance Edwards 300,000 10%
LeRoy Fisk 150,000 5%
Linda Hobbs 60,000 2%
In Year 3, Linda Hobbs purchased 60,000 shares from Walter Carson for $2,816,000, a price
representing eight times per share earnings for Year 2. At the end of Year 4, LeRoy Fisk
purchased 150,000 shares from Walter Carson for $7,250,000, a price representing 10 times the
estimated per share earnings for Year 4. Several smaller trades have occurred at various prices
over the past six years.
Board of Directors
Six individuals serve on the companys Board of Directors. Directors who are not managers are
paid an annual retainer of $25,000 per year and receive 1,000 shares in the firm. The Chair of the
Audit Committee and the Chair of the Compensation Committee each receive an additional fee
of $5,000. The total fees earned in Year 6 and shareholdings as of the end of Year 6 for each of
the directors are given below.
Fees
Shareholding
Eric Lombard, Chairman of the Board $ 1,290,000
Walter Carson, Chief Executive Officer 1,050,000
Brendon Sheppard 25,000 6,000
Susan Richee, Chair of the Audit Committee 30,000 2,000
Bruce Ludlow, Chair of the Compensation Committee 30,000 3,000
Gordon Meyers 25,000 5,000
Executive Compensation
The firm has only four executive-level employees. The compensation for the executive officers
for the past two years was as follows:
Y
ear 5 Year 6
Eric Lombard, Chairman of the Board $350,000 $400,000
Walter Carson, Chief Executive Officer $350,000 $400,000
Paul Brekkar, Legal Officer $180,000 $200,000
Denise Horton, Finance Officer $135,000 $150,000
The Compensation Committee reviews the compensation levels paid by a sample of 10 other
firms in the industry. It is the Boards policy to maintain executive compensation at levels
competitive with comparator firms.
Exhibit 2:
Information from the Companys Annual Report to Shareholders (continued)
Notes to Financial Statements
The preparation of our financial statements in conformance with generally accepted accounting
principles (GAAP) requires management to make estimates and assumptions affecting the
amounts to be reported. Actual results may differ from those estimates.
The company prepares its financial reporting accounts on an accrual accounting basis. It
prepares its tax return using cash-basis accounting. Deferred taxes are not material and are not
recognized in the accounts. The firm faces a tax rate of 30% on income.
The company has no fixed assets. The firms premises, furniture, office equipment, and all
fittings are leased. Lease obligations are $215,000 for Years 7 through 10 and $135,000 for
Years 11 through 14.
We are exposed to claims and litigation arising in the ordinary course of business and use
various methods to resolve these matters in a manner which we believe best serves the interest of
the firm. We do not believe any pending claim or action will have a material adverse effect on
the firm.
The firm has been experiencing an increase in the cost to acquire term deposits. Management
has been successful in passing the increase onto the firms borrowers. The average annual interest
rates paid and earned for the past six years are given below along with the average maturities.
Interest is paid quarterly to depositors and is received at maturity from borrowers.
Bastion Finance has received an unqualified audit opinion from its auditor, Goodman Cole, in
each of its six years of operation.
Loans Outstanding at Year End
The loan cards from the firms Loan Book for all of the loans outstanding as of the end of Year 6
are reproduced below. (Dollar amounts are shown in millions rounded to one decimal.)
Term DepositorsLoan CustomersYearAnnual Interest PaidAverage Maturity (Months)Annual
Interest EarnedAverage Maturity (Months)1 8%1811%212 9%1912%253 9%1612%254
9%1512%24510%1313%19611%1213%26
IMA EDUCATIONAL CASE JOURNAL VOL. 6, NO. 1, ART. 1, MARCH 2013
5
IMA EDUCATIONAL CASE JOURNAL VOL. 6, NO. 1, ART. 1, MARCH 2013
6
Loan Number 405 Principal Amount $20.0 M
Year Loan Granted 4 Year for Scheduled Repayment 5
Interest Rate 12%** Loan Origination Fee $1.6 M
Borrower Prestige Development
Principal Officers Cornelius Bowden, Sandy Maier, and Anthony Roest
Transactions
Year Description Loan Balance
4 Loan Principal $20.0 $20.0
4 Loan Origination Fee $1.6 $21.6
4 Interest $0.6 $22.2
5 Interest $2.7 $24.9
6 Interest $3.7 $28.6
Notes: Builder has encountered severe stability problems in the geological substrata of the
building site.
Project delayed indefinitely
. **Interest rate raised to 15% as of start of Year 6.
Loan Number 506 Principal Amount $30.0 M
Year Loan Granted 5 Year for Scheduled Repayment 9
Interest Rate 10% Loan Origination Fee $2.4 M
Borrower Gold Coast Condominiums
Principal Officers Barbara Liveris, Eric Lombard, and Phillip Greene
Transactions
Year Description Loan Balance
5 Loan Principal $30.0 $30.0
5 Loan Origination Fee $2.4 $32.4
5 Interest $0.3 $32.7
6 Interest $3.3 $36.0
Notes:
IMA EDUCATIONAL CASE JOURNAL VOL. 6, NO. 1, ART. 1, MARCH 2013
7
Loan Number 601 Principal Amount $65.0 M
Year Loan Granted 6 Year for Scheduled Repayment 8
Interest Rate 13% Loan Origination Fee $5.2 M
Borrower Kingsland Hotels
Principal Officers James Franklin and Jacqueline Bell
Transactions
Year Description Loan Balance
6 Loan Principal $65.0 $65.0
6 Loan Origination Fee $5.2 $70.2
6 Interest $6.7 $76.9
Notes:
Loan Number 602 Principal Amount $45.0 M
Year Loan Granted 6 Year for Scheduled Repayment 7
Interest Rate 15% Loan Origination Fee $3.6 M
Borrower Green Lane Apartments
Principal Officers Wang Lim, Henry Shi, and Chong Xie
Transactions
Year Description Loan Balance
6 Loan Principal $45.0 $45.0
6 Loan Origination Fee $3.6 $48.6
6 Interest $3.5 $52.1
Notes:
Exhibit
Exhibit 2:
Information from the Companys Annual Report to Shareholders (continued)
Loan Cards for Outstanding Loans
Loan Number 603 Principal Amount $50.0 M
Year Loan Granted 6 Year for Scheduled Repayment 7
Interest Rate 13% Loan Origination Fee $4.0 M
Borrower Lumineria Partners
Principal Officers Madeleine Lindquist and Heidi Coleman
Transactions
Year Description Loan Balance
6 Loan Principal $50.0 $50.0
6 Loan Origination Fee $4.0 $54.0
6 Interest $3.2 $57.2
Notes:
Loan Number 604 Principal Amount $85.0 M
Year Loan Granted 6 Year for Scheduled Repayment 9
Interest Rate 10% Loan Origination Fee $6.8 M
Borrower Dorchester Management Company
Principal Officers Gordon Reynolds, Phillip Greene, and Walter Carson
Transactions
Year Description Loan Balance
6 Loan Principal $85.0 $85.0
6 Loan Origination Fee $6.8 $91.8
6 Interest $5.1 $96.9
Loan Number 605 Principal Amount $40.0 M
Year Loan Granted 6 Year for Scheduled Repayment 9
Interest Rate 14% Loan Origination Fee $3.2 M
Borrower Hampton Arms Apartments
Principal Officers Anne Ward, Paul McLeahy, and Hamilton Wood
Transactions
Year Description Loan Balance
6 Loan Principal $40.0 $40.0
6 Loan Origination Fee $3.2 $43.2
6 Interest $2.4 $45.6
Notes:
Exhibit 2:
Information from the Companys Annual Report to Shareholders (continued)
Loan Cards for Outstanding Loans
Company Risk Factors
Bastion Finance is exposed to several sources of risk in its ordinary course of business. These
include credit risk, interest rate risk, liquidity risk, and general business risk. Credit risk refers to
the potential that some of our customers may default on the loans we have made to them. This
risk is augmented by our focus on second mortgages and our concentration in a narrow market
segment. Interest rate risk means that we may not be able to maintain a profitable spread between
our cost of borrowing and the returns from lending. Liquidity risk arises because we borrow from
term depositors on maturities ranging from 6-18 months while our loans to developers may
extend for multiple years. General business risk is inherent in the competitive nature of our
industry. We cannot be assured that our term depositors or loan customers will continue to
conduct business with us rather than with one or more of our competitors. Bastion Finance is not
exposed to foreign exchange risk and does not engage in derivatives trading.
Exhibit 3:
Loan Cards for Defaulted Loans
Loan Number 303 Principal Amount $25.0 M
Year Loan Granted 3 Year for Scheduled Repayment 4
Interest Rate 12% Loan Origination Fee $2.0 M
Borrower Phoenix Horizons
Principal Officers Linda Gibson and Phillip Greene
Transactions
Year Description Loan Balance
3 Loan Principal $25.0 $25.0
3 Loan Origination Fee $2.0 $27.0
3 Interest $1.6 $28.6
4 Interest $3.4 $32.0
5 Interest $1.9 $33.9
5 Repayment $30.0 $3.9
5 Loss Write Off $3.9
Notes: Holder of the first mortgage foreclosed the property. There were insufficient funds to
fully re-pay our
second mortgage.
Loan Number 502 Principal Amount $65.0 M
Year Loan Granted 5 Year for Scheduled Repayment 6
Interest Rate 13% Loan Origination Fee $5.2 M
Borrower Westwood Shopping Complex
Principal Officers Phyllis and David Edins
Transactions
Year Description Loan Balance
5 Loan Principal $65.0 $65.0
5 Loan Origination Fee $5.2 $70.2
5 Interest $5.9 $76.1
6 Interest $3.9 $80.0
6 Repayment $73.7 $6.3
6 Loss Write Off $6.3
Notes: Proceeds from the sale of the complex failed to cover the full development costs. The
company went
into liquidation.

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Prepare forecasted financial statements for Year 7 (cash flow statem.pdf

  • 1. Prepare forecasted financial statements for Year 7 (cash flow statement, income statement, and balance sheet). Prepare a brief justification for each assumption that you make when forecasting a specific value. Exhibit 1: Annual Summary Financial Statements Bastion Finance Summary of Audited Financial Statements ($ Millions) Income Statements Year 1 Year 2 Year3 Year 4 Year 5 Year 6 Revenues Interest Income 4.3 19.0 28.3 36.4 39.2 46.7 Loan Fees 5.2 15.4 8.0 11.2 20.0 22.8 Operating Revenue 9.5 34.4 36.3 47.6 59.2 69.5 Expenses Interest Expense 4.5 15.8 24.7 31.7 41.5 48.7 Salaries and Wages 0.7 0.8 0.9 1.1 1.3 1.5 Other 0.2 0.2 0.2 0.3 0.3 0.5 Operating Expenses 5.4 16.8 25.8 33.1 43.1 50.7 Operating Income 4.1 17.6 10.5 14.5 16.1 18.8 Bad Debts 0.0 0.0 0.0 0.0 3.9 6.3 Income Tax 0.0 0.0 0.0 0.0 4.8 1.6 Net Income 4.1 17.6 10.5 14.5 7.4 10.9 Statements of Retained Earnings Beginning Retained Earnings 0.0 1.1 5.7 5.2 5.7 6.1 Net Income 4.1 17.6 10.5 14.5 7.4 10.9 Dividends 3.0 13.0 11.0 14.0 7.0 10.0 Ending Retained Earnings 1.1 5.7 5.2 5.7 6.1 7.0 Balance Sheets Assets Cash 2.9 2.0 71.8 96.2 102.4 81.1 Loans Receivable 74.5 232.9 264.8 312.6 349.3 393.3 Total Assets 77.4 234.9 336.6 408.8 451.7 474.4 Liabilities Interest Payable 1.1 4.0 6.2 7.9 10.4 12.2 Term Deposits 75.0 225.0 325.0 395.0 435.0 455.0 Total Liabilities 76.1 229.0 331.2 402.9 445.4 467.2
  • 2. Owners Equity Common Stock 0.2 0.2 0.2 0.2 0.2 0.2 Retained Earnings 1.1 5.7 5.2 5.7 6.1 7.0 Total Liabilities and Equity 77.4 234.9 336.6 408.8 451.7 474.4 Exhibit 2: Information from the Companys Annual Report to Shareholders. Bastion Finance Fiscal Year The fiscal year for Bastion Finance runs from March 16 through March 15. To avoid confusion, dates are not used in the following discussion. Instead, references are made to each full fiscal year of operation. Thus Year 1 refers to the firms first full year of business and Year 6 to its most recently completed year. Company Regulatory Matters The company is organized as a commercial investment company. It is not subject to regulatory oversight as a bank. Securities regulations require that term investors be supplied with a current prospectus. Depositors investments are not insured or guaranteed by any governmental agency. Company Shareholders Shares in Bastion Finance are not listed on any exchange nor are they publicly traded. Private transactions between individuals have occurred infrequently. As of the end of Year 6, the firm is aware of 15 individuals owning sharesmost consist of very small holdings. The five largest shareholders and their holdings are: Shares % Eric Lombard 1,290,000 43% Walter Carson 1,050,000 35% Lance Edwards 300,000 10% LeRoy Fisk 150,000 5% Linda Hobbs 60,000 2% In Year 3, Linda Hobbs purchased 60,000 shares from Walter Carson for $2,816,000, a price representing eight times per share earnings for Year 2. At the end of Year 4, LeRoy Fisk purchased 150,000 shares from Walter Carson for $7,250,000, a price representing 10 times the estimated per share earnings for Year 4. Several smaller trades have occurred at various prices over the past six years. Board of Directors Six individuals serve on the companys Board of Directors. Directors who are not managers are paid an annual retainer of $25,000 per year and receive 1,000 shares in the firm. The Chair of the
  • 3. Audit Committee and the Chair of the Compensation Committee each receive an additional fee of $5,000. The total fees earned in Year 6 and shareholdings as of the end of Year 6 for each of the directors are given below. Fees Shareholding Eric Lombard, Chairman of the Board $ 1,290,000 Walter Carson, Chief Executive Officer 1,050,000 Brendon Sheppard 25,000 6,000 Susan Richee, Chair of the Audit Committee 30,000 2,000 Bruce Ludlow, Chair of the Compensation Committee 30,000 3,000 Gordon Meyers 25,000 5,000 Executive Compensation The firm has only four executive-level employees. The compensation for the executive officers for the past two years was as follows: Y ear 5 Year 6 Eric Lombard, Chairman of the Board $350,000 $400,000 Walter Carson, Chief Executive Officer $350,000 $400,000 Paul Brekkar, Legal Officer $180,000 $200,000 Denise Horton, Finance Officer $135,000 $150,000 The Compensation Committee reviews the compensation levels paid by a sample of 10 other firms in the industry. It is the Boards policy to maintain executive compensation at levels competitive with comparator firms. Exhibit 2: Information from the Companys Annual Report to Shareholders (continued) Notes to Financial Statements The preparation of our financial statements in conformance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions affecting the amounts to be reported. Actual results may differ from those estimates. The company prepares its financial reporting accounts on an accrual accounting basis. It prepares its tax return using cash-basis accounting. Deferred taxes are not material and are not recognized in the accounts. The firm faces a tax rate of 30% on income. The company has no fixed assets. The firms premises, furniture, office equipment, and all fittings are leased. Lease obligations are $215,000 for Years 7 through 10 and $135,000 for Years 11 through 14.
  • 4. We are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner which we believe best serves the interest of the firm. We do not believe any pending claim or action will have a material adverse effect on the firm. The firm has been experiencing an increase in the cost to acquire term deposits. Management has been successful in passing the increase onto the firms borrowers. The average annual interest rates paid and earned for the past six years are given below along with the average maturities. Interest is paid quarterly to depositors and is received at maturity from borrowers. Bastion Finance has received an unqualified audit opinion from its auditor, Goodman Cole, in each of its six years of operation. Loans Outstanding at Year End The loan cards from the firms Loan Book for all of the loans outstanding as of the end of Year 6 are reproduced below. (Dollar amounts are shown in millions rounded to one decimal.) Term DepositorsLoan CustomersYearAnnual Interest PaidAverage Maturity (Months)Annual Interest EarnedAverage Maturity (Months)1 8%1811%212 9%1912%253 9%1612%254 9%1512%24510%1313%19611%1213%26 IMA EDUCATIONAL CASE JOURNAL VOL. 6, NO. 1, ART. 1, MARCH 2013 5 IMA EDUCATIONAL CASE JOURNAL VOL. 6, NO. 1, ART. 1, MARCH 2013 6 Loan Number 405 Principal Amount $20.0 M Year Loan Granted 4 Year for Scheduled Repayment 5 Interest Rate 12%** Loan Origination Fee $1.6 M Borrower Prestige Development Principal Officers Cornelius Bowden, Sandy Maier, and Anthony Roest Transactions Year Description Loan Balance 4 Loan Principal $20.0 $20.0 4 Loan Origination Fee $1.6 $21.6 4 Interest $0.6 $22.2 5 Interest $2.7 $24.9 6 Interest $3.7 $28.6 Notes: Builder has encountered severe stability problems in the geological substrata of the building site. Project delayed indefinitely
  • 5. . **Interest rate raised to 15% as of start of Year 6. Loan Number 506 Principal Amount $30.0 M Year Loan Granted 5 Year for Scheduled Repayment 9 Interest Rate 10% Loan Origination Fee $2.4 M Borrower Gold Coast Condominiums Principal Officers Barbara Liveris, Eric Lombard, and Phillip Greene Transactions Year Description Loan Balance 5 Loan Principal $30.0 $30.0 5 Loan Origination Fee $2.4 $32.4 5 Interest $0.3 $32.7 6 Interest $3.3 $36.0 Notes: IMA EDUCATIONAL CASE JOURNAL VOL. 6, NO. 1, ART. 1, MARCH 2013 7 Loan Number 601 Principal Amount $65.0 M Year Loan Granted 6 Year for Scheduled Repayment 8 Interest Rate 13% Loan Origination Fee $5.2 M Borrower Kingsland Hotels Principal Officers James Franklin and Jacqueline Bell Transactions Year Description Loan Balance 6 Loan Principal $65.0 $65.0 6 Loan Origination Fee $5.2 $70.2 6 Interest $6.7 $76.9 Notes: Loan Number 602 Principal Amount $45.0 M Year Loan Granted 6 Year for Scheduled Repayment 7 Interest Rate 15% Loan Origination Fee $3.6 M Borrower Green Lane Apartments Principal Officers Wang Lim, Henry Shi, and Chong Xie Transactions Year Description Loan Balance 6 Loan Principal $45.0 $45.0 6 Loan Origination Fee $3.6 $48.6
  • 6. 6 Interest $3.5 $52.1 Notes: Exhibit Exhibit 2: Information from the Companys Annual Report to Shareholders (continued) Loan Cards for Outstanding Loans Loan Number 603 Principal Amount $50.0 M Year Loan Granted 6 Year for Scheduled Repayment 7 Interest Rate 13% Loan Origination Fee $4.0 M Borrower Lumineria Partners Principal Officers Madeleine Lindquist and Heidi Coleman Transactions Year Description Loan Balance 6 Loan Principal $50.0 $50.0 6 Loan Origination Fee $4.0 $54.0 6 Interest $3.2 $57.2 Notes: Loan Number 604 Principal Amount $85.0 M Year Loan Granted 6 Year for Scheduled Repayment 9 Interest Rate 10% Loan Origination Fee $6.8 M Borrower Dorchester Management Company Principal Officers Gordon Reynolds, Phillip Greene, and Walter Carson Transactions Year Description Loan Balance 6 Loan Principal $85.0 $85.0 6 Loan Origination Fee $6.8 $91.8 6 Interest $5.1 $96.9 Loan Number 605 Principal Amount $40.0 M Year Loan Granted 6 Year for Scheduled Repayment 9 Interest Rate 14% Loan Origination Fee $3.2 M Borrower Hampton Arms Apartments Principal Officers Anne Ward, Paul McLeahy, and Hamilton Wood Transactions Year Description Loan Balance
  • 7. 6 Loan Principal $40.0 $40.0 6 Loan Origination Fee $3.2 $43.2 6 Interest $2.4 $45.6 Notes: Exhibit 2: Information from the Companys Annual Report to Shareholders (continued) Loan Cards for Outstanding Loans Company Risk Factors Bastion Finance is exposed to several sources of risk in its ordinary course of business. These include credit risk, interest rate risk, liquidity risk, and general business risk. Credit risk refers to the potential that some of our customers may default on the loans we have made to them. This risk is augmented by our focus on second mortgages and our concentration in a narrow market segment. Interest rate risk means that we may not be able to maintain a profitable spread between our cost of borrowing and the returns from lending. Liquidity risk arises because we borrow from term depositors on maturities ranging from 6-18 months while our loans to developers may extend for multiple years. General business risk is inherent in the competitive nature of our industry. We cannot be assured that our term depositors or loan customers will continue to conduct business with us rather than with one or more of our competitors. Bastion Finance is not exposed to foreign exchange risk and does not engage in derivatives trading. Exhibit 3: Loan Cards for Defaulted Loans Loan Number 303 Principal Amount $25.0 M Year Loan Granted 3 Year for Scheduled Repayment 4 Interest Rate 12% Loan Origination Fee $2.0 M Borrower Phoenix Horizons Principal Officers Linda Gibson and Phillip Greene Transactions Year Description Loan Balance 3 Loan Principal $25.0 $25.0 3 Loan Origination Fee $2.0 $27.0 3 Interest $1.6 $28.6 4 Interest $3.4 $32.0 5 Interest $1.9 $33.9 5 Repayment $30.0 $3.9 5 Loss Write Off $3.9
  • 8. Notes: Holder of the first mortgage foreclosed the property. There were insufficient funds to fully re-pay our second mortgage. Loan Number 502 Principal Amount $65.0 M Year Loan Granted 5 Year for Scheduled Repayment 6 Interest Rate 13% Loan Origination Fee $5.2 M Borrower Westwood Shopping Complex Principal Officers Phyllis and David Edins Transactions Year Description Loan Balance 5 Loan Principal $65.0 $65.0 5 Loan Origination Fee $5.2 $70.2 5 Interest $5.9 $76.1 6 Interest $3.9 $80.0 6 Repayment $73.7 $6.3 6 Loss Write Off $6.3 Notes: Proceeds from the sale of the complex failed to cover the full development costs. The company went into liquidation.