Note 8 - Credit Quality Of Financing Receivables:

12 Months Ended

Jun. 30, 2013

Financing Receivable Credit Quality Indicators [Table Text Block]

Note 8 – Credit Quality of Financing Receivables:

The following tables provide information on the credit profile of the components of the portfolio and allowance for credit losses related to “financing receivables” as defined under Topic 310, Receivables. This disclosure on “financing receivables” covers the Company’s direct finance and sales-type leases and all commercial loans, but does not include operating leases and transactions in process. The portfolio is disaggregated into segments and classifications appropriate for assessing and monitoring the portfolios’ risk and performance. This disclosure does not encompass all risk assets or the entire allowance for credit losses.

Portfolio segments identified by the Company include leases and loans. These segments have been disaggregated into four classes: 1) commercial leases, 2) education, government and non-profit leases, 3) commercial and industrial loans and 4) commercial real estate loans. Relevant risk characteristics for establishing these portfolio classes generally include the nature of the borrower, structure of the transaction and collateral type. The Company’s credit process includes a policy of classifying all leases and loans in accordance with a risk rating classification system consistent with regulatory models under which leases and loans may be rated as “pass”, “special mention”, “substandard”, or “doubtful”. These risk categories reflect an assessment of the ability of the borrowers to service their obligation based on current financial position, historical payment experience, and collateral adequacy, among other factors. The Company uses the following definitions for risk ratings:

Pass – Includes credits of the highest quality as well as credits with positive primary repayment source but one or more characteristics that are of higher than average risk.

Special Mention – Have a potential weakness that if left uncorrected may result in deterioration of the repayment prospects for the lease or loan or of the Company’s credit position at some future date.

Substandard – Are inadequately protected by the paying capacity of the obligor or of the collateral, if any. Substandard credits have a well-defined weakness that jeopardize the liquidation of the debt or indicate the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Based on current information and events, collection of all amounts due according to the contractual terms of the lease or loan agreement is considered highly questionable and improbable.

The risk classification of financing receivables by portfolio class is as follows:

(dollars in thousands)	Commercial Leases		Education Government Non-profit Leases		Commercial & Industrial Loans		Commercial Real Estate Loans		Total Financing Receivable
As of June 30, 2013:
Pass	$	256,360	$	81,730	$	64,366	$	3,616	$	406,072
Special Mention		5,264		200		2,182		887		8,533
Substandard		1,499		615		-		4,901		7,015
Doubtful		73		12		-		-		85
	$	263,196	$	82,557	$	66,548	$	9,404	$	421,705
Non-accrual	$	1,591	$	23	$	-	$	-	$	1,614

As of June 30, 2012:
Pass	$	158,130	$	85,699	$	64,091	$	2,955	$	310,875
Special Mention		10,095		1,188		7,410		2,495		21,188
Substandard		683		770		-		8,031		9,484
Doubtful		119		2		-		-		121
	$	169,027	$	87,659	$	71,501	$	13,481	$	341,668
Non-accrual	$	161	$	368	$	-	$	-	$	529

The accrual of interest income on leases and loans will be discontinued when the customer becomes ninety days or more past due on its lease or loan payments with the Company, unless the Company believes the investment is otherwise recoverable. Leases and loans may be placed on non-accrual earlier if the Company has significant doubt about the ability of the customer to meet its lease or loan obligations, as evidenced by consistent delinquency, deterioration in the customer’s financial condition or other relevant factors. Payments received while on non-accrual are applied to reduce the Company’s recorded value.

The following table presents the aging of the financing receivables by portfolio class:

(dollars in thousands)	30-89 Days		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivable		Over 90 Days & Accruing

As of June 30, 2013:
Commercial Leases	$	113	$	-	$	113	$	263,083	$	263,196	$	-
Education, Government, Non-profit Leases		-		-		-		82,557		82,557		-
Commercial and Industrial Loans		-		-		-		66,548		66,548		-
Commercial Real Estate Loans		-		-		-		9,404		9,404		-
	$	113	$	-	$	113	$	421,592	$	421,705	$	-

As of June 30, 2012:
Commercial Leases	$	-	$	-	$	-	$	169,027	$	169,027	$	-
Education, Government, Non-profit Leases		-		-		-		87,659		87,659		-
Commercial and Industrial Loans		-		-		-		71,501		71,501		-
Commercial Real Estate Loans		-		-		-		13,481		13,481		-
	$	-	$	-	$	-	$	341,668	$	341,668	$	-

The following table presents the allowance balances and activity in the allowance related to financing receivables, along with the recorded investment and allowance determined based on impairment method as of June 30, 2013 and 2012:

(in thousands)	Commercial Leases			Education Government Non-profit Leases			Commercial & Industrial Loans		Commercial Real Estate Loans			Total Financing Receivable
As of June 30, 2013:
Allowance for lease and loan losses
Balance beginning of period	$	2,236		$	897		$	1,561	$	511		$	5,205
Charge-offs		(71	)		(279	)		-		-			(350	)
Recoveries		6			-			-		-			6
Provision		375			-			-		(100	)		275
Balance end of period	$	2,546		$	618		$	1,561	$	411		$	5,136

Individually evaluated for impairment	$	330		$	111		$	-	$	-		$	441
Collectively evaluated for impairment		2,216			507			1,561		411			4,695
Total ending allowance balance	$	2,546		$	618		$	1,561	$	411		$	5,136

Finance receivables
Individually evaluated for impairment	$	1,926		$	627		$	-	$	-		$	2,553
Collectively evaluated for impairment		261,270			81,930			66,548		9,404			419,152
	$	263,196		$	82,557		$	66,548	$	9,404		$	421,705

As of June 30, 2012:
Allowance for lease and loan losses
Balance beginning of period	$	2,080		$	897		$	1,561	$	511		$	5,049
Charge-offs		(51	)		-			-		-			(51	)
Recoveries		207			-			-		-			207
Provision		-			-			-		-			-
Balance end of period	$	2,236		$	897		$	1,561	$	511		$	5,205

Individually evaluated for impairment	$	292		$	226		$	-	$	-		$	518
Collectively evaluated for impairment		1,944			671			1,561		511			4,687
Total ending allowance balance	$	2,236		$	897		$	1,561	$	511		$	5,205

Finance receivables
Individually evaluated for impairment	$	1,855		$	772		$	-	$	-		$	2,627
Collectively evaluated for impairment		167,172			86,887			71,501		13,481			339,041
Total ending finance receivable balance	$	169,027		$	87,659		$	71,501	$	13,481		$	341,668