Note 5 - Net Investment in Leases

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Leases of Lessor Disclosure [Text Block]

Note 5 – Net Investment in Leases

:

The Company's net investment in leases consists of the following:

	June 30,
	2016			2015
	(in thousands)
Minimum lease payments receivable	$	248,527		$	310,960
Estimated residual value		10,871			13,819
Less unearned income		(19,434	)		(23,046	)
Net investment in leases before allowances		239,964			301,733
Less allowance for lease losses		(2,228	)		(3,339	)
Less valuation allowance for estimated residual value		(62	)		(70	)
Net investment in leases	$	237,674		$	298,324

The minimum lease payments receivable and estimated residual value are discounted using the internal rate of return method related to each specific lease. Unearned income and discounts include the offset of initial direct costs of $2.6 million and $2.4 million at June 30, 2016 and 2015, respectively.

At June 30, 2016, a summary of the installments due on minimum lease payments receivable, and the expected maturity of the Company's estimated residual value are as follows:

	Lease			Estimated
Years ending June 30,	Receivable			Residual Value			Total
	(in thousands)
2017	$	98,920		$	3,790		$	102,710
2018		68,795			4,197			72,992
2019		42,701			1,646			44,347
2020		20,194			123			20,317
2021		8,469			461			8,930
Thereafter		9,448			654			10,102
		248,527			10,871			259,398
Less unearned income		(18,390	)		(1,044	)		(19,434	)
Less allowances		(2,228	)		(62	)		(2,290	)
	$	227,909		$	9,765		$	237,674

Non-recourse debt, which relates to the discounting of lease receivables, bears interest at rates ranging from 2.11% to 4.75%. Maturities of such obligations at June 30, 2016 are as follows:

	Non-recourse
Years ending June 30,	Debt
	(in thousands)
2017	$	4,115
2018		276
Total non-recourse debt		4,391
Deferred interest expense		58
Discounted lease rentals assigned to lenders	$	4,449

Deferred interest expense of $58,000 at June 30, 2016 will be amortized against direct finance income related to the Company's discounted lease rentals assigned to lenders of $4.4 million using the effective yield method over the applicable lease term.