HGH - Heartland Group Holdings

[Snow Leopard]

...
At least 90 days past due $19.518m
Individually impaired $53.1m
Restructured assets $3.994m

That sums to $76.712m. Take off a provision for impairment of $34.214m and I get $42.498m.

However that $76.712m does not correspond to the:

"non-core property assets comprised net receivables of $25.6m and investment properties of $61.5m." (page 5 in same report)

which sum to $87.1m. Anyone know why the difference?
...

BECAUSE

NOT ALL

non-core property assets

are

either at least 90 days past due;
or individually impaired;
or restructured.

AND

NOT ALL

assets

that are:
either at least 90 days past due;
or individually impaired;
or restructured.

are

non-core property assets

banana-s.png

Best Wishes
Paper Tiger

[Snoopy]

BECAUSE

NOT ALL

non-core property assets

are

either at least 90 days past due;
or individually impaired;
or restructured.

Your answer must be correct PT, as there is no other logical way to reconcile things.

However, I did think that the reason the 'non-core' property assets became 'non-core' was because they were difficult assets to manage. ' Difficult' in one of these the senses:

1/ Being at least 90 days past due OR
2/ individually impaired; OR
3/ restructured

I can't see why property assets that weren't in those three categories would get thrown in the 'non-core' box. But I guess subsequent buying interest in those property assets by turning them into cash made a lie to the original 'non-core' diagnosis.

AND

NOT ALL

assets

that are:
either at least 90 days past due;
or individually impaired;
or restructured.

are

non-core property assets

Yes, but if that were true would you not expect the sum total of all 'difficult assets' ($76.712m, supposedly including the non core property assets) to be greater than the declared value of 'non-core property ' assets alone ($87.1m)?

SNOOPY

[Cool Bear]

anybody has any clue why the whole day trading is dominated by small parcels of shares ranging from 50 to just 500+ for each trade? wonder what are they?

[Snoopy]

The half year report last year did not provide the same level of disclosure as the full year report. This has proved to be the case again in HY2013.

Under note 12 and as of 31st December 2012, the percentage of deposits from the Canterbury region has reduced from 42% six months previously down to 36%. Overall I see this as a good thing, even if some market share in Canterbury must continue to be sacrificed to improve the overall term deposit risk profile.

Note 17c re-emphasises that the credit provision as reached with RECL (the real estate credit limit mangement agreement) has been fully utilised. This in turn means any further writedowns will directly hit the HNZ balance sheet.

I get the impression that rebalancing the account risk is still a work in progress.

The half year report for HY2014 (to 31st December 2013) is as much of interest for what it doesn't say than what it does say.

In contrast to last year, Note 13 on 'Borrowings', makes no mention of the relatively high proportion of deposits from the Canterbury region. Perhaps many of those Cantabs with deposits followed Percy's advice and used their deposit money to buy Heartland shares when those deposits matured? In any instance the overall deposit book has shrunk very slightly from the full year balance date. So the rebalancing of regional risk doesn't reflect a lot more money coming in from other regions and growing the deposit book overall. I would have expected the overall deposit book to strengthen as Heartland's credit rating improves. But I can't see any real evidence for that in the HY2014 report.

The previous half year report had a section headed 'credit risk and asset quality'. That heading is no longer there in the latest HY report. Instead the 'Asset quality of Finance Receivables' information has migrated to the 'Finance Receivables' section. Of particular note is the fall in 'At least 90 days past due' receivables down to $19.5m, from $49.2m a year previously.

The 'Provision for impaired assets' has its own stand alone note (17).

The RECL (Real Estate Credit Limited) agreement for difficult property assets, much discussed in the HY2013 report, has been brought back in house. Overall though this report does not go into enough detail to get a great feel for customer concentration risk.

SNOOPY

[Beagle]

Snoopy - Standard and Poors is given access to a huge amount of information that is not in the public domain.

[Snoopy]

The half year report for HY2014 (to 31st December 2013) is as much of interest for what it doesn't say than what it does say.

In contrast to last year, Note 13 on 'Borrowings', makes no mention of the relatively high proportion of deposits from the Canterbury region. In any instance the overall deposit book has shrunk very slightly from the full year balance date. So the rebalancing of regional risk doesn't reflect a lot more money coming in from other regions and growing the deposit book overall.

More information is revealed in the Heartland Bank disclosue statement for the period.

http://www.heartland.co.nz/uploadGal...nt%20Dec13.pdf

Note 19b contains enough information to work out the percentage of deposits coming from Canterbury as at 31st December 2013:

$716.290m / $2,076.968m = 34.4%

That compares to 36% from a year earlier. So the cantabs are obviously still a key part of the deposit book

The previous half year report had a section headed 'credit risk and asset quality'. That heading is no longer there in the latest HY report. Instead the 'Asset quality of Finance Receivables' information has migrated to the 'Finance Receivables' section. Of particular note is the fall in 'At least 90 days past due' receivables down to $19.5m, from $49.2m a year previously.

More information on this under note 16a.

The $19.6m is made up of $4.1m (rural) , $2.1m (property) $0.4m (residential), $10.5m (other) and $1.8m (all other). Seems funny to distinguish 'Other' from 'All other' but there you go!

SNOOPY

[noodles]

I would have expected the overall deposit book to strengthen as Heartland's credit rating improves. But I can't see any real evidence for that in the HY2014 report.

Snoopy, the credit rating upgrade was after the half year report.

[Beagle]

Maybe the inquisitive beagle should just roll over and be a good dog and accept that Standard and Poors have access to far more information than said Beagle can get his mischevious snout into

[Snow Leopard]

Your answer must be correct PT, as there is no other logical way to reconcile things.

Attachment 5922

However, I did think that the reason the 'non-core' property assets became 'non-core' was because they were difficult assets to manage. ' Difficult' in one of these the senses:

1/ Being at least 90 days past due OR
2/ individually impaired; OR
3/ restructured

I can't see why property assets that weren't in those three categories would get thrown in the 'non-core' box. But I guess subsequent buying interest in those property assets by turning them into cash made a lie to the original 'non-core' diagnosis.

Assumptions.png

Yes, but if that were true would you not expect the sum total of all 'difficult assets' ($76.712m, supposedly including the non core property assets) to be greater than the declared value of 'non-core property ' assets alone ($87.1m)?

GoodGrief.png

Best Wishes
Attachment 5924

[Snow Leopard]

Attachment 5926

Best Wishes
Paper Tiger