Credit Evaluation School Instructor eBook - Oct 2023

Internal Use Only

Ballard, Vernon & Mary - Discuss & Pass • Brought both notes current DX; bank allowed past due while awaiting construction delays. • Had some construction delays on warehouse but it will close on time. Have takeout commitment for $270M and will amortize remaining $30M over 10 years secured by closely held stock with est. value of $43M. • Vernon has grown company, has liquidity and an expansive customer base. His PS shows marketable securities of $144M. • He lives conservative lifestyle and is a hard-worker. People: VERNON AND MARY BALLARD/ DBA BALLARD’S NURSERY. He lives conservative lifestyle and is a hard worker. Family-run business for over 30 years. Dad is stepping down. Vernon realized costs savings from raising own plants and shrubbery and used own land to build new nursery. Purpose: 9304299 – Purchase nursery equipment. 9304299 – Construction of nursery warehouse Payment: Monthly P&I of $750 from sales. 2. Single pay note due on 4/12/15. Had some construction delays on warehouse but it will close on time. Have takeout commitment for $270M and will amortize remaining $30M over 10 years secured by closely held stock with est. value of $43M. We have a take-out letter from Tri-State Life Insurance for $270M. This was issued at beginning of construction. Recent increase in construction materials and supplies will increase costs of completion. Rate is too good and appraisal too costly to seek new financing. Protection: All nursery equipment purchased and hereafter owned, excluding purchased money interest. Nursery warehouse is on 10AL situated in CRE with great access in heavily trafficked area. Currently raw land, AV is as complete with an 80% LTV. His PS shows marketable securities of $144M. Performance: Debtors are performing well. Brought both notes current DX. Vernon has grown company, has liquidity and an expansive customer base. The Vernon’s have begun to receive large contracts due to their ability to perform on time and under budget.