CASH 2018 Annual Report
131 The asset classification of loans and leases at September 30, 2018, and 2017, were as follows: Asset Classification Pass Watch Special Mention Substandard Total Year Ended September 30, 2018 (Dollars in Thousands) National Lending Commercial finance $ 1,379,902 $ — $ 116,334 $ 13,613 1,509,849 Consumer finance 335,361 — — — 335,361 Tax services 1,073 — — — 1,073 Total National Lending 1,716,336 — 116,334 13,613 1,846,283 Community Banking Commercial and multi-family real estate 736,134 12,251 194 — 748,579 1-4 family real estate 222,883 281 239 79 223,482 Agricultural 42,292 2,447 4,872 10,887 60,498 Commercial operating 42,311 — — — 42,311 Consumer 23,580 256 — — 23,836 Total Community Banking 1,067,200 15,235 5,305 10,966 1,098,706 Total Loans and Leases $ 2,783,536 $ 15,235 $ 121,639 $ 24,579 $ 2,944,989 Asset Classification Pass Watch Special Mention Substandard Total Year Ended September 30, 2017 (Dollars in Thousands) National Lending Commercial finance $ 255,308 $ — $ — $ — 255,308 Consumer finance 140,229 — — — 140,229 Tax services 192 — — — 192 Total National Lending 395,729 — — — 395,729 Community Banking Commercial and multi-family real estate 574,730 10,200 201 379 585,510 1-4 family real estate 195,838 525 247 96 196,706 Agricultural 45,770 6,547 2,939 40,138 95,394 Commercial operating 30,718 — — — 30,718 Consumer 22,775 — — — 22,775 Total Community Banking 869,831 17,272 3,387 40,613 931,103 Total Loans and Leases $ 1,265,560 $ 17,272 $ 3,387 $ 40,613 $ 1,326,832 Federal regulations provide for the classification of loans and other assets such as debt and equity securities considered by the Bank's regulator, the Office of the Comptroller of the Currency (the “OCC”), to be of lesser quality as “substandard,” “doubtful” or “loss.” The loan classification and risk rating definitions are as follows: Pass- A pass asset is of sufficient quality in terms of repayment, collateral and management to preclude a special mention or an adverse rating. Watch- A watch asset is generally a credit performing well under current terms and conditions but with identifiable weakness meriting additional scrutiny and corrective measures. Watch is not a regulatory classification but can be used to designate assets that are exhibiting one or more weaknesses that deserve management’s attention. These assets are of better quality than special mention assets.
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