Student Loans

Included in installment loans are $65,655,000 and $68,221,000 in student loans at September 30, 2019 and December 31, 2018, respectively, made to medical and pharmacy school students. Upon graduation the loan is automatically placed on deferment for 6 months. This may be extended up to 48 months for graduates enrolling in Internship, Medical Residency or Fellowship. As approved, the student may receive additional deferment for hardship or administrative reasons in the form of forbearance for a maximum of 24 months throughout the life of the loan. Accrued interest on loans that had not entered repayment status totaled $8,056,000 at September 30, 2019 and $5,866,000 at December 31, 2018. At September 30, 2019 there were 570 loans within repayment, deferment, and forbearance which represented $14,421,000, $2,158,000, and $6,980,000, respectively. At December 31, 2018, there were 595 loans within repayment, deferment, and forbearance which represented $15,526,000, $1,945,000 and $7,336,000, respectively. As of September 30, 2019 and December 31, 2018 the reserve against the student loan portfolio was $2,088,000 and $1,520,000, respectively. There were no TDRs within the portfolio as of September 30, 2019 or December 31, 2018.

Reunion Student Loan Finance Corporation (RSLFC) is the third-party servicer for the student loan portfolio. RSLFC's services include application administration, processing, approval, documenting, funding, and collection. They also provide borrower file custodial responsibilities. Except in cases where applicants/loans do not meet program requirements, or extreme delinquency, RSLFC is responsible for complete program management. RSLFC is paid a monthly servicing fee based on the outstanding principal balance. Interest income on the student loan portfolio offsets this expense, and is presented net of expense within loan interest income on the consolidated statements of income.

The following tables summarize the credit quality indicators for outstanding student loans as of September 30, 2019 and December 31, 2018 (in 000's, except for number of borrowers):



	September 30, 2019					December 31, 2018
	Number of Loans	Amount		Accrued Interest		Number of Loans	Amount		Accrued Interest
School	586	$	23,477	$	4,049	1,056	$	42,852	$	5,494
Grace	404	18,619		3,765		23	562		81
Repayment	328	14,421		120		366	15,526		118
Deferment	73	2,158		108		48	1,945		79
Forbearance	169	6,980		134		181	7,336		212
Total	1,560	$	65,655	$	8,176	1,674	$	68,221	$	5,984

School - The time in which the borrower is still actively in school at least half time. No payments are expected during this stage, though the borrower may begin immediate payments.

Grace - A six month period of time granted to the borrower immediately upon graduation, or if deemed no longer an active student. Interest continues to accrue. Upon completion of the six month grace period the loan is transferred to repayment status. Additionally, if applicable, this status may represent a borrower activated to military duty while in their in-school period, they will be allowed to return to that status once their active duty has expired. The borrower must return to an at least half time status within six months of the active duty end date in order to return to an in-school status.

Repayment - The time in which the borrower is no longer actively in school at least half time, and has not received an approved grace, deferment, or forbearance. Regular payment is expected from these borrowers under an allotted payment plan.

Deferment - May be granted up to 48 months for borrowers who have begun the repayment period on their loans but are (1) actively enrolled in an eligible school at least half time, or (2) are actively enrolled in an approved and verifiable medical residency, internship, or fellowship program.

Forbearance - The period of time during which the borrower may postpone making principal and interest payments, which may be granted for either hardship or administrative reasons. Interest will continue to accrue on loans during periods of authorized forbearance. If the borrower is delinquent at the time the forbearance is granted, the delinquency will be covered by the forbearance and all accrued and unpaid interest from the date of delinquency or if none, from the date of beginning of the forbearance period, will be capitalized at the end of each forbearance period. The term of the loan will not change and payments may be increased to allow the loan to pay off in the required time frame. A forbearance that results in only an insignificant delay in payment, is not considered a concessionary change in terms, provided the borrower affirms the obligation. Forbearance is not an uncommon status designation, this designation is standard industry practice, and is consistent with the succession of students migrating to employed medical professionals.

Student Loan Aging

Student loans are generally charged off at the end of the month during which an account becomes 120 days contractually past due. Accrued but unpaid interest related to charged off student loans is reversed and charged against interest income. For the nine months ended September 30, 2019, $20,000 in accrued interest receivable was reversed, due to charge-offs of $338,000 within the student loan portfolio. As of December 31, 2018, $26,000 in accrued interest receivable was reversed, due to charge-offs of $388,000 within the student loan portfolio.

The following tables summarize the student loan aging for loans in repayment and forbearance as of September 30, 2019 and December 31, 2018 (in 000's, except for number of borrowers):



	September 30, 2019			December 31, 2018
	Number of Borrowers	Amount		Number of Borrowers	Amount
Current or less than 31 days	200	$	19,533	248	$	22,534
31 - 60 days	10	1,225		2	130
61 - 90 days	4	317		4	140
91 - 120 days	3	299		1	58
121-180 days	1	27		—	—
Total	218	$	21,401	255	$	22,862