XML 47 R31.htm IDEA: XBRL DOCUMENT v3.19.1
LEGAL MATTERS
12 Months Ended
Dec. 31, 2018
Commitments And Contingencies Disclosure [Abstract]  
LEGAL MATTERS

NOTE 23 – LEGAL MATTERS

The Company is party to various matters of litigation in the ordinary course of business.  The Company periodically reviews all outstanding pending or threatened legal proceedings and determines if such matters will have an adverse effect on the business, financial condition or results of operations or cash flows.  A loss contingency is recorded when the outcome is probable and reasonably able to be estimated.  The following loss contingencies have been identified by the Company as reasonably possible to result in an unfavorable outcome for the Company.

Equity Bank is a party to a February 3, 2015, lawsuit filed against it by CitiMortgage, Inc. (“Citi”).  The lawsuit involves an alleged breach of contract related to loan repurchase obligations and damages of $2,700 plus pre-judgment and post-judgment interest.  In January 2018, final judgement was entered by the court dismissing Citi’s claims with regard to six loans and holding Equity Bank liable with regard to six loans.  A loss contingency of $477 was recorded at December 31, 2017, in connection with the resolution of this case.  Subsequently Citi appealed the courts decision.  The Company believes it has numerous and meritorious defenses to the claims and continues to contest the matter vigorously.

Except for the above mentioned lawsuit and settlement, there have been no other claims for potential repurchase or indemnification demands regarding mortgage loans originated by Equity Bank and sold to investors.  However, the Company believes there is possible risk it may face similar demands based on comparable demands loan aggregators are facing from their investors, including Government Sponsored Entities such as Freddie Mac and Fannie Mae and/or settlement agreements loan aggregators have entered into with those investors.  The amount of potential loss and outcome of such possible litigation, if it were commenced, is uncertain and the Company would vigorously contest any claims.