Robert K. Beymer Current Position: Chief Financial Officer, Senior Trust Officer Employment History: The Kearny County Bank - 1980 to Present State of Kansas – Bank Examiner 1978-1980 Educational Background: Lakin High School Graduate, 1974 Kansas State University Graduate,1978, BS in Business Administration and Finance, Minor in Economics University of Colorado Graduate School of Banking 1987

CREDIT How to Get It & Keep It The 3 C’s of Credit

The 3 C’s of Credit Capacity Collateral Character

Capacity Do you have the ability to repay debt? How much do you earn? How much do you owe? What else do you own?

How much do you earn? Sources of Income Stability of Income

Sources of Income Wages Interest & Dividends Business / Farm Income Government Entitlements (Social Security/Welfare Other

Stability of Income Length of Employment Length of Prior Employment Cash flow variations Termination of entitlements

How much do you owe? Amount of other debts Purpose of other debts Payment amount on other debts

What else do you own? Other assets that can be used for repayment Real Estate Stocks / Bonds / Investments Savings Vehicles Machinery & Equipment

Collateral The Lender’s backup plan Secondary source of repayment if borrowers fails to service debt from his/her capacity.

Types of Collateral Tangible Intangible Can take physical possession of Intangible Assets of uncertain quantity and value

Tangible Collateral Types Loan to Value (LTV) Real Estate 70% - 100% Vehicles 50% - 100% Equipment 50% - 75% Grain 75% - 90% Stocks 50% Bonds 75% - 90% Savings 100%

Types Of Intangible Collateral Types Loan to Value (LTV) Growing Crops 70% - 80% (insured) Growing Crops 50% - 60% (uninsured) Blue Sky 50% - 75%

Collateral Insurance Insurance will be required if you don’t have sufficient income and other asset capacity to repay your loan if the collateral were damaged or destroyed.

CHARACTER The desire and willingness of an individual to repay debts

Factors of Character Credit History Age Education

Credit History Credit Report Shows repayment histories & high credit limits Shows collections, judgements, bankruptcies

Credit Score

Vehicle Pricing Matrix < 5,000 Miles Loan Pricing Example Vehicle Pricing Matrix < 5,000 Miles Borrower Rating / Credit Score LTV A / > 750 B / 700-749 C / 660-699 D / 625-659 E / < 625 <75% 4.000% 4.500% 5.250% 6.250% 7.500% 75-80% 4.050% 4.550% 5.350% 6.450% 7.750% 80-85% 4.100% 4.650% 5.550% 6.850% 8.250% 85-90% 4.150% 4.800% 5.850% 7.450% 9.000% 90-95% 4.200% 5.000% 10.000% 95-100% 4.250% 6.750% 9.250% 11.250% 100-105% 4.300% 7.350% 10.450% 12.750%

Other Factors of Character Age Lenders can’t discriminate based on age, but it can be used as a factor in determining the credit worthiness of a borrower. Education Generally, the more education a person has the easier it is to receive credit.

LENDER DECISION APPROVED

LENDER DECISION DENIED

Top 10 List of Stupid Things People Do With Their Finances Not saving money to pay income taxes Gambling more that you can afford Not understanding terms of loans and credit agreements Refinancing debt & extending repayment terms 6. Borrowing long term for short term expenses

Top 10 List of Stupid Things People Do With Their Finances Not budgeting – no planning Getting over extended on credit cards and other debts Using credit cards to pay regular monthly expenses Paying the minimum payment on credit cards 1. Not establishing reserves for emergencies

They make money by taking advantage of you! THE EVILS OF CREDIT CARDS They make money by taking advantage of you!