: Jackson Masonry Annual Loan Review Current Date: early January 2010 ackson Masonry Incorporated is a producer of masonry products, and the company supplies building matcrials including brick, pavers, and stone throughout a multi-county area of east Texas. Its plant is located in Huntsville, Texas. The company is well respected in the mmunity and is a major supplier of jobs for the area Bearkat National Bank (BNB) is a successful community bank also located in Huntsville, er branches in neighboring counties. The bank has total assets of just over $400 million and focuses on serving all the banking needs of its customers. Its products include both personal and business loans, a wide range of deposit accounts, and trust and investment services Jackson Masonry has been a customer of BNB for over 25 years, and uses BNB exclusively for all deposit accounts as well as a $200,000 unsecured line of credit. The company was founded by William Jackson in 1972. It is incorporated and privately owned by William (now 72) and his three children, Billy, Andrew, and Michelle. William is the president and CEO and owns 40% of the company's shares. Each sibling owns 20%, and each also works in the company. Billy is the Chief Operating Officer, Andrew is Vice President of Sales, and Michelle (who has an enginecring degree) is the Vice President of Manufacturing. The other officer of the company is Mark Johnson, a CPA who is the Controller William started the company as a manufacturer of decorative clay pots used in gardening. The company expanded into brick production in the 1980's, and that has been the driving force of company growth since then. The company now employs about 25 production orkers, and the Jackson family handles most of the management and sales. Producing the bricks is difficult work, and there is a high turnover rate for new employees. However, once an employee stays past the first year, the average tenure is nearly 15 years. William believes the longevity of so many of the workers is one of the keys to producing high quality product, and offers employees a generous pay and benefits package compared to other area manufacturers. William also notes that the company has not had to lay off a worker at any point since the company began operations. Assume you are the loan officer responsible for this account. It is now time for the annual view of the company's line of credit. A loan of $200,000 is a significant credit to BNB, so the loan is presented to the full loan committee for review. Over the past year, the line has reached a high of $156,000 and a low of $98,000, and the current balance is $147,000 Interest is due quarterly and is always paid on time. The interest rate is Wall Street Journal prime rate plus 1%, and the loan is reviewed/renewed annually. The loan is used to fund purchases of inventory and other short-term credit needs. It was initiated when the company began brick production, and has grown from a S50,000 line to its current limit o $200,000 ackson Masonry's financial statements for financial years 2007 to 2009 are posted