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Virginia National expects charge-off due to ReliaMax Surety's liquidation

Virginia National Bankshares Corp. expects it will charge off $320,000 in past due student loans because of the liquidation of ReliaMax Surety Co.

Additionally, the Charlottesville, Va.-based company expects to incur between $700,000 and $950,000 in additional provision for loan losses on its entire loan portfolio for the second quarter.

Sioux Falls, S.D.-based ReliaMax Surety is an insurance company that issued surety bonds related to the company's purchased student loans. On June 27, a judge in South Dakota placed ReliaMax Surety into liquidation due to insolvency. Larry Deiter, director of the South Dakota Division of Insurance, was appointed liquidator.

As of June 30, Virginia National held $59 million in purchased student loans, which represents around 11% of the company's total loan portfolio.

The company said it will aggressively pursue its claims against ReliaMax Surety in the liquidation proceedings. All claims as of July 27 must be filed by the end of the year, with claims to be paid in 2019.