Description of Ohio Valley Banc's Business Segments
Ohio Valley Banc Corp offers a diverse array of financial products and services, primarily tailored to meet the needs of individuals and businesses in southeastern Ohio and portions of western West Virginia. Below is an extensive overview of their key segments, products, and services.
Residential Real Estate Loans
Ohio Valley Banc Corps residential real estate loan offerings mainly target one- to four-family residential properties. These loans are structured similarly to their commercial loan counterparts, bearing inherent consumer and industry risks. The core aspects are as follows:
- Loan Structure: Residential loans are generally secured by a first lien mortgage or deed of trust. The bank enforces documentation of the property title in its favor, which establishes security for the loan.
- Insurance Requirements: Borrowers must provide proof of hazard insurance at closing, naming the Bank or Loan Central as both the mortgagee and loss payee. This requirement adds an additional layer of protection against potential risk.
- Lending Limits: The amount for a residential real estate loan is typically capped at 80% of the lesser between the propertys purchase price or its appraisal value. For borrowers seeking financing that exceeds this limit, private mortgage insurance (PMI) must be acquired for the excess amount.
- Loan Types: The company provides various loan types ranging from one-year adjustable-rate mortgages (ARMs) to thirty-year fixed-rate mortgages. However, it is noted that the availability of fixed-rate offerings stretches up to fifteen years, with the majority of thirty-year demand being sold to Freddie Mac, diversifying exposure to interest rate risk.
- Market Presence: Ohio Valley Banc Corp actively engages in selling fixed-rate loans to Freddie Mac, which supports customer preferences for long-term financing options while effectively managing risk exposure.
Commercial Loans
The commercial loan portfolio of Ohio Valley Banc Corp chiefly comprises loans designed for small to mid-sized enterprises across various sectors, including service, retail, and wholesale industries. This segment features:
- Collateral Security: Commercial loans are frequently secured against assets such as equipment, inventory, stock, commercial real estate, and rental properties, enhancing the banks risk mitigation strategies.
- Risk Assessment: The commercial lending environment is considered higher risk compared to residential mortgages yet is closely monitored. Factors influencing risk include economic conditions, technological advancements, labor costs, cash flow stability, financial structure, and asset quality.
- Underwriting Process: A stringent underwriting process is in place, involving thorough credit analyses of larger loan balances before approval. The Bank’s loan committee plays a critical role in the oversight of new commercial loan originations, with prescribed limits for unsecured (up to $750,000), secured (up to $3,000,000), and aggregate loans (up to $3,000,000).
- Executive Oversight: Loan originations that approach the banks legal lending limit require further scrutiny and approval from the Executive Committee of the Board of Directors, thus reinforcing a solid governance framework.
Consumer Loans
Ohio Valley Banc Corps consumer loan offerings focus on meeting the financing needs of individuals across their primary service areas. The segment encompasses:
- Secured and Unsecured Loans: The consumer loans portfolio features secured loans tied to collateral like automobiles, mobile homes, recreational vehicles, and personal property, alongside unsecured personal loans and credit card receivables.
- Approval Criteria: To qualify for consumer loans, applicants must demonstrate requisite income for loan repayment, stability in their employment, a history of positive credit, and adequate collateral for secured loans.
- Risk Management: The bank actively monitors key factors such as portfolio growth, prevailing lending policies, and broader economic conditions to maintain a balanced risk profile. Compliance with underwriting standards is regularly evaluated.
- Insurance Offerings: To mitigate potential loss for borrowers experiencing financial disruptions, the bank offers credit life insurance and health and accident insurance, thereby enhancing borrower protection.
- Portfolio Review: Monthly reviews of the consumer loan portfolio are conducted, facilitating timely charge-offs of non-compliant loans and maintaining portfolio integrity.
- Home Equity Options: Consumer loans also include home equity lines of credit, typically structured as second mortgages with variable interest rates. These lines often feature ten-year terms, with annual reviews.
- Specialized Offerings: The consumer loan segment additionally includes seasonal refund anticipation loans (RALs) offered by Loan Central, providing short-term cash advances based on anticipated income tax refunds.
Conclusion
In summary, Ohio Valley Banc Corp provides a comprehensive financial service portfolio encompassing residential real estate loans, commercial loans, and consumer loans. The institution emphasizes meticulous risk management procedures, rigorous underwriting standards, and diverse offerings tailored to individual and business needs within its primary market areas. This multifaceted approach positions Ohio Valley Banc Corp as a pivotal financial partner in the region.
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