What are 's Business Segments?
Commercial and Multi-Family Real Estate Lending. Our commercial real estate
loans include loans secured by properties classified as office, hospitality,
mini storage, mobile home park, congregate care, retail, education/worship and
other non-residential. These loans generally are priced at a higher rate of
interest than one-to-four family loans. Typically, these loans have higher loan
balances, are more difficult to evaluate and monitor, and involve a greater
degree of risk than one-to-four family loans. Often payments on loans secured
by commercial or multi-family properties are dependent on the successful operation
and management of the property; therefore, repayment of these loans may be affected
by adverse conditions in the real estate market or the economy. We generally
require and obtain loan guarantees from financially capable parties based upon
the review of personal financial statements. If the borrower is a corporation,
we generally require and obtain personal guarantees from the corporate principals
based upon a review of their personal financial statements and individual credit
reports.
One-to-Four Family Real Estate Lending. We originate both fixed rate and adjustable
rate loans in our residential lending program and use Freddie Mac underwriting
guidelines. None of our residential loan products allow for negative amortization
of principal. We typically base our decision on whether to sell or retain secondary
market quality loans on the rate and fees for each loan, market conditions and
liquidity needs. Although we have sold the majority of our residential loans
over the last two years, we do not sell all qualified loans on the secondary
market as we hold in our portfolio many residential loans that may not meet
all Freddie Mac guidelines yet meet our investment and liquidity objectives.
Consumer Lending. We offer a variety of consumer loans, including home equity
loans and lines of credit, automobile loans, credit cards and personal lines
of credit. Our home equity loans are risk priced using credit score, loan-to-value
and overall credit quality of the applicant. Home equity loans and lines of
credit are made for a variety of purposes including improvement of residential
properties. The majority of these loans are secured by a second deed of trust
on owner-occupied primary single family residential property. Our home equity
lines of credit include a maximum total term of 30 years, including an initial
period of 10 years with interest-only payments and a variable rate of interest
tied to the Prime Rate, plus a margin (the "draw" period), followed
by 20 years of principal and interest payments under a level amortization schedule
and an interest rate that is fixed for the 20 years at the fully indexed accrual
rate as of the time of variable-to-fixed rate conversion. Our home equity loans
are closed-end loans with a term of 20 years and have level amortization with
regular monthly payments of principal and interest. The interest rate is risk
based and reflects both credit and collateral risk. Both our home equity lines
and home equity loans are available up to 95% of the combined loan to value
ratio as determined by the Bank.
Commercial Business Lending. These loans are primarily originated as conventional
loans to business borrowers, which include lines of credit, term loans and letters
of credit. These loans are typically secured by collateral and are used for
general business purposes, including working capital financing, equipment financing,
capital investment and general investments. Loan terms vary from one to seven
years. The interest rates on such loans are generally floating rates indexed
to The Wall Street Journal prime rate. Inherent with our extension of business
credit is the business deposit relationship which frequently includes multiple
accounts and related services from which we realize low cost deposits plus service
and ancillary fee income.
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