What are Ameriserv Financial Inc's Business Segments?
Commercial Loans
This category includes credit extensions to commercial and industrial borrowers.
Business assets, including accounts receivable, inventory and/or equipment, typically
secure these credits. In appropriate instances, extensions of credit in this category
are subject to collateral advance formulas. Balance sheet strength and profitability
are considered when analyzing these credits, with special attention given to historical,
current and prospective sources of cash flow, and the ability of the customer
to sustain cash flow at acceptable levels. The Bank’s policy permits flexibility
in determining acceptable debt service coverage ratios, with a minimum level of
1.1 to 1x desired. Personal guarantees are frequently required; however, as the
financial strength of the borrower increases, the Bank’s ability to obtain
personal guarantees decreases. In addition to economic risk, this category is
impacted by the strength of the borrower’s management, industry risk and
portfolio concentration risk each of which are also monitored and considered during
the underwriting process.
Commercial Loans Secured by Real Estate
This category includes various types of loans, including acquisition and construction
of investment property, owner-occupied property and operating property. Maximum
term, minimum cash flow coverage, leasing requirements, maximum amortization
and maximum loan to value ratios are controlled by the Bank’s credit policy
and follow industry guidelines and norms, and regulatory limitations. Personal
guarantees are normally required during the construction phase on construction
credits and are frequently obtained on mid to smaller CRE loans. In addition
to economic risk, this category is subject to geographic and portfolio concentration
risk, each of which are monitored and considered in underwriting.
Residential Real Estate — Mortgages
This category includes mortgages that are secured by residential property. Underwriting
of loans within this category is pursuant to Freddie Mac/Fannie Mae underwriting
guidelines, with the exception of Community Reinvestment Act (CRA) loans, which
have more liberal standards. The major risk in this category is that a significant
downward economic trend would increase unemployment and cause payment default.
The Bank does not engage and has never engaged, in subprime residential mortgage
lending.
Consumer Loans
This category includes consumer installment loans and revolving credit plans.
Underwriting is pursuant to industry norms and guidelines. The major risk in
this category is a significant economic downturn.
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