What are C1 Financial's Business Segments?
We offer the following services and products:
Deposits. We offer a full range of interest-bearing and noninterest-bearing deposit
accounts, including commercial and retail checking accounts, savings accounts,
individual retirement accounts, and other deposits of various types, ranging from
daily money market accounts to longer term certificates of deposit. We seek deposits
from residents, businesses and employees of businesses in these markets. The FDIC
insures all of our accounts up to the maximum amount permitted by law.
Lending Activities. We utilize deposits, together with borrowings and other sources
of funds, to originate and purchase loans. We offer a full range of short and
medium-term small business and real estate, commercial and consumer loans. We
direct our lending activities primarily to individuals and businesses in the markets
where demand for funds falls within the Bank’s legal lending limits and
who are potential deposit customers. The following is a description of each of
the major categories of loans that we make:
Real Estate Loans. Real estate loans consist of the following:
Residential Real Estate Loans. We make residential real estate loans to
qualified individuals for the purchase of existing single-family residences in
our markets. We make these loans in accordance with our appraisal policy and real
estate lending policy, which detail maximum loan to value ratios and maturities.
We believe that these loan to value ratios are sufficient to compensate us for
fluctuations in real estate market value and to minimize losses that could result
from a downturn in the residential real estate market. Starting in 2014, we decided
to retain all residential real estate loans in our portfolio and currently only
offer a 5/1 ARM product.
Commercial Real Estate Loans. Commercial real estate loans consist of
loans to developers of both commercial and residential properties. We manage credit
risk associated with these loans by actively monitoring such measures as advance
rate, cash flow, collateral value and other appropriate credit factors. Risks
associated with commercial real estate loans include the general risk of the failure
of the commercial borrower, which are different for each type of business and
commercial entity. We evaluate each business on an individual basis and attempt
to determine such business’ risks and credit profile. We attempt to reduce
credit risks in the commercial real estate portfolio by emphasizing loans on owner-occupied
office and retail buildings where the loan-to-value ratio, established by independent
appraisals, generally does not exceed limits set by law and regulation. In addition,
we may also require personal guarantees of the principal owners.
Acquisition, Construction and Development Loans. We make acquisition,
construction and development loans on a pre-sold and speculative basis. If the
borrower has entered into an arrangement to sell or lease the property prior to
beginning construction, we consider the loan to be on a pre-sold or pre-leased
basis. If the borrower has not entered into an agreement to sell the property
prior to beginning construction, we consider the loan to be on a speculative basis.
We make residential and commercial construction loans to builders and developers
and to consumers who wish to build their own home. We limit the term of most construction
and development loans to 24 months, although we may structure the payments based
on a longer amortization basis. We base speculative loans on the borrower’s
financial strength and cash flow position. We disburse loan proceeds based on
the percentage of completion and only after an experienced construction lender
or appraiser inspects the project. These loans generally command higher rates
and fees commensurate with the risks associated with construction lending. The
risk in construction lending depends upon the performance of the builder, building
the project to the plans and specifications of the borrower and our ability to
administer and control all phases of the construction disbursements. Upon completion
of the construction, we typically convert construction loans to permanent loans.
Commercial Loans. Commercial loans consist of loans made to individuals, partnerships
or corporate borrowers for a variety of business purposes. We place particular
emphasis on loans to small and medium-sized professional firms, retail and wholesale
businesses, light industry and manufacturing concerns operating in our markets.
We consider small and medium-sized businesses to include commercial, professional
and retail businesses with annual gross sales of less than $50 million. Our commercial
loans include term loans with both variable and fixed interest rates secured by
equipment, inventory, receivables and real estate, as well as secured and unsecured
working capital lines of credit. Risks of these types of loans depend on the general
business conditions of the local economy and the borrower’s ability to sell
its products and services in order to generate sufficient business profits to
repay the loans under the agreed upon terms and conditions. Personal guarantees
may be obtained from the principals of business borrowers and third parties to
further support the borrowers’ ability to service the debt and reduce the
risk of nonpayment.
Consumer and Installment Loans. Consumer loans consist of lines of credit and
term loans secured by second mortgages on the residences of borrowers for a variety
of purposes, including home improvements, education and other personal expenditures.
Consumer loans also include installment loans to individuals for personal, family
and household purposes, including automobile loans to individuals and pre-approved
lines of credit. Consumer loans generally involve more risk than first mortgage
loans because the collateral for a defaulted loan may not provide an adequate
source of repayment of the principal. This risk is due to the potential for damage
to the collateral or other loss of value, while the remaining deficiency often
does not warrant further collection efforts. In addition, consumer loan performance
depends on the borrower’s continued financial stability and is, therefore,
more likely to be adversely affected by job loss, divorce, illness or personal
bankruptcy.
Other Services. Our other services include cash management services, safe deposit
boxes, direct deposit of payroll and social security checks, wire transfers, telephone
banking, and automatic drafts for various accounts. We offer a debit card and
MasterCard credit card services through our correspondent banks. We offer extended
banking hours, both drive-in and lobby, and after-hours depositories. We are associated
with a shared network of automated teller machines that customers may use throughout
our market areas and other regions. We are associated with third-party internet
banking service providers that enable us to provide customers with a cost-effective,
secure and reliable internet banking solution.
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