What are Central Pacific Financial's Business Segments?
Residential Mortgage Lending. Residential mortgage loans include fixed- and adjustable-rate
loans primarily secured by single-family, owner-occupied residences in Hawaii
and home equity lines of credit and loans. We typically require loan-to-value
ratios of not more than 80%, although higher levels are permitted with accompanying
mortgage insurance. First mortgage loans secured by residential properties have
an average loan size of approximately $0.4 million and marketable collateral.
Changes in interest rates, the economic recession and other market factors have
impacted, and future changes will likely continue to impact, the marketability
and value of collateral and the financial condition of our borrowers and thus
the level of credit risk inherent in the portfolio. The majority of our first
residential mortgage loan originations are sold in the secondary market.
Commercial Lending and Leasing. Loans in this category consist primarily of
term loans, lines of credit and equipment leases to small and middle-market
businesses and professionals in the state of Hawaii. The borrower’s business
is typically regarded as the principal source of repayment, although our underwriting
policies and practices generally require additional sources of collateral, including
real estate and other business assets, as well as personal guarantees where
possible to mitigate risk and help to reduce credit losses.
Commercial Mortgage Lending. Loans in this category consist of loans secured
by commercial real estate, including but not limited to, structures and facilities
to support activities designated as multi-family residential properties, industrial,
warehouse, general office, retail, health care and religious dwellings. Our
underwriting policies and practices generally requires net cash flow from the
property to cover the debt service while maintaining an appropriate amount of
reserves and permits consideration of liquidation of the collateral as a secondary
source of repayment.
Construction Lending. Construction lending encompasses the financing of residential
and commercial construction projects.
Consumer Lending. Loans in this category are generally either unsecured or
secured by personal assets, such as automobiles, and the average loan size is
generally small
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