What are 's Business Segments?
Real Estate Loans. The Bank originates residential mortgage loans, which are
generally long-term with either fixed or variable interest rates. The general
operating policy, which is subject to review by management due to changing market
and economic conditions and other factors, is to sell a majority of the fixed
rate residential real estate loans originated. Generally loan sales are on a
servicing-released basis in the secondary market, regardless of term or product.
The Bank, based on its lending guidelines, may elect to underwrite and retain
certain mortgages in its portfolio. The Bank also offers fixed rate home equity
loans and variable rate home equity lines of credit, which are usually retained
in its portfolio.
The retention of variable rate loans in the Bank's loan portfolio helps to reduce
the Bank's exposure to fluctuations in interest rates. However, such loans generally
pose credit risks different from the risks inherent in fixed rate loans, primarily
because as interest rates rise, the underlying payments from the borrowers rise,
thereby increasing the potential for default.
Personal Loans and Lines of Credit. The Bank makes personal loans and lines
of credit available to consumers for various purposes, such as the purchase
of automobiles, boats and other recreational vehicles, home improvements and
personal investments. The Bank's current policy is to retain substantially all
of these loans in its portfolio.
Commercial and Commercial Real Estate Loans. Commercial loans are made primarily
to small and mid-sized businesses. These loans are and will be both secured
and unsecured and are made available for general operating purposes, acquisition
of fixed assets including real estate, purchases of equipment and machinery,
financing of inventory and accounts receivable, as well as any other purposes
considered appropriate. From March 2002 through December 2007, substantially
all Commercial Real Estate Loan originations were executed by the Mortgage Company;
however both the Bank and the Mortgage Company have a portfolio of Commercial
Real Estate loans. Both entities generally look to a borrower's business operations
as the principal source of repayment, but will also receive, when appropriate,
liens on real estate, security interests in inventory, accounts receivable and
other personal property or personal guarantees.
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