What are Dime Community Bancshares Inc's Business Segments?
Multifamily Residential Lending and Commercial Real Estate Lending. The majority
of the Bank's lending activities consist of originating adjustable- and fixed-rate
multifamily residential (generally buildings possessing a minimum of five residential
units) and commercial real estate loans. The properties securing these loans
are generally located in the Bank's primary lending area.
Commercial real estate loans are generally viewed as exposing lenders to a
greater risk of loss than both one- to four-family and multifamily residential
mortgage loans. Because payments on loans secured by commercial real estate
are often dependent upon successful operation or management of the collateral
properties, as well as the success of the business and retail tenants occupying
the properties, repayment of such loans is generally more vulnerable to weak
economic conditions. Further, the collateral securing such loans may depreciate
over time, be difficult to appraise, or fluctuate in value based upon its rentability,
among other commercial factors. This increased risk is partially mitigated in
the following manners: (i) the Bank requires, in addition to the security interest
in the commercial real estate, a security interest in the personal property
associated with the collateral and standby assignments of rents and leases from
the borrower; (ii) the Bank will generally favor investments in mixed-use commercial
properties that derive some portion of income from residential units, which
provide a more reliable source of cash flow and lower vacancy rates, and (iii)
the interest rate on commercial real estate loans generally exceeds that on
multifamily residential loans.
One- to Four-Family Residential and Condominium / Cooperative Apartment Lending.
In 2013, the Bank ceased origination of residential first and second mortgage
loans secured primarily by owner-occupied, one- to four-family residences, including
condominium and cooperative apartments.
Home Equity and Home Improvement Loans. The Bank ceased origination of home
equity and home improvement loans during the year ended December 31, 2013,.
Home equity loans and home improvement loans, the great majority of which are
included in one- to four-family loans, were previously originated to a maximum
of $500,000. The combined balance of the first mortgage and home equity or home
improvement loan was not permitted to exceed 75% of the appraised value of the
collateral property at the time of origination of the home equity or home improvement
loan. Interest on home equity and home improvement loans was initially the "prime
lending" rate at the time of origination. After six months, the interest
rate adjusts and ranges from the prime interest rate to 100 basis points above
the prime interest rate in effect at the time. The interest rate on the loan
can never fall below the rate at origination.
Equity Lines of Credit on Multifamily Residential and Commercial Real Estate
Loans. Equity credit lines are available on multifamily residential and commercial
real estate loans. These loans are underwritten in the same manner as first
mortgage loans on these properties, except that the combined first mortgage
amount and equity line are used to determine the loan-to-value ratio and minimum
debt service coverage ratio. The interest rate on multifamily residential and
commercial real estate equity lines of credit adjusts regularly.
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