What are Enterprise Bancorp Inc's Business Segments?
Commercial Real Estate, Commercial and Industrial, and Commercial Construction
Loans
Commercial real estate loans include loans secured by both owner-use and non-owner
use real estate. These loans are typically secured by a variety of commercial
and industrial property types, including one-to-four family and multi-family
apartment buildings, office, industrial, or mixed-use facilities, strip shopping
centers, or other commercial properties, and are generally guaranteed by the
principals of the borrower. Commercial real estate loans generally have repayment
periods of approximately fifteen to twenty-five years. Variable interest rate
loans in this portfolio have a variety of adjustment terms and indices, and
are generally fixed for an initial period before periodic rate adjustments begin.
Residential Loans
Enterprise originates conventional mortgage loans on one-to-four family residential
properties. These properties may serve as the borrower’s primary residence,
vacation homes or investment properties. Loan-to-value limits vary, generally
from 75% for multi-family owner-occupied properties, up to 97% for single family
owner occupied properties, with mortgage insurance coverage required for loan-to-value
ratios greater than 80% based on program parameters. In addition, financing
is provided for the construction of owner occupied primary and secondary residences.
Residential mortgage loans may have terms of up to 30 years at either fixed
or adjustable rates of interest. Fixed and adjustable rate residential mortgage
loans are generally originated using secondary market underwriting and documentation
standards.
Home Equity Loans and Lines of Credit
Home equity term loans are originated for one-to-four family residential properties
with maximum combined loan-to-value ratios generally up to 80% of the assessed
or appraised value of the property securing the loan. Home equity loan payments
consist of monthly principal and interest based on amortization ranging from
three to fifteen years. The rates may also be fixed for three to fifteen years.
The Company originates home equity revolving lines of credit for one-to-four
family residential properties with maximum combined loan to value ratios generally
up to 80% of the assessed or appraised value of the property securing the loan.
Home equity lines generally have interest rates that adjust monthly based on
changes in the Wall Street Journal Prime Rate, although minimum rates may be
applicable. Some home equity line rates may be fixed for a period of time and
then adjusted monthly thereafter. The payment schedule for home equity lines
allows interest only payments for the first ten years of the lines. Generally,
at the end of ten years, the line may be frozen to future advances, and principal
plus interest payments are collected over a fifteen-year amortization schedule,
or, for eligible borrowers meeting certain requirements, the line availability
may be extended for an additional interest only period.
Consumer Loans
Consumer loans primarily consist of secured or unsecured personal loans, energy
efficiency financing programs in conjunction with Massachusetts public utilities,
and overdraft protection lines on checking accounts extended to individual customers.
The aggregate amounts of overdrawn deposit accounts are reclassified as loan
balances.
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