What are Fauquier Bankshares Inc's Business Segments?
ONE TO FOUR ("1-4") FAMILY RESIDENTIAL REAL ESTATE LOANS. The Bank's
1-4 family residential real estate loan portfolio primarily consists of conventional
loans, generally with fixed interest rates with 15 or 30 year terms, and balloon
loans with fixed interest rates, and 3, 5, 7, or 10-year maturities but utilizing
amortization schedules of 30 years or less. The Bank requires private mortgage
insurance if the principal amount of the loan exceeds 80% of the value of the
property held as collateral.
HOME EQUITY LINES OF CREDIT LOANS. The Bank's home equity line of credit loan
portfolio primarily consists of conventional loans, generally with variable
interest rates that are tied to the Wall Street Journal prime rate and with
10 year terms.
CONSTRUCTION AND LAND LOANS. The majority of the Bank's construction and land
loans are made to individuals to construct a primary residence. Such loans have
a maximum term of twelve months, a fixed rate of interest, and loan-to-value
ratios of 80% or less of the appraised value upon completion. The Bank requires
that permanent financing, with the Bank or some other lender, be in place prior
to closing any construction loan. Construction loans are generally considered
to involve a higher degree of credit risk than single-family residential mortgage
loans. The risk of loss on a construction loan is dependent largely upon the
accuracy of the initial estimate of the property's value at completion. The
Bank also provides construction loans and lines of credit to developers. Such
loans generally have maximum loan-to-value ratios of 80% of the appraised value
upon completion. The loans are made with a fixed rate of interest. The majority
of construction loans are made to selected local developers for the building
of single-family dwellings on either a pre-sold or speculative basis.
The Bank's commercial loans include loans to individuals and small-to-medium
sized businesses located primarily in Fauquier and Prince William Counties for
working capital, equipment purchases, and various other business purposes. Equipment
or similar assets secure approximately 81.2% of the Bank's commercial loans,
on a dollar-value basis, and the remaining 18.8% of commercial loans are on
an unsecured basis. Commercial loans have variable or fixed rates of interest.
Commercial lines of credit are typically granted on a one-year basis. Other
commercial loans with terms or amortization schedules longer than one year will
normally carry interest rates that vary with the prime lending rate and other
financial indices and will be payable in full in three to five years.
The Bank has U.S. Government guaranteed student loans, which were purchased
through and serviced by a third party and have a variable rate of interest.
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