What are First Capital Inc's Business Segments?
Residential Loans. The Bank’s lending activities have concentrated on
the origination of residential mortgages, both for sale in the secondary market
and for retention in the Bank’s loan portfolio.
The Bank offers both fixed-rate mortgage loans and adjustable rate mortgage
(“ARM”) loans typically with terms of 15 to 30 years. The Bank uses
loan documents approved by the Federal National Mortgage Corporation (“Fannie
Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”)
whether the loan is originated for investment or sale in the secondary market.
Construction Loans. The Bank originates construction loans for residential properties
and, to a lesser extent, commercial properties. Although the Bank originates
construction loans that are repaid with the proceeds of a limited number of
mortgage loans obtained by the borrower from another lender, the majority of
the construction loans that the Bank originates are permanently financed in
the secondary market by the Bank. Construction loans originated without a commitment
by the Bank to provide permanent financing are generally originated for a term
of six to 12 months and at a fixed interest rate based on the prime rate.
Commercial Real Estate Loans. Commercial real estate loans are generally secured
by small retail stores, professional office space and, in certain instances,
farm properties. Commercial real estate loans are generally originated with
a loan-to-value ratio not to exceed 75% of the appraised value of the property.
Property appraisals are performed by independent appraisers approved by the
Bank’s board of directors. The Bank seeks to originate commercial real
estate loans at variable interest rates based on the prime lending rate or the
United States Treasury Bill rate for terms ranging from ten to 15 years and
with interest rate adjustment intervals of five years. The Bank also originates
fixed-rate balloon loans with a short maturity, but a longer amortization schedule.
Commercial Business Loans. Commercial business loans are generally secured
by inventory, accounts receivable, and business equipment such as trucks and
tractors. Many commercial business loans also have real estate as collateral.
The Bank generally requires a personal guaranty of payment by the principals
of a corporate borrower, and reviews the personal financial statements and income
tax returns of the guarantors. Commercial business loans are generally originated
with loan-to-value ratios not exceeding 75%.
Consumer Loans. The Bank offers a variety of secured or guaranteed consumer
loans, including automobile and truck loans, home equity loans, home improvement
loans, boat loans, mobile home loans and loans secured by savings deposits.
In addition, the Bank offers unsecured consumer loans. Consumer loans are generally
originated at fixed interest rates and for terms not to exceed seven years.
The largest portion of the Bank’s consumer loan portfolio consists of
home equity and second mortgage loans followed by automobile and truck loans.
Automobile and truck loans are originated on both new and used vehicles. Such
loans are generally originated at fixed interest rates for terms up to five
years and at loan-to-value ratios up to 90% of the blue book value in the case
of used vehicles and 90% of the purchase price in the case of new vehicles.
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