Residential, Construction and Land Loans, and Multifamily Loans. The Bank of
Greene County's primary lending activity is the origination of residential mortgage
loans collateralized by property located in The Bank of Greene County’s
primary market area. Residential mortgage loans refer to loans collateralized
by single-family residences. By contrast, multi-family loans refer to loans
collateralized by multi-family units, such as apartment buildings. The Bank
of Greene County will originate residential mortgage loans with loan-to-value
ratios of up to 95.0%, with private mortgage insurance. Generally, residential
mortgage loans are originated for terms of up to 30 years. In recent years however,
The Bank of Greene County has been successful in marketing and originating such
loans with 10 and 15-year terms. The Bank of Greene County generally requires
fire and casualty insurance, the establishment of a mortgage escrow account
for the payment of real estate taxes, and hazard and flood insurance. The Bank
of Greene County requires title insurance on most loans for the construction
or purchase of residential properties collateralizing real estate loans made
by The Bank of Greene County. Title insurance is not required on all mortgage
loans, but is evaluated on a case by case basis.
Commercial Real Estate Mortgages. We have increased our focus on commercial
real estate mortgages and have developed a strong team of lenders and business
development staff which, we believe, has resulted in our growth in these portfolios.
Office buildings, mixed-use properties and other commercial properties collateralize
commercial real estate mortgages. The Bank of Greene County originates fixed-
and adjustable-rate commercial real estate mortgage loans with maximum terms
of up to 25 years.
Consumer Loans. The Bank of Greene County’s consumer loans consist of
direct loans on new and used automobiles, personal loans (either secured or
unsecured), home equity loans, and other consumer installment loans (consisting
of passbook loans, unsecured home improvement loans, recreational vehicle loans,
and deposit account overdrafts). Consumer loans (other than home equity loans
and deposit account overdrafts) are originated at fixed rates with terms to
maturity of one to five years.
Commercial Loans. The Bank of Greene County also originates commercial loans
with terms of up to 10 years at fixed and adjustable rates. The Bank of Greene
County attributes growth in this portfolio to its ability to offer borrowers
senior management attention as well as timely and local decision-making on commercial
loan applications. The decision to grant a commercial loan depends primarily
on the creditworthiness and cash flow of the borrower (and any guarantors) and
secondarily on the value of and ability to liquidate the collateral, which may
consist of receivables, inventory and equipment. A mortgage may also be taken
for additional collateral purposes, but is considered secondary to the other
collateral for commercial business loans. The Bank of Greene County generally
requires annual financial statements, tax returns and personal guarantees from
the commercial borrowers. The Bank of Greene County also generally requires
an appraisal of any real estate that collateralizes the loan. The Bank of Greene
County’s commercial loan portfolio includes loans collateralized by inventory,
fire trucks, other equipment, or real estate.