What are Home Federal Bancorp Inc Of Louisiana's Business Segments?
Commercial — Real Estate Secured Loans. It is the current policy of Home
Federal Bank to lend in a first lien position on real property occupied as a commercial
business property. Home Federal Bank offers fixed and variable rate commercial
real estate loans. Home Federal Bank's commercial real estate loans are limited
to a maximum of 85% of the appraised value and have terms up to 15 years, however,
the terms are generally no more than 5 years with amortization periods of 20 years
or less. It is our policy that commercial real estate secured lines of credit
are limited to a maximum of 85% of the appraised value of the property and shall
not exceed 3 to 5 year amortizations.
Multi-Family Residential Loans. Our multi-family residential loan portfolio
includes income producing properties of 50 or more units and low income housing
developments. We obtain personal guarantees on all properties other than those
of the public housing authority for which they are not permitted.
Commercial Business Loans. The business lending products we offer include lines
of credit, inventory financing and equipment loans. Commercial business loans
and lines of credit carry more credit risk than other types of commercial loans.
We attempt to limit such risk by making loans predominantly to small- and mid-sized
businesses located within our market area and having the loans personally guaranteed
by the principals involved. We have established underwriting standards in regard
to business loans which set forth the criteria for sources of repayment, borrower's
capacity to repay, specific financial and collateral margins and financial enhancements
such as guarantees. Generally, the primary source of repayment is cash flow
from the business and the financial strength of the borrower.
Land Loans. Land loans include land which has been acquired for the purpose
of development and unimproved land. Our loan policy provides for loan-to-value
ratios of 50% for unimproved land loans. Land loans are originated with fixed
rates and terms up to five years with longer amortizations. Although land loans
generally are considered to have greater credit risk than certain other types
of loans, we expect to mitigate such risk by requiring personal guarantees and
identifying other secondary sources of repayment for the land loan other than
the sale of the collateral. It is our practice to only originate a limited amount
of loans for speculative development to borrowers with whom our lenders have
a prior relationship.
Construction Loans. Our residential construction loans typically have terms
of six to 11 months with a takeout letter from Home Federal for the permanent
mortgage. Our commercial construction loans include owner occupied commercial
properties, pre-sold property and speculative office property.
Home Equity and Second Mortgage Loans. These loans are secured by the underlying
equity in the borrower's residence. We do not require that we hold the first
mortgage on the properties that secure the second mortgage loans. The amount
of our second mortgage loans generally cannot exceed a loan-to-value ratio of
90% after taking into consideration the first mortgage loan. These loans are
typically three-to-five year balloon loans with fixed rates and terms that will
not exceed 10 years and contain an on-demand clause that allows us to call the
loan in at any time.
Consumer Non-real Estate Loans. We are authorized to make loans for a wide
variety of personal or consumer purposes. We originate consumer loans primarily
in order to accommodate our customers. The consumer loans at June 30, 2015 consist
of loans secured by deposit accounts with us, automobile loans, overdraft and
other unsecured loans.
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