Commercial Portfolio
Commercial and Industrial: Loans in this category consist of revolving and term
loan obligations extended to business and corporate enterprises for the purpose
of financing working capital and/or capital investment. Collateral generally consists
of pledges of business assets including, but not limited to: accounts receivable,
inventory, plant & equipment, or real estate, if applicable. Repayment sources
consist of primarily, operating cash flow, and secondarily, liquidation of assets.
Commercial Real Estate: Loans in this category consist of mortgage loans to finance
investment in real property such as multi-family residential, commercial/retail,
office, industrial, hotels, educational and healthcare facilities and other specific
use properties. Loans are typically written with amortizing payment structures.
Collateral values are determined based upon third party appraisals and evaluations.
Loan to value ratios at origination are governed by established policy and regulatory
guidelines. Repayment sources consist of primarily, cash flow from operating leases
and rents, and secondarily, liquidation of assets.
Commercial Construction: Loans in this category consist of short-term construction
loans, revolving and nonrevolving credit lines and construction/permanent loans
to finance the acquisition, development and construction or rehabilitation of
real property. Project types include residential 1-4 family, condominium and multi-family
homes, commercial/retail, office, industrial, hotels, educational and healthcare
facilities and other specific use properties. Loans may be written with nonamortizing
or hybrid payment structures depending upon the type of project. Collateral values
are determined based upon third party appraisals and evaluations. Loan to value
ratios at origination are governed by established policy and regulatory guidelines.
Repayment sources vary depending upon the type of project and may consist of sale
or lease of units, operating cash flows or liquidation of other assets.
Small Business: Loans in this category consist of revolving, term loan and mortgage
obligations extended to sole proprietors and small businesses for purposes of
financing working capital and/or capital investment. Collateral generally consists
of pledges of business assets including, but not limited to, accounts receivable,
inventory, plant & equipment, or real estate if applicable. Repayment sources
consist primarily of operating cash flows, and secondarily, liquidation of assets.
For the commercial portfolio it is the Company’s policy to obtain personal
guarantees for payment from individuals holding material ownership interests of
the borrowing entities.
Consumer Portfolio
Residential Real Estate: Residential mortgage loans held in the Company’s
portfolio are made to borrowers who demonstrate the ability to make scheduled
payments with full consideration to underwriting factors such as current and
expected income, employment status, current assets, other financial resources,
credit history and the value of the collateral. Collateral consists of mortgage
liens on 1-4 family residential properties. The Company does not originate or
purchase sub-prime loans.
Home Equity: Home equity loans and lines are made to qualified individuals and
are primarily secured by senior or junior mortgage liens on owner-occupied 1-4
family homes, condominiums or vacation homes. The home equity loan has a fixed
rate and is billed in equal payments comprised of principal and interest. The
home equity line of credit has a variable rate and is billed in interest-only
payments during the draw period. At the end of the draw period, the home equity
line of credit is billed as a percentage of the principal balance plus all accrued
interest. Additionally, the Company has the option of renewing the line of credit
for additional draw periods. Borrower qualifications include favorable credit
history combined with supportive income requirements and combined loan to value
ratios within established policy guidelines.
Other Consumer: Other consumer loan products include personal lines of credit
and amortizing loans made to qualified individuals for various purposes such
as education, debt consolidation, personal expenses or overdraft protection.
Borrower qualifications include favorable credit history combined with supportive
income and collateral requirements within established policy guidelines. These
loans may be secured or unsecured.