Residential Mortgage Loans. We offer residential mortgage loans with terms
typically ranging from 15 to 30 years, with either fixed or adjustable interest
rates. Originations of fixed rate residential mortgage loans versus adjustable
rate residential mortgage loans are monitored on an ongoing basis. The percentage
of adjustable rate residential mortgage originations to total originations is
affected significantly by the level of market interest rates, customer preference,
our interest rate sensitivity and liquidity position, as well as loan products
offered by our competitors. Therefore, even when our strategy is to increase
the origination of adjustable rate residential mortgage loans, market conditions
may be such that there is greater demand for fixed rate mortgage loans.
Home Equity Loans. Generally, our home equity loans are secured by the borrower’s
principal residence with a maximum loan-to-value ratio, including the principal
balances of both the first and second mortgage loans, of 90% or less. Home equity
loans are offered on a fixed rate basis with terms of up to 20 years. Home equity
lines of credit are offered on an adjustable-rate basis with terms of up to
25 years. All home equity lines of credit are underwritten assuming the borrower
is required to immediately begin making principal and interest payments using
the current rates on our equivalent fixed rate products.
Other Consumer Loans. The principal types of other consumer loans we offer
are direct and indirect automobile loans, sales finance loans, unsecured personal
loans, credit card loans, and loans secured by deposit accounts. These loans
are typically offered with maturities of ten years or less.
Commercial Real Estate Loans. Our multi-family commercial real estate loans
are secured by multi-family residences, such as rental properties. Our commercial
real estate loans are secured by nonresidential properties such as hotels, commercial
offices, manufacturing facilities and retail establishments.
Commercial Loans. We offer commercial loans to finance various activities in
our market area, some of which are secured in part by additional real estate
collateral.
Commercial business loans are offered with both fixed and adjustable interest
rates. Underwriting standards we employ for commercial business loans include
a determination of the applicant’s ability to meet existing obligations
and payments on the proposed loan from operating cash flows generated by the
applicant’s business. The financial strength of each applicant also is
assessed through a review of financial statements provided by the applicant.
Commercial loans generally have higher interest rates than residential loans,
but they also may involve a higher risk of default since their repayment is
generally dependent on the successful operation of the borrower’s business.
We generally obtain personal guarantees from the borrower or a third party as
a condition to originating commercial loans.