What are Orrstown Financial Services Inc's Business Segments?
A majority of the Company’s loan assets are loans for business purposes.
Approximately 59% of the loan portfolio is comprised of commercial loans. The
Bank makes commercial real estate, equipment, working capital and other commercial
purpose loans as required by the broad range of borrowers across the Bank’s
various markets.
The Bank’s credit policy dictates the underwriting requirements for the
various types of loans the Bank would extend to borrowers. The policy covers
such requirements as debt coverage ratios, advance rate against different forms
of collateral, loan-to-value ratios (“LTV”) and maximum term.
The Bank provides home equity loans, home equity lines of credit and other
consumer loans primarily through its branch network and customer call center.
A large majority of the consumer loans are secured by either a first or second
lien position on the borrower’s primary residential real estate. The Bank
requires a LTV of no greater than 90% of the value of the real estate being
taken as collateral. The Bank’s underwriting standards typically require
that a borrower’s debt to income ratio generally cannot exceed 43%.
The Bank provides residential mortgages throughout its various markets through
a network of mortgage loan officers. A majority of the residential mortgages
originated are sold to secondary market investors, primarily Wells Fargo, Fannie
Mae and the Federal Home Loan Bank of Pittsburgh. All mortgages, regardless
of being sold or held in the Bank’s portfolio, are generally underwritten
to secondary market industry standards for prime mortgages. The Bank generally
requires a LTV of no greater than 80% of the value of the real estate being
taken as collateral, without the borrower obtaining private mortgage insurance.
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