What are Ottawa Bancorp Inc's Business Segments?
One- to-Four Family Residential Loans. Our primary lending activity is the
origination of mortgage loans to enable borrowers to purchase or refinance existing
homes or to construct new residential dwellings in our market area. We offer
fixed-rate and adjustable-rate mortgage loans with terms up to 30 years. Borrower
demand for adjustable-rate loans versus fixed-rate loans is a function of the
level of interest rates, the expectations of changes in the level of interest
rates, the difference between the interest rates and loan fees offered for fixed-rate
mortgage loans and the initial period interest rates and loan fees for adjustable-rate
loans. The relative amount of fixed-rate mortgage loans and adjustable-rate
mortgage loans that can be originated or purchased at any time is largely determined
by the demand for each in a competitive environment and the effect each has
on our interest rate risk. The loan fees charged, interest rates, and other
provisions of mortgage loans are determined by us on the basis of our own pricing
criteria and competitive market conditions.
Lines of Credit. We offer lines of credit, principally home equity lines of
credit, which have adjustable rates of interest that are indexed to the prime
rate as published in The Wall Street Journal for terms of up to 20 years. These
loans are originated with maximum loan-to-value ratios of 80% of the appraised
value of the property, and we require that we have a second lien position on
the property. We also offer secured and unsecured lines of credit for well-qualified
individuals and small businesses. Management includes these loans based on the
collateral supporting the line of credit in either the non-residential, multi-family,
commercial or one-to-four family categories for the purposes of monitoring and
evaluating the portfolio.
Multi-Family and Non-Residential Real Estate Loans. We offer fixed rate and
adjustable-rate mortgage loans secured by multi-family and non-residential real
estate. Our multi-family and non-residential real estate loans are generally
secured by condominiums, apartment buildings, single-family subdivisions and
owner-occupied properties used for businesses.
Commercial Loans. These loans consist of operating lines of credit secured
by general business assets and equipment. We loan primarily to businesses with
less than $5,000,000 in annual revenues. The operating lines of credit are generally
short term in nature with interest rates tied to short term rates and adjustments
occurring daily, monthly, or quarterly based on the original contract. For adjustable
loans, there is also an interest rate floor. The equipment loans are typically
made with maturities of less than five years and are priced with a fixed interest
rate. The Bank has originated commercial loans from Bankers Healthcare Group
in prior years. Bankers Healthcare Group specializes in loans to healthcare
professionals of all specialties throughout the United States. These loans are
primarily comprised of working capital and equipment loans. We underwrite these
loans based on our criteria and service the loans in-house.
Consumer Loans. We offer a variety of consumer loans, which include auto, share
loans and personal unsecured loans to our customer base. Unsecured loans generally
have a maximum borrowing limit of $25,000 and a maximum term of four years.
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