Commercial Real Estate, Multifamily and Land Loans. We originate commercial
real estate mortgage loans, loans on multifamily dwellings and loans on undeveloped
land.
We originate commercial real estate and multifamily loans secured primarily
by office buildings, strip mall centers, owner-occupied offices, hotels, condominiums,
apartment buildings and developed lots.
Our commercial real estate, multifamily and land loans are generally written
for terms of up to five years with a balloon payment at the end of the fifth
year, with a 15 year amortization schedule. Our Small Business Administration
(SBA) loans, and on a limited basis other commercial real estate loans, are
originated with terms of up to 10 years. On occasion, we may make these types
of loans with amortization terms of up to 25 years. The majority of our commercial
real estate, multifamily and land loans have fixed interest rates. The rates
on our adjustable-rate commercial real estate and multifamily loans are generally
tied to the prime interest rate as reported in The Wall Street Journal. Many
of our adjustable-rate commercial real estate loans are not fully amortizing
and, therefore, require a “balloon” payment at maturity. Our commercial
real estate, multifamily and land loans are generally subject to prepayment
penalties. A portion of our commercial real estate and multifamily loans represent
permanent financing for borrowers who have completed real estate construction
for which we previously provided construction financing.
One-to-Four Family Residential Mortgage Loans. We offer residential mortgage
loans that conform to Fannie Mae and Freddie Mac underwriting standards (conforming
loans) as well as non-conforming loans. We generally underwrite our one-to-four
family residential mortgage loans based on the applicant’s employment
and credit history and the appraised value of the subject property. We also
offer loans through various agency programs which are originated for sale.
Construction Loans. We also originate construction loans for one-to-four family
residential properties and commercial properties, including multifamily properties.
Home Equity Loans and Lines of Credit. In addition to traditional one-to-four
family residential mortgage loans, we offer home equity loans and home equity
lines of credit that are secured by the borrower’s primary or secondary
residence. Home equity loans and lines of credit are generally underwritten
using the same criteria that we use to underwrite one-to-four family residential
mortgage loans. Home equity loans may be underwritten with a loan-to-value ratio
of 80% when combined with the principal balance of the existing first mortgage
loan. Our home equity loans are primarily originated with fixed rates of interest
with terms of up to five years, a balloon payment, and a 15-year amortization
schedule. Home equity lines of credit generally are originated with variable
rates tied to the prime interest rate, with an established floor and monthly
payments of 2.0% of the outstanding balance.
Commercial Non-Mortgage Loans. We also originate commercial non-mortgage (term)
loans and variable lines of credit. These loans are generally originated to
small- and medium-sized companies in our primary market area. Our commercial
non-mortgage loans are generally used for working capital purposes or for acquiring
equipment, inventory or furniture. These loans are primarily secured by business
assets other than real estate, such as business equipment and inventory, accounts
receivable or stock. The commercial non-mortgage loans that we offer have fixed
interest rates or variable-rate indexed to the prime rate as published in The
Wall Street Journal, and with terms ranging from one to seven years. Our commercial
non-mortgage loan portfolio consists primarily of secured loans.
Consumer Loans. To a lesser extent, we offer a variety of consumer loans, including
new and used automobile loans, recreational vehicle loans, and loans secured
by certificates of deposits and other collateral, including marketable securities.