Consumer Group
The Consumer Group offers products and services to consumers and manages activities
and operations affecting consumers. The Group serves approximately 11.6 million
households through multiple distribution channels, including 1,776 retail banking
stores, 432 retail home loan stores, 2,990 ATMs, 39 wholesale home loan centers,
correspondent lenders, telephone call centers and online banking.
The Consumer Group's primary objectives in 2004 are to increase the number
of the Group's products and services used by consumers, thus increasing profitability,
and to drive efficiencies in its operations. The Group plans to achieve its
objective by cross-selling products and services to its existing customers and
by establishing and enlarging its customer base in selected markets.
Retail Banking and Financial Services
The principal activities of the Retail Banking and Financial Services segment
include:
Offering a comprehensive line of deposit and other retail banking products
and services to consumers;
Holding the Company's portfolio of home loans held for investment;
Managing and servicing the home equity and consumer loan portfolios; and
Providing investment advisory and brokerage services, sales of annuities, mutual
fund management and other financial services.
The segment holds loans in portfolio that are originated by the Mortgage Banking
segment. Through our specialty mortgage finance program, the segment also purchases
and re-underwrites loans to higher risk borrowers; such loans, while held in
portfolio, are serviced by third parties.
Investment advisory and securities brokerage services are provided by approximately
600 financial consultants of WM Financial Services, Inc., a licensed broker-dealer.
In addition, fixed annuities are offered to the public by approximately 1,300
licensed banking employees.
Mortgage Banking
The principal activities of the Mortgage Banking segment include:
Originating and servicing home loans;
Buying and selling home loans in the secondary market; and
Providing insurance-related products.
Through its multiple lending channels, the segment offers a diverse set of
home loan products including:
•
Fixed-rate home loans;
Adjustable-rate home loans (where the interest rate may be adjusted as frequently
as every month);
Hybrid home loans (where the interest rate is fixed for a predetermined time
period, typically 3 or 5 years, and then reprices monthly or annually, depending
on the product); and
Government insured or guaranteed home loans.
Home loans are either originated or purchased and are either held in portfolio
by the Retail Banking and Financial Services segment or sold by the Mortgage
Banking segment to institutional investors in the secondary market or to the
housing government-sponsored enterprises. In general, the Retail Banking and
Financial Services segment holds in portfolio purchased loans made to higher-risk
borrowers and adjustable-rate mortgages, and the Mortgage Banking segment sells
fixed-rate home loans, generally to the Federal National Mortgage Association
("Fannie Mae"), a government-sponsored enterprise. As conditions warrant,
the Mortgage Banking segment may securitize adjustable-rate loans into available-for-sale
securities to be held by the Treasury Division as part of the Company's overall
asset and liability management strategy. In the future, the segment may securitize
and sell adjustable-rate loans in the secondary market as part of the Company's
capital management process.
Mortgage servicing involves the administration and collection of home loan
payments. The Mortgage Banking segment performs most home loan servicing activities,
including the servicing of loans held in portfolio by the Retail Banking and
Financial Services segment. When loans are sold into the secondary market, the
Company generally retains the right to service those loans and hence retains
the customer relationship. The Company intends to use these customer relationships
to cross-sell additional products and services.
Commercial Group
The principal activities of the Commercial Group include:
•
Providing financing to developers, investors, mortgage bankers and homebuilders
for the acquisition or construction of multi-family dwellings, other commercial
properties and new homes;
•
Originating and servicing multi-family and other commercial real estate loans
and either holding such loans in portfolio as part of its commercial asset management
business or selling them in the secondary market;
•
Originating, selling and servicing home loans to higher-risk borrowers through
the Company's subsidiary, Long Beach Mortgage Company; and
Offering a full array of commercial banking products and services.
The multi-family lending business, which accounts for a majority of the Group's
revenues, is comprised of three key activities: originating and managing loans
retained in the loan portfolio, servicing loans and providing ancillary banking
services to enhance customer retention. Combining these three activities into
one integrated business model has allowed the Group to become a leading originator
and holder of multi-family loans. The Group's multi-family lending program has
a dominant market share of more than 20% in certain key cities along the west
coast and is building market share on the east coast with recent office openings
in Boston, Washington, D.C., and Miami.
As part of the Company's specialty mortgage finance program, the Group originates
home loans to higher-risk borrowers through Long Beach Mortgage, which it then
sells to secondary market participants, retaining the servicing relationship.
The Group also offers a full array of commercial banking products and services,
including lines of credit, receivables and inventory financing, equipment loans,
real estate financing, government-guaranteed loans, international trade financing,
cash management and merchant bankcard services.