Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of John Pancari of J.P. Morgan. Please proceed.
John Pancari – J.P. Morgan
Good afternoon. Could you run to a little bit more detail just, I guess, if you could just talk about your delinquencies in home equity and how, obviously I know you’re going to point to your under writing and everything, but I just I wanted just your updated take on how the delinquencies are continuing to trend so far below the industry median and we’re certainly hearing a lot of larger players in your market, they’re citing notable pressure right there in your market and home equity and also in construction for that matter, but I just want to see if we can talk a little bit of what you’re seeing in terms of the behavior of your borrowers when it comes to home equity?
Kenneth Waldych
John, it’s Ken Waldych and I’m afraid with the setup, I do have to say part of it is the underwriting. But beyond that, we are still enjoying a very favorable local environment and I would say that our client base – we have underwritten primarily at levels below 85% loan to value and we have not seen a very high level of unemployment, therefore they’re making their payments. In those situations where they’re unable to make payments, there is generally equity that is available in the project or in the home I should say, and we have been able to have a pretty good recovery on them. I would also say that I think there is a difference in how home equities were originally done. There are some lenders out there that did home equities, where they were really doing it on an accrual basis and they were taking this the second position so that they could advertise the product as a tax advantage product to the borrower. In our case, we under wrote them in a traditional way where we did our own appraisals and under wrote to the value of the asset and generally they were larger sized loans and I think that they have behaved more like first mortgages as a result.
John Pancari – J.P. Morgan
Okay. What is the average size of your home equity loans?
Kenneth Waldych
At $85, 000.
John Pancari – J.P. Morgan
85?
Kenneth Waldych
$85, 000
John Pancari – J.P. Morgan
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