Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matthew Schultheis - Boenning & Scattergood Inc.
Matthew Schultheis - Boenning & Scattergood Inc.
You mentioned that you had a product to help builders move inventory. What is that product?
R. Scott Smith
Basically what we are doing is we are going to portfolio some mortgages. I will give you the basics and Phil Wenger can follow up a little bit. But the idea is to make mortgages more available to our customers, who are builders, to their customers who are buying their homes. And what we have agreed to do is to make up to 80% mortgages on those homes and then allow the builder to finance the other 20% if required.
Those are not saleable in the secondary market and so we have agreed to portfolio them and we will see how much we will need to portfolio.
Matthew Schultheis - Boenning & Scattergood Inc.
How has that product been received so far?
E. Philip Wenger
We’re just coming out with it but we have talked to some of our builders and I think they are very appreciative. The underwriting standards from a credit scoring aspect will still be what we consider to be fairly conservative. We think they’re good loans going on but it kind of puts a product back in play where folks who have good credit and good earnings but don’t have the down payment to buy a home.
R. Scott Smith
And there will be half to three-quarters percent premium on those, too, so we will get a little extra income on it.
Matthew Schultheis - Boenning & Scattergood Inc.
You mentioned that re-fis were up how much in the last 60 days?
R. Scott Smith
Triple.
Matthew Schultheis - Boenning & Scattergood Inc.
Why do you think that you had a decrease in business-related now and DDA said it was a $29.0 million decrease?
R. Scott Smith
We’ve done some analysis on that and what seems to be happening is that customers are, particularly retail, well, both retail and small business customers, are just keeping less cash in their deposit accounts.
Matthew Schultheis - Boenning & Scattergood Inc.
I know you are being fairly aggressive in looking for the deposit account with the loan relationships.
R. Scott Smith
In our promotion this fall we are getting nice new account openings and frankly, we’re asking the same question, why aren’t deposits going up more. And people, just relative to the pass, are keeping less there. Smaller average balances.
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