Question-and-Answer Session
Operator
We will now begin the question and answer session, (Operator Instructions). The first question we have comes from Ken Zerbe of Morgan Stanley.
Ken Zerbe - Morgan Stanley
First question I had was in terms of the decline in the land and construction loans, could you just tell how much of that decline was driven specifically loan to sales as well as moving say some of the construction loans into a permanents loan types, and asset because the mortgage balance has gone up a lot, just trying to figure out how that’s being reduced? Thanks.
Dominic Ng
Zerbe in terms of the reduction of the construction loans actually it’s a combination of mainly from loan sales and also pay down form borrowers when they find other, when this condo units are being sold, they found other buyers, retail buyers coming and starts buying these condo units and that’s not paying down, if you recall in my last conference call of a quarter or two ago. I have talked about that more and more of these projects are coming to finish line as we expected that in the third and the fourth quarter, there will be substantially more pay down simply because of the construction loans is getting completed and moving on.
Now, we did not do that much residential financing for the single family units, such as the condos, the reason is that out pricing is not as attractive as (Inaudible) Wells Fargo and so forth so its hard for us to compete for that, that single family residential mortgage growth are mainly either through our own retail banking origination and also some purchases, we have done one bulk purchases in the third quarter, so for that reason I don’t think that there is much mature impact at all form the some of like, our single family residential mortgage growth really doesn’t have much to do with the construction pay down simply because we do not have asset attractive of a product in terms of long-term fixed rate, low interest rate type of mortgages for these condo buyers.
Now on the commercial construction area also as of the last three months I don’t recall that we have any construction loans that are taking now as a permanent mortgage in our commercial real estate category, so mainly these projects pay down when projects finish and taking out by some other vendors.
- To read the full transcript on Seeking Alpha, click here »
