ISBC 2017 Form 10-K & 2018 Proxy Statement

FORM 10-K Residential Mortgage Loans. At December 31, 2017, $5.03 billion, or 25.0%, of our loan portfolio consisted of residential mortgage loans. Residential mortgage loans are originated by our mortgage subsidiary, Investors Home Mortgage, for our loan portfolio and for sale to third parties. We also purchase mortgage loans from correspondent entities including other banks and mortgage brokers. Our agreements call for these correspondent entities to originate loans that adhere to our underwriting standards. In most cases, we acquire the loans with servicing rights. We offer various loan programs to provide financing for low-and moderate-income home buyers, some of which include down payment assistance for home purchases. Through these programs, qualified individuals receive a reduced rate of interest on most of our loan programs and have their application fee refunded at closing, as well as other incentives if certain conditions are met. Consumer and Other Loans. At December 31, 2017, consumer and other loans totaled $671.1 million, or 3.3% of our total loan portfolio. We offer consumer loans, most of which consist of home equity loans, home equity lines of credit and cash surrender value lending on life insurance contracts. Home equity loans and home equity lines of credit are secured by residences primarily located in New Jersey and New York. Home equity loans are offered with fixed rates of interest, terms up to 20 years and to a maximum of $500,000. Home equity lines of credit have adjustable rates of interest, indexed to the prime rate. At December 31, 2017, cash surrender value loans totaled $279.4 million, or 42% of consumer and other loans. Acceptable credit history and FICO scores are reviewed along with the evaluation of the financial rating of the insurance carrier. 8