Ask the Lender – How long will it take to find out if I’m approved for a commercial loan?
Rick Beverly, SVP/Findlay City President and Commercial Lender
This is a great question! Being a locally owned privately held community bank we have an advantage over some of our larger competitors with local decision-making on our loans. We always want to get an answer back to our clients as soon as we can and we have a loan committee that meets weekly. The time frame will vary based on what is being used as collateral and the size of the transaction.
If you are purchasing a piece of equipment for $100,000 it may only take a couple days to get the loan closed and have the check in-hand. But let’s say you are purchasing a parcel of commercial or agricultural land and the loan amount is $1 million. This loan may take a while longer because of a few extra steps we will need to take due to regulatory requirements such as a new appraisal and title (search) opinion on the property. Through this process it may take an average of three to five weeks to close, depending on how quick we get these items completed.
The other factor that will determine Citizens’ turnaround time is if we already have your current financial information, such as tax returns and financial statements, or if we need to collect this information from you. If we have this information on file, we can get the loan application started right away, which will speed up the underwriting and closing process. If we do not already have this information, then it will depend on how quickly it can be provided to us. We will work the quickest we can to meet your specific time frames. Our clients are very important to us!
The Health Care Law – What you should know for your business
The Affordable Care Act, also known simply as the Health Care Law, will officially go into effect in January 2014. In the time leading up to that, there is a lot of work to be done and decisions to be made as a business owner regarding the healthcare coverage you decide to offer your employees. Randy Myers, an insurance agent with Leland-Smith Insurance, discusses some of the requirements of the law and how the new coverage will work.
Randy Myers, Insurance Agent, Leland-Smith Insurance, Van Wert, Ohio
Three Options
“The new law requires all Americans be offered medical insurance. They have 3 choices: Participate in an employer-sponsored program if offered, purchase coverage themselves through the government exchange programs, or pay a fine,” states Myers. As an employer if you offer an insurance program it must be deemed affordable and meet the criteria defined by the government as providing a comprehensive package of items and services, known as essential health benefits (EHB). These include the following categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. In order to be
considered affordable, the portion the employee pays for coverage must not exceed 9.5% of his/her household income.
The exchange programs offer insurance coverage through the state and provide the same essential health benefits. States can choose to either run their own programs or have them run for them by the federal government. This is the option Ohio has chosen. There will be four plans available through the exchanges differentiated only by the amount a person is willing to pay for more coverage: Bronze, 60% coverage; Silver, 70% coverage; Gold, 80% coverage and Platinum, 90% coverage. “When determining between choosing an employer-based or exchange program, participants will want to consider the network of providers will probably be different for each,” Myers notes.
If a person chooses to not take coverage through an employer or the exchange he/she will be fined annually. The fine for 2014 will be $95 or 1% of his/her taxable income – whichever is greater. This fine is expected to increase each year.
Small vs. Large Businesses
“There are differences in requirements for smaller vs. larger businesses based upon the number of employees,” explains Myers. Companies with less than 50 employees may continue to offer their current coverage, assuming it meets the EHB requirements, or go on the exchange. “There are tax benefits available for companies with less than 25 employees and an average income per employee of less than $50,000 per year,” states Myers. For employees who choose the exchange vs. their employer plan there may be subsidies available to them if the employer plan is unaffordable based upon income. For companies with more than 50 employees, if they offer a medical plan that does not meet the EHB criteria they will be penalized $2000 per employee over 30 employees annually. “There are some situations where it will be more affordable for business owners to drop coverage and pay the penalty and allow the employees to simply go on the exchange,” Myers predicts.
What to Do Now
So what should business owners do now? Information on the exchanges should be available by July 2013 and open enrollment for employees will begin in October. Myers says, “Make sure you plan ahead. Rates are going to be more expensive because everyone is guaranteed coverage. The best thing to do is talk to an insurance agent you know and trust and discuss your options,” states Myers. For more information regarding the health care law, visit www.healthcare.gov.
Ask the Lender – How long will it take to find out if I’m approved for an ag real estate loan?
Steve Ritter, SVP/Bluffton City Executive and Ag Lender
We want to make it is as easy and quick as possible to process your loan application paperwork. As part of our underwriting process, you should be able to supply us with:
- Year-end financial statements (minimum 3 years)
- Personal financial statements if farm operation is in an entity
- 3-5 years of tax returns
- Operation plan of recent history and projections
- Additional information about your operation’s future plans and needs
The typical underwriting process will take from 1-4 weeks depending on the complexity of the request and timing our loan approval meetings. We make our loan approval decisions locally and have done this for almost a century. The majority of our lenders and credit underwriters have experience in the agriculture industry and several have hands-on experience.
We have several options available for your financing needs. We offer fixed and variable loan rates. We are preferred lenders with the Farm Service Agency and we typically have approvals from them in 10-14 days. We also participate in the FSA’s
Beginning Farmer Program and their loan guarantee programs.
Message from the President
April is National Community Banking Month and as such we always have activities that revolve around our commitment to our communities and our involvement with local businesses. This year, we are proud to feature several of the businesses we partner with through in-branch displays and online advertisements. This in addition to our monthly video series depicts the personal relationships we forge with our business customers year-round.
Recently we were honored to have been named by SNL Financial as one of the top 100 community banks in the nation. Inclusion in this list reflects the dedication we have to not only providing excellent customer service, but also to being a safe and sound bank. Ranked 55th on the list, Citizens National Bank was the only bank based out of Ohio to be included. SNL ranked the best-performing community banks using six core financial performance metrics that focus on profitability, asset quality and growth for the 12-month period ended Dec. 31, 2012.
Also, this month we celebrate the completion of a 15,000 square foot expansion of our Operations Center in Bluffton, located off I-75. The addition provided 24 new offices and allows for improved backroom support for the bank ensuring success for future growth opportunities in existing and new markets. We were excited to host a public open house on Sunday, April 21 and celebrate what community banking is all about!
Ask the Lender – How much are the closing costs?
Rhonda Hogrefe, Loan Specialist
MLO #554363
One of the first questions I often hear from first time home buyers is “how much are the closing costs?” Every purchase is different, so there is not one set amount. Typically closing costs run 2%-4% of the purchase price. Depending on the type of program you qualify for, your credit score may be a factor.
The following is a list of fees that you will typically see: origination fee, appraisal, documentation fee, title services and insurance, and the survey. You also have pre-paid items. These items include pre-paid interest, start up of your escrow account for taxes and insurance, and PMI insurance (if applicable). Maybe you decided to purchase points to get a lower rate. This is also collected at closing.
To help you better understand and be prepared so there are no surprises, you will be provided with several disclosures early on. These are required by law and are there for your protection. The most important are the Good Faith Estimate and the Truth in Lending.
Three days after your application is submitted, you will receive the Good Faith Estimate (GFE). This is a summary of your mortgage terms and settlement charges. This is only an estimate and the actual charges may differ. The estimate defines limits on how much certain fees can change between the estimate and the actual costs. You can evaluate your mortgage application and even explore other possibilities before accepting.
The Truth in Lending (TIL) allows you to see the cost of your mortgage under the terms of your loan. It will give you the APR (annual percentage rate) which combines your interest rate and closing costs and discloses it as a single rate to give you a true cost of borrowing so you can compare. For example, a loan with a lower interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher rate with very low fees may be an exceptional value.
Keep in mind the mortgage tax savings you may be entitled to, but be sure to consult your tax advisor as there are limitations. Points paid on acquisition for a residence is fully deductible on the year they are paid. Thereafter, interest paid on a mortgage is tax deductible if you itemize on your tax return. These tax savings can affect the Effective APR. Again, be sure to consult your tax advisor on these issues.
Citizens National Bank Named One of Top 100 Community Banks in the Nation As Ranked by SNL Financial
Citizens National Bank was recently named one of the top 100 community banks in the nation for companies with between $500 million and $5 billion in assets by SNL Financial. SNL Financial is an independent business intelligence firm that specializes in financial services data. Ranked 55th on the list, Citizens National Bank was the only bank based out of Ohio to be included.
SNL ranked the best-performing community banks using six core financial performance metrics that focus on profitability, asset quality and growth for the 12-month period ended Dec. 31, 2012. To compile this ranking, SNL defined community banks as institutions with between $500 million and $5 billion in assets and with 60 or fewer offices. Also, at least one-third of the banks’ balance sheets must be composed of loans, and they cannot have more than half of their loans in credit cards. “ We’re honored to be included in this list with other top-performing institutions,” states President/CEO J. Michael Romey. “Our continued focus on stable community-based lending and conservative banking practices has contributed greatly to the success we’ve seen over the past 3 years.”
With offices in Bluffton, Celina, Defiance, Elida, Findlay, Lima, Springfield and Van Wert, Citizens National Bank has assets totaling more than $600 million and has been serving the communities of West Central Ohio since 1920.
Lisa Rettig Named VP/Human Resources Manager at Citizens National Bank
Lisa Rettig was recently promoted to Vice President/Human Resource Manager at Citizens National Bank. In this position, Lisa is responsible for promoting and conducting human resource activities including employment and retention, employee relations, employee wellness initiatives and providing bank staff various training and development opportunities.
“We are pleased to recognize Lisa’s strong performance and its contribution to the success of the HR team and the bank,” said Karen Mitterholzer, SVP/Head of Human Resources.
Lisa is a certified Professional in Human Resource Management (PHR) and has a degree in Business Management with a HR major from Rhodes State College. Rettig returned to the Human Resources Department at Citizens National Bank in 2011 and has a combined four years of service with CNB.
With offices in Bluffton, Celina, Defiance, Elida, Findlay, Lima, Springfield and Van Wert, Citizens National Bank has assets totaling more than $600 million and has been serving the communities of West Central Ohio since 1920.
