Bank Community Reinvestment Act Plan

Community Reinvestment Act (“CRA”) Plan describes the actions that are necessary to fulfill a bank’s CRA obligations.  The plan is typically divided into the following sections:

Proposed Assessment Area

1. Summary of Performance Context
2. Identifiers of Credit Needs
3. Proposed CRA Evaluation Test
4. Discussion of Bank’s Programs, Products and Activities to Meet the Existing and Anticipated Needs of the Community
5. CRA Coordinator

This plan must be approved by the Board of Directors of the Bank and is typically reviewed quarterly for compliance.

PROPOSED ASSESSMENT AREA

An assessment area is established and delineates the zip codes within which the bank will make the majority of its loans.  Thus this is established as the banks primary assessment area.

SUMMARY OF PERFORMANCE CONTEXT

The loan or credit needs of the proposed assessment area is targeted at primarily centers on owners of small to medium business, retail customers, low-to-moderate income individuals, Senior citizens, professionals and those in need to purchase or refinance residential and income properties.  The use of borrowed funds can be used for starting and expanding local businesses and professional practices, financing all manner of consumer products, purchasing real estate for residential or income purposes and developing various community projects.

The bank may then present an analysis of the assessment area which shows the number of people within the assessment area that are in various income categories.

(Sample Income Analysis)

According to Claritas, 8.6% of the households in the assessment area have annual incomes less than $35,000; while 22.1% of the households in the assessment area fall into this category.  This segment may be classified as low- to moderate- income households.

The Economic Feasibility Study contains complete population and demographic data for the two CRA assessment areas.

1. IDENTIFIERS OF CREDIT NEEDS

In addition to the credit needs of the communities served by the Bank as evidenced by the general and statistical data obtained by the Bank and described above, the will identify local community credit needs through personal knowledge, banking experience and community involvement gained during their combined years of living and working in either assessment areas.  The bank may develop a plan to contact community organizations, government officials, non-profit groups, and business and trade associations to discuss the credit needs of the assessment area.

Civic Organizations may be represented by management and directors of the Bank who have held such positions as president, board members or active members in these types of organizations.  Each organization may be addressed or has been contacted about the credit needs of the area.  Other civic organizations, such as Kiwanis and Rotary Clubs, and trade associations such as the board of Realtors may also be contacted.  The Bank may also contact the Federal Home Loan bank to discuss first time home buyers assistance programs.

Through the Bank’s marketing program, directors and executive officers can be given a forum to ascertain ongoing community credit needs through their experiences as interactive members of the community.

PROPOSED CRA EVALUATION TEST

The Bank will be evaluated according to the either the Small or Large Bank Performance Standards depending upon its size.  The evaluation includes the following performance criteria:

The Bank’s loan-to-deposit ratio, adjusted for seasonal variation and, as appropriate, other lending-related activities, such as loan originations for sale to the secondary markets, community development loans or qualified investments;

• The percentage of loans and, as appropriate, other lending-related activities located in the Bank’s assessment area;
• The Bank’s record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels and businesses and farms of different sizes;
• The geographic distribution of the Bank’s loans; and,
• The Bank’s record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area.

1. 5. PROGRAMS, PRODUCTS AND ACTIVITIES TO MEET THE EXISTING AND ANTICIPATED NEEDS OF THE COMMUNITY

Products, services and programs for the low and moderate income individuals and areas are provided by the Bank, including low and moderate income mortgage products such as low down payment programs (up to 95% loan to cost when the appraisal is greater than purchase price), and mortgage loans with terms greater than 30 years when the appraisal and purchase price are 25% higher than the mortgage amount (ARM only).  Low cost deposit products such as fee free checking and small business flat fee checking will also be offered.  The Bank anticipates that it will participate in the Federal Home Loan Bank (“FHLB”) first time home buyers program for down payment assistance, and offer Small Business Administration loans and RLF loans.

The Bank may directly market to low and moderate income neighborhoods not only credit services appropriate to such communities’ needs, but all of the services offered by the Bank.   The direct marketing efforts may include, but are not be limited to, sponsorship of community programs, newsletters, community media, and management and employee involvement in the community.

As part of its efforts to meet the community’s needs, the Bank may expand and modify the programs, products and activities it provides in response to new credit needs information the Bank identifies through its community outreach efforts.

A primary reason for the efforts of the bank is typically their belief that community based bank can better identify and serve the local credit and banking needs of the community and can provide a higher quality of personal service to its customers than can a branch or subsidiary of outside banking organizations.

1. 6. CRA COOORDINATOR

The Bank appoints an officer to serve as its CRA Coordinator/Officer.  The CRA Coordinator/Officer will continually seek to update information about community credit and banking needs.  The CRA Coordinator will also provide periodic reports of CRA performance to the Board of Directors.

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