Community Reinvestment Act Plan

Transcription

1 Community Reinvestment Act Plan

2 2015 CRA Performance Evaluation Tri Counties Bank most recent FDIC Performance Evaluation for CRA was published in May The Bank rated Satisfactory overall Component Ratings: Lending: Low Satisfactory Investment: High Satisfactory Services: Low Satisfactory 2

3 What Ratings Do We Want? We need to maintain our overall Satisfactory rating The goal is to have a High Satisfactory rating in the Lending, Investment and Service categories. 3

4 Why Are the Component Ratings Important? The FDIC will consider the Bank s CRA record acceptable if our overall rating is Satisfactory. 4

5 Lending Goals The Bank s current component Rating is Low Satisfactory Goal is to Achieve and maintain a High Satisfactory component rating Lending contributes 50% to the overall CRA Rating 5

6 What Will it Take? High percentage of lending in our Assessment Areas. Meet or exceed the aggregate percentage of our competitors for Mortgage Lending and Small Business/Small Farm Lending in low and moderate income (LMI)Tracts. Increase our Community Development Lending. 6

7 Peer Research We reviewed the Lending, Investment and Service components of peer banks and used prior exam experience to determine our internal goals. Bank Name Asset Size CD Loan Total Lending Test Rating Investment Total Donation Total Investment Test Rating Service Hours Service Test Rating Overall Rating Tri Counties Bank $3.9b $30.5M LS $23.3M $309,700 HS 864 LS S Westamerica $5b $88M LS $112M $346,000 HS 1,800 HS S Bank of the Sierra $1.4b $72.9M HS $31.5M $99,600 LS 2,402 HS S Exchange Bank $1.8b $24.9M LS $4.5M $460,000 LS 7,798 O S Farmers & Merchants $1.9b $72.8M O $22.1M $602,790 HS 10,084 O O

8 Goals for Maintain assessment area penetration rate at 85% or more. Increase CRA Reportable Small Business/Small Farm and HMDA Reportable Mortgage lending in LMI tracts based on the goals on the following pages. Ensure stated income is captured on all Small Business Streamline Refinances Increase Community Development lending to at least $25 million a year, including more affordable housing related loans. The Bank is at $19.5 million as of November

9 Investment Goals The Bank s current component Rating is High Satisfactory Goal is to maintain a High Satisfactory component rating Investments, which include CRA qualified donations, contributes 25% to the overall CRA Rating 9

10 What Will It Take to Maintain That Rating? Continue exam period Investment rate of 5% of Tier One Capital until CRA portfolio reaches at least $50 million, then reassess goal. Ensure mix of innovative and creative LIHTC and EQ2 investments, as well as traditional investments such as MBS and Munis. As MBS and Munis paydown or pay off, replace the balances. 10

11 What About Donations? Continue to use the same formula for developed in the 2015 CRA Plan as a guideline for the annual budget goal. 1% of the 10 year average Net Profit Before Tax $400,000 has been budgeted for

12 Action Steps for Investments Complete purchase of 2015 budgeted investments, plus replenishment of traditional investments: $5 million Raymond James LIHTC $5 million Merritt Capital LIHTC $1 million Neighborworks Sacramento EQ2 $500,000 Arcata CDFI EQ2 $6 million in MBS and Munis Target Additional Investments for 2016 of at least $20 million, with at least 50% in creative and innovative investments Provide strategic donations to CRA qualified LMI organizations in the amount of $400,000 in 2016, per the approved budget. This includes the Bank s Scholarship Program which has been re-tooled to ensure LMI support for CRA credit. 12

13 Service Goals The Bank s current component Rating is Low Satisfactory Goal is to achieve and maintain a High Satisfactory component rating Services, which includes CRA qualified volunteer hours, FHLB Sponsorships, and Bank products and Services, 25% to the overall CRA Rating 13

14 What Will It Take? Education to employees as to what qualifies for CRA credit Board or Committee positions at non-profit organizations that have a mission to serve LMI communities Board or Committee positions in support of small business development and affordable housing initiatives Financial education in support of LMI individuals 14

15 Additional Support-Services Targeted support of FHLB sponsorships- Maximize member allocation. AHP (Affordable Housing Program) Grant AHEAD (Access to Housing and Economic Assistance for Development) Program Grant Develop relationship with non-profit to roll out the FDIC s MoneySmart financial education training program for LMI individuals. Identify LMI schools for the MoneySmart for Kids education program. 15