PUBLIC DISCLOSURE. September 4, 2001 COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION CITIZENS BANK OF EDMOND RSSD#

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1 PUBLIC DISCLOSURE COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION CITIZENS BANK OF EDMOND RSSD# ONE EAST 1 st STREET, P.O. BOX 30 EDMOND, OKLAHOMA Federal Reserve Bank of Kansas City 925 Grand Boulevard Kansas City, Missouri NOTE: This document is an evaluation of this institution s record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operation of the institution. This evaluation is not, nor should it be construed as, an assessment of the financial condition of this institution. The rating assigned to this institution does not represent an analysis, conclusion or opinion of the federal financial supervisory agency concerning the safety and soundness of this financial institution.

2 TABLE OF CONTENTS Institution s CRA Rating... 1 Description of Institution... 1 Description of Assessment Area... 2 Conclusions... 6

3 INSTITUTION S CRA RATING: This institution is rated Satisfactory The Citizens Bank of Edmond The bank has a satisfactory record of helping to meet the credit needs of its assessment area including low- and moderate-income neighborhoods, in a manner consistent with its resources and capabilities. The bank s performance was assessed under the following four core criteria for small banks: Loan-to-Deposit Ratio Lending Inside the Assessment Area Lending to Borrowers of Different Income Levels and to Businesses of Different Revenue Sizes Geographic Distribution of Loans The bank s net loan-to-deposit (LTD) ratios for the proceeding 16 quarters ending June 30, 2001 were compared to six similarly-situated competitor banks and averaged to mitigate disparities resulting from seasonal fluctuations. Conclusions for the remaining performance criteria were based on data compiled from a statistically derived sample of loan files reviewed for each major product line. An explanation of how each major product line was determined is provided later in this public disclosure. The bank s response to complaints was unrated, as the bank has not received any complaints about its performance under the Community Reinvestment Act (CRA) since its last examination. Based on a review of the data, the bank s average LTD ratio is considered reasonable. The analysis also showed that a substantial majority of the bank s loans are originated in the bank s assessment area. In addition, the distribution of loans in the bank s assessment area reflects reasonable dispersion to individuals of different income levels and businesses of different sizes, given area economic conditions and competitive factors. Finally, the geographic distribution of loans throughout the bank s assessment area is considered reasonable. DESCRIPTION OF INSTITUTION The Citizens Bank of Edmond (Citizens Bank) is a $181,886M financial institution located in Edmond, Oklahoma, a suburb in northern Oklahoma County, 13 miles north of Oklahoma City. Both cities are located in Oklahoma County, which together with Logan County to the north, comprise the bank s assessment area. Citizens Bank s main office is located in Edmond s original business district at One East First Street. The bank also has two branches located in local shopping center grocery stores, one drive-through facility, and one branch at the University of Central Oklahoma (UCO). All bank locations are within relatively close proximity of each other and are readily accessible to the entire community. Although the bank s assessment area consists of a two-county region, a majority of the bank s loans are made in the surrounding area of Edmond. According to an analysis of the bank s loan trial balance, over 80 percent of originations are made within approximately a 10-mile radius of the bank. Based on its financial condition, size, and credit offerings, the bank has the ability to meet the credit needs of its assessment area. Citizens Bank is primarily a commercial lender but offers a variety of credit products to meet the needs of its assessment area. Table 1 presents the 1

4 composition of the bank s loan portfolio as a percentage of average gross loans and leases, as of March 31, Table 1 Loan Portfolio Loan Type Amount ($000) Percent of Total One- to Four-Family Real Estate 25, Commercial 43, Consumer 20, Farmland or Agricultural Other Gross Loans & Leases 89, No legal or financial factors exist that hinder the bank s ability to meet the credit needs of its assessment area. The institution received a satisfactory rating at its last CRA examination dated August 18, DESCRIPTION OF THE BANK'S ASSESSMENT AREA Citizens Bank designated Logan and Oklahoma Counties in the northern and central parts of the Oklahoma City Metropolitan Statistical Area (MSA) as its assessment area. A total of 229 census tracts are located in the assessment area; 21 tracts are low-income; 63 tracts are moderate-income; 91 tracts are middle-income; and 50 tracts are upper-income. Four income tracts have no income designation since the tracts have either no population or no families. Logan County is the northernmost county in the MSA and is more rural in nature, containing only 4.9 percent of the area s population. Four of the eight census tracts comprising Logan County are moderate-income. All low-income tracts are located in the southern portion of Oklahoma County in or surrounding Oklahoma City. The area s economic, demographic and housing characteristics show substantial diversity. In particular, the city of Edmond, which is located in the central part of the area, has unique economic, housing, and socio-demographic characteristics compared to the area as a whole. According to community contacts, Edmond is a rapidly growing community, which is primarily due to its highly rated public school system and new housing developments that attract welleducated, upper-income families. Based on 2000 data from the Chamber of Commerce, more than 43 percent of Edmond residents have at least a college degree and a median-household income of $53,800, which is 61.7 percent higher than the state of Oklahoma. With a population of 694,372 in 2000, the area contains the MSA s largest population centers, having grown by 10.5 percent from 1990 to Statewide, the population grew by 9.7 percent over that period, and the MSA-wide population increased by 13.0 percent. Although both Oklahoma County s and Logan County s population increased by 10.1 percent and 16.9 percent, respectively, Oklahoma County experienced the largest numerical growth over the past decade. The city of Edmond grew at an exceptionally high rate of 30.6 percent from 1990 to

5 A smaller concentration of families 1 live in the area than in the MSA as a whole. In 2000, 64.3 percent of area households were families compared to a 66.8 percent family population MSAwide. However, family concentrations vary substantially within the area. In the city of Edmond, the family population is 73.6 percent. In addition, 39.3 percent of the families residing in the city of Edmond contain children under 13 years of age. As previously stated, many families purposely locate in the Edmond area because of the school district s favorable reputation. A large older population lives in the area. Based on 2000 data, 12.2 percent of the area population was over 64 years of age compared to 11.4 percent MSA-wide. Again, the areawide age demographics are not reflective of that in Edmond, in which only 8.8 percent of its population is over 64 years of age. The City of Edmond and Logan County contain relatively large concentrations of individuals living in group quarters that are not institutionalized. This is largely due to the location of UCO and Oklahoma Christian University which had 2000 enrollments of 14,195 students and 2,129 students, respectively. In 2000, 2.1 percent of the city of Edmond s population and 5.8 percent of Logan County s population lived in noninstitution group quarters. Compared to the MSA as a whole, only 1.5 percent of the population lived in noninstitution group quarters. In 1990 the area was a middle-income area overall with a median-family income ($33,252) that was percent that of the MSA as a whole ($32,406). Nonetheless, the area contained larger concentrations of low-and moderate-income households and families than the MSAwide. Logan County had a lower per capita personal income (PCPI) at $21, 560 than did Oklahoma County at $26,291 in The MSA-wide PCPI for 1999 was $24,433. The MSA is the largest in the state, and Oklahoma County is the state s most populous county containing the largest concentration of labor. The MSA s largest employers are the State of Oklahoma, Tinker Air Force Base, Oklahoma University Health Sciences Center, INTEGRIS Health, and Oklahoma Public Schools. The employment base also contains many automotive, tire and electrical manufacturing, computer and health care services, and communications industries. In the Edmond area, the largest employers include UCO, Edmond public schools, and the City of Edmond. Economic indicators signaled a slowing MSA economy from 1999 to 2000 and in the first five months of In 2000, annualized total payroll employment growth slowed for the first time in three years (2.5 percent from 1999 to 2000 compared to 2.8 percent from 1998 to 1999). Area and MSA labor force growth also cooled somewhat in From 1999 to 2000 the area labor force increased by 0.1 percent compared to 3.0 percent labor force growth from 1998 to High office and industrial vacancy rates also showed economic deceleration. In 1999 the annualized MSA office vacancy rate (19.6 percent) and industrial vacancy rate (4.5 percent) were the highest since Furthermore, the MSA single-family housing market was greatly effected by the cooling economy. After a 197 percent total housing permit growth rate from 1998 to 1999, total housing permits fell by 8.2 percent in 1999 and 6.8 percent in Single-family housing permit volume fell every quarter in 2000 and from 1999 to 2000, 1 Families area subset of households consist of households with at least two individuals related by birth, marriage or adoption. 3

6 single-family housing permits decreased by 26.1 percent. The drop in single-family housing permits from 1999 to 2000 was the largest in over ten years. The area s housing affordability 2 ratio of 56.0 percent exceeds the MSA s at 49.9 percent and statewide Oklahoma areas at 49.5 percent. Although the area s affordability ratio is high, the area contains a larger stock of older housing units. In addition, the area s vacancy and boarded-up rates are higher in the area than in the MSA as a whole, particularly in low-income tracts. This indicates that there may be housing deterioration in some parts of the area, making it increasingly challenging for financial institutions to originate home improvement and rehabilitation loans. In the past ten years, Edmond has experienced a significant amount of new residential and commercial construction activity in response to its growing population, according to the city s chamber of commerce. Furthermore, more expensive housing is being built in Edmond compared to the MSA. Over the first five months of 2001, the average construction costs of new, privately-owned residential building permits in the city of Edmond was $193,641 compared to$128,842 MSA-wide and $121,535 in Oklahoma County. According to the Chamber, the average sales price of an existing single-family home in Edmond is $150,654, which is 48 percent higher than the average sales price in Oklahoma City. Information obtained from members of the community about assessment area credit needs, as well as economic and housing conditions was used to determine the reasonableness of the bank s lending levels and loan distributions within the assessment area. One community contact, a representative from the chamber of commerce for Edmond, discussed the transformation of Edmond from a bedroom community for Oklahoma City to a retail center for the immediate area. Information provided by the contact showed that retail sales had grown percent from 1990 to In addition, due to its highly educated workforce, the chamber stated that the Edmond area expects to experience growth of knowledge-based jobs, specifically with technology firms. The contact acknowledged a general slowing down of the economy, stating that commercial construction has also slowed recently. Another contact, an administrator for an area church, stated that area banks have been supportive in financing the commercial growth in the Edmond area. Table 2 details the general demographic and economic characteristics of the bank s assessment area based on 1990 census data. 2 Affordability ratios are calculated using median household income divided by median housing value. The higher the rate, the more affordable the housing stock. 4

7 Table 2 Bank Assessment Area Characteristics* TRACT SUMMARY Entire Area Total Number of Tracts 229 Number of Low-Income Tracts 21 Number of Moderate-Income Tracts 63 Number of Middle-Income Tracts 91 Number of Upper-Income Tracts 50 N/A Tracts ** 4 Income Summary Median Family Income $33,252 Percent Low-Income Families 21.2 Percent Moderate-Income Families 18.3 Percent Middle-Income Families 22.1 Percent Upper-Income Families 38.4 Unemployment Summary Labor Force Population (Assessment Area) 321,144 Percent Unemployment (Assessment Area) 3.5 Miscellaneous Information Total Population 628,622 Percentage of Families Below Poverty 11.4 Total Housing Units 291,617 Percentage Owner-Occupied Units to Total Units 52.7 Percentage Rental Units to Total Units 39.4 Percentage Vacant Units to Total Units 14.9 * Based on 1990 Census Data. ** NA Tracts have either no population or no families and were excluded from the analysis. CONCLUSIONS WITH RESPECT TO PERFORMANCE CRITERIA Various criteria were considered in determining the bank s overall CRA performance rating, including: 1) the bank s level of lending in relation to similarly situated financial institutions; 2) the concentration of loan originations within the bank s assessment area; 3) the bank s level of lending to borrowers of different income levels and to businesses of different revenue sizes; and 4) the distribution of loan originations within the bank's assessment area by income level of census tract. The bank has not received any complaints relative to its performance under the CRA since the last examination. Two community members were contacted to obtain additional information about the assessment area s credit needs and to confirm that the products and services offered by the local banks adequately address those needs. The bank s performance under the Act is considered satisfactory based on the following assessment criteria analysis. 5

8 Loan-to-Deposit Ratio Citizens Bank s net LTD ratio, based on an average of the prior 16 consecutive quarters ending June 30, 2001, was percent. Although the bank s average LTD ratio is lower than its local, state, and national peers, the LTD ratio is considered reasonable. The bank s average LTD was compared to that of six similarly-situated competitor banks, whose ratios ranged from percent to percent over the same period. A comparison was also performed between the bank s LTD ratio and that of its national and state peer groups, whose LTD ratios averaged percent and percent, respectively. The bank s peer group consists of all insured commercial banks having assets between $100 million and $300 million with three or more banking offices, and located in a metropolitan area. While the bank s ratio has lagged that of its competitor banks and peer group, the lower LTD is attributed to substantial growth in its deposits, which has outpaced its loan growth. The substantial deposit growth is primarily due to a growing customer base, which is a result of recent mergers of other area financial institutions and Edmond s rapidly growing population. The bank s wide range of loan products demonstrates the bank s willingness to provide credit to borrowers of different income levels and businesses of different sizes within the area. Lending in the Assessment Area Based on the sample of loans reviewed during the examination, a substantial majority of the bank s lending occurs inside its assessment area as reflected in Table 3. The bank s three major loan products, residential real estate, commercial loans and consumer loans, were reviewed for this analysis. A review of the bank s Home Mortgage Disclosure Act (HMDA) Loan Application Register (LAR) for 1998, 1999, 2000 and the first half of 2001 showed that the bank originated 383 residential real estate loans, of which 363 loans (94.8 percent) by number were originated inside the bank s assessment area. Of the 40 commercial loans, 40 loans (100 percent) by number were originated inside the bank s assessment area. Finally, a review of 45 consumer loans revealed that 44 loans (97.8 percent) were originated inside the bank s assessment area. Viewed together, the bank s percentage of real estate, commercial, and consumer loans within the assessment area totaled 95.5 percent by number and 93.2 percent by dollar amount. Table 3 Loans Within The Bank s Assessment Area Loan Type Sampled Percentage of Loans Reviewed (By Number) Percentage of Loans Reviewed (By Dollar Amount) Real Estate Loans Commercial Loans Consumer Loans Totals

9 Distribution of Loans to Borrowers of Different Income Levels and to Businesses of Different Revenue Sizes Real Estate Loans and Consumer Loans The bank s percentage of loans made to borrowers of different income levels was compared to the percentage of families in the assessment area that are designated low-, moderate-, middle-, and upper-income. The analysis focused on the number of loans originated rather than the dollar volume, as it is a better indicator of the number of people benefiting from these products. The distribution of real estate loans and consumer loans by income level of borrower is summarized in Table 4. Table 4 Percentage Distribution of Real Estate and Consumer Loans Reviewed Within the Bank s Assessment Area By Income Level of Borrower 2001 Area Median Family Income * $45,400 Income Level Of Borrower Percentage of Real Estate Loans Reviewed Percentage of Consumer Loans Reviewed Percentage of Families within Assessment Area ** Low (Less Than 50 Percent of Median Income) Moderate (50 To 80 Percent Of Median Income) Middle (80 To 120 Percent Of Median Income) Upper (Greater Than 120 Percent Of Median Income) Income Not Available NA * Area Median Family Income is based on the 2001 HUD-adjusted median family income. The HUD-adjusted median family income for 1998, 1999, and 2000 were $41,300, $43,300, and $44,100 respectively. ** The Percentage of Families in Assessment Area is based on 1990 census data. Given Edmond s affluent nature, the distribution of consumer and real estate loans to borrowers of different income levels shows reasonable penetration among low- and moderateincome borrowers. Of the 44 consumer loans originated within the bank s assessment area, 11.4 percent were to low-income borrowers and 31.8 percent were to moderate-income borrowers, which compares favorably to the 21.2 percent low-income and 18.3 percent moderate-income families living in the area. Of the 363 real estate loans reviewed within the bank s assessment area, 8.0 percent were to low-income borrowers and 14.1 percent were to moderate-income borrowers. Although the level of real estate lending to low- and moderate-income borrowers is lower than the percentage of families within those income categories, several factors were considered in the evaluation of the bank s performance under this criteria. For instance, approximately 80 percent of the bank s loans were made within a ten-mile radius of the bank. Fewer low- and moderate-income families reside within the bank s immediate lending area than in its assessment area as a whole. Low- and moderate-income families comprise only 27.6 percent of the population within a ten mile radius of the bank compared to 39.5 percent low- and moderate-income families in the assessment area. In addition, the high median new home 7

10 value in the Edmond area limits real estate lending opportunities involving low- and moderateincome borrowers. The average sales price for an existing single-family home in the Edmond area is $150,654, a price range that low- and moderate-income borrowers are unlikely able to afford. Moreover, according to 1990 census data, 10.4 percent of area families lived below the poverty level and therefore, would be less likely to have sufficient economic viability to obtain large credit amounts that require more significant capital outlays and monthly payments, such as real estate purchases. Thus, effective loan demand is somewhat reduced by the percentage of families living below the poverty level, impeding the bank s ability to originate home loans to low- and moderate-income individuals. Nevertheless, in spite of these unique economic, demographic and housing affordability issues in the Edmond area, the bank has made reasonable efforts to make credit available to low- and moderate-income borrowers. Small Business Loans Based on the sample of commercial loans reviewed, the distribution of loans to businesses of different revenue sizes is considered reasonable as shown in Table 5. Under CRA, small businesses are those businesses with revenue sizes of less than or equal to $1 million. Of the 40 business loans within the bank s assessment area, 80.0 percent (32 loans) were made to small businesses. According to 2000 Dun and Bradstreet Data, 88.4 percent of the businesses in the bank s assessment area have revenues of less than $1 million. In addition, a review of the 32 loans originated to small businesses showed that 26 loans (81.3 percent) were for amounts less than or equal to $100,000. Loans for less than or equal to $100,000 further demonstrate the bank s willingness to meet the credit needs of small businesses in its assessment area. Loan Value Category Table 5 Distribution of Commercial Loan Originations Within the Bank's Assessment Area By Loan Amount Businesses Businesses w/revenues<=$1mm Percentage of Percentage Loans of Dollar Reviewed Amount w/revenues > $1MM Percentage of Percentage of Loans Dollar Amount Reviewed Less than or Equal to $100, Greater than $100,000 and less than or Equal to $250,000 Greater than $250, TOTAL Distribution of Loans by Income Level of Geography Real Estate and Consumer Loans 8

11 The bank s lending to low- and moderate-income tracts appears reasonable, given the economic, demographic, and housing factors that negatively impact the financial institutions ability to lend in these areas. As illustrated in Table 6, the geographic dispersion of loans reviewed showed that the bank originated no loans in low-income tracts for either residential real estate or consumer loans, although 9.2 percent of the geographies in the assessment area are low-income. In addition, moderate-income geographies accounted for 27.5 percent of the tracts in the area; however, the bank originated 14.6 percent of its real estate loans and 11.4 percent of its consumer loans in moderate-income tracts. 9

12 Table 6 Geographic Distribution of Real Estate And Consumer Loans Within the Bank's Assessment Area Income Level of Geography Low (Less than 50 percent of median income) Moderate (50 to 80 percent of median income) Middle (80 to 120 percent Of median income) Upper (Greater than 120 percent of median income) Real Estate Loans % of loans reviewed % of housing units Consumer Loans % of loans reviewed *Percentage of Geographies within Assessment Area *Tracts with no income level comprised 1.7 percent of the assessment area. An analysis of the geographic distribution of loans must take into account that the bank s immediate market area is comprised of all middle- and upper-income census tracts, except for two moderate-income census tracts in Edmond. However, the two moderate-income tracts in the city are located in an area around the old central business district and UCO, which has a relatively high population of senior citizens and students. Senior citizens and students do not traditionally generate strong credit demand. The majority of low- and moderate-income tracts are located in Oklahoma City, where the bank lacks significant physical presence. These areas are more easily served by the many other financial institutions in closer geographic proximity. Although there are two large moderate-income block numbering areas (BNAs) in northern Logan County, that area, which is sparsely populated, is also geographically distant from Citizens Bank and does not generate as much loan volume as Oklahoma County. Besides the geographical constraints, other significant factors, including population density among the tracts, poverty rates, and quality and quantity of housing stock, negatively impact the bank s ability to lend in these areas. First, low- and moderate-income tracts house a small percentage of the area population, totaling only 32.8 percent. In addition, it was noted that poverty rates in low- and moderate-income tracts are substantially higher than the area-wide household poverty rate. In low- income tracts, family poverty rates are 41.7 percent, and in moderate-income tracts the family poverty rate is 18.5 percent compared to the area-wide poverty rate of 10.4 percent. Finally, housing stock is significantly older and more deteriorated 10

13 in low- and moderate-income tracts. The dilapidated condition of housing stock affects the bank s ability to effectively originate housing loans because of inadequate collateral. In addition, there is a high concentration of multi-family housing units in the low- and moderateincome tracts as only 26.9 percent of the housing units are owner-occupied. Overall, given the geographical and economic conditions, which negatively impact the bank s ability to lend in these areas, the bank s level of penetration for residential real estate and consumer lending is considered reasonable. Small Business Loans Many of the aforementioned factors discussed under residential real estate and consumer loans also impede the bank s ability to make small business loans in low- and moderateincome geographies. The city of Edmond has experienced significant commercial growth in the past 10 years; however, most business development is occurring outside the older downtown business district where the immediate area s only two moderate-income tracts are located. As noted in Table 7, the bank s level of small business loans shows no penetration in low-income tracts and 10 percent in moderate-income tracts, compared to 6.9 percent and 27.3 percent of the area s small businesses located in low- and moderate-income geographies, respectively. Although the percentages would suggest an area for improvement, considering the bank s location within the affluent Edmond area, area demographics, and the location of competitor institutions in closer proximity to low- and moderate-income tracts, the bank s level of lending is considered reasonable. Table 7 Distribution of Small Business Loans Reviewed Within the Bank s Assessment Area by Income level of Geography Income Level of Geography Low (Less than 50 percent of median income) Percentage of Small Business Loans Reviewed *Percentage of Small Businesses Residing in Geographies within Assessment Area Moderate (50 to 80 percent of median income) Middle (80 to 120 percent of median income) Upper (Greater than 120 percent of median income) * Tracts with no income level contained 1,053 businesses (3.2 percent of area businesses). COMPLIANCE WITH ANTIDISCRIMINATION LAWS AND REGULATIONS 11

14 The bank is in compliance with the substantive provisions of the antidiscrimination laws and regulations. A review of bank policies, credit applications, and loans revealed no prohibited practices designed to discourage loan applicants. 12

15 GLOSSARY OF COMMON CRA TERMS (For additional information, please see the Definitions section of Regulation BB at 12 CFR ) Assessment Area The geographic area(s) delineated by the bank and used in evaluating the bank s record of helping to meet the credit needs of its community. The assessment area must include the geographies where the main office, branches, and deposit-taking automated tellers machines are located. The assessment area must consist only of whole geographies, may not reflect illegal discrimination, and may not arbitrarily exclude low- or moderate-income geographies. Block Numbering Areas (BNAs) BNAs are geographic entities similar to census tracts. Metropolitan areas are most often delineated into census tracts, while rural areas are delineated into BNAs. Census Tracts Census tracts are small, relatively permanent geographic entities within counties delineated by a committee of local data users. Generally, census tracts have between 2,500 and 8,000 residents and boundaries that follow visible features. Community Development Includes affordable housing (including multifamily rental housing) for low- and moderate-income individuals, community services targeted to lowand moderate-income individuals, activities that promote economic development by financing businesses or farms that have gross annual revenues of $1 million or less, or activities that revitalize or stabilize low- or moderate-income geographies. Community Development Loan A loan that has community development as its primary purpose and (except in the case of a wholesale or limited-purpose bank). 1. Has not been reported or collected by the bank or an affiliate as a home mortgage, small business, small farm, or consumer loan, unless it is a multifamily dwelling loan and 2. Benefits the bank s assessment area(s) or a broader statewide or regional area that includes the bank s assessment area(s). Community Development Service A service that has as its primary purpose community development, is related to the provision of financial services, has not been considered in the evaluation of the bank s retail banking services, benefits the banks assessment area(s) or a broader statewide or regional area that includes the bank s assessment area and has not been claimed by other affiliated institutions. Consumer Loans Loans to individuals for household, family and other personal expenditures. These loans do not include real estate-secured loans. Dun & Bradstreet Data Data collected by Dun & Bradstreet regarding types of businesses and their respective gross annual revenues. The data can be sorted by geographies.

16 Geography A census tract or a block numbering area. Income Level Both geographies and individuals can be described in terms of their income levels. In MSAs, the level is based on the MSA median income. In nonmsa areas, the level is based on the statewide, nonmsa median income. Low-Income Less than 50 percent of the area median income Moderate-Income At least 50 percent and less than 80 percent of the area median income Middle-Income At least 80 percent and less than 120 percent of the area median income Upper-Income At least 120 percent or more of the area median income Metropolitan Statistical Area (MSA) - The general concept of an MSA is that of a core area containing a large population nucleus, together with adjacent communities having a high degree of economic and social integration with that core. Generally, a single city with at least 50,000 inhabitants or an urbanized area with a total population of at least 100,000 would meet the definition of an MSA. Qualified Investment A lawful investment, deposit, membership share or grant that has as its primary purpose community development. Small Business A business with gross annual revenues of $1 million or less. Small Business Loan A loan with an original amount of $1 million or less that has been reported in the Consolidated Report of Condition and Income in the category Loans secured by nonfarm nonresidential properties or Commercial and industrial loans. Small Farm A farm with gross annual revenues of $1 million or less. Small Farm Loan A loan with an original amount of $500,000 or less that has been reported in the Consolidated Report of Condition and Income in the category Loans secured by farmland or Loans to finance agricultural production and other loans to farmers.