PUBLIC DISCLOSURE COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION UINTA COUNTY STATE BANK RSSD# 85052 P.O. BOX 159 MOUNTAIN VIEW, WYOMING 82939 Federal Reserve Bank of Kansas City 925 Grand Boulevard Kansas City, Missouri 64198 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.
TABLE OF CONTENTS Institution s CRA Rating... 2 Description of Institution... 2 Description of Assessment Area... 3 Conclusions... 4 1
GENERAL INFORMATION INSTITUTION S CRA RATING: This institution is rated Substantial Noncompliance An institution in this group has a substantially deficient record of helping to meet the credit needs of its entire assessment area, including low- and moderate-income neighborhoods, in a manner consistent with its resources and capabilities. The rating of the bank was assessed under the following five core criteria developed for evaluating Community Reinvestment Act (CRA) performances of small banks: Loan-to-Deposit Ratio Lending Inside the Assessment Area Lending to Individuals of Different Income Levels and Businesses of Different Sizes Geographic Distribution of Loans Record of Responding to Complaints About the Bank s CRA Performance Conclusions for each performance criterion were based on data compiled from a review of loans made since the previous examination. The analysis shows that s very low loan-to-deposit ratio is unreasonable given its size, financial condition, and assessment area credit needs. Although all the bank s loans were within the assessment area, the extremely low number of loans reveals that the bank is not meeting the credit needs of its community. The bank does not obtain applications, gather income documentation, or maintain credit files on customers; therefore, the information for lending to borrowers of different income levels and small businesses and small farms of different sizes was not available for review and assessment. While there are no low- or moderate-income geographies in the assessment area, the geographic distribution shows that all loans were made to individuals in the upper-income neighborhood of the assessment area. DESCRIPTION OF INSTITUTION, with one full-service facility, is a very small financial institution with only $8.3 million in total assets according to the March 2002 Consolidated Report of Condition and Income (Call Report). The bank s assets include $7.1 million in securities and federal funds sold and only $126,000 in loans. The loan portfolio consists of $48,000 in commercial loans and $36,000 in consumer loans. The remainder of the loan portfolio consists of $42,000 in Other Real Estate Owned (OREO), which represents a contract for deed on a previously foreclosed property from a few years ago. Bank deposits totaled $3.8 million, and the bank s equity capital was approximately $4.5 million. 2
DESCRIPTION OF THE BANK'S ASSESSMENT AREA is located in the town of Mountain View, Wyoming, which is in the southwestern part of Wyoming approximately 18 miles north and 45 miles east of the Utah border. The bank s assessment area includes the towns of Mountain View and Lyman and the unincorporated areas of Fort Bridger, Urie, and Evanston, Wyoming. The assessment area includes three of the four block numbering areas (BNAs) of Uinta County, Wyoming. Based on 1990 Census Bureau information, two BNAs are considered middle-income and one is considered upper-income. The bank s assessment area does not arbitrarily exclude any low- and moderate-income areas, and it has not changed since the last CRA evaluation conducted in June 2001. Based on 1990 U.S. Census data, the population of the bank s assessment area is 12,713. The population of the entire county was 18,705, and the population in Mountain View was 1,189. According to 2000 U.S. Census data, the Uinta County population has increased 5 percent to 19,742, while the population in Mountain View has decreased 3 percent to 1,153. The Department of Housing and Urban Development (HUD) indicates that the 2000 Estimated Median Income for the assessment area is approximately $47,200. According to the Wyoming Department of Employment, the labor force for Uinta County has increased 11 percent from 1990 to 2001. In addition, the unemployment rate of 5.5 percent has remained relatively unchanged since 1990. The median housing value of $62,302 is slightly higher than for other rural areas in Wyoming with a value of $60,917. The bank s assessment area is surrounded by ranch land, oil production areas, and national forest lands. The soda ash (trona) mining companies, approximately 45 miles to the east in Sweetwater County, employ approximately one-third of the work force living in the Bridger Valley, with the other major employers being Union Telephone, Uinta County government, the school district, and the U.S. Forest Service. A local government official was interviewed during the examination to gain a perspective on local economic conditions and possible credit needs. According to the community contact, the main industries in the area include mining, ranching, and lumber. Currently, the local economy is in a downturn due to recent layoffs in the mining industry, depressed cattle prices, and a low supply of timber for the three area sawmills. He noted that the southern part of Bridger Valley has had tremendous growth, which has inflated real estate values in the area and, thus, has the potential to impact lower-income residents. The community contact further added that all three local banks have done a good job of meeting the community s needs. 3
CONCLUSIONS WITH RESPECT TO PERFORMANCE CRITERIA The bank s performance under the CRA continues to be rated Substantial Noncompliance. The bank s low volume of lending reflects the bank s unresponsiveness to the credit needs of the community. This level of lending activity, in conjunction with the lack of relevant information on loan applicants, basically negates the evaluation of the remaining performance criteria used to assess the bank s record of helping to meet the credit needs of its assessment area. These criteria include the percentage of loans located in the bank s assessment area, the bank s lending to borrowers of different income levels and to businesses and farms of different sizes, and the geographic distribution of the bank s loans. Loan-to-Deposit Ratio The loan-to-deposit ratio is considered unreasonable given the bank s size, financial condition, and assessment area credit needs. Since the last examination, the four-quarter average loan-to-deposit ratio is 2.36 percent. This ratio is much lower than the 49.27 percent for other banks in Uinta County and the 66.41 percent for other rural banks in Wyoming with less than $100 million in total assets. While the bank has over 1,400 checking and saving accounts, only 10 loans have been made since the last examination. Lending in the Assessment Area This core performance criterion evaluates the concentration of loans originated by the bank in its assessment area. To evaluate the bank s lending activity within its assessment area, all loans originated by the bank since the most recent examination were reviewed. The review showed that 100 percent of the 10 loans originated were located in the assessment area. Although this percentage would ordinarily meet outstanding standards for this criterion, the bank s low number of loans and low loan-to-deposit ratio renders the rating of this performance criterion insignificant. Lending to Borrowers of Different Income Levels and Businesses and Farms of Different Sizes This core performance criterion evaluates the bank s loan originations to borrowers of different income levels, particularly to low- and moderate-income individuals and businesses and farms of different sizes. This criterion could not be assessed because the bank does not take written loan applications or gather income documentation. In addition, an analysis by loan proxy could not be done, as the bank never has taken income information in the past. Further, the limited number of loans would, also, make the analysis meaningless. Therefore, this performance criterion could not be rated. 4
Geographic Distribution of Loans This core performance criterion focuses on the bank s penetration of loans among geographies of different income levels, primarily in low- and moderate-income geographies in the bank s assessment area. The analysis shows that all 10 loans originated were located in the upper-income geography of the bank s assessment area. While this percentage would normally reflect poorly on the bank s performance, the bank is located in the upper-income geography with all loans being made within a small radius of the bank. Moreover, the low number of loans and low loan-to-deposit ratio render the rating for this performance criterion meaningless. Response to Complaints The bank has not received any complaints about its CRA performance in meeting assessment area credit needs. Therefore, an assessment of the bank s performance in responding to complaints was not required. Compliance with Antidiscrimination Laws and Regulations The examination did not identify any substantive violations of the antidiscrimination laws and regulations. 5
GLOSSARY OF COMMON CRA TERMS (For additional information, please see the Definitions section of Regulation BB at 12 CFR 228.12.) 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. 6
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. 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. 7