PUBLIC DISCLOSURE February 28, 2011 COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION First Utah Bank RSSD #207872 3826 South 2300 East Salt Lake City, Utah 84109 Federal Reserve Bank of San Francisco 101 Market Street San Francisco, California 94105 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 RATING... 1 Institution s CRA Rating... 1 INSTITUTION... 2 Description of Institution... 2 Description of Assessment Area... 3 Scope of Examination... 6 LENDING TEST... 6 COMMUNITY DEVELOPMENT TEST... 7 CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS... 8 Lending Test... 8 LOAN-TO-DEPOSIT RATIO... 8 LENDING IN ASSESSMENT AREA... 8 LENDING DISTRIBUTION BY GEOGRAPHY... 9 LENDING DISTRIBUTION BY BORROWER INCOME AND BUSINESS REVENUE... 9 RESPONSE TO COMPLAINTS... 9 Community Development Test... 10 COMMUNITY DEVELOPMENT LENDING... 10 COMMUNITY DEVELOPMENT INVESTMENTS... 11 COMMUNITY DEVELOPMENT SERVICES... 11 Fair Lending or Other Illegal Practices Review... 12 GLOSSARY OF TERMS... 13 i
INSTITUTION RATING Institution s CRA Rating First Utah Bank is rated "SATISFACTORY" The following table shows the performance ratings for the lending and community development tests. PERFORMANCE LEVELS LENDING TEST PERFORMANCE TESTS COMMUNITY DEVELOPMENT TEST OUTSTANDING SATISFACTORY X X NEEDS TO IMPROVE SUBSTANTIAL NONCOMPLIANCE The major factors supporting the institution s rating include: A majority of loans originated within the assessment area; An excellent dispersion of loans in geographies of different income levels; A reasonable distribution of small business loans by revenue size, many of which were in smaller dollar amounts of $100,000 or less; and A reasonable level and impact of community development loans supporting creation and retention of jobs, as well as community development services benefiting low- and moderate-income individuals. 1
INSTITUTION Description of Institution First Utah Bank (FUB), headquartered in Salt Lake City, Utah, with reported total assets of $306.0 million as of December 31, 2010, is a wholly-owned subsidiary of First Utah Bancorporation, a one bank holding company. FUB currently operates a network of eight fullservice branches in Salt Lake County - three located in Salt Lake City, two in West Valley City and one each in the cities of Midvale, Riverton and Sandy. FUB also operates one nonbank subsidiary, Premier Data Corporation, which began operations in June 1998 to provide data processing services for FUB and other financial institutions. FUB is a full-service community bank that provides products and services targeted to both businesses and consumers. Loan products primarily include commercial and commercial real estate loans, working capital, Small Business Administration (SBA) loans, consumer term loans, home equity lines of credit, and, to a lesser extent since the economic downturn, single family residential construction lending. FUB offers consumer mortgage loans through its mortgage department Skyline Mortgage Solutions. Below is the December 31, 2010, loan portfolio as stated in the Consolidated Reports of Condition and Income, which shows the bank s commercial lending focus. EXHIBIT 1 LOANS AND LEASES AS OF DECEMBER 31, 2011 Loan Type $ ( 000s) % Commercial/Industrial & Non-Farm Non-Residential Real Estate 94,632 55.1 Secured by 1-4 Family Residential Real Estate 40,163 23.3 Construction & Land Development 30,944 18.0 Leases 2,424 1.4 Consumer Loans & Credit Cards 2,035 1.2 All Other 1,520 1.0 Total (Gross) 171,718 100.0 During this review period, FUB faced no legal or financial impediments that would prevent it from helping to meet the credit needs of its assessment area consistent with its business strategy, size, financial capacity, and local economic conditions. The bank received a satisfactory rating at its previous CRA examination, which was conducted as of March 30, 2009. 2
Description of Assessment Area The bank s assessment area has not changed since the previous CRA examination; it remains Salt Lake County in its entirety. The county is located in north central Utah between the Wasatch Mountains on the east and the Oquirrh Mountains and the Great Salt Lake on the west. Salt Lake County is part of the Salt Lake City Metropolitan Statistical Area (MSA) and has a 2009 estimated population of 1,042,125. 1 The principal city in the assessment area is Salt Lake City, with just over 16 percent of the county s population. 2 Salt Lake County (SLC) experienced nominal population growth during the review period, but still is considered to be the economic and population center of the state. Other cities and towns in the county being Alta, Bluffdale, Cottonwood Heights, Draper, Herriman, Holladay, Kearns, Magna, Midvale, Murray, Riverton, Sandy, South Salt Lake City, South Jordan, Taylorsville, West Jordan, and West Valley City. Most of the bank s assessment area is situated south of Salt Lake City, which is in the northern portion of the county. FUB has a relatively small portion of the overall market. Large national banks have a significant presence in this area, with the top four banks, ranked by deposit share, comprising over 60 percent of the market. As of June 30, 2010, FUB s eight offices held $288.7 million in deposits, which represented a 0.12 percent of the market share, ranking the bank 25 th out of 50 Federal Deposit Insurance Corporation (FDIC) insured financial institutions operating in the area. 3 Additionally, in 2010, there were 74 lenders reporting small business loans, pursuant to the reporting requirements of the CRA, most of which were large multi-national and regional banks, thrifts, and credit unions. These institutions, which represent only a portion of the overall commercial lending market, extended nearly 25 thousand small business loans aggregating over $802.0 million. The following exhibit presents key demographic and business information, based on the 2000 U.S. Census and 2010 Dun and Bradstreet data, used to help develop a performance context for the assessment area. 1 Utah Department of Workforce Services Population Salt Lake County (accessed February 22, 2011); available from http://jobs.utah.gov 2 Salt Lake Tourist and Visitor Center Salt Lake City Demographics (accessed February 24, 2011); available from http://www.saltlakecityutah.org/salt_lake_demographics.htm 3 Federal Deposit Insurance Corporation, Institution Directory, Summary of Deposits, June 30, 2010 (accessed February 19, 2011); available from http://www2.fdic.gov/sod/ 3
Income Categories EXHIBIT 2 ASSESSMENT AREA DEMOGRAPHICS Tract Distribution SALT LAKE COUNTY Families by Tract Income Families < Poverty Level as % of Families by Tract Families by Family Income # % # % # % # % Low-income 5 2.6 1,486 0.7 320 21.5 36,086 16.7 Moderate-income 43 22.3 46,752 21.7 5,973 12.8 42,400 19.6 Middle-income 90 46.6 107,901 50.0 4,820 4.5 53,572 24.8 Upper-income 55 28.5 59,725 27.7 1,263 2.1 83,806 38.8 Total AA 193 100.0 215,864 100.0 12,376 5.7 215,864 100.0 Income Categories Housing Types by Tract Housing Owner-occupied Rental Vacant Units by %- %- Tract # # % # % tract unit Low-income 2,686 432 0.2 16.1 1,899 70.7 355 13.2 Moderate-income 85,792 35,447 17.4 41.3 44,236 51.6 6,109 7.1 Middle-income 148,513 105,628 51.9 71.1 36,858 24.8 6,027 4.1 Upper-income 73,997 62,183 30.5 84.0 8,458 11.4 3,356 4.5 Total AA 310,988 203,690 100.0 65.5 91,451 29.4 15,847 5.1 Income Categories Total Businesses by Tract Less Than or Equal to $1 Million Businesses by Tract & Revenue Size Greater than $1 Million Revenue Not Reported # % # % # % # % Low-income 3,230 6.6 2,317 5.4 600 17.5 313 14.4 Moderate-income 10,607 21.7 8,742 20.2 1,131 33.0 734 33.7 Middle-income 20,075 41.1 18,304 42.4 1,074 31.3 697 32.0 Upper-income 14,881 30.5 13,820 32.0 626 18.2 435 20.0 Total AA 48,793 100.0 43,183 100.0 3,431 100.0 2,179 100.0 Percentage of Total Businesses 88.5 7.0 4.5 2004 Median Family Income: $54,586 December 2010 Median Sales Price: 4 $184,664 2010 HUD Adjusted Median Family Income: $70,000 December 2010 Unemployment Rate: 5 6.8% SLC is the heart of Utah s economy, with 44 percent of the state s jobs concentrated in the county. The assessment area is home to the state s capital and is the center of the state s government, commercial and industrial, banking and financial service industries. 6 Although historically dependent on farming and mining, today the county is heavily dependent on government for employment. State and local government account for approximately 35 percent of employment in the area, with federal government rounding the number up to 40 percent. 4 Salt Lake Board of Realtors, Housing Market Statistics viewed by year, Median Sales Price in Salt Lake County, available from http://www.slrealtors.com/stats/market-statistics/ 5 Bureau of Labor Statistics, Metropolitan Area Employment and Unemployment - December 2010 6 Bureau of Labor Statistics, Economy at a Glance, Salt Lake City, UT (accessed February 24, 2011); available from http://www.bls.gov/eag/eag.ut_saltlakecity_msa.htm and Bureau of Labor Statistics, Economy at a Glance, Utah (accessed February 24, 2011); available from http://www.bls.gov/eag/eag.ut.htm and Bureau of Labor Statistics, Economy at a Glance, United States (accessed February 24, 2011), available from http://www.bls.gov/eag/eag.us.htm 4
Major employers in the assessment area include Intermountain Health Care, University of Utah, University Hospitals/Clinics, Associated Food Stores, Wal-Mart Stores, and Zions Bancorporation. 7 In addition to the large employers, small businesses (i.e., those with gross annual revenues of $1.0 million or less) provide a significant percentage of total assessment area employment as they comprise a substantial majority of all businesses in the assessment area. According to the Dun & Bradstreet data shown in Exhibit 2, approximately 88.5 percent of all assessment area businesses have gross annual revenue of less than or equal to $1.0 million. During the review period, the impact of the financial crisis was not as great in SLC and it fared better than many regions of the country. As of December 31, 2010, the unemployment rate was 6.8 percent, 8 which compared favorably with the 7.5 percent for the state of Utah, 9 and 9.4 for the nation. 10 Education, health services, and government experienced modest net job gains throughout the review period and helped offset other declining sectors, e.g. construction and related businesses. At the same time, the overall construction industry experienced employment contraction at around 22 percent. 11 Further impacting the economy was rising unemployment and job uncertainty, the move by many families from homes with single families to multiplefamily living arrangements, a slow-down in net in-migration, foreclosures, and negative equity. 12 According to the Federal Reserve Board s Senior Loan Officer Opinion Surveys on Bank Lending Practices, lending standards tightened considerably beginning in 2008 and, for the most part, remained so during the review period. In the October 2008 survey, nearly 80 percent of banks reported tightened lending standards for commercial and industrial loans. By October 2009, only approximately 15 percent of banks reported tightened lending standards, but none reported loosening standards, suggesting that the more stringent criteria adopted by many banks as a result of the financial crisis remained in place. By the time the July 2010 survey was released, there were signs that the tightening was starting to ease, as a small number of banks surveyed reported easing standards. Overall, the easing trend continued into the fourth quarter of 2010, however, the majority of institutions continue to report that standards were unchanged. As a result, there is a critical need for small business lending to support working capital for business start-up and expansion, which is ultimately vital to the health of small businesses as well as the broader economy. Furthermore, despite home values declining in the review period, homeownership remains a challenge for most Utah households. In December 2010, the median sales price was $185 thousand or a decline of 16 percent from median sales price of $220 thousand in first quarter 2009. 13 The 7 Moody s Analytics, Précis U. S. Metro, Salt Lake City August 2010 8 Bureau of Labor Statistics, Economy at a Glance Salt Lake City, UT (accessed February 22, 2011), available from http:www.bls.gov/eag/eag.ut_saltlaketity_msa.htm 9 Bureau of Labor Statistics, Economy at a Glance Utah (accessed February 24, 2011), available from http://www.bls.gov/eag/eat.ut.htm 10 Bureau of Labor Statistics, Economy at a Glance United States (accessed March 31, 2011), available from http://www.bls.gov/eag/eag.us.htm 11 Moody s Analytics, Précis U. S. Metro, Salt Lake City December 2009 12 Salt Lake Board of Realtors, 2011 Salt Lake Housing Forecast (accessed 03/29/2011) available from http://www.darrenmansell.com/_pdf/2011housingforecastreport.pdf 13 Salt Lake Board of Realtors, Housing Market Statistics viewed by year, Median Sales Price in Salt Lake County, available from http://www.slrealtors.com/stats/market-statistics/ 5
highest earning level of the moderate-income category, at 79.9 percent of the Department of Housing and Urban Development (HUD) adjusted median family income, could marginally qualify for a 30-year fixed rate mortgage of up to $181,609 with an interest rate of 5 percent, no down payment, and no existing debt. 14 With these results, home prices are out of reach for the majority of moderate- and low-income households. Furthermore, an estimated seven thousand homes in SLC were in foreclosure during 2010, and approximately 22 percent of Utah homeowners experienced negative equity at year-end 2010. 15 The gap between income and price, coupled with credit standards still tighter than those before the recession, contribute to the continued need for more affordable housing and the development and support of more affordable housing programs in the community. Community contacts indicate that not only is affordable housing for home ownership a pressing need, but there is a critical need for affordable rentals as well. Additionally, community contacts emphasized the need for more financial education, especially training targeting low- and moderate-income individuals, individuals with poor credit history, and seniors. Other identified community credit needs include loans to small businesses, particularly small dollar and micro loans, and loans for start-up capital. Scope of Examination The CRA examination of FUB was conducted using the Interagency Intermediate Small Institution CRA Examination Procedures. Performance for intermediate small banks is evaluated under two tests that consider the bank's lending and community development activities. LENDING TEST The lending test portion of the evaluation was based on the following performance criteria: Loan volume compared to deposits (Loan-to-Deposit Ratio); Lending inside versus outside the assessment area (Lending in Assessment Area); Dispersion of lending throughout the assessment area (Lending Distribution by Geography); and Lending to businesses of different revenue sizes (Lending Distribution by Business Revenue). Responsiveness to consumer complaints was not evaluated because the bank did not receive any CRA-related complaints during the review period. The lending test evaluation was based on small business loans originated between January 1, 2009, and December 31, 2010. A total of 175 small business loans were used in the evaluation of Lending in the Assessment Area. A sample of 57 small business loans extended within the 14 CNN Money How much House Can You Afford? (accessed February 23, 2011), available from http://cgi.money.cnn.com/tools/houseafford/houseafford.html 15 Salt Lake Board of Realtors, 2011 Salt Lake Housing Forecast (accessed 03/29/2011) available from http://www.darrenmansell.com/_pdf/2011housingforecastreport.pdf 6
assessment area was used in the evaluation of Lending Distribution by Geography and Lending Distribution by Business Revenue. Small farm, home purchase, home refinance, and home improvement loans were considered during the review but did not influence the overall assessment due to the limited volume. COMMUNITY DEVELOPMENT TEST The community development test portion of this examination included an evaluation of the bank s level of community development activities in relation to local needs and opportunities, as well as the bank s capacity to participate in such activities. The evaluation was based on qualified community development loans, investments and services provided by the bank between January 1, 2009 and December 31, 2010. 7
CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS Lending Test Overall performance under the lending test is satisfactory. The loan-to-deposit ratio and level of lending within the assessment area indicate that the bank is effectively engaging in lending activities within its defined market. The overall lending distribution are reasonable both by geography and by business revenue. LOAN-TO-DEPOSIT RATIO The bank s eight-quarter average loan-to-deposit ratio, at 70 percent as of December 31, 2010, is reasonable. Although slightly lower than the state average and national peer loan-to-deposit ratios of 83.2 and 82.5 percent respectively, it nonetheless shows the bank engaged in lending activities throughout the financial crisis. LENDING IN ASSESSMENT AREA A majority of the bank s small business loans were extended within its bank s assessment area. As shown in Exhibit 3, the bank extended approximately 84.6 percent by number and 85.9 percent by dollar volume in small business loans within its assessment area. These lending levels support that lending activities are focused on the local assessment area. EXHIBIT 3 LENDING INSIDE AND OUTSIDE THE ASSESSMENT AREAS JANUARY 1, 2009 THROUGH DECEMBER 2010 Inside Outside Loan Type $ $ # % % # % ( 000s) ( 000s) HMDA Home Purchase 3 23.08 960 23.07 10 76.92 3,202 76.93 HMDA Refinance 2 100.00 422 100.00 0 0.00 0 0.00 HMDA Home Improvement 4 100.00 118 100.00 0 0.00 0 0.00 Total HMDA-Related 9 47.37 1,500 31.90 10 52.53 3,202 68.10 Small Business 148 84.57 32,157 85.90 27 15.43 5,278 14.10 Total Business-Related 148 84.57 32,157 85.90 27 15.43 5,278 14.10 Total Loans 157 80.93 33,657 79.88 37 19.07 8,480 20.12 % 8
LENDING DISTRIBUTION BY GEOGRAPHY The geographic distribution of small business loans is excellent. Exhibit 4 shows that small business loans were extended in all income geographies, with no conspicuous gaps in lending patterns. Small business lending exceeded the percentage of business entities and the level of aggregate lending in low-income geographies, and is comparable to those measurements in moderate-income census tracts. This performance is largely attributable to the location of four branches and a loan production office in low-and moderate-income census tracts in Salt Lake City. All the low-income tracts and a vast majority of the moderate-income census tracts in the bank s assessment area are clustered around these branches, or in close proximity. EXHIBIT 4 GEOGRAPHIC DISTRIBUTION OF SMALL BUSINESS LOANS Census Tract Income Business Aggregate Bank Lending (%) Category Concentration (%) Lending (%) Low 17.54 6.53 7.89 Moderate 21.05 21.36 22.13 Middle 33.33 41.12 29.16 Upper 28.07 31.00 30.81 LENDING DISTRIBUTION BY BORROWER INCOME AND BUSINESS REVENUE Lending distribution of small business loans demonstrated a reasonable penetration among businesses of different sizes. As shown in Exhibit 5, the bank extended 38.6 percent of loans to businesses with gross annual revenues of $1.0 million or less. While the bank s percentage was below the percentage of small businesses, it exceeds the percentage of aggregate lending. In addition, approximately 43.9 percent of the loans extended were in amounts less than or equal to $100 thousand, thereby addressing an articulated credit need for small dollar loans. Businesses with Revenue <= $1 Million Bank Lending (%) EXHIBIT 5 BUSINESS REVENUE DISTRIBUTION OF SMALL BUSINESS LOANS All Businesses (%) <=$100K (%) Originations Regardless of Revenue Size by Loan Amount > $100K and <=$250K (%) > $250K and <=$1M (%) Aggregate Lending All Loans Revenue <= $1 Million (%) 38.6 88.52 43.9 26.32 29.82 24,733 28.44 RESPONSE TO COMPLAINTS The bank received no complaints related to CRA during the review period. Accordingly, the bank s performance in responding to complaints was not considered in evaluating its overall CRA performance. 9
Community Development Test FUB s performance under the community development test demonstrates satisfactory responsiveness to the community development needs of its assessment area through the provision of community development loans, services, and, to a lesser extent, investments. The level of these community development activities was generally consistent with the bank s presence in this market and with available opportunities. Although the primary community development activity was lending, the bank also provided community development services and engaged in limited community development investment activity. The following summarizes the different activities and highlights some of the more significant of them. Assessment Area EXHIBIT 6 COMMUNITY DEVELOPMENT ACTIVITIES Investments Loans Prior Period Current Period # $ ( 000s) # $ ( 000s) # $ ( 000s) Services # Hours Salt Lake County 17 14,625 0 0 2 0.8 13 380 Broader Statewide or Regional Area 0 0 1 11.4 7 1.6 NA NA Total 17 14,625 1 11.4 9 2.4 13 380 COMMUNITY DEVELOPMENT LENDING The bank extended seventeen community development loans totaling $14.6 million during the review period. Several of these loans were extended under the SBA 504 and SBA 7A programs that helped create and retain jobs in the assessment area, as well as under the SBA ARC program which allows viable small businesses to free up capital during a short-term downturn. Some of the more notable loans include: One loan for $3.6 million was extended to a manufacturing firm in a moderate-income geography. This loan helped to create 20 new jobs. One loan for $721 thousand for the purchase of land in a low-income census tract. The land will be improved by a restaurant which will create new jobs and help to revitalize or stabilize the community. One loan for $1.5 million to finance construction of a new building for a trucking company located in a moderate-income census tract. The new office will create jobs for three staff members and eight drivers, as well as help to revitalize or stabilize the community. 10
COMMUNITY DEVELOPMENT INVESTMENTS FUB s investment in the Utah Microenterprise Loan Fund (UMLF) remained at $11.4 thousand during the review period. UMLF provides loans of $1,000 to $25,000 to help launch or expand small businesses. In addition to the investment in the loan pool, one of the bank s executives serves on the organization s loan committee and reviews proposed loans and attends applicant presentations. While there were no current period investments other than a few donations, this was primarily the result of the current economic environment presenting financial constraints that limited opportunities and capacity for community development investments. During the review period, the bank provided $2,350 in donations to organizations that benefited low- and moderate-income individuals for services such as financial education, free health care, and youth services, as well as managerial and technical assistance to small businesses. COMMUNITY DEVELOPMENT SERVICES The bank s retail branches are distributed throughout the assessment area, with four of the bank s eight branch offices located in low- or moderate-income geographies, including one office in the highly competitive downtown area. The three branches located in low- or moderate-income census tracts away from downtown are located in areas relatively sparsely served by other financial institutions, and so provide access to banking services where they might otherwise be limited. Moreover, interviews with bank management indicate that the bank is able to provide services in fourteen languages, and conducts marketing in six languages. Through this branch network and through work with a variety of non-profit organizations, FUB provided 380 hours of community development services. Some of the more notable services include: A bank director provided over 108 hours of service as the president for a health care organization that provides services to low- and moderate-income families. The service hours included preparing budgets, conducting audits, and raising funds. The same director also provided 63 hours of service to an organization funding full and partial needs based scholarships for low- and moderate-income students to an independent college preparatory high school. A bank executive provided 12 hours of service as a board member of an organization which bestows grants to community organizations providing affordable housing. The grants are funded by real estate brokers converting their estate trust accounts to interest bearing accounts. The participating brokers donate the interest earned on these accounts to the fund. Bank management contributed over 55 hours of service to provide financial literacy training to low- and moderate-income students. 11
Fair Lending or Other Illegal Practices Review Concurrent with this CRA evaluation, a review of the bank s compliance with consumer protection laws and regulations was conducted and no violations of the substantive provisions of anti-discrimination, fair lending, or other illegal credit practice rules, laws or regulations were found that were inconsistent with helping to meet community credit needs. 12
GLOSSARY OF TERMS Aggregate lending: The number of loans originated and purchased by all reporting lenders in specified income categories as a percentage of the aggregate number of loans originated and purchased by all reporting lenders in the metropolitan area/assessment area. Census tract: A small subdivision of metropolitan and other densely populated counties. Census tract boundaries do not cross county lines; however, they may cross the boundaries of metropolitan statistical areas. Census tracts usually have between 2,500 and 8,000 persons, and their physical size varies widely depending upon population density. Census tracts are designed to be homogeneous with respect to population characteristics, economic status, and living conditions to allow for statistical comparisons. Community development: All Agencies have adopted the following language. Affordable housing (including multifamily rental housing) for low- or moderate-income individuals; community services targeted to low- or moderate-income individuals; activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration s Development Company or Small Business Investment Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less; or, activities that revitalize or stabilize low- or moderate-income geographies. Effective September 1, 2005, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have adopted the following additional language as part of the revitalize or stabilize definition of community development. Activities that revitalize or stabilize: (i) Low-or moderate-income geographies; (ii) Designated disaster areas; or (iii) Distressed or underserved nonmetropolitan middle-income geographies designated by the Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, based on: a. Rates of poverty, unemployment, and population loss; or b. Population size, density, and dispersion. Activities that revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals. Consumer loan(s): A loan(s) to one or more individuals for household, family, or other personal expenditures. A consumer loan does not include a home mortgage, small business, or small farm loan. This definition includes the following categories: motor vehicle loans, credit card loans, home equity loans, other secured consumer loans, and other unsecured consumer loans. Family: Includes a householder and one or more other persons living in the same household who are related to the householder by birth, marriage, or adoption. The number of family 13
households always equals the number of families; however, a family household may also include non-relatives living with the family. Families are classified by type as either a married-couple family or other family, which is further classified into male householder (a family with a male householder and no wife present) or female householder (a family with a female householder and no husband present). Full-scope review: Performance under the lending and community development tests is analyzed considering performance context, quantitative factors (for example, geographic distribution, borrower distribution, and total number and dollar amount of investments), and qualitative factors (for example, responsiveness). Geography: A census tract delineated by the United States Bureau of the Census in the most recent decennial census. Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders that do business or have banking offices in a metropolitan statistical area to file annual summary reports of their mortgage lending activity. The reports include such data as the race, gender, and the income of applications, the amount of loan requested, and the disposition of the application (for example, approved, denied, and withdrawn). Home mortgage loans: Includes home purchase and home improvement loans as defined in the HMDA regulation. This definition also includes multifamily (five or more families) dwelling loans, loans for the purchase of manufactured homes and refinancings of home improvement and home purchase loans. Household: Includes all persons occupying a housing unit. Persons not living in households are classified as living in group quarters. In 100 percent tabulations, the count of households always equals the count of occupied housing units. Limited-scope review: Performance under the lending and community development tests is analyzed using only quantitative factors (for example, geographic distribution, borrower distribution, total number and dollar amount of investments, and branch distribution). Low-income: Individual income that is less than 50 percent of the area median income, or a median family income that is less than 50 percent, in the case of a geography. Market share: The number of loans originated and purchased by the institution as a percentage of the aggregate number of loans originated and purchased by all reporting lenders in the metropolitan area/assessment area. Metropolitan area (MA): A metropolitan statistical area (MSA) or a metropolitan division (MD) as defined by the Office of Management and Budget. A MSA is a core area containing at least one urbanized area of 50,000 or more inhabitants, together with adjacent communities having a high degree of economic and social integration with that core. A MD is a division of a MSA based on specific criteria including commuting patterns. Only a MSA that has a population of at least 2.5 million may be divided into MDs. 14
Middle-income: Individual income that is at least 80 percent and less than 120 percent of the area median income, or a median family income that is at least 80 percent and less than 120 percent, in the case of a geography. Moderate-income: Individual income that is at least 50 percent and less than 80 percent of the area median income, or a median family income that is at least 50 percent and less than 80 percent, in the case of a geography. Multifamily: Refers to a residential structure that contains five or more units. Other products: Includes any unreported optional category of loans for which the institution collects and maintains data for consideration during a CRA examination. Examples of such activity include consumer loans and other loan data an institution may provide concerning its lending performance. Owner-occupied units: Includes units occupied by the owner or co-owner, even if the unit has not been fully paid for or is mortgaged. Qualified investment: A qualified investment is defined as any lawful investment, deposit, membership share, or grant that has as its primary purpose community development. Rated area: A rated area is a state or multistate metropolitan area. For an institution with domestic branches in only one state, the institution s CRA rating would be the state rating. If an institution maintains domestic branches in more than one state, the institution will receive a rating for each state in which those branches are located. If an institution maintains domestic branches in two or more states within a multistate metropolitan area, the institution will receive a rating for the multistate metropolitan area. Small loan(s) to business(es): A loan included in 'loans to small businesses' as defined in the Consolidated Report of Condition and Income (Call Report) and the Thrift Financial Reporting (TFR) instructions. These loans have original amounts of $1 million or less and typically are either secured by nonfarm or nonresidential real estate or are classified as commercial and industrial loans. However, thrift institutions may also exercise the option to report loans secured by nonfarm residential real estate as "small business loans" if the loans are reported on the TFR as nonmortgage, commercial loans. Small loan(s) to farm(s): A loan included in loans to small farms as defined in the instructions for preparation of the Consolidated Report of Condition and Income (Call Report). These loans have original amounts of $500,000 or less and are either secured by farmland, or are classified as loans to finance agricultural production and other loans to farmers. Upper-income: Individual income that is more than 120 percent of the area median income, or a median family income that is more than 120 percent, in the case of a geography. 15