Federal Deposit Insurance Corporation - FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Federal Deposit Insurance Corporation - FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Security Bank of Pulaski County
110 Lynn St./P.O. Box S
Waynesville, MO 65583
February 27, 2024
Community Reinvestment Act
The Board of Directors of the Security Bank of Pulaski County is committed to helping meet the credit and community development needs of its assessment area, including loans, services, and investments that will benefit low and moderate individuals and geographies consistent with the safe and sound operation of the institution.
Delineation of Bank’s Assessment Areas
The Bank’s assessment area consists of Pulaski County to include the clocked numbering area #4701.01, 4701.02, 4702.86, 4802.87, 4703.89, 4703.90, 4704.00, 4705.00, and 4706.00.
A map showing the geographies and boundaries of the assessment areas is attached hereto marked Exhibit “A”.
Anti-Discrimination Policy
It is the policy of the Bank to comply with the letter and intent of all applicable consumer and fair lending regulations and laws. The Bank will not deny services to any individual due to discrimination because of race, color, religion, national origin, sex, marital status, age, family status, or disability, because all or part of the applicant’s income is derived from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Protection Act. Employees are instructed to treat all persons fairly and will not discourage any individual from applying for credit. The Bank will accept and consider all completed written and verbal applications for credit and will grant credit based on sage and sound banking principles.
Locations
Our main business and full-service branch office is located at:
Tract No. 4704.00
110 Lynn Street
Waynesville, MO 65583.
Full-Service branch office located at:
Tract No. 4702.87
102 Carson Blvd.
St. Robert, MO 65584
The Bank has 24-Hour ATMs located at the following locations:
601 Marshall Drive
St Robert, MO 65584
102 Carson Blvd.
St Robert, MO 65584
110 Lynn Street
Waynesville, MO 65583
Branches Opened or Closed
The Bank opened a full-service branch office located at 102 Carson Blvd., St Robert, Missouri 65584, on May 05, 2008, and the bank consolidated the Marshall Drive location into the Carson Blvd. location on August 1, 2022. We still have the ATM operational at the Marshall Drive location.
Hours of Operation
Main Office
Drive-Up Hours 8:30 a.m. to 5:00 p.m. Monday-Friday
8:30 a.m. to 12:00 p.m. Saturday
Lobby Hours 8:30 a.m. to 4:30 p.m. Monday-Friday
Carson Branch Office
Drive-Up Hours 8:30 a.m. to 5:00 p.m. Monday-Friday
8:30 a.m. to 12:00 p.m. Saturday
Lobby Hours 8:30 a.m. to 4:30 p.m. Monday-Friday
Available Credit Service
The Bank offers a variety of commercial, including small business and small farm loans, real estate loans, and consumer loans. Transaction fees for available loans are attached hereto, marked Exhibit “B”. A list of available loans by category is as follows:
Commercial
Real Estate
Consumer
Available Deposit Services
The Bank offers a variety of competitively priced checking, savings, and money market accounts. The Bank also offers certificates of deposit and Individual Retirement Accounts (IRAs). The services and transaction fees are attached hereto marked Exhibit “C”.
Loan to Deposit Ratio
The Bank’s loan-to-deposit ratio for each quarter of the prior three calendar years is as follows:
| 2020 | 2021 | 2022 | 2023 | |
| March | .77 | .70 | .60 | .65 |
| June | .73 | .68 | .61 | .68 |
| September | .73 | .65 | .64 | .67 |
| December | .71 | .58 | .62 | .64 |
Written Comments and Responses
Written comments received from the public for the current year and each of the prior two calendar years relating to the Bank’s performance in helping meet community credit needs and responses to these comments by the Bank are contained in the file. The comments and responses are attached hereto, marked Exhibit “D”.
CRA Performance
A copy of the public section of the Bank’s most recent CRA Performance Evaluation prepared by the FDIC is attached hereto, marked Exhibit “E”.
Consumer Deposit accounts:
Free Checking: $100.00 to open, no monthly services charges. Must sign up for E-Statements.
Regular checking account: $100.00 to open. Monthly fee is based upon the lowest balance of the month. The charges are as follows:
Zero to $299.99 $6.00 monthly
$300.00 to $399.99 $5.00 monthly
$400.00 to $499.99 $4.00 monthly
You may avoid these fees if you maintain a balance of over $500.00.
Now Account: $1,200.00 to open. This account earns interest and has unlimited check writing. To avoid monthly fees the customer must maintain a balance of $1200.00 or higher. If the balance drops below $1,200.00, there will be a fee of $6.00.
Money market account: $1,000.00 to open. This account earns interest and has limited check writing. If the balance drops below $1,000.00 there will be a fee of $6.00. Preauthorized transfers are limited to no more than six each four week or similar period, of which only three may be payments by check to third parties. If you write more than three per month there will be a fee of $0.99 for each check.
Consumer Savings Accounts:
Statement Savings: $100.00 to open. You must maintain a balance of $100.00 in the account to avoid the $1.00 maintenance fee. You are limited to three withdrawals per month otherwise there is a fee of $0.50 per withdrawal after three. Interest pays quarterly.
Kidz Club Account: $10.00 to open. This account is designed for young people under the age of 18. This account is limited to three withdrawals per quarter. The fee is $1.00 for each withdrawal beyond three.
Business Accounts:
Small Business Checking – $100.00 minimum to open. A balance of $1,000.00 must be maintained or there is a $5.00 monthly fee. E-statements are required on this account.
Business Checking Plus – $500.00 minimum to open. A balance of $2,500.00 must be maintained or there is a $7.50 monthly fee. E-statements are available upon request.
Business Savings – $100.00 to open. You must maintain a balance of $100.00 in the account to avoid the $1.00 maintenance fee. You are limited to three withdrawals per month otherwise there is a fee of $0.50 per withdrawal after three. Interest pays quarterly.
Business Money Market – $1,000.00 to open. This account earns interest and has limited check writing. If the balance drops below $1,000.00 there will be a fee of $6.00. Preauthorized transfers are limited to no more than six each four week or similar period, of which only three may be payments by check to third parties. If you write more than three per month there will be a fee of $0.99 for each check.
Safe Deposit Boxes: Located at the Waynesville branch. Sizes and prices are as follows:
3×5 – $15
4×5 – $20
5×5 – $15
5×6 – $25
3×10 – $20
5×10 – $30
6×10 – $35
8×10 – $40
10×10 – $50
CDs: 3 month to 60 month Certificates of Deposit. Early withdrawal penalties may be assessed based on the term
IRA: 3 month to 60 month IRA (Individual Retirement Accounts) CDs. Early withdrawal penalties may be assessed based on the term.
There are currently no public comments. This exhibit is updated quarterly.
FEBRUARY 11, 2019
Security Bank of Pulaski County
Certificate Number: 15347
601 Marshall Drive
Saint Robert, Missouri 65584
Federal Deposit Insurance Corporation
Division of Depositor and Consumer Protection
Kansas City Regional Office
1100 Walnut Street, Suite 2100
Kansas City, Missouri 64106
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.
INSTITUTION RATING
INSTITUTION’S CRA RATING: This institution is rated Satisfactory. An institution in this category 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.
Security Bank of Pulaski County’s satisfactory Community Reinvestment Act (CRA) performance under the Lending Test supports the overall rating. Examiners did not identify any evidence of discriminatory or other illegal credit practices. The following points summarize the Lending Test performance.
SCOPE OF EVALUATION
General Information
This evaluation covers the period from the prior evaluation dated March 18, 2013, to the current evaluation dated February 11, 2019. Examiners used Interagency Small Institution Examination Procedures to evaluate the bank’s CRA performance. These procedures include a review of the institution’s performance based on the following criteria:
Loan Products Reviewed
Based on a review of the September 30, 2018, Consolidated Report of Condition and Income (Call Report), the bank’s primary loan products are home mortgage loans, commercial loans, and agricultural loans. These loan product categories represented 34.5 percent, 29.3 percent, and 17.6 percent of the loan portfolio, respectively, and are the primary focus of the institution’s business strategy. Residential real estate lending and commercial lending were given more weight in the evaluation due to the business strategy of the bank and the higher percentage of these loan types in the overall loan portfolio.
Bank records indicated that the lending focus and product mis has remained consistent throughout the evaluation period. Examiners reviewed a sample of home mortgage, small business, and small farm loans originated from January 1, 2018, to December 31, 2018. Management indicated a review of loans from this time period would be representative of the institution’s performance throughout the entire evaluation period. Specifically, examiners reviewed a sample of 36 home mortgage loans totaling $5,253,888 selected from the universe of 55 home mortgage loans totaling $6,885,966. In addition, examiners reviewed a sample of 47 small business loans totaling $2,290,366 selected from the universe of 134 small business loans totaling $8,152,384, and a sample of 30 small farm loans totaling $1,834,994 from a universe of 40 small farms loans totaling $2,035,684. Examiners used 2015 American Community Survey (ACS) data compiled by the Census Bureau to evaluate home mortgage lending performance and 2018 D&B data to evaluate small business and small farm lending performance.
Examiners evaluated lending activity based upon both the number and dollar volume of loans for Assessment Area Concentration. The Geographic Distribution and Borrower Profile criteria were evaluated primarily based on the number of loans as the number of loans is typically a better indicator of the lending performance of the institution. The dollar volume of the loans was reviewed for the Geographic Distribution and Borrower Profile criteria; however, the dollar volume of loans will not be discussed in the evaluation unless such an analysis materially alters conclusions.
DESCRIPTION OF INSTITUTION
Background
Security Bank of Pulaski County is a financial institution with total assets of $104,533,000, as of September 30, 2018. The bank is wholly-owned by Security Bancshares of Pulaski County, Inc., Waynesville, Missouri. The institution received a Satisfactory rating at its previous FDIC Performance Evaluation dated March 18, 2013, which also utilized Interagency Small Institution Examination Procedures.
Operations
The institution operates a main office and one branch facility in Saint Robert, Missouri, both of which are located in Census Tract (CT) 4702.87. The bank has one additional branch facility that is located in the nearby town of Waynesville, Missouri in CT 4704. All three offices are full-service and offer a traditional array of lending products, deposit products, and services for consumers and businesses. The institution has not opened or closed any branches since the previous performance evaluation. The institution operates cash-dispensing automated teller machines (ATMs) at all three banking facilities.
Ability and Capacity
Assets totaled approximately $104.5 million as of September 30, 2018, and included total loans of 68.2 million and securities totaling $20.5 million. The loan portfolio is illustrated in the following table.
|
Loan Portfolio Distribution as of 9/30/2018 |
||
| Loan Category | $(000s) | % |
| Construction and Land Development | 4,447 | 6.5 |
| Secured by Farmland | 8,002 | 11.7 |
| Secured by 1-4 Family Residential Properties | 23,524 | 34.5 |
| Secured by Multi-family (5 or more) Residential Properties | 2,405 | 3.5 |
| Secured by Non-farm Non-Residential Properties | 10,208 | 15.0 |
| Agricultural Loans | 4,001 | 5.9 |
| Commercial and Industrial Loans | 9,755 | 14.3 |
| Consumer Loans | 4,404 | 6.5 |
| Obligations of States and Political Subdivisions in the United States | 0 | 0.0 |
| Other Loans | 1,450 | 2.1 |
| Gross Loans | 68,196 | 100.0 |
| Less: Unearned Income | (0) | (0.0) |
| Total Loans | 68,196 | 100.0 |
| Source: Call Report dated 9/30/2018 | ||
Examination personnel did not identify any financial, legal, or other impediments affecting the institution’s ability to meet assessment area credit needs.
DESCRIPTION OF ASSESSMENT AREA
The CRA requires each financial institution to define one or more assessment areas within which its CRA performance will be evaluated. The bank has designated a single assessment area that includes the entirety of Pulaski County and is located in the non-metropolitan portion of south-central Missouri. The assessment area has not changed since the previous examination.
Economic and Demographic Data
The assessment area includes nine CTs, 4701.01, 4701.02, 4702.86, 4702.87, 4703.89, 4703.9, 4704, 4705, and 4706 comprising Pulaski County. Based on ACS data, the assessment area consists of one0moderate income CT (4703.89), five middle-income CTs, and three upper-income CTs. There are no low-income census tracts in the assessment area. The following table illustrates select demographic information for the assessment area.
| Demographic Information of the Assessment Area | ||||||
| Demographic Characteristics | # | Low
% of # |
Moderate
% of # |
Middle
% of # |
Upper
% of # |
NA*
% of # |
| Geographies (Census Tracts) | 9 | 0.0 | 11.1 | 55.6 | 33.3 | 0.0 |
| Population by Geography | 53,443 | 0.0 | 18.2 | 43.6 | 38.2 | 0.0 |
| Housing Units by Geography | 18,382 | 0.0 | 0.0 | 58.2 | 41.8 | 0.0 |
| Owner-Occupied Units by
Geography |
7,508 | 0.0 | 0.0 | 58.2 | 41.8 | 0.0 |
| Occupied Rental Units by Geography | 7,927 | 0.0 | 7.5 | 46.1 | 46.4 | 0.0 |
| Vacant Units by Geography | 2,947 | 0.0 | 2.1 | 44.5 | 53.4 | 0.0 |
| Businesses by Geography | 1,969 | 0.0 | 3.0 | 57.2 | 39.8 | 0.0 |
| Farms by Geography | 63 | 0.0 | 0.0 | 73.0 | 27.0 | 0.0 |
| Family Distribution by Income Level | 10,189 | 16.5 | 14.7 | 21.2 | 47.6 | 0.0 |
| Household Distribution by Income
Level |
15,435 | 16.2 | 13.3 | 19.3 | 51.2 | 0.0 |
| Median Family Income
Nonmetropolitan Missouri |
$48,553 | Median Housing Value | $129,733 | |||
| Median Gross Rent | $956 | |||||
| Families Below Poverty Level | 12.4% | |||||
| Source: 2015 ACS Census and 2018 D&B data
(*) The NA category consists of geographies that have not been assigned an income classification. |
||||||
There are 18,382 housing units in the assessment area. Of these, 40.9 percent are owner-occupied, 43.1 percent are occupied rental units, and 16.0 percent are vacant. The Geographic Distribution criterion compares home mortgage lending to the distribution of owner-occupied housing units.
The 2018 FFIEC-updated media family income levels for the non-metropolitan areas of Missouri were used to analyze home mortgage loans under the Borrower Profile criterion. The low-, moderate-, middle-, and upper-income categories are presented in the following table. These categories are based on the 2018 FFIES-updated median family income of $53,100.
| Median Family Income Ranges | ||||
| Median Family Incomes | Low
<50% |
Moderate
50% to <80% |
Middle
80% to <120% |
Upper
>120% |
| 2018 ($53,100) | <26,550 | $26,550 to <$42,480 | $42,480 to <$63,720 | >$63,720 |
| Source: FFIEC | ||||
According to 2018 D&B data, there were 1,969 non-farm businesses in the assessment area. Of these businesses, only 3.0 percent were located in the sole moderate-income CT, while 57.2 percent were located in middle-income CTs and 39.8 percent were located in upper-income CTs.
The analysis of small business loans under the Borrower Profile criterion compares small business lending to the distribution of businesses by Gross Annual Revenue (GAR) level. GARs for these businesses are as follows:
In addition, 2018 D&B data reveals there were 63 non-farm businesses in the assessment area. Of these farms, none were located in the moderate-income CT, while 73.0 percent were located in the middle-income CTs and 27 percent were located in upper-income CTs.
The analysis of small farm loans under the Borrower Profile criterion compares small farm lending to the distribution of farm operations by GAR level. GARs for these farms are as follows:
Service industries represent the largest portion of businesses and farms in the assessment area at 43.2 percent; followed by retail trade at 14.4 percent; and non-classifiable establishments at 13.8 percent. In addition, 63.1 percent of area businesses have four or fewer employees and 86.2 percent operate from a single location.
According to the Pulaski County Missouri Demographic Profile, published by the Waynesville/St. Robert Chamber of Commerce, the assessment area economy is largely dependent on Fort Leonard Wood (Fort). The Fort is one of the largest U.S. Army boot camp installations and home to the Army’s Engineer, Military Police, and Chemical & Nuclear schools. Given this, the local retail and service economy is highly dependent on supporting personnel on the Fort. In addition, the local economy is driven by visitors to the Waynesville/St. Robert area who are attending the ongoing graduation ceremonies conducted at the Fort. With over 97,000 service members graduating from training every year, an average of five family members and friends per trainee visit the area on a weekly basis in connection with the graduation festivities. The largest employers in Pulaski County, aside from the Fort, include the Waynesville R-VI School District, Walmart, and the Saint Robert and Waynesville municipal government offices.
According to the Bureau of Labor Statistics the unemployment rates for Pulaski County and the State of Missouri decreased over the evaluation period as noted in the following table, which indicates improving economic conditions.
| Unemployment Rates | ||||||
| Area | 2013* | 2014* | 2015* | 2016* | 2017* | 2018* |
| Pulaski County | 7.9 | 7.2 | 5.8 | 5.4 | 4.4 | 3.9 |
| State of Missouri | 6.7 | 6.1 | 5.0 | 4.6 | 3.8 | 3.3 |
| Source: Bureau of Labor Statistics
*Average Rates |
||||||
Competition
The assessment area is a relatively competitive market for financial services. According to the FDIC Deposit Markey Share data, as of the reporting year 2018, there were 11 financial institutions operating 19 offices within the assessment area. Of those institutions, Security Bank of Pulaski County ranked 3rd with 12.7 percent of the deposit market share.
Security Bank of Pulaski County is not required to collect and report its home mortgage loan data, and has not elected to do so. However, this data provides an indicator of loan demand and is considered in the institution’s performance context. The 2017 home mortgage aggregate lending data shows 137 institutions reported 1,733 home mortgage loans in the assessment area, which indicates good demand for this product.
Community Contact
Examiners reviewed a community contact with a community development organization from the assessment area. Community contact interviews are used to obtain a profile of the local communities, identify community development opportunities and general credit needs, and assess opportunities for participation by local financial institutions. The community contact information is considered by examiners when analyzing the institution’s CRA performance.
The contact stated that since Pulaski County’s economy is so dependent on the Fort that the country’s 2008 economic decline had virtually no effect on the local economy; however, the overall decline in national defense spending since 2010 did have an adverse impact. The contact also stated that the local retail and service industry is now improving as defense spending has increased in recent years. There is an abundance of affordable housing in Pulaski County; however, the contact stated that the area would benefit from large permanent industry that is not associated with the Fort. Such industry would diversify the economy and better insulate it from declines in Fort activity. Lastly, the contact felt the area financial institutions are meeting the area’s general banking and credit needs, and creditworthy individuals and businesses are able to obtain local financing.
Management of the institution categorized the overall economy as being stable and improving. Management also indicated the local economy continues to be heavily dependent on the operations of the Fort and its supporting businesses.
Credit and Community Development Needs and Opportunities
Considering information from the community contact, bank management, and demographics and economic data, small nosiness loans represent a primary credit need for the assessment area. Opportunity does not exist for originating such loans, as indicated by the percentage of businesses in the bank’s designated assessment area.
CONCLUSIONS ON PERFORMANCE CRITERIA
LENDING TEST
Security Bank of Pulaski County demonstrated satisfactory performance under the Lending Test. This conclusion is supported by reasonable performance in all of the evaluated criteria.
Loan-to-Deposit Ratio
The net LTD ratio is reasonable given the institution’s size, financial condition, and assessment area credit needs. The institution’s net LTD ratio, calculated from Call Report data, averaged 74.7 percent over the past 23 calendar quarters from March 31, 2013, to September 30, 2018. The ratio ranged from a low of 67.3 percent, as of December 31, 2013, to a high of 80.5 percent, as of September 30, 2015.
When available and relevant, the performance of similarly situated lenders serves as an additional method of assessing the adequacy of an institution’s average netLTD ratio. Similarly situated lenders are defined as financial institutions located in or near the bank’s assessment area and are comparable to the subject institution based on asset size and branching structure, market served, product offerings, and/or loan portfolio composition. As shown in the following table, subject bank’s average net LTD ratio compares higher than one identified similarly situated institution.
| LTD Ratio Comparison | ||
| Bank | Total Assets as of 09/30/18
$(000s) |
Average Net LTD Ratio
(%) |
| Security Bank of Pulaski County
Saint Robert, Missouri |
104,533 | 74.7 |
| Bank of Crocker
Waynesville, Missouri |
124,276 | 59.4 |
| Source: Call Reports dated 3/31/2013 through 9/30/2018 | ||
Assessment Area Concentration
Overall, the institution’s performance reflects a reasonable commitment to meeting the credit needs of the assessment area. A majority of the home mortgage, small business, and small farm loans reviewed were originated in the assessment area, as noted in the table below.
| Lending Inside and Outside of the Assessment Area | ||||||||||
| Number of Loans | Dollar Amount of Loans $(000s) | |||||||||
| Loan Category | Inside | Outside | Total | Inside | Outside | Total | ||||
| # | % | # | % | # | $ | % | $ | % | $(000s) | |
| Home Mortgage | 24 | 66.7 | 12 | 33.3 | 36 | 3,670 | 69.8 | 1,584 | 30.2 | 5,254 |
| Small Business | 39 | 83.0 | 8 | 17.0 | 47 | 1,753 | 76.6 | 537 | 23.4 | 2,290 |
| Small Farm | 20 | 66.7 | 10 | 33.3 | 30 | 990 | 53.9 | 845 | 46.1 | 1,835 |
| Source: Evaluation Period: 1/01/2018 – 12/31/2018 bank data. | ||||||||||
Geographic Distribution
The geographic distribution of loans reflects an overall reasonable dispersion throughout the assessment area. The distribution is reasonable for home mortgage, small business, and small farm loans. This conclusion was reached through further review of the loans originated in the assessment area for these three loan categories. Consideration was given to local competition, the institution’s capacity, and other relevant factors. Particular focus was given to the dispersion of these loans in relation to the one moderate-income CT in the assessment area.
Home Mortgage Loans
The geographic distribution of home mortgage loans reflects a reasonable dispersion throughout the assessment area. The following table reflects the geographic distribution of the home mortgage loans reviewed by tract income level. This table also includes comparative demographic data regarding the percentage of owner-occupied housing units in the assessment area by tract income level, based on 2015 ACS information.
It should be noted that the assessment area’s sole moderate-income geography (CT 4703.89) is situated within the boundaries of the Fort. 2015 ACS data shows CT 4703.89 has no owner-occupied housing units available for possible lending. Therefore, the bank’s lack of lending in this geography is appropriate.
| Geographic Distribution of Home Mortgage Loans | |||||
|
Tract Income Level |
% of Owner-Occupied Housing Units |
# |
% |
$(000s) |
% |
| Low | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Moderate | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Middle | 58.2 | 13 | 54.2 | 921 | 25.1 |
| Upper | 41.8 | 11 | 45.8 | 2,749 | 74.9 |
| Total | 100.0 | 24 | 100.0 | 3,670 | 100.0 |
| Source: 2015 ACS data & 1/01/2018 – 12/31/2018 bank data | |||||
Small Business Loans
The geographic distribution of small business loans reflects a reasonable dispersion throughout the assessment area. The following table reflects the geographic distribution of the small business loans reviewed and includes comparative demographic data regarding the percentages of businesses in the assessment area by tract income level, based on 2018 D&B data.
The table indicates that moderate-income CT 4703.89 accounts for just 3.0 percent of total businesses and that none of the bank’s small business loans were originated within CT 4703.89. As mentioned previously, CT 4703.89 is located within the boundaries of the Fort. According to bank management and the aforementioned community contact, those businesses operating on base property typically have contracts with the Department of Defense to provide support services for military personnel. Consequently, these types of businesses would not likely present any lending opportunities for local financial institutions. Upon consideration of this compensating factor, the geographic distribution of the small business loans is reasonable.
| Geographic Distribution of Small Business Loans | |||||
| Tract Income Level | % of Businesses | # | % | $(000s) | % |
| Low | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Moderate | 3.0 | 0 | 0.0 | 0 | 0.0 |
| Middle | 57.2 | 14 | 35.9 | 797 | 45.5 |
| Upper | 39.8 | 25 | 64.1 | 956 | 54.5 |
| Not Available | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Totals | 100.0 | 39 | 100.0 | 1,753 | 100.0 |
| Source: 2018 D&B data & 1/01/2018 – 12/31/2018 bank data. | |||||
Small Farm Loans
The geographic distribution of small farm loans reflects a reasonable dispersion throughout the assessment area. The following table reflects the geographic distribution of the small farm loans reviewed and includes comparative demographic data regarding the percentages of farms in the assessment area by tract income level, based on 2018 D&B data.
The table indicates that there are no farm operations located in moderate-income CT 4703.89 and that none of the bank’s small farm loans were originated within ST 4703.89. Since CT 4703.89 is located within the boundaries of the Fort, agricultural lending opportunities are non-existent in this geography. Upon consideration of this limitation, the geographic distribution of the small farm loans is reasonable.
| Geographic Distribution of Small Farm Loans | |||||
| Tract Income Level | % of Businesses | # | % | $(000s) | % |
| Low | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Moderate | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Middle | 73.0 | 13 | 65.0 | 400 | 40.4 |
| Upper | 27.0 | 7 | 35.0 | 590 | 59.6 |
| Not Available | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Totals | 100.0 | 20 | 100.0 | 990 | 100.0 |
| Source: 2018 D&B data & 1/01/2018 – 12/31/2018 bank data. | |||||
Borrower Profile
The overall distribution of borrowers reflects a reasonable penetration of loans to individuals of different income levels and among businesses and farm operations of different revenue sizes in the assessment area. The distribution is reasonable for home mortgage and small farm loans, and is excellent for small business loans. Particular focus was given to the dispersion of these loans in the assessment area in relation to low- and moderate-income individuals, small businesses, and small farms.
Home mortgage loans
The overall distribution of borrowers reflects a reasonable penetration among individuals of different income levels. The institution’s lending to low-income and moderate-income borrowers compares reasonably to the percentage of low- and moderate-income families in the assessment area.
In evaluating the institution’s performance, examiners considered certain limitations. For example, according to FFIEC data, the maximum income of a “low-income” family in the bank’s assessment area was $26,550 in 2018. A family at this income level would likely not qualify for a home mortgage under conventional underwriting standards, especially considering the assessment area’s median housing value of $129,733. Examiners also considered the 2015 ACS data, which reveals 12.4 percent of families in the assessment area are living below the poverty level. This factor is considered when evaluating the institution’s lending to low-income families, as the cost of owning and maintaining a home is more cost-prohibitive for these families. Considering these factors, the institution’s lending percentage to low-income borrowers of 12.5 percent reflects a reasonable penetration.
| Distribution of Home Mortgage Loans by Borrower Income Level | |||||
| Borrower Income Level | % of Families | # | % | $(000s) | % |
| Low | 16.5 | 3 | 12.5 | 121 | 3.3 |
| Moderate | 14.7 | 3 | 12.5 | 157 | 4.3 |
| Middle | 21.2 | 3 | 12.5 | 126 | 3.4 |
| Upper | 47.6 | 15 | 62.5 | 3,266 | 89.0 |
| Not Available | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Totals | 100.0 | 24 | 100.0 | 3,670 | 100.0 |
| Source: 2015 ACS data & 1/01/2018 – 12/31/2018 bank data. | |||||
Small Business Loans
The distribution of small business loans represents a reasonable penetration among businesses of different revenue sizes in the assessment area. The table below reflects the distribution of the small business loans by GAR level, including 2018 D&B business data for comparison purposes.
The table indicates that 94.9 percent of the loans sampled were originated to businesses with GARs of $1 million or less. Overall, the bank’s lending performance reflects excellent performance when compared to the available demographic data.
| Distribution of Small Business Loans by Gross Annual Revenue Category | |||||
| Gross Revenue Level | % of Businesses 2017 | # | % | $(000s) | % |
| <=$1,000,000 | 83.1 | 37 | 94.9 | 1,642 | 100.0 |
| >1,000,000 | 3.3 | 2 | 5.1 | 111 | 0.0 |
| Revenue Not Available | 13.6 | 0 | 0.0 | 0 | 0.0 |
| Total | 100.0 | 39 | 100.0 | 1,753 | 100.0 |
| Source: 2018 D&B data & 1/01/2018-12/31/2018 bank data. | |||||
Small Farm Loans
The distribution of small farm loans represents a reasonable penetration among farm operations of different revenue sizes in the assessment area. The following table reflects the distribution of the small farm loans by GAR level, including 2018 D&B farm data for comparison purposes.
The table indicates a 95.0 percent penetration regarding farm operations with GARs of $1 million or less. Overall, the bank’s lending performance is considered reasonable when compared to the demographic information.
| Distribution of Small Farm Loans by Gross Annual Revenue Category | |||||
| Gross Revenue Level | % of Farms | # | % | $(000s) | % |
| <=$1,000,000 | 100.0 | 19 | 95.0 | 687 | 69.4 |
| >1,000,000 | 0.0 | 1 | 5.0 | 303 | 30.6 |
| Revenue Not Available | 0.0 | 0 | 0.0 | 0 | 0.0 |
| Total | 100.0 | 20 | 100.0 | 990 | 100.0 |
| Source: 2018 D&B data & 1/01/2018-12/31/2018 bank data. | |||||
Response to Complaints
The Institution did not receive any CRA-related complaints since the previous evaluation; therefore, this factor did not affect the rating.
DISCRIMINATORY OR OTHER ILLEGAL CREDIT PRACTICES REVIEW
Examiners did not identify any evidence of discriminatory or other illegal credit practices; therefore, this consideration did not affect the institution’s overall CRA rating.
GLOSSARY
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.
Area Median Income: The median family income for the MSA, if a person or geography is located in an MSA; or the statewide nonmetropolitan median family income, if a person or geography is located outside and MSA.
Assessment Area: A geographic area delineated by the bank under the requirements of the Community Reinvestment Act.
Census tract: A small, relatively permanent statistical subdivision of a county or equivalent entity. The primary purpose of census tracts is to provide a stable set of geographic units for the presentation of statistical data. Census tracts generally have a population size between 1,200 and 8,000 people, with an optimum size of 4,000 people. Census tract boundaries generally follow visible and identifiable features, but they may follow nonvisible legal boundaries in some instances. State and county boundaries always are census tract boundaries.
Combined Statistical Area (CSA): A combination of several adjacent metropolitan statistical areas or micropolitan statistical areas or a mix of the two, which are linked by economic ties.
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.
Core Based Statistical Area (CBSA): The county or counties or equivalent entities associated with at least one core (urbanized area or urban cluster) of at least 10,000 population, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties with the counties associated with the core. Metropolitan and Micropolitan Statistical Areas are the two categories of CBSAs.
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 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. Other family 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).
Family Income: Includes the income of all members of a family that are age 15 and older.
FFIEC-Estimated Income Data: The Federal Financial Institutions Examination Council (FFIEC) issues annual estimates which update median family income from the metropolitan and nonmetropolitan areas. The FFIEC uses American Community Survey data and factors in information from other sources to arrive at an annual estimate that more closely reflects current economic conditions.
Full-Scope Review: A full-scope review is accomplished when examiners complete all applicable interagency examination procedures for an assessment area. Performance under applicable tests is analyzed considering performance context, quantitative factors (for example, geographic distributions, borrower profile, and total number and dollar amount of investments), and qualitative factors (for example, innovativeness, complexity, and 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 applicants; the amount of loan requested; and the disposition of the application (approved, denied, and withdrawn).
Home Mortgage Disclosure Loan Application Register (HMDA LAR): The HMDA LARs record all applications received for residential purchase, refinance, home improvement, and temporary-to-permanent construction loans.
Home Mortgage Loans: Includes home purchase and home improvement loans as defined in the HMDA regulation. This definition also includes multi-family (five or more families) dwelling loans, loans to purchase 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.
Household Income: Includes the income of the householder and all other persons that are age 15 and older in the household, whether related to the householder or not. Because many households are only one person, median household income is usually less than median family income.
Housing Unit: Includes a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied as separate living quarters.
Limited-Scope Review: A limited scope review is accomplished when examiners do not complete all applicable interagency examination procedures for an assessment area. Performance under applicable tests is often analyzed using only quantitative factors (for example, geographic distribution, borrower profile, 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.
Median Income: The median income divides the income distribution into two equal parts, one having incomes above the median and other having incomes below the median.
Metropolitan Division (MD): A county or group of counties within a CBSA that contain(s) an urbanized area with a population of at least 2.5 million. A MD is one or more main/secondary counties representing an employment center or centers, plus adjacent counties associated with the main/secondary county or counties through commuting ties.
Metropolitan Statistical Area (MSA): CBSA associated with at least one urbanized area having a population of at least 50,000. The MSA comprises the central county or counties or equivalent entities containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county or counties as measured through commuting.
Micropolitan Statistical Area: CBSA associated with at least one urbanized area having a population of at least 10,000, but less than 50,000.
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 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 id the area median income, or a median family income that is at least 50 and less than 80 percent in the case of a geography.
Multi-family: Refers to residential structure that contains five or more units.
Nonmetropolitan Area: All areas outside of metropolitan areas. The definition of nonmetropolitan area is not consistent with the definition of rural areas. Urban and rural classifications cut across the other hierarchies. For example, there is generally urban and rural territory within metropolitan and nonmetropolitan areas.
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.
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.
Rural Area: Territories, populations, and housing units that are not classified as urban.
Small Business Loan: A loan included in “loans to small businesses” as defined in the Consolidated Report of Condition and Income (Call Report). These loans have original amounts of $1 million or less and are either secured by nonfarm nonresidential properties or are classified as commercial and industrial loans.
Small Farm Loan: 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, including farm residential and other improvements, or are classified as loans to finance agricultural production and other loans to farmers.
Upper-Income: Individual income that is 120 percent or more of the area median income, or a median family income that is 120 percent or more in the case of a geography.
Urban Area: All territories, populations, and housing units in urbanized areas and in places of 2,500 or more persons outside urbanized areas. More specifically, “urban” consists of territory, persons, and housing units in places of 2,500 or more persons incorporated as cities, villages, boroughs (except in Alaska and New York), and towns, (except in the New England states, New York, and Wisconsin).
“Urban” excludes the rural portions of “extended cities”; census designated place of 2,500 or more persons; and other territory, incorporated or unincorporated, including in urbanized areas.