As is the case each month, the OCC and FDIC released a list of Community Reinvestment Act (CRA) performance evaluations from May of 2018. These evaluations are a fantastic tool for compliance professionals to understand the CRA requirements, what examiners expect, and best practices for improving CRA ratings. Specifically, a great deal of information can be learned by reviewing both the Outstanding and Substantial Noncompliance performance evaluations. Therefore, we are again providing an overview of noteworthy trends from these recent performance evaluations.
The following highlights come from the May 2018 CRA performance evaluations:
The OCC released a total of 32 evaluations containing 28 “satisfactory” ratings and four “outstanding” ratings.
Three large banks received an “outstanding” rating including the following:
Webster Bank, National Association of Waterbury, CT which owns HSA Bank and is the largest custodian of Health Savings Accounts (HSAs) nationwide.
Queensborough National Bank & Trust
One small bank received an “outstanding” rating:
New Buffalo Savings Bank of New Buffalo, MI ($126.2 million in total assets)
Average LTD ratio was 91.5%.
Loans inside the assessment area were 51.9 percent, though based on dollar amount, 69 percent of loan originations were outside the assessment area due to operating two loan production offices (LPOs) during the assessment time period.
The bank’s percentage of residential real estate loan originations to both low- and moderate-income borrowers exceeded the percentage of loans originated by the aggregate market.
The percentage of loans originated by the bank to small businesses within the assessment area is greater than the percentage of aggregate industry lending to small businesses.
The FDIC released a total of 72 evaluations with four “outstanding” ratings, one “needs to improve” rating, and all other ratings listed as “satisfactory.”
The four banks rated outstanding include the following:
Branch Banking and Trust Company in Winston-Salem, NC is a $214.4 billion state-chartered financial institution and the oldest bank in North Carolina. This CRA report contained 953 pages.
Liberty Bank in Middletown, CT is a large bank with 55 full-service branches with assets of $4.7 billion.
HarborOne Bank in Brockton, MA is a large bank which received an outstanding rating in the lending test, investment test, and service test.
WebBank in Salt Lake City, UT. This internet-based, non traditional bank does not have a customer presence, utilizes brokered deposits for the majority of its funding, and sells a majority of its loans. As a non traditional bank, the performance evaluation tested the bank on two different CRA strategic plans.
The sole “needs to improve” rating came from:
Laurel Road Bank in Darien, CT. (58257)
The OCC list of banks evaluated for CRA compliance during May of 2018 can be found here.
The FDIC list of banks evaluated for CRA compliance during May of 2018 can be found here.
The FDIC CRA examination schedule for the third and fourth quarter can be found here.