|
[Main Tabs]
[Table of Contents - 2000]
[Index]
[Previous Page]
[Next Page]
[Search]
2000 - Rules and Regulations
{{2-26-99 p.2786.15}}
Appendix A to Part 345Ratings
(a) Ratings in general--(1) In assigning a
rating, the FDIC evaluates a bank's performance under the applicable
performance criteria in this part, in accordance with
§ 345.21, and
§ 345.28, which provides for adjustments on the basis of evidence of
discriminatory or other illegal credit practices.
(2) A bank's performance need not fit each aspect of a particular
rating profile in order to receive that rating, and exceptionally
strong performance with respect to some aspects may compensate for weak
performance in others. The bank's overall performance, however, must be
consistent with safe and sound banking practices and generally with the
appropriate rating profile as follows.
(b) Banks evaluated under the lending, investment, and
service tests.--(1) Lending performance rating. The
FDIC assigns each bank's lending performance one of the five following
ratings.
(i) Outstanding. The FDIC rates a bank's lending
performance "outstanding" if, in general, it demonstrates:
(A) Excellent responsiveness to credit needs in its assessment
area(s), taking into account the number and amount of home mortgage,
small business, small farm, and consumer loans, if applicable, in its
assessment area(s);
(B) A substantial majority of its loans are made in its
assessment area(s);
(C) An excellent geographic distribution of loans in its
assessment area(s);
(D) An excellent distribution, particularly in its assessment
area(s), of loans among individuals of different income levels and
businesses (including farms) of different sizes, given the product
lines offered by the bank;
(E) An excellent record of serving the credit needs of highly
economically disadvantaged areas in its assessment area(s), low-income
individuals, or businesses (including farms) with gross annual revenues
of $1 million or less, consistent with safe and sound operations;
(F) Extensive use of innovative or flexible lending practices in
a safe and sound manner to address the credit needs of low- or
moderate-income individuals or geographies; and
(G) It is a leader in making community development loans.
(ii) High satisfactory. The FDIC rates a bank's
lending performance "high satisfactory" if, in general, it
demonstrates:
(A) Good responsiveness to credit needs in its assessment
area(s), taking into account the number and amount of home mortgage,
small business, small farm, and consumer loans, if applicable, in its
assessment area(s);
(B) A high percentage of its loans are made in its assessment
area(s);
(C) A good geographic distribution of loans in its assessment
area(s);
(D) A good distribution, particularly in its assessment area(s),
of loans among individuals of different income levels and businesses
(including farms) of different sizes, given the product lines offered
by the bank;
(E) A good record of serving the credit needs of highly
economically disadvantaged areas in its assessment area(s), low-income
individuals, or businesses (including farms) with gross annual revenues
of $1 million or less, consistent with safe and sound operations;
(F) Use of innovative or flexible lending practices in a safe and
sound manner to address the credit needs of low- or moderate-income
individuals or geographies; and
(G) It has made a relatively high level of community development
loans.
(iii) Low satisfactory. The FDIC rates a bank's
lending performance "low satisfactory" if, in general, it
demonstrates:
(A) Adequate responsiveness to credit needs in its assessment
area(s), taking into account the number and amount of home mortgage,
small business, small farm, and consumer loans, if applicable, in its
assessment area(s);
(B) An adequate percentage of its loans are made in its
assessment area(s);
{{2-26-99 p.2786.16}}
(C) An adequate geographic distribution of loans in its
assessment area(s);
(D) An adequate distribution, particularly in its assessment
area(s), of loans among individuals of different income levels and
businesses (including farms) of different sizes, given the product
lines offered by the bank;
(E) An adequate record of serving the credit needs of highly
economically disadvantaged areas in its assessment area(s), low-income
individuals, or businesses (including farms) with gross annual revenues
of $1 million or less, consistent with safe and sound operations;
(F) Limited use of innovative or flexible lending practices in a
safe and sound manner to address the credit needs of low- or
moderate-income individuals or geographies; and
(G) It has made an adequate level of community development loans.
(iv) Needs to improve. The FDIC rates a bank's lending
performance "needs to improve" if, in general, it
demonstrates:
{{6-30-95 p.2786.17}}
(A) Poor responsiveness to credit needs in its assessment
area(s), taking into account the number and amount of home mortgages,
small business, small farm, and consumer loans, if applicable, in its
assessment area(s);
(B) A small percentage of its loans are made in its assessment
area(s);
(C) A poor geographic distribution of loans, particularly to low-
or moderate-income geographies, in its assessment area(s);
(D) A poor distribution, particularly in its assessment area(s),
of loans among individuals of different income levels and businesses
(including farms) of different sizes, given the product lines offered
by the bank;
(E) A poor record of serving the credit needs of highly
economically disadvantaged areas in its assessment area(s), low-income
individuals, or businesses (including farms) with gross annual revenues
of $1 million or less, consistent with safe and sound operations;
(F) Little use of innovative or flexible lending practices in a
safe and sound manner to address the credit needs of low- or
moderate-income individuals or geographies; and
(G) It has made a low level of community development loans.
(v) Substantial noncompliance. The FDIC rates a bank's
lending performance as being in "substantial noncompliance" if,
in general, it demonstrates:
(A) A very poor responsiveness to credit needs in its assessment
area(s), taking into account the number and amount of home mortgage,
small business, small farm, and consumer loans, if applicable, in its
assessment area(s);
(B) A very small percentage of its loans are made in its
assessment area(s);
(C) A very poor geographic distribution of loans, particularly to
low- or moderate-income geographies, in its assessment area(s);
(D) A very poor distribution, particularly in its assessment
area(s), of loans among individuals of different income levels and
businesses (including farms) of different sizes, given the product
lines offered by the bank;
(E) A very poor record of serving the credit needs of highly
economically disadvantaged areas in its assessment area(s), low-income
individuals, or businesses (including farms) with gross annual revenues
of $1 million or less, consistent with safe and sound operations;
(F) No use of innovative or flexible lending practices in a safe
and sound manner to address the credit needs of low- or moderate-income
individuals or geographies; and
(G) It has made few, if any, community development loans.
(2) Investment performance rating. The FDIC assigns
each bank's investment performance one of the five following ratings:
(i) Outstanding. The FDIC rates a bank's investment
performance "outstanding" if, in general, it demonstrates:
(A) An excellent level of qualified investments, particularly
those that are not routinely provided by private investors, often in a
leadership position;
(B) Extensive use of innovative or complex qualified investments;
and
(C) Excellent responsiveness to credit and community development
needs.
(ii) High satisfactory. The FDIC rates a bank's
investment performance "high satisfactory" if, in general, it
demonstrates:
(A) A significant level of qualified investments, particularly
those that are not routinely provided by private investors,
occasionally in a leadership position;
(B) Significant use of innovative or complex qualified
investments; and
(C) Good responsiveness to credit and community development
needs.
(iii) Low satisfactory. The FDIC rates a bank's
investment performance "low satisfactory" if, in general, it
demonstrates:
(A) An adequate level of qualified investments, particularly
those that are not routinely provided by private investors, although
rarely in a leadership position;
(B) Occasional use of innovative or complex qualified
investments; and
{{6-30-95 p.2786.18}}
(C) Adequate responsiveness to credit and community development
needs.
(iv) Needs to improve. The FDIC rates a bank's
investment performance "needs to improve" if, in general, it
demonstrates:
(A) A poor level of qualified investments, particularly those
that are not routinely provided by private investors;
(B) Rare use of innovative or complex qualified investments; and
(C) Poor responsiveness to credit and community development
needs.
(v) Substantial noncompliance. The FDIC rates a bank's
investment performance as being in "substantial noncompliance"
if, in general, it demonstrates:
(A) Few, if any, qualified investments, particularly those that
are not routinely provided by private investors;
(B) No use of innovative or complex qualified investments; and
(C) Very poor responsiveness to credit and community development
needs.
(3) Service performance rating. The FDIC assigns each
bank's service performance one of the five following ratings.
(i) Outstanding. The FDIC rates a bank's service
performance "outstanding" if, in general, the bank demonstrates:
(A) Its service delivery systems are readily accessible to
geographies and individuals of different income levels in its
assessment area(s);
(B) To the extent changes have been made, its record of opening
and closing branches has improved the accessibility of its delivery
systems, particularly in low- or moderate-income geographies or to low-
or moderate-income individuals;
(C) Its services (including, where appropriate, business hours)
are tailored to the convenience and needs of its assessment area(s),
particularly low- or moderate-income geographies or low- or
moderate-income individuals; and
(D) It is a leader in providing community development services.
(ii) High satisfactory. The FDIC rates a bank's
service performance "high satisfactory" if, in general, the bank
demonstrates:
(A) Its service delivery systems are accessible to geographies
and individuals of different income levels in its assessment area(s);
(B) To the extent changes have been made, its record of opening
and closing branches has not adversely affected the accessibility of
its delivery systems, particularly in low- and moderate-income
geographies and to low- and moderate-income individuals;
(C) Its services (including, where appropriate, business hours)
do not vary in a way that inconveniences its assessment area(s),
particularly low- and moderate-income geographies and low- and
moderate-income individuals; and
(D) It provides a relatively high level of community development
services.
(iii) Low satisfactory. The FDIC rates a bank's
service performance "low satisfactory" if, in general, the bank
demonstrates:
(A) Its service delivery systems are reasonably accessible to
geographies and individuals of different income levels in its
assessment area(s);
(B) To the extent changes have been made, its record of opening
and closing branches has generally not adversely affected the
accessibility of its delivery systems, particularly in low- and
moderate-income geographies and to low- and moderate-income
individuals;
(C) Its services (including, where appropriate, business hours)
do not vary in a way that inconveniences its assessment area(s),
particularly low- and moderate-income geographies and low- and
moderate-income individuals; and
(D) It provides an adequate level of community development
services.
(iv) Needs to improve. The FDIC rates a bank's service
performance "needs to improve" if, in general, the bank
demonstrates:
(A) Its service delivery systems are unreasonably inaccessible to
portions of its assessment area(s), particularly to low- or
moderate-income geographies or to low- or moderate-income
individuals;
{{8-31-05 p.2786.19}}
(B) To the extent changes have been made, its record of opening
and closing branches has adversely affected the accessibility its
delivery systems, particularly in low- or moderate-income geographies
or to low- or moderate-income individuals;
(C) Its services (including, where appropriate, business hours)
vary in a way that inconveniences its assessment area(s), particularly
low- or moderate-income geographies or low- or moderate-income
individuals; and
(D) It provides a limited level of community development
services.
(v) Substantial noncompliance. The FDIC rates a bank's
service performance as being in "substantial noncompliance" if,
in general, the bank demonstrates:
(A) Its service delivery systems are unreasonably inaccessible to
significant portions of its assessment area(s), particularly to low- or
moderate-income geographies or to low- or moderate-income individuals;
(B) To the extent changes have been made, its record of opening
and closing branches has significantly adversely affected the
accessibility of its delivery systems, particularly in low- or
moderate-income geographies or to low- or moderate-income individuals;
(C) Its services (including, where appropriate, business hours)
vary in a way that significantly inconveniences its assessment area(s),
particularly low- or moderate-income geographies or low- or
moderate-income individuals; and
(D) It provides few, if any, community development services.
(c) Wholesale or limited purpose banks. The FDIC assigns
each wholesale or limited purpose bank's community development
performance one of the four following ratings.
(1) Outstanding. The FDIC rates a wholesale or limited
purpose bank's community development performance "outstanding"
if, in general, it demonstrates:
(i) A high level of community development loans, community
development services, or qualified investments, particularly
investments that are not routinely provided by private investors;
(ii) Extensive use of innovative or complex qualified
investments, community development loans, or community development
services; and
(iii) Excellent responsiveness to credit and community
development needs in its assessment area(s).
(2) Satisfactory. The FDIC rates a wholesale or
limited purpose bank's community development performance
"satisfactory" if, in general, it demonstrates:
(i) An adequate level of community development loans, community
development services, or qualified investments, particularly
investments that are not routinely provided by private investors;
(ii) Occasional use of innovative or complex qualified
investments, community development loans, or community development
services; and
(iii) Adequate responsiveness to credit and community development
needs in its assessment area(s).
(3) Needs to improve. The FDIC rates a wholesale or
limited purpose bank's community development performance as "needs
to improve" if, in general, it demonstrates:
(i) A poor level of community development loans, community
development services, or qualified investments, particularly
investments that are not routinely provided by private investors;
(ii) Rare use of innovative or complex qualified investments,
community development loans, or community development services; and
(iii) Poor responsiveness to credit and community development
needs in its assessment area(s).
(4) Substantial noncompliance. The FDIC rates a
wholesale or limited purpose bank's community development performance
in "substantial noncompliance" if, in general, it
demonstrates:
{{8-31-05 p.2786.20}}
(i) Few, if any, community development loans, community
development services, or qualified investments, particularly
investments that are not routinely provided by private investors;
(ii) No use of innovative or complex qualified investments,
community development loans, or community development services; and
(iii) Very poor responsiveness to credit and community
development needs in its assessment area(s).
(d) Banks evaluated under the small bank performance
standards--(1) Lending test ratings.
(i) Eligibility for a satisfactory lending test rating.
The FDIC rates a small bank's lending performance
"satisfactory" if, in general, the bank demonstrates:
(A) A reasonable loan-to-deposit ratio (considering seasonal
variations) given the bank's size, financial condition, the credit
needs of its assessment area(s), and taking into account, as
appropriate, other lending-related activities such as loan originations
for sale to the secondary markets and community development loans and
qualified investments;
(B) A majority of its loans and, as appropriate, other
lending-related activities, are in its assessment area;
(C) A distribution of loans to and, as appropriate, other
lending-related activities for individuals of different income levels
(including low- and moderate-income individuals) and businesses and
farms of different sizes that is reasonable given the demographics of
the bank's assessment area(s);
(D) A record of taking appropriate action, when warranted, in
response to written complaints, if any, about the bank's performance
in helping to meet the credit needs of its assessment area(s); and
(E) A reasonable geographic distribution of loans given the
bank's assessment area(s).
(ii) Eligibility for an "outstanding" lending test
rating. A small bank that meets each of the standards for a
"satisfactory" rating under this paragraph and exceeds some or
all of those standards may warrant consideration for a lending test
rating of "outstanding."
(iii) Needs to improve or substantial noncompliance
ratings. A small bank may also receive a lending test rating of
"needs to improve" or "substantial noncompliance depending on
the degree to which its performance has failed to meet the standard for
a "satisfactory" rating.
(2) Community development test ratings for intermediate
small banks--(i) Eligibility for a satisfactory community
development test rating. The FDIC rates an intermediate small
bank's community development performance "satisfactory" if the
bank demonstrates adequate responsiveness to the community development
needs of its assessment area(s) through community development loans,
qualified investments, and community development services. The adequacy
of the bank's response will depend on its capacity for such community
development activities, its assessment area's need for such community
development activities, and the availability of such opportunities for
community development in the bank's assessment area(s).
(ii) Eligibility for an outstanding community development
test rating. The FDIC rates an intermediate small bank's
community development performance "outstanding" if the bank
demonstrates excellent responsiveness to community development needs in
its assessment area(s) through community development loans, qualified
investments, and community development services, as appropriate,
considering the bank's capacity and the need and availability of such
opportunities for community development in the bank's assessment
area(s).
(iii) Needs to improve or substantial noncompliance
ratings. An intermediate small bank may also receive a community
development test rating of "needs to improve" or "substantial
noncompliance" depending on the degree to which its performance has
failed to meet the standards for a "satisfactory" rating.
(3) Overall rating--(i) Eligibility for a
satisfactory overall rating. No intermediate small bank may
receive an assigned overall rating of "satisfactory" unless it
receives a rating of a least "satisfactory" on both the lending
test and the community development test.
{{8-31-05 p.2786.21}}
(ii) Eligibility for an outstanding overall rating.
(A) An intermediate small bank that receives an
"outstanding" rating on one test and at least
"satisfactory" on the other test may receive an assigned overall
rating of "outstanding."
(B) A small bank that is not an intermediate small bank that
meets each of the standards for a "satisfactory" rating under the
lending test and exceeds some or all of those standards may warrant
consideration for an overall rating of "outstanding." In
assessing whether a bank's performance is "outstanding," the
FDIC considers the extent to which the bank exceeds each of the
performance standards for a "satisfactory" rating and its
performance in making qualified investments and its performance in
providing branches and other services and delivery systems that enhance
credit availability in its assessment area(s).
(iii) Needs to improve or substantial noncompliance overall
ratings. A small bank may also receive a rating of "needs to
improve" or "substantial noncompliance" depending on the
degree to which its performance has failed to meet the standards for a
"satisfactory" rating.
(e) Strategic plan assessment and rating.
(1) Satisfactory goals. The FDIC approves as
"satisfactory" measurable goals that adequately help to meet the
credit needs of the bank's assessment area(s).
(2) Outstanding goals. If the plan identifies a
separate group of measurable goals that substantially exceed the levels
approved as "satisfactory," the FDIC will approve those goals as
"outstanding."
(3) Rating. The FDIC assesses the performance of a
bank operating under an approved plan to determine if the bank has met
its plan goals:
(i) If the bank substantially achieves its plan goals for a
satisfactory rating, the FDIC will rate the bank's performance under
the plan as "satisfactory."
(ii) If the bank exceeds its plan goals for a satisfactory rating
and substantially achieves its plan goals for an outstanding rating,
the FDIC will rate the bank's performance under the plan as
"outstanding."
(iii) If the bank fails to meet substantially its plan goals for
a satisfactory rating, the FDIC will rate the bank as either "needs
to improve" or "substantial noncompliance," depending on the
extent to which it falls short of its plan goals, unless the bank
elected in its plan to be rated otherwise, as provided in
§ 345.27(f)(4).
{{6-30-08 p.2787}}
[Codified to 12 C.F.R. Part 345, Appendix A]
[Appendix A to Part 345 added at 60 Fed. Reg. 22209, May 4, 1995,
effective July 1, 1995; amended at 70 Fed. Reg. 44270, August 2, 2005,
effective September 1, 2005]
[Main Tabs]
[Table of Contents - 2000]
[Index]
[Previous Page]
[Next Page]
[Search]
|