This appendix, based on requirements
described in sections 228.24 through 228.26 and 228.28, includes the
following sections:
I.
Community Development Financing Tests—Calculation Components
and Allocation of Community Development Loans and Community Development
InvestmentsFor purposes of the Community
Development Financing Test in section 228.24 and Community Development
Financing Test for Limited Purpose Banks in section 228.26, the Board
identifies the community development loans and community development
investments included in the numerator of the metrics and benchmarks
and the deposits or assets included in the denominator of the metrics
and benchmarks, as applicable, pursuant to paragraph I.a of this appendix.
The Board determines whether to include a community development loan
or community development investment in the numerator for a particular
metric or benchmark pursuant to the allocation provisions in paragraph
I.b of this appendix.
a. Community development loans and community development investments,
deposits, and assets included in the community development financing
metrics and benchmarks—In general. The Board calculates
the community development financing metrics and benchmarks in sections
228.24 and 228.26 using community development loans and community
development investments and deposits or assets, as follows:
1. Numerator.
i. Community
development loans and community development investments considered. The Board includes community development loans and community development
investments originated, purchased, refinanced, or renewed by a depository
institution or attributed to a depository institution pursuant to
section 228.21(b) and (c) (e.g., an affiliate community development
loan) in the numerator of the metrics and benchmarks. The Board calculates
the annual dollar volume of community development loans and community
development investments by summing the dollar volume of the following
community development loans and community development investments
for each calendar year in an evaluation period (i.e., annual dollar
volume of community development loans and community development investments):
A. The dollar volume of all community development loans originated
or purchased and community development investments made, including
legally binding commitments to extend credit or legally binding commitments
to invest,
1 in that calendar year;
B. The dollar volume of any increase in the
calendar year to an existing community development loan that is refinanced
or renewed and in an existing community development investment that
is renewed;
C. The outstanding
dollar volume of community development loans originated or purchased
in previous calendar years and community development investments made
in previous calendar years, as of December 31 for each calendar year
that the loan or investment remains on the depository institution’s
balance sheet; and
D. The
outstanding dollar volume, less any increase reported in paragraph
I.a.1.B of this appendix in the same calendar year, of a community
development loan the depository institution refinanced or renewed
in a calendar year subsequent to the calendar year of origination
or purchase, as of December 31 for each calendar year that the loan
remains on the depository institution’s balance sheet, and an
existing community development investment renewed in a calendar year
subsequent to the calendar year of the investment, as of December
31 for each calendar year that the investment remains on the depository
institution’s balance sheet.
ii. Community development loan and
community development investment allocation. To calculate the
metrics and benchmarks provided in sections 228.24 and 228.26, the
Board includes all community development loans and community development
investments that are allocated to the specific facility-based assessment
area, state, multistate MSA, or nationwide area, respectively, in
the numerator for the metric and benchmarks applicable to that geographic
area. See paragraph I.b of this appendix for the community
development financing allocation provisions.
2. Denominator.
i. Annual
dollar volume of deposits. For purposes of metrics and benchmarks
in section 228.24, the Board calculates an annual dollar volume of
deposits in a depository institution that is specific to each metric
or benchmark for each calendar year in the evaluation period (i.e., annual dollar volume of deposits). For a depository institution
that collects, maintains, and reports deposits data as provided in
section 228.42 or 12 CFR 25.42 or 345.42, the annual dollar volume
of deposits is determined using the annual average daily balance of
deposits in the depository institution as provided in statements (e.g.,
monthly or quarterly statements) based on the deposit location. For
a depository institution that does not collect, maintain, and report
deposits data as provided in section 228.42 or 12 CFR 25.42 or 345.42,
the annual dollar volume of deposits is determined using the deposits
assigned to each facility pursuant to the FDIC’s Summary of
Deposits.
ii. Annual
dollar volume of assets. For purposes of the metrics and benchmarks
in section 228.26, the Board calculates an annual dollar volume of
assets for each calendar year in the evaluation period (i.e., the
annual dollar volume of assets). The annual dollar volume of assets
is calculated by averaging the assets for each quarter end in the
calendar year.
b. Allocation of community development loans and
community development investments.
1. In general. For the Community
Development Financing Test in section 228.24 and the Community Development
Financing Test for Limited Purpose Banks in section 228.26, the Board
considers community development loans and community development investments
in the evaluation of a bank’s performance in a facility-based
assessment area, state and multistate MSA, as applicable, and the
nationwide area, based on the data provided by the bank pursuant to
section 228.42(a)(5)(ii)(E) and the specific location, if available,
pursuant to section 228.42(a)(5)(ii)(D). As appropriate, the Board
may also consider publicly available information and information provided
by government or community sources that demonstrates that a community
development loan or community development investment benefits or serves
a facility-based assessment area, state, or multistate MSA, or the
nationwide area.
2.
A bank may allocate a community development loan or community development
investment as follows:
i. A community development loan or community
development investment that benefits or serves only one county, and
not any areas beyond that one county, would have the full dollar amount
of the activity allocated to that county.
ii. A community development loan or
community development investment that benefits or serves multiple
counties, a state, a multistate MSA, multiple states, multiple multistate
MSAs, or the nationwide area is allocated according to either specific
documentation that the bank can provide regarding the dollar amount
allocated to each county or based on the geographic scope of the activity,
as follows:
A. Allocation approach if specific documentation
is available. A bank may allocate a community development loan
or community development investment or portion of a loan or investment
based on documentation that specifies the appropriate dollar volume
to assign to each county, such as specific addresses and dollar volumes
associated with each address, or other information that indicates
the specific dollar volume of the loan or investment that benefits
or serves each county.
B.
Allocation approach based on geographic scope of a community
development loan or community development investment.2 In the absence of specific
documentation, the Board will allocate a community development loan
or community development investment based on the geographic scope
of the loan or investment as follows:
1. Allocate at the county level for a loan or investment with
a geographic scope of one county;
2. Allocate at the county level based
on the proportion of low- and moderate-income families in each county
for a loan or investment with a geographic scope of less than an entire
state or multistate MSA;
3. Allocate at the state or multistate MSA level for a loan
or investment with a geographic scope of the entire state or multistate
MSA, as applicable;
4. Allocate at the state or multistate MSA level, as applicable,
based on the proportion of low- and moderate-income families in each
state or multistate MSA for a loan or investment with a geographic
scope of one or more state(s) or multistate MSA(s), but not the entire
nation; and
5. Allocate at the nationwide area level for a loan or investment with
a geographic scope of the entire nation.
Table 1—Community
development loan or community development investment allocation
| Community development loan or community
development investment benefits or serves |
Allocation approach if specific
documentation is available |
Allocation approach based on Geographic
Scope of Activity |
| One county |
Allocate to county |
NA |
| Multiple counties that are part of one state or multistate MSA |
Allocate to counties |
Allocate to counties in proportions equivalent to the distribution
of low- and moderate-income families |
| One state or multistate MSA |
Allocate to counties |
Allocate to the state or multistate MSA |
| Multiple states or multistate MSAs, less than the entire nation |
Allocate to counties |
Allocate to the states or multistate MSAs, as applicable, based on
the proportion of low- and moderate-income families in each state
or multistate MSA |
| Nationwide area |
Allocate to counties |
Allocate to nationwide area |
The calculations for metrics, benchmarks, and combination
of performance scores for Community Development Financing Test in
section 228.24 are provided in this section. Additional information
regarding relevant calculation components is set forth in paragraph
I.a of this appendix.
a. Bank Assessment Area Community Development Financing Metric. The Board calculates the Bank Assessment Area Community Development
Financing Metric in section 228.24(b)(1) by:
1. Summing the bank’s annual dollar
volume of community development loans and community development investments
that benefit or serve the facility-based assessment area for each
year in the evaluation period.
2. Summing the bank’s annual dollar
volume of deposits located in the facility-based assessment area for
each year in the evaluation period.
3. Dividing the result of paragraph II.a.1
of this appendix by the result of paragraph II.a.2 of this appendix.
Example B-1: The bank has a three-year
evaluation period. The bank’s annual dollar volumes of community
development loans and community development investments that benefit
or serve a facility-based assessment area are $35,000 (year 1), $25,000
(year 2), and $40,000 (year 3). The sum of the bank’s annual
dollar volumes of community development loans and community development
investments that benefit or serve a facility-based assessment area
is therefore $100,000. The bank’s annual dollar volumes of deposits
located in the facility-based assessment area are $3.1 million (year
1), $3.3 million (year 2), and $3.6 million (year 3). The sum of the
bank’s annual dollar volumes of deposits located in the facility-based
assessment is therefore $10 million. For the evaluation period, the
Bank Assessment Area Community Development Financing Metric would
be $100,000 divided by $10 million, or 0.01 (equivalently, 1 percent).
Figure 1. DISPLAY EQUATION
$$
\frac{\textit{Bank’s community development loans and investments in the assessment area }($100,000)}{\textit{Deposits in the bank in the assessment area }($10\textit{ million})} \\= \textit{Bank Assessment Area Community Development Financing Metric }(1\%)
$$
b. Assessment
Area Community Development Financing Benchmark. The Board calculates
the Assessment Area Community Development Financing Benchmark in section
228.24(b)(2)(i) for each facility-based assessment area by:
1. Summing all large depository institutions’
annual dollar volume of community development loans and community
development investments that benefit or serve the facility-based assessment
area for each year in the evaluation period.
2. Summing all large depository institutions’
annual dollar volume of deposits located in the facility-based assessment
area for each year in the evaluation period.
3. Dividing the result of paragraph II.b.1
of this appendix by the result of paragraph II.b.2 of this appendix.
Example B-2: The applicable benchmark
uses a three-year evaluation period. The annual dollar volumes of
community development loans and community development investments
that benefit or serve a facility-based assessment area for all large
depository institutions are $3.25 million (year 1), $3 million (year
2), and $3.75 million (year 3). The sum of the annual dollar volumes
of community development loans and community development investments
that benefit or serve the facility-based assessment area conducted
by all large depository institutions is therefore $10 million. The
annual dollar volumes of deposits located in the facility-based assessment
area in all large depository institutions are $330 million (year 1),
$330 million (year 2), and $340 million (year 3). The sum of the annual
dollar volumes of deposits located in the facility-based assessment
area in all large depository institutions is therefore $1 billion.
For the evaluation period, the Assessment Area Community Development
Financing Benchmark for the facility-based assessment area would be
$10 million divided by $1 billion, or 0.01 (equivalently, 1 percent).
Figure 2. DISPLAY EQUATION
$$
\frac{\textit{Community development loans and investments in the assessment area by all large depository institutions }($10\textit{ million})}{\textit{Deposits in the assessment area in all large depository institutions }($1\textit{ billion})} \\= \textit{Assessment Area Community Development Financing Benchmark }(1\%)
$$
c. MSA and Nonmetropolitan
Nationwide Community Development Financing Benchmarks. The Board
calculates an MSA Nationwide Community Development Financing Benchmark
to be used for each MSA in which the bank has a facility-based assessment
area in the MSA. The Board calculates a Nonmetropolitan Nationwide
Community Development Financing Benchmark to be used for each nonmetropolitan
area in which the bank has a facility-based assessment area in the
nonmetropolitan area.
1. MSA Nationwide Community Development
Financing Benchmark. The Board calculates the MSA Nationwide Community
Development Financing Benchmark in section 228.24(b)(2)(ii)(A) by:
i. Summing all large depository institutions’ annual dollar
volume of community development loans and community development investments
that benefit or serve metropolitan areas in the nationwide area for
each year in the evaluation period.
ii. Summing all large depository institutions’
annual dollar volume of deposits located in metropolitan areas in
the nationwide area for each year in the evaluation period.
iii. Dividing the result
of paragraph II.c.1.i of this appendix by the result of paragraph
II.c.1.ii of this appendix.
Example B-3: The applicable benchmark uses a three-year evaluation
period. The annual dollar volumes of community development loans and
community development investments that benefit or serve metropolitan
areas in the nationwide area conducted by all large depository institutions
are $98 billion (year 1), $100 billion (year 2), and $102 billion
(year 3). The sum of the annual dollar volumes of community development
loans and community development investments that benefit or serve
metropolitan areas in the nationwide area conducted by all large depository
institutions is therefore $300 billion. The annual dollar volumes
of deposits located in metropolitan areas in the nationwide area in
all large depository institutions are $14.9 trillion (year 1), $15
trillion (year 2), and $15.1 trillion (year 3). The sum of the annual
dollar volumes of deposits located in metropolitan areas in the nationwide
area in all large depository institutions is therefore $45 trillion.
For the evaluation period, the Metropolitan Nationwide Community Development
Financing Benchmark would be $300 billion divided by $45 trillion,
or 0.007 (equivalently, 0.7 percent).
Figure 3. DISPLAY EQUATION
$$
\frac{\quad\quad\quad\quad\quad\quad\quad\quad\textit{ Community development loans and investments} \\ \textit{nationwide in metropolitan areas by all large depository institutions } ($300\textit{ billion})}{ \textit{Deposits nationwide in metropolitan areas in all large depository institutions }($45\textit{ trillion})} \\= \textit{Metropolitan Nationwide Community Development Financing Benchmark }(0.7\%)
$$
2. Nonmetropolitan Nationwide Community Development Financing Benchmark. The Board calculates the Nonmetropolitan Nationwide Community Development
Financing Benchmark in section 228.24(b)(2)(ii)(B) by:
i. Summing
all large depository institutions’ annual dollar volume of community
development loans and community development investments that benefit
or serve nonmetropolitan areas in the nationwide area for each year
in the evaluation period.
ii. Summing all large depository institutions’
annual dollar volume of deposits located in nonmetropolitan areas
in the nationwide area for each year in the evaluation period.
iii. Dividing the result
of paragraph II.c.2.i of this appendix by the result of paragraph
II.c.2.ii of this appendix.
Example B-4: The applicable benchmark uses a three-year evaluation
period. The annual dollar volumes of community development loans and
community development investments that benefit or serve nonmetropolitan
areas in the nationwide area conducted by all large depository institutions
are $3 billion (year 1), $3.2 billion (year 2), and $3.8 billion (year
3). The sum of the annual dollar volumes of community development
loans and community development investments that benefit or serve
nonmetropolitan areas in the nationwide area conducted by all large
depository institutions is therefore $10 billion. The annual dollar
volumes of deposits located in nonmetropolitan areas in all large
depository institutions are $330 billion (year 1), $334 billion (year
2), and $336 billion (year 3). The sum of the annual dollar volumes
of deposits located in nonmetropolitan areas in the nationwide area
in all large depository institutions is therefore $1 trillion. For
the evaluation period, the Nonmetropolitan Nationwide Community Development
Financing Benchmark would be $10 billion divided by $1 trillion, or
0.01 (equivalently, 1 percent).
Figure 4. DISPLAY EQUATION
$$
\frac{\quad\quad\quad\quad\quad\quad\quad\quad\textit{ Community development loans and investments} \\ \textit{nationwide in nonmetropolitan areas by all large depository institutions } ($10\textit{ billion})}{ \textit{Deposits nationwide in nonmetropolitan areas in all large depository institutions }($1\textit{ trillion})} \\= \textit{Nonmetropolitan Nationwide Community Development Financing Benchmark }(1\%)
$$
d. Bank State
Community Development Financing Metric. The Board calculates
the Bank State Community Development Financing Metric in section 228.24(c)(2)(i)
for each state in which the bank has a facility-based assessment area
by:
1. Summing the bank’s
annual dollar volume of community development loans and community
development investments that benefit or serve a state (which includes
all activities within the bank’s facility-based assessment areas
and outside of its facility-based assessment areas but within the
state) for each year in the evaluation period.
2. Summing the bank’s annual dollar
volume of deposits located in a state for each year in the evaluation
period.
3. Dividing the
result of paragraphs II.d.1 of this appendix by the result of paragraph
II.d.2 of this appendix.
Example B-5: The bank has a three-year evaluation period. The bank’s annual
dollar volumes of community development loans and community development
investments that benefit or serve the state are $15 million (year
1), $17 million (year 2), and $18 million (year 3). The sum of the
bank’s annual dollar volumes of community development loans
and community development investments that benefit or serve the state
conducted by a bank is therefore $50 million. The bank’s annual
dollar volumes of deposits located in the state are $1.5 billion (year
1), $1.6 billion (year 2), and $1.9 billion (year 3). The sum of the
bank’s annual dollar volumes of deposits located in the state
is therefore $5 billion. For the evaluation period, the Bank State
Community Development Financing Metric would be $50 million divided
by $5 billion, or 0.01 (equivalently, 1 percent).
Figure 5. DISPLAY EQUATION
$$
\frac{\textit{Bank's community development loans and investments in the State }($50\textit{ million})}{ \textit{Deposits in the bank in the State }($5\textit{ billion})} = \textit{State Community Development Financing Metric }(1\%)
$$
e. State Community
Development Financing Benchmark. The Board calculates the State
Community Development Financing Benchmark in section 228.24(c)(2)(ii)(A)
by:
1. Summing all large depository
institutions’ annual dollar volume of community development
loans and community development investments that benefit or serve
all or part of a state for each year in the evaluation period.
2. Summing all large depository
institutions’ annual dollar volume of deposits located in the
state for each year in the evaluation period.
3. Dividing the result of paragraph II.e.1
of this appendix by the result of paragraph II.e.2 of this appendix.
Example B-6: The applicable benchmark
uses a three-year evaluation period. The annual dollar volumes of
community development loans and community development investments
that benefit or serve the state conducted by all large depository
institutions are $2.3 billion (year 1), $2.5 billion (year 2), and
$2.7 billion (year 3). The sum of the annual dollar volumes of community
development loans and community development investments that benefit
or serve the state conducted by all large depository institutions
is therefore $7.5 billion. The annual dollar volumes of deposits located
in the state in all large depository institutions are $160 billion
(year 1), $170 billion (year 2), and $170 billion (year 3). The sum
of the annual dollar volumes of deposits located in the state in all
large depository institutions is therefore $500 billion. For the evaluation
period, the State Community Development Financing Benchmark would
be $7.5 billion divided by $500 billion, or 0.015 (equivalently, 1.5
percent).
Figure 6. DISPLAY EQUATION
$$
\frac{\quad\quad\quad\textit{Community development loans and investments} \\ \textit{in the State by all large depository institutions } ($7.5\textit{ billion})}{ \textit{Deposits in the State in all large depository institutions }($500\textit{ billion})} = \textit{State Community Development Financing Benchmark }(1.5\%)
$$
f. State Weighted
Assessment Area Community Development Financing Benchmark. The
Board calculates the State Weighted Assessment Area Community Development
Financing Benchmark in section 228.24(c)(2)(ii)(B) by averaging all
of the applicable Assessment Area Community Development Financing
Benchmarks (see paragraph II.b of this appendix) in a state for the
evaluation period, after weighting each pursuant to paragraph II.o
of this appendix.
Example B-7: The bank
has two facility-based assessment areas (FBAAs) in a state (FBAA-1
and FBAA-2). The Board does not evaluate the bank’s automobile
lending.
- In FBAA-1, the Assessment Area Community Development
Financing Benchmark is 3.0 percent. FBAA-1 represents 70 percent of
the combined dollar volume of the deposits in the bank in FBAA-1 and
FBAA-2. FBAA-1 represents 65 percent of the bank’s combined
dollar volume of originated and purchased closed-end home mortgage
loans, small business loans, and small farm loans in FBAA-1 and FBAA-2.
FBAA-1 represents 55 percent of the bank’s number of originated
and purchased closed-end home mortgage loans, small business loans,
and small farm loans in FBAA-1 and FBAA-2;
- In FBAA-2, the Assessment Area Community Development
Financing Benchmark is 5.0 percent. FBAA-2 represents 30 percent of
the combined dollar volume of the deposits in the bank in FBAA-1 and
FBAA-2. FBAA-2 represents 35 percent of the bank’s combined
dollar volume of originated and purchased closed-end home mortgage
loans, small business loans, and small farm loans in FBAA-1 and FBAA-2.
FBAA-2 represents 45 percent of the bank’s number of originated
and purchased closed-end home mortgage loans, small business loans,
and small farm loans in FBAA-1 and FBAA-2.
| |
FBAA-1 |
FBAA-2 |
| Benchmark |
3.0 |
5.0 |
| % of deposits |
70% |
30% |
| % of lending dollar volume |
65% |
35% |
| % of number of loans |
55% |
45% |
- Calculating weights for FBAA-1:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, as defined
in section 228.12, for FBAA-1 is 60 percent.
Figure 7. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(55\%) + \textit{Percent of loans }(65\%)}{2} = \textit{Percent of lending FBAA} - 1\text{ }(60\%)
$$
- o The weight for FBAA-1 is 65 percent.
Figure 8. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(70\%) + \textit{Percent of lending }(60\%)}{2} = \textit{Weight for FBAA} - 1\text{ }(65\%)
$$
- Calculating weights for FBAA-2:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, for FBAA-2
is 40 percent.
Figure 9. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(35\%) + \textit{Percent of loans }(45\%)}{2} = \textit{Percent of lending FBAA} - 2\text{ }(40\%)
$$
- o The weight for FBAA-2 is 35 percent.
Figure 10. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(30\%) + \textit{Percent of lending }(40\%)}{2} = \textit{Weight for FBAA} - 2\text{ }(35\%)
$$
- Applying the calculated weights for FBAA-1 and
FBAA-2:
- o The bank’s State Weighted Assessment
Area Community Development Financing Benchmark is 3.7 percent.
(Weight for FBAA-1 (0.65) × Benchmark in
FBAA-1 (3 %)) + (Weight for FBAA-2 (0.35) × Benchmark in FBAA-2
(5%)) = State Weighted Assessment Area Community Development Financing
Benchmark (3.7%)
g. Bank
Multistate MSA Community Development Financing Metric. The Board
calculates the Bank Multistate MSA Community Development Financing
Metric in section 228.24(d)(2)(i) for each multistate MSA in which
the bank has a facility-based assessment area by:
1. Summing the bank’s annual dollar
volume of community development loans and community development investments
that benefit or serve a multistate MSA (which includes all activities
within the bank’s facility-based assessment areas and outside
of its facility-based assessment areas but within the multistate MSA)
for each year in the evaluation period.
2. Summing the bank’s annual dollar
volume of deposits located in the multistate MSA for each year in
the evaluation period.
3. Dividing the result of paragraph II.g.1 of this appendix by the
result of paragraph II.g.2 of this appendix.
Example B-8: The bank has a three-year evaluation
period. The bank’s annual dollar volumes of community development
loans and community development investments that benefit or serve
a multistate MSA are $47 million (year 1), $51 million (year 2), and
$52 million (year 3). The sum of the bank’s annual dollar volumes
of community development loans and community development investments
that benefit or serve a multistate MSA conducted by the bank is therefore
$150 million. The bank’s annual dollar volumes of deposits located
in the multistate MSA are $3.1 billion (year 1), $3.3 billion (year
2), and $3.6 billion (year 3). The sum of the bank’s annual
dollar volumes of deposits located in the multistate MSA is therefore
$10 billion. For the evaluation period, the Bank Multistate MSA Community
Development Financing Metric would be $150 million divided by $10
billion, or 0.015 (equivalently, 1.5 percent).
Figure 11. DISPLAY EQUATION
$$
\frac{\textit{Bank's community development loans and investments in multistate MSA }($150\textit{ million})}{ \textit{Deposits in the bank in multistate MSA }($10\textit{ billion})} \\= \textit{Bank's Multistate MSA Community Development Financing Metric }(1.5\%)
$$
h. Multistate
MSA Community Development Financing Benchmark. The Board calculates
the Multistate MSA Community Development Financing Benchmark in section
228.24(d)(2)(ii)(A) by:
1. Summing all large depository institutions’
annual dollar volume of community development loans and community
development investments that benefit or serve all or part of a multistate
MSA for each year in the evaluation period.
2. Summing all large depository institutions’
annual dollar volume of deposits located in the multistate MSA for
each year in the evaluation period.
3. Dividing the result of paragraph II.h.1
of this appendix by the result of paragraph II.h.2 of this appendix.
Example B-9: The applicable benchmark
uses a three-year evaluation period. The annual dollar volumes of
community development loans and community development investments
that benefit or serve a multistate MSA for all large depository institutions
are $135 million (year 1), $140 million (year 2), and $145 million
(year 3). The sum of the annual dollar volumes of community development
loans and community development investments that benefit or serve
a multistate MSA conducted by all large depository institutions is
therefore $420 million. The annual dollar volumes of deposits located
in the multistate MSA in all large depository institutions are $4
billion (year 1), $5 billion (year 2), and $6 billion (year 3). The
sum of the annual dollar volume of deposits located in the multistate
MSA in all large depository institutions is therefore $15 billion.
For the evaluation period, the Multistate MSA Community Development
Financing Benchmark would be $420 million divided by $15 billion,
or 0.028 (equivalently, 2.8 percent).
Figure 12. DISPLAY EQUATION
$$
\frac{\textit{All large depository institutions' community development loans and investments} \\ \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\textit{in multistate MSA } ($420\textit{ million})}{ \textit{Deposits in multistate MSA in all large depository institutions }($15\textit{ billion})} \\= \textit{Multistate MSA Community Development Financing Benchmark }(2.8\%)
$$
i. Multistate
MSA Weighted Assessment Area Community Development Financing Benchmark. The Board calculates the Multistate MSA Weighted Assessment Area
Community Development Financing Benchmark in section 228.24(c)(3)(ii)(B)(2) by averaging all of the bank’s Assessment Area Community
Development Financing Benchmarks (see paragraph II.b of this appendix)
in a multistate MSA for the evaluation period, after weighting each
pursuant to paragraph II.o of this appendix.
Example B-10: The bank has two facility-based assessment areas
in a multistate MSA (FBAA-1 and FBAA-2). The Board does not evaluate
the bank’s automobile lending.
- In FBAA-1, the bank’s Assessment Area Community
Development Financing Benchmark is 3.0 percent. FBAA-1 represents
70 percent of the total dollar volume of the deposits in the bank
in FBAA-1 and FBAA-2. FBAA-1 represents 65 percent of the bank’s
combined dollar volume of originated and purchased closed-end home
mortgage loans, small business loans, and small farm loans in FBAA-1
and FBAA-2. FBAA-1 represents 55 percent of the bank’s number
of originated and purchased closed-end home mortgage loans, small
business loans, and small farm loans in FBAA-1 and FBAA-2;
- In FBAA-2, the bank’s Assessment Area Community
Development Financing Benchmark is 5.0 percent. FBAA-2 represents
30 percent of the total dollar volume of the deposits in the bank
in FBAA-1 and FBAA-2. FBAA-2 represents 35 percent of the bank’s
combined dollar volume of originated and purchased closed-end home
mortgage loans, small business loans, and small farm loans in FBAA-1
and FBAA-2. FBAA-2 represents 45 percent of the bank’s number
of originated and purchased closed-end home mortgage loans, small
business loans, and small farm loans in FBAA-1 and FBAA-2.
| |
FBAA-1 |
FBAA-2 |
| Benchmark |
3.0 |
5.0 |
| % of deposits |
70% |
30% |
| % of lending dollar volume |
65% |
35% |
| % of loans |
55% |
45% |
- Calculating weights for FBAA-1:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, as defined
in section 228.12, for FBAA-1 is 60 percent.
Figure 13. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(55\%) + \textit{Percent of loans }(65\%)}{2} = \textit{Percent of lending FBAA} - 1\text{ }(60\%)
$$
- o The weight for FBAA-1 is 65 percent.
Figure 14. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(70\%) + \textit{Percent of lending }(60\%)}{2} = \textit{Weight for FBAA} - 1\text{ }(65\%)
$$
- Calculating weights for FBAA-2:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, as defined
in section 228.12, for FBAA-2 is 40 percent.
Figure 15. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(35\%) + \textit{Percent of loans }(45\%)}{2} = \textit{Percent of lending FBAA} - 2\text{ }(40\%)
$$
- o The weight for FBAA-2 is 35 percent.
Figure 16. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(30\%) + \textit{Percent of lending }(40\%)}{2} = \textit{Weight for assessment area }2\text{ }(35\%)
$$
- Applying the calculated weights for FBAA-1 and
FBAA-2:
- o The bank’s Multistate MSA Weighted Assessment
Area Community Development Financing Benchmark is 3.7 percent.
(Weight of FBAA-1 (0.65) × Benchmark in
FBAA-1 (3 %)) + (weight of FBAA-2 (0.35) × benchmark in FBAA-2
(5 %)) = Multistate MSA Weighted Assessment Area Community Development
Financing Benchmark (3.7 %)
j. Bank Nationwide Community Development Financing
Metric. The Board calculates the Bank Nationwide Community Development
Financing Metric in section 228.24(e)(2)(i) for the nationwide area
by:
1. Summing the bank’s
annual dollar volume of community development loans and community
development investments that benefit or serve the nationwide area
(which includes all activities within the bank’s facility-based
assessment areas and outside of its facility-based assessment areas
within the nationwide area) for each year in the evaluation period.
2. Summing the bank’s
annual dollar volume of deposits located in the nationwide area for
each year in the evaluation period.
3. Dividing the results of paragraph II.j.1
of this appendix by the results of paragraph II.j.2 of this appendix.
Example B-11: The bank has a three-year
evaluation period. The bank’s annual dollar volumes of community
development loans and community development investments that benefit
or serve the nationwide area are $60 million (year 1), $65 million
(year 2), and $75 million (year 3). The sum of the bank’s annual
dollar volumes of community development loans and community development
investments that benefit or serve the nationwide area conducted by
the bank is therefore $200 million. The bank’s annual dollar
volumes of deposits located in the nationwide area are $2.5 billion
(year 1), $2.7 billion (year 2), and $2.8 billion (year 3). The sum
of the bank’s annual dollar volumes of deposits located in the
nationwide area is therefore $8 billion. For the evaluation period,
the Bank Nationwide Community Development Financing Metric would be
$200 million divided by $8 billion, or 0.025 (equivalently, 2.5 percent).
Figure 17. DISPLAY EQUATION
$$
\frac{\textit{Bank's community development loans and investments nationwide }($200\textit{ million})}{ \textit{Deposits nationwide in the bank }($8\textit{ billion})} = \textit{Nationwide Community Development Financing Metric }(2.5\%)
$$
k. Nationwide
Community Development Financing Benchmark. The Board calculates
the Nationwide Community Development Financing Benchmark in section
228.24(e)(2)(ii)(A) by:
1. Summing all large depository institutions’
annual dollar volume of community development loans and community
development investments that benefit or serve all or part of the nationwide
area for each year in the evaluation period.
2. Summing all depository institutions’
annual dollar volume of deposits located in the nationwide area for
each year in the evaluation period.
3. Dividing the result of paragraph II.k.1
of this appendix by the result of paragraph II.k.2 of this appendix.
Example B-12: The applicable benchmark
uses a three-year evaluation period. The annual dollar volumes of
community development loans and community development investments
that benefit or serve the nationwide area for all large depository
institutions are $100 billion (year 1), $103 billion (year 2), and
$107 billion (year 3). The sum of the annual dollar volumes of community
development loans and community development investments that benefit
or serve the nationwide area conducted by all large depository institutions
is therefore $310 billion. The annual dollar volumes of deposits located
in the nationwide area in all large depository institutions are $15.2
trillion (year 1), $15.3 trillion (year 2), and $15.5 trillion (year
3). The sum of the annual dollar volumes of deposits located in the
nationwide area in all large depository institutions is $46 trillion.
For the evaluation period, the Nationwide Community Development Financing
Benchmark would be $310 billion divided by $46 trillion, or 0.0067
(equivalently, 0.67 percent).
Figure 18. DISPLAY EQUATION
$$
\frac{\quad\quad\quad\textit{Community development loans and investments} \\ \textit{nationwide by all large depository institutions } ($310\textit{ billion})}{ \textit{Deposits nationwide in all large depository institutions }($46\textit{ trillion})} = \textit{Nationwide Community Development Financing Benchmark }(0.67\%)
$$
l. Nationwide
Weighted Assessment Area Community Development Financing Benchmark. The Board calculates the Nationwide Weighted Assessment Area Community
Development Financing Benchmark in section 228.24(e)(2)(ii)(B) by
averaging all of the bank’s Assessment Area Community Development
Financing Benchmarks (see paragraph II.b of this appendix) in the
nationwide area, after weighting each pursuant to paragraph II.o of
this appendix.
Example B-13: The bank has
three facility-based assessment areas in the nationwide area (FBAA-1,
FBAA-2, and FBAA-3).
- In FBAA-1, the bank’s Assessment Area Community
Development Financing Benchmark is 2.0 percent. FBAA-1 represents
60 percent of the combined dollar volume of the deposits in the bank
in FBAA-1, FBAA-2, and FBAA-3. FBAA-1 represents 40 percent of the
bank’s combined dollar volume of originated and purchased closed-end
home mortgage loans, small business loans, and small farm loans in
FBAA-1, FBAA-2, and FBAA-3. FBAA-1 represents 60 percent of the bank’s
number of originated and purchased closed-end home mortgage loans,
small business loans, and small farm loans in FBAA-1, FBAA-2, and
FBAA-3.
- In FBAA-2, the bank’s Assessment Area Community
Development Financing Benchmark is 3.0 percent. FBAA-2 represents
30 percent of the combined dollar volume of the deposits in the bank
in FBAA-1, FBAA-2, and FBAA-3. FBAA-2 represents 45 percent of the
bank’s combined dollar volume of originated and purchased closed-end
home mortgage loans, small business loans, and small farm loans in
FBAA-1, FBAA-2, and FBAA-3. FBAA-2 represents 35 percent of the bank’s
number of originated and purchased closed-end home mortgage loans,
small business loans, and small farm loans in FBAA-1, FBAA-2, and
FBAA-3.
- In FBAA-3, the bank’s Assessment Area Community
Development Financing Benchmark is 4.0 percent. FBAA-3 represents
10 percent of the combined dollar volume of the deposits in the bank
in FBAA-1, FBAA-2, and FBAA-3. FBAA-3 represents 15 percent of the
bank’s combined dollar volume of originated and purchased closed-end
home mortgage loans, small business loans, and small farm loans in
FBAA-1, FBAA-2, and FBAA-3. FBAA-3 represents 5 percent of the bank’s
number of originated and purchased closed-end home mortgage loans,
small business loans, and small farm loans in FBAA-1, FBAA-2, and
FBAA-3.
| |
FBAA-1 |
FBAA-2 |
FBAA-3 |
| Benchmark |
2.0 |
3.0 |
4.0 |
| % of deposits |
60% |
30% |
10% |
| % of lending dollar volume |
40% |
45% |
15% |
| % of loans |
60% |
35% |
5% |
- Calculating weights for FBAA-1:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, as defined
in section 228.12, for FBAA-1 is 50 percent.
Figure 19. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(40\%) + \textit{Percent of loans }(60\%)}{2} = \textit{Percent of lending FBAA} - 1\text{ }(50\%)
$$
- o The weight for FBAA-1 is 55 percent.
Figure 20. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(60\%) + \textit{Percent of lending }(50\%)}{2} = \textit{Weight for FBAA} - 1\text{ }(55\%)
$$
- Calculating weights for FBAA-2:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, as defined
in section 228.12, for FBAA-2 is 40 percent.
Figure 21. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(45\%) + \textit{Percent of loans }(35\%)}{2} = \textit{Percent of lending FBAA} - 2\text{ }(40\%)
$$
- o The weight for FBAA-2 is 35 percent.
Figure 22. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(30\%) + \textit{Percent of lending }(40\%)}{2} = \textit{Weight for FBAA} - 2\text{ }(35\%)
$$
- Calculating weights for FBAA-3:
- o The percent of originated and purchased closed-end
home mortgage lending, small business lending, and small farm lending,
based on the combination of loan dollars and loan count, as defined
in section 228.12, for FBAA-3 is 10 percent.
Figure 23. DISPLAY EQUATION
$$
\frac{\textit{Percent of lending dollar volume }(15\%) + \textit{Percent of loans }(5\%)}{2} = \textit{Percent of lending FBAA} - 3\text{ }(10\%)
$$
- o The weight for FBAA-3 is 10 percent.
Figure 24. DISPLAY EQUATION
$$
\frac{\textit{Percent of deposits }(10\%) + \textit{Percent of lending }(10\%)}{2} = \textit{Weight for FBAA} - 3\text{ }(10\%)
$$
- Applying the calculated weights from FBAA-1, FBAA-2,
and FBAA-3:
- o The bank’s Nationwide Weighted Assessment
Area Community Development Financing Benchmark is 2.55 percent.
(Weight of FBAA-1(0.55) × Benchmark in
FBAA-1 (2 %)) + (Weight of FBAA-2 (0.35) × Benchmark FBAA-2
(3%)) + (Weight of FBAA-3 (0.10) × Benchmark in FBAA-3 (4%))
= Nationwide Weighted Assessment Area Community Development Financing
Benchmark (2.55%)
m. Bank Nationwide Community Development Investment Metric. The
Board calculates the Bank Nationwide Community Development Investment
Metric in section 228.24(e)(2)(iii) for the nationwide area by:
1. Summing the bank’s annual dollar
volume of community development investments, excluding mortgage-backed
securities, that benefit or serve the nationwide area (which includes
all activities within the bank’s facility-based assessment areas
and outside of its facility-based assessment areas within the nationwide
area) for each year in the evaluation period.
2. Summing the bank’s annual dollar
volume of deposits located in the nationwide area for each year in
the evaluation period.
3. Dividing the results of paragraph II.m.1 of this appendix by the
results of paragraph II.m.2 of this appendix.
Example B-14: The bank has a three-year evaluation
period. The bank’s annual dollar volumes of community development
investments (excluding mortgage-backed securities) that benefit or
serve the nationwide area are $600 million (year 1), $680 million
(year 2), and $720 million (year 3). The sum of the bank’s annual
dollar volumes of community development investments (excluding mortgage-backed
securities) that benefit or serve the nationwide area conducted by
the bank is therefore $2 billion. The bank’s annual dollar volumes
of deposits located in the nationwide area are $24 billion (year 1),
$27 billion (year 2), and $29 billion (year 3). The sum of the bank’s
annual dollar volumes of deposits located in the nationwide area is
therefore $80 billion. For the evaluation period, the Bank Nationwide
Community Development Investment Metric would be $2 billion divided
by $80 billion, or 0.025 (equivalently, 2.5 percent).
Figure 25. DISPLAY EQUATION
$$
\frac{\textit{Bank's community development investments nationwide }($2\textit{ billion})}{ \textit{Deposits at the bank nationwide }($80\textit{ billion})} = \textit{Nationwide Community Development Investment Metric }(2.5\%)
$$
n. Nationwide
Community Development Investment Benchmark. The Board calculates
the Nationwide Community Development Investment Benchmark in section
228.24(e)(2)(iv) by:
1. Summing the annual dollar volume of
community development investments that benefit or serve all or part
of the nationwide area, excluding mortgage-backed securities, for
each year in the evaluation period for all large depository institutions
that had assets greater than $10 billion as of December 31 in both
of the prior two calendar years.
2. Summing the annual dollar volume of
deposits in the nationwide area for each year in the evaluation period
for all large depository institutions that had assets greater than
$10 billion as of December 31 in both of the prior two calendar years.
3. Dividing the result
of paragraph II.n.1 of this appendix by the result of paragraph II.n.2
of this appendix.
Example B-15: The applicable benchmark uses a three-year evaluation period. The
annual dollar volumes of community development investments (excluding
mortgage-backed securities) that benefit or serve the nationwide area
for all large depository institutions are $350 billion (year 1), $360
billion (year 2), and $390 billion (year 3). The sum of the annual
dollar volumes of community development investments (excluding mortgage-backed
securities) that benefit or serve the nationwide area conducted by
all large depository institutions is therefore $1.1 trillion. The
annual dollar volumes of deposits located in the nationwide area in
all large depository institutions are $21.9 trillion (year 1), $22
trillion (year 2), and $22.1 trillion (year 3). The sum of the annual
dollar volumes of deposits located in the nationwide area in all large
depository institutions is therefore $66 trillion. For the evaluation
period, the Nationwide Community Development Investment Benchmark
would be $1.1 trillion divided by $66 trillion, or 0.0167 (equivalently,
1.67 percent).
Figure 26. DISPLAY EQUATION
$$
\frac{\textit{Community development investments nationwide by all large depository institutions }($1.1\textit{ trillion})}{ \textit{Deposits nationwide at all large depository institutions }($66\textit{ trillion})} \\= \textit{Nationwide Community Development Investment Benchmark }(1.67\%)
$$
o. Weighting of
benchmarks. The Board calculates a weighted average of the Assessment
Area Community Development Financing Benchmarks for a bank’s
facility-based assessment areas in each state or multistate MSA, as
applicable, or the nationwide area. For the weighted average for a
state or multistate MSA, the Board considers Assessment Area Community
Development Financing Benchmarks for facility-based assessment areas
in the state or multistate MSA pursuant to section 228.28(c). For
the weighted average for the nationwide area, the Board considers
Assessment Area Community Development Financing Benchmarks for all
of the bank’s facility-based assessment areas. Each Assessment
Area Community Development Financing Benchmark is weighted by the
average of the following two ratios:
1. The ratio measuring the share of the
deposits in the bank in the facility-based assessment area, calculated
by:
i. Summing, over the years in the evaluation
period, the bank’s annual dollar volume of deposits in the facility-based
assessment area.
ii.
Summing, over the years in the evaluation period, the bank’s
annual dollar volume of deposits in all facility-based assessment
areas in the state, multistate MSA, or nationwide area, as applicable.
iii. Dividing the result
of paragraph II.o.1.i of this appendix by the result of paragraph
II.o.1.ii of this appendix.
For a bank
that reports deposits data pursuant to section 228.42(b)(3), the bank’s
annual dollar volume of deposits in a facility-based assessment area
is the total of annual average daily balances of deposits reported
by the bank in counties in the facility-based assessment area for
that year. For a bank that does not report deposits data pursuant
to section 228.42(b)(3), the bank’s annual dollar volume of
deposits in a facility-based assessment area is the total of deposits
assigned to facilities reported by the bank in the facility-based
assessment area in the FDIC’s Summary of Deposits for that year.
2. The ratio measuring
the share of the bank’s loans in the facility-based assessment
area, based on the combination of loan dollars and loan count, as
defined in section 228.12, calculated by dividing:
i. The
bank’s closed-end home mortgage loans, small business loans,
small farm loans, and, if a product line for the bank, automobile
loans in the facility-based assessment area originated or purchased
during the evaluation period; by
ii. The bank’s closed-end home
mortgage loans, small business loans, small farm loans, and, if a
product line for the bank, automobile loans in all facility-based
assessment areas in the state, multistate MSA, or nationwide area,
as applicable, originated or purchased during the evaluation period.
p. Combined score for facility-based assessment area conclusions and
the metrics and benchmarks analyses and the impact and responsiveness
reviews.
1. As described in section
228.24(c) through (e), the Board assigns a conclusion corresponding
to the conclusion category that is nearest to the performance score
calculated in paragraph p.2.iii of this appendix for a bank’s
performance under the Community Development Financing Test in each
state or multistate MSA, as applicable pursuant to section 228.28(c),
and for the institution as follows:
| Performance score |
Conclusion |
| 8.5 or more |
Outstanding |
| 6.5 or more but less than 8.5 |
High Satisfactory |
| 4.5 or more but less than 6.5 |
Low Satisfactory |
| 1.5 or more but less than 4.5 |
Needs to Improve |
| Less than 1.5 |
Substantial Noncompliance |
2. The Board bases
a Community Development Financing Test combined performance score
on the following:
i. Component one—Weighted average
of the bank’s performance scores corresponding to facility-based
assessment area conclusions. The Board derives a performance score
based on a weighted average of the performance scores corresponding
to conclusions for facility-based assessment areas in each state or
multistate MSA, as applicable, and the nationwide area, calculated
pursuant to section IV of this appendix.
ii. Component two—Bank score
for metric and benchmarks analyses and the impact and responsiveness
reviews. For each state or multistate MSA, as applicable, and
the nationwide area, the Board determines a performance score (as
shown in paragraph IV.a of this appendix) corresponding to a conclusion
category by considering the relevant metric and benchmarks and a review
of the impact and responsiveness of the bank’s community development
loans and community development investments. In the nationwide area,
for large banks that had assets greater than $10 billion as of December
31 in both of the prior two calendar years, the Board also considers
whether the bank’s performance under the Nationwide Community
Development Investment Metric, compared to the Community Development
Investment Benchmark, contributes positively to the bank’s Community
Development Financing Test conclusion.
iii. Combined score. The Board
associates the performance score calculated pursuant to this paragraph
II.p.2.iii with a conclusion category. The Board derives the combined
performance score corresponding to a conclusion category as follows:
A. The Board calculates the average of two components to determine
weighting:
1. The percentage,
calculated using the combination of loan dollars and loan count, as
defined in section 228.12, of the bank’s total originated and
purchased closed-end home mortgage lending, small business lending,
small farm lending, and automobile lending, as applicable, in its
facility-based assessment areas out of all of the bank’s originated
and purchased closed-end home mortgage lending, small business lending,
small farm lending, and automobile lending, as applicable, in the
state or multistate MSA, as applicable, or the nationwide area during
the evaluation period; and
2. The percentage of the total dollar volume of deposits in
its facility-based assessment areas out of all of the deposits in
the bank in the state or multistate MSA, as applicable, or the nationwide
area during the evaluation period. For purposes of this paragraph
II.p.2.iii.A.2, “deposits” excludes deposits reported
under section 228.42(b)(3)(ii).
B. If the average is:
1. At least 80 percent, then component
one receives a 50 percent weight and component two receives a 50 percent
weight.
2. At least
60 percent but less than 80 percent, then component one receives a
40 percent weight and component two receives a 60 percent weight.
3. At least 40 percent
but less than 60 percent, then component one receives a 30 percent
weight and component two receives a 70 percent weight.
4. At least 20 percent
but less than 40 percent, then component one receives a 20 percent
weight and component two receives an 80 percent weight.
5. Below 20 percent,
then component one receives a 10 percent weight and component two
receives a 90 percent weight.
Table 2—Component
weights for combined performance score
| Average of the percentage of deposits
and percentage of loans |
Weight on component 1 |
Weight on component 2 |
| Greater than or equal to 80% |
50% |
50% |
| Greater than or equal to 60% but less than 80% |
40% |
60% |
| Greater than or equal to 40% but less than 60% |
30% |
70% |
| Greater than or equal to 20% but less than 40% |
20% |
80% |
| Below 20% |
10% |
90% |
Example B-16:
- Assume that the weighted average of the bank’s
performance scores corresponding to its facility-based assessment
area conclusions nationwide is 7.5. Assume further that the bank score
for the metrics and benchmarks analysis and the review of the impact
and responsiveness of the bank’s community development loans
and community development investments nationwide is 6.
- Assume further that 95 percent of the deposits in
the bank and 75 percent of the bank’s originated and purchased
closed-end home mortgage lending, small business lending, small farm
lending, and automobile loans (calculated using the combination of
loan dollars and loan count, as defined in section 228.12) during
the evaluation period are associated with its facility-based assessment
areas.
- The Board assigns weights for component one and component
two based on the share of deposits in the bank and the share of the
bank’s originated and purchased closed-end home mortgage lending,
small business lending, small farm lending, and automobile lending,
calculated using the combination of loan dollars and loan count, as
defined in section 228.12, associated with its facility-based assessment
areas: (95 percent of deposits + 75 percent of originated and purchased
closed-end home mortgage lending, small business lending, small farm
lending, and automobile lending, based on the combination of loan
dollars and loan count)/2 = 85 percent, which is between 80 percent
and 100 percent.
- Thus, the weighted average of the bank’s facility-based
assessment area conclusions in the nationwide area (component one
– paragraph II.p.2.i of this appendix) receives a weight of
50 percent, and the metrics and benchmarks analysis and the review
of the impact and responsiveness of the bank’s community development
loans and community development investments in the nationwide area
(component two – paragraph II.p.2.ii of this appendix) receives
a weight of 50 percent.
- Using the point values – “Outstanding”
(10 points); “High Satisfactory” (7 points); “Low
Satisfactory” (6 points); “Needs to Improve” (3
points); “Substantial Noncompliance” (0 points) –
the bank’s Community Development Financing Test conclusion at
the institution level is a “High Satisfactory”: (0.50
weight × 7.5 points for the weighted average of the performance
scores corresponding to the bank’s facility-based assessment
area conclusions nationwide) + (0.50 weight × 6 points for the
bank score for metrics and benchmarks analysis and review of the impact
and responsiveness of the bank’s community development loans
and community development investments nationwide) results in a performance
score of 6.75, which is closest to the point value (7) associated
with “High Satisfactory.”
III. Community Development
Financing Test for Limited Purpose Banks in Section 228.26—Calculations
for Metrics and BenchmarksThe calculations
for metrics and benchmarks for Community Development Financing Test
for Limited Purpose Banks in section 228.26 are provided in this section.
Additional information regarding relevant calculation components is
set forth in paragraph I.a of this appendix.
a. Limited Purpose Bank Community Development Financing
Metric. The Board calculates the Limited Purpose Bank Community
Development Financing Metric provided in section 228.26 by:
1. Summing the bank’s annual dollar
volume of community development loans and community development investments
that benefit or serve the nationwide area for each year in the evaluation
period.
2. Summing the
bank’s annual dollar volume of the assets for each year in the
evaluation period.
3.
Dividing the result of paragraph III.a.1 of this appendix by the result
of paragraph III.a.2of this appendix.
b. Nationwide Limited Purpose Bank Community
Development Financing Benchmark. The Board calculates the Nationwide
Limited Purpose Bank Community Development Financing Benchmark by:
1. Summing the annual dollar volume of
community development loans and community development investments
of depository institutions designated as limited purpose banks or
savings associations pursuant to 12 CFR 25.26(a) or designated as
limited purpose banks pursuant to section 228.26(a) or 12 CFR 345.26(a)
reported pursuant to section 228.42(b) or 12 CFR 25.42(b) or 345.42(b)
that benefit or serve all or part of the nationwide area for each
year in the evaluation period.
2. Summing the annual dollar volume of
assets of depository institutions designated as limited purpose banks
or savings associations pursuant to 12 CFR 25.26(a) or designated
as limited purpose banks pursuant to section 228.26(a) or 12 CFR 345.26(a)
that reported community development loans and community development
investments pursuant to section 228.42(b) or 12 CFR 25.42(b) or 345.42(b)
for each year in the evaluation period.
3. Dividing the result of paragraph III.b.1
of this appendix by the result of paragraph III.b.2 of this appendix.
c. Nationwide
Asset-Based Community Development Financing Benchmark. The Board
calculates the Nationwide Asset-Based Community Development Financing
Benchmark by:
1. Summing the annual dollar
volume of community development loans and community development investments
of all depository institutions that reported pursuant to section 228.42(b)
or 12 CFR 25.42(b) or 345.42(b) that benefit or serve all or part
of the nationwide area for each year in the evaluation period.
2. Summing the annual dollar
volume of assets of all depository institutions that reported community
development loans and community development investments pursuant to
section 228.42(b) or 12 CFR 25.42(b) or 345.42(b) for each year in
the evaluation period.
3. Dividing the result of paragraph III.c.1 of this appendix by the
result of paragraph III.c.2 of this appendix.
d. Limited Purpose Bank Community
Development Investment Metric. The Board calculates the Limited
Purpose Bank Nationwide Community Development Investment Metric, provided
in section 228.26(f)(2)(iii), for the nationwide area by:
1. Summing the bank’s annual dollar
volume of community development investments, excluding mortgage-backed
securities, that benefit or serve the nationwide area for each year
in the evaluation period.
2. Summing the bank’s annual dollar volume of assets for each
year in the evaluation period.
3. Dividing the results of paragraph III.d.1
of this appendix by the results of paragraph III.d.2 of this appendix.
Example B-17: The bank has a three-year
evaluation period. The bank’s annual dollar volumes of community
development investments (excluding mortgage-backed securities) that
benefit or serve the nationwide area are $62 million (year 1), $65
million (year 2), and $73 million (year 3). The sum of the bank’s
annual dollar volumes of community development investments that benefit
or serve the nationwide area conducted by the bank is therefore $200
million. The bank’s annual dollar volumes of assets in the bank
are $2.4 billion (year 1), $2.7 billion (year 2), and $2.9 billion
(year 3). The sum of the bank’s annual dollar volumes of assets
in the bank over the evaluation period is therefore $8 billion. For
the evaluation period, the Bank Nationwide Community Development Investment
Metric would be $200 million divided by $8 billion, or 0.025 (equivalently,
2.5 percent).
Figure 27. DISPLAY EQUATION
$$
\frac{\textit{Bank's community development investments nationwide }($200\textit{ million})}{ \textit{Assets in the bank }($8\textit{ billion})} = \textit{Nationwide Community Development Investment Metric }(2.5\%)
$$
e. Nationwide
Asset-Based Community Development Investment Benchmark. The Board
calculates the Nationwide Asset-Based Community Development Investment
Benchmark, provided in section 228.26(f)(2)(iv), by:
1. Summing the annual dollar volume of
community development investments, excluding mortgage-backed securities,
of all depository institutions that had assets greater than $10 billion,
as of December 31 in both of the prior two calendar years, that benefit
or serve all or part of the nationwide area for each year in the evaluation
period.
2. Summing the
annual dollar volume of assets of all depository institutions that
had assets greater than $10 billion, as of December 31 in both of
the prior two calendar years, for each year in the evaluation period.
3. Dividing
the result of paragraph III.e.1 of this appendix by the result of
paragraph III.e.2 of this appendix.
Example B-18: The applicable benchmark uses a three-year evaluation
period. The annual dollar volumes of community development investments
(excluding mortgage-backed securities) that benefit or serve the nationwide
area for all depository institutions that had assets greater than
$10 billion are $35 billion (year 1), $37 million (year 2), and $38
billion (year 3). The sum of the annual dollar volumes of community
development investments that benefit or serve the nationwide area
conducted by all depository institutions that had assets greater than
$10 billion is therefore $110 billion. The annual dollar volumes of
assets in all depository institutions that had assets greater than
$10 billion are $1.8 trillion (year 1), $2.1 trillion (year 2), and
$2.1 trillion (year 3). The sum of the annual dollar volumes of assets
in all depository institutions that had assets greater than $10 billion
is therefore $6 trillion. For the evaluation period, the Nationwide
Asset-Based Community Development Investment Benchmark would be $110
billion divided by $6 trillion, or 0.0183 (equivalently, 1.83 percent).
Figure 28. DISPLAY EQUATION
$$
\frac{\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\textit{Community development investments} \\ \textit{nationwide by depository institutions with assets greater than }$10\textit{ billion }($110\textit{ billion})}{ \textit{Assets of depository institutions with assets greater than }$10 \textit{ billion }($6\textit{ trillion})} \\= \textit{Nationwide Asset} - \textit{Based Community Development Investment Benchmark }(1.83\%)
$$
The Board calculates
component one of the combined performance score, as set forth in paragraph
II.p.2.i of this appendix, for the Community Development Financing
Test in section 228.24 and a performance score for the Community Development
Services Test in section 228.25 in each state, multistate MSA, and
the nationwide area, as applicable, as described in this section.
a. The Board translates the Community Development
Financing Test and the Community Development Services Test conclusions
for facility-based assessment areas into numerical performance scores,
as follows:
| Conclusion |
Performance score |
| Outstanding |
10 |
| High Satisfactory |
7 |
| Low Satisfactory |
6 |
| Needs to Improve |
3 |
| Substantial Noncompliance |
0 |
b. The Board calculates the weighted average
of facility-based assessment area performance scores for a state or
multistate MSA, as applicable, and for the institution. For the weighted
average for a state or multistate MSA, the Board considers facility-based
assessment areas in the state or multistate MSA pursuant to section
228.28(c). For the weighted average for the institution, the Board
considers all of the bank’s facility-based assessment areas.
Each facility-based assessment area performance score is weighted
by the average the following two ratios:
1. The ratio measuring the share of the
deposits in the bank in the facility-based assessment area, calculated
by:
i. Summing, over the years in the evaluation
period, the bank’s annual dollar volume of deposits in the facility-based
assessment area.
ii.
Summing, over the years in the evaluation period, the bank’s
annual dollar volume of deposits in all facility-based assessment
areas in the state, in the multistate MSA, or for the nationwide area,
as applicable.
iii.
Dividing the result of paragraph IV.b.1.i of this appendix by the
result of paragraph IV.b.1.ii of this appendix.
For a bank that reports deposits data pursuant to section
228.42(b)(3), the bank’s annual dollar volume of deposits in
a facility-based assessment area is the total of annual average daily
balances of deposits reported by the bank in counties in the facility-based
assessment area for that year. For a bank that does not report deposits
data pursuant to section 228.42(b)(3), the bank’s annual dollar
volume of deposits in a facility-based assessment area is the total
of deposits assigned to facilities reported by the bank in the facility-based
assessment area in the FDIC’s Summary of Deposits for that year.
2. The ratio measuring
the share of the bank’s loans in the facility-based assessment
area, based on the combination of loan dollars and loan count, as
defined in section 228.12, calculated by dividing:
i. The
bank’s closed-end home mortgage loans, small business loans,
small farm loans, and, if a product line for the bank, automobile
loans in the facility-based assessment area originated or purchased
during the evaluation period; by
ii. The bank’s closed-end home
mortgage loans, small business loans, small farm loans, and, if a
product line for the bank, automobile loans in all facility-based
assessment areas in the state, in the multistate MSA, or for the nationwide
area, as applicable, originated or purchased during the evaluation
period.
