Regulators recently released the 2016 updated list ofunderserved and distressed census tracts for banks looking to receive CommunityReinvestment Act credit for revitalization or stabilization activities.
The largest underserved or remote rural nonmetropolitanmiddle-income geographies are located in the Midwest and West. An underservedcommunity is one where the population size, density and dispersion are smallenough that there is a likelihood that financing the fixed costs of essentialcommunity needs may be difficult.
Distressed communities are categorized using three criteria:a poverty rate of 20% or more, an unemployment rate at least 1.5x the nationalaverage and population loss of 5% or more in the five-year period preceding themost recent census. Areas can be categorized using one, two or all three ofthese criteria.
The Midwest, in addition to having large underserved areas,also has large areas of population loss, particularly throughout the Dakotas,Nebraska and Kansas. Meanwhile, the South and Southwest have highconcentrations in all three categories, with poverty and unemployment prominentin New Mexico and Arizona, and all three categories present in much of theSouth.
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There are currently seven banks and thrifts that areoperating under a "substantial noncompliance" CRA rating: CottonwoodHeights, Utah-basedProficio Bank;Haughton, La.-based Tri-StateBank and Trust; Sandy, Utah-based ; Reynolds,Ill.-based Reynolds StateBank; Elizabeth, N.J.-based Union County Savings Bank; Philadelphia-based ; and Lemont, Ill.-based
Since S&P Global Market Intelligence's on CRA ratings,the FDIC assigned Proficio Bank a "substantial noncompliance" ratingand marked Nokomis, Ill.-based Nokomis Savings Bank as "needs to improve" onJuly 1. Nokomis was previouslyassigned a "substantial noncompliance" rating on March 1, 2015.
Proficio also received the first prompt corrective action directive of2016 from the FDIC, which labeled the bank "undercapitalized." In addition,the bank was hit with a $250,000 civil money penalty for violations of the Real EstateSettlement Procedures Act and Home Mortgage Disclosure Act. Proficio is asubsidiary of NHB HoldingsInc.
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Click here for a template that allows a user to compare the current and historical branch distribution of a base company with peers based on the census tract CRA income designations.
Click here to view a recorded video demo on best practices for bank branch analysis using SNL.
SNL combines bank branch data with demographic information, which can be accessed via the market demographics page under the U.S. market analysis section of a company's briefing book page on the SNL website or in SNLxl.