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VIEWS: 49 PAGES: 17

									         NEW YORK STATE BANKING DEPARTMENT
                      CONSUMER SERVICES DIVISION
                             2 Rector Street
                           New York, NY 10006



                           PUBLIC SUMMARY




               COMMUNITY REINVESTMENT ACT
                 PERFORMANCE EVALUATION



            Date of Evaluation:    December 31, 2000


                    Institution:   Pathfinder Bank
                                   214 West First Street
                                   Oswego, NY 13126




Note:   This evaluation is not an assessment of the financial condition
        of this institution. The rating assigned does not represent an
        analysis, conclusion or opinion of the New York State Banking
        Department concerning the safety and soundness of this
        financial institution.
                                     TABLE OF CONTENTS


                                                                                                  Section
General Information .................................................................................         1
Overview of Institution’s Performance.....................................................                    2
Performance Context...............................................................................            3
              Institution’s Profile
              Assessment Area
Performance Standards and Assessment Factors ...............................                                  4
              Loan-to-Deposit Analysis
             Proportion of Lending Within Assessment Area
             Geographic Distribution of Lending
             Borrower Distribution of Lending
             Action Taken in Response to Written Complaints
                 With Respect to CRA
             Services
            Discrimination or Other Illegal Practices
            Process Factors
             Other Factors
Exhibits ..................................................................................................   5
Glossary ..................................................................................................   6




                                                       i
                                GENERAL INFORMATION


This document is an evaluation of the Community Reinvestment Act (“CRA”) performance of
Pathfinder Bank formerly Oswego County Savings Bank (“OCSB”), prepared by the New York
State Banking Department. The evaluation represents the Banking Department’s current
assessment and rating of the institution’s CRA performance based on an evaluation
conducted as of December 31, 2000.

Section 28-b of the New York State Banking Law, as amended, requires that when evaluating
certain applications, the Superintendent of Banks shall assess a banking institution’s record
of helping to meet the credit needs of its entire community, including low and moderate income
areas, consistent with safe and sound operations.

Part 76 of the General Regulations of the Banking Board implements Section 28-b and further
requires that the Banking Department assess the CRA performance records of regulated
financial institutions. Part 76 establishes the framework and criteria by which the Department
will evaluate the performance. Section 76.5 further provides that the Banking Department will
prepare a written report summarizing the results of such assessment and will assign to each
institution a numerical CRA rating based on a 1 to 4 scoring system. The numerical scores
represent an assessment of CRA performance as follows:

          (1)   outstanding record of meeting community credit needs;

          (2)   satisfactory record of meeting community credit needs;

          (3)   needs to improve record of meeting community credit needs; and

          (4)   substantial noncompliance in meeting community credit needs.

Section 76.5 further requires that the CRA rating and the written summary be made available
to the public (“Evaluation”). Evaluations are primarily based on a review of performance tests
and standards described in Section 76.7 and detailed in Sections 76.8 – 76.13. The tests
and standards incorporate the 12 assessment factors contained in Section 28-b of the New
York State Banking Law.

For explanation of technical terms used in this report, please consult the GLOSSARY at the
back of this document.




                                             1-1
                   OVERVIEW OF INSTITUTION’S PERFORMANCE

Pathfinder Bank is rated “2“, indicating a “satisfactory” record of helping to meet community
credit needs.
• According to Uniform Bank Performance Reports, the bank’s average loan-to-deposit ratio
    for the year ending 2000 was 91.1%, higher than the peer group’s average of 85.8%.
• Pathfinder Bank‘s assessment area lending meets performance standards and is rated
    “satisfactory”. The bank originated 80.2% of its HMDA-reportable loans within its
    assessment area in 1999 and 56.4% in 2000.
•   Pathfinder Bank’s LMI area lending barely meets performance standards, and is rated
    "low-satisfactory". Of the total HMDA-reportable loans originated by the bank in 1999, 32
    (10.9%) were extended in LMI areas. This level falls below the aggregate’s 14.3%. For the
    year 2000, the bank extended 10.1% of its HMDA-reportable loans in LMI areas (see
    Exhibits 2 and 4). The aggregate data for year 2000 is not yet available. The bank’s
    record of lending in LMI areas has been declining since 1997. This decline, however, is
    somewhat mitigated by the remarkable improvement in the bank’s record of lending to LMI
    individuals.
•   Distribution of HMDA-reportable loans by borrower income in 1999 and 2000 is low but
    improving. A review of Exhibit 1 (Page 5-1) reveals that in 1999 the bank extended 23.0%
    of its HMDA-reportable loans to LMI individuals within its assessment area. This falls
    below the aggregate’s 32.8% level of lending to LMI individuals. Loan origination to
    middle- and upper-income individuals were 28.5% and 48.5%, respectively, compared to
    the aggregate’s 27.6% and 36.3% levels.
• Pathfinder Bank actively participates in local community development and redevelopment
    programs and projects. For this evaluation period, the bank’s community development
    loan commitments totaled $3.0 million, indicating an outstanding level relative to the bank’s
    asset size.
• The New York State Banking Department received no CRA related complaints since the
    prior Evaluation.

This Evaluation was conducted based on a review of 12 assessment factors set forth in
Section 28-b of the New York State Banking Law and Part 76 of the General Regulations of
the Banking Board.




                                              2-1
                               PERFORMANCE CONTEXT

Institution’s Profile
Chartered in 1859, Pathfinder Bank, formerly OCSB, is a small community savings bank in
Oswego, New York. The bank is a subsidiary of Pathfinder Bancorp, a public bank holding
company, which is approximately 54% owned by Pathfinder Bancorp MNC, a mutual holding
company, and 46% owned by public shareholders. As of December 31, 2000, the bank
reported total assets of $233.7 million. Pathfinder Bank operates five full-service banking
offices in Oswego County, including the main office. Two branches are in the city of Oswego
and one each in the cities of Mexico and Fulton. In addition to two remote locations, all branch
offices house Automated Teller Machines (ATMs).

For the calendar year ended 12/31/2000, Pathfinder Bank reported total loans of $151 million
and total deposits of $164 million, resulting in a loan-to-deposit ratio of 92.1%, which is above
its peer group average of 85.8%. The bank is primarily a residential real estate lender.
Pathfinder Bank reported 71.3% of its loan portfolio in real estate loans, 16.6% in commercial
real estate loans, and 2.6% in consumer loans. Pathfinder Bank’s home county provides 96%
of the bank’s deposits according the latest available comparative deposit data, dated June
30, 1998.

Assessment Area
The bank’s assessment area encompasses a portion of Oswego County (the cities of Oswego
and Fulton, as well as the adjoining townships of Granby, Mexico, New Haven, Oswego,
Scriba and Volney), where it has a branch presence. The assessment area includes 16
census tracts, of which 3 (18.7%) are low- to moderate-income.

Pathfinder Bank’s market area appears rural in nature, but is supported by a diversified
economic base consisting of services, merchandising and manufacturing. The major
employers in the assessment area are Niagara Mohawk, Alcan Aluminum and the New York
Power Authority. In addition, the State University of New York, College at Oswego, is a major
employer in the area in terms of University employment and the economic activity resulting
from servicing the university.

The assessment area appears reasonable based upon the location of branches and the
bank’s lending patterns. There is no evidence that LMI areas are arbitrarily excluded.




                                              3-1
           PERFORMANCE STANDARDS AND ASSESSMENT FACTORS
The institution offers a wide variety of lending products including:
•   Residential mortgages;
•   Construction loans for single family residential units;
•   Home Equity loans or lines of credit;
•   Home Improvement loans;
•   Secured and unsecured consumer loans;
•   Student loans;
•   Commercial loans; and
•   Commercial mortgages.

In addition, the bank offers mortgages with Private Mortgage Insurance (“PMI”). This product
allows customers to obtain mortgage financing with only 5% minimum down payment.

According to the bank’s December 31, 1999 and December 31, 2000 Call Reports, the
following breakdown reflects the composition of the bank’s loan portfolio:

                      TOTAL GROSS LOANS OUTSTANDING
       LOAN TYPE                             12/31/2000         12/31/1999
                                          $ (‘000)    %      $ (‘000)    %
       Residential Mortgages               107,862      71.3   97,489     73.4
       Commercial Mortgages                  25,131     16.6   20,652     15.6
       Multifamily Mortgages                   1,602     1.1     1,677     1.3
       Consumer Loans                          3,869     2.6     3,495     2.6
       Agricultural Loans                          0     0.0          0    0.0
       Commercial & Industrial               12,683      8.4     9,362     7.1
       Other Loans                                 0     0.0          0    0.0

       Total Gross Loans                 $ 151,147      100.0 $ 132,675    100.0

As of December 31, 2000, total gross loans were $151.1 million, representing an increase of
13.9% from $132,675 million as of December 31, 1999. Residential mortgage loans
accounted for 77.3% of the loan portfolio, reflecting the bank’s primary business focus.

In year 2000, Pathfinder Bank processed 310 HMDA-reportable loan applications for $24.1
million and originated 287 (92.6%) for $22.8 million (94.6%). In 1999, the bank processed 330
HMDA-reportable loan applications for $23.3 million, and originated 293 (88.2%) totaling
$21.0 million (90.1%).




                                              4-1
Governmentally insured, guaranteed or subsidized loan programs for housing, small
business or small farms:
Pathfinder Bank’s participation in governmentally insured, guaranteed, or subsidized loan
programs for housing, small business or small farms includes:
Small Business Administration (“SBA”): The bank participates in the Small Business
Administration (“SBA”) guaranteed loan programs, including the “Low–Doc1 “ program. Since
1999, the bank originated $562 thousand worth of small business loans through this program.

Community Development
Pathfinder Bank actively participates in local community development and redevelopment
programs and projects. For the current evaluation period, community development loan
commitments totaled $850 thousand, with $1.3 million outstanding as of the Evaluation Date.
 Following is a brief description of these programs and projects:
New York Business Development Corporation (“NYBDC”) –The NYBDC is a privately
owned entity created by New York State statute and funded by both commercial and savings
banks under Lines of Credit, typically at LIBOR based rate, that are utilized to provide a broad
range of financing to small and mid-sized businesses located in New York State. Pathfinder
Bank provides referrals and loan funds.

Affordable Home Ownership Program - The bank participates in the Affordable Home
Ownership Programs of the Community Development Office of the cities of Oswego and
Fulton. The Home Ownership Program provides grants to bridge the gap between the actual
cost of a house and the amount, which the prospective borrower can afford. The amount of
the grant for which the participant qualifies is based on both the purchase price and the
applicant’s ability to pay. The estimated average grant, per household, is $15 thousand.
Applicants must meet the following guidelines:
•   two or more persons in the household,
•   minimum household income of $16.5 thousand, and
•   a maximum income of 80%2 of the median income.
In addition, applicants are required to attend pre- and post-closing homeownership counseling
sessions. For loans to program participants, the bank waives both the application fee and
points. In 1999, the bank increased its commitment to $257 thousand per year, and for year
2000, increased the commitment by $250 thousand for first time homebuyer mortgages for
qualified buyers.

Micro Enterprise Loan Program (“MELP”) - MELP, in conjunction with the community
development office of the City of Oswego, provides opportunities for new and growing small
businesses with 1-5 employees within the cities of Oswego and Fulton. Services provided by
MELP include (1)In-depth Business Plan Training, (2)Personal counseling assistance, and
(3)
   Working Capital and Start-Up loans from $500-$7,500. In order to qualify for a micro loan,

1 The Low Documentation Program of the SBA.
2
  Eighty percent of the median income limits the assistance to low- and moderate-income applicants.


                                                   4-2
a business plan is required. Additionally, all participants must commit either to start a new,
or expand an existing, business within the city limits of Oswego. Graduates from the micro-
enterprise training program must either have, or commit to hiring, low- to moderate-income
individuals to at least 51% of total staff. Pathfinder Bank has committed $100 thousand
annually for people who successfully complete the program and meet the City’s qualifications.


Oswego County Department of Planning & Community Development (“OCDPCD”):
Pathfinder Bank committed $750 thousand for housing rehabilitation loans within targeted
areas of Oswego County. These loans will be extended to qualified borrowers who are
partially eligible for HUD assistance due to income levels in excess of grant standards, and/or
in conjunction with the proposed grant money.

Loan-to-Deposit Analysis
According to Uniform Bank Performance Reports, the bank’s average loan-to-deposit ratio
for four quarters ended December 31, 2000 was 91.07%, higher than the peer group average
of 85.83%. Such a ratio indicates the bank’s high level of responsiveness to community credit
needs.

Proportion of Lending Within Assessment Area
For the year 2000, 56.4% of total loans originated was within the assessment area. For 1999,
80.2% of total loan origination was within the assessment area. This is considered satisfactory
performance.

Geographic Distribution of Lending
Pathfinder Bank’s LMI area lending barely meets the performance standards, and is rated
"low-satisfactory". Of the total HMDA-reportable loans originated by the bank in 1999, 10.9%
(32) was extended in LMI areas. This percentage falls below the aggregate’s 14.3%. For
year 2000, the bank originated 10.1% of its HMDA-reportable loans in LMI areas (See
Exhibits 2 and 4). The aggregate data for 2000 is not yet available. The bank’s record for
lending in LMI areas has been declining since 1997. This is somewhat mitigated by the
bank’s improving record of lending to LMI individuals.

Borrower Distribution of Lending
Exhibits 1 (Page 5-1) and 3 (Page 5-2) illustrate the distribution of HMDA-reportable loans by
borrower income in 1999 and 2000. A review of Exhibit 1 reveals that in 1999, the bank
extended 23.0% of its HMDA-reportable loans to LMI individuals within its assessment area.
 This falls below the aggregate’s 32.8%. Loan origination to middle- and upper-income
individuals were 28.5% and 48.5%, respectively, compared to the aggregate’s 27.6% and
36.3% respectively.

For the year 2000, the bank extended 33.3% of its HMDA-reportable loans to LMI individuals
living inside its assessment area. This percentage is an improvement over the previous year.


                                             4-3
HMDA loans originated to middle- and upper-income individuals in both years were 25.9%
and 40.7%, respectively. Aggregate data for 2000 is not yet available.
Action Taken In Response to Written Complaints With Respect to CRA
There were no CRA related complaints received since the last examination.

Services
Pathfinder Bank operates five full-service banking offices in Oswego County, including a main
office and two branches in Oswego City, one branch office in Mexico and another in Fulton
City. Three out of five branches (66.7%) are located in low- to moderate-income census
tracts. Each branch is equipped with an ATM. In addition, the bank has two ATMs: one at
Sunrise Food Store, in Mexico, and another at Dunkin Donuts, in Pulaski.

All banking offices offer convenient banking hours, including extended hours on Thursdays and
Fridays for lobby, drive-up facilities, and walk-up windows. On Mondays and Tuesdays, the
main office walk-up window closes at 5:30 P.M.

Pathfinder Bank’s banking facilities and business hours seem tailored to the convenience and
needs of its community.

Several bank officers serve as board members or trustees of various organizations including
the Oswego Hospital, Oswego Port Authority, New York Business Development Industry
Center at SUNY Oswego, Oswego Foundation, American Cancer Society, Riverside
Cemetery Association, Habitat for Humanity, The United Way, YMCA, Salvation Army, and
Zonta.

The bank also offers speakers to organizations, and provides teaching services to local
schools.

The bank’s East Side office provides office space to the Retired Senior Citizens Volunteer
Program, which offers free income tax services to senior citizens.

Discrimination or Other Illegal Practices
Any practices intended to discourage applications for types of credit set forth in the
banking institution’s CRA Public File.
There were no practices noted that were intended to discourage applications for the types of
credit offered by the institution.




                                            4-4
Evidence of prohibited discriminatory or other illegal credit practices.
The most recent regulatory compliance report indicates a satisfactory record of performance
in terms of adherence to anti-discrimination or other applicable laws and regulations. No
evidence of prohibited discrimination or other illegal credit practices was noted.

Process Factors
Activities conducted by the banking institution to ascertain the credit needs of its
community, including the extent of the banking institution’s efforts to communicate
with members of its community regarding the credit services being provided by the
banking institution.
Pathfinder Bank ascertains the credit needs of its local community through bank personnel and
members of the board of directors. They are regularly involved in various local community
organizations, committees, and non-profit groups like the New York Business Development
Industry Center at State University of New York (SUNY) Oswego, Waterfront Revitalization
Committee, Oswego Port Authority, Oswego Hospital, New Horizon Fair Housing Taskforce,
Oswego Foundation at SUNY Oswego, and the Oswego County Chamber of Commerce. In
addition, all employees are encouraged to establish and maintain contact with local residents,
public officials, local municipalities, businesses, and civic groups.

The extent of the banking institution’s marketing and special credit-related programs
to make members of the community aware of the credit services offered by the
banking institution.
The bank’s marketing program seems to be designed to reach all segments in its assessment
area. Local newspapers, radio and television stations are primarily utilized to advertise the
bank’s products and services. The bank advertises in local newspapers several times a
month. The radio and television stations are occasionally utilized for specific promotions.
Other advertising efforts include publications of local associations, community festivals and
events, area societies, and area schools.

The bank’s overall advertising efforts appear adequate and seem to reach all segments of the
assessment area, including low- and moderate–income geographies.

The extent of participation by the banking institution’s board of directors in
formulating the banking institution’s policies and reviewing its performance with
respect to the purposes of the Community Reinvestment Act.
The board of directors takes an active role in formulating the bank’s CRA policies. All
members of the Board of Directors are local businessmen who live within the bank’s
assessment area. Through contact with various local community organizations and
businesses, board members identify local community credit needs. The CRA Statement is
reviewed, on an annual basis, and changes are incorporated when necessary.




                                             4-5
Other Factors
Other factors that in the judgement of the Superintendent and Banking Board, bear
upon the extent to which a banking institution is helping to meet the credit needs of
its entire community.
The bank has a policy of cashing pension or Social Security (SSA and SSI) checks for non-
customers at no charge.




                                          4-6
                                                          EXHIBITS


Exhibit 1
                              Residential Real Estate Loans - Year 1999
                                     By Borrower Income Level*
Borrower                  Total Lending          Assessment Area Lending                                   Aggregate**
Income           Applications           Origination         Applications            Origination            Origination
Level
                  #          %           #          %          #            %          #          %         #          %
Low                 20         6.1        17          5.8        17           6.4       15          6.4         148     9.4
Moderate            59        17.9        48         16.4        49          18.6       39         16.6         368    23.4
Middle              88        26.7        83         28.3        72          27.3       67         28.5         435    27.6
Upper              161        48.8       143         48.8       126          47.7      114         48.5         571    36.3
N/A                  2         0.6         2          0.7                     0.0                   0.0          53     3.4

Total              330       100.0       293        100.0       264         100.0      235        100.0     1,575     100.0
*        Borrower income level is based upon the Department of Housing and Urban Development’s annual
         estimate of median family income figure for the MSA of the mortgaged property. Low income is defined
         as <50% of the MSA median, moderate-income is 50% to <80%, middle-income is 80% to <120%, and
         upper-income is at least 120%.
**       The term “Aggregate” refers to loans originated in the bank’s assessment area by all HMDA reporting
         lenders.

Exhibit 2
                               Residential Real Estate Loans - Year 1999
                                      By Geography Income Level*
Geography                    Total Lending          Assessment Area Lending                                Aggregate
Income            Applications           Origination            Applications           Origination         Origination
Level
                      #        %             #        %            #            %          #        %       #         %
Low                    -          0.0         -          0.0          -          0.0        -        0.0       -        0.0
Moderate               36        10.9         32        10.9          26         9.8        22       9.4      225      14.3
Middle                276        83.6        244        83.3         229        86.7       204      86.8    1,303      82.7
Upper                  16         4.8         15         5.1            9        3.4          9      3.8       47       3.0
N/A                      2        0.6           2        0.7          -          0.0                 0.0                0.0

Total                 330     100.0          293     100.0           264      100.0        235 100.0        1,575     100.0

•    Geography income level is based upon 1990 Census data on median family income figure for the MSA of the
     mortgaged property. Low income is defined as <50% of the MSA median, moderate income is 50% to <80%,
     middle income is 80% to <120%, and upper income is at least 120%.




     Exhibit 3

                                                               5-1
           Residential Real Estate Loans - Year 2000
                   By Borrower Income Level*
Borrower        Total Lending         Assessment Area Lending
Income   Applications Origination Applications       Origination
Level      #      %       #    %       #     %       #       %
Low          21    6.8      20   7.0     14   7.9      13       8.0
Moderate     68 21.9        62 21.6      45 25.3       41      25.3
Middle       75 24.2        65 22.6      49 27.5       42      25.9
Upper      145 46.8       139 48.4       70 39.3       66      40.7
N/A           1    0.3       1   0.3          0.0        -      0.0

Total             310 100.0          287 100.0          178 100.0          162       100.0
*    Borrower income level is based upon the Department of Housing and Urban
     Development’s annual estimate of median family income figure for the MSA of the
     mortgaged property. Low income is defined as <50% of the MSA median, moderate
     income is 50% to <80%, middle income is 80% to <120%, and upper income is at least
     120%.


Exhibit 4
           Residential Real Estate Loans - Year 2000
                 By Geography Income Level*
Geography       Total Lending          Assessment Area Lending
Income    Applications Origination Applications Origination
Level       #      %      #      %      #     %      #     %
Low           1     0.3      1     0.3     -    0.0     -    0.0
Moderate             29       9.4       28       9.8       13       7.3        12       7.4
Middle              243      78.4      223      77.7      157      88.2       142      87.7
Upper                36      11.6       34      11.8        8       4.5         8       4.9
N/A                   1       0.3        1       0.3                0.0         -       0.0

Total               310 100.0          287 100.0          178 100.0           162 100.0
*    Geography income level is based upon 1990 Census data on median family income figure for
     the MSA of the mortgaged property. Low income is defined as <50% of the MSA median,
     moderate income is 50% to <80%, middle income is 80% to <120%, and upper income is at
     least 120%.




                                                 5-2
                                        GLOSSARY


Aggregate
The cumulative lending by all HMDA-reporting lenders in the same geographic area under
evaluation.

Community Development
The term “community development” is defined to mean:
1. Affordable housing (including multifamily housing) for low- or moderate-income (“LMI”)
   individuals;
2. Community services targeted to LMI individuals;
3. Activities that promote economic development by financing business or farms that meet
   the size eligibility standards of the United States Small Business Administration (“SBA”)
   Development Company or Small Business Investment Company programs, or have gross
   annual incomes of $1 million or less;
4. Activities that revitalize or stabilize LMI geographies; and
5. Activities that seek to prevent defaults and/or foreclosures in loans included in (1)
   and (3), above.

A “community development loan” is defined as a loan that has as its primary purpose
community development. This includes, but is not limited to, loans to:
•   Borrowers for affordable housing rehabilitation and construction, including construction and
    permanent financing for multifamily rental property serving low or moderate income (“LMI”)
    persons;
•   Nonprofit organizations serving primarily LMI or other community development needs;
•   Borrowers to construct or rehabilitate community facilities that are located in LMI areas or
    that primarily serve LMI individuals;
•   Financial intermediaries including community development financial institutions, community
    development corporations, minority- and women-owned financial institutions, community
    loan funds or pools, micro-finance institutions, and low-income or community development
    credit unions that primarily lend or facilitate lending to promote community development;
•   Local, state and tribal governments for community development activities; and
•   Borrowers to finance environmental clean up or redevelopment of an industrial site as part
    of an effort to revitalize the LMI community in which the property is located.

A “qualified investment” is defined as a lawful investment, deposit, membership share or grant
that has as its primary purpose community development. This includes but is not limited to
investments, deposits, membership shares or grants in or to:
•   Financial intermediaries (including community development financial institutions,
    community development corporations, minority- and women-owned financial institutions,
    community loan funds, micro-finance institutions and low-income or community
    development credit unions) that primarily lend or facilitate lending in LMI areas or to LMI


                                              6-1
    individuals in order to promote community development;
•   Organizations engaged in affordable housing rehabilitation and construction;
•   Organizations, including, for example, small business investment corporations that promote
    economic development by financing small businesses;
•   Facilities that promote community development in LMI areas or LMI individuals, such as
    youth programs, homeless centers, soup kitchens, health care facilities, battered women’s
    centers, and alcohol and drug recovery centers;
•   Projects eligible for low-income housing tax credits;
•   State and municipal obligations, such as revenue bonds that specifically support affordable
    housing or other community development needs;
•   Organizations serving LMI housing or other community development needs, such as
    counseling for credit, home ownership, home maintenance, and other financial services
    education; and
•   Organizations supporting activities essential to the capacity of LMI individuals or
    geographies to utilize credit to sustain economic development, such as day care
    operations and job training programs that facilitate access to permanent jobs.

A “community development service” is defined as a service that has as its primary purpose
community development, is related to the provision of financial services, and has not been
considered in the evaluation of the banking institution's retail banking services. This includes
but is not limited to:
•   Providing technical assistance on financial matters to nonprofit, tribal or government
    organizations serving LMI housing or economic revitalization and development needs;
•   Providing technical assistance on financial matters to small businesses or community
    development organizations;
•   Lending employees to provide financial services for organizations facilitating affordable
    housing construction and rehabilitation or development of affordable housing;
•   Providing credit counseling, home buyers and home maintenance counseling, financial
    planning or other financial services education to promote community development and
    affordable housing;
•   Establishing school savings programs for LMI individuals;
•   Providing seminars for LMI persons on banking and bank account record-keeping;
•   Making ATM “Training Machines” available for extended periods at LMI community sites
    or at community facilities that serve LMI individuals; and
•   Technical assistance activities to community development organizations such as:
        v      Serving on a loan review committee;
        v      Developing loan application and underwriting standards;
        v      Developing loan processing systems;
        v      Developing secondary market vehicles or programs;
        v      Assisting in marketing financial services, including the development of
               advertising and promotions, publications, workshops and conferences;
        v      Furnishing financial services training for staff and management;
        v      Contributing accounting/bookkeeping services; and
        v      Assisting in fund raising, including soliciting or arranging investments.



                                              6-2
Demand-Adjusted Penetration Rate
The number of owner-occupied loans made by the institution (or aggregate as appropriate)
in a geographic area per thousand owner-occupied housing units in that area. Mathematically,
it is arrived at by dividing the number of owner-occupied housing units into the number of loans
made and then multiplying by 1,000.

Demand-Adjusted Penetration Ratio
A ratio that depicts geographic penetration of loans by comparing demand-adjusted lending
in LMI areas with non-LMI areas. Mathematically, it is arrived at by dividing the demand-
adjusted penetration rate in non-LMI areas into the demand-adjusted penetration rate in LMI
areas and then expressed as a percentage.

A ratio of 100% means that the institution (or aggregate as appropriate) made an equal
number of loans proportionally in LMI and non-LMI areas. Less than 100 percent would
indicate less lending in LMI areas on the same basis compared to non-LMI areas, whereas
over 100 percent would indicate a greater level of lending in LMI areas versus non-LMI areas.

Home Mortgage Disclosure Act (“HMDA”)
The Home Mortgage Disclosure Act, enacted by Congress in 1975, and subsequently
amended, requires institutions to annually report data about applications for residential
(including multifamily) financing.

Loans to Small Businesses
Small business loans to businesses with gross annual revenues of $1 million or less.

Low or Moderate Income (“LMI”) Geographies
Those census tracts or block numbering areas (“BNAs”), where, according to the 1990 US
Census, the median family income is less than 80% of the area median family income. In the
case of tracted areas that are part of a Metropolitan Statistical Area (“MSA”) or Primary
Metropolitan Statistical Area (“PMSA”), this would relate to the median family income for the
MSA or PMSA in which the tracts are located. In the case of BNAs and tracted areas that are
not part of a MSA or PMSA, the area median family income would be the statewide
nonmetropolitan median family income.

LMI Borrowers
Borrowers whose income, as reported on the loan application which the lender relied upon in
making the credit decision, is less than 80% of the area median family income. In the case
where the residential property is located in a MSA or PMSA, this would relate to the median
family income for that MSA or PMSA. Otherwise, the area median family income would be
the statewide nonmetropolitan median family income. In all instances, the area median family
incomes used to measure borrower income levels are updated annually by the U.S.
Department of Housing and Urban Development (“HUD”).



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LMI Individuals/Persons
Those individuals, whose income is less than 80% of the area median family income. In the
case where the individual resides in a MSA or PMSA, this would relate to the median family
income for that MSA or PMSA. Otherwise, the area median family income would be the
statewide nonmetropolitan median family income. In all instances, the area median family
incomes used to measure individual income levels are updated annually by HUD.

Small Business Loans
Loans to businesses with original amounts of $1 million or less.




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