Real Estate Lenders Home Equity Line of Credit South

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					                               PUBLIC DISCLOSURE

                                DECEMBER 27, 2007


                            LANDMARK CREDIT UNION
                                    CERT #68050

                             131 ASHLAND STREET
                            NORTH ADAMS, MA 01247

                                DIVISION OF BANKS
                               ONE SOUTH STATION
                                BOSTON, MA 02110

NOTE:   This evaluation is not, nor should it be construed as, an assessment of the financial
        condition of this institution. The rating assigned to this institution does not
        represent an analysis, conclusion or opinion of the Division of Banks concerning the
        safety and soundness of this financial institution.
                               GENERAL INFORMATION

The Community Reinvestment Act (“CRA”) requires the Division of Banks (“Division”) to
use its authority when examining financial institutions subject to its supervision, to
assess the institution's record of meeting the needs of its entire assessment area,
including low- and moderate-income neighborhoods, consistent with safe and sound
operation of the institution. Upon conclusion of such examination, the Division must
prepare a written evaluation of the institution's record of meeting the credit needs of its
assessment area.

This document is an evaluation of the CRA performance of LANDMARK CREDIT
UNION (or the “Credit Union”) prepared by the Division, the institution's supervisory

INSTITUTION'S CRA RATING: This institution is rated “Satisfactory”

Landmark Credit Union’s CRA rating is based on five performance criteria of a small
institution, which are evaluated within the institution’s performance context. The Credit
Union’s satisfactory rating is based on:

   (1) an average net loan to deposit ratio of 64.8 percent;
   (2) a substantial majority of mortgage loans was granted within its assessment
   (3) a more than reasonable lending distribution among borrowers of different income
   levels for both mortgage and consumer loans;
   (4) reasonably distributed lending throughout the census tracts; and
   (5) Fair lending policies and procedures were found to be satisfactory.


Description of Institution

Landmark Credit Union was founded in 1940 to serve the employees of Sprague
Electric Company in North Adams, Massachusetts. In the mid-1980s, Sprague Electric
began downsizing and finally ceased operations in 1996. The Credit Union over the
years expanded its membership to include other Sprague Electric facilities and a
diverse group of local employers. The institution’s name officially changed in January
1996 to better reflect its membership.

Landmark Credit Union is located at 131 Ashland Street, North Adams. This full-service
office provides a drive-up teller window and drive-up 24-hour ATM service. Additionally,
the Credit Union operates a walk-up ATM during lobby hours and two freestanding
ATMs, one each located at North Adams Regional Hospital and at Allegro Microsystems
in Worcester. All the Credit Union’s ATMs are part of the NYCE, CIRRUS, and TX
networks. The machines, however, only dispense cash.

As of September 30, 2007, total assets were $29.7 million of which loans totaled $18.8
million, or 63.3 percent of total assets. Table 1 depicts the composition of the Credit
Union’s loan portfolio.

                                             Table 1
                            Loan Portfolio as of September 30, 2007
                  Types of Loans              $(in Thousands)       % of Total Loans
        Residential Real Estate
                1-4 Family Mortgages               11,502                  61.2
                Home Equity Lines/Loans              2,266                 12.1
        Consumer Loans
                Personal Unsecured                   1,182                  6.3
                New Auto Loans                       1,905                 10.1
                Used Auto Loans                      1,649                  8.8
        All Other Loans                                283                  1.5

       Total                                            18,798                   100.0%
      Source: National Credit Union Administration Quarterly 5300 Call Reports

First mortgage loans secured by 1-4 family dwellings represent the majority (61.2%) of
the loan portfolio. The second largest segment (18.9%) of the loan portfolio includes
new and used auto loans. Unsecured personal, home equity lines/loans, and all other
loans comprise the remaining portion of the loan portfolio.

The Division last conducted a CRA examination of Landmark Credit Union on January
14, 2002. This examination resulted in a Satisfactory CRA rating.

Description of Assessment Area

The Division’s CRA regulation requires that each financial institution delineate one or
more assessment areas within which the institution’s record of helping to meeting
community credit needs is evaluated. The Division’s CRA regulation further states that
“a credit union whose membership by-law provisions are not based on residence may
delineate its membership as its assessment area.”


Landmark Credit Union’s by-law provisions (revised on February 2003) state that
membership shall be limited to: (a) all current and former members; (b) all persons who
live, work or attend school in North Berkshire County, including Adams, Cheshire,
Clarksburg, Florida, North Adams, Savoy and Williamstown; (c) the immediate family
members of the prior groups; and (d) all current and future employees of Allegro
Microsystems in Worcester, MA.

For the purpose of this evaluation, Landmark Credit Union will be considered to have
two assessment areas. The first assessment area (Assessment Area Number One) is
defined geographically based on the municipalities of Adams, Cheshire, Clarksburg,
Florida, North Adams, Peru, Savoy, Williamstown and Windsor. The CRA regulation
requires that a geographically defined assessment area consist only of whole
geographies/census tracts. Consequently, the towns of Windsor and Peru were added
since they share a census tract with Clarksburg, Florida and Savoy. The second
assessment area (Assessment Area Number Two) is defined based on employment in
these municipalities and with Allegro Microsystems, Worcester.

Demographic and Economic Data for Assessment Area One

According to the 2000 U.S. Census, Landmark Credit Union’s Assessment Area
Number One consists of fourteen census tracts. The distribution of these fourteen
census tract geographies are as follows: moderate-income tracts (5); middle-income
tracts (8); and upper-income tracts (1). There are no low-income census tracts located
in the assessment area. By definition, the 2000 U.S. Census area median Family
Household Income (FHI) within the census tracts is defined as follows: low-income is
less than 50% of area median FHI; moderate-income is 50-79% of area median FHI;
middle income is 80%-119% of area median FHI; and upper-income is 120% or greater
of area median FHI.

In contrast to the prior CRA public evaluation where all of the towns were in non-MSAs,
the current assessment is situated in the Pittsfield, MA Metropolitan Statistical Area
(“MSA”). The Pittsfield MSA area median incomes were $60,450 and $61,200 in 2005
and 2006, respectively.

The assessment area’s total population is 40,078 who comprise 16,290 households of
which 62.9 percent are family households. The five moderate-income tract geographies
include 14,213 residents representing 35.5 percent of the total population and 39.5
percent of total households. The eight middle-income tract geographies include 21,172
residents representing a majority of the area’s total population (52.8%) and households
(54.1%). Lastly, the sole upper-income tract geography includes 4,693 residents
representing 11.7 percent of the total population and 6.4 percent of the total

Table 2 provides the assessment area’s distribution of households and housing units by
census tract income levels.


                                             Table 2.
               Housing Characteristics by Census Tract Income Category
Geographic                         Distribution by Percentage
Income         Census     Households Housing Owner-           Rental-   Vacant   Median
Category       Tracts                    Units    Occupied Occupied      Units    Home
                                                               Units              Value
Moderate          35.7        39.5          39.5       30.9      55.1     40.2    $90,581
Middle            57.1        54.1          53.9       62.2      39.4     51.7   $106,882
Upper              7.2         6.4           6.6        6.9       5.5      8.0   $229,800
Total or         100.0       100.0         100.0       58.2      31.4     10.4    111,209
Source: 2000 U.S. Census data

Housing stock within the assessment area is primarily 1-4 family residential units.
Based on the 2000 U.S. Census data, the median home value of the assessment area
is $111,209, while the median rental income is $436. The median age of the housing
stock is 51 years. A more recent figure was obtained using figures from the Warren
Group, publishers of the Bankers & Tradesman with market statistics through December
2007. According to this publication, the median selling price for a home in the assessment
area was $129,900. Prices in the assessment area ranged from a low of $79,500 in the
town of Florida to a high of $235,000 in the town of Williamstown.

In 2006, the top three mortgage lenders within the Credit Union’s Assessment Area One
were: (1) Greylock Federal Credit Union; (2) Adams Co-operative Bank; and (3)
Beneficial Mortgage Company.

Assessment Area Number Two

The second assessment area (Assessment Area Number Two) is defined on a non-
geographic basis by the Credit Union’s membership by-laws. Assessment Area two is
defined as all eligible members including non-residents employed in the North Berkshire
County municipalities and employees of Allegro Microsystems, Worcester, MA. The
Worcester MSA area median incomes or Family Household Incomes (FHI) were
$70,400 and $71,700 in 2005 and 2006, respectively.


1.                       LOAN-TO-SHARE ANALYSIS

This first criterion evaluates the level and trend of the Credit Union’s net loan-to-share
ratio. The average net loan-to-share ratio is 64.8 percent from March 31, 2005 through
September 30, 2007. Landmark Credit Union’s performance is considered reasonable
given the membership’s credit needs and the institution’s lending capacity. Graph 1
depicts the loan-to-share ratios for the quarters reviewed. The dotted line represents
the quarterly average ratio.

                                                                         Graph 1

                                                  Landmark Credit Union
                                              Net Loans-to-Deposits Ratio (%)
                                               March 2005 - September 2007

                         80.0%                                           71.3%
                                                                                   73.5%                  72.5%
                                                                                            69.6% 70.1%
                         70.0%                                                                                    62.9%
                                   60.7%           59.0% 60.4% 57.3%                                                      Average
     Net LTD Ratio (%)

                         60.0%             55.1%                                                                          Ratio: 64.8%

                         40.0%                                                                                              Ratio























                                                              Time Period (Quarterly)

Data Source: National Credit Union Administration Quarterly 5300 Call Reports

As Graph 1 depicts, the net loans-to-share ratio fluctuated considerably during the
eleven quarters under review. There are no significant patterns or trends; however,
there are a few salient data points that are worth mentioning. The minimum ratio of
55.1 percent is observed on June 2005. The maximum ratio of 73.5 percent is recorded
on September 2006. In the time period between March 2006 and September 2006,
deposits decreased by 18.5 percent, while loan amounts grew by a moderate pace of
4.6 percent. This resulted in a large increase in the net loan-to-share ratio. Graph 2
shows that the fluctuation in the net loan-to-share ratio can be largely attributed to the
movement in deposit amounts (the standard deviation of deposits is 3.7 times greater
than the standard deviation of net loans).

                                                                                                Graph 2.

                                                     Landmark Credit Union
                                                 Net Loans and Deposit Trends
                                                 March 2005 - September 2007
     Net Loans & Deposits ($)

                                20,000,000                                                                                                         Net Loan Amount
                                15,000,000                                                                                                         Deposit Amount








                                                               Time Period (Quarterly)

In conclusion, Landmark Credit Union’s average net loan-to-share ratio of 64.8 percent
is reasonable and meets the standards for a satisfactory rating given the Credit Union’s
capacity to lend, its growth in lending activity and the credit needs of the assessment

                                ASSESSMENT AREA(S)

The second performance criterion is based on Landmark Credit Union’s record of
lending within Assessment Area One. Landmark Credit Union’s mortgage loan
originations for 2005 and 2006 were analyzed to determine the institution’s performance
for this criterion. The Credit Union originated 24 mortgage loans in 2005, totaling $2.7
million and 22 mortgage loans in 2006, totaling $2.0 million. Of these, 41 loans totaling
$4.2 million dollars were located within the Credit Union’s assessment area. Table 3
details the Credit Union’s lending inside and outside the assessment area.


                                        Table 3
    Distribution of Home Mortgage Loans Inside and Outside Assessment Area
Year                   Inside                             Outside
            Number of       Dollar in Loans     Number of      Dollars in Loans
               Loans             (000)            Loans             (000)

              #          %           $         %           #       %      $      %
2005          20       83.3%       2,266     85.1%         4     16.7%   396   14.9%
2006          21       95.5%       1,980     97.7%         1      4.5%    47    2.3%
Total         41       89.1%       4,246     90.6%         5     10.9%   443   9.4%
Source: Landmark Credit Union Mortgage Loan Origination Report

Overall, the Credit Union extended a majority of mortgage loans within their assessment
area (89.1% by number and 90.6% by dollar volume).

In conclusion, the Credit Union’s mortgage lending activity within the assessment area
represents a substantial majority. Given the number of loans originated during the
assessment period and the nature of the assessment area of the Credit Union this level
of penetration would be expected and, consequently, meets the standards for a
satisfactory performance.


The third performance criterion evaluates the extent to which an institution lends to
borrowers of different income levels inside its assessment area(s). The distribution of
loans by borrower income levels is based on the area median family income. The
borrowers’ income levels are identified as the ratio of the applicant’s income to the area
median family income.

Table 4 details the Credit Union’s mortgage lending activity by the borrowers’ income
                                         Table 4
               Distribution of Mortgage Loans by Borrower Income
Median         Family              2005              2006            Total
Family      Households           #        %       #       %        #       %
Income        (% of #)
Low             22.0            2        10.0     4      19.1      6      14.6
Moderate        21.4            9        45.0     3      14.3     12      29.3
Middle          22.5            4        20.0     7      33.3     11      26.8
Upper           34.1            5        25.0     7      33.3     12      29.3
NA               0.0            0         0.0     0       0.0      0       0.0
Total           100.0          20       100.0    21     100.0     41     100.0
Source: U.S. Census Data, Credit Union Mortgage data 2005-2006

Loans to low income borrowers represented 14.6% of the total number of loans the Credit
Union originated during the review period. In addition, loans to borrowers of moderate-
income represented 29.3% of the total number of loans. These favorable percentages
indicate willingness by the Credit Union to extend credit to borrowers of all income levels.

Consumer loans were also analyzed to determine performance within the assessment
area. A sample of 50 consumer loans for each year (2005 and 2006) was randomly
selected. Table 5 provides detail on the number of loans by borrower income level.

                                          Table 5
                Distribution of Consumer Loans by Borrower Income

Income             2005                     2006                 Total
                     #           %            #            %      #        %
Low                 14          40.0         14           41.2    28      40.6
Moderate            10          28.5          8           23.5    18      26.1
Middle               8          22.9          9           26.5    17      24.6
Upper                3           8.6         22            8.8     6       8.7
Total               35         100.0         34          100.0    69     100.0
Source: Landmark Credit Union Consumer Loan Sample

The consumer loan distribution demonstrates that low- and moderate-income borrowers
combined received a majority (66.7%) of the loans extended. Middle-income borrowers
received a reasonable portion (24.6%) of loans granted, while loans to upper-income
borrowers represented 8.7 percent of the loans analyzed. The consumer loan
distribution by borrower income levels depicts a very good distribution given the level of
loans granted to low- and moderate-income borrowers.

Since these loans are largely extended to individuals, the analysis compares individual
incomes to the area median family household income. This comparison skews to some
degree the results of the above distribution.        However, the above distribution
demonstrates that consumer loan originations are representative of the Credit Union’s
membership base, particularly low-income and moderate-income borrowers.

Based on the above information, Landmark Credit Union’s residential and consumer
lending demonstrates a solid distribution of loans granted to all income groups,
particularly low and moderate-income borrowers. Consequently, the Credit Union
exceeds the standards for satisfactory performance for this criterion.


The fourth performance criterion evaluates the institution’s record of addressing the
credit needs of the assessment area. Census tract geographies are defined as either
low, moderate, middle, or upper-income. The following table provides details on the
distribution of mortgage loans by census tracts. As was previously stated in the
performance context, the Credit Union’s assessment area contains no low-income
census tracts.


                                       Table 6
       Distribution of Mortgage Loans by Census Tract Income Category
Census         Owner-            2005               2006             Total
Tract         Occupied
Income        Housing
Level         Units (%)       #         %        #        %        #       %
Moderate         30.9         5        25.0      9       42.9     14      34.2
Middle           62.2        14        70.0     12       57.1     26      63.4
Upper             6.9         1         5.0      0        0.0      1       2.4
Total           100.0        20       100.0     21      100.0     41     100.0
Source: 2000 U.S. Census Data, Credit Union Mortgage data 2005-2006

As shown in the above table, the Credit Union originated 34.2 percent of its mortgage
loans in moderate-income census tracts. This percentage is slightly higher than the
30.9 percent of owner-occupied housing units located there. Overall, the Credit Union’s
distribution of mortgage loans remains reasonable, particularly given the assessment
area’s housing demographics.

The Credit Union’s consumer loan sample was also analyzed to determine the
distribution of consumer loans by census tract. The Credit Union originated 42.0 percent
of its consumer loans in moderate-income geographies in 2005 and 2006. Please refer
to the following table for more information.

                                      Table 7
       Distribution of Consumer Loans by Census Tract Income Category
Census Tract           2005               2006                  Total
Income Level
                       #          %             #              %       #        %
Moderate              15         42.9           14            41.2    29       42.0
Middle                20         57.1           20            58.8    40       58.0
Upper                  0          0.0            0             0.0     0        0.0
Total                 35        100.0           34           100.0    69      100.0
Source: Landmark Credit Union’s Consumer Loan Sample

Landmark Credit Union’s overall performance for this criterion is reasonable and meets
the standards for a satisfactory performance.


Landmark Credit Union received no CRA related complaints in the period under review.

Based upon the review of the Credit Union’s public comment file and its performance
relative to fair lending policies and practices, no violations of the anti-discrimination laws
and regulations were identified.


Massachusetts General Laws Chapter 167, Section 14, as amended, and the
Uniform Interagency Community Reinvestment Act (CRA) Guidelines for Disclosure
of Written Evaluations, and Part 345 of the Federal Deposit Insurance Corporation’s
Rules and Regulations, require all financial institutions to take the following actions
within 30 business days of receipt of the CRA evaluation of their institution:

1)    Make its most current CRA performance evaluation available to the public;

2)    At a minimum, place the evaluation in the institution's CRA public file located
      at the head office and at a designated office in each assessment area;

3)    Add the following language to the institution's required CRA public notice that
      is posted in each depository facility:

      "You may obtain the public section of our most recent CRA Performance
      Evaluation, which was prepared by the Massachusetts Division of Banks at
      131 Ashland Street, North Adams, MA 01247."

4)    Provide a copy of its current evaluation to the public, upon request. In
      connection with this, the institution is authorized to charge a fee which does
      not exceed the cost of reproduction and mailing (if applicable).

The format and content of the institution's evaluation, as prepared by its supervisory
agencies, may not be altered or abridged in any manner. The institution is
encouraged to include its response to the evaluation in its CRA public file.

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