Section 345.260 Small Bank Performance Standards

Section

345.260  Small Bank Performance Standards

a)         Performance criteria.

1)         Small banks that are not intermediate small

banks.  The Secretary evaluates the record of a small bank that is not, or that

was not during the prior calendar year, an intermediate small bank, of helping

to meet the credit needs of its assessment area

by

considering the assessment factors in Section 345.200 and

pursuant to the

criteria set forth in subsection (b) of this Section.

2)         Intermediate small banks.  The Secretary

evaluates the record of a small bank that is, or that was during the prior

calendar year, an intermediate small bank, of helping to meet the credit needs

of its assessment area by considering the assessment factors in Section 345.200

and pursuant to the criteria set forth in subsections (b) and (c) of this

Section.

b)         Lending test.  A small bank's lending

performance is evaluated pursuant to the following criteria:

1)         The bank's loan-to-deposit ratio, adjusted for

seasonal variation, and, as appropriate, other lending-related activities, such

as loan originations for sale to the secondary markets, community development

loans, or qualified investments;

2)         The percentage of loans, and as appropriate,

other lending-related activities located in the bank's assessment area;

3)         The bank's record of lending to and, as

appropriate, engaging in other lending-related activities for borrowers of different

income levels and businesses and farms of different sizes;

4)         The geographic distribution of the bank's

loans; and

5)         The bank's record of taking action, if

warranted, in response to written complaints about its performance in helping

to meet credit needs in its assessment area.

c)         Community development test

in other lending-related activities for borrowers of different

income levels and businesses and farms of different sizes;

4)         The geographic distribution of the bank's

loans; and

5)         The bank's record of taking action, if

warranted, in response to written complaints about its performance in helping

to meet credit needs in its assessment area.

c)         Community development test.  An intermediate

small bank's community development performance also is evaluated pursuant to

the following criteria:

1)         The number and amount of community development

loans;

2)         The number and amount of qualified

investments;

3)         The extent to which the bank provides

community development services; and

4)         The bank's responsiveness to community

development needs through activities addressing community development lending,

investment, and services needs.

d)         Small bank performance rating.  The Secretary considers

the assessment factors in Section 345.200 and rates the performance of a bank

evaluated under this Section as provided in Section 345.APPENDIX A.