Code of Federal Regulations (Last Updated: November 8, 2024)

Chapter II—Federal Reserve System

SubChapter A—Board of Governors of the Federal Reserve System

Part 228 - Community Reinvestment (Regulation BB)

Appendix A to Part 228 - —Calculations for the Retail Lending Test

Latest version.

Appendix A to Part 228—Ratings 228—Calculations for the Retail Lending Test

(a) Ratings in general.

(1) In assigning a rating, the Board evaluates a bank's performance under the applicable performance criteria in this part, in accordance with §§ 228.21 and 228.28. This includes consideration of low-cost education loans provided to low-income borrowers and activities in cooperation with minority- or women-owned financial institutions and low-income credit unions, as well as adjustments on the basis of evidence of discriminatory or other illegal credit practices.

(2) A bank's performance need not fit each aspect of a particular rating profile in order to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others. The bank's overall performance, however, must be consistent with safe and sound banking practices and generally with the appropriate rating profile as follows.

(b) Banks evaluated under the lending, investment, and service tests —

(1) Lending performance rating. The Board assigns each bank's lending performance one of the five following ratings.

(i) Outstanding. The Board rates a bank's lending performance “outstanding” if, in general, it demonstrates:

(A) Excellent responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(B) A substantial majority of its loans are made in its assessment area(s);

(D) An excellent distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank;

(E) An excellent record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Extensive use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It is a leader in making community development loans.

(ii) High satisfactory. The Board rates a bank's lending performance “high satisfactory” if, in general, it demonstrates:

(A) Good responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(B) A high percentage of its loans are made in its assessment area(s);

(D) A good distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank;

(E) A good record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made a relatively high level of community development loans.

(iii) Low satisfactory. The Board rates a bank's lending performance “low satisfactory” if, in general, it demonstrates:

(A) Adequate responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(B) An adequate percentage of its loans are made in its assessment area(s);

(D) An adequate distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank;

(E) An adequate record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Limited use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made an adequate level of community development loans.

(iv) Needs to improve. The Board rates a bank's lending performance “needs to improve” if, in general, it demonstrates:

(A) Poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(B) A small percentage of its loans are made in its assessment area(s);

(C) A poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s);

(D) A poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank;

(E) A poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Little use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made a low level of community development loans.

(v) Substantial noncompliance. The Board rates a bank's lending performance as being in “substantial noncompliance” if, in general, it demonstrates:

(A) A very poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(B) A very small percentage of its loans are made in its assessment area(s);

(C) A very poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s);

(D) A very poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank;

(E) A very poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) No use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made few, if any, community development loans.

(2) Investment performance rating. The Board assigns each bank's investment performance one of the five following ratings.

(i) Outstanding. The Board rates a bank's investment performance “outstanding” if, in general, it demonstrates:

(A) An excellent level of qualified investments, particularly those that are not routinely provided by private investors, often in a leadership position;

(B) Extensive use of innovative or complex qualified investments; and

(ii) High satisfactory. The Board rates a bank's investment performance “high satisfactory” if, in general, it demonstrates:

(A) A significant level of qualified investments, particularly those that are not routinely provided by private investors, occasionally in a leadership position;

(B) Significant use of innovative or complex qualified investments; and

(iii) Low satisfactory. The Board rates a bank's investment performance “low satisfactory” if, in general, it demonstrates:

(A) An adequate level of qualified investments, particularly those that are not routinely provided by private investors, although rarely in a leadership position;

(B) Occasional use of innovative or complex qualified investments; and

(iv) Needs to improve. The Board rates a bank's investment performance “needs to improve” if, in general, it demonstrates:

(A) A poor level of qualified investments, particularly those that are not routinely provided by private investors;

(B) Rare use of innovative or complex qualified investments; and

(v) Substantial noncompliance. The Board rates a bank's investment performance as being in “substantial noncompliance” if, in general, it demonstrates:

(A) Few, if any, qualified investments, particularly those that are not routinely provided by private investors;

(B) No use of innovative or complex qualified investments; and

(3) Service performance rating. The Board assigns each bank's service performance one of the five following ratings.

(i) Outstanding. The Board rates a bank's service performance “outstanding” if, in general, the bank demonstrates:

(A) Its service delivery systems are readily accessible to geographies and individuals of different income levels in its assessment area(s);

(B) To the extent changes have been made, its record of opening and closing branches has improved the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;

(C) Its services (including, where appropriate, business hours) are tailored to the convenience and needs of its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and

(D) It is a leader in providing community development services.

(ii) High satisfactory. The Board rates a bank's service performance “high satisfactory” if, in general, the bank demonstrates:

(A) Its service delivery systems are accessible to geographies and individuals of different income levels in its assessment area(s);

(B) To the extent changes have been made, its record of opening and closing branches has not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderate-income individuals;

(C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderate-income geographies and low- and moderate-income individuals; and

(D) It provides a relatively high level of community development services.

(iii) Low satisfactory. The Board rates a bank's service performance “low satisfactory” if, in general, the bank demonstrates:

(A) Its service delivery systems are reasonably accessible to geographies and individuals of different income levels in its assessment area(s);

(B) To the extent changes have been made, its record of opening and closing branches has generally not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderate-income individuals;

(D) It provides an adequate level of community development services.

(iv) Needs to improve. The Board rates a bank's service performance “needs to improve” if, in general, the bank demonstrates:

(A) Its service delivery systems are unreasonably inaccessible to portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals;

(B) To the extent changes have been made, its record of opening and closing branches has adversely affected the accessibility its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;

(C) Its services (including, where appropriate, business hours) vary in a way that inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and

(D) It provides a limited level of community development services.

(v) Substantial noncompliance. The Board rates a bank's service performance as being in “substantial noncompliance” if, in general, the bank demonstrates:

(A) Its service delivery systems are unreasonably inaccessible to significant portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals;

(B) To the extent changes have been made, its record of opening and closing branches has significantly adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;

(C) Its services (including, where appropriate, business hours) vary in a way that significantly inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and

(D) It provides few, if any, community development services.

(c) Wholesale or limited purpose banks. The Board assigns each wholesale or limited purpose bank's community development performance one of the four following ratings.

(1) Outstanding. The Board rates a wholesale or limited purpose bank's community development performance “outstanding” if, in general, it demonstrates:

(i) A high level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) Extensive use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Excellent responsiveness to credit and community development needs in its assessment area(s).

(2) Satisfactory. The Board rates a wholesale or limited purpose bank's community development performance “satisfactory” if, in general, it demonstrates:

(i) An adequate level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) Occasional use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Adequate responsiveness to credit and community development needs in its assessment area(s).

(3) Needs to improve. The Board rates a wholesale or limited purpose bank's community development performance as “needs to improve” if, in general, it demonstrates:

(i) A poor level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) Rare use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Poor responsiveness to credit and community development needs in its assessment area(s).

(4) Substantial noncompliance. The Board rates a wholesale or limited purpose bank's community development performance in “substantial noncompliance” if, in general, it demonstrates:

(i) Few, if any, community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) No use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Very poor responsiveness to credit and community development needs in its assessment area(s).

(d) Banks evaluated under the small bank performance standards —

(1) Lending test ratings.

(i) Eligibility for a satisfactory lending test rating. The Board rates a small bank's lending performance “satisfactory” if, in general, the bank demonstrates:

(A) A reasonable loan-to-deposit ratio (considering seasonal variations) given the bank's size, financial condition, the credit needs of its assessment area(s), and taking into account, as appropriate, other lending-related activities such as loan originations for sale to the secondary markets and community development loans and qualified investments;

(B) A majority of its loans and, as appropriate, other lending-related activities, are in its assessment area;

(C) A distribution of loans to and, as appropriate, other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of different sizes that is reasonable given the demographics of the bank's assessment area(s);

(D) A record of taking appropriate action, when warranted, in response to written complaints, if any, about the bank's performance in helping to meet the credit needs of its assessment area(s); and

(E) A reasonable geographic distribution of loans given the bank's assessment area(s).

(ii) Eligibility for an “outstanding” lending test rating. A small bank that meets each of the standards for a “satisfactory” rating under this paragraph and exceeds some or all of those standards may warrant consideration for a lending test rating of “outstanding.”

(iii) Needs to improve or substantial noncompliance ratings. A small bank may also receive a lending test rating of “needs to improve” or “substantial noncompliance” depending on the degree to which its performance has failed to meet the standard for a “satisfactory” rating.

(2) Community development test ratings for intermediate small banks —

(i) Eligibility for a satisfactory community development test rating. The Board rates an intermediate small bank's community development performance “satisfactory” if the bank demonstrates adequate responsiveness to the community development needs of its assessment area(s) through community development loans, qualified investments, and community development services. The adequacy of the bank's response will depend on its capacity for such community development activities, its assessment area's need for such community development activities, and the availability of such opportunities for community development in the bank's assessment area(s).

(ii) Eligibility for an outstanding community development test rating. The Board rates an intermediate small bank's community development performance “outstanding” if the bank demonstrates excellent responsiveness to community development needs in its assessment area(s) through community development loans, qualified investments, and community development services, as appropriate, considering the bank's capacity and the need and availability of such opportunities for community development in the bank's assessment area(s).

(iii) Needs to improve or substantial noncompliance ratings. An intermediate small bank may also receive a community development test rating of “needs to improve” or “substantial noncompliance” depending on the degree to which its performance has failed to meet the standards for a “satisfactory” rating.

(3) Overall rating —

(i) Eligibility for a satisfactory overall rating. No intermediate small bank may receive an assigned overall rating of “satisfactory” unless it receives a rating of at least “satisfactory” on both the lending test and the community development test.

(ii) Eligibility for an outstanding overall rating.

(A) An intermediate small bank that receives an “outstanding” rating on one test and at least “satisfactory” on the other test may receive an assigned overall rating of “outstanding.”

(B) A small bank that is not an intermediate small bank that meets each of the standards for a “satisfactory” rating under the lending test and exceeds some or all of those standards may warrant consideration for an overall rating of “outstanding.” In assessing whether a bank's performance is “outstanding,” the Board considers the extent to which the bank exceeds each of the performance standards for a “satisfactory” rating and its performance in making qualified investments and its performance in providing branches and other services and delivery systems that enhance credit availability in its assessment area(s).

(iii) Needs to improve or substantial noncompliance overall ratings. A small bank may also receive a rating of “needs to improve” or “substantial noncompliance” depending on the degree to which its performance has failed to meet the standards for a “satisfactory” rating.

(e) Strategic plan assessment and rating —

(1) Satisfactory goals. The Board approves as “satisfactory” measurable goals that adequately help to meet the credit needs of the bank's assessment area(s).

(2) Outstanding goals. If the plan identifies a separate group of measurable goals that substantially exceed the levels approved as “satisfactory,” the Board will approve those goals as “outstanding.”

(3) Rating. The Board assesses the performance of a bank operating under an approved plan to determine if the bank has met its plan goals:

(i) If the bank substantially achieves its plan goals for a satisfactory rating, the Board will rate the bank's performance under the plan as “satisfactory.”

(ii) If the bank exceeds its plan goals for a satisfactory rating and substantially achieves its plan goals for an outstanding rating, the Board will rate the bank's performance under the plan as “outstanding.”

(iii) If the bank fails to meet substantially its plan goals for a satisfactory rating, the Board will rate the bank as either “needs to improve” or “substantial noncompliance,” depending on the extent to which it falls short of its plan goals, unless the bank elected in its plan to be rated otherwise, as provided in § 228.27(f)(4).

[Reg. BB, 60 FR 22198, May 4, 1995, as amended at 70 FR 44268, Aug. 2, 2005; 75 FR 61044, Oct. 4, 2010]

This appendix, based on requirements described in §§ 228.22 and 228.28, includes the following sections:

I. Retail Lending Volume Screen

II. Retail Lending Test Distribution Metrics—Scope of Evaluation

III. Geographic Distribution Metrics and Benchmarks

IV. Borrower Distribution Metrics and Benchmarks

V. Supporting Conclusions for Major Product Lines Other Than Automobile Lending

VI. Supporting Conclusions for Automobile Lending

VII. Retail Lending Test Conclusions—All Major Product Lines

VIII. Retail Lending Test Weighting and Conclusions for States, Multistate MSAs, and the Institution

I. Retail Lending Volume Screen

The Board calculates the Bank Volume Metric and the Market Volume Benchmark for a facility-based assessment area and determines whether the bank has met or surpassed the Retail Lending Volume Threshold in that facility-based assessment area.

a. Bank Volume Metric. The Board calculates the Bank Volume Metric for each facility-based assessment area by:

1. Summing, over the years in the evaluation period, the bank's annual dollar volume of loans included in the Bank Volume Metric (i.e., volume metric loans). The bank's annual dollar volume of volume metric loans is the total dollar amount of all home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans originated or purchased by the bank in the facility-based assessment area in that year. Automobile loans are included in the bank's annual dollar amount of volume metric loans only if automobile loans are a product line for the bank.

2. Summing, over the years in the evaluation period, the bank's annual dollar volume of deposits in the facility-based assessment area. For a bank that reports deposits data pursuant to § 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 § 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.

3. Dividing the result of paragraph I.a.1 of this appendix by the result of paragraph I.a.2 of this appendix.

Example A-1: The bank has a three-year evaluation period. The bank's annual dollar amounts of volume metric loans are $300,000 (year 1), $300,000 (year 2), and $400,000 (year 3). The sum of the bank's annual dollar amount of volume metric loans in a facility-based assessment area, over the years in the evaluation period, is therefore $1 million. The annual dollar volumes of deposits in the bank located in the facility-based assessment area are $1.7 million (year 1), $1.6 million (year 2), and $1.7 million (year 3). The sum of the annual dollar volume of deposits in the facility-based assessment area, over the years in the evaluation period, is therefore $5 million. The Bank Volume Metric for the facility-based assessment area would be $1 million divided by $5 million, or 0.2 (equivalently, 20 percent).

b. Market Volume Benchmark. The Board calculates the Market Volume Benchmark for the facility-based assessment area. For purposes of calculating the Market Volume Benchmark, a benchmark depository institution for a particular year is a depository institution that, in that year, was subject to reporting pursuant to § 228.42(b)(1), 12 CFR 25.42(b)(1) or 345.42(b)(1), or 12 CFR part 1003, and operated a facility included in the FDIC's Summary of Deposits data in the facility-based assessment area. The Board calculates the Market Volume Benchmark by:

1. Summing, over the years in the evaluation period, the annual dollar volume of volume benchmark loans. The annual dollar volume of volume benchmark loans is the total dollar volume of all home mortgage loans, multifamily loans, small business loans, and small farm loans in the facility-based assessment area in that year that are reported loans originated by benchmark depository institutions.

2. Summing, over the years in the evaluation period, the annual dollar volume of deposits for benchmark depository institutions in the facility-based assessment area. The annual dollar volume of deposits for benchmark depository institutions in the facility-based assessment area is the sum across benchmark depository institutions of:

(i) for a benchmark depository institution that reports data pursuant to § 228.42(b)(3) or 12 CFR 25.42(b)(3) or 345.42(b)(3), the total of annual average daily balances of deposits reported by that depository institution in counties in the facility-based assessment area for that year; and

(ii) for a benchmark depository institution that does not report data pursuant to § 228.42(b)(3) or 12 CFR 25.42(b)(3) or 345.42(b)(3), the total of deposits assigned to facilities reported by that depository institution in counties in the facility-based assessment area in the FDIC's Summary of Deposits for that year.

3. Dividing the result of paragraph I.b.1 of this appendix by the result of paragraph I.b.2 of this appendix.

Example A-2: With reference to example A-1 to this appendix, the annual dollar volume of volume benchmark loans is $6 million (year 1), $7 million (year 2), and $7 million (year 3). The sum of the annual dollar volume of volume benchmark loans, over the years in the evaluation period, is therefore $20 million. The annual dollar volume of deposits for benchmark depository institutions is $17 million (year 1), $15 million (year 2), and $18 million (year 3). The sum of the annual dollar volume of deposits for benchmark depository institutions, over the years in the evaluation period, is therefore $50 million. The Market Volume Benchmark for that facility-based assessment area would be $20 million divided by $50 million, or 0.4 (equivalently, 40 percent).

c. Retail Lending Volume Threshold. For each facility-based assessment area, the Board calculates a Retail Lending Volume Threshold by multiplying the Market Volume Benchmark for that facility-based assessment area by 0.3 (equivalently, 30 percent). A bank meets or surpasses the Retail Lending Volume Threshold in a facility-based assessment area if the Bank Volume Metric is equal to or greater than the Retail Lending Volume Threshold.

Example A-3: Based on examples A-1 and A-2 to this appendix, the Board calculates the Retail Lending Volume Threshold by multiplying the Market Volume Benchmark of 40 percent by 0.3, equal to 0.12 (equivalently, 12 percent). The Bank Volume Metric, 0.2 (equivalently, 20 percent), is greater than the Retail Lending Volume Threshold. Accordingly, the bank surpasses the Retail Lending Volume Threshold.

Bank Volume Metric (20%) > Retail Lending Volume Threshold [(40%) × 0.3 = 12%]

II. Retail Lending Distribution Metrics—Scope Of Evaluation

a. Retail Lending Test Areas evaluated. A bank's major product lines are evaluated in its Retail Lending Test Areas, as provided in § 228.22(d) and as described in paragraphs II.a.1 and 2 of this appendix.

1. Large banks exempt from evaluation in retail lending assessment areas. Pursuant to § 228.17(a)(2), a large bank is not required to delineate retail lending assessment areas in a particular calendar year if the following ratio exceeds 80 percent, based on the combination of loan dollars and loan count as defined in § 228.12:

i. The sum, over the prior two calendar years, of the large bank's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the large bank, originated or purchased in its facility-based assessment areas; divided by

ii. The sum, over the prior two calendar years, of the large bank's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the large bank, originated or purchased overall.

Example A-4: A large bank (for which automobile loans are not a product line) originated or purchased 20,000 closed-end home mortgage loans, small business loans, and small farm loans in the prior two calendar years, representing $6 billion in loan dollars. Of these loans, 18,000 loans, representing $4.5 billion in loan dollars, were originated or purchased in the large bank's facility-based assessment areas. As such, the large bank originated or purchased 75 percent of closed-end home mortgage loans, small business loans, and small farm loans ($4.5 billion/$6 billion) by loan dollars and 90 percent (18,000/20,000) of these loans by loan count within its facility-based assessment areas. The combination of loan dollars and loan count is 82.5 percent, or (75 + 90)/2. Thus, this large bank is not required to delineate retail lending assessment areas pursuant to § 228.17(a)(2) in the current calendar year because the 82.5 percent exceeds the 80 percent threshold.

2. Small banks and intermediate banks evaluated in outside retail lending areas. Pursuant to § 228.18(a)(2), the Board evaluates the geographic and borrower distributions of the major product lines of an intermediate bank, or a small bank that opts to be evaluated under the Retail Lending Test, in the bank's outside retail lending area if either:

i. The bank opts to have its major product lines evaluated in its outside retail lending area; or

ii. The following ratio exceeds 50 percent, based on the combination of loan dollars and loan count as defined in § 228.12:

A. The sum, over the prior two calendar years, of the bank's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the bank, originated or purchased outside of its facility-based assessment areas; divided by

B. The sum, over the prior two calendar years, of the bank's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the bank, originated or purchased overall.

b. Product lines and major product lines. In each of a bank's Retail Lending Test Areas, the Board evaluates each of a bank's major product lines, as provided in § 228.22(d)(2) and as described in paragraphs II.b.1 through 3 of this appendix.

1. Major product line standard for facility-based assessment areas and outside retail lending areas. Except as provided in paragraph II.b.1.iii of this appendix, a product line is a major product line in a facility-based assessment area or outside retail lending area if the following ratio is 15 percent or more, based on the combination of loan dollars and loan count as defined in § 228.12:

i. The sum, over the years of the evaluation period, of the bank's loans in the product line originated or purchased in the facility-based assessment area or outside retail lending area; divided by

ii. The sum, over the years of the evaluation period, of the bank's loans in all product lines originated or purchased in the facility-based assessment area or outside retail lending area.

iii. If a bank has not collected, maintained, or reported loan data on a product line in a facility-based assessment area or outside retail lending area for one or more years of an evaluation period, the product line is a major product line if the Board determines that the product line is material to the bank's business in the facility-based assessment area or outside retail lending area.

2. Major product line standard for retail lending assessment areas. In a retail lending assessment area:

(i) Closed-end home mortgage loans are a major product line in any calendar year in the evaluation period in which the bank delineates a retail lending assessment area based on its closed-end home mortgage loans as determined by the standard in § 228.17(c)(1); and

(ii) Small business loans are a major product line in any calendar year in the evaluation period in which the bank delineates a retail lending assessment area based on its small business loans as determined by the standard in § 228.17(c)(2).

3. Banks for which automobile loans are a product line.

i. If a bank's automobile loans are a product line (either because the bank is a majority automobile lender or opts to have its automobile loans evaluated pursuant to § 228.22), automobile loans are a product line for the bank for the entire evaluation period.

ii. A bank is a majority automobile lender if the following ratio, calculated at the institution level, exceeds 50 percent, based on the combination of loan dollars and loan count as defined in § 228.12:

A. The sum, over the two calendar years preceding the first year of the evaluation period, of the bank's automobile loans originated or purchased overall; divided by

B. The sum, over the two calendar years preceding the first year of the evaluation period, of the bank's automobile loans, home mortgage loans, multifamily loans, small business loans, and small farm loans originated or purchased overall.

III. Geographic Distribution Metrics and Benchmarks

The Board calculates the Geographic Bank Metric, the Geographic Market Benchmark, and the Geographic Community Benchmark for low-income census tracts and for moderate-income census tracts, respectively, as set forth in this section. For each facility-based assessment area, retail lending assessment area, and component geographic area of the bank's outside retail lending area, the Board includes either low-income census tracts or moderate-income census tracts (i.e., designated census tracts) in the numerator of the metrics and benchmarks calculations for a particular year. To evaluate small banks and intermediate banks without data collection, maintenance and reporting requirements, the Board will use data collected by the bank in the ordinary course of business or through sampling of bank loan data.

a. Calculation of Geographic Bank Metric. The Board calculates the Geographic Bank Metric for low-income census tracts and for moderate-income census tracts, respectively, for each major product line in each Retail Lending Test Area. The Board calculates the Geographic Bank Metric by:

1. Summing, over the years in the evaluation period, the bank's annual number of originated and purchased loans in the major product line in designated census tracts in the Retail Lending Test Area.

2. Summing, over the years in the evaluation period, the bank's annual number of originated and purchased loans in the major product line in the Retail Lending Test Area.

3. Dividing the result of paragraph III.a.1 of this appendix by the result of paragraph III.a.2 of this appendix.

Example A-5: The bank has a three-year evaluation period, and small farm loans are a major product line for the bank in a facility-based assessment area (FBAA-1). The bank's annual numbers of originated and purchased small farm loans (i.e., the bank's originated and purchased small farm loans) are 100 (year 1), 75 (year 2), and 75 (year 3) in FBAA-1. The sum of the annual numbers of originated and purchased small farm loans is therefore 250 in the evaluation period. In the low-income census tracts within FBAA-1, the bank originated and purchased 25 small farm loans (year 1), 15 small farm loans (year 2), and 10 small farm loans (year 3) (a total of 50 small farm loans). In FBAA-1, the Geographic Bank Metric for small farm loans in low-income census tracts would be 50 divided by 250, or 0.2 (equivalently, 20 percent).

In the moderate-income census tracts within FBAA-1, the bank originated and purchased 30 small farm loans (year 1), 20 small farm loans (year 2), and 10 small farm loans (year 3) (a total of 60 small farm loans). In FBAA-1, the Geographic Bank Metric for small farm loans in moderate-income census tracts would be 60 divided by 250, or 0.24 (equivalently, 24 percent).

b. Calculation of Geographic Market Benchmarks for facility-based assessment areas and retail lending assessment areas. For each facility-based assessment area and retail lending assessment area, the Board calculates the Geographic Market Benchmark for designated census tracts for each major product line, excluding automobile loans. The Board calculates the Geographic Market Benchmark by:

1. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line in designated census tracts in the facility-based assessment area or retail lending assessment area originated by all lenders.

2. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line in the facility-based assessment area or retail lending assessment area originated by all lenders.

3. Dividing the result of paragraph III.b.1 of this appendix by the result of paragraph III.b.2 of this appendix.

Example A-6: The Geographic Market Benchmarks for small farm loans in FBAA-1 use a three-year evaluation period. Lenders that report small farm loan data originated 500 small farm loans (year 1), 250 small farm loans (year 2), and 250 small farm loans (year 3) within FBAA-1. The sum of the annual numbers of originated small farm loans is therefore 1,000 in the evaluation period. Lenders that report small farm loan data originated 200 small farm loans (year 1), 100 small farm loans (year 2) and 100 small farm loans (year 3) in low-income census tracts within FBAA-1. The sum of the annual numbers of originated small farm loans in low-income census tracts within FBAA-1 is therefore 400. The Geographic Market Benchmark for small farm loans in low-income census tracts within FBAA-1 would be 400 divided by 1,000, or 0.4 (equivalently, 40 percent).

Lenders that report small farm loan data originated 100 small farm loans (year 1), 100 small farm loans (year 2), and 100 small farm loans (year 3) in moderate-income census tracts within FBAA-1. The sum of the annual numbers of originated small farm loans in moderate-income census tracts within FBAA-1 is therefore 300. The Geographic Market Benchmark for small farm loans in moderate-income census tracts within FBAA-1 would be 300 divided by 1,000, or 0.3 (equivalently, 30 percent).

c. Calculation of Geographic Community Benchmarks for facility-based assessment areas and retail lending assessment areas. The Board calculates the Geographic Community Benchmark for designated census tracts for each major product line in each facility-based assessment area or retail lending assessment area.

1. For closed-end home mortgage loans, the Board calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in low-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.1.i of this appendix by the result of paragraph III.c.1.ii of this appendix.

2. For closed-end home mortgage loans, the Board calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in moderate-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.2.i of this appendix by the result of paragraph III.c.2.ii of this appendix.

3. For small business loans, the Board calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses in low-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.3.i of this appendix by the result of paragraph III.c.3.ii of this appendix.

4. For small business loans, the Board calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses in moderate-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.4.i of this appendix by the result of paragraph III.c.4.ii of this appendix.

5. For small farm loans, the Board calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of farms in low-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.5.i of this appendix by the result of paragraph III.c.5.ii of this appendix.

6. For small farm loans, the Board calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of farms in moderate-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.6.i of this appendix by the result of paragraph III.c.6.ii of this appendix.

7. For automobile loans, the Board calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of households in low-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.7.i of this appendix by the result of paragraph III.c.7.ii of this appendix.

8. For automobile loans, the Board calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of households in moderate-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.8.i of this appendix by the result of paragraph III.c.8.ii of this appendix.

Example A-7: The Geographic Community Benchmarks for small business loans in FBAA-1 use a three-year evaluation period. There were 1,300 non-farm businesses (year 1), 1,300 non-farm businesses (year 2), and 1,400 non-farm businesses (year 3) in FBAA-1. The sum of the number of non-farm businesses in FBAA-1 is therefore 4,000 in the evaluation period. In low-income census tracts within FBAA-1, there were 200 non-farm businesses (year 1), 150 non-farm businesses (year 2), and 150 non-farm businesses (year 3) (a total of 500 non-farm businesses). The Geographic Community Benchmark for small business loans in low-income census tracts within FBAA-1 would be 500 divided by 4,000, or 0.125 (equivalently, 12.5 percent).

In moderate-income census tracts within FBAA-1, there were 400 non-farm businesses (year 1), 300 non-farm businesses (year 2), and 300 non-farm businesses (year 3) (a total of 1,000 non-farm businesses). The Geographic Community Benchmark for small business loans in moderate-income census tracts within FBAA-1 would be 1,000 divided by 4,000, or 0.25 (equivalently, 25 percent).

d. Calculation of Geographic Market Benchmarks for the outside retail lending area. For a bank's outside retail lending area, the Board calculates the Geographic Market Benchmark for each major product line, excluding automobile loans, and for each category of designated census tracts by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating a benchmark for each category of designated census tracts and each major product line within each component geographic area as described in § 228.18(b) using the formula for the Geographic Market Benchmark described in paragraph III.b of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

2. Calculating the weighting for each component geographic area and major product line as the percentage of the bank's loans in the major product line originated or purchased in the outside retail lending area that are within the component geographic area, based on loan count.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph III.d.1 of this appendix and associated weightings in paragraph III.d.2 of this appendix.

e. Calculation of Geographic Community Benchmarks for the outside retail lending area. For a bank's outside retail lending area, the Board calculates the Geographic Community Benchmark for each category of designated census tract and for each major product line by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating a benchmark for each category of designated census tracts and each major product line within each component geographic area as described in § 228.18(b) using the formula for the Geographic Community Benchmark described in paragraph III.c of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph III.e.1 of this appendix and associated weightings in paragraph III.e.2 of this appendix.

IV. Borrower Distribution Metrics and Benchmarks

The Board calculates the Borrower Bank Metric, the Borrower Market Benchmark, and the Borrower Community Benchmark for each category of borrowers (i.e., designated borrowers), as set forth in this section.

For closed-end home mortgage loans, the Board calculates these metrics and benchmarks for each of the following designated borrowers: (i) low-income borrowers; and (ii) moderate-income borrowers.

For small business loans, the Board calculates these metrics and benchmarks for each of the following designated borrowers: (i) businesses with gross annual revenues of $250,000 or less; and (ii) businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million.

For small farm loans, the Board calculates these metrics and benchmarks for each of the following designated borrowers: (i) farms with gross annual revenues of $250,000 or less; and (ii) farms with gross annual revenues greater than $250,000 but less than or equal to $1 million.

For automobile loans, the Board calculates these metrics and benchmarks for each of the following designated borrowers: (i) low-income borrowers; and (ii) moderate income borrowers.

To evaluate small banks and intermediate banks without data collection, maintenance and reporting requirements, the Board will use data collected by the bank in the ordinary course of business or through sampling of bank loan data.

a. Calculation of Borrower Bank Metric. The Board calculates the Borrower Bank Metric for each major product line and category of designated borrowers in each Retail Lending Test Area by:

1. Summing, over the years in the evaluation period, the bank's annual number of originated and purchased loans in the major product line to designated borrowers in the Retail Lending Test Area.

2. Summing, over the years in the evaluation period, the bank's annual number of originated and purchased loans in the major product line in the Retail Lending Test Area.

3. Dividing the result of paragraph IV.a.1 of this appendix by the result of paragraph IV.a.2 of this appendix.

Example A-8: The bank has a three-year evaluation period, and closed-end home mortgage loans are a major product line for the bank in FBAA-1. The bank's annual numbers of originated and purchased closed-end home mortgage loans (i.e., the bank's originated and purchased closed-end home mortgage loans) are 30 (year 1), 40 (year 2), and 30 (year 3) in FBAA-1. The sum of the annual numbers of originated and purchased closed-end home mortgage loans is therefore 100 in the evaluation period. In FBAA-1, the bank originated and purchased 10 closed-end home mortgage loans to low-income borrowers (year 1), 3 closed-end home mortgage loans to low-income borrowers (year 2), and 7 closed-end home mortgage loans to low-income borrowers (year 3) (a total of 20 closed-end home mortgage loans to low-income borrowers). In FBAA-1, the Borrower Bank Metric for closed-end home mortgage loans to low-income borrowers would be 20 divided by 100, or 0.2 (equivalently, 20 percent).

In FBAA-1, the bank also originated and purchased 12 closed-end home mortgage loans to moderate-income borrowers (year 1), 5 closed-end home mortgage loans to moderate-income borrowers (year 2), and 13 closed-end home mortgage loans to moderate-income borrowers (year 3) (a total of 30 closed-end home mortgage loans to moderate-income borrowers). In FBAA-1, the Borrower Bank Metric for closed-end home mortgage loans to moderate-income borrowers would be 30 divided by 100, or 0.3 (equivalently, 30 percent).

b. Calculation of Borrower Market Benchmarks for facility-based assessment areas and retail lending assessment areas. For each facility-based assessment area and retail lending assessment area, the Board calculates the Borrower Market Metric for each major product line, excluding automobile loans, and for each category of designated borrowers by:

1. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line to designated borrowers in the facility-based assessment area or retail lending assessment area originated by all lenders.

3. Dividing the result of paragraph IV.b.1 of this appendix by the result of paragraph IV.b.2 of this appendix.

Example A-9: The Borrower Market Benchmarks for closed-end home mortgage loans use a three-year evaluation period. Lenders that report closed-end home mortgage loans originated 500 closed-end home mortgage loans (year 1), 275 closed-end home mortgage loans (year 2), and 225 closed-end home mortgage loans (year 3). The sum of the annual numbers of originated closed-end home mortgage loans is therefore 1,000 in the evaluation period. Lenders that report closed-end home mortgage loans originated 50 closed-end home mortgage loans to low-income borrowers (year 1), 20 closed-end home mortgage loans to low-income borrowers (year 2), and 30 closed-end home mortgage loans to low-income borrowers (year 3) in FBAA-1. The sum of the annual numbers of originated closed-end home mortgage loans to low-income borrowers within FBAA-1 is therefore 100. The Borrower Market Benchmark for closed-end home mortgage loans to low-income borrowers would be 100 divided by 1,000, or 0.1 (equivalently, 10 percent).

Lenders that report closed-end home mortgage loans originated 100 loans (year 1), 75 loans (year 2), and 25 loans (year 3) to moderate-income borrowers. The sum of the annual numbers of originated closed-end home mortgage loans to moderate-income borrowers within FBAA-1 is therefore 200. The Borrower Market Benchmark for closed-end home mortgage loans to moderate-income borrowers in FBAA-1 would be 200 divided by 1,000, or 0.2 (equivalently, 20 percent).

c. Calculation of Borrower Community Benchmarks for facility-based assessment areas and retail lending assessment areas. The Board calculates the Borrower Community Benchmark for each category of designated borrowers for each major product line in each facility-based assessment area or retail lending assessment area.

1. For closed-end home mortgage loans, the Board calculates a Borrower Community Benchmark for low-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of low-income families in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of families in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.1.i of this appendix by the result of paragraph IV.c.1.ii of this appendix.

2. For closed-end home mortgage loans, the Board calculates a Borrower Community Benchmark for moderate-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of moderate-income families in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of families in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.2.i of this appendix by the result of paragraph IV.c.2.ii of this appendix.

3. For small business loans, the Board calculates a Borrower Community Benchmark for non-farm businesses with gross annual revenues of $250,000 or less by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses with gross annual revenues of $250,000 or less in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.3.i of this appendix by the result of paragraph IV.c.3.ii of this appendix.

4. For small business loans, the Board calculates a Borrower Community Benchmark for non-farm businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.4.i of this appendix by the result of paragraph IV.c.1.ii of this appendix.

5. For small farm loans, the Board calculates a Borrower Community Benchmark for farms with gross annual revenues of $250,000 or less by:

i. Summing, over the years in the evaluation period, the annual number of farms with gross annual revenues of $250,000 or less in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.5.i of this appendix by the result of paragraph IV.c.5.ii of this appendix.

6. For small farm loans, the Board calculates a Borrower Community Benchmark for farms with gross annual revenues greater than $250,000 but less than or equal to $1 million:

i. Summing, over the years in the evaluation period, the annual number of farms with gross annual revenues greater than $250,000 but less than or equal to $1 million in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.6.i of this appendix by the result of paragraph IV.c.6.ii of this appendix.

7. For automobile loans, the Board calculates a Borrower Community Benchmark for low-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of low-income households in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.7.i of this appendix by the result of paragraph IV.c.7.ii of this appendix.

8. For automobile loans, the Board calculates a Borrower Community Benchmark for moderate-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of moderate-income households in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.8.i of this appendix by the result of paragraph IV.c.8.ii of this appendix.

Example A-10: The Borrower Community Benchmarks for closed-end home mortgage loans use a three-year evaluation period. There were 1,300 families (year 1), 1,300 families (year 2), and 1,400 families (year 3) in FBAA-1. The sum of the number of families in FBAA-1 is therefore 4,000 in the evaluation period. There were 300 low-income families (year 1), 300 low-income families (year 2), and 400 low-income families (year 3) (a total of 1,000 low-income families). The Borrower Community Benchmark for closed-end home mortgage loans to low-income families within the FBAA-1 would be 1,000 divided by 4,000, or 0.25 (equivalently, 25 percent).

There were 350 moderate-income families (year 1), 400 moderate-income families (year 2), and 450 moderate-income families (year 3) (a total of 1,200 moderate-income families). The Borrower Community Benchmark for closed-end home mortgage loans to moderate-income families in FBAA-1 would be 1,200 divided by 4,000, or 0.3 (equivalently, 30 percent).

d. Calculation of Borrower Market Benchmark for the outside retail lending area. For a bank's outside retail lending area, the Board calculates the Borrower Market Benchmark for each major product line, excluding automobile loans, and for each category of designated borrowers by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating a benchmark for each category of designated borrowers and each major product line within each component geographic area as described in § 228.18(b) using the formula for the Borrower Market Benchmark described in section IV.b of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph IV.d.1 of this appendix and associated weightings in paragraph IV.d.2 of this appendix.

e. Calculation of Borrower Community Benchmarks for the outside retail lending area. For a bank's outside retail lending area, the Board calculates the Borrower Community Benchmark for each major product line and for each category of designated borrowers in the bank's outside retail lending area by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating the benchmark for each category of designated borrowers and each major product line within each component geographic area as described in § 228.18(b) using the formula for the Borrower Community Benchmark described in paragraph IV.c of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph IV.e.1 of this appendix and associated weightings calculated in paragraph IV.e.2 of this appendix.

V. Supporting Conclusions for Major Product Lines Other Than Automobile Lending

The Board evaluates a bank's Retail Lending Test performance in each Retail Lending Test Area by comparing the bank's distribution metrics to sets of performance ranges determined by, as applicable, the market and community benchmarks, as described in this section.

a. Supporting conclusions for categories of designated census tracts and designated borrowers. For each major product line, excluding automobile lending, the Board develops separate supporting conclusions for each of the categories outlined in table 1 to this appendix.

Table 1 to Appendix A—Retail Lending Test Categories of Designated Census Tracts and Designated Borrowers

Major product line	Designated census tracts	Designated borrowers
Closed-End Home Mortgage Loans	Low-Income Census Tracts	Low-Income Borrowers.
	Moderate-Income Census Tracts	Moderate-Income Borrowers.
Small Business Loans	Low-Income Census Tracts	Non-farm businesses with Gross Annual Revenues of $250,000 or Less.
	Moderate-Income Census Tracts	Non-farm businesses with Gross Annual Revenues Greater than $250,000 but Less Than or Equal to $1 million.
Small Farm Loans	Low-Income Census Tracts	Farms with Gross Annual Revenues of $250,000 or Less.
	Moderate-Income Census Tracts	Farms with Gross Annual Revenues Greater than $250,000 but Less Than or Equal to $1 million.

b. Geographic distribution performance ranges. To evaluate a bank's geographic distributions for each major product line, excluding automobile lending, the Board compares the relevant Geographic Bank Metric for each category of designated census tracts to the applicable set of performance ranges. The performance ranges are determined by the values of the Geographic Market Benchmark and the Geographic Community Benchmark, as well as the multipliers associated with each supporting conclusion category, as follows:

1. The performance threshold for an “Outstanding” supporting conclusion is the lesser of either:

i. The product of 1.0 times the Geographic Community Benchmark; or

ii. The product of 1.15 times the Geographic Market Benchmark.

The “Outstanding” performance range is all potential values of the Geographic Bank Metric equal to or above the “Outstanding” performance threshold.

2. The performance threshold for a “High Satisfactory” Retail Lending Test supporting conclusion is the lesser of either:

i. The product of 0.8 times the Geographic Community Benchmark; or

ii. The product of 1.05 times the Geographic Market Benchmark.

The “High Satisfactory” performance range is all potential values of the Geographic Bank Metric equal to or above the “High Satisfactory” performance threshold but below the Outstanding performance threshold.

3. The performance threshold for a “Low Satisfactory” supporting conclusion is the lesser of either:

i. The product of 0.6 times the Geographic Community Benchmark; or

ii. The product of the 0.8 times the Geographic Market Benchmark.

The “Low Satisfactory” performance range is all potential values of the Geographic Bank Metric equal to or above the “Low Satisfactory” performance threshold but below the High Satisfactory performance threshold.

4. The performance threshold for a “Needs to Improve” supporting conclusion is the lesser of either:

i. The product of 0.3 times the Geographic Community Benchmark; or

ii. The product of 0.33 times the Geographic Market Benchmark.

The “Needs to Improve” performance range is all potential values of the Geographic Bank Metric equal to or above the “Needs to Improve” performance threshold but below the “Low Satisfactory” performance threshold.

5. The “Substantial Noncompliance” performance range is all potential values of the Geographic Bank Metric below the “Needs to Improve” performance threshold.

c. Geographic distribution supporting conclusions and performance scores. The Board compares each Geographic Bank Metric to the performance ranges provided in paragraphs V.b.1 through V.b.5 of this appendix. The geographic distribution supporting conclusion for each category of designated census tracts is determined by the performance range within which the Geographic Bank Metric falls. Each supporting conclusion is assigned a numerical performance score using the following corresponding points values:

Conclusion	Performance score
Outstanding	10
High Satisfactory	7
Low Satisfactory	6
Needs to Improve	3
Substantial Noncompliance	0

d. Borrower distribution performance ranges. To evaluate a bank's borrower distributions for each major product line, excluding automobile lending, the Board compares the relevant Borrower Bank Metric for each category of designated borrowers to the applicable set of performance ranges. The performance ranges are determined by the values of the Borrower Market Benchmark and Borrower Community Benchmark, as well as the multipliers associated with each supporting conclusion category, as follows:

1. The performance threshold for an “Outstanding” supporting conclusion is the lesser of either:

i. The product of 1.0 times the Borrower Community Benchmark; or

ii. The product of 1.15 times the Borrower Market Benchmark.

The “Outstanding” performance range is all potential values of the Borrower Bank Metric equal to or above the “Outstanding” performance threshold.

2. The performance threshold for a “High Satisfactory” supporting conclusion is the lesser of either:

i. The product of 0.8 times the Borrower Community Benchmark; or

ii. The product of 1.05 times the Borrower Market Benchmark.

The “High Satisfactory” performance range is all potential values of the Borrower Bank Metric equal to or above the “High Satisfactory” performance threshold but below the Outstanding performance threshold.

3. The performance threshold for a “Low Satisfactory” supporting conclusion is the lesser of either:

i. The product of 0.6 times the Borrower Community Benchmark; or

ii. The product of 0.8 times the Borrower Market Benchmark.

The “Low Satisfactory” performance range is all potential values of the Borrower Bank Metric equal to or above the “Low Satisfactory” performance threshold but below the High Satisfactory performance threshold.

4. The performance threshold for a “Needs to Improve” supporting conclusion is the lesser of either:

i. The product of 0.3 times the Borrower Community Benchmark; or

ii. The product of 0.33 times the Borrower Market Benchmark.

The “Needs to Improve” performance range is all potential values of the Borrower Bank Metric equal to or above the “Needs to Improve” performance threshold but below the “Low Satisfactory” performance threshold.

5. The “Substantial Noncompliance” performance range is all potential values of the Borrower Bank Metric below the “Needs to Improve” performance threshold.

e. Borrower distribution supporting conclusions and performance scores. The Board compares each Borrower Bank Metric to the performance ranges provided in paragraphs V.d.1 through V.d.5 of this appendix. The borrower distribution supporting conclusion for each category of designated borrowers is determined by the performance range within which the Borrower Bank Metric falls. Each supporting conclusion is assigned a numerical performance score using the following corresponding point values:

Conclusion	Performance score
Outstanding	10
High Satisfactory	7
Low Satisfactory	6
Needs to Improve	3
Substantial Noncompliance	0

VI. Supporting Conclusions for Automobile Lending

a. Supporting conclusions for categories of designated census tracts and designated borrowers. For any bank for which automobile lending is evaluated under § 228.22, the Board develops separate supporting conclusions for each of the categories outlined in table 2 to this appendix.

Table 2 to Appendix A—Automobile Loans: Categories of Designated Census Tracts and Designated Borrowers

Major product line	Designated census tracts	Designated borrowers
Automobile Lending	Low-Income Census Tracts	Low-Income Borrowers.
	Moderate-Income Census Tracts	Moderate-Income Borrowers.

b. Geographic distribution. The Board develops the supporting conclusion for a bank's geographic distribution for automobile lending based on a comparison of the Geographic Bank Metric for automobile lending in each category of designated census tracts to the corresponding Geographic Community Benchmark.

c. Borrower distribution. The Board develops the supporting conclusion for a bank's borrower distribution for automobile lending based on a comparison of the Borrower Bank Metric for automobile lending in each category of designated borrowers to the corresponding Borrower Community Benchmark.

d. Performance scores. Each supporting conclusion is assigned a numerical performance score using the following corresponding point values:

Conclusion	Performance score
Outstanding	10
High Satisfactory	7
Low Satisfactory	6
Needs to Improve	3
Substantial Noncompliance	0

VII. Retail Lending Test Conclusions—All Major Product Lines

a. The Board determines a bank's Retail Lending Test performance conclusion for a major product line in a Retail Lending Test Area by calculating a weighted performance score for each major product line:

1. The Board develops a weighted average performance score for each major product line in each Retail Lending Test Area as follows:

i. The Board creates a weighted average performance score across the categories of designated census tracts (i.e., geographic distribution average) and a weighted average performance score across the categories of designated borrowers (i.e., borrower distribution average).

ii. For the geographic distribution average of each major product line, the weighting assigned to each category of designated census tracts is based on the demographics of the Retail Testing Area as outlined in the following table:

Table 3 to Appendix A—Retail Lending, Test Geographic Distribution Average—Weights

Major product line	Category of designated census tracts	Weight
Closed-End Home Mortgage Loans	Low-Income Census Tracts	Percentage of total number of owner-occupied housing units in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in low-income census tracts.
	Moderate-Income Census Tracts	Percentage of total number of owner-occupied housing units in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in moderate-income census tracts.
Small Business Loans	Low-Income Census Tracts	Percentage of total number of non-farm businesses in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in low-income census tracts.
	Moderate-Income Census Tracts	Percentage of total number of non-farm businesses in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in moderate-income census tracts.
Small Farm Loans	Low-Income Census Tracts	Percentage of total number of farms in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in low-income census tracts.
	Moderate-Income Census Tracts	Percentage of total number of farms in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in moderate-income census tracts.
Automobile Loans	Low-Income Census Tracts	Percentage of total number of households in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in low-income census tracts.
	Moderate-Income Census Tracts	Percentage of total number of households in low- and moderate-income census tracts in the applicable Retail Lending Test Area that are in moderate-income census tracts.

In the case of a Retail Lending Test Area that contains no low-income census tracts and no moderate-income census tracts, the bank will not receive a geographic distribution average for that assessment area.

Example A-11: A large bank's closed-end home mortgage loans constitute a major product line for the bank in a facility-based assessment area. The bank's geographic distribution supporting conclusions for closed-end home mortgage loans in this facility-based assessment area are “High Satisfactory” (performance score of 7 points) for low-income census tracts and “Needs to Improve” (performance score of 3 points) for moderate-income census tracts. Owner-occupied housing units in moderate-income census tracts represents 20 percent of all owner-occupied housing units in the facility-based assessment area, and owner-occupied housing units in low-income census tracts represents 5 percent of all owner-occupied housing units in the facility-based assessment area. Accordingly, the weight assigned to the moderate-income geographic distribution performance score is 80 percent [20 percent/(20 percent + 5 percent) = 80 percent] and the weight assigned to the low-income geographic distribution performance score is 20 percent [5 percent/(20 percent + 5 percent) = 20 percent]. The bank's geographic distribution average for closed-end home mortgage loans in this facility-based assessment area is 3.8 [(7 points × 0.2 weight = 1.4) + (3 points × 0.8 weight = 2.4)].

iii. For the borrower distribution average of each major product line, the weighting assigned to each category of designated borrowers is based on the demographics of the Retail Lending Test Area as outlined in the following table:

Table 4 to Appendix A—Retail Lending Test, Borrower Distribution Average—Weights

Major product line	Categories of designated borrowers	Weight
Closed-End Home Mortgage Loans	Low-Income Borrowers	Percentage of total number of low-income and moderate-income families in the applicable Retail Lending Test Area that are low-income families.
	Moderate-Income Borrowers	Percentage of total number of low-income and moderate-income families in the applicable Retail Lending Test Area that are moderate-income families.
Small Business Loans	Non-farm businesses with gross annual revenues of $250,000 or less	Percentage of total number of non-farm businesses with gross annual revenues of $250,000 or less and non-farm businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million in the applicable Retail Lending Test Area that are non-farm businesses with gross annual revenues of $250,000 or less.
	Non-farm businesses with gross annual revenues greater than $250,000 and less than or equal to $1 million	Percentage of total number of non-farm businesses with gross annual revenues of $250,000 or less and non-farm businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million in the applicable Retail Lending Test Area that are non-farm businesses with gross annual revenues greater than $250,00 but less than or equal to $1 million.
Small Farm Loans	Farms with gross annual revenues of $250,000 or less	Percentage of total number of farms with gross annual revenues of $250,000 or less and farms with gross annual revenues greater than $250,000 but less than or equal to $1 million in the applicable Retail Lending Test Area that are farms with gross annual revenues of $250,000 or less.
	Farms with gross annual revenues greater than $250,000 and less than or equal to $1 million	Percentage of total number of farms with gross annual revenues of $250,000 or less and farms with gross annual revenues greater than $250,000 but less than or equal to $1 million in the applicable Retail Lending Test Area that are farms with gross annual revenues greater than $250,000 but less than or equal to $1 million.
Automobile Loans	Low-Income Borrowers	Percentage of total number of low-income and moderate-income households in the applicable Retail Lending Test Area that are low-income households.
	Moderate-Income Borrowers	Percentage of total number of low-income and moderate-income households in the applicable Retail Lending Test Area that are moderate-income households.

Example A-12: Building on example A-11 to this appendix, the bank's borrower distribution supporting conclusions for closed-end home mortgage loans in this facility-based assessment area are “Outstanding” (performance score of 10 points) for low-income borrowers and “Low Satisfactory” (performance score of 6 points) for moderate-income borrowers. Low-income families represent 14 percent of all families in the facility-based assessment area and moderate-income families represent 6 percent of all families in the facility-based assessment area. Accordingly, the weight assigned to the low-income borrower distribution performance score is 70 percent [14 percent/(14 percent + 6 percent) = 70 percent] and the weight assigned to the moderate-income borrower distribution performance score is 30 percent [6 percent/(14 percent + 6 percent) = 30 percent]. The bank's borrower distribution average for closed-end home mortgage loans in this facility-based assessment area is 8.8 [(10 points × 0.7 weight = 7.0) + (6 points × 0.3 weight = 1.8)].

2. For each major product line, the Board calculates the average of the geographic distribution average and the borrower distribution average (i.e., product line score). If a bank has no geographic distribution average for a product (due to the absence of both low-income census tracts and moderate-income census tracts in the geographic area), the product line score is the borrower distribution average.

Example A-13: Based on examples A-11 and A-12 to this appendix, the bank's product line score for closed-end home mortgage loans is 6.3 [(3.8 geographic distribution average × 0.5 weight = 1.9) + (8.8 borrower distribution average × 0.5 weight = 4.4)].

b. For each Retail Lending Test Area, the Board calculates a weighted average of product line scores across all major product lines (i.e., Retail Lending Test Area Score). For each Retail Lending Test Area, the Board uses a ratio of the bank's loan originations and purchases in each major product line to its loan originations and purchases in all major product lines during the evaluation period, based on the combination of loan dollars and loan count as defined in § 228.12, as weights in the weighted average.

Example A-14: In addition to the product line score of 6.3 for closed-end home mortgage loans in example A-13 to this appendix, the bank has a product line score of 4.2 for small business lending in the same facility-based assessment area. Among major product lines, 60 percent of the bank's loans in the facility-based assessment area are closed-end home mortgages and 40 percent are small business loans based upon the combination of loan dollars and loan count. Accordingly, the weight assigned to the closed-end home mortgage product line score is 60 percent and the weight assigned to the small business product line score is 40 percent. The bank's Retail Lending Test Area Score for this facility-based assessment area is 5.46 [(6.3 closed-end home mortgage loan product line score × 0.6 weight = 3.78) + (4.2 small business loan product line score × 0.4 weight = 1.68)].

c. The Board then develops a Retail Lending Test recommended conclusion corresponding with the conclusion category that is nearest to the Retail Lending Test Area Score, as follows:

Recommended conclusion	Retail lending test area score
Outstanding	8.5 or more.
High Satisfactory	6.5 or more but less than 8.5.
Low Satisfactory	4.5 or more but less than 6.5.
Needs to Improve	1.5 or more but less than 4.5.
Substantial Noncompliance	less than 1.5.

Example A-15: Based on example A-14 to this appendix, the bank's Retail Lending Test Area Score is associated with a “Low Satisfactory” conclusion, so the bank's Retail Lending Test recommended conclusion for this facility-based assessment area is “Low Satisfactory.”

d. Once a recommended conclusion is determined for a Retail Lending Test Area, the performance context information provided in § 228.21(d) and the additional factors provided in § 228.22(g) inform the Board's determination of the Retail Lending Test conclusion for the Retail Lending Test Area. The agency assigns a Retail Lending Test conclusion for the Retail Lending Test Area of “Outstanding,” “High Satisfactory,” “Low Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

VIII. Retail Lending Test Weighting and Conclusions for States, Multistate MSAs, and the Institution

The Board develops the Retail Lending Test conclusions for States, multistate MSAs, and the institution as described in this section.

a. The Board translates Retail Lending Test conclusions for facility-based assessment areas, retail lending assessment areas, and as applicable, the outside retail lending area 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 Retail Lending Test Area performance scores for a State or multistate MSA, as applicable, and for the institution (i.e., performance score for the Retail Lending Test). For the weighted average for a State or multistate MSA, the Board considers facility-based assessment areas and retail lending assessment areas in the State or multistate MSA pursuant to § 228.28(c). For the weighted average for the institution, the Board considers all of the bank's facility-based assessment areas and retail lending assessment areas and, as applicable, the bank's outside retail lending area. Each Retail Lending Test Area performance score is weighted by the average of the following two ratios:

1. The ratio measuring the share of the bank's deposits in the Retail Lending Test Area, calculated by:

i. Summing, over the years in the evaluation period, the bank's annual dollar volume of deposits in the Retail Lending Test Area.

ii. Summing, over the years in the evaluation period, the bank's annual dollar volume of deposits in all Retail Lending Test Areas in the State, in the multistate MSA, or for the institution, as applicable.

iii. Dividing the result of paragraph VIII.b.1.i of this appendix by the result of paragraph VIII.b.1.ii of this appendix.

For a bank that reports deposits data pursuant to § 228.42(b)(3), the bank's annual dollar volume of deposits in a Retail Lending Test Area is the total of annual average daily balances of deposits reported by the bank in counties in the Retail Lending Test Area for that year. For a bank that does not report deposits data pursuant to § 228.42(b)(3), the bank's annual dollar volume of deposits in a Retail Lending Test Area is the total of deposits assigned to facilities reported by the bank in the Retail Lending Test Area in the FDIC's Summary of Deposits for that year.

2. The ratio measuring the share of the bank's loans in the Retail Lending Test Area, based on the combination of loan dollars and loan count, as defined in § 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 Retail Lending Test 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 Retail Lending Test Areas in the State, in the multistate MSA, or for the institution, as applicable, originated or purchased during the evaluation period.

c. The Board develops a conclusion corresponding to the conclusion category that is nearest to the performance score for the Retail Lending Test for the State, the multistate MSA, or the institution, as applicable, as follows:

Conclusion	Retail lending test performance score
Outstanding	8.5 or more.
High Satisfactory	6.5 or more but less than 8.5.
Low Satisfactory	4.5 or more but less than 6.5.
Needs to Improve	1.5 or more but less than 4.5.
Substantial Noncompliance	Less than 1.5.

d. The agency considers relevant performance context information provided in § 228.21(d) to inform the Board's determination of the bank's Retail Lending Test conclusion for the State, the multistate MSA, or the institution, as applicable.

Example A-16: A large bank operates in one State only, and has two facility-based assessment areas and one retail lending assessment area in that state and also engages in closed-end home mortgage lending, small business lending, and small farm lending (but not automobile lending, as it is not a product line for the bank) in its outside retail lending area.

Additionally:

i. Facility-based assessment area 1 (FBAA-1) is associated with 75 percent of the deposits in all of the Retail Lending Test Areas of the bank (based on dollar amount) and 10 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 228.12). The bank received a “Needs to Improve” (3 points) Retail Lending Test conclusion in FBAA-1;

ii. Facility-based assessment area 2 (FBAA-2) is associated with 15 percent of the deposits in all of the Retail Lending Test Areas of the bank and 20 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 228.12). The bank received a “Low Satisfactory” (6 points) Retail Lending Test conclusion in FBAA-2;

iii. The Retail lending assessment area is associated with 8 percent of the deposits in all of the Retail Lending Test Areas of the bank and 68 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 228.12). The bank received an “Outstanding” (10 points) Retail Lending Test conclusion in the retail lending assessment area; and

iv. The bank's outside retail lending area, is associated with 2 percent of the deposits in all of the Retail Lending Test Areas of the bank and 2 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 228.12). The bank received a “High Satisfactory” (7 points) Retail Lending Test conclusion in the outside retail lending area.

Calculating weights:

i. For facility-based assessment area 1: weight = 42.5 percent [(75 percent of deposits + 10 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2];

ii. For facility-based assessment area 2: weight = 17.5 percent [(15 percent of deposits + 20 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2];

iii. For the retail lending assessment area: weight = 38 percent [(8 percent of deposits + 68 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2]; and

iv. For the outside retail lending area: weight = 2 percent [(2 percent of deposits + 2 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2].

Institution Retail Lending Test Performance Score and Conclusion: Using the relevant points values—“Outstanding” (10 points); “High Satisfactory” (7 points); “Low Satisfactory” (6 points); “Needs to Improve” (3 points); “Substantial Noncompliance” (0 points)—and based on the illustration in this example A-16, the bank's Retail Lending Test performance score for the institution is 6.3 [(0.425 weight × 3 points in facility-based assessment area 1) + (0.175 weight × 6 points in facility-based assessment area 2) + (0.38 weight × 10 points in retail lending assessment area) + (0.02 weight × 7 points in the outside retail lending area)].

A performance score of 6.3 corresponds with the conclusion category “Low Satisfactory,” so the bank's Retail Lending Test recommended conclusion at the institution level is “Low Satisfactory.” Relevant performance context information provided in § 228.21(d) may inform the Board's determination of the bank's conclusion at the institution level.

Example A-17: An intermediate bank operates in a single State, has two facility-based assessment areas, and also engages in closed-end home mortgage lending, small business lending, and small farm lending (but not automobile lending, as automobile lending is not a product line for the bank) in its outside retail lending area.

Additionally:

i. Facility-based assessment area 1 (FBAA-1) is associated with 60 percent of the deposits in all of the Retail Lending Test Areas of the bank and 30 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans. The bank received an “Outstanding” (10 points) Retail Lending Test conclusion in FBAA-1;

ii. Facility-based assessment area 2 (FBAA-2 is) associated with 40 percent of the deposits in all of the Retail Lending Test Areas of the bank and 10 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans. The bank received a “High Satisfactory” (7 points) Retail Lending Test conclusion in FBAA-2; and

iii. The bank's outside retail lending area is associated with 0 percent of the deposits in all of the Retail Lending Test Areas of the bank (the bank did not voluntarily collect and maintain depositor location data, so all deposits in the bank are attributed to its branches within facility-based assessment areas) and 60 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans. The bank received a “Needs to Improve” (3 points) Retail Lending Test conclusion in the outside retail lending area.

Calculating weights:

i. For FBAA-1: weight = 45 percent [(60 percent of deposits + 30 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2];

ii. For FBAA-2: weight = 25 percent [(40 percent of deposits + 10 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2]; and

iii. For the outside retail lending area: weight = 30 percent [(0 percent of deposits + 60 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2].

Institution Retail Lending Test Performance Score and Conclusion: Using the relevant points values—“Outstanding” (10 points); “High Satisfactory” (7 points); “Low Satisfactory” (6 points); “Needs to Improve” (3 points); “Substantial Noncompliance” (0 points)—and based on the illustration in this example A-17, the bank's recommended Retail Lending Test performance score at the institution level is 7.2 [(0.45 weight × 10 points in FBAA-1) + (0.25 weight × 7 points in FBAA-2) + (0.3 weight × 3 points in the outside retail lending area)].

A performance score of 7.2 corresponds with the conclusion category “High Satisfactory,” so the bank's Retail Lending Test recommended conclusion at the institution level is “High Satisfactory.” Relevant performance context information provided in § 228.21(d) may inform the Board's determination of the bank's conclusion at the institution level.

                    
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Appendix A to Part 228 - —Calculations for the Retail Lending Test

Appendix A to Part 228—Ratings 228—Calculations for the Retail Lending Test

Cross Reference