We are located in an MSA that is in two states, Kentucky and Tennessee. The majority of our business is conducted in Kentucky. In determining our assessment area, are we allowed to only include that part of the MSA that is in Kentucky, or must we include the whole thing? I was under the assumption that we only had to include Kentucky, but then I read somewhere that you can't chop up an MSA.

Check out the NEW MA effective 1/1/2004 and see if there is any change to the existing MSA. It may not be multi state any longer.

That was one of the first things I checked, and unfortunately the MSA still covers two counties in two states.

You don't have to designate the whole MSA, or even a whole county, but you must include all bank office locations, the tracts should be contiguious, and all tracts in a municipality must be included.

If you are in MSA 1660 Clarksville-Hopkins and up in Christian County, and Crofton is not an area you have a branch location, but Hopkinsville is you could not include tracts 2009.00, 2010.00, 2011.00 and 2012.00 in the northern part of the county.

You really need to know what your loan distribution is in order to make sure you have included enough tracts that include the majority of your loan originations.

If you are in Montgomery Cnty Tn and have an office in Clarksville, then IMO you might as well include the whole county as there are only a few tracts outside the Clarksville municipal boundary.

If you have no office or make few if any loans in that area then you should consider eliminateing it fro the AA

You can see why its a lot easier to include all track in the MSA for you, and the examiners like it, as it makes it easier from them to setup their analysis program

If you have specific questions you might e-mail me directly I'll help where I can.

We are also in a two state MSA (northern Kentucky) and have branches in both. We only include the counties in our MSA where we have branches located.

Yes, we're in Hopkinsville but don't have an office in Tennessee, so I'm assuming we can leave the TN portion out of our AA, especially since we do very little business there.

Thanks for your responses, guys, that helped me a lot!