Does anyone have any idea of a ballpark figure that examiners are expecting at an intermediate size bank (500mm-600mm)? This is my first CRA experience at this size institution(OCC Regulated). We are getting near 1mm in investments, and I am trying to decide whether it is worth it to go with the new intermediate to small size test, or stick with the large bank test that we are familiar with. I'm just not sure whether this level of investments (not counting CD lending) will carry much weight on this part of the test.

To get a Satisfactory on an ISB exam, the criteria is:

"The institution’s community development performance demonstrates adequate responsiveness to the community development needs of its assessment area(s) through community development loans, qualified investments, and community development services, as appropriate, considering the institution's capacity and the need and availability of such opportunities for community development in the institution’s assessment area(s)"

You must pass BOTH the CRA exam as well as the Community Development Exam.

If you believe you have done well in Community development then consider the ISB exam. BUT read the definitions of Community Development loans and investments and make sure your activities meet those definitions. The Community Development criteria now applies to banks of all sizes.

I guess my ultimate question is, has anyone seen any advantage to choosing the ISB category, when you can, otherwise, stay under the large bank test where the lending test counts for two thirds? That is the dilema.

There are advantages to both and only you can decide whats best for your bank.

I have been reading PE of ISB's and what they have in common is all that have been examined as an ISB have a history of Community Development Activities. They have a number of qualifying CD loans and Investments.

I have not found one where the examination is on a bank that has not reported CD loans on their LAR. It's going to be interestuing to see how they grade a bank that has not had or has no CD activities. So far those banks have not been selected for exams.

If you think your CD is strong then an ISB could work for you.

However consider that examiners still expect you to know your data and be able to explain it. The only way you can do that is to continue to collect and moniter your CRA loans. So IMO being an ISB does not eliminate data collection or CRA analysis. All it does is not require it to be reported.

IMO stick with what you know and do not abandon the data collection and analysis you have in place.

If you are debating about electing to be evaluated as an ISB you have to have reported your loan data or you would not have the elective. I assume you reported the data. All ISB's are effectively wagering their entire CRA PE on the CD test because the revised reg requires a minimum satisfactory on that test to qualify for a composite satisfactory PE. Samsara's story would suggest a pretty high standard for CD investments. But, given the hazy standards why would anyone, except those with a very strong history of CD activity, bet their entire PE on an unknown? The primary advantage of being an ISB was the "savings" generated by not reporting. But, as Don Narup aptly points out, you really still should be collecting, maintaining and monitoring your CRA data even if you are not reporting it. This is 95% of the cost in the first place. So the savings are minimal while the risk is great.

Thanks to all for the info. My gut call was to stick with what we know.

Don & Len - Thanks for confirming our assessment of my bank's situation. We were an ISB for 2005 and we kept flirting with the $1Billion mark. We will definately be over this year. We saw our CD loans going way down and decided that we were much better off going back to reporting as a Large Bank. We had continued to collect all the small business info, so we are in good shape for 2006. We had a CRA exam this year already, so 2005 is definately in the past.

OCC generally uses a measurement using the percentage of your tier 1 capital. To get an outstanding banks usually have to exceed 5%, but that is here in Los Angeles County. It really is a function of your assessment area and you should ber pulling the most recent evaluations of your peer banks to get an idea of what is reasonable for your assessment area. If you are just looking for a satisfactory rating, it might be just 1%