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#2208987 - 03/19/19 02:22 PM Assessment Area
CRAzy_lady Offline
Joined: Dec 2012
Posts: 53
I have a couple of questions regarding the bank's assessment area...

1. Currently, our bank's assessment area consists of counties in three states and three MSAs. We only include counties where we have a branch, so we don't include whole MSAs in our AA, rather only the counties in each MSA where we have branches. Is this ok?

2. In my board reports, I have broken our AA into smaller AAs according to the region/state they're located in. My logic was that it would provide better information for our regional managers. Now I am questioning myself, since examiners won't necessarily conduct our evaluation according to these delineations. I've looked back over the past couple of PEs and the areas assessed weren't exactly the same (even though our AA has stayed mostly the same). Is there any guidance available for understanding how best to delineate AAs for internal reporting purposes? We are regulated by FRB.

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#2209158 - 03/21/19 02:21 PM Re: Assessment Area CRAzy_lady
Tennismom Offline
Platinum Poster
Joined: Jan 2004
Posts: 765
#1 - That is how we delineate our AA....No comments from FDIC

#2 - Unfortunately, similar to you we maintain two sets of "AA". One as defined in the CRA and one for internal reporting by sales area and sales regions.

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#2209245 - 03/22/19 01:59 AM Re: Assessment Area CRAzy_lady
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,915
How you delineate your AA is the most important CRA decision you will ever make because it affects not only your results, it affects the "performance context" which in turn drives performance standards. In the 25 years I have been advising banks about CRA I've seen too many banks take the easy way out and annex whole counties when they have only one branch in the county. This makes it difficult to serve the entire AA because it is too large and all the LMI tracts that are outside your practical assessment area will inflate performance expectations.

What we do is use "live mapping" to advise banks about the various issues and tract combinations in different AA configurations to determine what is the best AA delineation for a bank.
CRA Exam Preparation, CRA Performance Evaluations, Key Performance Benchmarks, & maps

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