We are opening a branch a significant distance from out current locations. Of course we have an idea where we will be lending, is it better to overestimate the area or under estimate? I am currently considering 2-3 counties based on where the office will be. Limiting tracts within those will be difficult. Thoughts anyone?

Have you thought of using an entire county, that way you are not arbitrarily omitting LMI CTs or majority/minority CTs? As of yet, our examiners (FDIC) have not commented on how we delineate our AAs. If we have a branch presence in a county then that county is included in an AA. For example if we have branch locations in 6 out of 8 counties in a MSA, then we delineate that AA as the 6 counties were we have a branch. Yes, you need to monitor your lending in those other 2 counties and if deemed necessary change your AA to include. So to answer your question, under estimate as long as you are periodically monitoring lending activities..

We were in the process of opening our first branch barely inside an adjacent county within a major metro area during our most recent FRB exam. Examiners cautioned us that they would prefer entire counties rather than carving out census tracts. Performance context is there to explain away why you aren't lending on the other side of the geography, far away from your branch presence.