Only one bank earns ‘needs improvement’ CRA rating; 11 others (out of 79) evaluated as ‘outstanding’

Only one bank (out of 79) earned a rating of “needs improvement” in its Community Reinvestment Act (CRA) evaluations released Monday by the federal deposit insurer – and that bank no longer exists as a separate entity.

Eleven banks earned “outstanding” ratings (just under 14% of the evaluations released); the remaining 67 banks earned “satisfactory” ratings.

The Federal Deposit Insurance Corp. (FDIC), in a release, said that Plaza Bank of Seattle was the sole institution to receive the “needs improvement” (NI) evaluation, assigned in December of last year (but just released Monday).

“NI” is the second-lowest evaluation a bank may receive, ranking only above “substantial non-compliance.” Other ratings include “Outstanding” (O) and “Satisfactory” (S).

However, Plaza Bank – which had about $74 million in assets last year – merged into United Business Bank of Walnut Creek, Calif., in November. The bank operates under that name and brand; Plaza Bank is “inactive,” according to FDIC’s website.

The successor bank in California (United Business) held $1.2 billion in assets as of year-end 2017.

Meanwhile, the FDIC said that the 11 banks that earned the “O” evaluation are:

  • Capon Valley Bank; Wardensville, W.Va.
  • Soy Capital Bank and Trust Company; Decatur, Ill.
  • Northpointe Bank; Grand Rapids, Mich.
  • Crestmark Bank; Troy, Mich.
  • Sycamore Bank; Senatobia, Miss.
  • Decorah Bank & Trust Company; Decorah, Iowa
  • Union Savings Bank; Danbury, Conn.
  • Discover Bank; Greenwood, Del.
  • Norway Savings Bank; Norway, Maine
  • Fulton Bank of New Jersey, Mount Laurel
  • Sallie Mae Bank; Salt Lake City, Utah

The CRA is a 1977 law is an anti-redlining measure. According to FDIC, it is intended to encourage insured banks and thrifts to meet local credit needs, including those of low- and moderate-income neighborhoods, consistent with safe and sound operations. As part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Congress mandated the public disclosure of an evaluation and rating for each bank or thrift that undergoes a CRA examination on or after July 1, 1990, FDIC said.

FDIC Issues List of Banks Examined for CRA Compliance

 

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